    [Congressional Bills 111th Congress]
    [From the U.S. Government Publishing Office]
    [H.R. 4173 Engrossed in House (EH)]

    111th CONGRESS
      1st Session
                                    H. R. 4173

    _______________________________________________________________________

                                     AN ACT

     To provide for financial regulatory reform, to protect consumers and
      investors, to enhance Federal understanding of insurance issues, to
       regulate the over-the-counter derivatives markets, and for other
                                   purposes.

        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 ``Wall Street Reform and Consumer
    Protection Act of 2009''.

    SEC. 2. TABLE OF CONTENTS.

        The table of contents for this Act is as follows:

    Sec. 1. Short title.
    Sec. 2. Table of contents.
                  TITLE I--FINANCIAL STABILITY IMPROVEMENT ACT

    Sec. 1000. Short title; definitions.
    Sec. 1000A. Restrictions on the Federal Reserve System pending audit
                                report.
              Subtitle A--The Financial Services Oversight Council

    Sec. 1001. Financial Services Oversight Council established.
    Sec. 1002. Resolution of disputes among Federal financial regulatory
                                agencies.
    Sec. 1003. Technical and professional advisory committees.
    Sec. 1004. Financial Services Oversight Council meetings and council
                                governance.
    Sec. 1005. Council staff and funding.
    Sec. 1006. Reports to the Congress.
    Sec. 1007. Applicability of certain Federal laws.
    Sec. 1008. Oversight by GAO.
       Subtitle B--Prudential Regulation of Companies and Activities for
                          Financial Stability Purposes

    Sec. 1100. Federal Reserve Board authority that of agent acting on
                                behalf of Council.
    Sec. 1101. Council and Board authority to obtain information.
    Sec. 1102. Council prudential regulation recommendations to Federal
                                financial regulatory agencies; agency
                                authority.
    Sec. 1103. Subjecting financial companies to stricter prudential
                                standards for financial stability purposes.
    Sec. 1104. Stricter prudential standards for certain financial holding
                                companies for financial stability purposes.
    Sec. 1105. Mitigation of systemic risk.
    Sec. 1106. Subjecting activities or practices to stricter prudential
                                standards for financial stability purposes.
    Sec. 1107. Stricter regulation of activities and practices for
                                financial stability purposes.
    Sec. 1108. Effect of rescission of identification.
    Sec. 1109. Emergency financial stabilization.
    Sec. 1110. Additional related amendments.
    Sec. 1111. Corporation may receive warrants when paying or risking
                                taxpayer funds.
    Sec. 1112. Examinations and enforcement actions for insurance and
                                resolutions purposes.
    Sec. 1113. Study of the effects of size and complexity of financial
                                institutions on capital market efficiency
                                and economic growth.
    Sec. 1114. Exercise of Federal Reserve authority.
    Sec. 1115. Stress tests.
    Sec. 1116. Contingent Capital.
    Sec. 1117. Restriction on proprietary trading by designated financial
                                holding companies.
    Sec. 1118. Rule of construction.
    Sec. 1119. Antitrust savings clause.
       Subtitle C--Improvements to Supervision and Regulation of Federal
                            Depository Institutions

    Sec. 1201. Definitions.
    Sec. 1202. Amendments to the Home Owners' Loan Act relating to transfer
                                of functions.
    Sec. 1203. Amendments to the revised statutes.
    Sec. 1204. Power and duties transferred.
    Sec. 1205. Transfer date.
    Sec. 1206. Expiration of term of comptroller.
    Sec. 1207. Office of Thrift Supervision abolished.
    Sec. 1208. Savings provisions.
    Sec. 1209. Regulations and orders.
    Sec. 1210. Coordination of transition activities.
    Sec. 1211. Interim responsibilities of office of the comptroller of the
                                currency and office of thrift supervision.
    Sec. 1212. Employees transferred.
    Sec. 1213. Property transferred.
    Sec. 1214. Funds transferred.
    Sec. 1215. Disposition of affairs.
    Sec. 1216. Continuation of services.
    Sec. 1217. Contracting and leasing authority.
    Sec. 1218. Treatment of savings and loan holding companies.
    Sec. 1219. Practices of certain mutual thrift holding companies
                                preserved.
    Sec. 1220. Implementation plan and reports.
    Sec. 1221. Composition of board of directors of the Federal Deposit
                                Insurance Corporation.
    Sec. 1222. Amendments to section 3.
    Sec. 1223. Amendments to section 7.
    Sec. 1224. Amendments to section 8.
    Sec. 1225. Amendments to section 11.
    Sec. 1226. Amendments to section 13.
    Sec. 1227. Amendments to section 18.
    Sec. 1228. Amendments to section 28.
    Sec. 1229. Amendments to the Alternative Mortgage Transaction Parity
                                Act of 1982.
    Sec. 1230. Amendments to the Bank Holding Company Act of 1956.
    Sec. 1231. Amendments to the Bank Protection Act of 1968.
    Sec. 1232. Amendments to the Bank Service Company Act.
    Sec. 1233. Amendments to the Community Reinvestment Act of 1977.
    Sec. 1234. Amendments to the Depository Institution Management
                                Interlocks Act.
    Sec. 1235. Amendments to the Emergency Homeowners' Relief Act.
    Sec. 1236. Amendments to the Equal Credit Opportunity Act.
    Sec. 1237. Amendments to the Federal Credit Union Act.
    Sec. 1238. Amendments to the Federal Financial Institutions Examination
                                Council Act of 1978.
    Sec. 1239. Amendments to the Federal Home Loan Bank Act.
    Sec. 1240. Amendments to the Federal Reserve Act.
    Sec. 1241. Amendments to the Financial Institutions Reform, Recovery,
                                and Enforcement Act of 1989.
    Sec. 1242. Amendments to the Housing Act of 1948.
    Sec. 1243. Amendments to the Housing and Community Development Act of
                                1992 and the Federal Housing Enterprises
                                Financial Safety and Soundness Act of 1992.
    Sec. 1244. Amendment to the Housing and Urban-Rural Recovery Act of
                                1983.
    Sec. 1245. Amendments to the National Housing Act.
    Sec. 1246. Amendments to the Right to Financial Privacy Act of 1978.
    Sec. 1247. Amendments to the Balanced Budget and Emergency Deficit
                                Control Act of 1985.
    Sec. 1248. Amendments to the Crime Control Act of 1990.
    Sec. 1249. Amendment to the Flood Disaster Protection Act of 1973.
    Sec. 1250. Amendment to the Investment Company Act of 1940.
    Sec. 1251. Amendment to the Neighborhood Reinvestment Corporation Act.
    Sec. 1252. Amendments to the Securities Exchange Act of 1934.
    Sec. 1253. Amendments to title 18, United States Code.
    Sec. 1254. Amendments to title 31, United States Code.
    Sec. 1255. Requirement for Countercyclical Capital Requirements.
    Sec. 1256. Transfer of authority to the Board with respect to savings
                                and loan holding companies.
    Sec. 1257. Effective date.
      Subtitle D--Further Improvements to the Regulation of Bank Holding
                     Companies and Depository Institutions

    Sec. 1301. Treatment of industrial loan companies, savings
                                associations, and certain other companies
                                under the bank holding company act.
    Sec. 1302. Registration of certain companies as bank holding companies.
    Sec. 1303. Reports and examinations of bank holding companies;
                                regulation of functionally regulated
                                subsidiaries.
    Sec. 1304. Requirements for financial holding companies to remain well
                                capitalized and well managed.
    Sec. 1305. Standards for interstate acquisitions.
    Sec. 1306. Enhancing existing restrictions on bank transactions with
                                affiliates.
    Sec. 1307. Eliminating exceptions for transactions with financial
                                subsidiaries.
    Sec. 1308. Lending limits applicable to credit exposure on derivative
                                transactions, repurchase agreements,
                                reverse repurchase agreements, and
                                securities lending and borrowing
                                transactions.
    Sec. 1309. Restriction on conversions of troubled banks and thrifts.
    Sec. 1310. Lending limits to insiders.
    Sec. 1311. Limitations on purchases of assets from insiders.
    Sec. 1312. Rules regarding capital levels of bank holding companies.
    Sec. 1313. Enhancements to factors to be considered in certain
                                acquisitions.
    Sec. 1314. Elimination of elective investment bank holding company
                                framework.
    Sec. 1315. Examination fees for large bank holding companies.
    Sec. 1316. Mutual national banks and Federal mutual bank holding
                                companies authorized.
    Sec. 1317.  Nationwide Deposit Cap for Interstate Acquisitions.
    Sec. 1318. De novo branching into states.
         Subtitle E--Improvements to the Federal Deposit Insurance Fund

    Sec. 1401. Accounting for actual risk to the Deposit Insurance Fund.
    Sec. 1402. Creating a risk-focused assessment base.
    Sec. 1403. Elimination of procyclical assessments.
    Sec. 1404. Enhanced access to information for deposit insurance
                                purposes.
    Sec. 1405. Transition reserve ratio requirements to reflect new
                                assessment base.
      Subtitle F--Improvements to the Asset-Backed Securitization Process

    Sec. 1501. Short title.
    Sec. 1502. Credit risk retention.
    Sec. 1503. Periodic and other reporting under the Securities Exchange
                                Act of 1934 for asset-backed securities.
    Sec. 1504. Representations and warranties in asset-backed offerings.
    Sec. 1505. Exempted transactions under the Securities Act of 1933.
    Sec. 1506. Study on the macroeconomic effects of risk retention
                                requirements.
                   Subtitle G--Enhanced Dissolution Authority

    Sec. 1601. Short title; Purpose.
    Sec. 1602. Definitions.
    Sec. 1603. Systemic risk determination.
    Sec. 1604. Dissolution; stabilization.
    Sec. 1605. Judicial review.
    Sec. 1606. Directors not liable for acquiescing in appointment of
                                receiver.
    Sec. 1607. Termination and exclusion of other actions.
    Sec. 1608. Rulemaking.
    Sec. 1609. Powers and duties of corporation.
    Sec. 1610. Clarification of prohibition regarding concealment of assets
                                from receiver or liquidating agent.
    Sec. 1611. Office of Dissolution.
    Sec. 1612. Miscellaneous provisions.
    Sec. 1613. Amendment to Federal Deposit Insurance Act.
    Sec. 1614. Application of executive compensation limitations.
    Sec. 1615. Study on the effect of safe harbor provisions in insolvency
                                cases.
    Sec. 1616. Treasury study.
    Sec. 1617. Priority of claims in federal deposit insurance act.
      Subtitle H--Additional Improvements for Financial Crisis Management

    Sec. 1701. Additional improvements for financial crisis management.
    Sec. 1702. Certain restrictions related to foreign currency swap
                                authority.
    Sec. 1703. Additional oversight of financial regulatory system.
                           Subtitle I--Miscellaneous

    Sec. 1801. Inclusion of minorities and women; Diversity in agency
                                workforce.
    Sec. 1802. Federal Housing Finance Agency advisory role in FIEC.
                 Subtitle J--International Policy Coordination

    Sec. 1901. International policy coordination.
                 Subtitle K--International Financial Provisions

    Sec. 1951. Access to United States financial market by foreign
                                institutions.
    Sec. 1952. Reducing TARP funds to offset costs.
                    Subtitle L--Securities Holding Companies

    Sec. 1961. Securities holding companies.
    TITLE II--CORPORATE AND FINANCIAL INSTITUTION COMPENSATION FAIRNESS ACT

    Sec. 2001. Short title.
    Sec. 2002. Shareholder vote on executive compensation disclosures.
    Sec. 2003. Compensation committee independence.
    Sec. 2004. Enhanced compensation structure reporting to reduce perverse
                                incentives.
       TITLE III--DERIVATIVE MARKETS TRANSPARENCY AND ACCOUNTABILITY ACT

    Sec. 3001. Short title.
    Sec. 3002. Review of regulatory authority.
    Sec. 3003. International harmonization.
    Sec. 3004. Prohibition against government assistance.
    Sec. 3005. Studies.
    Sec. 3006. Recommendations for changes to insolvency laws.
    Sec. 3007. Abusive swaps.
    Sec. 3008. Authority to prohibit participation in swap activities.
    Sec. 3009. Memorandum.
                     Subtitle A--Regulation of Swap Markets

    Sec. 3101. Definitions.
    Sec. 3102. Jurisdiction.
    Sec. 3103. Clearing and execution transparency.
    Sec. 3104. Public reporting of aggregate swap data.
    Sec. 3105. Swap repositories.
    Sec. 3106. Reporting and recordkeeping.
    Sec. 3107. Registration and regulation of swap dealers and major swap
                                participants.
    Sec. 3108. Conflicts of interest.
    Sec. 3109. Swap execution facilities.
    Sec. 3110. Derivatives transaction execution facilities and exempt
                                boards of trade.
    Sec. 3111. Designated contract markets.
    Sec. 3112. Margin.
    Sec. 3113. Position limits.
    Sec. 3114. Enhanced authority over registered entities.
    Sec. 3115. Foreign boards of trade.
    Sec. 3116. Legal certainty for swaps.
    Sec. 3117. FDICIA amendments.
    Sec. 3118. Enforcement authority.
    Sec. 3119. Enforcement.
    Sec. 3120. Retail commodity transactions.
    Sec. 3121. Large swap trader reporting.
    Sec. 3122. Segregation of assets held as collateral in swap
                                transactions.
    Sec. 3123. Other authority.
    Sec. 3124. Antitrust.
    Sec. 3125. Review of prior actions.
    Sec. 3126. Expedited process.
    Sec. 3127. Effective date.
             Subtitle B--Regulation of Security-Based Swap Markets

    Sec. 3201. Definitions under the Securities Exchange Act of 1934.
    Sec. 3202. Repeal of prohibition on regulation of security-based swaps.
    Sec. 3203. Amendments to the Securities Exchange Act of 1934.
    Sec. 3204. Registration and regulation of swap dealers and major swap
                                participants.
    Sec. 3205. Reporting and recordkeeping.
    Sec. 3206. State gaming and bucket shop laws.
    Sec. 3207. Amendments to the Securities Act of 1933; treatment of
                                security-based swaps.
    Sec. 3208. Other authority.
    Sec. 3209. Jurisdiction.
    Sec. 3210. Effective date.
      Subtitle C--Improved Financial and Commodity Markets Oversight and
                                 Accountability

    Sec. 3301. Elevation of certain Inspectors General to appointment
                                pursuant to section 3 of the Inspector
                                General Act of 1978.
    Sec. 3302. Continuation of provisions relating to personnel.
    Sec. 3303. Corrective responses by heads of certain establishments to
                                deficiencies identified by Inspectors
                                General.
    Sec. 3304. Effective date; transition rule.
    Sec. 3305. Authority of the Commodity Futures Trading Commission to
                                define ``commercial risk'', ``operating
                                risk'', and ``balance sheet risk''.
    Sec. 3306.  Conflicts of interest in clearing organizations.
    Sec. 3307. Definitions of major swap participant and major security-
                                based swap participant.
               TITLE IV--CONSUMER FINANCIAL PROTECTION AGENCY ACT

    Sec. 4001. Short title.
    Sec. 4002. Definitions.
                    Subtitle A--Establishment of the Agency

    Sec. 4101. Establishment of the Consumer Financial Protection Agency.
    Sec. 4102. Director.
    Sec. 4103. Establishment and composition of the commission.
    Sec. 4104. Consumer Financial Protection Oversight Board.
    Sec. 4105. Executive and administrative powers.
    Sec. 4106. Administration.
    Sec. 4107. Consumer Advisory Board.
    Sec. 4108. Coordination.
    Sec. 4109. Reports to the Congress.
    Sec. 4110. GAO small business studies.
    Sec. 4111. Funding; fees and assessments; penalties and fines.
    Sec. 4112. Amendments relating to other administrative provisions.
    Sec. 4113. Oversight by GAO.
    Sec. 4114. Effective date.
             Subtitle B--General Powers of the Director and Agency

    Sec. 4201. Mandate and objectives.
    Sec. 4202. Authorities.
    Sec. 4203. Examination and enforcement for small banks, thrifts, and
                                credit unions.
    Sec. 4204. Simultaneous and coordinated supervisory action.
    Sec. 4205. Limitations on authority of agency and director.
    Sec. 4206. Collection of information; confidentiality regulations.
    Sec. 4207. Monitoring; assessments of significant regulations; reports.
    Sec. 4208. Authority to restrict mandatory predispute arbitration.
    Sec. 4209. Registration and supervision of nondepository covered
                                persons.
    Sec. 4210. Effective date.
                        Subtitle C--Specific Authorities

    Sec. 4301. Prohibiting unfair, deceptive, or abusive acts or practices.
    Sec. 4302. Disclosures.
    Sec. 4303. Sales practices.
    Sec. 4304. Pilot disclosures.
    Sec. 4305. Adopting operational standards to deter unfair, deceptive,
                                or abusive practices.
    Sec. 4306. Duties.
    Sec. 4307. Consumer rights to access information.
    Sec. 4308. Prohibited acts.
    Sec. 4309. Treatment of remittance transfers.
    Sec. 4310. Effective date.
    Sec. 4311. No authority to require the offering of financial products
                                or services.
    Sec. 4312. Appraisal independence requirements.
    Sec. 4313. Overdraft protection notice requirements.
    Sec. 4314. Review, report, and program with respect to exchange
                                facilitators.
    Sec. 4315. Regulation of person-to-person lending.
    Sec. 4316. Treatment of reverse mortgages.
                     Subtitle D--Preservation of State Law

    Sec. 4401. Relation to State law.
    Sec. 4402. Preservation of enforcement powers of States.
    Sec. 4403. Preservation of existing contracts.
    Sec. 4404. State law preemption standards for national banks and
                                subsidiaries clarified.
    Sec. 4405. Visitorial standards.
    Sec. 4406. Clarification of law applicable to nondepository institution
                                subsidiaries.
    Sec. 4407. State law preemption standards for Federal savings
                                associations and subsidiaries clarified.
    Sec. 4408. Visitorial standards.
    Sec. 4409. Clarification of law applicable to nondepository institution
                                subsidiaries.
    Sec. 4410. Effective date.
                         Subtitle E--Enforcement Powers

    Sec. 4501. Definitions.
    Sec. 4502. Investigations and administrative discovery.
    Sec. 4503. Hearings and adjudication proceedings.
    Sec. 4504. Litigation authority.
    Sec. 4505. Relief available.
    Sec. 4506. Referrals for criminal proceedings.
    Sec. 4507. Employee protection.
    Sec. 4508. No private right of action.
    Sec. 4509. Effective date.
         Subtitle F--Transfer of Functions and Personnel; Transitional
                                   Provisions

    Sec. 4601. Transfer of certain functions.
    Sec. 4602. Designated transfer date.
    Sec. 4603. Savings provisions.
    Sec. 4604. Transfer of certain personnel.
    Sec. 4605. Incidental transfers.
    Sec. 4606. Interim authority of the Secretary.
                      Subtitle G--Regulatory Improvements

    Sec. 4701. Collection of deposit account data.
    Sec. 4702. Small business data collection.
    Sec. 4703. Annual financial autopsy.
    Sec. 4704. Reporting of mortgage data by State.
                       Subtitle H--Conforming Amendments

    Sec. 4801. Amendments to the Inspector General Act of 1978.
    Sec. 4802. Amendments to the Privacy Act of 1974.
    Sec. 4803. Amendments to the Alternative Mortgage Transaction Parity
                                Act of 1982.
    Sec. 4804. Amendments to the Consumer Credit Protection Act.
    Sec. 4805. Amendments to the Expedited Funds Availability Act.
    Sec. 4806. Amendments to the Federal Deposit Insurance Act.
    Sec. 4807. Amendments to the Gramm-Leach-Bliley Act.
    Sec. 4808. Amendments to the Home Mortgage Disclosure Act of 1975.
    Sec. 4809. Amendments to division D of the Omnibus Appropriations Act,
                                2009.
    Sec. 4810. Amendments to the Homeowners Protection Act of 1998.
    Sec. 4811. Amendments to the Real Estate Settlement Procedures Act of
                                1974.
    Sec. 4812. Amendments to the Right to Financial Privacy Act of 1978.
    Sec. 4813. Amendments to the Secure and Fair Enforcement for Mortgage
                                Licensing Act of 2008.
    Sec. 4814. Amendments to the Truth in Savings Act.
    Sec. 4815. Amendments to the Telemarketing and Consumer Fraud Abuse and
                                Prevention Act.
    Sec. 4816. Membership in Financial Literacy and Education Commission.
    Sec. 4817. Effective date.
    Sec. 4818. Amendments to Truth in Lending Act.
          Subtitle I--Improvements to the Federal Trade Commission Act

    Sec. 4901. Amendments to the Federal Trade Commission Act.
                           Subtitle J--Miscellaneous

    Sec. 4951. Requirements for State-licensed loan originators.
                            TITLE V--CAPITAL MARKETS

         Subtitle A--Private Fund Investment Advisers Registration Act

    Sec. 5001. Short title.
    Sec. 5002. Definitions.
    Sec. 5003. Elimination of private adviser exemption; Limited exemption
                                for foreign private fund advisers; Limited
                                intrastate exemption.
    Sec. 5004. Collection of data.
    Sec. 5005. Elimination of disclosure provision.
    Sec. 5006. Exemption of and reporting by venture capital fund advisers.
    Sec. 5007. Exemption of and reporting by certain private fund advisers.
    Sec. 5008. Clarification of rulemaking authority.
    Sec. 5009. GAO study.
    Sec. 5010. Effective date; Transition period.
    Sec. 5011. Qualified client standard.
       Subtitle B--Accountability and Transparency in Rating Agencies Act

    Sec. 6001. Short title.
    Sec. 6002. Enhanced regulation of nationally recognized statistical
                                rating organizations.
    Sec. 6003. Standards for private actions.
    Sec. 6004. Issuer disclosure of preliminary ratings.
    Sec. 6005. Change to designation.
    Sec. 6006. Timeline for regulations.
    Sec. 6007. Elimination of exemption from fair disclosure rule.
    Sec. 6008. Advisory Board.
    Sec. 6009. Removal of statutory references to credit ratings.
    Sec. 6010. Review of reliance on ratings.
    Sec. 6011. Publication of rating histories on the EDGAR system.
    Sec. 6012. Effect of Rule 436(g).
    Sec. 6013. Studies.
                      Subtitle C--Investor Protection Act

    Sec. 7001. Short title.
                               Part 1--Disclosure

    Sec. 7101. Investor Advisory Committee established.
    Sec. 7102. Clarification of the Commission's authority to engage in
                                consumer testing.
    Sec. 7103. Establishment of a fiduciary duty for brokers, dealers, and
                                investment advisers, and harmonization of
                                regulation.
    Sec. 7104. Commission study and rulemaking on disclosure to retail
                                customers before purchase of products or
                                services.
    Sec. 7105. Beneficial ownership and short-swing profit reporting.
    Sec. 7106. Revision to recordkeeping rules.
    Sec. 7107. Study on enhancing investment adviser examinations.
    Sec. 7108. GAO study of financial planning.
                        Part 2--Enforcement and Remedies

    Sec. 7201. Authority to restrict mandatory pre-dispute arbitration.
    Sec. 7202. Comptroller General study to review securities arbitration
                                system.
    Sec. 7203. Whistleblower protection.
    Sec. 7204. Conforming amendments for whistleblower protection.
    Sec. 7205. Implementation and transition provisions for whistleblower
                                protections.
    Sec. 7206. Collateral bars.
    Sec. 7207. Aiding and abetting authority under the Securities Act and
                                the Investment Company Act.
    Sec. 7208. Authority to impose penalties for aiding and abetting
                                violations of the Investment Advisers Act.
    Sec. 7209. Deadline for completing examinations, inspections and
                                enforcement actions.
    Sec. 7210. Nationwide service of subpoenas.
    Sec. 7211. Authority to impose civil penalties in cease and desist
                                proceedings.
    Sec. 7212. Formerly associated persons.
    Sec. 7213. Sharing privileged information with other authorities.
    Sec. 7214. Expanded access to grand jury information.
    Sec. 7215. Aiding and abetting standard of knowledge satisfied by
                                recklessness.
    Sec. 7216. Extraterritorial jurisdiction of the antifraud provisions of
                                the Federal securities laws.
    Sec. 7217. Fidelity bonding.
    Sec. 7218. Enhanced SEC authority to conduct surveillance and risk
                                assessment.
    Sec. 7219. Investment company examinations.
    Sec. 7220. Control person liability under the Securities Exchange Act.
    Sec. 7221. Enhanced application of anti-fraud provisions.
    Sec. 7222. SEC authority to issue rules on proxy access.
                  Part 3--Commission Funding and Organization

    Sec. 7301. Authorization of appropriations.
    Sec. 7302. Investment adviser regulation funding.
    Sec. 7303. Amendments to section 31 of the Securities Exchange Act of
                                1934.
    Sec. 7304. Commission organizational study and reform.
    Sec. 7305. Capital Markets Safety Board.
    Sec. 7306. Report on implementation of ``post-Madoff reforms''.
    Sec. 7307. Joint Advisory Committee.
                     Part 4--Additional Commission Reforms

    Sec. 7401. Regulation of securities lending.
    Sec. 7402. Lost and stolen securities.
    Sec. 7403. Fingerprinting.
    Sec. 7404. Equal treatment of self-regulatory organization rules.
    Sec. 7405. Clarification that section 205 of the Investment Advisers
                                Act of 1940 does not apply to State-
                                registered advisers.
    Sec. 7406. Conforming amendments for the repeal of the Public Utility
                                Holding Company Act of 1935.
    Sec. 7407. Promoting transparency in financial reporting.
    Sec. 7408. Unlawful margin lending.
    Sec. 7409. Protecting confidentiality of materials submitted to the
                                Commission.
    Sec. 7410. Technical corrections.
    Sec. 7411. Municipal securities.
    Sec. 7412. Interested person definition.
    Sec. 7413. Rulemaking authority to protect redeeming investors.
    Sec. 7414. Study on SEC revolving door.
    Sec. 7415. Study on internal control evaluation and reporting cost
                                burdens on smaller issuers.
    Sec. 7416. Analysis of rule regarding smaller reporting companies.
    Sec. 7417. Financial Reporting Forum.
    Sec. 7418. Investment advisers subject to State authorities.
    Sec. 7419. Custodial requirements.
    Sec. 7420. Ombudsman.
    Sec. 7421. Notice to missing security holders.
    Sec. 7422. Short sale reforms.
    Sec. 7423. Streamlining of SEC filing procedures.
             Part 5--Securities Investor Protection Act Amendments

    Sec. 7501. Increasing the minimum assessment paid by SIPC members.
    Sec. 7502. Increasing the borrowing limit on treasury loans.
    Sec. 7503. Increasing the cash limit of protection.
    Sec. 7504. SIPC as trustee in SIPA liquidation proceedings.
    Sec. 7505. Insiders ineligible for SIPC advances.
    Sec. 7506. Eligibility for direct payment procedure.
    Sec. 7507. Increasing the fine for prohibited acts under SIPA.
    Sec. 7508. Penalty for misrepresentation of SIPC membership or
                                protection.
    Sec. 7509. Futures held in a portfolio margin securities account
                                protection.
    Sec. 7510. Study and report on the feasibility of risk-based
                                assessments for SIPC members.
                     Part 6--Sarbanes-Oxley Act Amendments

    Sec. 7601. Public Company Accounting Oversight Board oversight of
                                auditors of brokers and dealers.
    Sec. 7602. Foreign regulatory information sharing.
    Sec. 7603. Expansion of audit information to be produced and exchanged
                                with foreign counterparts.
    Sec. 7604. Conforming amendment related to registration.
    Sec. 7605. Fair fund amendments.
    Sec. 7606. Exemption for nonaccelerated filers.
    Sec. 7607. Whistleblower protection against retaliation by a subsidiary
                                of an issuer.
    Sec. 7608. Congressional access to information.
    Sec. 7609. Creation of ombudsman for the PCAOB.
    Sec. 7610. Auditing Oversight Board.
                      Part 7--Senior Investment Protection

    Sec. 7701. Findings.
    Sec. 7702. Definitions.
    Sec. 7703. Grants to States for enhanced protection of seniors from
                                being misled by false designations.
    Sec. 7704. Applications.
    Sec. 7705. Length of participation.
    Sec. 7706. Authorization of appropriations.
              Part 8--Registration of Municipal Financial Advisors

    Sec. 7801. Municipal financial adviser registration requirement.
    Sec. 7802. Conforming amendments.
    Sec. 7803. Effective dates.
                       TITLE VI--FEDERAL INSURANCE OFFICE

    Sec. 8001. Short title.
    Sec. 8002. Federal Insurance Office established.
    Sec. 8003. Report on global reinsurance market.
    Sec. 8004. Study on modernization and improvement of insurance
                                regulation in the United States.
    Sec. 8005. Sense of Congress regarding simplified mortgage contract
                                summaries.
           TITLE VII--MORTGAGE REFORM AND ANTI-PREDATORY LENDING ACT

    Sec. 9000. Short title; designation as enumerated consumer law.
          Subtitle A--Residential Mortgage Loan Origination Standards

    Sec. 9001. Definitions.
    Sec. 9002. Residential mortgage loan origination.
    Sec. 9003. Prohibition on steering incentives.
    Sec. 9004. Liability.
    Sec. 9005. Regulations.
    Sec. 9006. Study of shared appreciation mortgages.
                  Subtitle B--Minimum Standards For Mortgages

    Sec. 9101. Ability to repay.
    Sec. 9102. Net tangible benefit for refinancing of residential mortgage
                                loans.
    Sec. 9103. Safe harbor and rebuttable presumption.
    Sec. 9104. Liability.
    Sec. 9105. Defense to foreclosure.
    Sec. 9106. Additional standards and requirements.
    Sec. 9107. Rule of construction.
    Sec. 9108. Effect on State laws.
    Sec. 9109. Regulations.
    Sec. 9110. Amendments to civil liability provisions.
    Sec. 9111. Lender rights in the context of borrower deception.
    Sec. 9112. Six-month notice required before reset of hybrid adjustable
                                rate mortgages.
    Sec. 9113. Required disclosures.
    Sec. 9114. Disclosures required in monthly statements for residential
                                mortgage loans.
    Sec. 9115. Legal assistance for foreclosure-related issues.
    Sec. 9116. Effective date.
    Sec. 9117. Report by the GAO.
    Sec. 9118. State Attorney General enforcement authority.
                        Subtitle C--High-Cost Mortgages

    Sec. 9201. Definitions relating to high-cost mortgages.
    Sec. 9202. Amendments to existing requirements for certain mortgages.
    Sec. 9203. Additional requirements for certain mortgages.
    Sec. 9204. Regulations.
    Sec. 9205. Effective date.
                    Subtitle D--Office of Housing Counseling

    Sec. 9301. Short title.
    Sec. 9302. Establishment of Office of Housing Counseling.
    Sec. 9303. Counseling procedures.
    Sec. 9304. Grants for housing counseling assistance.
    Sec. 9305. Requirements to use HUD-certified counselors under HUD
                                programs.
    Sec. 9306. Study of defaults and foreclosures.
    Sec. 9307. Default and foreclosure database.
    Sec. 9308. Definitions for counseling-related programs.
    Sec. 9309. Accountability and transparency for grant recipients.
    Sec. 9310. Updating and simplification of mortgage information booklet.
    Sec. 9311. Home inspection counseling.
    Sec. 9312. Warnings to homeowners of foreclosure rescue scams.
                         Subtitle E--Mortgage Servicing

    Sec. 9401. Escrow and impound accounts relating to certain consumer
                                credit transactions.
    Sec. 9402. Disclosure notice required for consumers who waive escrow
                                services.
    Sec. 9403. Real Estate Settlement Procedures Act of 1974 amendments.
    Sec. 9404. Truth in Lending Act amendments.
    Sec. 9405. Escrows included in repayment analysis.
                        Subtitle F--Appraisal Activities

    Sec. 9501. Property appraisal requirements.
    Sec. 9502. Unfair and deceptive practices and acts relating to certain
                                consumer credit transactions.
    Sec. 9503. Amendments relating to Appraisal Subcommittee of FIEC,
                                Appraiser Independence Monitoring, Approved
                                Appraiser Education, Appraisal Management
                                Companies, Appraiser Complaint Hotline,
                                Automated Valuation Models, and Broker
                                Price Opinions.
    Sec. 9504. Study required on improvements in appraisal process and
                                compliance programs.
    Sec. 9505. Equal Credit Opportunity Act amendment.
    Sec. 9506. Real Estate Settlement Procedures Act of 1974 amendment
                                relating to certain appraisal fees.
     Subtitle G--Sense of Congress Regarding the Importance of Government
                          Sponsored Enterprises Reform

    Sec. 9601. Sense of Congress regarding the importance of Government-
                                sponsored enterprises reform to enhance the
                                protection, limitation, and regulation of
                                the terms of residential mortgage credit.
                    Subtitle H--Reports and Data Collection

    Sec. 9701. GAO study report on government efforts to combat mortgage
                                foreclosure rescue scams and loan
                                modification fraud.
    Sec. 9702. Reporting of mortgage data by State.
                  Subtitle I--Multifamily Mortgage Resolution

    Sec. 9801. Multifamily mortgage resolution program.
        Subtitle J--Study of Effect of Drywall Presence on Foreclosures

    Sec. 9901. Study of effect of drywall presence on foreclosures.
                Subtitle K--Home Affordable Modification Program

    Sec. 9911. Home Affordable Modification Program guidelines.
                   Subtitle L--Making Home Affordable Program

    Sec. 9921. Public availability of information.
            TITLE VIII--FORECLOSURE AVOIDANCE AND AFFORDABLE HOUSING

    Sec. 10001. Emergency mortgage relief.
    Sec. 10002. Additional assistance for Neighborhood Stabilization
                                Program.
                TITLE IX--NONADMITTED AND REINSURANCE REFORM ACT

    Sec. 10051. Short title.
    Sec. 10052. Effective date.
                       Subtitle A--Nonadmitted Insurance

    Sec. 10101. Reporting, payment, and allocation of premium taxes.
    Sec. 10102. Regulation of nonadmitted insurance by insured's home
                                state.
    Sec. 10103. Participation in national producer database.
    Sec. 10104. Uniform standards for surplus lines eligibility.
    Sec. 10105. Streamlined application for commercial purchasers.
    Sec. 10106. GAO study of nonadmitted insurance market.
    Sec. 10107. Definitions.
                            Subtitle B--Reinsurance

    Sec. 10201. Regulation of credit for reinsurance and reinsurance
                                agreements.
    Sec. 10202. Regulation of reinsurer solvency.
    Sec. 10203. Definitions.
                        Subtitle C--Rule of Construction

    Sec. 10301. Rule of construction.
    Sec. 10302. Severability.
           TITLE X--INTEREST-BEARING TRANSACTION ACCOUNTS AUTHORIZED

    Sec. 11001. Interest-bearing transaction accounts authorized.

                  TITLE I--FINANCIAL STABILITY IMPROVEMENT ACT

    SEC. 1000. SHORT TITLE; DEFINITIONS.

        (a) Short Title.--This title may be cited as the ``Financial
    Stability Improvement Act of 2009''.
        (b) Definitions.--For purposes of this title, the following
    definitions shall apply:
                (1) The term ``Board'' means the Board of Governors of the
            Federal Reserve System.
                (2) The term ``Council'' means the Financial Services
            Oversight Council established under section 1001.
                (3) The term ``Federal financial regulatory agency'' means
            any agency that has a voting member of the Council as set forth
            in section 1001(b)(1).
                (4) The term ``financial company'' means a company or other
            entity--
                        (A) that is--
                                (i) incorporated or organized under the
                            laws of the United States or any State,
                            territory, or possession of the United States,
                            the District of Columbia, Commonwealth of
                            Puerto Rico, Commonwealth of Northern Mariana
                            Islands, Guam, American Samoa, or the United
                            States Virgin Islands; or
                                (ii) a company incorporated in or organized
                            in a country other than the United States that
                            has significant operations in the United States
                            (hereafter in this title referred to as a
                            ``foreign financial parent'') after through--
                                        (I) a Federal or State branch or
                                    agency of a foreign bank as such terms
                                    are defined in the International
                                    Banking Act of 1978 (12 U.S.C. 3101 et
                                    seq.); or
                                        (II) a United States affiliate or
                                    other United States operating entity;
                        (B) that is, in whole or in part, directly or
                    indirectly, engaged in financial activities; and
                        (C) that is not a Farm Credit System institution
                    chartered under and subject to the provisions of the
                    Farm Credit Act of 1971, as amended (12 U.S.C. 2001 et
                    seq.).
                (5) Financial holding company subject to stricter
            standards.--The term ``financial holding company subject to
            stricter standards'' means--
                        (A) a financial company that has been subjected to
                    stricter prudential standards under subtitle B; or
                        (B) in the case of a financial company described in
                    subparagraph (A) that is required to establish an
                    intermediate holding company under section 6 of the
                    Bank Holding Company Act, the section 6 holding company
                    through which the financial company is required to
                    conduct its financial activities.
                (6) The term ``primary financial regulatory agency'' means
            the following:
                        (A) The Comptroller of the Currency, with respect
                    to any national bank, any Federal branch or Federal
                    agency of a foreign bank, and, after the date on which
                    the functions of the Office of Thrift Supervision and
                    the Director of the Office of Thrift Supervision are
                    transferred under subtitle C, a Federal savings
                    association.
                        (B) The Board, with respect to--
                                (i) any State member bank;
                                (ii) any bank holding company and any
                            subsidiary of such company (as such terms are
                            defined in the Bank Holding Company Act), other
                            than a subsidiary that is described in any
                            other subparagraph of this paragraph to the
                            extent that the subsidiary is engaged in an
                            activity described in such subparagraph;
                                (iii) any financial holding company subject
                            to stricter standards and any subsidiary (as
                            such term is defined in the Bank Holding
                            Company Act) of such company, other than a
                            subsidiary that is described in any other
                            subparagraph of this paragraph to the extent
                            that the subsidiary is engaged in an activity
                            described in such subparagraph;
                                (iv) after the date on which the functions
                            of the Office of Thrift Supervision are
                            transferred under subtitle C, any savings and
                            loan holding company (as defined in section
                            10(a)(1)(D) of the Home Owners' Loan Act) and
                            any subsidiary (as such term is defined in the
                            Bank Holding Company Act of 1956) of such
                            company, other than a subsidiary that is
                            described in any other subparagraph of this
                            paragraph, to the extent that the subsidiary is
                            engaged in an activity described in such
                            subparagraph;
                                (v) any organization organized and operated
                            under section 25 or 25A of the Federal Reserve
                            Act (12 U.S.C. 601 et seq. or 611 et seq.); and
                                (vi) any foreign bank or company that is
                            treated as a bank holding company under
                            subsection (a) of section 8 of the
                            International Banking Act of 1978 and any
                            subsidiary (other than a bank or other
                            subsidiary that is described in any other
                            subparagraph of this paragraph) of any such
                            foreign bank or company.
                        (C) The Federal Deposit Insurance Corporation, with
                    respect to any State nonmember bank, any insured State
                    branch of a foreign bank (as such terms are defined in
                    section 3 of the Federal Deposit Insurance Act), and,
                    after the date on which the functions of the Office of
                    Thrift Supervision are transferred under subtitle C,
                    any State savings association.
                        (D) The National Credit Union Administration, with
                    respect to any insured credit union under the Federal
                    Credit Union Act (12 U.S.C. 1751 et seq.).
                        (E) The Securities and Exchange Commission, with
                    respect to--
                                (i) any broker or dealer registered with
                            the Securities and Exchange Commission under
                            the Securities Exchange Act of 1934 (15 U.S.C.
                            78a et seq.);
                                (ii) any investment company registered with
                            the Securities and Exchange Commission under
                            the Investment Company Act of 1940 (15 U.S.C.
                            80a-1 et seq.);
                                (iii) any investment adviser registered
                            with the Securities and Exchange Commission
                            under the Investment Advisers Act of 1940 (15
                            U.S.C. 80b-1 et seq.) with respect to the
                            investment advisory activities of such company
                            and activities incidental to such advisory
                            activities;
                                (iv) any clearing agency (as defined in
                            section 3(a)(23) of the Securities Exchange Act
                            of 1934);
                                (v) a securities-based swap execution
                            facility that is registered with the Securities
                            and Exchange Commission under the Securities
                            Exchange Act of 1934 (15 U.S.C. 78a et seq.);
                                (vi) any exchange registered as a national
                            securities exchange with the Securities and
                            Exchange Commission under the Securities
                            Exchange Act of 1934 (15 U.S.C. 78a et seq.);
                                (vii) any credit rating agency registered
                            with the Securities and Exchange Commission
                            under the Securities Exchange Act of 1934 (15
                            U.S.C. 78a et seq.);
                                (viii) any securities information processor
                            registered with the Securities and Exchange
                            Commission under the Securities Exchange Act of
                            1934 (15 U.S.C. 78a et seq.); and
                                (ix) any transfer agent registered with the
                            Securities and Exchange Commission under the
                            Securities Exchange Act of 1934 (15 U.S.C. 78a
                            et seq.).
                        (F) The Commodity Futures Trading Commission, with
                    respect to--
                                (i) any futures commission merchant, any
                            commodity trading adviser, any retail foreign
                            exchange dealer, and any commodity pool
                            operator registered with the Commodity Futures
                            Trading Commission under the Commodity Exchange
                            Act (7 U.S.C. 1 et seq.) with respect to the
                            commodities activities of such entity and
                            activities incidental to such commodities
                            activities; and
                                (ii) any derivatives clearing organization,
                            designated contract market, or swap execution
                            facility (as defined in the Commodity Exchange
                            Act).
                        (G) The Federal Housing Finance Agency with respect
                    to the Federal National Mortgage Association, the
                    Federal Home Loan Mortgage Corporation, and the Federal
                    home loan banks.
                        (H) The State insurance authority of the State in
                    which an insurance company is domiciled, with respect
                    to the insurance activities and activities incidental
                    to such insurance activities of an insurance company
                    that is subject to supervision by the State insurance
                    authority under State insurance law.
                        (I) The Office of Thrift Supervision, with respect
                    to any Federal savings association, State savings
                    association, or savings and loan holding company, until
                    the date on which the functions of the Office of Thrift
                    Supervision are transferred under subtitle C.
                (7) Terms defined in other laws.--
                        (A) Affiliate.--The term ``affiliate'' has the
                    meaning given such term in section 2(k) of the Bank
                    Holding Company Act of 1956.
                        (B) State member bank, state nonmember bank.--The
                    terms ``State member bank'' and ``State nonmember
                    bank'' have the same meanings as in subsections (d)(2)
                    and (e)(2), respectively, of section 3 of the Federal
                    Deposit Insurance Act.

    SEC. 1000A. RESTRICTIONS ON THE FEDERAL RESERVE SYSTEM PENDING AUDIT
                  REPORT.

        (a) In General.--Notwithstanding any other provision of law, the
    Comptroller General of the United States shall perform an audit of all
    actions taken by the Board of Governors of the Federal Reserve System
    and the Federal reserve banks during the current economic crisis
    pursuant to the authority granted under section 13(c) of the Federal
    Reserve Act. Such audit shall be completed as expeditiously as
    possible, but no later than 2 years, after the date of the enactment of
    the Financial Stability Improvement Act of 2009.
        (b) Report.--
                (1) Required.--Not later than the end of the 90-day period
            beginning on the date the audit referred to in subsection (a)
            is completed, the Comptroller General of the United States
            shall submit a report to the Congress, and make such report
            available to the public.
                (2) Contents.--The report under paragraph (1) shall include
            a detailed description of the findings and conclusion of the
            Comptroller General with respect to the audit that is the
            subject of the report, together with such recommendations for
            legislative or administrative action as the Comptroller General
            may determine to be appropriate.

              Subtitle A--The Financial Services Oversight Council

    SEC. 1001. FINANCIAL SERVICES OVERSIGHT COUNCIL ESTABLISHED.

        (a) Establishment.--Immediately upon enactment of this title, there
    is established a Financial Services Oversight Council.
        (b) Membership.--The Council shall consist of the following:
                (1) Voting members.--Voting members, who shall each have
            one vote on the Council, as follows:
                        (A) The Secretary of the Treasury, who shall serve
                    as the Chairman of the Council.
                        (B) The Chairman of the Board of Governors of the
                    Federal Reserve System.
                        (C) The Comptroller of the Currency.
                        (D) The Director of the Office of Thrift
                    Supervision, until the functions of the Director of the
                    Office of Thrift Supervision are transferred pursuant
                    to subtitle C.
                        (E) The Chairman of the Securities and Exchange
                    Commission.
                        (F) The Chairman of the Commodity Futures Trading
                    Commission.
                        (G) The Chairperson of the Federal Deposit
                    Insurance Corporation.
                        (H) The Director of the Federal Housing Finance
                    Agency.
                        (I) The Chairman of the National Credit Union
                    Administration.
                        (J) The head of the Consumer Financial Protection
                    Agency.
                (2) Nonvoting members.--Nonvoting members, who shall serve
            in an advisory capacity and shall not be excluded from any of
            the Council's proceedings, meetings, discussions, and
            deliberations:
                        (A) The Director of the Federal Insurance Office.
                        (B) A State insurance commissioner, to be
                    designated by a selection process determined by the
                    State insurance commissioners, provided that the term
                    for which a State insurance commissioner may serve
                    shall last no more than the 2-year period beginning on
                    the date that the commissioner is selected.
                        (C) A State banking supervisor, to be designated by
                    a selection process determined by the State bank
                    supervisors, provided that the term for which a State
                    banking supervisor may serve shall last no more than
                    the 2-year period beginning on the date that the
                    supervisor is selected.
                        (D) A State securities commissioner (or an officer
                    performing like functions), to be designated by a
                    selection process determined by such State securities
                    commissioners, provided that the term for which a State
                    securities commissioner may serve shall last no more
                    than the 2-year period beginning on the date that the
                    commissioner is selected.
        (c) Duties.--The Council shall have the following duties:
                (1) To advise the Congress on financial domestic and
            international regulatory developments, including insurance and
            accounting developments, and make recommendations that will
            enhance the integrity, efficiency, competitiveness, and
            stability of the United States financial markets.
                (2) To monitor the financial services marketplace to
            identify potential threats to the stability of the United
            States financial system.
                (3) To identify potential threats to the stability of the
            United States financial system that do not arise out of the
            financial services marketplace.
                (4) To develop strategies (and conduct exercises in
            furtherance of those strategies) to prepare for potential
            threats identified under paragraphs (2) and (3). In doing so,
            the Council shall collaborate with participants in the
            financial sector, financial sector coordinating councils, and
            any other parties the Council determines to be appropriate.
                (5) To subject financial companies and financial activities
            to stricter prudential standards in order to promote financial
            stability and mitigate systemic risk in accordance with
            subtitle B.
                (6) To issue formal recommendations that a Council member
            agency adopt stricter prudential standards for firms it
            regulates to mitigate systemic risk in accordance with subtitle
            B of this title.
                (7) To monitor international regulatory developments,
            including both insurance and accounting developments, and to
            identify those developments that may conflict with the policies
            of the United States or place United States financial services
            firms or United States financial markets at a competitive
            disadvantage.
                (8) To facilitate information sharing and coordination
            among the members of the Council regarding financial services
            policy development, rulemakings, examinations, reporting
            requirements, and enforcement actions.
                (9) To provide a forum for discussion and analysis of
            emerging market developments and financial regulatory issues
            among its members.
                (10) At the request of an agency that is a Council member,
            to resolve a jurisdictional dispute between that agency and
            another agency that is a Council member in accordance with
            section 1002.
                (11) To review and submit comments to the Securities and
            Exchange Commission and any standards setting body with respect
            to an existing or proposed accounting principle, standard, or
            procedure.

    SEC. 1002. RESOLUTION OF DISPUTES AMONG FEDERAL FINANCIAL REGULATORY
                  AGENCIES.

        (a) Request for Dispute Resolution.--The Council shall resolve a
    dispute among 2 or more Federal financial regulatory agencies if--
                (1) a Federal financial regulatory agency has a dispute
            with another Federal financial regulatory agency about the
            agencies' respective jurisdiction over a particular financial
            company or financial activity or product (excluding matters for
            which a dispute mechanism specifically has been provided under
            section 4204 or title III);
                (2) the disputing agencies cannot, after a demonstrated
            good faith effort, resolve the dispute among themselves; and
                (3) any of the Federal financial regulatory agencies
            involved in the dispute--
                        (A) provides all other disputants prior notice of
                    its intent to request dispute resolution by the
                    Council; and
                        (B) requests in writing, no earlier than 14 days
                    after providing the notice described in paragraph (A),
                    that the Council resolve the dispute.
        (b) Council Decision.--The Council shall decide the dispute--
                (1) within a reasonable time after receiving the dispute
            resolution request;
                (2) after consideration of relevant information provided by
            each party to the dispute; and
                (3) by agreeing with 1 of the disputants regarding the
            entirety of the matter or by determining a compromise position.
        (c) Form and Binding Effect.--A Council decision under this section
    shall be in writing and include an explanation and shall be binding on
    all Federal financial regulatory agencies that are parties to the
    dispute.

    SEC. 1003. TECHNICAL AND PROFESSIONAL ADVISORY COMMITTEES.

        The Council is authorized to appoint--
                (1) subsidiary working groups composed of Council members
            and their staff, Council staff, or a combination; and
                (2) such temporary special advisory, technical, or
            professional committees as may be useful in carrying out its
            functions, which may be composed of Council members and their
            staff, other persons, or a combination.

    SEC. 1004. FINANCIAL SERVICES OVERSIGHT COUNCIL MEETINGS AND COUNCIL
                  GOVERNANCE.

        (a) Meetings.--The Council shall meet as frequently as the Chairman
    deems necessary, but not less than quarterly.
        (b) Voting.--Unless otherwise provided, the Council shall make all
    decisions the Council is required or authorized to make by a majority
    of the total voting membership of the Council under section 1001(b)(1).

    SEC. 1005. COUNCIL STAFF AND FUNDING.

        (a) Voting Members of the Council.--The Secretary of the Treasury
    shall and all other voting members of the Council may, with the
    approval of the Council--
                (1) detail permanent staff from the Department of the
            Treasury to provide the Council (and any temporary special
            advisory, technical, or professional committees appointed by
            the Council) with professional and expert support; and
                (2) provide such other services and facilities necessary
            for the performance of the Council's functions and fulfillment
            of the duties and mission of the Council.
        (b) Other Departments and Agencies.--In addition to the assistance
    prescribed in subsection (a), departments and agencies of the United
    States may, with the approval of the Council--
                (1) detail department or agency staff on a temporary basis
            to provide additional support to the Council (and any special
            advisory, technical, or professional committees appointed by
            the Council); and
                (2) provide such services, and facilities as the other
            departments or agencies may determine advisable.
        (c) Staff Status; Council Funding.--
                (1) Status.--Staff detailed to the Council by the Secretary
            of the Treasury and other United States departments or agencies
            shall--
                        (A) report to and be subject to oversight by the
                    Council during their assignment to the Council; and
                        (B) be compensated by the department of agency from
                    which the staff was detailed.
                (2) Funding.--The administrative expense of the Council
            shall be paid by the departments and agencies represented by
            voting members of the Council on an equal basis.

    SEC. 1006. REPORTS TO THE CONGRESS.

        (a) In General.--Semiannually the Council shall submit a report to
    the Committee on Ways and Means, the Committee on Agriculture, and the
    Committee on Financial Services of the House of Representatives and the
    Committee on Finance, the Committee on Agriculture, and the Committee
    on Banking, Housing, and Urban Affairs of the Senate, and the
    Comptroller General of the United States that--
                (1) describes significant financial and regulatory
            developments, including insurance and accounting regulations
            and standards, and assesses the impact of those developments on
            the stability of the financial system;
                (2) recommends actions that will improve financial
            stability;
                (3) details the size, scale, scope, concentration,
            activities, and interconnectedness of the 50 largest financial
            institutions, by total assets, in the United States;
                (4) describes strategies developed by the Council to
            respond to potential threats to the stability of the United
            States financial system and the outcome of exercises conducted
            in furtherance of those strategies;
                (5) describes the nature and scope of any company or
            activities identified under subtitle B and steps taken to
            address them; and
                (6) describes any dispute resolutions undertaken under
            section 1002 and the result of such resolutions.
        (b) Evaluation of Annual Report by GAO.--Not later than 120 days
    after receiving the report required by subsection (a), the Comptroller
    General of the United States shall submit an evaluation of such report
    to the Committee on Ways and Means, the Committee on Agriculture, and
    the Committee on Financial Services of the House of Representatives and
    the Committee on Finance, the Committee on Agriculture, and the
    Committee on Banking, Housing, and Urban Affairs of the Senate.
        (c) Statements by Voting Members of the Council.--At the time each
    report is submitted under subsection (a), each voting member of the
    Council shall--
                (1) if such member believes that the Council, the
            Government, and the private sector are taking all reasonable
            steps to ensure financial stability and to prevent systemic
            risk that would negatively affect the economy, submit a signed
            statement to the Committee on Ways and Means, the Committee on
            Agriculture, and the Committee on Financial Services of the
            House of Representatives and the Committee on Finance, the
            Committee on Agriculture, and the Committee on Banking,
            Housing, and Urban Affairs of the Senate stating such belief;
            or
                (2) if such member does not believe that all reasonable
            steps described under paragraph (1) are being taken, submit a
            signed statement to the Committee on Ways and Means, the
            Committee on Agriculture, and the Committee on Financial
            Services of the House of Representatives and the Committee on
            Finance, the Committee on Agriculture, and the Committee on
            Banking, Housing, and Urban Affairs of the Senate stating what
            actions such member believes need to be taken in order to
            ensure that all reasonable steps described under paragraph (1)
            are taken.
        (d) Testimony by the Chairman.--The Chairman of the Council shall
    appear before the Committee on Financial Services of the House of
    Representatives and the Committee on Banking, Housing, and Urban
    Affairs of the Senate at a semi-annual hearing, after the report is
    submitted under subsection (a)--
                (1) to discuss the efforts, activities, objectives, and
            plans of the Council; and
                (2) to discuss and answer questions concerning such report.
        (e) Study of Effects Consumer Financial Protection Agency
    Regulations and Standards.--
                (1) Study required.--The Council shall conduct a study of
            the effects that regulations and standards of the Consumer
            Financial Protection Agency will have on all covered persons
            (as such term is defined in section 4002(9)), including
            nondepository institution covered persons. The Director of the
            Consumer Financial Protection Agency shall take the findings of
            the study into account when issuing regulations.
                (2) Value of nonbank products.--The study shall include an
            evaluation and assessment of the appropriateness of using
            ``APR'' as a true measure of the value of all nonbank products.
                (3) Submission.--Not later than 240 days after the date of
            the enactment of this Act, the Director of the Consumer
            Financial Protection Agency shall submit the study to Congress
            and include any recommendations the Director may have for
            changes in law and regulations to improve consumer protections
            and maintain access to credit.

    SEC. 1007. APPLICABILITY OF CERTAIN FEDERAL LAWS.

        (a) The Federal Advisory Committee Act shall not apply to the
    Financial Services Oversight Council, or any special advisory,
    technical, or professional committees appointed by the Council (except
    that, if an advisory, technical, or professional committee has one or
    more members who are not employees of or affiliated with the United
    States government, the Council shall publish a list of the names of the
    members of such committee).
        (b) The Council shall not be deemed an ``agency'' for purposes of
    any State or Federal law.

    SEC. 1008. OVERSIGHT BY GAO.

        (a) Authority to Audit.--The Comptroller General of the United
    States may audit the activities and financial transactions of--
                (1) the Council; and
                (2) any person or entity acting on behalf of or under the
            authority of the Council, to the extent such activities and
            financial transactions relate to such person's or entity's work
            for the Council.
        (b) Access to Information.--
                (1) In general.--Notwithstanding any other provision of
            law, the Comptroller General of the United States shall have
            access, upon request and at such reasonable time and in such
            reasonable form as the Comptroller General may request, to--
                        (A) any records or other information under the
                    control of or used by the Council;
                        (B) any records or other information under the
                    control of a person or entity acting on behalf of or
                    under the authority of the Council, to the extent such
                    records or other information is relevant to an audit
                    under subsection (a); and
                        (C) the officers, directors, employees, financial
                    advisors, staff, working groups, and agents and
                    representatives of the Council (as related to the
                    agent's or representative's activities on behalf of the
                    Council) at such reasonable times as the Comptroller
                    General may request.
                (2) Certain information specified.--Access under paragraph
            (1) includes access to--
                        (A) information provided to the Council by its
                    voting and nonvoting members under section 1101; and
                        (B) the identity of each financial holding company
                    subject to stricter standards.
                (3) Copies.--Comptroller General may make and retain copies
            of such books, accounts, and other records access to which is
            granted under this provision as the Comptroller General
            considers appropriate.
        (c) Periodic Evaluations.--The Comptroller General of the United
    States shall periodically evaluate the processes and activities of the
    Council and the extent to which the Council is fulfilling its duties
    under this title. The Comptroller General shall submit to the Committee
    on Financial Services of the House of Representatives and the Committee
    on Banking, Housing, and Urban Affairs of the Senate a report on the
    results of each such evaluation.

       Subtitle B--Prudential Regulation of Companies and Activities for
                          Financial Stability Purposes

    SEC. 1100. FEDERAL RESERVE BOARD AUTHORITY THAT OF AGENT ACTING ON
                  BEHALF OF COUNCIL.

        For purposes of this subtitle, the Board of Governors of the
    Federal Reserve System shall act in the capacity of agent for the
    Council, acting on behalf of the Council.

    SEC. 1101. COUNCIL AND BOARD AUTHORITY TO OBTAIN INFORMATION.

        (a) In General.--The Council and the Board are authorized to
    receive, and may request the production of, any data or information
    from members of the Council, as necessary--
                (1) to monitor the financial services marketplace to
            identify potential threats to the stability of the United
            States financial system;
                (2) to identify global trends and developments that could
            pose systemic risks to the stability of the economy of the
            United States or other economies; or
                (3) to otherwise carry out any of the provisions of this
            title, including to ascertain a primary financial regulatory
            agency's implementation of recommended prudential standards
            under this subtitle.
        (b) Submission by Council Members.--Notwithstanding any provision
    of law, any voting or nonvoting member of the Council is authorized to
    provide information to the Council, and the members of the Council
    shall maintain the confidentiality of such information.
        (c) Financial Company Data Collection.--
                (1) In general.--The Council or the Board may require the
            submission of periodic and other reports from any financial
            company solely for the purpose of assessing the extent to which
            a financial activity or financial market in which the financial
            company participates, or the company itself, poses a threat to
            financial stability.
                (2) Mitigation of report burden.--Before requiring the
            submission of reports from financial companies that are
            regulated by the primary financial regulatory agencies, the
            Council or the Board shall coordinate with such agencies and
            shall, whenever possible, rely on information already being
            collected by such agencies.
                (3) Mitigation requirements in case of foreign financial
            parents.--Before requiring the submission of reports from a
            company that is a foreign financial parent, the Council or the
            Board shall, to the extent appropriate, coordinate with any
            appropriate foreign regulator of such company and any
            appropriate multilateral organization and, whenever possible,
            rely on information already being collected by such foreign
            regulator or multilateral organizational with English
            translation.
        (d) Consultation With Agencies and Entities.--The Council or the
    Board, as appropriate, may consult with Federal and State agencies and
    other entities (including the Federal Insurance Office) to carry out
    any of the provisions of this subtitle.
        (e) Additional Provisions.--
                (1) Data and information sharing.--The Chairman of the
            Council, in consultation with the other members of the Council,
            may--
                        (A) establish procedures to share data and
                    information collected by the Council under this section
                    with the members of the Council;
                        (B) develop an electronic process for sharing all
                    information collected by the Council with the Chairman
                    of the Board on a real-time basis;
                        (C) issue any regulations necessary to carry out
                    this subsection; and
                        (D) designate the format in which requested data
                    and information must be submitted to the Council,
                    including any electronic, digital, or other format that
                    facilitates the use of such data by the Council in its
                    analysis.
                (2) Applicable privileges not waived.--A Federal financial
            regulator, State financial regulator, United States financial
            company, foreign financial company operating in the United
            States, financial market utility, or other person shall not be
            compelled to waive and shall not be deemed to have waived any
            privilege otherwise applicable to any data or information by
            transferring the data or information to, or permitting that
            data or information to be used by--
                        (A) the Council;
                        (B) any Federal financial regulator or State
                    financial regulator, in any capacity; or
                        (C) any other agency of the Federal Government (as
                    defined in section 6 of title 18, United States Code).
                (3) Disclosure exemption.--Any information obtained by the
            Council under this section shall be exempt from the disclosure
            requirements under section 552 of title 5, United States Code.
                (4) Consultation with foreign governments.--Under the
            supervision of the President, and in a manner consistent with
            section 207 of the Foreign Service Act of 1980 (22 U.S.C.
            3927), the Chairman of the Council, in consultation with the
            other members of the Council, shall regularly consult with the
            financial regulatory entities and other appropriate
            organizations of foreign governments or international
            organizations on matters relating to systemic risk to the
            international financial system.
                (5) Report.--Not later than 6 months after the date of the
            enactment of this title, the Chairman of the Council shall
            report to the Financial Services Committee of the House of
            Representatives and the Banking, Housing, and Urban Affairs
            Committee of the Senate the opinion of the Council as to
            whether setting up an electronic database as described in
            paragraph (1)(B) would aid the Council in carrying out this
            section.

    SEC. 1102. COUNCIL PRUDENTIAL REGULATION RECOMMENDATIONS TO FEDERAL
                  FINANCIAL REGULATORY AGENCIES; AGENCY AUTHORITY.

        (a) In General.--The Council is authorized to issue formal
    recommendations, publicly or privately, that a Federal financial
    regulatory agency adopt stricter prudential standards for firms it
    regulates to mitigate systemic risk.
        (b) Agency Authority to Implement Standards.--
                (1) A Federal financial regulatory agency specifically may,
            in response to a Council recommendation under this section or
            otherwise, impose, require reports regarding, examine for
            compliance with, and enforce stricter prudential standards and
            safeguards for the firms it regulates to mitigate systemic
            risk. This authority is in addition to and does not limit any
            other authority of the Federal financial regulatory agencies.
            Compliance by an entity with actions taken by a Federal
            financial regulatory agency under this section shall be
            enforceable in accordance with the statutes governing the
            respective Federal financial regulatory agency's jurisdiction
            over the entity as if the agency action were taken under those
            statutes.
                (2) Applying standards to foreign financial parents.--In
            applying standards under paragraph (1) to any foreign financial
            parent, or to any branch of, subsidiary of, or other operating
            entity related to such foreign financial parent that operates
            within the United States, the Federal financial regulatory
            agency shall--
                        (A) give due regard to the principles of national
                    treatment and equality of competitive opportunity; and
                        (B) take into account the extent to which the
                    foreign financial parent is subject to comparable
                    standards on a consolidated basis in the home country
                    of such foreign financial parent that are administered
                    by a comparable foreign supervisory authority.
        (c) Agency Notice to Council.--A Federal financial regulatory
    agency shall, within 60 days of receiving a Council recommendation
    under this section, notify the Council in writing regarding--
                (1) the actions the Federal financial regulatory agency has
            taken in response to the Council's recommendation, additional
            actions contemplated, and timetables therefore; or
                (2) the reason the Federal financial regulatory agency has
            failed to respond to the Council's request.

    SEC. 1103. SUBJECTING FINANCIAL COMPANIES TO STRICTER PRUDENTIAL
                  STANDARDS FOR FINANCIAL STABILITY PURPOSES.

        (a) In General.--The Council shall, in consultation with the Board
    and any other primary financial regulatory agency that regulates the
    financial company or a subsidiary of such company, and, in the case of
    a financial holding company subject to stricter standards that is an
    insurance company, the Federal Insurance Office, subject a financial
    company to stricter prudential standards under this subtitle if the
    Council determines that--
                (1) material financial distress at the company could pose a
            threat to financial stability or the economy; or
                (2) the nature, scope, size, scale, concentration, and
            interconnectedness, or mix of the company's activities could
            pose a threat to financial stability or the economy.
        (b) Criteria.--In making a determination under subsection (a), the
    Council shall consider the following criteria:
                (1) The extent of the company's leverage.
                (2) The extent and nature of the company's off-balance
            sheet exposures.
                (3) The extent and nature of the company's transactions and
            relationships with other financial companies.
                (4) The company's importance as a source of credit for
            households, businesses, and State and local governments and as
            a source of liquidity for the financial system.
                (5) The company's importance as a source of credit for low-
            income, minority, or underserved communities and the impact the
            failure of such company would have on the availability of
            credit in such communities.
                (6) The extent to which assets are simply managed and not
            owned by the financial company and the extent to which
            ownership of assets under management is diffuse.
                (7) The nature, scope, and mix of the company's activities.
                (8) The degree to which the company is already regulated by
            one or more Federal financial regulatory agencies or, in the
            case of a foreign financial parent, the extent to which such
            foreign parent is subject to prudential standards on a
            consolidated basis in the home country of such financial parent
            that are administered and enforced by a comparable foreign
            supervisory authority.
                (9) The amount and nature of the company's financial
            assets.
                (10) The amount and nature of the company's liabilities,
            including the degree of reliance on short-term funding.
                (11) Any other factors that the Council deems appropriate.
        (c) Notification of Decision.--The Board, in an executive capacity
    on behalf of the Council, shall immediately upon the Council's decision
    notify the financial company by order, which shall be public, that the
    financial company is subject to stricter prudential standards, as
    prescribed by the Board in accordance with section 1104.
        (d) Periodic Review and Rescission of Findings.--
                (1) Submission of assessment.--The Board shall periodically
            submit a report to the Council containing an assessment of
            whether each company subjected to stricter prudential standards
            should continue to be subject to such standards.
                (2) Review and rescission.--The Council shall--
                        (A) review the assessment submitted pursuant to
                    paragraph (1) and any information or recommendation
                    submitted by members of the Council regarding whether a
                    financial holding company subject to stricter standards
                    continues to merit stricter prudential standards; and
                        (B) rescind the action subjecting a company to
                    stricter prudential standards if the Council determines
                    that the company no longer meets the conditions for
                    being subjected to stricter prudential standards in
                    subsections (a) and (b).
        (e) Appeal.--
                (1) Administrative.--The Council and the Board, in an
            executive capacity on behalf of the Council, shall establish a
            procedure through which a financial company that has been
            subjected to stricter prudential standards in accordance with
            this section may appeal being subjected to stricter prudential
            standards.
                (2) Judicial review.--Any financial company which has been
            subjected to stricter prudential standards may seek judicial
            review by filing a petition for such review in the United
            States Court of Appeals for the District of Columbia.
        (f) Effect of Council Decision.--
                (1) Application of federal laws.--
                        (A) Application of bank holding company act and
                    federal deposit insurance act.--A financial company
                    subject to stricter standards that does not own a bank
                    (as defined in section 2 of the Bank Holding Company
                    Act of 1956) and that is not a foreign bank or company
                    that is treated as a bank holding company under section
                    8 of the International Banking Act of 1978 shall be
                    subject to section 4, subsections (b), (c), (d), (e),
                    (f), and (g) of section 5, and section 8 of the Bank
                    Holding Company Act of 1956, and section 8 of the
                    Federal Deposit Insurance Act in the same manner and to
                    the same extent as if such financial holding company
                    subject to stricter standards were a bank holding
                    company that has elected to be a financial holding
                    company (as such terms are defined in the Bank Holding
                    Company Act of 1956), its subsidiaries were
                    subsidiaries of a bank holding company, and the Board
                    was its appropriate Federal banking agency (as such
                    term is defined under the Federal Deposit Insurance
                    Act).
                        (B) Board authority.--For purposes of administering
                    and enforcing the provisions of this title, the Board
                    may take any action with respect to a financial holding
                    company subject to stricter standards described in
                    subparagraph (A) or its subsidiaries under the
                    authorities described in subparagraph (A) as if such
                    financial holding company subject to stricter standards
                    were a bank holding company that has elected to be a
                    financial holding company (as such terms are defined in
                    the Bank Holding Company Act of 1956), its subsidiaries
                    were subsidiaries of a bank holding company, and the
                    Board was its appropriate Federal banking agency (as
                    such term is defined under the Federal Deposit
                    Insurance Act).
                (2) Application of activity restrictions and section 6
            holding company requirements.--
                        (A) In general.--Except as provided in
                    subparagraphs (B) and (C)--
                                (i) a financial holding company subject to
                            stricter standards that conducts activities
                            that do not comply with section 4 of the Bank
                            Holding Company Act shall be required to
                            establish or designate a section 6 holding
                            company in accordance with section 6 of the
                            Bank Holding Company Act of 1956 through which
                            it conducts activities of the company that are
                            determined to be financial in nature or
                            incidental thereto under section 4(k) of the
                            such Act; and
                                (ii) such section 6 holding company shall
                            be the financial holding company subject to
                            stricter standards for purposes of this title.
                        (B) Exceptions from section 6 holding company
                    requirements.--
                                (i) General requirement for board to
                            consider exceptions.--Before such time as a
                            financial holding company subject to stricter
                            standards is required to establish or designate
                            a section 6 holding company under section 6 of
                            the Bank Holding Company Act, and in
                            consultation with the financial holding company
                            subject to stricter standards and any
                            appropriate Federal or State financial
                            regulators (and, in the case of a financial
                            holding company subject to stricter standards
                            that is an insurance company, the Federal
                            Insurance Office)--
                                        (I) the Board shall consider
                                    whether to grant any of the exemptions
                                    from the requirements applicable to
                                    section 6 holding companies under
                                    section 6(a)(6)(A) of the Bank Holding
                                    Company Act of 1956, in accordance with
                                    that provision; and
                                        (II) the Board, at the request of a
                                    financial holding company subject to
                                    stricter standards that is
                                    predominantly engaged in activities
                                    that are determined to be financial in
                                    nature or incidental thereto under
                                    section 4(k) of the Bank Holding
                                    Company Act, shall consider whether to
                                    exempt the financial holding company
                                    subject to stricter standards from the
                                    requirement to establish a section 6
                                    holding company, taking into
                                    consideration paragraph (2)(D), and the
                                    extent to which the exemption would:
                                    facilitate the extension of credit to
                                    individuals, households and businesses;
                                    improve efficiency or customer service
                                    or result in other public benefits;
                                    potentially threaten the safety and
                                    soundness of the financial holding
                                    company or any of its subsidiaries;
                                    potentially increase systemic risk or
                                    threaten the stability of the overall
                                    financial system; potentially result in
                                    unfair competition; and potentially
                                    have anticompetitive effects that would
                                    not be outweighed by public benefits.
                                (ii) Board determination not to exempt.--
                                        (I) In general.--If the Board
                                    determines not to exempt the financial
                                    holding company subject to stricter
                                    standards from the requirement to
                                    establish a section 6 holding company,
                                    the financial holding company subject
                                    to stricter standards shall establish a
                                    section 6 holding company within 90
                                    days after the Board's determination.
                                        (II) Extension of period.--The
                                    Board may extend the time by which the
                                    financial holding company subject to
                                    stricter standards is required to
                                    establish a section 6 holding company
                                    for an additional reasonable period of
                                    time, not to exceed 180 days.
                                (iii) Board determination to exempt.--
                                        (I) In general.--If the Board
                                    grants the requested exemption from the
                                    requirement to establish a section 6
                                    holding company, the financial holding
                                    company subject to stricter standards
                                    shall at all times remain predominantly
                                    engaged in activities that are
                                    determined to be financial in nature or
                                    incidental thereto under section 4(k)
                                    of the Bank Holding Company Act of
                                    1956, and shall be the financial
                                    holding company subject to stricter
                                    standards for purposes of this title.
                                        (II) Subsequent loss of
                                    exemption.--Upon a determination by the
                                    Board, in consultation with any
                                    relevant Federal or State regulators of
                                    the financial holding company subject
                                    to stricter standards, and, in the case
                                    of a financial holding company subject
                                    to stricter standards that is an
                                    insurance company, the Federal
                                    Insurance Office, that the financial
                                    holding company subject to stricter
                                    standards fails to comply with this
                                    subsection, the financial holding
                                    company subject to stricter standards
                                    shall lose the exemption from the
                                    section 6 holding company requirement
                                    and shall establish a section 6 holding
                                    company within the time periods
                                    described in clause (ii)(I).
                        (C) Activities conducted abroad.--Section 4 of the
                    Bank Holding Company Act of 1956 shall not apply to any
                    activities that a foreign financial holding company
                    subject to stricter standards conducts solely outside
                    the United States if such activities are conducted
                    solely by a company or other entity that is located
                    outside the United States.
                        (D) Flexible application.--In applying the activity
                    restrictions and ownership limitations of section 4 of
                    the Bank Holding Company Act of 1956 to financial
                    holding companies subject to stricter standards
                    described in paragraph (1)(A), the Board shall flexibly
                    adapt such requirements taking into account the usual
                    and customary practices in the business sector of the
                    financial company subject to stricter standards so as
                    to avoid unnecessary burden and expense.
                (3) Leverage limitation.--The Board shall require each
            financial holding company subject to stricter standards to
            maintain a debt to equity ratio of no more than 15 to 1, and
            the Board shall issue regulations containing procedures and
            timelines for how a financial holding company subject to
            stricter standards with a debt to equity ratio of more than 15
            to 1 at the time such company becomes a financial holding
            company subject to stricter standards shall reduce such ratio.

    SEC. 1104. STRICTER PRUDENTIAL STANDARDS FOR CERTAIN FINANCIAL HOLDING
                  COMPANIES FOR FINANCIAL STABILITY PURPOSES.

        (a) Stricter Prudential Standards.--
                (1) In general.--To mitigate risks to financial stability
            and the economy posed by a financial holding company that has
            been subjected to stricter prudential standards in accordance
            with section 1103, the Board, as agent of the Council, shall
            impose stricter prudential standards on such company. Such
            standards shall be designed to maximize financial stability
            taking costs to long-term financial and economic growth into
            account, be heightened when compared to the standards that
            otherwise would apply to financial holding companies that are
            not subjected to stricter prudential standards pursuant to this
            subtitle (including by addressing additional or different types
            of risks than otherwise applicable standards), and reflect the
            potential risk posed to financial stability by the financial
            holding company subject to stricter standards.
                (2) Standards.--
                        (A) Required standards.--The stricter standards
                    imposed by the Board under this section shall include--
                                (i) risk-based capital requirements and
                            leverage limits, unless the Board determines
                            that such requirements are not appropriate for
                            a financial holding company subject to stricter
                            standards because of such company's activities
                            (such as investment company activities or
                            assets under management) or structure, in which
                            case the Board shall apply other standards that
                            result in appropriately stringent controls.
                                (ii) liquidity requirements;
                                (iii) concentration requirements (as
                            specified in subsection (c));
                                (iv) prompt corrective action requirements
                            (as specified in subsection (e));
                                (v) resolution plan requirements (as
                            specified in subsection (f)); and
                                (vi) overall risk management requirements.
                        (B) Additional standards.--The heightened standards
                    imposed by the Board under this section also may
                    include short-term debt limits prescribed in accordance
                    with subsection (d) and any other prudential standards
                    that the Board deems advisable, including taking
                    actions to mitigate systemic risk.
                        (C) Consultation with federal financial regulatory
                    agencies and the federal insurance office.--The Board,
                    in developing stricter prudential standards under this
                    subsection, shall consult with other Federal financial
                    regulatory agencies with respect to any standard that
                    is likely to have a significant impact on a
                    functionally regulated subsidiary, or a subsidiary
                    depository institution, of a financial holding company
                    that is subject to stricter prudential standards under
                    this title. With respect to a financial holding company
                    subject to stricter standards that is an insurance
                    company or any insurance company subsidiary of such a
                    financial holding company subject to stricter
                    standards, the Board shall also consult with the
                    Federal Insurance Office.
                (3) Application of required standards.--In imposing
            prudential standards under this section, the Board--
                        (A) may differentiate among financial holding
                    companies subject to stricter standards on an
                    individual basis or by category, taking into
                    consideration their capital structure, risk,
                    complexity, financial activities, the financial
                    activities of their subsidiaries, and any other factors
                    that the Board deems appropriate; and
                        (B) shall take into consideration whether and to
                    what extent a financial holding company subject to
                    stricter standards that is not a bank holding company
                    or treated as a bank holding company owns or controls a
                    depository institution and shall adapt the prudential
                    standards applied to such company as appropriate in
                    light of any predominant line of business of such
                    company, including assets under management or other
                    activities for which capital requirements are not
                    appropriate.
                (4) Well capitalized and well managed.--A financial holding
            company subject to stricter standards shall at all times after
            it is subject to such standards be well capitalized and well
            managed as defined by the Board.
                (5) Application to foreign financial companies.--The Board
            shall prescribe regulations regarding the application of
            stricter prudential standards to a foreign financial parent and
            to a Federal or State branch, subsidiary, or operating entity
            that is owned or controlled by a foreign financial parent,
            giving due regard to principles of national treatment and
            equality of competitive opportunity and taking into account the
            extent to which the foreign financial parent is subject on a
            consolidated basis to home country standards comparable to
            those applied to financial holding companies in the United
            States.
                (6) Inclusion of off balance sheet activities in computing
            capital requirements.--
                        (A) In general.--In the case of any financial
                    holding company subject to stricter standards, the
                    computation of capital requirements shall take into
                    account off balance sheet activities for such a
                    company.
                        (B) Exemption.--If the Board determines that an
                    exemption from the requirements under subparagraph (A)
                    is appropriate, the Board may exempt a financial
                    holding company subject to stricter standards from the
                    requirements under subparagraph (A) or any transaction
                    or transactions engaged in by such a company.
                        (C) Off balance sheet activities defined.--For
                    purposes of this paragraph, the term ``off balance
                    sheet activities'' means a liability that is not
                    currently a balance sheet liability but may become one
                    upon the happening of some future event, including the
                    following transactions, to the extent they may create a
                    liability:
                                (i) Direct credit substitutes in which a
                            bank substitutes its own credit for a third
                            party, including standby letters of credit.
                                (ii) Irrevocable letters of credit that
                            guarantee repayment of commercial paper or tax-
                            exempt securities.
                                (iii) Risk participation in bankers'
                            acceptances.
                                (iv) Sale and repurchase agreements.
                                (v) Asset sales with recourse against the
                            seller.
                                (vi) Interest rate swaps.
                                (vii) Credit swaps.
                                (viii) Commodity contracts.
                                (ix) Forward contracts.
                                (x) Securities contracts.
                                (xi) Such other activities or transactions
                            as the Board may, by rule, define.
        (b) Prudential Standards at Functionally Regulated Subsidiaries and
    Subsidiary Depository Institutions.--
                (1) Board authority to recommend standards.--With respect
            to a functionally regulated subsidiary (as such term is defined
            in section 5 of the Bank Holding Company Act) or a subsidiary
            depository institution of a financial holding company subject
            to stricter standards, the Board may recommend that the
            relevant Federal financial regulatory agency for such
            functionally regulated subsidiary or subsidiary depository
            institution prescribe stricter prudential standards on such
            functionally regulated subsidiary or subsidiary depository
            institution. Any standards recommended by the Board under this
            section shall be of the same type as those described in
            subsection (a)(2) that the Board is required or authorized to
            impose directly on the financial holding company subject to
            stricter standards.
                (2) Agency authority to implement heightened standards and
            safeguards.--Each Federal financial regulatory agency that
            receives a Board recommendation under paragraph (1) is
            authorized to impose, require reports regarding, examine for
            compliance with, and enforce standards under this subsection
            with respect to the entities such agency regulates as described
            in section 1006(b)(6). This authority is in addition to and
            does not limit any other authority of the Federal financial
            regulatory agencies. Compliance by an entity with actions taken
            by a Federal financial regulatory agency under this section
            shall be enforceable in accordance with the statutes governing
            the respective agency's jurisdiction over the entity as if the
            agency action were taken under those statutes.
                (3) Imposition of standards.--Standards imposed by a
            Federal financial regulatory agency under this subsection shall
            be the standards recommended by the Board in accordance with
            paragraph (1) or any other similar standards that the Board
            deems acceptable after consultation between the Board and the
            primary financial regulatory agency and, with respect to an
            insurance company, the Federal Insurance Office.
                (4) Federal financial regulatory agency response; notice to
            council and board.--A Federal financial regulatory agency shall
            notify the Council and the Board in writing on whether and to
            what extent the agency has imposed the stricter prudential
            standards described in paragraph (3) within 60 days of the
            Board's recommendation under paragraph (1). A Federal financial
            regulatory agency that fails to impose such standards shall
            provide specific justification for such failure to act in the
            written notice from the agency to the Council and Board.
        (c) Concentration Limits for Financial Holding Companies Subject to
    Stricter Standards.--
                (1) Standards.--In order to limit the risks that the
            failure of any company could pose to a financial holding
            company subject to stricter standards and to the stability of
            the United States financial system, the Board, by regulation,
            shall prescribe standards that limit the risks posed by the
            exposure of a financial holding company subject to stricter
            standards to any other company.
                (2) Limitation on credit exposure.--The regulations
            prescribed by the Board shall prohibit each financial holding
            company subject to stricter standards from having credit
            exposure to any unaffiliated company that exceeds 25 percent of
            capital stock and surplus of the financial holding company
            subject to stricter standards, or such lower amount as the
            Board may determine by regulation to be necessary to mitigate
            risks to financial stability.
                (3) Credit exposure.--For purposes of this subsection and
            with respect to a financial holding company subject to stricter
            standards, the term ``credit exposure'' to a company means--
                        (A) all extensions of credit to the company,
                    including loans, deposits, and lines of credit;
                        (B) all repurchase agreements and reverse
                    repurchase agreement with the company;
                        (C) all securities borrowing and lending
                    transactions with the company to the extent that such
                    transactions create credit exposure of the financial
                    holding company subject to stricter standards to the
                    company;
                        (D) all guarantees, acceptances, or letters of
                    credit (including endorsement or standby letters of
                    credit) issued on behalf of the company;
                        (E) all purchases of or investment in securities
                    issued by the company;
                        (F) counterparty credit exposure to the company in
                    connection with a derivative transaction between the
                    financial holding company subject to stricter standards
                    and the company; and
                        (G) any other similar transactions that the Board
                    by regulation determines to be a credit exposure for
                    purposes of this section.
                (4) Attribution rule.--For purposes of this subsection, any
            transaction by a financial holding company subject to stricter
            standards with any person is deemed a transaction with a
            company to the extent that the proceeds of the transaction are
            used for the benefit of, or transferred to, that company.
                (5) Rulemaking.--The Board may issue such regulations and
            orders, including definitions consistent with this subsection,
            as may be necessary to administer and carry out the purpose of
            this subsection.
                (6) Exemptions.--
                        (A) In general.--
                                (i) Federal home loan banks.--This
                            subsection shall not apply to any Federal home
                            loan bank, but Federal home loan banks are not
                            exempt from any other provision of this title
                            except as specifically provided in this title.
                                (ii) Applicability to other entities.--The
                            Federal National Mortgage Association and the
                            Federal Home Loan Mortgage Corporation are not
                            exempt from any provision of this title except
                            as specifically provided in this title.
                        (B) Regulations.--The Board may, by regulation or
                    order, exempt transactions, in whole or in part, from
                    the definition of credit exposure if it finds that the
                    exemption is in the public interest and consistent with
                    the purpose of this subsection.
                (7) Transition period.--This subsection and any regulations
            and orders of the Board under the authority of this subsection
            shall not take effect until the date that is 3 years from the
            date of the enactment of this subsection. The Board may extend
            the effective date for up to 2 additional years to promote
            financial stability.
        (d) Short-term Debt Limits for Certain Financial Holding
    Companies.--
                (1) In general.--In order to limit the risks that an
            overaccumulation of short-term debt could pose to financial
            holding companies and to the stability of the United States
            financial system, the Board may by regulation prescribe a limit
            on the amount of short-term debt, including off-balance sheet
            exposures, that may be accumulated by any financial holding
            company subject to stricter standards for purposes of this
            title.
                (2) Basis of limit.--Any limit prescribed under paragraph
            (1) shall be based on a financial holding company's short-term
            debt as a percentage of its capital stock and surplus or on
            such other measure as the Board considers appropriate.
                (3) Short-term debt defined.--For purposes of this
            subsection, the term ``short-term debt'' means such liabilities
            with short-dated maturity that the Board identifies by
            regulation, except that such term does not include insured
            deposits.
                (4) Rulemaking authority.--In addition to prescribing
            regulations under paragraphs (1) and (3), the Board may
            prescribe such regulations, including definitions consistent
            with this subsection, and issue such orders as may be necessary
            to carry out this subsection.
                (5) Authority to issue exemptions and adjustments.--
            Notwithstanding the Bank Holding Company Act of 1956 (12 U.S.C.
            1841 et seq.), the Board may, if it determines such action is
            necessary to ensure appropriate heightened prudential
            supervision, with respect to a financial holding company that
            does not control an insured depository institution, issue to
            such company an exemption from or adjustment to the limit
            prescribed under paragraph (1).
        (e) Prompt Corrective Action for Financial Holding Companies
    Subject to Stricter Standards.--
                (1) Prompt corrective action required.--The Board shall
            take prompt corrective action to resolve the problems of
            financial holding companies subject to stricter standards.
            Except as specifically provided otherwise, this subsection
            shall apply only to financial holding companies that are
            incorporated or organized under United States laws.
                (2) Definitions.--For purposes of this section--
                        (A) Capital categories.--
                                (i) Well capitalized.--A financial holding
                            company subject to stricter standards is ``well
                            capitalized'' if it exceeds the required
                            minimum level for each relevant capital
                            measure.
                                (ii) Undercapitalized.--A financial holding
                            company subject to stricter standards is
                            ``undercapitalized'' if it fails to meet the
                            required minimum level for any relevant capital
                            measure.
                                (iii) Significantly undercapitalized.--A
                            financial holding company subject to stricter
                            standards is ``significantly undercapitalized''
                            if it is significantly below the required
                            minimum level for any relevant capital measure.
                            The Board shall define by rule or regulation
                            the term ``significantly undercapitalized'' at
                            a threshold the Board determines to be prudent
                            for the effective monitoring, management and
                            oversight of the financial system.
                                (iv) Critically undercapitalized.--A
                            financial holding company subject to stricter
                            standards is ``critically undercapitalized'' if
                            it fails to meet any level specified in
                            paragraph (4)(C)(i).
                (3) Other definitions.--
                        (A) Average.--The ``average'' of an accounting item
                    (such as total assets or tangible equity) during a
                    given period means the sum of that item at the close of
                    business on each business day during that period
                    divided by the total number of business days in that
                    period.
                        (B) Capital distribution.--The term ``capital
                    distribution'' means--
                                (i) a distribution of cash or other
                            property by a financial holding company subject
                            to stricter standards to its owners made on
                            account of that ownership, but not including
                            any dividend consisting only of shares of the
                            financial holding company subject to stricter
                            standards or rights to purchase such shares;
                                (ii) a payment by a financial holding
                            company subject to stricter standards to
                            repurchase, redeem, retire, or otherwise
                            acquire any of its shares or other ownership
                            interests, including any extension of credit to
                            finance any person's acquisition of those
                            shares or interests; and
                                (iii) a transaction that the Board
                            determines, by order or regulation, to be in
                            substance a distribution of capital to the
                            owners of the financial holding company subject
                            to stricter standards.
                        (C) Capital restoration plan.--The term ``capital
                    restoration plan'' means a plan submitted under
                    paragraph (6)(B).
                        (D) Compensation.--The term ``compensation''
                    includes any payment of money or provision of any other
                    thing of value in consideration of employment.
                        (E) Relevant capital measure.--The term ``relevant
                    capital measure'' means the measures described in
                    paragraph (4).
                        (F) Required minimum level.--The term ``required
                    minimum level'' means, with respect to each relevant
                    capital measure, the minimum acceptable capital level
                    specified by the Board by regulation.
                        (G) Senior executive officer.--The term ``senior
                    executive officer'' has the same meaning as the term
                    ``executive officer'' in section 22(h) of the Federal
                    Reserve Act (12 U.S.C. 375b).
                (4) Capital standards.--
                        (A) Relevant capital measures.--
                                (i) In general.--Except as provided in
                            clause (ii)(II), the capital standards
                            prescribed by the Board under section
                            1104(a)(2) shall include--
                                        (I) a leverage limit; and
                                        (II) a risk-based capital
                                    requirement.
                                (ii) Other capital measures.--The Board may
                            by regulation--
                                        (I) establish any additional
                                    relevant capital measures to carry out
                                    this section; or
                                        (II) rescind any relevant capital
                                    measure required under clause (i) upon
                                    determining that the measure is no
                                    longer an appropriate means for
                                    carrying out this section.
                        (B) Capital categories generally.--The Board shall,
                    by regulation, specify for each relevant capital
                    measure the levels at which a financial holding company
                    subject to stricter standards is well capitalized,
                    undercapitalized, and significantly undercapitalized.
                        (C) Critical capital.--
                                (i) Board to specify level.--
                                        (I) Leverage limit.--The Board
                                    shall, by regulation, specify the ratio
                                    of tangible equity to total assets at
                                    which a financial holding company
                                    subject to stricter standards is
                                    critically undercapitalized.
                                        (II) Other relevant capital
                                    measures.--The Board may, by
                                    regulation, specify for 1 or more other
                                    relevant capital measures, the level at
                                    which a financial holding company
                                    subject to stricter standards is
                                    critically undercapitalized.
                                (ii) Leverage limit range.--The level
                            specified under clause (i)(I) shall require
                            tangible equity in an amount--
                                        (I) not less than 2 percent of
                                    total assets; and
                                        (II) except as provided in
                                    subclause (I), not more than 65 percent
                                    of the required minimum level of
                                    capital under the leverage limit.
                (5) Capital distributions restricted.--
                        (A) In general.--A financial holding company
                    subject to stricter standards shall make no capital
                    distribution if, after making the distribution, the
                    financial holding company subject to stricter standards
                    would be undercapitalized.
                        (B) Exception.--Notwithstanding subparagraph (A),
                    the Board may permit a financial holding company
                    subject to stricter standards to repurchase, redeem,
                    retire, or otherwise acquire shares or ownership
                    interests if the repurchase, redemption, retirement, or
                    other acquisition--
                                (i) is made in connection with the issuance
                            of additional shares or obligations of the
                            financial holding company subject to stricter
                            standards in at least an equivalent amount; and
                                (ii) will reduce the financial obligations
                            of the financial holding company subject to
                            stricter standards or otherwise improve the
                            financial condition of the financial holding
                            company subject to stricter standards.
                (6) Provisions applicable to undercapitalized financial
            holding company subject to stricter standards.--
                        (A) Monitoring required.--The Board shall--
                                (i) closely monitor the condition of any
                            undercapitalized financial holding company
                            subject to stricter standards;
                                (ii) closely monitor compliance by any
                            undercapitalized financial holding company
                            subject to stricter standards with capital
                            restoration plans, restrictions, and
                            requirements imposed under this section; and
                                (iii) periodically review the plan,
                            restrictions, and requirements applicable to
                            any undercapitalized financial holding company
                            subject to stricter standards to determine
                            whether the plan, restrictions, and
                            requirements are effective.
                        (B) Capital restoration plan required.--
                                (i) In general.--Any undercapitalized
                            financial holding company subject to stricter
                            standards shall submit an acceptable capital
                            restoration plan to the Board within the time
                            allowed by the Board under clause (iv).
                                (ii) Contents of plan.--The capital
                            restoration plan shall--
                                        (I) specify--
                                                (aa) the steps the
                                            financial holding company
                                            subject to stricter standards
                                            will take to become well
                                            capitalized;
                                                (bb) the levels of capital
                                            to be attained by the financial
                                            holding company subject to
                                            stricter standards during each
                                            year in which the plan will be
                                            in effect;
                                                (cc) how the financial
                                            holding company subject to
                                            stricter standards will comply
                                            with the restrictions or
                                            requirements then in effect
                                            under this section; and
                                                (dd) the types and levels
                                            of activities in which the
                                            financial holding company
                                            subject to stricter standards
                                            will engage; and
                                        (II) contain such other information
                                    that the Board may require.
                                (iii) Criteria for accepting plan.--The
                            Board shall not accept a capital restoration
                            plan unless it determines that the plan--
                                        (I) complies with clause (ii);
                                        (II) is based on realistic
                                    assumptions, and is likely to succeed
                                    in restoring the capital of the
                                    financial holding company subject to
                                    stricter standards; and
                                        (III) would not appreciably
                                    increase the risk (including credit
                                    risk, interest-rate risk, and other
                                    types of risk) to which the financial
                                    holding company subject to stricter
                                    standards is exposed.
                                (iv) Deadlines for submission and review of
                            plans.--The Board shall, by regulation,
                            establish deadlines that--
                                        (I) provide financial holding
                                    companies subject to stricter standards
                                    with reasonable time to submit capital
                                    restoration plans, and generally
                                    require a financial holding company
                                    subject to stricter standards to submit
                                    a plan not later than 45 days after it
                                    becomes undercapitalized; and
                                        (II) require the Board to act on
                                    capital restoration plans
                                    expeditiously, and generally not later
                                    than 60 days after the plan is
                                    submitted.
                        (C) Asset growth restricted.--An undercapitalized
                    financial holding company subject to stricter standards
                    shall not permit its average total assets during any
                    calendar quarter to exceed its average total assets
                    during the preceding calendar quarter unless--
                                (i) the Board has accepted the capital
                            restoration plan of the financial holding
                            company subject to stricter standards;
                                (ii) any increase in total assets is
                            consistent with the plan; and
                                (iii) the ratio of tangible equity to total
                            assets of the financial holding company subject
                            to stricter standards increases during the
                            calendar quarter at a rate sufficient to enable
                            it to become well capitalized within a
                            reasonable time.
                        (D) Prior approval required for acquisitions and
                    new lines of business.--An undercapitalized financial
                    holding company subject to stricter standards shall
                    not, directly or indirectly, acquire any interest in
                    any company or insured depository institution, or
                    engage in any new line of business, unless--
                                (i) the Board has accepted the capital
                            restoration plan of the financial holding
                            company subject to stricter standards, the
                            financial holding company subject to stricter
                            standards is implementing the plan, and the
                            Board determines that the proposed action is
                            consistent with and will further the
                            achievement of the plan;
                                (ii) the Board determines that the specific
                            proposed action is appropriate; or
                                (iii) the Board has exempted the financial
                            holding company subject to stricter standards
                            from the requirements of this paragraph with
                            respect to the class of acquisitions that
                            includes the proposed action.
                        (E) Discretionary safeguards.--The Board may, with
                    respect to any undercapitalized financial holding
                    company subject to stricter standards, take actions
                    described in any clause of paragraph (7)(B) if the
                    Board determines that those actions are necessary. The
                    Board, in determining whether to impose any requirement
                    under this subparagraph that is likely to have a
                    significant effect on a functionally regulated
                    subsidiary, subsidiary depository institution, or
                    insurance company subsidiary of a financial holding
                    company subject to stricter standards, shall consult
                    with the primary financial regulatory agency for such
                    subsidiary. In the case of an insurance company
                    subsidiary of a financial holding company subject to
                    stricter standards, the Board shall consult with the
                    Federal Insurance Office.
                (7) Provisions applicable to significantly undercapitalized
            financial holding companies subject to stricter standards and
            undercapitalized financial holding companies subject to
            stricter standards that fail to submit and implement capital
            restoration plans.--
                        (A) In general.--This paragraph shall apply with
                    respect to any financial holding company subject to
                    stricter standards that--
                                (i) is significantly undercapitalized; or
                                (ii) is undercapitalized and--
                                        (I) fails to submit an acceptable
                                    capital restoration plan within the
                                    time allowed by the Board under
                                    paragraph (6)(B)(iv); or
                                        (II) fails in any material respect
                                    to implement a capital restoration plan
                                    accepted by the Board.
                        (B) Specific actions authorized.--The Board shall
                    carry out this paragraph by taking 1 or more of the
                    following actions--
                                (i) Requiring recapitalization.--Doing one
                            or more of the following:
                                        (I) Requiring the financial holding
                                    company subject to stricter standards
                                    to sell enough shares or obligations of
                                    the financial holding company subject
                                    to stricter standards so that the
                                    financial holding company subject to
                                    stricter standards will be well
                                    capitalized after the sale.
                                        (II) Further requiring that
                                    instruments sold under subclause (I) be
                                    voting shares.
                                        (III) Requiring the financial
                                    holding company subject to stricter
                                    standards to be acquired by or combine
                                    with another company.
                                (ii) Restricting transactions with
                            affiliates.--
                                        (I) Requiring the financial holding
                                    company subject to stricter standards
                                    to comply with section 23A of the
                                    Federal Reserve Act (12 U.S.C. 371c),
                                    as if it were a member bank.
                                        (II) Further restricting the
                                    transactions of the financial holding
                                    company subject to stricter standards
                                    with affiliates and insiders.
                                (iii) Restricting asset growth.--
                            Restricting the asset growth of the financial
                            holding company subject to stricter standards
                            more stringently than paragraph (6)(C), or
                            requiring the financial holding company subject
                            to stricter standards to reduce its total
                            assets.
                                (iv) Restricting activities.--Requiring the
                            financial holding company subject to stricter
                            standards or any of its subsidiaries to alter,
                            reduce, or terminate any activity that the
                            Board determines poses excessive risk to the
                            financial holding company subject to stricter
                            standards.
                                (v) Improving management.--Doing one or
                            more of the following:
                                        (I) New election of directors.--
                                    Ordering a new election for the board
                                    of directors of the financial holding
                                    company subject to stricter standards.
                                        (II) Dismissing directors or senior
                                    executive officers.--Requiring the
                                    financial holding company subject to
                                    stricter standards to dismiss from
                                    office any director or senior executive
                                    officer who had held office for more
                                    than 180 days immediately before the
                                    financial holding company subject to
                                    stricter standards became
                                    undercapitalized. Dismissal under this
                                    clause shall not be construed to be a
                                    removal under section 8 of the Federal
                                    Deposit Insurance Act (12 U.S.C. 1818).
                                        (III) Employing qualified senior
                                    executive officers.--Requiring the
                                    financial holding company subject to
                                    stricter standards to employ qualified
                                    senior executive officers (who, if the
                                    Board so specifies, shall be subject to
                                    approval by the Board).
                                (vi) Requiring divestiture.--Requiring the
                            financial holding company subject to stricter
                            standards to divest itself of or liquidate any
                            subsidiary if the Board determines that the
                            subsidiary is in danger of becoming insolvent,
                            poses a significant risk to the financial
                            holding company subject to stricter standards,
                            or is likely to cause a significant dissipation
                            of the assets or earnings of the financial
                            holding company subject to stricter standards.
                                (vii) Requiring other action.--Requiring
                            the financial holding company subject to
                            stricter standards to take any other action
                            that the Board determines will better carry out
                            the purpose of this section than any of the
                            actions described in this subparagraph.
                        (C) Presumption in favor of certain actions.--In
                    complying with subparagraph (B), the Board shall take
                    the following actions, unless the Board determines that
                    the actions would not be appropriate:
                                (i) The action described in subclause (I)
                            or (III) of subparagraph (B)(i) (relating to
                            requiring the sale of shares or obligations, or
                            requiring the financial holding company subject
                            to stricter standards to be acquired by or
                            combine with another company).
                                (ii) The action described in subparagraph
                            (B)(ii) (relating to restricting transactions
                            with affiliates).
                        (D) Senior executive officers' compensation
                    restricted.--
                                (i) In general.--The financial holding
                            company subject to stricter standards shall not
                            do any of the following without the prior
                            written approval of the Board:
                                        (I) Pay any bonus to any senior
                                    executive officer.
                                        (II) Provide compensation to any
                                    senior executive officer at a rate
                                    exceeding that officer's average rate
                                    of compensation (excluding bonuses,
                                    stock options, and profit-sharing)
                                    during the 12 calendar months preceding
                                    the calendar month in which the
                                    financial holding company subject to
                                    stricter standards became
                                    undercapitalized.
                                (ii) Failing to submit plan.--The Board
                            shall not grant any approval under clause (i)
                            with respect to a financial holding company
                            subject to stricter standards that has failed
                            to submit an acceptable capital restoration
                            plan.
                        (E) Consultation with other regulators.--Before the
                    Board makes a determination under subparagraph (B)(vi)
                    with respect to a subsidiary that is a broker, dealer,
                    government securities broker, government securities
                    dealer, investment company, or investment adviser, the
                    Board shall consult with the Securities and Exchange
                    Commission and, in the case of any other subsidiary
                    which is subject to any financial responsibility or
                    capital requirement, any other appropriate regulator of
                    such subsidiary with respect to the proposed
                    determination of the Board and actions pursuant to such
                    determination.
                (8) More stringent treatment based on other supervisory
            criteria.--
                        (A) In general.--If the Board determines (after
                    notice and an opportunity for hearing) that a financial
                    holding company subject to stricter standards is in an
                    unsafe or unsound condition or, pursuant to section
                    8(b)(8) of the Federal Deposit Insurance Act (12 U.S.C.
                    1818(b)(8)), deems the financial holding company
                    subject to stricter standards to be engaging in an
                    unsafe or unsound practice, the Board may--
                                (i) if the financial holding company
                            subject to stricter standards is well
                            capitalized, require the financial holding
                            company subject to stricter standards to comply
                            with one or more provisions of paragraphs (6)
                            and (7), as if the institution were
                            undercapitalized; or
                                (ii) if the financial holding company
                            subject to stricter standards is
                            undercapitalized, take any one or more actions
                            authorized under paragraph (7)(B) as if the
                            financial holding company subject to stricter
                            standards were significantly undercapitalized,
                            after consultation with the primary financial
                            regulatory agency for any functionally
                            regulated subsidiary, subsidiary depository
                            institution, or insurance company subsidiary
                            that is likely to be significantly affected by
                            such actions. In the case of an insurance
                            company subsidiary of a financial holding
                            company subject to stricter standards, the
                            Board shall consult with the Federal Insurance
                            Office.
                        (B) Contents of plan.--A plan that may be required
                    pursuant to subparagraph (A)(i) shall specify the steps
                    that the financial holding company subject to stricter
                    standards will take to correct the unsafe or unsound
                    condition or practice.
                (9) Implementation.--The Board shall prescribe such
            regulations, issue such orders, and take such other actions the
            Board determines to be necessary to carry out this subsection.
                (10) Other authority not affected.--This section does not
            limit any authority of the Board, any other Federal regulatory
            agency, or a State to take action in addition to (but not in
            derogation of) that required under this section.
                (11) Consultation.--The Board and the Secretary of the
            Treasury shall consult with their foreign counterparts and
            through appropriate multilateral organizations to reach
            agreement to extend comprehensive and robust prudential
            supervision and regulation to all highly leveraged and
            substantially interconnected financial companies.
                (12) Administrative review of dismissal orders.--
                        (A) Timely petition required.--A director or senior
                    executive officer dismissed pursuant to an order under
                    paragraph (7)(B)(v)(II) may obtain review of that order
                    by filing a written petition for reinstatement with the
                    Board not later than 10 days after receiving notice of
                    the dismissal.
                        (B) Procedure.--
                                (i) Hearing required.--The Board shall give
                            the petitioner an opportunity to--
                                        (I) submit written materials in
                                    support of the petition; and
                                        (II) appear, personally or through
                                    counsel, before 1 or more members of
                                    the Board or designated employees of
                                    the Board.
                                (ii) Deadline for hearing.--The Board
                            shall--
                                        (I) schedule the hearing referred
                                    to in clause (i)(II) promptly after the
                                    petition is filed; and
                                        (II) hold the hearing not later
                                    than 30 days after the petition is
                                    filed, unless the petitioner requests
                                    that the hearing be held at a later
                                    time.
                                (iii) Deadline for decision.--Not later
                            than 60 days after the date of the hearing, the
                            Board shall--
                                        (I) by order, grant or deny the
                                    petition;
                                        (II) if the order is adverse to the
                                    petitioner, set forth the basis for the
                                    order; and
                                        (III) notify the petitioner of the
                                    order.
                        (C) Standard for review of dismissal orders.--The
                    petitioner shall bear the burden of proving that the
                    petitioner's continued employment would materially
                    strengthen the ability of the financial holding company
                    subject to stricter standards--
                                (i) to become well capitalized, to the
                            extent that the order is based on the capital
                            level of the financial holding company subject
                            to stricter standards or such company's failure
                            to submit or implement a capital restoration
                            plan; and
                                (ii) to correct the unsafe or unsound
                            condition or unsafe or unsound practice, to the
                            extent that the order is based on paragraph
                            (8)(A).
                (13) Enforcement authority for foreign financial holding
            company subject to stricter standards.--
                        (A) Termination authority.--If the Board believes
                    that a condition, practice, or activity of a foreign
                    financial holding company subject to stricter standards
                    does not comply with this title or the rules or orders
                    prescribed by the Board under this title or otherwise
                    poses a threat to financial stability, the Board may,
                    after notice and opportunity for a hearing, take such
                    actions as necessary to mitigate such risk, including
                    ordering a foreign financial holding company subject to
                    stricter standards in the United States to terminate
                    the activities of such branch, agency, or subsidiary.
                        (B) Discretion to deny hearing.--The Board may
                    issue an order under paragraph (1) without providing
                    for an opportunity for a hearing if the Board
                    determines that expeditious action is necessary in
                    order to protect the public interest.
        (f) Reports Regarding Rapid and Orderly Resolution and Credit
    Exposure.--
                (1) In general.--The Board shall require each financial
            holding company subject to stricter standards incorporated or
            organized in the United States to report periodically to the
            Board on--
                        (A) its plan for rapid and orderly resolution in
                    the event of severe financial distress;
                        (B) the nature and extent to which the financial
                    holding company subject to stricter standards has
                    credit exposure to other significant financial
                    companies; and
                        (C) the nature and extent to which other
                    significant financial companies have credit exposure to
                    the financial holding company subject to stricter
                    standards.
                (2) No limiting effect.--A rapid resolution plan submitted
            in accordance with this subsection shall not be binding on a
            receiver appointed under subtitle G, a bankruptcy court, or any
            other authority that is authorized or required to resolve the
            financial holding company subject to stricter standards or any
            of its subsidiaries or affiliates.
                (3) Reporting triggered by stress test results.--
                        (A) Financial holding companies subject to stricter
                    standards.--Each time the results of a quarterly stress
                    test under baseline or adverse conditions conducted by
                    a financial holding company subject to stricter
                    standards under section 1114(a) or the results of a
                    stress test of that financial holding company subject
                    to stricter standards conducted by the Board under
                    subsection (g) indicate that the financial holding
                    company subject to stricter standards is, in the
                    determination of the Board, significantly or critically
                    undercapitalized, that financial holding company
                    subject to stricter standards shall submit a rapid
                    resolution plan in accordance with this subsection that
                    has been revised to address the causes of those
                    results.
                        (B) Financial companies that are not financial
                    holding companies subject to stricter standards.--Each
                    time the results of a semiannual stress test under
                    baseline or adverse conditions conducted by a financial
                    company under section 1114(b) indicate that the
                    financial company is, in the determination of the
                    Board, significantly or critically undercapitalized,
                    that financial company shall be required to report
                    under this subsection. The Board shall prescribe
                    regulations establishing expedited procedures for such
                    reporting.
                        (C) Transparency.--Any rapid resolution plan
                    submitted pursuant to this paragraph shall be subject
                    to any restrictions regarding the disclosure of any
                    other rapid resolution plan submitted pursuant to this
                    subsection.
        (g) Stress Tests.--
                (1) The Board, in coordination with the appropriate primary
            financial regulatory agency, shall conduct annual stress tests
            of each financial holding company subject to stricter
            standards. The Board may, as the Board determines appropriate,
            conduct stress tests of financial companies that are not
            financial holding companies subject to stricter standards. The
            Board shall publish a summary of the results of such stress
            tests.
                (2) The Board shall issue regulations to define the term
            ``stress test'' for purposes of this subsection. Such a
            definition shall provide for not less than 3 different sets of
            conditions under which a stress test should be conducted:
            baseline, adverse, and severely adverse scenarios.
        (h) Avoiding Duplication.--The Board shall take any action the
    Board deems appropriate to avoid imposing duplicative requirements
    under this subtitle for financial holding companies subject to stricter
    standards that are also bank holding companies.
        (i) Resolution Plans Required.--
                (1) In general.--The Corporation and the Board, after
            consultation with the Council, shall jointly issue regulations
            requiring financial holding companies subject to stricter
            standards to develop plans designed to assist in the rapid and
            orderly resolution of the company.
                (2) Standards for resolution plans.--The regulations
            required by paragraph (1) shall--
                        (A) define the scope of financial holding companies
                    subject to stricter standards covered by these
                    requirements and may exempt financial holding companies
                    subject to stricter standards from the requirements of
                    this subsection if the Corporation and the Board
                    jointly determine that exemption is consistent with the
                    purposes of this title;
                        (B) require each plan to demonstrate that any
                    insured depository institution affiliated with a
                    financial holding company subject to stricter standards
                    is adequately insulated from the activities of any non-
                    bank subsidiary of the institution or financial holding
                    companies subject to stricter standards;
                        (C) require that each plan include information
                    detailing--
                                (i) the nature and extent to which the
                            financial holding company subject to stricter
                            standards has credit exposure to other
                            significant financial companies;
                                (ii) the nature and extent to which other
                            significant financial companies have credit
                            exposure to the financial holding company
                            subject to stricter standards;
                                (iii) full descriptions of the financial
                            holding company subject to stricter standards'
                            ownership structure, assets, liabilities, and
                            contractual obligations; and
                                (iv) the cross-guarantees tied to different
                            securities, a list of major counterparties, and
                            a process for determining where the financial
                            holding company subject to stricter standards'
                            collateral is pledged; and
                        (D) establish such other standards as the
                    Corporation and the Board may jointly deem necessary to
                    carry out this subsection.
                (3) Review of plans.--
                        (A) Submission of plans.--Each financial holding
                    company subject to stricter standards that is subject
                    to the requirement under paragraph (1) shall submit its
                    plan to the Corporation and the Board.
                        (B) Review.--Upon the submission of a plan pursuant
                    to subparagraph (A), and not less often than annually
                    thereafter, the Corporation and the Board, after
                    consultation with any Federal financial regulatory
                    agencies with jurisdiction over the financial holding
                    company subject to stricter standards (and, if the
                    financial holding company subject to stricter standards
                    is an insurance company, the Federal Insurance Office),
                    shall jointly review such plan and may require a
                    financial holding company subject to stricter standards
                    to revise its plan consistent with the standards
                    established pursuant to paragraph (2).
                (4) Enforcement.--
                        (A) In general.--The Corporation, after
                    consultation with the Board, shall have the authority
                    to take any enforcement action in section 8 of the
                    Federal Deposit Insurance Act (12 U.S.C. 1818) against
                    any financial holding company subject to stricter
                    standards that fails to comply with the requirements of
                    this section or any regulations issued pursuant to this
                    section.
                        (B) No limitation on board authority.--Nothing
                    under this subsection shall be construed as limiting
                    any enforcement authority available to the Board under
                    any other provision of law.
                (5) No limiting effect on receiver.--A rapid resolution
            plan submitted under this section shall not be binding on a
            receiver appointed under subtitle G, a bankruptcy court, or any
            other authority that is authorized or required to resolve the
            financial holding company subject to stricter standards or any
            of its subsidiaries or affiliates.
                (6) No private right of action.--No private right of action
            may be based on any resolution plan submitted under this
            section.
        (j) Rule of Construction Regarding Consumer Protection Standards.--
    The prudential standards imposed or recommended by the Board or the
    Council under this section shall not be construed as superseding--
                (1) any consumer protection standards promulgated under a
            State or Federal consumer protection law, including the
            Consumer Financial Protection Agency Act and the Federal Trade
            Commission Act; or
                (2) any investor protection standard that protects
            consumers (including public reporting requirements) imposed
            under State or Federal securities laws, including the
            Securities Act of 1933, the Securities Exchange Act of 1934,
            the Investment Company Act of 1944, and the Investment Advisors
            Act of 1944.
        (k) Rulemaking Authority.--The Board may prescribe such regulations
    and issue such orders as the Board, in consultation with the Council,
    determines to be necessary to carry out the provisions of this
    subtitle.

    SEC. 1105. MITIGATION OF SYSTEMIC RISK.

        (a) Council Authority to Restrict Operations and Activities.--If
    the Council determines, after notice and an opportunity for hearing,
    that despite the higher prudential standards imposed pursuant to
    section 1104(a)(2), the size of a financial holding company subject to
    stricter standards or the scope, nature, scale, concentration,
    interconnectedness, or mix of activities directly or indirectly
    conducted by a financial holding company subject to stricter standards
    poses a grave threat to the financial stability or economy of the
    United States, the Council shall require the company to undertake 1 or
    more mitigatory actions described in subsection (d).
        (b) Consultation With Federal Financial Regulatory Agencies.--The
    Council, in determining whether to impose any requirement under this
    section that is likely to have a significant impact on a functionally
    regulated subsidiary, or a subsidiary depository institution, of a
    financial holding company subject to stricter standards under this
    title, shall consult with the Federal financial regulatory agency for
    any such subsidiary. With respect to any requirements under this
    section that is likely to have a significant effect on an insurance
    company, the Council shall consult with the Federal Insurance Office.
        (c) Factors for Consideration.--In reaching a determination
    described in subsection (a), the Council shall take into consideration
    the following factors, as appropriate--
                (1) the amount and nature of the company's financial
            assets;
                (2) the amount and nature of the company's liabilities,
            including the degree of reliance on short-term funding;
                (3) the extent and nature of the company's off-balance
            sheet exposures;
                (4) the company's reliance on leverage;
                (5) the extent and nature of the company's transactions,
            relationships, and interconnectedness with other financial and
            non-financial companies;
                (6) the company's importance as a source of credit for
            households, businesses, and State and local governments and as
            a source of liquidity for the financial system;
                (7) the scope, nature, size, scale, concentration,
            interconnectedness and mix of the company's activities;
                (8) the extent to which prudential regulations mitigate the
            risk posed; and
                (9) any other factors identified that the Council
            determines appropriate.
        (d) Mitigatory Actions.--
                (1) In general.--Mitigatory action may include--
                        (A) modifying the stricter prudential standards
                    imposed pursuant to section 1104(a);
                        (B) terminating 1 or more activities;
                        (C) imposing conditions on the manner in which a
                    financial holding company subject to stricter standards
                    conducts 1 or more activities;
                        (D) limiting the ability to merge with, acquire,
                    consolidate with, or otherwise become affiliated with
                    another company;
                        (E) restricting the ability to offer a financial
                    product or products; and
                        (F) in the event the Council deems subparagraphs
                    (A) through (E) inadequate as a means to address the
                    identified risks, selling, divesting, or otherwise
                    transferring business units, branches, assets, or off-
                    balance sheet items to unaffiliated companies.
                (2) International competitiveness considerations.--In
            making any decision pursuant to paragraph (1), the Council
            shall consider--
                        (A) the need to maintain the international
                    competitiveness of the United States financial services
                    industry; and
                        (B) the extent to which other countries with a
                    significant financial services industry have
                    established corresponding regimes to mitigate threats
                    to financial stability or the economy posed by
                    financial companies.
        (e) Due Process.--
                (1) Notice and hearing.--The Council shall give notice to a
            financial holding company subject to stricter standards, and
            opportunity for hearing if requested, that the financial
            holding company subject to stricter standards is being
            considered for mitigatory action pursuant to subsection (a).
            The hearing shall occur no later than 30 days after the
            financial company receives notice of the proposed action from
            the Council.
                (2) Notice.--The Council shall notify the financial holding
            company subject to stricter standards of the Council's
            determination, and, if the Council determines that mitigatory
            action is appropriate, require the company to submit a plan to
            the Council to implement the required mitigatory action.
                (3) Submission of plan.--The financial holding company
            subject to stricter standards shall submit its proposed plan to
            implement the required mitigatory action or actions to the
            Council within 60 days from the date it receives notice under
            paragraph (2) or such shorter timeframe as the Council may
            require, if the Council determines an emergency situation
            merits expeditious implementation.
                (4) Approval or amendment of the plan.--The Council shall
            review the plan submitted pursuant to paragraph (3) and
            determine whether the plan achieves the goal of mitigating a
            grave threat to the financial stability or the economy of the
            United States. The Council may approve or disapprove the plan
            with or without amendment.
                (5) Effect of plan approval.--The Council shall--
                        (A) notify a financial holding company subject to
                    stricter standards by order, which shall be public,
                    that the Council has approved the plan with or without
                    amendment; and
                        (B) direct the Board to require a financial holding
                    company subject to stricter standards to comply with
                    the plan to implement mitigatory action or actions
                    within a reasonable timeframe after the Council's
                    approval and in accordance with such deadlines
                    established in the plan.
        (f) Treasury Secretary Concurrence.--Mitigatory action imposed by
    the Council involving the sale, divestiture, or transfer of more than
    $10,000,000,000 in total assets by a financial holding company subject
    to stricter standards shall require the Secretary of the Treasury's
    concurrence before the issuance of the notice in subsection (e)(5)(A).
    If the sale, divestiture, or transfer of total assets by a financial
    holding company subject to stricter standards exceeds $100,000,000,000,
    the Secretary of the Treasury shall consult with the President before
    concurrence. The aforementioned amounts shall be indexed to inflation.
        (g) Failure to Implement the Plan.--If a financial holding company
    subject to stricter standards fails to implement a plan for mitigatory
    action imposed pursuant to this section within a reasonable timeframe,
    the Council shall direct the Board to take such actions as necessary to
    ensure compliance with the plan.
        (h) Judicial Review.--For any plan required under this section, a
    financial holding company subject to stricter standards may, not later
    than 30 days after receipt of the Council's notice under subsection
    (e)(2), bring an action in the United States district court for the
    judicial district in which the home office of such company is located,
    or in the United States District Court for the District of Columbia,
    for an order requiring that the requirement for a mitigatory action be
    rescinded. Judicial review under this section shall be limited to the
    imposition of a mitigatory action pursuant to subsection (e)(5). In
    reviewing the Council's imposition of a mitigatory action, the court
    shall rescind or dismiss only those mitigatory actions it finds to be
    imposed in an arbitrary and capricious manner.
        (i) Rule of Construction.--Nothing in subsection (h) shall be
    construed as limiting the authority of a Federal financial regulatory
    agency to take action with respect to a financial company subject to
    the jurisdiction of such agency pursuant to applicable law other than
    this section.

    SEC. 1106. SUBJECTING ACTIVITIES OR PRACTICES TO STRICTER PRUDENTIAL
                  STANDARDS FOR FINANCIAL STABILITY PURPOSES.

        (a) In General.--The Council may subject a financial activity or
    practice to stricter prudential standards under this subtitle if the
    Council determines that the conduct, scope, nature, size, scale,
    concentration, or interconnectedness of such activity or practice could
    create or increase the risk of significant liquidity, credit, or other
    problems spreading among financial institutions or markets and local,
    minority, or underserved communities, and thereby threaten the
    stability of the financial system or economy.
        (b) Periodic Review of Activity Identifications.--
                (1) Submission of assessment.--The Board shall periodically
            submit a report to the Council containing an assessment of
            whether each activity or practice subjected to stricter
            prudential standards should continue to be subject to such
            standards.
                (2) Review and recision.--The Council shall--
                        (A) review the assessment submitted pursuant to
                    paragraph (1) and any information or recommendation
                    submitted by members of the Council regarding whether a
                    financial activity subjected to stricter prudential
                    standards continues to merit stricter prudential
                    standards; and
                        (B) rescind the action subjecting an activity to
                    heightened prudential supervision if the Council
                    determines that the activity no longer meets the
                    criteria in subsection (a).
        (c) Procedure for Subjecting or Ceasing to Subject an Activity or
    Practice to Stricter Prudential Standards.--
                (1) Council and board coordination.--The Council shall
            inform the Board if the Council is considering whether to
            subject or cease to subject an activity to stricter prudential
            standards in accordance with this section.
                (2) Notice and opportunity for consideration of written
            materials.--
                        (A) In general.--The Board shall, in an executive
                    capacity on behalf of the Council, provide notice to
                    financial companies that the Council is considering
                    whether to subject an activity or practice to
                    heightened prudential regulation, and shall provide a
                    financial company engaged in such activity or practice
                    30 days to submit written materials to inform the
                    Council's decision. The Council shall decide, and the
                    Board shall provide notice of the Council's decision,
                    within 60 days of the due date for such written
                    materials.
                        (B) Emergency exception.--The Council may waive or
                    modify the requirements of subparagraph (A) if the
                    Council determines that such waiver or modification is
                    necessary or appropriate to prevent or mitigate threats
                    posed by an activity to financial stability. The Board
                    shall, in an executive capacity on behalf of the
                    Council, provide notice of such waiver or modification
                    to financial companies as soon as practicable, which
                    shall be no later than 24 hours after the waiver or
                    modification.
                (3) Form of decision.--The Board shall provide all notices
            required under this subsection by posting a notice on the
            Board's web site and publishing a notice in the Federal
            Register.

    SEC. 1107. STRICTER REGULATION OF ACTIVITIES AND PRACTICES FOR
                  FINANCIAL STABILITY PURPOSES.

        (a) Prudential Standards.--
                (1) Board authority to recommend.--
                        (A) In general.--To mitigate the risks to United
                    States financial stability and the United States
                    economy posed by financial activities and practices
                    that the Council identifies for stricter prudential
                    standards under section 1106 the Board, as agent of the
                    Council, shall recommend prudential standards to the
                    appropriate primary financial regulatory agencies to
                    apply to such identified activities and practices.
                        (B) Consultation with primary financial regulatory
                    agencies.--The Board, in developing recommendations
                    under this subsection, shall consult with the relevant
                    primary financial regulatory agencies with respect to
                    any standard that is likely to have a significant
                    effect on entities described in section 1000(b)(6).
                    With respect to any standard that is likely to have a
                    significant effect on insurance companies, the Board
                    also shall consult with the Federal Insurance Office.
                (2) Criteria.--The actions recommended under paragraph
            (1)--
                        (A) shall be designed to maximize financial
                    stability, taking costs to long-term financial and
                    economic growth into account; and
                        (B) may include prescribing the conduct of the
                    activity or practice in specific ways (such as by
                    limiting its scope, nature, size, scale, concentration,
                    or interconnectedness, or applying particular capital
                    or risk-management requirements to the conduct of the
                    activity) or prohibiting the activity or practice
                    altogether.
                (3) Exception.--The standards recommended by the Board and
            adopted by a primary financial regulatory agency pursuant to
            this section shall not apply to activities that a foreign
            financial parent conducts solely outside the United States if
            such activities are conducted solely by a company or other
            operating entity that is located outside the United States.
        (b) Implementation of Recommended Standards.--
                (1) Role of primary financial regulatory agency.--Each
            primary financial regulatory agency is authorized to impose,
            require reports regarding, examine for compliance with, and
            enforce standards in accordance with this section with respect
            to those entities described in section 1000(b)(6) for which it
            is the primary financial regulatory agency. This authority is
            in addition to and does not limit any other authority of the
            primary financial regulatory agencies. Compliance by an entity
            with actions taken by a primary financial regulatory agency
            under this section shall be enforceable in accordance with the
            statutes governing the respective primary financial regulatory
            agency's jurisdiction over the entity as if the agency action
            were taken under those statutes.
                (2) Imposition of standards.--Standards imposed under this
            subsection shall be the standards recommended by the Board in
            accordance with subsection (a) or any other similar standards
            that the Board deems acceptable after consultation between the
            Board and the primary financial regulatory agency.
                (3) Primary financial regulatory agency response.--A
            primary financial regulatory agency shall notify the Council
            and the Board in writing on whether and to what extent the
            agency has imposed the stricter prudential standards described
            in paragraph (2) within 60 days of the Board's recommendation.
            A primary financial regulatory agency that fails to impose such
            standards shall provide specific justification for such failure
            to act in the written notice from the agency to the Council and
            Board.

    SEC. 1108. EFFECT OF RESCISSION OF IDENTIFICATION.

        (a) Notice.--When the Council determines that a company or activity
    or practice no longer is subject to heightened prudential scrutiny, the
    Board shall inform the relevant primary financial regulatory agency or
    agencies (if different from the Board) of that finding.
        (b) Determination of Primary Financial Regulatory Agency to
    Continue.--A primary financial regulatory agency that has imposed
    stricter prudential standards for financial stability purposes under
    this subtitle shall determine whether standards that it has imposed
    under this subtitle should remain in effect.

    SEC. 1109. EMERGENCY FINANCIAL STABILIZATION.

        (a) In General.--Upon the written determination of the Council that
    a liquidity event exists that could destabilize the financial system
    (which determination shall be made upon a vote of not less than two-
    thirds of the members of the Council then serving) and with the written
    consent of the Secretary of the Treasury (after certification by the
    President that an emergency exists), the Corporation may create a
    widely-available program designed to avoid or mitigate adverse effects
    on systemic economic conditions or financial stability by guaranteeing
    obligations of solvent insured depository institutions or solvent
    depository institution holding companies (including any affiliates
    thereof), if necessary to prevent systemic financial instability during
    times of severe economic distress, except that a guarantee of
    obligations under this section may not include provision of equity in
    any form.
        (b) Policies and Procedures.--Prior to exercising any authority
    under this section, the Corporation shall establish policies and
    procedures governing the issuance of guarantees. The terms and
    conditions of any guarantees issued shall be established by the
    Corporation with the approval of the Secretary of the Treasury and the
    Financial Stability Oversight Council. Such terms and conditions may
    include the Corporation requiring collateral as a condition of any such
    guarantee.
        (c) Cap for Guaranteed Amount.--
                (1) In general.--In connection with any program established
            pursuant to subsection (a) and subject to paragraph (2), the
            Corporation may not have guaranteed debt outstanding at any
            time of more than $500,000,000,000 (as indexed to reflect
            growth in assets of insured depository institutions and
            depository institution holding companies as determined by the
            Corporation).
                (2) Additional debt guarantee authority.--If the
            Corporation, with the concurrence of the Council and the
            Secretary (in consultation with the President), determines that
            the Corporation must guarantee debt in excess of
            $500,000,000,000 (as indexed pursuant to paragraph (1)) to
            prevent systemic financial instability, the Corporation may
            transmit to the Congress a request for authority to guarantee
            debt in excess of $500,000,000,000 (as indexed pursuant to
            paragraph (1)). Such request shall be considered granted by
            Congress upon adoption of a joint resolution approving such
            request. Such joint resolution shall be considered in the
            Senate under expedited procedures.
        (d) Funding.--
                (1) Administrative expenses and cost of guarantees.--A
            program established pursuant to this section shall require
            funding only for the purposes of paying administrative expenses
            and for paying a guarantee in the event that a guaranteed loan
            defaults.
                (2) Fees and other charges.--The Corporation shall charge
            fees or other charges to all participants in such program
            established pursuant to this section to offset projected losses
            and administrative expenses. To the extent that a program
            established pursuant to this section has expenses or losses,
            the program will be funded entirely through fees or other
            charges assessed on participants in such program.
                (3) Excess funds.--If at the conclusion of such program
            there are any excess funds collected from the fees associated
            with such program, the funds will be deposited into the
            Systemic Dissolution Fund established pursuant to section
            1609(n).
                (4) Authority of corporation.--For purposes of conducting a
            program established pursuant to this section, the Corporation--
                        (A) may borrow funds from the Secretary of the
                    Treasury, which shall be repaid in full with interest
                    through fees and charges paid by participants in
                    accordance with paragraph (2), and there shall be
                    available to the Corporation amounts in the Treasury
                    not otherwise appropriated, including for the payment
                    of reasonable administrative expenses;
                        (B) may not borrow funds from the Deposit Insurance
                    Fund established pursuant to section 11(a)(4) of the
                    Federal Deposit Insurance Act; and
                        (C) may not borrow funds from the Systemic
                    Dissolution Fund established pursuant to section
                    1609(n).
                (5) Back-up special assessment.--To the extent that the
            funds collected pursuant to paragraph (2) are insufficient to
            cover any losses or expenses (including monies borrowed
            pursuant to paragraph (4)) arising from a program established
            pursuant to this section, the Corporation shall impose a
            special assessment solely on participants in the program.
        (e) Plan for Maintenance or Increase of Lending.--In connection
    with any application or request to participate in such program
    authorized pursuant to this section, a solvent entity seeking to
    participate in such program shall be required to submit to the
    Corporation a plan detailing how the use of such guaranteed funds will
    facilitate the increase or maintenance of such solvent company's level
    of lending to consumers or small businesses.
        (f) Sunset of Corporation's Authority.--The Corporation's authority
    under subsections (a) and (d) and the authority to borrow funds from
    the Treasury under section 1609(o) shall expire on December 31, 2013.
        (g) Rule of Construction.--For purposes of this section, a
    guarantee of deposits held by insured depository institutions shall not
    be treated as a debt guarantee program.
        (h) Definitions.--For purposes of this section, the following
    definitions apply:
                (1) Corporation.--The term ``Corporation'' means the
            Federal Deposit Insurance Corporation.
                (2) Depository institution holding company.--The term
            ``depository institution holding company'' has the meaning
            given the term in section 3 of the Federal Deposit Insurance
            Act (12 U.S.C. 1813).
                (3) Insured depository institution.--The term ``insured
            depository institution'' has the meaning given the term in
            section 3 of the Federal Deposit Insurance Act (12 U.S.C.
            1813).
                (4) Solvent.--The term ``solvent'' means assets are more
            than the obligations to creditors.

    SEC. 1110. ADDITIONAL RELATED AMENDMENTS.

        (a) Federal Deposit Insurance Act Related Amendments.--
                (1) Suspension of parallel federal deposit insurance act
            authority.--Effective upon the date of the enactment of this
            section through December 31, 2013, the Corporation may not
            exercise its authority under section 13(c)(4)(G)(i) of the
            Federal Deposit Insurance Act (12 U.S.C. 1823(c)(4)(G)(i)) to
            establish any widely-available debt guarantee program for which
            section 1109 would provide authority.
                (2) Federal deposit insurance act authority preserved.--
            Effective December 31, 2013, the Corporation shall have the
            same authority pursuant to section 13(c)(4)(G)(i) of the
            Federal Deposit Insurance Act as the Corporation had prior to
            the date of enactment of this Act.
        (b) Effect of Default on an Fdic Guarantee.--If an insured
    depository institution or depository institution holding company
    participating in a program under section 1109 or any participant in a
    debt guarantee program established pursuant to section 13(c)(4)(G)(i)
    of the Federal Deposit Insurance Act defaults on any obligation
    guaranteed by the Corporation after the date of enactment of this Act,
    the Corporation may--
                (1) appoint itself as receiver for the insured depository
            institution that defaults;
                (2) with respect to any other participating company that is
            not an insured depository institution that defaults--
                        (A) require consideration of whether a
                    determination shall be made as provided in section 1603
                    to resolve the company under subtitle G; and
                        (B) if the Corporation is not appointed receiver
                    pursuant to subtitle G within 30 days of the date of
                    default, require the company to file a petition for
                    bankruptcy under section 301 of title 11, United States
                    Code, or file a petition for bankruptcy against the
                    company under section 303 of title 11, United States
                    Code.
        (c) Authority to File Involuntary Petition for Bankruptcy.--Section
    303 of title 11, United States Code, is amended by adding at the end
    the following:
        ``(m) Notwithstanding subsections (a) and (b), an involuntary case
    may be commenced by the Federal Deposit Insurance Corporation against a
    depository institution holding company as defined in section 3 of the
    Federal Deposit Insurance Act (12 U.S.C. 1813) or other company
    participating in a guarantee program established by the Corporation on
    the ground that the company has defaulted on a debt or obligation
    guaranteed by the Corporation.''.
        (d) Bankruptcy Priority for Defaults on Debt Guaranteed Pursuant to
    Section 1109.--Section 507(a)(9) of title 11, United States Code, is
    amended by inserting before the period at the end the following: ``and
    allowed unsecured claims based upon any debt to the Federal Deposit
    Insurance Corporation that arose prior to the commencement of the case
    under this title, as a result of the debtor's default on a guarantee
    provided by the Corporation pursuant to section 1109 of the Financial
    Stability Improvement Act of 2009 or the Federal Deposit Insurance Act,
    under a program established by the Corporation after the date of
    enactment of the Financial Stability Improvement Act of 2009''.

    SEC. 1111. CORPORATION MAY RECEIVE WARRANTS WHEN PAYING OR RISKING
                  TAXPAYER FUNDS.

        (a) In General.--In connection with any payment, credit extension,
    or guarantee or any commitment under section 1109 or 1604, the
    Corporation may obtain from the insured depository institution,
    depository institution holding company (including any affiliates
    thereof), or covered financial company, as the case may be--
                (1) in the case of an insured depository institution,
            depository institution holding company (including any
            affiliates thereof), or covered financial company, the
            securities of which are traded on a national securities
            exchange, a warrant giving the right to the Corporation to
            receive nonvoting common stock or preferred stock in such
            financial institution, or voting stock with respect to which,
            the Corporation agrees not to exercise voting power, as the
            Corporation determines appropriate; or
                (2) in the case of any insured depository institution,
            depository institution holding company (including any
            affiliates thereof), or covered financial company other than
            one described in paragraph (1), a warrant for common or
            preferred stock, or a senior debt instrument from such
            financial institution, as described in subsection (b)(3).
        (b) Terms and Conditions.--The terms and conditions of any warrant
    or senior debt instrument required under subsection (a) shall meet the
    following requirements:
                (1) Purposes.--Such terms and conditions shall, at a
            minimum, be designed--
                        (A) to provide for reasonable participation by the
                    Corporation, for the benefit of taxpayers, in equity
                    appreciation in the case of a warrant or other equity
                    security, or a reasonable interest rate premium, in the
                    case of a debt instrument; and
                        (B) to provide additional protection for the
                    taxpayer against losses from such payment, extension of
                    credit, or guarantee by the Corporation under this
                    title.
                (2) Authority to sell, exercise, or surrender.--The
            Corporation may sell, exercise, or surrender a warrant or any
            senior debt instrument received under this subsection, based on
            the conditions established under paragraph (1).
                (3) Conversion.--The warrant shall provide that if, after
            the warrant is received by the Corporation under this
            subsection, the financial company that issued the warrant is no
            longer listed or traded on a national securities exchange or
            securities association, as described in subsection (a)(1), such
            warrants shall convert to senior debt, or contain appropriate
            protections for the Corporation to ensure that the Corporation
            is appropriately compensated for the value of the warrant, in
            an amount determined by the Corporation.
                (4) Protections.--Any warrant representing securities to be
            received by the Corporation under this subsection shall contain
            anti-dilution provisions of the type employed in capital market
            transactions, as determined by the Corporation. Such provisions
            shall protect the value of the securities from market
            transactions such as stock splits, stock distributions,
            dividends, and other distributions, mergers, and other forms of
            reorganization or recapitalization.
                (5) Exercise price.--The exercise price for any warrant
            issued pursuant to this subsection shall be set by the
            Corporation, in the interest of the taxpayers.
                (6) Sufficiency.--The financial company shall guarantee to
            the Corporation that it has authorized shares of nonvoting
            stock available to fulfill its obligations under this
            subsection. Should the financial company not have sufficient
            authorized shares, including preferred shares that may carry
            dividend rights equal to a multiple number of common shares,
            the Corporation may, to the extent necessary, accept a senior
            debt note in an amount, and on such terms as will compensate
            the Corporation with equivalent value, in the event that a
            sufficient shareholder vote to authorize the necessary
            additional shares cannot be obtained.
        (c) Exceptions.--
                (1) The Corporation shall establish an exception to the
            requirements of this section and appropriate alternative
            requirements for any participating financial company that is
            legally prohibited from issuing securities and debt
            instruments, so as not to allow circumvention of the
            requirements of this section.
                (2) If the Corporation is providing a payment, extension of
            credit, or guarantee with regard to its authority under section
            1604 and the Corporate determines that it is certain that at
            the conclusion of the Resolution Process the shareholders of
            all classes shall lose their entire investment and receive
            nothing therefor, then the requirements of this section shall
            not apply.

    SEC. 1112. EXAMINATIONS AND ENFORCEMENT ACTIONS FOR INSURANCE AND
                  RESOLUTIONS PURPOSES.

        (a) Examinations for Insurance and Resolutions Purposes.--Section
    10(b)(3) of the Federal Deposit Insurance Act (12 U.S.C. 1820(b)(3)) is
    amended by striking ``whenever the Board of Directors determines'' and
    all that follows through the period and inserting ``or financial
    holding company subject to stricter standards (as defined in section
    1000(b)(5) of the Financial Stability Improvement Act of 2009) whenever
    the Board of Directors determines a special examination of any such
    depository institution is necessary to determine the condition of such
    depository institution for insurance or such financial holding company
    subject to stricter standards for resolution purposes.''.
        (b) Enforcement Authority.--Section 8(t) of the Federal Deposit
    Insurance Act (12 U.S.C. 1818(t)) is amended--
                (1) in paragraph (2)--
                        (A) at the end of subparagraph (B), by striking
                    ``or'';
                        (B) at the end of subparagraph (C), by striking the
                    period and inserting ``; or''; and
                        (C) by inserting at the end the following new
                    subparagraph:
                        ``(D) the conduct or threatened conduct (including
                    any acts or omissions) of the depository institution
                    holding company poses a risk to the Deposit Insurance
                    Fund.''; and
                (2) by adding at the end the following new paragraph:
                ``(6) For purposes of this subsection:
                        ``(A) The Corporation shall have the same powers
                    with respect to a depository institution holding
                    company and its affiliates as the appropriate Federal
                    banking agency has with respect to the holding company
                    and its affiliates; and
                        ``(B) the holding company and its affiliates shall
                    have the same duties and obligations with respect to
                    the Corporation as the holding company and its
                    affiliates have with respect to the appropriate Federal
                    banking agency.''.

    SEC. 1113. STUDY OF THE EFFECTS OF SIZE AND COMPLEXITY OF FINANCIAL
                  INSTITUTIONS ON CAPITAL MARKET EFFICIENCY AND ECONOMIC
                  GROWTH.

        (a) Study Required.--The Chairman of the Council shall carry out a
    study of the economic impact of possible financial services regulatory
    limitations intended to reduce systemic risk. Such study shall estimate
    the effect on the efficiency of capital markets, costs imposed on the
    financial sector, and on national economic growth, of--
                (1) explicit or implicit limits on the maximum size of
            banks, bank holding companies, and other large financial
            institutions;
                (2) limits on the organizational complexity and
            diversification of large financial institutions;
                (3) requirements for operational separation between
            business units of large financial institutions in order to
            expedite resolution in case of failure;
                (4) limits on risk transfer between business units of large
            financial institutions;
                (5) requirements to carry contingent capital or similar
            mechanisms;
                (6) limits on commingling of commercial and financial
            activities by large financial institutions;
                (7) segregation requirements between traditional financial
            activities and trading or other high-risk operations in large
            financial institutions; and
                (8) other limitations on the activities or structure of
            large financial institutions that may be useful to limit
            systemic risk.
    The study shall include recommendations for the optimal structure of
    any limits considered in paragraphs (1) through (5) in order to
    maximize their effectiveness and minimize their economic impact.
        (b) Report.--Not later than the end of the 180-day period beginning
    on the date of the enactment of this title, the Chairman shall issue a
    report to the Congress containing any findings and determinations made
    in carrying out the study required under subsection (a).

    SEC. 1114. EXERCISE OF FEDERAL RESERVE AUTHORITY.

        (a) No Decisions by Federal Reserve Bank Presidents.--No provision
    of this title relating to the authority of the Board shall be construed
    as conferring any decision-making authority on presidents of Federal
    reserve banks.
        (b) Voting Decisions by Board.--The Board of Governors of the
    Federal Reserve System shall not delegate the authority to make any
    voting decision that the Board is authorized or required to make under
    this title in contravention of section 11(k) of the Federal Reserve
    Act.

    SEC. 1115. STRESS TESTS.

        (a) A financial holding company subject to stricter standards
    shall--
                (1) conduct quarterly stress tests; and
                (2) submit a report on its quarterly stress test to the
            head of the primary financial regulatory agency and to the
            Board at such time, in such form, and containing such
            information as the head of the primary financial regulatory
            agency may require.
        (b) A financial company that has more than $10,000,000,000 in total
    assets and is not a financial holding company subject to stricter
    standards shall--
                (1) conduct semiannual stress tests; and
                (2) submit a report on its semiannual stress test to the
            head of the primary financial regulatory agency and to the
            Board at such time, in such form, and containing such
            information as the head of the primary financial regulatory
            agency may require.
        (c) A stress test under this section shall provide for testing
    under each of the following sets of conditions:
                (1) Baseline.
                (2) Adverse.
                (3) Severely adverse.
        (d) The head of each primary financial regulatory agency, in
    coordination with the Board, shall issue regulations to define the term
    ``stress test'' for purposes of this section.

    SEC. 1116. CONTINGENT CAPITAL.

        (a) In General.--The Board, in coordination with the appropriate
    primary financial regulatory agency, may, after notice and opportunity
    for comment, promulgate regulations that require a financial holding
    company subject to stricter standards to maintain a minimum amount of
    long-term hybrid debt that is convertible to equity when--
                (1) the Board determines that a specified financial company
            fails to meet prudential standards established by the Board; or
                (2) the Board has determined that threats to United States
            financial system stability make such a conversion necessary.
        (b) Factors to Consider.--In establishing regulations under this
    section, the Board shall consider--
                (1) an appropriate transition period for implementation of
            a conversion under this section;
                (2) capital requirements applicable to the specified
            financial company and its subsidiaries; and
                (3) any other factor that the Board deems appropriate.
        (c) Study Required.--The Chairman of the Council shall carry out a
    study to determine an optimal implementation of contingent capital
    requirements to maximize financial stability, minimize the probability
    of drawing on the Systemic Resolution Fund established under section
    1609(n) in a financial crisis, and minimize costs for financial holding
    companies subject to stricter standards. To the extent practicable, the
    study shall take place with input from industry participants and
    international financial regulators. Such study shall include--
                (1) an evaluation of the characteristics and amounts of
            convertible debt that should be required, including possible
            tranche structure;
                (2) an analysis of possible trigger mechanisms for debt
            conversion, including violation of regulatory capital
            requirements, failure of stress tests, declaration of systemic
            emergency by regulators, market-based triggers and other
            trigger mechanisms;
                (3) an estimate of the costs of carrying contingent
            capital;
                (4) an estimate of the effectiveness of contingent capital
            requirements in reducing losses to the systemic resolution fund
            in cases of single-firm or systemic failure; and
                (5) recommendations for implementing legislation.
        (d) Report.--Not later than the end of the 180-day period beginning
    on the date of the enactment of this title, the Chairman of Council
    shall issue a report to the Congress containing any findings and
    determinations made in carrying out the study required under subsection
    (c).

    SEC. 1117. RESTRICTION ON PROPRIETARY TRADING BY DESIGNATED FINANCIAL
                  HOLDING COMPANIES.

        (a) In General.--If the Board determines that propriety trading by
    a financial holding company subject to stricter standards poses an
    existing or foreseeable threat to the safety and soundness of such
    company or to the financial stability of the United States, the Board
    may prohibit such company from engaging in propriety trading.
        (b) Exceptions Permitted.--The Board may exempt from the
    prohibition of subsection (a) proprietary trading that the Board
    determines to be ancillary to other operations of such company and not
    to pose a threat to the safety and soundness of such company or to the
    financial stability of the United States, including--
                (1) making a market in securities issued by such company;
                (2) hedging or managing risk;
                (3) determining the market value of assets of such company;
            and
                (4) propriety trading for such other purposes allowed by
            the Board by rule.
        (c) Rulemaking Authority.--The primary financial regulatory
    agencies of banks and bank holding companies shall jointly issue
    regulations to carry out this section.
        (d) Effective Date.--The provisions of this section shall take
    effect after the end of the 180-day period beginning on the date of the
    enactment of this title.
        (e) Proprietary Trading Defined.--For purposes of this section and
    with respect to a company, the term ``proprietary trading'' means the
    trading of stocks, bonds, options, commodities, derivatives, or other
    financial instruments with the company's own money and for the
    company's own account.

    SEC. 1118. RULE OF CONSTRUCTION.

        (a) Construction.--The authorities granted to agencies under this
    subtitle are in addition to any rulemaking, report-related,
    examination, enforcement, or other authority that such agencies may
    have under other law and in no way shall be construed to limit such
    other authority, except that any standards imposed for financial
    stability purposes under this subtitle shall supersede any conflicting
    less stringent requirements of the primary financial regulatory agency
    but only the extent of the conflict.
        (b) Agent Responsibilities.--For purposes of this subtitle, the
    term ``agent'' means the Board acting under section 1103(c) and
    coordinating with the Council in exercising authority under sections
    1104 and 1107.

    SEC. 1119. ANTITRUST SAVINGS CLAUSE.

        Nothing in this subtitle shall be construed to modify, impair, or
    supercede the operation of any of the antitrust laws. For purposes of
    the preceding sentence, the term ``antitrust laws'' has the meaning
    given such term in subsection (a) of the first section of the Clayton
    Act, except that such term includes section 5 of the Federal Trade
    Commission Act to the extent that such section relates to unfair
    methods of competition.

       Subtitle C--Improvements to Supervision and Regulation of Federal
                            Depository Institutions

    SEC. 1201. DEFINITIONS.

        For purposes of this subtitle, the following definitions shall
    apply:
                (1) Board of governors.--The term ``Board of Governors''
            means the Board of Governors of the Federal Reserve System.
                (2) Corporation.--The term ``Corporation'' means the
            Federal Deposit Insurance Corporation.
                (3) Office of the comptroller of the currency.--The term
            ``Office of the Comptroller of the Currency'' means the office
            established by section 324 of the Revised Statutes (12 U.S.C.
            1).
                (4) Office of thrift supervision.--The term ``Office of
            Thrift Supervision'' means the office established by section 3
            of the Home Owners' Loan Act (12 U.S.C. 1462a).
                (5) Secretary.--The term ``Secretary'' means the Secretary
            of the Treasury.
                (6) Transfer date.--The term ``transfer date'' has the
            meaning provided in section 1205.
                (7) Certain other terms.--The terms ``affiliate'', ``bank
            holding company'', ``control'' (when used with respect to a
            depository institution), ``depository institution'', ``Federal
            banking agency'', ``Federal savings association'',
            ``including'', ``insured branch'', ``insured depository
            institution'', ``savings association'', ``State savings
            association'', and ``subsidiary'' have the same meanings as in
            section 3 of the Federal Deposit Insurance Act.

    SEC. 1202. AMENDMENTS TO THE HOME OWNERS' LOAN ACT RELATING TO TRANSFER
                  OF FUNCTIONS.

        (a) Amendments to Section 2.--Section 2 of the Home Owners' Loan
    Act (12 U.S.C. 1462) is amended--
                (1) by striking paragraph (1) and inserting the following
            new paragraph:
                ``(1) Board of governors.--The term `Board of Governors'
            means the Board of Governors of the Federal Reserve System.'';
            and
                (2) by striking paragraph (3) and inserting the following
            new paragraph:
                ``(3) [repealed]''.
        (b) Amendments to Section 3.--Section 3 of the Home Owners' Loan
    Act (12 U.S.C. 1462a) is amended--
                (1) by striking subsection (a) and inserting the following
            new subsection:
        ``(a) Establishment of Division of Thrift Supervision.--To carry
    out the purposes of this Act, there is hereby established the Division
    of Thrift Supervision, which shall be a division within the Office of
    the Comptroller of the Currency.'';
                (2) in subsection (b)--
                        (A) by striking paragraph (1) and inserting the
                    following new paragraph:
                ``(1) In general.--The Division of Thrift Supervision shall
            be headed by a Senior Deputy Comptroller of the Currency who
            shall be subject to the general oversight of the Comptroller of
            the Currency.'';
                        (B) in paragraph (2), by striking ``Director'' and
                    inserting ``Comptroller of the Currency''; and
                        (C) by striking paragraphs (3) and (4);
                (3) by striking subsections (c), (d), and (e) and inserting
            the following new subsection:
        ``(c) Powers of the Comptroller of the Currency.--The Comptroller
    of the Currency shall have all the powers, duties, and functions
    transferred by the Financial Stability Improvement Act of 2009 to the
    Comptroller of the Currency to carry out this Act.'';
                (4) by redesignating subsections (f) and (i) as subsections
            (d) and (e), respectively;
                (5) in subsection (d) (as so redesignated), by striking
            ``Director'' each place such term appears and inserting
            ``Comptroller of the Currency'';
                (6) by striking subsections (g), (h), and (j); and
                (7) in subsection (e) (as so redesignated), by striking
            ``compensation of the Director and other employees of the
            Office and all other expenses thereof'' and inserting
            ``expenses incurred by the Comptroller of the Currency in
            carrying out this Act''.
        (c) Amendments to Section 4.--Section 4 of the Home Owners' Loan
    Act (12 U.S.C. 1463) is amended by striking ``Director'' each time it
    appears and inserting ``Comptroller of the Currency''.
        (d) Amendments to Section 5.--
                (1) Universal.--Section 5 of the Home Owners' Loan Act (12
            U.S.C. 1464) is amended--
                        (A) by striking ``Director'' and ``Director of the
                    Office of Thrift Supervision'' each place such terms
                    appear and inserting ``Comptroller of the Currency'';
                    and
                        (B) by striking ``Director's'' each place such term
                    appears and inserting ``Comptroller of the
                    Currency's''.
                (2) Specific provisions.--
                        (A) Section 5(d)(2)(E) of the Home Owners' Loan Act
                    is amended by striking ``or the Resolution Trust
                    Corporation, as appropriate,'' each place such term
                    appears.
                        (B) Section 5(d)(3)(B) of the Home Owners' Loan Act
                    is amended by striking ``or the Resolution Trust
                    Corporation''.
        (e) Amendments to Sections 8 and 9.--Sections 8 and 9 of the Home
    Owners' Loan Act (12 U.S.C. 1466a and 1467) are each amended by
    striking ``Director'' each place such term appears and inserting
    ``Comptroller of the Currency''.
        (f) Technical and Conforming Amendments.--
                (1) Section 3.--The heading for section 3 of the Home
            Owners' Loan Act is amended by striking ``director of the
            office of thrift supervision'' and inserting ``division of
            thrift supervision''.
                (2) Section 5.--The heading for paragraph (2)(E)(ii) of
            section 5(d) of the Home Owners' Loan Act and the heading for
            paragraph (3)(B) of such section are each amended by striking
            ``OR RTC''.
        (g) Clerical Amendment.--The table of contents section for the Home
    Owners' Loan Act is amended by striking the item relating to section 3
    and inserting the following new item:

    ``Sec. 3. Division of Thrift Supervision.''.

    SEC. 1203. AMENDMENTS TO THE REVISED STATUTES.

        (a) Amendment to Section 324.--Section 324 of the Revised Statutes
    of the United States (12 U.S.C. 1) is amended to read as follows:

    ``SEC. 324. COMPTROLLER OF THE CURRENCY.

        ``There shall be in the Department of the Treasury a bureau, the
    chief officer of which bureau shall be called the Comptroller of the
    Currency, and shall perform the duties of the Comptroller of the
    Currency under the general direction of the Secretary of the Treasury.
    The Comptroller of the Currency shall have the same authority over
    matters as were vested in the Director of the Office of Thrift
    Supervision or the Office of Thrift Supervision on the day before the
    date of enactment of the Financial Stability Improvement Act of 2009
    other than those authorities with respect to savings and loan holding
    companies and any affiliate of any such company (other than a savings
    association) as were vested in the Director of the Office of Thrift
    Supervision on such date. The Secretary of the Treasury may not delay
    or prevent the issuance of any rule or the promulgation of any
    regulation by the Comptroller of the Currency and may not intervene in
    any matter or proceeding before the Comptroller of the Currency
    (including agency enforcement actions) unless otherwise specifically
    provided by law.''.
        (b) Amendments to Section 327.--Section 327 of the Revised Statutes
    of the United States (12 U.S.C. 4) is amended to read as follows:

    ``SEC. 327. DEPUTY COMPTROLLERS.

        ``(a) Appointment.--The Secretary of the Treasury shall appoint no
    more than 5 Deputy Comptrollers of the Currency--
                ``(1) 1 of whom shall be designated the Senior Deputy
            Comptroller for National Banks, who shall oversee the
            regulation and supervision of national banks; and
                ``(2) 1 of whom shall be designated the Senior Deputy
            Comptroller for Thrift Supervision, who shall oversee the
            regulation and supervision of Federal savings associations, and
            who shall coordinate with the Office of Thrift Supervision
            pursuant to section 1211.
        ``(b) Pay.--The Secretary of the Treasury shall fix the
    compensation of the Deputy Comptrollers of the Currency and provide
    such other benefits as the Secretary may determine to be appropriate.
        ``(c) Oath of Office; Duties.--Each Deputy Comptroller shall take
    the oath of office and shall perform such duties as the Comptroller of
    the Currency shall direct.
        ``(d) Service as Acting Comptroller.--During a vacancy in the
    office or during the absence or disability of the Comptroller, each
    Deputy Comptroller shall possess the power and perform the duties
    attached by law to the Office of the Comptroller under such order of
    succession as the Comptroller shall direct.''.
        (c) Amendment to Section 329.--Section 329 of the Revised Statutes
    of the United States (12 U.S.C. 11) is amended by inserting ``or any
    Federal savings association'' before the period at the end.
        (d) Amendment to Section 5240.--The fourth sentence of the second
    undesignated paragraph of Section 5240 of the Revised Statutes of the
    United States (12 U.S.C. 481) is amended by striking ``Secretary of the
    Treasury;'' and all that follows through the end of the sentence, and
    inserting ``Secretary of the Treasury; the employment and compensation
    of examiners, chief examiners, reviewing examiners, assistant
    examiners, and of the other employees of the office of the Comptroller
    of the Currency whose compensation is and shall be paid from
    assessments on banks or affiliates thereof or from other fees or
    charges imposed pursuant to this subchapter shall be set and adjusted
    pursuant to chapter 71 of title 5, United States Code and without
    regard to the provisions of other laws applicable to officers or
    employees of the United States.''.
        (e) Amendment to Section 5240.--The first sentence in the first
    undesignated paragraph of Section 5240 of the Revised Statutes of the
    United States (12 U.S.C. 482) is amended by inserting ``pursuant to
    chapter 71 of title 5, United States Code,'' after ``shall,''.
        (f) Effective Date.--Subsection (b) shall take effect on the date
    of the enactment of this Act.

    SEC. 1204. POWER AND DUTIES TRANSFERRED.

        (a) Director of the Office of Thrift Supervision.--
                (1) Transfer of functions.--Except as otherwise provided in
            this subtitle, all functions of the Director of the Office of
            Thrift Supervision are transferred to the Office of the
            Comptroller of the Currency.
                (2) Comptroller's authority.--Except as otherwise provided
            in this subtitle, the Comptroller of the Currency shall succeed
            to all powers, authorities, rights, and duties that were vested
            in the Director of the Office of Thrift Supervision under
            Federal law, including the Home Owners' Loan Act, on the day
            before the transfer date other than those powers, authorities,
            rights, and duties with respect to savings and loan holding
            companies and any affiliate of any such company (other than a
            savings association) as were vested in the Director of the
            Office of Thrift Supervision on such date.
                (3) Functions relating to supervision of state savings
            associations.--
                        (A) Transfer of functions.--All functions of the
                    Director of the Office of Thrift Supervision relating
                    to the supervision and regulation of State savings
                    associations are transferred to the Corporation.
                        (B) Corporation's authority.--The Corporation shall
                    succeed to all powers, authorities, rights, and duties
                    that were vested in the Director of the Office of
                    Thrift Supervision under Federal law, including the
                    Home Owners' Loan Act, on the day before the transfer
                    date, relating to the supervision and regulation of
                    State savings associations.
                (4) Functions relating to supervision of savings and loan
            holding companies.--
                        (A) Transfer of functions.--All functions of the
                    Director of the Office of Thrift Supervision relating
                    to the supervision and regulation of Savings and Loan
                    Holding Companies are transferred to the Board.
                        (B) Board authority.--The Board shall succeed to
                    all powers, authorities, rights, and duties that were
                    vested in the Director of the Office of Thrift
                    Supervision under Federal law, including the Home
                    Owners' Loan Act, on the day before the transfer date,
                    relating to the supervision and regulation of Savings
                    and Loan Holding Companies.
        (b) Appropriate Federal Banking Agency.--Section 3 of the Federal
    Deposit Insurance Act (12 U.S.C. 1813) is amended in subsection (q)--
                (1) by amending paragraph (1) to read as follows:
                ``(1) the Comptroller of the Currency in the case of any
            national bank, Federal savings association or any Federal
            branch or agency of a foreign bank;'';
                (2) in paragraph (2)(E), by striking ``and'' at the end;
                (3) in paragraph (2)(F), by adding ``and'' at the end after
            the semicolon;
                (4) after paragraph (2)(F), by inserting the following new
            subparagraph:
                        ``(G) any savings and loan holding company and any
                    subsidiary of a savings and loan holding company (other
                    than a savings association); and'';
                (5) by amending paragraph (3) to read as follows:
                ``(3) the Federal Deposit Insurance Corporation in the case
            of a State nonmember insured bank, a State savings association
            or a foreign bank having an insured branch.''; and
                (6) by striking paragraph (4).
        (c) Transfer of Consumer Financial Protection Functions.--Nothing
    in subsection (a) or (b) shall affect any transfer of consumer
    financial protection functions of the Comptroller of the Currency and
    the Director of the Office of Thrift Supervision to the Consumer
    Financial Protection Agency as provided in the Consumer Financial
    Protection Agency Act of 2009.
        (d) Effective Date.--Subsections (a) and (b) shall become effective
    on the transfer date.

    SEC. 1205. TRANSFER DATE.

        (a) In General.--Except as provided in subsection (b), the date for
    the transfer of functions to the Office of the Comptroller of the
    Currency and the Corporation under section 1204 shall be 1 year after
    the date of enactment of this title.
        (b) Extension Permitted.--
                (1) Notice required.--The Secretary, in consultation with
            the Comptroller of the Currency and the Director of the Office
            of Thrift Supervision, may designate a calendar date for the
            transfer of functions of the Office of Thrift Supervision to
            the Office of the Comptroller of the Currency, and the
            Corporation under section 1204 that is later than 1 year after
            the date of enactment of this title if the Secretary--
                        (A) transmits to the Committee on Banking, Housing,
                    and Urban Affairs of the Senate and the Committee on
                    Financial Services of the House of Representatives--
                                (i) a written determination that orderly
                            implementation of this subtitle is not feasible
                            on the date that is 1 year after the date of
                            enactment of this subtitle;
                                (ii) an explanation of why an extension is
                            necessary for the orderly implementation of
                            this subtitle; and
                                (iii) a description of the steps that will
                            be taken to effect an orderly and timely
                            implementation of this subtitle within the
                            extended time period; and
                        (B) publishes notice of that designated later date
                    in the Federal Register.
                (2) Extension limited.--In no case shall any date
            designated under paragraph (1) be later than 18 months after
            the date of enactment of this subtitle.
                (3) Effect on references to ``transfer date''.--If the
            Secretary takes the actions provided in paragraph (1) for
            designating a date for the transfer of functions to the Office
            of the Comptroller of the Currency, and the Corporation under
            section 1204, references in this title to ``transfer date''
            shall mean the date designated by the Secretary.

    SEC. 1206. EXPIRATION OF TERM OF COMPTROLLER.

        (a) In General.--Notwithstanding section 325 of the Revised
    Statutes of the United States, the term of the person serving as
    Comptroller on the date of the enactment of this title shall terminate
    as of such date.
        (b) Acting Comptroller.--Subject to sections 3345, 3346, and 3347
    of title 5, United States Code, the President may designate a person to
    serve as acting Comptroller and perform the functions and duties of the
    Comptroller until a Comptroller has been appointed and qualified in the
    manner established in section 325 of the Revised Statutes of the United
    States.

    SEC. 1207. OFFICE OF THRIFT SUPERVISION ABOLISHED.

        Effective 90 days after the transfer date, the position of Director
    of the Office of Thrift Supervision and the Office of Thrift
    Supervision are abolished.

    SEC. 1208. SAVINGS PROVISIONS.

        (a) Office of Thrift Supervision.--
                (1) Existing rights, duties, and obligations not
            affected.--Sections 1204(a) and 1207 shall not affect the
            validity of any right, duty, or obligation of the United
            States, the Director of the Office of Thrift Supervision, the
            Office of Thrift Supervision, or any other person, that existed
            on the day before the transfer date.
                (2) Continuation of suits.--This subtitle shall not abate
            any action or proceeding commenced by or against the Director
            of the Office of Thrift Supervision or the Office of Thrift
            Supervision before the transfer date, except that--
                        (A) for any action or proceeding arising out of a
                    function of the Director of the Office of Thrift
                    Supervision transferred to the Comptroller of the
                    Currency by this title, the Comptroller of the Currency
                    or the Office of the Comptroller of the Currency shall
                    be substituted for the Director of the Office of Thrift
                    Supervision or the Office of Thrift Supervision, as the
                    case may be, as a party to the action or proceeding as
                    of the transfer date; and
                        (B) for any action or proceeding arising out of a
                    function of the Director of the Office of Thrift
                    Supervision transferred to the Corporation by this
                    title, the Chairman of the Corporation shall be
                    substituted for the Director of the Office of Thrift
                    Supervision as a party to the action or proceeding as
                    of the transfer date.
        (b) Continuation of Existing OTS Orders, Resolutions,
    Determinations, Agreements, Regulations, etc.--All orders, resolutions,
    determinations, agreements, and regulations, interpretative rules,
    other interpretations, guidelines, procedures, and other advisory
    materials, that have been issued, made, prescribed, or allowed to
    become effective by the Office of Thrift Supervision, or by a court of
    competent jurisdiction, in the performance of functions that are
    transferred by this title and that are in effect on the day before the
    transfer date, shall continue in effect according to the terms of those
    orders, resolutions, determinations, agreements, and regulations,
    interpretative rules, other interpretations, guidelines, procedures,
    and other advisory materials, and shall be enforceable by or against--
                (1) the Office of the Comptroller of the Currency, in the
            case of a function of the Director of the Office of Thrift
            Supervision transferred to the Comptroller of the Currency,
            until modified, terminated, set aside, or superseded in
            accordance with applicable law by the Office of the Comptroller
            of the Currency, by any court of competent jurisdiction, or by
            operation of law; and
                (2) the Corporation, in the case of a function of the
            Director of the Office of Thrift Supervision transferred to the
            Corporation, until modified, terminated, set aside, or
            superseded in accordance with applicable law by the
            Corporation, by any court of competent jurisdiction, or by
            operation of law.
        (c) Continuation of Existing OTS Enforcement Actions.--Any formal
    or informal enforcement action taken by the Director of the Office of
    Thrift Supervision with respect to a savings and loan holding company,
    a subsidiary of a savings and loan holding company (other than a
    savings association) or an institution-affiliated party of a savings
    and loan holding company or such a subsidiary, that is in effect on the
    day before the date of the enactment of this title shall continue to be
    effective and enforceable against such company, subsidiary, or
    institution-affiliated party after such date as if--
                (1) such savings and loan holding company, or the savings
            and loan holding company related to such subsidiary or
            institution-affiliated party, had been a bank holding company
            on the effective date of the final enforcement action; and
                (2) the action had been taken by the Board, unless
            otherwise terminated or modified by the Board.
        (d) Identification of Regulations Continued.--
                (1) By office of the comptroller of the currency.--Not
            later than the transfer date, the Comptroller of the Currency
            shall--
                        (A) after consultation with the Chairperson of the
                    Corporation, identify the regulations continued under
                    subsection (b) that will be enforced by the Office of
                    the Comptroller of the Currency; and
                        (B) publish a list of such regulations in the
                    Federal Register.
                (2) By the corporation.--Not later than the transfer date,
            the Corporation shall--
                        (A) after consultation with the Office of the
                    Comptroller of the Currency, identify the regulations
                    continued under subsection (b) that will be enforced by
                    the Corporation; and
                        (B) publish a list of such regulations in the
                    Federal Register.
        (e) Status of Regulations Proposed or Not Yet Effective.--
                (1) Proposed regulations.--Any proposed regulation of the
            Office of Thrift Supervision, which that agency, in performing
            functions transferred by this title, has proposed before the
            transfer date but has not published as a final regulation
            before that date, shall be deemed to be a proposed regulation
            of the Office of the Comptroller of the Currency, or the
            Corporation, as appropriate, according to its terms.
                (2) Regulations not yet effective.--Any interim or final
            regulation of the Office of Thrift Supervision, which that
            agency, in performing functions transferred by this title, has
            published before the transfer date but which has not become
            effective before that date, shall become effective as a
            regulation of the Office of the Comptroller of the Currency, or
            the Corporation, as appropriate, according to its terms.

    SEC. 1209. REGULATIONS AND ORDERS.

        In addition to any powers transferred to the Comptroller of the
    Currency by this title, the Comptroller of the Currency may prescribe
    such regulations and issue such orders as the Comptroller of the
    Currency determines to be appropriate to carry out this title and the
    powers and duties transferred to the Comptroller of the Currency by
    this title.

    SEC. 1210. COORDINATION OF TRANSITION ACTIVITIES.

        Before the transfer date, the Comptroller of the Currency shall--
                (1) consult and cooperate with the Office of Thrift
            Supervision to facilitate the orderly transfer of functions to
            the Comptroller of the Currency;
                (2) determine and redetermine, from time to time--
                        (A) the amount of funds necessary to pay any
                    expenses associated with the transfer of functions
                    (including expenses for personnel, property, and
                    administrative services) during the period beginning on
                    the date of enactment of this title and ending on the
                    transfer date;
                        (B) what personnel are appropriate to facilitate
                    the orderly transfer of functions by this title; and
                        (C) what property and administrative services are
                    necessary to support the Office of the Comptroller of
                    the Currency during the period beginning on the date of
                    enactment of this title and ending on the transfer
                    date; and
                (3) take such actions as may be necessary to provide for
            the orderly implementation of this title.

    SEC. 1211. INTERIM RESPONSIBILITIES OF OFFICE OF THE COMPTROLLER OF THE
                  CURRENCY AND OFFICE OF THRIFT SUPERVISION.

        (a) In General.--When requested by the Comptroller of the Currency
    to do so before the transfer date, the Office of Thrift Supervision
    shall--
                (1) pay to the Comptroller of the Currency, from funds
            obtained by the Office of Thrift Supervision through
            assessments, fees, or other charges that the Office of Thrift
            Supervision is authorized by law to impose, such amounts that
            the Comptroller of the Currency determines to be necessary
            under section 1210(2)(A);
                (2) detail to the Office of the Comptroller of the Currency
            such personnel as the Comptroller of the Currency determines to
            be appropriate under section 1210(2)(B); and
                (3) make available to the Office of the Comptroller of the
            Currency such property and provide the Office of the
            Comptroller of the Currency such administrative services as the
            Comptroller of the Currency determines to be necessary under
            section 1210(2)(C).
        (b) Notice Required.--The Comptroller of the Currency shall give
    the Office of Thrift Supervision reasonable prior notice of any request
    that the Office of the Comptroller of the Currency intends to make
    under subsection (a).

    SEC. 1212. EMPLOYEES TRANSFERRED.

        (a) In General.--
                (1) OTS employees.--
                        (A) In general.--All employees of the Office of
                    Thrift Supervision shall be transferred to either the
                    Comptroller of the Currency or the Corporation for
                    employment.
                        (B) Allocating employees for transfer to receiving
                    agencies.--The Director of the Office of Thrift
                    Supervision, the Comptroller of the Currency, and the
                    Chairperson of the Corporation shall--
                                (i) jointly determine the number of
                            employees of the Office of Thrift Supervision
                            necessary to perform or support--
                                        (I) the functions of the Office of
                                    Thrift Supervision that are transferred
                                    to the Office of the Comptroller of the
                                    Currency by this title; and
                                        (II) the functions of the Office of
                                    Thrift Supervision that are transferred
                                    to the Corporation by this title;
                                (ii) consistent with the numbers determined
                            under clause (ii), jointly identify employees
                            of the Office of Thrift Supervision for
                            transfer to the Office of the Comptroller of
                            the Currency or the Corporation in a manner
                            that the Director of the Office of Thrift
                            Supervision, the Comptroller of the Currency,
                            and the Chairperson of the Corporation, in
                            their discretion, deem equitable.
                (2) Transfer of employees performing consumer financial
            protection functions.--Nothing in paragraph (1) shall affect
            the transfer of employees performing or supporting consumer
            financial protection functions of the Comptroller of the
            Currency and the Director of the Office of Thrift Supervision
            to the Consumer Financial Protection Agency as provided in the
            Consumer Financial Protection Agency Act of 2009.
                (3) Appointment authority for excepted service
            transferred.--
                        (A) In general.--In the case of employees occupying
                    positions in the excepted service, any appointment
                    authority established pursuant to law or regulations of
                    the Office of Personnel Management for filling such
                    positions shall be transferred, subject to subparagraph
                    (B).
                        (B) Declining transfers allowed.--The Office of the
                    Comptroller of the Currency and the Corporation may
                    decline to accept a transfer of authority under
                    subparagraph (A) (and the employees appointed pursuant
                    thereto) to the extent that such authority relates to
                    positions excepted from the competitive service because
                    of their confidential, policy-making, policy-
                    determining, or policy-advocating character.
        (b) Timing of Transfers and Position Assignments.--Each employee to
    be transferred under this section shall--
                (1) be transferred not later than 90 days after the
            transfer date; and
                (2) receive notice of his or her position assignment not
            later than 120 days after the effective date of his or her
            transfer.
        (c) Transfer of Function.--
                (1) In general.--Notwithstanding any other provision of
            law, the transfer of employees shall be deemed a transfer of
            functions for the purpose of section 3503 of title 5, United
            States Code.
                (2) Priority of this subtitle.--If any provision of this
            subtitle conflicts with any protection provided to transferred
            employees under section 3503 of title 5, United States Code,
            the provisions of this subtitle shall control.
        (d) Employees' Status and Eligibility.--The transfer of functions
    and employees under this title, and the abolition of the Office of
    Thrift Supervision, shall not affect the status of the transferred
    employees as employees of an agency of the United States under any
    provision of law.
        (e) Equal Status and Tenure Positions.--Each employee transferred
    from the Office of Thrift Supervision shall be placed in a position at
    either the Office of the Comptroller of the Currency or the Corporation
    with the same status and tenure as he or she held on the day before the
    transfer date.
        (f) No Additional Certification Requirements.--Examiners
    transferred to the Office of the Comptroller of the Currency or the
    Corporation shall not be subject to any additional certification
    requirements before being placed in a comparable examiner's position at
    the Office of the Comptroller of the Currency or the Corporation
    examining the same types of institutions as they examined before they
    were transferred.
        (g) Personnel Actions Limited.--
                (1) 3-year protection.--
                        (A) In general.--Except as provided in paragraph
                    (2), each affected employee shall not, during the 3-
                    year period beginning on the transfer date, be
                    involuntarily separated, or involuntarily reassigned
                    outside his or her locality pay area as defined by the
                    Office of Personnel Management.
                        (B) Affected employees.--For purposes of this
                    paragraph, the term ``affected employee'' means--
                                (i) an employee transferred from the Office
                            of Thrift Supervision holding a permanent
                            position on the day before the transfer date;
                            and
                                (ii) an employee of the Office of the
                            Comptroller of the Currency holding a permanent
                            position on the day before the transfer date.
                (2) Exceptions.--Paragraph (1) does not limit the right of
            the Office of the Comptroller of the Currency or the
            Corporation to--
                        (A) separate an employee for cause or for
                    unacceptable performance; or
                        (B) terminate an appointment to a position excepted
                    from the competitive service because of its
                    confidential policy-making, policy-determining, or
                    policy-advocating character.
        (h) Pay.--
                (1) 1-year protection.--Except as provided in paragraph
            (2), each employee transferred from the Office of Thrift
            Supervision shall, during the 1-year period beginning on the
            transfer date, receive pay at a rate not less than the basic
            rate of pay (including any geographic differential) that the
            employee received during the 1-year period immediately before
            the transfer.
                (2) Exceptions.--Paragraph (1) does not limit the right of
            the Office of the Comptroller of the Currency or the
            Corporation to reduce a transferred employee's rate of basic
            pay--
                        (A) for cause;
                        (B) for unacceptable performance; or
                        (C) with the employee's consent.
                (3) Protection only while employed.--Paragraph (1) applies
            to a transferred employee only while that employee remains
            employed by the Office of the Comptroller of the Currency or
            the Corporation.
                (4) Pay increases permitted.--Paragraph (1) does not limit
            the authority of the Office of the Comptroller of the Currency
            or the Corporation to increase a transferred employee's pay.
        (i) Benefits.--
                (1) Retirement benefits for transferred employees.--
                        (A) In general.--
                                (i) Continuation of existing retirement
                            plan.--Each employee transferred from the
                            Office of Thrift Supervision may remain
                            enrolled in his or her existing retirement plan
                            or plans as long as he or she remains employed
                            by the Office of the Comptroller of the
                            Currency or the Corporation.
                                (ii) Employer's contribution.--The Office
                            of the Comptroller of the Currency or the
                            Corporation shall pay any employer
                            contributions to the existing retirement plan
                            of each employee transferred from the Office of
                            Thrift Supervision as required under that plan.
                        (B) Definition.--For purposes of this paragraph,
                    the term ``existing retirement plan'' means, with
                    respect to any employee transferred under this section,
                    the particular retirement plan (including the Financial
                    Institutions Retirement Fund) and any associated thrift
                    savings plan of the agency from which the employee was
                    transferred, which the employee was enrolled in on the
                    day before the transfer date.
                (2) Benefits other than retirement benefits.--
                        (A) During 1st year.--
                                (i) Existing plans continue.--Each
                            transferred employee may, for 1 year after the
                            transfer date, retain membership in any other
                            employee benefit program of the Office of
                            Thrift Supervision, including a dental, vision,
                            long term care, or life insurance program, to
                            which the employee belonged on the day before
                            the transfer date.
                                (ii) Employer's contribution.--The Office
                            of the Comptroller of the Currency or the
                            Corporation shall pay any employer cost in
                            continuing to extend coverage in the benefit
                            program to the employee as required under that
                            program or negotiated agreements.
                        (B) Dental, vision, or life insurance after 1st
                    year.--If, after the 1-year period beginning on the
                    transfer date, the Office of the Comptroller of the
                    Currency or the Corporation decides not to continue
                    participation in any dental, vision, or life insurance
                    program of the Office of Thrift Supervision, an
                    employee transferred from the Office of Thrift
                    Supervision pursuant to this title who is a member of
                    such a program may, before the decision of the Office
                    of the Comptroller of the Currency or the Corporation
                    takes effect, elect to enroll, without regard to any
                    regularly scheduled open season, in--
                                (i) the enhanced dental benefits program
                            established by chapter 89A of title 5, United
                            States Code;
                                (ii) the enhanced vision benefits
                            established by chapter 89B of title 5, United
                            States Code; and
                                (iii) the Federal Employees Group Life
                            Insurance Program established by chapter 87 of
                            title 5, United States Code, without regard to
                            any requirement of insurability.
                        (C) Long term care insurance after 1st year.--If,
                    after the 1-year period beginning on the transfer date,
                    the Office of the Comptroller of the Currency or the
                    Corporation decides not to continue participation in
                    any long term care insurance program of the Office of
                    Thrift Supervision, an employee transferred from the
                    Office of Thrift Supervision pursuant to this title who
                    is a member of such a program may, before the decision
                    of the Office of the Comptroller of the Currency or the
                    Corporation takes effect, elect to apply for coverage
                    under the Federal Long Term Care Insurance Program
                    established by chapter 90 of title 5, United States
                    Code, under the underwriting requirements applicable to
                    a new active workforce member (as defined in Part 875,
                    title 5, Code of Federal Regulations).
                        (D) Employee's contribution.--
                                (i) In general.--Subject to clause (ii), an
                            individual enrolled in the Federal Employees
                            Health Benefits program under this subparagraph
                            shall pay any employee contribution required by
                            the plan.
                                (ii) Cost differential.--The difference in
                            costs between the benefits that the Office of
                            Thrift Supervision is providing on the date of
                            enactment of this title and the benefits
                            provided by this section shall be paid by the
                            Comptroller of the Currency or the Corporation.
                                (iii) Funds transfer.--The Office of the
                            Comptroller of the Currency or the Corporation
                            shall transfer to the Federal Employees Health
                            Benefits Fund established under section 8909 of
                            title 5, United States Code, an amount
                            determined by the Director of the Office of
                            Personnel Management, after consultation with
                            the Office of the Comptroller of the Currency
                            or the Corporation and the Office of Management
                            and Budget, to be necessary to reimburse the
                            Fund for the cost to the Fund of providing
                            benefits under this subparagraph not otherwise
                            paid for by the employee under clause (i).
                        (E) Special provisions to ensure continuation of
                    life insurance benefits.--
                                (i) In general.--An annuitant (as defined
                            in section 8901(3) of title 5, United States
                            Code) who is enrolled in a life insurance plan
                            administered by the Office of Thrift
                            Supervision on the day before the transfer date
                            shall be eligible for coverage by a life
                            insurance plan under sections 8706(b), 8714a,
                            8714b, and 8714c of title 5, United States
                            Code, or in a life insurance plan established
                            by the Office of the Comptroller of the
                            Currency or the Corporation, without regard to
                            any regularly scheduled open season and
                            requirement of insurability.
                                (ii) Employee's contribution.--
                                        (I) In general.--Subject to
                                    subclause (II), an individual enrolled
                                    in a life insurance plan under this
                                    clause shall pay any employee
                                    contribution required by the plan.
                                        (II) Cost differential.--The
                                    difference in costs between the
                                    benefits that the Office of Thrift
                                    Supervision is providing on the date of
                                    enactment of this title and the
                                    benefits provided by this section shall
                                    be paid by the Comptroller of the
                                    Currency or the Corporation.
                                        (III) Funds transfer.--The Office
                                    of the Comptroller of the Currency or
                                    the Corporation shall transfer to the
                                    Employees' Life Insurance Fund
                                    established under section 8714 of title
                                    5, United States Code, an amount
                                    determined by the Director of the
                                    Office of Personnel Management, after
                                    consultation with the Office of the
                                    Comptroller of the Currency or the
                                    Corporation and the Office of
                                    Management and Budget, to be necessary
                                    to reimburse the Fund for the cost to
                                    the Fund of providing benefits under
                                    this subparagraph not otherwise paid
                                    for by the employee under subclause
                                    (I).
                                        (IV) Credit for time enrolled in
                                    other plans.--For employees transferred
                                    under this section, enrollment in a
                                    life insurance plan administered by the
                                    Office of the Comptroller of the
                                    Currency, the Office of Thrift
                                    Supervision, or the Corporation
                                    immediately before enrollment in a life
                                    insurance plan under chapter 87 of
                                    title 5, United States Code, shall be
                                    considered as enrollment in a life
                                    insurance plan under that chapter for
                                    purposes of section 8706(b)(1)(A) of
                                    title 5, United States Code.
        (j) Equitable Treatment.--In administering the provisions of this
    section, the Office of the Comptroller of the Currency and the
    Corporation--
                (1) shall take no action that would unfairly disadvantage
            transferred employees relative to other employees of the Office
            of the Comptroller of the Currency or the Corporation based on
            their prior employment by the Office of Thrift Supervision;
                (2) may take such action as is appropriate in individual
            cases so that employees transferred under this section receive
            equitable treatment, with respect to those employees' status,
            tenure, pay, benefits (other than benefits under programs
            administered by the Office of Personnel Management), and
            accrued leave or vacation time, for prior periods of service
            with any Federal agency;
                (3) shall, jointly with the Director of the Office of
            Thrift Supervision, develop and adopt procedures and safeguards
            designed to ensure that the requirements of this subsection are
            met; and
                (4) shall conduct a study detailing the position
            assignments of all employees transferred pursuant to subsection
            (a), describing the procedures and safeguards adopted pursuant
            to paragraph (3), and demonstrating that the requirements of
            this subsection have been met; and shall, not later than 365
            days after the transfer date, submit a copy of such study to
            Congress.

    SEC. 1213. PROPERTY TRANSFERRED.

        (a) In General.--Not later than 90 days after the transfer date,
    all property of the Office of Thrift Supervision shall be transferred
    to the Office of the Comptroller of the Currency or the Corporation,
    allocated in a manner consistent with section 1212(a).
        (b) Contracts Related to Property Transferred.--All contracts,
    agreements, leases, licenses, permits, and similar arrangements
    relating to property transferred to the Office of the Comptroller of
    the Currency or the Corporation by this section shall be transferred to
    the Office of the Comptroller of the Currency or the Corporation
    together with that property.
        (c) Preservation of Property.--Property identified for transfer
    under this section shall not be altered, destroyed, or deleted before
    transfer under this section.
        (d) Property Defined.--For purposes of this section, the term
    ``property'' includes all real property (including leaseholds) and all
    personal property (including computers, furniture, fixtures, equipment,
    books, accounts, records, reports, files, memoranda, paper, reports of
    examination, work papers and correspondence related to such reports,
    and any other information or materials).

    SEC. 1214. FUNDS TRANSFERRED.

        Except to the extent needed to dispose of affairs under section
    1215, all funds that, on the day before the transfer date, are
    available to the Director of the Office of Thrift Supervision to pay
    the expenses of the Office of Thrift Supervision shall be transferred
    to the Office of the Comptroller of the Currency or the Corporation,
    allocated in a manner consistent with section 1212(a), on the transfer
    date.

    SEC. 1215. DISPOSITION OF AFFAIRS.

        (a) In General.--During the 90-day period beginning on the transfer
    date, the Director of the Office of Thrift Supervision--
                (1) shall, solely for the purpose of winding up the affairs
            of the agency related to any function transferred to the Office
            of the Comptroller of the Currency or the Corporation by this
            subtitle--
                        (A) manage any employees of the Office of Thrift
                    Supervision and provide for the payment of the
                    compensation and benefits of any such employees that
                    accrue before the transfer date; and
                        (B) manage any property of the Office of Thrift
                    Supervision until the property is transferred under
                    section 1213; and
                (2) may take any other action necessary to wind up the
            affairs of the Office of Thrift Supervision relating to the
            transferred functions.
        (b) Authority and Status of Director.--
                (1) In general.--Notwithstanding the transfers of functions
            under this subtitle, the Director of the Office of Thrift
            Supervision shall, during the 90-day period beginning on the
            transfer date, retain and may exercise any authority vested in
            the Director on the day before the transfer date that is
            necessary to carry out the requirements of this subtitle during
            that period.
                (2) Other provisions.--For purposes of paragraph (1), the
            Director of the Office of Thrift Supervision shall, during the
            90-day period beginning on the transfer date, continue to be--
                        (A) treated as an officer of the United States; and
                        (B) entitled to receive compensation at the same
                    annual rate of basic pay that he or she was receiving
                    on the day before the transfer date.

    SEC. 1216. CONTINUATION OF SERVICES.

        Any agency, department, or other instrumentality of the United
    States, and any successor to any such agency, department, or
    instrumentality, that was, before the transfer date, providing support
    services to the Office of Thrift Supervision in connection with
    functions to be transferred to the Office of the Comptroller of the
    Currency or the Corporation, shall--
                (1) continue to provide those services, subject to
            reimbursement, until the transfer of those functions is
            complete; and
                (2) consult with any such agency to coordinate and
            facilitate a prompt and orderly transition.

    SEC. 1217. CONTRACTING AND LEASING AUTHORITY.

        In addition to any powers transferred to the Comptroller of the
    Currency by this subtitle, the Comptroller of the Currency may--
                (1) enter into and perform contracts, execute instruments,
            and acquire in any lawful manner such goods and services, or
            real or personal property, or interest in property, as the
            Comptroller of the Currency determines to be necessary or
            convenient to carry out the duties and responsibilities of the
            Comptroller of the Currency; and
                (2) hold, maintain, sell, lease, or otherwise dispose of
            any real or personal property or interest in property without
            regard to title 40, United States Code, title III of the
            Federal Properties and Administrative Services Act of 1949 (41
            U.S.C. 251 et seq.), and other Federal laws of a similar type
            governing the procurement of goods and services or the
            acquisition or disposition of any property or interest in
            property by Federal agencies.

    SEC. 1218. TREATMENT OF SAVINGS AND LOAN HOLDING COMPANIES.

        Section 10 of the Home Owners' Loan Act (12 U.S.C. 1467a) is
    amended as follows:
                (1) In subsection (a)--
                        (A) in paragraph (1)(A), by striking ``Director''
                    and inserting ``Board'';
                        (B) in paragraph (1)(D), by striking clause (i) and
                    inserting: ``(i) In general.--.
                                ``(i) In general.--Except as provided in
                            clause (ii), the term `savings and loan holding
                            company' means any company that directly or
                            indirectly controls a savings association or
                            that controls any company that is a savings and
                            loan holding company, and that is either--
                                        ``(I) a fraternal beneficiary
                                    society, as defined in section
                                    501(c)(8) of the Internal Revenue Code
                                    of 1986; or
                                        ``(II) a company that is, together
                                    with all of its affiliates on a
                                    consolidated basis, predominantly
                                    engaged in the business of
                                    insurance.'';
                        (C) in paragraph (1)(F), by striking ``Director''
                    and inserting ``Board'';
                        (D) in paragraph (1), by inserting at the end the
                    following new subparagraph:
                        ``(K) Board.--The term `Board' means the Board of
                    Governors of the Federal Reserve System.''.
                        (E) in paragraph (2)(D), by striking ``Director''
                    and inserting ``Board'';
                        (F) in paragraph (3)(A), by striking ``Director''
                    and inserting ``Board''; and
                        (G) in paragraph (4), by striking ``Director'' and
                    inserting ``Board''.
                (2) In subsection (b), by striking ``Director'' each place
            it appears and inserting ``Board''.
                (3) In subsection (c)--
                        (A) in paragraph, (2)(F)(i)--
                                (i) by striking ``of Governors of the
                            Federal Reserve System''; and
                                (ii) by striking ``Director'' and inserting
                            ``Board'';
                        (B) in paragraph (2)(G), by striking ``Director''
                    and inserting ``Board'';
                        (C) in paragraph (4)(A), by striking ``Director''
                    and inserting ``Board'';
                        (D) in paragraph (4)(B)--
                                (i) in the heading, by striking
                            ``director'' and inserting ``Board''; and
                                (ii) by striking ``the Director shall'' and
                            inserting ``the Board shall'';
                        (E) in paragraph (4)(C)--
                                (i) in the heading, by striking
                            ``director'' and inserting ``Board''; and
                                (ii) by striking ``the Director may'' and
                            inserting ``the Board may'';
                        (F) in paragraph (5), by striking ``Director'' and
                    inserting ``Board'';
                        (G) in paragraph (6)(D)--
                                (i) in the heading, by striking
                            ``director'' and inserting ``Board''; and
                                (ii) by striking ``Director'' each place it
                            appears and inserting ``Board'';
                        (H) in paragraph (9)(A)(ii), by inserting ``, but
                    only if the conditions for engaging in expanded
                    financial activities set forth in section 4(l) of the
                    Bank Holding Company Act of 1956 have been met'' after
                    ``1956''; and
                        (I) in paragraph (9)(E), by striking ``Director''
                    each place it appears and inserting ``Board''.
                (4) In subsection (e)--
                        (A) in paragraph (1)(A)--
                                (i) in clause (i), by striking ``Director''
                            and inserting ``Board'';
                                (ii) in clause (ii), by striking
                            ``Director'' and inserting ``Board'';
                                (iii) in clause (iii), by striking
                            ``Director'' each place it appears and
                            inserting ``Board''; and
                                (iv) in clause (iv), by striking
                            ``Director'' each place it appears and
                            inserting ``Board'';
                        (B) in paragraph (1)(B), by striking ``Director''
                    each place it appears and inserting ``Board'';
                        (C) in paragraph (2), by striking ``Director'' each
                    place it appears and inserting ``Board'';
                        (D) in paragraph (3), by striking ``Director'' and
                    inserting ``Board'';
                        (E) in paragraph (4)(A), by striking ``Director''
                    and inserting ``Board''; and
                        (F) in paragraph (5), by striking ``Director'' each
                    place it appears and inserting ``Board''.
                (5) In subsection (f), by striking ``Director'' each place
            it appears and inserting ``Board''.
                (6) In subsection (g), by striking ``Director'' each place
            it appears and inserting ``Board''.
                (7) In subsection (h)--
                        (A) in paragraph (2), by striking ``Director'' and
                    inserting ``Board''; and
                        (B) in paragraph (3), by striking ``Director'' and
                    inserting ``Board''.
                (8) In subsection (i)--
                        (A) in paragraph (1)(A), by striking ``Director''
                    and inserting ``Board'';
                        (B) in paragraph (2)(B), by striking ``Director''
                    and inserting ``Board'';
                        (C) in paragraph (2)(F), by striking ``Director''
                    and inserting ``Board'';
                        (D) in paragraph (3)(B), by striking ``Director''
                    and inserting ``Board'';
                        (E) in paragraph (3)(F), by striking ``Director''
                    and inserting ``Board'';
                        (F) in paragraph (4), by striking ``Director'' and
                    inserting ``Board''; and
                        (G) in paragraph (5), by striking ``Director'' and
                    inserting ``Board''.
                (9) In subsection (j), by striking ``Director'' each place
            it appears and inserting ``Board''.
                (10) In subsection (l)--
                        (A) in paragraph (1), by striking ``Director'' and
                    inserting ``Board, in consultation with the Comptroller
                    of the Currency,''; and
                        (B) in paragraph (2), by striking ``Director'' and
                    inserting ``Board, in consultation with the Comptroller
                    of the Currency,''.
                (11) In subsection (m)--
                        (A) in paragraph (2), by striking ``Director'' and
                    inserting ``Comptroller'';
                        (B) in paragraph (2), by striking ``Director may
                    grant'' and inserting ``Comptroller of the Currency may
                    grant'';
                        (C) in paragraph (2), by striking ``the Director
                    deems'' and inserting ``the Comptroller deems'';
                        (D) in paragraph (2)(A), by striking ``Director''
                    and inserting ``Comptroller'';
                        (E) in paragraph (2)(B), by striking ``Director''
                    and inserting ``Comptroller'';
                        (F) in paragraph (2)(B)(iii), by striking
                    ``Director'' and inserting ``Comptroller'';
                        (G) by striking subparagraph (A) of paragraph (3)
                    and inserting the following new subparagraph:
                        ``(A) In general.--A savings association that fails
                    to become or remain a qualified thrift lender shall--
                                ``(i) immediately be subject to the
                            restrictions in subparagraph (B); and
                                ``(ii) become one or more banks (other than
                            a savings bank) within one year after the date
                            on which the savings association should have
                            become or ceases to be a qualified thrift
                            lender, except as provided in subparagraph
                            (C)(i).'';
                        (H) by striking subclause (III) of paragraph
                    (3)(B)(i) and inserting the following new subclause:
                                        ``(III) Dividends.--The savings
                                    association shall be prohibited from
                                    paying dividends except for such
                                    dividends--
                                                ``(aa) as would be
                                            permissible for a national
                                            bank;
                                                ``(bb) that are necessary
                                            to meet obligations of a
                                            company that controls such
                                            savings association; and
                                                ``(cc) that are
                                            specifically approved by the
                                            Comptroller and the Board of
                                            Governors after prior written
                                            request of at least 30 days to
                                            the Comptroller and the Board
                                            of Governors.'';
                        (I) by striking clause (ii) of paragraph (3)(B);
                        (J) by striking subparagraphs (C) and (D) of
                    paragraph (3) and inserting the following new
                    subparagraphs:
                        ``(C) Regulatory authority.--A savings association
                    that fails to become or remain a qualified thrift
                    lender shall be deemed to have violated section 5 of
                    the Home Owners' Loan Act and subject to actions
                    authorized by section 5(d) of the Home Owners' Loan
                    Act.
                        ``(D) Requalifications.--
                                ``(i) A savings association that should
                            have become or ceases to be a qualified thrift
                            lender shall not be subject to subparagraph
                            (A)(ii) if the savings association becomes a
                            qualified thrift lender by meeting the
                            qualified thrift lender requirement in
                            paragraph (1) on a monthly average basis in 9
                            out of the preceding 12 months and remains a
                            qualified thrift lender.
                                ``(ii) If the savings association referred
                            to in clause (i) (or any savings association
                            that acquired all or substantially all of its
                            assets from that savings association) at any
                            time thereafter ceases to be a qualified thrift
                            lender it shall immediately be subject to
                            subparagraph (A)(ii) as if the 1-year time
                            period provided for in subparagraph (A)(ii)
                            already has expired, and as if the exception in
                            clause (i) was not applicable or available to
                            such savings association.'';
                        (K) in paragraph (4)(D) by striking ``Director''
                    and inserting ``Comptroller'';
                        (L) in paragraph (4)(E) by striking ``Director''
                    and inserting ``Comptroller''; and
                        (M) in paragraph (7)(B) by striking ``Director''
                    and inserting ``Comptroller''.
                (12) In subsection (o)--
                        (A) in paragraph (3) in the heading by striking
                    ``Director'' and inserting ``Board'';
                        (B) in paragraph (3)(A) by striking ``Director''
                    and inserting ``Board'';
                        (C) in paragraph (3)(B) by striking ``Director''
                    and inserting ``Board'';
                        (D) in paragraph (3)(C) by striking ``Director''
                    and inserting ``Board'';
                        (E) in paragraph (3)(D) by striking ``Director''
                    and inserting ``Comptroller'';
                        (F) in paragraph (5)(E), by striking ``activities
                    described in subsection (c)(2) or (c)(9)(A)(ii)'' and
                    inserting ``activities otherwise permissible for the
                    company pursuant to, and in accordance with, section 4
                    of the Bank Holding Company Act of 1956'';
                        (G) in paragraph (7) by striking ``chartered by the
                    Director'' and inserting ``chartered by the
                    Comptroller''; and
                        (H) in paragraph (7) by striking ``regulations as
                    the Director may'' and inserting ``regulations as the
                    Board may''.
                (13) In subsections (p), (q), (r), and (s), by striking
            ``Director'' each place it appears and inserting ``Board''.

    SEC. 1219. PRACTICES OF CERTAIN MUTUAL THRIFT HOLDING COMPANIES
                  PRESERVED.

        (a) Treatment of Dividends by Certain Mutual Holding Companies.--
    Section 3(g) of the Bank Holding Company Act of 1956 (12 U.S.C.
    1842(g)) is amended by adding at the end the following new paragraphs:
                ``(3) Declaration of dividends.--Every subsidiary savings
            association of a mutual holding company shall give the Board
            not less than 30 days advance notice of the proposed
            declaration by its directors of any dividend on its guaranty,
            permanent, or other nonwithdrawable stock. Such notice period
            shall commence to run from the date of receipt of such notice
            by the Board. Any such dividend declared within such period, or
            without the giving of such notice to the Board, shall be
            invalid and shall confer no rights or benefits upon the holder
            of any such stock.
                ``(4) Waiver of dividends.--Any mutual thrift holding
            company organized under section 10(b) of the Home Owners' Loan
            Act shall be permitted to waive such company's right to receive
            any dividend declared by a subsidiary, if--
                        ``(A) no insider of the mutual holding company,
                    associate of an insider, or tax-qualified or non-tax-
                    qualified employee stock benefit plan of the mutual
                    holding company holds any share of the stock in the
                    class of stock to which the waiver would apply; or
                        ``(B) the mutual holding company provides the Board
                    with written notice of its intent to waive its right to
                    receive dividends 30 days prior to the proposed date of
                    payment of the dividend and the Board does not object.
                ``(5) Standards for waiver of dividend.--The Board shall
            not object to a notice of intent to waive dividends under
            paragraph (4) if--
                        ``(A) the waiver would not be detrimental to the
                    safe and sound operation of the savings association;
                    and
                        ``(B) the board of directors of the mutual holding
                    company expressly determines that a waiver of the
                    dividend by the mutual holding company is consistent
                    with the directors' fiduciary duties to the mutual
                    members of such company.
                ``(6) Resolution included in waiver notice.--A dividend
            waiver notice shall include a copy of the resolution of the
            board of directors of the mutual holding company, in form and
            substance satisfactory to the Board, together with any
            supporting materials relied upon by the board of directors,
            concluding that the proposed dividend waiver is consistent with
            the board of director's fiduciary duties to the mutual members
            of the mutual holding company.
                ``(7) Valuation.--
                        ``(A) In general.--The Board shall consider waived
                    dividends in determining an appropriate exchange ratio
                    in the event of a full conversion to stock form.
                        ``(B) Exception.--In the case of a savings
                    association which has reorganized into a mutual thrift
                    holding company under section 10(b) of the Home Owners'
                    Loan Act and has issued minority stock either from its
                    mid-tier stock holding company or its subsidiary stock
                    savings association prior to December 1, 2009, the
                    Board shall not consider waived dividends in
                    determining an appropriate exchange ratio in the event
                    of a full conversion to stock form.''.

    SEC. 1220. IMPLEMENTATION PLAN AND REPORTS.

        (a) Plan Submission.--Within 90 days of the enactment of the
    Financial Stability Improvement Act of 2009, the Secretary and the
    Corporation, in consultation with the Office of the Comptroller of the
    Currency and the Office of Thrift Supervision, shall jointly submit a
    plan to the Congress and the Inspectors General of the Department of
    the Treasury and of the Corporation detailing the steps the Secretary,
    the Corporation, the Office of the Comptroller of the Currency, and the
    Office of Thrift Supervision will take to implement the provisions of
    sections 1201 through 1216, and the provisions of the amendments made
    by such sections.
        (b) Inspectors General Review of the Plan.--Within 60 days of the
    date on which the Congress receives the plan required under subsection
    (a), the Inspectors General of the Department of the Treasury and of
    the Corporation shall jointly provide a written report to the Secretary
    and the Corporation and shall submit a copy to the Congress detailing
    whether the plan conforms with the intent of the provisions of sections
    1201 through 1216, and the provisions of the amendments made by such
    sections, including--
                (1) whether the plan sufficiently takes into consideration
            the orderly transfer of personnel;
                (2) whether the plan describes procedures and safeguards to
            ensure that the Office of Thrift Supervision employees are not
            unfairly disadvantaged relative to employees of the Office of
            the Comptroller of the Currency and the Corporation;
                (3) whether the plan sufficiently takes into consideration
            the orderly transfer of authority and responsibilities;
                (4) whether the plan sufficiently takes into consideration
            the effective transfer of funds;
                (5) whether the plan sufficiently takes in consideration
            the orderly transfer of property; and
                (6) any additional recommendations for an orderly and
            effective process.
        (c) Implementation Reports.--Not later than 6 months after the date
    on which the Congress receives the report required under subsection
    (b), and every 6 months thereafter until all aspects of the plan have
    been implemented, the Inspectors General of the Department of the
    Treasury and the Corporation shall jointly provide a written report on
    the status of the implementation of the plan to the Secretary and the
    Corporation and shall submit a copy to the Congress.

    SEC. 1221. COMPOSITION OF BOARD OF DIRECTORS OF THE FEDERAL DEPOSIT
                  INSURANCE CORPORATION.

        Section 2 of the Federal Deposit Insurance Act (12 U.S.C. 1812) is
    amended--
                (1) in subsection (a)(1)--
                        (A) in subparagraph (B), by striking ``Director of
                    the Office of Thrift Supervision'' and inserting
                    ``Chairman of the Board of Governors of the Federal
                    Reserve System, or such other member of the Board of
                    Governors as the Chairman of the Board of Governors
                    shall designate'';
                (2) by amending subsection (d)(2) to read as follows:
                ``(2) Acting officials may serve.--In the event of a
            vacancy in the office of the Comptroller of the Currency and
            pending the appointment of a successor, or during the absence
            or disability of the Comptroller of the Currency, the acting
            Comptroller of the Currency shall be a member of the Board of
            Directors in the place of the Comptroller of the Currency.'';
            and
                (3) in subsection (f)(2), by striking ``or of the Office of
            Thrift Supervision''.

    SEC. 1222. AMENDMENTS TO SECTION 3.

        Section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813) is
    amended--
                (1) in subsection (b)(1)(C) (relating to the definition of
            the term ``savings association''), by striking ``Director of
            the Office of Thrift Supervision'' and inserting ``Comptroller
            of the Currency'';
                (2) in subsection (l)(5) (relating to the definition of the
            term ``deposit''), in the introductory text, by striking
            ``Director of the Office of Thrift Supervision,''; and
                (3) in subsection (z) (relating to the definition of the
            term ``Federal banking agency''), by striking ``the Director of
            the Office of Thrift Supervision,''.

    SEC. 1223. AMENDMENTS TO SECTION 7.

        Section 7(a) of the Federal Deposit Insurance Act (12 U.S.C. 1817)
    is amended--
                (1) in paragraph (2)(A)--
                        (A) in the first sentence, by striking ``the
                    Director of the Office of Thrift Supervision'';
                        (B) in the second sentence, by striking ``the
                    Director of the Office of Thrift Supervision,'';
                (2) in paragraph (3), in the first sentence, by striking
            ``, the Comptroller of the Currency, the Chairman of the Board
            of Governors of the Federal Reserve System, and the Director of
            the Office of Thrift Supervision'' and inserting ``Comptroller
            of the Currency and the Chairman of the Board of Governors of
            the Federal Reserve System''; and
                (3) in paragraph (7), by striking ``, the Director of the
            Office of Thrift Supervision,''.

    SEC. 1224. AMENDMENTS TO SECTION 8.

        Section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818) is
    amended--
                (1) in subsection (a)(8)(B)(ii), in the last sentence--
                        (A) by striking ``Director of the Office of Thrift
                    Supervision'' each place it appears and inserting
                    ``Comptroller of the Currency''; and
                        (B) by inserting ``the Office of Thrift
                    Supervision, as a successor to'' after ``as a successor
                    to'';
                (2) in subsection (o), by striking ``Director of the Office
            of Thrift Supervision'' and inserting ``Comptroller of the
            Currency''; and
                (3) in subsection (w)(3)(A), by striking ``Office of Thrift
            Supervision'' and inserting ``Office of the Comptroller of the
            Currency''.

    SEC. 1225. AMENDMENTS TO SECTION 11.

        Section 11 of the Federal Deposit Insurance Act (12 U.S.C. 1821) is
    amended--
                (1) in subsection (c)(6)--
                        (A) in the heading, by striking ``director of the
                    office of thrift supervision'' and inserting
                    ``Comptroller of the currency'';
                        (B) in subparagraph (A), by striking ``Director of
                    the Office of Thrift Supervision'' and inserting
                    ``Comptroller of the Currency'';
                        (C) in subparagraph (B), by striking ``Director of
                    the Office of Thrift Supervision'' and inserting
                    ``Comptroller of the Currency'';
                (2) in subsection (d)--
                        (A) in paragraph (17)(A)--
                                (i) by striking ``, or the Director of the
                            Office of Thrift Supervision''; and
                                (ii) by striking ``appropriate''; and
                        (B) in paragraph (18)(B), by striking ``or the
                    Director of the Office of Thrift Supervision''; and
                (3) in subsection (n)--
                        (A) in paragraph (1)(A), by striking ``the Director
                    of the Office of Thrift Supervision, with respect to 1
                    or more insured'';
                        (B) in paragraph (2)(A), by striking ``the Director
                    of the Office of Thrift Supervision'';
                        (C) in paragraph (4)(D), by striking ``and the
                    Director of the Office of Thrift Supervision, as
                    appropriate,'';
                        (D) in paragraph (4)(G), by striking ``and the
                    Director of the Office of Thrift Supervision, as
                    appropriate,''; and
                        (E) in paragraph (12)(B), by striking ``or the
                    Director of the Office of Thrift Supervision, as
                    appropriate,''.

    SEC. 1226. AMENDMENTS TO SECTION 13.

        Section 13(k)(1)(A)(iv) of the Federal Deposit Insurance Act (12
    U.S.C. 1823(k)(1)(A)(iv)) is amended by striking ``Director of the
    Office of Thrift Supervision'' and inserting ``Comptroller of the
    Currency''.

    SEC. 1227. AMENDMENTS TO SECTION 18.

        Section 18 of the Federal Deposit Insurance Act (12 U.S.C. 1828) is
    amended--
                (1) in subsection (c)(2)--
                        (A) in subparagraph (A), by striking ``bank;'' and
                    inserting ``bank or a savings association; and'';
                        (B) in subparagraph (B), by inserting ``and'' at
                    the end after the semicolon;
                        (C) in subparagraph (C), by striking ``bank (except
                    a savings bank supervised by the Director of the Office
                    of Thrift Supervision); and'' and inserting ``bank or
                    State savings association.''; and
                        (D) by striking subparagraph (D);
                (2) in subsection (i)(2)--
                        (A) by striking subparagraph (B) and inserting the
                    following new subparagraph:
                        ``(B) the Corporation, if the resulting institution
                    is to be a State nonmember insured bank or insured
                    State savings association.''; and
                        (B) by striking subparagraph (C); and
                (3) in subsection (m)--
                        (A) in paragraph (1)--
                                (i) in subparagraph (A), by striking
                            ``Director of the Office of Thrift
                            Supervision'' and inserting ``Comptroller of
                            the Currency''; and
                                (ii) in subparagraph (B), by striking
                            ``Director of the Office of Thrift
                            Supervision'' and inserting ``Comptroller of
                            the Currency'';
                        (B) in paragraph (2)--
                                (i) in subparagraph (A), by striking
                            ``Director of the Office of Thrift
                            Supervision'' and inserting ``Comptroller of
                            the Currency''; and
                                (ii) in subparagraph (B)--
                                        (I) by striking ``Director of the
                                    Office of Thrift Supervision'' each
                                    place it appears and inserting
                                    ``Comptroller of the Currency''; and
                                        (II) by striking ``Director may
                                    deem appropriate'' and inserting
                                    ``Comptroller may deem appropriate'';
                                    and
                        (C) in paragraph (3)--
                                (i) in subparagraph (A), by striking
                            ``Director of the Office of Thrift
                            Supervision'' and inserting ``Comptroller of
                            the Currency''; and
                                (ii) in subparagraph (B), by striking
                            ``Office of Thrift Supervision'' and inserting
                            ``Comptroller of the Currency''.

    SEC. 1228. AMENDMENTS TO SECTION 28.

        Section 28 of the Federal Deposit Insurance Act (12 U.S.C. 1831e)
    is amended--
                (1) in subsection (e)--
                        (A) in paragraph (2)--
                                (i) in subparagraph (A)(ii), by striking
                            ``Director of the Office of Thrift
                            Supervision'' and inserting ``Comptroller of
                            the Currency'';
                                (ii) in subparagraph (C), by striking
                            ``Director of the Office of Thrift
                            Supervision'' and inserting ``Comptroller of
                            the Currency''; and
                                (iii) in subparagraph (F), by striking
                            ``Director of the Office of Thrift
                            Supervision'' and inserting ``Comptroller of
                            the Currency''; and
                        (B) in paragraph (3)--
                                (i) in subparagraph (A), by striking
                            ``Director of the Office of Thrift
                            Supervision'' and inserting ``Comptroller of
                            the Currency''; and
                                (ii) in subparagraph (B), by striking
                            ``Director of the Office of Thrift
                            Supervision'' and inserting ``Comptroller of
                            the Currency''; and
                (2) in subsection (h)(2), by striking ``Director of the
            Office of Thrift Supervision'' and inserting ``Comptroller of
            the Currency''.

    SEC. 1229. AMENDMENTS TO THE ALTERNATIVE MORTGAGE TRANSACTION PARITY
                  ACT OF 1982.

        (a) Amendments to Section 802.--Section 802(a)(3) of the
    Alternative Mortgage Transaction Parity Act of 1982 (12 U.S.C.
    3801(a)(3)) is amended--
                (1) by striking ``Comptroller of the Currency,'' and
            inserting ``Comptroller of the Currency and''; and
                (2) by striking ``, and the Director of the Office of
            Thrift Supervision''.
        (b) Amendments to Section 804.--Section 804(a) of the Alternative
    Mortgage Transaction Parity Act of 1982 (12 U.S.C. 3803(a)) is
    amended--
                (1) by amending paragraph (1) to read as follows:
                ``(1) with respect to banks, savings associations, mutual
            savings banks, and savings banks, only to transactions made in
            accordance with regulations governing alternative mortgage
            transactions as prescribed by the Comptroller of the Currency
            to the extent that such regulations are authorized by
            rulemaking authority granted to the Comptroller of the Currency
            under laws other than this section; and'';
                (2) in paragraph (2), by striking ``; and'' and inserting a
            period; and
                (3) by striking paragraph (3).

    SEC. 1230. AMENDMENTS TO THE BANK HOLDING COMPANY ACT OF 1956.

        Section 4(f)(12)(A) of the Bank Holding Company Act of 1956 (12
    U.S.C. 1843(f)(12)(A)) is amended striking ``the Resolution Trust
    Corporation, the Federal Deposit Insurance Corporation, or'' and
    inserting ``the Federal Deposit Insurance Corporation or''.

    SEC. 1231. AMENDMENTS TO THE BANK PROTECTION ACT OF 1968.

        Section 2 of the Bank Protection Act of 1968 (12 U.S.C. 1881) is
    amended--
                (1) in paragraph (1), by striking ``national banks,'' and
            inserting ``national banks and federal savings associations,'';
                (2) in paragraph (2), by inserting ``and'' at the end;
                (3) in paragraph (3), by striking ``, and'' and inserting a
            period; and
                (4) by striking paragraph (4).

    SEC. 1232. AMENDMENTS TO THE BANK SERVICE COMPANY ACT.

        Section 1(b) of the Bank Service Company Act (12 U.S.C. 1861(b)) is
    amended--
                (1) in paragraph (4), by striking ``insured bank,'' and
            inserting ``insured bank or'';
                (2) by striking ``Director of the Office of Thrift
            Supervision'' and inserting ``Comptroller of the Currency'';
            and
                (3) by striking ``, the Federal Savings and Loan Insurance
            Corporation,''.

    SEC. 1233. AMENDMENTS TO THE COMMUNITY REINVESTMENT ACT OF 1977.

        Section 803 of the Community Reinvestment Act of 1977 (12 U.S.C.
    2902) is amended--
                (1) in paragraph (1)--
                        (A) in subparagraph (A), by striking ``national
                    banks'' and inserting ``national banks or savings
                    associations (the deposits of which are insured by the
                    Federal Deposit Insurance Corporation)''; and
                        (B) in subparagraph (B), by striking ``and bank
                    holding companies;'' and inserting ``, bank holding
                    companies and savings and loan holding companies;'';
                    and
                (2) by striking the first paragraph (2) (relating to
            section 8 of the Federal Deposit Insurance Act).

    SEC. 1234. AMENDMENTS TO THE DEPOSITORY INSTITUTION MANAGEMENT
                  INTERLOCKS ACT.

        (a) Amendment to Section 207.--Section 207 of the Depository
    Institution Management Interlocks Act (12 U.S.C. 3206) is amended--
                (1) in paragraph (1), by striking ``national banks,'' and
            inserting ``national banks and Federal savings associations
            (the deposits of which are insured by the Federal Deposit
            Insurance Corporation),'';
                (2) in paragraph (2), by striking ``and bank holding
            companies,'' and inserting ``, bank holding companies, and
            savings and loan holding companies,'';
                (3) by striking paragraph (4); and
                (4) by redesignating paragraphs (5) and (6) as paragraphs
            (4) and (5), respectively.
        (b) Amendment to Section 209.--Section 209 of the Depository
    Institution Management Interlocks Act (12 U.S.C. 3207) is amended--
                (1) in paragraph (1), by striking ``national banks,'' and
            inserting ``national banks and Federal savings associations
            (the deposits of which are insured by the Federal Deposit
            Insurance Corporation),'';
                (2) in paragraph (2), by striking ``and bank holding
            companies,'' and inserting ``, bank holding companies, and
            savings and loan holding companies,'';
                (3) at the end of paragraph (3), by inserting ``and'' after
            the comma;
                (4) by striking paragraph (4); and
                (5) by redesignating paragraph (5) as paragraph (4).
        (c) Amendment to Section 210.--Subsection 210(a) of the Depository
    Institution Management Interlocks Act (12 U.S.C. 3208(a)) is amended--
                (1) by striking ``his'' and inserting ``the''; and
                (2) by inserting ``of the Attorney General'' after
            ``enforcement functions''.

    SEC. 1235. AMENDMENTS TO THE EMERGENCY HOMEOWNERS' RELIEF ACT.

        Section 110 of the Emergency Homeowners' Relief Act (12 U.S.C.
    2709) is amended--
                (1) by striking the ``Federal Home Loan Bank Board'' and
            inserting ``Federal Housing Finance Agency''; and
                (2) by striking ``the Federal Savings and Loan Insurance
            Corporation,''.

    SEC. 1236. AMENDMENTS TO THE EQUAL CREDIT OPPORTUNITY ACT.

        Section 704(a) of the Equal Credit Opportunity Act (15 U.S.C.
    1691c(a)) is amended--
                (1) in paragraph (1)(A), by striking ``and Federal branches
            and Federal agencies of foreign banks,'' and inserting
            ``Federal branches and Federal agencies of foreign banks, or a
            savings association the deposits of which are insured by the
            Federal Deposit Insurance Corporation,'';
                (2) by striking paragraph (2); and
                (3) by redesignating paragraphs (3) through (9) as
            paragraphs (2) through (8).

    SEC. 1237. AMENDMENTS TO THE FEDERAL CREDIT UNION ACT.

        (a) Amendments to Section 206.--Section 206(g)(7) of the Federal
    Credit Union Act (12 U.S.C. 1786(g)(7)) is amended--
                (1) in subparagraph (A)--
                        (A) in clause (v), by inserting ``and'' after the
                    semicolon;
                        (B) in clause (vi)--
                                (i) by striking ``Federal Housing Finance
                            Board'' and inserting ``Federal Housing Finance
                            Agency''; and
                                (ii) by striking ``; and'' and inserting a
                            period; and
                        (C) by striking clause (vii); and
                (2) in subparagraph (D)--
                        (A) in clause (iii), by inserting ``and'' after the
                    semicolon;
                        (B) in clause (iv), by striking ``; and'' and
                    inserting a period; and
                        (C) by striking clause (v).

    SEC. 1238. AMENDMENTS TO THE FEDERAL FINANCIAL INSTITUTIONS EXAMINATION
                  COUNCIL ACT OF 1978.

        (a) Amendment to Section 1002.--Section 1002 of the Federal
    Financial Institutions Examination Council Act of 1978 (12 U.S.C. 3301)
    is amended by striking ``Federal Home Loan Bank Board'' and inserting
    ``Federal Housing Finance Agency''.
        (b) Amendment to Section 1003.--Section 1003(1) of the Federal
    Financial Institutions Examination Council Act of 1978 (12 U.S.C.
    3302(1)) is amended by striking ``the Office of Thrift Supervision,''.
        (c) Amendments to Section 1004.--Section 1004(a) of the Federal
    Financial Institutions Examination Council Act of 1978 (12 U.S.C.
    3303(a)) is amended--
                (1) by striking paragraph (4); and
                (2) by redesignating paragraphs (5) and (6) as paragraphs
            (4) and (5), respectively.

    SEC. 1239. AMENDMENTS TO THE FEDERAL HOME LOAN BANK ACT.

        (a) Amendments to Section 18.--Section 18(c) of the Federal Home
    Loan Bank Act (12 U.S.C. 1438(c)) is amended--
                (1) by striking ``Director of the Office of Thrift
            Supervision'' each place it appears and inserting ``Comptroller
            of the Currency'';
                (2) in paragraph (1)(B), by striking ``and the agencies
            under its administration or supervision''; and
                (3) in paragraph (5), by striking ``and such agencies''.
        (b) Repeal of Section 21A.--Section 21A of the Federal Home Loan
    Bank Act (12 U.S.C. 1441a) is hereby repealed.

    SEC. 1240. AMENDMENTS TO THE FEDERAL RESERVE ACT.

        Section 19(b) of the Federal Reserve Act (12 U.S.C. 461) is
    amended--
                (1) in paragraph (1)(F), by striking ``the Director of the
            Office of Thrift Supervision'' and inserting ``the Comptroller
            of the Currency''; and
                (2) in paragraph (4)(B), by striking ``the Director of the
            Office of Thrift Supervision'' and inserting ``the Comptroller
            of the Currency''.

    SEC. 1241. AMENDMENTS TO THE FINANCIAL INSTITUTIONS REFORM, RECOVERY,
                  AND ENFORCEMENT ACT OF 1989.

        (a) Amendments to Section 302.--Section 302(1) of the Financial
    Institutions Reform, Recovery, and Enforcement Act of 1989 is amended
    by striking ``Director of the Office of Thrift Supervision'' and
    inserting ``Comptroller of the Currency''.
        (b) Amendment to Section 305.--Section 305(b)(1) of the Financial
    Institutions Reform, Recovery, and Enforcement Act of 1989 is amended
    by striking ``Director of the Office of Thrift Supervision'' and
    inserting ``Comptroller of the Currency''.
        (c) Amendment to Section 308.--Section 308(a) of the Financial
    Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
    1463 note) is amended by striking ``Director of the Office of
    Supervision'' and inserting ``Comptroller of the Currency''.
        (d) Amendments to Section 402.--Section 402 of the Financial
    Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
    1437 note) is amended--
                (1) in subsection (a), by striking ``Director of the Office
            of Thrift Supervision'' and inserting ``Comptroller of the
            Currency'';
                (2) in subsection (b), by striking ``Director of the Office
            of Thrift Supervision'' and inserting ``Comptroller of the
            Currency''; and
                (3) in subsection (e)--
                        (A) in paragraph (1), by striking ``Office of
                    Thrift Supervision'' and inserting ``Office of the
                    Comptroller of the Currency'';
                        (B) in paragraph (2), by striking ``Director of the
                    Office of Thrift Supervision'' each place it appears
                    and inserting ``Comptroller of the Currency'';
                        (C) in paragraph (3), by striking ``Director of the
                    Office of Thrift Supervision'' and inserting
                    ``Comptroller of the Currency''; and
                        (D) in paragraph (4), by striking ``Director of the
                    Office of Thrift Supervision'' and inserting
                    ``Comptroller of the Currency''.
        (e) Amendment to Section 1103.--Section 1103(a)(2) of the Financial
    Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
    3332(a)(2)) is amended by striking ``and the Resolution Trust
    Corporation''.
        (f) Amendments to Section 1205.--Subsection 1205(b) of the
    Financial Institutions Reform, Recovery, and Enforcement Act of 1989
    (12 U.S.C. 1818 note) is amended--
                (1) in paragraph (1)--
                        (A) in subparagraph (B), by striking ``Director of
                    the Office of Thrift Supervision, or the Director's
                    designee'' and inserting ``Comptroller of the Currency,
                    or the Comptroller's designee'';
                        (B) by striking subparagraph (D); and
                        (C) by redesignating subparagraphs (E) and (F) as
                    subparagraphs (D) and (E), respectively;
                (2) in paragraph (2), by striking ``paragraph (1)(F)'' and
            inserting ``paragraph (1)(E)'';
                (3) in paragraph (3), by striking ``paragraph (1)(F)'' and
            inserting ``paragraph (1)(E)''; and
                (4) in paragraph (5), by striking ``through (E)'' and
            inserting ``through (D)''.
        (g) Amendments to Section 1206.--Section 1206(a) of the Financial
    Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
    1833b(a)) is amended--
                (1) by striking ``the Oversight Board of the Resolution
            Trust Corporation'' and inserting ``and''; and
                (2) by striking ``, and the Office of Thrift
            Supervision,''.
        (h) Amendments to Section 1216.--Section 1216 of the Financial
    Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
    1833e) is amended--
                (1) in subsection (a)--
                        (A) by striking paragraphs (2), (5), and (6);
                        (B) by redesignating paragraphs (3) and (4) as
                    paragraphs (2) and (3), respectively; and
                        (C) in paragraph (2) (as redesignated), by adding
                    ``and'' at the end;
                (2) in subsection (c)--
                        (A) by striking ``the Director of the Office of
                    Thrift Supervision,'' and inserting ``and''; and
                        (B) by striking ``, the Oversight Board of the
                    Resolution Trust Corporation, and the Resolution Trust
                    Corporation''; and
                (3) in subsection (d)--
                        (A) by striking paragraphs (3), (5), and (6); and
                        (B) by redesignating paragraphs (4), (7), and (8)
                    as paragraphs (3), (4), and (5), respectively.

    SEC. 1242. AMENDMENTS TO THE HOUSING ACT OF 1948.

        Section 502(c) of the Housing Act of 1948 (12 U.S.C. 1701c(c)) is
    amended in the introductory text by striking ``Director of the Office
    of Thrift Supervision'' and inserting ``Comptroller of the Currency''.

    SEC. 1243. AMENDMENTS TO THE HOUSING AND COMMUNITY DEVELOPMENT ACT OF
                  1992 AND THE FEDERAL HOUSING ENTERPRISES FINANCIAL SAFETY
                  AND SOUNDNESS ACT OF 1992.

        (a) Amendments to Section 543 of the Housing and Community
    Development Act of 1992.--Section 543 of the Housing and Community
    Development Act of 1992 (12 U.S.C. 1707 note) is amended--
                (1) in subsection (c)(1)--
                        (A) by striking subparagraphs (D) through (F); and
                        (B) by redesignating subparagraphs (G) and (H) as
                    subparagraphs (D) and (E), respectively; and
                (2) in subsection (f)--
                        (A) in paragraph (2)--
                                (i) by striking ``the Office of Thrift
                            Supervision,''; and
                                (ii) in subparagraph (D), by striking ``the
                            Office of Thrift Supervision,''; and
                        (B) in paragraph (3)--
                                (i) by striking ``the Office of Thrift
                            Supervision,''; and
                                (ii) in subparagraph (D), by striking
                            ``Office of Thrift Supervision,'' and inserting
                            ``Comptroller of the Currency,''.
        (b) Amendment to Section 1315 of the Federal Housing Enterprises
    Financial Safety and Soundness Act of 1992.--Section 1315(b) of the
    Federal Housing Enterprises Financial Safety and Soundness Act of 1992
    (12 U.S.C. 4515(b)) is amended by striking ``the Federal Deposit
    Insurance Corporation, and the Office of Thrift Supervision.'' and
    inserting ``and the Federal Deposit Insurance Corporation.''.
        (c) Amendment to Section 1317 of the Federal Housing Enterprises
    Financial Safety and Soundness Act of 1992.--Section 1317(c) of the of
    the Federal Housing Enterprises Financial Safety and Soundness Act of
    1992 (12 U.S.C. 4517(c)) is amended by striking ``the Federal Deposit
    Insurance Corporation, or the Director of the Office of Thrift
    Supervision'' and inserting ``or the Federal Deposit Insurance
    Corporation''.

    SEC. 1244. AMENDMENT TO THE HOUSING AND URBAN-RURAL RECOVERY ACT OF
                  1983.

        Section 469 of the Housing and Urban-Rural Recovery Act of 1983 (12
    U.S.C. 1701p-1) is amended in the first sentence by striking ``Federal
    Home Loan Bank Board'' and inserting ``Federal Housing Finance
    Agency''.

    SEC. 1245. AMENDMENTS TO THE NATIONAL HOUSING ACT.

        Section 202(f) of the National Housing Act is amended--
                (1) by amending paragraph (5) to read as follows:
                ``(5) if the mortgagee is a national bank, a subsidiary or
            affiliate of such a bank, a Federal savings association or a
            subsidiary or affiliate of a savings association, the
            Comptroller of the Currency;'';
                (2) in paragraph (6), by adding ``and'' at the end;
                (3) in paragraph (7)--
                        (A) by inserting ``or State savings association''
                    after ``State bank''; and
                        (B) by striking ``; and'' and inserting a period;
                    and
                (4) by striking paragraph (8).

    SEC. 1246. AMENDMENTS TO THE RIGHT TO FINANCIAL PRIVACY ACT OF 1978.

        Section 1101(7) of the Right to Financial Privacy Act of 1978 (12
    U.S.C. 3401(7)) is amended by striking subparagraph (B).

    SEC. 1247. AMENDMENTS TO THE BALANCED BUDGET AND EMERGENCY DEFICIT
                  CONTROL ACT OF 1985.

        (a) Amendments to Section 255.--Section 255(g)(1)(A) of the
    Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C.
    905(g)(1)(A)) is amended by striking ``Office of Thrift Supervision
    (20-4108-0-3-373);''.
        (b) Amendments to Section 256.--Section 256(h)(4) of the Balanced
    Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 906(h)(4))
    is amended--
                (1) by striking subparagraphs (C) and (G); and
                (2) by redesignating subparagraphs (D), (E), (F), and (H)
            as subparagraphs (C) through (G), respectively.

    SEC. 1248. AMENDMENTS TO THE CRIME CONTROL ACT OF 1990.

        (a) Amendments to Section 2539.--Section 2539(c)(2) of the Crime
    Control Act of 1990 (Public Law 101-647) is amended by striking
    subparagraph (F) and redesignating subparagraphs (G) and (H) as
    subparagraphs (F) through (G), respectively.
        (b) Amendment to Section 2554.--Section 2554(b)(2) of the Crime
    Control Act of 1990 (Public Law 101-647) is amended by striking
    ``Director of the Office of Thrift Supervision'' and inserting
    ``Comptroller of the Currency''.

    SEC. 1249. AMENDMENT TO THE FLOOD DISASTER PROTECTION ACT OF 1973.

        Section 3(a)(5) of the Flood Disaster Protection Act of 1973 (42
    U.S.C. 4003(a)(5)) is amended by striking ``the Office of Thrift
    Supervision,''.

    SEC. 1250. AMENDMENT TO THE INVESTMENT COMPANY ACT OF 1940.

        Section 6(a)(3) of the Investment Company Act of 1940 (15 U.S.C.
    80a-6(a)(3)) is amended by striking ``Federal Savings and Loan
    Insurance Corporation'' and inserting ``Comptroller of the Currency''.

    SEC. 1251. AMENDMENT TO THE NEIGHBORHOOD REINVESTMENT CORPORATION ACT.

        Section 606(c)(3) of the Neighborhood Reinvestment Corporation Act
    is amended by striking ``Federal Home Loan Bank Board'' and inserting
    ``Federal Housing Finance Agency''.

    SEC. 1252. AMENDMENTS TO THE SECURITIES EXCHANGE ACT OF 1934.

        (a) Amendments to Section 3.--Section 3(a)(34) of the Securities
    Exchange Act of 1934 (15 U.S.C. 78c(a)(34)) is amended--
                (1) in subparagraph (A)--
                        (A) in clause (i), by striking ``bank;'' and
                    inserting ``bank, or a savings association (as defined
                    in section 3(b) of the Federal Deposit Insurance Act
                    (12 U.S.C. 1813(b))), the deposits of which are insured
                    by the Federal Deposit Insurance Corporation, a
                    subsidiary or a department or division of any such
                    savings association, or a savings and loan holding;'';
                        (B) in clause (iii), by adding ``and'' at the end;
                        (C) by striking clause (iv); and
                        (D) by redesignating clause (v) as clause (iv);
                (2) in subparagraph (B)--
                        (A) in clause (i), by striking ``bank;'' and
                    inserting ``bank, or a savings association (as defined
                    in section 3(b) of the Federal Deposit Insurance Act
                    (12 U.S.C. 1813 (b))), the deposits of which are
                    insured by the Federal Deposit Insurance Corporation, a
                    subsidiary or a department or division of any such
                    savings association, or a savings and loan holding;'';
                        (B) in clause (iii), by adding ``and'' at the end;
                        (C) by striking clause (iv); and
                        (D) by redesignating clause (v) as clause (iv);
                (3) in subparagraph (C)--
                        (A) in clause (i), by striking ``bank;'' and
                    inserting ``bank, or a savings association (as defined
                    in section 3(b) of the Federal Deposit Insurance Act
                    (12 U.S.C. 1813 (b))), the deposits of which are
                    insured by the Federal Deposit Insurance Corporation, a
                    subsidiary or a department or division of any such
                    savings association, or a savings and loan holding;'';
                        (B) in clause (iii), by adding ``and'' at the end;
                        (C) by striking clause (iv); and
                        (D) by redesignating clause (v) as clause (iv); and
                (4) in subparagraph (F)--
                        (A) in clause (i), by striking ``bank;'' and
                    inserting ``or a savings association (as defined in
                    section 3(b) of the Federal Deposit Insurance Act (12
                    U.S.C. 1813 (b))), the deposits of which are insured by
                    the Federal Deposit Insurance Corporation;'';
                        (B) by striking clause (ii); and
                        (C) redesignating clauses (iii), (iv), and (v) as
                    clauses (ii), (iii) and (iv), respectively.
        (b) Amendments to Section 15C.--Section 15C of the Securities
    Exchange Act of 1934 (15 U.S.C. 78o-5) is amended in subsection (g)(1)
    by striking ``the Director of the Office of Thrift Supervision, the
    Federal Savings and Loan Insurance Corporation,''.

    SEC. 1253. AMENDMENTS TO TITLE 18, UNITED STATES CODE.

        (a) Amendment to Section 212.--Section 212(c)(2) of title 18,
    United States Code, is amended--
                (1) by striking subparagraph (C); and
                (2) by redesignating subparagraphs (D) through (H) as
            subparagraphs (C) through (G), respectively.
        (b) Amendment to Section 657.--Section 657 of title 18, United
    States Code, is amended by striking ``Office of Thrift Supervision, the
    Resolution Trust Corporation,''.
        (c) Amendment to Section 981.--Section 981(a)(1)(D) of title 18,
    United States Code, is amended--
                (1) by striking ``the Resolution Trust Corporation,''; and
                (2) by striking ``or the Office of Thrift Supervision''.
        (d) Amendment to Section 982.--Section 982(a)(3) of title 18,
    United States Code, is amended--
                (1) by striking ``the Resolution Trust Corporation,''; and
                (2) by striking ``or the Office of Thrift Supervision''.
        (e) Amendment to Section 1006.--Section 1006 of title 18, United
    States Code, is amended--
                (1) by striking ``Office of Thrift Supervision,''; and
                (2) by striking ``the Resolution Trust Corporation,''.
        (f) Amendment to Section 1014.--Section 1014 of title 18, United
    States Code, is amended--
                (1) by striking ``the Office of Thrift Supervision,''; and
                (2) by striking ``the Resolution Trust Corporation,''.
        (g) Amendment to Section 1032.--Section 1032(1) of title 18, United
    States Code, is amended--
                (1) by striking ``the Resolution Trust Corporation,''; and
                (2) by striking ``or the Director of the Office of Thrift
            Supervision''.

    SEC. 1254. AMENDMENTS TO TITLE 31, UNITED STATES CODE.

        (a) Amendment to Section 309.--Section 309 of title 31, United
    States Code, is amended to read as follows:
    ``Sec. 309. Division of Thrift Supervision
        ``The Division of Thrift Supervision established under section 3(a)
    of the Home Owners' Loan Act shall be a division in the Office of the
    Comptroller of the Currency.''.
        (b) Amendments to Section 321.--Section 321 of title 31, United
    States Code, is amended--
                (1) in subsection (c)--
                        (A) in paragraph (1), by adding ``and'' at the end;
                        (B) in paragraph (2), by striking ``; and'' and
                    inserting a period; and
                        (C) by striking paragraph (3); and
                (2) by striking subsection (e).
        (c) Amendments to Section 714.--Section 714 of title 31, United
    States Code, is amended--
                (1) in subsection (a), by striking ``the Office of the
            Comptroller of the Currency, and the Office of Thrift
            Supervision.'' and inserting ``and the Office of the
            Comptroller of the Currency.'';
                (2) in subsection (b), by striking all after ``has
            consented in writing.'' and inserting the following: ``Audits
            of the Federal Reserve Board and Federal reserve banks shall
            not include unreleased transcripts or minutes of meetings of
            the Board of Governors or of the Federal Open Market Committee.
            To the extent that an audit deals with individual market
            actions, records related to such actions shall only be released
            by the Comptroller General after 180 days have elapsed
            following the effective date of such actions.'';
                (3) in subsection (c)(1), in the first sentence, by
            striking ``subsection,'' and inserting ``subsection or in the
            audits or audit reports referring or relating to the Federal
            Reserve Board or Reserve Banks,''; and
                (4) by adding at the end the following:
        ``(f) Audit and Report of the Federal Reserve System.--
                ``(1) In general.--An audit of the Board of Governors of
            the Federal Reserve System and the Federal reserve banks under
            subsection (b) shall be completed within 12 months of the
            enactment of the Financial Stability Improvement Act of 2009.
                ``(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--
                                ``(i) the Speaker of the House of
                            Representatives;
                                ``(ii) the majority and minority leaders of
                            the House of Representatives;
                                ``(iii) the majority and minority leaders
                            of the Senate;
                                ``(iv) the Chairman and Ranking Member of
                            the committee and each subcommittee of
                            jurisdiction in the House of Representatives
                            and the Senate; and
                                ``(v) 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.
                ``(3) Construction.--Nothing in this subsection shall be
            construed--
                        ``(A) as interference in or dictation of monetary
                    policy to the Federal Reserve System by the Congress or
                    the Government Accountability Office; or
                        ``(B) to limit the ability of the Government
                    Accountability Office to perform additional audits of
                    the Board of Governors of the Federal Reserve System or
                    of the Federal reserve banks.''.

    SEC. 1255. REQUIREMENT FOR COUNTERCYCLICAL CAPITAL REQUIREMENTS.

        Section 908(a) of the International Lending Supervision Act of 1983
    (12 U.S.C. 3907(a)) is amended by adding at the end the following new
    paragraph:
                ``(3) Each appropriate Federal banking agency shall, in
            establishing capital requirements under this Act or other
            provisions of Federal law for banking institutions, seek to
            make such requirements countercyclical so that the amount of
            capital required to be maintained by a banking institution
            increases in times of economic expansion and decreases in times
            of economic contraction, consistent with the safety and
            soundness of the institution.''.

    SEC. 1256. TRANSFER OF AUTHORITY TO THE BOARD WITH RESPECT TO SAVINGS
                  AND LOAN HOLDING COMPANIES.

        (a) Transfer of Functions.--Notwithstanding any other provision of
    this subtitle, all functions of the Director of the Office of Thrift
    Supervision with respect to savings and loan holding companies that are
    a fraternal beneficiary society, as defined in section 501(c)(8) of the
    Internal Revenue Code of 1986, or a company that is, together with all
    of its affiliates on a consolidated basis, predominantly engaged in the
    business of insurance are transferred to the Board.
        (b) Board's Authority.--Notwithstanding any other provision of this
    subtitle, the Board shall succeed to all powers, authorities, rights,
    and duties with respect to savings and loan holding companies that are
    a fraternal beneficiary society, as defined in section 501(c)(8) of the
    Internal Revenue Code of 1986, or a company that is, together with all
    of its affiliates on a consolidated basis, predominantly engaged in the
    business of insurance that were vested in the Director of the Office of
    Thrift Supervision under Federal law, including the Home Owners' Loan
    Act, on the day before the transfer date.
        (c) Savings and Loan Holding Company Defined.--The term ``savings
    and loan holding company'' shall have the meaning given such term under
    section 10 of the Home Owners' Loan Act.

    SEC. 1257. EFFECTIVE DATE.

        Except as otherwise provided in this subtitle, the amendments made
    by sections 1221 through section 1253 and 1256 and subsections (a),
    (b), and (c)(1) of section 1254 shall take effect on the transfer date.

      Subtitle D--Further Improvements to the Regulation of Bank Holding
                     Companies and Depository Institutions

    SEC. 1301. TREATMENT OF INDUSTRIAL LOAN COMPANIES, SAVINGS
                  ASSOCIATIONS, AND CERTAIN OTHER COMPANIES UNDER THE BANK
                  HOLDING COMPANY ACT.

        (a) Definitions.--Section 2 of the Bank Holding Company Act of 1956
    (12 U.S.C. 1841) is amended--
                (1) by striking subsection (a)(1) and inserting the
            following:
        ``(a) Bank Holding Company.--
                ``(1) In general.--Except as provided in paragraph (5), the
            term `bank holding company' means--
                        ``(A) any company, other than a company described
                    in section 4(p), which has control over any bank or
                    over any company that is or becomes a bank holding
                    company by virtue of this Act; and
                        ``(B) any section 6 holding company established by
                    a company described in section 6(a)(1)(C).''.
                (2) in subsection (a)(5), by adding at the end the
            following new subparagraph:
                        ``(G) No company is a bank holding company by
                    virtue of its ownership or control of a section 6
                    holding company or any subsidiary of a section 6
                    holding company, so long as the requirements of
                    sections 4(p) and 6 of this Act are met, as applicable,
                    by the section 6 holding company;'';
                (3) in subsection (c)(1)(A), by striking ``insured bank''
            and inserting ``insured depository institution'', and by
            striking ``section 3(h) of the Federal Deposit Insurance Act''
            and inserting ``section 3(c)(2) of the Federal Deposit
            Insurance Act'';
                (4) in subsection (c)(2)--
                        (A) in subparagraph (B), by inserting before the
                    period the following: ``that is controlled by a company
                    that is a fraternal beneficiary society, as defined in
                    section 501(c)(8) of the Internal Revenue Code of 1986,
                    or a company that is, together with all of its
                    affiliates on a consolidated basis, predominantly
                    engaged in the business of insurance''; and
                        (B) in subparagraph (F)(i), by inserting before the
                    semicolon the following: ``, including issuing credit
                    cards and other credit devices (including virtual or
                    intangible devices) that function as credit cards'';
                        (C) in subparagraph (F)(v), by inserting before the
                    semicolon the following: ``, other than loans that
                    otherwise meet the requirements of this subparagraph
                    and are made to businesses that meet the criteria for a
                    small business concern to be eligible for business
                    loans under regulations established by the Small
                    Business Administration under part 121 of title 13,
                    Code of Federal Regulations''; and
                        (D) by striking subparagraph (H) and inserting the
                    following:
                        ``(H) An industrial loan company, industrial bank,
                    or other similar institution which--
                                ``(i) is an institution organized under the
                            laws of a State which, on March 5, 1987, had in
                            effect or had under consideration in such
                            State's legislature a statute which required or
                            would require such institution to obtain
                            insurance under the Federal Deposit Insurance
                            Act;
                                ``(ii) either--
                                        ``(I) does not accept demand
                                    deposits that the depositor may
                                    withdraw by check or similar means for
                                    payment to third parties;
                                        ``(II) has total assets of less
                                    than $100,000,000; or
                                        ``(III) the control of which is not
                                    acquired by any company after August
                                    10, 1987;
                                ``(iii) predominantly provides financial
                            products and services to current and former
                            members of the military and their families; and
                                ``(iv) is controlled by a savings and loan
                            holding company, as defined in section 10(a) of
                            the Home Owners' Loan Act.
                    This subparagraph shall cease to apply to any
                    institution which permits any overdraft (including any
                    intraday overdraft), or which incurs any such overdraft
                    in such institution's account at a Federal Reserve
                    bank, on behalf of an affiliate, if such overdraft is
                    not the result of an inadvertent computer or accounting
                    error that is beyond the control of both the
                    institution and the affiliate, or that is otherwise
                    permissible for a bank controlled by a company
                    described in section 1843(f)(1) of this title.''; and
                (5) by adding at the end the following new subsection:
        ``(r) Section 6 Holding Companies.--The term `section 6 holding
    company' means a company that is required to be established as an
    intermediate holding company under section 6 of this Act.''.
        (b) Nonbanking Activities Exceptions.--Section 4 of the Bank
    Holding Company Act of 1956 (12 U.S.C. 1843) is amended--
                (1) in subsection (f)(1)(B) by striking ``for purposes of
            this Act'' and inserting ``for purposes of section 4(a)''; and
                (2) in subsection (f)(2)--
                        (A) in subparagraph (B)(ii), by striking ``; or''
                    and inserting a semicolon;
                        (B) in subparagraph (C), by striking the period and
                    inserting ``; or''; and
                        (C) by adding at the end the following new
                    subparagraph:
                        ``(D) such company fails to--
                                ``(i) establish and register a section 6
                            holding company pursuant to section 6 of this
                            Act within 180 days after the adoption of rules
                            required by this section; and
                                ``(ii) conduct all such activities which
                            are permissible for a financial holding
                            company, as determined under section 4(k),
                            through such section 6 holding company, other
                            than--
                                        ``(I) internal financial activities
                                    conducted for such company or any
                                    affiliate, including, but not limited
                                    to internal treasury, investment, and
                                    employee benefit functions, provided
                                    that with respect to any internal
                                    financial activity engaged in for the
                                    company or an affiliate and a
                                    nonaffiliate during the year prior to
                                    date of enactment, the company (or an
                                    affiliate not a subsidiary of the
                                    section 6 company) may continue to
                                    engage in that activity so long as the
                                    at least two-thirds of the assets or
                                    two-thirds of the revenues generated
                                    from the activity are from or
                                    attributable to the company or an
                                    affiliate, subject to review by the
                                    Board to determine whether engaging in
                                    such activity presents undue risk to
                                    the section 6 company or undue systemic
                                    risk; and
                                        ``(II) financial activities
                                    involving the provision of credit for
                                    the purchase or lease of products or
                                    services from an affiliate or for the
                                    purchase or lease of products produced
                                    by an affiliate of such section 6
                                    holding company that is not a
                                    subsidiary of such section six holding
                                    company, in accordance with regulations
                                    prescribed by or orders issued by the
                                    Board, pursuant to section 6 of this
                                    Act.''; and
                (3) by inserting at the end the following new subsections:
        ``(p) Certain Companies Not Subject to This Act.--
                ``(1) In general.--Except as provided in paragraphs (6) and
            (7), any company which--
                        ``(A) was--
                                ``(i) on the date of enactment of the
                            Financial Stability Improvement Act of 2009, a
                            unitary savings and loan holding company that
                            continues to control not fewer than one savings
                            association that it controlled on May 4, 1999,
                            or that it acquired pursuant to an application
                            pending before the Office of Thrift Supervision
                            on or before that date, and that became a bank
                            for purposes of the Bank Holding Company Act as
                            a result of the enactment of section 1301(a)(3)
                            of the Financial Stability Improvement Act of
                            2009; or
                                ``(ii) on November 23, 2009--
                                        ``(I) controlled an institution
                                    which became a bank as a result of the
                                    enactment of section 1301(a)(4)(B) of
                                    the Financial Stability Improvement Act
                                    of 2009;
                                        ``(II) had an application pending,
                                    or approved but not executed, before
                                    the Federal Deposit Insurance
                                    Corporation, that, if approved, would
                                    permit the applicant to control an
                                    industrial loan company, industrial
                                    bank, or other similar institution--
                                                ``(aa) that is a federally
                                            insured, State-chartered
                                            depository institution;
                                                ``(bb) that is organized
                                            under the laws of a State that
                                            on March 5, 1987, had in
                                            effect, or had under
                                            consideration in the
                                            legislature of such State, a
                                            statute that required such
                                            institution to obtain insurance
                                            under the Federal Deposit
                                            Insurance Act; and
                                                ``(cc) that--

                                                        ``(AA) does not
                                                    accept demand deposits
                                                    that the depositor may
                                                    withdraw by check or
                                                    similar means for
                                                    payment to third
                                                    parties; or

                                                        ``(BB) maintains
                                                    total assets of less
                                                    than $100,000,000; or

                                        ``(III) controlled an institution
                                    it has continuously controlled since
                                    March 5, 1987, which became a bank as a
                                    result of the enactment of the
                                    Competitive Equality Banking Act of
                                    1987, pursuant to subsection (f);
                        ``(B) was not on June 30, 2009--
                                ``(i) a bank holding company; or
                                ``(ii) subject to the Bank Holding Company
                            Act of 1956 by reason of section 8(a) of the
                            International Banking Act of 1978 (12 U.S.C.
                            3106(a)); and
                        ``(C) on June 30, 2009, directly or indirectly
                    controlled shares or engaged in activities that did
                    not, on the day before the date of enactment of the
                    Financial Stability Act of 2009, comply with the
                    activity or investment restrictions on financial
                    holding companies in section 4 in accordance with
                    regulations prescribed by the Board,
            shall not be treated as a bank holding company for purposes of
            this Act solely by virtue of such company's control of such
            institution and control of a section 6 holding company
            established pursuant to section 6.
                ``(2) Loss of exemption.--A company described in paragraph
            (1) shall no longer qualify for the exemption provided under
            that paragraph if--
                        ``(A) such company fails to--
                                ``(i) establish and register a section 6
                            holding company pursuant to section 6 of this
                            Act within 180 days after adoption of rules
                            required by this section, unless the Board
                            grants an extension of such period for
                            compliance which shall not exceed 180
                            additional days; and
                                ``(ii) maintain a section 6 holding company
                            in compliance with all the requirements for a
                            section 6 holding company under section 6 of
                            this Act.
                        ``(B) such company directly or indirectly
                    (including through the section 6 holding company it
                    must form pursuant to this subsection and section 6 of
                    this Act) acquires control of an additional bank or
                    insured depository institution after June 30, 2009,
                    provided that such company directly or indirectly
                    (including through the section 6 holding company) may
                    acquire--
                                ``(i) shares held as a bona fide fiduciary
                            (whether with or without the sole discretion to
                            vote such shares);
                                ``(ii) shares held by any person as a bona
                            fide fiduciary solely for the benefit of
                            employees of either the company described in
                            paragraph (1) or any subsidiary of that company
                            and the beneficiaries of those employees;
                                ``(iii) shares held temporarily pursuant to
                            an underwriting commitment in the normal course
                            of an underwriting business;
                                ``(iv) shares held in an account solely for
                            trading purposes;
                                ``(v) shares over which no control is held
                            other than control of voting rights acquired in
                            the normal course of a proxy solicitation;
                                ``(vi) loans or other accounts receivable
                            acquired from an insured depository institution
                            in the normal course of business;
                                ``(vii) shares or assets acquired in
                            securing or collecting a debt previously
                            contracted in good faith, during the 2-year
                            period beginning on the date of such
                            acquisition or for such additional time (not
                            exceeding 3 years) as the Board may permit if
                            the Board determines that such an extension
                            will not be detrimental to the public interest;
                                ``(viii) shares or assets acquired directly
                            or indirectly by a depository institution
                            controlled by such company in a transaction
                            involving an insured depository institution for
                            which the Federal Deposit Insurance Corporation
                            has been appointed as receiver or which has
                            been found to be in danger of default (as
                            defined in section 3 of the Federal Deposit
                            Insurance Act) by the appropriate Federal or
                            State authority;
                                ``(ix) shares or assets of another
                            industrial loan company meeting the
                            requirements of this Act if such company
                            continuously controlled an industrial loan
                            company since the date of enactment of the
                            Financial Stability Improvement Act of 2009;
                            and
                                ``(x) shares or assets of a savings
                            association acquired directly or indirectly by
                            the savings association controlled by such
                            company if such company continuously controlled
                            a savings association since the date of
                            enactment of the Financial Stability
                            Improvement Act of 2009;
                        ``(C)(i) the section 6 holding company required to
                    be established by such company, or any subsidiary bank
                    of such company undergoes a change in control after the
                    date of enactment of the Financial Stability
                    Improvement Act of 2009, other than--
                                ``(I) the merger or whole acquisition of
                            such parent company in a bona fide merger or
                            acquisition (as shall be determined by the
                            Board, which is authorized to find that a
                            transaction is not a bona fide merger or
                            acquisition and thus results in the loss of
                            exemption), with a company that is
                            predominantly engaged in activities not
                            permissible for a financial holding company
                            pursuant to section 4(k);
                                ``(II) a change of control of an industrial
                            bank, its section 6 holding company, or any
                            entity that directly or indirectly controls the
                            industrial bank, in a transaction other than a
                            merger described in subclause (I), by an
                            acquiring company that is predominately engaged
                            in activities not permissible for a financial
                            holding company pursuant to subsection (k),
                            if--
                                        ``(aa) the transaction is approved
                                    by the appropriate Federal banking
                                    agency and the Board; and
                                        ``(bb) the industrial bank does not
                                    thereafter establish a domestic branch
                                    as defined in section 3(o) of the
                                    Federal Deposit Insurance Act (12
                                    U.S.C. 1813(o));
                                ``(III) an inadvertent acquisition of
                            control, as determined by the Board, if such
                            inadvertent acquisition of control is reversed
                            or rectified within 180 days of its discovery;
                            or
                                ``(IV) the acquisition of additional shares
                            by a company that owned or controlled 7.5
                            percent or more of any class of such parent
                            company's outstanding voting stock on or before
                            June 30, 2009, and continuously owned or
                            controlled at least such 7.5 percent since June
                            30, 2009.
                        ``(ii) Nothing in this subparagraph shall be
                    construed as preventing the Board from requiring
                    compliance with this subsection, section 6 or the
                    requirements of the Change in Bank Control Act, as
                    applicable to a company that is permitted to acquire
                    control without loss of the exemption in this
                    subsection 4(p)(2); or
                        ``(D) any subsidiary bank of such company engages
                    in any activity after the date of enactment of the
                    Financial Stability Improvement Act of 2009 which would
                    have caused such institution to be a bank (as defined
                    in section 2(c) of this Act, as in effect before such
                    date) if such activities had been engaged in before
                    such date.
                ``(3) Divestiture in case of loss of exemption.--If any
            company described in paragraph (1) fails to qualify for the
            exemption provided under paragraph (1) by operation of
            paragraph (2), such exemption shall cease to apply to such
            company and such company shall divest control of each bank it
            controls before the end of the 180-day period beginning on the
            date on which the company receives notice from the Board that
            the company has failed to continue to qualify for such
            exemption, unless, before the end of such 180-day period, the
            company has--
                        ``(A) either--
                                ``(i) corrected the condition or ceased the
                            activity that caused the company to fail to
                            continue to qualify for the exemption; or
                                ``(ii) submitted a plan to the Board for
                            approval to cease the activity or correct the
                            condition in a timely manner (which shall not
                            exceed 1 year); and
                        ``(B) implemented procedures that are reasonably
                    adapted to avoid the reoccurrence of such condition or
                    activity.
                ``(4) Subsection ceases to apply under certain
            circumstances.--This subsection shall cease to apply to any
            company described in paragraph (1) if such company--
                        ``(A) registers as a bank holding company under
                    section 2(a) of this Act;
                        ``(B) immediately upon such registration, complies
                    with all of the requirements of this chapter, and
                    regulations prescribed by the Board pursuant to this
                    chapter, including the nonbanking restrictions of this
                    section; and
                        ``(C) does not, at the time of such registration,
                    control banks in more than one State, the acquisition
                    of which would be prohibited by section 3(d) of this
                    Act if an application for such acquisition by such
                    company were filed under section 3(a) of this Act.
                ``(5) Information requirement.--Each company described in
            paragraph (1) shall, within 60 days after the date of enactment
            of the Financial Stability Improvement Act of 2009, provide the
            Board with the name and address of such company, the name and
            address of each bank such company controls, and a description
            of each such bank's activities.
                ``(6) Examinations and reports.--The Board may, from time
            to time, examine a company described in paragraph (1) or a bank
            controlled by such a company, and may require reports under
            oath from a company described in paragraph (1), and appropriate
            officers or directors of such company, in each case solely for
            purposes of assuring compliance with the provisions of this
            subsection and enforcing such compliance.
                ``(7) Limited enforcement.--
                        ``(A) In general.--In addition to any other power
                    of the Board, the Board may enforce compliance with the
                    provisions of this subsection which are applicable to
                    any company described in paragraph (1), and any bank
                    controlled by such company, under section 8 of the
                    Federal Deposit Insurance Act, and such company or bank
                    shall be subject to such section (for such purposes) in
                    the same manner and to the same extent as if such
                    company were a bank holding company.
                        ``(B) Application of other act.--Any violation of
                    this subsection by any company described in paragraph
                    (1) or any bank controlled by such a company, may also
                    be treated as a violation of the Federal Deposit
                    Insurance Act for purposes of subparagraph (A).
                        ``(C) No effect on other authority.--No provision
                    of this paragraph shall be construed as limiting any
                    authority of the Board or any other Federal agency
                    under any other provision of law.
                ``(8) Unitary savings and loan holding company defined.--
            For purposes of this subsection, the term `unitary savings and
            loan holding company' means a company that was a savings and
            loan holding company on May 4, 1999 (as then defined), or that
            became a savings and loan holding company pursuant to an
            application pending before the Office of Thrift Supervision on
            or before that date, and--
                        ``(A) that controls--
                                ``(i) only 1 savings association; or
                                ``(ii) more than 1 savings association, if
                            all, or all but 1, of the savings association
                            subsidiaries of such company were initially
                            acquired by the company pursuant to a
                            supervisory transaction under section 1823(c),
                            1823(i), or 1823(k) of this title, or section
                            408(m) of the National Housing Act (12 U.S.C.
                            1730a(m));
                        ``(B) all of the savings association subsidiaries
                    of such company are qualified thrift lenders (as
                    determined under section 10 of the Home Owners' Loan
                    Act); and
                        ``(C) that continues to control not fewer than 1
                    savings association that it controlled on May 4, 1999,
                    or that it acquired pursuant to an application pending
                    before the Office of Thrift Supervision on or before
                    that date.
        ``(q) Preservation of Certain Savings and Loan Holding Company
    Authorities.--Notwithstanding subsection (a), a company that was a
    savings and loan holding company on June 30, 2009, that became a bank
    holding company by operation of section 1301 of the Financial Stability
    Improvement Act of 2009 may continue to engage in the following
    activities in which such company was continuously engaged on June 30,
    2009, through the day of enactment of the Financial Stability
    Improvement Act of 2009:
                ``(1) Furnishing or performing management services for a
            savings association subsidiary of such company.
                ``(2) Conducting an insurance agency or escrow business.
                ``(3) Holding, managing, or liquidating assets owned or
            acquired from a savings association subsidiary of such company.
                ``(4) Holding or managing properties used or occupied by a
            savings association subsidiary of such company.
                ``(5) Acting as trustee under deed of trust.
                ``(6) Any other activity in which multiple savings and loan
            holding companies were authorized (by regulation) to directly
            engage on March 5, 1987.''.
        (c) Section 6 Holding Companies.--The Bank Holding Company Act of
    1956 (12 U.S.C. 1841 et seq.) is amended by inserting after section 5
    the following new section:

    ``SEC. 6. SPECIAL-PURPOSE HOLDING COMPANIES.

        ``(a) Establishment, Purpose and Requirements of Special Purpose
    Holding Companies.--
                ``(1) Requirement.--A special purpose holding company
            (hereafter in this section referred to as a `section 6 holding
            company') shall be established and maintained by a company--
                        ``(A) described in section 4(f)(1) as required by
                    section 4(f)(2)(D) of this Act;
                        ``(B) described in section 4(p)(1) as required by
                    section 4(p)(2)(A) of this Act; or
                        ``(C) that--
                                ``(i) is subject to stricter prudential
                            standards under section 1103 of the Financial
                            Stability Improvement Act of 2009;
                                ``(ii) is not--
                                        ``(I) a bank holding company; or
                                        ``(II) subject to the Bank Holding
                                    Company Act by reason of section 8(a)
                                    of the International Banking Act of
                                    1978 (12 U.S.C. 3106(a)); and
                                ``(iii) directly or indirectly controlled
                            shares or engaged in activities that did not,
                            on the date the company is first subject to
                            stricter prudential standards pursuant to
                            subtitle B of the Financial Stability
                            Improvement Act of 2009, comply with the
                            activity or investment restrictions on
                            financial holding companies in section 4 in
                            accordance with regulations prescribed by the
                            Board.
                ``(2) Purpose.--
                        ``(A) The purpose of this section is to provide for
                    consolidated supervision of certain financial companies
                    by the Board.
                        ``(B) A company that is required to form a section
                    a section 6 holding company shall conduct all such
                    activities which are permissible for a financial
                    holding company, as determined under section 4(k),
                    through such section 6 holding company, other than--
                                ``(i) internal financial activities
                            conducted for such company or any affiliate,
                            including, but not limited to internal
                            treasury, investment, and employee benefit
                            functions, provided that with respect to any
                            internal financial activity engaged in for the
                            company or an affiliate and a nonaffiliate
                            during the year prior to date of enactment, the
                            company (or an affiliate not a subsidiary of
                            the section 6 company) may continue to engage
                            in that activity so long as the at least \2/3\
                            of the assets or \2/3\ of the revenues
                            generated from the activity are from or
                            attributable to the company or an affiliate,
                            subject to review by the Board to determine
                            whether engaging in such activity presents
                            undue risk to the section 6 company or undue
                            systemic risk; and
                                ``(ii) financial activities involving the
                            provision of credit for the purchase or lease
                            of products or services from an affiliate or
                            for the purchase or lease of products produced
                            by an affiliate of such section 6 holding
                            company that is not a subsidiary of such
                            section 6 holding company, in accordance with
                            regulations prescribed by or orders issued by
                            the Board, pursuant to section 6 of this Act.
                        ``(C) A section 6 holding company shall be
                    prohibited from conducting any nonbanking activities or
                    investing in any nonbank companies other than those
                    permissible for a financial holding company under
                    sections 3 and 4, unless the Board specifically
                    determines otherwise in accordance with paragraph (6),
                    and provided that, for purposes of this paragraph, a
                    company designated as a section 6 holding company and
                    described under paragraph (4) (or any permitted
                    successor) is not prohibited from continuing to engage
                    in any impermissible activity in which it was engaged
                    continuously during the 6 months prior to the date of
                    enactment, from owning any shares or types of assets
                    related to such activity, or continuing to own such
                    other shares or assets that it owned on the date of
                    enactment.
                ``(3) Registration.--
                        ``(A) A section 6 holding company required to be
                    established by a company described in paragraph (1)(A)
                    shall be established, and such company shall register
                    with the Board as a bank holding company, pursuant to
                    the requirements in section 4(f).
                        ``(B) A section 6 holding company required to be
                    established by a company described in paragraph (1)(B)
                    shall be established, and such company shall register
                    with the Board as a bank holding company, pursuant to
                    the requirements in section 4(p).
                        ``(C) A section 6 holding company required to be
                    established by a company described in paragraph (1)(C)
                    shall be--
                                ``(i) established, and such company shall
                            register with the Board within 90 days after
                            such company or such company's parent holding
                            company has been notified by the Board that
                            such company is subject to stricter prudential
                            standards under section 1103 of the Financial
                            Stability Improvement Act of 2009, unless the
                            Board grants an extension of such period for
                            compliance which shall not exceed 180
                            additional days;
                                ``(ii) subject to the provisions of this
                            Act and other Federal law as provided in
                            section 1103(g) of the Financial Stability
                            Improvement Act of 2009; and
                                ``(iii) subject to the authority of the
                            Board to enforce compliance with the provisions
                            of this section under section 8 of the Federal
                            Deposit Insurance Act in the same manner and to
                            the same extent as if such company were a bank
                            holding company.
                ``(4) Rule of construction.--For purposes of this section,
            designation of an already established intermediate holding
            company that will serve as the section 6 holding company shall
            satisfy the requirement to establish a section 6 holding
            company, provided that such existing intermediate holding
            company complies with all other provisions applicable to a
            section 6 holding company.
                ``(5) Limitations on authority of commercial parent.--A
            company that is not a bank holding company or treated as a bank
            holding company pursuant to section 8(a) of the International
            Bank Act of 1978 that has been notified that it is a financial
            holding company subject to stricter standards, pursuant to
            section 1103 of the Financial Stability Improvement Act of
            2009, shall--
                        ``(A) not be deemed to be, or treated as, a bank
                    holding company, solely because of its ownership or
                    control of a section 6 holding company; and
                        ``(B) not be subject to this Act, except for such
                    provisions as are explicitly made applicable in this
                    section.
                ``(6) Board authority.--
                        ``(A) Rules and exemptions.--In addition to any
                    other authority of the Board, the Board shall prescribe
                    rules and regulations or issue orders providing for the
                    establishment and registration of section 6 holding
                    companies and shall provide exemptions from the
                    requirements of this Act (including an order in
                    response to a request from an affected company),
                    including, but not limited to, exemptions--
                                ``(i) with respect to the requirement to
                            conduct such activities which are financial in
                            nature, as determined under section 4(k), other
                            than financial activities conducted for such
                            company or any affiliate, including any
                            financial activity engaged in for both the
                            company or an affiliate and a nonaffiliate as
                            permitted under section 4(f)(2)(D) or section
                            6(a)(2)(B) and financial activities involving
                            the provision of credit for the purchase or
                            lease of products or services from an affiliate
                            or for the purchase or lease of products
                            produced by an affiliate of such section 6
                            holding company that is not a subsidiary of
                            such section 6 holding company, through such
                            section 6 holding company, if the Board makes a
                            finding that such exemption--
                                        ``(I)(aa) would facilitate the
                                    extension of credit to individuals,
                                    households, and businesses; or
                                        ``(bb) would allow for greater
                                    efficiency, improved customer service,
                                    or other public benefits in the conduct
                                    of financial activities by affected
                                    companies;
                                        ``(II) would not threaten the
                                    safety and soundness of the section 6
                                    holding company, or of any insured
                                    depository institution or other
                                    subsidiary of the section 6 holding
                                    company;
                                        ``(III) would not increase systemic
                                    risk or threaten the stability of the
                                    overall financial system;
                                        ``(IV) would not, as applied to the
                                    activities that are the subject of the
                                    rule, order or request, result in
                                    substantially lessening competition, or
                                    to tend to create a monopoly, or which
                                    in any other manner would be in
                                    restraint of trade, unless the Board
                                    finds that the anticompetitive effects
                                    are outweighed in the public interest
                                    by the probable effect of the exemption
                                    in meeting the convenience and needs of
                                    the community to be served; and
                                        ``(V) would meet the financial and
                                    managerial standards for financial
                                    holding companies described in
                                    subparagraphs (A) and (B) of section
                                    4(j)(4); and
                                ``(ii) from the affiliate transaction
                            requirements of subsection (b), including but
                            not limited to exemptions that would facilitate
                            extensions of credit to unaffiliated persons
                            for the personal, household, or business
                            purposes of such unaffiliated persons, unless
                            the Board makes a finding that such exemption--
                                        ``(I) is not consistent with the
                                    purposes of section 23A and section 23B
                                    of the Federal Reserve Act;
                                        ``(II) would threaten the safety
                                    and soundness of the section 6 holding
                                    company, or any insured depository
                                    institution or other subsidiary of the
                                    section 6 holding company;
                                        ``(III) would increase systemic
                                    risk or threaten the stability of the
                                    overall financial system;
                                        ``(IV) would not, as applied to the
                                    activities that are the subject of the
                                    rule, order or request result in
                                    substantially lessening competition, or
                                    to tend to create a monopoly, or which
                                    in any other manner would be in
                                    restraint of trade, unless the Board
                                    finds that the anticompetitive effects
                                    are outweighed in the public interest
                                    by the probable effect of the exemption
                                    in meeting the convenience and needs of
                                    the community to be served; or
                                        ``(V) would permit an unfair,
                                    deceptive, abusive, or unsafe-and-
                                    unsound act or practice.
                        ``(B) Parent company reports.--The Board may, from
                    time to time, require reports under oath from a company
                    that controls a section 6 holding company, and
                    appropriate officers or directors of such company,
                    solely for purposes of ensuring compliance with the
                    provisions of this section (including assessing the
                    company's ability to serve as a source of financial
                    strength pursuant to subsection (g)) and enforcing such
                    compliance.
                        ``(C) Limited parent company enforcement.--
                                ``(i) In general.--In addition to any other
                            power of the Board, the Board may enforce
                            compliance with the provisions of this
                            subsection which are applicable to any company
                            described in paragraph (1), and any bank
                            controlled by such company, under section 8 of
                            the Federal Deposit Insurance Act and such
                            company or bank shall be subject to such
                            section (for such purposes) in the same manner
                            and to the same extent as if such company were
                            a bank holding company.
                                ``(ii) Application of other act.--Any
                            violation of this subsection by any company
                            that controls a section 6 holding company or
                            any bank controlled by such a company, may also
                            be treated as a violation of the Federal
                            Deposit Insurance Act for purposes of clause
                            (i).
                                ``(iii) No effect on other authority.--No
                            provision of this subparagraph shall be
                            construed as limiting any authority of the
                            Board or any other Federal agency under any
                            other provision of law.
        ``(b) Restrictions on Affiliate Transactions.--
                ``(1) Section 23a and 23b applicability.--
                        ``(A) In general.--Transactions between a section 6
                    holding company (or any nonbank subsidiary thereof) and
                    any affiliate not controlled by the section 6 holding
                    company shall be subject to the restrictions and
                    limitations contained in section 23A and section 23B of
                    the Federal Reserve Act as if the section 6 holding
                    company were a member bank, provided, that a
                    transaction that otherwise would be a covered
                    transaction shall not be a covered transaction if the
                    transaction is in connection with the bona fide
                    acquisition or lease by an unaffiliated person of
                    assets, goods or services but shall be subject to
                    review under section 23A(f)(1) of such Act.
                        ``(B) Covered transactions.--A depository
                    institution controlled by a section 6 holding company
                    may not engage in a covered transaction (as defined in
                    section 23A(b)(7) of the Federal Reserve Act) with any
                    affiliate that is not the section 6 holding company or
                    a subsidiary of the section 6 holding company; provided
                    that, for purposes of the prohibition, a transaction
                    that otherwise would be a covered transaction shall not
                    be a covered transaction if the transaction is in
                    connection with the bona fide acquisition or lease by
                    an unaffiliated person of assets, goods or services,
                    but shall be subject to review under section 23A(f)(1)
                    of the Federal Reserve Act.
                ``(2) Rule of construction.--No provision of this
            subsection shall be construed as exempting any subsidiary
            insured depository institution of a section 6 holding company
            from compliance with section 23A or 23B of the Federal Reserve
            Act with respect to each affiliate of such institution (as
            defined in section 23A or 23B of the Federal Reserve Act),
            including any affiliate that is the section 6 holding company
            or subsidiary of the section 6 holding company.
        ``(c) Tying Provisions.--A company that directly or indirectly
    controls a section 6 holding company shall be--
                ``(1) treated as a bank holding company for purposes of
            section 106 of the Bank Holding Company Act Amendments of 1970
            and section 22(h) of the Federal Reserve Act and any regulation
            prescribed under any such section; and
                ``(2) subject to the restrictions of section 106 of the
            Bank Holding Company Act Amendments of 1970, in connection with
            any transaction involving the products or services of such
            company or affiliate and those of a bank affiliate, as if such
            company or affiliate were a bank and such bank were a
            subsidiary of a bank holding company.
        ``(d) Financial Holding Company Requirements.--A section 6 holding
    company shall be subject to--
                ``(1) the conditions for engaging in expanded financial
            activities in section 4(l); and
                ``(2) the provisions applicable to financial holding
            companies that fail to meet certain requirements in section
            4(m).
        ``(e) Independence of Section 6 Holding Company.--
                ``(1) No less than 25 percent of the members of the board
            of directors of a section 6 holding company, and each
            subsidiary of a section 6 holding company, shall be independent
            of the parent company of the section 6 holding company and any
            subsidiary of such parent company. For purposes of this
            subsection, a director shall be independent of the parent
            company if such person is not currently serving, and has not
            within the previous 2-year period served, as a director,
            officer, or employee of any affiliate of the section 6 holding
            company that is not a subsidiary of the section 6 holding
            company.
                ``(2) No executive officer of a section 6 holding company
            or any subsidiary of a section 6 holding company may serve as a
            director, officer, or employee of an affiliate of the section 6
            holding company that is not a subsidiary of the section 6
            holding company.
                ``(3) The Board shall issue regulations that require
            effective legal and operational separation of the functions of
            a section 6 holding company from its affiliates that are not
            subsidiaries of such section 6 holding company, provided,
            however that such rules shall not require operational
            separation of internal functions including, but not limited to,
            human resources management, employee benefit plans, and
            information technology.
        ``(f) Source of Strength.--A company that directly or indirectly
    controls a section 6 holding company shall serve as a source of
    financial strength to its subsidiary section 6 holding company.''.

    SEC. 1302. REGISTRATION OF CERTAIN COMPANIES AS BANK HOLDING COMPANIES.

        Section 5 of the Bank Holding Company Act of 1956 (12 U.S.C. 1844)
    is amended by inserting at the end the following new subsection:
        ``(h) Conversion to Bank Holding Company by Operation of Law.--
                ``(1) Conversion by operation of law.--A company that, on
            the day before the date of enactment of the Financial Stability
            Improvement Act of 2009, was not a bank holding company but
            which, by reason of section 1301 of the Financial Stability
            Improvement Act of 2009 becomes a bank holding company, other
            than a section 6 holding company, by operation of law, shall
            register as a bank holding company with the Board in accordance
            with section 5(a) within 90 days of the date of enactment of
            that Act.
                ``(2) Compliance with bank holding company act.--With
            respect to any company described in paragraph (1), the Board
            may grant temporary exemptions or provide other appropriate
            temporary relief to permit such company to implement measures
            necessary to comply with the requirements under the Bank
            Holding Company Act.''.

    SEC. 1303. REPORTS AND EXAMINATIONS OF BANK HOLDING COMPANIES;
                  REGULATION OF FUNCTIONALLY REGULATED SUBSIDIARIES.

        (a) Reports of Bank Holding Companies.--Sections 5(c)(1)(A) and (B)
    of the Bank Holding Company Act of 1956 (12 U.S.C. 1844(c)(1)(A) and
    (B)) are amended to read as follows:
                        ``(A) In general.--The Board, from time to time,
                    may require a bank holding company and any subsidiary
                    of such company to submit reports under oath that the
                    Board determines are necessary or appropriate for the
                    Board to carry out the purposes of this chapter,
                    prevent evasions thereof, and monitor compliance by the
                    company or subsidiary with the applicable provisions of
                    law.
                        ``(B) Use of existing reports.--
                                ``(i) In general.--The Board shall, to the
                            fullest extent possible, use--
                                        ``(I) reports that a bank holding
                                    company or any subsidiary of such
                                    company has been required to provide to
                                    other Federal or State regulatory
                                    agencies;
                                        ``(II) information that is
                                    otherwise required to be reported
                                    publicly; and
                                        ``(III) externally audited
                                    financial statements.
                                ``(ii) Availability.--A bank holding
                            company or a subsidiary of such company shall
                            promptly provide to the Board, at the request
                            of the Board, a report referred to in clause
                            (i)(I).''.
        (b) Functionally Regulated Subsidiary.--Section 5(c)(1) of the Bank
    Holding Company Act of 1956 (12 U.S.C. 1844(c)(1)) is amended by
    inserting at the end the following new subparagraph:
                        ``(C) Definition.--For purposes of this subsection
                    and section 6, the term `functionally regulated
                    subsidiary' means any subsidiary (other than a
                    depository institution) of a bank holding company that
                    is--
                                ``(i) a broker or dealer registered with
                            the Securities and Exchange Commission under
                            the Securities Exchange Act of 1934, for which
                            the Securities and Exchange Commission is the
                            Federal regulatory agency;
                                ``(ii) an investment company registered
                            with the Securities and Exchange Commission
                            under the Investment Company Act of 1940, for
                            which the Securities and Exchange Commission is
                            the Federal regulatory agency;
                                ``(iii) an investment adviser registered
                            with the Securities and Exchange Commission
                            under the Investment Advisers Act of 1940, for
                            which the Securities and Exchange Commission is
                            the Federal regulatory agency, with respect to
                            the investment advisory activities of such
                            investment adviser and activities incidental to
                            such investment advisory activities; and
                                ``(iv) a futures commission merchant,
                            commodity trading advisor, and commodity pool
                            operator registered with the Commodity Futures
                            Trading Commission under the Commodity Exchange
                            Act, for which the Commodity Futures Trading
                            Commission is the Federal regulatory agency,
                            with respect to the commodities activities of
                            such entity and activities incidental to such
                            commodities activities.''.
        (c) Examinations of Bank Holding Companies.--Sections 5(c)(2)(A)
    and (B) of the Bank Holding Company Act of 1956 (12 U.S.C.
    1844(c)(2)(A) and (B)) are amended to read as follows:
                        ``(A) In general.--The Board may make examinations
                    of a bank holding company and any subsidiary of such a
                    company to carry out the purposes of this chapter,
                    prevent evasions thereof, and monitor compliance by the
                    company or subsidiary with applicable provisions of
                    law.
                        ``(B) Functionally regulated and depository
                    institution subsidiaries.--The Board shall, to the
                    fullest extent possible, use reports of examination of
                    functionally regulated subsidiaries and subsidiary
                    depository institutions made by other Federal or State
                    regulatory authorities.''.
        (d) Regulation of Financial Holding Companies.--Section 5(c)(2) of
    the Bank Holding Company Act of 1956 (12 U.S.C. 1844(c)) is amended by
    striking subparagraphs (C), (D), and (E).
        (e) Authority to Regulate Functionally Regulated Subsidiaries of
    Bank Holding Companies.--The Bank Holding Company Act of 1956 (12
    U.S.C. 1841 et seq.) is amended by striking section 10A (12 U.S.C.
    1848a).

    SEC. 1304. REQUIREMENTS FOR FINANCIAL HOLDING COMPANIES TO REMAIN WELL
                  CAPITALIZED AND WELL MANAGED.

        Section 4(l)(1) of the Bank Holding Company Act of 1956 (12 U.S.C.
    1843(l)(1)) is amended--
                (1) in subparagraph (B), by striking ``and'';
                (2) by redesignating subparagraph (C) as subparagraph (D);
                (3) by inserting after subparagraph (B) the following new
            subparagraph:
                        ``(C) the bank holding company is well capitalized
                    and well managed; and''; and
                (4) in subparagraph (D) (as so redesignated) by amending
            clause (ii) to read as follows:
                                ``(ii) a certification that the company
                            meets the requirements of subparagraphs (A)
                            through (C).''.

    SEC. 1305. STANDARDS FOR INTERSTATE ACQUISITIONS.

        (a) Bank Holding Company Act of 1956 Amendment.--Section 3(d)(1)(A)
    of the Bank Holding Company Act of 1956 (12 U.S.C. 1842(d)(1)(A)) is
    amended--
                (1) by striking ``adequately capitalized'' and inserting
            ``well capitalized''; and
                (2) by striking ``adequately managed'' and inserting ``well
            managed''.
        (b) Federal Deposit Insurance Act Amendment.--Section 44(b)(4)(B)
    of the Federal Deposit Insurance Act (12 U.S.C. 1831u(b)(4)(B)) is
    amended to read as follows:
                        ``(B) the responsible agency determines that the
                    resulting bank will be well capitalized and well
                    managed upon the consummation of the transaction.''.

    SEC. 1306. ENHANCING EXISTING RESTRICTIONS ON BANK TRANSACTIONS WITH
                  AFFILIATES.

        (a) Section 23A of the Federal Reserve Act (12 U.S.C. 371c) is
    amended--
                (1) in subsection (b)(1), by striking subparagraph (D) and
            inserting the following new subparagraph:
                        ``(D) any investment fund with respect to which a
                    member bank or affiliate thereof is an investment
                    adviser; and'';
                (2) in subsection (b)(7)(A), by inserting ``(including a
            purchase of assets subject to an agreement to repurchase)''
            after ``affiliate'';
                (3) in subsection (b)(7)(C), by striking ``, including
            assets subject to an agreement to repurchase,'';
                (4) in subsection (b)(7)(D)--
                        (A) by inserting ``or other debt obligations''
                    after ``acceptance of securities''; and
                        (B) by striking ``or'' after the semicolon;
                (5) in subsection (b)(7), by inserting at the end the
            following new subparagraphs:
                        ``(F) any securities borrowing and lending
                    transactions with an affiliate to the extent that the
                    transactions create credit exposure of the member bank
                    to the affiliate; or
                        ``(G) current and potential future credit exposure
                    to the affiliate on derivative transactions with the
                    affiliate;'';
                (6) in subsection (c)(1), by striking ``at the time of the
            transaction,'' and inserting ``at all times'';
                (7) in subsection (c)--
                        (A) by striking paragraph (2);
                        (B) by redesignating paragraphs (3), (4), and (5)
                    as paragraphs (2), (3), and (4), respectively;
                (8) in subsection (c)(3) (as so redesignated by paragraph
            (7)), by inserting ``or other debt obligations'' after
            ``securities'';
                (9) in subsection (f)(2), by inserting at the end the
            following: ``The Board may not, by regulation or order, grant
            an exemption under this section unless the Board obtains the
            concurrence of the Chairman of the Federal Deposit Insurance
            Corporation.''; and
                (10) in subsection (f)--
                        (A) by redesignating paragraph (3) as paragraph
                    (4); and
                        (B) and inserting after paragraph (2) the following
                    new paragraph:
                ``(3) Concurrence of the comptroller of the currency.--With
            respect to a transaction or relationship involving a national
            bank or Federal savings association, the Board may not grant an
            exemption under this section unless the Board obtains the
            concurrence of the Comptroller of the Currency (in addition to
            obtaining the concurrence of the Chairman of the Federal
            Deposit Insurance Corporation under paragraph (2)).''.
        (b) Technical and Conforming Amendment.--Section 23B(e) of the
    Federal Reserve Act (12 U.S.C. 371-1(e)), is amended by inserting at
    the end the following new paragraph:
                ``(3) The Board may not grant an exemption or exclusion
            under this section unless the Board obtains the concurrence of
            the Chairman of the Federal Deposit Insurance Corporation.''.

    SEC. 1307. ELIMINATING EXCEPTIONS FOR TRANSACTIONS WITH FINANCIAL
                  SUBSIDIARIES.

        Section 23A(e) of the Federal Reserve Act (12 U.S.C. 371c(e)) is
    amended--
                (1) by striking paragraph (3); and
                (2) by redesignating paragraph (4) as paragraph (3).

    SEC. 1308. LENDING LIMITS APPLICABLE TO CREDIT EXPOSURE ON DERIVATIVE
                  TRANSACTIONS, REPURCHASE AGREEMENTS, REVERSE REPURCHASE
                  AGREEMENTS, AND SECURITIES LENDING AND BORROWING
                  TRANSACTIONS.

        Section 5200 of the Revised Statutes of the United States (12
    U.S.C. 84) is amended--
                (1) in subsection (b)(1), by striking ``shall include all
            direct or indirect'' and all that follows through
            ``commitment;'' and inserting: ``shall include--
                        ``(A) all direct or indirect advances of funds to a
                    person made on the basis of any obligation of that
                    person to repay the funds or repayable from specific
                    property pledged by or on behalf of the person;
                        ``(B) to the extent specified by the Comptroller of
                    the Currency, such term shall also include any
                    liability of a national banking association to advance
                    funds to or on behalf of a person pursuant to a
                    contractual commitment; and
                        ``(C) credit exposure to a person arising from a
                    derivative transaction, repurchase agreement, reverse
                    repurchase agreement, securities lending transaction,
                    or securities borrowing transaction between the
                    national banking association and the person;'';
                (2) in subsection (b)(2) by striking the period at the end
            and inserting ``; and'';
                (3) in subsection (b), by inserting after paragraph (2) the
            following new paragraph:
                ``(3) the term `derivative transaction' means any
            transaction that is a contract, agreement, swap, warrant, note,
            or option that is based, in whole or in part, on the value of,
            any interest in, or any quantitative measure or the occurrence
            of any event relating to, one or more commodities, securities,
            currencies, interest or other rates, indices, or other
            assets.''; and
                (4) in subsection (d), by inserting after paragraph (2) the
            following new paragraph:
                ``(3) The Comptroller of the Currency shall prescribe rules
            to administer and carry out the purposes of this section with
            respect to credit exposures arising from any derivative
            transaction, repurchase agreement, reverse repurchase
            agreement, securities lending transaction, or securities
            borrowing transaction. Rules required to be prescribed under
            this paragraph (3) shall take effect, in final form, not later
            than 180 days after the date of enactment of the Financial
            Stability Improvement Act of 2009.''.

    SEC. 1309. RESTRICTION ON CONVERSIONS OF TROUBLED BANKS AND THRIFTS.

        (a) Conversion of a National Banking Association to a State Bank.--
    The National Bank Consolidation and Merger Act (12 U.S.C. 215 et seq.)
    is amended by redesignating section 7 as section 8 and by inserting
    after section 6 the following:

    ``SEC. 7. PROHIBITION ON CERTAIN CONVERSIONS.

        ``A national bank may not convert to a State bank during any period
    of time in which it is subject to a cease and desist order, memorandum
    of understanding, or other enforcement action entered into with or
    issued by the Comptroller of the Currency.''.
        (b) Conversion of a State Bank to a National Bank.--Section 5154 of
    the Revised Statutes (12 U.S.C. 35) is amended by adding at the end the
    following new sentence: ``The Comptroller of the Currency shall not
    approve the conversion of a State bank to a national bank during any
    period of time in which the State bank is subject to a cease and desist
    order, memorandum of understanding, or other enforcement action entered
    into or issued by a State bank supervisor, the Federal Deposit
    Insurance Corporation, the Board of Governors of the Federal Reserve
    System or a Federal Reserve Bank.''.
        (c) Conversion Between a Federal Savings Association and a State
    Savings Association.--Section 5(i) of the Home Owners' Loan Act (12
    U.S.C. 1464(i)) is amended by adding at the end the following new
    paragraph:
                ``(6) Prohibition on certain conversions.--A Federal
            savings association may not convert to a State savings
            association, and a State savings association may not convert to
            a Federal savings association, during any period of time in
            which such savings association is subject to a cease and desist
            order, memorandum of understanding, or other enforcement action
            entered into with or issued by the Director of the Office of
            Thrift Supervision or a State savings association
            supervisor.''.

    SEC. 1310. LENDING LIMITS TO INSIDERS.

        Section 22(h)(9)(D)(ii) of the Federal Reserve Act (12 U.S.C.
    375b(h)(9)(D)(ii)) is amended by inserting ``, except that a member
    bank shall be deemed to have extended credit to a person if the member
    bank has credit exposure to the person arising from a derivative
    transaction, repurchase agreement, reverse repurchase agreement,
    securities lending transaction, or securities borrowing transaction
    between the member bank and the person'' before the period at the end.

    SEC. 1311. LIMITATIONS ON PURCHASES OF ASSETS FROM INSIDERS.

        (a) Section 18 of the Federal Deposit Insurance Act (12 U.S.C.
    1828) is amended by inserting at the end the following new subsection:
        ``(y) General Prohibition.--An insured depository institution shall
    not purchase an asset from, or sell an asset to, one of its executive
    officers, directors, or principal shareholders or any related interest
    of such person (as such terms are defined in section 22(h) of Federal
    Reserve Act) unless the transaction is on market terms and, if the
    transaction represents more than 10 percent of the institution's
    capital stock and surplus, the transaction has been approved in advance
    by a majority of the institution's board of directors (with interested
    directors of the insured depository institution not participating in
    the approval of the transaction).''.
        (b) FDIC Rulemaking Authority.--The Federal Deposit Insurance
    Corporation may prescribe rules to implement the requirements of
    subsection (a) and the amendments made by subsection (a).
        (c) Amendments to the Federal Reserve Act.--Section 22 of the
    Federal Reserve Act (12 U.S.C. 375) is amended by striking subsection
    (d).

    SEC. 1312. RULES REGARDING CAPITAL LEVELS OF BANK HOLDING COMPANIES.

        Section 5(b) of the Bank Holding Company Act of 1956 (12 U.S.C.
    1844(b)) is amended by inserting ``, including regulations relating to
    the capital levels of bank holding companies'' before the period at the
    end.

    SEC. 1313. ENHANCEMENTS TO FACTORS TO BE CONSIDERED IN CERTAIN
                  ACQUISITIONS.

        (a) Bank Acquisitions.--Section 3(c) of the Bank Holding Company
    Act of 1956 (12 U.S.C. 1842(c)) is amended by inserting at the end the
    following new paragraph:
                ``(7) Financial stability.--
                        ``(A) In general.--In every case, the Board shall
                    take into consideration the extent to which the
                    proposed acquisition, merger, or consolidation may pose
                    risk to the stability of the United States financial
                    system or the economy of the United States, including
                    the resulting scope, nature, size, scale,
                    concentration, or interconnectedness of activities that
                    are financial in nature.
                        ``(B) Standards for approval.--The Board may in its
                    sole discretion disapprove any acquisition, merger, or
                    consolidation of, or by, a financial holding company
                    subject to stricter standards if the Board determines
                    that the resulting concentration of liabilities on a
                    consolidated basis is likely to pose a great threat to
                    financial stability during times of severe economic
                    distress.''.
        (b) Nonbank Acquisitions.--
                (1) Section 4(j)(2)(A) of the Bank Holding Company is
            amended by--
                        (A) striking ``or'' before ``unsound banking
                    practices''; and
                        (B) inserting before the period at the end the
                    following: ``, or risk to the stability of the United
                    States financial system or the economy of the United
                    States''.
                (2) Section 4(k)(6) of the Bank Holding Company Act of 1956
            is amended by striking subparagraph (B) and inserting the
            following new subparagraph:
                        ``(B) A financial holding company may commence any
                    activity or acquire any company, pursuant to paragraph
                    (4) or any regulation prescribed or order issued under
                    paragraph (5), without prior approval of the Board,
                    except--
                                ``(i) for a transaction in which the total
                            assets to be acquired by the financial holding
                            company exceed $25 billion; and
                                ``(ii) as provided in subsection (j) with
                            regard to the acquisition of a savings
                            association.''.
                (3) Section 4(j) of the Bank Holding Company Act of 1956 is
            amended by inserting after paragraph (4) the following new
            paragraph (and redesignating succeeding paragraphs
            accordingly):
                ``(5) Financial stability.--
                        ``(A) In general.--In every case, the Board shall
                    take into consideration the extent to which the
                    proposed acquisition, merger, or consolidation may pose
                    risk to the stability of the United States financial
                    system or the economy of the United States, including
                    the resulting scope, nature, size, scale,
                    concentration, or interconnectedness of activities that
                    are financial in nature.
                        ``(B) Standards for approval.--The Board may, in
                    the sole discretion of the Board, disapprove any
                    acquisition, merger, or consolidation of, or by, a
                    financial holding company subject to stricter standards
                    if the Board determines that the resulting
                    concentration of liabilities on a consolidated basis is
                    likely to pose a great threat to financial stability
                    during times of severe economic distress.''.
        (c) Bank Merger Act Transactions.--Section 18(c)(5) of the Federal
    Deposit Insurance Act (12 U.S.C. 1828(c)) is amended by--
                (1) in paragraph (5), by striking ``and'' before ``the
            convenience and needs of the community to be served'';
                (2) in paragraph (5), by inserting before the period at the
            end the following: ``, and the risk to the stability of the
            United States financial system and the economy of the United
            States based on, among other things, the scope, nature, size,
            scale, concentration, or interconnectedness of activities that
            are financial in nature''; and
                (3) in paragraph (7)(B), by inserting ``subparagraphs (A)
            and (B) of'' before ``paragraph''.

    SEC. 1314. ELIMINATION OF ELECTIVE INVESTMENT BANK HOLDING COMPANY
                  FRAMEWORK.

        Section 17 of the Securities Exchange Act of 1934 (15 U.S.C. 78q)
    is amended--
                (1) by striking subsection (i); and
                (2) by redesignating subsections (j) and (k) as subsections
            (i) and (j), respectively.

    SEC. 1315. EXAMINATION FEES FOR LARGE BANK HOLDING COMPANIES.

        The Bank Holding Company Act of 1956 is amended by inserting after
    section 5 the following new section:

    ``SEC. 5A. EXAMINATION FEES.

        ``The Board of Governors of the Federal Reserve System or the
    Federal Reserve Banks shall assess fees on bank holding companies with
    total consolidated assets of $10 billion or more. Such fees shall be
    sufficient to defray the cost of the examination of such bank holding
    companies.''.

    SEC. 1316. MUTUAL NATIONAL BANKS AND FEDERAL MUTUAL BANK HOLDING
                  COMPANIES AUTHORIZED.

        (a) In General.--Chapter one of title LXII of the Revised Statutes
    of the United States (12 U.S.C. 21 et seq.) is amended by inserting
    after section 5133 the following new sections:

    ``SEC. 5133A. MUTUAL NATIONAL BANKS.

        ``(a) In General.--Notwithstanding the section designated the
    `Third' of section 5134, in order to provide mutual institutions for
    the deposit of funds, the extension of credit, and provision of other
    services, the Comptroller of the Currency may charter mutual national
    banks either de novo or through a conversion of any insured depository
    institution or any State mutual bank or credit union, subject to
    regulations prescribed by the Comptroller of the Currency in accordance
    with this section. The powers conferred by this section are intended to
    provide for the creation and maintenance of mutual national banks as
    bodies corporate existing in perpetuity for the benefit of their
    depositors and the communities in which they operate.
        ``(b) Regulations.--
                ``(1) Regulations of the comptroller.--The Comptroller of
            the Currency is authorized to prescribe appropriate regulations
            for the organization, incorporation, examination, operation,
            and regulation of mutual national banks. Except to the extent
            that such existing regulations conflict with sections 5133A and
            5133B, mutual national banks shall be subject to the
            regulations of the Director of the Office of Thrift Supervision
            governing corporate organization, governance, and conversion of
            mutual institutions, as in effect on the date of the enactment
            of the Wall Street Reform and Consumer Protection Act of 2009,
            including parts 543, 544, 546, 563b, and 563c of chapter V of
            title 12, Code of Federal Regulations (as in effect on that
            date), for up to 3 years beginning on the date of the enactment
            of the Wall Street Reform and Consumer Protection Act of 2009.
                ``(2) Applicability of capital stock requirements.--The
            Comptroller of the Currency shall prescribe regulations
            regarding the manner in which requirements of this title with
            respect to capital stock, and limitations imposed on national
            banks under this title based on capital stock, shall apply to
            mutual national banks.
        ``(c) Conversions.--
                ``(1) Conversion of a mutual depository to a mutual
            national bank.--Subject to such regulations as the Comptroller
            of the Currency may prescribe for the protection of depositors'
            rights and for any other purpose the Comptroller of the
            Currency may consider appropriate, any mutual depository may
            convert to a mutual national bank by filing with the
            Comptroller of the Currency a notice of its election to convert
            on a specified date that is not earlier than 30 days after the
            date on which the notice is filed, and the mutual depository
            shall be converted to a mutual national bank charter on the
            date specified in the notice.
                ``(2) Conversion to stock national bank.--Subject to such
            regulations as the Comptroller of the Currency may prescribe
            for the protection of depositors' rights and for any other
            purpose the Comptroller of the Currency may consider
            appropriate, any national bank that is organized in the mutual
            form under subsection (a) may reorganize as a stock national
            bank.
                ``(3) Conversion to state banks.--Any national mutual bank
            may convert to a State bank charter in accordance with
            regulations prescribed by the Comptroller of the Currency and
            applicable State law.
        ``(d) Terminating Mutuality.--If a mutual national bank elects to
    terminate mutuality, it must do so by--
                ``(1) liquidating; or
                ``(2) converting to a national banking association
            operating in stock form.
        ``(e) Status and Rights of Members.--
                ``(1) In general, the status of a member is primarily that
            of a depositor and secondarily that of a holder of a contingent
            right to participate in the equity of a mutual national bank
            upon a liquidation or conversion.
                ``(2) Each member of a mutual national bank shall have the
            following rights:
                        ``(A) Such rights as may be agreed upon, by
                    contract, between the member and the mutual national
                    bank.
                        ``(B) The right to vote for members of the board of
                    directors of the mutual national bank.
                        ``(C) The right to attend any meeting of members
                    properly called by the board of directors of a mutual
                    national bank.
                        ``(D) In the event the board of directors, in its
                    sole discretion, determines a conversion of a mutual
                    national bank to a national banking association
                    operating in stock form is in the best interests of the
                    community in which the bank operates and the members
                    approve the conversion through a special proxy, then
                    the members as of a record date set by the board of
                    directors shall have the first right to subscribe for
                    and purchase stock in the converted bank.
                        ``(E) In the event the board of directors, in its
                    sole discretion, determines a liquidation of the mutual
                    national bank is in the best interests of the community
                    in which the bank operates and the members approve the
                    liquidation, or if for any other reason the bank is
                    liquidated by operation of law, then the members as of
                    the date of liquidation shall have the right to have
                    credited to their accounts, on a pro rata basis, any
                    residual assets left after the liquidation of the
                    mutual national bank.
                ``(3) In the consideration of all questions requiring
            action by the members of a national mutual bank, the bank may
            provide in its charter that each member shall be permitted (i)
            one vote per member, or (ii) to cast one vote for each $100, or
            fraction thereof, of the withdrawal value of the member's
            account, but not more than 1,000 votes per member.
        ``(f) Proxies.--
                ``(1) A member may give, in writing or electronically, a
            perpetual proxy to a committee of the board of directors of a
            mutual depository, provided that the member may revoke such a
            proxy in writing or electronically, with such revocation to
            take effect after 6 business days.
                ``(2) Such proxies may be used to vote on any issue
            requiring approval of the members, including the conversion of
            a mutual depository into a mutual national bank and the
            reorganization of a mutual national bank into a Federal mutual
            bank holding company, except that, without a prior finding by
            the regulator of the mutual national bank that such action is
            needed to avoid loss to the Federal Deposit Insurance
            Corporation's deposit insurance fund or to protect the
            stability of the United States financial system, such proxies
            may not be used to vote in favor of--
                        ``(A) terminating mutuality for a mutual national
                    bank or a Federal mutual bank holding company;
                        ``(B) permitting the modification of a Federal
                    mutual bank holding company; or
                        ``(C) issuing mutual capital certificates (except
                    when used to found a mutual national bank or a Federal
                    mutual bank holding company de novo).
                ``(3) Proxies given by a member, in writing or
            electronically, to management of, or to a committee of the
            board of directors of, a mutual depository shall not be deemed
            to have been revoked solely because of, and shall continue to
            exist following, a conversion to a mutual national bank and any
            concurrent or subsequent reorganization to a Federal mutual
            bank holding company.
        ``(g) Definitions.--For purposes of this section, the following
    definitions shall apply:
                ``(1) Insured depository institution.--The term `insured
            depository institution' has the same meaning as in section 3 of
            the Federal Deposit Insurance Act.
                ``(2) Mutual national bank.--The term `mutual national
            bank' means a national banking association that operates in
            mutual form and is chartered by the Comptroller of the Currency
            under this section.
                ``(3) Mutual depository.--The term `mutual depository'
            means a depository institution that is organized in non-stock
            form, including a Federal non-stock depository and any form of
            non-stock depository provided for under State law, the deposits
            of which are insured by an instrumentality of the Federal
            Government.
                ``(4) Mutuality.--The term `mutuality' means the quality of
            being an insured depository institution organized under a
            Federal or State law providing for the organization of non-
            stock depository institutions, or a holding company organized
            under a Federal or State law providing for the organization of
            non-stock entities that control one or more depository
            institutions.
                ``(5) Member.--The term `member' means each tax-liable
            depositor in a mutual depository's savings, demand, or other
            authorized depository accounts and each tax-liable depositor in
            such an account in a depository subsidiary of a Federal mutual
            bank holding company.
                ``(6) Tax liable depositor.--The term `tax liable
            depositor' means the single person responsible for paying any
            Federal taxes due on any interest paid on any deposits held
            within any savings, demand, or other authorized depository
            account or accounts with any mutual depository.
                ``(7) Membership rights.--The term `membership rights'
            means the rights of each member under this section.
        ``(h) Conforming References.--Unless otherwise provided by the
    Comptroller of the Currency--
                ``(1) any reference in any Federal law to a national bank
            operating in stock form, including a reference to the term
            `national banking association', `member bank', `national bank',
            `national association', `bank', `insured bank', `insured
            depository institution', or `depository institution', shall be
            deemed to refer also to a mutual national bank;
                ``(2) any reference in any Federal law to the term `board
            of directors', `director', or `directors' of a national bank
            operating in stock form shall be deemed to refer also to the
            board of a mutual national bank; and
                ``(3) any terms in Federal law that may apply only to a
            national bank operating in stock form, including the terms
            `stock', `shares', `shares of stock', `capital stock', `common
            stock', `stock certificate', `stock certificates',
            `certificates representing shares of stock', `stock dividend',
            `transferable stock', `each class of stock', `cumulate such
            shares', `par value', `preferred stock' shall not apply to a
            mutual national bank, unless the Comptroller of the Currency
            determines that the context requires otherwise.

    ``SEC. 5133B. FEDERAL MUTUAL BANK HOLDING COMPANIES.

        ``(a) Reorganization of Mutual National Bank as a Holding
    Company.--
                ``(1) In general.--Subject to approval under the Bank
            Holding Company Act of 1956, a mutual national bank may
            reorganize so as to become a Federal mutual bank holding
            company by submitting a reorganization plan to the appropriate
            bank holding company regulator.
                ``(2) Plan approval.--Upon the approval of the
            reorganization plan by the appropriate bank holding company
            regulator and the issuance of the appropriate charters--
                        ``(A) the substantial part of the mutual national
                    bank's assets and liabilities, including all of the
                    bank's insured liabilities, shall be transferred to a
                    national banking association, a majority of the shares
                    of voting stock of which is owned, directly or
                    indirectly, by the mutual national bank that is to
                    become a Federal mutual bank holding company; and
                        ``(B) the mutual national bank shall become a
                    Federal mutual bank holding company.
        ``(b) Directors and Certain Account Holders' Approval of Plan
    Required.--This subsection does not authorize a reorganization unless--
                ``(1) a majority of the mutual national bank's board of
            directors has approved the plan providing for such
            reorganization; and
                ``(2) a majority of members has approved the plan at a
            meeting held at the call of the directors under the procedures
            prescribed by the bank's charter and bylaws.
        ``(c) Ownership of Depository Subsidiaries.--To avoid terminating
    mutuality, a Federal mutual bank holding company must own, directly or
    indirectly, a majority of the shares of voting stock of each of its
    depository subsidiaries.
        ``(d) No Termination of Mutuality.--Neither a reorganization of a
    mutual depository nor a modification of a Federal mutual bank holding
    company shall cause a termination of mutuality.
        ``(e) Retention of Capital.--In connection with a transaction
    described in subsection (a), a mutual national bank may, subject to the
    approval of the appropriate bank holding company regulator, retain
    capital at the holding company level to the extent that the capital
    retained at the holding company level exceeds the amount of capital
    required for the national banking association chartered as a part of a
    transaction described in subsection (a) to meet all relevant capital
    standards established by the Comptroller of the Currency for national
    banking associations.
        ``(f) Terminating Mutuality.--If a Federal mutual bank holding
    company elects to terminate mutuality, it must do so by either
    liquidating or converting to a bank holding company operating in stock
    form.
        ``(g) Membership Rights.--Holders of savings, demand, or other
    authorized depository accounts in a depository subsidiary of a Federal
    mutual bank holding company shall have the same membership rights with
    respect to the Federal mutual bank holding company as those holders
    would have had if the depository subsidiary of the Federal mutual bank
    holding company had been a mutual national bank.
        ``(h) Regulation.--A Federal mutual bank holding company shall be--
                ``(1) chartered by the appropriate bank holding company
            regulator and shall be subject to such regulations as the
            appropriate bank holding company regulator shall prescribe; and
                ``(2) regulated under the Bank Holding Company Act of 1956
            on the same terms and subject to the same limitations as any
            other company that controls a bank.
        ``(i) Capital Improvement.--
                ``(1) Pledge of stock of national bank subsidiary.--This
            section shall not prohibit a Federal mutual bank holding
            company from pledging all or a portion of the stock of the
            national banking association chartered as part of a transaction
            described in subsection (a) to raise capital for such national
            banking association.
                ``(2) Issuance of nonvoting shares.--This section shall not
            prohibit a national banking association chartered as part of a
            transaction described in subsection (a) from issuing any
            nonvoting shares or less than 50 percent of the voting shares
            of such bank to any person other than the Federal mutual bank
            holding company.
        ``(j) Insolvency and Liquidation.--
                ``(1) In general.--Notwithstanding any other provision of
            law, the appropriate bank holding company regulator may file a
            petition under chapter 7 of title 11, United States Code, with
            respect to a Federal mutual bank holding company upon--
                        ``(A) the default of any national bank--
                                ``(i) the stock of which is owned by the
                            Federal mutual bank holding company; and
                                ``(ii) that was chartered in a transaction
                            described in subsection (a); or
                        ``(B) a foreclosure on a pledge by the Federal
                    mutual bank holding company described in subsection
                    (i)(1).
                ``(2) Distribution of net proceeds.--Except as provided in
            paragraph (3), the net proceeds of any liquidation of any
            Federal mutual bank holding company under paragraph (1) shall
            be transferred to persons who hold membership interests in such
            Federal mutual bank holding company.
                ``(3) Recovery by fdic.--If the Federal Deposit Insurance
            Corporation incurs a loss as a result of the default of any
            insured bank subsidiary of a Federal mutual bank holding
            company that is liquidated under paragraph (1), the Federal
            Deposit Insurance Corporation shall succeed to the interests of
            the depositors of the bank as members in the Federal mutual
            bank holding company, to the extent of the Federal Deposit
            Insurance Corporation's loss.
        ``(k) Definitions.--
                ``(1) Federal mutual bank holding company.--The term
            `Federal mutual bank holding company' means a holding company
            that is organized in mutual form and owns, directly or
            indirectly, a majority of the shares of voting stock of one or
            more depository subsidiaries of a Federal mutual bank holding
            company.
                ``(2) Depository subsidiary of a federal mutual bank
            holding company.--The term `depository subsidiary of a Federal
            mutual bank holding company' means a depository institution
            organized in stock form that is insured by the Federal Deposit
            Insurance Corporation, the majority of the shares of voting
            stock of which are owned by the Federal mutual bank holding
            company or its wholly owned subsidiaries and none of the shares
            of stock of which are pledged or otherwise subjected to lien
            except as permitted in subsection (i).
                ``(3) Reorganization of a mutual depository.--The term
            `reorganization of a mutual depository' means the conversion of
            a mutual depository into a depository subsidiary of a Federal
            mutual bank holding company.
                ``(4) Modification of a federal mutual bank holding
            company.--The term `modification of a Federal mutual bank
            holding company' means either: (A) the sale of shares of common
            or preferred stock in a depository subsidiary of a Federal
            mutual bank holding company to any party other than the
            subsidiary's parent Federal mutual bank holding company or a
            wholly owned subsidiary of that parent; or (B) the voluntary
            grant of a lien on shares of common or preferred stock in a
            depository subsidiary of a Federal mutual bank holding company.
                ``(5) Default.--With respect to a national bank, the term
            `default' means an adjudication or other official determination
            by any court of competent jurisdiction, the Comptroller of the
            Currency, or other public authority pursuant to which a
            conservator, receiver, or other legal custodian is appointed
            for the national bank.
        ``(l) Conforming References.--Unless otherwise provided by the
    appropriate bank holding company regulator--
                ``(1) any reference in any Federal law to a bank holding
            company operating in stock form shall be deemed to refer also
            to a Federal mutual bank holding company;
                ``(2) any reference in any Federal law to the term `board
            of directors', `director', or `directors' of a national bank
            operating in stock form shall be deemed to refer also to the
            board of a Federal mutual bank holding company; and
                ``(3) any terms in Federal law that may apply only to a
            national bank operating in stock form, including the terms
            `stock', `shares', `shares of stock', `capital stock', `common
            stock', `stock certificate', `stock certificates',
            `certificates representing shares of stock', `stock dividend',
            `transferable stock', `each class of stock', `cumulate such
            shares', `par value', `preferred stock' shall not apply to a
            Federal mutual bank holding company, unless the appropriate
            bank holding company regulator determines that the context
            requires otherwise.''.
        (b) Limitation on Federal Regulation of State Banks.--Except as
    otherwise provided in Federal law, the Comptroller of the Currency, the
    Board of Governors of the Federal Reserve System, and the Federal
    Deposit Insurance Corporation may not adopt or enforce any regulation
    that contravenes the corporate governance rules prescribed by State law
    or regulation for State banks unless the Director, Board, or
    Corporation finds that the Federal regulation is necessary to assure
    the safety and soundness of the State banks.
        (c) Technical Amendment.--The table of sections for chapter one of
    title LXII of the Revised Statutes of the United States (12 U.S.C. 21
    et seq.) is amended by inserting after the item relating to section
    5133 the following new items:

    ``5133A. Mutual national banks.
    ``5133B. Federal mutual bank holding companies.''.
        (d) Appropriate Federal Banking Agency for Federal Mutual Bank
    Holding Companies.--Section 3(q)(1) of the Federal Deposit Insurance
    Act (12 U.S.C. 1813(q)(2)) is amended by inserting after subparagraph
    (F) the following new subparagraph:
                        ``(G) supervisory or regulatory proceedings arising
                    from the authority given to the appropriate bank
                    holding company regulator under section 5133B of the
                    Revised Statutes of the United States.''.
        (e) Mutual Holding Company Conversion.--
                (1) In general.--Any mutual holding company, including any
            form of mutual depository holding company provided for under
            State law, may convert to a Federal mutual bank holding company
            by filing with the appropriate bank holding company regulator a
            notice of its election to convert on a specified date that is
            not earlier than 30 days after the date on which the notice is
            filed, and the mutual holding company shall be converted to a
            Federal mutual holding company charter on the date specified in
            the notice.
                (2) Definitions.--For purposes of this subsection, the
            following definitions shall apply:
                        (A) Federal mutual bank holding company.--The term
                    ``Federal mutual bank holding company'' has the same
                    meaning as in section 5133B of the Revised Statutes of
                    the United States (as added by this section); and
                        (B) Mutual holding company.--The term ``mutual
                    holding company'' has the same meaning as in section
                    10(o)(10)(A) of the Home Owners Loan Act as in effect
                    on the day before the date of enactment of this Act.
        (f) Effective Date.--This section shall take effect on the date of
    enactment of this Act.

    SEC. 1317. NATIONWIDE DEPOSIT CAP FOR INTERSTATE ACQUISITIONS.

        (a) Amendments to the Bank Holding Company Act of 1956.--
                (1) Concentration limit for bank holding companies.--
            Section 3(d)(2)(A) of the Bank Holding Company Act (12 U.S.C.
            1842(d)(2)(A)) is amended by striking ``paragraph (1)(A)'' and
            inserting ``subsection (a) of this section''.
                (2) Removal of nonbank savings association provision in
            light of being defined as a bank.--Section 4 of the Bank
            Holding Company Act is amended by striking subsection (i) and
            insert the following new subsection:
        ``(i) [Repealed.]''.
        (b) Amendments to the Federal Deposit Insurance Act.--
                (1) In general.--Section 18(e) of the Federal Deposit
            Insurance Act (12 U.S.C. 1828(c)) is amended--
                        (A) by redesignating paragraph (12) as paragraph
                    (13); and
                        (B) by inserting after paragraph (11), the
                    following new paragraph:
                ``(12) Nationwide deposit cap.--The responsible agency may
            not approve an application for an interstate merger transaction
            if the resulting insured depository institution (including all
            insured depository institutions which are affiliates of the
            resulting insured depository institution), upon consummation of
            the transaction, would control more than 10 percent of, the
            total amount of deposits of insured depository institutions in
            the United States.''.
                (2) Parallel requirement.--Section 44(b)(2) of the Federal
            Deposit Insurance Act (12 U.S.C. 1831u(b)(2)(A) is amended to
            read as follows:
                        ``(A) Nationwide concentration limits.--The
                    responsible agency may not approve an application for
                    an interstate merger transaction involving two or more
                    insured depository institutions if the resulting
                    insured depository institution (including all insured
                    depository institutions which are affiliates of such
                    institution), upon consummation of the transaction
                    would control more than 10 percent of the total amount
                    of deposits of insured depository institutions in the
                    United States.''.
        (c) Amendments to the Home Owners' Loan Act.--Section 10(e)(2) of
    the Home Owners' Loan Act (12 U.S.C. 467a(e)(2)) is amended--
                (1) by striking ``or'' at the end of subparagraph (C); and
                (2) by striking the period at the end of subparagraph (D),
            the following new subparagraph:
                        ``(E) in the case of an application involving an
                    interstate acquisition, if the applicant (including all
                    insured depository institutions which are affiliates of
                    the applicant) controls, or upon consummation of the
                    acquisition for which such application is filed would
                    control, more than 10 percent of the total amount of
                    deposits of insured depository institutions in the
                    United States.''.

    SEC. 1318. DE NOVO BRANCHING INTO STATES.

        (a) National Banks.--Section 5155(g)(1)(A) of the Revised Statutes
    (12 U.S.C. 36(g)(1)(A)) is amended to read as follows:
                        ``(A) the law of the State where the branch is
                    located, or is to be located, would permit
                    establishment of the branch if the national bank were a
                    state bank chartered by such State;''.
        (b) State Insured Banks.--Section 18(d)(4)(A)(i) of the Federal
    Deposit Insurance Act (12 U.S.C. 1828(d)(4)(A)(i)) is amended to read
    as follows:
                                ``(i) the law of the State where the branch
                            is located, or is to be located, would permit
                            establishment of the branch if the bank were a
                            State bank chartered by such State;''.

         Subtitle E--Improvements to the Federal Deposit Insurance Fund

    SEC. 1401. ACCOUNTING FOR ACTUAL RISK TO THE DEPOSIT INSURANCE FUND.

        (a) Section 7(b)(1)(C) of the Federal Deposit Insurance Act is
    amended to read as follows:
                        ``(C) `Risk-based assessment system' defined.--For
                    purposes of this paragraph, the term `risk-based
                    assessment system' means a system for calculating a
                    depository institution's assessment based on--
                                ``(i) the probability that the Deposit
                            Insurance Fund will incur a loss with respect
                            to the institution;
                                ``(ii) the likely amount of any such loss;
                                ``(iii) the risks to the Deposit Insurance
                            Fund attributable to such depository
                            institution, including risks posed by its
                            affiliates to the extent the Corporation
                            determines appropriate, taking into account--
                                        ``(I) the amount, different
                                    categories, and concentrations of
                                    assets of the insured depository
                                    institution and its affiliates,
                                    including both on-balance sheet and
                                    off-balance sheet assets;
                                        ``(II) the amount, different
                                    categories, and concentrations of
                                    liabilities, both insured and
                                    uninsured, contingent and
                                    noncontingent, including both on-
                                    balance sheet and off-balance sheet
                                    liabilities, of the insured depository
                                    institution and its affiliates; and
                                        ``(III) any other factors the
                                    Corporation determines are relevant to
                                    assessing the risks; and
                                ``(iv) the revenue needs of the Deposit
                            Insurance Fund.''.
        (b) Section 7(b)(2) of the Federal Deposit Insurance Act is amended
    by striking subparagraph (D) and by redesignating subparagraph (E) as
    subparagraph (D).

    SEC. 1402. CREATING A RISK-FOCUSED ASSESSMENT BASE.

        Section 7(b)(2) of such Act, as amended, is further amended by
    amending subparagraph (C) to read as follows:
                        ``(C) Assessment.--The assessment of any insured
                    depository institution imposed under this subsection
                    shall be an amount equal to the product of--
                                ``(i) an assessment rate established by the
                            Corporation; and
                                ``(ii) the amount of the insured depository
                            institution's average total assets during the
                            assessment period minus the amount of the
                            insured depository institution's average
                            tangible equity during the assessment period,
                            minus additional deductions or adjustments
                            necessary to establish assessments consistent
                            with the definition under section 7(b)(1)(C) of
                            the Federal Deposit Insurance Act for custodial
                            banks (as defined by the Corporation based on
                            factors including percentage of total revenues
                            generated by custodial businesses and the level
                            of assets under custody) or a bankers' bank (as
                            referred to in section 5136 of the Revised
                            Statutes of the United States).''.

    SEC. 1403. ELIMINATION OF PROCYCLICAL ASSESSMENTS.

        Section 7(e) of the Federal Deposit Insurance Act is amended--
                (1) in paragraph (2)--
                        (A) by amending subparagraph (B) to read as
                    follows:
                        ``(B) Limitation.--The Board of Directors may, in
                    its sole discretion, suspend or limit the declaration
                    of payment of dividends under subparagraph (A).'';
                        (B) by amending subparagraph (C) to read as
                    follows:
                        ``(C) Notice and opportunity for comment.--The
                    Corporation shall prescribe, by regulation, after
                    notice and opportunity for comment, the method for the
                    declaration, calculation, distribution, and payment of
                    dividends under this paragraph''; and
                        (C) by striking subparagraphs (D) through (G); and
                (2) in paragraph (4)(A) by striking ``paragraphs (2)(D)
            and'' and inserting ``paragraphs (2) and''.

    SEC. 1404. ENHANCED ACCESS TO INFORMATION FOR DEPOSIT INSURANCE
                  PURPOSES.

        (a) Section 7(a)(2)(B) of the Federal Deposit Insurance Act is
    amended by striking ``, after agreement with the Comptroller of the
    Currency, the Board of Governors of the Federal Reserve System, and the
    Director of the Office of Thrift Supervision, as appropriate,''.
        (b) Section 7(b)(1)(E) of the Federal Deposit Insurance Act is
    amended--
                (1) in clause (i), by striking ``such as'' and inserting
            ``including''; and
                (2) by striking clause (iii).

    SEC. 1405. TRANSITION RESERVE RATIO REQUIREMENTS TO REFLECT NEW
                  ASSESSMENT BASE.

        (a) Section 7(b)(3)(B) of the Federal Deposit Insurance Act is
    amended to read as follows:
                        ``(B) Minimum reserve ratio.--The reserve ratio
                    designated by the Board of Directors for any year may
                    not be less than 1.15 percent of estimated insured
                    deposits, or the comparable percentage of the
                    assessment base set forth in paragraph (2)(C).''.
        (b) Section 3(y)(3) of the Federal Deposit Insurance Act is amended
    by inserting ``, or such comparable percentage of the assessment base
    set forth in section 7(b)(2)(C)'' before the period.
        (c) For a period of not less than 5 years after the date of the
    enactment of this title, the Federal Deposit Insurance Corporation
    shall make available to the public the reserve ratio and the designated
    reserve ratio using both estimated insured deposits and the assessment
    base under section 7(b)(2)(C) of the Federal Deposit Insurance Act.

      Subtitle F--Improvements to the Asset-backed Securitization Process

    SEC. 1501. SHORT TITLE.

        This subtitle may be cited as the ``Credit Risk Retention Act of
    2009''.

    SEC. 1502. CREDIT RISK RETENTION.

        (a) Amendment.--The Securities Act of 1933 (15 U.S.C. 77a et seq.)
    is amended by inserting after section 28 the following new section:

    ``SEC. 29. CREDIT RISK RETENTION.

        ``(a) In General.--
                ``(1) Interest in loans made by creditors.--Within 180 days
            of the date of the enactment of this section, the appropriate
            agencies shall prescribe regulations to require any creditor
            that makes a loan to retain an economic interest in a material
            portion of the credit risk of any such loan that the creditor
            transfers, sells, or conveys to a third party, including for
            the purpose of including such loan in a pool of loans backing
            an issuance of asset-backed securities.
                ``(2) Interest in assets backing asset-backed securities.--
            The appropriate agencies shall prescribe regulations to require
            any securitizer of asset-backed securities that are backed by
            assets not described in paragraph (1) to retain an economic
            interest in a material portion of any such asset used to back
            an issuance of securities.
        ``(b) Alternative Risk Retention for Credit Securitizers.--The
    appropriate agencies may apply the risk retention requirements of this
    section to securitizers of loans or particular types of loans in
    addition to or in substitution for any or all of the requirements that
    apply to creditors that make such loans or types of loans, if the
    agencies determine that applying the requirements to such securitizers
    would--
                ``(1) be consistent with helping to ensure high quality
            underwriting standards for creditors, taking into account other
            applicable laws, regulations, and standards; and
                ``(2) facilitate appropriate risk management practices by
            such creditors, improve access of consumers to credit on
            reasonable terms, or otherwise serve the public interest.
        ``(c) Standards for Regulation.--Regulations prescribed under
    subsections (a) and (b) shall--
                ``(1) prohibit a creditor or securitizer from directly or
            indirectly hedging or otherwise transferring the credit risk
            such creditor or securitizer is required to retain under the
            regulations;
                ``(2) require a creditor or securitizer to retain 5 percent
            of the credit risk on any loan that is transferred, sold, or
            conveyed by such creditor or securitized by such securitizer
            except--
                        ``(A) an appropriate agency may specify that the
                    percentage of risk may be less than 5 percent of the
                    credit risk, or exempt such creditor or securitizer
                    from the risk retention requirement, if--
                                ``(i) the credit underwriting by the
                            creditor or the due diligence by the
                            securitizer meets such standards as an
                            appropriate agency prescribes; and
                                ``(ii) the loan that is transferred, sold,
                            or conveyed by such creditor or securitized by
                            such securitizer meets terms, conditions, and
                            characteristics that are determined by an
                            appropriate agency to reflect loans with
                            reduced credit risk, such as loans that meet
                            certain interest rate thresholds, loans that
                            are fully amortizing, and loans that are
                            included in a securitization in which a third-
                            party purchaser specifically negotiates for the
                            purchase of the first-loss position and
                            provides due diligence on all individual loans
                            in the pool prior to the issuance of the asset-
                            backed securities, and retains a first-loss
                            position; and
                        ``(B) an appropriate agency may specify that the
                    percentage of risk may be more than 5 percent of the
                    credit risk if the underwriting by the creditor or due
                    diligence by the securitizer is insufficient;
                ``(3) specify that the credit risk retained must be no less
            at risk for loss than the average of the credit risk not so
            retained; and
                ``(4) set the minimum duration of the required risk
            retention.
        ``(d) Exemptions and Adjustments.--
                ``(1) In general.--The appropriate agencies shall have
            authority to provide exemptions or adjustments to the
            requirements of this section, including exemptions or
            adjustments relating to the percentage of risk retention
            required to be held and the hedging prohibition.
                ``(2) Applicable standards.--Any exemptions or adjustments
            provided under paragraph (1) shall--
                        ``(A) be consistent with the purpose of ensuring
                    high quality underwriting standards for creditors,
                    taking into account other applicable laws, regulations,
                    or standards; and
                        ``(B) facilitate appropriate risk management
                    practices by such creditors, improve access for
                    consumers to credit on reasonable terms, or otherwise
                    serve the public interest.
        ``(e) Appropriate Agency Defined.--For purposes of this section,
    the term `appropriate agency' means any of the following agencies with
    regard to the respective loans and asset-backed securities:
                ``(1) Banking agencies.--The Federal banking agencies, the
            National Credit Union Administration Board, and the Commission,
            with respect to any loan or asset-backed security for which
            there is no appropriate agency under paragraph (2).
                ``(2) Other agencies.--
                        ``(A) With regard to any mortgage insured under
                    title II of the National Housing Act, the Secretary of
                    Housing and Urban Development.
                        ``(B) With regard to any loan meeting the
                    conforming loan standards of the Federal National
                    Mortgage Corporation or the Federal Home Loan Mortgage
                    Corporation or any asset-backed security issued by
                    either such corporation, the Federal Housing Finance
                    Agency.
                        ``(C) With regard to any loan insured by the Rural
                    Housing Service, the Rural Housing Service.
        ``(f) Joint Appropriate Agency Regulations.--All regulations
    prescribed by the agencies identified in subsection (e)(1) shall be
    prescribed jointly by such agencies.
        ``(g) Enforcement.--
                ``(1) Compliance with the requirements imposed under this
            section shall be enforced under--
                        ``(A) section 8 of the Federal Deposit Insurance
                    Act (12 U.S.C. 1818), in the case of--
                                ``(i) national banks, and Federal branches
                            and Federal agencies of foreign banks, by the
                            Office of the Comptroller of the Currency;
                                ``(ii) member banks of the Federal Reserve
                            System (other than national banks), branches
                            and agencies of foreign banks (other than
                            Federal branches, Federal agencies, and insured
                            State branches of foreign banks), commercial
                            lending companies owned or controlled by
                            foreign banks, and organizations operating
                            under section 25 or 25A of the Federal Reserve
                            Act, bank holding companies, and subsidiaries
                            of bank holding companies (other than insured
                            depository institutions), by the Board; and
                                ``(iii) banks insured by the Federal
                            Deposit Insurance Corporation (other than
                            members of the Federal Reserve System) and
                            insured State branches of foreign banks, by the
                            Board of Directors of the Federal Deposit
                            Insurance Corporation;
                        ``(B) section 8 of the Federal Deposit Insurance
                    Act (12 U.S.C. 1818), by the Director of the Office of
                    Thrift Supervision, in the case of a savings
                    association the deposits of which are insured by the
                    Federal Deposit Insurance Corporation and a savings and
                    loan holding company and to any subsidiary (other than
                    a bank or subsidiary of that bank); and
                        ``(C) the Federal Credit Union Act (12 U.S.C. 1751
                    et seq.), by the National Credit Union Administration
                    Board with respect to any Federal credit union.
                ``(2) Except to the extent that enforcement of the
            requirements imposed under this section is specifically
            committed to some other Federal agency under paragraph (1), the
            Commission shall enforce such requirements.
                ``(3) The authority of the Commission under this section
            shall be in addition to its existing authority to enforce the
            securities laws.
        ``(h) Exclusions.--Notwithstanding any other provision of this
    section, the requirements of this section shall not apply to any loan--
                ``(1) insured, guaranteed, or administered by the Secretary
            of Education, the Secretary of Agriculture, the Secretary of
            Veterans Affairs, or the Small Business Administration; or
                ``(2) made, insured, guaranteed, or purchased by any person
            that is subject to the supervision of the Farm Credit
            Administration, including the Federal Agricultural Mortgage
            Corporation.
        ``(i) Definitions.--For purposes of this section:
                ``(1) The term `asset-backed security' has the meaning
            given such term in section 229.1101(c) of title 17, Code of
            Federal Regulations, or any successor thereto.
                ``(2) The term `Federal banking agencies' means the Board
            of Governors of the Federal Reserve System, the Office of the
            Comptroller of the Currency, the Office of Thrift Supervision,
            and the Federal Deposit Insurance Corporation.
                ``(3) The term `insured depository institution' has the
            meaning given such term in section 3(c) of the Federal Deposit
            Insurance Act (12 U.S.C. 1813(c)).
                ``(4) The term `securitization vehicle' means a trust,
            corporation, partnership, limited liability entity, special
            purpose entity, or other structure that--
                        ``(A) is the issuer, or is created by the issuer,
                    of pass-through certificates, participation
                    certificates, asset-backed securities, or other similar
                    securities backed by a pool of assets that includes
                    loans; and
                        ``(B) holds such loans.
                ``(5) The term `securitizer' means the person that
            transfers, conveys, or assigns, or causes the transfer,
            conveyance, or assignment of, loans, including through a
            special purpose vehicle, to any securitization vehicle,
            excluding any trustee that holds such loans for the benefit of
            the securitization vehicle.''.
        (b) Study on Risk Retention.--
                (1) Study.--The Board, in coordination and consultation
            with the Comptroller of the Currency, the Office of Thrift
            Supervision, the Federal Deposit Insurance Corporation, and the
            Securities and Exchange Commission, shall conduct a study of
            the combined impact by each individual class of asset-backed
            security of--
                        (A) the new credit risk retention requirements
                    contained in the amendment made by subsection (a); and
                        (B) the Financial Accounting Statements 166 and 167
                    issued by the Financial Accounting Standards Board.
                (2) Report.--Not later than 90 days after the date of
            enactment of this title, the Board shall submit to Congress a
            report on the study conducted under paragraph (1). Such report
            shall include statutory and regulatory recommendations for
            eliminating any negative impacts on the continued viability of
            the asset-backed securitization markets and on the availability
            of credit for new lending identified by the study conducted
            under paragraph (1).

    SEC. 1503. PERIODIC AND OTHER REPORTING UNDER THE SECURITIES EXCHANGE
                  ACT OF 1934 FOR ASSET-BACKED SECURITIES.

        Section 15(d) of Securities Exchange Act of 1934 (15 U.S.C. 78o(d))
    is amended--
                (1) by inserting ``, other than securities of any class of
            asset-backed security (as defined in section 229.1101(c) of
            title 17, Code of Federal Regulations, or any successor
            thereto),'' after ``securities of each class'';
                (2) by inserting at the end the following: ``The Commission
            may by rules and regulations provide for the suspension or
            termination of the duty to file under this subsection for any
            class of issuer of asset-backed security upon such terms and
            conditions and for such period or periods as it deems necessary
            or appropriate in the public interest or for the protection of
            investors. The Commission may, for the purposes of this
            subsection, classify issuers and prescribe requirements
            appropriate for each class of issuer of asset-backed
            security.''; and
                (3) by inserting after the fifth sentence the following:
            ``The Commission shall adopt regulations under this subsection
            requiring each issuer of an asset-backed security to disclose,
            for each tranche or class of security, information regarding
            the assets backing that security. In adopting regulations under
            this subsection, the Commission shall set standards for the
            format of the data provided by issuers of an asset-backed
            security, which shall, to the extent feasible, facilitate
            comparison of such data across securities in similar types of
            asset classes. The Commission shall require issuers of asset-
            backed securities at a minimum to disclose asset-level or loan-
            level data necessary for investors to independently perform due
            diligence. Asset-level or loan-level data shall include data
            with unique identifiers relating to loan brokers or
            originators, the nature and extent of the compensation of the
            broker or originator of the assets backing the security, and
            the amount of risk retention of the originator or the
            securitizer of such assets.''.

    SEC. 1504. REPRESENTATIONS AND WARRANTIES IN ASSET-BACKED OFFERINGS.

        The Commission shall prescribe regulations on the use of
    representations and warranties in the asset-backed securities market
    that--
                (1) require credit rating agencies to include in reports
            accompanying credit ratings a description of the
            representations, warranties, and enforcement mechanisms
            available to investors and how they differ from
            representations, warranties, and enforcement mechanisms in
            similar issuances; and
                (2) require disclosure on fulfilled repurchase requests
            across all trusts aggregated by originator, so that investors
            may identify asset originators with clear underwriting
            deficiencies.

    SEC. 1505. EXEMPTED TRANSACTIONS UNDER THE SECURITIES ACT OF 1933.

        (a) In General.--Section 4 of the Securities Act of 1933 (15 U.S.C.
    77d) is amended--
                (1) by striking paragraph (5); and
                (2) by redesignating paragraph (6) as paragraph (5).
        (b) Conforming Amendment.--Section 3(a)(4)(B)(vii)(I) of the
    Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(4)(B)(vii)(I)) is
    amended by striking ``4(6)'' and inserting ``4(5)''.

    SEC. 1506. STUDY ON THE MACROECONOMIC EFFECTS OF RISK RETENTION
                  REQUIREMENTS.

        (a) Study Required.--The Chairman of the Financial Services
    Oversight Council shall carry out a study on the macroeconomic effects
    of the risk retention requirements under this subtitle, and the
    amendments made by this subtitle, with emphasis placed on potential
    beneficial effects with respect to stabilizing the real estate market.
    Such study shall include--
                (1) an analysis of the effects of risk retention on real
            estate asset price bubbles, including a retrospective estimate
            of what fraction of real estate losses may have been averted
            had such requirements been in force in recent years;
                (2) an analysis of the feasibility of minimizing real
            estate price bubbles by proactively adjusting the percentage of
            risk retention that must be borne by creditors and securitizers
            of real estate debt, as a function of regional or national
            market conditions;
                (3) a comparable analysis for proactively adjusting
            mortgage origination requirements;
                (4) an assessment of whether such proactive adjustments
            should be made by an independent regulator, or in a formulaic
            and transparent manner;
                (5) an assessment of whether such adjustments should take
            place independently or in concert with monetary policy; and
                (6) recommendations for implementation and enabling
            legislation.
        (b) Report.--Not later than the end of the 180-day period beginning
    on the date of the enactment of this title, the Chairman of the
    Financial Services Oversight Council shall issue a report to the
    Congress containing any findings and determinations made in carrying
    out the study required under subsection (a).

                   Subtitle G--Enhanced Dissolution Authority

    SEC. 1601. SHORT TITLE; PURPOSE.

        (a) Short Title.--This subtitle may be cited as the ``Dissolution
    Authority for Large, Interconnected Financial Companies Act of 2009''.
        (b) Purpose.--The purpose of this subtitle is to protect the
    financial system of the United States in times of severe crisis by
    providing for the orderly resolution of large, interconnected financial
    companies whose failure could create, or increase, the risk of
    significant liquidity, credit, or other financial problems spreading
    among financial institutions or markets and thereby threaten the
    stability of the overall financial system of the United States. There
    shall be a strong presumption that resolution under the bankruptcy laws
    will remain the primary method of resolving financial companies, and
    the authorities contained in this subtitle will only be used in the
    most exigent circumstances.

    SEC. 1602. DEFINITIONS.

        For purposes of this subtitle, the following definitions shall
    apply:
                (1) Appropriate regulatory agency.--
                        (A) Corporation and commission.--The term
                    ``appropriate regulatory agency'' means--
                                (i) the Corporation;
                                (ii) the Commission, if the financial
                            company, or an affiliate thereof, is a broker
                            or dealer registered with the Commission under
                            section 15(b) of the Securities Exchange Act of
                            1934 (15 U.S.C. 78o(b) (other than an insured
                            depository institution)); and
                                (iii) if the financial company or an
                            affiliate of the financial company is an
                            insurance company (other than an insured
                            depository institution), the applicable State
                            insurance authority of the State in which the
                            insurance company is domiciled.
                        (B) Rules of construction.--More than 1 agency may
                    be an appropriate regulatory agency with respect to any
                    given financial company. In such instances, the
                    Commission shall be the appropriate regulatory agency
                    for purposes of section 1603 if the largest subsidiary
                    of the financial company is a broker or dealer as
                    measured by total assets as of the end of the previous
                    calendar quarter, the applicable State insurance
                    authority of the State in which the insurance company
                    is domiciled shall be the appropriate regulatory agency
                    for purposes of section 1603 if the financial company
                    is an insurance company or if the largest subsidiary of
                    the financial company is an insurance company as
                    measured by total assets as of the end of the previous
                    calendar quarter, and otherwise the Corporation shall
                    be the appropriate regulatory agency for purposes of
                    section 1603.
                (2) Bridge financial company.--The term ``bridge financial
            company'' means a new financial company organized in accordance
            with section 1609(h) by the Corporation.
                (3) Commission.--The term ``Commission'' means the
            Securities and Exchange Commission.
                (4) Corporation.--The term ``Corporation'' means the
            Federal Deposit Insurance Corporation.
                (5) Covered financial company.--The term ``covered
            financial company'' means a financial company for which a
            determination has been made pursuant to and in accordance with
            section 1603(b).
                (6) Covered subsidiary.--The term ``covered subsidiary''
            means a subsidiary covered in paragraph (9)(B)(v).
                (7) Customer property.--The term ``customer property'' has
            the meaning ascribed to it in the Securities Investor
            Protection Act of 1970.
                (8) Federal reserve board.--The term ``Federal Reserve
            Board'' means the Board of Governors of the Federal Reserve
            System.
                (9) Financial company.--The term ``financial company''
            means any company that--
                        (A) is incorporated or organized under Federal law
                    or the laws of any State;
                        (B) is--
                                (i) any bank holding company as defined in
                            section 2(a) of the Bank Holding Company Act of
                            1956 (12 U.S.C. 1841(a));
                                (ii) any company that has been subjected to
                            stricter prudential regulation under section
                            1103;
                                (iii) any insurance company;
                                (iv) any company predominantly engaged in
                            activities that are financial in nature or
                            incidental thereto for purposes of section 4(k)
                            of the Bank Holding Company Act of 1956 (12
                            U.S.C. 1843(k)) or activities that have been
                            identified for stricter prudential standards
                            under section 1103 of this title; or
                                (v) any subsidiary of companies described
                            in clauses (i) through (iv) (other than an
                            insured depository institution or any broker or
                            dealer registered with the Commission under
                            section 15(b) of the Securities Exchange Act of
                            1934 (15 U.S.C. 78o(b)) that is a member of the
                            Securities Investor Protection Corporation);
                        (C) that is not a Farm Credit System institution
                    chartered under and subject to the provisions of the
                    Farm Credit Act of 1971, as amended (12 U.S.C. 2001 et
                    seq.);
                        (D) that is not a Federal home loan bank, the
                    Federal National Mortgage Association, or the Federal
                    Home Loan Mortgage Corporation; and
                        (E) is not an insured depository institution (as
                    defined in section 3(c) of the Federal Deposit
                    Insurance act), a Federal credit union or a State-
                    chartered credit union (as such terms are defined in
                    section 101 of the Federal Credit Union Act), or a
                    government-sponsored enterprise (as such term is
                    defined in section 1004(f) of the Financial
                    Institutions Reform, Recovery and Enforcement Act of
                    1989 (12 U.S.C. 1811 note)).
                (10) Fund.--The term ``Fund'' means the Systemic
            Dissolution Fund established in accordance with section
            1609(n).
                (11) Insurance company.--The term ``insurance company''
            means any entity covered by a State law designed specifically
            to deal with the rehabilitation, liquidation, or insolvency of
            an insurance company.
                (12) Secretary.--The term ``Secretary'' shall mean the
            Secretary of the Treasury.
                (13) State.--The term ``State'' means any State,
            commonwealth, territory, or possession of the United States,
            the District of Columbia, the Commonwealth of Puerto Rico, the
            Commonwealth of the Northern Mariana Islands, American Samoa,
            Guam, and the United States Virgin Islands.
                (14) Certain other terms.--The terms ``affiliate'',
            ``company'', ``control'', ``deposit'', ``depository
            institution'', ``foreign bank'', ``insured depository
            institution'', and ``subsidiary'' have the same meanings as in
            section 3 of the Federal Deposit Insurance Act (12 U.S.C.
            1813).

    SEC. 1603. SYSTEMIC RISK DETERMINATION.

        (a) Written Recommendation of the Federal Reserve Board and the
    Appropriate Regulatory Agency.--
                (1) Vote required.--
                        (A) In general.--At the request of the Secretary,
                    the Chairman of the Federal Reserve Board, or the
                    appropriate regulatory agency, the Board and the
                    appropriate regulatory agency shall, or on their own
                    initiative the Board and the appropriate regulatory
                    agency may, consider whether to make the written
                    recommendation provided for in paragraph (2) with
                    respect to a financial company.
                        (B) Two-thirds agreement.--Any recommendation under
                    subparagraph (A) shall be made upon a vote of not less
                    than two-thirds of the members of the Federal Reserve
                    Board then serving and not less than two thirds of any
                    members of the board or commission then serving of the
                    appropriate regulatory agency, as applicable.
                (2) Recommendation required.--Any written recommendations
            made by the Federal Reserve Board and the appropriate
            regulatory agency under paragraph (1) shall contain the
            following:
                        (A) A description of the effect that the default of
                    the financial company would have on economic conditions
                    or financial stability in the United States.
                        (B) A description of the effect that the default of
                    the financial company would have on economic conditions
                    or financial stability for low-income, minority, or
                    underserved communities.
                        (C) A recommendation regarding the nature and the
                    extent of actions that the Board and the appropriate
                    regulatory agency recommend be taken under section 1604
                    regarding the financial company.
        (b) Determination by the Secretary.--Notwithstanding any other
    provision of Federal law or the law of any State, if, upon the written
    recommendation of the Federal Reserve Board and the appropriate
    regulatory agency as provided for in subsection (a)(1), the Secretary
    (in consultation with the President) determines that--
                (1) the financial company is in default or is in danger of
            default;
                (2) the failure of the financial company and its
            dissolution under otherwise applicable Federal or State law
            would have serious adverse effects on financial stability or
            economic conditions in the United States; and
                (3) any action under section 1604 would avoid or mitigate
            such adverse effects, taking into consideration the
            effectiveness of the action in mitigating potential adverse
            effects on the financial system or economic conditions, the
            cost to the general fund of the Treasury, and the potential to
            increase moral hazard on the part of creditors, counterparties,
            and shareholders in the financial company,
    then the Secretary must take action under section 1604(a), the
    Corporation must act in accordance with section 1604(b), and the
    Corporation may take 1 or more actions specified in section 1604(c) in
    accordance with the requirements of that subsection, except that, prior
    to the Secretary or Corporation taking any action under section 1604,
    the Federal Reserve Board or the appropriate Federal regulatory agency
    shall take action to avoid or mitigate potential adverse effects on
    low-income, minority, or underserved communities affected by the
    failure of such financial company.
        (c) Documentation and Review.--
                (1) In general.--The Secretary shall--
                        (A) document any determination under subsection
                    (b); and
                        (B) retain the documentation for review under
                    paragraph (2).
                (2) GAO review.--The Comptroller General of the United
            States shall review and report to the Congress on any
            determination under subsection (b), including--
                        (A) the basis for the determination;
                        (B) the purpose for which any action was taken
                    pursuant thereto; and
                        (C) the likely effect of the determination and such
                    action on the incentives and conduct of financial
                    companies and their creditors, counterparties, and
                    shareholders.
                (3) Report to congress.--Within 48 hours after a
            determination is made under subsection (b), the Secretary shall
            provide written notice of the determination to the Committee on
            Banking, Housing, and Urban Affairs and the Committee on the
            Judiciary of the Senate and the Committee on Financial Services
            and the Committee on the Judiciary of the House of
            Representatives. The notice shall include a description of the
            basis for the determination.
        (d) Default or in Danger of Default.--For purposes of subsection
    (b), a financial company shall be considered to be in default or in
    danger of default if any of the following conditions exist, as
    determined in accordance with that subsection:
                (1) A case has been, or likely will promptly be, commenced
            with respect to the financial company under title 11, United
            States Code.
                (2) The financial company is critically undercapitalized,
            as such term has been or may be defined by the Federal Reserve
            Board.
                (3) The financial company has incurred, or is likely to
            incur, losses that will deplete all or substantially all of its
            capital, and there is no reasonable prospect for the company to
            avoid such depletion without assistance under section 1604.
                (4) The assets of the financial company are, or are likely
            to be, less than its obligations to creditors and others.
                (5) The financial company is, or is likely to be, unable to
            pay its obligations (other than those subject to a bona fide
            dispute) in the normal course of business.

    SEC. 1604. DISSOLUTION; STABILIZATION.

        (a) Appointment of Receiver.--
                (1) In general.--Upon the Secretary making a determination
            in accordance with section 1603(b), the Secretary shall appoint
            the Corporation as receiver for the covered financial company.
                (2) Time limit on receivership authority.--Any appointment
            of the Corporation as receiver under paragraph (1) shall
            terminate on the date that is the end of the 1-year period
            beginning on the date such appointment is made.
                (3) Extension of time limit.--The time limit established in
            paragraph (2) may be extended by the Secretary for up to 1
            additional year if--
                        (A) the Corporation has not completed the
                    dissolution of the company within the time provided in
                    paragraph (2); and
                        (B) the Secretary certifies in writing that
                    continuation of the receivership is necessary--
                                (i) to protect the best interests of the
                            taxpayers of the United States; and
                                (ii) to protect the stability of the
                            financial system and the economy of the United
                            States.
                (4) Further extension.--The time limit, as extended in
            paragraph (3), may be extended for up to 1 additional year if--
                        (A) the conditions of paragraph (3) are met; and
                        (B) the Corporation submits a report to the
                    Congress, no later than 60 days before the receivership
                    will expire under the extended limit under paragraph
                    (3), that describes in detail--
                                (i) the basis for the determination by the
                            Corporation that a second extension is
                            necessary; and
                                (ii) the specific plan of the Corporation
                            for concluding the receivership before the end
                            of the proposed additional year.
        (b) Dissolution Limitations.--
                (1) In general.--An insolvent financial company may be
            dissolved under this subtitle only if the failure and
            dissolution of such company under title 11, United States Code,
            would be systemically destabilizing, as determined by the
            appropriate Federal regulatory agencies and the Secretary of
            the Treasury (in consultation with the President) in accordance
            with section 1603(b).
                (2) Liquidation.--A financial company that comes within
            coverage of this subtitle for dissolution shall be placed in
            liquidation, and the associated liquidation costs shall be paid
            from the company's assets and borne by the shareholders and
            unsecured creditors of such company.
                (3) Assessment for excess liquidation costs.--Any
            liquidation costs that exceed the amount of liquidated assets
            of the company shall be paid through assessments on large
            financial companies.
        (c) Consultation.--The Corporation, as receiver--
                (1) shall consult with the regulators of the covered
            financial company and its covered subsidiaries for purposes of
            ensuring an orderly dissolution of the covered financial
            company;
                (2) may consult with, or under section 1609(a)(1)(B)(v) or
            section 1609(a)(1)(K) acquire services of, any outside experts
            as appropriate to inform and aid the Corporation in the
            dissolution process; and
                (3) shall consult with the primary regulators of any
            subsidiaries of the covered financial company that are not
            covered subsidiaries as described in section 1602(9)(B)(v) and
            coordinate with such regulators regarding the treatment of such
            solvent subsidiaries and the separate dissolution of any such
            insolvent subsidiaries under other governmental authority, as
            appropriate.
        (d) Emergency Stabilization After Appointment of Receiver.--Upon
    the Secretary appointing the Corporation as receiver under subsection
    (a), the Corporation may, in its corporate capacity and as an agency of
    the United States, with the approval of the Secretary and subject to
    the conditions in subsections (f) through (g), take the following
    actions under such terms and conditions that the Corporation and the
    Secretary jointly deem appropriate:
                (1) Making loans to, or purchasing any debt obligation of,
            the covered financial company or any covered subsidiary.
                (2) Purchasing assets of the covered financial company or
            any covered subsidiary directly or through an entity
            established by the Corporation for such purpose.
                (3) Assuming or guaranteeing the obligations of the covered
            financial company or any covered subsidiary to one or more
            third parties.
                (4) Taking a lien on any or all assets of the covered
            financial company or any covered subsidiary, including a first
            priority lien on all unencumbered assets of the company or any
            covered subsidiary to secure repayment of any transactions
            conducted under this subsection.
                (5) Selling or transferring all, or any part thereof, of
            such acquired assets, liabilities, or obligations of the
            covered financial company or any covered subsidiary.
        (e) Treatment of Insurance Companies and Insurance Company
    Subsidiaries.--
                (1) In general.--Notwithstanding subsection (a), if an
            insurance company covered by a State law designed specifically
            to deal with the rehabilitation, liquidation or insolvency of
            an insurance company is a covered financial company or a
            subsidiary of a covered financial company, resolution of such
            insurance company, and any subsidiary of such company, will be
            conducted as provided under such State law.
                (2) Exception for covered subsidiaries.--The requirement of
            paragraph (1) shall not apply with respect to any covered
            subsidiary of such an insurance company, that is not itself an
            insurance company.
                (3) Backup authority.--Notwithstanding paragraph (1), with
            respect to a covered financial company described under
            paragraph (1), if, after the end of the 60-day period beginning
            on the date a determination is made under section 1603(b) with
            respect to such company, the appropriate regulatory agency has
            not filed the appropriate judicial action in the appropriate
            State court to place such company into dissolution under the
            State's laws and requirements, the Corporation shall have the
            authority to stand in the place of the appropriate regulatory
            agency and file the appropriate judicial action in the
            appropriate State court to place such company into dissolution
            under the State's laws and requirements.
        (f) Mandatory Terms and Conditions for All Stabilization Actions.--
    The Corporation as receiver is authorized to take the stabilization
    actions listed in subsection (d) only if--
                (1) the Secretary and the Corporation determine that such
            action is necessary for the purpose of financial stability and
            not for the purpose of preserving the covered financial
            company;
                (2) the Corporation ensures that the shareholders of a
            covered financial company do not receive payment until after
            all other claims are fully paid;
                (3) the Corporation ensures that any funds from taxpayers
            shall be repaid as part of the resolution process before
            payments are made to creditors;
                (4) the Corporation ensures that unsecured creditors bear
            losses;
                (5) the Corporation ensures that management responsible for
            the failed condition of the covered financial company is
            removed (if such management has not already been removed at the
            time the Corporation is appointed as receiver); and
                (6) the Corporation ensures that the members of the board
            of directors (or body performing similar functions) responsible
            for the failed condition of the covered financial company are
            removed (if such members have not already been removed at the
            time the Corporation is appointed as receiver).
        (g) Recoupment of Funds Expended for Systemic Stabilization
    Purposes.--Amounts expended from the Fund by the Corporation under this
    section shall be repaid in full to the Fund only from the following
    sources:
                (1) Dissolution process.--Amounts attributable to the
            proceeds of the sale of, or income from, the assets of the
            covered financial company.
                (2) Industry assessments.--If the sources described in
            paragraph (1) are insufficient to repay the amount of the
            stabilization action in full, the difference shall be recouped
            through assessments on financial companies in accordance with
            section 1609(o).

    SEC. 1605. JUDICIAL REVIEW.

        If a receiver is appointed in accordance with section 1604, the
    covered financial company may, not later than 30 days thereafter, bring
    an action in the United States district court for the judicial district
    in which the home office of such covered financial company is located,
    or in the United States District Court for the District of Columbia,
    for an order requiring that the receiver be removed, and the court
    shall, upon the merits, dismiss such action or direct the receiver to
    be removed. Review of such an action shall be limited to the
    appointment of a receiver under section 1604.

    SEC. 1606. DIRECTORS NOT LIABLE FOR ACQUIESCING IN APPOINTMENT OF
                  RECEIVER.

        The members of the board of directors (or body performing similar
    functions) of a covered financial company shall not be liable to the
    covered financial company's shareholders or creditors for acquiescing
    in or consenting in good faith to--
                (1) the Secretary's appointment of the Corporation as
            receiver for the covered financial company under section 1604;
            or
                (2) an acquisition, combination, or transfer of assets or
            liabilities under section 1609.

    SEC. 1607. TERMINATION AND EXCLUSION OF OTHER ACTIONS.

        (a) Termination and Exclusion of Bankruptcy.--The Corporation's
    acting as receiver for a covered financial company under this subtitle
    shall immediately, and by operation of law, terminate any case
    commenced with respect to the covered financial company under title 11,
    United States Code, or any proceeding under any State insolvency law
    with respect to the covered financial company, and no such case or
    proceeding may be commenced with respect to the covered financial
    company at any time while the Corporation acts as receiver for the
    covered financial company.
        (b) Conversion to Bankruptcy.--
                (1) Conversion.--The Corporation may at any time, with the
            approval of the Secretary and after consulting with the
            Council, convert the receivership of a covered financial
            company to a proceeding under chapter 7 or 11 of title 11,
            United States Code, by filing a petition against the covered
            financial company under section 303(m) of such title. The
            Corporation may serve as the trustee for the covered financial
            company in bankruptcy.
                (2) Bridge financial company.--The Corporation's exercise
            of authority under paragraph (1) shall not affect any powers or
            duties of the Corporation with regard to any bridge financial
            company established under section 1609(h).
        (c) Reporting to the Congress.--
                (1) In general.--
                        (A) Initial report.--Upon the appointment of the
                    Corporation as receiver under section 1604(a), the
                    Corporation shall issue a report on the issue described
                    under paragraph (3)(A).
                        (B) Continuing reports.--At the end of each 180-day
                    period after the appointment of the Corporation as
                    receiver under section 1604(a), and continuing while
                    the Corporation is acting as receiver, the Corporation
                    shall issue a report on the issues described under
                    subparagraphs (A) through (C) of paragraph (3).
                (2) Committees to receive reports.--Reports issued under
            this subsection shall be issued to the Committee on Banking,
            Housing, and Urban Affairs and the Committee on the Judiciary
            of the Senate and the Committee on Financial Services and the
            Committee on the Judiciary of the House of Representatives.
                (3) Reporting issues.--
                        (A) Why the receivership should continue instead of
                    converting the receivership into a proceeding under
                    chapter 7 or 11 of title 11, United States Code.
                        (B) The extent to which unsecured creditors are
                    likely to receive at least as much as they would
                    receive if the receivership of the covered financial
                    company was converted to a case under chapter 7 of
                    title 11, United States Code.
                        (C) An explanation of each instance where the
                    Corporation as receiver of a covered financial company
                    waived the requirement of 12 CFR Part 366 with respect
                    to conflicts of interest by any person in the private
                    sector who was retained to provide services to the
                    Corporation in connection with such receivership.

    SEC. 1608. RULEMAKING.

        The Corporation may, after following the notice and comment
    rulemaking requirements under the Administrative Procedure Act,
    prescribe such regulations as the Corporation considers necessary or
    appropriate to implement the provisions of this title.

    SEC. 1609. POWERS AND DUTIES OF CORPORATION.

        (a) Powers and Authorities.--
                (1) General powers.--
                        (A) Successor to covered financial company.--The
                    Corporation shall, upon appointment as receiver for a
                    covered financial company under section 1604, and by
                    operation of law, succeed to--
                                (i) all rights, titles, powers, and
                            privileges of the covered financial company,
                            and of any stockholder, member, officer, or
                            director of such institution with respect to
                            the covered financial company and the assets of
                            the covered financial company; and
                                (ii) title to the books, records, and
                            assets of any previous receiver or other legal
                            custodian of such covered financial company.
                        (B) Operate the covered financial company.--The
                    Corporation as receiver for a covered financial company
                    may--
                                (i) take over the assets of and operate the
                            covered financial company with all the powers
                            of the members or shareholders, the directors,
                            and the officers of the covered financial
                            company and conduct all business of the covered
                            financial company;
                                (ii) collect all obligations and money due
                            the covered financial company;
                                (iii) perform all functions of the covered
                            financial company in the name of the covered
                            financial company;
                                (iv) preserve and conserve the assets and
                            property of the covered financial company; and
                                (v) provide by contract for assistance in
                            fulfilling any function, activity, action, or
                            duty of the Corporation as receiver.
                        (C) Functions of covered financial company's
                    officers, directors, and shareholders.--
                                (i) In general.--The Corporation may
                            provide for the exercise of any function by any
                            member or stockholder, director, or officer of
                            any covered financial company for which the
                            Corporation has been appointed as receiver
                            under this section.
                                (ii) Presumption.--There shall be a strong
                            presumption that the Corporation, as receiver,
                            will remove management responsible for the
                            failed condition of the covered financial
                            company (if such management has not already
                            been removed at the time the Corporation is
                            appointed as receiver).
                        (D) Additional powers as receiver.--The Corporation
                    may, as receiver, and subject to all legally
                    enforceable and perfected security interests, place the
                    covered financial company in liquidation and proceed to
                    realize upon the assets of the covered financial
                    company in such manner as the Corporation deems
                    appropriate, including through the sale of assets, the
                    transfer of assets to a bridge financial company
                    established under subsection (h), or the exercise of
                    any other rights or privileges granted to the receiver
                    under this section.
                        (E) Organization of new companies.--The Corporation
                    as receiver may organize a bridge financial company
                    under subsection (h).
                        (F) Merger; transfer of assets and liabilities.--
                                (i) In general.--Subject to clause (ii),
                            the Corporation as receiver may--
                                        (I) merge the covered financial
                                    company with another company; or
                                        (II) transfer any asset or
                                    liability of the covered financial
                                    company (including assets and
                                    liabilities associated with any trust
                                    or custody business) without obtaining
                                    any approval, assignment, or consent
                                    with respect to such transfer.
                                (ii) Federal agency approval; antitrust
                            review.--
                                        (I) In general.--If a transaction
                                    described in clause (i) requires
                                    approval by a Federal agency, the
                                    transaction may not be consummated
                                    before the 5th calendar day after the
                                    date of approval by the Federal agency
                                    responsible for such approval with
                                    respect thereto. If, in connection with
                                    any such approval, a report on
                                    competitive factors is required, the
                                    Federal agency responsible for such
                                    approval shall promptly notify the
                                    Attorney General of the proposed
                                    transaction and the Attorney General
                                    shall provide the required report
                                    within 10 days of the request. If
                                    notification under section 7A of the
                                    Clayton Act is required with respect to
                                    such transaction, then the required
                                    waiting period shall end on the 15th
                                    day after the date on which the
                                    Attorney General and the Federal Trade
                                    Commission receive such notification,
                                    unless the waiting period is terminated
                                    earlier under subsection (b)(2) of such
                                    section, or is extended pursuant to
                                    subsection (e)(2) of such section.
                                        (II) Emergency.--If the Secretary
                                    in consultation with the Chairman of
                                    the Federal Reserve Board has found
                                    that the Corporation must act
                                    immediately to prevent the probable
                                    failure of the covered financial
                                    company involved, the approval and
                                    prior notification referred to in
                                    subclause (I) shall not be required and
                                    the transaction may be consummated
                                    immediately by the Corporation. The
                                    preceding sentence shall not otherwise
                                    modify, impair, or supercede the
                                    operation of any of the antitrust laws
                                    (as defined in subsection (a) of the
                                    first section of the Clayton Act,
                                    except that such term includes section
                                    5 of the Federal Trade Commission Act
                                    to the extent that such section 5
                                    relates to unfair methods of
                                    competition).
                        (G) Payment of valid obligations.--The Corporation,
                    as receiver, shall, to the extent funds are available,
                    pay all valid obligations of the covered financial
                    company that are due and payable at the time of the
                    appointment of the Corporation as receiver in
                    accordance with the prescriptions and limitations of
                    this title.
                        (H) Subpoena authority.--
                                (i) In general.--The Corporation may, for
                            purposes of carrying out any power, authority,
                            or duty with respect to a covered financial
                            company (including determining any claim
                            against the covered financial company and
                            determining and realizing upon any asset of any
                            person in the course of collecting money due
                            the covered financial company), exercise any
                            power established under section 8(n) of the
                            Federal Deposit Insurance Act as if the covered
                            financial company were an insured depository
                            institution.
                                (ii) Rule of construction.--This section
                            shall not be construed as limiting any rights
                            that the Corporation, in any capacity, might
                            otherwise have to exercise any powers described
                            in clause (i) under any other provision of law.
                        (I) Incidental powers.--The Corporation, as
                    receiver, may--
                                (i) exercise all powers and authorities
                            specifically granted to receivers under this
                            section and such incidental powers as shall be
                            necessary to carry out such powers; and
                                (ii) take any action authorized by this
                            section, which the Corporation determines is in
                            the best interests of the covered financial
                            company, its customers, its creditors, its
                            counterparties, or the stability of the
                            financial system.
                        (J) Utilization of private sector.--In carrying out
                    its responsibilities in the management and disposition
                    of assets from a covered financial company, the
                    Corporation, as receiver, may utilize the services of
                    private persons, including real estate and loan
                    portfolio asset management, property management,
                    auction marketing, legal, and brokerage services, if
                    such services are available in the private sector and
                    the Corporation determines utilization of such services
                    is practicable, efficient, and cost effective.
                        (K) Shareholders and creditors of covered financial
                    company.--Notwithstanding any other provision of law,
                    the Corporation as receiver for a covered financial
                    company pursuant to this section and its succession, by
                    operation of law, to the rights, titles, powers, and
                    privileges described in subparagraph (A) shall
                    terminate all rights and claims that the stockholders
                    and creditors of the covered financial company may have
                    against the assets of the covered financial company or
                    the Corporation arising out of their status as
                    stockholders or creditors, except for their right to
                    payment, resolution, or other satisfaction of their
                    claims, as permitted under this section. The
                    Corporation shall ensure that shareholders and
                    unsecured creditors bear losses, consistent with the
                    priority of claims provisions in section 1609(b).
                        (L) Coordination with foreign financial
                    authorities.--The Corporation as receiver for a covered
                    financial company shall coordinate with the appropriate
                    foreign financial authorities regarding the dissolution
                    of subsidiaries of the covered financial company that
                    are established in a country other than the United
                    States.
                        (M) Appointment of consumer privacy advisor.--
                                (i) Appointment.--Upon the appointment of
                            the Corporation as receiver under section
                            1604(a), the Corporation shall appoint a
                            Consumer Privacy Advisor.
                                (ii) Duties.--The Consumer Privacy Advisor
                            appointed under clause (i) shall advise the
                            Corporation with respect to--
                                        (I) the covered financial company's
                                    consumer privacy policies;
                                        (II) the potential losses or gains
                                    of privacy to consumers upon any sale,
                                    lease, or other transfer of material
                                    assets of the covered financial
                                    company;
                                        (III) the potential costs or
                                    benefits to consumers upon any sale,
                                    lease, or other transfer of material
                                    assets of the covered financial
                                    company; and
                                        (IV) the potential alternatives
                                    that would mitigate potential privacy
                                    loses or potential costs to consumers.
                (2) Authority of corporation to determine claims.--
                        (A) In general.--The Corporation may, as receiver,
                    determine claims in accordance with the requirements of
                    this subsection and regulations prescribed under
                    paragraph (3).
                        (B) Notice requirements.--The receiver, in any case
                    involving the liquidation or winding up of the affairs
                    of a covered financial company, shall--
                                (i) promptly publish a notice to the
                            covered financial company's creditors to
                            present their claims, together with proof, to
                            the receiver by a date specified in the notice
                            which shall be not less than 90 days after the
                            publication of such notice; and
                                (ii) republish such notice approximately 1
                            month and 2 months, respectively, after the
                            publication under clause (i).
                        (C) Mailing required.--The receiver shall mail a
                    notice similar to the notice published under
                    subparagraph (B)(i) at the time of such publication to
                    any creditor shown on the covered financial company's
                    books--
                                (i) at the creditor's last address
                            appearing in such books; or
                                (ii) upon discovery of the name and address
                            of a claimant not appearing on the covered
                            financial company's books, within 30 days after
                            the discovery of such name and address.
                (3) Rulemaking authority relating to determination of
            claims.--
                        (A) In general.--Subject to subsection (b), the
                    Corporation shall, after following the notice and
                    comment rulemaking requirements under the
                    Administrative Procedure Act, prescribe rules and
                    regulations regarding the allowance or disallowance of
                    claims by the Corporation and providing for
                    administrative determination of claims and review of
                    such determination.
                        (B) Existing rules.--The Corporation may elect to
                    use the regulations adopted pursuant to the provisions
                    of section 11 of the Federal Deposit Insurance Act with
                    respect to the determination of claims for a covered
                    financial company as if the covered financial company
                    were an insured depository institution.
                (4) Procedures for determination of claims.--
                        (A) Determination period.--
                                (i) In general.--Before the end of the 180-
                            day period beginning on the date any claim
                            against a covered financial company is filed
                            with the Corporation as receiver, the
                            Corporation shall determine whether to allow or
                            disallow the claim and shall notify the
                            claimant of any determination with respect to
                            such claim.
                                (ii) Extension of time.--The period
                            described in clause (i) may be extended by a
                            written agreement between the claimant and the
                            Corporation.
                                (iii) Mailing of notice sufficient.--The
                            requirements of clause (i) shall be deemed to
                            be satisfied if the notice of any determination
                            with respect to any claim is mailed to the last
                            address of the claimant which appears--
                                        (I) on the covered financial
                                    company's books;
                                        (II) in the claim filed by the
                                    claimant; or
                                        (III) in documents submitted in
                                    proof of the claim.
                                (iv) Contents of notice of disallowance.--
                            If any claim filed under clause (i) is
                            disallowed, the notice to the claimant shall
                            contain--
                                        (I) a statement of each reason for
                                    the disallowance; and
                                        (II) the procedures available for
                                    obtaining agency review of the
                                    determination to disallow the claim or
                                    judicial determination of the claim.
                        (B) Allowance of proven claim.--The Corporation
                    shall allow any claim received on or before the date
                    specified in the notice published under paragraph
                    (2)(B)(i) by the Corporation from any claimant which is
                    proved to the satisfaction of the Corporation.
                        (C) Disallowance of claims filed after end of
                    filing period.--
                                (i) In general.--Except as provided in
                            clause (ii), claims filed after the date
                            specified in the notice published under
                            paragraph (2)(B)(i) shall be disallowed and
                            such disallowance shall be final.
                                (ii) Certain exceptions.--Clause (i) shall
                            not apply with respect to any claim filed by
                            any claimant after the date specified in the
                            notice published under paragraph (2)(B)(i) and
                            such claim may be considered by the receiver
                            if--
                                        (I) the claimant did not receive
                                    notice of the appointment of the
                                    receiver in time to file such claim
                                    before such date; and
                                        (II) such claim is filed in time to
                                    permit payment of such claim.
                        (D) Authority to disallow claims.--
                                (i) In general.--The Corporation may
                            disallow any portion of any claim by a creditor
                            or claim of security, preference, or priority
                            which is not proved to the satisfaction of the
                            Corporation.
                                (ii) Payments to less than fully secured
                            creditors.--In the case of a claim of a
                            creditor against a covered financial company
                            which is secured by any property or other asset
                            of such covered financial company, the
                            receiver--
                                        (I) may treat the portion of such
                                    claim which exceeds an amount equal to
                                    the fair market value of such property
                                    or other asset as an unsecured claim
                                    against the covered financial company;
                                    and
                                        (II) may not make any payment with
                                    respect to such unsecured portion of
                                    the claim other than in connection with
                                    the disposition of all claims of
                                    unsecured creditors of the covered
                                    financial company.
                                (iii) Exceptions.--No provision of this
                            paragraph shall apply with respect to--
                                        (I) any extension of credit from
                                    any Federal Reserve bank, or the
                                    Corporation, to any covered financial
                                    company; or
                                        (II) subject to clause (ii), any
                                    legally enforceable or perfected
                                    security interest in the assets of the
                                    covered financial company securing any
                                    such extension of credit.
                                (iv) Payments to fully secured creditors.--
                            Notwithstanding any other provision of law, in
                            any receivership of a covered financial company
                            in which amounts realized from the dissolution
                            are insufficient to satisfy completely any
                            amounts owed to the United States or to the
                            Fund, as determined in the receiver's sole
                            discretion, an allowed claim under a legally
                            enforceable or perfected security interest in
                            assets of the covered financial company arising
                            under a qualified financial contract (as
                            defined under subsection (c)(8)(D)(i)) with an
                            original term of 30 days or less (except that,
                            for a contract for a term linked to a calendar
                            month, the original term must be less than 1
                            calendar month), secured by collateral other
                            than securities issued by the United States
                            Treasury, the Board of Governors of the Federal
                            Reserve System, any agency of the United
                            States, any Federal Reserve bank, or any
                            Government Sponsored Enterprise, that became a
                            legally enforceable or perfected security
                            interest after the date of the enactment of
                            this clause, and that is not a security
                            interest of the Federal Government in any of
                            the assets of the covered financial company in
                            receivership may be treated as an unsecured
                            claim in the amount specified under clause (v)
                            as necessary to satisfy any amounts owed to the
                            United States or to the Fund. Any balance of
                            such claim that is treated as an unsecured
                            claim under this subparagraph shall be paid as
                            a general liability of the covered financial
                            company. This clause shall not apply with
                            respect to debt obligations secured by real
                            property. This clause may only be implemented
                            with respect to secured creditors if, as a
                            result of the dissolution of the covered
                            financial company, no funds are available to
                            satisfy, in whole or in part, any claims of
                            unsecured creditors or shareholders.
                                (v) Amount specified.--For purposes of
                            clause (iv), the amount specified under this
                            clause, in the case of a secured creditor, is
                            the amount of up to 10 percent.
                        (E) No judicial review of determination pursuant to
                    subparagraph (d).--No court may review the Corporation
                    determination pursuant to subparagraph (D) to disallow
                    a claim.
                        (F) Legal effect of filing.--
                                (i) Statute of limitation tolled.--For
                            purposes of any applicable statute of
                            limitations, the filing of a claim with the
                            Corporation shall constitute a commencement of
                            an action.
                                (ii) No prejudice to other actions.--
                            Subject to paragraph (9), the filing of a claim
                            with the Corporation shall not prejudice any
                            right of the claimant to continue any action
                            which was filed before the appointment of the
                            Corporation as receiver for the covered
                            financial company.
                (5) Provision for judicial determination of claims.--
                        (A) In general.--Before the end of the 60-day
                    period beginning on the earlier of--
                                (i) the end of the period described in
                            paragraph (4)(A)(i) (or, if extended by
                            agreement of the Corporation and the claimant,
                            the period described in paragraph (4)(A)(ii))
                            with respect to any claim against a covered
                            financial company for which the Corporation is
                            receiver; or
                                (ii) the date of any notice of disallowance
                            of such claim pursuant to paragraph (4)(A)(i),
                    the claimant may file suit on a claim (or continue an
                    action commenced before the appointment of the
                    receiver) in the district or territorial court of the
                    United States for the district within which the covered
                    financial company's principal place of business is
                    located or the United States District Court for the
                    District of Columbia (and such court shall have
                    jurisdiction to hear such claim).
                        (B) Statute of limitations.--If any claimant fails
                    to file suit on such claim (or continue an action
                    commenced before the appointment of the receiver)
                    before the end of the 60-day period described in
                    subparagraph (A), the claim shall be deemed to be
                    disallowed (other than any portion of such claim which
                    was allowed by the receiver) as of the end of such
                    period, such disallowance shall be final, and the
                    claimant shall have no further rights or remedies with
                    respect to such claim.
                (6) Expedited determination of claims.--
                        (A) Establishment required.--The Corporation shall
                    establish a procedure for expedited relief outside of
                    the routine claims process established under paragraph
                    (4) for claimants who--
                                (i) allege the existence of legally valid
                            and enforceable or perfected security interests
                            in assets of any covered financial company for
                            which the Corporation has been appointed as
                            receiver; and
                                (ii) allege that irreparable injury will
                            occur if the routine claims procedure is
                            followed.
                        (B) Determination period.--Before the end of the
                    90-day period beginning on the date any claim is filed
                    in accordance with the procedures established pursuant
                    to subparagraph (A), the Corporation shall--
                                (i) determine--
                                        (I) whether to allow or disallow
                                    such claim; or
                                        (II) whether such claim should be
                                    determined pursuant to the procedures
                                    established pursuant to paragraph (4);
                                    and
                                (ii) notify the claimant of the
                            determination, and if the claim is disallowed,
                            provide a statement of each reason for the
                            disallowance and the procedure for obtaining
                            judicial determination.
                        (C) Period for filing or renewing suit.--Any
                    claimant who files a request for expedited relief shall
                    be permitted to file a suit, or to continue such a suit
                    filed before the appointment of the Corporation as
                    receiver, seeking a determination of the claimant's
                    rights with respect to such security interest after the
                    earlier of--
                                (i) the end of the 90-day period beginning
                            on the date of the filing of a request for
                            expedited relief; or
                                (ii) the date the Corporation denies the
                            claim.
                        (D) Statute of limitations.--If an action described
                    in subparagraph (C) is not filed, or the motion to
                    renew a previously filed suit is not made, before the
                    end of the 30-day period beginning on the date on which
                    such action or motion may be filed in accordance with
                    subparagraph (B), the claim shall be deemed to be
                    disallowed as of the end of such period (other than any
                    portion of such claim which was allowed by the
                    receiver), such disallowance shall be final, and the
                    claimant shall have no further rights or remedies with
                    respect to such claim.
                        (E) Legal effect of filing.--
                                (i) Statute of limitation tolled.--For
                            purposes of any applicable statute of
                            limitations, the filing of a claim with the
                            receiver shall constitute a commencement of an
                            action.
                                (ii) No prejudice to other actions.--
                            Subject to paragraph (9), the filing of a claim
                            with the receiver shall not prejudice any right
                            of the claimant to continue any action which
                            was filed before the appointment of the
                            Corporation as receiver for the covered
                            financial company.
                (7) Agreements against interest of the receiver.--No
            agreement that tends to diminish or defeat the interest of the
            Corporation as receiver in any asset acquired by the receiver
            under this section shall be valid against the receiver unless
            such agreement is in writing and executed by an authorized
            officer or representative of the covered financial company.
                (8) Payment of claims.--
                        (A) In general.--The Corporation as receiver may,
                    in its discretion and to the extent funds are
                    available, pay creditor claims, in such manner and
                    amounts as are authorized under this section, which
                    are--
                                (i) allowed by the receiver;
                                (ii) approved by the Corporation pursuant
                            to a final determination pursuant to paragraph
                            (6); or
                                (iii) determined by the final judgment of
                            any court of competent jurisdiction.
                        (B) Payment of dividends on claims.--The receiver
                    may, in the receiver's sole discretion and to the
                    extent otherwise permitted by this section, pay
                    dividends on proven claims at any time, and no
                    liability shall attach to the Corporation (in the
                    Corporation's capacity as receiver), by reason of any
                    such payment, for failure to pay dividends to a
                    claimant whose claim is not proved at the time of any
                    such payment.
                        (C) Rulemaking authority of corporation.--The
                    Corporation may prescribe such rules, including
                    definitions of terms, as it deems appropriate to
                    establish a single uniform interest rate for, or to
                    make payments of post insolvency interest to creditors
                    holding proven claims against the receivership estates
                    of a covered financial company following satisfaction
                    by the receiver of the principal amount of all creditor
                    claims.
                (9) Suspension of legal actions.--
                        (A) In general.--After the appointment of the
                    Corporation as receiver for a covered financial
                    company, the Corporation may request a stay for a
                    period not to exceed 90 days in any noncriminal
                    judicial action or proceeding to which such covered
                    financial company is or becomes a party.
                        (B) Grant of stay by all courts required.--Upon
                    receipt of a request by the Corporation pursuant to
                    subparagraph (A) for a stay of any non-criminal
                    judicial action or proceeding in any court with
                    jurisdiction of such action or proceeding, the court
                    shall grant such stay as to all parties.
                (10) Additional rights and duties.--
                        (A) Prior final adjudication.--The Corporation
                    shall abide by any final unappealable judgment of any
                    court of competent jurisdiction which was rendered
                    before the appointment of the Corporation as receiver.
                        (B) Rights and remedies of receiver.--In the event
                    of any appealable judgment, the Corporation as receiver
                    shall--
                                (i) have all the rights and remedies
                            available to the covered financial company
                            (before the appointment of the receiver under
                            section 1604) and the Corporation, including
                            but not limited to removal to Federal court and
                            all appellate rights; and
                                (ii) not be required to post any bond in
                            order to pursue such remedies.
                        (C) No attachment or execution.--No attachment or
                    execution may issue by any court upon assets in the
                    possession of the receiver.
                        (D) Limitation on judicial review.--Except as
                    otherwise provided in this subsection, no court shall
                    have jurisdiction over--
                                (i) any claim or action for payment from,
                            or any action seeking a determination of rights
                            with respect to, the assets of any covered
                            financial company for which the Corporation has
                            been appointed receiver, including any assets
                            which the Corporation may acquire from itself
                            as such receiver; or
                                (ii) any claim relating to any act or
                            omission of such covered financial company or
                            the Corporation as receiver.
                        (E) Disposition of assets.--In exercising any
                    right, power, privilege, or authority as receiver in
                    connection with any covered financial company for which
                    the Corporation is acting as receiver under this
                    section, the Corporation shall, to the greatest extent
                    practicable, conduct its operations in a manner which--
                                (i) maximizes the net present value return
                            from the sale or disposition of such assets;
                                (ii) minimizes the amount of any loss
                            realized in the resolution of cases;
                                (iii) minimizes the cost to the general
                            fund of the Treasury;
                                (iv) mitigates the potential for serious
                            adverse effects to the financial system and the
                            United States economy;
                                (v) ensures timely and adequate competition
                            and fair and consistent treatment of offerors;
                            and
                                (vi) prohibits discrimination on the basis
                            of race, sex, or ethnic groups in the
                            solicitation and consideration of offers.
                (11) Statute of limitations for actions brought by
            receiver.--
                        (A) In general.--Notwithstanding any provision of
                    any contract, the applicable statute of limitations
                    with regard to any action brought by the Corporation as
                    receiver shall be--
                                (i) in the case of any contract claim, the
                            longer of--
                                        (I) the 6-year period beginning on
                                    the date the claim accrues; or
                                        (II) the period applicable under
                                    State law; and
                                (ii) in the case of any tort claim, the
                            longer of--
                                        (I) the 3-year period beginning on
                                    the date the claim accrues; or
                                        (II) the period applicable under
                                    State law.
                        (B) Determination of the date on which a claim
                    accrues.--For purposes of subparagraph (A), the date on
                    which the statute of limitations begins to run on any
                    claim described in such subparagraph shall be the later
                    of--
                                (i) the date of the appointment of the
                            Corporation as receiver under this title; or
                                (ii) the date on which the cause of action
                            accrues.
                        (C) Revival of expired state causes of action.--
                                (i) In general.--In the case of any tort
                            claim described in clause (ii) for which the
                            statute of limitation applicable under State
                            law with respect to such claim has expired not
                            more than 5 years before the appointment of the
                            Corporation as receiver, the Corporation may
                            bring an action as receiver on such claim
                            without regard to the expiration of the statute
                            of limitation applicable under State law.
                                (ii) Claims described.--A tort claim
                            referred to in clause (i) is a claim arising
                            from fraud, intentional misconduct resulting in
                            unjust enrichment, or intentional misconduct
                            resulting in substantial loss to the covered
                            financial company.
                (12) Fraudulent transfers.--
                        (A) In general.--The Corporation, as receiver for
                    any covered financial company, may avoid a transfer of
                    any interest of an institution affiliated party, or any
                    person who the Corporation determines is a debtor of
                    the covered financial company, in property, or any
                    obligation incurred by such party or person, that was
                    made within 5 years of the date on which the
                    Corporation was appointed receiver if such party or
                    person voluntarily or involuntarily made such transfer
                    or incurred such liability with the intent to hinder,
                    delay, or defraud the covered financial company or the
                    Corporation.
                        (B) Preferential transfers.--The Corporation as
                    receiver for any covered financial company may avoid a
                    transfer of an interest of the covered financial
                    company in property that--
                                (i) was made to or for the benefit of a
                            creditor;
                                (ii) was made for or on account of an
                            antecedent debt that was owed by the covered
                            financial company before the transfer was made;
                                (iii) was made while the covered financial
                            company was insolvent;
                                (iv) was made--
                                        (I) on or within 90 days before the
                                    date on which the Corporation was
                                    appointed receiver; or
                                        (II) between 90 days and one year
                                    before the date that the Corporation
                                    was appointed receiver, if such
                                    creditor at the time of the transfer
                                    was an insider, as that term is defined
                                    in section 101(31) of title 11, United
                                    States Code; and
                                (v) enables such creditor to receive more
                            than such creditor would receive in the
                            liquidation of the covered financial company
                            if--
                                        (I) the transfer had not been made;
                                    and
                                        (II) such creditor received payment
                                    of such debt to the extent provided by
                                    the provisions of this subtitle.
                        (C) Post-receivership transactions.--The
                    Corporation as receiver for any covered financial
                    company may avoid a transfer of property of the
                    receivership that occurred after the Corporation was
                    appointed receiver that was not authorized under this
                    title.
                        (D) Right of recovery.--To the extent that a
                    transfer is avoided under subparagraph (A), (B) or (C),
                    the Corporation may recover, for the benefit of the
                    covered financial company, the property transferred or,
                    if a court so orders, the value of such property from--
                                (i) the initial transferee of such transfer
                            or the entity for whose benefit such transfer
                            was made; or
                                (ii) any immediate or mediate transferee of
                            any such initial transferee.
                        (E) Rights of transferee or obligee.--The
                    Corporation may not recover under subparagraph
                    (D)(ii)--
                                (i) from a transferee that takes for value,
                            including satisfaction or securing of a present
                            or antecedent debt, in good faith, and without
                            knowledge of the violability of the transfer
                            avoided; or
                                (ii) any immediate or mediate good faith
                            transferee of such transferee.
                        (F) Defenses.--A transferee or obligee from whom
                    the Corporation seeks to recover a transfer or avoid an
                    obligation under subparagraph (A), (B) or (C) shall
                    have the same affirmative defenses and rights to liens
                    on the property transferred to the extent they would be
                    available to a transferee or obligee from whom a
                    trustee under title 11 seeks to recover a transfer
                    under sections 547, 548, and 549 of title 11, United
                    States Code.
                        (G) Limitations on avoiding powers.--The rights of
                    the Corporation under subparagraph (A), (B) or (C) are
                    restricted to the same extent as the rights of a
                    trustee in bankruptcy under section 546(b)(1) of the
                    Bankruptcy Code.
                        (H) Presumption of insolvency.--For purposes of
                    subparagraph (B), the covered financial company is
                    presumed to have been insolvent on and during the 90
                    days immediately preceding the date on which the
                    Corporation is appointed as receiver.
                        (I) Rights under this subsection.--The rights of
                    the Corporation as receiver for a covered financial
                    company under this subsection shall be superior to any
                    rights of a trustee or any other party (other than any
                    party which is a Federal agency of a Federal Home Loan
                    Bank) under title 11, United States Code.
                        (J) Right of recovery.--To the extent a transfer is
                    avoided under subparagraph (A), the Corporation may
                    recover, for the benefit of the covered financial
                    company, the property transferred or, if a court so
                    orders, the value of such property (at the time of such
                    transfer) from--
                                (i) the initial transferee of such transfer
                            or the institution-affiliated party or person
                            for whose benefit such transfer was made; or
                                (ii) any immediate or mediate transferee of
                            any such initial transferee.
                        (K) Rights of transferee or obligee.--The
                    Corporation may not recover under subparagraph (B)--
                                (i) any transfer that takes for value,
                            including satisfaction or securing of a present
                            or antecedent debt, in good faith; or
                                (ii) any immediate or mediate good faith
                            transferee of such transferee.
                        (L) Rights under this subsection.--The rights of
                    the Corporation as receiver of a covered financial
                    company under this subsection shall be superior to any
                    rights of a trustee or any other party (other than any
                    party which is a Federal agency) under title 11, United
                    States Code.
                        (M) Definition.--For purposes of this subsection,
                    the term ``institution affiliated party'' means--
                                (i) any director, officer, employee, or
                            controlling stockholder of, or agent for, a
                            covered financial company;
                                (ii) any shareholder, consultant, joint
                            venture partner, and any other person as
                            determined by the Corporation (by regulation or
                            otherwise) who participates in the conduct of
                            the affairs of a covered financial company; and
                                (iii) any independent contractor (including
                            any attorney, appraiser, or accountant) who
                            knowingly or recklessly participates in--
                                        (I) any violation of any law or
                                    regulation;
                                        (II) any breach of fiduciary duty;
                                    or
                                        (III) any unsafe or unsound
                                    practice,
                            which caused or is likely to cause more than a
                            minimal financial loss to, or a significant
                            adverse effect on, the covered financial
                            company.
                (13) Attachment of assets and other injunctive relief.--
            Subject to paragraph (14), any court of competent jurisdiction
            may, at the request of the Corporation, issue an order in
            accordance with Rule 65 of the Federal Rules of Civil
            Procedure, including an order placing the assets of any person
            designated by the Corporation under the control of the court
            and appointing a trustee to hold such assets.
                (14) Standards.--
                        (A) Showing.--Rule 65 of the Federal Rules of Civil
                    Procedure shall apply with respect to any proceeding
                    under paragraph (13) without regard to the requirement
                    of such rule that the applicant show that the injury,
                    loss, or damage is irreparable and immediate.
                        (B) State proceeding.--If, in the case of any
                    proceeding in a State court, the court determines that
                    rules of civil procedure available under the laws of
                    such State provide substantially similar protections to
                    such party's right to due process as Rule 65 (as
                    modified with respect to such proceeding by
                    subparagraph (A)), the relief sought by the Corporation
                    pursuant to paragraph (14) may be requested under the
                    laws of such State.
                (15) Treatment of claims arising from breach of contracts
            executed by the corporation as receiver.--Notwithstanding any
            other provision of this subsection, any final and unappealable
            judgment for monetary damages entered against the Corporation
            as receiver for a covered financial company for the breach of
            an agreement executed or approved by the Corporation after the
            date of its appointment shall be paid as an administrative
            expense of the receiver. Nothing in this paragraph shall be
            construed to limit the power of a receiver to exercise any
            rights under contract or law, including to terminate, breach,
            cancel, or otherwise discontinue such agreement.
                (16) Accounting and recordkeeping requirements.--
                        (A) In general.--The Corporation as receiver shall,
                    consistent with the accounting and reporting practices
                    and procedures established by the Corporation, maintain
                    a full accounting of each receivership or other
                    disposition of any covered financial company.
                        (B) Annual accounting or report.--With respect to
                    each receivership to which the Corporation was
                    appointed, the Corporation shall make an annual
                    accounting or report, as appropriate, available to the
                    Secretary and the Comptroller General of the United
                    States.
                        (C) Availability of reports.--Any report prepared
                    pursuant to subparagraph (B) shall be made available by
                    the Corporation upon request to any member of the
                    public.
                        (D) Recordkeeping requirement.--
                                (i) In general.--Except as provided in
                            clause (ii), after the end of the 6-year period
                            beginning on the date the Corporation is
                            appointed as receiver of a covered financial
                            company the Corporation may destroy any records
                            of such covered financial company which the
                            Corporation, in the Corporation's discretion,
                            determines to be unnecessary unless directed
                            not to do so by a court of competent
                            jurisdiction or governmental agency, or
                            prohibited by law.
                                (ii) Old records.--Notwithstanding clause
                            (i), the Corporation may destroy records of a
                            covered financial company which are at least 10
                            years old as of the date on which the
                            Corporation is appointed as the receiver of
                            such company in accordance with clause (i) at
                            any time after such appointment is final,
                            without regard to the 6-year period of
                            limitation contained in clause (i).
        (b) Priority of Expenses and Unsecured Claims.--
                (1) In general.--Unsecured claims against a covered
            financial company, or the receiver for such covered financial
            company under this section, that are proven to the satisfaction
            of the receiver shall have priority in the following order:
                        (A) Administrative expenses of the receiver.
                        (B) Any amounts owed to the United States, unless
                    the United States agrees or consents otherwise.
                        (C) Wages, salaries, or commissions, including
                    vacation, severance, and sick leave pay earned by an
                    individual (other than management responsible for the
                    failed condition of the covered financial company who
                    have been removed), subject to the limitations for such
                    payments contained in title 11, United States Code,
                    including the amount (11 U.S.C. 507(a)(4)) and
                    restrictions on severance payments to insiders (11
                    U.S.C. 503(c)).
                        (D) Contributions to employee benefit plans,
                    subject to the limitations in title 11, United States
                    Code (11 U.S.C. 507(a)(5)).
                        (E) Any other general or senior liability of the
                    covered financial company (which is not a liability
                    described under subparagraph (F) or (G)).
                        (F) Any obligation subordinated to general
                    creditors (which is not an obligation described under
                    subparagraph (G)).
                        (G) Any obligation to shareholders, members,
                    general partners, limited partners or other persons
                    with interests in the equity of the covered financial
                    company arising as a result of their status as
                    shareholders, members, general partners, limited
                    partners or other persons with interests in the equity
                    of the covered financial company.
                (2) Post-receivership financing priority.--In the event
            that the Corporation as receiver is unable to obtain unsecured
            credit for the covered financial company from commercial
            sources, the Corporation as receiver may obtain credit or incur
            debt on the part of the covered financial company which shall
            have priority over any or all administrative expenses of the
            receiver under paragraph (1)(A).
                (3) Claims of the united states.--Unsecured claims of the
            United States shall, at a minimum, have a higher priority than
            liabilities of the covered financial company that count as
            regulatory capital.
                (4) Creditors similarly situated.--Subject to the
            priorities established under paragraphs (2) and (3), all
            claimants of a covered financial company that are similarly
            situated under paragraph (1) shall be treated in a similar
            manner, except that the receiver may take any action (including
            making payments) that does not comply with this subsection,
            if--
                        (A) the Corporation determines that such action is
                    necessary to maximize the value of the assets of the
                    covered financial company, to maximize the present
                    value return from the sale or other disposition of the
                    assets of the covered financial company, to minimize
                    the amount of any loss realized upon the sale or other
                    disposition of the assets of the covered financial
                    company, or to contain or address serious adverse
                    effects on financial stability or the U.S. economy; and
                        (B) all claimants that are similarly situated under
                    paragraph (1) receive not less than the amount provided
                    in subsection (d)(2).
                (5) Secured claims unaffected.--This subsection shall not
            affect secured claims, except to the extent that the security
            is insufficient to satisfy the claim and then only with regard
            to the difference between the claim and the amount realized
            from the security.
                (6) Definitions.--As used in this subsection, the term
            ``administrative expenses of the receiver'' includes--
                        (A) the actual, necessary costs and expenses
                    incurred by the receiver in preserving the assets of a
                    covered financial company or liquidating or otherwise
                    dissolving the affairs of a covered financial company
                    for which the Corporation has been appointed as
                    receiver; and
                        (B) any obligations that the receiver determines
                    are necessary and appropriate to facilitate the smooth
                    and orderly liquidation or other dissolution of the
                    covered financial company.
                (7) Rulemaking.--The Corporation shall, after following the
            notice and comment rulemaking requirements under the
            Administrative Procedure Act, prescribe rules to carry out this
            section.
        (c) Provisions Relating to Contracts Entered Into Before
    Appointment of Receiver.--
                (1) Authority to repudiate contracts.--In addition to any
            other rights a receiver may have, the Corporation as receiver
            for any covered financial company may disaffirm or repudiate
            any contract or lease--
                        (A) to which the covered financial company is a
                    party;
                        (B) the performance of which the receiver, in the
                    receiver's discretion, determines to be burdensome; and
                        (C) the disaffirmance or repudiation of which the
                    receiver determines, in the receiver's discretion, will
                    promote the orderly administration of the covered
                    financial company's affairs.
                (2) Timing of repudiation.--The receiver appointed for any
            covered financial company under section 1604 shall determine
            whether or not to exercise the rights of repudiation under this
            subsection within a reasonable period following such
            appointment.
                (3) Claims for damages for repudiation.--
                        (A) In general.--Except as otherwise provided in
                    subparagraph (C) and paragraphs (4), (5), and (6), the
                    liability of the receiver for the disaffirmance or
                    repudiation of any contract pursuant to paragraph (1)
                    shall be--
                                (i) limited to actual direct compensatory
                            damages; and
                                (ii) determined as of--
                                        (I) the date of the appointment of
                                    the receiver; or
                                        (II) in the case of any contract or
                                    agreement referred to in paragraph (8),
                                    the date of the disaffirmance or
                                    repudiation of such contract or
                                    agreement.
                        (B) No liability for other damages.--For purposes
                    of subparagraph (A), the term ``actual direct
                    compensatory damages'' does not include--
                                (i) punitive or exemplary damages;
                                (ii) damages for lost profits or
                            opportunity; or
                                (iii) damages for pain and suffering.
                        (C) Measure of damages for repudiation of qualified
                    financial contracts.--In the case of any qualified
                    financial contract or agreement to which paragraph (8)
                    applies, compensatory damages shall be--
                                (i) deemed to include normal and reasonable
                            costs of cover or other reasonable measures of
                            damages utilized in the industries for such
                            contract and agreement claims; and
                                (ii) paid in accordance with this
                            subsection and subsection (d) except as
                            otherwise specifically provided in this
                            subsection.
                (4) Leases under which the covered financial company is the
            lessee.--
                        (A) In general.--If the receiver disaffirms or
                    repudiates a lease under which the covered financial
                    company was the lessee, the receiver shall not be
                    liable for any damages (other than damages determined
                    pursuant to subparagraph (B)) for the disaffirmance or
                    repudiation of such lease.
                        (B) Payments of rent.--Notwithstanding subparagraph
                    (A), the lessor under a lease to which such
                    subparagraph applies shall--
                                (i) be entitled to the contractual rent
                            accruing before the later of the date--
                                        (I) the notice of disaffirmance or
                                    repudiation is mailed; or
                                        (II) the disaffirmance or
                                    repudiation becomes effective, unless
                                    the lessor is in default or breach of
                                    the terms of the lease;
                                (ii) have no claim for damages under any
                            acceleration clause or other penalty provision
                            in the lease; and
                                (iii) have a claim for any unpaid rent,
                            subject to all appropriate offsets and
                            defenses, due as of the date of the appointment
                            which shall be paid in accordance with this
                            subsection and subsection (d).
                (5) Leases under which the covered financial company is the
            lessor.--
                        (A) In general.--If the receiver repudiates an
                    unexpired written lease of real property of the covered
                    financial company under which the covered financial
                    company is the lessor and the lessee is not, as of the
                    date of such repudiation, in default, the lessee under
                    such lease may either--
                                (i) treat the lease as terminated by such
                            repudiation; or
                                (ii) remain in possession of the leasehold
                            interest for the balance of the term of the
                            lease unless the lessee defaults under the
                            terms of the lease after the date of such
                            repudiation.
                        (B) Provisions applicable to lessee remaining in
                    possession.--If any lessee under a lease described in
                    subparagraph (A) remains in possession of a leasehold
                    interest pursuant to clause (ii) of such subparagraph--
                                (i) the lessee--
                                        (I) shall continue to pay the
                                    contractual rent pursuant to the terms
                                    of the lease after the date of the
                                    repudiation of such lease;
                                        (II) may offset against any rent
                                    payment which accrues after the date of
                                    the repudiation of the lease, any
                                    damages which accrue after such date
                                    due to the nonperformance of any
                                    obligation of the covered financial
                                    company under the lease after such
                                    date; and
                                (ii) the receiver shall not be liable to
                            the lessee for any damages arising after such
                            date as a result of the repudiation other than
                            the amount of any offset allowed under clause
                            (i)(II).
                (6) Contracts for the sale of real property.--
                        (A) In general.--If the receiver repudiates any
                    contract (which meets the requirements of subsection
                    (a)(7)) for the sale of real property and the purchaser
                    of such real property under such contract is in
                    possession and is not, as of the date of such
                    repudiation, in default, such purchaser may either--
                                (i) treat the contract as terminated by
                            such repudiation; or
                                (ii) remain in possession of such real
                            property.
                        (B) Provisions applicable to purchaser remaining in
                    possession.--If any purchaser of real property under
                    any contract described in subparagraph (A) remains in
                    possession of such property pursuant to clause (ii) of
                    such subparagraph--
                                (i) the purchaser--
                                        (I) shall continue to make all
                                    payments due under the contract after
                                    the date of the repudiation of the
                                    contract; and
                                        (II) may offset against any such
                                    payments any damages which accrue after
                                    such date due to the nonperformance
                                    (after such date) of any obligation of
                                    the covered financial company under the
                                    contract; and
                                (ii) the receiver shall--
                                        (I) not be liable to the purchaser
                                    for any damages arising after such date
                                    as a result of the repudiation other
                                    than the amount of any offset allowed
                                    under clause (i)(II);
                                        (II) deliver title to the purchaser
                                    in accordance with the provisions of
                                    the contract; and
                                        (III) have no obligation under the
                                    contract other than the performance
                                    required under subclause (II).
                        (C) Assignment and sale allowed.--
                                (i) In general.--No provision of this
                            paragraph shall be construed as limiting the
                            right of the receiver to assign the contract
                            described in subparagraph (A) and sell the
                            property subject to the contract and the
                            provisions of this paragraph.
                                (ii) No liability after assignment and
                            sale.--If an assignment and sale described in
                            clause (i) is consummated, the receiver shall
                            have no further liability under the contract
                            described in subparagraph (A) or with respect
                            to the real property which was the subject of
                            such contract.
                (7) Provisions applicable to service contracts.--
                        (A) Services performed before appointment.--In the
                    case of any contract for services between any person
                    and any covered financial company for which the
                    Corporation has been appointed receiver, any claim of
                    such person for services performed before the
                    appointment of the receiver shall be--
                                (i) a claim to be paid in accordance with
                            subsections (a), (b), and (d); and
                                (ii) deemed to have arisen as of the date
                            the receiver was appointed.
                        (B) Services performed after appointment and prior
                    to repudiation.--If, in the case of any contract for
                    services described in subparagraph (A), the receiver
                    accepts performance by the other person before the
                    receiver makes any determination to exercise the right
                    of repudiation of such contract under this section--
                                (i) the other party shall be paid under the
                            terms of the contract for the services
                            performed; and
                                (ii) the amount of such payment shall be
                            treated as an administrative expense of the
                            receivership.
                        (C) Acceptance of performance no bar to subsequent
                    repudiation.--The acceptance by any receiver of
                    services referred to in subparagraph (B) in connection
                    with a contract described in such subparagraph shall
                    not affect the right of the receiver to repudiate such
                    contract under this section at any time after such
                    performance.
                (8) Certain qualified financial contracts.--
                        (A) Rights of parties to contracts.--Subject to
                    paragraphs (9) and (10) of this subsection and
                    notwithstanding any other provision of this section
                    (other than subsection (a)(7)), any other Federal law,
                    or the law of any State, no person shall be stayed or
                    prohibited from exercising--
                                (i) any right such person has to cause the
                            termination, liquidation, or acceleration of
                            any qualified financial contract with a covered
                            financial company which arises upon the
                            appointment of the Corporation as receiver for
                            such covered financial company at any time
                            after such appointment;
                                (ii) any right under any security agreement
                            or arrangement or other credit enhancement
                            related to one or more qualified financial
                            contracts described in clause (i);
                                (iii) any right to offset or net out any
                            termination value, payment amount, or other
                            transfer obligation arising under or in
                            connection with 1 or more contracts and
                            agreements described in clause (i), including
                            any master agreement for such contracts or
                            agreements.
                        (B) Applicability of other provisions.--Subsection
                    (a)(9) shall apply in the case of any judicial action
                    or proceeding brought against any receiver referred to
                    in subparagraph (A), or the covered financial company
                    for which such receiver was appointed, by any party to
                    a contract or agreement described in subparagraph
                    (A)(i) with such company.
                        (C) Certain transfers not avoidable.--
                                (i) In general.--Notwithstanding paragraph
                            (11), section 5242 of the Revised Statutes of
                            the United States or any other provision of
                            Federal or State law relating to the avoidance
                            of preferential or fraudulent transfers, the
                            Corporation, whether acting as such or as
                            receiver of a covered financial company, may
                            not avoid any transfer of money or other
                            property in connection with any qualified
                            financial contract with a covered financial
                            company.
                                (ii) Exception for certain transfers.--
                            Clause (i) shall not apply to any transfer of
                            money or other property in connection with any
                            qualified financial contract with a covered
                            financial company if the Corporation determines
                            that the transferee had actual intent to
                            hinder, delay, or defraud such company, the
                            creditors of such company, or any receiver
                            appointed for such company.
                        (D) Certain contacts and agreements defined.--For
                    purposes of this subsection, the following definitions
                    shall apply:
                                (i) Qualified financial contract.--The term
                            ``qualified financial contract'' means any
                            securities contract, commodity contract,
                            forward contract, repurchase agreement, swap
                            agreement, and any similar agreement that the
                            Corporation determines by regulation,
                            resolution, or order to be a qualified
                            financial contract for purposes of this
                            paragraph.
                                (ii) Securities contract.--The term
                            ``securities contract''--
                                        (I) means a contract for the
                                    purchase, sale, or loan of a security,
                                    a certificate of deposit, a mortgage
                                    loan, any interest in a mortgage loan,
                                    a group or index of securities,
                                    certificates of deposit, or mortgage
                                    loans or interests therein (including
                                    any interest therein or based on the
                                    value thereof) or any option on any of
                                    the foregoing, including any option to
                                    purchase or sell any such security,
                                    certificate of deposit, mortgage loan,
                                    interest, group or index, or option,
                                    and including any repurchase or reverse
                                    repurchase transaction on any such
                                    security, certificate of deposit,
                                    mortgage loan, interest, group or
                                    index, or option (whether or not such
                                    repurchase or reverse repurchase
                                    transaction is a ``repurchase
                                    agreement,'' as defined in clause (v));
                                        (II) does not include any purchase,
                                    sale, or repurchase obligation under a
                                    participation in a commercial mortgage
                                    loan unless the Corporation determines
                                    by regulation, resolution, or order to
                                    include any such agreement within the
                                    meaning of such term;
                                        (III) means any option entered into
                                    on a national securities exchange
                                    relating to foreign currencies;
                                        (IV) means the guarantee (including
                                    by novation) by or to any securities
                                    clearing agency of any settlement of
                                    cash, securities, certificates of
                                    deposit, mortgage loans or interests
                                    therein, group or index of securities,
                                    certificates of deposit or mortgage
                                    loans or interests therein (including
                                    any interest therein or based on the
                                    value thereof) or option on any of the
                                    foregoing, including any option to
                                    purchase or sell any such security,
                                    certificate of deposit, mortgage loan,
                                    interest, group or index, or option
                                    (whether or not such settlement is in
                                    connection with any agreement or
                                    transaction referred to in subclauses
                                    (I) through (XII) (other than subclause
                                    (II));
                                        (V) means any margin loan;
                                        (VI) means any extension of credit
                                    for the clearance or settlement of
                                    securities transactions;
                                        (VII) means any loan transaction
                                    coupled with a securities collar
                                    transaction, any prepaid securities
                                    forward transaction, or any total
                                    return swap transaction coupled with a
                                    securities sale transaction;
                                        (VIII) means any other agreement or
                                    transaction that is similar to any
                                    agreement or transaction referred to in
                                    this clause;
                                        (IX) means any combination of the
                                    agreements or transactions referred to
                                    in this clause;
                                        (X) means any option to enter into
                                    any agreement or transaction referred
                                    to in this clause;
                                        (XI) means a master agreement that
                                    provides for an agreement or
                                    transaction referred to in subclause
                                    (I), (III), (IV), (V), (VI), (VII),
                                    (VIII), (IX), or (X), together with all
                                    supplements to any such master
                                    agreement, without regard to whether
                                    the master agreement provides for an
                                    agreement or transaction that is not a
                                    securities contract under this clause,
                                    except that the master agreement shall
                                    be considered to be a securities
                                    contract under this clause only with
                                    respect to each agreement or
                                    transaction under the master agreement
                                    that is referred to in subclause (I),
                                    (III), (IV), (V), (VI), (VII), (VIII),
                                    (IX), or (X); and
                                        (XII) means any security agreement
                                    or arrangement or other credit
                                    enhancement related to any agreement or
                                    transaction referred to in this clause,
                                    including any guarantee or
                                    reimbursement obligation in connection
                                    with any agreement or transaction
                                    referred to in this clause.
                                (iii) Commodity contract.--The term
                            ``commodity contract'' means--
                                        (I) with respect to a futures
                                    commission merchant, a contract for the
                                    purchase or sale of a commodity for
                                    future delivery on, or subject to the
                                    rules of, a contract market or board of
                                    trade;
                                        (II) with respect to a foreign
                                    futures commission merchant, a foreign
                                    future;
                                        (III) with respect to a leverage
                                    transaction merchant, a leverage
                                    transaction;
                                        (IV) with respect to a clearing
                                    organization, a contract for the
                                    purchase or sale of a commodity for
                                    future delivery on, or subject to the
                                    rules of, a contract market or board of
                                    trade that is cleared by such clearing
                                    organization, or commodity option
                                    traded on, or subject to the rules of,
                                    a contract market or board of trade
                                    that is cleared by such clearing
                                    organization;
                                        (V) with respect to a commodity
                                    options dealer, a commodity option;
                                        (VI) any other agreement or
                                    transaction that is similar to any
                                    agreement or transaction referred to in
                                    this clause;
                                        (VII) any combination of the
                                    agreements or transactions referred to
                                    in this clause;
                                        (VIII) any option to enter into any
                                    agreement or transaction referred to in
                                    this clause;
                                        (IX) a master agreement that
                                    provides for an agreement or
                                    transaction referred to in subclause
                                    (I), (II), (III), (IV), (V), (VI),
                                    (VII), or (VIII), together with all
                                    supplements to any such master
                                    agreement, without regard to whether
                                    the master agreement provides for an
                                    agreement or transaction that is not a
                                    commodity contract under this clause,
                                    except that the master agreement shall
                                    be considered to be a commodity
                                    contract under this clause only with
                                    respect to each agreement or
                                    transaction under the master agreement
                                    that is referred to in subclause (I),
                                    (II), (III), (IV), (V), (VI), (VII), or
                                    (VIII); or
                                        (X) any security agreement or
                                    arrangement or other credit enhancement
                                    related to any agreement or transaction
                                    referred to in this clause, including
                                    any guarantee or reimbursement
                                    obligation in connection with any
                                    agreement or transaction referred to in
                                    this clause.
                                (iv) Forward contract.--The term ``forward
                            contract'' means--
                                        (I) a contract (other than a
                                    commodity contract) for the purchase,
                                    sale, or transfer of a commodity or any
                                    similar good, article, service, right,
                                    or interest which is presently or in
                                    the future becomes the subject of
                                    dealing in the forward contract trade,
                                    or product or byproduct thereof, with a
                                    maturity date more than 2 days after
                                    the date the contract is entered into,
                                    including a repurchase or reverse
                                    repurchase transaction (whether or not
                                    such repurchase or reverse repurchase
                                    transaction is a ``repurchase
                                    agreement'', as defined in clause (v)),
                                    consignment, lease, swap, hedge
                                    transaction, deposit, loan, option,
                                    allocated transaction, unallocated
                                    transaction, or any other similar
                                    agreement;
                                        (II) any combination of agreements
                                    or transactions referred to in
                                    subclauses (I) and (III);
                                        (III) any option to enter into any
                                    agreement or transaction referred to in
                                    subclause (I) or (II);
                                        (IV) a master agreement that
                                    provides for an agreement or
                                    transaction referred to in subclauses
                                    (I), (II), or (III), together with all
                                    supplements to any such master
                                    agreement, without regard to whether
                                    the master agreement provides for an
                                    agreement or transaction that is not a
                                    forward contract under this clause,
                                    except that the master agreement shall
                                    be considered to be a forward contract
                                    under this clause only with respect to
                                    each agreement or transaction under the
                                    master agreement that is referred to in
                                    subclause (I), (II), or (III); or
                                        (V) any security agreement or
                                    arrangement or other credit enhancement
                                    related to any agreement or transaction
                                    referred to in subclause (I), (II),
                                    (III), or (IV), including any guarantee
                                    or reimbursement obligation in
                                    connection with any agreement or
                                    transaction referred to in any such
                                    subclause.
                                (v) Repurchase agreement.--The term
                            ``repurchase agreement'' (which definition also
                            applies to a reverse repurchase agreement)--
                                        (I) means an agreement, including
                                    related terms, which provides for the
                                    transfer of one or more certificates of
                                    deposit, mortgage-related securities
                                    (as such term is defined in the
                                    Securities Exchange Act of 1934),
                                    mortgage loans, interests in mortgage-
                                    related securities or mortgage loans,
                                    eligible bankers' acceptances,
                                    qualified foreign government securities
                                    (which for purposes of this clause
                                    shall mean a security that is a direct
                                    obligation of, or that is fully
                                    guaranteed by, the central government
                                    of a member of the Organization for
                                    Economic Cooperation and Development as
                                    determined by regulation or order
                                    adopted by the Federal Reserve Board)
                                    or securities that are direct
                                    obligations of, or that are fully
                                    guaranteed by, the United States or any
                                    agency of the United States against the
                                    transfer of funds by the transferee of
                                    such certificates of deposit, eligible
                                    bankers' acceptances, securities,
                                    mortgage loans, or interests with a
                                    simultaneous agreement by such
                                    transferee to transfer to the
                                    transferor thereof certificates of
                                    deposit, eligible bankers' acceptances,
                                    securities, mortgage loans, or
                                    interests as described above, at a date
                                    certain not later than 1 year after
                                    such transfers or on demand, against
                                    the transfer of funds, or any other
                                    similar agreement;
                                        (II) does not include any
                                    repurchase obligation under a
                                    participation in a commercial mortgage
                                    loan unless the Corporation determines
                                    by regulation, resolution, or order to
                                    include any such participation within
                                    the meaning of such term;
                                        (III) means any combination of
                                    agreements or transactions referred to
                                    in subclauses (I) and (IV);
                                        (IV) means any option to enter into
                                    any agreement or transaction referred
                                    to in subclause (I) or (III);
                                        (V) means a master agreement that
                                    provides for an agreement or
                                    transaction referred to in subclause
                                    (I), (III), or (IV), together with all
                                    supplements to any such master
                                    agreement, without regard to whether
                                    the master agreement provides for an
                                    agreement or transaction that is not a
                                    repurchase agreement under this clause,
                                    except that the master agreement shall
                                    be considered to be a repurchase
                                    agreement under this subclause only
                                    with respect to each agreement or
                                    transaction under the master agreement
                                    that is referred to in subclause (I),
                                    (III), or (IV); and
                                        (VI) means any security agreement
                                    or arrangement or other credit
                                    enhancement related to any agreement or
                                    transaction referred to in subclause
                                    (I), (III), (IV), or (V), including any
                                    guarantee or reimbursement obligation
                                    in connection with any agreement or
                                    transaction referred to in any such
                                    subclause.
                                (vi) Swap agreement.--The term ``swap
                            agreement'' means--
                                        (I) any agreement, including the
                                    terms and conditions incorporated by
                                    reference in any such agreement, which
                                    is an interest rate swap, option,
                                    future, or forward agreement, including
                                    a rate floor, rate cap, rate collar,
                                    cross-currency rate swap, and basis
                                    swap; a spot, same day-tomorrow,
                                    tomorrow-next, forward, or other
                                    foreign exchange, precious metals, or
                                    other commodity agreement; a currency
                                    swap, option, future, or forward
                                    agreement; an equity index or equity
                                    swap, option, future, or forward
                                    agreement; a debt index or debt swap,
                                    option, future, or forward agreement; a
                                    total return, credit spread or credit
                                    swap, option, future, or forward
                                    agreement; a commodity index or
                                    commodity swap, option, future, or
                                    forward agreement; weather swap,
                                    option, future, or forward agreement;
                                    an emissions swap, option, future, or
                                    forward agreement; or an inflation
                                    swap, option, future, or forward
                                    agreement;
                                        (II) any agreement or transaction
                                    that is similar to any other agreement
                                    or transaction referred to in this
                                    clause and that is of a type that has
                                    been, is presently, or in the future
                                    becomes, the subject of recurrent
                                    dealings in the swap or other
                                    derivatives markets (including terms
                                    and conditions incorporated by
                                    reference in such agreement) and that
                                    is a forward, swap, future, option or
                                    spot transaction on one or more rates,
                                    currencies, commodities, equity
                                    securities or other equity instruments,
                                    debt securities or other debt
                                    instruments, quantitative measures
                                    associated with an occurrence, extent
                                    of an occurrence, or contingency
                                    associated with a financial,
                                    commercial, or economic consequence, or
                                    economic or financial indices or
                                    measures of economic or financial risk
                                    or value;
                                        (III) any combination of agreements
                                    or transactions referred to in this
                                    clause;
                                        (IV) any option to enter into any
                                    agreement or transaction referred to in
                                    this clause;
                                        (V) a master agreement that
                                    provides for an agreement or
                                    transaction referred to in subclause
                                    (I), (II), (III), or (IV), together
                                    with all supplements to any such master
                                    agreement, without regard to whether
                                    the master agreement contains an
                                    agreement or transaction that is not a
                                    swap agreement under this clause,
                                    except that the master agreement shall
                                    be considered to be a swap agreement
                                    under this clause only with respect to
                                    each agreement or transaction under the
                                    master agreement that is referred to in
                                    subclause (I), (II), (III), or (IV);
                                    and
                                        (VI) any security agreement or
                                    arrangement or other credit enhancement
                                    related to any agreements or
                                    transactions referred to in subclause
                                    (I), (II), (III), (IV), or (V),
                                    including any guarantee or
                                    reimbursement obligation in connection
                                    with any agreement or transaction
                                    referred to in any such subclause.
                                (vii) Definitions relating to default.--
                            When used in this paragraph and paragraph
                            (10)--
                                        (I) The term ``default'' shall
                                    mean, with respect to a covered
                                    financial company, any adjudication or
                                    other official determination by any
                                    court of competent jurisdiction, or
                                    other public authority pursuant to
                                    which a conservator, receiver, or other
                                    legal custodian is appointed; and
                                        (II) The term ``in danger of
                                    default'' shall mean a covered
                                    financial company with respect to which
                                    the Corporation or appropriate State
                                    authority has determined that--
                                                (aa) in the opinion of the
                                            Corporation or such authority--

                                                        (AA) the covered
                                                    financial company is
                                                    not likely to be able
                                                    to pay its obligations
                                                    in the normal course of
                                                    business; and

                                                        (BB) there is no
                                                    reasonable prospect
                                                    that the covered
                                                    financial company will
                                                    be able to pay such
                                                    obligations without
                                                    Federal assistance; or

                                                        (CC) in the opinion
                                                    of the Corporation or
                                                    such authority--

                                                (bb) the covered financial
                                            company has incurred or is
                                            likely to incur losses that
                                            will deplete all or
                                            substantially all of its
                                            capital; and
                                                (cc) there is no reasonable
                                            prospect that the capital will
                                            be replenished without Federal
                                            assistance.
                                (viii) Treatment of master agreement as one
                            agreement.--Any master agreement for any
                            contract or agreement described in any
                            preceding clause of this subparagraph (or any
                            master agreement for such master agreement or
                            agreements), together with all supplements to
                            such master agreement, shall be treated as a
                            single agreement and a single qualified
                            financial contact. If a master agreement
                            contains provisions relating to agreements or
                            transactions that are not themselves qualified
                            financial contracts, the master agreement shall
                            be deemed to be a qualified financial contract
                            only with respect to those transactions that
                            are themselves qualified financial contracts.
                                (ix) Transfer.--The term ``transfer'' means
                            every mode, direct or indirect, absolute or
                            conditional, voluntary or involuntary, of
                            disposing of or parting with property or with
                            an interest in property, including retention of
                            title as a security interest and foreclosure of
                            the covered financial company's equity of
                            redemption.
                                (x) Person.--The term ``person'' includes
                            any governmental entity in addition to any
                            entity included in the definition of such term
                            in section 1, title 1, United States Code.
                        (E) Clarification.--No provision of law shall be
                    construed as limiting the right or power of the
                    Corporation, or authorizing any court or agency to
                    limit or delay, in any manner, the right or power of
                    the Corporation to transfer any qualified financial
                    contract in accordance with paragraphs (9) and (10) of
                    this subsection or to disaffirm or repudiate any such
                    contract in accordance with subsection (c)(1) of this
                    section.
                        (F) Walkaway clauses not effective.--
                                (i) In general.--Notwithstanding the
                            provisions of subparagraph (A) and sections 403
                            and 404 of the Federal Deposit Insurance
                            Corporation Improvement Act of 1991, no
                            walkaway clause shall be enforceable in a
                            qualified financial contract of a covered
                            financial company in default.
                                (ii) Limited suspension of certain
                            obligations.--In the case of a qualified
                            financial contract referred to in clause (i),
                            any payment or delivery obligations otherwise
                            due from a party pursuant to the qualified
                            financial contract shall be suspended from the
                            time the receiver is appointed until the
                            earlier of--
                                        (I) the time such party receives
                                    notice that such contract has been
                                    transferred pursuant to paragraph
                                    (10)(A); or
                                        (II) 5:00 p.m. (eastern time) on
                                    the business day following the date of
                                    the appointment of the receiver.
                                (iii) Walkaway clause defined.--For
                            purposes of this subparagraph, the term
                            ``walkaway clause'' means any provision in a
                            qualified financial contract that suspends,
                            conditions, or extinguishes a payment
                            obligation of a party, in whole or in part, or
                            does not create a payment obligation of a party
                            that would otherwise exist, solely because of
                            such party's status as a nondefaulting party in
                            connection with the insolvency of a covered
                            financial company that is a party to the
                            contract or the appointment of or the exercise
                            of rights or powers by a receiver of such
                            covered financial company, and not as a result
                            of a party's exercise of any right to offset,
                            setoff, or net obligations that exist under the
                            contract, any other contract between those
                            parties, or applicable law.
                        (G) Recordkeeping.--The Corporation, in
                    consultation with the Federal Reserve Board, may
                    prescribe regulations requiring that the covered
                    financial company maintain such records with respect to
                    qualified financial contracts (including market
                    valuations) as the Corporation determines to be
                    necessary or appropriate in order to assist the
                    receiver of the covered financial company in being able
                    to exercise its rights and fulfill its obligations
                    under this paragraph or paragraph (9) or (10).
                (9) Transfer of qualified financial contracts.--
                        (A) In general.--In making any transfer of assets
                    or liabilities of a covered financial company in
                    default which includes any qualified financial
                    contract, the receiver for such covered financial
                    company shall either--
                                (i) transfer to one financial institution,
                            other than a financial institution for which a
                            conservator, receiver, trustee in bankruptcy,
                            or other legal custodian has been appointed or
                            which is otherwise the subject of a bankruptcy
                            or insolvency proceeding--
                                        (I) all qualified financial
                                    contracts between any person or any
                                    affiliate of such person and the
                                    covered financial company in default;
                                        (II) all claims of such person or
                                    any affiliate of such person against
                                    such covered financial company under
                                    any such contract (other than any claim
                                    which, under the terms of any such
                                    contract, is subordinated to the claims
                                    of general unsecured creditors of such
                                    company);
                                        (III) all claims of such covered
                                    financial company against such person
                                    or any affiliate of such person under
                                    any such contract; and
                                        (IV) all property securing or any
                                    other credit enhancement for any
                                    contract described in subclause (I) or
                                    any claim described in subclause (II)
                                    or (III) under any such contract; or
                                (ii) transfer none of the qualified
                            financial contracts, claims, property or other
                            credit enhancement referred to in clause (i)
                            (with respect to such person and any affiliate
                            of such person).
                        (B) Transfer to foreign bank, financial
                    institution, or branch or agency thereof.--In
                    transferring any qualified financial contracts and
                    related claims and property under subparagraph (A)(i),
                    the receiver for the covered financial company shall
                    not make such transfer to a foreign bank, financial
                    institution organized under the laws of a foreign
                    country, or a branch or agency of a foreign bank or
                    financial institution unless, under the law applicable
                    to such bank, financial institution, branch or agency,
                    to the qualified financial contracts, and to any
                    netting contract, any security agreement or arrangement
                    or other credit enhancement related to one or more
                    qualified financial contracts, the contractual rights
                    of the parties to such qualified financial contracts,
                    netting contracts, security agreements or arrangements,
                    or other credit enhancements are enforceable
                    substantially to the same extent as permitted under
                    this section.
                        (C) Transfer of contracts subject to the rules of a
                    clearing organization.--In the event that a receiver
                    transfers any qualified financial contract and related
                    claims, property, and credit enhancements pursuant to
                    subparagraph (A)(i) and such contract is cleared by or
                    subject to the rules of a clearing organization, the
                    clearing organization shall not be required to accept
                    the transferee as a member by virtue of the transfer.
                        (D) Definitions.--For purposes of this paragraph,
                    the term ``financial institution'' means a broker or
                    dealer, a depository institution, a futures commission
                    merchant, a bridge financial company, or any other
                    institution determined by the Corporation by regulation
                    to be a financial institution, and the term ``clearing
                    organization'' has the same meaning as in section 402
                    of the Federal Deposit Insurance Corporation
                    Improvement Act of 1991.
                (10) Notification of transfer.--
                        (A) In general.--If--
                                (i) the receiver for a covered financial
                            company in default or in danger of default
                            transfers any assets and liabilities of the
                            covered financial company; and
                                (ii) the transfer includes any qualified
                            financial contract,
                    the receiver shall notify any person who is a party to
                    any such contract of such transfer by 5:00 p.m.
                    (eastern time) on the business day following the date
                    of the appointment of the receiver.
                        (B) Certain rights not enforceable.--
                                (i) Receivership.--A person who is a party
                            to a qualified financial contract with a
                            covered financial company may not exercise any
                            right that such person has to terminate,
                            liquidate, or net such contract under paragraph
                            (8)(A) of this subsection solely by reason of
                            or incidental to the appointment under this
                            section of a receiver for the covered financial
                            company (or the insolvency or financial
                            condition of the covered financial company for
                            which the receiver has been appointed)--
                                        (I) until 5:00 p.m. (eastern time)
                                    on the business day following the date
                                    of the appointment of the receiver; or
                                        (II) after the person has received
                                    notice that the contract has been
                                    transferred pursuant to paragraph
                                    (9)(A).
                                (ii) Notice.--For purposes of this
                            paragraph, the receiver for a covered financial
                            company shall be deemed to have notified a
                            person who is a party to a qualified financial
                            contract with such covered financial company if
                            the receiver has taken steps reasonably
                            calculated to provide notice to such person by
                            the time specified in subparagraph (A).
                        (C) Treatment of bridge financial company.--For
                    purposes of paragraph (9), a bridge financial company
                    shall not be considered to be a financial institution
                    for which a conservator, receiver, trustee in
                    bankruptcy, or other legal custodian has been appointed
                    or which is otherwise the subject of a bankruptcy or
                    insolvency proceeding.
                        (D) Business day defined.--For purposes of this
                    paragraph, the term ``business day'' means any day
                    other than any Saturday, Sunday, or any day on which
                    either the New York Stock Exchange or the Federal
                    Reserve Bank of New York is closed.
                (11) Disaffirmance or repudiation of qualified financial
            contracts.--In exercising the rights of disaffirmance or
            repudiation of a receiver with respect to any qualified
            financial contract to which a covered financial company is a
            party, the receiver for such covered financial shall either--
                        (A) disaffirm or repudiate all qualified financial
                    contracts between--
                                (i) any person or any affiliate of such
                            person; and
                                (ii) the covered financial company in
                            default; or
                        (B) disaffirm or repudiate none of the qualified
                    financial contracts referred to in subparagraph (A)
                    (with respect to such person or any affiliate of such
                    person).
                (12) Certain security and customer interests not
            avoidable.--No provision of this subsection shall be construed
            as permitting the avoidance of any--
                        (A) legally enforceable or perfected security
                    interest in any of the assets of any covered financial
                    company except where such an interest is taken in
                    contemplation of the company's insolvency or with the
                    intent to hinder, delay, or defraud the company or the
                    creditors of such company; or
                        (B) legally enforceable interest in customer
                    property.
                (13) Authority to enforce contracts.--
                        (A) In general.--The receiver may enforce any
                    contract, other than a director's or officer's
                    liability insurance contract or a financial institution
                    bond, entered into by the covered financial company
                    notwithstanding any provision of the contract providing
                    for termination, default, acceleration, or exercise of
                    rights upon, or solely by reason of, insolvency or the
                    appointment of or the exercise of rights or powers by a
                    receiver.
                        (B) Certain rights not affected.--No provision of
                    this paragraph may be construed as impairing or
                    affecting any right of the receiver to enforce or
                    recover under a director's or officer's liability
                    insurance contract or financial institution bond under
                    other applicable law.
                        (C) Consent requirement.--
                                (i) In general.--Except as otherwise
                            provided by this section, no person may
                            exercise any right or power to terminate,
                            accelerate, or declare a default under any
                            contract to which the covered financial company
                            is a party, or to obtain possession of or
                            exercise control over any property of the
                            covered financial company or affect any
                            contractual rights of the covered financial
                            company, without the consent of the receiver,
                            as appropriate, of the covered financial
                            company during the 90-day period beginning on
                            the date of the appointment of the receiver, as
                            applicable.
                                (ii) Certain exceptions.--No provision of
                            this subparagraph shall apply to a director or
                            officer liability insurance contract or a
                            financial institution bond, to the rights of
                            parties to certain qualified financial
                            contracts pursuant to paragraph (8), or to the
                            rights of parties to netting contracts pursuant
                            to subtitle A of title IV of the Federal
                            Deposit Insurance Corporation Improvement Act
                            of 1991 (12 U.S.C. 4401 et seq.), or shall be
                            construed as permitting the receiver to fail to
                            comply with otherwise enforceable provisions of
                            such contract.
                (14) Exception for federal reserve banks and corporation
            security interest.--No provision of this subsection shall apply
            with respect to--
                        (A) any extension of credit from any Federal
                    Reserve bank or the Corporation to any covered
                    financial company; or
                        (B) any security interest in the assets of the
                    covered financial company securing any such extension
                    of credit.
                (15) Savings clause.--The meanings of terms used in this
            subsection are applicable for purposes of this subsection only,
            and shall not be construed or applied so as to challenge or
            affect the characterization, definition, or treatment of any
            similar terms under any other statute, regulation, or rule,
            including, but not limited, to the Gramm-Leach-Bliley Act, the
            Legal Certainty for Bank Products Act of 2000, the securities
            laws (as that term is defined in section 3(a)(47) of the
            Securities Exchange Act of 1934), and the Commodity Exchange
            Act.
                (16) Authority regarding collective bargaining
            agreements.--The Corporation as receiver for any covered
            financial company shall not disaffirm or repudiate any
            collective bargaining agreement to which the covered financial
            company is a party unless the Corporation determines that
            repudiation is necessary for the orderly resolution of the
            covered financial company after taking into consideration the
            cost to taxpayers and the financial stability of the United
            States.
        (d) Valuation of Claims in Default.--
                (1) In general.--Notwithstanding any other provision of
            Federal law or the law of any State, and regardless of the
            method which the Corporation determines to utilize with respect
            to a covered financial company, including transactions
            authorized under subsection (h), this subsection shall govern
            the rights of the creditors of such covered financial company.
                (2) Maximum liability.--The maximum liability of the
            Corporation, acting as receiver or in any other capacity, to
            any person having a claim against the receiver or the covered
            financial company for which such receiver is appointed shall
            equal the amount such claimant would have received if--
                        (A) a determination had not been made under section
                    1603(b) with respect to the covered financial company;
                    and
                        (B) the covered financial company had been
                    liquidated under title 11, United States Code, or any
                    case related to title 11, United States Code (including
                    a case initiated by the Securities Investor Protection
                    Corporation with respect to a financial company subject
                    to the Securities Investor Protection Act of 1970), or
                    any State insolvency law.
                (3) Additional payments authorized.--
                        (A) In general.--The Corporation may, as receiver
                    and with the approval of the Secretary, make additional
                    payments or credit additional amounts to or with
                    respect to or for the account of any claimant or
                    category of claimants of a covered financial company if
                    the Corporation determines that such payments or
                    credits are necessary or appropriate to--
                                (i) minimize losses to the receiver from
                            the dissolution of the covered financial
                            company under this section; or
                                (ii) prevent or mitigate serious adverse
                            effects to financial stability or the United
                            States economy.
                        (B) Manner of payment.--The Corporation may make
                    payments or credit amounts under subparagraph (A)
                    directly to the claimants or may make such payments or
                    credit such amounts to a company other than a covered
                    financial company or a bridge financial company
                    established with respect thereto in order to induce
                    such other company to accept liability for such claims.
        (e) Limitation on Court Action.--Except as provided in this section
    or at the request of the receiver appointed for a covered financial
    company, no court may take any action to restrain or affect the
    exercise of powers or functions of the receiver hereunder.
        (f) Liability of Directors and Officers.--
                (1) In general.--A director or officer of a covered
            financial company may be held personally liable for monetary
            damages in any civil action described in paragraph (2) by, on
            behalf of, or at the request or direction of the Corporation,
            which action is prosecuted wholly or partially for the benefit
            of the Corporation--
                        (A) acting as receiver of such covered financial
                    company;
                        (B) acting based upon a suit, claim, or cause of
                    action purchased from, assigned by, or otherwise
                    conveyed by such receiver; or
                        (C) acting based upon a suit, claim, or cause of
                    action purchased from, assigned by, or otherwise
                    conveyed in whole or in part by a covered financial
                    company or its affiliate in connection with assistance
                    provided under section 1604.
                (2) Actions covered.--Paragraph (1) shall apply with
            respect to actions for gross negligence, including any similar
            conduct or conduct that demonstrates a greater disregard of a
            duty of care (than gross negligence) including intentional
            tortious conduct, as such terms are defined and determined
            under applicable State law.
                (3) Savings clause.--Nothing in this subsection shall
            impair or affect any right of the Corporation under other
            applicable law.
        (g) Damages.--In any proceeding related to any claim against a
    covered financial company's director, officer, employee, agent,
    attorney, accountant, appraiser, or any other party employed by or
    providing services to a covered financial company, recoverable damages
    determined to result from the improvident or otherwise improper use or
    investment of any covered financial company's assets shall include
    principal losses and appropriate interest.
        (h) Bridge Financial Companies.--
                (1) Organization.--
                        (A) Purpose.--The Corporation, as receiver of one
                    or more covered financial companies may organize one or
                    more bridge financial companies in accordance with this
                    subsection.
                        (B) Authorities.--Upon the creation of a bridge
                    financial company under subparagraph (A) with respect
                    to a covered financial company, such bridge financial
                    company may--
                                (i) assume such liabilities (including
                            liabilities associated with any trust or
                            custody business but excluding any liabilities
                            that count as regulatory capital) of such
                            covered financial company as the Corporation
                            may, in its discretion, determine to be
                            appropriate;
                                (ii) purchase such assets (including assets
                            associated with any trust or custody business)
                            of such covered financial company as the
                            Corporation may, in its discretion, determine
                            to be appropriate; and
                                (iii) perform any other temporary function
                            which the Corporation may, in its discretion,
                            prescribe in accordance with this section.
                (2) Charter and establishment.--
                        (A) Establishment.--If the Corporation is appointed
                    as receiver for a covered financial company, the
                    Corporation may grant a Federal charter to and approve
                    articles of association for one or more bridge
                    financial company or companies with respect to such
                    covered financial company which shall, by operation of
                    law and immediately upon issuance of its charter and
                    approval of its articles of association, be established
                    and operate in accordance with, and subject to, such
                    charter, articles, and this section.
                        (B) Management.--Upon its establishment, a bridge
                    financial company shall be under the management of a
                    board of directors appointed by the Corporation.
                        (C) Articles of association.--The articles of
                    association and organization certificate of a bridge
                    financial shall have such terms as the Corporation may
                    provide, and shall be executed by such representatives
                    as the Corporation may designate.
                        (D) Terms of charter; rights and privileges.--
                    Subject to and in accordance with the provisions of
                    this subsection, the Corporation shall--
                                (i) establish the terms of the charter of a
                            bridge financial company and the rights,
                            powers, authorities and privileges of a bridge
                            financial company granted by the charter or as
                            an incident thereto; and
                                (ii) provide for, and establish the terms
                            and conditions governing, the management
                            (including, but not limited to, the bylaws and
                            the number of directors of the board of
                            directors) and operations of the bridge
                            financial company.
                        (E) Transfer of rights and privileges of covered
                    financial company.--
                                (i) In general.--Notwithstanding any other
                            provision of Federal law or the law of any
                            State, the Corporation may provide for a bridge
                            financial company to succeed to and assume any
                            rights, powers, authorities or privileges of
                            the covered financial company with respect to
                            which the bridge financial company was
                            established and, upon such determination by the
                            Corporation, the bridge financial company shall
                            immediately and by operation of law succeed to
                            and assume such rights, powers, authorities and
                            privileges.
                                (ii) Effective without approval.--Any
                            succession to or assumption by a bridge
                            financial company of rights, powers,
                            authorities or privileges of a covered
                            financial company under clause (i) or otherwise
                            shall be effective without any further approval
                            under Federal or State law, assignment, or
                            consent with respect thereto.
                        (F) Corporate governance and election and
                    designation of body of law.--To the extent permitted by
                    the Corporation and consistent with this section and
                    any rules, regulations or directives issued by the
                    Corporation under this section, a bridge financial
                    company may elect to follow the corporate governance
                    practices and procedures as are applicable to a
                    corporation incorporated under the general corporation
                    law of the State of Delaware, or the State of
                    incorporation or organization of the covered financial
                    company with respect to which the bridge financial
                    company was established, as such law may be amended
                    from time to time.
                        (G) Capital.--
                                (i) Capital not required.--Notwithstanding
                            any other provision of Federal or State law, a
                            bridge financial company may, if permitted by
                            the Corporation, operate without any capital or
                            surplus, or with such capital or surplus as the
                            Corporation may in its discretion determine to
                            be appropriate.
                                (ii) No contribution by the corporation
                            required.--The Corporation is not required to
                            pay capital into a bridge financial company or
                            to issue any capital stock on behalf of a
                            bridge financial company established under this
                            subsection.
                                (iii) Authority.--If the Corporation
                            determines that such action is advisable, the
                            Corporation may cause capital stock or other
                            securities of a bridge financial company
                            established with respect to a covered financial
                            company to be issued and offered for sale in
                            such amounts and on such terms and conditions
                            as the Corporation may, in its discretion,
                            determine.
                (3) Interests in and assets and obligations of covered
            financial company.--Notwithstanding paragraph (1) or (2) or any
            other provision of law--
                        (A) a bridge financial company shall assume,
                    acquire, or succeed to the assets or liabilities of a
                    covered financial company (including the assets or
                    liabilities associated with any trust or custody
                    business) only to the extent that such assets or
                    liabilities are transferred by the Corporation to the
                    bridge financial company in accordance with, and
                    subject to the restrictions set forth in, paragraph
                    (1)(B); and
                        (B) a bridge financial company shall not assume,
                    acquire, or succeed to any obligation that a covered
                    financial company for which a receiver has been
                    appointed may have to any shareholder, member, general
                    partner, limited partner, or other person with an
                    interest in the equity of the covered financial company
                    that arises as a result of the status of that person
                    having an equity claim in the covered financial
                    company.
                (4) Bridge financial company treated as being in default
            for certain purposes.--A bridge financial company shall be
            treated as a covered financial company in default at such times
            and for such purposes as the Corporation may, in its
            discretion, determine.
                (5) Transfer of assets and liabilities.--
                        (A) Transfer of assets and liabilities.--The
                    Corporation, as receiver, may transfer any assets and
                    liabilities of a covered financial company (including
                    any assets or liabilities associated with any trust or
                    custody business) to one or more bridge financial
                    companies in accordance with and subject to the
                    restrictions of paragraph (1)(B).
                        (B) Subsequent transfers.--At any time after the
                    establishment of a bridge financial company with
                    respect to a covered financial company, the
                    Corporation, as receiver, may transfer any assets and
                    liabilities of such covered financial company as the
                    Corporation may, in its discretion, determine to be
                    appropriate in accordance with and subject to the
                    restrictions of paragraph (1)(B).
                        (C) Treatment of trust or custody business.--For
                    purposes of this paragraph, the trust or custody
                    business, including fiduciary appointments, held by any
                    covered financial company is included among its assets
                    and liabilities.
                        (D) Effective without approval.--The transfer of
                    any assets or liabilities, including those associated
                    with any trust or custody business of a covered
                    financial company to a bridge financial company shall
                    be effective without any further approval under Federal
                    or State law, assignment, or consent with respect
                    thereto.
                        (E) Equitable treatment of similarly situated
                    creditors.--The Corporation shall treat all creditors
                    of a covered financial company that are similarly
                    situated under subsection (b)(1) in a similar manner in
                    exercising the authority of the Corporation under this
                    subsection to transfer any assets or liabilities of the
                    covered financial company to one or more bridge
                    financial companies established with respect to such
                    covered financial company, except that the Corporation
                    may take actions (including making payments) that do
                    not comply with this subparagraph, if--
                                (i) the Corporation determines that such
                            actions are necessary to maximize the value of
                            the assets of the covered financial company, to
                            maximize the present value return from the sale
                            or other disposition of the assets of the
                            covered financial company, to minimize the
                            amount of any loss realized upon the sale or
                            other disposition of the assets of the covered
                            financial company, or to contain or address
                            serious adverse effects to financial stability
                            or the United States economy; and
                                (ii) all creditors that are similarly
                            situated under subsection (b)(1) receive not
                            less than the amount provided in subsection
                            (d)(2).
                        (F) Limitation on transfer of liabilities.--
                    Notwithstanding any other provision of law, the
                    aggregate amount of liabilities of a covered financial
                    company that are transferred to, or assumed by, a
                    bridge financial company from a covered financial
                    company may not exceed the aggregate amount of the
                    assets of the covered financial company that are
                    transferred to, or purchased by, the bridge financial
                    company from the covered financial company.
                (6) Stay of judicial action.--Any judicial action to which
            a bridge financial company becomes a party by virtue of its
            acquisition of any assets or assumption of any liabilities of a
            covered financial company shall be stayed from further
            proceedings for a period of up to 45 days (or such longer
            period as may be agreed to upon the consent of all parties) at
            the request of the bridge financial company.
                (7) Agreements against interest of the bridge financial
            company.--No agreement that tends to diminish or defeat the
            interest of the bridge financial company in any asset of a
            covered financial company acquired by the bridge financial
            company shall be valid against the bridge financial company
            unless such agreement is in writing and executed by an
            authorized officer or representative of the covered financial
            company.
                (8) No federal status.--
                        (A) Agency status.--A bridge financial company is
                    not an agency, establishment, or instrumentality of the
                    United States.
                        (B) Employee status.--Representatives for purposes
                    of paragraph (1)(B), directors, officers, employees, or
                    agents of a bridge financial company are not, solely by
                    virtue of service in any such capacity, officers or
                    employees of the United States. Any employee of the
                    Corporation or of any Federal instrumentality who
                    serves at the request of the Corporation as a
                    representative for purposes of paragraph (1)(B),
                    director, officer, employee, or agent of a bridge
                    financial company shall not--
                                (i) solely by virtue of service in any such
                            capacity lose any existing status as an officer
                            or employee of the United States for purposes
                            of title 5, United States Code, or any other
                            provision of law; or
                                (ii) receive any salary or benefits for
                            service in any such capacity with respect to a
                            bridge financial company in addition to such
                            salary or benefits as are obtained through
                            employment with the Corporation or such Federal
                            instrumentality.
                (9) Exempt tax status.--
                        (A) Exemption from federal income tax.--Subsection
                    (l) of section 501 of the Internal Revenue Code of 1986
                    is amended by adding at the end the following new
                    paragraph:
                ``(4) Any bridge financial company organized under section
            1609(h) of the Financial Stability Improvement Act of 2009.''.
                        (B) Exemption from certain other taxes.--
                    Notwithstanding any other provision of Federal or State
                    law, a bridge financial company, its franchise,
                    property, and income shall be exempt from all taxation
                    now or hereafter imposed by any territory, dependency,
                    or possession of the United States, or by any State,
                    county, municipality, or local taxing authority.
                (10) Federal agency approval; antitrust review.--
                        (A) In general.--If a transaction involving the
                    merger or sale of a bridge financial company requires
                    approval by a Federal agency, the transaction may not
                    be consummated before the 5th calendar day after the
                    date of approval by the Federal agency responsible for
                    such approval with respect thereto. If, in connection
                    with any such approval a report on competitive factors
                    from the Attorney General is required, the Federal
                    agency responsible for such approval shall promptly
                    notify the Attorney General of the proposed transaction
                    and the Attorney General shall provide the required
                    report within 10 days of the request. If notification
                    under section 7A of the Clayton Act is required with
                    respect to such transaction, then the required waiting
                    period shall end on the 15th day after the date on
                    which the Attorney General and the Federal Trade
                    Commission receive such notification, unless the
                    waiting period is terminated earlier under subsection
                    (b)(2) of such section, or is extended pursuant to
                    subsection (e)(2) of such section.
                        (B) Emergency.--If the Secretary, in consultation
                    with the Chairman of the Federal Reserve Board, has
                    found that the Corporation must act immediately to
                    prevent the probable failure of the covered financial
                    company involved, the approval and prior notification
                    referred to in subparagraph (A) shall not be required
                    and the transaction may be consummated immediately by
                    the Corporation. The preceding sentence shall not
                    otherwise modify, impair, or supercede the operation of
                    any of the antitrust laws (as defined in subsection (a)
                    of the first section of the Clayton Act, except that
                    such term includes section 5 of the Federal Trade
                    Commission Act to the extent that such section 5
                    relates to unfair methods of competition).
                (11) Duration of bridge financial company.--Subject to
            paragraphs (12), (13), and (14), the status of a bridge
            financial company as such shall terminate at the end of the 2-
            year period following the date it was granted a charter. The
            Corporation may, in its discretion, extend the status of the
            bridge financial company as such for 3 additional 1-year
            periods.
                (12) Termination of bridge financial company status.--The
            status of any bridge financial company as such shall terminate
            upon the earliest of--
                        (A) the merger or consolidation of the bridge
                    financial company with a company that is not a bridge
                    financial company;
                        (B) at the election of the Corporation, the sale of
                    a majority of the capital stock of the bridge financial
                    company to a company other than the Corporation and
                    other than another bridge financial company;
                        (C) the sale of 80 percent, or more, of the capital
                    stock of the bridge financial company to a person other
                    than the Corporation and other than another bridge
                    financial company;
                        (D) at the election of the Corporation, either the
                    assumption of all or substantially all of the
                    liabilities of the bridge financial company by a
                    company that is not a bridge financial company, or the
                    acquisition of all or substantially all of the assets
                    of the bridge financial company by a company that is
                    not a bridge financial company, or other entity as
                    permitted under applicable law; and
                        (E) the expiration of the period provided in
                    paragraph (11), or the earlier dissolution of the
                    bridge financial company as provided in paragraph (14).
                (13) Effect of termination events.--
                        (A) Merger or consolidation.--A merger or
                    consolidation as provided in paragraph (12)(A) shall be
                    conducted in accordance with, and shall have the effect
                    provided in, the provisions of applicable law. For the
                    purpose of effecting such a merger or consolidation,
                    the bridge financial company shall be treated as a
                    corporation organized under the laws of the State of
                    Delaware (unless the law of another State has been
                    selected by the bridge financial company in accordance
                    with paragraph (2)(F)), and the Corporation shall be
                    treated as the sole shareholder thereof,
                    notwithstanding any other provision of State or Federal
                    law.
                        (B) Charter conversion.--Following the sale of a
                    majority of the capital stock of the bridge financial
                    company as provided in paragraph (12)(B), the
                    Corporation may amend the charter of the bridge
                    financial company to reflect the termination of the
                    status of the bridge financial company as such,
                    whereupon the company shall have all of the rights,
                    powers, and privileges under its constituent documents
                    and applicable State or Federal law. In connection
                    therewith, the Corporation may take such steps as may
                    be necessary or convenient to reincorporate the bridge
                    financial company under the laws of a State and,
                    notwithstanding any provisions of State or Federal law,
                    such State-chartered corporation shall be deemed to
                    succeed by operation of law to such rights, titles,
                    powers and interests of the bridge financial company as
                    the Corporation may provide, with the same effect as if
                    the bridge financial company had merged with the State-
                    chartered corporation under provisions of the corporate
                    laws of such State.
                        (C) Sale of stock.--Following the sale of 80
                    percent or more of the capital stock of a bridge
                    financial company as provided in paragraph (12)(C), the
                    company shall have all of the rights, powers, and
                    privileges under its constituent documents and
                    applicable State or Federal law. In connection
                    therewith, the Corporation may take such steps as may
                    be necessary or convenient to reincorporate the bridge
                    financial company under the laws of a State and,
                    notwithstanding any provisions of State or Federal law,
                    the State-chartered corporation shall be deemed to
                    succeed by operation of law to such rights, titles,
                    powers and interests of the bridge financial company as
                    the Corporation may provide, with the same effect as if
                    the bridge financial company had merged with the State-
                    chartered corporation under provisions of the corporate
                    laws of such State.
                        (D) Assumption of liabilities and sale of assets.--
                    Following the assumption of all or substantially all of
                    the liabilities of the bridge financial company, or the
                    sale of all or substantially all of the assets of the
                    bridge financial company, as provided in paragraph
                    (12)(D), at the election of the Corporation the bridge
                    financial company may retain its status as such for the
                    period provided in paragraph (11) or may be dissolved
                    at the election of the Corporation.
                        (E) Amendments to charter.--Following the
                    consummation of a transaction described in subparagraph
                    (A), (B), (C), or (D) of paragraph (12), the charter of
                    the resulting company shall be amended to reflect the
                    termination of bridge financial company status, if
                    appropriate.
                (14) Dissolution of bridge financial company.--
                        (A) In general.--Notwithstanding any other
                    provision of State or Federal law, if a bridge
                    financial company's status as such has not previously
                    been terminated by the occurrence of an event specified
                    in subparagraph (A), (B), (C), or (D) of paragraph
                    (12)--
                                (i) the Corporation may, in its discretion,
                            dissolve the bridge financial company in
                            accordance with this paragraph at any time; and
                                (ii) the Corporation shall promptly
                            commence dissolution proceedings in accordance
                            with this paragraph upon the expiration of the
                            2-year period following the date the bridge
                            financial company was chartered, or any
                            extension thereof, as provided in paragraph
                            (11).
                        (B) Procedures.--The Corporation shall remain the
                    receiver of a bridge financial company for the purpose
                    of dissolving the bridge financial company. The
                    Corporation as such receiver shall wind up the affairs
                    of the bridge financial company in conformity with the
                    provisions of law relating to the liquidation of
                    covered financial companies. With respect to any such
                    bridge financial company, the Corporation as receiver
                    shall have all the rights, powers, and privileges and
                    shall perform the duties related to the exercise of
                    such rights, powers, or privileges granted by law to a
                    receiver of a covered financial company and,
                    notwithstanding any other provision of law, in the
                    exercise of such rights, powers, and privileges the
                    Corporation shall not be subject to the direction or
                    supervision of any State agency or other Federal
                    agency.
                (15) Authority to obtain credit.--
                        (A) In general.--A bridge financial company may
                    obtain unsecured credit and issue unsecured debt.
                        (B) Inability to obtain credit.--If a bridge
                    financial company is unable to obtain unsecured credit
                    or issue unsecured debt, the Corporation may authorize
                    the obtaining of credit or the issuance of debt by the
                    bridge financial company--
                                (i) with priority over any or all of the
                            obligations of the bridge financial company;
                                (ii) secured by a lien on property of the
                            bridge financial company that is not otherwise
                            subject to a lien; or
                                (iii) secured by a junior lien on property
                            of the bridge financial company that is subject
                            to a lien.
                        (C) Limitations.--
                                (i) In general.--The Corporation, after
                            notice and a hearing, may authorize the
                            obtaining of credit or the issuance of debt by
                            a bridge financial company that is secured by a
                            senior or equal lien on property of the bridge
                            financial company that is subject to a lien
                            only if--
                                        (I) the bridge financial company is
                                    unable to otherwise obtain such credit
                                    or issue such debt; and
                                        (II) there is adequate protection
                                    of the interest of the holder of the
                                    lien on the property with respect to
                                    which such senior or equal lien is
                                    proposed to be granted.
                        (D) Burden of proof.--In any hearing under this
                    subsection, the Corporation has the burden of proof on
                    the issue of adequate protection.
                (16) Effect on debts and liens.--The reversal or
            modification on appeal of an authorization under this
            subsection to obtain credit or issue debt, or of a grant under
            this section of a priority or a lien, does not affect the
            validity of any debt so issued, or any priority or lien so
            granted, to an entity that extended such credit in good faith,
            whether or not such entity knew of the pendency of the appeal,
            unless such authorization and the issuance of such debt, or the
            granting of such priority or lien, were stayed pending appeal.
        (i) Sharing Records.--Whenever the Corporation has been appointed
    as receiver for a covered financial company, the Federal Reserve Board
    and the company's primary appropriate regulatory agency, if any, shall
    each make all records relating to the company available to the receiver
    which may be used by the receiver in any manner the receiver determines
    to be appropriate.
        (j) Expedited Procedures for Certain Claims.--
                (1) Time for filing notice of appeal.--The notice of appeal
            of any order, whether interlocutory or final, entered in any
            case brought by the Corporation against a covered financial
            company's director, officer, employee, agent, attorney,
            accountant, or appraiser or any other person employed by or
            providing services to a covered financial company shall be
            filed not later than 30 days after the date of entry of the
            order. The hearing of the appeal shall be held not later than
            120 days after the date of the notice of appeal. The appeal
            shall be decided not later than 180 days after the date of the
            notice of appeal.
                (2) Scheduling.--A court of the United States shall
            expedite the consideration of any case brought by the
            Corporation against a covered financial company's director,
            officer, employee, agent, attorney, accountant, or appraiser or
            any other person employed by or providing services to a covered
            financial company. As far as practicable, the court shall give
            such case priority on its docket.
                (3) Judicial discretion.--The court may modify the schedule
            and limitations stated in paragraphs (1) and (2) in a
            particular case, based on a specific finding that the ends of
            justice that would be served by making such a modification
            would outweigh the best interest of the public in having the
            case resolved expeditiously.
        (k) Foreign Investigations.--The Corporation, as receiver of any
    covered financial company and for purposes of carrying out any power,
    authority, or duty with respect to a covered financial company--
                (1) may request the assistance of any foreign financial
            authority and provide assistance to any foreign financial
            authority in accordance with section 8(v) of the Federal
            Deposit Insurance Act as if the covered financial company were
            an insured depository institution, the Corporation were the
            appropriate Federal banking agency for the company and any
            foreign financial authority were the foreign banking authority;
            and
                (2) may maintain an office to coordinate foreign
            investigations or investigations on behalf of foreign financial
            authorities.
        (l) Prohibition on Entering Secrecy Agreements and Protective
    Orders.--The Corporation may not enter into any agreement or approve
    any protective order which prohibits the Corporation from disclosing
    the terms of any settlement of an administrative or other action for
    damages or restitution brought by the Corporation in its capacity as
    receiver for a covered financial company.
        (m) Liquidation of Certain Covered Financial Companies or Bridge
    Financial Companies.--Notwithstanding any other provision of law (other
    than a conflicting provision of this section), the Corporation, in
    connection with the liquidation of any covered financial company or
    bridge financial company with respect to which the Corporation has been
    appointed as receiver, shall--
                (1) in the case of any covered financial company or bridge
            financial company that is or has a subsidiary that is a
            stockbroker (as that term is defined in section 101 of title 11
            of the United States Code) but is not a member of the
            Securities Investor Protection Corporation, apply the
            provisions of subchapter III of chapter 7 of title 11 of the
            United States Code in respect of the distribution to any
            ``customer'' of all ``customer name securities'' and ``customer
            property'' (as such terms are defined in section 741 of such
            title 11) as if such covered financial company or bridge
            financial company were a debtor for purposes of such
            subchapter; or
                (2) in the case of any covered financial company or bridge
            financial company that is a commodity broker (as that term is
            defined in section 101 of title 11 of the United States Code),
            apply the provisions of subchapter IV of chapter 7 of title 11
            of the United States Code in respect of the distribution to any
            ``customer'' of all ``customer property'' (as such terms are
            defined in section 761 of such title 11) as if such covered
            financial company or bridge financial company were a debtor for
            purposes of such subchapter.
        (n) Systemic Dissolution Fund.--
                (1) Establishment and purpose.--
                        (A) In general.--There is established in the
                    Treasury a separate fund to be known as the ``Systemic
                    Dissolution Fund''--
                                (i) to facilitate and provide for the
                            orderly and complete dissolution of any failed
                            financial company or companies that pose a
                            systemic threat to the financial markets or
                            economy, as determined under 1603(b); and
                                (ii) to ensure that any taxpayer funds
                            utilized to facilitate such liquidations are
                            fully repaid from assessments levied on
                            financial companies that have assets of
                            $50,000,000,000, adjusted for inflation, or
                            more.
                        (B) Adjustment of threshold.--The threshold
                    referred to in subparagraph (A)(ii) shall be adjusted
                    on an annual basis, based on the growth of assets owned
                    or managed by financial companies (as defined in
                    section 1602(9)).
                (2) Authority.--The Systemic Dissolution Fund shall be
            administered by the Corporation, which shall have exclusive
            authority to--
                        (A) impose assessments on covered financial
                    companies in accordance with paragraphs (6) through
                    (8);
                        (B) maintain and administer the Fund in a manner so
                    as to make clear to the general public that such Fund
                    is unrelated to any other Fund maintained and
                    administered by the Corporation, including the Deposit
                    Insurance Fund;
                        (C) utilize the Fund to facilitate the dissolution
                    of a covered financial company (as defined by section
                    1602(5)) as provided in paragraph (3), or take such
                    other actions as are authorized by this subtitle;
                        (D) invest the Fund in accordance with section
                    13(a) of the Federal Deposit Insurance Act; and
                        (E) exercise borrowing authority as prescribed in
                    subsection (o).
                (3) Uses.--
                        (A) The Fund shall be available to the Corporation
                    for use with respect to the dissolution of a covered
                    financial company to--
                                (i) cover the costs incurred by the
                            Corporation, including as receiver, in
                            exercising its rights, authorities, and powers
                            and fulfilling its obligations and
                            responsibilities under this section;
                                (ii) repay such funds in accordance with
                            subsection (o)(6); and
                                (iii) cover the costs of systemic
                            stabilization actions, pursuant to subsections
                            (d) and (f) of section 1604.
                        (B) The Fund shall not be used in any manner to
                    benefit any officer or director of such company removed
                    pursuant to section 1604(f)(6).
                (4) Deposits to fund.--All amounts assessed against a
            financial company under this section shall be deposited into
            the Fund.
                (5) Size of fund.--The Corporation shall, by rule,
            establish the minimum size of the Fund consistent with
            subparagraphs (C) and (D) of paragraph (6).
                (6) Assessments.--
                        (A) Assessments to maintain fund.--The Corporation
                    shall impose risk-based assessments on financial
                    companies in such amount and manner and subject to such
                    terms and conditions that the Corporation determines,
                    by regulation and in consultation with the Council, are
                    necessary for the amount in the Fund to at least equal
                    the minimum size established pursuant to paragraph (5).
                        (B) Assessments to replenish the fund.--If the Fund
                    falls below the minimum size established pursuant to
                    paragraph (5), the Corporation shall impose assessments
                    on financial companies in such amounts and manner and
                    subject to such terms and conditions as the Corporation
                    determines, by regulation and in consultation with the
                    Council, are necessary to replenish the fund subject to
                    the limitations in subparagraph (D).
                        (C) Minimum assessment threshold.--
                                (i) In general.--The Corporation shall not
                            assess financial companies with less than
                            $50,000,000,000, adjusted for inflation, of
                            assets on a consolidated basis, subject to any
                            differentiation as permitted in paragraph (8)
                            and shall assess financial companies with
                            $50,000,000,000, adjusted for inflation, or
                            more in assets in accordance with paragraphs
                            (7) and (8).
                                (ii) Hedge funds.--The Corporation shall
                            not assess financial companies that manage
                            hedge funds (as defined by the Corporation for
                            the purpose of this section, in consultation
                            with the Securities and Exchange Commission)
                            with less than $10,000,000,000, adjusted for
                            inflation, of assets, under management on a
                            consolidated basis, subject to any
                            differentiation as permitted in paragraph (8)
                            and shall assess any financial companies that
                            manage hedge funds with $10,000,000,000 or more
                            of assets under management in accordance with
                            paragraphs (7) and (8).
                        (D) Maximum size of fund via assessments.--
                                (i) In general.--The Corporation shall
                            suspend assessments on financial companies on
                            the day after the date on which the total of
                            the assessments, excluding interest or other
                            earnings from investments made pursuant to
                            paragraph (2)(D), equals $150,000,000,000.
                                (ii) Exceptions.--Any suspension of
                            assessments under clause (i)--
                                        (I) may be set aside if the Fund
                                    falls below $150,000,000,000; and
                                        (II) shall be set aside if the Fund
                                    falls below the minimum level
                                    established in subparagraph (C).
                        (E) Additional authorized assessments.--The
                    Corporation is authorized to conduct risk-based
                    assessments on financial companies in such amount and
                    manner and subject to terms and conditions that the
                    Corporation determines, with the concurrence of the
                    Secretary of the Treasury and the Federal Reserve
                    Board, are necessary to pay any shortfall in the
                    Troubled Asset Relief Program established by the
                    Emergency Economic Stabilization Act of 2008 that would
                    add to the deficit or national debt, as identified by
                    the Director of the Office of Management and Budget, in
                    consultation with the Director of the Congressional
                    Budget Office pursuant to section 134 of such Act (12
                    U.S.C. 5239).
                (7) Factors.--The Corporation, in consultation with the
            Council shall establish a risk matrix to be used in
            establishing assessments that takes into account--
                        (A) the actual or expected risk of losses to the
                    Fund;
                        (B) economic conditions generally affecting
                    financial companies so as to allow assessments and the
                    Fund to increase during more favorable economic
                    conditions and to decrease during less favorable
                    economic conditions;
                        (C) any assessments imposed on a financial company
                    or an affiliate of a financial company that--
                                (i) is an insured depository institution,
                            assessed pursuant to section 7 or 13(c)(4)(G)
                            of the Federal Deposit Insurance Act;
                                (ii) is a member of the Securities Investor
                            Protection Corporation, assessed pursuant to
                            section 4 of the Securities Investor Protection
                            Act of 1970 (15 U.S.C. 78ddd);
                                (iii) is an insured credit union, assessed
                            pursuant to section 202(c)(1)(A)(i) of the
                            Federal Credit Union Act (12 U.S.C.
                            1782(c)(1)(A)(i)); or
                                (iv) is an insurance company, assessed
                            pursuant to applicable State law to cover (or
                            reimburse payments made to cover) the costs of
                            the rehabilitation, liquidation or other State
                            insolvency proceeding with respect to 1 or more
                            insurance companies;
                        (D) the risks presented by the financial company to
                    the financial system and the extent to which the
                    financial company has benefitted, or likely would
                    benefit, from the dissolution of a financial company
                    under this title, including--
                                (i) the amount, different categories, and
                            concentrations of assets of the financial
                            company and its affiliates, including both on-
                            balance sheet and off-balance sheet assets;
                                (ii) the activities of the financial
                            company and its affiliates;
                                (iii) the relevant market share of the
                            financial company and its affiliates;
                                (iv) the extent to which the financial
                            company is leveraged;
                                (v) the potential exposure to sudden calls
                            on liquidity precipitated by economic distress;
                                (vi) the amount, maturity, volatility, and
                            stability of the company's financial
                            obligations to, and relationship with, other
                            financial companies;
                                (vii) the amount, maturity, volatility, and
                            stability of the company's liabilities,
                            including the degree of reliance on short-term
                            funding, taking into consideration existing
                            systems for measuring a company's risk-based
                            capital;
                                (viii) the stability and variety of the
                            company's sources of funding;
                                (ix) the company's importance as a source
                            of credit for households, businesses, and State
                            and local governments and as a source of
                            liquidity for the financial system;
                                (x) the extent to which assets are simply
                            managed and not owned by the financial company
                            and the extent to which ownership of assets
                            under management is diffuse; and
                                (xi) the amount, different categories, and
                            concentrations of liabilities, both insured and
                            uninsured, contingent and noncontingent,
                            including both on-balance sheet and off-balance
                            sheet liabilities, of the financial company and
                            its affiliates; and
                        (E) such other factors as the Corporation, in
                    consultation with the Council, may determine to be
                    appropriate.
                (8) Requirement for equitable treatment in assessments.--In
            establishing the assessment system for the Fund, the
            Corporation, by regulation and in consultation with the
            Council, shall differentiate among financial companies based on
            complexity of operations or organization, interconnectedness,
            size, direct or indirect activities, and any other factors the
            Corporation or the Council may deem appropriate to ensure that
            the assessments charged equitably reflect the risk posed to the
            Fund by particular classes of financial companies.
                (9) Minimum comment period.--In order to ensure sufficient
            opportunity for public and congressional review and evaluation
            of any assessment system, any proposed regulations regarding
            the implementation of the assessment system under this subtitle
            shall provide an opportunity for public comment during a period
            of not less than 60 days.
        (o) Borrowing Authority.--
                (1) Borrowing from treasury.--
                        (A) In general.--Subject to paragraphs (3), (4),
                    and (5), the Corporation may borrow from the Treasury,
                    and the Secretary of the Treasury is authorized to lend
                    to the Corporation on such terms as may be fixed by the
                    Corporation and the Secretary, such funds as in the
                    judgment of the Board of Directors of the Corporation
                    are required, in addition to the funds available in the
                    Systemic Dissolution Fund, to permit the orderly
                    dissolution of 1 or more covered systemically
                    significant financial companies, covered affiliates, or
                    covered subsidiaries under this title.
                        (B) Rate of interest.--The rate of interest to be
                    charged in connection with any loan made pursuant to
                    this subsection shall not be less than an amount
                    determined by the Secretary of the Treasury, taking
                    into consideration current market yields on outstanding
                    marketable obligations of the United States of
                    comparable maturities.
                (2) Public debt issuances.--For the purposes described in
            subsection (1), the Secretary of the Treasury may use as a
            public-debt transaction the proceeds of the sale of any
            securities hereafter issued under chapter 31 of title 31, and
            the purposes for which securities may be issued under chapter
            31 of title 31 are extended to include such loans. All loans
            and repayments under this subsection shall be treated as
            public-debt transactions of the United States.
                (3) Borrowing authority when fund assets are less than
            $150,000,000,000.--
                        (A) Subject to paragraph (B), the borrowing
                    authority granted in paragraph (1) shall be available
                    to the Corporation where--
                                (i) the value of the Fund is less than
                            $150,000,000,000;
                                (ii) the Corporation determines that the
                            immediate dissolution of a financial company or
                            financial companies requires more funds than
                            are available in the Fund; and
                                (iii) the Corporation has provided a
                            specific plan for repayment under paragraph
                            (7)(A).
                        (B) The Corporation may borrow, and the Secretary
                    may lend, any amount of funds that, when added to the
                    amount available in the Fund on the date the
                    Corporation makes a request to borrow funds, would not
                    exceed $150,000,000,000.
                        (C) For purposes of paragraph (1), the
                    Corporation's total debt may not exceed
                    $150,000,000,000 (not including any funds borrowed
                    pursuant to subsection (s)).
                (4) Additional borrowing authority.--
                        (A) If at any time the Corporation anticipates that
                    the dissolution of any financial company or financial
                    companies will require funds in excess of
                    $150,000,000,000--
                                (i) the Corporation shall submit to the
                            Secretary and the President a written request
                            for additional borrowing authority subject to
                            the limitation in subparagraph (5), which shall
                            be accompanied by a certification indicating
                            the anticipated amount needed, the basis on
                            which such amount was determined, and any such
                            information as the Secretary may deem
                            necessary; and
                                (ii) the President shall transmit a request
                            to the House of Representatives and the Senate
                            requesting the additional borrowing authority,
                            which shall include the certification referred
                            to in clause (i) and which includes a repayment
                            schedule as outlined in paragraph (7).
                        (B) Any request for borrowing authority under
                    paragraph (A) shall be effective only if approved by
                    affirmative vote of the House of Representatives and
                    the Senate in accordance with subsection (s).
                (5) Limitations on additional borrowing authority.--
                        (A) No request for borrowing authority is permitted
                    under paragraph (4) unless the President, in
                    consultation with the Council, certifies to the House
                    of Representatives and the Senate that the borrowing
                    authority is necessary to avoid or mitigate an imminent
                    financial emergency.
                        (B) The amount of borrowing authority requested
                    under subparagraph (A)(i) may not exceed
                    $50,000,000,000.
                (6) Proceeds from liquidation, repayment of funds.--
                        (A) In general.--The Corporation shall take such
                    measures as may be appropriate to maximize the amount
                    of funds from any dissolution that may be available for
                    repayment under subparagraph (B) consistent with
                    systemic concerns.
                        (B) Repayment priority.--Amounts realized from the
                    dissolution of any financial company under this
                    subtitle that are not otherwise utilized by the
                    Corporation to dissolve a financial company under
                    subsection (n)(3)(A) shall be paid--
                                (i) first, to repay any costs incurred in
                            exercising the borrowing authority granted in
                            paragraph (1); and
                                (ii) second, to recapitalize the Fund,
                            subject to the requirements of section 1604(g),
                            to such level as the Corporation deems
                            necessary, but not to exceed $150,000,000,000.
                (7) Repayment plan and schedules required for any
            borrowing.--
                        (A) In general.--No amount may be provided by the
                    Secretary of the Treasury to the Corporation under
                    paragraph (1) unless an agreement is in effect between
                    the Secretary and the Corporation which--
                                (i) provides a specific plan and schedule
                            for assessments under (n)(6) to achieve the
                            repayment of the outstanding amount of any
                            borrowing under such subsection; and
                                (ii) demonstrates that income to the
                            Corporation from assessments under this section
                            will be sufficient to amortize the outstanding
                            balance within the period established in the
                            repayment schedule and pay the interest
                            accruing on such balance.
                        (B) Consultation with and report to congress.--The
                    Secretary of the Treasury and the Corporation shall--
                                (i) consult with the Committee on Financial
                            Services of the House of Representatives and
                            the Committee on Banking, Housing, and Urban
                            Affairs of the Senate on the terms of any
                            repayment schedule agreement; and
                                (ii) submit a copy of each repayment
                            schedule agreement to the Committee on
                            Financial Services of the House of
                            Representatives and the Committee on Banking,
                            Housing, and Urban Affairs of the Senate before
                            the end of the 30-day period beginning on the
                            date any amount is provided by the Secretary of
                            the Treasury to the Corporation under paragraph
                            (1).
        (p) Information Gathering and Verification; Payments.--
                (1) In general.--The Corporation may require each financial
            company to make available such information as the Corporation
            may require--
                        (A) for purposes of--
                                (i) determining the financial company's
                            assessment under this section;
                                (ii) verifying the accuracy of information;
                            and
                                (iii) preparing for dissolution, including
                            a dissolution plan as required by this section;
                            and
                        (B) for such other purposes as may be appropriate
                    and necessary to promote the orderly dissolution of the
                    financial company.
                (2) Use of existing reports.--The Corporation shall, to the
            fullest extent possible, accept--
                        (A) reports that a financial company has provided
                    or been required to provide to other Federal or State
                    supervisors or to appropriate self-regulatory
                    organizations;
                        (B) information that is otherwise required to be
                    reported publicly; and
                        (C) externally audited financial statements.
                (3) Authority for on-site inspection.--The Corporation may
            make on-site inspections of a financial company's books and
            records as necessary to carry out the purposes of this
            subsection.
                (4) Rulemaking.--The Corporation may promulgate such rules
            or regulations as are necessary or appropriate to implement
            this subsection.
                (5) Payments of assessments required.--
                        (A) In general.--Any financial company subject to
                    an assessment under this section shall pay to the
                    Corporation such assessment.
                        (B) Form of payment.--The payments required under
                    this section shall be made in such manner and at such
                    time or times as the Corporation, in consultation with
                    the Council, shall prescribe by regulation.
                (6) Penalty for failure to timely pay assessments.--Any
            financial company that fails or refuses to pay any assessment
            under this section shall be subject to a penalty under section
            18(h) of the Federal Deposit Insurance Act, as if that
            financial company were an insured depository institution.
        (q) Assessment Actions.--
                (1) In general.--The Corporation, in any court of competent
            jurisdiction, shall be entitled to recover from any financial
            company the amount of any unpaid assessment lawfully payable by
            such company.
                (2) Statute of limitations.--Notwithstanding any other
            provision in Federal law, or the law of any State--
                        (A) any action by a financial company to recover
                    from the Corporation the overpaid amount of any
                    assessment shall be brought within 3 years after the
                    date the assessment payment was due, subject to
                    subparagraph (C);
                        (B) any action by the Corporation to recover from a
                    financial company the underpaid amount of any
                    assessment shall be brought within 3 years after the
                    date the assessment payment was due, subject to
                    subparagraph (C); and
                        (C) if a financial company has made a false or
                    fraudulent statement with intent to evade any or all of
                    its assessment, the Corporation shall have until 3
                    years after the date of discovery of the false or
                    fraudulent statement in which to bring an action to
                    recover the underpaid amount.
        (r) Requirement to Maintain Systemic Dissolution Fund as Separate
    Fund.--The Systemic Dissolution Fund shall at all times be administered
    in a manner that is separate and distinct from the Deposit Insurance
    Fund, and the Corporation shall take such actions as may be necessary
    to ensure that such distinction is made with respect to internal
    processes and procedures as well as with regard to any public
    information, discussion or other communications involving either Fund.
        (s) Congressional Approval of Additional Borrowing Authority.--
                (1) Introduction.--On the day on which the request of the
            President is received by the House of Representatives and the
            Senate under subsection (o)(4)(A)(ii), a joint resolution
            specified in paragraph (5) shall be introduced in the House by
            the majority leader of the House and in the Senate by the
            majority leader of the Senate. If either House is not in
            session on the day on which such a request is received, the
            joint resolution with respect to such request shall be
            introduced in that House, as provided in the preceding
            sentence, on the first day thereafter on which that House is in
            session.
                (2) Consideration in the house of representatives.--
                        (A) Reporting and discharge.--Any committee of the
                    House of Representatives to which a joint resolution
                    introduced under paragraph (1) is referred shall report
                    such joint resolution to the House not later than 5
                    calendar days after the applicable date of introduction
                    of the joint resolution. If a committee fails to report
                    such 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.
                        (B) Proceeding to consideration.--After all
                    committees authorized to consider a joint resolution
                    have reported such joint resolution to the House or
                    have been discharged from its consideration, it shall
                    be in order, not later than the sixth day after the
                    applicable date of introduction of the joint
                    resolution, for the majority leader to move to proceed
                    to consider the joint resolution in the House. Such a
                    motion shall not be in order after the House has
                    disposed of a motion to proceed on the joint resolution
                    and shall not be in order if the House has received a
                    message from the Senate under paragraph (4)(C). The
                    previous question shall be considered as ordered on the
                    motion to its adoption without intervening motion. A
                    motion to reconsider the vote by which the motion is
                    disposed of shall not be in order.
                        (C) Consideration.--The joint resolution shall be
                    considered in the House and shall be considered as
                    read. All points of order against a 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 a joint resolution
                    shall not be in order.
                (3) Consideration in the senate.--
                        (A) Placement on calendar.--Upon introduction in
                    the Senate, the joint resolution shall be placed
                    immediately on the calendar.
                        (B) 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 fourth day after the applicable date of
                            introduction in the Senate and ending on the
                            sixth day after the applicable date of
                            introduction in the Senate (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.
                (4) Rules relating to senate and house of
            representatives.--
                        (A) 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 the joint resolution
                            of the House receiving the resolution, the
                            procedure in that House shall be the same as if
                            no such joint resolution had been received from
                            the other House; but the vote on passage shall
                            be on the joint resolution of the other House.
                        (B) Treatment of companion measures.--If, following
                    passage of a joint resolution in the Senate, the Senate
                    then receives the companion measure from the House of
                    Representatives, the companion measure shall not be
                    debatable.
                        (C) Failure of joint resolution in the senate.--
                                (i) If, in the Senate, the motion to
                            proceed to the consideration of the joint
                            resolution fails on adoption, the Secretary of
                            the Senate shall transmit a message to that
                            effect to the House of Representatives.
                                (ii) If, in the Senate, the joint
                            resolution fails on passage, the Secretary of
                            the Senate shall transmit a message to that
                            effect to the House of Representatives.
                        (D) Rules of house of representatives and senate.--
                    This paragraph and the preceding paragraphs 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.
                (5) Definition.--In this section, the term ``joint
            resolution'' means only a joint resolution--
                        (A) which does not have a preamble;
                        (B) the title of which is as follows: ``Joint
                    resolution relating to the approval of request for
                    borrowing authority under the Financial Stability
                    Improvement Act of 2009.''; and
                        (C) the sole matter after the resolving clause of
                    which is as follows: ``That the Congress approves the
                    request for additional borrowing authority transmitted
                    to the Congress on ___ by the President under section
                    1609(o)(4)(A)(ii) of the Financial Stability
                    Improvement Act of 2009.'', the blank space being
                    filled with the appropriate date.
        (t) No Federal Status.--
                (1) Agency status.--A covered financial company (or any
            covered subsidiary thereof) that is placed into receivership is
            not a department, agency, or instrumentality of the United
            States for purposes of statutes that confer powers on or impose
            obligations on government entities.
                (2) Employee status.--Interim directors, directors,
            officers, employees, or agents of a covered financial company
            that is placed into receivership are not, solely by virtue of
            service in any such capacity, officers or employees of the
            United States. Any employee of the Corporation, acting as
            receiver or of any Federal agency who serves at the request of
            the receiver as an interim director, director, officer,
            employee, or agent of a covered financial company that is
            placed into receivership shall not--
                        (A) solely by virtue of service in any such
                    capacity lose any existing status as an officer or
                    employee of the United States for purposes of title 5,
                    United States Code, or any other provision of law, or;
                        (B) receive any salary or benefits for service in
                    any such capacity with respect to a covered financial
                    company that is placed into receivership in addition to
                    such salary or benefits as are obtained through
                    employment with the Corporation or other Federal
                    agency.
        (u) Study of Payment of Consumer Claims.--Not later than 6 months
    following the dissolution of a covered financial company under section
    1603(b), the Comptroller General of the United States shall carry out a
    study, and report on such study to the Committee on Banking, Housing,
    and Urban Affairs and the Committee on the Judiciary of the Senate and
    the Committee on Financial Services and the Committee on the Judiciary
    of the House of Representatives, regarding the satisfaction of claims
    arising from violations of the provisions of the Truth in Lending Act,
    if any, in instances where any assets were transferred from such
    covered financial company.

    SEC. 1610. CLARIFICATION OF PROHIBITION REGARDING CONCEALMENT OF ASSETS
                  FROM RECEIVER OR LIQUIDATING AGENT.

        (a) In General.--Section 1032 of title 18, United States Code, is
    amended in paragraph (1) by deleting ``or'' before ``the National
    Credit Union Administration Board,'' and by inserting immediately
    thereafter ``or the Corporation, as defined in section 1602 of the
    Dissolution Authority for Large, Interconnected Financial Companies Act
    of 2009,''.
        (b) Conforming Change.--The heading of section 1032 of title 18,
    United States Code, is amended by striking ``of financial
    institution''.

    SEC. 1611. OFFICE OF DISSOLUTION.

        (a) Trigger of and Plan for Establishment.--
                (1) Trigger.--If the Secretary appoints the Corporation as
            receiver for a financial company under section 1604, the
            Inspector General of the Corporation shall, as soon as possible
            after such appointment, establish in accordance with this
            section the Office of Dissolution as an office within the
            Office of the Inspector General of the Corporation.
                (2) Plan.--The Inspector General of the Corporation shall,
            in consultation with the Council of Inspectors General on
            Financial Oversight established under section 1702, formulate
            and maintain a plan to allow for the timely establishment of an
            Office of Dissolution in accordance with paragraph (1). The
            Inspector General of the Corporation shall make such plan
            available to the Financial Services Oversight Council
            established under section 1001.
        (b) Special Deputy Inspector General.--The head of the Office of
    Dissolution is the Special Deputy Inspector General for Dissolution (in
    this section referred to as the ``Special Deputy Inspector General''),
    who shall be appointed by and report to the Inspector General of the
    Corporation.
        (c) Duties.--
                (1) Audits and investigations.--It shall be the duty of the
            Special Deputy Inspector General, in consultation with and
            subject to the approval of the Inspector General of the
            Corporation, to conduct, supervise, and coordinate audits and
            investigations of the activities of the Corporation in its
            capacity as receiver for a financial company under section
            1604, including by collecting the following information:
                        (A) A description of each financial company for
                    which the Corporation has been appointed as receiver
                    under section 1604.
                        (B) A description of the activities and future
                    plans of the Corporation with respect to each financial
                    company for which it has been appointed as receiver,
                    and an analysis of whether such activities and plans
                    conform to the requirements of this subtitle and other
                    applicable law and are in the best interest of the
                    overall stability of the financial system.
                        (C) Such other information as the Special Deputy
                    Inspector General considers appropriate, in
                    consultation with and subject to the approval of the
                    Inspector General of the Corporation.
                (2) Additional duties.--
                        (A) Systems, procedures, and controls.--The Special
                    Deputy Inspector General shall establish, maintain, and
                    oversee such systems, procedures, and controls as the
                    Special Deputy Inspector General considers appropriate,
                    in consultation with and subject to the approval of the
                    Inspector General of the Corporation, to discharge the
                    duties under paragraph (1).
                        (B) Reporting of criminal violations to attorney
                    general.--If the Special Deputy Inspector General, in
                    carrying out this section, discovers facts that give
                    the Special Deputy Inspector General reasonable grounds
                    to believe there has been a violation of Federal
                    criminal law, the Special Deputy Inspector General
                    shall expeditiously report such facts to the Attorney
                    General.
                        (C) Minimizing duplication of effort.--The
                    Inspector General of the Corporation and the Special
                    Deputy Inspector General shall coordinate to minimize
                    duplication of effort in the oversight of the
                    Corporation's activities as receiver for financial
                    companies under section 1604.
                (3) Duties under the inspector general act of 1978.--In
            addition to the duties specified in paragraphs (1) and (2), the
            Special Deputy Inspector General shall assist the Inspector
            General of the Corporation in carrying out such duties and
            responsibilities of inspectors general under the Inspector
            General Act of 1978 as the Inspector General of the Corporation
            considers appropriate.
        (d) Authorities Under the Inspector General Act of 1978.--The
    Inspector General of the Corporation may confer on the Special Deputy
    Inspector General such authorities provided to the Inspector General of
    the Corporation in section 6 of the Inspector General Act of 1978 as
    the Inspector General of the Corporation considers necessary to enable
    the Special Deputy Inspector General to carry out the duties specified
    in subsection (c).
        (e) Personnel, Facilities, and Other Resources.--
                (1) In general.--The Special Deputy Inspector General may,
            in consultation with and subject to the approval of the
            Inspector General of the Corporation, expend such amounts from
            the fund established under section 1609(n) as are necessary to
            carry out the duties described in subsection (c) and to submit
            the reports required by subsection (h).
                (2) Additional funds.--If the fund established under
            section 1609(n) is insufficient to enable the Special Deputy
            Inspector General to begin carrying out the duties of the
            Special Deputy Inspector General in a timely fashion or later
            becomes insufficient to enable the Special Deputy Inspector
            General to carry out such duties, the Inspector General of the
            Corporation shall detail the necessary personnel, facilities,
            or other resources to the Special Deputy Inspector General.
        (f) Corrective Responses to Audit Problems.--The Chairman of the
    Corporation shall--
                (1) take action to address deficiencies identified by a
            report or investigation of the Special Deputy Inspector
            General; or
                (2) certify to the appropriate committees of Congress that
            no action is necessary or appropriate.
        (g) Cooperation and Coordination With Other Entities.--In carrying
    out the duties, responsibilities, and authorities of the Special Deputy
    Inspector General under this section, the Special Deputy Inspector
    General shall work with each of the inspectors general who is a member
    of the Council of Inspectors General on Financial Oversight established
    under section 1703(a)(1), in order to avoid duplication of effort and
    ensure comprehensive oversight of the Corporation's activities as a
    receiver appointed under section 1604.
        (h) Reports.--
                (1) In general.--In lieu of the semiannual reports required
            by section 5(a) of the Inspector General Act of 1978, the
            Special Deputy Inspector General shall submit to the
            appropriate committees of Congress at the following times a
            report prepared in consultation with and approved by the
            Inspector General of the Corporation:
                        (A) Not later than 30 days after the appointment of
                    the Special Deputy Inspector General.
                        (B) During the first 3 years after such
                    appointment, not later than 30 days after the end of
                    each fiscal quarter during which the Corporation acts
                    as receiver for a financial company under section 1604.
                        (C) During the 4th year after such appointment and
                    each year thereafter, not later than 30 days after the
                    end of the 2nd and the 4th fiscal quarters, if the
                    Corporation acts as receiver for a financial company
                    under section 1604 during such semiannual period.
                (2) Content of reports.--Each report required by paragraph
            (1) shall include a summary, for the period since the last
            required report (or, in the case of the first report, for the
            period since the Corporation was first appointed as a receiver
            under section 1604) of--
                        (A) the activities of the Special Deputy Inspector
                    General; and
                        (B) the activities and future plans of the
                    Corporation with respect to each financial company for
                    which it served as receiver.
        (i) Termination.--The Office of Dissolution shall terminate 6
    months after the Corporation ceases to serve as a receiver for any
    financial company under section 1604, subject to reestablishment
    pursuant to subsection (a)(1).

    SEC. 1612. MISCELLANEOUS PROVISIONS.

        (a) Bankruptcy Code Amendments.--
                (1) Section 109(b)(2) of title 11 of the United States Code
            is amended by inserting ``covered financial company (as that
            term is defined in section 1602(5) of the Dissolution Authority
            for Large, Interconnected Financial Companies Act of 2009),''
            after ``a domestic insurance company,''.
                (2) Section 303 of title 11, United States Code, is
            amended--
                        (A) in subsection (h)--
                                (i) by striking ``or'' at the end of
                            paragraph (1);
                                (ii) by striking the period at the end of
                            paragraph (2) and inserting ``; or''; and
                                (iii) by adding at the end the following
                            new paragraph:
                ``(3) an involuntary case is filed against a covered
            financial company, as defined in section 1602(5) of the
            Dissolution Authority for Large, Interconnected Financial
            Companies Act of 2009, by the Federal Deposit Insurance
            Corporation under section 1607 of that Act.''; and
                        (B) by adding at the end the following new
                    subsection:
        ``(m) Notwithstanding subsections (a) and (b) of this section and
    section 109(b)(2), an involuntary case may be commenced by the Federal
    Deposit Insurance Corporation against a covered financial company (as
    defined in section 1602(5) of the Dissolution Authority for Large,
    Interconnected Financial Companies Act of 2009). Such involuntary case
    may be commenced by the Federal Deposit Insurance Corporation in
    accordance with section 1607 of that Act.''.
                (3) Title 11, United States Code, is amended by inserting
            after section 303 the following new section:

    ``SEC. 304. CASES INVOLVING FDIC DISSOLUTION AUTHORITY.

        ``(a) Appointment.--In any case commenced by the Federal Deposit
    Insurance Corporation under section 303(m), on the request of the
    Federal Deposit Insurance Corporation, such Corporation shall be
    appointed to serve as trustee in such case, notwithstanding any other
    provision of this title.
        ``(b) Qualification.--Sections 321, 322, 324, and 326 shall not
    apply with respect to the appointment or service of such Corporation as
    trustee in any case so commenced.''.
        (b) Federal Deposit Insurance Act and Federal Deposit Insurance
    Corporation Improvement Act of 1991.--
                (1) Section 18(c)(4)(G)(i) of the Federal Deposit Insurance
            Act (12 U.S.C. 1823(c)(4)(G)(i)) is amended by inserting at the
            end the following new sentence: ``The determination with regard
            to the Corporation's exercise of authority under this
            subparagraph shall apply to only an insured depository
            institution except when severe financial conditions exist which
            threaten the stability of a significant number of insured
            depository institutions.''.
                (2) Section 403(a) of the Federal Deposit Insurance
            Corporation Improvement Act of 1991 (12 U.S.C. 4403(a)) is
            amended by inserting ``section 1609(c) of the Dissolution
            Authority for Large, Interconnected Financial Companies Act of
            2009, section 1367 of the Federal Housing Enterprises Financial
            Safety and Soundness Act of 1992 (12 U.S.C. 4617(d)),'' after
            ``section 11(e) of the Federal Deposit Insurance Act,''.

    SEC. 1613. AMENDMENT TO FEDERAL DEPOSIT INSURANCE ACT.

        The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) is
    amended by inserting after section 11A the following new section:

    ``SEC. 11B. SYSTEMIC DISSOLUTION AUTHORITY AND FUND.

        ``(a) Systemic Dissolution Authority.--The Corporation shall
    establish a Systemic Dissolution Authority, which shall function as a
    subsidiary of the Corporation.
        ``(b) Systemic Dissolution Fund.--Any fund established for the
    purpose of facilitating the dissolution of a financial company under
    subtitle G of the Financial Stability Improvement Act shall be called
    the Systemic Dissolution Fund, which shall be managed by the
    Corporation, through the Systemic Dissolution Authority.
        ``(c) Management of Fund.--
                ``(1) Separate maintenance.--The Systemic Dissolution Fund
            shall be separately maintained and not commingled with any
            other fund of the Corporation.
                ``(2) Treatment of and accounting for assets.--The assets
            and liabilities of the Systemic Dissolution Fund--
                        ``(A) shall be the assets and liabilities of the
                    Fund and not of the Corporation; and
                        ``(B) shall not be consolidated with the assets and
                    liabilities of the Deposit Insurance Fund or the
                    Corporation for accounting, reporting, or any other
                    purpose.
        ``(d) Rights, Powers, and Duties.--
                ``(1) In general.--The Corporation, in addition to any
            rights, powers, and duties under this Act or any other law,
            shall, through the Systemic Dissolution Authority, have all
            rights, powers, and duties necessary to implement and maintain
            the Systemic Dissolution Fund in accordance with subtitle G of
            the Financial Stability Improvement Act of 2009.
                ``(2) Powers as receiver for covered financial company.--
            When acting as receiver with respect to any covered financial
            company, as defined in subtitle G of the Financial Stability
            Improvement Act of 2009, the Corporation, through the Systemic
            Dissolution Authority, shall have all rights, powers, and
            duties that the Corporation has as receiver under such
            subtitle.
                ``(3) Specific and incidental powers.--The Corporation,
            through the Systemic Dissolution Authority, or any duly
            authorized officer or agent of the Authority, may exercise all
            powers specifically granted by the provisions of this Act and
            subtitle G of the Financial Stability Improvement Act and such
            incidental powers as shall be necessary to carry out the powers
            so granted and accomplish the purposes of subtitle G of the
            Financial Stability Improvement Act.
        ``(e) Staff and Resources.--
                ``(1) In general.--The Corporation shall assign such staff,
            and provide such administrative and other support services to
            the Systemic Dissolution Authority as is necessary to fulfill
            the statutory responsibilities of the Authority.
                ``(2) Administrative expenses.--The cost of all personnel,
            services, and resources provided on behalf of the Systemic
            Dissolution Authority shall be paid from the Systemic
            Dissolution Fund.''.

    SEC. 1614. APPLICATION OF EXECUTIVE COMPENSATION LIMITATIONS.

        At any time that the Corporation has borrowed from the Treasury
    pursuant to section 1609(o) to resolve a covered financial company, the
    Corporation shall apply the executive compensation limits under section
    111 of the Emergency Economic Stabilization Act of 2008 to such company
    for so long as such company is in receivership.

    SEC. 1615. STUDY ON THE EFFECT OF SAFE HARBOR PROVISIONS IN INSOLVENCY
                  CASES.

        (a) Study.--The Comptroller General of the United States shall
    conduct a study of the safe harbor provisions under Federal law for
    derivatives, swaps, and securities transactions addressing--
                (1) how the safe harbor provisions have been applied in
            insolvency cases;
                (2) how such provisions impact the rights of parties in
            interest in insolvency cases;
                (3) whether these provisions impede or interfere with
            allowing a debtor a reasonable period of time to pursue
            rehabilitation and reorganization; and
                (4) whether these provisions had an adverse impact on the
            financial marketplace.
        (b) Report to the Congress.--Not later than 180 days after the date
    of the enactment of this title, the Comptroller General shall submit to
    the President pro tempore of the Senate and the Speaker of the House of
    Representatives a report on the results of the study conducted under
    subsection (a), together with any recommendations for legislation to
    address any adverse impacts presented by the Federal safe harbor
    provisions.

    SEC. 1616. TREASURY STUDY.

        (a) Study Required.--The Secretary shall carry out a study
    analyzing how the resolution authority provided under this subtitle
    should be funded. Such study shall consider the following factors:
                (1) The consequences of any assessments on the overall
            recovery of the economy of the United States.
                (2) Any immediate or continuing consequences of assessments
            on other aspects of the economy of the United States, including
            job creation, public and private investments, small business
            loans, and general credit availability.
                (3) The consequences of any assessments on individual
            sectors of the financial services industry.
                (4) The consequences of any assessments on the financial
            integrity on individual firms within each sector of the
            financial services industry.
                (5) The appropriateness and effect of assessments on firms
            that are subject to separate assessments under existing State
            or Federal depositor, policyholder, or investor protection
            mechanisms and the consequences of any such assessments on
            these mechanisms themselves.
                (6) The implications of assessments on all relevant
            stakeholders, including taxpayers, depositors, insurance
            policyholders, investors, counterparties, and creditors.
                (7) Evaluation of the appropriate assessment base,
            including but not limited to factors such as assets and
            liabilities, assets under management, policyholder reserves,
            other reserves, statutory and regulatory capital requirements,
            trusteed assets, and deposits and inflationary factors.
        (b) Report.--Not later than the end of the 6-month period beginning
    on the date of the enactment of this subtitle, the Secretary shall
    issue a report to the Congress containing all determinations and
    conclusions made by the Secretary in carrying out the study required
    under subsection (a).

    SEC. 1617. PRIORITY OF CLAIMS IN FEDERAL DEPOSIT INSURANCE ACT.

        Section 11(d)(11)(A) of the Federal Deposit Insurance Act (12
    U.S.C. 1821(d)(11)(A)) is amended--
                (1) by redesignating clauses (iii) through (v) as clauses
            (iv) through (vi), respectively; and
                (2) by inserting after clause (ii) the following new clause
            (iii):
                                ``(iii) Any obligation of the institution
                            owed to the Corporation as a result of the
                            institution's default on a Corporation-
                            guaranteed debt.''.

      Subtitle H--Additional Improvements for Financial Crisis Management

    SEC. 1701. ADDITIONAL IMPROVEMENTS FOR FINANCIAL CRISIS MANAGEMENT.

        Section 13 of the Federal Reserve Act (12 U.S.C. 343) is amended by
    striking the 3rd undesignated paragraph and inserting the following new
    subsection:
        ``(c) Financial Crisis Management.--
                ``(1) In general.--In unusual and exigent circumstances,
            the Board of Governors of the Federal Reserve System, upon the
            written determination, pursuant to section 1109 of the
            Financial Stability Improvement Act of 2009, of the Financial
            Stability Oversight Council, that a liquidity event exists that
            could destabilize the financial system (which determination
            shall be made upon a vote of not less than two-thirds of the
            members of such Council then serving), and with the written
            consent of the Secretary of the Treasury (after certification
            by the President that an emergency exists), may authorize any
            Federal reserve bank, during such periods as the Board may
            determine and at rates established in accordance with the
            provision designated as (d) of section 14, to discount for an
            individual, partnership, or corporation, notes, drafts, and
            bills of exchange when such notes, drafts, and bills of
            exchange are indorsed or otherwise secured to the satisfaction
            of the Federal reserve bank and in conformance with regulations
            or guidelines issued by the Board of Governors regarding the
            quality of notes, drafts, and bills of exchange available for
            discount and of the security for those notes, drafts and bills
            of exchange, unless a joint resolution (as defined in paragraph
            (5)) is adopted. Upon making any determination under this
            paragraph, with the consent of the Secretary of the Treasury,
            the Financial Stability Oversight Council shall promptly submit
            a notice of such determination to the House of Representatives
            and the Senate. The amounts made available under this
            subsection shall not exceed $4,000,000,000,000.
                ``(2) Clarification of `secured to the satisfaction of the
            federal reserve bank'.--No member of the Board of Governors of
            the Federal Reserve System shall vote to authorize any action
            permitted under paragraph (1) and the Secretary of the Treasury
            shall not provide the written consent required by paragraph (1)
            unless that member believes and the Secretary of the Treasury
            believes:
                        ``(A) that there is at least a 99 percent
                    likelihood that all funds disbursed or put at risk by
                    such action will be repaid to the Federal Reserve
                    System; and
                        ``(B) that there is at least a 99 percent
                    likelihood that all interest due on any funds disbursed
                    will also be paid to the Federal Reserve System.
                ``(3) Low quality assets excluded.--The notes, drafts, and
            bills of exchange available for discount for purposes of
            paragraph (1), and the security for those notes, drafts and
            bills of exchange may only include any of the following assets
            if such asset is used to further enhance the security for those
            notes, drafts and bills of exchange which shall be fully
            secured with assets that are not any of the following assets:
                        ``(A) An asset (including a security) that would be
                    classified as ``substandard,'' ``doubtful,'' or
                    ``loss,'' or treated as ``special mention'' or ``other
                    transfer risk problems,'' in a report of examination or
                    inspection of bank or an affiliate of a bank prepared
                    by either a Federal or State supervisory agency or in
                    any internal classification system used by such
                    individual, partnership or corporation.
                        ``(B) An asset in a nonaccrual status.
                        ``(C) An asset on which principal or interest
                    payments are more than 30 days past due.
                        ``(D) An asset whose terms have been renegotiated
                    or compromised due to the deteriorating financial
                    condition of the obligor unless such asset has been
                    performing for at least 6 months since the
                    renegotiation.
                ``(4) No single or specific beneficiaries.--The Board of
            Governors of the Federal Reserve System may authorize a Federal
            reserve bank to discount notes, drafts, or bills of exchange
            under this section only as part of a broadly available credit
            or other facility and may not authorize a Federal Reserve bank
            to discount notes, drafts, or bills of exchange for only a
            single and specific individual, partnership, or corporation.
                ``(5) Evidence of unavailability of credit.--Before
            discounting any note, draft, or bill of exchange under this
            subsection for an individual, a partnership or corporation as
            part of a broadly available credit or other facility the
            Federal reserve bank shall obtain evidence that such
            individual, partnership, or corporation is unable to secure
            adequate credit accommodations from other banking institutions.
            All discounts under this subsection for individuals,
            partnerships, or corporations shall be subject to such
            limitations, restrictions, and regulations as the Board of
            Governors of the Federal Reserve System may prescribe.
                ``(6) Congressional disapproval of additional borrowing
            authority.--
                        ``(A) Introduction.--Within 90 days of the day on
                    which notice from the Financial Stability Oversight
                    Council is received by the House of Representatives and
                    the Senate under paragraph (1), a joint resolution
                    specified in subparagraph (E) may be introduced in the
                    House by the majority leader and in the Senate by the
                    majority leader.
                        ``(B) Consideration in the house of
                    representatives.--
                                ``(i) Reporting and discharge.--Any
                            committee of the House of Representatives to
                            which a joint resolution introduced under
                            subparagraph (A) is referred shall report such
                            joint resolution to the House not later than 5
                            calendar days after the applicable date of
                            introduction of the joint resolution. If a
                            committee fails to report such 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.
                                ``(ii) Proceeding to consideration.--After
                            all committees authorized to consider a joint
                            resolution have reported such joint resolution
                            to the House or have been discharged from its
                            consideration, it shall be in order, not later
                            than the sixth day after the applicable date of
                            introduction of the joint resolution, for the
                            majority leader to move to proceed to consider
                            the joint resolution in the House. Such a
                            motion shall not be in order after the House
                            has disposed of a motion to proceed on the
                            joint resolution and shall not be in order if
                            the House has received a message from the
                            Senate under subparagraph (D)(iii)(I). The
                            previous question shall be considered as
                            ordered on the motion to its adoption without
                            intervening motion. A motion to reconsider the
                            vote by which the motion is disposed of shall
                            not be in order.
                                ``(iii) Consideration.--The joint
                            resolution shall be considered in the House and
                            shall be considered as read. All points of
                            order against a 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 a joint resolution shall not
                            be in order.
                        ``(C) Consideration in the senate.--
                                ``(i) Placement on calendar.--Upon
                            introduction in the Senate, the joint
                            resolution shall be placed immediately on the
                            calendar.
                                ``(ii) 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
                                    fourth day after the applicable date of
                                    introduction of the joint resolution in
                                    the Senate and ending on the sixth day
                                    after the applicable date of
                                    introduction in the Senate (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.
                        ``(D) 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 the joint
                                    resolution of the House receiving the
                                    resolution, the procedure in that House
                                    shall be the same as if no such joint
                                    resolution had been received from the
                                    other House; but the vote on passage
                                    shall be on the joint resolution of the
                                    other House.
                                ``(ii) Treatment of companion measures.--
                            If, following passage of a joint resolution in
                            the Senate, the Senate then receives the
                            companion measure from the House of
                            Representatives, the companion measure shall
                            not be debatable.
                                ``(iii) Failure of joint resolution in the
                            senate.--
                                        ``(I) If, in the Senate, the motion
                                    to proceed to the consideration of the
                                    joint resolution fails on adoption, the
                                    Secretary of the Senate shall transmit
                                    a message to that effect to the House
                                    of Representatives.
                                        ``(II) If, in the Senate, the joint
                                    resolution fails on passage, the
                                    Secretary of the Senate shall transmit
                                    a message to that effect to the House
                                    of Representatives.
                                ``(iv) Rules of house of representatives
                            and senate.--This paragraph and the preceding
                            paragraphs 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.
                        ``(E) Definition.--In this paragraph, the term
                    `joint resolution' means only a joint resolution--
                                ``(i) which does not have a preamble;
                                ``(ii) the title of which is as follows:
                            `Joint resolution relating to the use of
                            authority relevant to section 13(c) of the
                            Federal Reserve Act under the Financial
                            Stability Improvement Act of 2009.'; and
                                ``(iii) the sole matter after the resolving
                            clause of which is as follows: `That the
                            Congress disapproves the use of authority
                            pursuant to section 13(c) of the Federal
                            Reserve Act transmitted to the Congress on ___
                            by the Board of Governors of the Federal
                            Reserve System', the blank space being filled
                            with the appropriate date.
                        ``(F) Nonscoring of joint resolutions of
                    disapproval.--A joint resolution of disapproval shall
                    be treated as having no budgetary effect by the
                    Congressional Budget Office and the Office of
                    Management and Budget for any purpose under the Rules
                    of the House of Representatives, the Standing Rules of
                    the Senate, the Congressional Budget Act of 1974, or
                    any statutory pay-as-you-go requirement.''.

    SEC. 1702. CERTAIN RESTRICTIONS RELATED TO FOREIGN CURRENCY SWAP
                  AUTHORITY.

        Section 14 of the Federal Reserve Act is amended by adding at the
    end the following new subsection:
        ``(h) Certain Restrictions Related to Foreign Currency Swap
    Authority.--A Federal reserve bank may not take any action pursuant to
    the authority provided under this section with respect to foreign
    currency swaps unless--
                ``(1) such action is approved in advance by the affirmative
            vote of not less than five members of the Board of Governors of
            the Federal Reserve System; and
                ``(2) such action is taken with the written concurrence of
            the Secretary of the Treasury.''.

    SEC. 1703. ADDITIONAL OVERSIGHT OF FINANCIAL REGULATORY SYSTEM.

        (a) Council of Inspectors General on Financial Oversight.--
                (1) Establishment and membership.--There is established a
            Council of Inspectors General on Financial Oversight (in this
            section referred to as the ``Council of Inspectors General'')
            chaired by the Inspector General of the Department of the
            Treasury and composed of the inspectors general of the
            following:
                        (A) The Board of Governors of the Federal Reserve
                    System.
                        (B) The Commodity Futures Trading Commission.
                        (C) The Department of Housing and Urban
                    Development.
                        (D) The Department of the Treasury.
                        (E) The Federal Deposit Insurance Corporation.
                        (F) The Federal Housing Finance Agency.
                        (G) The National Credit Union Administration.
                        (H) The Securities and Exchange Commission.
                        (I) The Troubled Asset Relief Program (until the
                    termination of the authority of the Special Inspector
                    General for such program under section 121(h) of the
                    Emergency Economic Stabilization Act of 2008 (12 U.S.C.
                    5231(h))).
                (2) Duties.--
                        (A) Meetings.--The Council of Inspectors General
                    shall meet not less than once each quarter, or more
                    frequently if the chair considers it appropriate, to
                    facilitate the sharing of information among inspectors
                    general and to discuss the ongoing work of each
                    inspector general who is a member of the Council of
                    Inspectors General, with a focus on concerns that may
                    apply to the broader financial sector and ways to
                    improve financial oversight.
                        (B) Annual report.--The Council of Inspectors
                    General shall, each year within a timeframe that
                    permits consideration by the Financial Services
                    Oversight Council (in this section referred to as the
                    ``Oversight Council'') prior to the submission of its
                    report for such year under section 1006, submit to the
                    Oversight Council and to Congress a report including--
                                (i) for each inspector general who is a
                            member of the Council of Inspectors General, a
                            section within the exclusive editorial control
                            of such inspector general that highlights the
                            concerns and recommendations of such inspector
                            general in such inspector general's ongoing and
                            completed work, with a focus on issues that may
                            apply to the broader financial sector; and
                                (ii) a summary of the general observations
                            of the Council of Inspectors General based on
                            the views expressed by each inspector general
                            as required by clause (i), with a focus on
                            measures that should be taken to improve
                            financial oversight.
                (3) Council of inspectors general working groups.--
                        (A) Working groups to evaluate oversight council.--
                                (i) Convening a working group.--The Council
                            of Inspectors General may, by majority vote,
                            convene a Council of Inspectors General Working
                            Group to evaluate the effectiveness and
                            internal operations of the Oversight Council.
                                (ii) Personnel and resources.--The
                            inspectors general who are members of the
                            Council of Inspectors General may detail staff
                            and resources to a Council of Inspectors
                            General Working Group established under this
                            subparagraph to enable it to carry out its
                            duties.
                                (iii) Reports.--A Council of Inspectors
                            General Working Group established under this
                            subparagraph shall submit regular reports to
                            the Oversight Council and to Congress on its
                            evaluations pursuant to this subparagraph.
                        (B) Working groups for financial companies
                    undergoing resolution.--
                                (i) Convening a working group.--The Council
                            of Inspectors General shall convene a Council
                            of Inspectors General Working Group for each
                            financial company for which the Secretary of
                            the Treasury appoints the Federal Deposit
                            Insurance Corporation as receiver under section
                            1604.
                                (ii) Personnel and resources.--The
                            inspectors general who are members of the
                            Council of Inspectors General may detail staff
                            and resources to a Council of Inspectors
                            General Working Group established under this
                            subparagraph to enable it to carry out its
                            duties.
                                (iii) Reports.--Not later than 270 days
                            after the appointment of the Federal Deposit
                            Insurance Corporation as receiver for the
                            financial company for which a Council of
                            Inspectors General Working Group is convened
                            under clause (i), such Working Group shall
                            submit to the primary financial regulatory
                            agency and to Congress a report that includes--
                                        (I) the reasons for such financial
                                    company's failure;
                                        (II) the reasons for the Secretary
                                    of the Treasury's appointment of the
                                    Federal Deposit Insurance Corporation
                                    as receiver for such financial company;
                                    and
                                        (III) recommendations for
                                    preventing future failures of financial
                                    companies.
        (b) Response to Report by Oversight Council.--The Oversight Council
    shall include in its annual report under section 1006 responses to the
    concerns raised in the report of the Council of Inspectors General
    under subsection (a)(2)(B) for such year.

                           Subtitle I--Miscellaneous

    SEC. 1801. INCLUSION OF MINORITIES AND WOMEN; DIVERSITY IN AGENCY
                  WORKFORCE.

        (a) Office of Minority and Women Inclusion.--
                (1) Establishment.--Not later than 180 days following the
            enactment of this title, each agency shall establish an Office
            of Minority and Women Inclusion (hereinafter in this section
            referred to as the ``Office'') that shall advise the agency
            administrator of the impact of policies and regulations of the
            agency on minority-owned and women-owned businesses (as such
            terms are defined in subsection (c)(1)), and shall be
            responsible for all matters of the agency relating to diversity
            in management, employment, and business activities, including
            the coordination of technical assistance, in accordance with
            such standards and requirements as the Director of the Office
            shall establish.
                (2) Consolidation.--Each agency that has assigned these or
            comparable responsibilities to existing offices shall ensure
            that such responsibilities are consolidated within the Office.
        (b) Director.--
                (1) In general.--For each Office, the President shall
            appoint, by and with the advice and consent of the Senate, a
            Director of Minority and Women Inclusion (hereinafter in this
            section referred to as the ``Director''), who shall also hold a
            title within such agency comparable to that of other senior
            level staff who are, as applicable, either appointed by the
            President, by and with the advice and consent of the Senate, or
            act in a managerial capacity that requires reporting directly
            to the agency administrator.
                (2) Duties.--Each Director shall--
                        (A) ensure equal employment opportunity and the
                    racial, ethnic and gender diversity of the agency's
                    workforce and senior management;
                        (B) increase the participation of minority-owned
                    and women-owned businesses in the programs and
                    contracts of the agency;
                        (C) provide guidance to the agency administrator to
                    ensure that the policies and regulations of the agency
                    strengthen minority-owned and women-owned businesses;
                    and
                        (D) conduct an assessment, as part of the
                    examination process for the entities regulated or
                    monitored by the agency of the diversity and inclusion
                    efforts by such entities.
        (c) Inclusion in All Levels of Business Activities.--
                (1) In general.--Each Director shall develop and implement
            standards and procedures to ensure, to the maximum extent
            possible, the inclusion and utilization of minorities (as such
            term is defined in section 1204(c) of the Financial
            Institutions Reform, Recovery, and Enforcement Act of 1989 (12
            U.S.C. 1811 note)), women, and minority-owned and women-owned
            businesses (as such terms are defined in section 21A(r)(4) of
            the Federal Home Loan Bank Act (12 U.S.C. 1441a(r)(4))
            (including financial institutions, investment banking firms,
            mortgage banking firms, asset management firms, broker-dealers,
            financial services firms, underwriters, accountants, brokers,
            investment consultants, and providers of legal services) in all
            business and activities of the agency at all levels, including
            in procurement, insurance, and all types of contracts
            (including, as applicable, contracts for the issuance or
            guarantee of any debt, equity, or security, the sale of assets,
            the management of its assets, the making of its equity
            investments, and the implementation of programs to address
            economic recovery).
                (2) Contracts.--The processes established by each agency
            for review and evaluation for contract proposals and to hire
            service providers shall include a component that gives
            consideration to the diversity of the applicant.
                (3) Written assurance.--All such contract proposals,
            provided such proposals are of an amount greater than $50,000
            and the contractor employs more than 50 employees, shall
            include a written assurance, in a form and substance that the
            Director shall prescribe, that the contractor shall ensure, to
            the maximum extent possible, the inclusion of minorities and
            women in its workforce and, as applicable, by its
            subcontractors.
                (4) Termination.--A Director may terminate any contract
            upon a finding that the contractor has failed to make a good
            faith effort to comply with paragraph (3), except that a
            contractor may appeal such finding and termination to the
            agency administrator within a reasonable amount of time as
            determined by the Director.
        (d) Applicability.--This section shall apply to all contracts of an
    agency for services of any kind, including services that require the
    services of investment banking, asset management entities, broker-
    dealers, financial services entities, underwriters, accountants,
    investment consultants, and providers of legal services.
        (e) Reports.--Not later than 90 days before the end of each Federal
    fiscal year, each Director shall report to the Congress detailed
    information describing the actions taken by the agency and the Director
    pursuant to this section, which shall--
                (1) to the extent contracts exceed the contract amount and
            employment levels established in subsection (c)(3), include a
            statement of the total amounts paid by the agency to third
            party contractors since the last such report;
                (2) the percentage of such amounts paid to businesses
            described in subsection (c)(1);
                (3) the successes achieved and challenges faced by the
            agency in operating minority and women outreach programs;
                (4) the challenges the agency may face in hiring qualified
            minority and women employees and contracting with qualified
            minority-owned and women-owned businesses; and
                (5) such other information, findings, conclusions, and
            recommendations for legislative or agency action, as the
            Director may determine to be appropriate to include in such
            report.
        (f) Diversity in Agency Workforce.--Each agency shall take
    affirmative steps to seek diversity in its workforce at all levels of
    the agency consistent with the demographic diversity of the United
    States and the Federal government, which shall include--
                (1) heavily recruiting at historically black colleges and
            universities, Hispanic-serving institutions, women's colleges,
            and colleges that typically serve majority minority
            populations;
                (2) sponsoring and recruiting at job fairs in urban
            communities, and placing employment advertisements in
            newspapers and magazines oriented toward women and people of
            color;
                (3) partnering with organizations that are focused on
            developing opportunities for minorities and women to place
            talented young minorities and women in industry internships,
            summer employment, and full-time positions;
                (4) where feasible, partnering with inner-city high
            schools, girls' high schools, and high schools with majority
            minority populations to establish or enhance financial literacy
            programs and provide mentoring; and
                (5) such other mass media communications that the Director
            determines are necessary.
        (g) Definitions.--For purposes of this section:
                (1) Agency.--The term ``agency'' means--
                        (A) the Department of the Treasury;
                        (B) the Federal Deposit Insurance Corporation;
                        (C) the Federal Housing Finance Agency;
                        (D) each of the Federal reserve banks;
                        (E) the Board;
                        (F) the National Credit Union Administration;
                        (G) the Office of the Comptroller of the Currency;
                        (H) the Office of Thrift Supervision;
                        (I) the Securities and Exchange Commission;
                        (J) the Consumer Financial Protection Agency; and
                        (K) the Federal Insurance Office,
            and any successors to such entities.
                (2) Agency administrator.--The term ``agency
            administrator'' means the head of an agency.

    SEC. 1802. FEDERAL HOUSING FINANCE AGENCY ADVISORY ROLE IN FIEC.

        After section 1007 of the Federal Financial Institutions
    Examination Council Act of 1987 (12 U.S.C. 3306) insert the following
    new section:

    ``SEC. 1007A. FEDERAL HOUSING FINANCE AGENCY ADVISORY ROLE.

        ``Whenever the Council takes any actions with respect to issues
    that relate to the Federal National Mortgage Association, the Federal
    Home Loan Mortgage Corporation, or the Federal home loan banks, the
    Federal Housing Finance Agency shall participate in the Council's
    proceedings in an advisory role.''.

                 Subtitle J--International Policy Coordination

    SEC. 1901. INTERNATIONAL POLICY COORDINATION.

        The President of the United States, or a designee of the President,
    shall coordinate through all available international policy channels
    similar policies as found in United States law related to limiting the
    scope, nature, size, scale, concentration, and interconnectedness of
    financial companies in order to protect financial stability and the
    global economy.

                 Subtitle K--International Financial Provisions

    SEC. 1951. ACCESS TO UNITED STATES FINANCIAL MARKET BY FOREIGN
                  INSTITUTIONS.

        (a) Establishment of Foreign Bank Offices in the United States.--
    Subsection 7(d)(3) of the International Banking Act of 1978 (12 U.S.C.
    3105(d)(3)) is amended--
                (1) by striking ``and'' at the end of subparagraph (C);
                (2) by striking the period at the end of subparagraph (D)
            and inserting ``; and''; and
                (3) by adding at the end the following new subparagraph:
                        ``(E) for a foreign bank that presents a systemic
                    risk to the United States, whether the home country of
                    the foreign bank has adopted, or is making demonstrable
                    progress toward adopting, an appropriate system of
                    financial regulation for the financial system of such
                    home country to mitigate such systemic risk.''.
        (b) Termination of Foreign Bank Offices in the United States.--
    Subsection 7(e)(1) of the International Banking Act of 1978 (12 U.S.C.
    3105(e)(1)) is amended--
                (1) by striking ``or'' at the end of subparagraph (A);
                (2) by striking the period at the end of subparagraph (B)
            and inserting ``; or''; and
                (3) by inserting after subparagraph (B), the following new
            subparagraph:
                        ``(C) for a foreign bank that presents a systemic
                    risk to the United States, the home country of the
                    foreign bank has not adopted or made demonstrable
                    progress toward adopting an appropriate system of
                    financial regulation to mitigate such systemic risk.''.
        (c) Registration or Succession to United States Brokerage or Dealer
    and Termination of Such Registration.--Section 15 of the Securities
    Exchange Act of 1934 (15 U.S.C. 78o) is amended by adding at the end
    the following new subsections:
        ``(k) Registration or Succession to a United States Broker or
    Dealer.--In determining whether to permit a foreign person or an
    affiliate of a foreign person to register as a United States broker or
    dealer, or succeed to the registration of a United States broker or
    dealer, the Securities and Exchange Commission may consider whether,
    for a foreign person, or an affiliate of a foreign person that presents
    a systemic risk to the United States, the home country of the foreign
    person has adopted or made demonstrable progress toward adopting an
    appropriate system of financial regulation to mitigate such systemic
    risk.
        ``(l) Termination of a United States Broker or Dealer.--For a
    foreign person or an affiliate of a foreign person that presents such a
    systemic risk to the United States, the Securities and Exchange
    Commission may determine to terminate the registration of such foreign
    person or an affiliate of such foreign person as a broker or dealer in
    the United States if the Commission determines that the home country of
    the foreign person has not adopted, or made demonstrable progress
    toward adopting, an appropriate system of financial regulation to
    mitigate such systemic risk.''.

    SEC. 1952. REDUCING TARP FUNDS TO OFFSET COSTS.

        Section 115(a)(3) of the Emergency Economic Stabilization Act of
    2008 (12 U.S.C. 5225(a)(3)) is amended by striking ``$700,000,000,000,
    as such amount is reduced by $1,259,000,000,, as such amount is reduced
    by $1,244,000,000, outstanding at any one time'' and inserting
    ``$700,000,000,000, as such amount is reduced by $23,625,000,000,
    outstanding at any one time''.

                    Subtitle L--Securities Holding Companies

    SEC. 1961. SECURITIES HOLDING COMPANIES.

        (a) Supervision of a Securities Holding Company Not Having a Bank
    or Savings Association Affiliate.--
                (1) In general.--A securities holding company that is
            required by a foreign regulator or foreign law to be subject to
            comprehensive consolidated supervision and that is not--
                        (A) a financial holding company subject to stricter
                    standards;
                        (B) an affiliate of an insured bank (other than an
                    institution described in subparagraphs (D) or (G) of
                    section 2(c)(2) of the Bank Holding Company Act of
                    1956) or a savings association;
                        (C) a foreign bank, foreign company, or company
                    that is described in section 8(a) of the International
                    Banking Act of 1978;
                        (D) a foreign bank that controls, directly or
                    indirectly, a corporation chartered under section 25A
                    of the Federal Reserve Act (12 U.S.C. 611 et seq.); or
                        (E) subject to comprehensive consolidated
                    supervision by a foreign regulator,
            may register with the Board to become supervised, pursuant to
            paragraph (2). Any securities holding company filing such a
            registration shall be supervised in accordance with this
            section and comply with the rules and orders prescribed by the
            Board applicable to supervised securities holding companies.
                (2) Registration as a supervised securities holding
            company.--A securities holding company described in paragraph
            (1) shall register by filing with the Board such information
            and documents concerning such securities holding company as the
            Board, by regulation, may prescribe as necessary or appropriate
            in furtherance of the purposes of this section. Such
            supervision shall become effective 45 days after the date of
            receipt of such registration by the Board or within such
            shorter time period as the Board, by rule or order, may
            determine.
        (b) Supervision of Securities Holding Companies.--
                (1) Recordkeeping and reporting.--
                        (A) In general.--Every supervised securities
                    holding company and each affiliate of such company
                    shall make and keep for prescribed periods such
                    records, furnish copies of records, and make such
                    reports, as the Board determines to be necessary or
                    appropriate for the Board to carry out the purposes of
                    this section, prevent evasions, and monitor compliance
                    by the company or affiliate with applicable provisions
                    of law.
                        (B) Form and contents.--Such records and reports
                    shall be prepared in such form and according to such
                    specifications (including certification by a registered
                    public accounting firm), as the Board may require and
                    shall be provided promptly at any time upon request by
                    the Board. Such records and reports may include--
                                (i) a balance sheet and income statement;
                                (ii) an assessment of the consolidated
                            capital of the supervised securities holding
                            company;
                                (iii) an independent auditor's report
                            attesting to the supervised securities holding
                            company's compliance with its internal risk
                            management and internal control objectives; and
                                (iv) reports concerning the extent to which
                            the company or affiliate has complied with the
                            provisions of this section and any regulations
                            prescribed and orders issued under this
                            section.
                (2) Use of existing reports.--
                        (A) In general.--The Board shall, to the fullest
                    extent possible, accept reports in fulfillment of the
                    requirements under this paragraph that the supervised
                    securities holding company or its affiliates have been
                    required to provide to another appropriate regulatory
                    agency or self-regulatory organization.
                        (B) Availability.--A supervised securities holding
                    company or an affiliate of such company shall provide
                    to the Board, at the request of the Board, any report
                    referred to in subparagraph (A), as permitted by law.
                (3) Examination authority.--
                        (A) Focus of examination authority.--The Board may
                    make examinations of any supervised securities holding
                    company and any affiliate of such company to carry out
                    the purposes of this subsection, prevent evasions
                    thereof, and monitor compliance by the company or
                    affiliate with applicable provisions of law.
                        (B) Deference to other examinations.--For purposes
                    of this subparagraph, the Board shall, to the fullest
                    extent possible, use the reports of examination made by
                    other appropriate Federal or State regulatory
                    authorities with respect to any functionally regulated
                    subsidiary, as defined under section 5(c)(1) of the
                    Bank Holding Company Act of 1956 (12 U.S.C.
                    1844(c)(1)), or an institution described in
                    subparagraphs (D) or (G) of section 1841(c)(2).
        (c) Capital and Risk Management.--
                (1) The Board shall, by regulation or order, prescribe
            capital adequacy and other risk management standards for a
            supervised securities holding company appropriate to protect
            the safety and soundness of the company and address the risks
            posed to financial stability by a supervised securities holding
            company. Standards imposed under this subparagraph shall take
            account of differences among types of business activities and--
                        (A) the amount and nature of the company's
                    financial assets;
                        (B) the amount and nature of the company's
                    liabilities, including the degree of reliance on short-
                    term funding;
                        (C) the extent and nature of the company's off-
                    balance sheet exposures;
                        (D) the extent and nature of the company's
                    transactions and relationships with other financial
                    companies;
                        (E) the company's importance as a source of credit
                    for households, businesses, and State and local
                    governments and as a source of liquidity for the
                    financial system; and
                        (F) the nature, scope, and mix of the company's
                    activities.
                (2) In imposing standards under this subsection, the Board
            may differentiate among supervised securities holding companies
            on an individual basis or by category, taking into
            consideration the criteria specified above.
                (3) Any capital requirements imposed under this subsection
            shall not take effect until the expiration of 180 days after a
            supervised securities holding company is provided notice of
            such requirement.
        (d) Other Provisions.--
                (1) Subsections (b), (c) through (s), and (u) of section 8
            of the Federal Deposit Insurance Act shall apply to any
            supervised securities holding company, and to any subsidiary
            (other than a bank) of a supervised securities holding company,
            in the same manner as they apply to a bank holding company. For
            purposes of applying such subsections to a supervised
            securities holding company or a subsidiary (other than a bank)
            of a supervised securities holding company, the Board shall be
            considered the appropriate Federal banking agency for the
            supervised securities holding company or subsidiary.
                (2) Except as the Board may otherwise provide by regulation
            or order, a supervised securities holding company shall be
            subject to the provisions of the Bank Holding Company Act of
            1956 (12 U.S.C. 1841 et seq.) in the same manner and to the
            same extent that bank holding companies are subject to such
            provisions, except that any such supervised securities holding
            company shall not by reason of this subparagraph be deemed a
            bank holding company for purposes of section 4 of the Bank
            Holding Company Act of 1956.
        (e) Definitions.--For purposes of this section, the following
    definitions shall apply:
                (1) Securities holding company.--The term ``securities
            holding company'' means--
                        (A) any person other than a natural person that
                    owns or controls one or more brokers or dealers as
                    defined in section 3 of the Securities Exchange Act;
                    and
                        (B) the associated persons of the securities
                    holding company.
                (2) Supervised securities holding company.--The term
            ``supervised securities holding company'' means any securities
            holding company that is supervised by the Board pursuant to
            this section.
                (3) Other banking terms.--The terms ``affiliate'',
            ``bank'', ``bank holding company'', ``company'', ``control'',
            ``savings association'', and ``subsidiary'' have the same
            meanings as in section 2 of the Bank Holding Company Act of
            1956.
                (4) Insured bank.--The term ``insured bank'' has the same
            meaning as in section 13 of the Federal Deposit Insurance Act.
                (5) Foreign bank.--The term ``foreign bank'' has the same
            meaning as in section 1(b)(7) of the International Banking Act
            of 1978.
                (6) Associated persons.--The terms ``person associated with
            a securities holding company'' and ``associated person of a
            securities holding company'' mean any person directly or
            indirectly controlling, controlled by, or under common control
            with, a securities holding company.

    TITLE II--CORPORATE AND FINANCIAL INSTITUTION COMPENSATION FAIRNESS ACT

    SEC. 2001. SHORT TITLE.

        This title may be cited as the ``Corporate and Financial
    Institution Compensation Fairness Act of 2009''.

    SEC. 2002. SHAREHOLDER VOTE ON EXECUTIVE COMPENSATION DISCLOSURES.

        Section 14 of the Securities Exchange Act of 1934 (15 U.S.C. 78n)
    is amended by adding at the end the following new subsection:
        ``(i) Annual Shareholder Approval of Executive Compensation.--
                ``(1) Annual vote.--Any proxy or consent or authorization
            (the solicitation of which is subject to the rules of the
            Commission pursuant to subsection (a)) for an annual meeting of
            the shareholders to elect directors (or a special meeting in
            lieu of such meeting) where proxies are solicited in respect of
            any security registered under section 12 occurring on or after
            the date that is 6 months after the date on which final rules
            are issued under paragraph (4), shall provide for a separate
            shareholder vote to approve the compensation of executives as
            disclosed pursuant to the Commission's compensation disclosure
            rules for named executive officers (which disclosure shall
            include the compensation committee report, the compensation
            discussion and analysis, the compensation tables, and any
            related materials, to the extent required by such rules). The
            shareholder vote shall not be binding on the issuer or the
            board of directors and shall not be construed as overruling a
            decision by such board, nor to create or imply any additional
            fiduciary duty by such board, nor shall such vote be construed
            to restrict or limit the ability of shareholders to make
            proposals for inclusion in such proxy materials related to
            executive compensation.
                ``(2) Shareholder approval of golden parachute
            compensation.--
                        ``(A) Disclosure.--In any proxy or consent
                    solicitation material (the solicitation of which is
                    subject to the rules of the Commission pursuant to
                    subsection (a)) for a meeting of the shareholders
                    occurring on or after the date that is 6 months after
                    the date on which final rules are issued under
                    paragraph (4), at which shareholders are asked to
                    approve an acquisition, merger, consolidation, or
                    proposed sale or other disposition of all or
                    substantially all the assets of an issuer, the person
                    making such solicitation shall disclose in the proxy or
                    consent solicitation material, in a clear and simple
                    form in accordance with regulations to be promulgated
                    by the Commission, any agreements or understandings
                    that such person has with any named executive officers
                    of such issuer (or of the acquiring issuer, if such
                    issuer is not the acquiring issuer) concerning any type
                    of compensation (whether present, deferred, or
                    contingent) that is based on or otherwise relates to
                    the acquisition, merger, consolidation, sale, or other
                    disposition of all or substantially all of the assets
                    of the issuer and the aggregate total of all such
                    compensation that may (and the conditions upon which it
                    may) be paid or become payable to or on behalf of such
                    executive officer.
                        ``(B) Shareholder approval.--Any proxy or consent
                    or authorization relating to the proxy or consent
                    solicitation material containing the disclosure
                    required by subparagraph (A) shall provide for a
                    separate shareholder vote to approve such agreements or
                    understandings and compensation as disclosed, unless
                    such agreements or understandings have been subject to
                    a shareholder vote under paragraph (1). A vote by the
                    shareholders shall not be binding on the issuer or the
                    board of directors of the issuer or the person making
                    the solicitation and shall not be construed as
                    overruling a decision by any such person or issuer, nor
                    to create or imply any additional fiduciary duty by any
                    such person or issuer.
                ``(3) Disclosure of votes.--Every institutional investment
            manager subject to section 13(f) shall report at least annually
            how it voted on any shareholder vote pursuant to paragraph (1)
            or (2) of this section, unless such vote is otherwise required
            to be reported publicly by rule or regulation of the
            Commission.
                ``(4) Rulemaking.--Not later than 6 months after the date
            of the enactment of the Corporate and Financial Institution
            Compensation Fairness Act of 2009, the Commission shall issue
            final rules to implement this subsection.
                ``(5) Exemption authority.--The Commission may exempt
            certain categories of issuers from the requirements of this
            subsection, where appropriate in view of the purpose of this
            subsection. In determining appropriate exemptions, the
            Commission shall take into account, among other considerations,
            the potential impact on smaller reporting issuers.''.

    SEC. 2003. COMPENSATION COMMITTEE INDEPENDENCE.

        (a) Standards Relating to Compensation Committees.--The Securities
    Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended by inserting
    after section 10A the following new section:

    ``SEC. 10B. STANDARDS RELATING TO COMPENSATION COMMITTEES.

        ``(a) Commission Rules.--
                ``(1) In general.--Effective not later than 9 months after
            the date of enactment of the Corporate and Financial
            Institution Compensation Fairness Act of 2009, the Commission
            shall, by rule, direct the national securities exchanges and
            national securities associations to prohibit the listing of any
            class of equity security of an issuer that is not in compliance
            with the requirements of any portion of subsections (b) through
            (f).
                ``(2) Opportunity to cure defects.--The rules of the
            Commission under paragraph (1) shall provide for appropriate
            procedures for an issuer to have an opportunity to cure any
            defects that would be the basis for a prohibition under
            paragraph (1) before the imposition of such prohibition.
                ``(3) Exemption authority.--The Commission may exempt
            certain categories of issuers from the requirements of
            subsections (b) through (f), where appropriate in view of the
            purpose of this section. In determining appropriate exemptions,
            the Commission shall take into account, among other
            considerations, the potential impact on smaller reporting
            issuers.
        ``(b) Independence of Compensation Committees.--
                ``(1) In general.--Each member of the compensation
            committee of the board of directors of the issuer shall be
            independent.
                ``(2) Criteria.--In order to be considered to be
            independent for purposes of this subsection, a member of a
            compensation committee of an issuer may not, other than in his
            or her capacity as a member of the compensation committee, the
            board of directors, or any other board committee accept any
            consulting, advisory, or other compensatory fee from the
            issuer.
                ``(3) Exemption authority.--The Commission may exempt from
            the requirements of paragraph (2) a particular relationship
            with respect to compensation committee members, where
            appropriate in view of the purpose of this section.
                ``(4) Definition.--As used in this section, the term
            `compensation committee' means--
                        ``(A) a committee (or equivalent body) established
                    by and amongst the board of directors of an issuer for
                    the purpose of determining and approving the
                    compensation arrangements for the executive officers of
                    the issuer; and
                        ``(B) if no such committee exists with respect to
                    an issuer, the independent members of the entire board
                    of directors.
        ``(c) Independence Standards for Compensation Consultants and Other
    Committee Advisors.--Any compensation consultant or other similar
    adviser to the compensation committee of any issuer shall meet
    standards for independence established by the Commission by regulation.
        ``(d) Compensation Committee Authority Relating to Compensation
    Consultants.--
                ``(1) In general.--The compensation committee of each
            issuer, in its capacity as a committee of the board of
            directors, shall have the authority, in its sole discretion, to
            retain and obtain the advice of a compensation consultant
            meeting the standards for independence promulgated pursuant to
            subsection (c), and the compensation committee shall be
            directly responsible for the appointment, compensation, and
            oversight of the work of such independent compensation
            consultant. This provision shall not be construed to require
            the compensation committee to implement or act consistently
            with the advice or recommendations of the compensation
            consultant, and shall not otherwise affect the compensation
            committee's ability or obligation to exercise its own judgment
            in fulfillment of its duties.
                ``(2) Disclosure.--In any proxy or consent solicitation
            material for an annual meeting of the shareholders (or a
            special meeting in lieu of the annual meeting) occurring on or
            after the date that is 1 year after the date of enactment of
            the Corporate and Financial Institution Compensation Fairness
            Act of 2009, each issuer shall disclose in the proxy or consent
            material, in accordance with regulations to be promulgated by
            the Commission whether the compensation committee of the issuer
            retained and obtained the advice of a compensation consultant
            meeting the standards for independence promulgated pursuant to
            subsection (c).
                ``(3) Regulations.--In promulgating regulations under this
            subsection or any other provision of law with respect to
            compensation consultants, the Commission shall ensure that such
            regulations are competitively neutral among categories of
            consultants and preserve the ability of compensation committees
            to retain the services of members of any such category.
        ``(e) Authority To Engage Independent Counsel and Other Advisors.--
    The compensation committee of each issuer, in its capacity as a
    committee of the board of directors, shall have the authority, in its
    sole discretion, to retain and obtain the advice of independent counsel
    and other advisers meeting the standards for independence promulgated
    pursuant to subsection (c), and the compensation committee shall be
    directly responsible for the appointment, compensation, and oversight
    of the work of such independent counsel and other advisers. This
    provision shall not be construed to require the compensation committee
    to implement or act consistently with the advice or recommendations of
    such independent counsel and other advisers, and shall not otherwise
    affect the compensation committee's ability or obligation to exercise
    its own judgment in fulfillment of its duties.
        ``(f) Funding.--Each issuer shall provide for appropriate funding,
    as determined by the compensation committee, in its capacity as a
    committee of the board of directors, for payment of compensation--
                ``(1) to any compensation consultant to the compensation
            committee that meets the standards for independence promulgated
            pursuant to subsection (c); and
                ``(2) to any independent counsel or other adviser to the
            compensation committee.''.
        (b) Study and Review Required.--
                (1) In general.--The Securities and Exchange Commission
            shall conduct a study and review of the use of compensation
            consultants meeting the standards for independence promulgated
            pursuant to section 10B(c) of the Securities Exchange Act of
            1934 (as added by subsection (a)), and the effects of such use.
                (2) Report to congress.--Not later than 2 years after the
            rules required by the amendment made by this section take
            effect, the Commission shall submit a report to the Congress on
            the results of the study and review required by this paragraph.

    SEC. 2004. ENHANCED COMPENSATION STRUCTURE REPORTING TO REDUCE PERVERSE
                  INCENTIVES.

        (a) Enhanced Disclosure and Reporting of Compensation
    Arrangements.--
                (1) In general.--Not later than 9 months after the date of
            enactment of this title, the appropriate Federal regulators
            jointly shall prescribe regulations to require each covered
            financial institution to disclose to the appropriate Federal
            regulator the structures of all incentive-based compensation
            arrangements offered by such covered financial institutions
            sufficient to determine whether the compensation structure--
                        (A) is aligned with sound risk management;
                        (B) is structured to account for the time horizon
                    of risks; and
                        (C) meets such other criteria as the appropriate
                    Federal regulators jointly may determine to be
                    appropriate to reduce unreasonable incentives offered
                    by such institutions for employees to take undue risks
                    that--
                                (i) could threaten the safety and soundness
                            of covered financial institutions; or
                                (ii) could have serious adverse effects on
                            economic conditions or financial stability.
                (2) Rules of construction.--Nothing in this subsection
            shall be construed as requiring the reporting of the actual
            compensation of particular individuals. Nothing in this
            subsection shall be construed to require a covered financial
            institution that does not have an incentive-based payment
            arrangement to make the disclosures required under this
            subsection.
        (b) Prohibition on Certain Compensation Arrangements.--Not later
    than 9 months after the date of enactment of this title, and taking
    into account the factors described in subparagraphs (A), (B), and (C)
    of subsection (a)(1), the appropriate Federal regulators shall jointly
    prescribe regulations that prohibit any incentive-based payment
    arrangement, or any feature of any such arrangement, that the
    regulators determine encourages inappropriate risks by covered
    financial institutions that--
                (1) could threaten the safety and soundness of covered
            financial institutions; or
                (2) could have serious adverse effects on economic
            conditions or financial stability.
        (c) Enforcement.--The provisions of this section shall be enforced
    under section 505 of the Gramm-Leach-Bliley Act and, for purposes of
    such section, a violation of this section shall be treated as a
    violation of subtitle A of title V of such Act.
        (d) Definitions.--As used in this section--
                (1) the term ``appropriate Federal regulator'' means--
                        (A) the Board of Governors of the Federal Reserve
                    System;
                        (B) the Office of the Comptroller of the Currency;
                        (C) the Board of Directors of the Federal Deposit
                    Insurance Corporation;
                        (D) the Director of the Office of Thrift
                    Supervision;
                        (E) the National Credit Union Administration Board;
                        (F) the Securities and Exchange Commission; and
                        (G) the Federal Housing Finance Agency; and
                (2) the term ``covered financial institution'' means--
                        (A) a depository institution or depository
                    institution holding company, as such terms are defined
                    in section 3 of the Federal Deposit Insurance Act (12
                    U.S.C. 1813);
                        (B) a broker-dealer registered under section 15 of
                    the Securities Exchange Act of 1934 (15 U.S.C. 78o);
                        (C) a credit union, as described in section
                    19(b)(1)(A)(iv) of the Federal Reserve Act;
                        (D) an investment advisor, as such term is defined
                    in section 202(a)(11) of the Investment Advisers Act of
                    1940 (15 U.S.C. 80b-2(a)(11));
                        (E) the Federal National Mortgage Association;
                        (F) the Federal Home Loan Mortgage Corporation; and
                        (G) any other financial institution that the
                    appropriate Federal regulators, jointly, by rule,
                    determine should be treated as a covered financial
                    institution for purposes of this section.
        (e) Exemption for Certain Financial Institutions.--The requirements
    of this section shall not apply to covered financial institutions with
    assets of less than $1,000,000,000.
        (f) Limitation.--No regulation promulgated pursuant to this section
    shall be allowed to require the recovery of incentive-based
    compensation under compensation arrangements in effect on the date of
    enactment of this title, provided such compensation agreements are for
    a period of no more than 24 months. Nothing in this title shall prevent
    or limit the recovery of incentive-based compensation under any other
    applicable law.
        (g) GAO Study.--
                (1) Study required.--
                        (A) In general.--The Comptroller General of the
                    United States shall carry out a study to determine
                    whether there is a correlation between compensation
                    structures and excessive risk taking.
                        (B) Factors to consider.--In carrying out the study
                    required under subparagraph (A), the Comptroller
                    General shall--
                                (i) consider compensation structures used
                            by companies from 2000 to 2008; and
                                (ii) compare companies that failed, or
                            nearly failed but for government assistance, to
                            companies that remained viable throughout the
                            housing and credit market crisis of 2007 and
                            2008, including the compensation practices of
                            all such companies.
                        (C) Determining companies that failed or nearly
                    failed.--In determining whether a company failed, or
                    nearly failed but for government assistance, for
                    purposes of subparagraph (B)(ii), the Comptroller
                    General shall focus on--
                                (i) companies that received exceptional
                            assistance under the Troubled Asset Relief
                            Program under title I of the Emergency Economic
                            Stabilization Act of 2008 (12 U.S.C. 5211 et
                            seq.) or other forms of significant government
                            assistance, including under the Automotive
                            Industry Financing Program, the Targeted
                            Investment Program, the Asset Guarantee
                            Program, and the Systemically Significant
                            Failing Institutions Program;
                                (ii) the Federal National Mortgage
                            Association;
                                (iii) the Federal Home Loan Mortgage
                            Corporation; and
                                (iv) companies that participated in the
                            Security and Exchange Commission's Consolidated
                            Supervised Entities Program as of January 2008.
                (2) Report.--Not later than the end of the 1-year period
            beginning on the date of the enactment of this title, the
            Comptroller General shall issue a report to the Congress
            containing the results of the study required under paragraph
            (1).

       TITLE III--DERIVATIVE MARKETS TRANSPARENCY AND ACCOUNTABILITY ACT

    SEC. 3001. SHORT TITLE.

        This title may be cited as the ``Derivative Markets Transparency
    and Accountability Act of 2009''.

    SEC. 3002. REVIEW OF REGULATORY AUTHORITY.

        (a) Consultation.--
                (1) CFTC.--Before commencing any rulemaking or issuing an
            order regarding swaps, swap dealers, major swap participants,
            swap repositories, persons associated with a swap dealer or
            major swap participant, eligible contract participants, or swap
            execution facilities pursuant to subtitle A, the Commodity
            Futures Trading Commission shall consult with the Securities
            and Exchange Commission and the Prudential Regulators.
                (2) SEC.--Before commencing any rulemaking or issuing an
            order regarding security-based swaps, security-based swap
            dealers, major security-based swap participants, security-based
            swap repositories, persons associated with a security-based
            swap dealer or major security-based swap participant, eligible
            contract participants with regard to security-based swaps, or
            swap execution facilities pursuant to subtitle B, the
            Securities and Exchange Commission shall consult with the
            Commodity Futures Trading Commission and the Prudential
            Regulators.
                (3) In developing and promulgating rules or orders pursuant
            to this subsection, the Commodity Futures Trading Commission
            and the Securities and Exchange Commission shall consider each
            other's views and the views of the Prudential Regulators.
                (4) In adopting a rule or order described in paragraph (1)
            or (2), the Commodity Futures Trading Commission and the
            Securities and Exchange Commission shall treat functionally or
            economically similar products or entities similarly.
                (5) Paragraph (4) shall not be construed to require the
            Commodity Futures Trading Commission or the Securities Exchange
            Commission to adopt a rule or order that treats functionally or
            economically similar products or entities identically.
        (b) Limitation.--
                (1) CFTC.--Nothing in this title, unless specifically
            provided, shall be construed to confer jurisdiction on the
            Commodity Futures Trading Commission to issue a rule,
            regulation, or order providing for oversight or regulation of--
                        (A) security-based swaps; or
                        (B) with regard to their activities or functions
                    concerning security-based swaps--
                                (i) security-based swap dealers;
                                (ii) major security-based swap
                            participants;
                                (iii) security-based swap repositories;
                                (iv) persons associated with a security-
                            based swap dealer or major security-based swap
                            participant;
                                (v) eligible contract participants with
                            respect to security-based swaps; or
                                (vi) swap execution facilities.
                (2) SEC.--Nothing in this title, unless specifically
            provided, shall be construed to confer jurisdiction on the
            Securities and Exchange Commission to issue a rule, regulation,
            or order providing for oversight or regulation of--
                        (A) swaps; or
                        (B) with regard to their activities or functions
                    concerning swaps--
                                (i) swap dealers;
                                (ii) major swap participants;
                                (iii) swap repositories;
                                (iv) persons associated with a swap dealer
                            or major swap participant;
                                (v) eligible contract participants with
                            respect to swaps; or
                                (vi) swap execution facilities.
        (c) Objection to Commission Regulation.--
                (1) Filing of petition for review.--If either Commission
            referred to in this section believes that a final rule,
            regulation, or order of the other such Commission conflicts
            with subsection (a)(4) or (b), then the complaining Commission
            may obtain review thereof in the United States Court of Appeals
            for the District of Columbia Circuit by filing in the court,
            not later than 60 days after the date of publication of the
            final rule, regulation, or order, a written petition requesting
            that the rule, regulation, or order be set aside. Any such
            proceeding shall be expedited by the Court of Appeals.
                (2) Transmittal of petition and record.--A copy of a
            petition described in paragraph (1) shall be transmitted not
            later than 1 business day after filing by the complaining
            Commission to the Secretary of the responding Commission. On
            receipt of the petition, the responding Commission shall file
            with the court a copy of the rule, regulation, or order under
            review and any documents referred to therein, and any other
            materials prescribed by the court.
                (3) Standard of review.--The court, giving deference to the
            views of neither Commission, shall determine to affirm or set
            aside a rule, regulation, or order of the responding Commission
            under this subsection, based on the determination of the court,
            as to whether the rule, regulation, or order is in conflict
            with subsection (a)(4) or (b), as applicable.
                (4) Judicial stay.--The filing of a petition by the
            complaining Commission pursuant to paragraph (1) shall operate
            as a stay of the rule, regulation, or order, until the date on
            which the determination of the court is final (including any
            appeal of the determination).
        (d) Definitions.--In this section, the terms ``Prudential
    Regulators'', ``swap'', ``swap dealer'', ``major swap participant'',
    ``swap repository'', ``person associated with a swap dealer or major
    swap participant'', ``eligible contract participant'', ``swap execution
    facility'', ``security-based swap'', ``security-based swap dealer'',
    ``major security-based swap participant'', ``security-based swap
    repository'', and ``person associated with a security-based swap dealer
    or major security-based swap participant'' shall have the meanings
    provided, respectively, in the Commodity Exchange Act, including any
    modification of the meanings under section 3101(b) of this Act.
        (e)(1) Notwithstanding subsections (b) and (c), the Commodity
    Futures Trading Commission and the Securities Exchange Commission shall
    jointly adopt rules to--
                (A) define the terms ``security-based swap agreement'' in
            section 3(a)(76) of the Securities Exchange Act of 1934 and
            ``swap'' in section 1a(35)(A)(v) of the Commodity Exchange Act;
                (B) require the maintenance of records of all activities
            related to transactions defined in subparagraph (A) that are
            not cleared; and
                (C) make available to the Securities and Exchange
            Commission information relating to transactions defined in
            subparagraph (A) that are uncleared.
        (2) In the event that the Commodity Futures Trading Commission and
    the Securities Exchange Commission fail to jointly prescribe rules
    pursuant to paragraph (1) in a timely manner, at the request of either
    Commission, the Financial Services Oversight Council shall resolve the
    dispute--
                (A) within a reasonable time after receiving the request;
                (B) after consideration of relevant information provided by
            each Commission; and
                (C) by agreeing with one of the Commissions regarding the
            entirety of the matter or by determining a compromise position.

    SEC. 3003. INTERNATIONAL HARMONIZATION.

        (a) In order to promote effective and consistent global regulation
    of contracts of sale of swaps and security-based swaps, the Commodity
    Futures Trading Commission, the Securities and Exchange Commission, and
    the Prudential Regulators (as defined in section 1a(42) of the
    Commodity Exchange Act), as appropriate, shall consult and coordinate
    with foreign regulatory authorities on the establishment of consistent
    international standards with respect to the regulation of contracts of
    sale of swaps and security-based swaps, and may agree to such
    information-sharing arrangements as may be deemed to be necessary or
    appropriate in the public interest or for the protection of investors,
    swap counterparties, and security-based swap counterparties.
        (b) In order to promote effective and consistent global regulation
    of contracts of sale of a commodity for future delivery, the Commodity
    Futures Trading Commission shall consult and coordinate with foreign
    regulatory authorities on the establishment of consistent international
    standards with respect to the regulation of contracts of sale of a
    commodity for future delivery, and may agree to such information-
    sharing arrangements as may be deemed necessary or appropriate in the
    public interest for the protection users of contracts of sale of a
    commodity for future delivery.

    SEC. 3004. PROHIBITION AGAINST GOVERNMENT ASSISTANCE.

        (a) In General.--No provision of this title shall be construed to
    authorize Federal assistance to support clearing operations or
    liquidation of a derivatives clearing organization described in the
    Commodity Exchange Act or a clearing agency described in the Securities
    Exchange Act of 1934, except where explicitly authorized by an Act of
    Congress.
        (b) Definition.--For the purposes of this section, the term
    ``Federal assistance'' means the use of public funds for the purposes
    of--
                (1) making loans to, or purchasing any debt obligation of,
            a derivatives clearing organization, a clearing agency, or a
            subsidiary of either;
                (2) purchasing assets of a derivatives clearing
            organization, a clearing agency, or a subsidiary of either;
                (3) assuming or guaranteeing the obligations of a
            derivatives clearing organization, a clearing agency, or a
            subsidiary of either; or
                (4) acquiring any type of equity interest or security of a
            derivatives clearing organization, a clearing agency, or a
            subsidiary of either.

    SEC. 3005. STUDIES.

        (a) Study on Effects of Position Limits on Trading on Exchanges in
    the United States.--
                (1) Study.--The Commodity Futures Trading Commission, in
            consultation with each entity that is a designated contract
            market under the Commodity Exchange Act, shall conduct a study
            of the effects (if any) of the position limits imposed pursuant
            to the other provisions of this title on excessive speculation
            and on the movement of transactions from exchanges in the
            United States to trading venues outside the United States.
                (2) Report to the congress.--Within 12 months after the
            imposition of position limits pursuant to the other provisions
            of this title, the Commodity Futures Trading Commission, in
            consultation with each entity that is a designated contract
            market under the Commodity Exchange Act, shall submit to the
            Congress a report on the matters described in paragraph (1).
                (3) Within 30 legislative days after the submission to the
            Congress of the report described in paragraph (2), the
            Committee on Agriculture of the House of Representatives shall
            hold a hearing examining the findings of the report.
                (4) In addition to the study required in paragraph (1), the
            Chairman of the Commodity Futures Trading Commission shall
            prepare and submit to the Congress biennial reports on the
            growth or decline of the derivatives markets in the United
            States and abroad, which shall include assessments of the
            causes of any such growth or decline, the effectiveness of
            regulatory regimes in managing systemic risk, a comparison of
            the costs of compliance at the time of the report for market
            participants subject to regulation by the United States with
            the costs of compliance in December 2008 for the market
            participants, and the quality of the available data. In
            preparing the report, the Chairman shall solicit the views of,
            consult with, and address the concerns raised by, market
            participants, regulators, legislators, and other interested
            parties.
        (b) Study on Feasibility of Requiring Use of Standardized
    Algorithmic Descriptions for Financial Derivatives.--
                (1) In general.--The Securities and Exchange Commission and
            the Commodity Futures Trading Commission shall conduct a joint
            study of the feasibility of requiring the derivatives industry
            to adopt standardized computer-readable algorithmic
            descriptions which may be used to describe complex and
            standardized financial derivatives.
                (2) Goals.--The algorithmic descriptions defined in the
            study shall be designed to facilitate computerized analysis of
            individual derivative contracts and to calculate net exposures
            to complex derivatives. The algorithmic descriptions shall be
            optimized for simultaneous use by:
                        (A) commercial users and traders of derivatives;
                        (B) derivative clearing houses, exchanges and
                    electronic trading platforms;
                        (C) trade repositories and regulator investigations
                    of market activities; and
                        (D) systemic risk regulators.
            The study will also examine the extent to which the algorithmic
            description, together with standardized and extensible legal
            definitions, may serve as the binding legal definition of
            derivative contracts. The study will examine the logistics of
            possible implementations of standardized algorithmic
            descriptions for derivatives contracts. The study shall be
            limited to electronic formats for exchange of derivative
            contract descriptions and will not contemplate disclosure of
            proprietary valuation models.
                (3) International coordination.--In conducting the study,
            the Securities and Exchange Commission and the Commodity
            Futures Trading Commission shall coordinate the study with
            international financial institutions and regulators as
            appropriate and practical.
                (4) Report.--Within 8 months after the date of the
            enactment of this Act, the Securities and Exchange Commission
            and the Commodity Futures Trading Commission shall jointly
            submit to the Committees on Agriculture and on Financial
            Services of the House of Representatives and the Committees on
            Agriculture, Nutrition, and Forestry and on Banking, Housing,
            and Urban Affairs of the Senate a written report which contains
            the results of the study required by paragraphs (1) through
            (3).
        (c) Study of Desirability and Feasibility of Establishing Single
    Regulator for All Transactions Involving Financial Derivatives.--
                (1) In general.--The Secretary of the Treasury, the
            Commodity Futures Trading Commission, and the Securities and
            Exchange Commission shall conduct a joint study of the
            desirability and feasibility of establishing, by January 1,
            2012, a single regulator for all transactions involving
            financial derivatives.
                (2) Report to the congress.--Not later than December 1,
            2010, Secretary of the Treasury, the Commodity Futures Trading
            Commission, and the Securities and Exchange Commission shall
            jointly submit to the Committees on Agriculture and on
            Financial Services of the House of Representatives and the
            Committees on Agriculture, Nutrition, and Forestry and on
            Banking, Housing, and Urban Affairs of the Senate a written
            report that contains the results of the study required by
            paragraph (1).

    SEC. 3006. RECOMMENDATIONS FOR CHANGES TO INSOLVENCY LAWS.

        Not later than 180 days after the date of the enactment of this
    Act, the Securities and Exchange Commission, the Commodity Futures
    Trading Commission, and the Prudential Regulators (as defined in
    section 1a of the Commodity Exchange Act, as amended by section 3111 of
    this Act) shall transmit to Congress recommendations for legislative
    changes to the Federal insolvency laws--
                (1) in order to enhance the legal certainty with respect to
            swap participants clearing non-proprietary swap positions with
            a swap clearinghouse, including--
                        (A) customer rights to recover margin deposits or
                    custodial property held at or through an insolvent swap
                    clearinghouse, or clearing participant; and
                        (B) the enforceability of clearing rules relating
                    to the portability of customer swap positions (and
                    associated margin) upon the insolvency of a clearing
                    participant;
                (2) to clarify and harmonize the insolvency law framework
            applicable to entities that are both commodity brokers (as
            defined in section 101(6) of title 11, United States Code) and
            registered brokers or dealers (as defined in section 3(a) of
            the Securities Exchange Act of 1934 (15 U.S.C. 78c(a))); and
                (3) to facilitate the portfolio margining of securities and
            commodity futures and options positions held through entities
            that are both futures commission merchants (as defined in
            section 1a of the Commodity Exchange Act) and registered
            brokers or dealers (as defined in section 3 of the Securities
            Exchange Act of 1934 (15 U.S.C. 78c(a))).

    SEC. 3007. ABUSIVE SWAPS.

        The Commodity Futures Trading Commission and the Securities and
    Exchange Commission may, by rule or order, jointly collect information
    as may be necessary concerning the markets for any types of swap (as
    defined in section 1a(35) of the Commodity Exchange Act) or security-
    based swap (as defined in section 1a(38) of such Act) and jointly issue
    a report with respect to any types of swaps or security-based swaps
    which the Commodity Futures Trading Commission and the Securities and
    Exchange Commission find are detrimental to the stability of a
    financial market or of participants in a financial market.

    SEC. 3008. AUTHORITY TO PROHIBIT PARTICIPATION IN SWAP ACTIVITIES.

        If the Commodity Futures Trading Commission or the Securities and
    Exchange Commission determines that the regulation of swaps or
    security-based swaps markets in a foreign country undermines the
    stability of the United States financial system, either Commission, in
    consultation with the Secretary of the Treasury, may prohibit an entity
    domiciled in that country from participating in the United States in
    any swap or security-based swap activities.

    SEC. 3009. MEMORANDUM.

        (a)(1) The Commodity Futures Trading Commission and the Federal
    Energy Regulatory Commission shall, not later than 180 days after the
    date of the enactment of this section, negotiate a memorandum of
    understanding to establish procedures for--
                (A) applying their respective authorities in a manner so as
            to ensure effective and efficient regulation in the public
            interest;
                (B) resolving conflicts concerning overlapping jurisdiction
            between the two agencies; and
                (C) avoiding, to the extent possible, conflicting or
            duplicative regulation.
        (2) Such memorandum and any subsequent amendments to the memorandum
    shall be promptly submitted to the appropriate committees of Congress.
        (b) The Commodity Futures Trading Commission and the Federal Energy
    Regulatory Commission shall, not later than 180 days after the date of
    the enactment of this section, negotiate a memorandum of understanding
    to share information that may be requested where either Commission is
    conducting an investigation into potential manipulation, fraud, or
    market power abuse in markets subject to such Commission's regulation
    or oversight. Shared information shall remain subject to the same
    restrictions on disclosure applicable to the Commission initially
    holding the information.

                     Subtitle A--Regulation of Swap Markets

    SEC. 3101. DEFINITIONS.

        (a) Amendments to Definitions in the Commodity Exchange Act.--
    Section 1a of the Commodity Exchange Act (7 U.S.C. 1a) is amended--
                (1) in paragraph (12)(A)--
                        (A) in clause (vii)(III), by striking
                    ``$25,000,000'' and inserting ``$50,000,000''; and
                        (B) in clause (xi), by striking ``total assets in
                    an amount'' and inserting ``amounts invested on a
                    discretionary basis'';
                (2) in paragraph (29)--
                        (A) in subparagraph (D), by striking ``and'';
                        (B) by redesignating subparagraph (E) as
                    subparagraph (G); and
                        (C) by inserting after subparagraph (D) the
                    following:
                        ``(E) a swap execution facility registered under
                    section 5h;
                        ``(F) a swap repository; and''; and
                (3) by adding at the end the following:
                ``(35) Swap.--
                        ``(A) In general.--Except as provided in
                    subparagraph (B), the term `swap' means any agreement,
                    contract, or transaction that--
                                ``(i) is a put, call, cap, floor, collar,
                            or similar option of any kind for the purchase
                            or sale of, or based on the value of, 1 or more
                            interest or other rates, currencies,
                            commodities, securities, instruments of
                            indebtedness, indices, quantitative measures,
                            or other financial or economic interests or
                            property of any kind;
                                ``(ii) provides for any purchase, sale,
                            payment, or delivery (other than a dividend on
                            an equity security) that is dependent on the
                            occurrence, non-occurrence, or the extent of
                            the occurrence of an event or contingency
                            associated with a potential financial,
                            economic, or commercial consequence;
                                ``(iii) provides on an executory basis for
                            the exchange, on a fixed or contingent basis,
                            of 1 or more payments based on the value or
                            level of 1 or more interest or other rates,
                            currencies, commodities, securities,
                            instruments of indebtedness, indices,
                            quantitative measures, or other financial or
                            economic interests or property of any kind, or
                            any interest therein or based on the value
                            thereof, and that transfers, as between the
                            parties to the transaction, in whole or in
                            part, the financial risk associated with a
                            future change in any such value or level
                            without also conveying a current or future
                            direct or indirect ownership interest in an
                            asset (including any enterprise or investment
                            pool) or liability that incorporates the
                            financial risk so transferred, and includes any
                            agreement, contract, or transaction commonly
                            known as an interest rate swap, a rate floor,
                            rate cap, rate collar, cross-currency rate
                            swap, basis swap, currency swap, total return
                            swap, equity index swap, equity swap, debt
                            index swap, debt swap, credit spread, credit
                            default swap, credit swap, weather swap, energy
                            swap, metal swap, agricultural swap, emissions
                            swap, or commodity swap;
                                ``(iv) is, or in the future becomes,
                            commonly known to the trade as a swap;
                                ``(v) meets the definition of `swap
                            agreement' as defined in section 206A of the
                            Gramm-Leach-Bliley Act of which a material term
                            of which is based on the price, yield, value,
                            or volatility of any security or any group or
                            index of securities, or any interest therein;
                            or
                                ``(vi) is any combination or permutation
                            of, or option on, any agreement, contract, or
                            transaction described in any of clauses (i)
                            through (v).
                        ``(B) Exclusions.--The term `swap' does not
                    include--
                                ``(i) any contract of sale of a commodity
                            for future delivery (or any option on such a
                            contract) or security futures product traded on
                            or subject to the rules of any board of trade
                            designated as a contract market under section 5
                            or 5f;
                                ``(ii) any sale of a nonfinancial commodity
                            or security for deferred shipment or delivery,
                            so long as the transaction is intended to be
                            physically settled;
                                ``(iii) any put, call, straddle, option, or
                            privilege on any security, certificate of
                            deposit, or group or index of securities,
                            including any interest therein or based on the
                            value thereof, that is subject to the
                            Securities Act of 1933 (15 U.S.C. 77a et seq.)
                            and the Securities Exchange Act of 1934 (15
                            U.S.C. 78a et seq.);
                                ``(iv) any put, call, straddle, option, or
                            privilege relating to foreign currency entered
                            into on a national securities exchange
                            registered pursuant to section 6(a) of the
                            Securities Exchange Act of 1934 (15 U.S.C.
                            78f(a));
                                ``(v) any agreement, contract, or
                            transaction providing for the purchase or sale
                            of 1 or more securities on a fixed basis that
                            is subject to the Securities Act of 1933 (15
                            U.S.C. 77a et seq.) and the Securities Exchange
                            Act of 1934 (15 U.S.C. 78a et seq.);
                                ``(vi) any agreement, contract, or
                            transaction providing for the purchase or sale
                            of 1 or more securities on a contingent basis
                            that is subject to the Securities Act of 1933
                            (15 U.S.C. 77a et seq.) and the Securities
                            Exchange Act of 1934 (15 U.S.C. 78a et seq.),
                            unless the agreement, contract, or transaction
                            predicates the purchase or sale on the
                            occurrence of a bona fide contingency that
                            might reasonably be expected to affect or be
                            affected by the creditworthiness of a party
                            other than a party to the agreement, contract,
                            or transaction;
                                ``(vii) any note, bond, or evidence of
                            indebtedness that is a security as defined in
                            section 2(a)(1) of the Securities Act of 1933
                            (15 U.S.C. 77b(a)(1));
                                ``(viii) any agreement, contract, or
                            transaction that is--
                                        ``(I) based on a security; and
                                        ``(II) entered into directly or
                                    through an underwriter (as defined in
                                    section 2(a)(11) of the Securities Act
                                    of 1933) (15 U.S.C. 77b(a)(11)) by the
                                    issuer of the security for the purposes
                                    of raising capital, unless the
                                    agreement, contract, or transaction is
                                    entered into to manage a risk
                                    associated with capital-raising;
                                ``(ix) any foreign exchange forward;
                                ``(x) any foreign exchange swap;
                                ``(xi) any agreement, contract, or
                            transaction a counterparty of which is a
                            Federal Reserve bank, the United States
                            government or an agency of the United States
                            government that is expressly backed by the full
                            faith and credit of the United States; and
                                ``(xii) any security-based swap.
                        ``(C) Rule of construction regarding master
                    agreements.--The term `swap' shall be construed to
                    include a master agreement that provides for an
                    agreement, contract, or transaction that is a swap
                    pursuant to subparagraph (A), together with all
                    supplements to any such master agreement, without
                    regard to whether the master agreement contains an
                    agreement, contract, or transaction that is not a swap
                    pursuant to subparagraph (A), except that the master
                    agreement shall be considered to be a swap only with
                    respect to each agreement, contract, or transaction
                    under the master agreement that is a swap pursuant to
                    subparagraph (A).
                        ``(D) Foreign exchange swaps and forwards
                    exception.--
                                ``(i) In general.--Notwithstanding clauses
                            (ix) and (x) of subparagraph (B), foreign
                            exchange swaps and foreign exchange forwards
                            shall be considered swaps under this paragraph
                            if the Commission makes a determination that
                            either foreign exchange swaps or foreign
                            exchange forwards or both should be regulated
                            as swaps under this Act and the Secretary
                            concurs with such determination.
                                ``(ii) Scope of authority.--
                                        ``(I) The Commission and the
                                    Secretary shall jointly determine which
                                    of the authorities under this Act
                                    regarding swaps the Commission shall
                                    exercise over foreign exchange swaps
                                    and foreign exchange forwards. Such
                                    authorities shall subsequently be
                                    exercised solely by the Commission. The
                                    Commission and the Secretary may
                                    jointly amend any previously made
                                    determination under this subclause.
                                        ``(II) Notwithstanding clause (i),
                                    the Commission and the Secretary of the
                                    Treasury may determine that either
                                    foreign exchange swaps or foreign
                                    exchange forwards or both should not be
                                    regulated as swaps under this Act if
                                    such determination is jointly made.
                                ``(iii) Reporting.--Notwithstanding clauses
                            (ix) and (x) of subparagraph (B) and
                            subparagraph (D)(ii), all foreign exchange
                            swaps and foreign exchange forwards shall be
                            reported to either a swap repository, or, if
                            there is no swap repository that would accept
                            such swaps or forwards, to the Commission
                            pursuant to section 4r within such time period
                            as the Commission may by rule or regulation
                            prescribe.
                                ``(iv) Secretary.--For purposes of this
                            subparagraph only, the term `Secretary' means
                            the Secretary of the Treasury.
                ``(36) Board.--The term `Board' means the Board of
            Governors of the Federal Reserve System.
                ``(37) Security-based swap.--The term `security-based swap'
            has the same meaning as in section 3(a)(68) of the Securities
            and Exchange Act of 1934.
                ``(38) Swap dealer.--
                        ``(A) In general.--The term `swap dealer' means any
                    person who--
                                ``(i) holds itself out as a dealer in
                            swaps;
                                ``(ii) makes a market in swaps;
                                ``(iii) regularly engages in the purchase
                            of swaps and their resale to customers in the
                            ordinary course of a business; or
                                ``(iv) engages in any activity causing the
                            person to be commonly known in the trade as a
                            dealer or market maker in swaps.
                        ``(B) A person may be designated a swap dealer for
                    a single type or single class or category of swap and
                    considered not a swap dealer for other types, classes,
                    or categories of swaps.
                        ``(C) De minimus exception.--The Commission shall
                    make a determination to exempt from designation as a
                    swap dealer an entity that engages in a de minimus
                    amount of swap dealing in connection with transactions
                    with or on the behalf of its customers.
                ``(39) Major swap participant.--
                        ``(A) In general.--The term `major swap
                    participant' means any person who is not a swap dealer,
                    and--
                                ``(i) maintains a substantial net position
                            in outstanding swaps, excluding positions held
                            primarily for hedging, reducing or otherwise
                            mitigating its commercial risk, including
                            operating and balance sheet risk; or
                                ``(ii) whose outstanding swaps create
                            substantial net counterparty exposure among the
                            aggregate of its counterparties that could
                            expose those counterparties to significant
                            credit losses.
                        ``(B) Definition of substantial net position.--The
                    Commission shall define by rule or regulation the terms
                    `substantial net position', `substantial net
                    counterparty exposure', and `significant credit losses'
                    at thresholds that the Commission determines prudent
                    for the effective monitoring, management and oversight
                    of entities which are systemically important or can
                    significantly impact the financial system through
                    counterparty credit risk. In setting the definitions,
                    the Commission shall consider the person's relative
                    position in uncleared as opposed to cleared swaps.
                        ``(C) A person may be designated a major swap
                    participant for 1 or more individual types of swaps
                    without being classified as a major swap participant
                    for all classes of swaps.
                ``(40) Major security-based swap participant.--The term
            `major security-based swap participant' has the same meaning as
            in section 3(a)(67) of the Securities Exchange Act of 1934.
                ``(41) Appropriate federal banking agency.--The term
            `appropriate Federal banking agency' has the same meaning as in
            section 3(q) of the Federal Deposit Insurance Act (12 U.S.C.
            1813(q)).
                ``(42) Prudential regulator.--The term `Prudential
            Regulator' means--
                        ``(A) the Board in the case of a swap dealer, major
                    swap participant, security-based swap dealer, or major
                    security-based swap participant that is--
                                ``(i) a State-chartered bank that is a
                            member of the Federal Reserve System; or
                                ``(ii) a State-chartered branch or agency
                            of a foreign bank;
                        ``(B) the Office of the Comptroller of the Currency
                    in the case of a swap dealer, major swap participant,
                    security-based swap dealer, or major security-based
                    swap participant that is--
                                ``(i) a national bank; or
                                ``(ii) a federally chartered branch or
                            agency of a foreign bank; and
                        ``(C) the Federal Deposit Insurance Corporation in
                    the case of a swap dealer, major swap participant,
                    security-based swap dealer, or major security-based
                    swap participant that is a State-chartered bank that is
                    not a member of the Federal Reserve System.
                ``(43) Security-based swap dealer.--The term `security-
            based swap dealer' has the same meaning as in section 3(a)(71)
            of the Securities Exchange Act of 1934.
                ``(44) Foreign exchange forward.--The term `foreign
            exchange forward' means a transaction that solely involves the
            exchange of 2 different currencies on a specific future date at
            a fixed rate agreed at the inception of the contract.
                ``(45) Foreign exchange swap.--The term `foreign exchange
            swap' means a transaction that solely involves the exchange of
            2 different currencies on a specific date at a fixed rate
            agreed at the inception of the contract, and a reverse exchange
            of the same 2 currencies at a date further in the future and at
            a fixed rate agreed at the inception of the contract.
                ``(46) Person associated with a security-based swap dealer
            or major security-based swap participant.--The term `person
            associated with a security-based swap dealer or major security-
            based swap participant' or `associated person of a security-
            based swap dealer or major security-based swap participant' has
            the same meaning as in section 3(a)(70) of the Securities
            Exchange Act of 1934.
                ``(47) Person associated with a swap dealer or major swap
            participant.--The term `person associated with a swap dealer or
            major swap participant' or `associated person of a swap dealer
            or major swap participant' means any partner, officer,
            director, or branch manager of a swap dealer or major swap
            participant (or any person occupying a similar status or
            performing similar functions), any person directly or
            indirectly controlling, controlled by, or under common control
            with a swap dealer or major swap participant, or any employee
            of a swap dealer or major swap participant, except that any
            person associated with a swap dealer or major swap participant
            whose functions are solely clerical or ministerial shall not be
            included in the meaning of the term other than for purposes of
            section 4s(b)(6).
                ``(48) Swap repository.--The term `swap repository' means
            any person that collects, calculates, prepares or maintains
            information or records with respect to transactions or
            positions in or the terms and conditions of swaps entered into
            by third parties.
                ``(49) Swap execution facility.--The term `swap execution
            facility' means a person or entity that facilitates the
            execution or trading of swaps between two persons through any
            means of interstate commerce, but which is not a designated
            contract market, including any electronic trade execution or
            voice brokerage facility.
                ``(50) Derivative.--The term `derivative' means--
                        ``(A) a contract of sale of a commodity for future
                    delivery; or
                        ``(B) a swap.''.
        (b) Authority to Further Define Terms.--The Commodity Futures
    Trading Commission shall adopt a rule further defining the terms
    ``swap'', ``swap dealer'', ``major swap participant'', and ``eligible
    contract participant'' for the purpose of including transactions and
    entities that have been structured to evade this title.
        (c) Exemptions.--Section 4(c) of the Commodity Exchange Act (7
    U.S.C. 4(c)) is amended by adding at the end the following: ``The
    Commission shall not have the authority to grant exemptions from the
    provisions of sections 3101(a), 3101(c), 3104, 3105, 3106, 3107, 3109,
    3110, 3113, 3115, 3120, and 3121 of the Derivative Markets Transparency
    and Accountability Act of 2009, except as expressly authorized under
    the provisions of that Act. Notwithstanding the preceding sentence, the
    Commodity Futures Trading Commission may exempt from any provision of
    the Commodity Exchange Act, pursuant to this subsection, an agreement,
    contract, or transaction that is entered into pursuant to a tariff
    approved by the Federal Energy Regulatory Commission, if the Commodity
    Futures Trading Commission determines that the exemption would be
    consistent with the public interest, and shall consider and not
    unreasonably deny any request made by the Federal Energy Regulatory
    Commission for such an exemption.''.

    SEC. 3102. JURISDICTION.

        (a) Exclusive Jurisdiction.--Section 2(a)(1) of the Commodity
    Exchange Act (7 U.S.C. 2(a)(1)) is amended--
                (1) in the 1st sentence of subparagraph (A)--
                        (A) by striking ``(c) through (i)'' and inserting
                    ``(c) and (f)'';
                        (B) by inserting ``swaps, or'' before ``contracts
                    of sale'';
                        (C) by striking ``derivatives transaction execution
                    facility'' and inserting ``swap execution facility'';
                    and
                        (D) by striking ``5a'' and inserting ``5h''; and
                (2) by adding at the end the following:
                        ``(G)(i) Nothing in this paragraph shall limit the
                    jurisdiction conferred on the Securities and Exchange
                    Commission by the Derivative Markets Transparency and
                    Accountability Act of 2009 with regard to security-
                    based swap agreements as defined pursuant to section
                    3002(e) of such Act, and security-based swaps.
                        ``(ii) In addition to the authority of the
                    Securities Exchange Commission described in clause (i),
                    nothing in this subparagraph shall limit or affect any
                    statutory authority of the Commission with respect to
                    an agreement, contract, or transaction described in
                    clause (i).
                        ``(H)(i) Nothing in this Act shall limit or affect
                    any statutory authority of the Federal Energy
                    Regulatory Commission with respect to an agreement,
                    contract, or transaction that is--
                                ``(I) not executed, traded, or cleared on a
                            registered entity or trading facility; and
                                ``(II) entered into pursuant to a tariff or
                            rate schedule approved by the Federal Energy
                            Regulatory Commission.
                        ``(ii) In addition to the authority of the Federal
                    Energy Regulatory Commission described in clause (i),
                    nothing in this subparagraph shall limit or affect any
                    statutory authority of the Commission with respect to
                    an agreement, contract, or transaction described in
                    clause (i).''.
        (b) Additions.--Section 2(c)(2)(A) of such Act (7 U.S.C.
    2(c)(2)(A)) is amended--
                (1) in clause (i) by striking ``or'' at the end;
                (2) by redesignating clause (ii) as clause (iii); and
                (3) by inserting after clause (i) the following:
                                ``(ii) a swap; or''.
        (c) Section 12(e) of such Act (7 U.S.C. 16(e)) is amended--
                (1) in paragraph (1)(B), by inserting ``or (3)'' after
            ``paragraph (2)'';
                (2) in paragraph (2), by striking subparagraphs (A) and (B)
            and inserting the following:
                        ``(A) a swap; and
                        ``(B) an agreement, contract, or transaction that
                    is excluded from this Act under section 2(c) or 2(f) of
                    this Act or title IV of the Commodity Futures
                    Modernization Act of 2000 or exempted under section
                    4(c) of this Act (regardless of whether any such
                    agreement, contract, or transaction is otherwise
                    subject to this Act).''; and
                (3) by adding at the end the following:
                ``(3) A swap may not be regulated as an insurance contract
            under State law.
                ``(4) The provisions of this Act relating to swaps that
            were enacted by the Derivative Markets Transparency and
            Accountability Act of 2009, including any rule or regulation
            thereunder, shall not apply to activities outside the United
            States unless those activities--
                        ``(A) have a direct and significant connection with
                    activities in or effect on United States commerce; or
                        ``(B) contravene such rules or regulations as the
                    Commission may prescribe as necessary or appropriate to
                    prevent the evasion of any provision of this Act that
                    was enacted by the Derivative Markets Transparency and
                    Accountability Act of 2009.''.
        (d) Nothing in the Derivative Markets Transparency and
    Accountability Act of 2009 or the amendments to the Commodity Exchange
    Act made by such Act shall limit or affect any statutory enforcement
    authority of the Federal Energy Regulatory Commission pursuant to
    Section 222 of the Federal Power Act and Section 4A of the Natural Gas
    Act that existed prior to the date of enactment of the Derivative
    Markets Transparency and Accountability Act of 2009.

    SEC. 3103. CLEARING AND EXECUTION TRANSPARENCY.

        (a) Clearing and Execution Transparency Requirements.--
                (1) Section 2 of the Commodity Exchange Act (7 U.S.C. 2) is
            amended by striking subsections (d), (e), (g), and (h).
                (2)(A) Prior to the final effective dates in this title, a
            person may petition the Commodity Futures Trading Commission to
            remain subject to paragraphs (3) through (7) of section 2(h) of
            the Commodity Exchange Act.
                (B) The Commodity Futures Trading Commission shall consider
            any petition submitted under subparagraph (A) in a prompt
            manner and may allow a person to continue operating subject to
            paragraphs (3) through (7) of section 2(h) of the Commodity
            Exchange Act for up to one year after the effective date of
            this subtitle.
                (3) Section 2 of such Act (7 U.S.C. 2) is further amended
            by inserting after subsection (c) the following:
        ``(d) Swaps.--Nothing in this Act (other than subsections
    (a)(1)(A), (a)(1)(B), (c)(2)(A)(ii), (e), (f), (j), and (k), sections
    4a, 4b, 4b-1, 4c(a), 4c(b), 4o, 4r, 4s, 4t, 5, 5b, 5c, 5h, 6(c), 6(d),
    6c, 6d, 8, 8a, 9, 12(e)(2), 12(f), 13(a), 13(b), 21, and 22(a)(4) and
    such other provisions of this Act as are applicable by their terms to
    registered entities and Commission registrants) governs or applies to a
    swap.
        ``(e) Limitation on Participation.--It shall be unlawful for any
    person, other than an eligible contract participant, to enter into a
    swap unless the swap is entered into on or subject to the rules of a
    board of trade designated as a contract market under section 5.''.
                (4) Section 2 of such Act (7 U.S.C. 2) is further amended
            by inserting after subsection (i) the following:
        ``(j) Clearing Requirement.--
                ``(1) In general.--
                        ``(A) Standard for clearing.--A swap shall be
                    submitted for clearing if a derivatives clearing
                    organization that is registered under this Act will
                    accept the swap for clearing, and the Commission has
                    determined under paragraph (2)(B)(ii) that the swap is
                    required to be cleared.
                        ``(B) Open access.--The rules of a derivatives
                    clearing organization described in subparagraph (A)
                    shall--
                                ``(i) prescribe that all swaps submitted to
                            the derivatives clearing organization with the
                            same terms and conditions are economically
                            equivalent within the derivatives clearing
                            organization and may be offset with each other
                            within the derivatives clearing organization;
                            and
                                ``(ii) provide for non-discriminatory
                            clearing of a swap executed bilaterally or on
                            or through the rules of an unaffiliated
                            designated contract market or swap execution
                            facility.
                ``(2) Commission review.--
                        ``(A) Commission-initiated review.--
                                ``(i) The Commission shall review each
                            swap, or any group, category, type or class of
                            swaps to make a determination as to whether the
                            swap or group, category, type, or class of
                            swaps should be required to be cleared.
                                ``(ii) The Commission shall provide at
                            least a 30-day public comment period regarding
                            any determination made under clause (i).
                        ``(B) Swap submissions.--
                                ``(i) A derivatives clearing organization
                            shall submit to the Commission each swap, or
                            any group, category, type or class of swaps
                            that it plans to accept for clearing, and
                            provide notice to its members (in a manner to
                            be determined by the Commission) of the
                            submission.
                                ``(ii) The Commission shall--
                                        ``(I) make available to the public
                                    any submission received under clause
                                    (i);
                                        ``(II) review each submission made
                                    under clause (i), and determine whether
                                    the swap, or group, category, type, or
                                    class of swaps described in the
                                    submission is required to be cleared;
                                    and
                                        ``(III) provide at least a 30-day
                                    public comment period regarding its
                                    determination as to whether the
                                    clearing requirement under paragraph
                                    (1)(A) shall apply to the submission.
                        ``(C) Deadline.--The Commission shall make its
                    determination under subparagraph (B)(ii) not later than
                    90 days after receiving a submission made under
                    subparagraph (B)(i), unless the submitting derivatives
                    clearing organization agrees to an extension for the
                    time limitation established under this subparagraph.
                        ``(D) Determination.--
                                ``(i) In reviewing a submission made under
                            subparagraph (B), the Commission shall review
                            whether the submission is consistent with
                            section 5b(c)(2).
                                ``(ii) In reviewing a swap, group of swaps,
                            or class of swaps pursuant to subparagraph (A)
                            or a submission made under subparagraph (B),
                            the Commission shall take into account the
                            following factors:
                                        ``(I) The existence of significant
                                    outstanding notional exposures, trading
                                    liquidity and adequate pricing data.
                                        ``(II) The availability of rule
                                    framework, capacity, operational
                                    expertise and resources, and credit
                                    support infrastructure to clear the
                                    contract on terms that are consistent
                                    with the material terms and trading
                                    conventions on which the contract is
                                    then traded.
                                        ``(III) The effect on the
                                    mitigation of systemic risk, taking
                                    into account the size of the market for
                                    such contract and the resources of the
                                    derivatives clearing organization
                                    available to clear the contract.
                                        ``(IV) The effect on competition,
                                    including appropriate fees and charges
                                    applied to clearing.
                                        ``(V) The existence of reasonable
                                    legal certainty in the event of the
                                    insolvency of the relevant derivatives
                                    clearing organization or 1 or more of
                                    its clearing members with regard to the
                                    treatment of customer and swap
                                    counterparty positions, funds, and
                                    property.
                                ``(iii) In making a determination under
                            subparagraph (B)(ii) that the clearing
                            requirement shall apply, the Commission may
                            require such terms and conditions to the
                            requirement as the Commission determines to be
                            appropriate.
                        ``(E) Rules.--Not later than 1 year after the date
                    of the enactment of the Derivative Markets Transparency
                    and Accountability Act of 2009, the Commission shall
                    adopt rules for a derivatives clearing organization's
                    submission for review, pursuant to this paragraph, of a
                    swap, or a group, category, type or class of swaps,
                    that it seeks to accept for clearing.
                ``(3) Stay of clearing requirement.--
                        ``(A) After a determination pursuant to paragraph
                    (2)(B), the Commission, on application of a
                    counterparty to a swap or on its own initiative, may
                    stay the clearing requirement of paragraph (1) until
                    the Commission completes a review of the terms of the
                    swap (or the group, category, type or class of swaps)
                    and the clearing arrangement.
                        ``(B) Deadline.--The Commission shall complete a
                    review undertaken pursuant to subparagraph (A) not
                    later than 90 days after issuance of the stay, unless
                    the derivatives clearing organization that clears the
                    swap, or group, category, type or class of swaps,
                    agrees to an extension of the time limitation
                    established under this subparagraph.
                        ``(C) Determination.--Upon completion of the review
                    undertaken pursuant to subparagraph (A), the Commission
                    may--
                                ``(i) determine, unconditionally or subject
                            to such terms and conditions as the Commission
                            determines to be appropriate, that the swap, or
                            group, category, type or class of swaps, must
                            be cleared pursuant to this subsection if it
                            finds that such clearing is consistent with
                            paragraph (2)(D); or
                                ``(ii) determine that the clearing
                            requirement of paragraph (1) shall not apply to
                            the swap, or group, category, type or class of
                            swaps.
                        ``(D) Rules.--Not later than 1 year after the date
                    of the enactment of the Derivative Markets Transparency
                    and Accountability Act of 2009, the Commission shall
                    adopt rules for reviewing, pursuant to this paragraph,
                    a derivatives clearing organization's clearing of a
                    swap, or a group, category, type or class of swaps,
                    that it has accepted for clearing.
                ``(4) Prevention of evasion.--The Commission may prescribe
            rules under this subsection, or issue interpretations of the
            rules, as necessary to prevent evasions of this subsection.
                ``(5) Required reporting.--
                        ``(A) In general.--All swaps that are not accepted
                    for clearing by any derivatives clearing organization
                    shall be reported either to a swap repository described
                    in section 21 or, if there is no repository that would
                    accept the swap, to the Commission pursuant to section
                    4r within such time period as the Commission may by
                    rule or regulation prescribe. Counterparties to a swap
                    may agree which counterparty will report the swap as
                    required by this paragraph.
                        ``(B) Swap dealer designation.--With regard to
                    swaps where only 1 counterparty is a swap dealer, the
                    swap dealer shall report the swap as required by this
                    paragraph.
                ``(6) Reporting transition rules.--Rules adopted by the
            Commission under this section shall provide for the reporting
            of data, as follows:
                        ``(A) Swaps entered into before the date of the
                    enactment of this subsection shall be reported to a
                    registered swap repository or the Commission no later
                    than 180 days after the effective date of this
                    subsection; and
                        ``(B) Swaps entered into on or after such date of
                    enactment shall be reported to a registered swap
                    repository or the Commission no later than the later
                    of--
                                ``(i) 90 days after such effective date; or
                                ``(ii) such other time after entering into
                            the swap as the Commission may prescribe by
                            rule or regulation.
                ``(7) Clearing transition rules.--
                        ``(A) Swaps entered into before the date of the
                    enactment of this subsection are exempt from the
                    clearing requirements of this subsection if reported
                    pursuant to paragraph (6)(A).
                        ``(B) Swaps entered into before application of the
                    clearing requirement pursuant to this subsection are
                    exempt from the clearing requirements of this
                    subsection if reported pursuant to paragraph (6)(B).
                ``(8) Exceptions.--
                        ``(A) In general.--The requirements of paragraph
                    (1) shall not apply to a swap if one of the
                    counterparties to the swap--
                                ``(i) is not a swap dealer or major swap
                            participant;
                                ``(ii) is using swaps to hedge or mitigate
                            commercial risk, including operating or balance
                            sheet risk; and
                                ``(iii) notifies the Commission, in a
                            manner set forth by the Commission, how it
                            generally meets its financial obligations
                            associated with entering into non-cleared
                            swaps.
                        ``(B) Abuse of exception.--The Commission may
                    prescribe rules under this subsection, or issue
                    interpretations of the rules, as necessary to prevent
                    abuse of the exemption in subparagraph (A) by swap
                    dealers and major swap participants.
                        ``(C) Option to clear.--The application of the
                    clearing exception in subparagraph (A) is solely at the
                    discretion of the counterparty to the swap that meets
                    the conditions of clauses (i) through (iii) of
                    subparagraph (A).
        ``(k) Execution Transparency.--
                ``(1) Requirement.--A swap that is subject to the clearing
            requirement of subsection (j) shall not be traded except on or
            through a board of trade designated as a contract market under
            section 5, or on or through a swap execution facility
            registered under section 5h, that makes the swap available for
            trading.
                ``(2) Exceptions.--The requirement of paragraph (1) shall
            not apply to a swap if no designated contract market or swap
            execution facility makes the swap available for trading.
                ``(3) Agricultural swaps.--No person shall offer to enter
            into, enter into or confirm the execution of, any swap in an
            agricultural commodity (as defined by the Commission) that is
            subject to paragraphs (1) and (2) except pursuant to a rule or
            regulation of the Commission allowing the swap under such terms
            and conditions as the Commission shall prescribe.
                ``(4) Required reporting.--If the exception of paragraph
            (2) applies and there is no facility that makes the swap
            available to trade, the counterparties shall comply with any
            recordkeeping and transaction reporting requirements that may
            be prescribed by the Commission with respect to swaps subject
            to the requirements of paragraph (1).
                ``(5) Exchange trading.--In adopting rules and regulations,
            the Commission shall endeavor to eliminate unnecessary
            impediments to the trading on boards of trade designated as
            contract markets under section 5 of contracts, agreements, or
            transactions that would be security-based swaps but for the
            trading of such contracts, agreements or transactions on such a
            designated contract market.''.
        (b) Derivatives Clearing Organizations.--
                (1) Subsections (a) and (b) of section 5b of such Act (7
            U.S.C. 7a-1) are amended to read as follows:
        ``(a) Registration Requirement.--
                ``(1) In general.--It shall be unlawful for any entity,
            unless registered with the Commission, directly or indirectly
            to make use of the mails or any means or instrumentality of
            interstate commerce to perform the functions of a derivatives
            clearing organization described in section 1a(10) of this Act
            with respect to--
                        ``(A) a contract of sale of a commodity for future
                    delivery (or option on such a contract) or option on a
                    commodity, in each case unless the contract or option
                    is--
                                ``(i) excluded from this Act by section
                            2(a)(1)(C)(i), 2(c), or 2(f); or
                                ``(ii) a security futures product cleared
                            by a clearing agency registered with the
                            Securities and Exchange Commission under the
                            Securities Exchange Act of 1934 (15 U.S.C. 78a
                            et seq.); or
                        ``(B) a swap.
                ``(2) Existing banks and clearing agencies.--A bank or a
            clearing agency registered with the Securities and Exchange
            Commission under the Securities Exchange Act of 1934 required
            to be registered as a derivatives clearing organization under
            this section is deemed to be registered under this section to
            the extent that the bank cleared swaps, as defined in this Act,
            as a multilateral clearing organization or the clearing agency
            cleared swaps, as defined in this Act, before the enactment of
            this subsection. A bank to which this paragraph applies may, by
            the vote of the shareholders owning not less than 51 percent of
            the voting interests of the bank, be converted into a State
            corporation, partnership, limited liability company, or other
            similar legal form pursuant to a plan of conversion, if the
            conversion is not in contravention of applicable State law.
        ``(b) Voluntary Registration.--A person that clears agreements,
    contracts, or transactions that are not required to be cleared under
    this Act may register with the Commission as a derivatives clearing
    organization.''.
                (2) Section 5b of such Act (7 U.S.C. 7a-1) is amended by
            adding at the end the following:
        ``(g) Rules.--Not later than 1 year after the date of the enactment
    of the Derivative Markets Transparency and Accountability Act of 2009,
    the Commission shall adopt rules governing persons that are registered
    as derivatives clearing organizations for swaps under this subsection.
        ``(h) Exemptions.--
                ``(1) In general.--The Commission may exempt, conditionally
            or unconditionally, a derivatives clearing organization from
            registration under this section for the clearing of swaps if
            the Commission finds that the derivatives clearing organization
            is subject to comparable, comprehensive supervision and
            regulation on a consolidated basis by a Prudential Regulator or
            the appropriate governmental authorities in the organization's
            home country.
                ``(2) A person that is required to be registered as a
            derivatives clearing organization under this section, whose
            principal business is clearing securities and options on
            securities and which is a clearing agency registered with the
            Securities Exchange Commission under the Securities Exchange
            Act of 1934 (15 U.S.C. 78a et seq.), shall be unconditionally
            exempt from registration under this section solely for the
            purpose of clearing swaps, unless the Commission finds that the
            clearing agency is not subject to comparable, comprehensive
            supervision and regulation by the Securities and Exchange
            Commission.
        ``(i) Designation of Compliance Officer.--
                ``(1) In general.--Each derivatives clearing organization
            shall designate an individual to serve as a compliance officer.
                ``(2) Duties.--The compliance officer--
                        ``(A) shall report directly to the board or to the
                    senior officer of the derivatives clearing
                    organization; and
                        ``(B) shall--
                                ``(i) review compliance with the core
                            principles in section 5b(c)(2).
                                ``(ii) in consultation with the board of
                            the derivatives clearing organization, a body
                            performing a function similar to that of a
                            board, or the senior officer of the derivatives
                            clearing organization, resolve any conflicts of
                            interest that may arise;
                                ``(iii) be responsible for administering
                            the policies and procedures required to be
                            established pursuant to this section; and
                                ``(iv) ensure compliance with this Act and
                            the rules and regulations issued under this
                            Act; and
                        ``(C) shall establish procedures for remediation of
                    non-compliance issues found during compliance office
                    reviews, lookbacks, internal or external audit
                    findings, self-reported errors, or through validated
                    complaints. The procedures shall establish the
                    handling, management response, remediation, re-testing,
                    and closing of non-compliant issues.
                ``(3) Annual reports required.--The compliance officer
            shall annually prepare and sign a report on the compliance of
            the derivatives clearing organization with this Act and the
            policies and procedures of the derivatives clearing
            organization, including the code of ethics and conflict of
            interest policies of the derivatives clearing organization, in
            accordance with rules prescribed by the Commission. The
            compliance report shall accompany the financial reports of the
            derivatives clearing organization that are required to be
            furnished to the Commission pursuant to this section and shall
            include a certification that, under penalty of law, the report
            is accurate and complete.''.
                (3) Section 5b(c)(2) of such Act (7 U.S.C. 7a-1(c)(2)) is
            amended to read as follows:
                ``(2) Core principles for derivatives clearing
            organizations.--
                        ``(A) In general.--To be registered and to maintain
                    registration as a derivatives clearing organization, a
                    derivatives clearing organization shall comply with the
                    core principles specified in this paragraph and any
                    requirement that the Commission may impose by rule or
                    regulation pursuant to section 8a(5). Except where the
                    Commission determines otherwise by rule or regulation,
                    a derivatives clearing organization shall have
                    reasonable discretion in establishing the manner in
                    which the organization complies with the core
                    principles.
                        ``(B) Financial resources.--
                                ``(i) The derivatives clearing organization
                            shall have adequate financial, operational, and
                            managerial resources to discharge the
                            responsibilities of the organization.
                                ``(ii) The financial resources of the
                            derivatives clearing organization shall at a
                            minimum exceed the total amount that would--
                                        ``(I) enable the organization to
                                    meet the financial obligations of the
                                    organization to the members of, and
                                    participants in, the organization,
                                    notwithstanding a default by the member
                                    or participant creating the largest
                                    financial exposure for the organization
                                    in extreme but plausible market
                                    conditions; and
                                        ``(II) enable the organization to
                                    cover the operating costs of the
                                    organization for a period of 1 year,
                                    calculated on a rolling basis.
                        ``(C) Participant and product eligibility.--
                                ``(i) The derivatives clearing organization
                            shall establish--
                                        ``(I) appropriate admission and
                                    continuing eligibility standards
                                    (including sufficient financial
                                    resources and operational capacity to
                                    meet obligations arising from
                                    participation in the organization) for
                                    members of and participants in the
                                    organization; and
                                        ``(II) appropriate standards for
                                    determining eligibility of agreements,
                                    contracts, or transactions submitted to
                                    the organization for clearing.
                                ``(ii) The derivatives clearing
                            organization shall have procedures in place to
                            verify that participation and membership
                            requirements are met on an ongoing basis.
                                ``(iii) The participation and membership
                            requirements of the derivatives clearing
                            organization shall be objective, publicly
                            disclosed, and permit fair and open access.
                        ``(D) Risk management.--
                                ``(i) The derivatives clearing organization
                            shall have the ability to manage the risks
                            associated with discharging the
                            responsibilities of a derivatives clearing
                            organization through the use of appropriate
                            tools and procedures.
                                ``(ii) The derivatives clearing
                            organization shall measure the credit exposures
                            of the organization to the members of, and
                            participants in, the organization at least once
                            each business day and shall monitor the
                            exposures throughout the business day.
                                ``(iii) Through margin requirements and
                            other risk control mechanisms, a derivatives
                            clearing organization shall limit the exposures
                            of the organization to potential losses from
                            defaults by the members of, and participants
                            in, the organization so that the operations of
                            the organization would not be disrupted and
                            non-defaulting members or participants would
                            not be exposed to losses that they cannot
                            anticipate or control.
                                ``(iv) Margin required from all members and
                            participants shall be sufficient to cover
                            potential exposures in normal market
                            conditions.
                                ``(v) The models and parameters used in
                            setting margin requirements shall be risk-based
                            and reviewed regularly.
                        ``(E) Settlement procedures.--The derivatives
                    clearing organization shall--
                                ``(i) complete money settlements on a
                            timely basis, and not less than once each
                            business day;
                                ``(ii) employ money settlement arrangements
                            that eliminate or strictly limit the exposure
                            of the organization to settlement bank risks,
                            such as credit and liquidity risks from the use
                            of banks to effect money settlements;
                                ``(iii) ensure money settlements are final
                            when effected;
                                ``(iv) maintain an accurate record of the
                            flow of funds associated with each money
                            settlement;
                                ``(v) have the ability to comply with the
                            terms and conditions of any permitted netting
                            or offset arrangements with other clearing
                            organizations; and
                                ``(vi) for physical settlements, establish
                            rules that clearly state the obligations of the
                            organization with respect to physical
                            deliveries, including how risks from these
                            obligations shall be identified and managed.
                        ``(F) Treatment of funds.--
                                ``(i) The derivatives clearing organization
                            shall have standards and procedures designed to
                            protect and ensure the safety of member and
                            participant funds and assets.
                                ``(ii) The derivatives clearing
                            organization shall hold member and participant
                            funds and assets in a manner whereby risk of
                            loss or of delay in the access of the
                            organization to the assets and funds is
                            minimized.
                                ``(iii) Assets and funds invested by the
                            derivatives clearing organization shall be held
                            in instruments with minimal credit, market, and
                            liquidity risks.
                        ``(G) Default rules and procedures.--
                                ``(i) The derivatives clearing organization
                            shall have rules and procedures designed to
                            allow for the efficient, fair, and safe
                            management of events when members or
                            participants become insolvent or otherwise
                            default on their obligations to the
                            organization.
                                ``(ii) The default procedures of the
                            derivatives clearing organization shall be
                            clearly stated, and they shall ensure that the
                            organization can take timely action to contain
                            losses and liquidity pressures and to continue
                            meeting the obligations of the organization.
                                ``(iii) The default procedures shall be
                            publicly available.
                        ``(H) Rule enforcement.--The derivatives clearing
                    organization shall--
                                ``(i) maintain adequate arrangements and
                            resources for the effective monitoring and
                            enforcement of compliance with rules of the
                            organization and for resolution of disputes;
                            and
                                ``(ii) have the authority and ability to
                            discipline, limit, suspend, or terminate the
                            activities of a member or participant for
                            violations of rules of the organization.
                        ``(I) System safeguards.--The derivatives clearing
                    organization shall--
                                ``(i) establish and maintain a program of
                            risk analysis and oversight to identify and
                            minimize sources of operational risk through
                            the development of appropriate controls and
                            procedures, and the development of automated
                            systems, that are reliable, secure, and have
                            adequate scalable capacity;
                                ``(ii) establish and maintain emergency
                            procedures, backup facilities, and a plan for
                            disaster recovery that allows for the timely
                            recovery and resumption of operations and the
                            fulfillment of the responsibilities and
                            obligations of the organization; and
                                ``(iii) periodically conduct tests to
                            verify that backup resources are sufficient to
                            ensure continued order processing and trade
                            matching, price reporting, market surveillance,
                            and maintenance of a comprehensive and accurate
                            audit trail.
                        ``(J) Reporting.--The derivatives clearing
                    organization shall provide to the Commission all
                    information necessary for the Commission to conduct
                    oversight of the organization.
                        ``(K) Recordkeeping.--The derivatives clearing
                    organization shall maintain records of all activities
                    related to the business of the organization as a
                    derivatives clearing organization in a form and manner
                    acceptable to the Commission for a period of 5 years.
                        ``(L) Public information.--
                                ``(i) The derivatives clearing organization
                            shall provide market participants with
                            sufficient information to identify and evaluate
                            accurately the risks and costs associated with
                            using the services of the organization.
                                ``(ii) The derivatives clearing
                            organization shall make information concerning
                            the rules and operating procedures governing
                            the clearing and settlement systems (including
                            default procedures) of the organization
                            available to market participants.
                                ``(iii) The derivatives clearing
                            organization shall disclose publicly and to the
                            Commission information concerning--
                                        ``(I) the terms and conditions of
                                    contracts, agreements, and transactions
                                    cleared and settled by the
                                    organization;
                                        ``(II) clearing and other fees that
                                    the organization charges the members
                                    of, and participants in, the
                                    organization;
                                        ``(III) the margin-setting
                                    methodology and the size and
                                    composition of the financial resource
                                    package of the organization;
                                        ``(IV) other information relevant
                                    to participation in the settlement and
                                    clearing activities of the
                                    organization; and
                                        ``(V) daily settlement prices,
                                    volume, and open interest for all
                                    contracts settled or cleared by the
                                    organization.
                        ``(M) Information-sharing.--The derivatives
                    clearing organization shall--
                                ``(i) enter into and abide by the terms of
                            all appropriate and applicable domestic and
                            international information-sharing agreements;
                            and
                                ``(ii) use relevant information obtained
                            from the agreements in carrying out the risk
                            management program of the organization.
                        ``(N) Antitrust considerations.--The derivatives
                    clearing organization shall avoid--
                                ``(i) adopting any rule or taking any
                            action that results in any unreasonable
                            restraint of trade; or
                                ``(ii) imposing any material
                            anticompetitive burden.
                        ``(O) Governance fitness standards.--
                                ``(i) The derivatives clearing organization
                            shall establish governance arrangements that
                            are transparent in order to fulfill public
                            interest requirements and to support the
                            objectives of the owners of, and participants
                            in, the organization.
                                ``(ii) The derivatives clearing
                            organization shall establish and enforce
                            appropriate fitness standards for the
                            directors, members of any disciplinary
                            committee, and members of the organization, and
                            any other persons with direct access to the
                            settlement or clearing activities of the
                            organization, including any parties affiliated
                            with any of the persons described in this
                            subparagraph.
                        ``(P) Conflicts of interest.--The derivatives
                    clearing organization shall establish and enforce rules
                    to minimize conflicts of interest in the decision-
                    making process of the organization and establish a
                    process for resolving the conflicts of interest.
                        ``(Q) Composition of the boards.--The derivatives
                    clearing organization shall ensure that the composition
                    of the governing board or committee includes market
                    participants.
                        ``(R) Legal risk.--The derivatives clearing
                    organization shall have a well founded, transparent,
                    and enforceable legal framework for each aspect of its
                    activities.''.
                (4) Section 5b of such Act (7 U.S.C. 7a-1) is further
            amended by adding after subsection (i), as added by this
            section, the following:
        ``(j) Reporting.--
                ``(1) In general.--A derivatives clearing organization that
            clears swaps shall provide to the Commission all information
            determined by the Commission to be necessary to perform the
            responsibilities of the Commission under this Act. The
            Commission shall adopt data collection and maintenance
            requirements for swaps cleared by derivatives clearing
            organizations that are comparable to the corresponding
            requirements for swaps accepted by swap repositories and swaps
            traded on swap execution facilities. The Commission shall share
            the information, upon request, with the Board, the Securities
            and Exchange Commission, the appropriate Federal banking
            agencies, the Financial Services Oversight Council, and the
            Department of Justice or other persons the Commission deems
            appropriate, including foreign financial supervisors (including
            foreign futures authorities), foreign central banks, and
            foreign ministries that comply with the provisions of section
            8.
                ``(2) Public information.--A derivatives clearing
            organization that clears swaps shall provide to the Commission,
            or its designee, such information as is required by, and in a
            form and at a frequency to be determined by, the Commission, in
            order to comply with the public reporting requirements
            contained in section 8(j).
                ``(3) A derivatives clearing organization shall keep any
            such books and records relating to swaps defined in section
            1a(35)(A)(v) open to inspection and examination by the
            Securities and Exchange Commission.''.
                (5) Section 8(e) of such Act (7 U.S.C. 12(e)) is amended in
            the last sentence by inserting ``central bank and ministries''
            after ``department'' each place it appears.
        (c) Legal Certainty for Identified Banking Products.--
                (1) Repeal.--Sections 402(d), 404, 407, 408(b), and
            408(c)(2) of the Legal Certainty for Bank Products Act of 2000
            (7 U.S.C. 27(d), 27b, 27e, 27f(b), and 27f(c)(2)) are repealed.
                (2) Legal certainty.--Section 403 of the Legal Certainty
            for Bank Products Act of 2000 (7 U.S.C. 27a) is amended to read
            as follows:

    ``SEC. 403. EXCLUSION OF IDENTIFIED BANKING PRODUCT.

        ``(a) Exclusion.--Except as provided in subsection (b) or (c)--
                ``(1) the Commodity Exchange Act shall not apply to, and
            the Commodity Futures Trading Commission shall not exercise
            regulatory authority under such Act with respect to, an
            identified banking product; and
                ``(2) the definitions of `security-based swap' in section
            3(a)(68) of the Securities Exchange Act of 1934 and `security-
            based swap agreement' in section 3(a)(76) of the Securities
            Exchange Act of 1934 do not include any identified banking
            product.
        ``(b) Exception.--An appropriate Federal banking agency may except
    an identified banking product of a bank under its regulatory
    jurisdiction from the exclusions in subsection (a) if the agency
    determines, in consultation with the Commodity Futures Trading
    Commission and the Securities and Exchange Commission, that the
    product--
                ``(1) would meet the definition of swap in section 1a(35)
            of the Commodity Exchange Act (7 U.S.C. 1a(35)) or security-
            based swap in section 3(a)(68) of the Securities and Exchange
            Act of 1934; and
                ``(2) has become known to the trade as a swap or security-
            based swap, or otherwise has been structured as an identified
            banking product for the purpose of evading the provisions of
            the Commodity Exchange Act (7 U.S.C. 1 et seq.), the Securities
            Act of 1933 (15 U.S.C. 77a et seq.), or the Securities Exchange
            Act of 1934 (15 U.S.C. 78a et seq.).
        ``(c) Exception.--The exclusions in subsection (a) shall not apply
    to an identified banking product that--
                ``(1) is a product of a bank that is not under the
            regulatory jurisdiction of an appropriate Federal banking
            agency;
                ``(2) meets the definition of swap in section 1a(35) of the
            Commodity Exchange Act or security-based swap in section
            3(a)(68) of the Securities and Exchange Act of 1934; and
                ``(3) has become known to the trade as a swap or security-
            based swap, or otherwise has been structured as an identified
            banking product for the purpose of evading the provisions of
            the Commodity Exchange Act (7 U.S.C. 1 et seq.), the Securities
            Act of 1933 (15 U.S.C. 77a et seq.), or the Securities Exchange
            Act of 1934 (15 U.S.C. 78a et seq.).''.

    SEC. 3104. PUBLIC REPORTING OF AGGREGATE SWAP DATA.

        Section 8 of the Commodity Exchange Act (7 U.S.C. 12) is amended by
    adding at the end the following:
        ``(j) Public Reporting of Aggregate Swap Data.--
                ``(1) In general.--The Commission, or a person designated
            by the Commission pursuant to paragraph (2), shall make
            available to the public, in a manner that does not disclose the
            business transactions and market positions of any person,
            aggregate data on swap trading volumes and positions from the
            sources set forth in paragraph (3).
                ``(2) Designee of the commission.--The Commission may
            designate a derivatives clearing organization or a swap
            repository to carry out the public reporting described in
            paragraph (1).
                ``(3) Sources of information.--The sources of the
            information to be publicly reported as described in paragraph
            (1) are--
                        ``(A) derivatives clearing organizations pursuant
                    to section 5b(j)(2);
                        ``(B) swap repositories pursuant to section
                    21(c)(3); and
                        ``(C) reports received by the Commission pursuant
                    to section 4r.''.

    SEC. 3105. SWAP REPOSITORIES.

        The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by
    inserting after section 20 the following:

    ``SEC. 21. SWAP REPOSITORIES.

        ``(a) Registration Requirement.--
                ``(1) In general.--It shall be unlawful for any person,
            unless registered with the Commission, directly or indirectly
            to make use of the mails or any means or instrumentality of
            interstate commerce to perform the functions of a swap
            repository.
                ``(2) Inspection and examination.--Registered swap
            repositories shall be subject to inspection and examination by
            any representative of the Commission.
        ``(b) Standard Setting.--
                ``(1) Data identification.--The Commission shall prescribe
            standards that specify the data elements for each swap that
            shall be collected and maintained by each registered swap
            repository.
                ``(2) Data collection and maintenance.--The Commission
            shall prescribe data collection and data maintenance standards
            for swap repositories.
                ``(3) Comparability.--The standards prescribed by the
            Commission under this subsection shall be comparable to the
            data standards imposed by the Commission on derivatives
            clearing organizations that clear swaps.
        ``(c) Duties.--A swap repository shall--
                ``(1) accept data prescribed by the Commission for each
            swap under subsection (b);
                ``(2) maintain the data in such form and manner and for
            such period as may be required by the Commission;
                ``(3) provide to the Commission, or its designee, such
            information as is required by, and in a form and at a frequency
            to be determined by, the Commission, in order to comply with
            the public reporting requirements contained in section 8(j);
            and
                ``(4) make available, on a confidential basis pursuant to
            section 8, all data obtained by the swap repository, including
            individual counterparty trade and position data, to the
            Commission, the appropriate Federal banking agencies, the
            Financial Services Oversight Council, the Securities and
            Exchange Commission, and the Department of Justice or to other
            persons the Commission deems appropriate, including foreign
            financial supervisors (including foreign futures authorities),
            foreign central banks, and foreign ministries.
        ``(d) Rules.--Not later than 1 year after the date of the enactment
    of the Derivative Markets Transparency and Accountability Act of 2009,
    the Commission shall adopt rules governing persons that are registered
    under this section, including rules that specify the data elements that
    shall be collected and maintained.
        ``(e) Exemptions.--The Commission may exempt, conditionally or
    unconditionally, a swap repository from the requirements of this
    section if the Commission finds that the swap repository is subject to
    comparable, comprehensive supervision and regulation on a consolidated
    basis by the Securities and Exchange Commission, a Prudential Regulator
    or the appropriate governmental authorities in the organization's home
    country.''.

    SEC. 3106. REPORTING AND RECORDKEEPING.

        The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by
    inserting after section 4q the following:

    ``SEC. 4R. REPORTING AND RECORDKEEPING FOR CERTAIN SWAPS.

        ``(a) In General.--Any person who enters into a swap and--
                ``(1) did not have the swap cleared in accordance with
            section 2(j)(1); and
                ``(2) did not have data regarding the swap accepted by a
            swap repository in accordance with rules (including timeframes)
            adopted by the Commission under section 21,
    shall meet the requirements in subsection (b).
        ``(b) Reports.--Any person described in subsection (a) shall--
                ``(1) make such reports in such form and manner and for
            such period as the Commission shall prescribe by rule or
            regulation regarding the swaps held by the person; and
                ``(2) keep books and records pertaining to the swaps held
            by the person in such form and manner and for such period as
            may be required by the Commission, which books and records
            shall be open to inspection by any representative of the
            Commission, an appropriate Federal banking agency, the
            Securities and Exchange Commission, the Financial Services
            Oversight Council, and the Department of Justice.
        ``(c) Identical Data.--In adopting rules under this section, the
    Commission shall require persons described in subsection (a) to report
    the same or a more comprehensive set of data than the Commission
    requires swap repositories to collect under section 21.''.

    SEC. 3107. REGISTRATION AND REGULATION OF SWAP DEALERS AND MAJOR SWAP
                  PARTICIPANTS.

        The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by
    inserting after section 4r (as added by section 3106) the following:

    ``SEC. 4S. REGISTRATION AND REGULATION OF SWAP DEALERS AND MAJOR SWAP
                  PARTICIPANTS.

        ``(a) Registration.--
                ``(1) It shall be unlawful for any person to act as a swap
            dealer unless the person is registered as a swap dealer with
            the Commission.
                ``(2) It shall be unlawful for any person to act as a major
            swap participant unless the person is registered as a major
            swap participant with the Commission.
        ``(b) Requirements.--
                ``(1) In general.--A person shall register as a swap dealer
            or major swap participant by filing a registration application
            with the Commission.
                ``(2) Contents.--The application shall be made in such form
            and manner as prescribed by the Commission, giving any
            information and facts as the Commission may deem necessary
            concerning the business in which the applicant is or will be
            engaged. The person, when registered as a swap dealer or major
            swap participant, shall continue to report and furnish to the
            Commission such information pertaining to the person's business
            as the Commission may require.
                ``(3) Expiration.--Each registration shall expire at such
            time as the Commission may by rule or regulation prescribe.
                ``(4) Rules.--Except as provided in subsections (c), (d)
            and (e), the Commission may prescribe rules applicable to swap
            dealers and major swap participants, including rules that limit
            the activities of swap dealers and major swap participants.
            Except with regard to subsection (d)(1)(A), the Commission may
            provide conditional or unconditional exemptions from some or
            all of the rules or requirements prescribed under this section
            for swap dealers and major swap participants.
                ``(5) Transition.--Rules adopted under this section shall
            provide for the registration of swap dealers and major swap
            participants no later than 1 year after the effective date of
            the Derivative Markets Transparency and Accountability Act of
            2009.
                ``(6) Statutory disqualification.--Except to the extent
            otherwise specifically provided by rule, regulation, or order,
            it shall be unlawful for a swap dealer or a major swap
            participant to permit any person associated with a swap dealer
            or a major swap participant who is subject to a statutory
            disqualification to effect or be involved in effecting swaps on
            behalf of the swap dealer or major swap participant, if the
            swap dealer or major swap participant knew, or in the exercise
            of reasonable care should have known, of the statutory
            disqualification.
        ``(c) Rules.--
                ``(1) In general.--Not later than 1 year after the date of
            the enactment of this section, the Commission shall adopt rules
            for persons that are registered as swap dealers or major swap
            participants under this section.
                ``(2) Exception for prudential requirements.--The
            Commission shall not prescribe rules imposing prudential
            requirements on swap dealers or major swap participants for
            which there is a Prudential Regulator. This provision shall not
            be construed as limiting the authority of the Commission to
            prescribe appropriate business conduct, reporting, and
            recordkeeping requirements to protect investors.
        ``(d) Capital and Margin Requirements.--
                ``(1) In general.--
                        ``(A) Bank swap dealers and major swap
                    participants.--Each registered swap dealer and major
                    swap participant for which there is a Prudential
                    Regulator shall meet such minimum capital requirements
                    and minimum initial and variation margin requirements
                    as the Prudential Regulators shall by rule or
                    regulation jointly prescribe that:
                                ``(i) help ensure the safety and soundness
                            of the swap dealer or major swap participant;
                            and
                                ``(ii) are appropriate for the risk
                            associated with the non-cleared swaps held as a
                            swap dealer or major swap participant.
                        ``(B) Non-bank swap dealers and major swap
                    participants.--Each registered swap dealer and major
                    swap participant for which there is not a Prudential
                    Regulator shall meet such minimum capital requirements
                    and minimum initial and variation margin requirements
                    as the Commission shall by rule or regulation prescribe
                    that--
                                ``(i) help ensure the safety and soundness
                            of the swap dealer or major swap participant;
                            and
                                ``(ii) are appropriate for the risk
                            associated with the non-cleared swaps held as a
                            swap dealer or major swap participant.
                ``(2) Rules.--
                        ``(A) Bank swap dealers and major swap
                    participants.--No later than 1 year after the date of
                    the enactment of the Derivative Markets Transparency
                    and Accountability Act of 2009, the Prudential
                    Regulators, in consultation with the Commission, shall
                    jointly adopt rules imposing capital and margin
                    requirements under this subsection for swap dealers and
                    major swap participants, with respect to their
                    activities as a swap dealer or major swap participant
                    for which there is a Prudential Regulator.
                        ``(B) Non-bank swap dealers and major swap
                    participants.--No later than 1 year after the date of
                    the enactment of the Derivative Markets Transparency
                    and Accountability Act of 2009, the Commission shall
                    adopt rules imposing capital and margin requirements
                    under this subsection for swap dealers and major swap
                    participants for which there is no Prudential
                    Regulator.
                ``(3) Authority.--Nothing in this section shall limit the
            authority of the Commission to set capital requirements for a
            registered futures commission merchant or introducing broker in
            accordance with section 4f.
        ``(e) Reporting and Recordkeeping.--
                ``(1) In general.--Each registered swap dealer and major
            swap participant--
                        ``(A) shall make such reports as are prescribed by
                    the Commission by rule or regulation regarding the
                    transactions and positions and financial condition of
                    the person;
                        ``(B) for which--
                                ``(i) there is a Prudential Regulator,
                            shall keep books and records of all activities
                            related to its business as a swap dealer or
                            major swap participant in such form and manner
                            and for such period as may be prescribed by the
                            Commission by rule or regulation;
                                ``(ii) there is no Prudential Regulator,
                            shall keep books and records in such form and
                            manner and for such period as may be prescribed
                            by the Commission by rule or regulation;
                        ``(C) shall keep the books and records open to
                    inspection and examination by any representative of the
                    Commission; and
                        ``(D) shall keep any such books and records
                    relating to swaps defined in section 1a(35)(A)(v) open
                    to inspection and examination by the Securities and
                    Exchange Commission.
                ``(2) Rules.--No later than 1 year after the date of the
            enactment of the Derivative Markets Transparency and
            Accountability Act of 2009, the Commission shall adopt rules
            governing reporting and recordkeeping for swap dealers and
            major swap participants.
        ``(f) Daily Trading Records.--
                ``(1) In general.--Each registered swap dealer and major
            swap participant shall maintain daily trading records of its
            swaps and all related records (including related cash or
            forward transactions) and recorded communications including but
            not limited to electronic mail, instant messages, and
            recordings of telephone calls, for such period as may be
            prescribed by the Commission by rule or regulation.
                ``(2) Information requirements.--The daily trading records
            shall include such information as the Commission shall
            prescribe by rule or regulation.
                ``(3) Customer records.--Each registered swap dealer and
            major swap participant shall maintain daily trading records for
            each customer or counterparty in such manner and form as to be
            identifiable with each swap transaction.
                ``(4) Audit trail.--Each registered swap dealer and major
            swap participant shall maintain a complete audit trail for
            conducting comprehensive and accurate trade reconstructions.
                ``(5) Rules.--No later than 1 year after the date of the
            enactment of the Derivative Markets Transparency and
            Accountability Act of 2009, the Commission shall adopt rules
            governing daily trading records for swap dealers and major swap
            participants.
        ``(g) Business Conduct Standards.--
                ``(1) In general.--Each registered swap dealer and major
            swap participant shall conform with business conduct standards
            as may be prescribed by the Commission by rule or regulation
            addressing--
                        ``(A) fraud, manipulation, and other abusive
                    practices involving swaps (including swaps that are
                    offered but not entered into);
                        ``(B) diligent supervision of its business as a
                    swap dealer;
                        ``(C) adherence to all applicable position limits;
                    and
                        ``(D) such other matters as the Commission shall
                    determine to be necessary or appropriate.
                ``(2) Business conduct requirements.--Business conduct
            requirements adopted by the Commission shall--
                        ``(A) establish the standard of care for a swap
                    dealer or major swap participant to verify that any
                    counterparty meets the eligibility standards for an
                    eligible contract participant;
                        ``(B) require disclosure by the swap dealer or
                    major swap participant to any counterparty to the
                    transaction (other than a swap dealer or major swap
                    participant) of--
                                ``(i) information about the material risks
                            and characteristics of the swap;
                                ``(ii) for cleared swaps, upon the request
                            of the counterparty, the daily mark from the
                            appropriate derivatives clearing organization,
                            and for non-cleared swaps, upon request of the
                            counterparty, the daily mark of the swap dealer
                            or major swap participant; and
                                ``(iii) any other material incentives or
                            conflicts of interest that the swap dealer or
                            major swap participant may have in connection
                            with the swap; and
                        ``(C) establish such other standards and
                    requirements as the Commission may determine are
                    necessary or appropriate in the public interest, for
                    the protection of investors, or otherwise in
                    furtherance of the purposes of this Act.
                ``(3) Rules.--The Commission shall prescribe rules under
            this subsection governing business conduct standards for swap
            dealers and major swap participants no later than 1 year after
            the date of the enactment of the Derivative Markets
            Transparency and Accountability Act of 2009.
        ``(h) Documentation Standards.--
                ``(1) In general.--Each registered swap dealer and major
            swap participant shall conform with standards, as may be
            prescribed by the Commission by rule or regulation, addressing
            timely and accurate confirmation, processing, netting,
            documentation, and valuation of all swaps.
                ``(2) Rules.--No later than 1 year after the date of the
            enactment of the Derivative Markets Transparency and
            Accountability Act of 2009, the Commission shall adopt rules
            governing the standards described in paragraph (1) for swap
            dealers and major swap participants.
        ``(i) Dealer Responsibilities.--Each registered swap dealer and
    major swap participant at all times shall comply with the following
    requirements:
                ``(1) Monitoring of trading.--The swap dealer or major swap
            participant shall monitor its trading in swaps to prevent
            violations of applicable position limits.
                ``(2) Disclosure of general information.--The swap dealer
            or major swap participant shall disclose to the Commission or
            to the Prudential Regulator for the swap dealer or major swap
            participant, as applicable, information concerning--
                        ``(A) terms and conditions of its swaps;
                        ``(B) swap trading operations, mechanisms, and
                    practices;
                        ``(C) financial integrity protections relating to
                    swaps; and
                        ``(D) other information relevant to its trading in
                    swaps.
                ``(3) Ability to obtain information.--The swap dealer or
            major swap participant shall--
                        ``(A) establish and enforce internal systems and
                    procedures to obtain any necessary information to
                    perform any of the functions described in this section;
                    and
                        ``(B) provide the information to the Commission or
                    to the Prudential Regulator for the swap dealer or
                    major swap participant, as applicable, upon request.
                ``(4) Conflicts of interest.--The swap dealer and major
            swap participant shall implement conflict-of-interest systems
            and procedures that--
                        ``(A) establish structural and institutional
                    safeguards to assure that the activities of any person
                    within the firm relating to research or analysis of the
                    price or market for any commodity are separated by
                    appropriate informational partitions within the firm
                    from the review, pressure, or oversight of those whose
                    involvement in trading or clearing activities might
                    potentially bias their judgment or supervision; and
                        ``(B) address such other issues as the Commission
                    determines appropriate.
                ``(5) Antitrust considerations.--The swap dealer or major
            swap participant shall avoid--
                        ``(A) adopting any processes or taking any actions
                    that result in any unreasonable restraints of trade; or
                        ``(B) imposing any material anticompetitive burden
                    on trading.''.

    SEC. 3108. CONFLICTS OF INTEREST.

        Section 4d of the Commodity Exchange Act (7 U.S.C. 6d) is amended
    by--
                (1) redesignating subsection (c) as subsection (d); and
                (2) inserting after subsection (b) the following:
        ``(c) Conflicts of Interest.--The Commission shall require that
    futures commission merchants and introducing brokers implement
    conflict-of-interest systems and procedures that--
                ``(1) establish structural and institutional safeguards to
            assure that the activities of any person within the firm
            relating to research or analysis of the price or market for any
            commodity are separated by appropriate informational partitions
            within the firm from the review, pressure, or oversight of
            those whose involvement in trading or clearing activities might
            potentially bias their judgment or supervision; and
                ``(2) address such other issues as the Commission
            determines appropriate.''.

    SEC. 3109. SWAP EXECUTION FACILITIES.

        The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by
    inserting after section 5g the following:

    ``SEC. 5H. SWAP EXECUTION FACILITIES.

        ``(a) Registration.--A person may not operate a swap execution
    facility unless the facility is registered under this section or is
    registered with the Commission as a designated contract market under
    section 5 or a swap execution facility under section 5.
        ``(b) Requirements for Trading.--
                ``(1) A swap execution facility that is registered under
            subsection (a) may make available for trading any swap.
                ``(2) Rules for trading through the facility.--Not later
            than 1 year after the date of the enactment of the Derivative
            Markets Transparency and Accountability Act of 2009, the
            Commission shall adopt rules to allow a swap to be traded
            through the facilities of a designated contract market or a
            swap execution facility. Such rules shall permit an
            intermediary, acting as principal or agent, to enter into or
            execute a swap, notwithstanding section 2(k), if the swap is
            executed, reported, recorded, or confirmed in accordance with
            the rules of the designated contract market or swap execution
            facility.
                ``(3) Agricultural swaps.--A swap execution facility may
            not list for trading or confirm the execution of any swap in an
            agricultural commodity (as defined by the Commission) except
            pursuant to a rule or regulation of the Commission allowing the
            swap under such terms and conditions as the Commission shall
            prescribe.
        ``(c) Trading by Contract Markets.--A board of trade that operates
    a contract market shall, to the extent that the board of trade also
    operates a swap execution facility and uses the same electronic trade
    execution system for trading on the contract market and the swap
    execution facility, identify whether the electronic trading is taking
    place on the contract market or the swap execution facility.
        ``(d) Core Principles for Swap Execution Facilities.--
                ``(1) In general.--To be registered as, and to maintain its
            registration as, a swap execution facility, the facility shall
            comply with the core principles specified in this subsection
            and any requirement that the Commission may impose by rule or
            regulation pursuant to section 8a(5). Except where the
            Commission determines otherwise by rule or regulation, the
            facility shall have reasonable discretion in establishing the
            manner in which it complies with these core principles.
                ``(2) Compliance with rules.--The swap execution facility
            shall--
                        ``(A) monitor and enforce compliance with any of
                    the rules of the facility, including the terms and
                    conditions of the swaps traded on or through the
                    facility and any limitations on access to the facility;
                    and
                        ``(B) establish and enforce trading and
                    participation rules that will deter abuses and have the
                    capacity to detect, investigate, and enforce those
                    rules, including means to--
                                ``(i) provide market participants with
                            impartial access to the market; and
                                ``(ii) capture information that may be used
                            in establishing whether rule violations have
                            occurred.
                ``(3) Swaps not readily susceptible to manipulation.--The
            swap execution facility shall permit trading only in swaps that
            are not readily susceptible to manipulation.
                ``(4) Monitoring of trading.--The swap execution facility
            shall--
                        ``(A) establish and enforce rules or terms and
                    conditions defining, or specifications detailing,
                    trading procedures to be used in entering and executing
                    orders traded on or through its facilities; and
                        ``(B) monitor trading in swaps to prevent
                    manipulation, price distortion, and disruptions of the
                    delivery or cash settlement process through
                    surveillance, compliance, and disciplinary practices
                    and procedures, including methods for conducting real-
                    time monitoring of trading and comprehensive and
                    accurate trade reconstructions.
                ``(5) Ability to obtain information.--The swap execution
            facility shall--
                        ``(A) establish and enforce rules that will allow
                    the facility to obtain any necessary information to
                    perform any of the functions described in this section;
                        ``(B) provide the information to the Commission
                    upon request; and
                        ``(C) have the capacity to carry out such
                    international information-sharing agreements as the
                    Commission may require.
                ``(6) Position limits or accountability.--
                        ``(A) To reduce the potential threat of market
                    manipulation or congestion, especially during trading
                    in the delivery month, a swap execution facility that
                    is a trading facility shall adopt for each of its
                    contracts made available for trading on the trading
                    facility, where necessary and appropriate, position
                    limitations or position accountability for speculators
                    who establish positions in the contract.
                        ``(B) For any contract of a swap execution facility
                    that is subject to a position limitation established by
                    the Commission pursuant to section 4a(a), the swap
                    execution facility--
                                ``(i) may set a position limitation at a
                            level that is lower than the Commission
                            limitation; and
                                ``(ii) shall monitor positions established
                            on or through the swap execution facility for
                            compliance with the limit set by the Commission
                            and the limit, if any, set by the swap
                            execution facility.
                ``(7) Financial integrity of transactions.--The swap
            execution facility shall establish and enforce rules and
            procedures for ensuring the financial integrity of swaps
            entered on or through its facilities, including the clearance
            and settlement of the swaps pursuant to section 2(j)(1).
                ``(8) Emergency authority.--The swap execution facility
            shall adopt rules to provide for the exercise of emergency
            authority, in consultation or cooperation with the Commission,
            where necessary and appropriate, including the authority to
            liquidate or transfer open positions in any swap or to suspend
            or curtail trading in a swap.
                ``(9) Timely publication of trading information.--The swap
            execution facility shall make public timely information on
            price, trading volume, and other trading data on swaps to the
            extent prescribed by the Commission. The Commission shall
            evaluate the impact of public disclosure on market liquidity in
            the relevant market, and shall seek to avoid public disclosure
            of information in a manner that would significantly reduce
            market liquidity. The Commission shall not disclose information
            related to the internal business decisions of particular market
            participants.
                ``(10) Recordkeeping and reporting.--The swap execution
            facility shall maintain records of all activities related to
            the business of the facility, including a complete audit trail,
            in a form and manner acceptable to the Commission for a period
            of 5 years, and report to the Commission all information
            determined by the Commission to be necessary or appropriate for
            the Commission to perform its responsibilities under this Act
            in a form and manner acceptable to the Commission. The swap
            execution facility shall keep any such records relating to
            swaps defined in section 1a(35)(A)(v) open to inspection and
            examination by the Securities and Exchange Commission. The
            Commission shall adopt data collection and reporting
            requirements for swap execution facilities that are comparable
            to corresponding requirements for derivatives clearing
            organizations and swap repositories.
                ``(11) Antitrust considerations.--The swap execution
            facility shall avoid--
                        ``(A) adopting any rules or taking any actions that
                    result in any unreasonable restraints of trade; or
                        ``(B) imposing any material anticompetitive burden
                    on trading on the swap execution facility.
                ``(12) Conflicts of interest.--The swap execution facility
            shall--
                        ``(A) establish and enforce rules to minimize
                    conflicts of interest in its decision-making process;
                    and
                        ``(B) establish a process for resolving the
                    conflicts of interest.
                ``(13) Financial resources.--
                        ``(A) The swap execution facility shall have
                    adequate financial, operational, and managerial
                    resources to discharge its responsibilities.
                        ``(B) The financial resources of the swap execution
                    facility shall be considered adequate if their value
                    exceeds the total amount that would enable the facility
                    to cover its operating costs for a period of 1 year,
                    calculated on a rolling basis.
                ``(14) System safeguards.--The swap execution facility
            shall--
                        ``(A) establish and maintain a program of risk
                    analysis and oversight to identify and minimize sources
                    of operational risk, through the development of
                    appropriate controls and procedures, and the
                    development of automated systems, that are reliable,
                    secure, and have adequate scalable capacity;
                        ``(B) establish and maintain emergency procedures,
                    backup facilities, and a plan for disaster recovery
                    that allow for the timely recovery and resumption of
                    operations and the fulfillment of the swap execution
                    facility's responsibilities and obligation; and
                        ``(C) periodically conduct tests to verify that
                    backup resources are sufficient to ensure continued
                    order processing and trade matching, price reporting,
                    market surveillance, and maintenance of a comprehensive
                    and accurate audit trail.
                ``(15) Designation of compliance officer.--
                        ``(A) In general.--Each swap execution facility
                    shall designate an individual to serve as a compliance
                    officer.
                        ``(B) Duties.--The compliance officer--
                                ``(i) shall report directly to the board or
                            to the senior officer of the facility;
                                ``(ii) shall--
                                        ``(I) review compliance with the
                                    core principles in this subsection;
                                        ``(II) in consultation with the
                                    board of the facility, a body
                                    performing a function similar to that
                                    of a board, or the senior officer of
                                    the facility, resolve any conflicts of
                                    interest that may arise;
                                        ``(III) be responsible for
                                    administering the policies and
                                    procedures required to be established
                                    pursuant to this section; and
                                        ``(IV) ensure compliance with this
                                    Act and the rules and regulations
                                    issued under this Act, including rules
                                    prescribed by the Commission pursuant
                                    to this section; and
                                ``(iii) shall establish procedures for
                            remediation of non-compliance issues found
                            during compliance office reviews, lookbacks,
                            internal or external audit findings, self-
                            reported errors, or through validated
                            complaints, and for the handling, management
                            response, remediation, re-testing, and closing
                            of non-compliant issues.
                        ``(C) Annual reports required.--The compliance
                    officer shall annually prepare and sign a report on the
                    compliance of the facility with this Act and its
                    policies and procedures, including its code of ethics
                    and conflict of interest policies, in accordance with
                    rules prescribed by the Commission. The compliance
                    report shall accompany the financial reports of the
                    facility that are required to be furnished to the
                    Commission pursuant to this section and shall include a
                    certification that, under penalty of law, the report is
                    accurate and complete.
        ``(e) Exemptions.--The Commission may exempt, conditionally or
    unconditionally, a swap execution facility from registration under this
    section if the Commission finds that the facility is subject to
    comparable, comprehensive supervision and regulation on a consolidated
    basis by the Securities and Exchange Commission, a Prudential Regulator
    or the appropriate governmental authorities in the organization's home
    country.
        ``(f) Rules.--No later than 1 year after the date of the enactment
    of the Derivative Markets Transparency and Accountability Act of 2009,
    the Commission shall prescribe rules governing the regulation of swap
    execution facilities under this section.''.

    SEC. 3110. DERIVATIVES TRANSACTION EXECUTION FACILITIES AND EXEMPT
                  BOARDS OF TRADE.

        (a) Sections 5a and 5d of the Commodity Exchange Act (7 U.S.C. 1 et
    seq.) are repealed.
        (b)(1) Prior to the final effective dates in this title, a person
    may petition the Commodity Futures Trading Commission to remain subject
    to the provisions of section 5d of the Commodity Exchange Act, as such
    provisions existed prior to the effective date of this subtitle.
        (2) The Commodity Futures Trading Commission shall consider any
    petition submitted under paragraph (1) in a prompt manner and may allow
    a person to continue operating subject to the provisions of section 5d
    of the Commodity Exchange Act for up to 1 year after the effective date
    of this subtitle.

    SEC. 3111. DESIGNATED CONTRACT MARKETS.

        (a) Section 5(d) of the Commodity Exchange Act (7 U.S.C. 7(d)) is
    amended by striking paragraphs (1) and (2) and inserting the following:
                ``(1) In general.--To be designated as, and to maintain the
            designation of a board of trade as a contract market, the board
            of trade shall comply with the core principles specified in
            this subsection and any requirement that the Commission may
            impose by rule or regulation pursuant to section 8a(5). Except
            where the Commission determines otherwise by rule or
            regulation, the board of trade shall have reasonable discretion
            in establishing the manner in which it complies with the core
            principles.
                ``(2) Compliance with rules.--
                        ``(A) The board of trade shall monitor and enforce
                    compliance with the rules of the contract market,
                    including access requirements, the terms and conditions
                    of any contracts to be traded on the contract market
                    and the contract market's abusive trade practice
                    prohibitions.
                        ``(B) The board of trade shall have the capacity to
                    detect, investigate, and apply appropriate sanctions
                    to, any person or entity that violates the rules.
                        ``(C) The rules shall provide the board of trade
                    with the ability and authority to obtain any necessary
                    information to perform any of the functions described
                    in this subsection, including the capacity to carry out
                    such international information-sharing agreements as
                    the Commission may require.''.
        (b) Section 5(d) of such Act (7 U.S.C. 7(d)) is amended by striking
    paragraphs (4) and (5) and inserting the following:
                ``(4) Prevention of market disruption.--The board of trade
            shall have the capacity and responsibility to prevent
            manipulation, price distortion, and disruptions of the delivery
            or cash-settlement process through market surveillance,
            compliance, and enforcement practices and procedures, including
            methods for conducting real-time monitoring of trading and
            comprehensive and accurate trade reconstructions.
                ``(5) Position limitations or accountability.--
                        ``(A) To reduce the potential threat of market
                    manipulation or congestion, especially during trading
                    in the delivery month, the board of trade shall adopt
                    for each of its contracts, where necessary and
                    appropriate, position limitations or position
                    accountability for speculators.
                        ``(B) For any contract that is subject to a
                    position limitation established by the Commission
                    pursuant to section 4a(a), the board of trade shall set
                    its position limitation at a level no higher than the
                    Commission-established limitation.''.
        (c) Section 5(d) of such Act (7 U.S.C. 7(d)) is amended by striking
    paragraph (7) and inserting the following:
                ``(7) Availability of general information.--The board of
            trade shall make available to market authorities, market
            participants, and the public accurate information concerning--
                        ``(A) the terms and conditions of the contracts of
                    the contract market; and
                        ``(B) the rules, regulations and mechanisms for
                    executing transactions on or through the facilities of
                    the contract market, and the rules and specifications
                    describing the operation of the board of trade's
                    electronic matching platform or other trade execution
                    facility.''.
        (d) Section 5(d) of such Act (7 U.S.C. 7(d)) is amended by striking
    paragraph (9) and inserting the following:
                ``(9) Execution of transactions.--
                        ``(A) The board of trade shall provide a
                    competitive, open, and efficient market and mechanism
                    for executing transactions that protects the price
                    discovery process of trading in the board of trade's
                    centralized market.
                        ``(B) The rules may authorize, for bona fide
                    business purposes--
                                ``(i) transfer trades or office trades;
                                ``(ii) an exchange of--
                                        ``(I) futures in connection with a
                                    cash commodity transaction;
                                        ``(II) futures for cash
                                    commodities; or
                                        ``(III) futures for swaps; or
                                ``(iii) A futures commission merchant,
                            acting as principal or agent, to enter into or
                            confirm the execution of a contract for the
                            purchase or sale of a commodity for future
                            delivery if the contract is reported, recorded,
                            or cleared in accordance with the rules of the
                            contract market or a derivatives clearing
                            organization.''.
        (e) Section 5(d)(17) of such Act (7 U.S.C. 7(d)(17)) is amended by
    adding at the end the following: ``The board of trade shall keep any
    such records relating to swaps defined in section 1a(35)(A)(v) open to
    inspection and examination by the Securities and Exchange
    Commission.''.
        (f) Section 5(d) of such Act (7 U.S.C. 7(d)) is amended by adding
    at the end the following:
                ``(19) Financial resources.--The board of trade shall have
            adequate financial, operational, and managerial resources to
            discharge the responsibilities of a contract market. For the
            financial resources of a board of trade to be considered
            adequate, their value shall exceed the total amount that would
            enable the contract market to cover its operating costs for a
            period of 1 year, calculated on a rolling basis.
                ``(20) System safeguards.--The board of trade shall--
                        ``(A) establish and maintain a program of risk
                    analysis and oversight to identify and minimize sources
                    of operational risk through the development of
                    appropriate controls and procedures, and the
                    development of automated systems, that are reliable,
                    secure, and give adequate scalable capacity;
                        ``(B) establish and maintain emergency procedures,
                    backup facilities, and a plan for disaster recovery
                    that allow for the timely recovery and resumption of
                    operations and the fulfillment of the board of trade's
                    responsibilities and obligations; and
                        ``(C) periodically conduct tests to verify that
                    back-up resources are sufficient to ensure continued
                    order processing and trade matching, price reporting,
                    market surveillance, and maintenance of a comprehensive
                    and accurate audit trail.
                ``(21) Diversity of boards of directors.--The board of
            trade, if a publicly traded company, shall endeavor to recruit
            individuals to serve on the board of directors and the other
            decision-making bodies (as determined by the Commission) of the
            board of trade from among, and to have the composition of the
            bodies reflect, a broad and culturally diverse pool of
            qualified candidates.
                ``(22) Disciplinary procedures.--The board of trade shall
            establish and enforce disciplinary procedures that authorize
            the board of trade to discipline, suspend, or expel members or
            market participants that violate the rules of the board of
            trade, or similar methods for performing the same functions,
            including delegation of the functions to third parties.''.
        (g) Section 5 of such Act (7 U.S.C. 7) is amended by striking
    subsection (b).

    SEC. 3112. MARGIN.

        (a) Section 8a(7)(C) of the Commodity Exchange Act (7 U.S.C.
    12a(7)(C)) is amended by striking ``, excepting the setting of levels
    of margin''.
        (b) Section 8a(7) of such Act (7 U.S.C. 12a(7)) is amended by
    redesignating subparagraphs (D) through (F) as subparagraphs (E)
    through (G), respectively, and inserting after subparagraph (C) the
    following:
                        ``(D) margin requirements, provided that such
                    rules, regulations, or orders shall--
                                ``(i) be limited to protecting the
                            financial integrity of the derivatives clearing
                            organization;
                                ``(ii) be designed for risk management
                            purposes in order to protect the financial
                            integrity of transactions; and
                                ``(iii) not set specific margin amounts.''.

    SEC. 3113. POSITION LIMITS.

        (a) Section 4a(a) of the Commodity Exchange Act (7 U.S.C. 6a(a)) is
    amended by--
                (1) inserting ``(1)'' after ``(a)'';
                (2) striking ``on electronic trading facilities with
            respect to a significant price discovery contract'' in the
            first sentence and inserting ``swaps that perform or affect a
            significant price discovery function with respect to registered
            entities'';
                (3) inserting ``, including any group or class of
            traders,'' in the second sentence after ``held by any person'';
                (4) striking ``on an electronic trading facility with
            respect to a significant price discovery contract,'' in the
            second sentence and inserting ``swaps that perform or affect a
            significant price discovery function with respect to registered
            entities,''; and
                (5) inserting at the end the following:
                ``(2)(A) In accordance with the standards set forth in
            paragraph (1) of this subsection and consistent with the good
            faith exception cited in subsection (b)(2), with respect to
            physical commodities other than excluded commodities as defined
            by the Commission, the Commission shall by rule, regulation, or
            order establish limits on the amount of positions, as
            appropriate, other than bona fide hedge positions, that may be
            held by any person with respect to contracts of sale for future
            delivery or with respect to options on the contracts or
            commodities traded on or subject to the rules of a designated
            contract market.
                ``(B)(i) For exempt commodities, the limits shall be
            established within 180 days after the date of the enactment of
            this paragraph.
                ``(ii) For agricultural commodities, the limits shall be
            established within 270 days after the date of the enactment of
            this paragraph.
                ``(C) In establishing the limits, the Commission shall
            strive to ensure that trading on foreign boards of trade in the
            same commodity will be subject to comparable limits and that
            any limits to be imposed by the Commission will not cause price
            discovery in the commodity to shift to trading on the foreign
            boards of trade.
                ``(3) In establishing the limits required in paragraph (2),
            the Commission, as appropriate, shall set limits--
                        ``(A) on the number of positions that may be held
                    by any person for the spot month, each other month, and
                    the aggregate number of positions that may be held by
                    any person for all months; and
                        ``(B) to the maximum extent practicable, in its
                    discretion--
                                ``(i) to diminish, eliminate, or prevent
                            excessive speculation as described under this
                            section;
                                ``(ii) to deter and prevent market
                            manipulation, squeezes, and corners;
                                ``(iii) to ensure sufficient market
                            liquidity for bona fide hedgers; and
                                ``(iv) to ensure that the price discovery
                            function of the underlying market is not
                            disrupted.
                ``(4)(A) Not later than 150 days after the establishment of
            position limits pursuant to paragraph (2), and biannually
            thereafter, the Commission shall hold 2 public hearings, 1 for
            agriculture commodities and 1 for energy commodities as such
            terms are defined by the Commission, in order to receive
            recommendations regarding the position limits to be established
            in paragraph (2).
                ``(B) Each public hearing held pursuant to subparagraph (A)
            shall, at a minimum providing there is sufficient interest,
            receive recommendations from--
                        ``(i) 7 predominantly commercial short hedgers of
                    the actual physical commodity for future delivery;
                        ``(ii) 7 predominantly commercial long hedgers of
                    the actual physical commodity for future delivery;
                        ``(iii) 4 non-commercial participants in markets
                    for commodities for future delivery; and
                        ``(iv) each designated contract market upon which a
                    contract in the commodity for future delivery is
                    traded.
                ``(C) Within 60 days after each public hearing held
            pursuant to subparagraph (A), the Commission shall publish in
            the Federal Register its response to the recommendations
            regarding position limits heard at the hearing.
                ``(5) Significant price discovery function.--In making a
            determination whether a swap performs or affects a significant
            price discovery function with respect to regulated markets, the
            Commission shall consider, as appropriate:
                        ``(A) Price linkage.--The extent to which the swap
                    uses or otherwise relies on a daily or final settlement
                    price, or other major price parameter, of another
                    contract traded on a regulated market based upon the
                    same underlying commodity, to value a position,
                    transfer or convert a position, financially settle a
                    position, or close out a position;
                        ``(B) Arbitrage.--The extent to which the price for
                    the swap is sufficiently related to the price of
                    another contract traded on a regulated market based
                    upon the same underlying commodity so as to permit
                    market participants to effectively arbitrage between
                    the markets by simultaneously maintaining positions or
                    executing trades in the swaps on a frequent and
                    recurring basis;
                        ``(C) Material price reference.--The extent to
                    which, on a frequent and recurring basis, bids, offers,
                    or transactions in a contract traded on a regulated
                    market are directly based on, or are determined by
                    referencing, the price generated by the swap;
                        ``(D) Material liquidity.--The extent to which the
                    volume of swaps being traded in the commodity is
                    sufficient to have a material effect on another
                    contract traded on a regulated market; and
                        ``(E) Other material factors.--Such other material
                    factors as the Commission specifies by rule or
                    regulation as relevant to determine whether a swap
                    serves a significant price discovery function with
                    respect to a regulated market.
                ``(6) Economically equivalent contracts.--
                        ``(A) Notwithstanding any other provision of this
                    section, the Commission shall establish limits on the
                    amount of positions, including aggregate position
                    limits, as appropriate, other than bona fide hedge
                    positions, that may be held by any person with respect
                    to swaps that are economically equivalent to contracts
                    of sale for future delivery or to options on the
                    contracts or commodities traded on or subject to the
                    rules of a designated contract market subject to
                    paragraph (2).
                        ``(B) In establishing limits pursuant to
                    subparagraph (A), the Commission shall--
                                ``(i) develop the limits concurrently with
                            limits established under paragraph (2), and the
                            limits shall have similar requirements as under
                            paragraph (3)(B); and
                                ``(ii) establish the limits simultaneously
                            with limits established under paragraph (2).
                ``(7) Aggregate position limits.--The Commission shall, by
            rule or regulation, establish limits (including related hedge
            exemption provisions) on the aggregate number or amount of
            positions in contracts based upon the same underlying commodity
            (as defined by the Commission) that may be held by any person,
            including any group or class of traders, for each month
            across--
                        ``(A) contracts listed by designated contract
                    markets;
                        ``(B) with respect to an agreement contract, or
                    transaction that settles against any price (including
                    the daily or final settlement price) of 1 or more
                    contracts listed for trading on a registered entity,
                    contracts traded on a foreign board of trade that
                    provides members or other participants located in the
                    United States with direct access to its electronic
                    trading and order matching system; and
                        ``(C) swap contracts that perform or affect a
                    significant price discovery function with respect to
                    regulated entities.
                ``(8) Exemptions.--The Commission, by rule, regulation, or
            order, may exempt, conditionally or unconditionally, any person
            or class of persons, any swap or class of swaps, any contract
            of sale of a commodity for future delivery or class of such
            contracts, any option or class of options, or any transaction
            or class of transactions from any requirement it may establish
            under this section with respect to position limits.''.
        (b) Section 4a(b) of such Act (7 U.S.C. 6a(b)) is amended--
                (1) in paragraph (1), by striking ``or derivatives
            transaction execution facility or facilities or electronic
            trading facility'' and inserting ``or swap execution facility
            or facilities''; and
                (2) in paragraph (2), by striking ``or derivatives
            transaction execution facility or facilities or electronic
            trading facility'' and inserting ``or swap execution
            facility''.
        (c) Section 4a(c) of such Act is amended--
                (1) by inserting ``(1)'' after ``(c)''; and
                (2) by adding after and below the end the following:
                ``(2) For the purposes of implementation of subsection
            (a)(2) for contracts of sale for future delivery or options on
            the contracts or commodities, the Commission shall define what
            constitutes a bona fide hedging transaction or position as a
            transaction or position that--
                        ``(A)(i) represents a substitute for transactions
                    made or to be made or positions taken or to be taken at
                    a later time in a physical marketing channel;
                        ``(ii) is economically appropriate to the reduction
                    of risks in the conduct and management of a commercial
                    enterprise; and
                        ``(iii) arises from the potential change in the
                    value of--
                                ``(I) assets that a person owns, produces,
                            manufactures, processes, or merchandises or
                            anticipates owning, producing, manufacturing,
                            processing, or merchandising;
                                ``(II) liabilities that a person owns or
                            anticipates incurring; or
                                ``(III) services that a person provides,
                            purchases, or anticipates providing or
                            purchasing; or
                        ``(B) reduces risks attendant to a position
                    resulting from a swap that--
                                ``(i) was executed opposite a counterparty
                            for which the transaction would qualify as a
                            bona fide hedging transaction pursuant to
                            subparagraph (A); or
                                ``(ii) meets the requirements of
                            subparagraph (A).''.
        (d) This section shall become effective on the date of its
    enactment.

    SEC. 3114. ENHANCED AUTHORITY OVER REGISTERED ENTITIES.

        (a) Section 5c(a) of the Commodity Exchange Act (7 U.S.C. 7a-2(a))
    is amended--
                (1) in paragraph (1), by striking ``5a(d) and 5b(c)(2)''
            and inserting ``5b(c)(2) and 5h(e)''; and
                (2) in paragraph (2), by striking ``shall not'' and
            inserting ``may''.
        (b) Section 5c(b) of such Act (7 U.S.C. 7a-2(b)) is amended in each
    of paragraphs (1), (2), and (3) by inserting ``or swap execution
    facility'' after ``contract market'' each place it appears.
        (c) Section 5c(c)(1) of such Act (7 U.S.C. 7a-2(c)(1)) is amended--
                (1) by inserting ``(A)'' after ``In general.--''; and
                (2) by adding at the end the following:
                ``(B) The new rule or rule amendment shall become
            effective, pursuant to the registered entity's certification
            and notice of such certification to its members (in a manner to
            be determined by the Commission), 10 business days after the
            Commission's receipt of the certification (or such shorter
            period determined by the Commission by rule or regulation)
            unless the Commission notifies the registered entity within
            such time that it is staying the certification because there
            exist novel or complex issues that require additional time to
            analyze, an inadequate explanation by the submitting registered
            entity, or a potential inconsistency with this Act (including
            regulations under this Act).
                ``(C)(i) A notification by the Commission pursuant to
            subparagraph (B) shall stay the certification of the new
            contract or instrument or clearing of the new contract or
            instrument, new rule or new amendment for up to an additional
            90 days from the date of the notification.
                ``(ii) The Commission shall provide at least a 30-day
            public comment period, within the 90-day period in which the
            stay is in effect described in clause (i), whenever it reviews
            a rule or rule amendment pursuant to a notification by the
            Commission under this paragraph.''.
        (d) Section 5c(d) of such Act (7 U.S.C. 7a-2(d)) is repealed.

    SEC. 3115. FOREIGN BOARDS OF TRADE.

        (a) In General.--Section 4 of the Commodity Exchange Act (7 U.S.C.
    6) is amended by adding at the end the following:
        ``(e) Foreign Boards of Trade.--
                ``(1) In general.--The Commission may not permit a foreign
            board of trade to provide to the members of the foreign board
            of trade or other participants located in the United States
            direct access to the electronic trading and order-matching
            system of the foreign board of trade with respect to an
            agreement, contract, or transaction that settles against any
            price (including the daily or final settlement price) of 1 or
            more contracts listed for trading on a registered entity,
            unless the Commission determines that--
                        ``(A) the foreign board of trade makes public daily
                    trading information regarding the agreement, contract,
                    or transaction that is comparable to the daily trading
                    information published by the registered entity for the
                    1 or more contracts against which the agreement,
                    contract, or transaction traded on the foreign board of
                    trade settles; and
                        ``(B) the foreign board of trade (or the foreign
                    futures authority that oversees the foreign board of
                    trade)--
                                ``(i) adopts position limits (including
                            related hedge exemption provisions) for the
                            agreement, contract, or transaction that are
                            comparable, taking into consideration the
                            relative sizes of the respective markets, to
                            the position limits (including related hedge
                            exemption provisions) adopted by the registered
                            entity for the 1 or more contracts against
                            which the agreement, contract, or transaction
                            traded on the foreign board of trade settles;
                                ``(ii) has the authority to require or
                            direct market participants to limit, reduce, or
                            liquidate any position the foreign board of
                            trade (or the foreign futures authority that
                            oversees the foreign board of trade) determines
                            to be necessary to prevent or reduce the threat
                            of price manipulation, excessive speculation as
                            described in section 4a, price distortion, or
                            disruption of delivery or the cash settlement
                            process;
                                ``(iii) agrees to promptly notify the
                            Commission, with regard to the agreement,
                            contract, or transaction that settles against
                            any price (including the daily or final
                            settlement price) of 1 or more contracts listed
                            for trading on a registered entity, of any
                            change regarding--
                                        ``(I) the information that the
                                    foreign board of trade will make
                                    publicly available;
                                        ``(II) the position limits that the
                                    foreign board of trade or foreign
                                    futures authority will adopt and
                                    enforce;
                                        ``(III) the position reductions
                                    required to prevent manipulation,
                                    excessive speculation as described in
                                    section 4a, price distortion, or
                                    disruption of delivery or the cash
                                    settlement process; and
                                        ``(IV) any other area of interest
                                    expressed by the Commission to the
                                    foreign board of trade or foreign
                                    futures authority;
                                ``(iv) provides information to the
                            Commission regarding large trader positions in
                            the agreement, contract, or transaction that is
                            comparable to the large trader position
                            information collected by the Commission for the
                            1 or more contracts against which the
                            agreement, contract, or transaction traded on
                            the foreign board of trade settles; and
                                ``(v) provides the Commission with
                            information necessary to publish reports on
                            aggregate trader positions for the agreement,
                            contract, or transaction traded on the foreign
                            board of trade that are comparable to the
                            reports on aggregate trader positions for the 1
                            or more contracts against which the agreement,
                            contract, or transaction traded on the foreign
                            board of trade settles.
                ``(2) Existing foreign boards of trade.--Paragraph (1)
            shall not be effective with respect to any foreign board of
            trade to which the Commission has granted direct access
            permission before the date of the enactment of this subsection
            until the date that is 180 days after such date of enactment.
                ``(3) Persons located in the united states.--''.
        (b) Liability of Registered Persons Trading on a Foreign Board of
    Trade.--
                (1) Section 4(a) of such Act (7. U.S.C. 6(a)) is amended by
            inserting ``or by subsection (f)'' after ``Unless exempted by
            the Commission pursuant to subsection (c)''; and
                (2) Section 4 of such Act (7 U.S.C. 6) is further amended
            by adding at the end the following:
        ``(f)(1) A person registered with the Commission, or exempt from
    registration by the Commission, under this Act may not be found to have
    violated subsection (a) with respect to a transaction in, or in
    connection with, a contract of sale of a commodity for future delivery
    if the person--
                ``(A) has reason to believe that the transaction and the
            contract is made on or subject to the rules of a foreign board
            of trade that is--
                        ``(i) legally organized under the laws of a foreign
                    country;
                        ``(ii) authorized to act as a board of trade by a
                    foreign futures authority; and
                        ``(iii) subject to regulation by the foreign
                    futures authority; and
                ``(B) has not been determined by the Commission to be
            operating in violation of subsection (a).
        ``(2) Nothing in this subsection shall be construed as implying or
    creating any presumption that a board of trade, exchange, or market is
    located outside the United States, or its territories or possessions,
    for purposes of subsection (a).''.
        (c) Contract Enforcement for Foreign Futures Contracts.--Section
    22(a) of such Act (7 U.S.C. 25(a)) is amended by adding at the end the
    following:
                ``(5) Contract enforcement for foreign futures contracts.--
            A contract of sale of a commodity for future delivery traded or
            executed on or through the facilities of a board of trade,
            exchange, or market located outside the United States for
            purposes of section 4(a) shall not be void, voidable, or
            unenforceable, and a party to such a contract shall not be
            entitled to rescind or recover any payment made with respect to
            the contract, based on the failure of the foreign board of
            trade to comply with any provision of this Act.''.

    SEC. 3116. LEGAL CERTAINTY FOR SWAPS.

        Section 22(a)(4) of the Commodity Exchange Act (7 U.S.C. 25(a)(4))
    is amended to read as follows:
                ``(4) Contract enforcement between eligible
            counterparties.--
                        ``(A) A hybrid instrument sold to any investor
                    shall not be void, voidable, or unenforceable, and a
                    party to such a hybrid instrument shall not be entitled
                    to rescind, or recover any payment made with respect
                    to, such a hybrid instrument under this section or any
                    other provision of Federal or State law, based solely
                    on the failure of the hybrid instrument to comply with
                    the terms or conditions of section 2(f) or regulations
                    of the Commission; and
                        ``(B) An agreement, contract, or transaction
                    between eligible contract participants or persons
                    reasonably believed to be eligible contract
                    participants shall not be void, voidable, or
                    unenforceable, and a party thereto shall not be
                    entitled to rescind, or recover any payment made with
                    respect to, such an agreement, contract, or transaction
                    under this section or any other provision of Federal or
                    State law, based solely on the failure of the
                    agreement, contract, or transaction to meet the
                    definition of a swap set forth in section 1a, be traded
                    in the manner set forth in section 2(k)(1), or be
                    cleared pursuant to 2(j)(1) or regulations of the
                    Commission pursuant thereto.''.

    SEC. 3117. FDICIA AMENDMENTS.

        Sections 408 and 409 of the Federal Deposit Insurance Corporation
    Improvement Act of 1991 (12 U.S.C. 4421 and 4422) are repealed.

    SEC. 3118. ENFORCEMENT AUTHORITY.

        (a) The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by
    inserting after section 4b the following:

    ``SEC. 4B-1. ENFORCEMENT AUTHORITY.

        ``(a) CFTC.--Except as provided in subsection (b), the Commission
    shall have exclusive authority to enforce the provisions of subtitle A
    of the Derivative Markets Transparency and Accountability Act of 2009
    with respect to any person.
        ``(b) Prudential Regulators.--The Prudential Regulators shall have
    exclusive authority to enforce the provisions of section 4s(d) and
    other prudential requirements of this Act with respect to banks, and
    branches or agencies of foreign banks that are swap dealers or major
    swap participants.
        ``(c) Referral.--(1) If the Prudential Regulator for a swap dealer
    or major swap participant has cause to believe that the swap dealer or
    major swap participant may have engaged in conduct that constitutes a
    violation of the nonprudential requirements of section 4s or rules
    adopted by the Commission thereunder, that Prudential Regulator may
    recommend in writing to the Commission that the Commission initiate an
    enforcement proceeding as authorized under this Act. The recommendation
    shall be accompanied by a written explanation of the concerns giving
    rise to the recommendation.
        ``(2) If the Commission has cause to believe that a swap dealer or
    major swap participant that has a Prudential Regulator may have engaged
    in conduct that constitutes a violation of the prudential requirements
    of section 4s or rules adopted thereunder, the Commission may recommend
    in writing to the Prudential Regulator that the Prudential Regulator
    initiate an enforcement proceeding as authorized under this Act. The
    recommendation shall be accompanied by a written explanation of the
    concerns given rise to the recommendation.''.
        (b)(1) Section 4c(a) of such Act (7 U.S.C. 6c(a)) is amended by
    adding at the end the following:
                ``(3) Disruptive practices.--It shall be unlawful for any
            person to engage in any trading or practice on or subject to
            the rules of a registered entity that--
                        ``(A) violates bids and offers (intentionally
                    bidding at a price higher than the lowest offer, or
                    offering at a price lower than the highest bid);
                        ``(B) is, is of the character of, or is commonly
                    known to the trade as `marking the close' (bidding or
                    offering during or near the market's closing period
                    with the intent to influence the settlement price);
                        ``(C) is, is of the character of, or is commonly
                    known to the trade as `spoofing' (bidding or offering
                    with the intent to cancel the bid or offer before
                    execution); or
                        ``(D) constitutes uneconomic trading (trading that
                    has no legitimate economic purpose but for the effect
                    on price).
                ``(4) The Commission may make and promulgate such rules and
            regulations as, in the judgment of the Commission, are
            reasonably necessary to prohibit any other trading practice
            that is disruptive of fair and equitable trading.''.
        (2) The amendment made by paragraph (1) shall become effective upon
    enactment.

    SEC. 3119. ENFORCEMENT.

        (a) Section 4b(a)(2) of the Commodity Exchange Act (7 U.S.C.
    6b(a)(2)) is amended by striking ``or other agreement, contract, or
    transaction subject to paragraphs (1) and (2) of section 5a(g),'' and
    inserting ``or swap,''.
        (b) Section 4b(b) of such Act (7 U.S.C. 6b(b)) is amended by
    striking ``or other agreement, contract or transaction subject to
    paragraphs (1) and (2) of section 5a(g),'' and inserting ``or swap,''.
        (c) Section 4c(a) of such Act (7 U.S.C. 6c(a)) is amended by
    inserting ``or swap'' before ``if the transaction is used or may be
    used''.
        (d) Section 9(a)(2) of such Act (7 U.S.C. 13(a)(2)) is amended by
    inserting ``or of any swap,'' before ``or to corner''.
        (e) Section 9(a)(4) of such Act (7 U.S.C. 13(a)(4)) is amended by
    inserting ``swap repository,'' before ``or futures association''.
        (f) Section 9(e)(1) of such Act (7 U.S.C. 13(e)(1)) is amended by
    inserting ``swap repository,'' before ``or registered futures
    association'' and by inserting ``, or swaps,'' before ``on the basis''.
        (g) Section 8(b) of the Federal Deposit Insurance Act (12 U.S.C.
    1818(b)) is amended by redesignating paragraphs (6) through (10) as
    paragraphs (7) through (11), respectively, and inserting after
    paragraph (5) the following:
                ``(6) This section shall apply to any swap dealer, major
            swap participant, security-based swap dealer, major security-
            based swap participant, derivatives clearing organization, swap
            repository, security-based swap repository, or swap execution
            facility, whether or not it is an insured depository
            institution, for which the Board, the Corporation, or the
            Office of the Comptroller of the Currency is the appropriate
            Federal banking agency or Prudential Regulator for purposes of
            the Derivative Markets Transparency and Accountability Act of
            2009.''.

    SEC. 3120. RETAIL COMMODITY TRANSACTIONS.

        (a) Section 2(c) of the Commodity Exchange Act (7 U.S.C. 2(c)) is
    amended--
                (1) in paragraph (1), by striking ``(other than section 5a
            (to the extent provided in section 5a(g)), 5b, 5d, or
            12(e)(2)(B))'' and inserting ``(other than section 5b or
            12(e)(2)(B))''; and
                (2) in paragraph (2), by inserting after subparagraph (C)
            the following:
                        ``(D) Retail commodity transactions.--
                                ``(i) This subparagraph shall apply to, and
                            the Commission shall have jurisdiction over,
                            any agreement, contract, or transaction in any
                            commodity that is--
                                        ``(I) entered into with, or offered
                                    to (even if not entered into with), a
                                    person that is not an eligible contract
                                    participant or eligible commercial
                                    entity; and
                                        ``(II) entered into, or offered
                                    (even if not entered into), on a
                                    leveraged or margined basis, or
                                    financed by the offeror, the
                                    counterparty, or a person acting in
                                    concert with the offeror or
                                    counterparty on a similar basis.
                                ``(ii) Clause (i) shall not apply to--
                                        ``(I) an agreement, contract, or
                                    transaction described in paragraph (1)
                                    or subparagraphs (A), (B), or (C),
                                    including any agreement, contract, or
                                    transaction specifically excluded from
                                    subparagraph (A), (B), or (C);
                                        ``(II) any security;
                                        ``(III) a contract of sale that--
                                                ``(aa) results in actual
                                            delivery within 28 days or such
                                            other longer period as the
                                            Commission may determine by
                                            rule or regulation based upon
                                            the typical commercial practice
                                            in cash or spot markets for the
                                            commodity involved; or
                                                ``(bb) creates an
                                            enforceable obligation to
                                            deliver between a seller and a
                                            buyer that have the ability to
                                            deliver and accept delivery,
                                            respectively, in connection
                                            with their line of business.
                                        ``(IV) an agreement, contract, or
                                    transaction that is listed on a
                                    national securities exchange registered
                                    under section 6(a) of the Securities
                                    Exchange Act of 1934 (15 U.S.C.
                                    78f(a)); or
                                        ``(V) an identified banking
                                    product, as defined in section 402(b)
                                    of the Legal Certainty for Bank
                                    Products Act of 2000 (7 U.S.C. 27(b)).
                                ``(iii) Sections 4(a), 4(b) and 4b shall
                            apply to any agreement, contract or transaction
                            described in clause (i), that is not excluded
                            from clause (i) by clause (ii), as if the
                            agreement, contract, or transaction were a
                            contract of sale of a commodity for future
                            delivery.
                                ``(iv) This subparagraph shall not be
                            construed to limit any jurisdiction that the
                            Commission may otherwise have under any other
                            provision of this Act over an agreement,
                            contract, or transaction that is a contract of
                            sale of a commodity for future delivery;
                                ``(v) This subparagraph shall not be
                            construed to limit any jurisdiction that the
                            Commission or the Securities and Exchange
                            Commission may otherwise have under any other
                            provisions of this Act with respect to security
                            futures products and persons effecting
                            transactions in security futures products;
                                ``(vi) For the purposes of this
                            subparagraph, an agricultural producer, packer,
                            or handler shall be considered an eligible
                            commercial entity for any agreement, contract,
                            or transaction for a commodity in connection
                            with its line of business.''.
        (b) The amendments made by subsection (a) shall become effective on
    the date of the enactment of this section.

    SEC. 3121. LARGE SWAP TRADER REPORTING.

        The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by
    inserting after section 4s (as added by section 3107 of this Act) the
    following:

    ``SEC. 4T. LARGE SWAP TRADER REPORTING.

        ``(a) It shall be unlawful for any person to enter into any swap
    that performs or affects a significant price discovery function with
    respect to registered entities if--
                ``(1) the person directly or indirectly enters into such
            swaps during any 1 day in an amount equal to or in excess of
            such amount as shall be fixed from time to time by the
            Commission; and
                ``(2) such person directly or indirectly has or obtains a
            position in such swaps equal to or in excess of such amount as
            shall be fixed from time to time by the Commission,
    unless the person files or causes to be filed with the properly
    designated officer of the Commission such reports regarding any
    transactions or positions described in paragraphs (1) and (2) as the
    Commission may by rule or regulation require and unless, in accordance
    with the rules and regulations of the Commission, the person keeps
    books and records of all such swaps and any transactions and positions
    in any related commodity traded on or subject to the rules of any board
    of trade, and of cash or spot transactions in, inventories of, and
    purchase and sale commitments of, such a commodity.
        ``(b) The books and records shall show complete details concerning
    all transactions and positions as the Commission may by rule or
    regulation prescribe.
        ``(c) The books and records shall be open at all times to
    inspection and examination by any representative of the Commission.
        ``(d) For the purpose of this subsection, the swaps, futures and
    cash or spot transactions and positions of any person shall include the
    transactions and positions of any persons directly or indirectly
    controlled by the person.
        ``(e) In making a determination whether a swap performs or affects
    a significant price discovery function with respect to regulated
    markets, the Commission shall consider the factors set forth in section
    4a(a)(3).''.

    SEC. 3122. SEGREGATION OF ASSETS HELD AS COLLATERAL IN SWAP
                  TRANSACTIONS.

        The Commodity Exchange Act (7 U.S.C. 1 et seq.) is further amended
    by inserting after section 4t the following:

    ``SEC. 4U. SEGREGATION OF ASSETS HELD AS COLLATERAL IN OVER-THE-COUNTER
                  SWAP TRANSACTIONS.

        ``(a) Segregation.--At the request of a swap counterparty who
    provides funds or other property to a swap dealer initial margin or
    collateral to secure the obligations of the counterparty under a swap
    between the counterparty and the swap dealer that is not submitted for
    clearing to a derivatives clearing organization, the swap dealer shall
    segregate the funds or other property for the benefit of the
    counterparty, and maintain the initial margin or collateral in an
    account which is carried by an independent third-party custodian and
    designated as a segregated account for the counterparty, in accordance
    with such rules and regulations as the Commission or Prudential
    Regulator may prescribe. If a swap counterparty is a swap dealer or
    major swap participant who owns more than 20 percent of, or has more
    than 50 percent representation on the board of directors of a
    custodian, the custodian shall not be considered independent from the
    swap counterparties for purposes of the preceding sentence. This
    subsection shall not be interpreted to preclude commercial arrangements
    regarding the investment of the segregated funds or other property and
    the related allocation of gains and losses resulting from any such
    investment.
        ``(b) Further Audit Reporting.--If a swap dealer does not segregate
    funds pursuant to the request of a swap counterparty in accordance with
    subsection (a), the swap dealer shall report to its counterparty on a
    quarterly basis that its procedures relating to margin and collateral
    requirements are in compliance with the agreement of the
    counterparties.''.

    SEC. 3123. OTHER AUTHORITY.

        Unless otherwise provided by its terms, this subtitle does not
    divest any appropriate Federal banking agency, the Commission, the
    Securities and Exchange Commission, or other Federal or State agency,
    of any authority derived from any other applicable law.

    SEC. 3124. ANTITRUST.

        Nothing in the amendments made by this subtitle shall be construed
    to modify, impair, or supersede the operation of any of the antitrust
    laws. For purposes of this subtitle, the term ``antitrust laws'' has
    the same meaning given the term in subsection (a) of the first section
    of the Clayton Act, except that the term includes section 5 of the
    Federal Trade Commission Act to the extent that such section 5 applies
    to unfair methods of competition.

    SEC. 3125. REVIEW OF PRIOR ACTIONS.

        Notwithstanding any other provision of the Commodity Exchange Act,
    the Commodity Futures Trading Commission shall review, as appropriate,
    all regulations, rules, exemptions, exclusions, guidance, no action
    letters, orders, other actions taken by or on behalf of the Commission,
    and any action taken pursuant to the Commodity Exchange Act by an
    exchange, self-regulatory organization, or any other registered entity,
    that are currently in effect, to ensure that such prior actions are in
    compliance with the provisions of this title.

    SEC. 3126. EXPEDITED PROCESS.

        The Commodity Futures Trading Commission may use emergency and
    expedited procedures (including any administrative or other procedure
    as appropriate) to carry out this title if, in its discretion, it deems
    it necessary to do so.

    SEC. 3127. EFFECTIVE DATE.

        (a) Unless otherwise provided, the provisions of this subtitle
    shall become effective the later of 270 days after the date of the
    enactment of this subtitle or, to the extent a provision of this
    subtitle requires rulemaking, no less than 60 days after publication of
    a final rule or regulation implementing such provision of this
    subtitle.
        (b) Subsection (a) shall not preclude the Commodity Futures Trading
    Commission from any rulemaking required or directed under this subtitle
    to implement the provisions of this subtitle.

             Subtitle B--Regulation of Security-Based Swap Markets

    SEC. 3201. DEFINITIONS UNDER THE SECURITIES EXCHANGE ACT OF 1934.

        (a) Definitions.--Section 3(a) of the Securities Exchange Act of
    1934 (15 U.S.C. 78c(a)) is amended--
                (1) in paragraph (5)(A) and (B), by inserting ``(but not
            security-based swaps, other than security-based swaps with or
            for persons that are not eligible contract participants)''
            after the word ``securities'' in each place it appears;
                (2) in paragraph (10), by inserting ``security-based
            swap,'' after ``security future,'';
                (3) in paragraph (13), by adding at the end the following:
            ``For security-based swaps, such terms include the execution,
            termination (prior to its scheduled maturity date), assignment,
            exchange, or similar transfer or conveyance of, or
            extinguishing of rights or obligations under, a security-based
            swap, as the context may require.'';
                (4) in paragraph (14), by adding at the end the following:
            ``For security-based swaps, such terms include the execution,
            termination (prior to its scheduled maturity date), assignment,
            exchange, or similar transfer or conveyance of, or
            extinguishing of rights or obligations under, a security-based
            swap, as the context may require.'';
                (5) in paragraph (39)--
                        (A) by striking ``or government securities dealer''
                    and adding ``government securities dealer, security-
                    based swap dealer or major security-based swap
                    participant'' in its place in subparagraph (B)(i)(I);
                        (B) by adding ``security-based swap dealer, major
                    security-based swap participant,'' after ``government
                    securities dealer,'' in subparagraph (B)(i)(II);
                        (C) by striking ``or government securities dealer''
                    and adding ``government securities dealer, security-
                    based swap dealer or major security-based swap
                    participant'' in its place in subparagraph (C); and
                        (D) by adding ``security-based swap dealer, major
                    security-based swap participant,'' after ``government
                    securities dealer,'' in subparagraph (D); and
                (6) by adding at the end the following:
                ``(65) Eligible contract participant.--The term `eligible
            contract participant' has the same meaning as in section 1a(12)
            of the Commodity Exchange Act (7 U.S.C. 1a(12)).
                ``(66) Major swap participant.--The term `major swap
            participant' has the same meaning as in section 1a(39) of the
            Commodity Exchange Act (7 U.S.C. 1a(39)).
                ``(67) Major security-based swap participant.--
                        ``(A) In general.--The term `major security-based
                    swap participant' means any person who is not a
                    security-based swap dealer, and--
                                ``(i) maintains a substantial net position
                            in outstanding security-based swaps, excluding
                            positions held primarily for hedging, reducing
                            or otherwise mitigating its commercial risk,
                            including operating and balance sheet risk; or
                                ``(ii) whose outstanding security-based
                            swaps create substantial net counterparty
                            exposure among the aggregate of its
                            counterparties that could expose those
                            counterparties to significant credit losses.
                        ``(B) Definition of `substantial net position'.--
                    The Commission shall define by rule or regulation the
                    terms `substantial net position', `substantial net
                    counterparty exposure', and `significant credit losses'
                    at thresholds that the Commission determines prudent
                    for the effective monitoring, management and oversight
                    of entities which are systemically important or can
                    significantly impact the financial system through
                    counterparty credit risk. In setting the definitions,
                    the Commission shall consider the person's relative
                    position in uncleared as opposed to cleared swaps.
                        ``(C) A person may be designated a major security-
                    based swap participant for 1 or more individual types
                    of security-based swaps without being classified as a
                    major security-based swap participant for all classes
                    of security-based swaps.
                ``(68) Security-based swap.--
                        ``(A) In general.--Except as provided in
                    subparagraph (B), the term `security-based swap' means
                    any agreement, contract, or transaction that would be a
                    swap under section 1a(35) of the Commodity Exchange
                    Act, and that--
                                ``(i) is primarily based on an index that
                            is a narrow-based security index, including any
                            interest therein or based on the value thereof;
                                ``(ii) is primarily based on a single
                            security or loan, including any interest
                            therein or based on the value thereof; or
                                ``(iii) is primarily based on the
                            occurrence, non-occurrence, or extent of the
                            occurrence of an event relating to a single
                            issuer of a security or the issuers of
                            securities in a narrow-based security index,
                            provided that such event must directly affect
                            the financial statements, financial condition,
                            or financial obligations of the issuer.
                        ``(B) Rule of construction regarding master
                    agreements.--The term `security-based swap' shall be
                    construed to include a master agreement that provides
                    for an agreement, contract, or transaction that is a
                    security-based swap pursuant to subparagraph (A),
                    together with all supplements to any such master
                    agreement, without regard to whether the master
                    agreement contains an agreement, contract, or
                    transaction that is not a security-based swap pursuant
                    to subparagraph (A), except that the master agreement
                    shall be considered to be a security-based swap only
                    with respect to each agreement, contract, or
                    transaction under the master agreement that is a
                    security-based swap pursuant to subparagraph (A).
                        ``(C) Exclusion.--The term `security-based swap'
                    does not include any agreement, contract, or
                    transaction that meets the definition of a security-
                    based swap only because it references, is based upon,
                    or settles through the transfer, delivery, or receipt
                    of an exempted security under section 3(a)(12) of the
                    Securities Exchange Act of 1934 as in effect on the
                    date of enactment of the Futures Trading Act of 1982
                    (other than any municipal security as defined in
                    section 3(a)(29) as in effect on the date of enactment
                    of the Futures Trading Act of 1982), unless such
                    agreement, contract, or transaction is of the character
                    of, or is commonly known in the trade as, a put, call,
                    or other option.
                ``(69) Swap.--The term `swap' has the same meaning as in
            section 1a(35) of the Commodity Exchange Act (7 U.S.C. 1a(35)).
                ``(70) Person associated with a security-based swap dealer
            or major security-based swap participant.--The term `person
            associated with a security-based swap dealer or major security-
            based swap participant' or `associated person of a security-
            based swap dealer or major security-based swap participant'
            means any partner, officer, director, or branch manager of such
            security-based swap dealer or major security-based swap
            participant (or any person occupying a similar status or
            performing similar functions), any person directly or
            indirectly controlling, controlled by, or under common control
            with such security-based swap dealer or major security-based
            swap participant, or any employee of such security-based swap
            dealer or major security-based swap participant, except that
            any person associated with a security-based swap dealer or
            major security-based swap participant whose functions are
            solely clerical or ministerial shall not be included in the
            meaning of such term other than for purposes of section
            15F(e)(2).
                ``(71) Security-based swap dealer.--
                        ``(A) In general.--The term `security-based swap
                    dealer' means any person that--
                                ``(i) holds itself out as a dealer in
                            security-based swaps;
                                ``(ii) makes a market in security-based
                            swaps;
                                ``(iii) regularly engages in the purchase
                            of security-based swaps and their resale to
                            customers in the ordinary course of a business;
                            or
                                ``(iv) engages in any activity causing it
                            to be commonly known in the trade as a dealer
                            or market maker in security-based swaps.
                        ``(B) Designation by type or class.--A person may
                    be designated a security-based swap dealer for a single
                    type or single class or category of security-based swap
                    and considered not a security-based swap dealer for
                    other types, classes, or categories of security-based
                    swaps.
                        ``(C) De minimus exception.--The Commission shall
                    make a determination to exempt from designation as a
                    security-based swap dealer an entity that engages in a
                    de minimus amount of security-based swap dealing in
                    connection with transactions with or on the behalf of
                    its customers.
                ``(72) Appropriate federal banking agency.--The term
            `appropriate Federal banking agency' has the same meaning as in
            section 3(q) of the Federal Deposit Insurance Act (12 U.S.C.
            1813(q)).
                ``(73) Board.--The term `Board' means the Board of
            Governors of the Federal Reserve System.
                ``(74) Prudential regulator.--The term `Prudential
            Regulator' means--
                        ``(A) the Board in the case of a swap dealer, major
                    swap participant, security-based swap dealer or major
                    security-based swap participant that is--
                                ``(i) a State-chartered bank that is a
                            member of the Federal Reserve System; or
                                ``(ii) a State-chartered branch or agency
                            of a foreign bank;
                        ``(B) the Office of the Comptroller of the Currency
                    in the case of a swap dealer, major swap participant,
                    security-based swap dealer or major security-based swap
                    participant that is--
                                ``(i) a national bank; or
                                ``(ii) a federally chartered branch or
                            agency of a foreign bank; and
                        ``(C) the Federal Deposit Insurance Corporation in
                    the case of a swap dealer, major swap participant,
                    security-based swap dealer or major security-based swap
                    participant that is a state-chartered bank that is not
                    a member of the Federal Reserve System.
                ``(75) Swap dealer.--The term `swap dealer' has the same
            meaning as in section 1a(38) of the Commodity Exchange Act (7
            U.S.C. 1a(38)).
                ``(76) Security-based swap agreement.--
                        ``(A) In general.--For purposes of sections 10, 16,
                    20, and 21A of this Act, and section 17 of the
                    Securities Act of 1933 (15 U.S.C. 77q), the term
                    `security-based swap agreement' means a swap agreement
                    as defined in section 206A of the Gramm-Leach-Bliley
                    Act (15 U.S.C. 78c note) of which a material term is
                    based on the price, yield, value, or volatility of any
                    security or any group or index of securities, or any
                    interest therein.
                        ``(B) Exclusions.--The term `security-based swap
                    agreement' does not include any security-based swap.
                ``(76) Security-based swap repository.--The term `security-
            based swap repository' means any person that collects,
            calculates, prepares or maintains information or records with
            respect to transactions or positions in, or the terms and
            conditions of, security-based swaps entered into by third
            parties.
                ``(77) Swap execution facility.--The term `swap execution
            facility' means a person or entity that facilitates the
            execution or trading of security-based swaps between two
            persons through any means of interstate commerce, but which is
            not a national securities exchange, including any electronic
            trade execution or voice brokerage facility.''.
        (b) Authority to Further Define Terms.--The Securities and Exchange
    Commission may adopt a rule further defining the terms ``security-based
    swap'', ``security-based swap dealer'', ``major security-based swap
    participant'', and ``eligible contract participant'' with regard to
    security-based swaps (as such terms are defined in the amendments made
    by subsection (a)) for the purpose of including transactions and
    entities that have been structured to evade this title.

    SEC. 3202. REPEAL OF PROHIBITION ON REGULATION OF SECURITY-BASED SWAPS.

        (a) Repeal of Law.--Section 206B of the Gramm-Leach-Bliley Act (15
    U.S.C. 78c note) is repealed.
        (b) Conforming Amendments to the Securities Act of 1933.--
                (1) Section 2A(b) of the Securities Act of 1933 (15 U.S.C.
            77b-1) is amended by striking ``(as defined in section 206B of
            the Gramm-Leach-Bliley Act)'' each place that such term
            appears.
                (2) Section 17 of the Securities Act of 1933 (15 U.S.C.
            77q) is amended--
                        (A) in subsection (a)--
                                (i) by inserting ``(including security-
                            based swaps)'' after ``securities''; and
                                (ii) by striking ``206B of the Gramm-Leach-
                            Bliley Act'' and inserting ``3(a)(76) of the
                            Securities Exchange Act of 1934''; and
                        (B) in subsection (d), by striking ``206B of the
                    Gramm-Leach-Bliley Act'' and inserting ``3(a)(76) of
                    the Securities Exchange Act of 1934''.
        (c) Conforming Amendments to the Securities Exchange Act of 1934.--
    The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended
    as follows:
                (1) Section 3A (15 U.S.C. 78c-1) is amended by striking
            ``(as defined in section 206B of the Gramm-Leach-Bliley Act)''
            each place that the term appears.
                (2) Section 9(a) (15 U.S.C. 78i(a)) is amended by striking
            paragraphs (2) through (5) and inserting:
        ``(2) To effect, alone or with one or more other persons, a series
    of transactions in any security registered on a national securities
    exchange or in connection with any security-based swap or security-
    based swap agreement with respect to such security creating actual or
    apparent active trading in such security, or raising or depressing the
    price of such security, for the purpose of inducing the purchase or
    sale of such security by others.
        ``(3) If a dealer, broker, security-based swap dealer, major
    security-based swap participant or other person selling or offering for
    sale or purchasing or offering to purchase the security, or a security-
    based swap or security-based swap agreement with respect to such
    security, to induce the purchase or sale of any security registered on
    a national securities exchange or any security-based swap or security-
    based swap agreement with respect to such security by the circulation
    or dissemination in the ordinary course of business of information to
    the effect that the price of any such security will or is likely to
    rise or fall because of market operations of any one or more persons
    conducted for the purpose of raising or depressing the price of such
    security.
        ``(4) If a dealer, broker, security-based swap dealer, major
    security-based swap participant or other person selling or offering for
    sale or purchasing or offering to purchase the security, or a security-
    based swap or security-based swap agreement with respect to such
    security, to make, regarding any security registered on a national
    securities exchange or any security-based swap or security-based swap
    agreement with respect to such security, for the purpose of inducing
    the purchase or sale of such security or such security-based swap or
    security-based swap agreement, any statement which was at the time and
    in the light of the circumstances under which it was made, false or
    misleading with respect to any material fact, and which he knew or had
    reasonable ground to believe was so false or misleading.
        ``(5) For a consideration, received directly or indirectly from a
    dealer, broker, security-based swap dealer, major security-based swap
    participant or other person selling or offering for sale or purchasing
    or offering to purchase the security, or a security-based swap or
    security-based swap agreement with respect to such security, to induce
    the purchase of any security registered on a national securities
    exchange or any security-based swap or security-based swap agreement
    with respect to such security by the circulation or dissemination of
    information to the effect that the price of any such security will or
    is likely to rise or fall because of the market operations of any one
    or more persons conducted for the purpose of raising or depressing the
    price of such security.''.
                (3) Section 9(i) (15 U.S.C. 78i(i)) is amended by striking
            ``(as defined in section 206B of the Gramm-Leach-Bliley Act)'';
                (4) Section 10 (15 U.S.C. 78j) is amended by striking ``(as
            defined in section 206B of the Gramm-Leach-Bliley Act)'' each
            place that the term appears.
                (5) Section 15(c)(1) is amended--
                        (A) in subparagraph (A), by striking ``, or any
                    security-based swap agreement (as defined in section
                    206B of the Gramm-Leach-Bliley Act),''; and
                        (B) in subparagraphs (B) and (C), by striking
                    ``agreement (as defined in section 206B of the Gramm-
                    Leach-Bliley Act)'' in each place that the term
                    appears.
                (6) Section 15(i) (15 U.S.C. 78o(i), as added by section
            303(f) of the Commodity Futures Modernization Act of 2000
            (Public Law 106-554; 114 Stat. 2763A-455) is amended by
            striking ``(as defined in section 206B of the Gramm-Leach-
            Bliley Act)''.
                (7) Section 16 (15 U.S.C. 78p) is amended--
                        (A) in subsection (a)(2)(C), by striking ``(as
                    defined in section 206(b) of the Gramm-Leach-Bliley Act
                    (15 U.S.C. 78c note))'';
                        (B) in subsection (b), by striking ``(as defined in
                    section 206B of the Gramm-Leach-Bliley Act)'' in each
                    place that the term appears; and
                        (C) in subsection (g), by striking ``(as defined in
                    section 206B of the Gramm-Leach-Bliley Act)'';
                (8) Section 20 (15 U.S.C. 78t) is amended--
                        (A) in subsection (d), by striking ``(as defined in
                    section 206B of the Gramm-Leach-Bliley Act)''; and
                        (B) in subsection (f), by striking ``(as defined in
                    section 206B of the Gramm-Leach-Bliley Act)''; and
                (9) Section 21A (15 U.S.C. 78u-1) is amended--
                        (A) in subsection (a)(1), by striking ``(as defined
                    in section 206B of the Gramm-Leach-Bliley Act)''; and
                        (B) in subsection (g), by striking ``(as defined in
                    section 206B of the Gramm-Leach-Bliley Act)''.

    SEC. 3203. AMENDMENTS TO THE SECURITIES EXCHANGE ACT OF 1934.

        (a) Clearing for Security-based Swaps.--The Securities Exchange Act
    of 1934 (15 U.S.C. 78a et seq.) is amended by adding the following
    section after section 3A:

    ``SEC. 3B. CLEARING FOR SECURITY-BASED SWAPS.

        ``(a) In General.--
                ``(1) Standard for clearing.--A security-based swap shall
            be submitted for clearing if a clearing agency that is
            registered under this Act will accept the security-based swap
            for clearing, and the Commission has determined under paragraph
            (2)(B)(ii) of subsection (b) that the security-based swap is
            required to be cleared.
                ``(2) Open access.--The rules of a clearing agency
            described in paragraph (1) shall--
                        ``(A) prescribe that all security-based swaps
                    submitted to the clearing agency with the same terms
                    and conditions are economically equivalent within the
                    clearing agency and may be offset with each other
                    within the clearing agency; and
                        ``(B) provide for non-discriminatory clearing of a
                    security-based swap executed bilaterally or on or
                    through the rules of an unaffiliated national
                    securities exchange or swap execution facility.
        ``(b) Commission Review.--
                ``(1) Commission-initiated review.--
                        ``(A) The Commission shall review each security-
                    based swap, or any group, category, type or class of
                    security-based swaps to make a determination that such
                    security-based swap, or group, category, type or class
                    of security-based swaps should be required to be
                    cleared.
                        ``(B) The Commission shall provide at least a 30-
                    day public comment period regarding any determination
                    under subparagraph (A).
                ``(2) Swap submissions.--
                        ``(A) A clearing agency shall submit to the
                    Commission each security-based swap, or any group,
                    category, type or class of security-based swaps that it
                    plans to accept for clearing and provide notice to its
                    members (in a manner to be determined by the
                    Commission) of such submission.
                        ``(B) The Commission shall--
                                ``(i) make available to the public any
                            submission received under subparagraph (A);
                                ``(ii) review each submission made under
                            subparagraph (A), and determine whether the
                            security-based swap, or group, category, type,
                            or class of security-based swaps, described in
                            the submission is required to be cleared; and
                                ``(iii) provide at least a 30-day public
                            comment period regarding its determination
                            whether the clearing requirement under
                            subsection (a)(1) shall apply to the
                            submission.
                ``(3) Deadline.--The Commission shall make its
            determination under paragraph (2)(B) not later than 90 days
            after receiving a submission made under paragraph (2)(A),
            unless the submitting clearing agency agrees to an extension
            for the time limitation established under this paragraph.
                ``(4) Determination.--
                        ``(A) In reviewing a submission made under
                    paragraph (2), the Commission shall review whether the
                    submission is consistent with section 5b(c)(2).
                        ``(B) In reviewing a security-based swap, group of
                    security-based swaps or class of security-based swaps
                    pursuant to paragraph (1) or a submission made under
                    paragraph (2), the Commission shall take into account
                    the following factors:
                                ``(i) The existence of significant
                            outstanding notional exposures, trading
                            liquidity and adequate pricing data.
                                ``(ii) The availability of rule framework,
                            capacity, operational expertise and resources,
                            and credit support infrastructure to clear the
                            contract on terms that are consistent with the
                            material terms and trading conventions on which
                            the contract is then traded.
                                ``(iii) The effect on the mitigation of
                            systemic risk, taking into account the size of
                            the market for such contract and the resources
                            of the clearing agency available to clear the
                            contract.
                                ``(iv) The effect on competition, including
                            appropriate fees and charges applied to
                            clearing.
                                ``(v) The existence of reasonable legal
                            certainty in the event of the insolvency of the
                            relevant clearing agency or 1 or more of its
                            clearing members with regard to the treatment
                            of customer and security-based swap
                            counterparty positions, funds, and property.
                        ``(C) In making a determination under paragraph
                    (2)(B) that the clearing requirement shall apply, the
                    Commission may require such terms and conditions to the
                    requirement as the Commission determines to be
                    appropriate.
                ``(5) Rules.--Not later than 1 year after the date of the
            enactment of the Derivative Markets Transparency and
            Accountability Act of 2009, the Commission shall adopt rules
            for a clearing agency's submission for review, pursuant to this
            subsection, of a security-based swap, or a group, category,
            type or class of security-based swaps, that it seeks to accept
            for clearing.
        ``(c) Stay of Clearing Requirement.--
                ``(1) After an determination pursuant to subsection (b)(2),
            the Commission, on application of a counterparty to a security-
            based swap or on its own initiative, may stay the clearing
            requirement of subsection (a)(1) until the Commission completes
            a review of the terms of the security-based swap (or the group,
            category, type or class of security-based swaps) and the
            clearing arrangement.
                ``(2) Deadline.--The Commission shall complete a review
            undertaken pursuant to paragraph (1) not later than 90 days
            after issuance of the stay, unless the clearing agency that
            clears the security-based swap, or group, category, type or
            class of security-based swaps, agrees to an extension of the
            time limitation established under this paragraph.
                ``(3) Determination.--Upon completion of the review
            undertaken pursuant to paragraph (1), the Commission may--
                        ``(A) determine, unconditionally or subject to such
                    terms and conditions as the Commission determines to be
                    appropriate, that the security-based swap, or group,
                    category, type or class of security-based swaps, must
                    be cleared pursuant to this subsection if it finds that
                    such clearing is consistent with subsection (b)(4); or
                        ``(B) determine that the clearing requirement of
                    subsection (a)(1) shall not apply to the security-based
                    swap, or group, category, type or class of security-
                    based swaps.
                ``(4) Rules.--Not later than 1 year after the date of the
            enactment of the Derivative Markets Transparency and
            Accountability Act of 2009, the Commission shall adopt rules
            for reviewing, pursuant to this subsection, a clearing agency's
            clearing of a security-based swap, or a group, category, type
            or class of security-based swaps, that it has accepted for
            clearing.
        ``(d) Prevention of Evasion.--The Commission may prescribe rules
    under this subsection, or issue interpretations of the rules, as
    necessary to prevent evasions of this section.
        ``(e) Required Reporting.--
                ``(1) In general.--All security-based swaps that are not
            accepted for clearing by any clearing agency shall be reported
            either to a security-based swap repository described in
            subsection 13(n) or, if there is no security-based swap
            repository that would accept the security-based swap, to the
            Commission pursuant to section 13A within such time period as
            the Commission may by rule or regulation prescribe.
            Counterparties to a security-based swap may agree which
            counterparty will report the security-based swap as required by
            this paragraph.
                ``(2) Swap dealer designation.--With regard to security-
            based swaps where only 1 counterparty is a security-based swap
            dealer, the security-based swap dealer shall report the
            security-based swap as required by this subsection.
        ``(f) Reporting Transition Rules.--Rules adopted by the Commission
    under this section shall provide for the reporting of data, as follows:
                ``(1) Security-based swaps entered into before the date of
            the enactment of this section shall be reported to a registered
            security-based swap repository or the Commission no later than
            180 days after the effective date of this section; and
                ``(2) Security-based swaps entered into on or after such
            date of enactment shall be reported to a registered security-
            based swap repository or the Commission no later than the later
            of--
                        ``(A) 90 days after such effective date; or
                        ``(B) such other time after entering into the
                    security-based swap as the Commission may prescribe by
                    rule or regulation.
        ``(g) Clearing Transition Rules.--
                ``(1) Security-based swaps entered into before the date of
            the enactment of this section are exempt from the clearing
            requirements of this subsection if reported pursuant to
            subsection (f)(1).
                ``(2) Security-based swaps entered into before application
            of the clearing requirement pursuant to this section are exempt
            from the clearing requirements of this section if reported
            pursuant to subsection (f)(2).
        ``(h) Exceptions.--
                ``(1) In general.--The requirements of subsection (a)(1)
            shall not apply to a security-based swap if one of the
            counterparties to the security-based swap--
                        ``(A) is not a security-based swap dealer or major
                    security-based swap participant;
                        ``(B) is using security-based swaps to hedge or
                    mitigate commercial risk, including operating or
                    balance sheet risk; and
                        ``(C) notifies the Commission, in a manner set
                    forth by the Commission, how it generally meets its
                    financial obligations associated with entering into
                    non-cleared security-based swaps.
                ``(2) Abuse of exception.--The Commission may prescribe
            rules under this subsection, or issue interpretations of the
            rules, as necessary to prevent abuse of the exemption in
            paragraph (1) by security-based swap dealers and major
            security-based swap participants.
                ``(3) Option to clear.--The application of the clearing
            exception in paragraph (1) is solely at the discretion the
            counterparty to the swap that meets the conditions of
            subparagraphs (A) through (C) of paragraph (1).''.
        (b) Clearing Agency Requirements.--Section 17A of the Securities
    Exchange Act of 1934 (15 U.S.C. 78q) is amended by adding at the end
    the following new subsections:
        ``(g) Registration Requirement.--It shall be unlawful for a
    clearing agency, unless registered with the Commission, directly or
    indirectly to make use of the mails or any means or instrumentality of
    interstate commerce to perform the functions of a clearing agency with
    respect to a swap.
        ``(h) Voluntary Registration.--A person that clears agreements,
    contracts, or transactions that are not required to be cleared under
    this Act may register with the Commission as a clearing agency.
        ``(i) Existing Banks and Derivatives Clearing Organizations.--A
    bank or a derivatives clearing organization registered with the
    Commodity Futures Trading Commission under the Commodity Exchange Act
    required to be a registered as a clearing agency under this title,
    solely because it clears security-based swaps, is deemed to be a
    registered clearing agency under this title solely for the purpose of
    clearing security-based swaps to the extent that the bank cleared
    security-based swaps, as defined in this Act, as a multilateral
    clearing organization or the derivatives clearing organization cleared
    security-based swaps, as defined in this title pursuant to an exemption
    from registration as a clearing agency, before the enactment of this
    section. A bank or derivative clearing organization to which this
    subsection applies shall continue to comply with the requirements in
    section 17A(b)(3) of this title. A bank to which this subsection
    applies may, by the vote of the shareholders owning not less than 51
    percent of the voting interests of such bank, be converted into a State
    corporation, partnership, limited liability company, or other similar
    legal form pursuant to a plan of conversion, if the conversion is not
    in contravention of applicable State law.
        ``(j) Reporting.--
                ``(1) In general.--A clearing agency that clears security-
            based swaps shall provide to the Commission all information
            determined by the Commission to be necessary to perform its
            responsibilities under this Act. The Commission shall adopt
            data collection and maintenance requirements for security-based
            swaps cleared by clearing agencies that are comparable to the
            corresponding requirements for security-based swaps accepted by
            security-based swap repositories and security-based swaps
            traded on swap execution facilities. Subject to section 24, the
            Commission shall share such information, upon request, with the
            Board, the Commodity Futures Trading Commission, the
            appropriate Federal banking agencies, the Financial Services
            Oversight Council, and the Department of Justice or to other
            persons the Commission deems appropriate, including foreign
            financial supervisors (including foreign futures authorities),
            foreign central banks, and foreign ministries.
                ``(2) Public information.--A clearing agency that clears
            security-based swaps shall provide to the Commission, or its
            designee, such information as is required by, and in a form and
            at a frequency to be determined by, the Commission, in order to
            comply with the public reporting requirements contained in
            section 13.
        ``(k) Designation of Compliance Officer.--
                ``(1) In general.--Each clearing agency that clears
            security-based swaps shall designate an individual to serve as
            a compliance officer.
                ``(2) Duties.--The compliance officer shall--
                        ``(A) report directly to the board or to the senior
                    officer of the clearing agency;
                        ``(B) in consultation with the board of the
                    clearing agency, a body performing a function similar
                    to that of a board, or the senior officer of the
                    clearing agency, resolve any conflicts of interest that
                    may arise;
                        ``(C) be responsible for administering the policies
                    and procedures required to be established pursuant to
                    this section;
                        ``(D) ensure compliance with securities laws and
                    the rules and regulations issued thereunder, including
                    rules prescribed by the Commission pursuant to this
                    section; and
                        ``(E) establish procedures for remediation of non-
                    compliance issues found during compliance office
                    reviews, lookbacks, internal or external audit
                    findings, self-reported errors, or through validated
                    complaints. Procedures will establish the handling,
                    management response, remediation, re-testing, and
                    closing of non-compliant issues.
                ``(3) Annual reports required.--The compliance officer
            shall annually prepare and sign a report on the compliance of
            the clearing agency with the securities laws and its policies
            and procedures, including its code of ethics and conflict of
            interest policies, in accordance with rules prescribed by the
            Commission. Such compliance report shall accompany the
            financial reports of the clearing agency that are required to
            be furnished to the Commission pursuant to this section and
            shall include a certification that, under penalty of law, the
            report is accurate and complete.
        ``(l) Standards for Clearing Agencies Clearing Swap Transactions.--
    To be registered and to maintain registration as a clearing agency that
    clears swap transactions, a clearing agency shall comply with such
    standards as the Commission may establish by rule. In establishing any
    such standards, and in the exercise of its oversight of such a clearing
    agency pursuant to this title, the Commission may conform such
    standards or oversight to reflect evolving United States and
    international standards. Except where the Commission determines
    otherwise by rule or regulation, a clearing agency shall have
    reasonable discretion in establishing the manner in which it complies
    with any such standards.
        ``(m) Rules.--Not later than 1 year after the date of the enactment
    of the Derivative Markets Transparency and Accountability Act of 2009,
    the Commission shall adopt rules governing persons that are registered
    as clearing agencies for security-based swaps under this Act.
        ``(n) Exemptions.--
                ``(1) In general.--The Commission may exempt, conditionally
            or unconditionally, a clearing agency from registration under
            this section for the clearing of security-based swaps if the
            Commission finds that such clearing agency is subject to
            comparable, comprehensive supervision and regulation on a
            consolidated basis by the Commodity Futures Trading Commission,
            a Prudential Regulator, or the appropriate governmental
            authorities in the organization's home country or if necessary
            or appropriate in the public interest and consistent with the
            purpose of this Act.
                ``(2) A person that is required to be registered as
            clearing agency under this section, whose principal business is
            clearing commodity futures and options on commodity futures
            transactions and which is a derivatives clearing organization
            registered with the Commodity Futures Trading Commission under
            the Commodity Exchange Act (7 U.S.C. 1 et seq.), shall be
            unconditionally exempt from registration under this section
            solely for the purpose of clearing security-based swaps, unless
            the Commission finds that such derivatives clearing
            organization is not subject to comparable, comprehensive
            supervision and regulation by the Commodity Futures Trading
            Commission.''.
        (c) Execution of Security-based Swaps.--The Securities Exchange Act
    of 1934 (15 U.S.C. 78a et seq.) is amended by inserting after section 5
    the following:

    ``SEC. 5A. EXECUTION OF SECURITY-BASED SWAPS.

        ``(a) Execution Transparency.--
                ``(1) Requirement.--A security-based swap that is subject
            to the clearing requirement of section 3B shall not be traded
            except on or through a national securities exchange or on or
            through an swap execution facility registered under section 5h,
            that makes the security-based swap available for trading.
                ``(2) Exceptions.--The requirement of paragraph (1) shall
            not apply to a security-based swap if no national securities
            exchange or swap execution facility makes the security-based
            swap available for trading.
                ``(3) Required reporting.--If the exception of paragraph
            (2) applies and there is no national securities exchange or
            swap execution facility that makes the security-based swap
            available to trade, the counterparties shall comply with any
            recordkeeping and transaction reporting requirements as may be
            prescribed by the Commission with respect to security-based
            swaps subject to the requirements of paragraph (1).
        ``(b) Exchange Trading.--In adopting rules and regulations, the
    Commission shall endeavor to eliminate unnecessary impediments to the
    trading on national securities exchanges of contracts, agreements, or
    transactions that would be swaps but for the trading of such contracts,
    agreements or transactions on such a national securities exchange.''.
        (d) Swap Execution Facilities.--The Securities Exchange Act of 1934
    (15 U.S.C. 78a et seq.) is amended by adding after section 3B (as added
    by subsection (a)) the following:

    ``SEC. 3C. SWAP EXECUTION FACILITIES.

        ``(a) Registration.--No person may operate a facility for the
    trading of security-based swaps unless the facility is registered as a
    swap execution facility under this section.
        ``(b) Requirements for Trading.--
                ``(1) In general.--A swap execution facility that is
            registered under subsection (a) may list for trading any
            security-based swap.
                ``(2) Rules for trading through the facility.--Not later
            than 1 year after the date of the enactment of the Derivative
            Markets Transparency and Accountability Act of 2009, the
            Commission shall adopt rules to allow a security-based swap to
            be traded through the facilities of an exchange or a swap
            execution facility. Such rules shall permit an intermediary,
            acting as principal or agent, to enter into or execute a
            security-based swap, notwithstanding section 3B(b), if the
            security-based swap is reported, recorded, or confirmed in
            accordance with the rules of the exchange or swap execution
            facility.
        ``(c) Trading by Exchanges.--An exchange shall, to the extent that
    the exchange also operates a swap execution facility and uses the same
    electronic trade execution system for trading on the exchange and the
    swap execution facility, identify whether the electronic trading is
    taking place on the exchange or the swap execution facility.
        ``(d) Core Principles for Swap Execution Facilities.--
                ``(1) In general.--To be registered as, and to maintain its
            registration as, a swap execution facility, the facility shall
            comply with the core principles specified in this subsection
            and any requirement that the Commission may impose by rule or
            regulation pursuant to section 8a(5). Except where the
            Commission determines otherwise by rule or regulation, the
            facility shall have reasonable discretion in establishing the
            manner in which it complies with these core principles.
                ``(2) Compliance with rules.--The swap execution facility
            shall--
                        ``(A) monitor and enforce compliance with any of
                    the rules of the facility, including the terms and
                    conditions of the swaps traded on or through the
                    facility and any limitations on access to the facility;
                    and
                        ``(B) establish and enforce trading and
                    participation rules that will deter abuses and have the
                    capacity to detect, investigate, and enforce those
                    rules, including means to--
                                ``(i) provide market participants with
                            impartial access to the market; and
                                ``(ii) capture information that may be used
                            in establishing whether rule violations have
                            occurred.
                ``(3) Security-based swaps not readily susceptible to
            manipulation.--The swap execution facility shall permit trading
            only in security-based swaps that are not readily susceptible
            to manipulation.
                ``(4) Monitoring of trading.--The swap execution facility
            shall--
                        ``(A) establish and enforce rules or terms and
                    conditions defining, or specifications detailing,
                    trading procedures to be used in entering and executing
                    orders traded on or through its facilities; and
                        ``(B) monitor trading in swaps to prevent
                    manipulation, price distortion, and disruptions of the
                    delivery or cash settlement process through
                    surveillance, compliance, and disciplinary practices
                    and procedures, including methods for conducting real-
                    time monitoring of trading and comprehensive and
                    accurate trade reconstructions.
                ``(5) Ability to obtain information.--The swap execution
            facility shall--
                        ``(A) establish and enforce rules that will allow
                    the facility to obtain any necessary information to
                    perform any of the functions described in this section;
                        ``(B) provide the information to the Commission
                    upon request; and
                        ``(C) have the capacity to carry out such
                    international information-sharing agreements as the
                    Commission may require.
                ``(6) Financial integrity of transactions.--The swap
            execution facility shall establish and enforce rules and
            procedures for ensuring the financial integrity of security-
            based swaps entered on or through its facilities, including the
            clearance and settlement of the security-based swaps pursuant
            to section 3B.
                ``(7) Emergency authority.--The swap execution facility
            shall adopt rules to provide for the exercise of emergency
            authority, in consultation or cooperation with the Commission,
            where necessary and appropriate, including the authority to
            suspend or curtail trading in a security-based swap.
                ``(8) Timely publication of trading information.--The swap
            execution facility shall make public timely information on
            price, trading volume, and other trading data to the extent
            prescribed by the Commission. The Commission shall evaluate the
            impact of public disclosure on market liquidity in the relevant
            market, and shall seek to avoid public disclosure of
            information in a manner that would significantly reduce market
            liquidity. The Commission shall not disclose information
            related to the internal business decisions of particular market
            participants.
                ``(9) Recordkeeping and reporting.--The swap execution
            facility shall maintain records of all activities related to
            the business of the facility, including a complete audit trail,
            in a form and manner acceptable to the Commission for a period
            of 5 years, and report to the Commission all information
            determined by the Commission to be necessary or appropriate for
            the Commission to perform its responsibilities under this Act
            in a form and manner acceptable to the Commission. The
            Commission shall adopt data collection and reporting
            requirements for swap execution facilities that are comparable
            to corresponding requirements for clearing agencies and
            security-based swap repositories.
                ``(10) Conflicts of interest.--The swap execution facility
            shall--
                        ``(A) establish and enforce rules to minimize
                    conflicts of interest in its decision-making process;
                    and
                        ``(B) establish a process for resolving the
                    conflicts of interest.
                ``(11) Financial resources.--The swap execution facility
            shall have adequate financial, operational, and managerial
            resources to discharge its responsibilities. Such financial
            resources shall be considered adequate if their value exceeds
            the total amount that would enable the facility to cover its
            operating costs for a period of one year, calculated on a
            rolling basis.
                ``(12) System safeguards.--The swap execution facility
            shall--
                        ``(A) establish and maintain a program of risk
                    analysis and oversight to identify and minimize sources
                    of operational risk, through the development of
                    appropriate controls and procedures, and the
                    development of automated systems, that are reliable,
                    secure, and have adequate scalable capacity;
                        ``(B) establish and maintain emergency procedures,
                    backup facilities, and a plan for disaster recovery
                    that allow for the timely recovery and resumption of
                    operations and the fulfillment of the swap execution
                    facility's responsibilities and obligation; and
                        ``(C) periodically conduct tests to verify that
                    backup resources are sufficient to ensure continued
                    order processing and trade matching, price reporting,
                    market surveillance, and maintenance of a comprehensive
                    and accurate audit trail.
                ``(13) Designation of compliance officer.--
                        ``(A) In general.--Each swap execution facility
                    shall designate an individual to serve as a compliance
                    officer.
                        ``(B) Duties.--The compliance officer--
                                ``(i) shall report directly to the board or
                            to the senior officer of the facility; and
                                ``(ii) shall--
                                        ``(I) review compliance with the
                                    core principles in section 3B(e).
                                        ``(II) in consultation with the
                                    board of the facility, a body
                                    performing a function similar to that
                                    of a board, or the senior officer of
                                    the facility, resolve any conflicts of
                                    interest that may arise;
                                        ``(III) be responsible for
                                    administering the policies and
                                    procedures required to be established
                                    pursuant to this section; and
                                        ``(IV) ensure compliance with
                                    securities laws and the rules and
                                    regulations issued thereunder,
                                    including rules prescribed by the
                                    Commission pursuant to this section;
                                    and
                                ``(iii) shall establish procedures for
                            remediation of non-compliance issues found
                            during compliance office reviews, lookbacks,
                            internal or external audit findings, self-
                            reported errors, or through validated
                            complaints and to establish the handling,
                            management response, remediation, re-testing,
                            and closing of non-compliant issues.
                        ``(C) Annual reports required.--The compliance
                    officer shall annually prepare and sign a report on the
                    compliance of the facility with the securities laws and
                    its policies and procedures, including its code of
                    ethics and conflict of interest policies, in accordance
                    with rules prescribed by the Commission. Such
                    compliance report shall accompany the financial reports
                    of the facility that are required to be furnished to
                    the Commission pursuant to this section and shall
                    include a certification that, under penalty of law, the
                    report is accurate and complete.
        ``(e) Exemptions.--The Commission may exempt, conditionally or
    unconditionally, a swap execution facility from registration under this
    section if the Commission finds that such organization is subject to
    comparable, comprehensive supervision and regulation on a consolidated
    basis by the Commodity Futures Trading Commission, a Prudential
    Regulator or the appropriate governmental authorities in the
    organization's home country or if necessary or appropriate in the
    public interest and consistent with the purpose of this Act.
        ``(f) Rules.--Not later than 1 year after the date of the enactment
    of the Derivative Markets Transparency and Accountability Act of 2009,
    the Commission shall prescribe rules governing the regulation of swap
    execution facilities under this section.''.
        (e) Segregation of Assets Held as Collateral in Swap
    Transactions.--The Securities Exchange Act of 1934 (15 U.S.C. 78a et
    seq.) is further amended by adding after section 3C (as added by
    subsection (b) the following:

    ``SEC. 3D. SEGREGATION OF ASSETS HELD AS COLLATERAL IN SECURITY-BASED
                  SWAP TRANSACTIONS.

        ``(a) Over-the-counter Swaps.--At the request of a counterparty to
    a security-based swap who provides funds or other property to a
    security-based swap dealer as initial margin or collateral to secure
    the obligations of the counterparty under a security-based swap between
    the counterparty and the security-based swap dealer that is not
    submitted for clearing to a derivatives clearing agency, the security-
    based swap dealer shall segregate the funds or other property for the
    benefit of the counterparty, and maintain the funds or other property
    in an account which is carried by a third-party custodian and
    designated as a segregated account for the counterparty, in accordance
    with such rules and regulations as the Commission or Prudential
    Regulator may prescribe. If a security-based swap counterparty is a
    security-based swap dealer or major security-based swap participant who
    owns more than 20 percent of, or has more than 50 percent
    representation on the board of directors of a custodian, the custodian
    shall not be considered independent from the security-based swap
    counterparties for purposes of the preceding sentence. This subsection
    shall not be interpreted to preclude commercial arrangements regarding
    the investment of the segregated funds or other property and the
    related allocation of gains and losses resulting from any such
    investment.
        ``(b) Further Audit Reporting.--If a security-based swap dealer
    does not segregate funds pursuant to the request of a security-based
    swap counterparty in accordance with subsection (a), the security-based
    swap dealer shall report to its counterparty on a quarterly basis that
    its procedures relating to margin and collateral requirements are in
    compliance with the agreement of the counterparties.''.
        (f) Trading in Security-based Swaps.--Section 6 of the Securities
    Exchange Act of 1934 (15 U.S.C. 78f) is amended by adding at the end
    the following:
        ``(l) It shall be unlawful for any person to effect a transaction
    in a security-based swap with or for a person that is not an eligible
    contract participant unless such transaction is effected on a national
    securities exchange registered pursuant to subsection (b).''.
        (g) Additions of Security-based Swaps to Certain Enforcement
    Provisions.--Paragraphs (1) through (3) of section 9(b) of the
    Securities Exchange Act of 1934 (15 U.S.C. 78i(b)(1)-(3)) are amended
    to read as follows:
                ``(1) any transaction in connection with any security
            whereby any party to such transaction acquires (A) any put,
            call, straddle, or other option or privilege of buying the
            security from or selling the security to another without being
            bound to do so; (B) any security futures product on the
            security; or (C) any security-based swap involving the security
            or the issuer of the security; or
                ``(2) any transaction in connection with any security with
            relation to which he has, directly or indirectly, any interest
            in any (A) such put, call, straddle, option, or privilege; (B)
            such security futures product; or (C) such security-based swap;
            or
                ``(3) any transaction in any security for the account of
            any person who he has reason to believe has, and who actually
            has, directly or indirectly, any interest in any (A) such put,
            call, straddle, option, or privilege; (B) such security futures
            product with relation to such security; or (C) any security-
            based swap involving such security or the issuer of such
            security.''.
        (h) Rulemaking Authority to Prevent Fraud, Manipulation and
    Deceptive Conduct in Security-based Swaps.--Section 9 of the Securities
    Exchange Act of 1934 (15 U.S.C. 78i) is amended by adding at the end
    the following:
        ``(i) It shall be unlawful for any person, directly or indirectly,
    by the use of any means or instrumentality of interstate commerce or of
    the mails, or of any facility of any national securities exchange, to
    effect any transaction in, or to induce or attempt to induce the
    purchase or sale of, any security-based swap, in connection with which
    such person engages in any fraudulent, deceptive, or manipulative act
    or practice, makes any fictitious quotation, or engages in any
    transaction, practice, or course of business which operates as a fraud
    or deceit upon any person. The Commission shall, for the purposes of
    this paragraph, by rules and regulations define, and prescribe means
    reasonably designed to prevent, such transactions, acts, practices, and
    courses of business as are fraudulent, deceptive, or manipulative, and
    such quotations as are fictitious.''.
        (i) Position Limits and Position Accountability for Security-based
    Swaps.--The Securities Exchange Act of 1934 is amended by inserting
    after section 10A (15 U.S.C. 78j-1) the following new section:

    ``SEC. 10B. POSITION LIMITS AND POSITION ACCOUNTABILITY FOR SECURITY-
                  BASED SWAPS AND LARGE TRADER REPORTING.

        ``(a) Position Limits.--As a means reasonably designed to prevent
    fraud and manipulation, the Commission may, by rule or regulation, as
    necessary or appropriate in the public interest or for the protection
    of investors, establish limits (including related hedge exemption
    provisions) on the size of positions in any security-based swap that
    may be held by any person. In establishing such limits, the Commission
    may require any person to aggregate positions in--
                ``(1) any security-based swap and any security or loan or
            group or index of securities or loans on which such security-
            based swap is based, which such security-based swap references,
            or to which such security-based swap is related as described in
            section 3(a)(68), and any other instrument relating to such
            security or loan or group or index of securities or loans; or
                ``(2) any security-based swap and (A) any security or group
            or index of securities, the price, yield, value, or volatility
            of which, or of which any interest therein, is the basis for a
            material term of such security-based swap as described in
            section 3(a)(76) and (B) any security-based swap and any other
            instrument relating to the same security or group or index of
            securities.
        ``(b) Exemptions.--The Commission, by rule, regulation, or order,
    may conditionally or unconditionally exempt any person or class of
    persons, any security-based swap or class of security-based swaps, or
    any transaction or class of transactions from any requirement it may
    establish under this section with respect to position limits.
        ``(c) SRO Rules.--
                ``(1) In general.--As a means reasonably designed to
            prevent fraud or manipulation, the Commission, by rule,
            regulation, or order, as necessary or appropriate in the public
            interest, for the protection of investors, or otherwise in
            furtherance of the purposes of this title, may direct a self-
            regulatory organization--
                        ``(A) to adopt rules regarding the size of
                    positions in any security-based swap that may be held
                    by--
                                ``(i) any member of such self-regulatory
                            organization; or
                                ``(ii) any person for whom a member of such
                            self-regulatory organization effects
                            transactions in such security-based swap; and
                        ``(B) to adopt rules reasonably designed to ensure
                    compliance with requirements prescribed by the
                    Commission under subsection (c)(1)(A).
                ``(2) Requirement to aggregate positions.--In establishing
            such limits, the self-regulatory organization may require such
            member or person to aggregate positions in--
                        ``(A) any security-based swap and any security or
                    loan or group or index of securities or loans on which
                    such security-based swap is based, which such security-
                    based swap references, or to which such security-based
                    swap is related as described in section 3(a)(68), and
                    any other instrument relating to such security or loan
                    or group or index of securities or loans; or
                        ``(B)(i) any security-based swap; and
                        ``(ii) any security-based swap and any other
                    instrument relating to the same security or group or
                    index of securities.
        ``(d) Large Trader Reporting.--The Commission, by rule or
    regulation, may require any person that effects transactions for such
    person's own account or the account of others in any securities-based
    swap or uncleared security-based swap agreement and any security or
    loan or group or index of securities or loans as set forth in
    paragraphs (1) and (2) of subsection (a) under this section to report
    such information as the Commission may prescribe regarding any position
    or positions in any security-based swap or uncleared security-based
    swap agreement and any security or loan or group or index of securities
    or loans and any other instrument relating to such security or loan or
    group or index of securities or loans as set forth in paragraphs (1)
    and (2) of subsection (a) under this section.''.
        (j) Public Reporting and Repositories for Security-based Swaps.--
    Section 13 of the Securities Exchange Act of 1934 (15 U.S.C. 78m) is
    amended by adding at the end the following:
        ``(m) Public Reporting of Aggregate Security-based Swap Data.--
                ``(1) In general.--The Commission, or a person designated
            by the Commission pursuant to paragraph (2), shall make
            available to the public, in a manner that does not disclose the
            business transactions and market positions of any person,
            aggregate data on security-based swap trading volumes and
            positions from the sources set forth in paragraph (3).
                ``(2) Designee of the commission.--The Commission may
            designate a clearing agency or a security-based swap repository
            to carry out the public reporting described in paragraph (1).
                ``(3) Sources of information.--The sources of the
            information to be publicly reported as described in paragraph
            (1) are--
                        ``(A) clearing agencies pursuant to section 3A;
                        ``(B) security-based swap repositories pursuant to
                    subsection (n); and
                        ``(C) reports received by the Commission pursuant
                    to section 13A.
        ``(n) Security-based Swap Repositories.--
                ``(1) Registration requirement.--
                        ``(A) In general.--It shall be unlawful for a
                    security-based swap repository, unless registered with
                    the Commission, directly or indirectly to make use of
                    the mails or any means or instrumentality of interstate
                    commerce to perform the functions of a security-based
                    swap repository.
                        ``(B) Inspection and examination.--Registered
                    security-based swap repositories shall be subject to
                    inspection and examination by any representatives of
                    the Commission.
                ``(2) Standard setting.--
                        ``(A) Data identification.--The Commission shall
                    prescribe standards that specify the data elements for
                    each security-based swap that shall be collected and
                    maintained by each security-based swap repository.
                        ``(B) Data collection and maintenance.--The
                    Commission shall prescribe data collection and data
                    maintenance standards for security-based swap
                    repositories.
                        ``(C) Comparability.--The standards prescribed by
                    the Commission under this subsection shall be
                    comparable to the data standards imposed by the
                    Commission on clearing agencies that clear security-
                    based swaps.
                ``(3) Duties.--A security-based swap repository shall--
                        ``(A) accept data prescribed by the Commission for
                    each security-based swap under this paragraph (2);
                        ``(B) maintain such data in such form and manner
                    and for such period as may be required by the
                    Commission;
                        ``(C) provide to the Commission, or its designee,
                    such information as is required by, and in a form and
                    at a frequency to be determined by, the Commission, in
                    order to comply with the public reporting requirements
                    contained in subsection (m); and
                        ``(D) make available, on a confidential basis, all
                    data obtained by the security-based swap repository,
                    including individual counterparty trade and position
                    data, to the Commission, the appropriate Federal
                    banking agencies, the Commodity Futures Trading
                    Commission, the Financial Services Oversight Council,
                    and the Department of Justice or to other persons the
                    Commission deems appropriate, including foreign
                    financial supervisors (including foreign futures
                    authorities), foreign central banks, and foreign
                    ministries.
                ``(4) Rules.--Not later than 1 year after the date of the
            enactment of the Derivative Markets Transparency and
            Accountability Act of 2009, the Commission shall adopt rules
            governing persons that are registered under this section,
            including rules that specify the data elements that shall be
            collected and maintained.
                ``(5) Exemptions.--The Commission may exempt, conditionally
            or unconditionally, a security-based swap repository from the
            requirements of this section if the Commission finds that such
            security-based swap repository is subject to comparable,
            comprehensive supervision or regulation on a consolidated basis
            by the Commodity Futures Trading Commission, a Prudential
            Regulator or the appropriate governmental authorities in the
            organization's home country or if necessary or appropriate in
            the public interest and consistent with the purpose of this
            Act.''.

    SEC. 3204. REGISTRATION AND REGULATION OF SWAP DEALERS AND MAJOR SWAP
                  PARTICIPANTS.

        The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is
    amended by inserting after section 15E (15 U.S.C. 78o-7) the following:

    ``SEC. 15F. REGISTRATION AND REGULATION OF SECURITY-BASED SWAP DEALERS
                  AND MAJOR SECURITY-BASED SWAP PARTICIPANTS.

        ``(a) Registration.--
                ``(1) It shall be unlawful for any person to act as a
            security-based swap dealer unless such person is registered as
            a security-based swap dealer with the Commission.
                ``(2) It shall be unlawful for any person to act as a major
            security-based swap participant unless such person is
            registered as a major security-based swap participant with the
            Commission.
        ``(b) Requirements.--
                ``(1) In general.--A person shall register as a security-
            based swap dealer or major security-based swap participant by
            filing a registration application with the Commission.
                ``(2) Contents.--The application shall be made in such form
            and manner as prescribed by the Commission, giving any
            information and facts as the Commission may deem necessary
            concerning the business in which the applicant is or will be
            engaged. Such person, when registered as a security-based swap
            dealer or major security-based swap participant, shall continue
            to report and furnish to the Commission such information
            pertaining to such person's business as the Commission may
            require.
                ``(3) Expiration.--Each registration shall expire at such
            time as the Commission may by rule or regulation prescribe.
                ``(4) Rules.--Except as provided in subsections (c) and
            (d), the Commission may prescribe rules applicable to security-
            based swap dealers and major security-based swap participants,
            including rules that limit the activities of security-based
            swap dealers and major security-based swap participants. Except
            as provided in subsection (d)(1)(A), the Commission may provide
            conditional or unconditional exemptions from some or all of the
            rules or requirements prescribed under this section for
            security-based swap dealers and major security-based swap
            participants.
                ``(5) Transition.--Rules adopted under this section shall
            provide for the registration of security-based swap dealers and
            major security-based swap participants no later than 1 year
            after the effective date of the Derivative Markets Transparency
            and Accountability Act of 2009.
        ``(c) Rules.--
                ``(1) In general.--Not later than 1 year after the date of
            the enactment of the Derivative Markets Transparency and
            Accountability Act of 2009, the Commission shall adopt rules
            for persons that are registered as security-based swap dealers
            or major security-based swap participants under this Act.
                ``(2) Exception for prudential requirements.--The
            Commission shall not prescribe rules imposing prudential
            requirements on security-based swap dealers or major security-
            based swap participants for which there is a Prudential
            Regulator. This provision shall not be construed as limiting
            the authority of the Commission to prescribe appropriate
            business conduct, reporting, and recordkeeping requirements to
            protect investors.
        ``(d) Capital and Margin Requirements.--
                ``(1) In general.--
                        ``(A) Bank security-based swap dealers and major
                    security-based swap participants.--Each registered
                    security-based swap dealer and major security-based
                    swap participant for which there is a Prudential
                    Regulator shall meet such minimum capital requirements
                    and minimum initial and variation margin requirements
                    as the Prudential Regulators shall by rule or
                    regulation jointly prescribe that--
                                ``(i) help ensure the safety and soundness
                            of the security-based swap dealer or major
                            security-based swap participant; and
                                ``(ii) are appropriate for the risk
                            associated with the non-cleared swaps held as a
                            swap dealer or major swap participant.
                        ``(B) Non-bank security-based swap dealers and
                    major security-based swap participants.--Each
                    registered security-based swap dealer and major
                    security-based swap participant for which there is not
                    a Prudential Regulator shall meet such minimum capital
                    requirements and minimum initial and variation margin
                    requirements as the Commission shall by rule or
                    regulation prescribe that--
                                ``(i) help ensure the safety and soundness
                            of the security-based swap dealer or major
                            security-based swap participant; and
                                ``(ii) are appropriate for the risk
                            associated with the non-cleared swaps held as
                            the swap dealer or major swap participant.
                ``(2) Rules.--
                        ``(A) Bank security-based swap dealers and major
                    security-based swap participants.--Not later than 1
                    year after the date of the enactment of the Derivative
                    Markets Transparency and Accountability Act of 2009,
                    the Prudential Regulators, in consultation with the
                    Commission, shall jointly adopt rules imposing capital
                    and margin requirements under this subsection for
                    security-based swap dealers and major security-based
                    swap participants, with respect to their activities as
                    a security-based swap dealer or major security-based
                    swap participant for which there is a Prudential
                    Regulator.
                        ``(B) Non-bank security-based swap dealers and
                    major security-based swap participants.--Not later than
                    1 year after the date of the enactment of the
                    Derivative Markets Transparency and Accountability Act
                    of 2009, the Commission shall adopt rules imposing
                    capital and margin requirements under this subsection
                    for security-based swap dealers and major security-
                    based swap participants for which there is no
                    Prudential Regulator.
                ``(3) Authority.--Nothing in this section shall limit the
            authority of the Commission to set capital requirements for a
            broker or dealer registered in accordance with section 15 of
            this Act.
        ``(e) Reporting and Recordkeeping.--
                ``(1) In general.--Each registered security-based swap
            dealer and major security-based swap participant--
                        ``(A) shall make such reports as are prescribed by
                    the Commission by rule or regulation regarding the
                    transactions and positions and financial condition of
                    such person;
                        ``(B) for which--
                                ``(i) there is a Prudential Regulator shall
                            keep books and records of all activities
                            related to its business as a security-based
                            swap dealer or major security-based swap
                            participant in such form and manner and for
                            such period as may be prescribed by the
                            Commission by rule or regulation;
                                ``(ii) there is no Prudential Regulator
                            shall keep books and records in such form and
                            manner and for such period as may be prescribed
                            by the Commission by rule or regulation; and
                        ``(C) shall keep such books and records open to
                    inspection and examination by any representative of the
                    Commission.
                ``(2) Rules.--Not later than 1 year after the date of
            enactment of the Derivative Markets Transparency and
            Accountability Act of 2009, the Commission shall adopt rules
            governing reporting and recordkeeping for security-based swap
            dealers and major security-based swap participants.
        ``(f) Daily Trading Records.--
                ``(1) In general.--Each registered security-based swap
            dealer and major security-based swap participant shall maintain
            daily trading records of its security-based swaps and all
            related records (including related transactions) and recorded
            communications including but not limited to electronic mail,
            instant messages, and recordings of telephone calls, for such
            period as may be prescribed by the Commission by rule or
            regulation.
                ``(2) Information requirements.--The daily trading records
            shall include such information as the Commission shall
            prescribe by rule or regulation.
                ``(3) Customer records.--Each registered security-based
            swap dealer or major security-based swap participant shall
            maintain daily trading records for each customer or
            counterparty in such manner and form as to be identifiable with
            each security-based swap transaction.
                ``(4) Audit trail.--Each registered security-based swap
            dealer or major security-based swap participant shall maintain
            a complete audit trail for conducting comprehensive and
            accurate trade reconstructions.
                ``(5) Rules.--Not later than 1 year after the date of the
            enactment of the Derivative Markets Transparency and
            Accountability Act of 2009, the Commission shall adopt rules
            governing daily trading records for security-based swap dealers
            and major security-based swap participants.
        ``(g) Business Conduct Standards.--
                ``(1) In general.--Each registered security-based swap
            dealer and major security-based swap participant shall conform
            with business conduct standards as may be prescribed by the
            Commission by rule or regulation addressing--
                        ``(A) fraud, manipulation, and other abusive
                    practices involving security-based swaps (including
                    security-based swaps that are offered but not entered
                    into);
                        ``(B) diligent supervision of its business as a
                    security-based swap dealer;
                        ``(C) adherence to all applicable position limits;
                    and
                        ``(D) such other matters as the Commission shall
                    determine to be necessary or appropriate.
                ``(2) Business conduct requirements.--Business conduct
            requirements adopted by the Commission shall--
                        ``(A) establish the standard of care for a
                    security-based swap dealer or major security-based swap
                    participant to verify that any security-based swap
                    counterparty meets the eligibility standards for an
                    eligible contract participant;
                        ``(B) require disclosure by the security-based swap
                    dealer or major security-based swap participant to any
                    counterparty to the security-based swap (other than a
                    security-based swap dealer or major security-based swap
                    participant) of:
                                ``(i) information about the material risks
                            and characteristics of the security-based swap;
                                ``(ii) for cleared security-based swaps,
                            upon the request of the counterparty, the daily
                            mark from the appropriate clearing agency, and
                            for non-cleared security-based swaps, upon
                            request of the counterparty, the daily mark of
                            the security-based swap dealer or major
                            security-based swap participant; and
                                ``(iii) any other material incentives or
                            conflicts of interest that the security-based
                            swap dealer or major security-based swap
                            participant may have in connection with the
                            security-based swap; and
                        ``(C) establish such other standards and
                    requirements as the Commission may determine are
                    necessary or appropriate in the public interest, for
                    the protection of investors, or otherwise in
                    furtherance of the purposes of this title.
                ``(3) Rules.--The Commission shall prescribe rules under
            this subsection governing business conduct standards for
            security-based swap dealers and major security-based swap
            participants not later than 1 year after the date of enactment
            of the Derivative Markets Transparency and Accountability Act
            of 2009.
        ``(h) Documentation Standards.--
                ``(1) In general.--Each registered security-based swap
            dealer and major security-based swap participant shall conform
            with standards, as may be prescribed by the Commission by rule
            or regulation, addressing timely and accurate confirmation,
            processing, netting, documentation, and valuation of all
            security-based swaps.
                ``(2) Rules.--Not later than 1 year after the date of
            enactment of the Derivative Markets Transparency and
            Accountability Act of 2009, the Commission and the appropriate
            Federal banking agencies, shall adopt rules governing the
            standards described in paragraph (1) for security-based swap
            dealers and major security-based swap participants.
        ``(i) Dealer Responsibilities.--Each registered security-based swap
    dealer and major security-based swap participant at all times shall
    comply with the following requirements:
                ``(1) Monitoring of trading.--The security-based swap
            dealer or major security-based swap participant shall monitor
            its trading in security-based swaps to prevent violations of
            applicable position limits.
                ``(2) Disclosure of general information.--The security-
            based swap dealer or major security-based swap participant
            shall disclose to the Commission or to the Prudential Regulator
            for such security-based swap dealer or major security-based
            swap participant, as applicable, information concerning--
                        ``(A) terms and conditions of its security-based
                    swaps;
                        ``(B) security-based swap trading operations,
                    mechanisms, and practices;
                        ``(C) financial integrity protections relating to
                    security-based swaps; and
                        ``(D) other information relevant to its trading in
                    security-based swaps.
                ``(3) Ability to obtain information.--The security-based
            swap dealer or major swap security-based participant shall--
                        ``(A) establish and enforce internal systems and
                    procedures to obtain any necessary information to
                    perform any of the functions described in this section;
                    and
                        ``(B) provide the information to the Commission or
                    to the Prudential Regulator for such security-based
                    swap dealer or major security-based swap participant,
                    as applicable, upon request.
                ``(4) Conflicts of interest.--The security-based swap
            dealer and major security-based swap participant shall
            implement conflict-of-interest systems and procedures that--
                        ``(A) establish structural and institutional
                    safeguards to assure that the activities of any person
                    within the firm relating to research or analysis of the
                    price or market for any security are separated by
                    appropriate informational partitions within the firm
                    from the review, pressure, or oversight of those whose
                    involvement in trading or clearing activities might
                    potentially bias their judgment or supervision; and
                        ``(B) address such other issues as the Commission
                    determines appropriate.
        ``(j) Statutory Disqualification.--Except to the extent otherwise
    specifically provided by rule, regulation, or order of the Commission,
    it shall be unlawful for a security-based swap dealer or a major
    security-based swap participant to permit any person associated with a
    security-based swap dealer or a major security-based swap participant
    who is subject to a statutory disqualification to effect or be involved
    in effecting security-based swaps on behalf of such security-based swap
    dealer or major security-based swap participant, if such security-based
    swap dealer or major security-based swap participant knew, or in the
    exercise of reasonable care should have known, of such statutory
    disqualification.
        ``(k) Enforcement and Administrative Proceeding Authority.--
                ``(1) Primary enforcement authority.--
                        ``(A) SEC.--Except as provided in subparagraph (B),
                    the Commission shall have exclusive authority to
                    enforce the amendments made by subtitle B of the
                    Derivative Markets Transparency and Accountability Act
                    of 2009 with respect to any person.
                        ``(B) Prudential regulators.--The Prudential
                    Regulators shall have exclusive authority to enforce
                    the provisions of section 15F(d) and other prudential
                    requirements of this Act with respect to banks, and
                    branches or agencies of foreign banks that are
                    security-based swap dealers or major security-based
                    swap participants.
                        ``(C) Referral.--
                                ``(i) Violations of nonprudential
                            requirements.--If the Prudential Regulator for
                            a security-based swap dealer or major security-
                            based swap participant has cause to believe
                            that such security-based swap dealer or major
                            security-based swap participant may have
                            engaged in conduct that constitutes a violation
                            of the nonprudential requirements of section
                            15F or rules adopted by the Commission
                            thereunder, that Prudential Regulator may
                            recommend in writing to the Commission that the
                            Commission initiate an enforcement proceeding
                            as authorized under this Act. The
                            recommendation shall be accompanied by a
                            written explanation of the concerns giving rise
                            to the recommendation.
                                ``(ii) Violations of prudential
                            requirements.--If the Commission has cause to
                            believe that a securities-based swap dealer or
                            major securities-based swap participant that
                            has a Prudential Regulator may have engaged in
                            conduct that constitute a violation of the
                            prudential requirements of section 15F(e) or
                            rules adopted thereunder, the Commission may
                            recommend in writing to the Prudential
                            Regulator that the Prudential Regulator
                            initiate an enforcement proceeding as
                            authorized under this Act. The recommendation
                            shall be accompanied by a written explanation
                            of the concerns giving rise to the
                            recommendation.
                ``(2) Censure, denial, suspension; notice and hearing.--The
            Commission, by order, shall censure, place limitations on the
            activities, functions, or operations of, or revoke the
            registration of any security-based swap dealer or major
            security-based swap participant that has registered with the
            Commission pursuant to subsection (b) if it finds, on the
            record after notice and opportunity for hearing, that such
            censure, placing of limitations, or revocation is in the public
            interest and that such security-based swap dealer or major
            security-based swap participant, or any person associated with
            such security-based swap dealer or major security-based swap
            participant effecting or involved in effecting transactions in
            security-based swaps on behalf of such security-based swap
            dealer or major security-based swap participant, whether prior
            or subsequent to becoming so associated--
                        ``(A) has committed or omitted any act, or is
                    subject to an order or finding, enumerated in
                    subparagraph (A), (D), or (E) of paragraph (4) of
                    section 15(b);
                        ``(B) has been convicted of any offense specified
                    in subparagraph (B) of such paragraph (4) within 10
                    years of the commencement of the proceedings under this
                    subsection;
                        ``(C) is enjoined from any action, conduct, or
                    practice specified in subparagraph (C) of such
                    paragraph (4);
                        ``(D) is subject to an order or a final order
                    specified in subparagraph (F) or (H), respectively, of
                    such paragraph (4); or
                        ``(E) has been found by a foreign financial
                    regulatory authority to have committed or omitted any
                    act, or violated any foreign statute or regulation,
                    enumerated in subparagraph (G) of such paragraph (4).
                ``(3) Associated persons.--With respect to any person who
            is associated, who is seeking to become associated, or, at the
            time of the alleged misconduct, who was associated or was
            seeking to become associated with a security-based swap dealer
            or major security-based swap participant for the purpose of
            effecting or being involved in effecting security-based swaps
            on behalf of such security-based swap dealer or major security-
            based swap participant, the Commission, by order, shall
            censure, place limitations on the activities or functions of
            such person, or suspend for a period not exceeding 12 months,
            or bar such person from being associated with a security-based
            swap dealer or major security-based swap participant, if the
            Commission finds, on the record after notice and opportunity
            for a hearing, that such censure, placing of limitations,
            suspension, or bar is in the public interest and that such
            person--
                        ``(A) has committed or omitted any act, or is
                    subject to an order or finding, enumerated in
                    subparagraph (A), (D), or (E) of paragraph (4) of
                    section 15(b);
                        ``(B) has been convicted of any offense specified
                    in subparagraph (B) of such paragraph (4) within 10
                    years of the commencement of the proceedings under this
                    subsection;
                        ``(C) is enjoined from any action, conduct, or
                    practice specified in subparagraph (C) of such
                    paragraph (4);
                        ``(D) is subject to an order or a final order
                    specified in subparagraph (F) or (H), respectively, of
                    such paragraph (4); or
                        ``(E) has been found by a foreign financial
                    regulatory authority to have committed or omitted any
                    act, or violated any foreign statute or regulation,
                    enumerated in subparagraph (G) of such paragraph (4).
                ``(4) Unlawful conduct.--It shall be unlawful--
                        ``(A) for any person as to whom an order under
                    paragraph (3) is in effect, without the consent of the
                    Commission, willfully to become, or to be, associated
                    with a security-based swap dealer or major security-
                    based swap participant in contravention of such order;
                    or
                        ``(B) for any security-based swap dealer or major
                    security-based swap participant to permit such a
                    person, without the consent of the Commission, to
                    become or remain a person associated with the security-
                    based swap dealer or major security-based swap
                    participant in contravention of such order, if such
                    security-based swap dealer or major security-based swap
                    participant knew, or in the exercise of reasonable care
                    should have known, of such order.''.

    SEC. 3205. REPORTING AND RECORDKEEPING.

        (a) The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is
    amended by inserting after section 13 the following section:

    ``SEC. 13A. REPORTING AND RECORDKEEPING FOR CERTAIN SECURITY-BASED
                  SWAPS.

        ``(a) In General.--Any person who enters into a security-based swap
    and--
                ``(1) did not clear the security-based swap in accordance
            with section 3A; and
                ``(2) did not have data regarding the security-based swap
            accepted by a security-based swap repository in accordance with
            rules adopted by the Commission under section 13(n),
    shall meet the requirements in subsection (b).
        ``(b) Reports.--Any person described in subsection (a) shall--
                ``(1) make such reports in such form and manner and for
            such period as the Commission shall prescribe by rule or
            regulation regarding the security-based swaps held by the
            person; and
                ``(2) keep books and records pertaining to the security-
            based swaps held by the person in such form and manner and for
            such period as may be required by the Commission, which books
            and records shall be open to inspection by any representative
            of the Commission, an appropriate Federal banking agency, the
            Commodity Futures Trading Commission, the Financial Services
            Oversight Council, and the Department of Justice.
        ``(c) Identical Data.--In adopting rules under this section, the
    Commission shall require persons described in subsection (a) to report
    the same or more comprehensive data than the Commission requires
    security-based swap repositories to collect under subsection (n).''.
        (b) Beneficial Ownership Reporting.--
                (1) Section 13(d)(1) of the Securities Exchange Act of 1934
            (15 U.S.C. 78m(d)(1)) is amended by inserting ``or otherwise
            becomes or is deemed to become a beneficial owner of any of the
            foregoing upon the purchase or sale of a security-based swap or
            other derivative instrument that the Commission may define by
            rule, and'' after ``Alaska Native Claims Settlement Act,''; and
                (2) Section 13(g)(1) of the Securities Exchange Act of 1934
            (15 U.S.C. 78m(g)(1)) is amended by inserting ``or otherwise
            becomes or is deemed to become a beneficial owner of any
            security of a class described in subsection (d)(1) upon the
            purchase or sale of a security-based swap or other derivative
            instrument that the Commission may define by rule'' after
            ``subsection (d)(1) of this section''.
        (c) Reports by Institutional Investment Managers.--Section 13(f)(1)
    of the Securities Exchange Act of 1934 (15 U.S.C. 78m(f)(1)) is amended
    by inserting ``or otherwise becomes or is deemed to become a beneficial
    owner of any security of a class described in subsection (d)(1) upon
    the purchase or sale of a security-based swap or other derivative
    instrument that the Commission may define by rule,'' after ``subsection
    (d)(1) of this section''.
        (d) Administrative Proceeding Authority.--Section 15(b)(4) of the
    Securities Exchange Act of 1934 (15 U.S.C. 78o(b)(4)) is amended--
                (1) in subparagraph (C), by adding ``security-based swap
            dealer, major security-based swap participant,'' after
            ``government securities dealer,''; and
                (2) in subparagraph (F), by adding ``, or security-based
            swap dealer, or a major security-based swap participant'' after
            ``or dealer''.
        (e) Derivatives Beneficial Ownership.--Section 13 of the Securities
    Exchange Act of 1934 (15 U.S.C. 78m) is amended by adding at the end
    the following:
        ``(o) Beneficial Ownership.--For purposes of this section and
    section 16, a person shall be deemed to acquire beneficial ownership of
    an equity security based on the purchase or sale of a security-based
    swap or other derivative instrument only to the extent that the
    Commission, by rule, determines after consultation with the Prudential
    Regulators and the Secretary of the Treasury, that the purchase or sale
    of the security-based swap or other derivative instrument, or class of
    security-based swaps or other derivative instruments, provides
    incidents of ownership comparable to direct ownership of the equity
    security, and that it is necessary to achieve the purposes of this
    section that the purchase or sale of the security-based swaps or
    instrument, or class of security-based swap or instruments, be deemed
    the acquisition of beneficial ownership of the equity security.''.

    SEC. 3206. STATE GAMING AND BUCKET SHOP LAWS.

        Section 28(a) of the Securities Exchange Act of 1934 (15 U.S.C.
    78bb(a)) is amended to read as follows:
        ``(a) Except as provided in subsection (f), the rights and remedies
    provided by this title shall be in addition to any and all other rights
    and remedies that may exist at law or in equity; but no person
    permitted to maintain a suit for damages under the provisions of this
    title shall recover, through satisfaction of judgment in one or more
    actions, a total amount in excess of his actual damages on account of
    the act complained of. Except as otherwise specifically provided in
    this title, nothing in this title shall affect the jurisdiction of the
    securities commission (or any agency or officer performing like
    functions) of any State over any security or any person insofar as it
    does not conflict with the provisions of this title or the rules and
    regulations thereunder. No State law which prohibits or regulates the
    making or promoting of wagering or gaming contracts, or the operation
    of `bucket shops' or other similar or related activities, shall
    invalidate (1) any put, call, straddle, option, privilege, or other
    security subject to this title (except any security that has a pari-
    mutuel payout or otherwise is determined by the Commission, acting by
    rule, regulation, or order, to be appropriately subject to such laws),
    or apply to any activity which is incidental or related to the offer,
    purchase, sale, exercise, settlement, or closeout of any such security,
    (2) any security-based swap between eligible contract participants, or
    (3) any security-based swap effected on a national securities exchange
    registered pursuant to section 6(b). No provision of State law
    regarding the offer, sale, or distribution of securities shall apply to
    any transaction in a security-based swap or a security futures product,
    except that this sentence shall not be construed as limiting any State
    antifraud law of general applicability. A security-based swap may not
    be regulated as an insurance contract under State law.''.

    SEC. 3207. AMENDMENTS TO THE SECURITIES ACT OF 1933; TREATMENT OF
                  SECURITY-BASED SWAPS.

        (a) Definitions.--Section 2(a) of the Securities Act of 1933 (15
    U.S.C. 77b(a)) is amended--
                (1) in paragraph (1), by inserting ``security-based swap,''
            after ``security future,'';
                (2) in paragraph (3) by adding at the end the following:
            ``Any offer or sale of a security-based swap by or on behalf of
            the issuer of the securities upon which such security-based
            swap is based or is referenced, an affiliate of the issuer, or
            an underwriter, shall constitute a contract for sale of, sale
            of, offer for sale, or offer to sell such securities.''; and
                (3) by adding at the end the following:
                ``(17) The terms `swap' and `security-based swap' have the
            same meanings as provided in sections 1a(35) of the Commodity
            Exchange Act (7 U.S.C. 1a(35)) and section 3(a)(68) of the
            Securities Exchange Act of 1934.
                ``(18) The terms `purchase' or `sale' of a security-based
            swap shall be deemed to mean the execution, termination (prior
            to its scheduled maturity date), assignment, exchange, or
            similar transfer or conveyance of, or extinguishing of rights
            or obligations under, a security-based swap, as the context may
            require.''.
        (b) Exemption From Registration.--Section 3(a) of the Securities
    Act of 1933 is amended by adding at the end the following:
                ``(15) Any security-based swap, as defined in section
            2(a)(17) that is not otherwise a security as defined in section
            2(a)(1) and that satisfies such conditions as established by
            rule or regulation by the Commission consistent with the
            provisions of the Derivative Markets Transparency and
            Accountability Act of 2009. The Commission shall promulgate
            rules implementing this exemption.''.
        (c) Registration of Security-based Swaps.--Section 5 of the
    Securities Act of 1933 (15 U.S.C. 77e) is amended by adding at the end
    the following:
        ``(d) Notwithstanding the provisions of section 3 or section 4,
    unless a registration statement meeting the requirements of subsection
    (a) of section 10 is in effect as to a security-based swap, it shall be
    unlawful for any person, directly or indirectly, to make use of any
    means or instruments of transportation or communication in interstate
    commerce or of the mails to offer to sell, offer to buy or purchase or
    sell a security-based swap to any person who is not an eligible
    contract participant as defined in section 1a(12) of the Commodity
    Exchange Act (7 U.S.C. 1a(12)).''.

    SEC. 3208. OTHER AUTHORITY.

        Unless otherwise provided by its terms, this subtitle does not
    divest any appropriate Federal banking agency, the Commission, the
    Commodity Futures Trading Commission, or other Federal or State agency,
    of any authority derived from any other applicable law.

    SEC. 3209. JURISDICTION.

        (a) Section 36 of the Securities Exchange Act of 1934 (15 U.S.C.
    78mm) is amended by adding at the end the following new subsection:
        ``(c) Derivatives.--The Commission shall not grant exemptions from
    the security-based swap provisions of the Derivative Markets
    Transparency and Accountability Act of 2009, except as expressly
    authorized under the provisions of that Act.''.
        (b) Section 30 of the Securities Exchange Act of 1934 is amended by
    adding at the end the following:
        ``(c) No provision of this Act that was added by the Derivative
    Markets Transparency and Accountability Act of 2009 or any rule or
    regulation thereunder shall apply to any person insofar as such person
    transacts a business in security-based swaps without the jurisdiction
    of the United States unless he transacts such business in contravention
    of such rules and regulations as the Commission may prescribe as
    necessary or appropriate to prevent the evasion of any provision of
    this Act that was added by the Derivative Markets Transparency and
    Accountability Act of 2009. This subsection shall not be construed to
    limit the jurisdiction of the Commission under any provision of this
    Act as in effect prior to enactment of the Derivative Markets
    Transparency and Accountability Act of 2009.''.

    SEC. 3210. EFFECTIVE DATE.

        (a) Unless otherwise provided, the provisions of this subtitle
    shall become effective the later of 270 days after the date of the
    enactment of this subtitle or, to the extent a provision of this
    subtitle requires rulemaking, no less than 60 days after publication of
    a final rule or regulation implementing such provision of this
    subtitle.
        (b) Subsection (a) shall not preclude the Securities Exchange
    Commission from any rulemaking required to implement the provisions of
    this subtitle.

      Subtitle C--Improved Financial and Commodity Markets Oversight and
                                 Accountability

    SEC. 3301. ELEVATION OF CERTAIN INSPECTORS GENERAL TO APPOINTMENT
                  PURSUANT TO SECTION 3 OF THE INSPECTOR GENERAL ACT OF
                  1978.

        (a) Inclusion in Certain Definitions.--Section 12 of the Inspector
    General Act of 1978 (5 U.S.C. App.) is amended--
                (1) in paragraph (1), by striking ``or the Federal
            Cochairpersons of the Commissions established under section
            15301 of title 40, United States Code;'' and inserting ``the
            Federal Cochairpersons of the Commissions established under
            section 15301 of title 40, United States Code; the Chairman of
            the Board of Governors of the Federal Reserve System; the
            Chairman of the Commodity Futures Trading Commission; the
            Chairman of the National Credit Union Administration; the
            Director of the Pension Benefit Guaranty Corporation; the
            Chairman of the Securities and Exchange Commission; or the
            Director of the Consumer Financial Protection Agency;''; and
                (2) in paragraph (2), by striking ``or the Commissions
            established under section 15301 of title 40, United States
            Code,'' and inserting ``the Commissions established under
            section 15301 of title 40, United States Code, the Board of
            Governors of the Federal Reserve System, the Commodity Futures
            Trading Commission, the National Credit Union Administration,
            the Pension Benefit Guaranty Corporation, the Securities and
            Exchange Commission, or the Director of the Consumer Financial
            Protection Agency,''.
        (b) Exclusion From Definition of Designated Federal Entity.--
    Section 8G(a)(2) of the Inspector General Act of 1978 (5 U.S.C. App.)
    is amended--
                (1) by striking ``the Board of Governors of the Federal
            Reserve System,'';
                (2) by striking ``the Commodity Futures Trading
            Commission,'';
                (3) by striking ``the National Credit Union
            Administration,''; and
                (4) by striking ``the Pension Benefit Guaranty Corporation,
            the Securities and Exchange Commission,''.

    SEC. 3302. CONTINUATION OF PROVISIONS RELATING TO PERSONNEL.

        (a) In General.--The Inspector General Act of 1978 (5 U.S.C. App.)
    is amended by inserting after section 8L the following:

    ``SEC. 8M. SPECIAL PROVISIONS CONCERNING CERTAIN ESTABLISHMENTS.

        ``(a) Definition.--For purposes of this section, the term `covered
    establishment' means the Board of Governors of the Federal Reserve
    System, the Commodity Futures Trading Commission, the National Credit
    Union Administration, the Pension Benefit Guaranty Corporation, and the
    Securities and Exchange Commission.
        ``(b) Provisions Relating to All Covered Establishments.--
                ``(1) Provisions relating to inspectors general.--In the
            case of the Inspector General of a covered establishment,
            subsections (b) and (c) of section 4 of the Inspector General
            Reform Act of 2008 (Public Law 110-409) shall apply in the same
            manner as if such covered establishment were a designated
            Federal entity under section 8G. An Inspector General who is
            subject to the preceding sentence shall not be subject to
            section 3(e).
                ``(2) Provisions relating to other personnel.--
            Notwithstanding paragraphs (7) and (8) of section 6(a), the
            Inspector General of a covered establishment may select,
            appoint, and employ such officers and employees as may be
            necessary for carrying out the functions, powers, and duties of
            the Office of Inspector General of such establishment and to
            obtain the temporary or intermittent services of experts or
            consultants or an organization of experts or consultants,
            subject to the applicable laws and regulations that govern such
            selections, appointments, and employment, and the obtaining of
            such services, within such establishment.
        ``(c) Provision Relating to the Board of Governors of the Federal
    Reserve System.--The provisions of subsection (a) of section 8D (other
    than the provisions of subparagraphs (A), (B), (C), and (E) of
    paragraph (1) of such subsection (a)) shall apply to the Inspector
    General of the Board of Governors of the Federal Reserve System and the
    Chairman of the Board of Governors of the Federal Reserve System in the
    same manner as such provisions apply to the Inspector General of the
    Department of the Treasury and the Secretary of the Treasury,
    respectively.''.
        (b) Conforming Amendment.--Paragraph (3) of section 8G(g) of the
    Inspector General Act of 1978 (5 U.S.C. App.) is repealed.

    SEC. 3303. CORRECTIVE RESPONSES BY HEADS OF CERTAIN ESTABLISHMENTS TO
                  DEFICIENCIES IDENTIFIED BY INSPECTORS GENERAL.

        The Chairman of the Board of Governors of the Federal Reserve
    System, the Chairman of the Commodity Futures Trading Commission, the
    Chairman of the National Credit Union Administration, the Director of
    the Pension Benefit Guaranty Corporation, and the Chairman of the
    Securities and Exchange Commission shall each--
                (1) take action to address deficiencies identified by a
            report or investigation of the Inspector General of the
            establishment concerned; or
                (2) certify to both Houses of Congress that no action is
            necessary or appropriate in connection with a deficiency
            described in paragraph (1).

    SEC. 3304. EFFECTIVE DATE; TRANSITION RULE.

        (a) Effective Date.--This subtitle and the amendments made by this
    subtitle shall take effect 30 days after the date of the enactment of
    this subtitle.
        (b) Transition Rule.--An individual serving as Inspector General of
    the Board of Governors of the Federal Reserve System, the Commodity
    Futures Trading Commission, the National Credit Union Administration,
    the Pension Benefit Guaranty Corporation, or the Securities and
    Exchange Commission on the effective date of this subtitle pursuant to
    an appointment made under section 8G of the Inspector General Act of
    1978 (5 U.S.C. App.)--
                (1) may continue so serving until the President makes an
            appointment under section 3(a) of such Act with respect to the
            Board of Governors of the Federal Reserve System, the Commodity
            Futures Trading Commission, the National Credit Union
            Administration, the Pension Benefit Guaranty Corporation, or
            the Securities and Exchange Commission, as the case may be,
            consistent with the amendments made by section 301; and
                (2) shall, while serving under paragraph (1), remain
            subject to the provisions of section 8G of such Act which,
            immediately before the effective date of this subtitle, applied
            with respect to the Inspector General of the Board of Governors
            of the Federal Reserve System, the Commodity Futures Trading
            Commission, the National Credit Union Administration, the
            Pension Benefit Guaranty Corporation, or the Securities and
            Exchange Commission, as the case may be, and suffer no
            reduction in pay.

    SEC. 3305. AUTHORITY OF THE COMMODITY FUTURES TRADING COMMISSION TO
                  DEFINE ``COMMERCIAL RISK'', ``OPERATING RISK'', AND
                  ``BALANCE SHEET RISK''.

        (a) In General.--Section 1a of the Commodity Exchange Act (7 U.S.C.
    1a), as amended by the preceding provisions of this Act, is amended by
    adding at the end the following:
                ``(51) Commercial risk; operating risk; balance sheet
            risk.--The terms `commercial risk', `operating risk', and
            `balance sheet risk' shall have such meanings as the Commission
            may prescribe.''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    take effect as if included in subtitle A.

    SEC. 3306. CONFLICTS OF INTEREST IN CLEARING ORGANIZATIONS.

        (a) Commodity Exchange Act.--
                (1) Definition of restricted owner.--Section 1a of the
            Commodity Exchange Act (7 U.S.C. 1a) (as amended by the
            preceding provisions of this Act) is further amended by adding
            at the end the following:
                ``(51) Restricted owner.--The term `restricted owner' means
            any swap dealer, security-based swap dealer, major swap
            participant, or major security-based swap participant, that is
            an identified financial holding company as defined in Section
            1000(b)(5) of the Financial Stability Improvement Act of 2009,
            or a person associated with a swap dealer or a major swap
            participant that is an identified financial holding company, or
            a person associated with a security-based swap dealer or major
            security-based swap participant that is an identified financial
            holding company.''.
                (2) Conflicts of interest.--
                        (A) Subparagraph (P) of section 5b(c)(2) of the
                    Commodity Exchange Act (as added by the preceding
                    provisions of this Act) is amended by adding at the end
                    of such subparagraph the following: ``The rules of the
                    derivatives clearing organization that clears swaps
                    shall provide that a restricted owner shall not be
                    permitted directly or indirectly to acquire beneficial
                    ownership of interests in the organization or in
                    persons with a controlling interest in the
                    organization, to the extent that such an acquisition
                    would result in restricted owners being entitled to
                    vote, cause the voting of, or cause the withholding of
                    votes of, more than 20 percent of the votes entitled to
                    be cast on any matter by the holders of the ownership
                    interests. The rules of the derivatives clearing
                    organization shall provide that a majority of the
                    directors of the organization shall not be associated
                    with a restricted owner. This subparagraph shall not be
                    construed to require divestiture of any interest of a
                    restricted owner in an established and operational
                    derivatives clearing organization acquired prior to
                    January 1, 2010, provided that acquisitions by such
                    restricted owner after such date shall be subject to
                    this subparagraph. The Commission may determine whether
                    any acquisition by a restricted owner during any
                    interim period prior to the date of the enactment of
                    this Act has been made for the purpose of avoiding the
                    effect of this subparagraph.''.
                        (B) Section 4s(g)(1) of the Commodity Exchange Act
                    (as added by the preceding provisions of this Act) is
                    amended--
                                (i) by striking ``and'' at the end of
                            subparagraph (C); and
                                (ii) by redesignating subparagraph (D) as
                            subparagraph (E) and insert after subparagraph
                            (C) the following:
                        ``(D) the prevention of self-dealing, by limiting
                    the extent to which such a swap dealer or major swap
                    participant may conduct business with a derivatives
                    clearing organization, a board of trade, or an
                    alternative swap execution facility that clears or
                    trades swaps and in which such a swap dealer or major
                    swap participant has a material debt or equity
                    investment; and''.
                        (C) Paragraph (12) of section 5h(d) of the
                    Commodity Exchange Act (as added by the preceding
                    provisions of this Act) is amended by adding at the end
                    the following new subparagraph:
                        ``(C) The rules of the swap execution facility
                    shall provide that a restricted owner shall not be
                    permitted directly or indirectly to acquire beneficial
                    ownership of interests in the facility or in persons
                    with a controlling interest in the facility, to the
                    extent that such an acquisition would result in
                    restricted owners being entitled to vote, cause the
                    voting of, or cause the withholding of votes of, more
                    than 20 percent of the votes entitled to be cast on any
                    matter by the holders of the ownership interests. This
                    subparagraph shall not be construed to require
                    divestiture of any interest of a restricted owner in an
                    established and operational swap execution facility
                    acquired prior to January 1, 2010, provided that
                    acquisitions by such restricted owner after such date
                    shall be subject to this subparagraph. The Commission
                    may determine whether any acquisition by a restricted
                    owner during any interim period prior to the date of
                    the enactment of this Act has been made for the purpose
                    of avoiding the effect of this subparagraph.
                        ``(D) The rules of the swap execution facility
                    shall provide that a majority of the directors of the
                    facility shall not be associated with a restricted
                    owner.''.
                        (D) Section 5(d) of the Commodity Exchange Act (as
                    amended by the preceding provisions of this Act) is
                    further amended by striking paragraph (15) and
                    inserting the following:
                ``(15) Conflicts of interest.--
                        ``(A) The board of trade shall establish and
                    enforce rules to minimize conflicts of interest in the
                    decisionmaking process of the contract market, and
                    establish a process for resolving any such conflicts of
                    interest.
                        ``(B) The rules of a board of trade that trades
                    swaps shall provide that a restricted owner shall not
                    be permitted directly or indirectly to acquire
                    beneficial ownership of interests in the board of trade
                    or in persons with a controlling interest in the board
                    of trade, to the extent that such an acquisition would
                    result in restricted owners being entitled to vote,
                    cause the voting of, or cause the withholding of votes
                    of, more than 20 percent of the votes entitled to be
                    cast on any matter by the holders of the ownership
                    interests. This paragraph shall not be construed to
                    require divestiture of any interest of a restricted
                    owner in an established and operational board of trade
                    acquired prior to January 1, 2010, provided that
                    acquisitions by such restricted owner after such date
                    shall be subject to this paragraph. The Commission may
                    determine whether any acquisition by a restricted owner
                    during any interim period prior to the date of the
                    enactment of this Act has been made for the purpose of
                    avoiding the effect of this paragraph.
                        ``(C) The rules of a board of trade that trades
                    swaps shall provide that a majority of the directors of
                    the board of trade shall not be associated with a
                    restricted owner.''.
        (b) Securities Exchange Act of 1934.--
                (1) Definition of restricted owner.--Section 3(a) of the
            Securities Exchange Act of 1934 (15 U.S.C. 78c(a)) (as amended
            by the preceding provisions of this Act) is further amended by
            adding at the end the following:
                ``(78) Restricted owner.--The term `restricted owner' has
            the same meaning as in section 1a(51) of the Commodity Exchange
            Act.''.
                (2) Conflicts of interest.--
                        (A) Paragraph (10) of section 3C(d) of the
                    Securities Exchange Act of 1934 (as added by the
                    preceding provisions of this Act) is amended by adding
                    after subparagraph (B) the following:
    ``The rules of the swap execution facility shall provide that a
    restricted owner shall not be permitted directly or indirectly to
    acquire beneficial ownership of interests in the facility or in persons
    with a controlling interest in the facility, to the extent that such an
    acquisition would result in restricted owners being entitled to vote,
    cause the voting of, or cause the withholding of votes of, more than 20
    percent of the votes entitled to be cast on any matter by the holders
    of the ownership interests. The rules of the swap execution facility
    shall provide that a majority of the directors of the facility shall
    not be associated with a restricted owner. This paragraph shall not be
    construed to require divestiture of any interest of a restricted owner
    in an established and operational swap execution facility acquired
    prior to January 1, 2010, provided that acquisitions by such restricted
    owner after such date shall be subject to this paragraph. The
    Commission may determine whether any acquisition by a restricted owner
    during any interim period prior to the date of the enactment of this
    Act has been made for the purpose of avoiding the effect of this
    paragraph.''.
                        (B) Section 15F(g)(1) of the Securities Exchange
                    Act of 1934 (as added by the preceding provisions of
                    this Act) is amended--
                                (i) in subparagraph (C), strike ``and'';
                            and
                                (ii) insert after subparagraph (C) the
                            following (and redesignate the succeeding
                            subparagraph accordingly):
                        ``(D) the prevention of self-dealing by limiting
                    the extent to which a security-based swap dealer or
                    major security-based swap participant may conduct
                    business with a clearing agency, an exchange, or an
                    alternative swap execution facility that clears or
                    trades security-based swaps and in which such a dealer
                    or participant has a material debt or equity
                    investment; and''.
                        (C) Section 6(b) of the Securities Exchange Act of
                    1934 (15 U.S.C. 78f(b)) is amended by adding at the end
                    the following new paragraphs:
                ``(10) The rules of the exchange minimize conflicts of
            interest in its decision-making process and establish a process
            for resolving such conflicts of interest.
                ``(11) The rules of an exchange that trades security-based
            swaps provide that a majority of the directors of the exchange
            shall not be associated with a restricted owner.
                ``(12) The rules of an exchange that trades security-based
            swaps provide that a restricted owner shall not be permitted
            directly or indirectly to acquire beneficial ownership of
            interests in the exchange or in persons with a controlling
            interest in the exchange, to the extent that such an
            acquisition would result in restricted owners being entitled to
            vote, cause the voting of, or cause the withholding of votes
            of, more than 20 percent of the votes entitled to be cast on
            any matter by the holders of the ownership interests. This
            paragraph shall not be construed to require divestiture of any
            interest of a restricted owner in an established and
            operational exchange acquired prior to January 1, 2010,
            provided that acquisitions by such restricted owner after such
            date shall be subject to this paragraph. The Commission may
            determine whether any acquisition by a restricted owner during
            any interim period prior to the date of the enactment of this
            Act has been made for the purpose of avoiding the effect of
            this paragraph.''.
                        (D) Section 17A(b)(3) of the Securities Exchange
                    Act of 1934 (15 U.S.C. 78f(b)) is amended by adding at
                    the end the following new subparagraphs:
                        ``(J) The rules of a clearing agency that clears
                    security-based swaps shall provide that a restricted
                    owner shall not be permitted directly or indirectly to
                    acquire beneficial ownership of interests in the agency
                    or in persons with a controlling interest in the
                    agency, to the extent that such an acquisition would
                    result in restricted owners being entitled to vote,
                    cause the voting of, or cause the withholding of votes
                    of, more than 20 percent of the votes entitled to be
                    cast on any matter by the holders of the ownership
                    interests. This subparagraph shall not be construed to
                    require divestiture of any interest of a restricted
                    owner in an established and operational clearing agency
                    acquired prior to January 1, 2010, provided that
                    acquisitions by such restricted owner after such date
                    shall be subject to this subparagraph. The Commission
                    may determine whether any acquisition by a restricted
                    owner during any interim period prior to the date of
                    the enactment of this Act has been made for the purpose
                    of avoiding the effect of this subparagraph.
                        ``(K) The rules of the clearing agency shall
                    provide that a majority of the directors of the agency
                    shall not be associated with a restricted owner.''.

    SEC. 3307. DEFINITIONS OF MAJOR SWAP PARTICIPANT AND MAJOR SECURITY-
                  BASED SWAP PARTICIPANT.

        (a) Major Swap Participant.--Section 1a(39) of the Commodity
    Exchange Act (7 U.S.C. 1a), as added by the preceding provisions of
    this Act, is amended to read as follows:
                ``(39) Major swap participant.--
                        ``(A) In general.--The term `major swap
                    participant' means any person who is not a swap dealer,
                    and--
                                ``(i) maintains a substantial net position
                            in outstanding swaps, excluding positions held
                            primarily for hedging, reducing or otherwise
                            mitigating its commercial risk; or
                                ``(ii) whose outstanding swaps create
                            substantial net counterparty exposure that
                            could have serious adverse effects on the
                            financial stability of the United States
                            banking system or financial markets.
                        ``(B) Definition of substantial net position.--The
                    Commission shall define by rule or regulation the term
                    `substantial net position' at a threshold that the
                    Commission determines prudent for the effective
                    monitoring, management, and oversight of entities which
                    are systemically important or can significantly impact
                    the financial system. In setting the definitions, the
                    Commission shall consider the person's relative
                    position in uncleared as opposed to cleared swaps.
                        ``(C) A person may be designated a major swap
                    participant for 1 or more individual types of swaps
                    without being classified as a major swap participant
                    for all classes of swaps.''.
        (b) Major Security-based Swap Participant.--Section 3(a)(67) of the
    Securities Exchange Act of 1934 (15 U.S.C. 78c(a)), as added by the
    preceding provisions of this Act, is amended to read as follows:
                ``(67) Major security-based swap participant.--
                        ``(A) In general.--The term `major security-based
                    swap participant' means any person who is not a
                    security-based swap dealer, and--
                                ``(i) maintains a substantial net position
                            in outstanding security-based swaps, excluding
                            positions held primarily for hedging, reducing
                            or otherwise mitigating its commercial risk; or
                                ``(ii) whose outstanding security-based
                            swaps create substantial net counterparty
                            exposure that could have serious adverse
                            effects on the financial stability of the
                            United States banking system or financial
                            markets.
                        ``(B) Definition of substantial net position.--The
                    Commission shall define by rule or regulation the term
                    `substantial net position' at a threshold that the
                    Commission determines prudent for the effective
                    monitoring, management, and oversight of entities which
                    are systemically important or can significantly impact
                    the financial system. In setting the definitions, the
                    Commission shall consider the person's relative
                    position in uncleared as opposed to cleared security-
                    based swaps.
                        ``(C) A person may be designated a major security-
                    based swap participant for 1 or more individual types
                    of security-based swaps without being classified as a
                    major security-based swap participant for all classes
                    of security-based swaps.''.
        (c) Effective Dates.--
                (1) Major swap participant.--The amendment made by
            subsection (a)(1) shall take effect as if included in subtitle
            A.
                (2) Major security-based swap participant.--The amendment
            made by subsection (a)(2) shall take effect as if included in
            subtitle B.

               TITLE IV--CONSUMER FINANCIAL PROTECTION AGENCY ACT

    SEC. 4001. SHORT TITLE.

        This title may be cited as the ``Consumer Financial Protection
    Agency Act of 2009''.

    SEC. 4002. DEFINITIONS.

        For the purposes of subtitles A through F of this title, the
    following definitions shall apply:
                (1) Affiliate.--The term ``affiliate'' means any person
            that controls, is controlled by, or is under common control
            with another person.
                (2) Agency.--The term ``Agency'' means--
                        (A) before the Agency conversion date, the Consumer
                    Financial Protection Agency; and
                        (B) on and after the Agency conversion date, the
                    commission established under section 4103.
                (3) Bank holding company.--The term ``bank holding
            company'' has the same meaning as in section 2(a) of the Bank
            Holding Company Act of 1956.
                (4) Board.--Except when used in connection with the term
            ``Board of Governors'', the term ``Board'' means the Consumer
            Financial Protection Oversight Board.
                (5) Board of governors.--The term ``Board of Governors''
            means the Board of Governors of the Federal Reserve System.
                (6) Business of insurance.--The term ``business of
            insurance'' means the writing of insurance or the reinsuring of
            risks by an insurer, including all acts necessary to such
            writing or reinsuring and the activities relating to the
            writing of insurance or the reinsuring of risks conducted by
            persons who act as, or are, officers, directors, agents, or
            employees of insurers or who are other persons authorized to
            act on behalf of such persons.
                (7) Consumer.--The term ``consumer'' means an individual or
            an agent, trustee, or representative acting on behalf of an
            individual.
                (8) Consumer financial product or service.--The term
            ``consumer financial product or service'' means any financial
            product, other than a Federal tax return, or service to be used
            by a consumer primarily for personal, family, or household
            purposes.
                (9) Covered person.--
                        (A) In general.--The term ``covered person'' means
                    any person who engages directly or indirectly in a
                    financial activity, in connection with the provision of
                    a consumer financial product or service.
                        (B) Exclusion.--The term ``covered person'' shall
                    not include the Secretary, the Department of the
                    Treasury, any agency or bureau under the jurisdiction
                    of the Secretary, or any person collecting Federal
                    taxes for the United States to the extent such person
                    is acting in such capacity.
                (10) Credit.--The term ``credit'' means the right granted
            by a person to a consumer to defer payment of a debt, incur
            debt and defer its payment, or purchase property or services
            and defer payment for such purchase.
                (11) Credit union.--The term ``credit union'' means a
            Federal credit union or a State credit union as defined in
            section 101 of the Federal Credit Union Act.
                (12) Deposit.--The term ``deposit''--
                        (A) has the same meaning as in section 3(l) of the
                    Federal Deposit Insurance Act; and
                        (B) includes a share in a member account (as
                    defined in section 101(5) of the Federal Credit Union
                    Act) at a credit union.
                (13) Deposit-taking, money acceptance, or money movement
            activity.--The term ``deposit-taking, money acceptance, or
            money movement activities'' means--
                        (A) the acceptance of deposits, the maintenance of
                    deposit accounts, or the provision of services related
                    to the acceptance of deposits;
                        (B) the acceptance of money, the provision of other
                    services related to the acceptance of money, or the
                    maintenance of members' share accounts by a credit
                    union; or
                        (C) the receipt of money or its equivalent, as the
                    Director may determine by regulation or order, received
                    or held by the covered person (or an agent for the
                    person) for the purpose of facilitating a payment or
                    transferring funds or value of funds by a consumer to a
                    third party.
                (14) Designated transfer date.--The term ``designated
            transfer date'' has the meaning provided in section 4602.
                (15) Director.--The term ``Director'' means--
                        (A) before the Agency conversion date, the Director
                    of the Agency; and
                        (B) on and after the Agency conversion date, the
                    commission established under section 4103.
                (16) Enumerated consumer laws.--The term ``enumerated
            consumer laws'' means each of the following:
                        (A) The Alternative Mortgage Transaction Parity Act
                    (12 U.S.C. 3801 et seq.).
                        (B) The Electronic Funds Transfer Act (15 U.S.C.
                    1693 et seq.).
                        (C) The Equal Credit Opportunity Act (15 U.S.C.
                    1691 et seq.).
                        (D) The Fair Credit Reporting Act (15 U.S.C. 1681
                    et seq.), except with respect to sections 615(e) and
                    628 of such Act.
                        (E) The Fair Debt Collection Practices Act (15
                    U.S.C. 1692 et seq.).
                        (F) Subsections (b), (c), (d), (e), and (f) of
                    section 43 of the Federal Deposit Insurance Act (12
                    U.S.C. 1831t).
                        (G) Sections 502, 503, 504, 505, 506, 507, 508, and
                    509 of the Gramm-Leach-Bliley Act (15 U.S.C. 6802 et
                    seq.) except for section 505 as it applies to section
                    501(b).
                        (H) The Homeowners Protection Act of 1998.
                        (I) The Home Mortgage Disclosure Act (12 U.S.C.
                    2801 et seq.).
                        (J) The Real Estate Settlement Procedures Act (12
                    U.S.C. 2601 et seq.).
                        (K) The Secure and Fair Enforcement for Mortgage
                    Licensing Act (12 U.S.C. 5101 et seq.).
                        (L) The Truth in Lending Act (15 U.S.C. 1601 et
                    seq.).
                        (M) The Truth in Savings Act (12 U.S.C. 4301 et
                    seq.).
                        (N) Section 626 of the Omnibus Appropriations Act,
                    2009 (Public Law 111-8).
                        (O) The Unlawful Internet Gambling Enforcement Act
                    of 2006.
                (17) Federal banking agency.--The term ``Federal banking
            agency'' means the Board of Governors, the Comptroller of the
            Currency, the Director of the Office of Thrift Supervision, the
            Federal Deposit Insurance Corporation, or the National Credit
            Union Administration and the term ``Federal banking agencies''
            means all of such agencies.
                (18) Fair lending.--The term ``fair lending'' means fair,
            equitable, and nondiscriminatory access to credit for both
            individuals and communities.
                (19) Financial activity.--
                        (A) In general.--The term ``financial activity''
                    means any of the following activities:
                                (i) Deposit-taking, money acceptance, or
                            money movement activities.
                                (ii) Extending credit and servicing loans,
                            including--
                                        (I) acquiring, purchasing, selling,
                                    brokering, or servicing loans or other
                                    extensions of credit; and
                                        (II) engaging in any other activity
                                    usual in connection with extensions of
                                    credit or servicing loans, including
                                    performing appraisals of real estate
                                    and personal property.
                                (iii) Check cashing and check-guaranty
                            services, including--
                                        (I) authorizing a subscribing
                                    merchant to accept personal checks
                                    tendered by the merchant's customers in
                                    payment for goods and services; and
                                        (II) purchasing from a subscribing
                                    merchant validly authorized checks that
                                    are subsequently dishonored.
                                (iv) Collecting, analyzing, maintaining,
                            and providing consumer report information or
                            other account information by covered persons,
                            including information relating to the credit
                            history of consumers and providing the
                            information to a credit grantor who is
                            considering a consumer application for credit
                            or who has extended credit to the borrower,
                            except that furnishing a consumer report to
                            another person that it has reason to believe
                            intends to use the information for employment
                            purposes, including for security
                            investigations, government licensing and
                            evaluating a consumer's residential or tenant
                            history shall not be considered a financial
                            activity.
                                (v) Collection of debt related to any
                            consumer financial product or service.
                                (vi) Providing real estate settlement
                            services.
                                (vii) Leasing personal or real property or
                            acting as agent, broker, or adviser in leasing
                            such property if--
                                        (I) the lease is on a non-operating
                                    basis;
                                        (II) the initial term of the lease
                                    is at least 90 days; and
                                        (III) in the case of leases
                                    involving real property, at the
                                    inception of the initial lease, the
                                    transaction is intended to result in
                                    ownership of the leased property to be
                                    transferred to the lessee, subject to
                                    standards prescribed by the Director.
                                (viii) Acting as an investment adviser to
                            any person (excluding an investment adviser
                            that is a person regulated by the Commodity
                            Futures Trading Commission, the Securities and
                            Exchange Commission, or a person regulated as
                            an investment adviser by any securities
                            commission (or any agency or office performing
                            like functions) of any State).
                                (ix) Acting as financial adviser to any
                            person (excluding an investment adviser that is
                            a person regulated by the Commodity Futures
                            Trading Commission, the Securities and Exchange
                            Commission, or any securities commission (or
                            any agency or office performing like functions)
                            of any State), including--
                                        (I) providing financial and other
                                    related advisory services;
                                        (II) providing educational courses,
                                    and instructional materials to
                                    consumers on individual financial
                                    management matters;
                                        (III) providing credit counseling
                                    or tax planning services to any person
                                    (excluding the preparation of returns,
                                    or claims for refund, of tax imposed by
                                    the Internal Revenue Code or advice
                                    with respect to positions taken
                                    therein, or services regulated by the
                                    Secretary of the Treasury under section
                                    330 of title 31, United States Code);
                                    or
                                        (IV) providing services to assist a
                                    consumer with debt management or debt
                                    settlement, with modifying the terms of
                                    any extension of credit, or with
                                    avoiding foreclosure.
                                (x) For purposes of this title, the
                            following shall not be considered acting as
                            financial adviser:
                                        (I) Publishing any bona fide
                                    newspaper, news magazine or business or
                                    financial publication of general and
                                    regular circulation, including
                                    publishing market data, news, or data
                                    analytics or investment information or
                                    recommendations that are not tailored
                                    to the individual needs of a particular
                                    consumer.
                                        (II) Providing advice, analyses, or
                                    reports that do not relate to any
                                    securities other than securities which
                                    are direct obligations of or
                                    obligations guaranteed as to principal
                                    or interest by the United States, or
                                    securities issued or guaranteed by
                                    corporations in which the United States
                                    has a direct or indirect interest which
                                    shall have been designated by the
                                    Secretary of the Treasury, pursuant to
                                    section 3(a)(12) of the Securities
                                    Exchange Act of 1934, as exempted
                                    securities for the purposes of that
                                    Act.
                                (xi) Financial data processing by any
                            technological means, including providing data
                            processing, access to or use of databases or
                            facilities, or advice regarding processing or
                            archiving, if the data to be processed,
                            furnished, stored, or archived are financial,
                            banking, or economic, except that it shall not
                            be considered a ``financial activity'' with
                            respect to financial data processing--
                                        (I) to the extent the person is
                                    providing interactive computer service,
                                    as defined in section 230 of the
                                    Communications Act of 1934 (47 U.S.C.
                                    230); or
                                        (II) if the person--
                                                (aa) unknowingly or
                                            incidentally transmits,
                                            processes, or stores financial
                                            data in a manner that such data
                                            is undifferentiated from other
                                            types of data that the person
                                            transmits, processes, or
                                            stores;
                                                (bb) does not provide to
                                            any consumer a consumer
                                            financial product or service in
                                            connection with or relating to
                                            in any manner financial data
                                            processing; and
                                                (cc) does not provide a
                                            material service to any covered
                                            person in connection with the
                                            provision of a consumer
                                            financial product or service.
                                (xii) Money transmitting.
                                (xiii) Sale, provision or issuance of
                            stored value, except that, in the case of a
                            sale, only if the seller influences the terms
                            or conditions of the stored value provided to
                            the consumer.
                                (xiv) Acting as a money services business.
                                (xv) Acting as a custodian of money or any
                            financial instrument.
                                (xvi)(I) Any other activity that the
                            Director defines, by regulation, as a financial
                            activity after finding that--
                                                (aa) the activity is
                                            financial in nature or is
                                            otherwise a permissible
                                            activity for a bank or bank
                                            holding company, including a
                                            financial holding company,
                                            under any provision of Federal
                                            law or regulation applicable to
                                            a bank or bank holding company,
                                            including a financial holding
                                            company;
                                                (bb) the activity is
                                            incidental or complementary to
                                            any other financial activity
                                            regulated by the Agency; or
                                                (cc) the activity is
                                            entered into or conducted as a
                                            subterfuge or with a purpose to
                                            evade any requirement under
                                            this title, the enumerated
                                            consumer laws, and the
                                            authorities transferred under
                                            subtitles F and H.
                                (II) For purposes of subclause (I)(bb), the
                            following activities provided to a covered
                            person shall not be ``incidental or
                            complementary'':
                                        (aa) Providing information products
                                    or services to a covered person for
                                    identity authentication.
                                        (bb) Providing information products
                                    or services for fraud or identify theft
                                    detection, prevention, or
                                    investigation.
                                        (cc) Providing document retrieval
                                    or delivery services.
                                        (dd) Providing public records
                                    information retrieval.
                                        (ee) Providing information products
                                    or services for anti-money laundering
                                    activities.
                        (B) Exceptions.--The term ``financial activity''
                    shall not include the business of insurance or the
                    provision of electronic data transmission, routing,
                    intermediate or transient storage, or connections to a
                    system or network, where the person providing such
                    services does not select or modify the content of the
                    electronic data, is not the sender or the intended
                    recipient of the data, and such person transmits,
                    routes, stores, or provides connections for electronic
                    data, including financial data, in a manner that such
                    financial data is undifferentiated from other types of
                    data that such person transmits, routes, stores, or
                    provides connections.
                (20) Financial product or service.--The term ``financial
            product or service'' means any product or service that,
            directly or indirectly, results from or is related to engaging
            in 1 or more financial activities.
                (21) Foreign exchange.--The term ``foreign exchange'' means
            the exchange, for compensation, of currency of the United
            States or of a foreign government for currency of another
            government.
                (22) Insured credit union.--The term ``insured credit
            union'' has the same meaning as in section 101 of the National
            Credit Union Act.
                (23) Insured depository institution.--The term ``insured
            depository institution'' has the same meaning as in section 3
            of the Federal Deposit Insurance Act and shall include any
            uninsured branch or agency of a foreign bank or a commercial
            lending company owned or controlled by a foreign bank.
                (24) Money services business.--The term ``money services
            business'' means a person that--
                        (A) receives currency, monetary value, or payment
                    instruments for the purpose of exchanging or
                    transmitting the same by any means, including
                    transmission by wire, facsimile, electronic transfer,
                    courier, the Internet, or through bill payment
                    services, or other businesses that facilitate third-
                    party transfers within the United States or to or from
                    the United States; or
                        (B) issues payment instruments or stored value.
                (25) Money transmitting.--The term ``money transmitting''
            means the receipt by a person of currency, monetary value, or
            payment instruments for the purpose of transmitting the same to
            any third-party by any means, including transmission by wire,
            facsimile, electronic transfer, courier, the Internet, or
            through bill payment services.
                (26) Payment instrument.--The term ``payment instrument''
            means a check, draft, warrant, money order, traveler's check,
            electronic instrument, or other instrument, payment of money,
            or monetary value (other than currency).
                (27) Person.--The term ``person'' means an individual,
            partnership, company, corporation, association (incorporated or
            unincorporated), trust, estate, cooperative organization, or
            other entity.
                (28) Person regulated by a state insurance regulator.--The
            term ``person regulated by a State insurance regulator'' means
            any person who is--
                        (A) engaged in the business of insurance; and
                        (B) subject to regulation by any State insurance
                    regulator,
            but only to the extent that such person acts in such capacity.
                (29) Person regulated by the commodity futures trading
            commission.--The term ``person regulated by the Commodity
            Futures Trading Commission'' means any futures commission
            merchant, commodity trading adviser, commodity pool operator,
            introducing broker, boards of trade, derivatives clearing
            organizations, multilateral clearing organizations, retail
            foreign exchange dealer, or swap execution facility to the
            extent that such person's actions are subject to the
            jurisdiction of the Commodity Futures Trading Commission under
            the Commodity Exchange Act and any agent, employee, or
            contractor acting on behalf of, registered with, or providing
            services to such person but only to the extent the person, or
            the employee, agent, or contractor of such person, acts in a
            registered capacity.
                (30) Person regulated by the securities and exchange
            commission.--The term ``person regulated by the Securities and
            Exchange Commission'' means--
                        (A) a broker or dealer that is required to be
                    registered under the Securities Exchange Act of 1934;
                        (B) an investment adviser that is registered under
                    the Investment Advisers Act of 1940;
                        (C) an investment company that--
                                (i) is required to be registered under the
                            Investment Company Act of 1940; or
                                (ii) is excepted from the definition of
                            investment company under section 3(c) of such
                            Act, or any successor provision;
                        (D) a national securities exchange that is required
                    to be registered under the Securities Exchange Act of
                    1934;
                        (E) a transfer agent that is required to be
                    registered under the Securities Exchange Act of 1934;
                        (F) a clearing corporation that is required to be
                    registered under the Securities Exchange Act of 1934;
                        (G) any municipal securities dealer that is
                    registered with the Securities and Exchange Commission;
                        (H) any self-regulatory organization that is
                    registered with the Securities and Exchange Commission;
                        (I) any national securities exchange or other
                    entity that is required to be registered under the
                    Securities Exchange Act of 1934; and
                        (J) the Municipal Securities Rulemaking Board,
            and any employee, agent, or contractor acting on behalf of,
            registered with, or providing services to, any such person, but
            only to the extent that any person described in any
            subparagraph of this paragraph, or the employee agent, or
            contractor of such person, acts in a registered capacity, or,
            with respect to a person described in subparagraph (C)(ii), any
            employee, agent, or contractor acting on behalf of, or
            providing services to any such person, but only to the extent
            that such person, or the employee, agent, or contractor of such
            person acts in such exempt capacity.
                (31) Provision of a consumer financial product or
            service.--The terms ``provision of a consumer financial product
            or service'' and ``providing a consumer financial product or
            service'' mean the advertisement, marketing, solicitation,
            sale, disclosure, delivery, or account maintenance or servicing
            of a consumer financial product or service.
                (32) Person that performs income tax preparation activities
            for consumers.--The term ``person that performs income tax
            preparation activities for consumers'' means--
                        (A) any tax return preparer (as defined in section
                    7701(a)(36) of the Internal Revenue Code of 1986),
                    regardless of whether compensated, but only to the
                    extent that the person acts in such capacity;
                        (B) any person regulated by the Secretary of the
                    Treasury under section 330 of title 31, United States
                    Code, but only to the extent that the person acts in
                    such capacity; and
                        (C) any authorized IRS e-file Providers (as defined
                    for purposes of section 7216 of the Internal Revenue
                    Code of 1986), but only to the extent that the person
                    acts in such capacity.
                (33) Related person.--
                        (A) In general.--The term ``related person'', when
                    used in connection with a covered person that is not a
                    bank holding company, credit union, depository
                    institution, means--
                                (i) any director, officer, employee charged
                            with managerial responsibility, or controlling
                            stockholder of, or agent for, such covered
                            person;
                                (ii) any shareholder, consultant, joint
                            venture partner, and any other person as
                            determined by the Director (by regulation or on
                            a case-by-case basis) who materially
                            participates in the conduct of the affairs of
                            such covered person; and
                                (iii) any independent contractor (including
                            any attorney, appraiser, or accountant), with
                            respect to such covered person, who knowingly
                            or recklessly participates in any--
                                        (I) violation of any law or
                                    regulation; or
                                        (II) breach of fiduciary duty.
                        (B) Treatment of a related person as a covered
                    person.--Any person who is a related person under
                    subparagraph (A) shall be deemed to be a covered person
                    for all purposes of this title, any enumerated consumer
                    law, and any law for which authorities were transferred
                    by subtitles F and H.
                (34) Secretary.--The term ``Secretary'' means the Secretary
            of the Treasury.
                (35) Service provider.--
                        (A) In general.--The term ``service provider''
                    means any person who provides a material service to a
                    covered person in the provision of a consumer financial
                    product or service, including a person who--
                                (i) facilitates the design of, or
                            operations relating to the provision of, the
                            consumer financial product or service;
                                (ii) has direct interaction with a consumer
                            (whether in person or via telecommunication
                            device or other similar technology) regarding
                            the consumer financial product or service; or
                                (iii) processes transactions relating to
                            the consumer financial product or service.
                        (B) Exceptions.--The term ``service provider''
                    shall not apply to a person solely by virtue of such
                    person providing or selling to a covered person--
                                (i) a support service of a type provided to
                            businesses generally or a similar ministerial
                            service;
                                (ii) a service that does not materially
                            affect the terms or conditions of the consumer
                            financial product or service, its performance
                            or operation, or the propensity of a consumer
                            to obtain or use such product or service; or
                                (iii) time or space for an advertisement
                            for a consumer financial product or service
                            through print, newspaper, or electronic media.
                (36) State.--The term ``State'' means any State, territory,
            or possession of the United States, the District of Columbia,
            Commonwealth of Puerto Rico, Commonwealth of the Northern
            Mariana Islands, Guam, American Samoa, or the United States
            Virgin Islands or any federally recognized Indian tribe as
            defined by the Secretary of the Interior under section 104(a)
            of the Federally Recognized Indian Tribe List Act of 1994 (25
            U.S.C. 479a-1(a)).
                (37) Stored value.--The term ``stored value''--
                        (A) means funds or monetary value represented in
                    any electronic format, whether or not specially
                    encrypted, and stored or capable of storage on
                    electronic media in such a way as to be retrievable and
                    transferred electronically; and
                        (B) includes a prepaid debit card or product (other
                    than a card or product used solely for telephone
                    services) or any other similar product,
            regardless of whether the amount of the funds or monetary value
            may be increased or reloaded.
                (38) Agency conversion date.--The term ``Agency conversion
            date'' means the date that is 2 years after the designated
            transfer date.

                    Subtitle A--Establishment of the Agency

    SEC. 4101. ESTABLISHMENT OF THE CONSUMER FINANCIAL PROTECTION AGENCY.

        (a) Agency Established.--There is established the Consumer
    Financial Protection Agency as an independent agency to regulate the
    provision of consumer financial products or services under this title,
    the enumerated consumer laws, and the authorities transferred under
    subtitles F and H.
        (b) Agency Structure.--
                (1) Initial structure.--The Agency shall be led by a
            Director or Acting Director, established pursuant to section
            4102, until the day before the Agency conversion date.
                (2) Subsequent structure.--On and after the Agency
            conversion date, the Agency shall consist of the commission
            established under section 4103.
        (c) Principal Office.--The principal office of the Agency shall be
    located in the city of Washington, District of Columbia, at 1 or more
    sites.

    SEC. 4102. DIRECTOR.

        (a) Establishment of Position.--
                (1) In general.--There is hereby established the position
            of the Director of the Agency who shall be the head of the
            Agency.
                (2) Authority to prescribe regulations.--The Director may
            prescribe such regulations and issue such orders in accordance
            with this title as the Director may determine to be necessary
            for carrying out this title and all other laws within the
            Director's jurisdiction and shall exercise any authorities
            granted under this title and all other laws within the
            Director's jurisdiction.
        (b) Appointment; Term.--
                (1) Nomination.--Within 60 days after the date of enactment
            of this title, the President shall nominate the Director, from
            among individuals who--
                        (A) are citizens of the United States; and
                        (B) have strong competencies and experiences
                    related to consumer financial protection.
                (2) Appointment subject to confirmation.--The Director
            nominated under paragraph (1) shall be appointed by and with
            the advice and consent of the Senate.
                (3) Acting director before senate confirmation.--The
            individual nominated pursuant to paragraph (1) shall serve as
            Acting Director with full authorities granted to the Director
            under this title until the Director is confirmed by the Senate.
                (4) Term.--The Director shall be appointed for a term that
            ends on the Agency conversion date.
                (5) Removal.--The Director may be removed before the end of
            a term only for cause.
                (6) Vacancy.--
                        (A)  In general.--A vacancy in the position of
                    Director which occurs before the expiration of the term
                    for which a Director was appointed shall be filled in
                    the manner established in paragraph (2) and the
                    Director appointed to fill such vacancy shall be
                    appointed only for the remainder of such term.
                        (B) Acting director.--
                                (i) In general.--In the event of vacancy or
                            during the absence of the Director (who has
                            been confirmed by the Senate pursuant to
                            paragraph (2)), an Acting Director shall be
                            appointed in the manner provided in section
                            3345 of title 5, United States Code.
                                (ii) Authority of acting director.--Any
                            individual serving as Acting Director under
                            this subparagraph shall be vested with all
                            authority, duties, and privileges of the
                            Director.
                (7) Service after end of term.--An individual may serve as
            Director after the expiration of the term for which appointed
            until a successor Director has been appointed and qualified.
        (c) Prohibition on Financial Interests.--The Director shall not
    have a direct or indirect financial interest in any covered person.
        (d) Compensation.--The Director shall receive compensation at the
    rate prescribed for Level I of the Executive Schedule under section
    5313 of title 5, United States Code.

    SEC. 4103. ESTABLISHMENT AND COMPOSITION OF THE COMMISSION.

        (a) Establishment of the Commission.--
                (1) In general.--On the Agency conversion date, there shall
            be established a commission (hereinafter in this section
            referred to as the ``Commission'') that shall by operation of
            law succeed to all of the authorities of the Director of the
            Agency granted under this title and any other law.
                (2) Authority to prescribe regulations.--The Commission may
            prescribe such regulations and issue such orders in accordance
            with this title as the Commission may determine to be necessary
            for carrying out this title and all other laws within the
            Commission's jurisdiction and shall exercise any authorities
            granted under this title and all other laws within the
            Commission's jurisdiction.
        (b) Composition of the Commission.--
                (1) In general.--The Commission shall be composed of 5
            members who shall be appointed by the President, by and with
            the advice and consent of the Senate, from among individuals
            who--
                        (A) are citizens of the United States; and
                        (B) have strong competencies and experiences
                    related to consumer financial protection.
                (2) Initial appointments.--
                        (A) In general.--The initial members of the
                    Commission, other than the initial Chair, may be
                    appointed by the President, by and with the advice and
                    consent of the Senate, prior to the Agency conversion
                    date, but may not serve in their positions until such
                    date.
                        (B) Staggering.--Except as provided under
                    subsection (d)(1), the members of the Commission shall
                    serve staggered terms, which initially shall be
                    established by the President for terms of 1, 2, 4, and
                    5 years, respectively.
                (3) Terms.--
                        (A) In general.--Except as provided in subsection
                    (d)(1), each member of the Commission, including the
                    Chair, shall serve for a term of 5 years.
                        (B) Removal for cause.--The President may remove
                    any member of the Commission only for inefficiency,
                    neglect of duty, or malfeasance in office.
                        (C) Vacancies.--Any member of the Commission
                    appointed to fill a vacancy occurring before the
                    expiration of the term to which that member's
                    predecessor was appointed (including the Chair) shall
                    be appointed only for the remainder of the term.
                        (D) Continuation of service.--Each member of the
                    Commission may continue to serve after the expiration
                    of the term of office to which that member was
                    appointed until a successor has been appointed by the
                    President and confirmed by the Senate, except that a
                    member may not continue to serve more than 1 year after
                    the date on which that member's term would otherwise
                    expire.
                        (E) Other employment prohibited.--No member of the
                    Commission shall engage in any other business,
                    vocation, or employment.
        (c) Affiliation.--With respect to members appointed pursuant to
    subsection (b), not more than 3 shall be members of any one political
    party.
        (d) Chair of the Commission.--
                (1) Appointment.--
                        (A) Initial chair.--The first Chair of the
                    Commission shall be the Director or Acting Director
                    serving on the day before the Agency conversion date,
                    and such individual shall serve in the position of
                    Chair for a period of 3 years.
                        (B) Subsequent chairs.--Subsequent chairs shall be
                    appointed by the President from among the members of
                    the Commission to serve as the Chair.
                (2) Authority.--The Chair shall be the principal executive
            officer of the Agency, and shall exercise all of the executive
            and administrative functions of the Agency, including with
            respect to--
                        (A) the appointment and supervision of personnel
                    employed under the Agency (other than personnel
                    employed regularly and full time in the immediate
                    offices of members of the Commission other than the
                    Chair);
                        (B) the distribution of business among personnel
                    appointed and supervised by the Chair and among
                    administrative units of the Agency; and
                        (C) the use and expenditure of funds.
                (3) Limitation.--In carrying out any of the Chair's
            functions under the provisions of this subsection the Chair
            shall be governed by general policies of the Commission and by
            such regulatory decisions, findings, and determinations as the
            Commission may by law be authorized to make.
                (4) Requests or estimates related to appropriations.--
            Requests or estimates for regular, supplemental, or deficiency
            appropriations on behalf of the Commission may not be submitted
            by the Chair without the prior approval of the commission.
        (e) No Impairment by Reason of Vacancies.--No vacancy in the
    members of the Commission shall impair the right of the remaining
    members of the Commission to exercise all the powers of the Commission.
    Three members of the Commission shall constitute a quorum for the
    transaction of business, except that if there are only 3 members
    serving on the Commission because of vacancies in the Commission, 2
    members of the Commission shall constitute a quorum for the transaction
    of business. If there are only 2 members serving on the Commission
    because of vacancies in the Commission, 2 members shall constitute a
    quorum for the 6-month period beginning on the date of the vacancy
    which caused the number of Commission members to decline to 2.
        (f) Seal.--The Commission shall have an official seal.
        (g) Compensation.--
                (1) Chair.--The Chair shall receive compensation at the
            rate prescribed for level I of the Executive Schedule under
            section 5313 of title 5, United States Code.
                (2) Other members of the commission.--The 4 other members
            of the Commission shall each receive compensation at the rate
            prescribed for level II of the Executive Schedule under section
            5314 of title 5, United States Code.
        (h) Initial Quorum Established.--During any time period prior to
    the confirmation of at least two members of the Commission under
    subsection (b)(2), one member of the Commission shall constitute a
    quorum for the transaction of business. Following the confirmation of
    at least 2 additional commissioners, the quorum requirements of
    subsection (e) shall apply.
        (i) Definitions.--Notwithstanding section 4002, for purposes of
    this section:
                (1) Agency.--The term ``Agency'' means the Consumer
            Financial Protection Agency.
                (2) Director.--The term ``Director'' means the Director of
            the Agency.

    SEC. 4104. CONSUMER FINANCIAL PROTECTION OVERSIGHT BOARD.

        (a) Established.--There is hereby established the Consumer
    Financial Protection Oversight Board as an instrumentality of the
    United States.
        (b) Duties and Powers.--
                (1) Duty to advise director.--The Board shall advise the
            Director on--
                        (A) the consistency of a proposed regulation of the
                    Director with prudential, market, or systemic
                    objectives administered by the agencies that comprise
                    the Board;
                        (B) the overall strategies and policies in carrying
                    out the duties of the Director under this title; and
                        (C) actions the Director can take to enhance and
                    ensure that all consumers are subject to robust
                    financial protection.
                (2) Limitation on powers.--The Board may not exercise any
            executive authority, and the Director may not delegate to the
            Board any of the functions, powers, or duties of the Director.
        (c) Composition.--The Board shall be comprised of 7 members as
    follows:
                (1) The Chairman of the Board of Governors.
                (2) The head of the agency responsible for chartering and
            regulating national banks.
                (3) The Chairperson of the Federal Deposit Insurance
            Corporation.
                (4) The Chairman of the National Credit Union
            Administration.
                (5) The Chairman of the Federal Trade Commission.
                (6) The Secretary of Housing and Urban Development.
                (7) The Chairman of the liaison committee of
            representatives of State agencies to the Financial Institutions
            Examination Council.
        (d) Representative of Additional Interests.--
                (1) Composition.--Notwithstanding subsection (c), the
            President, by and with the advice and consent of the Senate,
            shall appoint 5 additional members of the Board from among
            experts in the fields of consumer protection, fair lending and
            civil rights, representatives of depository institutions that
            primarily serve underserved communities, or representatives of
            communities that have been significantly impacted by higher-
            priced mortgage loans, as such communities are identified by
            the Director through an analysis of data received by reason of
            the provisions of the Home Mortgage Disclosure Act of 1975 or
            other data on lending patterns.
                (2) Affiliation.--With respect to members appointed
            pursuant to paragraph (1), not more than 3 shall be members of
            any one political party.
        (e) Meetings.--
                (1) In general.--The Board shall meet upon notice by the
            Director, but in no event shall the Board meet less frequently
            than once every 3 months.
                (2) Special meetings.--Any member of the Board may, upon
            giving written notice to the Director, require a special
            meeting of the Board.
        (f) Prohibition on Additional Compensation.--Members of the Board
    may not receive additional pay, allowances, or benefits by reason of
    their service on the Board.
        (g) Complaints Related to Required Offering of Specific Financial
    Products or Services.--The Board shall establish procedures to receive
    and analyze complaints from any person claiming that the Director is
    not in compliance with the requirements under section 4311.

    SEC. 4105. EXECUTIVE AND ADMINISTRATIVE POWERS.

        The Director may exercise all executive and administrative
    functions of the Agency, including to--
                (1) establish regulations for conducting the Agency's
            general business in a manner not inconsistent with this title;
                (2) bind the Agency and enter into contracts;
                (3) direct the establishment of and maintain divisions or
            other offices within the Agency in order to fulfill the
            responsibilities of this title, the enumerated consumer laws,
            and the authorities transferred under subtitles F and H, and to
            satisfy the requirements of other applicable law, except that
            the Director shall not exercise any authorities that are
            granted to State insurance authorities under section 505(a)(6)
            of the Gramm-Leach-Bliley Act;
                (4) coordinate and oversee the operation of all
            administrative, enforcement, and research activities of the
            Agency;
                (5) adopt and use a seal;
                (6) determine the character of and the necessity for the
            Agency's obligations and expenditures, and the manner in which
            they shall be incurred, allowed, and paid;
                (7) delegate authority, at the Director's discretion, to
            any officer or employee of the Agency to take action under any
            provision of this title or under other applicable law;
                (8) to implement this title and the Agency's authorities
            under the enumerated consumer laws and under subtitles F and H
            through regulations, orders, guidance, interpretations,
            statements of policy, examinations, and enforcement actions;
            and
                (9) perform such other functions as may be authorized or
            required by law.

    SEC. 4106. ADMINISTRATION.

        (a) Officers.--The Director shall appoint the following officials:
                (1) A secretary, who shall be charged with maintaining the
            records of the Agency and performing such other activities as
            the Director directs.
                (2) A general counsel, who shall be charged with overseeing
            the legal affairs of the Agency and performing such other
            activities as the Director directs.
                (3) An inspector general, who shall have the authority and
            functions of an inspector general of an establishment under the
            Inspector General Act of 1978 (5 U.S.C. App. 3).
                (4) An Ombudsperson, who shall--
                        (A) develop and maintain expertise in and
                    understanding of the law relating to consumer financial
                    products;
                        (B) at the request of a Federal agency or a State
                    agency, and with the prior approval of the Director,
                    advise such agency with respect to actions that may
                    affect consumers;
                        (C) advise consumers who may have a legitimate
                    potential or actual claim against a Federal agency
                    involving the provision of consumer financial products
                    regarding their rights under this title;
                        (D) identify Federal agency actions that have
                    potential implications for consumers and, if
                    appropriate, and with the prior approval of the
                    Director, advise the relevant Federal agencies with
                    respect to those implications;
                        (E) provide information to private citizens, civic
                    groups, Federal agencies, State agencies, and other
                    interested parties regarding the rights of those
                    parties under this title;
                        (F) develop, maintain, and provide expertise
                    designed to assist covered persons, especially smaller
                    depository institutions and other smaller entities to
                    comply with regulations and other requirements issued
                    to implement the provisions of this title, and where
                    such assistance for smaller depository institutions
                    shall be provided jointly by the Agency and the
                    appropriate Federal banking agency;
                        (G) develop procedures to assist covered persons,
                    especially smaller depository institutions and other
                    smaller entities, in responding to or challenging
                    actions taken by the Director or the Agency to
                    implement the provisions of this title and to ensure
                    that safeguards exist to preserve the confidentiality
                    of covered persons using those procedures; and
                        (H) perform such other duties as the Director may
                    delegate to the Ombudsperson.
        (b) Personnel.--
                (1) Appointment.--The Director may fix the number of, and
            appoint and direct, all employees of the Agency.
                (2) Compensation.--
                        (A) Pay.--The Director shall fix, adjust, and
                    administer the pay for all employees of the Agency
                    without regard to the provisions of chapter 51 or
                    subchapter III of chapter 53 of title 5, United States
                    Code.
                        (B) Benefits.--The Director may provide additional
                    benefits to Agency employees if the same type of
                    benefits are then being provided by the Board of
                    Governors or, if not then being provided, could be
                    provided by the Board of Governors under applicable
                    provisions of law or regulations.
                        (C) Minimum standard.--The Director shall at all
                    times provide compensation and benefits to classes of
                    employees that, at a minimum, are equivalent to the
                    compensation and benefits provided by the Board of
                    Governors for the corresponding class of employees in
                    any fiscal year.
        (c) Specific Functional Units.--
                (1) Research.--The Agency shall establish a unit whose
            functions shall include--
                        (A) conducting research on consumer financial
                    counseling and education, including--
                                (i) on the topics of debt, credit, savings,
                            financial product usage, and financial
                            planning;
                                (ii) exploring effective methods, tools,
                            and approaches; and
                                (iii) identifying ways to incorporate new
                            technology for the delivery and evaluation of
                            financial counseling and education efforts;
                        (B) researching, analyzing, and reporting on--
                                (i) current and prospective developments in
                            markets for consumer financial products or
                            services, including market areas of alternative
                            consumer financial products or services with
                            high growth rates;
                                (ii) consumer awareness, understanding, and
                            use of disclosures and communications regarding
                            consumer financial products or services;
                                (iii) consumer awareness and understanding
                            of costs, risks, and benefits of consumer
                            financial products or services;
                                (iv) consumer behavior with respect to
                            consumer financial products or services,
                            including performance on mortgage loan;
                                (v) experiences of traditionally
                            underserved consumers, including un-banked and
                            under-banked consumers, regarding consumer
                            financial products or services, and the impact
                            of Federal policies, including resource limits
                            in means-tested Federal benefit programs (as
                            defined in section 318 of the Higher Education
                            Act of 1965; 20 U.S.C. 1059e), on such
                            consumers in influencing banking behavior; and
                                (vi) the nature, range, and size of
                            variations between the credit scores sold to
                            creditors and those sold to consumers by
                            consumer reporting agencies that compile and
                            maintain files on consumers on a nationwide
                            basis (as defined in section 603(p) of the Fair
                            Credit Reporting Act; 15 U.S.C. 1681a(p)), and
                            whether such variations disadvantage consumers;
                        (C) identifying priorities for consumer financial
                    education efforts, based on consumer complaints,
                    research or analysis conducted pursuant to subparagraph
                    (A), or other information; and
                        (D) testing and identifying methods of educating
                    consumers to determine which methods are most
                    effective.
                (2) Community affairs.--The Director shall establish a unit
            whose functions shall include providing information, guidance,
            and technical assistance regarding the provision of consumer
            financial products or services to traditionally underserved
            consumers and communities.
                (3) Consumer complaints.--
                        (A) In general.--The Director shall establish a
                    unit whose functions shall include establishing a
                    central database, or utilizing an existing database,
                    for collecting and tracking information on consumer
                    complaints about consumer financial products or
                    services and resolution of complaints.
                        (B) Coordination.--In performing the functions
                    described in subparagraph (A), the Director shall
                    coordinate with the Federal banking agencies, the
                    Federal Trade Commission, other Federal agencies, and
                    other regulatory agencies or enforcement authorities.
                        (C) Data sharing required.--To the extent permitted
                    by law and the regulations prescribed by the Director
                    regarding the confidential treatment of information,
                    the Director shall share data relating to consumer
                    complaints with Federal banking agencies, the Federal
                    Trade Commission, other Federal agencies, and State
                    regulators. To the extent permitted by law and the
                    regulations prescribed by the Federal banking agencies
                    and other Federal agencies regarding the confidential
                    treatment of information, the Federal banking agencies
                    and other Federal agencies, respectively, shall share
                    data relating to consumer complaints with the Director
                    and the Agency.
                        (D) Consumer complaint web site.--The Director
                    shall establish an Internet Web site for consumer
                    complaints and inquiries concerning institutions
                    regulated by the Agency. The Web site shall be
                    interoperable with the database established under
                    subparagraph (A).
                (4) Consumer financial education.--
                        (A) In general.--The Agency shall establish a unit
                    to be named the Office of Financial Literacy, whose
                    functions shall include activities designed to
                    facilitate the education of consumers on consumer
                    financial products and services, including through the
                    dissemination of materials to consumers on such topics.
                        (B) Director.--The Office of Financial Literacy
                    shall be headed by a director.
                        (C) Duties.--Such unit shall--
                                (i) develop goals for programs to be
                            provided by persons that provide consumer
                            financial education and counseling, including
                            programs through which such persons--
                                        (I) provide one-on-one financial
                                    counseling;
                                        (II) help individuals understand
                                    basic banking and savings tools;
                                        (III) help individuals understand
                                    their credit history and credit score;
                                        (IV) assist individuals in efforts
                                    to plan for major purchases, reduce
                                    their debt, and improve their financial
                                    stability; and
                                        (V) work with individuals to design
                                    plans for long-term savings;
                                (ii) develop recommendations regarding
                            effective certification of persons providing
                            programs, or performing the activities,
                            described in clause (i), including
                            recommendations regarding--
                                        (I) certification processes and
                                    standards for certification;
                                        (II) appropriate certifying bodies;
                                    and
                                        (III) mechanisms for funding the
                                    certification processes;
                                (iii) develop a technology tool to collect
                            data on financial education and counseling
                            outcomes; and
                                (iv) conduct research to identify effective
                            methods, tools, technoloy, and strategies to
                            educate and counsel consumers about personal
                            finance management, including on the topics of
                            debt, credit, savings, financial product usage,
                            and financial planning.
                        (D) Coordination.--Such unit shall coordinate with
                    other units within the Agency in carrying out its
                    functions, including--
                                (i) working with the unit established under
                            paragraph (2) to--
                                        (I) provide information and
                                    resources to community organizations,
                                    nonprofit organizations, and other
                                    entities to assist in helping educate
                                    consumers about consumer financial
                                    products and services; and
                                        (II) develop a marketing strategy
                                    to promote financial education and one-
                                    on-one counseling; and
                                (ii) working with the unit established
                            under paragraph (1) to conduct research related
                            to consumer financial education and counseling.
        (d) Single Toll-free Telephone Number for Consumer Complaints and
    Inquiries.--
                (1) Call intake system.--The Consumer Financial Protection
            Agency shall establish a single, toll-free telephone number for
            consumer complaints and inquiries concerning institutions
            regulated by such agencies and a system for collecting and
            monitoring complaints and, as soon as practicable, a system for
            routing such calls to the Federal financial institution
            regulatory agency that primarily supervises the financial
            institution, or that is otherwise the appropriate Federal
            agency to address the subject of the complaint or inquiry.
                (2) Routing calls to states.--To the extent practicable,
            State agencies may receive appropriate call transfers from the
            system established under paragraph (1) if--
                        (A) the State agency's system has the functional
                    capacity to receive calls routed by the system; and
                        (B) the State agency has satisfied any conditions
                    of participation in the system that the Council,
                    coordinating with State agencies through the
                    chairperson of the State Liaison Committee, may
                    establish.
        (e) Report to the Congress.--Before the end of the 6-month period
    beginning on the date of the enactment of this title, the Federal
    financial institution regulatory agencies shall submit a report to the
    Committee on Financial Services of the House of Representatives and the
    Committee on Banking, Housing, and Urban Affairs of the Senate
    describing the agencies' efforts to establish--
                (1) a public interagency Web site for directing and
            referring Internet consumer complaints and inquiries concerning
            any financial institution to the Consumer Financial Protection
            Agency for purposes of collecting, monitoring, and responding
            to such complaints and, where appropriate, a system for
            referring complaints to the Federal financial institution
            regulatory agency, other Federal agency, or State agency that
            is otherwise the appropriate agency to address the subject of
            the complaint or inquiry; and
                (2) a system to expedite the prompt and effective rerouting
            of any misdirected consumer complaint or inquiry documents
            between or among the agencies, with prompt referral of any
            complaint or inquiry to the appropriate Federal financial
            institution regulatory agency, and to participating State
            agencies.
        (f) Office of Financial Protection for Older Americans.--
                (1) Establishment.--Before the end of the 180-day period
            beginning on the date of the enactment of this title, the
            Director shall establish within the Agency the Office of
            Financial Protection for Older Americans, whose functions shall
            include activities designed to facilitate the financial
            literacy of individuals who have attained the age of 62 years
            or more (in this paragraph, referred to as ``seniors'') on
            protection from unfair and deceptive practices and on current
            and future financial choices, including through the
            dissemination of materials to seniors on such topics.
                (2) Director.--The Office of Financial Protection for Older
            Americans shall be headed by a director.
                (3) Duties.--Such unit shall perform the following duties:
                        (A) Develop goals for programs that provide seniors
                    financial literacy and counseling, including programs
                    that--
                                (i) help seniors recognize warning signs of
                            unfair and deceptive practices, protect
                            themselves from such practices;
                                (ii) provide one-on-one financial
                            counseling on issues including long-term
                            savings and later-life economic security; and
                                (iii) provide personal consumer credit
                            advocacy to respond to consumer problems caused
                            by unfair and deceptive practices.
                        (B) Monitor certifications or designations of
                    financial advisors who advise seniors and alert the
                    Securities and Exchange Commission and State regulators
                    of certifications or designations that are identified
                    as unfair or deceptive.
                        (C) Not later than 18 months after the date of the
                    establishment of the Office of Financial Protection for
                    Older Americans, submit to Congress and the Securities
                    and Exchange Commission recommendations of the best
                    practices for any legislative and regulatory--
                                (i) disseminating information regarding the
                            legitimacy of certifications of financial
                            advisers who advise seniors;
                                (ii) methods in which a senior can identify
                            the financial advisor most appropriate for the
                            senior's needs; and
                                (iii) methods in which a senior can verify
                            a financial advisor's credentials.
                        (D) Conduct research to identify best practices and
                    effective methods, tools, technology and strategies to
                    educate and counsel seniors about personal finance
                    management with a focus on--
                                (i) protecting themselves from unfair and
                            deceptive practices;
                                (ii) long-term savings; and
                                (iii) planning for retirement and long-term
                            care.
                        (E) Coordinate consumer protection efforts of
                    seniors with other Federal agencies and State
                    regulators, as appropriate, to promote consistent,
                    effective, and efficient enforcement.
                        (F) Work with community organizations, non-profit
                    organizations, and other entities that are involved
                    with educating or assisting seniors (including the
                    National Education and Resource Center on Women and
                    Retirement Planning).
        (g) Office of Fair Lending and Equal Opportunity.--
                (1) Establishment.--Before the end of the 180-day period
            beginning on the date of the enactment of this title, the
            Director shall establish within the Agency the Office of Fair
            Lending and Equal Opportunity.
                (2) Functions.--The Office of Fair Lending and Equal
            Opportunity shall have such powers and duties as the Director
            may delegate the Office which shall include the following
            functions:
                        (A) Providing oversight and enforcement of Federal
                    laws intended to ensure the fair, equitable, and
                    nondiscriminatory access to credit for both individuals
                    and communities that are enforced by the Agency,
                    including the Equal Credit Opportunity Act and the Home
                    Mortgage Disclosure Act.
                        (B) Coordinating fair lending enforcement efforts
                    of the Agency with other Federal agencies and State
                    regulators, as appropriate, to promote consistent,
                    efficient and effective enforcement of Federal fair
                    lending laws.
                        (C) Working with private industry, fair lending,
                    civil rights, consumer and community advocates on the
                    promotion of fair lending compliance and education.
                        (D) Providing annual reports to the Congress on the
                    Agency's efforts to fulfill its fair lending mandate.
                (3) Administration of office.--There is hereby established
            the position of Assistant Director of the Agency for Fair
            Lending and Equal Opportunity who--
                        (A) shall be appointed by the Director;
                        (B) shall carry out such duties as the Director may
                    delegate to such Assistant Director; and
                        (C) shall serve as the Director of the Office of
                    Fair Lending and Equal Opportunity.
                (4) Prohibitions on participation in programs with respect
            to certain indicted organizations.--
                        (A) Prohibition.--The Director of the Office of
                    Fair Lending and Equal Opportunity may not allow a
                    covered organization to participate in any program
                    established by such Director.
                        (B) Covered organization.--In this paragraph, the
                    term ``covered organization'' means any of the
                    following:
                                (i) Any organization that has been indicted
                            for a violation under any Federal or State law
                            governing the financing of a campaign for
                            election for public office or any law governing
                            the administration of an election for public
                            office, including a law relating to voter
                            registration.
                                (ii) Any organization that had its State
                            corporate charter terminated due to its failure
                            to comply with Federal or State lobbying
                            disclosure requirements.
                                (iii) Any organization that has filed a
                            fraudulent form with any Federal or State
                            regulatory agency.
                                (iv) Any organization that--
                                        (I) employs any applicable
                                    individual, in a permanent or temporary
                                    capacity;
                                        (II) has under contract or retains
                                    any applicable individual; or
                                        (III) has any applicable individual
                                    acting on the organization's behalf or
                                    with the express or apparent authority
                                    of the organization.
                        (C) Additional definitions.--In this paragraph:
                                (i) The term ``organization'' includes the
                            Association of Community Organizations for
                            Reform Now (in this paragraph referred to as
                            ``ACORN'') and any ACORN-related affiliate.
                                (ii) The term ``ACORN-related affiliate''
                            means any of the following:
                                        (I) Any State chapter of ACORN
                                    registered with the Secretary of
                                    State's office in that State.
                                        (II) Any organization that shares
                                    directors, employees, or independent
                                    contractors with ACORN.
                                        (III) Any organization that has a
                                    financial stake in ACORN.
                                        (IV) Any organization whose
                                    finances, whether federally funded,
                                    donor-funded, or raised through
                                    organizational goods and services, are
                                    shared or controlled by ACORN.
                                (iii) The term ``applicable individual''
                            means an individual who has been indicted for a
                            violation under Federal or State law relating
                            to an election for Federal or State office.
                        (D) Revision of federal acquisition regulation.--
                    The Federal Acquisition Regulation shall be revised to
                    carry out the provisions of this paragraph relating to
                    contracts.
                        (E) Severability.--If any provision of this section
                    or any application of such provision to any person or
                    circumstance is held to be unconstitutional, the
                    remainder of this section and the application of the
                    provision to any other person or circumstance shall not
                    be affected.

    SEC. 4107. CONSUMER ADVISORY BOARD.

        (a) Establishment Required.--The Director shall establish a
    Consumer Advisory Board to advise and consult with the Director in the
    exercise of the functions of the Director and the Agency under this
    title, the enumerated consumer laws, and to provide information on
    emerging practices in the consumer financial products or services
    industry.
        (b) Membership.--
                (1) In general.--In appointing the members of the Consumer
            Advisory Board, the Director shall seek--
                        (A) to assemble experts in financial services,
                    community development, fair lending and civil rights,
                    consumer protection, and consumer financial products or
                    services; and
                        (B) to represent the interests of covered persons
                    and consumers.
                (2) Prohibition on membership with respect to certain
            indicted organizations.--The director may not appoint an
            employee of a covered organization (as defined in section
            4105(f)(4)(B)) to the Consumer Advisory Board.
        (c) Political Affiliation.--Not more than 1 more than half of the
    members of the Consumer Advisory Board may be members of the same
    political party.
        (d) Meetings.--The Consumer Advisory Board shall meet from time to
    time at the call of the Director, but, at a minimum, shall meet at
    least twice in each year.
        (e) Compensation and Travel Expenses.--Members of the Consumer
    Advisory Board who are not full-time employees of the United States
    shall--
                (1) be entitled to receive compensation at a rate fixed by
            the Director while attending meetings of the Consumer Advisory
            Board, including travel time; and
                (2) be allowed travel expenses, including transportation
            and subsistence, while away from their homes or regular places
            of business.

    SEC. 4108. COORDINATION.

        (a) Coordination With Other Federal Agencies and State
    Regulators.--The Director shall coordinate with the Securities and
    Exchange Commission, the Commodity Futures Trading Commission, the
    Secretary of the Treasury, the Federal Trade Commission, and other
    Federal agencies and State regulators, as appropriate, to promote
    consistent regulatory treatment of, and enforcement related to,
    consumer and investment products, services, and laws.
        (b) Coordination of Consumer Education Initiatives.--
                (1) In general.--The Director shall coordinate with each
            agency that is a member of the Financial Literacy and Education
            Commission established by the Financial Literacy and Education
            Improvement Act (20 U.S.C. 9701 et seq.) to assist each agency
            in enhancing its existing financial literacy and education
            initiatives to better achieve the goals in paragraph (2) and to
            ensure the consistency of such initiatives across Federal
            agencies.
                (2) Goals of coordination.--In coordinating with the
            agencies described in paragraph (1), the Director shall seek to
            improve efforts to educate consumers about financial matters
            generally, the management of their own financial affairs, and
            their judgments about the appropriateness of certain financial
            products.
        (c) Coordination.--The Agency may coordinate investigations,
    compliance examinations, information sharing, and related activities in
    support of activities undertaken pursuant to the Fair Housing Act by
    other Federal agencies.

    SEC. 4109. REPORTS TO THE CONGRESS.

        (a) Reports Required.--The Director shall prepare and submit to the
    President and the appropriate committees of the Congress a report at
    the beginning of each regular session of the Congress, beginning with
    the session following the designated transfer date.
        (b) Contents.--The reports required by subsection (a) shall
    include--
                (1) a list of the significant regulations and orders
            adopted by the Director, as well as other significant
            initiatives conducted by the Director, during the preceding
            year and the Director's plan for regulations, orders, or other
            initiatives to be undertaken during the upcoming period;
                (2) an analysis of the major problems consumers of
            financial products and services were confronted with during the
            preceding year, including a description of the nature of such
            problems, and recommendations for such administrative and
            legislative action as may be appropriate to resolve such
            problems;
                (3) a list, with a brief statement of the issues, of the
            public supervisory and enforcement actions to which the Agency
            is a party (including adjudication proceedings conducted under
            subtitle E) during the preceding year;
                (4) the actions taken regarding regulations, orders, and
            supervisory actions with respect to covered persons which are
            not credit unions or depository institutions, including
            descriptions of the types of such covered persons, financial
            activities, and consumer financial products or services
            affected by such regulations, orders, and supervisory actions;
                (5) an appraisal of significant actions, including actions
            under Federal or State law, by State attorneys general or State
            regulators relating to this title, the authorities transferred
            under subtitles F and H, and the enumerated consumer laws;
                (6) an analysis of the Agency's efforts to increase
            workforce and contracting diversity consistent with subtitle I
            of title I of this Act;
                (7) an analysis of the Agency's efforts to fulfill the fair
            lending mission of the Agency; and
                (8) an appraisal of the regulatory and legal difficulties
            encountered by the Agency in carrying out the mission and
            duties of the Agency with respect to consumer protection,
            including a description of--
                        (A) the difficulties and hardships encountered with
                    respect to coordinating with other Federal and State
                    government entities;
                        (B) the regulatory and enforcement limitations
                    placed on the Agency by this title;
                        (C) the practices of persons, covered and uncovered
                    under this title, that allow such persons to harm
                    consumers and escape regulation or enforcement,
                    including any trends identified; and
                        (D) legislative and administrative recommendations
                    with respect to solving or alleviating identified
                    difficulties.
        (c) Annual Appearance Before the Congress.--The Director shall
    appear before the House Committee on Financial Services and the House
    Committee on Energy and Commerce at an annual hearing, after the report
    is submitted under subsection (a)--
                (1) to discuss the efforts, activities, objectives and
            plans of the Agency; and
                (2) discuss and answer questions concerning such report.

    SEC. 4110. GAO SMALL BUSINESS STUDIES.

        (a) Studies Required.--Not later than the end of the 3-year period
    beginning on the designated transfer date, and also 3 years thereafter,
    the Comptroller General of the United States shall carry out a study to
    examine the effects that regulations issued by the Agency have on small
    businesses.
        (b) Report.--At the conclusion of each study required under
    subsection (a), the Comptroller General of the United States shall
    issue a report to the Congress containing the finding and
    determinations made by the Comptroller General in carrying out such
    study.

    SEC. 4111. FUNDING; FEES AND ASSESSMENTS; PENALTIES AND FINES.

        (a) Transfer of Funds From the Board of Governors.--
                (1) Transfer required.--Each year, beginning on the
            designated transfer date, the Board of Governors shall transfer
            funds in an amount equaling 10 percent of the Federal Reserve
            System's total system expenses (as reported in the Budget
            Review of the Board of Governors most recent Annual Report to
            Congress) to the Director for the purposes of carrying out the
            authorities granted in this title, under the enumerated
            consumer laws, and transferred under subtitles F and H.
                (2) Procedures.--The Board of Governors, in consultation
            with the Agency, shall make appropriate arrangements to
            transfer funds to the Director in accordance with this
            subsection.
        (b) Fees and Assessments.--
                (1) Assessment required.--
                        (A) In general.--Taking into account such other
                    sums available to the Agency and subject to the
                    provisions of this subsection and subsection (d), the
                    Director shall assess fees on covered persons to meet
                    the Agency's expenses for carrying out the duties and
                    responsibilities of the Agency, including supervising
                    such covered persons.
                        (B) Basis for assessment.--The Agency shall assess
                    fees on covered persons pursuant to this subsection
                    based on the size, complexity of, risk posed by, and
                    the compliance record of the covered person under the
                    enumerated consumer laws, the laws and authorities
                    transferred under subtitles F and H, and this title.
                (2) Regulations.--
                        (A) In general.--The Director shall prescribe
                    regulations to govern the imposition and collection of
                    fees and assessments.
                        (B) Factors required to be addressed.--Regulations
                    prescribed by the Director under this subsection shall
                    specify and define--
                                (i) the basis of fees or assessments (such
                            as the outstanding number of consumer credit
                            accounts, off-balance sheet receivables
                            attributable to the covered person, total
                            consolidated assets, total assets under
                            management, or volume of consumer financial
                            transactions or use of service providers);
                                (ii) the amount and frequency of fees or
                            assessments; and
                                (iii) such other factors that the Director
                            determines are appropriate, which shall include
                            a covered person's compliance record under the
                            enumerated consumer laws, the authorities
                            transferred under subtitles F and H, and this
                            title.
                (3) Assessments on depository institution covered
            persons.--
                        (A) Depository institution covered person
                    defined.--For purposes of this section, the term
                    ``depository institution covered person'' means a
                    covered person that is an insured depository
                    institution or credit union.
                        (B) Assessments.--
                                (i) Fees required.--The Director shall
                            assess fees for supervision as are appropriate
                            on depository institution covered persons,
                            taking into account the size, complexity of,
                            risk posed by, and the compliance record of the
                            covered person under the enumerated consumer
                            laws, the laws and authorities transferred
                            under subtitles F and H, and this title.
                                (ii) Limitation on certain fees.--The
                            Agency shall not assess examination fees on an
                            institution referred to in section 4203(a), or
                            an institution whose examination
                            responsibilities have been delegated to an
                            appropriate agency, pursuant to section
                            4202(c)(11).
                                (iii) Basis for fee amounts.--Fees assessed
                            by the Director under this subparagraph may be
                            established at levels necessary to meet the
                            Agency's expenses for carrying out the duties
                            and responsibilities of the Director and the
                            Agency under this title with regard to
                            depository institution covered persons.
                        (C) Coordination during implementation period.--The
                    Director and the agencies responsible for chartering
                    and or supervising depository institution covered
                    persons shall coordinate on the levels of fees assessed
                    on depository institution covered persons under this
                    paragraph, so that levels of assessments under this
                    subparagraph combined with levels of assessments by
                    agencies responsible for chartering and or supervising
                    depository institution covered persons in each of the
                    first 3 years following the date of enactment of this
                    Act shall be no more than the assessments such
                    depository institution covered person was required to
                    pay for the calendar year immediately preceding the
                    designated transfer date.
                        (D) Marginal assessment rate.--
                                (i) In general.--In setting assessment
                            rates for depository institution covered
                            persons, the Director shall not impose
                            assessments that, on a risk-adjusted basis,
                            result in higher marginal assessment rates for
                            depository institution covered persons with
                            assets of less than $25,000,000,000 than the
                            marginal rates for depository institutions
                            covered persons with assets that exceed that
                            amount.
                                (ii) Rule of construction.--Clause (i)
                            shall not be construed as limiting or impairing
                            the authority of the Director to set
                            assessments that would result in higher
                            marginal assessment rates on the larger
                            depository institution covered persons or to
                            set assessments that would result in higher
                            marginal assessments on the depository
                            institution covered persons with assets of less
                            than $25,000,000,000 if based on the compliance
                            record of or higher risks posed by such covered
                            persons.
                        (E) Limitations on assessments.--
                                (i) Assessments for administrative costs.--
                            Notwithstanding any provision in this title, no
                            depository institution covered person shall be
                            charged an assessment to be used for the
                            supervision, examination, or enforcement
                            activities by the Agency of nondepository
                            covered persons.
                                (ii) Amounts paid for consumer compliance
                            supervision.--Notwithstanding any provision in
                            this title, no depository institution covered
                            person shall pay more for consumer compliance
                            supervision so that levels of assessments under
                            this subparagraph combined with levels of
                            assessments by an agency responsible for
                            chartering and/or supervising the depository
                            institution covered person shall be no more
                            than it paid before the date of enactment of
                            this title.
                (4) Assessments on nondepository covered persons.--
                        (A) Nondepository covered person defined.--For
                    purposes of this section, the term ``nondepository
                    covered person''--
                                (i) means a covered person that is not a
                            credit union or insured depository institution;
                            and
                                (ii) includes any bank holding company.
                        (B) Assessments.--
                                (i) Fees required.--The Director shall
                            assess fees for registration, examination, and
                            supervision of nondepository covered persons.
                                (ii) Basis for fee amounts.--Fees assessed
                            by the Director under this subparagraph may be
                            established at levels necessary to meet the
                            Agency's expenses for carrying out the duties
                            and responsibilities of the Director and the
                            Agency, including supervising such covered
                            persons, taking into account such other sums
                            available to the Agency.
                                (iii) Registration fee minimums.--
                            Registration fees imposed on a nondepository
                            covered person under this paragraph shall, at a
                            minimum, be imposed on such covered person at
                            the time the person registers (or periodically
                            renews any such registration) with the Agency,
                            in accordance with regulations prescribed by
                            the Director.
                        (C) Nondepository covered person assessment not
                    less than for depository covered persons.--Assessment
                    rates levied by the Director under this section on a
                    nondepository institution covered persons shall be no
                    less than assessments levied by the Agency under this
                    section on a depository institution covered person with
                    similar characteristics.
                        (D) Offsetting collections.--Fees assessed under
                    this paragraph--
                                (i) shall not be collected for any fiscal
                            year except to the extent provided in advance
                            in appropriation Acts; and
                                (ii) shall be deposited and credited as
                            offsetting collections to the account providing
                            appropriations to the Agency.
        (c) Authorization of Appropriations.--
                (1) In general.--For the purposes of carrying out the
            authorities granted in this title, under the enumerated
            consumer laws, and the laws and authorities transferred under
            subtitles F and H, there are authorized to be appropriated to
            the Director $200,000,000 for each of fiscal years 2010, 2011,
            2012, 2013, and 2014.
                (2) Apportionment.--Notwithstanding any other provision of
            law, such amounts shall be subject to apportionment under
            section 1517 of title 31, United States Code, and restrictions
            that generally apply to the use of appropriated funds in title
            31, United States Code, and other laws.
                (3) Other available funds taken into account.--Sums
            appropriated under this subsection shall take into account such
            other sums available to the Agency under this section.
        (d) Consumer Financial Protection Agency Depository Institution
    Fund.--
                (1) Establishment.--
                        (A) In general.--There is established in the
                    Treasury a separate fund to be known as the ``Consumer
                    Financial Protection Agency Depository Institution
                    Fund'' (hereafter in this section referred to as the
                    ``CFPA Depository Fund'').
                        (B) Amounts in fund not available for certain
                    purposes.--Other than pursuant to subsection (f),
                    amounts on deposit in the CFPA Depository Fund shall
                    not be used in the supervision and examination of
                    nondepository institution covered persons.
                (2) All transferred funds deposited.--All amounts
            transferred to the Agency under subsection (a) shall be
            deposited into the CFPA Depository Fund or the CFPA
            Nondepository Fund, at the discretion of the Agency.
                (3) All applicable supervisory fees and assessments
            deposited.--The Director shall deposit all amounts received
            from assessments under subsection (b)(3) in the CFPA Depository
            Fund.
        (e) Consumer Financial Protection Agency Nondepository Institution
    Fund.--
                (1) Establishment.--
                        (A) In general.--There is established in the
                    Treasury a separate fund called the Consumer Financial
                    Protection Agency Nondepository Institution Fund
                    (hereafter in this section referred to as the ``CFPA
                    Nondepository Fund'').
                        (B) Amounts in fund not available for certain
                    purposes.--Other than pursuant to subsection (f),
                    amounts on deposit in the CFPA Nondepository Fund shall
                    not be used for the supervision and examination of
                    depository institution covered persons.
                (2) All applicable supervisory fees and assessments
            deposited.--The Director shall deposit all amounts received
            from assessments under subsection (b)(4) in the CFPA
            Nondepository Fund.
        (f) General Provisions Relating to Funds.--
                (1) Maintenance of funds.--
                        (A) Agency funds maintained by treasury.--The
                    Consumer Financial Protection Agency Depository
                    Institution Fund established under subsection (d) and
                    the Consumer Financial Protection Agency Nondepository
                    Institution Fund established under subsection (e) shall
                    each be--
                                (i) maintained and administered by the
                            Secretary; and
                                (ii) maintained separately and not
                            commingled.
                        (B) Agency's authority.--Any provision of this
                    title forbidding the commingling or use of the CFPA
                    Depository Fund and the CFPA Nondepository Fund shall
                    not be construed as limiting or impairing the authority
                    of the Agency to use the same facilities and resources
                    in the course of conducting supervisory and regulatory
                    functions with respect to depository institutions and
                    nondepository institutions, or to integrate such
                    functions.
                        (C) Accounting requirements.--
                                (i) Accounting for use of facilities and
                            resources.--The Agency shall keep a full and
                            complete accounting of all costs and expenses
                            associated with the use of any facility or
                            resource used in the course of any function
                            specified in subparagraph (B) and shall
                            allocate, in the manner provided in
                            subparagraph (D), any such costs and expenses
                            incurred by the Agency--
                                        (I) with respect to depository
                                    institution covered persons, to the
                                    CFPA Depository Fund; and
                                        (II) with respect to nondepository
                                    covered persons, to the CFPA
                                    Nondepository fund.
                        (D) Allocation of administrative expenses.--Any
                    personnel, administrative, or other overhead expense of
                    the Agency shall be allocated--
                                (i) fully to the CFPA Depository Fund if
                            the expense was incurred directly as a result
                            of the Agency's responsibilities solely with
                            respect to depository institution covered
                            persons;
                                (ii) fully to the CFPA Nondepository Fund,
                            if the expense was incurred directly as a
                            result of the Agency's responsibilities solely
                            with respect to nondepository covered persons;
                                (iii) between the CFPA Depository Fund and
                            the CFPA Nondepository Fund, in amounts
                            reflecting the relative degree to which the
                            expense was incurred that are reasonably
                            related as a general matter to activities of
                            depository institution covered persons, and
                            nondepository covered persons; and
                                (iv) if the Director is unable to make a
                            complete allocation under clause (i), (ii), or
                            (iii), between the CFPA Depository Fund and the
                            CFPA Nondepository Fund, in amounts reflecting
                            the relative proportion that, as of the end of
                            the preceding year--
                                        (I) the aggregate assets of all
                                    depository institution covered persons
                                    bears to the aggregate assets of all
                                    covered persons; and
                                        (II) the aggregate assets of all
                                    nondepository covered persons bears to
                                    the aggregate assets of all covered
                                    persons.
                        (E) Agency fund.--The ``Agency fund'' means the
                    Consumer Financial Protection Agency Depository
                    Institution Fund established under subsection (d), and,
                    the Consumer Financial Protection Agency Nondepository
                    Institution Fund established under subsection (e), and
                    the Consumer Financial Protection Agency Civil Penalty
                    Fund established under subsection (g).
                (2) Investment.--
                        (A) Amounts in funds may be invested.--The Director
                    may request the Secretary to invest the portion of any
                    Agency fund that, in the Director's judgment, is not
                    required to meet the current needs of such fund.
                        (B) Eligible investments.--Investments pursuant to
                    subparagraph (A) shall be made by the Secretary in
                    obligations of the United States or obligations that
                    are guaranteed as to principal and interest by the
                    United States, with maturities suitable to the needs of
                    the Agency fund involved, as determined by the
                    Director.
                        (C) Interest and proceeds credited.--The interest
                    on, and the proceeds from the sale or redemption of,
                    any obligations held in the respective Agency Fund
                    shall be credited to and form a part of the respective
                    Agency Fund.
                (3) Exception.--Notwithstanding paragraph (1), an
            attorney's activities related to assisting another person in
            preventing a foreclosure shall be subject to this title except
            to the extent such activities constitute, or are incidental to,
            the provision of legal services to a client of the attorney.
        (g) Penalties and Fines.--
                (1) Establishment of victims relief fund.--There is
            established in the Treasury of the United States a fund to be
            known as the ``Consumer Financial Protection Agency Civil
            Penalty Fund'' (hereafter in this section referred to as the
            ``Civil Penalty Fund'').
                (2) Deposits.--If the Agency obtains a civil penalty
            against any person in any judicial or administrative action
            under this title, any law or authority transferred under
            subtitles F and H, or any enumerated consumer law, the Agency
            shall deposit into the Civil Penalty Fund the amount of the
            penalty collected.
                (3) Payment to victims.--Amounts in the Civil Penalty Fund
            shall be available to the Director, without fiscal year
            limitation, for payments to the victims of activities for which
            civil penalties have been imposed under this title, the law and
            authorities transferred under subtitles F and H, or any
            enumerated consumer law.
                (4) Financial education and counseling program.--
                        (A) In general.--To the extent such victims cannot
                    be located or such payments are otherwise not
                    practicable, 5 percent of the Victims Relief Fund shall
                    be transferred, up to $10,000,000 on an annual basis,
                    to the Secretary of the Treasury so that the Secretary
                    may carry out the Financial Education and Counseling
                    Grant Program established under section 1132 of the
                    Housing and Economic Recovery Act of 2008 (12 U.S.C.
                    1701).
                        (B) Memorandum of understanding.--Not later than 12
                    months after the date of enactment of this subtitle,
                    the Director shall enter into a memorandum of
                    understanding with the Secretary of the Treasury to
                    coordinate the release of Civil Penalty Fund amounts
                    under subparagraph (A).
                        (C) Assistance for individuals at financial risk.--
                    Section 1132 of the Housing and Economic Recovery Act
                    of 2008 (12 U.S.C. 1701) is amended--
                                (i) in subsection (a), by striking
                            ``prospective homebuyers'' each place that term
                            appears and inserting ``individuals at
                            financial risk'';
                                (ii) in subsection (b)--
                                        (I) in paragraph (1), by striking
                                    ``prospective homebuyers'' and
                                    inserting ``individuals at financial
                                    risk''; and
                                        (II) by adding at the end the
                                    following:
                ``(3) Determination of financial risk.--For purposes of
            this section, the Director of the Consumer Financial Protection
            Agency shall establish the criteria used to determine whether
            an individual is at financial risk, and the Secretary shall use
            such criteria when selecting organizations under paragraph
            (2).''; and
                                (iii) in subsection (c)(1)--
                                        (I) in subparagraph (A), by
                                    striking ``or'';
                                        (II) in subparagraph (B), by
                                    striking the period and inserting ``;
                                    or''; and
                                        (III) by adding at the end the
                                    following:
                        ``(C) a nonprofit corporation that--
                                ``(i) is exempt from taxation under section
                            501(c)(3) of the Internal Revenue Code of 1986;
                            and
                                ``(ii) specializes or has expertise in
                            working with individuals at financial risk.''.
        (h) Assessments for Certain Nondepository Institution Covered
    Persons.--
                (1) In general.--Notwithstanding any other provision of
            this Act, a nondepository institution covered person shall not
            be subject to assessments by the Agency if--
                        (A) the assets that are financial activities of
                    that nondepository covered person represent less than a
                    substantial portion of its total assets; and
                        (B) the gross revenues derived from financial
                    activities of that nondepository covered person are
                    less than a substantial portion of its gross revenues.
                (2) Extensive consumer financial products or services
            operations.--Paragraph (1) shall not apply to nondepository
            institution covered person that the Director determines has a
            level of assets or revenues derived from financial activities,
            a number of transactions in consumer financial products or
            services, or a number of accounts relating to consumer
            financial products or services that the Director determines
            represents an extensive consumer financial products or services
            operation.

    SEC. 4112. AMENDMENTS RELATING TO OTHER ADMINISTRATIVE PROVISIONS.

        (a) Act of October 28, 1974.--Section 111 of Public Law 93-495 (12
    U.S.C. 250) is amended by inserting ``the Consumer Financial Protection
    Agency,'' after ``Federal Deposit Insurance Corporation,''.
        (b) Paperwork Reduction Act.--Section 2(5) of the Paperwork
    Reduction Act (44 U.S.C. 3502(5)) by inserting ``the Consumer Financial
    Protection Agency,'' after ``the Securities and Exchange Commission,''.

    SEC. 4113. OVERSIGHT BY GAO.

        (a) Authority.--The Comptroller General may audit the programs,
    activities, receipts, expenditures, and financial transactions of the
    Agency and of any agents and representatives of the Agency as related
    to the agent's or representative's activities on behalf of or under
    authority of the Agency.
        (b) Access.--Notwithstanding any other provision of law, the
    Comptroller General shall have access, upon request, to any
    information, data, schedules, books, accounts, financial records,
    reports, files, electronic communications, or other papers, things, or
    property belonging to or in use by the Agency, or any vehicles
    established by the Agency under this Act, and to the directors,
    officers, employees, independent public accountants, financial
    advisors, staff, working groups, and agents and representatives of the
    Agency (as related to the agent's or representative's activities on
    behalf of the Agency) or any vehicle established by the Agency at such
    reasonable time as the Comptroller General may request. The Comptroller
    General may make and retain copies of such books, accounts, and other
    records as the Comptroller General deems appropriate.

    SEC. 4114. EFFECTIVE DATE.

        This subtitle shall take effect on the date of the enactment of
    this title.

             Subtitle B--General Powers of the Director and Agency

    SEC. 4201. MANDATE AND OBJECTIVES.

        (a) Mandate.--The Director shall seek to promote transparency,
    simplicity, fairness, accountability, and equal access in the market
    for consumer financial products or services.
        (b) Objectives.--The Director may exercise the authorities granted
    in this title, in the enumerated consumer laws, and transferred under
    subtitles F and H for the purposes of ensuring that, with respect to
    consumer financial products or services--
                (1) consumers have and can use the information they need to
            make responsible decisions about consumer financial products or
            services;
                (2) consumers are protected from abuse, unfairness,
            deception, and discrimination;
                (3) markets for consumer financial products or services
            operate fairly and efficiently with ample room for sustainable
            growth and innovation; and
                (4) traditionally underserved consumers and communities
            have equal access to responsible financial services.

    SEC. 4202. AUTHORITIES.

        (a) In General.--The Director may exercise the authorities granted
    in this title, in the enumerated consumer laws, and transferred under
    subtitles F and H, to administer, enforce, and otherwise implement the
    provisions of this title, the authorities transferred in subtitles F
    and H, and the enumerated consumer laws.
        (b) Rulemaking, Orders, and Guidance.--
                (1) In general.--The Director may prescribe regulations and
            issue orders and guidance as may be necessary or appropriate to
            enable it to administer and carry out the purposes and
            objectives of this title, the authorities transferred under
            subtitles F and H, and the enumerated consumer laws, and to
            prevent evasions of this title, any such authority, and any
            such law.
                (2) Standards for rulemaking.--In prescribing a regulation
            under this title or pursuant to the authorities transferred
            under subtitles F and H or the enumerated consumer laws, the
            Director shall--
                        (A) consider the potential benefits and costs to
                    consumers, covered persons, and the Federal Government,
                    including the potential reduction of consumers' access
                    to consumer financial products or services, resulting
                    from such regulation; and
                        (B) consult with the Federal banking agencies,
                    State bank supervisors, the Federal Trade Commission,
                    or other Federal agencies, as appropriate, regarding
                    the consistency of a proposed regulation with
                    prudential, consumer protection, civil rights, market,
                    or systemic objectives administered by such agencies or
                    supervisors and whether such regulation will have an
                    inconsistent effect on nondepository institution
                    covered persons and depository institution covered
                    persons.
                (3) Exemptions.--
                        (A) In general.--The Director, by regulation or
                    order, may conditionally or unconditionally exempt any
                    covered person, service provider, or any consumer
                    financial product or service or any class of covered
                    persons, class of service providers, or consumer
                    financial products or services, from any provision of
                    this title, any enumerated consumer law, or from any
                    regulation under any such provision or law, as the
                    Director deems necessary or appropriate to carry out
                    the purposes and objectives of this title taking into
                    consideration the factors in subparagraph (B).
                        (B) Factors.--In issuing an exemption by regulation
                    or order as permitted in subparagraph (A), the Director
                    shall as appropriate take into consideration the
                    following:
                                (i) The total assets of the covered person.
                                (ii) The volume of transactions involving
                            consumer financial products or services in
                            which the covered person engages.
                                (iii) The extent to which the covered
                            person engages in 1 or more financial
                            activities.
                                (iv) Existing laws or regulations which are
                            applicable to the consumer financial product or
                            service and the extent to which such laws or
                            regulations provide consumers with adequate
                            protections.
                        (C) Rule of construction.--No provision of this
                    section shall be construed as altering, amending, or
                    affecting any authority under sections 304(a), 304(i),
                    305(a), and 306(b) of the Home Mortgage Disclosure Act
                    of 1975 and sections 703(a)(1), 703(a)(2), 703(a)(3),
                    705(f), and 705(g) of the Equal Credit Opportunity Act
                    for determining whether a covered person should be
                    provided an exemption.
        (c) Examinations and Reports.--
                (1) In general.--Except as provided under section 4203, the
            Director may on a periodic basis examine a covered person or
            service provider, with respect to any consumer financial
            product or service, for purposes of ensuring compliance with
            the requirements of this title, the enumerated consumer laws,
            and any regulations prescribed by the Director under this title
            or pursuant to the authorities transferred under subtitles F
            and H, and enforcing compliance with such requirements.
                (2) Examination program.--The Director shall exercise any
            authority of the Director under paragraph (1) in a manner
            designed to ensure that such authorities are exercised with
            respect to covered persons or service providers, without regard
            to charter or corporate form, based on the Director's
            assessment of the risks posed to consumers in the relevant
            product markets and geographic markets, and taking into
            consideration, as applicable, the following factors:
                        (A) The asset size of the covered persons.
                        (B) The volume of transactions involving consumer
                    financial products or services in which the covered
                    persons engage.
                        (C) The risks to consumers created by the provision
                    of such consumer financial products or services.
                        (D) In the case of State-chartered institutions,
                    the extent to which such institutions are subject to
                    oversight by State authorities for consumer protection.
                (3) Coordination.--The Director shall coordinate the
            Agency's supervisory activities with the supervisory activities
            conducted by the Federal banking agencies and the State bank
            supervisors, including establishing their respective schedules
            for examining covered persons and requirements regarding
            reports to be submitted by covered persons.
                (4) Reports.--The Director may require reports from a
            covered person for purposes of ensuring compliance with the
            requirements of this title, the enumerated consumers laws, and
            any regulation prescribed by the Director under this title or
            pursuant to the authorities transferred under subtitles F and
            H, and enforcing compliance with such requirements.
                (5) Content of reports.--The reports authorized in
            paragraph (4) may include such information as necessary to keep
            the Agency informed as to--
                        (A) the compliance systems or procedures of the
                    covered person or any affiliate thereof, with
                    applicable provisions of this title or any other law
                    that the Agency has jurisdiction to enforce; and
                        (B) matters related to the provision of consumer
                    financial products or services including the servicing
                    or maintenance of accounts or extensions of credit.
                (6) Use of existing reports.--In general, the Agency shall,
            to the fullest extent possible, use--
                        (A) reports that a covered person, or any affiliate
                    thereof, or any service provider to such covered person
                    or affiliate, has provided or been required to provide
                    to a Federal or State agency; and
                        (B) information that has been reported publicly.
                (7) Access by the agency to reports of other regulators.--
                        (A) Examination and financial condition reports.--
                    Upon providing reasonable assurances of
                    confidentiality, the Agency shall have access to any
                    report of examination or financial condition, including
                    a report containing data regarding consumer complaints,
                    made by a Federal banking agency or other Federal
                    agency having supervision of a covered person, or a
                    service provider, (other than returns and return
                    information described in section 6103 of the Internal
                    Revenue Code of 1986) and to all revisions made to any
                    such report.
                        (B) Provision of other reports to agency.--In
                    addition to the reports described in subparagraph (A),
                    a Federal banking agency may, in its discretion,
                    furnish to the Agency any other report or other
                    confidential supervisory information concerning any
                    insured depository institution, any credit union, or
                    other entity examined by such agency under authority of
                    any Federal law.
                (8) Access by other regulators to reports of the agency.--
                        (A) Examination reports.--Upon providing reasonable
                    assurances of confidentiality, a Federal banking
                    agency, a State regulator, or any other Federal agency
                    having supervision of a covered person shall have
                    access to any report of examination made by the Agency
                    with respect to the covered person or service provider,
                    and to all revisions made to any such report.
                        (B) Provision of other reports to other
                    regulators.--In addition to the reports described in
                    paragraph (A), the Agency may, in the discretion of the
                    Agency, furnish to a Federal banking agency any other
                    report or other confidential supervisory information
                    concerning any insured depository institution, any
                    credit union, or other entity examined by the Agency
                    under authority of any Federal law.
                (9) Preservation of authority.--No provision in paragraph
            (3) shall be construed as preventing the Agency from conducting
            an examination authorized by this title or under the
            authorities transferred under subtitles F and H or pursuant to
            any enumerated consumer law. No provision of this title shall
            be construed as limiting the authority of the Director to
            require reports from a covered person, as permitted under
            paragraph (4), regarding information owned or under the control
            of the covered person, regardless of whether such information
            is maintained, stored, or processed by another person.
                (10) Reports of tax law noncompliance.--The Director shall
            provide the Commissioner of Internal Revenue with any report of
            examination or related information identifying possible tax law
            noncompliance.
                (11) Delegation.--
                        (A) In general.--The Director may delegate the
                    examination authorities of the Agency under this title
                    to any appropriate agency, as defined in section 4203,
                    for any insured depository institution or insured
                    credit union that is not subject to section 4203 upon a
                    petition by an appropriate agency.
                        (B) Standard for delegation.--The Director shall
                    provide such delegation if, in the Director's sole
                    discretion, the Director determines that--
                                (i) the delegation is consistent with the
                            public interest;
                                (ii) the appropriate agency is capable of
                            enforcing compliance with this title, and with
                            any regulation prescribed under this title; and
                                (iii) such capability is comparable to or
                            superior to the capability of the Agency, in
                            terms of expertise, demonstrated commitment,
                            and overall effectiveness, in enforcing such
                            compliance.
                        (C) Effect of delegation.--The insured depository
                    institution or insured credit union shall be subject to
                    the examination process described in section 4203(b).
                        (D) No effect on enforcement.--The Director's
                    delegation authority under this paragraph shall not
                    apply to the Director's enforcement responsibilities
                    under subsection (e).
        (d) Exclusive Rulemaking and Examination Authority.--
    Notwithstanding any other provision of Federal law other than section
    4203 and subsections (f) and (h) of this section, to the extent that a
    Federal law authorizes the Director and another Federal agency to
    prescribe regulations, issue guidance, conduct examinations, or require
    reports under a provision of that law for purposes of assuring
    compliance with this title, a provision of any enumerated consumer law,
    any provision of the laws for which authorities were transferred under
    subtitles F and H, and any regulations prescribed under this title or
    pursuant to any such authority, the Director shall have the exclusive
    authority under that provision of law to prescribe regulations, issue
    guidance, conduct examinations, require reports, or issue exemptions
    with regard to any person subject to that law and with respect to any
    activity regulated under any enumerated consumer law.
        (e) Primary Enforcement Authority.--
                (1) The agency to have primary enforcement authority.--To
            the extent that a Federal law authorizes the Agency and another
            Federal agency to enforce a provision of a law, the Agency
            shall have primary enforcement authority to enforce the
            provision of that Federal law with respect to any person in
            accordance with this subsection.
                (2) Coordination with the federal trade commission.--
                        (A) Notice.--If the Federal Trade Commission is
                    authorized to enforce any Federal law described in
                    paragraph (1), or a regulation prescribed under any
                    such Federal law, either the Agency or the Federal
                    Trade Commission shall serve written notice to the
                    other of any enforcement action prior to initiating
                    such an enforcement action, except that if the agency
                    or commission filing the action determines that prior
                    notice is not feasible, that agency or commission may
                    provide notice immediately upon initiating such
                    enforcement action.
                        (B) Intervention by either entity.--Upon receiving
                    any notice under subparagraph (A) with respect to an
                    enforcement action, the Agency or Federal Trade
                    Commission may intervene in such enforcement action,
                    and upon intervening--
                                (i) be heard on all matters arising in such
                            enforcement action; and
                                (ii) file petitions for appeal in such
                            enforcement action.
                        (C) Pendency of action.--Whenever a civil action
                    has been instituted by or on behalf of the Agency or
                    the Federal Trade Commission for any violation of any
                    Federal law described in paragraph (1), or a regulation
                    prescribed under any such Federal law, the other entity
                    may not, during the pendency of that action, institute
                    a civil action under such law or regulation against any
                    defendant named in the complaint in such pending action
                    for any violation alleged in the complaint.
                        (D) Agreements between entities.--
                                (i) Negotiations authorized.--The Agency
                            and the Federal Trade Commission may negotiate
                            an agreement to establish procedures to ensure
                            that the enforcement actions of the 2 agencies
                            are appropriately coordinated.
                                (ii) Scope of negotiated agreement.--The
                            terms of any agreement negotiated pursuant to
                            clause (i) may modify or supersede the
                            provisions of subparagraphs (A), (B), and (C).
                (3) Coordination with other federal agency.--
                        (A) Referral.--Any Federal agency (other than the
                    Federal Trade Commission) that is authorized to enforce
                    a Federal law described in paragraph (1) may recommend
                    in writing to the Director that the Agency initiate an
                    enforcement proceeding to the extent the Agency is
                    authorized by that Federal law or by this title. The
                    recommendation shall be accompanied by a written
                    explanation of the concerns giving rise to the
                    recommendation.
                        (B) Backstop enforcement authority of other federal
                    agency.--If the Agency does not, before the end of the
                    120-day period beginning on the date on which the
                    Director receives a recommendation under subparagraph
                    (A), initiate an enforcement proceeding, the other
                    agency referred to in subparagraph (A) may initiate an
                    enforcement proceeding as permitted by that Federal
                    law.
                (4) Institutions subject to special examination and
            enforcement procedures.--This subsection shall not apply to
            institutions subject to section 4203.
        (f) Preservation of Other Authority.--
                (1) Attorney general.--No provision of this title shall be
            construed as affecting any authority of the Attorney General.
                (2) Secretary of the treasury.--No provision of this title
            shall be construed as affecting any authority of the Secretary
            of the Treasury, including with respect to prescribing
            regulations, initiating enforcement proceedings, or taking
            other actions with respect to a person providing tax planning
            or tax preparation services.
                (3) Fair housing act.--No provision of this title shall be
            construed as affecting any authority arising under the Fair
            Housing Act.
        (g) Effect on Other Authority.--No provision of this section or
    section 4203 shall be construed as modifying or limiting the authority
    of any appropriate Federal banking agency or the Director or Agency to
    interpret, or take enforcement action under, any law or regulation the
    interpretation or enforcement of which is committed to the banking
    agency or the Director or Agency, which shall include, in the case of
    the Director and the Agency, this title, the enumerated consumer laws,
    and the regulations prescribed under this title or such laws.
        (h) Preservation of Federal Trade Commission Authority.--No
    provision of this title shall be construed as modifying, limiting, or
    otherwise affecting the authority of the Federal Trade Commission under
    the Federal Trade Commission Act or other laws other than the
    enumerated consumer laws.
        (i) Preservation of Farm Credit Administration Authority.--No
    provision of this title shall be construed as modifying, limiting, or
    otherwise affecting the authority of the Farm Credit Administration.

    SEC. 4203. EXAMINATION AND ENFORCEMENT FOR SMALL BANKS, THRIFTS, AND
                  CREDIT UNIONS.

         (a) Scope of Institutions Subject to This Section.--
                (1) Institutions covered.--This section shall apply to--
                        (A) any insured depository institution with total
                    assets of $10,000,000,000 or less; or
                        (B) any insured credit union with total assets of
                    $10,000,000,000 or less.
                (2) Appropriate agency.--For purposes of this title, the
            term ``appropriate agency'' means--
                        (A) in the case of an insured depository
                    institution, the appropriate Federal banking agency as
                    such term is defined in section 3 of the Federal
                    Deposit Insurance Act; and
                        (B) in the case of an insured credit union, the
                    National Credit Union Administration.
        (b) Examinations.--
                (1) In general.--The appropriate agency shall on a periodic
            basis examine, or require reports from, an institution referred
            to in subsection (a) for purposes of ensuring compliance with
            the requirements of this title, the enumerated consumer laws,
            and any regulation prescribed by the Director under this title
            or pursuant to the authorities transferred under subtitles F
            and H, and enforcing compliance with such requirements.
                (2) Agency role in examinations.--
                        (A) The appropriate agency shall provide all
                    reports, records, and documentation related to the
                    examination process to the Agency on a timely and
                    ongoing basis.
                        (B) The Director and Agency may, at its discretion,
                    include an examiner on any examination conducted under
                    paragraph (1). The appropriate agency shall involve
                    such Agency examiner in the entire examination process,
                    including setting the scope of an examination,
                    participating in the examination, and providing input
                    on the examination report, matters requiring attention
                    and examination ratings.
        (c) Enforcement.--
                (1) In general.--Notwithstanding any other provision of
            this title other than this subsection, the appropriate agency
            shall have primary authority to enforce violations identified
            at institutions referred to in subsection (a) of any of the
            requirements of this title, the enumerated consumers laws, and
            any regulation prescribed by the Director under this title or
            pursuant to the authorities transferred under subtitles F and
            H.
                (2) Coordination with appropriate agency.--
                        (A) Referral.--
                                (i) In general.--The Agency may recommend
                            in writing to the appropriate agency that the
                            appropriate agency initiate an enforcement
                            proceeding to the extent the appropriate agency
                            is authorized by that Federal law or by this
                            title.
                                (ii) Explanation.--Any recommendation under
                            clause (i) shall be accompanied by a written
                            explanation of the concerns giving rise to the
                            recommendation.
                        (B) Backstop enforcement authority of agency.--If
                    the appropriate agency does not, before the end of the
                    120-day period beginning on the date on which the
                    appropriate agency receives a recommendation under
                    subparagraph (A), initiate an enforcement proceeding,
                    the Agency may initiate an enforcement proceeding as
                    permitted by Federal law.
        (d) Actions Arising Out of Consumer Complaint System.--
    Notwithstanding any provision of this section, if through the consumer
    complaint system administered by the Agency under section 4105(c)(3),
    the Director has reasonable cause to believe that an institution
    referred to in subsection (a) demonstrates noncompliance with any
    provision of this title, the enumerated consumer laws, or any
    regulation prescribed by the Director under this title or pursuant to
    the authorities transferred under subtitles F and H, the Director may
    directly investigate such institution for such noncompliance and take
    any action permitted under subtitle E that the Director deems
    appropriate.
        (e) Removal of Appropriate Agency for Particular Institution.--
                (1) Heightened supervision.--The Director--
                        (A) may provide notice to an appropriate agency
                    that the Director is considering issuing a removal
                    order under paragraph (2); and
                        (B) shall have an Agency examiner participate in
                    the examination process under subsection (b) for at
                    least 1 examination cycle.
                (2) Removal by order.--If, after the completion of at least
            1 examination cycle following the provision of notice to an
            appropriate agency under paragraph (1), the Director determines
            in writing that the appropriate agency has failed to adequately
            conduct consumer compliance examinations or bring appropriate
            enforcement actions against an institution referred to in
            subsection (a), the Director may order the removal of the
            appropriate agency from its responsibilities under this section
            for such institution.
                (3) Agency authority upon removal.--Upon removal pursuant
            to paragraph (2), the Agency shall examine and enforce against
            such institution as if the institution were subject to section
            4202.
                (4) Effective date.--An order under paragraph (2) shall
            take effect 30 days after a determination by the Secretary of
            the Treasury pursuant to paragraphs (5) and (6).
                (5) Automatic appeal.--An order issued by the Director
            pursuant to paragraph (2) shall be automatically appealed to
            the Secretary.
                (6) Decision by the secretary of the treasury.--
                        (A) Determination.--The order issued pursuant to
                    paragraph (2) shall be deemed affirmed unless the
                    Secretary of the Treasury denies the determination of
                    the Director within 120 days of the issuance of the
                    order pursuant to paragraph (2).
                        (B) Rule of construction.--Nothing in subparagraph
                    (A) shall be construed as prohibiting the Secretary of
                    the Treasury from making a determination to either
                    affirm or deny an order issued pursuant to paragraph
                    (2) prior to the passage of the time period in
                    subparagraph (A).
                (7) Regulations.--By the transfer date, the Secretary shall
            issue regulations that establish the standards the Director
            shall apply in making a determination to remove an appropriate
            agency and the process, procedures, and standards for an
            appeal. Such standards shall require the Director to consider
            at least the following in issuing an order removing an
            appropriate agency for an institution referred to in subsection
            (a)(1):
                        (A) Reports of examination of such institution.
                        (B) Any enforcement actions taken by an appropriate
                    agency against such institution and the results of
                    those actions.
                        (C) Consumer complaints issued against such
                    institution.
                        (D) Actions taken by State attorneys general and
                    private rights of action against such institution.
        (f) Policies and Procedures.--Within 180 days after the designated
    transfer date, the Agency and the appropriate agency shall develop
    policies and procedures for implementing this section.
        (g) Assessments.--
                (1) Limitation on certain fees.--The Agency shall not
            assess examination fees on an institution referred to in
            subsection (a).
                (2) Rule of construction.--No provision of this section
            shall be construed as preventing the appropriate agency from
            assessing fees on an institution referred to in paragraph (1)
            to meet the appropriate agency's expenses for carrying out such
            examination and supervision responsibilities pursuant to this
            section.
        (h) Assistive Division for Community Financial Institutions.--
                (1) Establishment; purpose.--There is established in the
            Agency an office to be known as the ``Assistive Division for
            Community Financial Institutions'' to advise the Director on
            the impact of Agency policies and regulations on community
            financial institutions and to help ensure that the policies and
            regulations of the Agency do not unduly burden community
            financial institutions.
                (2) Additional duties.--The Assistive Division for
            Community Financial Institutions shall also--
                        (A) provide assistance to and respond to inquiries
                    from community financial institutions regarding
                    policies of the Agency and the effects of such policies
                    on community financial institutions;
                        (B) provide educational materials, training aides,
                    and support to community financial institutions with
                    respect to any new regulatory obligations the Agency
                    establishes during the initial rule-making period;
                        (C) establish and maintain a toll-free telephone
                    number, to be available at least 8 hours a day and 7
                    days a week, at which community financial institution
                    may make inquiries and receive assistance under
                    subparagraph (A); and
                        (D) perform other duties and exercise such other
                    powers set by the Director.

    SEC. 4204. SIMULTANEOUS AND COORDINATED SUPERVISORY ACTION.

        (a) Examinations.--A Federal banking agency and the Agency shall,
    with respect to each insured depository institution, credit union, or
    other covered person supervised by the Federal banking agency and the
    Agency, respectively--
                (1) coordinate the scheduling of examinations of the
            insured depository institution, and credit union, or other
            covered person;
                (2) conduct simultaneous examinations of each insured
            depository institution, credit union or other covered person,
            unless such institution requests examinations to be conducted
            separately;
                (3) share each draft report of examination with the other
            agency and permit the receiving agency a reasonable opportunity
            (which shall not be less than a period of 30 days after the
            date of receipt) to comment on the draft report before such
            report is made final; and
                (4) prior to issuing a final report of examination or
            taking supervisory action, an agency shall take into
            consideration concerns, if any, raised in the comments made by
            the other agency.
        (b) Coordination With State Bank Supervisors.--The Agency shall
    pursue arrangements and agreements with State bank supervisors to
    coordinate examinations consistent with subsection (a).
        (c) Resolution of Conflict in Supervision.--
                (1) Request of depository institution.--
                        (A) In general.--If the proposed material
                    supervisory determinations of the Agency and a Federal
                    banking agency are conflicting, an insured depository
                    institution, credit union, or other covered person may
                    request the agencies to coordinate and present a joint
                    statement of coordinated supervisory action.
                        (B) Limitation.--A request of an insured depository
                    institution, credit union, or other covered person
                    shall not be used to appeal a supervisory rating or
                    determination by the Agency or a Federal banking
                    agency.
                (2) Joint statement.--The agencies receiving a request from
            an insured depository institution, credit union, or covered
            person under paragraph (1) shall provide a joint statement
            resolving the conflict under such subparagraph before the end
            of the 30-day period beginning on the date the agencies receive
            such request.
        (d) Appeals to Governing Panel.--
                (1) In general.--If the agencies receiving a request from
            an insured depository institution, credit union, or covered
            person under subsection (c)(1) do not issue a joint statement
            under subsection (c)(2), or if either agency takes or attempts
            to take any supervisory action relating to the request for the
            joint statement without the consent of the other agency, the
            insured depository institution, credit union, or other covered
            person may institute an appeal to a governing panel under this
            subsection.
                (2) Timetable.--Any appeal under paragraph (1) with regard
            to a failure of agencies to issue a joint statement shall be
            filed before the end of the 30-day period beginning at the end
            of the 30-day period during which such joint statement was due
            under subsection (c)(2).
        (e) Composition of Governing Panel.--The governing panel for an
    appeal under this section shall be composed of--
                (1) 2 individuals--
                        (A) 1 of whom is a representative from the Agency;
                        (B) 1 of whom is a representative of the Federal
                    banking agency which received the request to which the
                    appeal relates; and
                        (C) neither of whom--
                                (i) have participated in the material
                            supervisory determinations under appeal; and
                                (ii) report directly or indirectly to the
                            individual who made the supervisory
                            determinations under appeal; and
                (2) 1 individual who is a representative from--
                        (A) the Federal banking agency that heads the
                    Financial Institution Examination Council; or
                        (B) if the Financial Institutions Examination
                    Council is headed by a Federal banking agency that is a
                    party to the appeal, the Federal banking agency that is
                    next scheduled to head the Financial Institutions
                    Examination Council.
        (f) Conduct of Appeal.--
                (1) Content of filing appeal.--The insured depository
            institution, credit union, or other covered person which
            institutes an appeal under subsection (d)(1) shall include in
            the filing of such appeal all the facts and legal arguments
            pertaining to the matter appealed.
                (2) Appearance.--The insured depository institution, credit
            union, or other covered person which institutes an appeal under
            this section may appear before the governing panel in person or
            by telephone, through counsel, employees, or representatives
            of, or for, such institution, credit union, or other covered
            person.
                (3) Requests for additional information.--Any governing
            panel convened under this section may request the insured
            depository institution, credit union, or other covered person,
            the Agency, or the Federal banking agency to produce additional
            information relevant to the appeal.
                (4) Final written determinations.--Any governing panel
            convened under this section, by a majority vote of the members
            of the panel, shall provide a final determination, in writing,
            within 30 days of the filing of an informationally complete
            appeal, or such longer period as the panel and the insured
            depository institution, credit union, or other covered person
            may jointly agree.
                (5) Public information.--A redacted copy of any
            determination by a governing panel convened under this section
            shall be made public upon the issuance of such determination.
        (g) Prohibition Against Retaliation.--The Director and the Federal
    banking agencies shall prescribe regulations to provide safeguards from
    retaliation against any insured depository institution, credit union,
    or other covered person which institutes an appeal under this section,
    as well as against any officer or and employee of any such institution,
    credit union, or other person.
        (h) Material Supervisory Determination Defined.--For purposes of
    this section, the term ``material supervisory determination''--
                (1) includes any action relating to any supervision or
            examinations; and
                (2) does not include--
                        (A) a determination by any Federal banking agency
                    to appoint a conservator or receiver for an insured
                    depository institution or a liquidating agent for an
                    insured credit union, as the case may be, or a decision
                    to take action pursuant to section 38 of the Federal
                    Deposit Insurance Act or section 212 of the Federal
                    Credit Union Act, as the case may be; or
                        (B) any regulation or guidance, or order of general
                    applicability.

    SEC. 4205. LIMITATIONS ON AUTHORITY OF AGENCY AND DIRECTOR.

        (a) Exclusion for Merchants, Retailers, and Sellers of Nonfinancial
    Services.--
                (1) In general.--Notwithstanding any provision of this
            title (other than paragraph (4)) and subject to paragraph (2),
            the Director and the Agency may not exercise any rulemaking,
            supervisory, enforcement or other authority, including
            authority to order assessments, under this title with respect
            to--
                        (A) credit extended directly by a merchant,
                    retailer, or seller of nonfinancial goods or services
                    to a consumer, in a case in which the good or service
                    being provided is not itself a consumer financial
                    product or service, exclusively for the purpose of
                    enabling that consumer to purchase such goods or
                    services directly from the merchant, retailer, or
                    seller of nonfinancial services; or
                        (B) collection of debt, directly by the merchant,
                    retailer, or seller of nonfinancial services, arising
                    from such credit extended.
            In the application of this paragraph, the extension of credit
            and the collection of debt described in subparagraphs (A) and
            (B), respectively, shall not be considered a consumer financial
            product or service.
                (2) Exception for existing authority.--The Director may
            exercise any rulemaking authority regarding an extension of
            credit described in paragraph (1)(A) or the collection of debt
            arising from such extension, as may be authorized by the
            enumerated consumer laws or any law or authority transferred
            under subtitle F or H.
                (3) Rule of construction.--No provision of this title shall
            be construed as modifying, limiting, or superseding the
            authority of the Federal Trade Commission or any agency other
            than the Agency with respect to credit extended, or the
            collection of debt arising from such extension, directly by a
            merchant or retailer to a consumer exclusively for the purpose
            of enabling that consumer to purchase goods or services
            directly from the merchant or retailer.
                (4) Exclusion not applicable to certain credit
            transactions.--Paragraph (1) shall not apply to--
                        (A) any credit transaction, including the
                    collection of the debt arising from such extension, in
                    which the merchant, retailer, or seller of nonfinancial
                    services assigns, sells, or otherwise conveys such debt
                    owed by the consumer to another person;
                        (B) any credit transaction--
                                (i) in which the credit provided
                            significantly exceeds the market value of the
                            product or service provided; and
                                (ii) with respect to which the Director
                            finds that the sale of the product or service
                            is done as a subterfuge so as to evade or
                            circumvent the provisions of this title; or
                        (C) any credit transaction involving a person who
                    operates a line of business that involves the extension
                    of retail credit or retail leases involving motor
                    vehicles, if--
                                (i) the extension of retail credit or
                            retail leases is provided directly to
                            consumers; and
                                (ii) the contracts governing such extension
                            of retail credit or retail leases are not
                            assigned to a third party finance or leasing
                            source, except on a de minimis basis.
        (b) Exclusion for Persons Regulated by the Securities and Exchange
    Commission.--
                (1) In general.--No provision of this title shall be
            construed as altering, amending, or affecting the authority of
            the Securities and Exchange Commission or any securities
            commission (or any agency or office performing like functions)
            of any State to adopt rules, initiate enforcement proceedings,
            or take any other action with respect to a person regulated by
            the Securities and Exchange Commission or any securities
            commission (or any agency or office performing like functions)
            of any State. The Director and Agency shall have no rulemaking,
            supervisory, enforcement or other authority, including the
            authority to order assessments, under this title with respect
            to a person regulated by the Securities and Exchange Commission
            or any securities commission (or any agency or office
            performing like functions) of any State.
                (2) Consultation and coordination.--Notwithstanding
            paragraph (1), the Securities and Exchange Commission shall
            consult and coordinate with the Director with respect to any
            rule (including any advance notice of proposed rulemaking)
            regarding an investment product or service that is the same
            type of product as, or that competes directly with, a consumer
            financial product or service that is subject to the
            jurisdiction of the Agency under this title or under any other
            law.
        (c) Exclusion for Persons Regulated by the Commodity Futures
    Trading Commission.--
                (1) In general.--No provision of this title shall be
            construed as altering, amending, or affecting the authority of
            the Commodity Futures Trading Commission to adopt rules,
            initiate enforcement proceedings, or take any other action with
            respect to a person regulated by the Commodity Futures Trading
            Commission. The Director and the Agency shall have no authority
            to exercise any power to enforce this title with respect to a
            person regulated by the Commodity Futures Trading Commission.
                (2) Consultation and coordination.--Notwithstanding
            paragraph (1), the Commodity Futures Trading Commission shall
            consult and coordinate with the Director with respect to any
            rule (including any advance notice of proposed rulemaking)
            regarding a product or service that is the same type of product
            as, or that competes directly with, a consumer financial
            product or service that is subject to the jurisdiction of the
            Agency under this title or under any other law.
        (d) Persons Regulated by a State Securities Commission.--
                (1) In general.--No provision of this title shall be
            construed as altering, amending, or affecting the authority of
            any securities commission (or any agency or office performing
            like functions) of any State to adopt rules, initiate
            enforcement proceedings, or take any other action with respect
            to a person regulated by any securities commission (or any
            agency or office performing like functions) of any State.
            Except as permitted in paragraph (2) and subsection (m), the
            Director and the Agency shall have no authority to exercise any
            power to enforce this title with respect to a person regulated
            by any securities commission (or any agency or office
            performing like functions) of any State, but only to the extent
            that the person acts in such regulated capacity.
                (2) Description of activities.--Paragraph (1) shall not
            apply to any person to the extent such person is engaged in any
            financial activity described in any subparagraph of section
            101(19) or is otherwise subject to any enumerated consumer law
            or any law or authority transferred under subtitle F or H.
        (e) Exclusion for Persons Regulated by a State Insurance
    Regulator.--
                (1) In general.--No provision of this title shall be
            construed as altering, amending, or affecting the authority of
            any State insurance regulator to adopt rules, initiate
            enforcement proceedings, or take any other action with respect
            to a person regulated by any State insurance regulator. Except
            as provided in paragraphs (2) and (3), the Agency shall have no
            authority to exercise any power to enforce this title with
            respect to a person regulated by any State insurance regulator.
                (2) Description of activities.--Paragraph (1) shall not
            apply to any person described in such paragraph to the extent
            such person is engaged in any financial activity described in
            any subparagraph of section 4002(19) or is otherwise subject to
            any of the enumerated consumer laws or the authorities
            transferred under subtitle F or H.
                (3) Preservation of certain authorities.--No provision of
            this title shall be construed as limiting the authority of the
            Director and the Agency from exercising powers under this Act
            with respect to a person, other than a person regulated by a
            State insurance regulator, who provides a product or service
            for or on behalf of a person regulated by a State insurance
            regulator in connection with a financial activity.
        (f) Exclusion for Persons Regulated by the Federal Housing Finance
    Agency.--No provision of this title shall be construed as altering,
    amending, or affecting the authority of the Federal Housing Finance
    Agency to adopt rules, initiate enforcement proceedings, or take any
    other action with respect to a person regulated by the Federal Housing
    Finance Agency. The Director and Agency shall have no authority to
    exercise any power to enforce this title with respect to a person
    regulated by the Federal Housing Finance Agency. For purposes of this
    subsection, the term ``person regulated by the Federal Housing Finance
    Agency'' means any Federal home loan bank, and any joint office of 1 or
    more Federal home loan banks.
        (g) Exclusion for Persons Regulated by the Farm Credit
    Administration.--No provision of this title shall be constructed as
    altering, amending, or affecting the authority of the Farm Credit
    Administration to adopt rules, institute enforcement proceedings, or
    take any other action with respect to a person regulated by the Farm
    Credit Administration. The Director and Agency shall have no authority
    to exercise any power to enforce this title, compel registration, or to
    order assessments with respect to a person regulated by the Farm Credit
    Administration. For purposes of this subsection, the term ``person
    regulated by the Farm Credit Administration'' means any Farm Credit
    System Institution.
        (h) Employee Benefit and Compensation Plans and Certain Other
    Arrangements Under the Internal Revenue Code of 1986.--
                (1) Authority retained by other agencies.--No provision of
            this title shall be construed as altering, amending, or
            affecting the authority of the Secretary of the Treasury, the
            Secretary of Labor, or the Commissioner of Internal Revenue to
            adopt regulations, initiate enforcement proceedings, or take
            any actions with respect to any specified plan or arrangement.
                (2) Activities not constituting financial activities.--For
            the purposes of this title, a person shall not be treated as
            having engaged in a financial activity, as defined in section
            4002(19), solely because such person is a specified plan or
            arrangement or is engaged in the activity of establishing or
            maintaining, for the benefit of employees of such person (or
            for members of an employee organization), any specified plan or
            arrangement.
                (3) Regulatory coordination.--In the case of regulations
            promulgated under this title that address any financial
            activity specifically pertaining to the administration and
            maintenance of a specified plan or arrangement, the Director
            shall coordinate with the Secretary of Labor and the Secretary
            of Treasury, as appropriate.
                (4) Specified plan or arrangement.--For purposes of this
            subsection, the term ``specified plan or arrangement'' means
            any plan, account, or arrangement described in section 220,
            223, 401(a), 403(a), 403(b), 408, 408A, 529, or 530 of the
            Internal Revenue Code of 1986, or any employee benefit or
            compensation plan or arrangement, including a plan that is
            subject to title I of the Employee Retirement Income Security
            Act of 1974.
        (i) Exclusion for Accountants and Tax Preparers.--
                (1) In general.--Except as permitted in paragraph (2), the
            Director and the Agency may not exercise any rulemaking,
            supervisory, enforcement or other authority, including
            authority to order assessments, over--
                        (A) any person that is a certified public
                    accountant, permitted to practice as a certified public
                    accounting firm, or certified or licensed for such
                    purpose by a State, or any individual who is employed
                    by or holds an ownership interest with respect to a
                    person described in this subparagraph when such person
                    is performing or offering to perform customary and
                    usual accounting activities, including the provision of
                    accounting, tax, advisory, other services that are
                    subject to the regulatory authority of a state board of
                    accountancy or a Federal authority, or other services
                    that are incidental to such customary and usual
                    accounting activities, to the extent that such
                    incidental services are not offered or provided by the
                    person separate and apart from such customary and usual
                    accounting activities and are not offered or provided
                    to consumers who are not receiving such customary and
                    usual accounting activities; or
                        (B) any person other than a person described in
                    subparagraph (A) that performs income tax preparation
                    activities for consumers.
                (2) Certain activities not excluded.--
                        (A) In general.--In no event shall paragraph (1)
                    apply to any activity which involves the sale of
                    securities or extension of credit which is provided by
                    a person described in paragraph (1)(A).
                        (B) Definition.--For purposes of subparagraph (A),
                    the term ``extension of credit'' shall not include an
                    ordinary account receivable.
                (3) Description of activities.--Paragraph (1) shall not
            apply to--
                        (A) any person described in paragraph (1)(A) to the
                    extent such person is engaged in any activity which is
                    not a customary and usual accounting activity described
                    in paragraph (1)(A) or incidental thereto but which is
                    a financial activity described in any subparagraph of
                    section 4002(19);
                        (B) any person described in paragraph (1)(B) to the
                    extent such person is engaged in any activity which is
                    a financial activity described in any subparagraph of
                    section 4002(19); or
                        (C) any person described in paragraph (1)(A) or
                    (1)(B) that is otherwise subject to any of the
                    enumerated consumer laws or the authorities transferred
                    under subtitle F or H.
        (j) Exclusion for Real Estate Licensees.--
                (1) In general.--Except as permitted in paragraph (2), the
            Director and the Agency may not exercise any rulemaking,
            supervisory, enforcement or other authority, including
            authority to order assessments, over a person that is licensed
            or registered as a real estate broker, real estate agent, in
            accordance with State law, but only to the extent that such
            person--
                        (A) acts as a real estate agent or broker for a
                    buyer, seller, lessor, or lessee of real property;
                        (B) brings together parties interested in the sale,
                    purchase, lease, rental, or exchange of real property;
                        (C) negotiates, on behalf of any party, any portion
                    of a contract relating to the sale, purchase, lease,
                    rental, or exchange of real property (other than in
                    connection with providing financing with respect to any
                    such transaction);
                        (D) engages in any activity for which a person
                    engaged in the activity is required to be registered or
                    licensed as a real estate agent or real estate broker
                    under any applicable law; or
                        (E) offers to engage in any activity, or act in any
                    capacity, described in subparagraph (A), (B), (C), or
                    (D).
                (2) Description of activities.--Paragraph (1) shall not
            apply to any person described in such paragraph to the extent
            such person is engaged in any financial activity described in
            any subparagraph of section 4002(19) or is otherwise subject to
            any of the enumerated consumer laws or the authorities
            transferred under subtitle F or H.
        (k) Exclusion for Auto Dealers.--
                (1) In general.--The Director and the Agency may not
            exercise any rulemaking, supervisory, enforcement or any other
            authority, including authority to order assessments, over a
            motor vehicle dealer that is primarily engaged in the sale and
            servicing of motor vehicles, the leasing and servicing of motor
            vehicles, or both.
                (2) Certain functions excepted.--The provisions of
            paragraph (1) shall not apply to any person to the extent that
            person--
                        (A) provides consumers with any services related to
                    residential mortgages; or
                        (B) operates a line of business that involves the
                    extension of retail credit or retail leases involving
                    motor vehicles, and in which--
                                (i) the extension of retail credit or
                            retail leases is routinely provided directly to
                            consumers; and
                                (ii) the contract governing such extension
                            of retail credit or retail leases is not
                            routinely assigned to a third party finance or
                            leasing source.
                (3) No impact on prior authority.--Nothing in this
            subsection shall be construed to modify, limit, or supersede
            the rulemaking or enforcement authority over motor vehicle
            dealers that could be exercised by any Federal department or
            agency on the day prior to the enactment of this title.
                (4) No transfer of certain authority.--Notwithstanding
            subtitle F or any other provision of law under this title, the
            consumer financial protection functions of the Board of
            Governors and the Federal Trade Commission shall not be
            transferred to the Director or the Agency to the extent such
            functions are with respect to a person described under
            paragraph (1).
                (5) Definitions.--For purposes of this subsection:
                        (A) Motor vehicle.--The term ``motor vehicle''
                    means any self-propelled vehicle designed for
                    transporting persons or property on a street, highway,
                    or other road.
                        (B) Motor vehicle dealer.--The term ``motor vehicle
                    dealer'' means any person resident in the United States
                    or any territory of the United States, and licensed by
                    a State, a territory of the United States, or the
                    District of Columbia to engage in the sale of motor
                    vehicles.
        (l) No Authority to Impose Usury Limit.--No provision of this title
    shall be construed as conferring authority on the Director or the
    Agency to establish a usury limit applicable to an extension of credit
    offered or made by a covered person to a consumer, unless explicitly
    authorized by law.
        (m) Exclusion for Manufactured Home Retailers and Modular Home
    Retailers.--
                (1) In general.--The Director and the Agency may not
            exercise any rulemaking, supervisory, enforcement or other
            authority, including authority to order assessments, over a
            person to the extent such person--
                        (A) acts as an agent or broker for a buyer or
                    seller of a manufactured home or a modular home;
                        (B) facilitates the purchase by a consumer of a
                    manufactured home or modular home, by negotiating the
                    purchase price or terms of the sales contract (other
                    than providing financing with respect to such
                    transaction); or
                        (C) offers to engage in any activity described in
                    subparagraph (A) or (B).
                (2) Description of activities.--Paragraph (1) shall not
            apply to any person described in such paragraph to the extent
            such person is engaged in any financial activity described in
            any subparagraph of section 4002(19) or is otherwise subject to
            any of the enumerated consumer laws or the authorities
            transferred under subtitle F or H.
                (3) Definitions.--For purposes of this subsection:
                        (A) Manufactured home.--The term ``manufactured
                    home'' has the meaning given such term in section 603
                    of the National Manufactured Housing Construction and
                    Safety Standards Act of 1974 (42 U.S.C. 5402).
                        (B) Modular home.--The term ``modular home'' means
                    a house built in a factory in two or more modules that
                    meet the State or local building codes where the house
                    will be located and where such modules are transported
                    to the building site, installed on foundations, and
                    completed.
        (n) Exclusion for Practice of Law.--
                (1) In general.--Except as provided under paragraph (2),
            nothing in this title shall apply with respect to an activity
            engaged in by an attorney, or engaged in under the direction of
            an attorney, as part of the practice of law under the laws of a
            State in which the attorney is licensed to practice law.
                (2) Rule of construction.--
                        (A) In general.--Paragraph (1) shall not be
                    construed to limit the exercise by the Director and the
                    Agency of any rulemaking, supervisory, enforcement, or
                    other authority, including authority to order
                    assessments, regarding any activity that is a financial
                    activity described in any subparagraph of section
                    4002(19) and is not engaged in as--
                                (i) part of the practice of law; or
                                (ii) incidental to the practice of law, to
                            the extent that such activity is provided
                            exclusively within the scope of the attorney-
                            client relationship and is not otherwise
                            provided by or under the direction of the
                            attorney to any consumer who is not receiving
                            legal advice or services from the attorney in
                            connection with such activity.
                        (B) Construction.--Paragraph (1) shall not be
                    construed to limit the authority of the Director and
                    the Agency with respect to any activity to the extent
                    that such activity is otherwise subject to any of the
                    enumerated consumer laws or the authorities transferred
                    under subtitle F or H.
                (3) Exception.--Notwithstanding paragraph (1), an
            individual who provides legal advice or services related to
            preventing a foreclosure shall be subject to this title unless
            such individual provides foreclosure prevention services in
            connection with--
                        (A) the preparation and filing of a bankruptcy
                    petition; or
                        (B) court proceedings to avoid a foreclosure.
        (o) Exclusion for Pawnbrokers.--
                (1) In general.--The Director and the Agency may not
            exercise any rulemaking, supervisory, enforcement, or other
            authority, including authority to order assessments, under this
            title with respect to any pawnbroker licensed by a State or
            political subdivision thereof, a territory of the United
            States, or the District of Columbia, but only to the extent
            that such person acts in such capacity and provides either--
                        (A) non-recourse credit secured by a possessory
                    security interest in tangible goods physically
                    delivered by the consumer to the pawnbroker for which
                    the consumer does not provide a written or electronic
                    promise, order or authorization to pay, or in any other
                    manner authorize a debit of a deposit account, prior to
                    or contemporaneously with the disbursement of the
                    original proceeds; or
                        (B) credit or any other financial activity issued
                    directly by a pawnbroker to a consumer, in a case in
                    which the good or service being provided is not itself
                    a consumer financial product or service, exclusively
                    for the purpose of enabling that consumer to purchase
                    goods or services directly from the pawnbroker.
                (2) Rule of construction.--
                        (A) FTC authority preserved.--Except as provided in
                    subparagraph (B), no provision of this title shall be
                    construed as modifying, limiting, or superseding the
                    authority of the Federal Trade Commission with respect
                    to the activities described under paragraph (1).
                        (B) Exercise of rulemaking authority.--The Director
                    may exercise any rulemaking authority regarding the
                    activities described in paragraph (1) only as may be
                    authorized by the enumerated consumer laws or any law
                    or authority transferred under subtitle F or H.
        (p) Exclusion for Certain Consumer Reporting Agencies.--
                (1) In general.--Except as permitted in paragraph (2), the
            Director and the Agency may not exercise any rulemaking,
            supervisory, enforcement or other authority, including
            authority to order assessments, over a person that is a
            consumer reporting agency, as such term is defined in section
            603(f) of the Fair Credit Reporting Act (15 U.S.C. 1681a(f)),
            but only to the extent that such consumer reporting agency
            furnishes a consumer report to another person that it has
            reason to believe intends to use the information for employment
            purposes, including for security investigations, government
            licensing and evaluating a consumer's residential or tenant
            history.
                (2) Description of activities.--Paragraph (1) shall not
            apply to any person described in such paragraph to the extent
            such person is engaged in any financial activity described in
            any subparagraph of section 4002(19) or is otherwise subject to
            any of the enumerated consumer laws or the authorities
            transferred under subtitle F or H.
        (q) Limited Authority of the Agency to Obtain Information.--
    Notwithstanding subsections (a), (f), (g), (h), (i), and (k), the
    Director may request or require information from any person subject to
    or described in any such subsection in order to carry out the
    responsibilities and functions of the Agency and in accordance with
    section 4206, 4501, or 4502.
        (r) Exclusion for Activities Relating to Charitable
    Contributions.--
                (1) The Director and the Agency may not exercise any
            rulemaking, supervisory, enforcement, or other authority,
            including authority to order assessments or penalties, over any
            activities related to the solicitation or making of voluntary
            contributions to or through a tax-exempt organization as
            recognized by the Internal Revenue Service, by any agent,
            volunteer or representative of such organizations to the extent
            the organization, agent, volunteer or representative thereof is
            soliciting or providing advice, information, education or
            instruction to donor(s) or potential donor(s) relating to a
            contribution to or through the organization.
                (2) This exclusion shall not apply to other activities not
            described in the paragraph above and are financial activities
            as described in any subparagraph of section 4002(19), or
            otherwise subject to any of the enumerated consumer laws, or
            the authorities transferred under subtitle F or H.

    SEC. 4206. COLLECTION OF INFORMATION; CONFIDENTIALITY REGULATIONS.

        (a) Collection of Information.--
                (1) In general.--In conducting research on the provision of
            consumer financial products or services, the Director shall
            have the power to gather information from time to time
            regarding the organization, business conduct, and practices of
            covered persons or service providers.
                (2) Specific authority.--In order to gather such
            information, the Director shall have the power--
                        (A) to gather and compile information;
                        (B) to require persons to file with the Agency, in
                    such form and within such reasonable period of time as
                    the Director may prescribe, by regulation or order,
                    annual or special reports, or answers in writing to
                    specific questions, furnishing information the Director
                    may require; and
                        (C) to make public such information obtained by it
                    under this section as is in the public interest in
                    reports or otherwise in the manner best suited for
                    public information and use.
        (b) Confidentiality Regulations.--The Director shall prescribe
    regulations regarding the confidential treatment of information
    obtained from persons in connection with the exercise of any authority
    of the Agency or Director under this title and the enumerated consumer
    laws and the authorities transferred under subtitles F and H.
        (c) Privacy Considerations.--In collecting information from any
    person, publicly releasing information held by the Agency, or requiring
    covered persons to publicly report information, the Director and the
    Agency shall take steps to ensure that proprietary, personal or
    confidential consumer information that are protected from public
    disclosure under section 552(b) or 552a of title 5, United States Code,
    or any other provision of law are not made public under this title.

    SEC. 4207. MONITORING; ASSESSMENTS OF SIGNIFICANT REGULATIONS; REPORTS.

        (a) Monitoring.--
                (1) In general.--The Agency shall monitor for risks to
            consumers in the provision of consumer financial products or
            services, including developments in markets for such products
            or services.
                (2) Means of monitoring.--Such monitoring may be conducted
            by examinations of covered persons or service providers,
            analysis of reports obtained from covered persons or service
            providers, assessment of consumer complaints, surveys and
            interviews of covered persons, service providers, and
            consumers, and review of available databases.
                (3) Considerations.--In allocating the resources of the
            Agency to perform the monitoring required by this section, the
            Director may consider, among other factors--
                        (A) likely risks and costs to consumers associated
                    with buying or using a type of consumer financial
                    product or service;
                        (B) consumers' understanding of the risks of a type
                    of consumer financial product or service;
                        (C) the state of the law that applies to the
                    provision of a consumer financial product or service,
                    including the extent to which the law is likely to
                    adequately protect consumers;
                        (D) rates of growth in the provision of a consumer
                    financial product or service;
                        (E) extent, if any, to which the risks of a
                    consumer financial product or service may
                    disproportionately affect traditionally underserved
                    consumers, if any; or
                        (F) types, number, and other pertinent
                    characteristics of covered persons that provide the
                    product or service.
                (4) Reports.--The Agency shall publish at least 1 report of
            significant findings of the monitoring required by paragraph
            (1) in each calendar year, beginning in the calendar year that
            is 1 year after the designated transfer date.
        (b) Assessment of Significant Regulations.--
                (1) In general.--The Agency shall conduct an assessment of
            each significant regulation prescribed or order issued by the
            Director under this title, under the authorities transferred
            under subtitles F and H or pursuant to any enumerated consumer
            law that addresses, among other relevant factors, the
            effectiveness of the regulation in meeting the purposes and
            objectives of this title and the specific goals stated by the
            Director.
                (2) Basis for assessment.--The assessment shall reflect
            available evidence and any data that the Agency reasonably may
            collect.
                (3) Reports.--The Agency shall publish a report of an
            assessment under this subsection not later than 3 years after
            the effective date of the regulation or order, unless the
            Director determines that 3 years is not sufficient time to
            study or review the impact of the regulation, but in no event
            shall the Agency publish a report of such assessment more than
            5 years after the effective date of the regulation or order.
                (4) Public comment required.--Before publishing a report of
            its assessment, the Agency shall invite, with sufficient time
            allotted, public comment on, and may hold public hearings on,
            recommendations for modifying, expanding, or eliminating the
            newly adopted significant regulation or order.
        (c) Information Gathering.--In conducting any monitoring or
    assessment required by this section, the Agency may gather information
    through a variety of methods, including by conducting surveys or
    interviews of consumers.

    SEC. 4208. AUTHORITY TO RESTRICT MANDATORY PREDISPUTE ARBITRATION.

        (a) In General.--The Director, by regulation, may prohibit or
    impose conditions or limitations on the use of any agreement between a
    covered person and a consumer for a consumer financial product or
    service providing for arbitration of any future dispute between the
    parties if the Director finds that such a prohibition or imposition of
    conditions or limitations are in the public interest and for the
    protection of consumers. This authority shall not prohibit or restrict
    a consumer from entering into a voluntary arbitration agreement with a
    covered person after a dispute has arisen.
        (b) Effective Date.--Notwithstanding any other provision of law,
    any regulation prescribed by the Director under subsection (a) shall
    apply, consistent with the terms of the regulation, to any agreement
    between a consumer and a covered person entered into after the end of
    the 180-day period beginning on the effective date of the regulation,
    as established by the Director.

    SEC. 4209. REGISTRATION AND SUPERVISION OF NONDEPOSITORY COVERED
                  PERSONS.

        (a) Risk-based Programs.--
                (1) In general.--The Agency shall develop risk-based
            programs to supervise covered persons that are not credit
            unions, depository institutions, or persons excluded under
            section 4205 by prescribing registration requirements,
            reporting requirements, and examination standards and
            procedures.
                (2) Basis for programs.--The risk-based supervisory
            programs established pursuant to paragraph (1) shall be based
            on--
                        (A) relevant registration and reporting information
                    about such covered persons, as determined by the
                    Agency; and
                        (B) the Agency's assessment of risks posed to
                    consumers in the relevant geographic markets and
                    markets for consumer financial products and services.
        (b) Registration.--
                (1) In general.--The Director shall prescribe regulations
            regarding registration requirements for covered persons that
            are not credit unions or depository institutions.
                (2) Consultation with state agencies.--In developing and
            implementing registration requirements under this subsection,
            the Agency shall consult with State agencies regarding
            requirements or systems for registration (including coordinated
            or combined systems), where appropriate.
                (3) Exception for related persons.--The Agency shall not
            impose requirements regarding the registration of a related
            person.
                (4) Registration information.--Subject to regulations
            prescribed by the Director, the Agency shall publicly disclose
            the registration information about a covered person which is
            not a bank holding company, credit union, or depository
            institution for the purposes of facilitating the ability of
            consumers to identify the covered person as registered with the
            Agency.
        (c) Reporting Requirements.--
                (1) In general.--The Agency may require reports from
            covered persons that are not credit unions or depository
            institutions, or service providers thereto, for the purposes of
            facilitating supervision of such covered persons or service
            providers.
                (2) Consistency of reporting requirements and risk-based
            standards.--The Agency shall impose reporting requirements
            under this subsection that are consistent with the risk-based
            standards developed and implemented under this section and the
            registration information pertaining to the relevant types or
            classes of covered persons.
                (3) Contents of reports.--Reporting requirements imposed
            under this paragraph may include information regarding--
                        (A) the nature of the covered person's business;
                        (B) the covered person's name, legal form,
                    ownership and management structure, and related
                    persons;
                        (C) the covered person's locations of operation;
                        (D) the covered person's types and number of
                    consumer financial products and services provided by
                    the covered person;
                        (E) compliance with any requirement imposed or
                    enforced by the Agency, including any requirement
                    relating to registration, licensing, fees, or
                    assessments; and
                        (F) the financial condition of such covered person,
                    including a related person, for the purpose of
                    assessing the ability of such person to perform its
                    obligation to consumers.
                (4) Consultation with the federal trade commission.--In
            developing and implementing report requirements under this
            subsection, the Agency shall consult with the Federal Trade
            Commission, where appropriate.
                (5)  Exception for related persons.--Other than reports
            permitted under paragraph (3)(F) or in connection with a
            supervisory action or examination or pursuant to the powers
            granted in subtitle E, the Agency shall not impose requirements
            regarding reports of any related person.
        (d) Examinations.--
                (1) Examinations required.--The Agency shall conduct
            examinations of covered persons that are not credit unions or
            depository institutions as part of the programs implemented
            under paragraphs (2) and (3) of section 4202(c).
                (2) Examination standards and procedures.--The Director
            shall establish risk-based standards and procedures for
            conducting examinations of covered persons required to be
            examined under paragraph (1), including the frequency and scope
            of such examinations, except that the Agency shall conduct
            examinations of such covered persons that are determined to
            pose the highest risk to consumers based on factors determined
            by the Director, such as the operations, sales practices, or
            consumer financial products or services provided by such
            covered persons.
        (e) Authority to Collect Information Regarding Fees or
    Assessments.--To the extent permitted by Federal law, the Agency may
    obtain from the Secretary of the Treasury information relating to a
    covered person which is not a bank holding company, credit union, or
    depository institution, including information regarding compliance with
    a reporting or registration requirement under the subchapter II of
    chapter 53 of title 31, United States Code, for the purposes of, and
    only to the extent necessary in, investigating, determining, or
    enforcing compliance with a requirement relating to any fee or
    assessment imposed by the Agency under this title.

    SEC. 4210. EFFECTIVE DATE.

        This subtitle shall take effect on the designated transfer date.

                        Subtitle C--Specific Authorities

    SEC. 4301. PROHIBITING UNFAIR, DECEPTIVE, OR ABUSIVE ACTS OR PRACTICES.

        (a) In General.--The Agency may take any action authorized under
    subtitle E to prevent a person from committing or engaging in an
    unfair, deceptive, or abusive act or practice under Federal law in
    connection with any transaction with a consumer for a consumer
    financial product or service, or the offering of a consumer financial
    product or service.
        (b) Regulations.--
                (1) In general.--The Director may prescribe regulations
            identifying as unlawful unfair, deceptive, or abusive acts or
            practices in connection with any transaction with a consumer
            for a consumer financial product or service or the offering of
            a consumer financial product or service.
                (2) Includes prevention measures.--Regulations prescribed
            under this section may include requirements for the purpose of
            preventing such acts or practices.
        (c) Unfair, Deceptive, or Abusive Acts or Practices Defined.--
                (1) Unfair acts or practices.--Any determination by the
            Director and the Agency that an act or practice is unfair shall
            be consistent with the standard set forth under section 5 of
            the Federal Trade Commission Act and with the policy statement
            adopted by the Federal Trade Commission pursuant to section 5
            of the Federal Trade Commission Act and dated December 17,
            1980.
                (2) Deceptive acts or practices.--Any determination by the
            Director and the Agency that an act or practice is deceptive
            shall be consistent with the policy statement adopted by the
            Federal Trade Commission pursuant to section 5 of the Federal
            Trade Commission Act and dated October 14, 1983.
                (3) Abusive acts or practices.--The Director and the Agency
            may determine that an act or practice is abusive only if the
            Director finds that--
                        (A) the act or practice is reasonably likely to
                    result in a consumer's inability to understand the
                    terms and conditions of a financial product or service
                    or to protect their own interests in selecting or using
                    a financial product or service; and
                        (B) the widespread use of the act or practice is
                    reasonably likely to contribute to instability and
                    greater risk in the financial system.
                (4) Consider as unfair certain practices with regard to the
            provision of credit scores.--Subject to regulations prescribed
            by the Director, it shall be considered unfair for any consumer
            reporting agency that compiles and maintains files on consumers
            on a nationwide basis (as defined in section 603(p) of the Fair
            Credit Reporting Act; 15 U.S.C. 1681a(p)) to make available for
            purchase by creditors any credit score for a consumer that is
            not also available for purchase by that consumer at the same
            price as other credit scores sold to consumers by such agency.
        (d) Consultation.--In prescribing any regulation under this
    section, the Director shall consult with the Federal banking agencies,
    State bank supervisors, the Federal Trade Commission, or other Federal
    agencies, as appropriate, regarding the consistency of a proposed
    regulation with prudential, consumer protection, civil rights, market,
    or systemic objectives administered by such agencies or supervisors.

    SEC. 4302. DISCLOSURES.

        (a) In General.--The Director may prescribe regulations to ensure
    the timely, appropriate and effective disclosure to consumers of the
    costs, benefits, and risks associated with any consumer financial
    product or service.
        (b) Coordination With Other Laws.--In prescribing regulations under
    subsection (a), the Director shall take into account disclosure
    requirements under other laws in order to enhance consumer compliance
    and reduce regulatory burden.
        (c) Compliance.--
                (1) Model disclosures.--The Agency may provide model
            disclosures to facilitate compliance with the requirements of
            regulations prescribed under this section.
                (2) Per se compliance.--Compliance by a covered person with
            the model disclosures issued by the Agency under this
            subsection shall per se constitute compliance with the
            disclosure requirements of this section.
                (3) Additional guidance.--The Agency may issue exemptions,
            no action letters, and other guidance to promote compliance
            with disclosures requirements of regulations prescribed under
            this section.
        (d) Combined Mortgage Loan Disclosure.--Within 1 year after the
    designated transfer date, the Director shall propose for public comment
    regulations and model disclosures that combine the disclosures required
    under the Truth in Lending Act and the Real Estate Settlement
    Procedures Act into a single, integrated disclosure for mortgage loan
    transactions covered by those laws, unless the Director determines that
    any proposal issued by the Board of Governors and the Department of
    Housing and Urban Development carries out the same purpose.

    SEC. 4303. SALES PRACTICES.

        The Director may prescribe regulations and issue orders and
    guidance regarding the manner, settings, and circumstances for the
    provision of any consumer financial products or services to ensure that
    the risks, costs, and benefits of the products or services, both
    initially and over the term of the products or services, are fully and
    accurately represented to consumers.

    SEC. 4304. PILOT DISCLOSURES.

        (a) Pilot Disclosures.--The Agency shall establish standards and
    procedures for approval of pilot disclosures to be provided or made
    available by a covered person to consumers in connection with the
    provision of a consumer financial product or service, or the offering
    of a consumer financial product or service.
        (b) Standards.--The procedures shall provide that a pilot
    disclosure must be limited in time and scope and reasonably designed to
    contribute materially to the understanding of consumer awareness and
    understanding of, and responses to, disclosures or communications about
    the risks, costs, and benefits of consumer financial products or
    services.
        (c) Transparency.--The procedures shall provide for public
    disclosure of pilots, but the Agency may limit disclosure to the extent
    necessary to encourage covered persons to conduct effective pilots.

    SEC. 4305. ADOPTING OPERATIONAL STANDARDS TO DETER UNFAIR, DECEPTIVE,
                  OR ABUSIVE PRACTICES.

        (a) Authority To Prescribe Standards.--The States are encouraged to
    prescribe standards applicable to covered persons who are not insured
    depository institutions or credit unions, or service providers, to
    deter and detect unfair, deceptive, abusive, fraudulent, or illegal
    transactions in the provision of consumer financial products or
    services, including standards for--
                (1) background checks for principals, officers, directors,
            or key personnel;
                (2) registration, licensing, or certification;
                (3) bond or other appropriate financial requirements to
            provide reasonable assurance of ability to perform its
            obligations to consumers;
                (4) creating and maintaining records of transactions or
            accounts; or
                (5) procedures and operations relating to the provision of,
            or maintenance of accounts for, consumer financial products or
            services.
        (b) Agency Authority to Prescribe Standards.--
                (1) In general.--The Director may prescribe regulations
            establishing minimum standards under this section for any class
            of covered persons other than covered persons which are subject
            to the jurisdiction of a Federal banking agency or a State bank
            supervisor, or for any service provider.
                (2) Registration and licensing standards.--In addition to
            prescribing standards for the purposes described in subsection
            (a), the Director may prescribe registration or licensing
            standards applicable to covered persons for the purposes of
            imposing fees or assessments in accordance with this title.
                (3) Enforcement of standards.--The Director may enforce
            under subtitle E compliance with standards adopted by the
            Director or a State pursuant to this section for covered
            persons or service providers operating in that State.
        (c) Consultation.--In prescribing minimum standards under this
    section, the Director shall consult with the Federal banking agencies,
    State bank supervisors, the Federal Trade Commission, or other Federal
    agencies, as appropriate, regarding the consistency of a proposed
    regulation with prudential, consumer protection, civil rights, market,
    or systemic objectives administered by such agencies or supervisors.

    SEC. 4306. DUTIES.

        (a) In General.--
                (1) Regulations ensuring fair dealing with consumers.--The
            Director shall prescribe regulations imposing duties on a
            covered person, or an employee of a covered person, or an agent
            or independent contractor for a covered person, who deals or
            communicates directly with consumers in the provision of a
            consumer financial product or service, as the Director deems
            appropriate or necessary to ensure fair dealing with consumers.
                (2) Considerations for duties.--In prescribing such
            regulations, the Director shall consider whether--
                        (A) the covered person, employee, agent, or
                    independent contractor represents implicitly or
                    explicitly that the person, employee, agent, or
                    contractor is acting in the interest of the consumer
                    with respect to any aspect of the transaction;
                        (B) the covered person, employee, agent, or
                    independent contractor provides the consumer with
                    advice with respect to any aspect of the transaction;
                        (C) the consumer's reliance on or use of any advice
                    from the covered person, employee, agent, or
                    independent contractor would be reasonable and
                    justifiable under the circumstances;
                        (D) the benefits to consumers of imposing a
                    particular duty would outweigh the costs; and
                        (E) any other factors as the Director considers
                    appropriate.
                (3) Duties relating to compensation practices.--
                        (A) In general.--The Director may prescribe
                    regulations establishing duties regarding compensation
                    practices applicable to a covered person, employee,
                    agent, or independent contractor who deals or
                    communicates directly with a consumer in the provision
                    of a consumer financial product or service for the
                    purpose of promoting fair dealing with consumers.
                        (B) No compensation caps.--The Director may not
                    prescribe a limit on the total dollar amount of
                    compensation paid to any person.
                        (C) Disparity treatment prohibited.--The Director
                    may not prescribe regulations that directly or
                    indirectly disparately treat, or are interpreted to
                    disparately treat, or disparately impact any entity
                    that employs covered persons.
                (4) Requirement to include disclaimer on public
            statements.--The Director shall ensure that the Agency's
            website, and any statement made by the Director or the Agency
            to the public, includes a disclaimer stating that the Agency
            does not endorse any particular financial product or service
            and consumers are expected to exercise due diligence in
            deciding what financial products and services are appropriate
            for them.
        (b) Administrative Proceedings.--
                (1) In general.--Any regulation prescribed by the Director
            under this section shall be enforceable only by the Agency
            through an adjudication proceeding under subtitle E or by a
            State regulator through an appropriate administrative
            proceeding as permitted under State law.
                (2) Exclusivity of remedy.--No action may be commenced in
            any court to enforce any requirement of a regulation prescribed
            under this section (other than by the Agency, or by a State
            regulator, as may be necessary to enforce an administrative
            order under this section), and no court may exercise
            supplemental jurisdiction over a claim asserted under a
            regulation prescribed under this section based on allegations
            or evidence of conduct that otherwise may be subject to such
            regulation.
                (3) Rule of construction.--The Agency, the Attorney
            General, and any State attorney general or State regulator
            shall not be precluded from enforcing any other Federal or
            State law against a person with respect to conduct that may be
            subject to a regulation prescribed by the Director under this
            section.
        (c) Exclusions.--This section shall not be construed as authorizing
    the Director to prescribe regulations applicable to--
                (1) an attorney licensed to practice law and in compliance
            with the applicable rules and standards of professional
            conduct, but only to the extent that the consumer financial
            product or service provided is within the attorney-client
            relationship with the consumer; or
                (2) any trustee, custodian, or other person that holds a
            fiduciary duty in connection with a trust, including a
            fiduciary duty to a grantor or beneficiary of a trust, that is
            subject to and in compliance with the applicable law relating
            to such trust.

    SEC. 4307. CONSUMER RIGHTS TO ACCESS INFORMATION.

        (a) In General.--Subject to regulations prescribed by the Director,
    a covered person shall make available to a consumer, in an electronic
    form usable by the consumer, information in the control or possession
    of the covered person concerning the consumer financial product or
    service that the consumer obtained from such covered person including
    information relating to any transaction, series of transactions, or to
    the account including costs, charges and usage data.
        (b) Exceptions.--A covered person shall not be required by this
    section to make available to the consumer--
                (1) any confidential commercial information, including an
            algorithm used to derive credit scores or other risk scores or
            predictors;
                (2) any information collected by the covered person for the
            purpose of preventing fraud or money laundering, or detecting,
            or making any report regarding other unlawful or potentially
            unlawful conduct;
                (3) any information required to be kept confidential by any
            other law (including section 6103 of the Internal Revenue Code
            of 1986); or
                (4) any information that the covered person cannot retrieve
            in the ordinary course of its business with respect to that
            information.
        (c) No Duty To Maintain Records.--No provision of this section
    shall be construed as imposing any duty on a covered person to maintain
    or keep any information about a consumer.
        (d) Standardized Formats for Data.--The Director, by regulation,
    shall prescribe standards applicable to covered persons to promote the
    development and use of standardized formats for information, including
    through the use of machine readable files, to be made available to
    consumers under this section.
        (e) Consultation.--The Director shall, when prescribing any
    regulation under this section, consult with the Federal banking
    agencies, State bank supervisors, the Federal Trade Commission, and the
    Commissioner of Internal Revenue to ensure that the regulations--
                (1) impose substantively similar requirements on covered
            persons;
                (2) take into account conditions under which covered
            persons do business both in the United States and in other
            countries; and
                (3) do not require or promote the use of any particular
            technology in order to develop systems for compliance.

    SEC. 4308. PROHIBITED ACTS.

        It shall be unlawful for any person--
                (1) to advertise, market, offer, sell, enforce, or attempt
            to enforce, any term, agreement, change in terms, fee, or
            charge in connection with a consumer financial product or
            service that is not in conformity with this title or applicable
            regulation prescribed or order issued by the Director or to
            engage in any unfair, deceptive, or abusive act or practice,
            except that no person shall be held to have violated this
            subsection solely by virtue of providing or selling time or
            space to a person placing an advertisement;
                (2) to fail or refuse to pay any fee or assessment imposed
            by the Agency under this title, to fail or refuse to permit
            access to or copying of records, to fail or refuse to establish
            or maintain records, or to fail or refuse to make reports or
            provide information to the Agency, as required by this title,
            an enumerated consumer law, or pursuant to the authorities
            transferred by subtitles F and H, or any regulation prescribed
            or order issued by the Director this title or pursuant to any
            such authority; or
                (3) to knowingly or recklessly provide substantial
            assistance to another person in violation of the provisions of
            section 4301, or any regulation prescribed or order issued
            under such section, and, notwithstanding any other provision of
            this title, any such person shall be deemed to be in violation
            of that section to the same extent as the person to whom such
            assistance is provided.
    Nothing in this section shall be construed as limiting or superseding
    the protection provided to any provider or user qualifying for
    protection under section 230(c)(1) of the Communications Act of 1934
    (47 U.S.C. 230(c)(1)).

    SEC. 4309. TREATMENT OF REMITTANCE TRANSFERS.

        (a) Disclosures Required for Remittance Transfers.--
                (1) In general.--Each remittance transfer provider shall
            make disclosures to consumers, as specified by this section and
            by regulation prescribed by the Director.
                (2) Specific disclosures.--In addition to any other
            disclosures applicable under this title, a remittance transfer
            provider shall--
                        (A) disclose clearly and conspicuously, in writing
                    and in a form that the consumer may keep, to each
                    consumer who requests information regarding the fees or
                    exchange rate for a remittance transfer, prior to the
                    consumer making any payment in connection with the
                    transfer--
                                (i) the total amount in United States
                            dollars that will be required to be paid by the
                            consumer in connection with the remittance
                            transfer;
                                (ii) the amount of currency that the
                            designated recipient of the remittance transfer
                            will receive, using the values of the currency
                            into which the funds will be exchanged;
                                (iii) the fee charged by the remittance
                            transfer provider for the remittance transfer;
                                (iv) any exchange rate to be used by the
                            remittance transfer provider for the remittance
                            transfer, unless the exchange rate is not fixed
                            on send;
                                (v) the amount of time for which the
                            information specified in this subparagraph (A)
                            will be in effect;
                                (vi) the expected time interval within
                            which the funds being transferred will be made
                            available to the recipient; and
                                (vii) the location where the funds being
                            transferred will be made available to the
                            recipient if the funds are to be made available
                            only at one location, or if the remittance
                            transfer provider permits the recipient to
                            choose from multiple locations where the funds
                            being transferred will be made available to the
                            recipient, the remittance transfer provider
                            shall make available to the consumer or the
                            recipient a resource that lists such locations;
                        (B) at the time at which the consumer makes payment
                    in connection with the remittance transfer, a receipt
                    in writing disclosing clearly and conspicuously--
                                (i) the information described in
                            subparagraph (A);
                                (ii) the expected time interval within
                            which the funds being transferred will be made
                            available to the recipient, which shall be not
                            more than ten days after the date the consumer
                            makes payment in connection with the remittance
                            transfer unless otherwise prohibited by
                            applicable State or Federal law or the law of
                            another country, or as may be specified by the
                            consumer so long as the consumer has the choice
                            to order that the funds be made available to
                            the recipient not more than ten days after the
                            consumer makes payment in connection with the
                            remittance transfer;
                                (iii) the location where the funds being
                            transferred will be made available to the
                            recipient if the funds are to be made available
                            only at one location, or if the remittance
                            transfer provider permits the recipient to
                            choose from multiple locations where the funds
                            being transferred will be made available to the
                            recipient, the remittance transfer provider
                            shall make available to the consumer or the
                            recipient a resource that lists such locations;
                                (iv) the name and telephone number or
                            address of the designated recipient, if
                            provided to the remittance transfer provider by
                            the consumer;
                                (v) information about the rights of the
                            consumer under this section to cancel the
                            remittance transfer, to resolve errors and to
                            receive refunds;
                                (vi) appropriate contact information for
                            the remittance transfer provider;
                                (vii) a transaction reference number unique
                            to that remittance transfer; and
                                (viii) information as to when the exchange
                            rate will be calculated (for example, when the
                            funds are received by the recipient), if the
                            customer has been notified that the exchange
                            rate is not fixed on send;
                        (C) at the time at which the consumer initiates the
                    remittance transfer, offer to provide in writing, prior
                    to making any payment in connection with the transfer,
                    the information listed in subparagraph (A); and
                        (D) in the case of an exchange rate not fixed on
                    send, the remittance provider shall also disclose, at
                    the time at which the consumer initiates the remittance
                    transfer, the range, using the high and low rates, for
                    the prior 30 day period, that the consumer would have
                    received if a representative amount had been exchanged
                    by the remittance transfer provider, as well as a clear
                    and conspicuous notice that the actual exchange rate
                    may vary.
            If the actual rate used for the transfer is known to the
            remittance provider, either because such rate was set by the
            remittance provider itself or because the remittance provider
            receives confirmation of the actual exchange rate used, the
            remittance provider shall make available to consumers written
            or electronic confirmation of the actual exchange rate used and
            the amount of currency that the recipient or the remittance
            transfer received, using the values of the currency into which
            the funds were exchanged. The Director shall within 2 years
            after the date of the enactment of the Consumer Financial
            Protection Agency Act of 2009 prescribe consumer disclosures
            for transfers with rates not fixed on send that are
            functionally equivalent to those applicable to remittances
            where the exchange rate is specified by the remittance transfer
            provider at the time the consumer initiates the remittance
            transfer. To the greatest extent possible, the Director shall
            ensure that functional equivalence will enable remittance
            transfer providers to comply with all requirements in this
            title and provide consumers with information sufficient to
            compare services providers, to time their use of the product,
            to discover errors in transmission and to seek remedies.
                (3) Exemption.--Notwithstanding requirements under
            paragraph (2)(A)(ii), (2)(A)(iv), or (2)(B)(i), no such
            disclosure is required--
                        (A) because of the requirements of another law,
                    including the law of another country;
                        (B) because the transfer is being routed through
                    the Directo a Mexico offered by the Federal reserve
                    banks; or
                        (C) because of any other circumstance deemed
                    permissible by regulation of the Director; If the
                    actual rate used for the transfer is known to the
                    remittance provider, the remittance provider shall make
                    available to consumers written or electronic
                    confirmation of the actual exchange rate used and the
                    amount of currency that the recipient of the remittance
                    transfer received, using the values of the currency
                    into which the funds were exchanged.
                (4) Provision of toll-free number and web access.--
                        (A) In addition to providing the disclosures
                    required by this section to a consumer at a remittance
                    transfer provider location, a remittance transfer
                    provider shall provide a toll-free telephone number or
                    local number, and an Internet website that a consumer
                    can access for which access no remittance transfer
                    provider may assess a charge, to obtain the information
                    required by paragraph (2)(A) for remittance transfers
                    offered by that remittance transfer provider or
                    information about the status of a remittance transfer
                    for which a consumer has made payment.
                        (B) A remittance transfer provider that on an
                    aggregate basis originates 30,000 or fewer transfers on
                    a calendar year basis (or such other amount as may be
                    prescribed by the Director) is not required to offer
                    the web access prescribed in subparagraph (A), but is
                    required to provide a toll-free telephone number or
                    local number as prescribed in subparagraph (A).
                (5) Alternative methods of disclosure.--Subject to
            subsection (e)(2), a remittance transfer provider may--
                        (A) if the transaction is conducted entirely by
                    telephone (which shall include, but not be limited to,
                    a mobile telephone) satisfy the requirements of
                    paragraph (2)(A) orally or, at the option of the
                    consumer, electronically through a message sent to the
                    consumer through any electronic means (including, but
                    not limited to, an electronic mail address or a mobile
                    telephone) as designated by the consumer;
                        (B) satisfy the requirements of paragraph (2)(A)
                    electronically if the transfer is initiated by the
                    consumer electronically through the remittance transfer
                    provider's website or through any other electronic
                    means; and
                        (C) satisfy the requirements of paragraph (2)(B) by
                    mailing (or transmitting electronically if the transfer
                    is initiated electronically by the consumer through the
                    remittance transfer provider's website or the consumer
                    otherwise consents in accordance with the provisions of
                    section 101 of the Electronic Signatures in Global and
                    National Commerce Act) the information required under
                    such paragraph to the consumer not later than one
                    business day after the date on which the transaction is
                    conducted, if the transaction is conducted entirely by
                    telephone (or electronically) and the consumer requests
                    a written receipt.
        (b) Written Foreign Language Disclosures.--
                (1) In general.--The disclosures required under subsections
            (a)(2)(A) and (a)(2)(B)(i) shall be made in English and--
                        (A) at each remittance transfer provider location,
                    shall be made in the same languages principally used by
                    the remittance transfer provider, or any of its agents,
                    to advertise, solicit, or market its remittance
                    transfers business, either orally or in writing, at
                    that location, if other than English, provided that
                    such languages are those for which the Director has
                    issued model disclosures as provided in subsection (g);
                    or
                        (B) on a remittance transfer provider's website,
                    shall at a minimum be made in any other language for
                    which the Director has issued model disclosures as
                    provided in subsection (g) if the remittance transfer
                    provider, or any of its agents, advertises, solicits,
                    or markets its remittance transfers business in such
                    language.
                (2) Disputes concerning terms.--If a disclosure is required
            by this section to be in English and another language, the
            English version of the disclosure shall govern any dispute
            concerning the terms of the receipt. However, any discrepancies
            between the English version and any other version due to the
            translation of the receipt from English to another language
            including errors or ambiguities shall be construed against the
            remittance transfer provider or its agent and the remittance
            transfer provider or its agent shall be liable for any damages
            caused by these discrepancies.
        (c) Remittance Transfer Cancellations, Refunds, and Errors.--
                (1) Cancellations.--
                        (A) After receiving the receipt required under
                    subsection (a)(2)(B), a consumer may cancel the
                    currency transaction--
                                (i) before leaving the premises of the
                            remittance transfer provider where the consumer
                            received the receipt; and
                                (ii) not later than 30 minutes after the
                            time the consumer initiated the remittance
                            transfer with the remittance transfer provider.
                        (B) If a consumer cancels the transaction, the
                    remittance transfer provider shall immediately refund
                    to the consumer the fees paid and the currency to be
                    transferred, and issue a receipt indicating that the
                    transaction has been cancelled.
                        (C) A consumer may not cancel a remittance transfer
                    after the remittance transfer provider has sent the
                    funds to the recipient.
                        (D) A remittance transfer provider shall not be
                    required to provide a refund if providing a refund
                    would violate State or Federal law.
                (2) Refunds.--
                        (A) If a remittance transfer provider receives
                    written notice from the consumer within 10 days of the
                    promised date of delivery of a remittance transfer that
                    no amount of the funds to be remitted was made
                    available to the designated recipient in the foreign
                    country, the remittance transfer provider shall--
                                (i) refund to the consumer the total amount
                            in U.S. dollars that was paid by the consumer
                            in connection with such remittance transfer;
                                (ii) promptly transmit the remittance
                            transfer in accordance with the terms in the
                            written receipt provided to the consumer
                            pursuant to subsection (a)(2)(B);
                                (iii) provide such other remedy, as
                            determined appropriate by rule of the Director
                            for the protection of consumers; or
                                (iv) demonstrate to the consumer that the
                            proceeds of the remittance transfer were made
                            available to the recipient of the remittance
                            provider.
                        (B) A remittance transfer provider shall not be
                    required to provide a refund if providing a refund
                    would violate State or Federal law.
                (3) Error resolution.--
                        (A) In general.--If a remittance transfer provider
                    receives written notice from the consumer within 60
                    days of the promised date of delivery that an error
                    occurred with respect to a remittance transfer,
                    including that the full amount of the funds to be
                    remitted was not made available to the designated
                    recipient in the foreign country, the remittance
                    transfer provider shall resolve the error pursuant to
                    this paragraph.
                        (B) Remedies.--Not later than 120 days after the
                    date of receipt of a notice from the consumer pursuant
                    to subparagraph (A), the remittance transfer provider
                    shall--
                                (i) as applicable to the error and as
                            designated by the consumer--
                                        (I) refund to the consumer the
                                    total amount in United States dollars
                                    that was paid by the consumer in
                                    connection with the remittance transfer
                                    that was not properly transmitted;
                                        (II) make available to the
                                    designated recipient, without
                                    additional cost to the designated
                                    recipient or to the consumer, the
                                    amount appropriate to resolve the
                                    error;
                                        (III) provide such other remedy, as
                                    determined appropriate by regulation of
                                    the Director for the protection of
                                    consumers; or
                                (ii) demonstrate to the consumer that there
                            was no error.
                (4) Regulations.--The Director, in order to protect
            consumers, shall establish, by regulation, clear and
            appropriate standards for remittance transfer providers with
            respect to error resolution, cancellation and refunds.
        (d) Enforcement Authority.--The Director shall have the sole
    authority to enforce the provisions of this section, and any
    regulations established pursuant to this section.
        (e) Applicability of Other Provisions of Law.--
                (1) Applicability of title 18 and title 31 provisions.--A
            remittance transfer provider that is a money transmitting
            business as defined in section 5330 of title 31, United States
            Code, may provide remittance transfers only if such provider is
            in compliance with the requirements of section 5330 of title
            31, United States Code, and section 1960 of title 18, United
            States Code, as applicable.
                (2) Rule of construction.--Nothing in this section shall be
            construed--
                        (A) to affect the application to any transaction,
                    to any remittance provider, or to any other person of
                    any of the provisions of subchapter II of chapter 53 of
                    title 31, United States Code, section 21 of the Federal
                    Deposit Insurance Act, or chapter 2 of title I of
                    Public Law 91-508, or any regulations promulgated
                    thereunder; or
                        (B) to cause any fund transfer that would not
                    otherwise be treated as such under paragraph (2) to be
                    treated as an electronic fund transfer, or as otherwise
                    subject to this title, for the purposes of any of the
                    provisions referred to in subparagraph (A) or any
                    regulation prescribed under such subparagraph.
        (f) Definitions.--For purposes of this section, the following
    definitions shall apply:
                (1) Depository institution.--the term ``depository
            institution'' has the same meaning as in section 3 of the
            Federal Deposit Insurance Act and includes a credit union.
                (2) Not fixed on send.--The term ``not fixed on send'' when
            referring to an exchange rate used in a remittance transfer
            means an exchange rate that is not set by the remittance
            transfer provider at the time the consumer initiates the
            remittance transfer.
                (3) Remittance transfer.--The term ``remittance transfer''
            means the electronic (as defined in section 106(2) of the
            Electronic Signatures in Global and National Commerce Act)
            transfer of funds to be effected or used primarily for
            personal, family, or household purposes at the request of a
            consumer located in any State to a person in another country
            that is initiated by a remittance transfer provider, whether or
            not the consumer is an account holder of the remittance
            transfer provider or whether or not the remittance transfer is
            also an electronic fund transfer, as defined in section 903 of
            the Electronic Fund Transfer Act.
                (4) Remittance transfer provider.--The term ``remittance
            transfer provider'' means any person or depository institution,
            or agent thereof, that originates remittance transfers on
            behalf of consumers in the normal course of its business,
            whether or not the consumer is an account holder of that person
            or depository institution.
        (g) Model Disclosures.--
                (1) Publication.--Notwithstanding any provisions of this
            title, the Director shall establish and publish model
            disclosure forms to facilitate compliance with the disclosure
            requirements of this section and to aid the consumer in
            understanding the transaction to which the subject disclosure
            form relates.
                (2) Languages to be used in model disclosures.--The
            Director shall make these disclosures available within 1 year
            of the effective date of this title--
                        (A) in English; and
                        (B) the ten most frequently spoken languages in the
                    United States, other than English, used by consumers
                    initiating remittance transfers, as may be determined
                    by the Director.
                (3) Use of automated equipment.--In establishing model
            forms under this subsection, the Director shall consider the
            use by lessors of data processing or similar automated
            equipment.
                (4) Use optional.--A remittance transfer provider may
            utilize a model disclosure form established by the Director
            under this subsection for purposes of compliance with this
            section, at the discretion of the remittance transfer provider.
                (5) Effect of use.--Any remittance transfer provider that
            properly uses the material aspects of any model disclosure form
            established by the Director under this subsection shall be
            deemed to be in compliance with the disclosure requirements to
            which the form relates.
        (h) Regulation and Exemption Authority.--Notwithstanding any other
    provisions of this title, the Director, in the sole discretion of the
    Director, in consultation with relevant Federal and State government
    agencies may by regulation exempt from one or more requirements of this
    section, any category of remittance transfer provider if the Director
    determines that under applicable Federal or State law that such
    category of remittance transfer provider is subject to requirements
    substantially similar to those imposed under this section or that such
    law gives greater protection and benefit to the consumer, and that
    there is adequate provision for enforcement.
        (i) Applicability of State Law.--
                (1) This section does not annul, alter, affect, or exempt
            any person subject to the provisions of this section from
            complying with other applicable Federal law and the laws of any
            State relating to remittance transfers and remittance transfer
            providers, except to the extent that those laws are
            inconsistent with the provisions of this section, and then only
            to the extent of the inconsistency.
                (2) Notwithstanding any other provisions of this title, the
            Director may determine whether such inconsistencies exist. A
            State law is not inconsistent with this section if the
            protection such law affords any consumer is greater than the
            protection afforded by this section. If the Director determines
            that a State requirement is inconsistent, remittance transfer
            providers shall incur no liability under the law of that State
            for a good faith failure to comply with that law,
            notwithstanding that such determination is subsequently
            amended, rescinded, or determined by judicial or other
            authority to be invalid for any reason. This section does not
            extend the applicability of any such law to any class of
            persons or transactions to which it would not otherwise apply.
                (3) This section does not annul, alter, or affect the laws
            of any State relating to the licensing or registration,
            supervision or examination of remittance transfer providers.
                (4) Nothing in this section shall be construed as limiting
            the authority of a State attorney general or State regulator to
            bring an action or other regulatory proceeding arising solely
            under the law of that State.
        (j) Federal Credit Union Act Amendment.--Paragraph (12)(A) of
    section 107 of the Federal Credit Union Act (12 U.S.C. 1757(12)(A)) is
    amended by inserting ``and remittance transfers, as defined in section
    4309 of the Consumer Financial Protection Agency Act of 2009'' after
    ``and domestic electronic fund transfers''.
        (k) Automated Clearinghouse System.--
                (1) Expansion of system.--The Board of Governors of the
            Federal Reserve System shall work with the Federal reserve
            banks to expand the use of the automated clearinghouse system
            for remittance transfers to foreign countries, with a focus on
            countries that receive significant remittance transfers from
            the United States, based on--
                        (A) the volume and dollar amount of remittance
                    transfers to those countries;
                        (B) the significance of the volume of such
                    transfers, relative to the external financial flows of
                    the receiving country; and
                        (C) the feasibility of such an expansion.
                (2) Report to the congress.--Before the end of the 180-day
            period beginning on the date of the enactment of this title,
            and on April 30 biennially thereafter, the Board of Governors
            of the Federal Reserve System shall submit a report to the
            Director, the Committee on Banking, Housing, and Urban Affairs
            of the Senate, and the Committee on Financial Services of the
            House of Representatives on the status of the automated
            clearinghouse system and its progress in complying with the
            requirements of this section.
        (l) Regulatory Guidance on Remittance Transfers.--
                (1) Provision of guidelines to institutions.--The Director
            shall provide guidelines to all remittance transfer providers
            regarding--
                        (A) the offering of low-cost remittance transfers;
                        (B) the availability of agency services to
                    remittance transfer providers;
                        (C) compliance with the provisions of this title;
                    and
                        (D) specific options that allow remittance transfer
                    providers to take advantage of automated clearing
                    systems, including the FedACH International Services
                    offered by the Board of Governors of the Federal
                    Reserve System and the Federal reserve banks, to
                    transmit remittances at low cost.
                (2) Content of guidelines.--Guidelines provided to
            remittance transfer providers under this section shall
            include--
                        (A) information as to the methods of providing
                    remittance transfer services;
                        (B) the potential economic opportunities in
                    providing low-cost remittance transfers; and
                        (C) the potential value to depository institutions
                    of broadening their financial bases to include persons
                    that use remittance transfers.
                (3) Assistance to financial literacy commission.--The
            Secretary of the Treasury and each agency referred to in
            subsection (a) shall, as part of their duties as members of the
            Financial Literacy and Education Commission, assist that
            Commission in improving the financial literacy and education of
            consumers who send remittances.
        (m) Report on Feasibility of and Impediments to Use of Remittance
    History in Calculation of Credit Score.--Before the end of the 365-day
    period beginning on the date of the enactment of this title, the
    Director shall submit a report to the President, the Committee on
    Banking, Housing, and Urban Affairs of the Senate, and the Committee on
    Financial Services of the House of Representatives regarding--
                (1) the manner in which a consumer's remittance history
            could be used to enhance a consumer's credit score;
                (2) the current legal and business model barriers and
            impediments that impede the use of a consumer's remittance
            history to enhance the consumer's credit score; and
                (3) recommendations on the manner in which maximum
            transparency and disclosure to consumers of exchange rates for
            remittance transfers subject to this title may be accomplished,
            whether or not such exchange rates are known at the time of
            origination or payment by the consumer for the remittance
            transfer, including disclosure to the sender of the actual
            exchange rate used and the amount of currency that the
            recipient of the remittance transfer received, using the values
            of the currency into which the funds were exchanged, as
            contained in section s 919(a)(2)(D) and 919(a)(3) of the
            Electronic Fund Transfer Act (as amended by subsection (a)).
        (n) Effective Date.--This section shall apply with respect to
    remittance transfers made after the end of the 180-day period beginning
    on the date of the enactment of this title.

    SEC. 4310. EFFECTIVE DATE.

        This subtitle shall take effect on the designated transfer date.

    SEC. 4311. NO AUTHORITY TO REQUIRE THE OFFERING OF FINANCIAL PRODUCTS
                  OR SERVICES.

        The Director may not prescribe any regulation, issue any order or
    guidance, or take any other action, including any enforcement action,
    the effect of which would be to require a covered person to offer to
    any consumer a specific financial product or service.

    SEC. 4312. APPRAISAL INDEPENDENCE REQUIREMENTS.

        (a) Promulgation of New Requirements.--The Director shall lead a
    Negotiated Rulemaking Committee under the Federal Advisory Committee
    Act and the Negotiated Rulemaking Act to promulgate appraisal
    independence requirements for residential loan purposes, and such
    Committee shall promulgate such requirements not later than the end of
    the 60-day period beginning on the date of the enactment of this title.
        (b) Certain Regulation Requirements.--Regulations promulgated by
    the Negotiated Rulemaking Committee under this section--
                (1) shall not prohibit lenders, the Federal National
            Mortgage Association, or the Federal Home Loan Mortgage
            Corporation from accepting any appraisal report completed by an
            appraiser selected, retained, or compensated in any manner by a
            mortgage loan originator--
                        (A) licensed or registered in accordance with
                    section 1501 et seq. of the SAFE Mortgage Licensing Act
                    of 2008; and
                        (B) subject to State or Federal laws that make it
                    unlawful for a mortgage loan originator to make any
                    payment, threat, or promise, directly or indirectly, to
                    any appraiser of a property, for the purposes of
                    influencing the independent judgment of the appraiser
                    with respect to the value of the property, except that
                    nothing in this section shall prohibit a person with an
                    interest in a real estate transaction from asking an
                    appraiser to--
                                (i) consider additional, appropriate
                            property information;
                                (ii) provide further detail,
                            substantiation, or explanation for the
                            appraiser's value conclusion; or
                                (iii) correct errors in the appraisal
                            report; and
                (2) shall include a requirement that lenders and their
            agents compensate appraisers at a rate that is customary and
            reasonable for appraisal services performed in the market area
            of the property being appraised.
        (c) Sunset.--Effective on the date the appraisal independence
    requirements are promulgated pursuant to subsection (a), the Home
    Valuation Code of Conduct announced by the Federal Housing Finance
    Agency on December 23, 2008, shall have no force or effect.

    SEC. 4313. OVERDRAFT PROTECTION NOTICE REQUIREMENTS.

        Not later than 180 days after the date of the enactment of this
    Act, the Director shall promulgate a new rule that requires banks to
    prominently place in each consumer branch office information regarding
    the fees and charges associated with enrollment in the bank's overdraft
    protection program.

    SEC. 4314. REVIEW, REPORT, AND PROGRAM WITH RESPECT TO EXCHANGE
                  FACILITATORS.

        (a) Review.--The Director shall review all Federal laws and
    regulations relating to the protection of persons who utilize exchange
    facilitators.
        (b) Report.--Not later than 180 days after the effective date of
    this subtitle, the Director shall submit to Congress a report
    describing--
                (1) recommendations for legislation to ensure the
            appropriate protection of persons who utilize exchange
            facilitators;
                (2) recommendations for updating the regulations of Federal
            departments and agencies to ensure the appropriate protection
            of such persons; and
                (3) recommendations for Agency regulations to ensure the
            appropriate protection of such persons.
        (c) Program.--Not later than 180 days after the date of the
    submission of the report under subsection (b), the Director shall
    establish and carry out a program, utilizing the authorities of the
    Agency, to protect persons who utilize exchange facilitators.
        (d) Exchange Facilitator Defined.--In this section, the term
    ``exchange facilitator'' means a person that--
                (1) facilitates, for a fee, an exchange of like-kind
            property by entering into an agreement with a taxpayer by which
            the exchange facilitator acquires from the taxpayer the
            contractual rights to sell the taxpayer's relinquished property
            and transfers a replacement property to the taxpayer as a
            qualified intermediary (within the meaning of Treasury
            Regulations section 1.1031(k)-1(g)(4)) or enters into an
            agreement with the taxpayer to take title to a property as an
            exchange accommodation titleholder (within the meaning of
            Revenue Procedure 2000-37) or enters into an agreement with a
            taxpayer to act as a qualified trustee or qualified escrow
            holder (within the meaning of Treasury Regulations section
            1.1031(k)-1(g)(3));
                (2) maintains an office for the purpose of soliciting
            business as an exchange facilitator; or
                (3) purports to be an exchange facilitator by advertising
            any of the services listed in paragraph (1) or soliciting
            clients in printed publications, direct mail, television or
            radio advertisements, telephone calls, facsimile transmissions,
            or other electronic communications directed to the general
            public for purposes of providing any such services.

    SEC. 4315. REGULATION OF PERSON-TO-PERSON LENDING.

        (a) Scope of Exemption From Federal Securities Regulation.--Section
    3(a) of the Securities Act of 1933 (15 U.S.C. 77c(a)) is amended by
    adding at the end the following new paragraph:
                ``(15) Person-to-person lending.--
                        ``(A) In general.--Any consumer loan, and any note
                    representing a whole or fractional interest in any such
                    loan, funded or sold through a person-to-person lending
                    platform.
                        ``(B) Definitions.-- For purposes of this
                    paragraph:
                                ``(i) Consumer loan.--The term `consumer
                            loan' means a loan made to a natural person,
                            the proceeds of which are intended primarily
                            for personal, family, educational, household,
                            or business use.
                                ``(ii) Person-to-person lending platform.--
                                        ``(I) In general.--The term
                                    `person-to-person lending platform'
                                    means an Internet website, the primary
                                    purpose of which is to provide a
                                    transaction platform for the funding or
                                    sale of individual consumer loans, or
                                    the sale of notes representing whole or
                                    fractional interests in individual
                                    consumer loans, by matching natural
                                    persons who wish to obtain such loans
                                    with persons who wish to fund them, or
                                    by matching persons who wish to sell
                                    such loans or notes with persons who
                                    wish to purchase them.
                                        ``(II) Prohibition on multiple
                                    loans in a single transaction.--The
                                    term `person-to-person lending
                                    platform' does not include any platform
                                    on which multiple loans may be funded
                                    or sold in a single transaction, or on
                                    which a note representing an interest
                                    in multiple loans or other debt
                                    obligations may be sold.''.
        (b) Regulation by the Agency.--
                (1) In general.--Primary jurisdiction for the regulation of
            the lending activities of person-to-person lending and person-
            to-person lending platforms is hereby vested in the Agency.
                (2) Interim requirements.--Until the Director issues and
            adopts disclosure requirements with respect to the sale of
            consumer loans, or notes representing whole or fractional
            interests therein, on person-to-person lending platforms, a
            person-to-person lending platform that registers the offer and
            sale of any such notes under the Securities Act of 1933 shall,
            with respect to such registered offer and sale, provide the
            disclosure required under the Securities Act of 1933 to be
            contained in the registration statement and prospectus and
            provide such disclosure required in any periodic reports
            required to be filed by such person-to-person lender pursuant
            to section 13 or section 15(d) of the Securities Exchange Act
            of 1934.
                (3) Definitions.--For purposes of this subsection, the
            terms ``consumer loan'', ``person-to-person lending platform'',
            ``prospectus'', and ``registration statement'' shall have the
            meaning given such term under the Securities Act of 1933.
        (c) Rulemaking.--The Director may prescribe such regulations and
    issue such orders as the Director considers necessary or appropriate to
    implement the provisions of this section and to provide borrower
    protection, lender protection, consumer choice, and expanded consumer
    access to fair and reasonable credit choices.
        (d) Effective Date.--Notwithstanding section 4310, this section
    shall take effect on the date of the enactment of this title.

    SEC. 4316. TREATMENT OF REVERSE MORTGAGES.

        (a) In General.--The Director shall examine the practices of
    covered persons in connection with any reverse mortgage transaction (as
    defined in section 103(bb) of the Truth in Lending Act (15 U.S.C.
    1602)) and shall prescribe regulations identifying any acts or
    practices as unlawful, unfair, deceptive, or abusive in connection with
    a reverse mortgage transaction or the offering of a reverse mortgage.
        (b) Regulations.--In prescribing regulations under subsection (a),
    the Director shall ensure that such regulations shall--
                (1) include requirements for--
                        (A) the purpose of preventing unlawful, unfair,
                    deceptive or abusive acts and practices in connection
                    with a reverse mortgage transaction; and
                        (B) the purpose of providing timely, appropriate,
                    and effective disclosure to consumers in connection
                    with a reverse mortgage transaction that are consistent
                    with requirements prescribed by the Director in
                    connection with other consumer mortgage products or
                    services under this title;
                (2) with respect to the requirements under paragraph (1),
            be consistent with requirements prescribed by the Director in
            connection with other consumer mortgage products or services
            under this title; and
                (3) provide for an integrated disclosure standard and model
            disclosures for reverse mortgage transactions, consistent with
            section 4302(d), that combines the relevant disclosures
            required under the Truth in Lending Act (15 U.S.C. 1601 et
            seq.) and the Real Estate Settlement Procedures Act, with the
            disclosures required to be provided to consumers for Home
            Equity Conversion Mortgages under section 255 of the National
            Housing Act.
        (c) Consultation.--In connection with the issuance of any
    regulations under this section, the Director shall consult with the
    Federal banking agencies, State bank supervisors, the Federal Trade
    Commission, and the Department of Housing and Urban Development, as
    appropriate, to ensure that any proposed regulation--
                (1) imposes substantially similar requirements on all
            covered persons; and
                (2) is consistent with prudential, consumer protection,
            civil rights, market or systemic objectives administered by
            such agencies or supervisors.
        (d) Deadline for Rulemaking.--The Director shall commence the
    rulemaking required under subsection (a) not later than 12 months after
    the date of the enactment of this Act.

                     Subtitle D--Preservation of State Law

    SEC. 4401. RELATION TO STATE LAW.

        (a) In General.--
                (1) Rule of construction.--This title shall not be
            construed as annulling, altering, or affecting, or exempting
            any person subject to the provisions of this title from
            complying with, the laws, regulations, orders, or
            interpretations, in effect in any State, except to the extent
            that such statute, regulation, order, or interpretation is
            inconsistent with the provisions of this title and then only to
            the extent of the inconsistency.
                (2) Greater protection under state law.--For the purposes
            of this subsection, a statute, regulation, order, or
            interpretation in effect in any State is not inconsistent with
            the provisions of this title if the protection such statute,
            regulation, order, or interpretation affords consumers is
            greater than the protection provided under this title. A
            determination regarding whether a statute, regulation, order,
            or interpretation in effect in any State is inconsistent with
            the provisions of this title may be made by the Agency on its
            own motion or in response to a nonfrivolous petition initiated
            by any interested person.
        (b) Relation to Other Provisions of Enumerated Consumer Laws That
    Relate to State Law.--No provision of this title, except as provided in
    section 4803, shall be construed as modifying, limiting, or superseding
    the operation of any provision of an enumerated consumer law that
    relates to the application of a law in effect in any State with respect
    to such Federal law.
        (c) Additional Consumer Protection Regulations in Response to State
    Action.--
                (1) Notice of proposed rule required.--The Agency shall
            issue a notice of proposed rulemaking whenever a majority of
            the States has enacted a resolution in support of the
            establishment or modification of a consumer protection
            regulation by the Agency.
                (2) Agency considerations required for issuance of final
            regulation.--Before prescribing a final regulation based upon a
            notice issued pursuant to paragraph (1), the Agency shall take
            into account whether--
                        (A) the proposed regulation would afford greater
                    protection to consumers than any existing regulation;
                        (B) the intended benefits of the proposed
                    regulation for consumers would outweigh any increased
                    costs or inconveniences for consumers, and would not
                    discriminate unfairly against any category or class of
                    consumers; and
                        (C) a Federal banking agency has advised that the
                    proposed regulation is likely to present an
                    unacceptable safety and soundness risk to insured
                    depository institutions.
                (3) Explanation of considerations.--The Agency--
                        (A) shall include a discussion of the
                    considerations required in subsection (b) in the
                    Federal Register notice of a final regulation
                    prescribed pursuant to this section; and
                        (B) whenever the Agency determines not to prescribe
                    a final regulation, shall publish an explanation of
                    such determination in the Federal Register, and provide
                    a copy of such explanation to each State that enacted a
                    resolution in support of the proposed regulation, the
                    Committee on Financial Services of the House of
                    Representatives, and the Committee on Banking, Housing,
                    and Urban Affairs of the Senate.
                (4) Reservation of authority.--No provision of this section
            shall be construed as limiting or restricting the authority of
            the Agency to enhance consumer protection standards established
            pursuant to this title in response to its own motion or in
            response to a request by any other interested person.
                (5) Rule of construction.--No provision of this section
            shall be construed as exempt the Agency from complying with
            subchapter II of chapter 5 of title 5, United States Code.
                (6) Definition.--For purposes of this section, the term
            ``consumer protection regulation'' means a regulation that the
            Agency is authorized to prescribe under this title, the
            enumerated consumer laws, or any law or authority transferred
            under subtitle F or H.

    SEC. 4402. PRESERVATION OF ENFORCEMENT POWERS OF STATES.

        (a) In General.--
                (1) Action by state.--Any State attorney general may bring
            a civil action in the name of such State, as parens patriae on
            behalf of natural persons residing in such State, in any
            district court of the United States or State court having
            jurisdiction of the defendant, to enforce and secure remedies
            under provisions of this title or regulations issued
            thereunder, or otherwise provided under other law.
                (2) Rule of construction.--No provision of this title shall
            be construed as modifying, limiting, or superseding the
            operation of any provision of an enumerated consumer law that
            relates to the authority of a State attorney general or State
            regulator to enforce such Federal law.
        (b) Consultation Required.--
                (1) Notice.--
                        (A) In general.--Before initiating any action in a
                    court or other administrative or regulatory proceeding
                    against any covered person to enforce any provision of
                    this title, including any regulation prescribed by the
                    Director under this title, a State attorney general or
                    State regulator shall timely provide a copy of the
                    complete complaint to be filed and written notice
                    describing such action or proceeding to the Agency, or
                    the Agency's designee.
                        (B) Emergency action.--If prior notice is not
                    practicable, the State attorney general or State
                    regulator shall provide a copy of the complete
                    complaint and the notice to the Agency immediately upon
                    instituting the action or proceeding.
                        (C) Contents of notice.--The notification required
                    under this section shall, at a minimum, describe--
                                (i) the identity of the parties;
                                (ii) the alleged facts underlying the
                            proceeding; and
                                (iii) whether there may be a need to
                            coordinate the prosecution of the proceeding so
                            as not to interfere with any action, including
                            any rulemaking, undertaken by the Director or
                            Agency or another Federal agency.
                (2) Agency response.--In any action described in paragraph
            (1), the Agency may--
                        (A) intervene in the action as a party;
                        (B) upon intervening--
                                (i) remove the action to the appropriate
                            United States district court, if the action was
                            not originally brought there; and
                                (ii) be heard on all matters arising in the
                            action; and
                        (C) appeal any order or judgment to the same extent
                    as any other party in the proceeding may.
        (c) Regulations.--The Director shall prescribe regulations to
    implement the requirements of this section and, from time to time,
    provide guidance in order to further coordinate actions with the State
    attorneys general and other regulators.
        (d) Preservation of State Authority.--
                (1) State claims.--No provision of this section shall be
            construed as limiting the authority of a State attorney general
            or State regulator to bring an action or other regulatory
            proceeding arising solely under the law of that State.
                (2) State securities regulators.--No provision of this
            title shall be construed as altering, limiting, or affecting
            the authority of a State securities commission (or any agency
            or office performing like functions) under State law to adopt
            rules, initiate enforcement proceedings, or take any other
            action with respect to a person regulated by such commission or
            authority.
                (3) State insurance regulators.--No provision of this title
            shall be construed as altering, limiting, or affecting the
            authority of a State insurance commission or State insurance
            regulator under State law to adopt rules, initiate enforcement
            proceedings, or take any other action with respect to a person
            regulated by such commission or regulator.

    SEC. 4403. PRESERVATION OF EXISTING CONTRACTS.

        This title, and regulations, orders, guidance, and interpretations
    prescribed, issued, and established by the Agency, shall not be
    construed to alter or affect the applicability of any regulation,
    order, guidance, or interpretation prescribed, issued, and established
    by the Comptroller of the Currency or the Director of the Office of
    Thrift Supervision regarding the applicability of State law under
    Federal banking law to any contract entered into on or before the date
    of the enactment of this title, by national banks, Federal savings
    associations, or subsidiaries thereof that are regulated and supervised
    by the Comptroller of the Currency or the Director of the Office of
    Thrift Supervision, respectively.

    SEC. 4404. STATE LAW PREEMPTION STANDARDS FOR NATIONAL BANKS AND
                  SUBSIDIARIES CLARIFIED.

        (a) In General.--Chapter one of title LXII of the Revised Statutes
    of the United States (12 U.S.C. 21 et 1 seq.) is amended by inserting
    after section 5136B the following new section:

    ``SEC. 5136C. STATE LAW PREEMPTION STANDARDS FOR NATIONAL BANKS AND
                  SUBSIDIARIES CLARIFIED.

        ``(a) Definitions.--For purposes of this section, the following
    definitions shall apply:
                ``(1) National bank.--The term `national bank' includes--
                        ``(A) any bank organized under the laws of the
                    United States; and
                        ``(B) any Federal branch established in accordance
                    with the International Banking Act of 1978.
                ``(2) State consumer financial laws.--The term `State
            consumer financial law' means a State law that does not
            directly or indirectly discriminate against national banks and
            that directly and specifically regulates the manner, content,
            or terms and conditions of any financial transaction (as may be
            authorized for national banks to engage in), or any account
            related thereto, with respect to a consumer.
                ``(3) Other definitions.--The terms `affiliate',
            `subsidiary', `includes', and `including' have the same meaning
            as in section 3 of the Federal Deposit Insurance Act.
        ``(b) Preemption Standard.--
                ``(1) In general.--State consumer financial laws are
            preempted only if--
                        ``(A) application of a State consumer financial law
                    would have a discriminatory effect on national banks in
                    comparison with the effect of the law on a bank
                    chartered by that State;
                        ``(B) the State consumer financial law prevents,
                    significantly interferes with, or materially impairs
                    the ability of an institution chartered as a national
                    bank to engage in the business of banking. Any
                    preemption determination under this subparagraph may be
                    made by a court or by regulation or order of the
                    Comptroller of the Currency in accordance with
                    applicable law, on a case-by-case basis. Any such
                    determination by a court shall comply with the
                    standards set forth in subsection (d) of this section,
                    with the court making the subsection (d) finding de
                    novo; or
                        ``(C) the State consumer financial law is preempted
                    by Federal law other than this Act.
                ``(2) Savings clause.--This Act does not preempt or alter
            the applicability of any State law to any subsidiary or
            affiliate of a national bank (other than an institution
            chartered as a national bank) that is not a depository
            institution.
                ``(3) Case-by-case determination.--
                        ``(A) Definition.--The term `case-by-case
                    determination pursuant to this section' means a
                    determination made by the Comptroller concerning the
                    impact of a particular State consumer financial law on
                    any national bank that is subject to that law, or the
                    law of any other State with substantively equivalent
                    terms.
                        ``(B) Consultation.--When making case-by-case
                    determination pursuant to this section that a State
                    consumer financial law of another State has a
                    substantively equivalent terms as one that the
                    Comptroller is preempting, the Comptroller shall first
                    consult with the Consumer Financial Protection Agency
                    and shall take such Agency's views into account when
                    making the determination.
                ``(4) Rule of construction.--This Act does not occupy the
            field in any area of State law.
                ``(5) Standards of review.--
                        ``(A) Preemption.--A court reviewing any
                    determinations made by the Comptroller regarding
                    preemption of a State law by this Act shall assess the
                    validity of such determinations depending upon the
                    thoroughness evident in the agency's consideration, the
                    validity of the agency's reasoning, the consistency
                    with other valid determinations made by the agency, and
                    other factors which the court finds persuasive and
                    relevant to its decision.
                        ``(B) Savings clause.--Except as provided in
                    subparagraph (A), nothing in this section shall affect
                    the deference that a court may afford to the
                    Comptroller in making determinations regarding the
                    meaning or interpretation of title LXII of the Revised
                    Statutes of the United States or other Federal laws.
                ``(6) Comptroller determination not delegable.--Any
            regulation, order or determination made by the Comptroller of
            the Currency under subsection (b)(1)(B) shall be made by the
            Comptroller and shall not be delegable to another officer or
            employee of the Comptroller of the Currency.
        ``(c) Substantial Evidence.--No regulation or order of the
    Comptroller of the Currency prescribed under subsection (b)(1)(B),
    shall be interpreted or applied so as to invalidate, or otherwise
    declare inapplicable to a national bank, the provision of the State
    consumer financial law unless substantial evidence, made on the record
    of the proceeding, supports the specific finding that the provision
    prevents, significantly interferes with, or materially impairs the
    ability of a national bank to engage in the business of banking.
        ``(d) Other Federal Laws.--Notwithstanding any other provision of
    law, the Comptroller of the Currency may not prescribe a regulation or
    order pursuant to subsection (b)(1)(B) until the Comptroller of the
    Currency, after consultation with the Consumer Financial Protection
    Agency, makes a finding, in writing, that a Federal law provides a
    substantive standard, applicable to a national bank, which regulates
    the particular conduct, activity, or authority that is subject to such
    provision of the State consumer financial law.
        ``(e) Periodic Review of Preemption Determinations.--The
    Comptroller of the Currency shall periodically conduct a review,
    through notice and public comment, of each determination that a
    provision of Federal law preempts a State consumer financial law. The
    agency shall conduct such review within the 5-year period after
    prescribing or otherwise issuing such determination, and at least once
    during each 5-year period thereafter. After conducting the review of,
    and inspecting the comments made on, the determination, the agency
    shall timely propose to continue, amend or rescind it, as may be
    appropriate, in accordance with the procedures set forth in subsections
    (a) and (b) of section 5244 (12 U.S.C. 43(a) and (b)).
        ``(f) Application of State Consumer Financial Law to Subsidiaries
    and Affiliates.--Notwithstanding any provision of this title, a State
    consumer financial law shall apply to a subsidiary or affiliate of a
    national bank to the same extent that the State consumer financial law
    applies to any person, corporation, or other entity subject to such
    State law.
        ``(g) Preservation of Powers Related to Charging Interest.--No
    provision of this title shall be construed as altering or otherwise
    affecting the authority conferred by section 5197 of the Revised
    Statutes of the United States (12 U.S.C. 85) for the charging of
    interest by a national bank at the rate allowed by the laws of the
    State, territory or district where the bank is located, including with
    respect to the meaning of `interest' under such provision.
        ``(h) Transparency of Occ Preemption Determinations.--The
    Comptroller of the Currency shall publish and update no less frequently
    than quarterly, a list of preemption determinations by the Comptroller
    of the Currency then in effect that identifies the activities and
    practices covered by each determination and the requirements and
    constraints determined to be preempted.''.
        (b) Clerical Amendment.--The table of sections for chapter one of
    title LXII of the Revised Statutes of the United States is amended by
    inserting after the item relating to section 5136B the following new
    item:

    ``5136C. State law preemption standards for national banks and
                                subsidiaries clarified.''.

    SEC. 4405. VISITORIAL STANDARDS.

        Section 5136C of the Revised Statutes of the United States (as
    added by section 4404) is amended by adding at the end the following
    new subsections:
        ``(g) Visitorial Powers.--
                ``(1) Rule of construction.--No provision of this title
            which relates to visitorial powers or otherwise limits or
            restricts the visitorial authority to which any national bank
            is subject shall be construed as limiting or restricting the
            authority of any attorney general (or other chief law
            enforcement officer) of any State to bring any action in any
            court of appropriate jurisdiction--
                        ``(A) to enforce any applicable Federal or State
                    law, as authorized by such law; or
                        ``(B) on behalf of residents of such State, to
                    enforce any applicable provision of any Federal or
                    nonpreempted State law against a national bank, as
                    authorized by such law, or to seek relief as authorized
                    by such law.
                ``(2) Consultation.--The attorney general (or other chief
            law enforcement officer) of any State shall consult with the
            head of the agency responsible for chartering and regulating
            national banks before acting under paragraph (1).
        ``(h) Enforcement Actions.--The ability of the head of the agency
    responsible for chartering and regulating national banks to bring an
    enforcement action under this title or section 5 of the Federal Trade
    Commission Act shall not be construed as precluding private parties
    from enforcing rights granted under Federal or State law in the
    courts.''.

    SEC. 4406. CLARIFICATION OF LAW APPLICABLE TO NONDEPOSITORY INSTITUTION
                  SUBSIDIARIES.

        Section 5136C of the Revised Statutes of the United States is
    amended by inserting after subsection (h) (as added by section 4405)
    the following new subsection:
        ``(i) Clarification of Law Applicable to Nondepository Institution
    Subsidiaries and Affiliates of National Banks.--
                ``(1) Definitions.--For purposes of this section, the
            following definitions shall apply:
                        ``(A) Depository institution, subsidiary,
                    affiliate.--The terms `depository institution',
                    `subsidiary', and `affiliate' have the same meanings as
                    in section 3 of the Federal Deposit Insurance Act.
                        ``(B) Nondepository institution.--The term
                    `nondepository institution' means any entity that is
                    not a depository institution.
                ``(2) In general.--No provision of this title shall be
            construed as annulling, altering, or affecting the
            applicability of State law to any nondepository institution,
            subsidiary, other affiliate, or agent of a national bank.''.

    SEC. 4407. STATE LAW PREEMPTION STANDARDS FOR FEDERAL SAVINGS
                  ASSOCIATIONS AND SUBSIDIARIES CLARIFIED.

        (a) In General.--The Home Owners' Loan Act (12 U.S.C. 1461 et seq.)
    is amended by inserting after section 5 the following new section:

    ``SEC. 6. STATE LAW PREEMPTION STANDARDS FOR FEDERAL SAVINGS
                  ASSOCIATIONS CLARIFIED.

        ``(a) State Consumer Financial Law Defined.--For purposes of this
    section, the term `State consumer financial law' means a State law that
    does not directly or indirectly discriminate against Federal savings
    associations and that directly and specifically regulates the manner,
    content, or terms and conditions of any financial transaction (as may
    be authorized for Federal savings associations to engage in), or any
    account related thereto, with respect to a consumer.
        ``(b) Preemption Standard.--
                ``(1) In general.--State consumer financial laws are
            preempted only if--
                        ``(A) application of a State consumer financial law
                    would have a discriminatory effect on Federal savings
                    associations in comparison with the effect of the law
                    on a bank chartered by that State;
                        ``(B) the State consumer financial law prevents,
                    significantly interferes with, or materially impairs
                    the ability of an institution chartered as a Federal
                    savings association to engage in the business of
                    banking. Any preemption determination under this
                    subparagraph may be made by a court or by regulation or
                    order of the Director of the Office of Thrift
                    Supervision in accordance with applicable law, on a
                    case-by-case basis. Any such determination by a court
                    shall comply with the standards set forth in subsection
                    (d) of this section, with the court making the
                    subsection (d) finding de novo; or
                        ``(C) the State consumer financial law is preempted
                    by Federal law other than this Act.
                ``(2) Savings clause.--This Act does not preempt or alter
            the applicability of any State law to any subsidiary or
            affiliate of a Federal savings association (other than an
            institution chartered as a Federal savings association) that is
            not a depository institution.
                ``(3) Case-by-case determination.--
                        ``(A) Definition.--The term `case-by-case
                    determination pursuant to this section' means a
                    determination made by the Director concerning the
                    impact of a particular State consumer financial law on
                    any Federal savings association that is subject to that
                    law, or the law of any other State with substantively
                    equivalent terms.
                        ``(B) Consultation.--When making case-by-case
                    determination pursuant to this section that a State
                    consumer financial law of another State has a
                    substantively equivalent terms as one that the Director
                    of the Office of Thrift Supervision is preempting, the
                    Director shall first consult with the Consumer
                    Financial Protection Agency and shall take such
                    Agency's views into account when making the
                    determination.
                ``(4) Rule of construction.--This Act does not occupy the
            field in any area of State law.
                ``(5) Standards of review.--
                        ``(A) Preemption.--A court reviewing any
                    determinations made by the Director regarding
                    preemption of a State law by this Act shall assess the
                    validity of such determinations depending upon the
                    thoroughness evident in the agency's consideration, the
                    validity of the agency's reasoning, the consistency
                    with other valid determinations made by the agency, and
                    other factors which the court finds persuasive and
                    relevant to its decision.
                        ``(B) Savings clause.--Except as provided in
                    subparagraph (A), nothing in this section shall affect
                    the deference that a court may afford to the Director
                    in making determinations regarding the meaning or
                    interpretation of the Home Owners' Loan Act or other
                    Federal laws.
                ``(6) OTS determination not delegable.--Any regulation,
            order, or determination made by the Director of the Office of
            Thrift Supervision under subsection (b)(1)(B) shall be made by
            the Director and shall not be delegable to another officer or
            employee of the Director of the Office of Thrift Supervision.
        ``(c) Other Federal Law.--Notwithstanding any other provision of
    law, the Director of the Office of Thrift Supervision may not prescribe
    any regulation or order pursuant to subsection (b)(1)(B) until such
    Director, after consultation with the Consumer Financial Protection
    Agency, makes a finding, in writing, that a Federal law provides a
    substantive standard, applicable to a Federal savings association,
    which regulates the particular conduct, activity, or authority that is
    subject to such provision of the State consumer financial law.
        ``(d) Substantial Evidence.--No regulation or order prescribed by
    the Director of the Office of Thrift Supervision issued under
    subsection (b)(1)(B) shall be interpreted or applied so as to
    invalidate, or otherwise declare inapplicable to a Federal savings
    association, the provision of the State consumer financial law unless
    substantial evidence, made on the record of the proceeding, supports
    the specific finding that the provision prevents, significantly
    interferes with, or materially impairs the ability of a Federal savings
    association to engage in the business of banking.
        ``(e) Periodic Review of Preemption Determinations.--The Director
    of the Office of Thrift Supervision shall periodically conduct a
    review, through notice and public comment, of each determination that a
    provision of Federal law preempts a State consumer financial law. The
    agency shall conduct such review within the 5-year period after
    prescribing or otherwise issuing such determination, and at least once
    during each 5-year period thereafter. After conducting the review of,
    and inspecting the comments made on, the determination, the agency
    shall timely propose to continue, amend or rescind it, as may be
    appropriate, in accordance with the procedures set forth in subsections
    (a) and (b) of section 5244 of the Revised Statutes of the United
    States (12 U.S.C. 43(a) and (b)).
        ``(f) Application of State Consumer Financial Law to Subsidiaries
    and Affiliates.--Notwithstanding any provision of this Act, a State
    consumer financial law shall apply to a subsidiary or affiliate of a
    Federal savings association to the same extent that the State consumer
    financial law applies to any person, corporation, or other entity
    subject to such State law and consistent with Federal law.
        ``(g) Preservation of Powers Related to Charging of Interest.--No
    provision of this title shall be construed as altering or otherwise
    affecting the authority conferred by section 4(g) of the Home Owners'
    Loan Act (12 U.S.C. 1463(g)) for the charging of interest by a Federal
    savings association at the rate allowed by the laws of the State,
    territory, or district where the bank is located, including with
    respect to the meaning of `interest' under such provision.
        ``(h) Transparency of OTS Preemption Determinations.--The Director
    of the Office of Thrift Supervision shall publish and update no less
    frequently than quarterly, a list of preemption determinations by such
    Director then in effect that identifies the activities and practices
    covered by each determination and the requirements and constraints
    determined to be preempted.''.
        (b) Clerical Amendment.--The table of sections for the Home Owners'
    Loan Act (12 U.S.C. 1461 et seq.) is amended by striking the item
    relating to section 6 and inserting the following new item:

    ``Sec. 6. State law preemption standards for Federal savings
                                associations clarified.''.

    SEC. 4408. VISITORIAL STANDARDS.

        Section 6 of the Home Owners' Loan Act (as added by section 4407 of
    this title) is amended by adding at the end the following new
    subsections:
        ``(g) Visitorial Powers.--
                ``(1) In general.--No provision of this Act shall be
            construed as limiting or restricting the authority of any
            attorney general (or other chief law enforcement officer) of
            any State to bring any action in any court of appropriate
            jurisdiction--
                        ``(A) to enforce any applicable Federal or State
                    law, as authorized by such law; or
                        ``(B) on behalf of residents of such State, to
                    enforce any applicable provision of any Federal or
                    State law against a Federal savings association, as
                    authorized by such law, or to seek relief as authorized
                    by such law.
                ``(2) Consultation.--The attorney general (or other chief
            law enforcement officer) of any State shall consult with the
            Director or any successor agency before acting under paragraph
            (1).
        ``(h) Enforcement Actions.--The ability of the Director or any
    successor officer or agency to bring an enforcement action under this
    Act or section 5 of the Federal Trade Commission Act shall not be
    construed as precluding private parties from enforcing rights granted
    under Federal or State law in the courts.''.

    SEC. 4409. CLARIFICATION OF LAW APPLICABLE TO NONDEPOSITORY INSTITUTION
                  SUBSIDIARIES.

        Section 6 of the Home Owners' Loan Act is amended by adding after
    subsection (h) (as added by section 4408) the following new subsection:
        ``(i) Clarification of Law Applicable to Nondepository Institution
    Subsidiaries and Affiliates of Federal Savings Associations.--
                ``(1) Definitions.--For purposes of this section, the
            following definitions shall apply:
                        ``(A) Depository institution, subsidiary,
                    affiliate.--The terms `depository institution',
                    `subsidiary', and `affiliate' have the same meanings as
                    in section 3 of the Federal Deposit Insurance Act.
                        ``(B) Nondepository institution.--The term
                    `nondepository institution' means any entity that is
                    not a depository institution.
                ``(2) In general.--No provision of this title shall be
            construed as preempting the applicability of State law to any
            nondepository institution, subsidiary, other affiliate, or
            agent of a Federal savings association.''.

    SEC. 4410. EFFECTIVE DATE.

        This subtitle shall take effect on the designated transfer date.

                         Subtitle E--Enforcement Powers

    SEC. 4501. DEFINITIONS.

        For purposes of this subtitle, the following definitions shall
    apply:
                (1) Agency investigation.--The term ``Agency
            investigation'' means any inquiry conducted by an Agency
            investigator for the purpose of ascertaining whether any person
            is or has been engaged in any conduct that violates this title,
            any enumerated consumer law, or any regulation prescribed or
            order issued by the Director under this title or under the
            authorities transferred under subtitles F and H.
                (2) Agency investigator.--The term ``Agency investigator''
            means any attorney or investigator employed by the Agency who
            is charged with the duty of enforcing or carrying into effect
            any provisions of this title, any enumerated consumer law, the
            authorities transferred under subtitles F and H, or any
            regulation prescribed or order issued under this title or
            pursuant to any such authority by the Director.
                (3) Covered employee.--The term ``covered employee'' means
            any individual performing tasks related to the provision of a
            financial product or service to a consumer.
                (4) Custodian.--The term ``custodian'' means the custodian
            or any deputy custodian designated by the Agency.
                (5) Documentary material.--The term ``documentary
            material'' includes the original or any copy of any book,
            document, record, report, memorandum, paper, communication,
            tabulation, chart, log, electronic file, or other data or data
            compilations stored in any medium.
                (6) Violation.--The term ``violation'' means any act or
            omission that, if proved, would constitute a violation of any
            provision of this title, any enumerated consumer law, any law
            for which authorities were transferred under subtitles F and H,
            or of any regulation prescribed or order issued by the Director
            under this title or pursuant to any such authority.

    SEC. 4502. INVESTIGATIONS AND ADMINISTRATIVE DISCOVERY.

        (a) Joint Investigations.--
                (1) In general.--The Agency or, where appropriate, an
            Agency representative may engage in joint investigations and
            requests for information.
                (2) Fair lending.--The authority under paragraph (1)
            includes matters relating to fair lending, and where
            appropriate, joint investigations and requests for information
            with the Secretary of Housing and Urban Development, the
            Attorney General, or both.
        (b) Subpoenas.--
                (1) In general.--The Agency or an Agency investigator may
            issue subpoenas for the attendance and testimony of witnesses
            and the production of relevant papers, books, documents, or
            other material in connection with hearings under this title.
                (2) Failure to obey.--In case of contumacy or refusal to
            obey a subpoena issued pursuant to this paragraph and served
            upon any person, an appropriate United States district court
            may, upon application by the Agency or an Agency investigator
            and after notice to such person, issue an order requiring such
            person to appear and give testimony or to appear and produce
            documents or other material, or both.
        (c) Demands.--
                (1) In general.--Whenever the Agency has reason to believe
            that any person may be in possession, custody, or control of
            any documentary material or tangible things, or may have any
            information, relevant to a violation, the Agency may, before
            the institution of any proceedings under this title or under
            any enumerated consumer law or pursuant to the authorities
            transferred under subtitles F and H, issue in writing, and
            cause to be served upon such person, a civil investigative
            demand requiring such person to--
                        (A) produce such documentary material for
                    inspection and copying or reproduction in the form or
                    medium requested by the Agency;
                        (B) submit such tangible things;
                        (C) file written reports or answers to questions;
                        (D) give oral testimony concerning documentary
                    material or other information; or
                        (E) furnish any combination of such material,
                    answers, or testimony.
                (2) Requirements.--Each civil investigative demand shall
            state the nature of the conduct constituting the alleged
            violation which is under investigation and the provision of law
            applicable to such violation.
                (3) Production of documents.--Each civil investigative
            demand for the production of documentary material shall--
                        (A) describe each class of documentary material to
                    be produced under the demand with such definiteness and
                    certainty as to permit such material to be fairly
                    identified;
                        (B) prescribe a return date or dates which will
                    provide a reasonable period of time within which the
                    material so demanded may be assembled and made
                    available for inspection and copying or reproduction;
                    and
                        (C) identify the custodian to whom such material
                    shall be made available.
                (4) Production of things.--Each civil investigative demand
            for the submission of tangible things shall--
                        (A) describe each class of tangible things to be
                    submitted under the demand with such definiteness and
                    certainty as to permit such things to be fairly
                    identified;
                        (B) prescribe a return date or dates which will
                    provide a reasonable period of time within which the
                    things so demanded may be assembled and submitted; and
                        (C) identify the custodian to whom such things
                    shall be submitted.
                (5) Demand for written reports or answers.--Each civil
            investigative demand for written reports or answers to
            questions shall--
                        (A) propound with definiteness and certainty the
                    reports to be produced or the questions to be answered;
                        (B) prescribe a date or dates at which time written
                    reports or answers to questions shall be submitted; and
                        (C) identify the custodian to whom such reports or
                    answers shall be submitted.
                (6) Oral testimony.--Each civil investigative demand for
            the giving of oral testimony shall--
                        (A) prescribe a date, time, and place at which oral
                    testimony shall be commenced; and
                        (B) identify a Agency investigator who shall
                    conduct the investigation and the custodian to whom the
                    transcript of such investigation shall be submitted.
                (7) Service.--
                        (A) Any civil investigative demand may be served by
                    any Agency investigator at any place within the
                    territorial jurisdiction of any court of the United
                    States.
                        (B) Any such demand or any enforcement petition
                    filed under this section may be served upon any person
                    who is not found within the territorial jurisdiction of
                    any court of the United States, in such manner as the
                    Federal Rules of Civil Procedure prescribe for service
                    in a foreign nation.
                (8) Method of service.--Service of any civil investigative
            demand or any enforcement petition filed under this section may
            be made upon a person, including any legal entity, by--
                        (A) delivering a duly executed copy of such demand
                    or petition to the individual or to any partner,
                    executive officer, managing agent, or general agent of
                    such person, or to any agent of such person authorized
                    by appointment or by law to receive service of process
                    on behalf of such person;
                        (B) delivering a duly executed copy of such demand
                    or petition to the principal office or place of
                    business of the person to be served; or
                        (C) depositing a duly executed copy in the United
                    States mails, by registered or certified mail, return
                    receipt requested, duly addressed to such person at its
                    principal office or place of business.
                (9) Proof of service.--
                        (A) A verified return by the individual serving any
                    civil investigative demand or any enforcement petition
                    filed under this section setting forth the manner of
                    such service shall be proof of such service.
                        (B) In the case of service by registered or
                    certified mail, such return shall be accompanied by the
                    return post office receipt of delivery of such demand
                    or enforcement petition.
                (10) Production of documentary material.--The production of
            documentary material in response to a civil investigative
            demand shall be made under a sworn certificate, in such form as
            the demand designates, by the person, if a natural person, to
            whom the demand is directed or, if not a natural person, by any
            person having knowledge of the facts and circumstances relating
            to such production, to the effect that all of the documentary
            material required by the demand and in the possession, custody,
            or control of the person to whom the demand is directed has
            been produced and made available to the custodian.
                (11) Submission of tangible things.--The submission of
            tangible things in response to a civil investigative demand
            shall be made under a sworn certificate, in such form as the
            demand designates, by the person to whom the demand is directed
            or, if not a natural person, by any person having knowledge of
            the facts and circumstances relating to such production, to the
            effect that all of the tangible things required by the demand
            and in the possession, custody, or control of the person to
            whom the demand is directed have been submitted to the
            custodian.
                (12) Separate answers.--Each reporting requirement or
            question in a civil investigative demand shall be answered
            separately and fully in writing under oath, unless it is
            objected to, in which event the reasons for the objection shall
            be stated in lieu of an answer, and it shall be submitted under
            a sworn certificate, in such form as the demand designates, by
            the person, if a natural person, to whom the demand is directed
            or, if not a natural person, by any person responsible for
            answering each reporting requirement or question, to the effect
            that all information required by the demand and in the
            possession, custody, control, or knowledge of the person to
            whom the demand is directed has been submitted.
                (13) Testimony.--
                        (A) Procedure.--
                                (i) Oath and recordation.--The examination
                            of any person pursuant to a demand for oral
                            testimony served under this subsection shall be
                            taken before an officer authorized to
                            administer oaths and affirmations by the laws
                            of the United States or of the place where the
                            examination is held. The officer before whom
                            oral testimony is to be taken shall put the
                            witness on oath or affirmation and shall
                            personally, or by any individual acting under
                            the direction of and in the presence of the
                            officer, record the testimony of the witness.
                                (ii) Transcriptions.--The testimony shall
                            be taken stenographically and transcribed.
                                (iii) Copy to custodian.--After the
                            testimony is fully transcribed, the officer
                            before whom the testimony is taken shall
                            promptly transmit a copy of the transcript of
                            the testimony to the custodian.
                        (B) Parties present.--Any Agency investigator
                    before whom oral testimony is to be taken shall exclude
                    from the place where the testimony is to be taken all
                    other persons except the person giving the testimony,
                    the attorney for such person, the officer before whom
                    the testimony is to be taken, an investigator or
                    representative of an agency with which the Agency is
                    engaged in a joint investigation, and any stenographer
                    taking such testimony.
                        (C) Location.--The oral testimony of any person
                    taken pursuant to a civil investigative demand shall be
                    taken in the judicial district of the United States in
                    which such person resides, is found, or transacts
                    business, or in such other place as may be agreed upon
                    by the Agency investigator before whom the oral
                    testimony of such person is to be taken and such
                    person.
                        (D) Attorney representation.--
                                (i) In general.--Any person compelled to
                            appear under a civil investigative demand for
                            oral testimony pursuant to this section may be
                            accompanied, represented, and advised by an
                            attorney.
                                (ii) Confidential advice.--The attorney may
                            advise the person summoned, in confidence,
                            either upon the request of such person or upon
                            the initiative of the attorney, with respect to
                            any question asked of such person.
                                (iii) Objections.--The person summoned or
                            the attorney may object on the record to any
                            question, in whole or in part, and shall
                            briefly state for the record the reason for the
                            objection.
                                (iv) Refusal to answer.--An objection may
                            properly be made, received, and entered upon
                            the record when it is claimed that the person
                            summoned is entitled to refuse to answer the
                            question on grounds of any constitutional or
                            other legal right or privilege, including the
                            privilege against self-incrimination, but such
                            person shall not otherwise object to or refuse
                            to answer any question, and shall not otherwise
                            interrupt the oral examination, directly or
                            through such person's attorney.
                                (v) Petition for order.--If such person
                            refuses to answer any question, the Agency may
                            petition the district court of the United
                            States pursuant to this section for an order
                            compelling such person to answer such question.
                                (vi) Basis for compelling testimony.--If
                            such person refuses to answer any question on
                            grounds of the privilege against self-
                            incrimination, the testimony of such person may
                            be compelled in accordance with the provisions
                            of section 6004 of title 18, United States
                            Code.
                        (E) Transcripts.--
                                (i) Right to examine.--After the testimony
                            of any witness is fully transcribed, the Agency
                            investigator shall afford the witness (who may
                            be accompanied by an attorney) a reasonable
                            opportunity to examine the transcript.
                                (ii) Reading the transcript.--The
                            transcript shall be read to or by the witness,
                            unless such examination and reading are waived
                            by the witness.
                                (iii) Request for changes.--Any changes in
                            form or substance which the witness desires to
                            make shall be entered and identified upon the
                            transcript by the Agency investigator with a
                            statement of the reasons given by the witness
                            for making such changes.
                                (iv) Signature.--The transcript shall be
                            signed by the witness, unless the witness in
                            writing waives the signing, is ill, cannot be
                            found, or refuses to sign.
                                (v) Agency action in lieu of signature.--If
                            the transcript is not signed by the witness
                            during the 30-day period following the date
                            upon which the witness is first afforded a
                            reasonable opportunity to examine it, the
                            officer or the Agency investigator shall sign
                            the transcript and state on the record the fact
                            of the waiver, illness, absence of the witness,
                            or the refusal to sign, together with any
                            reasons given for the failure to sign.
                        (F) Certification by investigator.--The officer
                    shall certify on the transcript that the witness was
                    duly sworn by the investigator and that the transcript
                    is a true record of the testimony given by the witness,
                    and the officer or the Agency investigator shall
                    promptly deliver the transcript or send it by
                    registered or certified mail to the custodian.
                        (G) Copy of transcript.--The Agency investigator
                    shall furnish a copy of the transcript (upon payment of
                    reasonable charges for the transcript) to the witness
                    only, except that the Agency may for good cause limit
                    such witness to inspection of the official transcript
                    of the testimony of such witness.
                        (H) Witness fees.--Any witness appearing for the
                    taking of oral testimony pursuant to a civil
                    investigative demand shall be entitled to the same fees
                    and mileage which are paid to witnesses in the district
                    courts of the United States.
        (d) Confidential Treatment of Demand Material.--
                (1) In general.--Materials received as a result of a civil
            investigative demand shall be subject to requirements and
            procedures regarding confidentiality, in accordance with
            regulations established by the Director.
                (2) Disclosure to congress.--No regulation established by
            the Director regarding the confidentiality of materials
            submitted to, or otherwise obtained by, the Agency shall be
            intended to prevent disclosure to either House of the Congress
            or to an appropriate committee of the Congress, except that the
            Director may prescribe regulations allowing prior notice to any
            party that owns or otherwise provided the material to the
            Agency and has designated such material as confidential.
        (e) Petition for Enforcement.--
                (1) In general.--Whenever any person fails to comply with
            any civil investigative demand duly served upon such person
            under this section, or whenever satisfactory copying or
            reproduction of material requested pursuant to the demand
            cannot be accomplished and such person refuses to surrender
            such material, the Agency, through such officers or attorneys
            as the Director may designate, may file, in the district court
            of the United States for any judicial district in which such
            person resides, is found, or transacts business, and serve upon
            such person, a petition for an order of such court for the
            enforcement of this section.
                (2) Service of process.--All process of any court to which
            application may be made as provided in this subsection may be
            served in any judicial district.
        (f) Petition for Order Modifying or Setting Aside Demand.--
                (1) In general.--Not later than 20 days after the service
            of any civil investigative demand upon any person under
            subsection (b), or at any time before the return date specified
            in the demand, whichever period is shorter, or within such
            period exceeding 20 days after service or in excess of such
            return date as may be prescribed in writing, subsequent to
            service, by any Agency investigator named in the demand, such
            person may file with the Agency a petition for an order by the
            Agency modifying or setting aside the demand.
                (2) Compliance during pendency.--The time permitted for
            compliance with the demand in whole or in part, as deemed
            proper and ordered by the Agency, shall not run during the
            pendency of such petition at the Agency, except that such
            person shall comply with any portions of the demand not sought
            to be modified or set aside.
                (3) Specific grounds.--Such petition shall specify each
            ground upon which the petitioner relies in seeking such relief,
            and may be based upon any failure of the demand to comply with
            the provisions of this section, or upon any constitutional or
            other legal right or privilege of such person.
        (g) Custodial Control.--At any time during which any custodian is
    in custody or control of any documentary material, tangible things,
    reports, answers to questions, or transcripts of oral testimony given
    by any person in compliance with any civil investigative demand, such
    person may file, in the district court of the United States for the
    judicial district within which the office of such custodian is
    situated, and serve upon such custodian, a petition for an order of
    such court requiring the performance by such custodian of any duty
    imposed upon such custodian by this section or regulation prescribed by
    the Director.
        (h) Jurisdiction of Court.--
                (1) In general.--Whenever any petition is filed in any
            district court of the United States under this section, such
            court shall have jurisdiction to hear and determine the matter
            so presented, and to enter such order or orders as may be
            required to carry into effect the provisions of this section.
                (2) Appeal.--Any final order so entered shall be subject to
            appeal pursuant to section 1291 of title 28, United States
            Code.

    SEC. 4503. HEARINGS AND ADJUDICATION PROCEEDINGS.

        (a) In General.--The Agency may conduct hearings and adjudication
    proceedings with respect to any person in the manner prescribed by
    chapter 5 of title 5, United States Code in order to ensure or enforce
    compliance with--
                (1) the provisions of this title, including any regulations
            prescribed by the Director under this title; and
                (2) any other Federal law that the Agency is authorized to
            enforce, including an enumerated consumer law, and any
            regulations or order prescribed thereunder, unless such Federal
            law specifically limits the Agency from conducting a hearing or
            adjudication proceeding and only to the extent of such
            limitation.
        (b) Special Rules for Cease-and-desist Proceedings.--
                (1) Issuance.--
                        (A) Notice of charges.--If, in the opinion of the
                    Agency, any covered person or service provider is
                    engaging or has engaged in an activity that violates a
                    law, regulation, or any condition imposed in writing on
                    the person by the Agency, the Agency may issue and
                    serve upon the person a notice of charges with respect
                    to such violation.
                        (B) Contents of notice.--The notice shall contain a
                    statement of the facts constituting any alleged
                    violation and shall fix a time and place at which a
                    hearing will be held to determine whether an order to
                    cease-and-desist there from should issue against the
                    person.
                        (C) Time of hearing.--A hearing under this
                    subsection shall be fixed for a date not earlier than
                    30 days nor later than 60 days after service of such
                    notice unless an earlier or a later date is set by the
                    Agency at the request of any party so served.
                        (D) Nonappearance deemed to be consent to order.--
                    Unless the party or parties so served shall appear at
                    the hearing personally or by a duly authorized
                    representative, they shall be deemed to have consented
                    to the issuance of the cease-and-desist order.
                        (E) Issuance of order.--In the event of such
                    consent, or if upon the record made at any such
                    hearing, the Agency shall find that any violation
                    specified in the notice of charges has been
                    established, the Agency may issue and serve upon the
                    person an order to cease-and-desist from any such
                    violation or practice.
                        (F) Includes requirement for corrective action.--
                    Such order may, by provisions which may be mandatory or
                    otherwise, require the person to cease-and-desist from
                    the same, and, further, to take affirmative action to
                    correct the conditions resulting from any such
                    violation.
                (2) Effectiveness of order.--A cease-and-desist order shall
            take effect at the end of the 30-day period beginning on the
            date of the service of such order upon the covered person or
            service provider concerned (except in the case of a cease-and-
            desist order issued upon consent, which shall take effect at
            the time specified therein), and shall remain effective and
            enforceable as provided therein, except to such extent as it is
            stayed, modified, terminated, or set aside by action of the
            Agency or a reviewing court.
                (3) Decision and appeal.--
                        (A) Place of and procedures for hearing.--Any
                    hearing provided for in this subsection shall be held
                    in the Federal judicial district or in the territory in
                    which the residence or home office of the person is
                    located unless the person consents to another place,
                    and shall be conducted in accordance with the
                    provisions of chapter 5 of title 5 of the United States
                    Code.
                        (B) Time limit for decision.--After such hearing,
                    and within 90 days after the Agency has notified the
                    parties that the case has been submitted to it for
                    final decision, the Agency shall--
                                (i) render its decision (which shall
                            include findings of fact upon which its
                            decision is predicated) and shall issue; and
                                (ii) serve upon each party to the
                            proceeding an order or orders consistent with
                            the provisions of this section. Judicial review
                            of any such order shall be exclusively as
                            provided in this subsection.
                        (C) Modification of order generally.--Unless a
                    petition for review is timely filed in a court of
                    appeals of the United States, as hereinafter provided
                    in paragraph (4), and thereafter until the record in
                    the proceeding has been filed as so provided, the
                    Agency may at any time, upon such notice and in such
                    manner as it shall deem proper, modify, terminate, or
                    set aside any such order.
                        (D) Modification of order after filing record on
                    appeal.--Upon such filing of the record, the Agency may
                    modify, terminate, or set aside any such order with
                    permission of the court.
                (4) Appeal to court of appeals.--
                        (A) In general.--Any party to any proceeding under
                    this subsection may obtain a review of any order served
                    pursuant to this subsection (other than an order issued
                    with the consent of the person concerned) by the filing
                    in the court of appeals of the United States for the
                    circuit in which the principal office of the covered
                    person is located, or in the United States Court of
                    Appeals for the District of Columbia Circuit, within 30
                    days after the date of service of such order, a written
                    petition praying that the order of the Agency be
                    modified, terminated, or set aside.
                        (B) Transmittal of copy to the agency.--A copy of
                    such petition shall be forthwith transmitted by the
                    clerk of the court to the Agency, and thereupon the
                    Agency shall file in the court the record in the
                    proceeding, as provided in section 2112 of title 28 of
                    the United States Code.
                        (C) Jurisdiction of court.--Upon the filing of a
                    petition under subparagraph (A), such court shall have
                    jurisdiction, which upon the filing of the record shall
                    except as provided in the last sentence of paragraph
                    (3) be exclusive, to affirm, modify, terminate, or set
                    aside, in whole or in part, the order of the Agency.
                        (D) Scope of review.--Review of such proceedings
                    shall be had as provided in chapter 7 of title 5 of the
                    United States Code.
                        (E) Finality.--The judgment and decree of the court
                    shall be final, except that the same shall be subject
                    to review by the Supreme Court upon certiorari, as
                    provided in section 1254 of title 28 of the United
                    States Code.
                (5) No stay.--The commencement of proceedings for judicial
            review under paragraph (4) shall not, unless specifically
            ordered by the court, operate as a stay of any order issued by
            the Agency.
        (c) Special Rules for Temporary Cease-and-desist Proceedings.--
                (1) Issuance.--
                        (A) In general.--Whenever the Agency determines
                    that the violation specified in the notice of charges
                    served upon a person, including a service provider,
                    pursuant to subsection (b), or the continuation of such
                    violation, is likely to cause the person to be
                    insolvent or otherwise prejudice the interests of
                    consumers before the completion of the proceedings
                    conducted pursuant to subsection (b), the Agency may
                    issue a temporary order requiring the person to cease-
                    and-desist from any such violation or practice and to
                    take affirmative action to prevent or remedy such
                    insolvency or other condition pending completion of
                    such proceedings.
                        (B) Other requirements.--Any temporary order issued
                    under this paragraph may include any requirement
                    authorized under this subtitle.
                        (C) Effect date of order.--Any temporary order
                    issued under this paragraph shall take effect upon
                    service upon the person and, unless set aside, limited,
                    or suspended by a court in proceedings authorized by
                    paragraph (2) of this subsection, shall remain
                    effective and enforceable pending the completion of the
                    administrative proceedings pursuant to such notice and
                    until such time as the Agency shall dismiss the charges
                    specified in such notice, or if a cease-and-desist
                    order is issued against the person, until the effective
                    date of such order.
                (2) Appeal.--Within 10 days after the person concerned has
            been served with a temporary cease-and-desist order, the person
            may apply to the United States district court for the judicial
            district in which the home office of the person is located, or
            the United States District Court for the District of Columbia,
            for an injunction setting aside, limiting, or suspending the
            enforcement, operation, or effectiveness of such order pending
            the completion of the administrative proceedings pursuant to
            the notice of charges served upon the person under subsection
            (b), and such court shall have jurisdiction to issue such
            injunction.
                (3) Incomplete or inaccurate records.--
                        (A) Temporary order.--If a notice of charges served
                    under subsection (b) specifies, on the basis of
                    particular facts and circumstances, that a person's
                    books and records are so incomplete or inaccurate that
                    the Agency is unable to determine the financial
                    condition of that person or the details or purpose of
                    any transaction or transactions that may have a
                    material effect on the financial condition of that
                    person, the Agency may issue a temporary order
                    requiring--
                                (i) the cessation of any activity or
                            practice which gave rise, whether in whole or
                            in part, to the incomplete or inaccurate state
                            of the books or records; or
                                (ii) affirmative action to restore such
                            books or records to a complete and accurate
                            state, until the completion of the proceedings
                            under subsection (b)(1).
                        (B) Effective period.--Any temporary order issued
                    under subparagraph (A)--
                                (i) shall take effect upon service; and
                                (ii) unless set aside, limited, or
                            suspended by a court in proceedings under
                            paragraph (2), shall remain in effect and
                            enforceable until the earlier of--
                                        (I) the completion of the
                                    proceeding initiated under subsection
                                    (b) in connection with the notice of
                                    charges; or
                                        (II) the date the Agency
                                    determines, by examination or
                                    otherwise, that the person's books and
                                    records are accurate and reflect the
                                    financial condition of the person.
        (d) Special Rules for Enforcement of Orders.--
                (1) In general.--The Agency may in its discretion apply to
            the United States district court within the jurisdiction of
            which the principal office of the person is located, for the
            enforcement of any effective and outstanding notice or order
            issued under this section, and such court shall have
            jurisdiction and power to order and require compliance
            herewith.
                (2) Exception.--Except as otherwise provided in this
            subsection, no court shall have jurisdiction to affect by
            injunction or otherwise the issuance or enforcement of any
            notice or order or to review, modify, suspend, terminate, or
            set aside any such notice or order.
        (e) Regulations.--The Director shall prescribe regulations
    establishing such procedures as may be necessary to carry out this
    section.

    SEC. 4504. LITIGATION AUTHORITY.

        (a) In General.--If any person violates a provision of this title,
    any enumerated consumer law, any law for which authorities were
    transferred under subtitles F and H, or any regulation prescribed or
    order issued by the Director under this title or pursuant to any such
    authority, the Agency may commence a civil action against such person
    to impose a civil penalty and to seek all appropriate legal and
    equitable relief including a permanent or temporary injunction as
    permitted by law.
        (b) Representation.--The Agency may act in its own name and through
    its own attorneys in enforcing any provision of this title, regulations
    under this title, or any other law or regulation, or in any action,
    suit, or proceeding to which the Agency is a party.
        (c) Compromise of Actions.--The Agency may compromise or settle any
    action if such compromise is approved by the court.
        (d) Notice to the Attorney General.--When commencing a civil action
    under this title, any enumerated consumer law, any law for which
    authorities were transferred under subtitles F and H, or any regulation
    thereunder, the Agency shall notify the Attorney General.
        (e) Appearance Before the Supreme Court.--The Agency may represent
    itself in its own name before the Supreme Court of the United States,
    if--
                (1) the Agency makes a written request to the Attorney
            General within the 10-day period which begins on the date of
            entry of the judgment which would permit any party to file a
            petition for writ of certiorari; and
                (2) the Attorney General concurs with such request or fails
            to take action within 60 days of the Agency's request.
        (f) Forum.--Any civil action brought under this title may be
    brought in a United States district court or in any court of competent
    jurisdiction of a state in a district in which the defendant is located
    or resides or is doing business, and such court shall have jurisdiction
    to enjoin such person and to require compliance with this title, any
    enumerated consumer law, any law for which authorities were transferred
    under subtitles F and H, or any regulation prescribed or order issued
    by the Director under this title or pursuant to any such authority.
        (g) Time for Bringing Action.--
                (1) In general.--Except as otherwise permitted by law or
            equity, no action may be brought under this title more than 3
            years after the date of the discovery of the violation to which
            an action relates.
                (2) Limitations under other federal laws.--
                        (A) For purposes of this section, an action arising
                    under this title shall not include claims arising
                    solely under enumerated consumer laws.
                        (B) In any action arising solely under an
                    enumerated consumer law, the Agency may commence,
                    defend, or intervene in the action in accordance with
                    the requirements of that law, as applicable.
                        (C) In any action arising solely under the laws for
                    which authorities were transferred by subtitles F and
                    H, the Agency may commence, defend, or intervene in the
                    action in accordance with the requirements of that law,
                    as applicable.

    SEC. 4505. RELIEF AVAILABLE.

        (a) Administrative Proceedings or Court Actions.--
                (1) Jurisdiction.--The court (or Agency, as the case may
            be) in an action or adjudication proceeding brought under this
            title, any enumerated consumer law, or any law for which
            authorities were transferred by subtitles F and H, shall have
            jurisdiction to grant any appropriate legal or equitable relief
            with respect to a violation of this title, any enumerated
            consumer law, and any law for which authorities were
            transferred by subtitles F and H, including a violation of a
            regulation prescribed or order issued under this title, any
            enumerated consumer law and any law for which authorities were
            transferred by subtitles F and H.
                (2) Relief.--Such relief may include--
                        (A) rescission or reformation of contracts;
                        (B) refund of moneys or return of real property;
                        (C) restitution;
                        (D) disgorgement or compensation for unjust
                    enrichment;
                        (E) payment of damages;
                        (F) public notification regarding the violation,
                    including the costs of notification;
                        (G) limits on the activities or functions of the
                    person; and
                        (H) civil money penalties under subsection (c).
                (3) No exemplary or punitive damages.--Nothing in this
            subsection shall be construed as authorizing the imposition of
            exemplary or punitive damages.
        (b) Recovery of Costs.--In any action brought by the Agency, a
    State attorney general, or a State bank supervisor to enforce any
    provision of this title, any enumerated consumer law, any law for which
    authorities were transferred by subtitles F and H, or any regulation
    prescribed or order issued by the Director under this title or pursuant
    to any such authority, the Agency, State attorney general, or State
    bank supervisor may recover the costs incurred by such Agency, attorney
    general, or supervisor in connection with prosecuting such action if
    the Agency, State attorney general, or State bank supervisors (as the
    case may be) is the prevailing party in the action.
        (c) Civil Money Penalty in Court and Administrative Actions.--
                (1) Any person that violates, through any act or omission,
            any provision of this title, any enumerated consumer law, or
            any regulation prescribed or order issued by the Director under
            this title shall forfeit and pay a civil penalty pursuant to
            this subsection determined as follows:
                        (A) First tier.--For any violation of any law,
                    regulation, final order or condition imposed in writing
                    by the Agency, or for any failure to pay any fee or
                    assessment imposed by the Agency (including any fee or
                    assessment for which a related person may be liable), a
                    civil penalty shall not exceed $5,000 for each day
                    during which such violation continues.
                        (B) Second tier.--Notwithstanding paragraph (A),
                    for any person that recklessly engages in a violation
                    of this title, any enumerated consumer law, or any
                    regulation prescribed or order issued by the Director
                    under this title, relating to the provision of an
                    alternative consumer financial product or service, a
                    civil penalty shall not exceed $25,000 for each day
                    during which such violation continues.
                        (C) Third tier.--Notwithstanding subparagraphs (A)
                    and (B), for any person that knowingly violates this
                    title, any enumerated consumer law, or any regulation
                    prescribed or order issued by the Director under this
                    title, a civil penalty shall not exceed $1,000,000 for
                    each day during which such violation continues.
                (2) Mitigating factors.--In determining the amount of any
            penalty assessed under paragraph (1), the Agency or the court
            shall take into account the appropriateness of the penalty with
            respect to--
                        (A) the size of financial resources and good faith
                    of the person charged;
                        (B) the gravity of the violation or failure to pay;
                        (C) the severity of the risks to or losses of the
                    consumer, which may take into account the number of
                    products or services sold or provided;
                        (D) the history of previous violations; and
                        (E) such other matters as justice may require.
                (3) Authority to modify or remit penalty.--The Agency may
            compromise, modify, or remit any penalty which may be assessed
            or had already been assessed under paragraph (1). The amount of
            such penalty, when finally determined, shall be exclusive of
            any sums owed by the person to the United States in connection
            with the costs of the proceeding, and may be deducted from any
            sums owing by the United States to the person charged.
                (4) Notice and hearing.--No civil penalty may be assessed
            with respect to a violation of this title, any enumerated
            consumer law, or any regulation prescribed or order issued by
            the Director, unless--
                        (A) the Agency gives notice and an opportunity for
                    a hearing to the person accused of the violation; or
                        (B) the appropriate court has ordered such
                    assessment and entered judgment in favor of the Agency.

    SEC. 4506. REFERRALS FOR CRIMINAL PROCEEDINGS.

        Whenever the Agency obtains evidence that any person, either
    domestic or foreign, has engaged in conduct that may constitute a
    violation of Federal criminal law, the Agency shall transmit such
    evidence to the Attorney General, who may institute criminal
    proceedings under appropriate law. No provision of this section shall
    be construed as affecting any other authority of the Agency to disclose
    information.

    SEC. 4507. EMPLOYEE PROTECTION.

        (a) No covered person shall terminate or in any other way
    discriminate against, or cause to be terminated or discriminated
    against, any covered employee or any authorized representative of
    covered employees by reason of the fact that such employee or
    representative whether at the employee's initiative or in the ordinary
    course of the employee's duties (or any person acting pursuant to a
    request of the employee) has--
                (1) provided information to the Agency or to any other
            state, local, Federal, or tribal government entity, filed,
            instituted or caused to be filed or instituted any proceeding
            under this title, any enumerated consumer law, any law for
            which authorities were transferred by subtitles F and H, or has
            testified or is about to testify in any proceeding resulting
            from the administration or enforcement of the provisions of
            this title; or
                (2) objected to, or refused to participate in, any
            activity, policy, practice, or assigned task that the employee
            (or other such person) reasonably believed to be in violation
            of any law, rule, or regulation, or to be unfair, deceptive, or
            abusive and likely to cause specific and substantial injury to
            one or more consumers.
        (b)(1) A person who believes that he or she has been discharged or
    otherwise discriminated against by any person in violation of
    subsection (a) may, not later than 180 days after the date on which
    such violation occurs, file (or have any person file on his or her
    behalf) a complaint with the Secretary of Labor alleging such discharge
    or discrimination and identifying the person responsible for such act.
    Upon receipt of such a complaint, the Secretary shall notify, in
    writing, the person named in the complaint of the filing of the
    complaint, of the allegations contained in the complaint, of the
    substance of evidence supporting the complaint, and of the
    opportunities that will be afforded to such person under paragraph (2).
        (2)(A) Not later than 60 days after the date of receipt of a
    complaint filed under paragraph (1) and after affording the complainant
    and the person named in the complaint an opportunity to submit to the
    Secretary a written response to the complaint and an opportunity to
    meet with a representative of the Secretary to present statements from
    witnesses, the Secretary shall initiate an investigation and determine
    whether there is reasonable cause to believe that the complaint has
    merit and notify, in writing, the complainant and the person alleged to
    have committed a violation of subsection (a) of the Secretary's
    findings. If the Secretary concludes that there is reasonable cause to
    believe that a violation of subsection (a) has occurred, the Secretary
    shall accompany the Secretary's findings with a preliminary order
    providing the relief prescribed by paragraph (3)(B). Not later than 30
    days after the date of notification of findings under this paragraph,
    either the person alleged to have committed the violation or the
    complainant may file objections to the findings or preliminary order,
    or both, and request a hearing on the record. The filing of such
    objections shall not operate to stay any reinstatement remedy contained
    in the preliminary order. Any such hearing shall be conducted
    expeditiously. If a hearing is not requested in such 30-day period, the
    preliminary order shall be deemed a final order that is not subject to
    judicial review.
        (B)(i) The Secretary shall dismiss a complaint filed under this
    subsection and shall not conduct an investigation otherwise required
    under subparagraph (A) unless the complainant makes a prima facie
    showing that any behavior described in paragraphs (1) through (4) of
    subsection (a) was a contributing factor in the unfavorable personnel
    action alleged in the complaint.
        (ii) Notwithstanding a finding by the Secretary that the
    complainant has made the showing required under clause (i), no
    investigation otherwise required under subparagraph (A) shall be
    conducted if the employer demonstrates, by clear and convincing
    evidence, that the employer would have taken the same unfavorable
    personnel action in the absence of that behavior.
        (iii) The Secretary may determine that a violation of subsection
    (a) has occurred only if the complainant demonstrates that any behavior
    described in paragraphs (1) through (4) of subsection (a) was a
    contributing factor in the unfavorable personnel action alleged in the
    complaint.
        (iv) Relief may not be ordered under subparagraph (A) if the
    employer demonstrates by clear and convincing evidence that the
    employer would have taken the same unfavorable personnel action in the
    absence of that behavior.
        (3)(A) Not later than 120 days after the date of conclusion of any
    hearing under paragraph (2), the Secretary shall issue a final order
    providing the relief prescribed by this paragraph or denying the
    complaint. At any time before issuance of a final order, a proceeding
    under this subsection may be terminated on the basis of a settlement
    agreement entered into by the Secretary, the complainant, and the
    person alleged to have committed the violation.
        (B) If, in response to a complaint filed under paragraph (1), the
    Secretary determines that a violation of subsection (a) has occurred,
    the Secretary shall order the person who committed such violation--
                (i) to take affirmative action to abate the violation;
                (ii) to reinstate the complainant to his or her former
            position together with compensation (including back pay) and
            restore the terms, conditions, and privileges associated with
            his or her employment; and
                (iii) to provide compensatory damages to the complainant.
            If such an order is issued under this paragraph, the Secretary,
            at the request of the complainant, shall assess against the
            person against whom the order is issued a sum equal to the
            aggregate amount of all costs and expenses (including
            attorneys' and expert witness fees) reasonably incurred, as
            determined by the Secretary, by the complainant for, or in
            connection with, the bringing of the complaint upon which the
            order was issued.
        (C) If the Secretary finds that a complaint under paragraph (1) is
    frivolous or has been brought in bad faith, the Secretary may award to
    the prevailing employer a reasonable attorneys' fee, not exceeding $
    1,000, to be paid by the complainant.
        (4) If the Secretary has not issued a final decision within 210
    days after the filing of the complaint, or within 90 days after
    receiving a written determination, the complainant may bring an action
    at law or equity for de novo review in the appropriate district court
    of the United States with jurisdiction, which shall have jurisdiction
    over such an action without regard to the amount in controversy, and
    which action shall, at the request of either party to such action, be
    tried by the court with a jury. The proceedings shall be governed by
    the same legal burdens of proof specified in paragraph (2)(B). The
    court shall have jurisdiction to grant all relief necessary to make the
    employee whole, including injunctive relief and compensatory damages,
    including--
                (A) reinstatement with the same seniority status that the
            employee would have had, but for the discharge or
            discrimination;
                (B) the amount of back pay, with interest; and
                (C) compensation for any special damages sustained as a
            result of the discharge or discrimination, including litigation
            costs, expert witness fees, and reasonable attorney's fees.
        (5)(A) Unless the complainant brings an action under paragraph (4),
    any person adversely affected or aggrieved by a final order issued
    under paragraph (3) may obtain review of the order in the United States
    Court of Appeals for the circuit in which the violation, with respect
    to which the order was issued, allegedly occurred or the circuit in
    which the complainant resided on the date of such violation. The
    petition for review must be filed not later than 60 days after the date
    of the issuance of the final order of the Secretary. Review shall
    conform to chapter 7 of title 5, United States Code. The commencement
    of proceedings under this subparagraph shall not, unless ordered by the
    court, operate as a stay of the order.
        (B) An order of the Secretary with respect to which review could
    have been obtained under subparagraph (A) shall not be subject to
    judicial review in any criminal or other civil proceeding.
        (6) Whenever any person has failed to comply with an order issued
    under paragraph (3), the Secretary may file a civil action in the
    United States district court for the district in which the violation
    was found to occur, or in the United States district court for the
    District of Columbia, to enforce such order. In actions brought under
    this paragraph, the district courts shall have jurisdiction to grant
    all appropriate relief including, but not limited to, injunctive relief
    and compensatory damages.
        (7)(A) A person on whose behalf an order was issued under paragraph
    (3) may commence a civil action against the person to whom such order
    was issued to require compliance with such order. The appropriate
    United States district court shall have jurisdiction, without regard to
    the amount in controversy or the citizenship of the parties, to enforce
    such order.
        (B) The court, in issuing any final order under this paragraph, may
    award costs of litigation (including reasonable attorneys' and expert
    witness fees) to any party whenever the court determines such award is
    appropriate.
        (c) Any nondiscretionary duty imposed by this section shall be
    enforceable in a mandamus proceeding brought under section 1361 of
    title 28, United States Code.
        (d)(1) Except as provided under paragraph (3), the rights and
    remedies provided for in this section may not be waived by any
    agreement, policy, form, or condition of employment, including by any
    predispute arbitration agreement.
        (2) Except as provided under paragraph (3), no predispute
    arbitration agreement shall be valid or enforceable if it requires
    arbitration of a dispute arising under this section.
        (e) Notwithstanding paragraphs (1) and (2), an arbitration
    provision in a collective bargaining agreement shall be enforceable as
    to disputes arising under paragraph (a)(2) of this section unless the
    Agency determines by rule that such provision is inconsistent with the
    purposes of this Act.
        (f) Any employer receiving covered funds shall post notice of the
    rights and remedies provided under this section.

    SEC. 4508. NO PRIVATE RIGHT OF ACTION.

        Nothing in this title shall be construed to create a private right
    of action, but this section shall not be construed or interpreted to
    deny any private right of action arising under the enumerated consumer
    laws or the authorities transferred under subtitle F or H.

    SEC. 4509. EFFECTIVE DATE.

        This subtitle shall take effect on the designated transfer date.

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

    SEC. 4601. TRANSFER OF CERTAIN FUNCTIONS.

        (a) In General.--Except as provided in subsection (b), consumer
    financial protection functions are transferred as follows:
                (1) Board of governors.--
                        (A) Transfer of functions.--All consumer financial
                    protection functions of the Board of Governors are
                    transferred to the Director.
                        (B) Board of governors' authority.--The Director
                    shall have all powers and duties that were vested in
                    the Board of Governors, relating to consumer financial
                    protection functions, on the day before the designated
                    transfer date.
                        (C) Retention of consumer advisory council.--
                                (i) Retention and continuation.--
                            Notwithstanding the transfer of functions under
                            subparagraph (A), the Consumer Advisory Council
                            established by the Board of Governors pursuant
                            to section 703(b) of Public Law 90-321 (15
                            U.S.C. 1691b(b)) shall continue as an entity
                            within the Federal Reserve System.
                                (ii) Additional functions.--In addition to
                            the functions performed by the Consumer
                            Advisory Council as of the designated transfer
                            date, the Consumer Advisory Council shall--
                                        (I) submit to the Director (and
                                    make available to the public) an annual
                                    set of recommendations for consumer
                                    protection regulations and meet with
                                    the Director to discuss the annual
                                    recommendations;
                                        (II) meet with the Board of
                                    Governors of the Federal Reserve System
                                    at least once a year and provide oral
                                    or written representations concerning
                                    matters within the jurisdiction of the
                                    Board; and
                                        (III) call for information and make
                                    recommendations in regard to consumer
                                    protection regulations.
                                (iii) Response to recommendations.--When
                            the Chair of the Federal Reserve testifies
                            before Congress, the Chair shall also testify
                            about the recommendations of the Consumer
                            Advisory Council under clause (ii)(II) and its
                            recommendations for consumer protection
                            regulations.
                (2) Comptroller of the currency.--
                        (A) Transfer of functions.--All consumer financial
                    protection functions of the Comptroller of the Currency
                    are transferred to the Director.
                        (B) Comptroller's authority.--The Director shall
                    have all powers and duties that were vested in the
                    Comptroller of the Currency, relating to consumer
                    financial protection functions, on the day before the
                    designated transfer date.
                (3) Director of the office of thrift supervision.--
                        (A) Transfer of functions.--All consumer financial
                    protection functions of the Director of the Office of
                    Thrift Supervision are transferred to the Director.
                        (B) Director's authority.--The Director shall have
                    all powers and duties that were vested in the Director
                    of the Office of Thrift Supervision, relating to
                    consumer financial protection functions, on the day
                    before the designated transfer date.
                (4) Federal deposit insurance corporation.--
                        (A) Transfer of functions.--All consumer financial
                    protection functions of the Federal Deposit Insurance
                    Corporation are transferred to the Director.
                        (B) Corporation's authority.--The Director shall
                    have all powers and duties that were vested in the
                    Federal Deposit Insurance Corporation, relating to
                    consumer financial protection functions, on the day
                    before the designated transfer date.
                (5) Federal trade commission.--
                        (A) Transfer of functions.--Except as provided in
                    subparagraph (C), the consumer financial protection
                    functions of the Federal Trade Commission that are
                    contained within the enumerated consumer laws are
                    transferred to the Agency, except as provided in
                    section 4202(e). This transfer shall not be subject to
                    the provisions of section 3503 of title 5, United
                    States Code.
                        (B) Federal trade commission authority.--The Agency
                    shall have all powers and duties that were vested in
                    the Federal Trade Commission that were contained within
                    the enumerated statutes, except as provided in section
                    4202(e), on the day before the designated transfer
                    date.
                (6) National credit union administration.--
                        (A) Transfer of functions.--All consumer financial
                    protection functions of the National Credit Union
                    Administration are transferred to the Director.
                        (B) National credit union administration's
                    authority.--The Director shall have all powers and
                    duties that were vested in the National Credit Union
                    Administration, relating to consumer financial
                    protection functions, on the day before the designated
                    transfer date.
                (7) Secretary of housing and urban development.--
                        (A) Transfer of functions.--All consumer protection
                    functions of the Secretary of Housing and Urban
                    Development relating to the Real Estate Settlement
                    Procedures Act of 1974 and the Secure and Fair
                    Enforcement for Mortgage Licensing Act of 2008 are
                    transferred to the Director.
                        (B) Secretary of hud's authority.--The Director
                    shall have all powers and duties that were vested in
                    the Secretary of Housing and Urban Development relating
                    to the Real Estate Settlement Procedures Act of 1974
                    and the Secure and Fair Enforcement for Mortgage
                    Licensing Act of 2008, on the day before the designated
                    transfer date.
        (b) Transfers of Functions Subject to Enforcement Authority
    Remaining With Transferor Agencies.--The transfers of functions in
    subsection (a) shall not affect the authority of the agencies
    identified in subsection (a) from initiating enforcement proceedings
    under the circumstances described in paragraph (2) or (3) of section
    4202(e).
        (c) Termination of Authority of Transferor Agencies To Collect Fees
    for Consumer Financial Protection Purposes.--Authorities of the
    agencies identified in subsection (a) to assess and collect fees to
    cover the cost of conducting consumer financial protection functions
    transferred under subsection (a) shall terminate on the day before the
    designated transfer date.
        (d) Consumer Financial Protection Functions Defined.--For purposes
    of this subtitle, the term ``consumer financial protection functions''
    means research, rulemaking, issuance of orders or guidance,
    supervision, examination, and enforcement activities, powers, and
    duties relating to the provision of consumer financial products or
    services, including the authority to assess and collect fees for those
    purposes, except that such term shall not include any such function
    relating to an agency's responsibilities under the Community
    Reinvestment Act of 1977.
        (e) Effective Date.--Subsections (a) and (b) shall take effect on
    the designated transfer date.

    SEC. 4602. DESIGNATED TRANSFER DATE.

        The designated transfer date shall be 180 days after the date of
    enactment of this title.

    SEC. 4603. SAVINGS PROVISIONS.

        (a) Board of Governors.--
                (1) Existing rights, duties, and obligations not
            affected.--Section 4601(a)(1) shall not affect the validity of
            any right, duty, or obligation of the United States, the Board
            of Governors (or any Federal reserve bank), or any other person
            that--
                        (A) arises under any provision of law relating to
                    any consumer financial protection function of the Board
                    of Governors transferred to the Director by this title;
                    and
                        (B) existed on the day before the designated
                    transfer date.
                (2) Continuation of suits.--this title shall not abate any
            proceeding commenced by or against the Board of Governors (or
            any Federal reserve bank) before the designated transfer date
            with respect to any consumer financial protection function of
            the Board of Governors (or any Federal reserve bank)
            transferred to the Director by this title, except that the
            Director shall be substituted for the Board of Governors (or
            Federal reserve bank) as a party to any such proceeding as of
            the designated transfer date.
        (b) Federal Deposit Insurance Corporation.--
                (1) Existing rights, duties, and obligations not
            affected.--Section 4601(a)(4) 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 that Corporation, or any other person, that--
                        (A) arises under any provision of law relating to
                    any consumer financial protection function of the
                    Federal Deposit Insurance Corporation transferred to
                    the Director by this title; and
                        (B) existed on the day before the designated
                    transfer date.
                (2) Continuation of suits.--this title shall not abate any
            proceeding commenced by or against the Federal Deposit
            Insurance Corporation (or the Board of Directors of that
            Corporation) before the designated transfer date with respect
            to any consumer financial protection function of the Federal
            Deposit Insurance Corporation transferred to the Director by
            this title, except that the Director shall be substituted for
            the Federal Deposit Insurance Corporation (or Board of
            Directors) as a party to any such proceeding as of the
            designated transfer date.
        (c) Federal Trade Commission.--Section 4601(a)(5) shall not affect
    the validity of any right, duty, or obligation of the United States,
    the Federal Trade Commission, or any other person, that--
                (1) arises under any provision of law relating to any
            consumer financial protection function of the Federal Trade
            Commission transferred to the Director by this title; and
                (2) existed on the day before the designated transfer date.
        (d) National Credit Union Administration.--
                (1) Existing rights, duties, and obligations not
            affected.--Section 4601(a)(6) shall not affect the validity of
            any right, duty, or obligation of the United States, the
            National Credit Union Administration, the National Credit Union
            Administration Board, or any other person, that--
                        (A) arises under any provision of law relating to
                    any consumer financial protection function of the
                    National Credit Union Administration transferred to the
                    Director by this title; and
                        (B) existed on the day before the designated
                    transfer date.
                (2) Continuation of suits.--this title shall not abate any
            proceeding commenced by or against the National Credit Union
            Administration (or the National Credit Union Administration
            Board) before the designated transfer date with respect to any
            consumer financial protection function of the National Credit
            Union Administration transferred to the Director by this title,
            except that the Director shall be substituted for the National
            Credit Union Administration (or National Credit Union
            Administration Board) as a party to any such proceeding as of
            the designated transfer date.
        (e) Comptroller of the Currency.--
                (1) Existing rights, duties, and obligations not
            affected.--Section 4601(a)(2) 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, that--
                        (A) arises under any provision of law relating to
                    any consumer financial protection function of the
                    Comptroller of the Currency transferred to the Director
                    by this title; and
                        (B) existed on the day before the designated
                    transfer date.
                (2) Continuation of suits.--this title shall not abate any
            proceeding commenced by or against the Comptroller of the
            Currency (or the Office of the Comptroller of the Currency)
            with respect to any consumer financial protection function of
            the Comptroller of the Currency transferred to the Director by
            this title before the designated transfer date, except that the
            Director shall be substituted for the Comptroller of the
            Currency (or the Office of the Comptroller of the Currency) as
            a party to any such proceeding as of the designated transfer
            date.
        (f) Director of the Office of Thrift Supervision.--
                (1) Existing rights, duties, and obligations not
            affected.--Section 4601(a)(3) shall not affect the validity of
            any right, duty, or obligation of the United States, the
            Director of the Office of Thrift Supervision, the Office of
            Thrift Supervision, or any other person, that--
                        (A) arises under any provision of law relating to
                    any consumer financial protection function of the
                    Director of the Office of Thrift Supervision
                    transferred to the Director by this title; and
                        (B) that existed on the day before the designated
                    transfer date.
                (2) Continuation of suits.--this title shall not abate any
            proceeding commenced by or against the Director of the Office
            of Thrift Supervision (or the Office of Thrift Supervision)
            with respect to any consumer financial protection function of
            the Director of the Office of Thrift Supervision transferred to
            the Director by this title before the designated transfer date,
            except that the Director shall be substituted for the Director
            (or the Office of Thrift Supervision) as a party to any such
            proceeding as of the designated transfer date.
        (g) Secretary of Housing and Urban Development.--
                (1) Existing rights, duties, and obligations not
            affected.--Section 4601(a)(7) shall not affect the validity of
            any right, duty, or obligation of the United States, the
            Secretary of Housing and Urban Development, the Department of
            Housing and Urban Development, or any other person, that--
                        (A) arises under any provision of law relating to
                    any function of the Secretary of Housing and Urban
                    Development under the Real Estate Settlement Procedures
                    Act of 1974 and the Secure and Fair Enforcement for
                    Mortgage Licensing Act of 2008 transferred to the
                    Director by this title; and
                        (B) that existed on the day before the designated
                    transfer date.
                (2) Continuation of suits.--this title shall not abate any
            proceeding commenced by or against the Secretary of Housing and
            Urban Development (or the Department of Housing and Urban
            Development) with respect to any consumer financial protection
            function of the Secretary of Housing and Urban Development
            transferred to the Director by this title before the designated
            transfer date, except that the Director shall be substituted
            for the Secretary of Housing and Urban Development (or such
            Department) as a party to any such proceeding as of the
            designated transfer date.
        (h) Continuation of Existing Orders, Regulations, Determinations,
    Agreements, and Resolutions.--All orders, resolutions, determinations,
    agreements, and regulations that have been issued, made, prescribed, or
    allowed to become effective by the Board of Governors (or any Federal
    reserve bank), the Federal Deposit Insurance Corporation, the Federal
    Trade Commission, the National Credit Union Administration, the
    Comptroller of the Currency, the Director of the Office of Thrift
    Supervision, the Secretary of Housing and Urban Development, or by a
    court of competent jurisdiction, in the performance of consumer
    financial protection functions that are transferred by this title and
    that are in effect on the day before the designated transfer date,
    shall continue in effect according to the terms of those orders,
    resolutions, determinations, agreements, and regulations, and shall be
    enforceable by or against the Director until modified, terminated, set
    aside, or superseded in accordance with applicable law by the Director,
    by any court of competent jurisdiction, or by operation of law.
        (i) Identification of Regulations Continued.--Not later than the
    designated transfer date, the Director--
                (1) shall, after consultation with the Chairman of the
            Board of Governors, the Chairperson of the Federal Deposit
            Insurance Corporation, the Chairman of the Federal Trade
            Commission, the Chairman of the National Credit Union
            Administration Board, the Comptroller of the Currency, the
            Director of the Office of Thrift Supervision, and the Secretary
            of Housing and Urban Development identify the regulations
            continued under subsection (g) that will be enforced by the
            Director; and
                (2) shall publish a list of such regulations in the Federal
            Register.
        (j) Status of Regulations Proposed or Not Yet Effective.--
                (1) Proposed regulations.--Any proposed regulation of the
            Board of Governors, the Federal Deposit Insurance Corporation,
            the Federal Trade Commission, the National Credit Union
            Administration, the Comptroller of the Currency, the Director
            of the Office of Thrift Supervision, or the Secretary of
            Housing and Urban Development which that agency, in performing
            consumer financial protection functions transferred by this
            title, has proposed before the designated transfer date but has
            not published as a final regulation before that date, shall be
            deemed to be a proposed regulation of the Director.
                (2) Regulations not yet effective.--Any interim or final
            regulation of Board of Governors, the Federal Deposit Insurance
            Corporation, the Federal Trade Commission, the National Credit
            Union Administration, the Comptroller of the Currency, the
            Director of the Office of Thrift Supervision, or the Secretary
            of Housing and Urban Development which that agency, in
            performing consumer financial protection functions transferred
            by this title, has published before the designated transfer
            date but which has not become effective before that date, shall
            take effect as a regulation of the Director according to its
            terms.

    SEC. 4604. TRANSFER OF CERTAIN PERSONNEL.

        (a) In General.--
                (1) Certain federal reserve system employees transferred.--
                        (A) Identifying employees for transfer.--The
                    Director and the Board of Governors shall--
                                (i) jointly determine the number of
                            employees of the Board necessary to perform or
                            support the consumer financial protection
                            functions of the Board of Governors that are
                            transferred to the Director by this title; and
                                (ii) consistent with the number determined
                            under clause (i), jointly identify employees of
                            the Board of Governors for transfer to the
                            Agency in a manner that the Director and the
                            Board of Governors, in their sole discretion,
                            deem equitable.
                        (B) Identified employees transferred.--All
                    employees of the Board of Governors identified under
                    subparagraph (A)(ii) shall be transferred to the Agency
                    for employment.
                        (C) Federal reserve bank employees.--Employees of
                    any Federal reserve bank who, on the day before the
                    designated transfer date, are performing consumer
                    financial protection functions on behalf of the Board
                    of Governors shall be treated as employees of the Board
                    of Governors for purposes of subparagraphs (A) and (B).
                (2) Certain fdic employees transferred.--
                        (A) Identifying employees for transfer.--The
                    Director and the Board of Directors of the Federal
                    Deposit Insurance Corporation shall--
                                (i) jointly determine the number of
                            employees of that Corporation necessary to
                            perform or support the consumer financial
                            protection functions of the Corporation that
                            are transferred to the Director by this title;
                            and
                                (ii) consistent with the number determined
                            under clause (i), jointly identify employees of
                            the Corporation for transfer to the Agency in a
                            manner that the Director and the Board of
                            Directors of the Corporation, in their
                            discretion, deem equitable.
                        (B) Identified employees transferred.--All
                    employees of the Corporation identified under
                    subparagraph (A)(ii) shall be transferred to the Agency
                    for employment.
                (3) Certain ncua employees transferred.--
                        (A) Identifying employees for transfer.--The
                    Director and the National Credit Union Administration
                    Board shall--
                                (i) jointly determine the number of
                            employees of the National Credit Union
                            Administration necessary to perform or support
                            the consumer financial protection functions of
                            the National Credit Union Administration that
                            are transferred to the Director by this title;
                            and
                                (ii) consistent with the number determined
                            under clause (i), jointly identify employees of
                            the National Credit Union Administration for
                            transfer to the Agency in a manner that the
                            Director and the National Credit Union
                            Administration Board, in their discretion, deem
                            equitable.
                        (B) Identified employees transferred.--All
                    employees of the National Credit Union Administration
                    identified under subparagraph (A)(ii) shall be
                    transferred to the Agency for employment.
                (4) Certain hud employees transferred.--
                        (A) Identifying employees for transfer.--The
                    Director and the Secretary of Housing and Urban
                    Development shall--
                                (i) jointly determine the number of
                            employees of the Department of Housing and
                            Urban Development necessary to perform or
                            support the consumer financial protection
                            functions of the Secretary of Housing and Urban
                            Development that are transferred to the
                            Director by this title; and
                                (ii) consistent with the number determined
                            under clause (i), jointly identify employees of
                            the Department of Housing and Urban Development
                            for transfer to the Agency in a manner that the
                            Director and the Secretary of Housing and Urban
                            Development, in their discretion, deem
                            equitable.
                        (B) Identified employees transferred.--All
                    employees of the Department of Housing and Urban
                    Development identified under subparagraph (A)(ii) shall
                    be transferred to the Agency for employment.
                (5) Appointment authority for excepted service and senior
            executive service transferred.--
                        (A) In general.--In the case of employees occupying
                    positions in the excepted service or the Senior
                    Executive Service, any appointment authority
                    established pursuant to law or regulations of the
                    Director of the Office of Personnel Management for
                    filling such positions shall be transferred, subject to
                    subparagraph (B).
                        (B) Declining transfers allowed.--An agency or
                    entity may decline to make a transfer of authority
                    under subparagraph (A) (and the employees appointed
                    pursuant to such subparagraph) to the extent that such
                    authority relates to positions excepted from the
                    competitive service because of their confidential,
                    policy-making, policy-determining, or policy-advocating
                    character, and non-career positions in the Senior
                    Executive Service (within the meaning of section
                    3132(a)(7) of title 5, United States Code).
        (b) Timing of Transfers and Position Assignments.--Each employee to
    be transferred under this section shall--
                (1) be transferred not later than 90 days after the
            designated transfer date; and
                (2) receive notice of such employee's position assignment
            not later than 120 days after the effective date of the
            employee's transfer.
        (c) Transfer of Function.--
                (1) In general.--Notwithstanding any other provision of
            law, the transfer of employees shall be deemed a transfer of
            functions for the purpose of section 3503 of title 5, United
            States Code.
                (2) Priority of this title.--If any provisions of this
            title conflict with any protection provided to transferred
            employees under section 3503 of title 5, United States Code,
            the provisions of this title shall control.
        (d) Equal Status and Tenure Positions.--
                (1) Employees transferred from fdic, ftc, hud, ncua, occ,
            and ots.--Each employee transferred from the Federal Deposit
            Insurance Corporation, the Federal Trade Commission, the
            Department of Housing and Urban Development, the National
            Credit Union Administration, the Office of the Comptroller of
            the Currency, or the Office of Thrift Supervision shall be
            placed in a position at the Agency with the same status and
            tenure as he or she held on the day before the designated
            transfer date.
                (2) Employees transferred from the federal reserve
            system.--
                        (A) Comparability.--Each employee transferred from
                    the Board of Governors or from a Federal reserve bank
                    shall be placed in a position with the same status and
                    tenure as that of employees transferring to the Agency
                    from the Office of the Comptroller of the Currency who
                    perform similar functions and have similar periods of
                    service.
                        (B) Service periods credited.--For purposes of this
                    paragraph, periods of service with the Board of
                    Governors or a Federal reserve bank shall be credited
                    as periods of service with a Federal agency.
        (e) Additional Certification Requirements Limited.--Examiners
    transferred to the Agency shall not be subject to any additional
    certification requirements before being placed in a comparable
    examiner's position at the Agency examining the same types of
    institutions as the transferred examiners examined before such
    examiners were transferred.
        (f) Personnel Actions Limited.--
                (1) 5-year protection.--Except as provided in paragraph
            (2), each transferred employee holding a permanent position on
            the day before the designated transfer date shall not, during
            the 5-year period beginning on the designated transfer date, be
            involuntarily separated, or involuntarily reassigned outside
            such transferred employee's local locality pay area as defined
            by the Director of the Office of Personnel Management.
                (2) Exceptions.--Paragraph (1) shall not be construed as
            limiting the right of the Director to--
                        (A) separate an employee for cause or for
                    unacceptable performance;
                        (B) terminate an appointment to a position excepted
                    from the competitive service because of its
                    confidential policy-making, policy-determining, or
                    policy-advocating character; or
                        (C) reassign a supervisory employee outside such
                    employee's locality pay area as defined by the Director
                    of the Office of Personnel Management when the Director
                    determines that the reassignment is necessary for the
                    efficient operation of the Agency.
        (g) Pay.--
                (1) 1-year protection.--Except as provided in paragraph
            (2), each transferred employee shall, during the 1-year period
            beginning on the designated transfer date, receive pay at a
            rate not less than the basic rate of pay (including any
            geographic differential) that the employee received during the
            1-year period immediately before the transfer.
                (2) Exceptions.--Paragraph (1) shall not be construed as
            limiting the right of the Agency to reduce the rate of basic
            pay of a transferred employee--
                        (A) for cause;
                        (B) for unacceptable performance; or
                        (C) with the employee's consent.
                (3) Protection only while employed.--Paragraph (1) applies
            to a transferred employee only while that employee remains
            employed by the Agency.
                (4) Pay increases permitted.--Paragraph (1) shall not be
            construed as limiting the authority of the Agency to increase a
            transferred employee's pay.
        (h) Reorganization.--
                (1) Between 1st and 3rd year.--
                        (A) In general.--If the Agency determines, during
                    the period beginning 1 year after the designated
                    transfer date and ending 3 years after the designated
                    transfer date, that a reorganization of the staff of
                    the Agency is required--
                                (i) that reorganization shall be deemed a
                            ``major reorganization'' for purposes of
                            affording affected employees retirement under
                            section 8336(d)(2) or 8414(b)(1)(B) of title 5,
                            United States Code;
                                (ii) before the reorganization occurs, all
                            employees in the same locality pay area as
                            defined by the Director of the Office of
                            Personnel Management shall be placed in a
                            uniform position classification system; and
                                (iii) any resulting reduction in force
                            shall be governed by the provisions of chapter
                            35 of title 5, United States Code, except that
                            the Agency shall--
                                        (I) establish competitive areas (as
                                    that term is defined in regulations
                                    issued by the Director of the Office of
                                    Personnel Management) to include at a
                                    minimum all employees in the same
                                    locality pay area as defined by the
                                    Office of Personnel Management;
                                        (II) establish competitive levels
                                    (as that term is defined in regulations
                                    issued by the Director of the Office of
                                    Personnel Management) without regard to
                                    whether the particular employees have
                                    been appointed to positions in the
                                    competitive service or the excepted
                                    service; and
                                        (III) afford employees appointed to
                                    positions in the excepted service
                                    (other than to a position excepted from
                                    the competitive service because of its
                                    confidential policy-making, policy-
                                    determining, or policy-advocating
                                    character) the same assignment rights
                                    to positions within the Agency as
                                    employees appointed to positions in the
                                    competitive service.
                        (B) Service credit for reductions in force.--For
                    purposes of this paragraph, periods of service with the
                    Board of Governors, a Federal reserve bank, the Federal
                    Deposit Insurance Corporation, the National Credit
                    Union Administration, or the Federal Home Loan Bank
                    Board or any successor to such Board shall be credited
                    as periods of service with a Federal agency.
                (2) After 3rd year.--
                        (A) In general.--If the Agency determines, at any
                    time after the 3-year period beginning on the
                    designated transfer date, that a reorganization of the
                    staff of the Agency is required, any resulting
                    reduction in force shall be governed by the provisions
                    of chapter 35 of title 5, United States Code, except
                    that the Agency shall establish competitive levels (as
                    that term is defined in regulations issued by the
                    Office of Personnel Management) without regard to types
                    of appointment held by particular employees transferred
                    under this section.
                        (B) Service credit for reductions in force.--For
                    purposes of this paragraph, periods of service with the
                    Board of Governors, a Federal reserve bank, the Federal
                    Deposit Insurance Corporation, the National Credit
                    Union Administration, or the Federal Home Loan Bank
                    Board or any successor to such Board shall be credited
                    as periods of service with a Federal agency.
        (i) Benefits.--
                (1) Retirement benefits for transferred employees.--
                        (A) In general.--
                                (i) Continuation of existing retirement
                            plan.--Except as provided in subparagraph (B),
                            each transferred employee shall remain enrolled
                            in such employee's existing retirement plan as
                            long as the employee remains employed by the
                            Agency.
                                (ii) Employer's contribution.--The Director
                            shall pay any employer contributions to the
                            existing retirement plan of each transferred
                            employee as required under that plan.
                        (B) Option for employees transferred from federal
                    reserve system to be subject to federal employee
                    retirement program.--
                                (i) Election.--Any transferred employee who
                            was enrolled in a Federal Reserve System
                            retirement plan on the day before the date of
                            the employee's transfer to the Agency may,
                            during the period beginning 6 months after the
                            designated transfer date and ending 1 year
                            after the designated transfer date, elect to be
                            subject to the Federal employee retirement
                            program.
                                (ii) Effective date of coverage.--For any
                            employee making an election under clause (i),
                            coverage by the Federal employee retirement
                            program shall begin 1 year after the designated
                            transfer date.
                        (C) Agency participation in federal reserve system
                    retirement plan.--
                                (i) Separate account in federal reserve
                            system retirement plan established.--A separate
                            account in the Federal Reserve System
                            retirement plan shall be established for Agency
                            employees who do not make the election under
                            subparagraph (B).
                                (ii) Funds attributable to transferred
                            employees remaining in federal reserve system
                            retirement plan transferred.--The proportionate
                            share of funds in the Federal Reserve System
                            retirement plan, including the proportionate
                            share of any funding surplus in that plan,
                            attributable to a transferred employee who does
                            not make the election under subparagraph (B),
                            shall be transferred to the account established
                            under clause (i).
                                (iii) Employer contributions deposited.--
                            The Director shall deposit into the account
                            established under clause (i) the employer
                            contributions that the Agency makes on behalf
                            of employees who do not make the election under
                            subparagraph (B).
                                (iv) Account administration.--The Director
                            shall administer the account established under
                            clause (i) as a participating employer in the
                            Federal Reserve System retirement plan.
                        (D) Definitions.--For purposes of this paragraph,
                    the following definitions shall apply:
                                (i) Existing retirement plan.--The term
                            ``existing retirement plan'' means, with
                            respect to any employee transferred under this
                            section, the particular retirement plan
                            (including the Financial Institutions
                            Retirement Fund) and any associated thrift
                            savings plan of the agency or Federal reserve
                            bank from which the employee was transferred,
                            which the employee was enrolled in on the day
                            before the designated transfer date.
                                (ii) Federal employee retirement plan.--The
                            term ``Federal employee retirement program''
                            means the retirement program for Federal
                            employees established by chapters 83 and 84 of
                            title 5, United States Code.
                (2) Benefits other than retirement benefits for transferred
            employees.--
                        (A) During 1st year.--
                                (i) Existing plans continue.--Each
                            transferred employee may, for 1 year after the
                            designated transfer date, retain membership in
                            any other employee benefit program of the
                            agency or bank from which the employee
                            transferred, including a dental, vision, long-
                            term care, or life insurance program, to which
                            the employee belonged on the day before the
                            designated transfer date.
                                (ii) Employer's contribution.--The Director
                            shall reimburse the agency or bank from which
                            an employee was transferred for any cost
                            incurred by that agency or bank in continuing
                            to extend coverage in the benefit program to
                            the employee as required under that program or
                            negotiated agreements.
                        (B) Dental, vision, or life insurance after 1st
                    year.--If, after the 1-year period beginning on the
                    designated transfer date, the Director decides not to
                    continue participation in any dental, vision, or life
                    insurance program of an agency or bank from which
                    employees transferred, a transferred employee who is a
                    member of such a program may, before the Director's
                    decision takes effect, elect to enroll, without regard
                    to any regularly scheduled open season, in--
                                (i) the enhanced dental benefits
                            established by chapter 89A of title 5, United
                            States Code;
                                (ii) the enhanced vision benefits
                            established by chapter 89B of title 5, United
                            States Code; and
                                (iii) the Federal Employees Group Life
                            Insurance Program established by chapter 87 of
                            title 5, United States Code, without regard to
                            any requirement of insurability.
                        (C) Long-term care insurance after 1st year.--If,
                    after the 1-year period beginning on the designated
                    transfer date, the Director decides not to continue
                    participation in any long-term care insurance program
                    of an agency or bank from which employees transferred,
                    a transferred employee who is a member of such a
                    program may, before the Director's decision takes
                    effect, elect to apply for coverage under the Federal
                    Long Term Care Insurance Program established by chapter
                    90 of title 5, United States Code, under the
                    underwriting requirements applicable to a new active
                    workforce member (as defined in Part 875, title 5, Code
                    of Federal Regulations).
                        (D) Employee's contribution.--An individual
                    enrolled in the Federal Employees Health Benefits
                    program shall pay any employee contribution required by
                    the plan.
                        (E) Additional funding.--The Director shall
                    transfer to the Federal Employees Health Benefits Fund
                    established under section 8909 of title 5, United
                    States Code, an amount determined by the Director of
                    the Office of Personnel Management, after consultation
                    with the Director and the Director of the Office of
                    Management and Budget, to be necessary to reimburse the
                    Fund for the cost to the Fund of providing benefits
                    under this subparagraph.
                        (F) Credit for time enrolled in other plans.--For
                    employees transferred under this section, enrollment in
                    a health benefits plan administered by the Comptroller
                    of the Currency, the Director of the Office of Thrift
                    Supervision, the Federal Deposit Insurance Corporation,
                    the National Credit Union Administration, the Board of
                    Governors, the Secretary of Housing and Urban
                    Development, or a Federal reserve bank, immediately
                    before enrollment in a health benefits plan under
                    chapter 89 of title 5, United States Code, shall be
                    considered as enrollment in a health benefits plan
                    under that chapter for purposes of section
                    8905(b)(1)(A) of title 5, United States Code.
                        (G) Special provisions to ensure continuation of
                    life insurance benefits.--
                                (i) In general.--An annuitant (as defined
                            in section 8901(3) of title 5, United States
                            Code) who is enrolled in a life insurance plan
                            administered by the Board of Governors of the
                            Federal Reserve System, the Federal Deposit
                            Insurance Corporation, the Federal Trade
                            Commission, the Secretary of Housing and Urban
                            Development, the National Credit Union
                            Administration, the Comptroller of the
                            Currency, or the Director of the Office of
                            Thrift Supervision on the day before the
                            designated transfer date shall be eligible for
                            coverage by a life insurance plan under
                            sections 8706(b), 8714a, 8714b, and 8714c of
                            title 5, United States Code, or in a life
                            insurance plan established by the Agency,
                            without regard to any regularly scheduled open
                            season and requirement of insurability.
                                (ii) Employee's contribution.--An
                            individual enrolled in a life insurance plan
                            under this clause shall pay any employee
                            contribution required by the plan.
                                (iii) Additional funding.--The Director
                            shall transfer to the Employees' Life Insurance
                            Fund established under section 8714 of title 5,
                            United States Code, an amount determined by the
                            Director of the Office of Personnel Management,
                            after consultation with the Director and the
                            Director of the Office of Management and
                            Budget, to be necessary to reimburse the Fund
                            for the cost to the Fund of providing benefits
                            under this subparagraph not otherwise paid for
                            by the employee under clause (ii).
                                (iv) Credit for time enrolled in other
                            plans.--For employees transferred under this
                            section, enrollment in a life insurance plan
                            administered by the Board of Governors, the
                            Federal Deposit Insurance Corporation, the
                            Federal Trade Commission, the Secretary of
                            Housing and Urban Development, the National
                            Credit Union Administration, the Comptroller of
                            the Currency, the Director of the Office of
                            Thrift Supervision, or a Federal reserve bank
                            immediately before enrollment in a life
                            insurance plan under chapter 87 of title 5,
                            United States Code, shall be considered as
                            enrollment in a life insurance plan under that
                            chapter for purposes of section 8706(b)(1)(A)
                            of title 5, United States Code.
        (j) Implementation of Uniform Pay and Classification System.--Not
    later than 2 years after the designated transfer date, the Director
    shall implement a uniform pay and classification system for all
    transferred employees.
        (k) Equitable Treatment.--In administering the provisions of this
    section, the Director--
                (1) shall take no action that would unfairly disadvantage
            transferred employees relative to each other based on their
            prior employment by the Board of Governors, the Federal Deposit
            Insurance Corporation, the Federal Trade Commission, the
            Secretary of Housing and Urban Development, the National Credit
            Union Administration, the Office of the Comptroller of the
            Currency, the Office of Thrift Supervision, a Federal reserve
            bank, the Federal Home Loan Bank Board or any successor to such
            Board, a Federal home loan bank, or a joint office of the
            Federal home loan banks; and
                (2) may take such action as is appropriate in individual
            cases so that employees transferred under this section receive
            equitable treatment, with respect to those employees' status,
            tenure, pay, benefits (other than benefits under programs
            administered by the Office of Personnel Management), and
            accrued leave or vacation time, for prior periods of service
            with any Federal agency, including the Board of Governors of
            the Federal Reserve System, the Federal Deposit Insurance
            Corporation, the Federal Trade Commission, the Department of
            Housing and Urban Development, the National Credit Union
            Administration, the Office of the Comptroller of the Currency,
            the Office of Thrift Supervision, a Federal reserve bank, the
            Federal Home Loan Bank Board or any successor to such Board, a
            Federal home loan bank, or a joint office of the Federal home
            loan banks.
        (l) Implementation.--In implementing the provisions of this
    section, the Director shall work with the Director of the Office of
    Personnel Management and other entities with expertise in matters
    related to employment to ensure a fair and orderly transition for
    affected employees.

    SEC. 4605. INCIDENTAL TRANSFERS.

        (a) Incidental Transfers Authorized.--The Director of the Office of
    Management and Budget, in consultation with the Secretary, shall make
    such additional incidental transfers and dispositions of assets and
    liabilities held, used, arising from, available, or to be made
    available, in connection with the functions transferred by this title,
    as the Director may determine necessary to accomplish the purposes of
    this title.
        (b) Sunset.--The authority provided in this section shall terminate
    5 years after the date of the enactment of this title.

    SEC. 4606. INTERIM AUTHORITY OF THE SECRETARY.

        (a) In General.--The Secretary is authorized to perform the
    functions of the Director under this subtitle until the appointment of
    the Director in accordance with section 4102.
        (b) Interim Administrative Services by the Department of the
    Treasury.--The Secretary of the Treasury may provide administrative
    services necessary to support the Agency during the 24-month period
    beginning on the date of the enactment of this title.
        (c) Interim Funding for the Department of the Treasury.--For the
    purposes of carrying out the authorities granted in this section, there
    are appropriated to the Secretary of the Treasury such sums as are
    necessary. Notwithstanding any other provision of law, such amounts
    shall be subject to apportionment under section 1517 of title 31,
    United States Code, and restrictions that generally apply to the use of
    appropriated funds in title 31, United States Code, and other laws.

                      Subtitle G--Regulatory Improvements

    SEC. 4701. COLLECTION OF DEPOSIT ACCOUNT DATA.

        (a) Purpose.--The purpose of this section is to promote awareness
    and understanding of the access of individuals and communities to
    financial services, and to identify business and community development
    needs and opportunities.
        (b) In General.--
                (1) Records required.--For each branch, automated teller
            machine at which deposits are accepted, and other deposit
            taking service facility with respect to any financial
            institution, the financial institution shall maintain records
            of the number and dollar amounts of deposit accounts of
            customers.
                (2) Geo-coded addresses of depositors.--The customers'
            addresses maintained pursuant to paragraph (1) shall be geo-
            coded so that data shall be collected regarding the census
            tracts of the residence or business location of the customers.
                (3) Identification of depositor type.--In maintaining
            records on any deposit account under this section, the
            financial institution shall also record whether the deposit
            account is for a residential or commercial customer.
                (4) Public availability.--
                        (A) In general.--The following information shall be
                    publicly available on an annual basis--
                                (i) the address and census tracts of each
                            branch, automated teller machine at which
                            deposits are accepted, and other deposit taking
                            service facility with respect to any financial
                            institution;
                                (ii) the type of deposit account including
                            whether the account was a checking or savings
                            account;
                                (iii) data on the number and dollar amounts
                            of the accounts, presented by census tract
                            location of the residential and commercial
                            customers; and
                                (iv) any other data deemed appropriate by
                            the Director.
                        (B) Protection of identity.--In the publicly
                    available data, any personally identifiable data
                    element shall be removed so as to protect the
                    identities of the commercial and residential customers.
        (c) Availability of Information.--
                (1) Submission to agencies.--The data required to be
            compiled and maintained under this section by any financial
            institution shall be submitted annually to the Agency, or to a
            Federal banking agency, in accordance with regulations
            prescribed by the Director.
                (2) Availability of information.--Information compiled and
            maintained under this section shall be retained for not less
            than 3 years after the date of preparation and shall be made
            available to the public, upon request, in the form required
            under regulations prescribed by the Director.
        (d) Agency Use.--The Director--
                (1) shall assess the distribution of residential and
            commercial accounts at such financial institution across income
            and minority level of census tracts; and
                (2) may use the data for any other purpose as permitted by
            law.
        (e) Regulations and Guidance.--
                (1) In general.--The Director shall prescribe such
            regulations and issue guidance as may be necessary to carry
            out, enforce, and compile data pursuant to this section.
                (2) Data compilation regulations.--The Director shall
            prescribe regulations regarding the provision of data compiled
            under this section to the Federal banking agencies to carry out
            the purposes of this section and shall issue guidance to
            financial institutions regarding measures to facilitate
            compliance with the this section and the requirements of
            regulations prescribed under this section.
        (f) Definitions.--For purposes of this section, the following
    definitions shall apply:
                (1) Agency.--The term ``Agency'' means the Consumer
            Financial Protection Agency.
                (2) Credit union.--The term ``credit union'' means a
            Federal credit union or a State-chartered credit union (as such
            terms are defined in section 101 of the Federal Credit Union
            Act).
                (3) Deposit account.--The term ``deposit account'' includes
            any checking account, savings account, credit union share
            account, and other type of account as defined by the Director.
                (4) Director.--The term ``Director'' means the Director of
            the Agency.
                (5) Federal banking agency.--The term ``Federal banking
            agency'' means the Board of Governors of the Federal Reserve
            System, the head of the agency responsible for chartering and
            regulating national banks, the Director of the Office of Thrift
            Supervision, the Federal Deposit Insurance Corporation, and the
            National Credit Union Administration; and the term ``Federal
            banking agencies'' means all of those agencies.
                (6) Financial institution.--The term ``financial
            institution''--
                        (A) has the meaning given to the term ``insured
                    depository institution'' in section 3(c)(2) of the
                    Federal Deposit Insurance Act; and
                        (B) includes any credit union.
        (g) Effective Date.--This section shall take effect on the
    designated transfer date.

    SEC. 4702. SMALL BUSINESS DATA COLLECTION.

        (a) In General.--The Equal Credit Opportunity Act (15 U.S.C. 1691
    et seq.) is amended by inserting after section 704A the following new
    section:
    ``Sec. 704B. Small business loan data collection
        ``(a) Purpose.--The purpose of this section is to facilitate
    enforcement of fair lending laws and enable communities, governmental
    entities, and creditors to identify business and community development
    needs and opportunities of women- and minority-owned small businesses.
        ``(b) In General.--Subject to the requirements of this section, in
    the case of any application to a financial institution for credit for a
    small business, the financial institution shall--
                ``(1) inquire whether the business is a women- or minority-
            owned business, without regard to whether such application is
            received in person, by mail, by telephone, by electronic mail
            or other form of electronic transmission, or by any other means
            and whether or not such application is in response to a
            solicitation by the financial institution; and
                ``(2) maintain a record of the responses to such inquiry
            separate from the application and accompanying information.
        ``(c) Right to Refuse.--Any applicant for credit may refuse to
    provide any information requested pursuant to subsection (b) in
    connection with any application for credit.
        ``(d) No Access by Underwriters.--
                ``(1) In general.--Where feasible, no loan underwriter or
            other officer or employee of a financial institution, or any
            affiliate of a financial institution, involved in making any
            determination concerning an application for credit shall have
            access to any information provided by the applicant pursuant to
            a request under subsection (b) in connection with such
            application.
                ``(2) Exception.--If a financial institution determines
            that loan underwriter or other officer or employee of a
            financial institution, or any affiliate of a financial
            institution, involved in making any determination concerning an
            application for credit should have access to any information
            provided by the applicant pursuant to a request under
            subsection (b), the financial institution will provide notice
            to the applicant of the access of the underwriter to this
            information, along with notice that the financial institution
            may not discriminate on this basis of this information.
        ``(e) Form and Manner of Information.--
                ``(1) In general.--Each financial institution shall compile
            and maintain, in accordance with regulations of the Agency, a
            record of the information provided by any loan applicant
            pursuant to a request under subsection (b).
                ``(2) Itemization.--Information compiled and maintained
            under paragraph (1) shall also be itemized in order to clearly
            and conspicuously disclose the following:
                        ``(A) The number of the application and the date
                    the application was received.
                        ``(B) The type and purpose of the loan or other
                    credit being applied for.
                        ``(C) The amount of the credit or credit limit
                    applied for and the amount of the credit transaction or
                    the credit limit approved for such applicant.
                        ``(D) The type of action taken with respect to such
                    application and the date of such action.
                        ``(E) The census tract in which is located the
                    principal place of business of the small business loan
                    applicant.
                        ``(F) The gross annual revenue of the business in
                    the last fiscal year of the small business loan
                    applicant preceding the date of the application.
                        ``(G) The race, sex, and ethnicity of the principal
                    owners of the business.
                        ``(H) Any additional data the Agency determines
                    would aid in fulfilling the purposes of this section.
                ``(3) Inclusion of personally identifiable information
            prohibited.--In compiling and maintaining any record of
            information under this section, a financial institution may not
            include in such record the name, specific address (other than
            the census tract required under paragraph (1)(E)), telephone
            number, electronic mail address, and any other personally
            identifiable information concerning any individual who is, or
            is connected with, the small business loan applicant.
                ``(4) Discretion to delete or modify publicly available
            data.--The Agency may, in the discretion of the Agency, delete
            or modify data collected under this section which is or will be
            available to the public if the Agency determines that the
            deletion or modification of the data would advance a compelling
            privacy interest.
        ``(f) Availability of Information.--
                ``(1) Submission to agency.--The data required to be
            compiled and maintained under this section by any financial
            institution shall be submitted annually to the Agency.
                ``(2) Availability of information.--
                        ``(A) In general.--Information compiled and
                    maintained under this section shall be retained for not
                    less than 3 years after the date of preparation and
                    shall be made available to the public, upon request, in
                    the form required under regulations prescribed by the
                    Agency.
                        ``(B) Annual disclosure to the public.--In addition
                    to the availability by request under subparagraph (A)
                    of data compiled and maintained under this section, the
                    Agency shall annually provide such data to the public.
                        ``(C) Procedures.--The procedures for disclosing
                    data compiled and maintained under this section to the
                    public shall be determined by the Agency by regulation.
                ``(3) Compilation of aggregate data.--
                        ``(A) In general.--The Agency may, in the
                    discretion of the Agency, compile for the Agency's own
                    use compilations of aggregate data.
                        ``(B) Public availability of aggregate data.--The
                    Agency may, in the discretion of the Agency, make
                    public compilations of aggregate data in such manner as
                    the Agency may determine to be appropriate.
        ``(g) Definitions.--For purposes of this section, the following
    definitions shall apply:
                ``(1) Financial institution.--The term `financial
            institution' means any partnership, company, corporation,
            association (incorporated or unincorporated), trust, estate,
            cooperative organization, or other entity that engages in any
            financial activity.
                ``(2) Minority-owned business.--The term `minority-owned
            business' means a business--
                        ``(A) more than 50 percent of the ownership or
                    control of which is held by 1 or more minority
                    individuals; and
                        ``(B) more than 50 percent of the net profit or
                    loss of which accrues to 1 or more minority
                    individuals.
                ``(3) Women-owned business.--The term `women-owned
            business' means a business--
                        ``(A) more than 50 percent of the ownership or
                    control of which is held by 1 or more women; and
                        ``(B) more than 50 percent of the net profit or
                    loss of which accrues to 1 or more women.
                ``(4) Minority.--The term `minority' has the meaning given
            to such term by section 1204(c)(3) of the Financial
            Institutions Reform, Recovery, and Enforcement Act of 1989.
                ``(5) Small business loan.--The term `small business loan'
            shall be defined by the Agency, which may take into account--
                        ``(A) the gross revenues of the borrower;
                        ``(B) the total number of employees of the
                    borrower;
                        ``(C) the industry in which the borrower has its
                    primary operations; and
                        ``(D) the size of the loan.
        ``(h) Agency Action.--
                ``(1) In general.--The Agency shall prescribe such
            regulations and issue such guidance as may be necessary to
            carry out, enforce, and compile data pursuant to this section.
                ``(2) Exceptions.--The Agency, by regulation or order, may
            adopt exceptions to any requirement of this section and may,
            conditionally or unconditionally, exempt any financial
            institution or class of institutions from the requirements of
            this section as the Agency determines to be necessary or
            appropriate to carry out the purposes and objectives of this
            section.
                ``(3) Guidance.--The Agency shall issue guidance designed
            to facilitate compliance with the requirements of this section,
            including assisting financial institutions in working with
            applicants to determine whether the applicants are women- or
            minority-owned for the purposes of this section.''.
        (b) Technical and Conforming Amendment.--Section 701(b) of the
    Equal Credit Opportunity Act (15 U.S.C. 1691(b)) is amended--
                (1) by striking ``or'' after the semicolon at the end of
            paragraph (3);
                (2) by striking the period at the end of paragraph (4) and
            inserting ``; or''; and
                (3) by inserting after paragraph (4), the following new
            paragraph:
                ``(5) to make an inquiry under section 704B in accordance
            with the requirements of such section.''.
        (c) Clerical Amendment.--The table of sections for the Equal Credit
    Opportunity Act is amended by inserting after the item relating to
    section 704A the following new item:

    ``704B. Small business loan data collection.''.
        (d) Effective Date.--This section shall take effect on the
    designated transfer date.

    SEC. 4703. ANNUAL FINANCIAL AUTOPSY.

        (a) Study Required.--Not later than March 31 of each calendar year,
    the Director shall--
                (1) conduct a scientific sampling of foreclosures and
            bankruptcies during the previous calendar year in each State or
            territory of the United States; and
                (2) identify any underlying causes of such bankruptcies or
            foreclosures, including any specific financial products or
            services that have been the cause of substantial numbers of
            such bankruptcies or foreclosures.
        (b) Report.--After the completion of each study required under
    subsection (a), the Director shall submit a report to the Congress
    containing--
                (1) any conclusions made by the Director in carrying out
            such study;
                (2) any specific financial products or services that the
            Director has identified to have caused a substantial number of
            bankruptcies or foreclosures, as well as which companies or
            individuals provided such financial products or services; and
                (3) any recommendations the Director has for legislation
            that would reduce the underlying causes of bankruptcies and
            foreclosures identified in such study.

    SEC. 4704. REPORTING OF MORTGAGE DATA BY STATE.

        (a) In General.--Section 104(a) of the Helping Families Save Their
    Homes Act of 2009 (division A of Public Law 111-22) is amended--
                (1) in paragraph (2), by striking ``resulting'' and
            inserting ``in each State that result'';
                (2) in paragraph (3), by inserting ``each State for'' after
            ``modifications in''; and
                (3) in paragraph (4), by inserting ``in each State'' after
            ``total number of loans''.
        (b) Conforming Amendment.--Section 104(b)(1)(A) of such Act is
    amended by adding at the end the following sentence: ``Not later than
    60 days after the date of the enactment of the Wall Street Reform and
    Consumer Protection Act of 2009, the Comptroller of the Currency and
    the Director of the Office of Thrift Supervision shall update such
    requirements to reflect amendments made to this section by such Act.''.

                       Subtitle H--Conforming Amendments

    SEC. 4801. AMENDMENTS TO THE INSPECTOR GENERAL ACT OF 1978.

        (a) Establishment.--Section 8G(a)(2) of the Inspector General Act
    of 1978 (5 U.S.C. App.) is amended by inserting ``the Consumer
    Financial Protection Agency,'' before ``the Consumer Product Safety
    Commission,''.
        (b) Effective Date.--This section shall take effect on the date of
    the enactment of this title.

    SEC. 4802. AMENDMENTS TO THE PRIVACY ACT OF 1974.

        (a) Applicability.--Section 552a of title 5, United States Code, is
    amended by adding at the end the following new subsection:
        ``(w) Applicability to Consumer Financial Protection Agency.--
    Except as provided in the Consumer Financial Protection Agency Act of
    2009, this section shall apply with respect to the Consumer Financial
    Protection Agency.''.
        (b) Effective Date.--This section shall take effect on the date of
    the enactment of this title.

    SEC. 4803. AMENDMENTS TO THE ALTERNATIVE MORTGAGE TRANSACTION PARITY
                  ACT OF 1982.

        (a) Section 803(1).--Section 803(1) of the Alternative Mortgage
    Transaction Parity Act of 1982 (12 U.S.C. 3802(1)) is amended by
    striking paragraphs (B) and (C).
        (b) Section 804(a).--Section 804(a) of the Alternative Mortgage
    Transaction Parity Act of l982 (12 U.S.C. 3803(a)) is amended--
                (1) in paragraphs (1), (2), and (3), by inserting ``on or
            before the designated transfer date, as determined in section
            4602 of the Consumer Financial Protection Agency Act of 2009''
            after ``transactions made'' each place such term appears;
                (2) in paragraph (2), by striking ``and'' at the end;
                (3) in paragraph (3), by striking the period at the end and
            inserting ``; and''; and
                (4) by adding at the end the following new paragraph:
                ``(4) with respect to transactions made after the
            designated transfer date, as determined in section 4602 of the
            Consumer Financial Protection Agency Act of 2009, only in
            accordance with regulations governing alternative mortgage
            transactions as issued by the Consumer Financial Protection
            Agency for federally chartered housing creditors, in accordance
            with the rulemaking authority granted to the Consumer Financial
            Protection Agency with regard to federally chartered housing
            creditors under laws other than this section.''.
        (c) Section 804.--Section 804 of the Alternative Mortgage
    Transaction Parity Act of l982 (12 U.S.C. 3803) is amended--
                (1) by striking subsection (c) and inserting the following
            new subsection:
        ``(c) Effect of State Law.--
                ``(1) In general.--An alternative mortgage transaction may
            be made by a housing creditor in accordance with this section,
            notwithstanding any State Constitution, law, or regulation that
            prohibits an alternative mortgage transaction.
                ``(2) Rule of construction.--For purposes of this
            subsection, a State Constitution, law, or regulation that
            prohibits an alternative mortgage transaction does not include
            any State Constitution, law, or regulation that regulates
            mortgage transactions generally, including any restriction on
            prepayment penalties or late charges.''; and
                (2) by adding at the end the following new subsection:
        ``(d) Duties of Consumer Financial Protection Agency.--The Consumer
    Financial Protection Agency shall--
                ``(1) review the regulations identified by the Comptroller
            of the Currency, the National Credit Union Administration, and
            the Director of the Office of Thrift Supervision (as those
            regulations exist on the designated transfer date, as
            determined in section 4602 of the Consumer Financial Protection
            Agency Act of 2009) as applicable under paragraphs (1), (2),
            and (3) of subsection (a);
                ``(2) determine whether such regulations are fair and not
            deceptive and otherwise meet the objectives of section 4201 of
            the Consumer Financial Protection Agency Act of 2009; and
                ``(3) prescribe regulations under subsection (a)(4) after
            the designated transfer date, as determined under such Act.''.
        (d) Effective Date and Scope of Application.--
                (1) Effective date.--This section shall take effect on the
            designated transfer date.
                (2) Scope of application.--The amendments made by
            subsection (a) shall not affect any transaction covered by the
            Alternative Mortgage Transaction Parity Act of l982 which is
            entered into on or before the designated transfer date.

    SEC. 4804. AMENDMENTS TO THE CONSUMER CREDIT PROTECTION ACT.

        (a) Truth in Lending Act.--
                (1) Section 103.--Section 103 of the Truth in Lending Act
            (15 U.S.C. 1602) is amended by striking subsection (b) and
            inserting the following new subsection:
        ``(b) Agency Definitions.--
                ``(1) Board.--The term `Board' means the `Board of
            Governors of the Federal Reserve System'.
                ``(2) Agency.--The term `Agency' means the Consumer
            Financial Protection Agency.''.
                (2) Universal amendment relating to board of governors of
            the federal reserve system.--
                        (A) In general.--Except as provided in subparagraph
                    (B), the Truth in Lending Act (15 U.S.C. 1601 et seq.)
                    is amended by striking ``Board'' each place such term
                    appears, including in chapters 4 and 5 relating to
                    credit billing and consumer leases, and inserting
                    ``Agency''.
                        (B) Exceptions.--The amendment described in
                    subparagraph (A) shall not apply to sections 108(a) (as
                    amended by paragraph (4)) and 140(d) and shall not
                    apply to the term ``Board'' when used in reference to
                    the Federal Deposit Insurance Corporation or the
                    National Credit Union Administration.
                (3) Section 105.--Section 105(b) of the Truth in Lending
            Act (15 U.S.C. 1604(b)) is amended by striking the first
            sentence and inserting the following: ``The Agency shall
            publish a single, integrated disclosure for mortgage loan
            transactions, including real estate settlement cost statements,
            which include the disclosure requirements of this title, in
            conjunction with the disclosure requirements of the Real Estate
            Settlement Procedures Act that, taken together, may apply to
            transactions subject to both or either law. The purpose of such
            model disclosure shall be to facilitate compliance with the
            disclosure requirements of those titles, and to aid the
            borrower or lessee in understanding the transaction by
            utilizing readily understandable language to simplify the
            technical nature of the disclosures.''.
                (4) Section 108.--Section 108 of the Truth in Lending Act
            (15 U.S.C. 1607) is amended--
                        (A) by striking subsection (a) and inserting the
                    following new subsection:
        ``(a) Enforcing Agencies.--Subject to section 4202 of the Consumer
    Financial Protection Agency Act of 2009, compliance with the
    requirements imposed under this title shall be enforced as follows:
                ``(1) Under section 8 of the Federal Deposit Insurance Act,
            in the case of--
                        ``(A) national banks, and Federal branches and
                    Federal agencies of foreign banks, by the head of the
                    agency responsible for chartering and regulating
                    national banks;
                        ``(B) member banks of the Federal Reserve System
                    (other than national banks), branches and agencies of
                    foreign banks (other than Federal branches, Federal
                    agencies, and insured State branches of foreign banks),
                    commercial lending companies owned or controlled by
                    foreign banks, and organizations operating under
                    section 25 or 25A of the Federal Reserve Act, by the
                    Board;
                        ``(C) depository institution insured by the Federal
                    Deposit Insurance Corporation (other than members of
                    the Federal Reserve System, Federal savings
                    associations, and savings and loan holding companies)
                    and insured State branches of foreign banks, by the
                    Board of Directors of the Federal Deposit Insurance
                    Corporation; and
                        ``(D) Federal savings associations and savings and
                    loan holding companies, by the Director of the Office
                    of Thrift Supervision.
                ``(2) Under subtitle E of the Consumer Financial Protection
            Agency Act of 2009, by the Agency.
                ``(3) Under the Federal Credit Union Act, by the head of
            the agency responsible for chartering and regulating Federal
            credit unions.
                ``(4) Under the Federal Aviation Act of 1958, by the
            Secretary of Transportation with respect to any air carrier or
            foreign air carrier subject to that Act.
                ``(5) Under the Packers and Stockyards Act, 1921 (except as
            provided in section 406 of that Act), by the Secretary of
            Agriculture with respect to any activities subject to that Act.
                ``(6) Under the Farm Credit Act of 1971, by the Farm Credit
            Administration with respect to any Federal land bank, Federal
            land bank association, Federal intermediate credit bank, or
            production credit association.''; and
                        (B) by striking subsection (c) and inserting the
                    following new subsection:
        ``(c) Overall Enforcement Authority of the Federal Trade
    Commission.--Except to the extent that enforcement of the requirements
    imposed under this title is specifically committed to some other
    Government agency (other than the Consumer Financial Protection Agency)
    under subsection (a) and subject to section 4202 of the Consumer
    Financial Protection Agency Act of 2009, the Federal Trade Commission
    shall enforce such requirements. For the purpose of the exercise by the
    Federal Trade Commission of its functions and powers under the Federal
    Trade Commission Act, a violation of any requirement imposed under this
    title shall be deemed a violation of a requirement imposed under that
    Act. All of the functions and powers of the Federal Trade Commission
    under the Federal Trade Commission Act are available to the Commission
    to enforce compliance by any person with the requirements under this
    title, irrespective of whether that person is engaged in commerce or
    meets any other jurisdictional tests in the Federal Trade Commission
    Act.''.
                (5) Universal amendment relating to the federal trade
            commission.--
                        (A) In general.--Except as provided in subparagraph
                    (B) (and except for any insertion of ``Federal Trade
                    Commission'' made by this subtitle), the Truth in
                    Lending Act (15 U.S.C. 1601 et seq.) is amended by
                    striking ``Federal Trade Commission'' each place such
                    term appears and inserting ``Agency''.
                        (B) Exceptions.--The amendment described in
                    subparagraph (A) shall not apply to sections 108(c) (as
                    amended by paragraph (4)) 129(m) (as amended by
                    paragraph (7)), 140A, or 149 (as amended by paragraph
                    (8)).
                (6) Section 127.--Subparagraph (C) of section 127(b)(11) of
            the Truth in Lending Act (15 U.S.C. 1637(b)(11)) is amended to
            read as follows:
                        ``(C) Notwithstanding subparagraphs (A) and (B), in
                    the case of a creditor with respect to which compliance
                    with this title is enforced by the Agency, the
                    following statement, in a prominent location on the
                    front of the billing statement, disclosed clearly and
                    conspicuously: `Minimum Payment Warning: Making only
                    the required minimum payment will increase the interest
                    you pay and the time it takes to repay your balance.
                    For example, making only the typical 5 percent minimum
                    monthly payment on a balance of $300 at an interest
                    rate of 17 percent would take 24 months to repay the
                    balance in full. For an estimate of the time it would
                    take to repay your balance, making only minimum monthly
                    payments, call the Consumer Financial Protection Agency
                    at this toll-free number: _________ [the blank space to
                    be filled in by the creditor].' A creditor who is
                    subject to this subparagraph shall not be subject to
                    subparagraph (A) or (B).''.
                (7) Section 129.--Section 129(m) of the Truth in Lending
            Act (15 U.S.C. 1639(m)) is amended to read as follows:
        ``(m) Civil Penalties in Federal Trade Commission Enforcement
    Actions.--For purposes of enforcement by the Federal Trade Commission,
    any violation of a regulation issued by the Agency pursuant to
    subsection (l)(2) of this section shall be treated as a violation of a
    regulation promulgated under section 18 of the Federal Trade Commission
    Act (15 U.S.C. 57a) regarding unfair or deceptive acts or practices.''.
                (8) Section 149.--Section 149(b) of the Truth in Lending
            Act (15 U.S.C. 1665d(b)) is amended by inserting ``the Federal
            Trade Commission,'' after ``in consultation with''.
        (b) Fair Credit Reporting Act.--
                (1) Section 603.--Section 603 of the Fair Credit Reporting
            Act (15 U.S.C. 1681a) is amended--
                        (A) by redesignating subsections (w) and (x) as
                    subsections (x) and (y), respectively; and
                        (B) by inserting after subsection (v) the following
                    new subsection:
        ``(w) Agency.--The term `Agency' means the Consumer Financial
    Protection Agency.''.
                (2) Universal amendments relating to the federal trade
            commission.--Other than in connection with the amendment made
            by paragraphs (7)(B), (8)(A), (8)(C), and (8)(D) of this
            subsection (and except for any insertion of ``Federal Trade
            Commission'' made by this subtitle), the Fair Credit Reporting
            Act (15 U.S.C. 1681a) is amended--
                        (A) by striking ``Federal Trade Commission'' each
                    place such term appears and inserting ``Agency'';
                        (B) by striking ``Commission'' each place such term
                    appears (other than in connection with the term amended
                    in subparagraph (A)) and inserting ``Agency''; and
                        (C) by striking ``Federal banking agencies, the
                    National Credit Union Administration, and the
                    Commission shall jointly'' each place such term appears
                    in sections 605(h)(2) and 623(a)(8)(A) and inserting
                    ``Agency shall''.
                (3) Section 603.--Section 603(k)(2) of the Fair Credit
            Reporting Act (15 U.S.C. 1681a(k)(2)) is amended by striking
            ``Board of Governors of the Federal Reserve System'' and
            inserting ``Agency''.
                (4) Section 604.--Subsection 604(g) of the Fair Credit
            Reporting Act (15 U.S.C. 1681b(g)) is amended--
                        (A) by striking subparagraph (C) of paragraph (3)
                    and inserting the following new subparagraph:
                        ``(C) as otherwise determined to be necessary and
                    appropriate, by regulation or order and subject to
                    paragraph (6), by the Agency (with respect to any
                    covered person subject to the jurisdiction of such
                    agency under paragraph (2) of section 621(b)), or the
                    applicable State insurance authority (with respect to
                    any person engaged in providing insurance or
                    annuities).''; and
                        (B) by striking paragraph (5) and inserting the
                    following new paragraph:
                ``(5) Regulations required.--The Agency may, after notice
            and opportunity for comment, prescribe regulations that permit
            transactions under paragraph (2) that are determined to be
            necessary and appropriate to protect legitimate operational,
            transactional, risk, consumer, and other needs (and which shall
            include permitting actions necessary for administrative
            verification purposes), consistent with the intent of paragraph
            (2) to restrict the use of medical information for
            inappropriate purposes.''.
                (5) Section 609.--Section 609(d)(1) of the Fair Credit
            Reporting Act (15 U.S.C. 1681g(d)(1)) is amended by inserting
            ``the Federal Trade Commission,'' after ``in consultation
            with''.
                (6) Section 611.--Section 611(e) of the Fair Credit
            Reporting Act (15 U.S.C. 1681i(e)) is amended--
                        (A) by amending paragraph (2) to read as follows:
                ``(2) Exclusion.--Complaints received or obtained by the
            Agency pursuant to its investigative authority under the
            Consumer Financial Protection Agency Act of 2009 shall not be
            subject to paragraph (1).''; and
                        (B) in the heading of paragraph (3) by inserting
                    ``Consumer reporting'' before ``agency''.
                (7) Section 615.--Section 615 of the Fair Credit Reporting
            Act (15 U.S.C. 1681m) is amended--
                        (A) in subsection (d)(2)(B), by inserting ``the
                    Federal Trade Commission,'' after ``in consultation
                    with'';
                        (B) in subsection (e)(1), by striking ``and the
                    Commission'' and inserting ``the Federal Trade
                    Commission, the Securities and Exchange Commission, and
                    the Commodities Futures Trading Commission''; and
                        (C) by striking subparagraph (A) of subsection
                    (h)(6) and inserting the following:
                        ``(A) Rules required.--The Agency shall prescribe
                    rules.''.
                (8) Section 621.--Section 621 of the Fair Credit Reporting
            Act (15 U.S.C. 1681s) is amended--
                        (A) by striking subsection (a) and inserting the
                    following new subsection:
        ``(a) Enforcement by Federal Trade Commission.--
                ``(1) In general.--Subject to section 4202 of the Consumer
            Financial Protection Agency Act of 2009, compliance with the
            requirements imposed under this title shall be enforced under
            the Federal Trade Commission Act by the Federal Trade
            Commission with respect to consumer reporting agencies and all
            other persons subject thereto, except to the extent that
            enforcement of the requirements imposed under this title is
            specifically committed to some other government agency (other
            than the Consumer Financial Protection Agency) under subsection
            (b) hereof. For the purpose of the exercise by the Federal
            Trade Commission of its functions and powers under the Federal
            Trade Commission Act, a violation of any requirement or
            prohibition imposed under this title shall constitute an unfair
            or deceptive act or practice in commerce in violation of
            section 5(a) of the Federal Trade Commission Act and shall be
            subject to enforcement by the Federal Trade Commission under
            section 5(b) of such Act with respect to any consumer reporting
            agency or person subject to enforcement by the Federal Trade
            Commission pursuant to this subsection, irrespective of whether
            that person is engaged in commerce or meets any other
            jurisdictional tests in the Federal Trade Commission Act. The
            Federal Trade Commission shall have such procedural,
            investigative, and enforcement powers (subject to section 4202
            of the Consumer Financial Protection Agency Act of 2009),
            including the power to issue procedural rules in enforcing
            compliance with the requirements imposed under this title and
            to require the filing of reports, the production of documents,
            and the appearance of witnesses as though the applicable terms
            and conditions of the Federal Trade Commission Act were part of
            this title. Any person violating any of the provisions of this
            title shall be subject to the penalties and entitled to the
            privileges and immunities provided in the Federal Trade
            Commission Act as though the applicable terms and provisions
            thereof were part of this title.
                ``(2) Civil money penalties.--
                        ``(A) In general.--Subject to section 4202 of the
                    Consumer Financial Protection Agency Act of 2009, in
                    the event of a knowing violation, which constitutes a
                    pattern or practice of violations of this title, the
                    Commission may commence a civil action to recover a
                    civil penalty in a district court of the United States
                    against any person that violates this title. In such
                    action, such person shall be liable for a civil penalty
                    of not more than $2,500 per violation.
                        ``(B) Factors in determining amount.--In
                    determining the amount of a civil penalty under
                    subparagraph (A), the court shall take into account the
                    degree of culpability, any history of prior such
                    conduct, ability to pay, effect on ability to continue
                    to do business, and such other matters as justice may
                    require.
                ``(3) Exception.--Notwithstanding paragraph (2), a court
            may not impose any civil penalty on a person for a violation of
            section 623(a)(1) unless the person has been enjoined from
            committing the violation, or ordered not to commit the
            violation, in an action or proceeding brought by or on behalf
            of the Federal Trade Commission or the Agency, as the case may
            be, and has violated the injunction or order, and the court may
            not impose any civil penalty for any violation occurring before
            the date of the violation of the injunction or order.'';
                        (B) by striking subsection (b) and inserting the
                    following new subsection:
        ``(b) Enforcement by Other Agencies.--Subject to section 4202 of
    the Consumer Financial Protection Agency Act of 2009, compliance with
    the requirements imposed under this title with respect to consumer
    reporting agencies, persons who use consumer reports from such
    agencies, persons who furnish information to such agencies, and users
    of information that are subject to subsection (d) of section 615 shall
    be enforced as follows:
                ``(1) Under section 8 of the Federal Deposit Insurance Act,
            in the case of--
                        ``(A) national banks, and Federal branches and
                    Federal agencies of foreign banks, by the head of the
                    agency responsible for chartering and regulating
                    national banks;
                        ``(B) member banks of the Federal Reserve System
                    (other than national banks), branches and agencies of
                    foreign banks (other than Federal branches, Federal
                    agencies, and insured State branches of foreign banks),
                    commercial lending companies owned or controlled by
                    foreign banks, and organizations operating under
                    section 25 or 25A of the Federal Reserve Act, by the
                    Board of Governors of the Federal Reserve System;
                        ``(C) banks insured by the Federal Deposit
                    Insurance Corporation (other than members of the
                    Federal Reserve System, Federal savings associations,
                    and savings and loan holding companies) and insured
                    State branches of foreign banks, by the Board of
                    Directors of the Federal Deposit Insurance Corporation;
                    and
                        ``(D) Federal savings associations and savings and
                    loan holding companies, by the Director of the Office
                    of Thrift Supervision.
                ``(2) Under subtitle E of the Consumer Financial Protection
            Agency Act of 2009, by the Agency in the case of a covered
            person under that Act.
                ``(3) Under the Federal Credit Union Act, by the National
            Credit Union Administration Board with respect to any Federal
            credit union.
                ``(4) Under subtitle IV of title 49, United States Code, by
            the Secretary of Transportation, with respect to all carriers
            subject to the jurisdiction of the Surface Transportation
            Board.
                ``(5) Under the Federal Aviation Act of 1958, by the
            Secretary of Transportation with respect to any air carrier or
            foreign air carrier subject to that Act.
                ``(6) Under the Packers and Stockyards Act, 1921 (except as
            provided in section 406 of that Act), by the Secretary of
            Agriculture with respect to any activities subject to that Act.
                ``(7) Under the Commodity Exchange Act, with respect to a
            person subject to the jurisdiction of the Commodity Futures
            Trading Commission.
                ``(8) Under the Federal securities law and any other laws
            subject to the jurisdiction of the Securities and Exchange
            Commission, with respect to a person subject to the
            jurisdiction of the Securities and Exchange Commission.
    Any term used in paragraph (1) that is not defined in this title or
    otherwise defined in section 3(s) of the Federal Deposit Insurance Act
    shall have the meaning given to such term in section 1(b) of the
    International Banking Act of 1978.'';
                        (C) in paragraph (2) of subsection (c)--
                                (i) by inserting ``the Agency and'' before
                            ``the Federal Trade Commission'' in the first
                            sentence;
                                (ii) by inserting ``Agency and the Federal
                            Trade'' after ``provide the''; and
                                (iii) by inserting ``Agency,'' before
                            ``Federal Trade Commission'' in the second
                            sentence;
                        (D) in paragraph (4) of subsection (c)--
                                (i) by inserting ``Agency'', before ``the
                            Federal Trade Commission''; and
                                (ii) inserting ``Agency, the Federal
                            Trade'' after ``complaint of the'';
                        (E) in paragraph (2) of subsection (f), by
                    inserting ``the Federal Trade Commission'' after ``in
                    consultation with'';
                        (F) by striking subsection (e) and inserting the
                    following new subsection:
        ``(e) Regulatory Authority.--The Agency shall prescribe such
    regulations as necessary to carry out the purposes of this Act, except
    that, with respect to sections 615(e) and 628 of this title, the
    agencies identified in subsections (a) and (b) of this section shall
    prescribe such regulations as necessary to carry out the purposes of
    such sections with respect to entities within their enforcement
    authority under such subsections.''; and
                        (G) in the heading of subsection (g) by striking
                    ``FTC''.
                (8) Section 623.--Section 623 of the Fair Credit Reporting
            Act (15 U.S.C. 1681s-2) is amended--
                        (A) by amending subparagraph (a)(7)(D) to read as
                    follows:
                        ``(D) Model disclosure.--
                                ``(i) Duty of agency to prepare.--The
                            Agency shall prescribe a brief model disclosure
                            a financial institution may use to comply with
                            subparagraph (A), which shall not exceed 30
                            words.
                                ``(ii) Use of model not required.--No
                            provision of this paragraph shall be construed
                            as requiring a financial institution to use any
                            such model form prescribed by the Agency.
                                ``(iii) Compliance using model.--A
                            financial institution shall be deemed to be in
                            compliance with subparagraph (A) if the
                            financial institution uses any such model form
                            prescribed by the Agency, or the financial
                            institution uses any such model form and
                            rearranges its format.''.
                        (B) by amending subsection (e) to read as follows:
        ``(e) Accuracy Guidelines and Regulations Required.--
                ``(1) Guidelines.--The Agency shall, with respect to the
            entities that are subject to its enforcement authority under
            section 621--
                        ``(A) establish and maintain guidelines for use by
                    each person that furnishes information to a consumer
                    reporting agency regarding the accuracy and integrity
                    of the information relating to consumers that such
                    entities furnish to consumer reporting agencies, and
                    update such guidelines as often as necessary; and
                        ``(B) prescribe regulations requiring each person
                    that furnishes information to a consumer reporting
                    agency to establish reasonable policies and procedures
                    or implementing the guidelines established pursuant to
                    subparagraph (A).
                ``(2) Criteria.--In developing the guidelines required by
            paragraph (1)(A), the Agency shall--
                        ``(A) identify patterns, practices, and specific
                    forms of activity that can compromise the accuracy and
                    integrity of information furnished to consumer
                    reporting agencies;
                        ``(B) review the methods (including technological
                    means) used to furnish information relating to
                    consumers to consumer reporting agencies;
                        ``(C) determine whether persons that furnish
                    information to consumer reporting agencies maintain and
                    enforce policies to ensure the accuracy and integrity
                    of information furnished to consumer reporting
                    agencies; and
                        ``(D) examine the policies and processes that
                    persons that furnish information to consumer reporting
                    agencies employ to conduct reinvestigations and correct
                    inaccurate information relating to consumers that has
                    been furnished to consumer reporting agencies.''.
        (c) Equal Credit Opportunity Act.--
                (1) Section 701.--Section 701 of the Equal Credit
            Opportunity Act (15 U.S.C. 1691) is amended by striking
            ``Board'' each place such term appears and inserting
            ``Agency''.
                (2) Section 702.--Section 702(c) of the Equal Credit
            Opportunity Act (15 U.S.C. 1691a) is amended to read as
            follows:
        ``(c) The term `Agency' means the Consumer Financial Protection
    Agency.''.
                (3) Section 703.--Section 703 of the Equal Credit
            Opportunity Act (15 U.S.C. 1691b) is amended--
                        (A) by striking subsection (b);
                        (B) in subsection (a)--
                                (i) by striking ``(1)''; and
                                (ii) by redesignating paragraphs (2), (3),
                            (4), and (5) as subsections (b), (c), (d), and
                            (e), respectively;
                        (C) in subsection (c) (as so redesignated)--
                                (i) by striking ``paragraph (2)'' and
                            inserting ``subsection (b)''; and
                                (ii) by striking ``such paragraph'' and
                            inserting ``such subsection'';
                        (D) in subsection (d) (as so redesignated)--
                                (i) by striking ``subsection'' and
                            inserting ``section'';
                                (ii) by striking ``Act'' and inserting
                            ``title''; and
                                (iii) by striking ``this paragraph'' and
                            inserting ``this subsection''; and
                        (E) by striking ``Board'' each place such term
                    appears in such section and inserting ``Agency''.
                (4) Section 704.--Section 704 of the Equal Credit
            Opportunity Act (15 U.S.C. 1691c) is amended--
                        (A) in subsection (a)--
                                (i) in the matter preceding paragraph (1),
                            by striking ``Compliance'' and inserting
                            ``Subject to section 4202 of the Consumer
                            Financial Protection Agency Act of 2009,
                            compliance'';
                                (ii) in paragraph (1)(A), by striking
                            ``Office of the Comptroller of the Currency''
                            and inserting ``head of the agency responsible
                            for chartering and regulating national banks'';
                                (iii) in paragraph (1)(B)--
                                        (I) by inserting ``of Governors of
                                    the Federal Reserve System'' after
                                    ``Board''; and
                                        (II) by striking ``and'' after the
                                    semicolon;
                                (iv) in paragraph (1)(C), by inserting
                            ``and'' after the semicolon;
                                (v) by inserting after subparagraph (C) of
                            paragraph (1) the following new subparagraph:
                        ``(D) savings associations and savings and loan
                    holding companies by the Director of the Office of
                    Thrift Supervision;''; and
                                (vi) by amending paragraph (2) to read as
                            follows:
                ``(2) Subtitle E of the Consumer Financial Protection
            Agency Act of 2009, by the Agency.'';
                        (B) by striking subsection (c) and inserting the
                    following new subsection:
        ``(c) Overall Enforcement Authority of Federal Trade Commission.--
    Except to the extent that enforcement of the requirements imposed under
    this title is specifically committed to some other Government agency
    (other than the Consumer Financial Protection Agency) under subsection
    (a) and subject to section 4202 of the Consumer Financial Protection
    Agency Act of 2009, the Federal Trade Commission shall enforce such
    requirements. For the purpose of the exercise by the Federal Trade
    Commission of its functions and powers under the Federal Trade
    Commission Act, a violation of any requirement imposed under this title
    shall be deemed a violation of a requirement imposed under that Act.
    All of the functions and powers of the Federal Trade Commission under
    the Federal Trade Commission Act are available to the Commission to
    enforce compliance by any person with the requirements imposed under
    this title, irrespective of whether that person is engaged in commerce
    or meets any other jurisdictional tests in the Federal Trade Commission
    Act, including the power to enforce any regulation prescribed by the
    Director under this title in the same manner as if the violation had
    been a violation of a Federal Trade Commission trade regulation
    rule.''; and
                        (C) in subsection (d), by striking ``Board'' and
                    inserting ``Agency''.
                (5) Section 704a.--Section 704A(a)(1) of the Equal Credit
            Opportunity Act (15 U.S.C. 1691c-1(a)(1)) is amended in by
            striking ``Board'' and inserting ``Agency''.
                (6) Section 705.--Section 705 of the Equal Credit
            Opportunity Act (15 U.S.C. 1691d) is amended--
                        (A) in subsection (f), by striking ``Board'' each
                    place such term appears and inserting ``Agency''; and
                        (B) in subsection (g), by striking ``Board'' and
                    inserting ``Agency''.
                (7) Section 706.--Section 706 of the Equal Credit
            Opportunity Act (15 U.S.C. 1691e) is amended--
                        (A) in subsection (e)--
                                (i) by striking ``Board'' each place such
                            term appears and inserting ``Agency''; and
                                (ii) by striking ``Federal Reserve System''
                            and inserting ``Consumer Financial Protection
                            Agency'';
                        (B) in subsection (f), by striking ``two years''
                    each place such term appears and inserting ``5 years'';
                        (C) in subsection (g)--
                                (i) by striking ``The agencies having'', in
                            the 1st sentence, and inserting ``The Agency
                            and the agencies having'';
                                (ii) by striking ``Each agency referred'',
                            in the 2nd sentence, and inserting ``The Agency
                            and each agency referred'';
                                (iii) by striking ``Each such agency'', in
                            the 3rd sentence, and inserting ``The Agency
                            and each such agency''; and
                                (iv) by striking ``whenever the agency'' in
                            the 3rd sentence, and inserting ``whenever the
                            Agency or an agency having responsibility for
                            administrative enforcement under section 704'';
                            and
                        (D) in subsection (k)--
                                (i) by striking ``Whenever an agency'' and
                            inserting ``Whenever the Agency or an agency'';
                            and
                                (ii) by striking ``the agency shall
                            notify'' and inserting ``the Agency, or an
                            agency referred to in any such paragraph, as
                            the case may be, shall notify''.
                (8) Section 707.--Section 707 of the Equal Credit
            Opportunity Act (15 U.S.C. 1691f) is amended by striking
            ``Board'' each place such term appears and inserting
            ``Agency''.
        (d) Fair Debt Collection Practices Act.--
                (1) Section 803.--Section 803 of the Fair Debt Collection
            Practices Act (15 U.S.C. 1692a) is amended--
                        (A) by redesignating paragraphs (1), (2), (3), (4),
                    (5), (6), (7), and (8) as paragraphs (2), (3), (4),
                    (5), (6), (7), (8), and (9), respectively; and
                        (B) by inserting before paragraph (2) (as so
                    redesignated) the following new paragraph:
                ``(1) The term `Agency' means the Consumer Financial
            Protection Agency.''.
                (2) Section 813.--Section 813(e) of the Fair Debt
            Collection Practices Act (15 U.S.C. 1692k(e)) is amended by
            striking ``Commission'' and inserting ``Agency''.
                (3) Section 814.--Section 814 of the Fair Debt Collection
            Practices Act (15 U.S.C. 1692l) is amended--
                        (A) by striking subsection (a) and inserting the
                    following new subsection:
        ``(a) Federal Trade Commission.--Subject to section 4202 of the
    Consumer Financial Protection Agency Act of 2009, compliance with this
    title shall be enforced by the Commission, except to the extent that
    enforcement of the requirements imposed under this title is
    specifically committed to another agency (other than the Consumer
    Financial Protection Agency) under subsection (b). For purpose of the
    exercise by the Commission of its functions and powers under the
    Federal Trade Commission Act, a violation of this title shall be deemed
    an unfair or deceptive act or practice in violation of that Act. All of
    the functions and powers of the Commission under the Federal Trade
    Commission Act are available to the Commission to enforce compliance by
    any person with this title, irrespective of whether that person is
    engaged in commerce or meets any other jurisdictional tests in the
    Federal Trade Commission Act, including the power to enforce the
    provisions of this title in the same manner as if the violation had
    been a violation of a Federal Trade Commission trade regulation
    rule.'';
                        (B) in subsection (b)--
                                (i) in the matter preceding paragraph (1),
                            by striking ``Compliance'' and inserting
                            ``Enforcement by Other Agency.--Subject to
                            section 4202 of the Consumer Financial
                            Protection Agency Act of 2009, compliance'';
                                (ii) in paragraph (1)(A), by striking
                            ``Office of the Comptroller of the Currency;''
                            and inserting ``head of the agency responsible
                            for chartering and regulating national
                            banks;'';
                                (iii) in paragraph (1)(B), by striking
                            ``and'' after the semicolon;
                                (iv) in paragraph (1)(C), by inserting
                            ``and'' after the semicolon;
                                (v) by inserting after subparagraph (C) of
                            paragraph (1) the following new subparagraph:
                        ``(D) savings associations and savings and loan
                    holding companies by the Director of the Office of
                    Thrift Supervision;''; and
                                (vi) by striking paragraph (2) and
                            inserting the following new paragraph:
                ``(2) subtitle E of the Consumer Financial Protection
            Agency Act of 2009, by the Agency;''; and
                        (C) by striking subsection (d) and inserting the
                    following new subsection:
        ``(d) Regulations.--The Agency may prescribe regulations with
    respect to the collection of debts by any debt collector.''.
                (4) Section 815.--Section 815 (15 U.S.C. 1692m) is
            amended--
                        (A) in the section heading, by striking
                    ``Commission'' and inserting ``Agency''; and
                        (B) by striking ``Commission'' each place such term
                    appears and inserting ``Agency''.
                (5) Section 817.--Section 817 (15 U.S.C. 1692o) is amended
            by striking ``Commission'' each place such term appears and
            inserting ``Agency''.
        (e) Electronic Fund Transfer Act.--
                (1) Section 903.--Section 903 of the Electronic Fund
            Transfer Act (15 U.S.C. 1693a) is amended--
                        (A) by striking paragraph (3) and inserting the
                    following new paragraph:
                ``(3) the term `Agency' means the Consumer Financial
            Protection Agency;''; and
                        (B) in paragraph (6), by striking ``Board'' and
                    inserting ``Agency''.
                (2) Section 904.--Section 904 of the Electronic Fund
            Transfer Act (15 U.S.C. 1693b) is amended by striking ``Board''
            each place such term appears and inserting ``Agency''.
                (3) Section 905.--Section 905 of the Electronic Fund
            Transfer Act (15 U.S.C. 1693c) is amended by striking ``Board''
            each place such term appears and inserting ``Agency''.
                (4) Section 906.--Section 906(b) of the Electronic Fund
            Transfer Act (15 U.S.C. 1693d(b)) is amended by striking
            ``Board'' and inserting ``Agency''.
                (5) Section 907.--Section 907(b) of the Electronic Fund
            Transfer Act (15 U.S.C. 1693e(b)) is amended by striking
            ``Board'' and inserting ``Agency''.
                (6) Section 908.--Section 908(f)(7) of the Electronic Fund
            Transfer Act (15 U.S.C. 1693f(f)(7)) is amended by striking
            ``Board'' and inserting ``Agency''.
                (7) Section 910.--Section 910(a)(1)(E) of the Electronic
            Fund Transfer Act (15 U.S.C. 1693h(a)(1)(E)) is amended by
            striking ``Board'' and inserting ``Agency''.
                (8) Section 911.--Section 911(b)(3) of the Electronic Fund
            Transfer Act (15 U.S.C. 1693i(b)(3) is amended by striking
            ``Board'' and inserting ``Agency''.
                (9) Section 915.--Section 915(d) of the Electronic Fund
            Transfer Act (15 U.S.C. 1693m(d)) is amended--
                        (A) by striking ``Board'' each place such term
                    appears and inserting ``Agency''; and
                        (B) by striking ``Federal Reserve System'' and
                    inserting ``Consumer Financial Protection Agency''.
                (10) Section 917.--Section 917 of the Electronic Fund
            Transfer Act (15 U.S.C. 1693o) is amended--
                        (A) in subsection (a)--
                                (i) by striking ``Compliance'' and
                            inserting ``Subject to section 4202 of the
                            Consumer Financial Protection Agency Act of
                            2009, compliance'';
                                (ii) in paragraph (1)(A), by striking
                            ``Office of the Comptroller of the Currency''
                            and inserting ``head of the agency responsible
                            for chartering and regulating national banks'';
                                (iii) in paragraph (l)(B), by inserting
                            ``of Governors of the Federal Reserve System''
                            after ``Board''; and
                                (iv) by striking paragraph (2) and
                            inserting:
                ``(2) subtitle E of the Consumer Financial Protection
            Agency Act of 2009, by the Agency;''; and
                        (B) by striking subsection (c) and inserting the
                    following new subsection:
        ``(c) Overall Enforcement Authority of the Federal Trade
    Commission.--Except to the extent that enforcement of the requirements
    imposed under this title is specifically committed to some other
    Government agency (other than the Consumer Financial Protection Agency)
    under subsection (a) and subject to section 4202 of the Consumer
    Financial Protection Agency Act of 2009, the Federal Trade Commission
    shall enforce such requirements. For the purpose of the exercise by the
    Federal Trade Commission of its functions and powers under the Federal
    Trade Commission Act, a violation of any requirement imposed under this
    title shall be deemed a violation of a requirement imposed under that
    Act. All of the functions and powers of the Federal Trade Commission
    under the Federal Trade Commission Act are available to the Commission
    to enforce compliance by any person subject to the jurisdiction of the
    Commission with the requirements imposed under this title, irrespective
    of whether that person is engaged in commerce or meets any other
    jurisdictional tests in the Federal Trade Commission Act.''.
                (11) Section 918.--Section 918 of the Electronic Fund
            Transfer Act (15 U.S.C. 1693p) is amended by striking ``Board''
            each place such term appears and inserting ``Agency''.
                (12) Section 919.--Section 919 of the Electronic Fund
            Transfer Act (15 U.S.C. 1693q) is amended by striking ``Board''
            each place such term appears and inserting ``Agency''.
                (13) Section 920.--Section 920 of the Electronic Fund
            Transfer Act (15 U.S.C. 1693r) is amended by striking ``Board''
            each place such term appears and inserting ``Agency''.
        (f) Amendments to HOEPA Relating to the Truth in Lending Act.--
    Section 158 of the Home Ownership and Equity Protection Act of 1994 (15
    U.S.C. 1601 note) (relating to hearings on home equity lending) is
    amended--
                (1) in subsection (a), by striking ``Board of Governors of
            the Federal Reserve System, in consultation with the Consumer
            Advisory Council of the Board,'' and inserting ``Consumer
            Financial Protection Agency, in consultation with the Advisory
            Board to the Agency''; and
                (2) in subsection (b), by striking ``Board of Governors of
            the Federal Reserve System'' and inserting ``Consumer Financial
            Protection Agency''.
        (g) Amendment to the Fair and Accurate Credit Transactions Act of
    2003 Relating to the Fair Credit Reporting Act.--Section 214(b)(1) of
    the Fair and Accurate Credit Transactions Act of 2003 (15 U.S.C. 1681s-
    3 note) is amended by striking ``The Federal banking agencies, the
    National Credit Union Administration, and the Commission, with respect
    to the entities that are subject to their respective enforcement
    authority under section 621 of the Fair Credit Reporting Act and'' and
    inserting ``The Consumer Financial Protection Agency, with respect to a
    person subject to the enforcement authority of the Agency, the
    Commodity Futures Trading Commission, and''.

    SEC. 4805. AMENDMENTS TO THE EXPEDITED FUNDS AVAILABILITY ACT.

        (a) Section 605.--Section 605(f)(1) of the Expedited Funds
    Availability Act (12 U.S.C. 4004(f)(1)) is amended by inserting ``, in
    consultation with the Director of the Consumer Financial Protection
    Agency,'' after ``Board''.
        (b) Section 609.--Section 609(a) of the Expedited Funds
    Availability Act (12 U.S.C. 4008(a)) is amended by inserting ``, in
    consultation with the Director of the Consumer Financial Protection
    Agency,'' after ``Board''.

    SEC. 4806. AMENDMENTS TO THE FEDERAL DEPOSIT INSURANCE ACT.

        (a) Section 8.--Section 8(t) the Federal Deposit Insurance Act (12
    U.S.C. 1818(t)), as amended by section 1111(b)(2), is further amended
    by adding at the end the following new paragraph:
                ``(7) Referral to consumer financial protection
            commission.--Each appropriate Federal banking agency shall make
            a referral to the Consumer Financial Protection Agency when the
            Federal banking agency has a reasonable belief that a violation
            of an enumerated consumer law, as defined in section 4202(e)(2)
            of the Consumer Financial Protection Agency Act of 2009, by any
            insured depository institution or institution-affiliated party
            within the jurisdiction of that appropriate Federal banking
            agency.''.
        (b) Section 43.--Section 43 of the Federal Deposit Insurance Act
    (12 U.S.C. 1831t) is amended--
                (1) in subsection (c), by striking ``Federal Trade
            Commission'' and inserting ``Agency'';
                (2) in subsection (d), by striking ``Federal Trade
            Commission'' and inserting ``Agency'';
                (3) in subsection (e)--
                        (A) in paragraph (2)(B), by striking ``Federal
                    Trade Commission'' and inserting ``Agency''; and
                        (B) by adding at the end the following new
                    paragraph:
                ``(5) Agency.--The term `Agency' means the Consumer
            Financial Protection Agency.''.
        (c) Section 43(f).--Section 43(f) of the Federal Deposit Insurance
    Act (12 U.S.C. 1831t(f)) is amended--
                (1) by striking paragraph (1) and inserting the following
            new paragraph:
                ``(1) Limited enforcement authority.--Compliance with the
            requirements of subsections (b), (c), and (e), and any
            regulation prescribed or order issued under such subsection,
            shall be enforced under the Consumer Financial Protection
            Agency Act of 2009 by the Agency with respect to any person
            (and without regard to the provision of a consumer financial
            product or service).''; and
                (2) in paragraph (2), by striking subparagraph (C) and
            inserting the following new subparagraph:
                        ``(C) Limitation on state action while federal
                    action pending.--If the Agency has instituted an
                    enforcement action for a violation of this section, no
                    appropriate State supervisory may, during the pendency
                    of such action, bring an action under this section
                    against any defendant named in the complaint of the
                    Agency for any violation of this section that is
                    alleged in that complaint.''.

    SEC. 4807. AMENDMENTS TO THE GRAMM-LEACH-BLILEY ACT.

        (a) Section 501.--Section 501(b) of the Gramm-Leach-Bliley Act (15
    U.S.C. 6801(b)) is amended by inserting ``(other than the Consumer
    Financial Protection Agency)'' after ``title''.
        (b) Section 502.--Section 502(e)(5) of the Gramm-Leach-Bliley Act
    (15 U.S.C. 6802(e)(5)) is amended by inserting ``the Consumer Financial
    Protection Agency,'' after ``(including''.
        (c) Section 503.--Section 503(e)(1) of the Gramm-Leach-Bliley Act
    (15 U.S.C. 6803(e)(1)) is amended--
                (1) by inserting ``Consumer Financial Protection Agency in
            consultation with the other'' before ``agencies''; and
                (2) by striking ``jointly''.
        (d) Section 504.--Section 504(a)(1) of the Gramm-Leach-Bliley Act
    (15 U.S.C. 6804(a)(1)) is amended--
                (1) by striking ``The Federal banking agencies, the
            National Credit Union Administration, the Secretary of the
            Treasury,'' and inserting ``The Consumer Financial Protection
            Agency and'';
                (2) by striking ``, and the Federal Trade Commission''; and
                (3) by inserting ``the Federal banking agencies, the
            National Credit Union Administration, the Secretary of the
            Treasury, the Federal Trade Commission, and'' before
            ``representatives of State insurance authorities''.
        (e) Section 505.--
                (1) Section 505(a) of the Gramm-Leach-Bliley Act (15 U.S.C.
            6805(a)) is amended--
                        (A) in the matter preceding paragraph (1), by
                    striking ``This subtitle and the regulations prescribed
                    thereunder shall be enforced by'' and inserting
                    ``Subject to section 4202 of the Consumer Financial
                    Protection Agency Act of 2009, this subtitle and the
                    regulations prescribed under this title shall be
                    enforced by the Consumer Financial Protection
                    Agency,''; and
                        (B) by inserting after paragraph (7) the following
                    new paragraph:
                ``(8) Under the Consumer Financial Protection Agency Act of
            2009, by the Consumer Financial Protection Agency in the case
            of financial institutions and other covered persons and service
            providers subject to the jurisdiction of the Agency under that
            Act, but not with respect to the standards under section
            501.''.
                (2) Section 505(b)(1) of the Gramm-Leach-Bliley Act (15
            U.S.C. 6805(b)(1)) is amended by inserting ``, other than the
            Consumer Financial Protection Agency,'' after ``described in
            subsection (a)''.
        (f) Section 507.--Subsection 507(b) of the Gramm-Leach-Bliley Act
    (15 U.S.C. 6807(b)) is amended by striking ``Federal Trade Commission''
    and inserting ``Consumer Financial Protection Agency, or in the case of
    a rule under section 501(b), the Federal Trade Commission or the
    Securities and Exchange Commission''.

    SEC. 4808. AMENDMENTS TO THE HOME MORTGAGE DISCLOSURE ACT OF 1975.

        (a) Section 303.--Section 303 of the Home Mortgage Disclosure Act
    of 1975 (12 U.S.C. 2802) is amended--
                (1) by redesignating paragraphs (1), (2), (3), (4), (5),
            and (6) as paragraphs (2), (3), (4), (5), (6), and (7),
            respectively; and
                (2) by inserting before paragraph (2) (as so redesignated)
            the following new paragraph:
                ``(1) The term `Agency' means the Consumer Financial
            Protection Agency.''.
        (b) Universal Amendment Relating to Agency.--Except as provided in
    subsections (c), (d), (e), and (f), the Home Mortgage Disclosure Act of
    1975 (12 U.S.C. 2801-11) is amended by striking ``Board'' each place
    such term appears and inserting ``Agency''.
        (c) Section 304.--Section 304 of the Home Mortgage Disclosure Act
    of 1975 (12 U.S.C. 2803(h)) is amended--
                (1) in subsection (b)--
                        (A) by striking ``and'' after the semicolon at the
                    end of paragraph (3);
                        (B) by striking ``and gender'' in paragraph (4),
                    and inserting ``age, and gender'';
                        (C) by striking the period at the end of paragraph
                    (4) and inserting a semicolon; and
                        (D) by inserting after paragraph (4) the following
                    new paragraphs:
                ``(5) the number and dollar amount of mortgage loans
            grouped according to the following measurements:
                        ``(A) the total points and fees payable at
                    origination in connection with the mortgage as
                    determined by the Agency, taking into account section
                    103(aa)(4) of the Truth in Lending Act (15 U.S.C.
                    1602(aa)(4));
                        ``(B) the difference between the annual percentage
                    rate associated with the loan and a benchmark rate or
                    rates for all loans;
                        ``(C) the term in months of any prepayment penalty
                    or other fee or charge payable on repayment of some
                    portion of principal or the entire principal in advance
                    of scheduled payments; and
                        ``(D) such other information as the Agency may
                    require; and
                ``(6) the number and dollar amount of mortgage loans and
            completed applications grouped according to the following
            measurements:
                        ``(A) the value of the real property pledged or
                    proposed to be pledged as collateral;
                        ``(B) the actual or proposed term in months of any
                    introductory period after which the rate of interest
                    may change;
                        ``(C) the presence of contractual terms or proposed
                    contractual terms that would allow the mortgagor or
                    applicant to make payments other than fully-amortizing
                    payments during any portion of the loan term;
                        ``(D) the actual or proposed term in months of the
                    mortgage loan;
                        ``(E) the channel through which application was
                    made, including retail, broker, and other relevant
                    categories;
                        ``(F) as the Agency may determine to be
                    appropriate, a unique identifier that identifies the
                    loan originator as set forth in section 1503 of the
                    Secure and Fair Enforcement for Mortgage Licensing Act
                    of 2008;
                        ``(G) as the Agency may determine to be
                    appropriate, a universal loan identifier;
                        ``(H) as the Agency may determine to be
                    appropriate, the parcel number that corresponds to the
                    real property pledged or proposed to be pledged as
                    collateral;
                        ``(I) the credit score of mortgage applicants and
                    mortgagors in such form as the Agency may prescribe,
                    except that the Agency shall modify or require
                    modification of credit score data that is or will be
                    available to the public to protect the compelling
                    privacy interest of the mortgage applicant or
                    mortgagors; and
                        ``(J) such other information as the Agency may
                    require.'';
                (2) by striking subsection (h) and inserting the following
            new subsection:
        ``(h) Submission to Agencies.--
                ``(1) In general.--The data required to be disclosed under
            subsection (b) shall be submitted to the Agency or to the
            appropriate agency for any institution reporting under this
            title, in accordance with regulations prescribed by the Agency.
            Institutions will not be required to report new data required
            under section 4808(c) before the first January 1 that occurs
            after the end of the 9-month period beginning on the date that
            regulations prescribed by the Agency are prescribed in final
            form.
                ``(2) Regulations.--Notwithstanding the requirement of
            section 304(a)(2)(A) for disclosure by census tract, the
            Agency, in cooperation with other appropriate regulators,
            including--
                        ``(A) the head of the agency responsible for
                    chartering and regulating national banks for national
                    banks and Federal branches, Federal agencies of foreign
                    banks, and savings associations;
                        ``(B) the Federal Deposit Insurance Corporation for
                    depository institutions insured by the Federal Deposit
                    Insurance Corporation (other than members of the
                    Federal Reserve System, Federal savings associations,
                    and savings and loan holding companies) and insured
                    State branches of foreign banks;
                        ``(C) the Director of the Office of Thrift
                    Supervision for Federal savings associations and
                    savings and loan holding companies;
                        ``(D) the National Credit Union Administration
                    Board for credit unions; and
                        ``(E) the Secretary of Housing and Urban
                    Development for other lending institutions not
                    regulated by an agency referred to in subparagraph (A),
                    (B), (C), or (D),
            shall develop regulations prescribing the format for such
            disclosures, the method for submission of the data to the
            appropriate regulatory agency, and the procedures for
            disclosing the information to the public.
                ``(3) Required disclosures.--The regulations prescribed
            under paragraph (2) shall require the collection of data
            required to be disclosed under subsection (b) with respect to
            loans sold by each institution reporting under this title, and,
            in addition, shall require disclosure of the class of the
            purchaser of such loans.
                ``(4) Additional data or explanations.--Any reporting
            institution may submit in writing to the Agency or to the
            appropriate agency such additional data or explanations as it
            deems relevant to the decision to originate or purchase
            mortgage loans.'';
                (3) in subsection (i), by striking ``subsection (b)(4)''
            and inserting ``paragraphs (4), (5), and (6) of subsection
            (b)'';
                (4) in subsection (j)--
                        (A) by striking ``(as'' where such term appears in
                    paragraph (1) and inserting ``(containing loan-level
                    and application-level information relating to
                    disclosures required under subsections (a) and (b) and
                    as otherwise'';
                        (B) by striking ``in the format in which such
                    information is maintained by the institution'' where
                    such term appears in paragraph (2)(A), and inserting
                    ``in such formats as the Agency may require''; and
                        (C) by striking paragraph (3) and inserting the
                    following new paragraph:
                ``(3) Change of form not required.--A depository
            institution meets the disclosure requirement of paragraph (1)
            if the institution provides the information required under such
            paragraph in such formats as the Agency may require.''; and
                (5) by striking paragraph (2) of subsection (m) and
            inserting the following new paragraph:
                ``(2) Form of information.--In complying with paragraph
            (1), a depository institution shall provide the person
            requesting the information with a copy of the information
            requested in such formats as the Agency may require.''.
        (d) Section 305.--Section 305 of the Home Mortgage Disclosure Act
    of 1975 (12 U.S.C. 2804) is amended--
                (1) by striking subsection (b) and inserting the following
            new subsection:
        ``(b) Powers of Certain Other Agencies.--Compliance with the
    requirements imposed under this title shall be enforced under--
                ``(1) section 8 of the Federal Deposit Insurance Act, in
            the case of--
                        ``(A) national banks, and Federal branches and
                    Federal agencies of foreign banks, by the head of the
                    agency responsible for chartering and regulating
                    national banks;
                        ``(B) member banks of the Federal Reserve System
                    (other than national banks), branches and agencies of
                    foreign banks (other than Federal branches, Federal
                    agencies, and insured State branches of foreign banks),
                    commercial lending companies owned or controlled by
                    foreign banks, and organizations operating under
                    section 25 or 25A of the Federal Reserve Act, by the
                    Board;
                        ``(C) depository institutions insured by the
                    Federal Deposit Insurance Corporation (other than
                    members of the Federal Reserve System, Federal savings
                    associations, and savings and loan holding companies)
                    and insured State branches of foreign banks, by the
                    Board of Directors of the Federal Deposit Insurance
                    Corporation; and
                        ``(D) Federal savings associations, and savings and
                    loan holding companies, by the Director of the Office
                    of Thrift Supervision;
                ``(2) subtitle E of the Consumer Financial Protection
            Agency Act of 2009, by the Agency;
                ``(3) the Federal Credit Union Act, by the Administrator of
            the National Credit Union Administration with respect to any
            credit union; and
                ``(4) other lending institutions, by the Secretary of
            Housing and Urban Development. The terms used in paragraph (1)
            that are not defined in this title or otherwise defined in
            section 3(s) of the Federal Deposit Insurance Act (12 U.S.C.
            1813(s)) shall have the meaning given to them in section 1(b)
            of the International Banking Act of 1978 (12 U.S.C. 3101).
    The terms used in paragraph (1) that are not defined in this title or
    otherwise defined in section 3(s) of the Federal Deposit Insurance Act
    (12 U.S.C. 1813(s)) shall have the meaning given to them in section
    1(b) of the International Banking Act of 1978.''; and
                (2) by inserting at the end of section 305 the following
            new subsection:
        ``(d) Overall Enforcement Authority of the Consumer Financial
    Protection Agency.--Subject to section 4202 of the Consumer Financial
    Protection Agency Act of 2009, enforcement of the requirements imposed
    under this title is committed to each of the agencies under subsection
    (b). The Agency may exercise its authorities under the Consumer
    Financial Protection Agency Act of 2009 to exercise principal authority
    to examine and enforce compliance by any person with the requirements
    under this title.''.
        (e) Section 306.--Subsection 306(b) of the Home Mortgage Disclosure
    Act of 1975 (12 U.S.C. 2805(b)) is amended to read as follows:
        ``(b) The Agency may, by regulation, exempt from the requirements
    of this title any State chartered depository institution within any
    State or subdivision of any state if the Agency determines that, under
    the law of such State or subdivision, that institution is subject to
    requirements substantially similar to those imposed under this title,
    and that such law contains adequate provisions for enforcement.
    Notwithstanding any other provision of this subsection, compliance with
    the requirements imposed under this subsection shall be enforced by the
    head of the agency responsible for chartering and regulating national
    banks under section 8 of the Federal Deposit Insurance Act in the case
    of national banks and savings association the deposits of which are
    insured by the Federal Deposit Insurance Corporation.''.
        (f) Section 307.--Section 307 of the Home Mortgage Disclosure Act
    of 1975 (12 U.S.C. 2806) is amended to read as follows:

    ``SEC. 307. RESEARCH AND IMPROVED METHODS.

        ``(a) Enhanced Compliance in Economical Manner.--
                ``(1) In general.--The Director of the Consumer Financial
            Protection Agency, with the assistance of the Secretary, the
            Director of the Bureau of the Census, the Board of Governors of
            the Federal Reserve System, the Federal Deposit Insurance
            Corporation, and such other persons as the Consumer Financial
            Protection Agency deems appropriate, shall develop or assist in
            the improvement of, methods of matching addresses and census
            tracts to facilitate compliance by depository institutions in
            as economical a manner as possible with the requirements of
            this title.
                ``(2) Authorization of appropriation.--There is authorized
            to be appropriated such sums as may be necessary to carry out
            this subsection.
                ``(3) Authority of agency.--The Director of the Consumer
            Financial Protection Agency is authorized to utilize, contract
            with, act through, or compensate any person or agency in order
            to carry out this subsection.
        ``(b) Recommendations to the Congress.--The Director of the
    Consumer Financial Protection Agency shall recommend to the Committee
    on Financial Services of the House of Representatives and the Committee
    on Banking, Housing, and Urban Affairs of the Senate such additional
    legislation as the Director of the Consumer Financial Protection Agency
    deems appropriate to carry out the purpose of this title.''.

    SEC. 4809. AMENDMENTS TO DIVISION D OF THE OMNIBUS APPROPRIATIONS ACT,
                  2009.

        (a) Section 626(a) of title VI of division D of the Omnibus
    Appropriations Act, 2009 (15 U.S.C. 1638 note) (as amended by the
    Credit Card Accountability Responsibility and Disclosure Act of 2009)
    is amended--
                (1) by striking by paragraph (1) and inserting the
            following new paragraph: ``(1) The Director of the Consumer
            Financial Protection Agency shall have authority to prescribe
            regulations with respect to mortgage loans in accordance with
            section 553 of title 5, United States Code. Such rulemaking
            shall relate to unfair or deceptive acts or practices regarding
            mortgage loans, which may include unfair or deceptive acts or
            practices involving loan modification and foreclosure rescue
            services. Any violation of a regulation prescribed under this
            subsection shall be treated as a violation of a regulation
            prohibiting unfair, deceptive, or abusive acts or practices
            under the Consumer Financial Protection Agency Act of 2009.'';
                (2) by striking paragraph (2);
                (3) by striking paragraph (3); and
                (4) by striking paragraph (4) and inserting the following
            new paragraph:
        ``(2) The Director of the Consumer Financial Protection Agency
    shall enforce the regulations issued under paragraph (1) in the same
    manner, by the same means, and with the same jurisdiction, powers, and
    duties as though all applicable terms and provisions of the Consumer
    Financial Protection Agency Act of 2009 were incorporated into and made
    part of this section.''.
        (b) Section 626(b) of title VI of division D of the Omnibus
    Appropriations Act, 2009 (15 U.S.C. 1638 note) (as amended by the
    Credit Card Accountability Responsibility and Disclosure Act of 2009)
    is amended by striking ``primary Federal regulator'' each place it
    appears and inserting ``Consumer Financial Protection Agency''.

    SEC. 4810. AMENDMENTS TO THE HOMEOWNERS PROTECTION ACT OF 1998.

        Section 10 of the Homeowners Protection Act of 1998 (12 U.S.C.
    4909) is amended--
                (1) in the matter preceding paragraph (1) of subsection
            (a), by striking ``Compliance'' and inserting ``Subject to
            section 4202 of the Consumer Financial Protection Agency Act of
            2009, compliance'';
                (2) in subsection (a)(2), by striking ``and'' after the
            semicolon at the end;
                (3) in subsection (a)(3), by striking the period at the end
            and inserting ``; and'';
                (4) by inserting after subsection (a)(3), the following new
            paragraph:
                ``(4) subtitle E of the Consumer Financial Protection
            Agency Act of 2009, by the Consumer Financial Protection
            Agency.''; and
                (5) in subsection (b)(2), by inserting ``, subject to
            section 4202 of the Consumer Financial Protection Agency Act of
            2009'' before the period at the end.

    SEC. 4811. AMENDMENTS TO THE REAL ESTATE SETTLEMENT PROCEDURES ACT OF
                  1974.

        (a) Section 3.--Section 3 of the Real Estate Settlement Procedures
    Act of 1974 (12 U.S.C. 2602) is amended--
                (1) in paragraph (7), by striking ``and'' after the
            semicolon at the end;
                (2) in paragraph (8), by striking the period at the end and
            inserting ``; and''; and
                (3) by adding at the end the following new paragraph:
                ``(9) the term `Agency' means the Consumer Financial
            Protection Agency.''.
        (b) Section 4.--Section 4 of the Real Estate Settlement Procedures
    Act of 1974 (12 U.S.C. 2603) is amended--
                (1) in subsection (a), by striking the first sentence and
            inserting the following: ``The Agency shall publish a single,
            integrated disclosure for mortgage loan transactions, including
            real estate settlement cost statements, which include the
            disclosure requirements of this title, in conjunction with the
            disclosure requirements of the Truth in Lending Act (15 U.S.C.
            1601 note et seq.) that, taken together, may apply to
            transactions subject to both or either law. The purpose of such
            model disclosure shall be to facilitate compliance with the
            disclosure requirements of those titles, and to aid the
            borrower or lessee in understanding the transaction by
            utilizing readily understandable language to simplify the
            technical nature of the disclosures.'';
                (2) by striking ``Secretary'' each place such term appears
            and inserting ``Agency''; and
                (3) by striking ``form'' each place such term appears and
            inserting ``forms''.
        (c) Section 5.--Section 5 of the Real Estate Settlement Procedures
    Act of 1974 (12 U.S.C. 2604) is amended--
                (1) by striking ``Secretary'' each place such term appears,
            and inserting ``Agency''; and
                (2) by striking the first sentence of subsection (a), and
            inserting ``The Agency shall prepare and distribute booklets
            jointly complying with the requirements of the Truth in Lending
            Act (15 U.S.C. 1601 note et seq.) and the provisions of this
            title, in order to help persons borrowing money to finance the
            purchase of residential real estate better to understand the
            nature and costs of real estate settlement services.''.
        (d) Section 6.--Section 6(j)(3) of the Real Estate Settlement
    Procedures Act of 1974 (12 U.S.C. 2605(j)(3)) is amended--
                (1) by striking ``Secretary'' and inserting ``Director of
            the Agency''; and
                (2) by striking ``by regulations that shall take effect not
            later than April 20, 1991,'' and inserting ``by regulation,''.
        (e) Section 7.--Section 7 of the Real Estate Settlement Procedures
    Act of 1974 (12 U.S.C. 2606) is amended by striking ``Secretary'' and
    inserting ``the Director of the Agency''.
        (f) Section 8.--Section 8 of the Real Estate Settlement Procedures
    Act of 1974 (12 U.S.C. 2607) is amended--
                (1) in subsection (c)(5), by striking ``prescribed by the
            Secretary'' and inserting ``prescribed by the Director of the
            Agency''; and
                (2) in subsection (d)(4)--
                        (A) by striking ``The Secretary,'' and inserting
                    ``The Agency, the Secretary,''; and
                        (B) by adding at the end the following new
                    sentence: ``However, to the extent that a Federal law
                    authorizes the Agency and other Federal and State
                    agencies to enforce or administer the law, the Agency
                    shall have primary authority to enforce or administer
                    that Federal law in accordance with section 4202 of the
                    Consumer Financial Protection Agency Act of 2009.''.
        (g) Section 10.--Section 10(d) of the Real Estate Settlement
    Procedures Act of 1974 (12 U.S.C. 2609(d)) is amended by striking
    ``Secretary'' and inserting ``Agency''.
        (h) Section 16.--Section 16 of the Real Estate Settlement
    Procedures Act of 1974 (12 U.S.C. 2614) is amended by inserting ``the
    Agency,'' before ``the Secretary''.
        (i) Section 18.--Section 18 of the Real Estate Settlement
    Procedures Act of 1974 (12 U.S.C. 2616) is amended by striking
    ``Secretary'' each place such term appears and inserting ``Agency''.
        (j) Section 19.--Section 19 of the Real Estate Settlement
    Procedures Act of 1974 (12 U.S.C. 2617) is amended--
                (1) in the section heading, by striking ``secretary'' and
            inserting ``agency''; and
                (2) by striking ``Secretary'' each place such term appears
            and inserting ``Agency''.

    SEC. 4812. AMENDMENTS TO THE RIGHT TO FINANCIAL PRIVACY ACT OF 1978.

        (a) Amendments to Section 1101.--Section 1101 of the Right to
    Financial Privacy Act of 1978 (12 U.S.C. 3401) is amended--
                (1) by striking paragraph (1) and inserting the following
            new paragraph:
                ``(1) `financial institution' means any bank, savings
            association, card issuer as defined in section 103(n) of the
            Truth in Lending Act, credit union, or consumer finance
            institution located in any State or territory of the United
            States, the District of Columbia, Puerto Rico, Guam, American
            Samoa, or the Virgin Islands;''; and
                (2) in paragraph (7), by inserting after subparagraph (A)
            the following new subparagraph:
                        ``(B) the Consumer Financial Protection Agency;''.
        (b) Amendments to Section 1112.--Section 1112(e) of the Right to
    Financial Privacy Act of 1978 (12 U.S.C. 3412) is amended by striking
    ``and the Commodity Futures Trading Commission is permitted'' and
    inserting ``the Commodity Futures Trading Commission, and the Consumer
    Financial Protection Agency is permitted''.
        (c) Amendments to Section 1113.--Section 1113 of the Right to
    Financial Privacy Act of 1978 (12 U.S.C. 3413) is amended by adding at
    the end the following new subsection--
        ``(r) Disclosure to the Consumer Financial Protection Agency.--
    Nothing in this chapter shall apply to the examination by or disclosure
    to the Consumer Financial Protection Agency of financial records or
    information in the exercise of its authority with respect to a
    financial institution.''.

    SEC. 4813. AMENDMENTS TO THE SECURE AND FAIR ENFORCEMENT FOR MORTGAGE
                  LICENSING ACT OF 2008.

        (a) Section 1503.--Section 1503 of the Secure and Fair Enforcement
    for Mortgage Licensing Act of 2008 (12 U.S.C. 5102) is amended--
                (1) by striking paragraph (9);
                (2) by redesignating paragraph (1) as paragraph (4), and
            transferring paragraph (4) (as so redesignated) and inserting
            such paragraph after paragraph (3) (as added by paragraph (5));
                (3) by redesignating paragraphs (3), (4), (5), (6), (7),
            (8), (10), (11), and (12) as paragraphs (5), (6), (7), (8),
            (9), (10), (11), (12), and (13), respectively;
                (4) by inserting before paragraph (2) the following new
            paragraph:
                ``(1) Agency.--The term `Agency' means the Consumer
            Financial Protection Agency.''; and
                (5) by inserting after paragraph (2) the following new
            paragraph:
                ``(3) Director.--The term `Director' means the Director of
            the Agency.''.
        (b) Universal Amendments Relating to Agency.--The Secure and Fair
    Enforcement for Mortgage Licensing Act of 2008 (12 U.S.C. 5101 et seq.)
    is amended--
                (1) by striking ``Federal banking agencies'' each place
            such term appears (other than in subsection (a)(4) (as so
            redesignated by subsection (a), relating to the definition of
            Federal banking agencies) or in connection with a reference
            that is specifically amended by another provision of this
            section) and inserting ``Agency''; and
                (2) by striking ``Secretary'' each place such term appears
            (other than in connection with a reference that is specifically
            amended by another provision of this section) and inserting
            ``Director''.
        (c) Section 1507.--Section 1507 of the Secure and Fair Enforcement
    for Mortgage Licensing Act of 2008 (12 U.S.C. 5106) is amended--
                (1) in subsection (a)--
                        (A) by striking paragraph (1) and inserting the
                    following new paragraph:
                ``(1) In general.--The Agency shall develop and maintain a
            system for registering employees of any depository institution,
            employees of a subsidiary that is owned and controlled by a
            depository institution and regulated by a Federal banking
            agency, or employees of an institution regulated by the Farm
            Credit Administration, as registered loan originators with the
            Nationwide Mortgage Licensing System and Registry. The system
            shall be implemented before July 30, 2010.''; and
                        (B) by striking ``appropriate Federal banking
                    agency and the Farm Credit Administration'' in
                    paragraph (2) and inserting ``Agency''; and
                (2) in subsection (b), by striking ``Federal banking
            agencies, through the Financial Institutions Examination
            Council, and the Farm Credit Administration'' each place such
            term appears and inserting ``Agency''.
        (d) Section 1508.--
                (1) In general.--Section 1508 of the Secure and Fair
            Enforcement for Mortgage Licensing Act of 2008 (12 U.S.C. 5107)
            is amended by adding at the end the following new subsection:
        ``(f) Regulations.--
                ``(1) In general.--The Agency may prescribe regulations
            setting minimum net worth or surety bond requirements for
            residential mortgage loan originators and minimum requirements
            for recovery funds paid into by loan originators.
                ``(2) Factors taken into account.--Such regulations shall
            take into account the need to provide originators adequate
            incentives to originate affordable and sustainable mortgage
            loans as well as the need to ensure a competitive origination
            market that maximizes consumers' access to affordable and
            sustainable mortgage loans.''.
                (2) Clerical amendment.--The heading for section 1508 of
            the Secure and Fair Enforcement for Mortgage Licensing Act of
            2008 is amended by striking ``secretary of housing and urban
            development'' and inserting ``consumer financial protection
            agency''.
        (e) Section 1510.--Section 1510 of the Secure and Fair Enforcement
    for Mortgage Licensing Act of 2008 (12 U.S.C. 5109) is amended to read
    as follows:

    ``SEC. 1510. FEES.

        ``The Agency and the Nationwide Mortgage Licensing System and
    Registry may charge reasonable fees to cover the costs of maintaining
    and providing access to information from the Nationwide Mortgage
    Licensing System and Registry, to the extent that such fees are not
    charged to consumers for access to such system and registry.''.
        (f) Section 1513.--Section 1513 of the Secure and Fair Enforcement
    for Mortgage Licensing Act of 2008 (12 U.S.C. 5112) is amended to read
    as follows:

    ``SEC. 1513. LIABILITY PROVISIONS.

        ``The Agency, any State official or agency, or any organization
    serving as the administrator of the Nationwide Mortgage Licensing
    System and Registry or a system established by the Director under
    section 1509, or any officer or employee of any such entity, shall not
    by subject to any civil action or proceeding for monetary damages by
    reason of the good faith action or omission of any officer or employee
    of any such entity, while acting within the scope of office or
    employment, relating to the collection, furnishing, or dissemination of
    information concerning persons who are loan originators or are applying
    for licensing or registration as loan originators.''.
        (g) Section 1514.--The heading for section 1514 of the Secure and
    Fair Enforcement for Mortgage Licensing Act of 2008 (12 U.S.C. 5113) is
    amended by striking ``under hud backup licensing system'' and inserting
    ``by the agency''.

    SEC. 4814. AMENDMENTS TO THE TRUTH IN SAVINGS ACT.

        (a) Section 263.--Section 263 of the Truth in Savings Act (12
    U.S.C. 4302) is amended in subsection (b) by striking ``Board'' each
    place such term appears and inserting ``Agency''.
        (b) Section 265.--Section 265 of the Truth in Savings Act (12
    U.S.C. 4304) is amended by striking ``Board'' each place such term
    appears and inserting ``Agency''.
        (c) Section 266.--Section 266(e) of the Truth in Savings Act is
    amended (12 U.S.C. 4305) by striking ``Board'' and inserting
    ``Agency''.
        (d) Section 269.--Section 269 of the Truth in Savings Act (12
    U.S.C. 4308) is amended by striking ``Board'' each place such term
    appears and inserting ``Agency''.
        (e) Section 270.--Section 270 of the Truth in Savings Act (12
    U.S.C. 4309) is amended--
                (1) in subsection (a)--
                        (A) by striking ``Compliance'' and inserting
                    ``Subject to section 4202 of the Consumer Financial
                    Protection Agency Act of 2009, compliance'';
                        (B) by striking subparagraph (A) of paragraph (1)
                    and inserting the following new subparagraph:
                        ``(A) by the head of the agency responsible for
                    chartering and regulating national banks for national
                    banks, and Federal branches and Federal agencies of
                    foreign banks;''; and
                        (C) by adding at the end, the following new
                    paragraph:
                ``(3) subtitle E of the Consumer Financial Protection
            Agency Act of 2009, by the Agency.''; and
                (2) in subsection (c)--
                        (A) in the subsection heading, by striking
                    ``Board'' and insert ``Agency''; and
                        (B) by striking ``Board'' and inserting ``Agency''.
        (f) Section 272.--Section 272 of the Truth in Savings Act (12
    U.S.C. 4311) is amended--
                (1) in subsection (a), by striking ``Board'' and inserting
            ``Agency''; and
                (2) in subsection (b), by striking ``regulation prescribed
            by the Board'' each place such term appears and inserting
            ``regulation prescribed by the Agency''.
        (g) Section 273.--Section 273 of the Truth in Savings Act (12
    U.S.C. 4312) is amended in the last sentence by striking ``Board'' and
    inserting ``Agency''.
        (h) Section 274.--Section 274 of the Truth in Savings Act (12
    U.S.C. 4313) is amended--
                (1) in paragraph (2) by striking ``Board'' and inserting
            ``Agency''; and
                (2) by striking paragraph (4) and inserting the following
            new paragraph:
                ``(4) Agency.--The term `Agency' means the Consumer
            Financial Protection Agency.''.

    SEC. 4815. AMENDMENTS TO THE TELEMARKETING AND CONSUMER FRAUD ABUSE AND
                  PREVENTION ACT.

        (a) Section 4 of the Telemarketing and Consumer Fraud Abuse and
    Prevention Act (15 U.S.C. 6102) is amended--
                (1) in subsection (b)--
                        (A) by inserting ``and the Consumer Financial
                    Protection Agency with respect to a person subject to
                    the authority of that Agency under the Consumer
                    Financial Protection Agency Act'' after ``Commission''
                    each of the first 2 places it appears; and
                        (B) by inserting ``or the Consumer Financial
                    Protection Agency'' after ``Commission'' the last place
                    it appears; and
                (2) in subsection (d), by inserting ``or the Consumer
            Financial Protection Agency'' after ``Commission'' each place
            such term appears.
        (b) Section 5 of the Telemarketing and Consumer Fraud Abuse and
    Prevention Act (15 U.S.C. 6102) is amended--
                (1) in subsection (b)--
                        (A) by inserting ``and the Consumer Financial
                    Protection Agency with respect to a person subject to
                    the authority of that Agency under the Consumer
                    Financial Protection Agency Act'' after ``Commission''
                    each of the first 2 places it appears; and
                        (B) by inserting ``or the Consumer Financial
                    Protection Agency'' after ``Commission'' the last place
                    it appears; and
                (2) in subsection (c), by inserting ``or the Consumer
            Financial Protection Agency'' after ``Commission'' each place
            such term appears.
        (c) Section 6 of the Telemarketing and Consumer Fraud Abuse and
    Prevention Act (15 U.S.C. 6102) is amended by redesignating subsection
    (c) as subsection (d) and inserting after subsection (b) the following:
        ``(c) Enforcement by the Consumer Financial Protection Agency.--
    Subject to section 4202 of the Consumer Financial Protection Agency Act
    of 2009, this Act shall be enforced by the Consumer Financial
    Protection Agency, under subtitle E of that Act, with respect to a
    person subject to the authority of that Agency under that Act. For the
    purpose of the exercise by the Consumer Financial Protection Agency of
    its powers under subtitle E, a violation of any requirement imposed
    under this Act shall be deemed to be a violation of a requirement
    imposed under the Consumer Financial Protection Agency Act. In addition
    to its powers under subtitle E of that Act, the Agency may exercise,
    for the purpose of enforcing compliance with any requirement imposed
    under this Act, any other authority conferred on it by law.''.

    SEC. 4816. MEMBERSHIP IN FINANCIAL LITERACY AND EDUCATION COMMISSION.

        Section 513(c)(1) of the Financial Literacy and Education
    Improvement Act (20 U.S.C. 9702(c)(1)) is amended--
                (1) in subparagraph (B), by striking ``and'' at the end;
                (2) by redesignating subparagraph (C) as subparagraph (D);
            and
                (3) by inserting after subparagraph (B) the following new
            subparagraph:
                        ``(C) the Director of the Consumer Financial
                    Protection Agency; and''.

    SEC. 4817. EFFECTIVE DATE.

        The amendments made by sections 4803 through 4815 shall take effect
    on the designated transfer date.

    SEC. 4818. AMENDMENTS TO TRUTH IN LENDING ACT.

        (a) In General.--Section 128(e) of the Truth in Lending Act is
    amended--
                (1) by striking paragraph (3) and inserting the following
            new paragraph (3):
                ``(3) Institutional certification required.--(A) Except as
            provided in subparagraph (B), before a creditor may issue any
            funds with respect to an extension of credit described in
            paragraph (1), the creditor shall obtain from the relevant
            institution of higher education such institution's
            certification--
                        ``(i) of the enrollment status of the borrower;
                        ``(ii) of the borrower's cost of attendance at the
                    institution as determined by the institution under part
                    F of title IV of the Higher Education Act of 1965;
                        ``(iii) of the difference between the borrower's
                    cost of attendance and the borrower's estimated
                    financial assistance received under title IV of the
                    Higher Education Act of 1965 and other assistance known
                    to the institution, as applicable; and
                        ``(iv) that the institution has--
                                ``(I) informed the borrower--
                                        ``(aa) about the availability of,
                                    and the borrower's potential
                                    eligibility for, Federal financial
                                    assistance under this title, including
                                    disclosing the terms, conditions, and
                                    interest rates of Federal student
                                    loans;
                                        ``(bb) of the borrower's ability to
                                    select a private educational lender of
                                    the borrower's choice;
                                        ``(cc) about the impact of a
                                    proposed private education loan on the
                                    borrowers' potential eligibility for
                                    other financial assistance, including
                                    Federal financial assistance under the
                                    Higher Education Act of 1965; and
                                        ``(dd) about a borrower's right to
                                    accept or reject a private education
                                    loan within the 30-day period following
                                    a private educational lender's approval
                                    of a borrower's application and about a
                                    borrower's 3-day right to cancel
                                    altogether;
                                ``(II) determined whether the borrower has
                            applied for and exhausted the Federal financial
                            assistance available to the borrower under the
                            Higher Education Act of 1965 and informed the
                            borrower accordingly; and
                                ``(III) counseled the borrower on the
                            borrower's financial aid options.
                ``(B) A creditor may issue funds with respect to an
            extension of credit described in paragraph (1) without
            obtaining from the relevant institution of higher education
            such institution's certification if such institution fails to
            provide such certification within 21 calendar days or 15
            business days, whichever comes first, of the creditor's request
            for such certification.'';
                (2) by redesignating paragraphs (9), (10), and (11) as
            paragraphs (10), (11), and (12), respectively; and
                (3) by inserting after paragraph (8) the following new
            paragraph (9):
                ``(9) Provision of information.--On or before the date a
            creditor issues any funds with respect to an extension of
            credit described in paragraph (1), the creditor shall notify
            the relevant institution of higher education, in writing, of
            the amount of the extension of credit and the student on whose
            behalf credit is extended. The form of such written
            notification shall be subject to the regulations of the
            Agency.''.
        (b) Regulations.--
                (1) Deadline for regulations.--Not later than 365 days
            after the date of enactment of this Act, the Agency shall issue
            regulations in final form to implement paragraphs (3) and (9)
            of section 128(e) of the Truth in Lending Act, as amended by
            subsection (a). Such regulations shall become effective not
            later than 6 months after their date of issuance.
                (2) Effective date.--The regulations in effect pursuant to
            section 128(e) of the Truth in Lending Act as of the date of
            the enactment of this Act shall remain in effect until the
            effective date of the regulations issued under paragraph (1).
        (c) Study and Report on Private Education Loans and Private
    Educational Lenders.--
                (1) Report.--Not later than 2 years after the date of
            enactment of this Act, the Director and the Secretary of
            Education, in consultation with the Commissioners of the
            Federal Trade Commission, and the Attorney General, shall
            submit a report to the Committee on Financial Services and the
            Committee on Education and Labor of the House of
            Representatives and the Committee on Banking, Housing, and
            Urban Affairs and the Committee on Health Education, Labor, and
            Pensions of the Senate on private education loans (as that term
            is defined in section 140 of the Truth in Lending Act (15
            U.S.C. 1650)) and private educational lenders (as that term is
            defined in such section).
                (2) Content.--The report required by this subsection shall
            examine, at a minimum, the following:
                        (A) the growth and changes of the private education
                    loan market in the United States;
                        (B) factors influencing such growth and changes;
                        (C) the extent to which students and parents of
                    students rely on private education loans to finance
                    postsecondary education and the private education loan
                    indebtedness of borrowers;
                        (D) the characteristics of private education loan
                    borrowers, including the types of institutions of
                    higher education they attend, socioeconomic
                    characteristics (including income and education levels,
                    racial characteristics, geographical background, age,
                    and gender), what other forms of financing borrowers
                    use to pay for education, whether they exhaust their
                    Federal loan options before taking out a private loan,
                    whether such borrowers are dependent or independent
                    students (as determined under part F of title IV of the
                    Higher Education Act of 1965) or parents of such
                    students, whether such borrowers are students enrolled
                    in a program leading to a certificate, license or
                    credential other than a degree, an associates degree, a
                    baccalaureate degree, or a graduate or professional
                    degree and, if practicable, employment and repayment
                    behaviors;
                        (E) the characteristics of private educational
                    lenders, including whether such creditors are for-
                    profit, non-profit, or institutions of higher
                    education;
                        (F) the underwriting criteria used by private
                    educational lenders, including the use of cohort
                    default rate (as such term is defined in section 435(m)
                    of the Higher Education Act of 1965);
                        (G) the terms, conditions, and pricing of private
                    education loans;
                        (H) the consumer protections available to private
                    education loan borrowers, including the effectiveness
                    of existing disclosures and requirements and borrowers'
                    awareness and understanding about terms and conditions
                    of various financial products;
                        (I) whether Federal regulators and the public have
                    access to information sufficient to provide them with
                    assurances that private education loans are provided in
                    accord with the Nation's fair lending laws and that
                    allows public officials to determine lenders'
                    compliance with fair lending laws; and
                        (J) any statutory or legislative recommendations
                    necessary to improve consumer protections for private
                    education loan borrowers and to better enable Federal
                    regulators and the public to ascertain private
                    educational lender compliance with fair lending laws.
        (d) Report.-- Not later than 18 months after the issuance of
    regulations under subsection (b)(1), the Consumer Financial Protection
    Agency and the Secretary of Education shall jointly submit to Congress
    a report on the compliance of institutions and private educational
    lenders with the amendments made by this section. The report shall
    include the degree to which specific institutions utilize
    certifications in effectively encouraging the exhaustion of Federal
    student loan eligibility and lowering student debt.

          Subtitle I--Improvements to the Federal Trade Commission Act

    SEC. 4901. AMENDMENTS TO THE FEDERAL TRADE COMMISSION ACT.

        (a) Section 5(m)(1)(A) of the Federal Trade Commission Act (15
    U.S.C. 45(m)(1)(A)) is amended--
                (1) by inserting ``this Act or'' after ``violates'' the
            first place such term appears;
                (2) by inserting a comma after ``under this Act'';
                (3) by inserting a comma after ``subsection (a)(1))''; and
                (4) by inserting ``a violation of this Act or is'' before
            ``prohibited''.
        (b) Section 5 of the Federal Trade Commission Act (15 U.S.C. 45) is
    amended by adding at the end thereof the following new subsection:
        ``(o) Unlawful Assistance.--It is unlawful for any person,
    partnership, or corporation, knowingly or recklessly, to provide
    substantial assistance to another in violating any provision of this
    Act or of any other Act enforceable by the Commission that relates to
    unfair or deceptive acts or practices. Any such violation shall
    constitute an unfair or deceptive act or practice described in section
    5(a)(1) of this Act. Nothing in this section shall be construed as
    limiting or superseding the protection provided to any provider or user
    qualifying for protection under section 230(c)(1) of the Communications
    Act of 1934 (47 U.S.C. 230(c)(1)).''.
        (c) Section 18 of the Federal Trade Commission Act (15 U.S.C. 57a)
    is amended--
                (1) in subsection (a)(1), by striking ``(h)'' and inserting
            ``(f)'';
                (2) by amending subsection (b) to read as follows:
        ``(b) Procedure Applicable.--When prescribing a rule under
    subsection (a)(1)(B) of this section, the Commission shall proceed in
    accordance with section 553 of title 5.'';
                (3) by striking subsection (c);
                (4) in subsection (d), by striking ``(d)(1) The
            Commission's'' and all that follows through the end of
            paragraph (2) and by redesignating paragraph (3) of such
            subsection as subsection (c);
                (5) In such subsection (c) (as so redesignated), by
            inserting ``prescribed'' after ``any rule'';
                (6) by striking subsections (f), (i), and (j) and
            redesignating subsections (e), (g), and (h) as subsections (d),
            (e), and (f), respectively;
                (7) in subsection (c) (as redesignated), by inserting
            ``prescribed'' after ``rule''; and
                (8) in subsection (d) (as redesignated)--
                        (A) in paragraph (1)(A) by striking ``promulgated''
                    and inserting ``prescribed'';
                        (B) in paragraph (1)(B), by striking ``the
                    transcript required by subsection (c)(5),'';
                        (C) in paragraph (3), by striking ``The court shall
                    hold unlawful'' and all that follows through the end of
                    the paragraph; and
                        (D) by striking paragraphs (4) and (5) and
                    inserting the following:
        ``(4) The procedure set forth in this subsection for judicial
    review of a rule prescribed under subsection (a)(1)(B) is the exclusive
    means for such review, other than in an enforcement proceeding.''; and
                (9) in subsection (e)(2) (as so redesignated), by striking
            ``class or persons'' and inserting ``class of persons''.
        (d) Section 16(a)(2) of the Federal Trade Commission Act (15 U.S.C.
    56(a)(2)) is amended--
                (1) in subparagraph (D), by striking ``; or'' and inserting
            a semicolon; and
                (2) by inserting after subparagraph (E) the following:
                        ``(F) to obtain a civil penalty authorized under
                    any provision of law enforced by the Commission.''.
        (e) Section 5(l) of the Federal Trade Commission Act (15 U.S.C.
    45(l)) is amended in the first sentence by inserting ``the Commission
    or'' after ``brought by''.

                           Subtitle J--Miscellaneous

    SEC. 4951. REQUIREMENTS FOR STATE-LICENSED LOAN ORIGINATORS.

        Paragraph (2) of section 1505 (b) of the S.A.F.E. Mortgage
    Licensing Act of 2008 (12 U.S.C. 5104(b)(2)) is amended by inserting
    after and below subparagraph (B), the following:
            ``Notwithstanding the preceding sentence, a State loan
            originator supervisory authority may provide for review of
            applicants and for granting exceptions, on a case-by-case
            basis, to the minimum standard under subparagraph (B), but only
            to the extent that any such exception otherwise complies with
            the purposes of this title.''.

                            TITLE V--CAPITAL MARKETS

         Subtitle A--Private Fund Investment Advisers Registration Act

    SEC. 5001. SHORT TITLE.

        This subtitle may be cited as the ``Private Fund Investment
    Advisers Registration Act of 2009''.

    SEC. 5002. DEFINITIONS.

        Section 202(a) of the Investment Advisers Act of 1940 (15 U.S.C.
    80b-2(a)) is amended by adding at the end the following new paragraphs:
                ``(29) Private fund.--The term `private fund' means an
            issuer that would be an investment company under section 3(a)
            of the Investment Company Act of 1940 (15 U.S.C. 80a-3(a)) but
            for the exception provided from that definition by either
            section 3(c)(1) or section 3(c)(7) of such Act.
                ``(30) Foreign private fund adviser.--The term `foreign
            private fund adviser' means an investment adviser who--
                        ``(A) has no place of business in the United
                    States;
                        ``(B) during the preceding 12 months has had--
                                ``(i) in total, fewer than 15 clients and
                            investors in the United States in private funds
                            advised by the investment adviser; and
                                ``(ii) aggregate assets under management
                            attributable to clients and investors in the
                            United States in private funds advised by the
                            investment adviser of less than $25,000,000, or
                            such higher amount as the Commission may, by
                            rule, deem appropriate in the public interest
                            or for the protection of investors; and
                        ``(C) neither holds itself out generally to the
                    public in the United States as an investment adviser,
                    nor acts as an investment adviser to any investment
                    company registered under the Investment Company Act of
                    1940, or a company which has elected to be a business
                    development company pursuant to section 54 of the
                    Investment Company Act of 1940 (15 U.S.C. 80a-53) and
                    has not withdrawn such election.''.

    SEC. 5003. ELIMINATION OF PRIVATE ADVISER EXEMPTION; LIMITED EXEMPTION
                  FOR FOREIGN PRIVATE FUND ADVISERS; LIMITED INTRASTATE
                  EXEMPTION.

        (a) Exemption.--Section 203(b) of the Investment Advisers Act of
    1940 (15 U.S.C. 80b-3(b)) is amended--
                (1) in paragraph (1), by inserting ``, except an investment
            adviser who acts as an investment adviser to any private
            fund,'' after ``any investment adviser'';
                (2) by amending paragraph (3) to read as follows:
                ``(3) any investment adviser that is a foreign private fund
            adviser;'';
                (3) in paragraph (5), by striking ``or'' at the end;
                (4) in paragraph (6)--
                        (A) in subparagraph (A), by striking ``or'';
                        (B) in subparagraph (B), by striking the period at
                    the end and adding ``; or''; and
                        (C) by adding at the end the following new
                    subparagraph:
                        ``(C) a private fund; or''; and
                (5) by adding at the end the following:
                ``(7) any investment adviser who solely advises--
                        ``(A) small business investment companies licensed
                    under the Small Business Investment Act of 1958;
                        ``(B) entities that have received from the Small
                    Business Administration notice to proceed to qualify
                    for a license, which notice or license has not been
                    revoked; or
                        ``(C) applicants, related to one or more licensed
                    small business investment companies covered in
                    subparagraph (A), that have applied for another
                    license, which application remains pending.''.
        (b) Consideration of Risk.--Section 203(c) of the Investment
    Advisers Act of 1940 (15 U.S.C. 80b-3(c)) is amended by adding at the
    end the following:
                ``(3) The Commission shall take into account the relative
            risk profile of different classes of private funds as it
            establishes, by rule or regulation, the registration
            requirements for private funds.''.

    SEC. 5004. COLLECTION OF DATA.

        Section 204 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-
    4) is amended--
                (1) by redesignating subsections (b) and (c) as subsections
            (c) and (d), respectively; and
                (2) by inserting after subsection (a) the following new
            subsection:
        ``(b) Records and Reports of Private Funds.--
                ``(1) In general.--The Commission is authorized to require
            any investment adviser registered under this Act to maintain
            such records of and file with the Commission such reports
            regarding private funds advised by the investment adviser as
            are necessary or appropriate in the public interest and for the
            protection of investors or for the assessment of systemic risk
            as the Commission determines in consultation with the Board of
            Governors of the Federal Reserve System. The Commission is
            authorized to provide or make available to the Board of
            Governors of the Federal Reserve System and to the Financial
            Services Oversight Council, those reports or records or the
            information contained therein. The records and reports of any
            private fund, to which any such investment adviser provides
            investment advice, maintained or filed by an investment adviser
            registered under this Act, shall be deemed to be the records
            and reports of the investment adviser.
                ``(2) Required information.--The records and reports
            required to be maintained or filed with the Commission under
            this subsection shall include, for each private fund advised by
            the investment adviser--
                        ``(A) the amount of assets under management;
                        ``(B) the use of leverage (including off-balance
                    sheet leverage);
                        ``(C) counterparty credit risk exposures;
                        ``(D) trading and investment positions;
                        ``(E) trading practices; and
                        ``(F) such other information as the Commission, in
                    consultation with the Board of Governors of the Federal
                    Reserve System, determines necessary or appropriate in
                    the public interest and for the protection of investors
                    or for the assessment of systemic risk.
                ``(3) Optional information.--The Commission may require the
            reporting of such additional information from private fund
            advisers as the Commission determines necessary. In making such
            determination, the Commission, taking into account the public
            interest and potential to contribute to systemic risk, may set
            different reporting requirements for different classes of
            private fund advisers, based on the particular types or sizes
            of private funds advised by such advisers.
                ``(4) Maintenance of records.--An investment adviser
            registered under this Act is required to maintain and keep such
            records of private funds advised by the investment adviser for
            such period or periods as the Commission, by rule or
            regulation, may prescribe as necessary or appropriate in the
            public interest and for the protection of investors or for the
            assessment of systemic risk.
                ``(5) Examination of records.--
                        ``(A) Periodic and special examinations.--All
                    records of a private fund maintained by an investment
                    adviser registered under this Act shall be subject at
                    any time and from time to time to such periodic,
                    special, and other examinations by the Commission, or
                    any member or representative thereof, as the Commission
                    may prescribe.
                        ``(B) Availability of records.--An investment
                    adviser registered under this Act shall make available
                    to the Commission or its representatives any copies or
                    extracts from such records as may be prepared without
                    undue effort, expense, or delay as the Commission or
                    its representatives may reasonably request.
                ``(6) Information sharing.--The Commission shall make
            available to the Board of Governors of the Federal Reserve
            System and to the Financial Services Oversight Council, copies
            of all reports, documents, records, and information filed with
            or provided to the Commission by an investment adviser under
            this subsection as the Board, or the Financial Services
            Oversight Council, may consider necessary for the purpose of
            assessing the systemic risk of a private fund. All such
            reports, documents, records, and information obtained by the
            Board, or such other entity, from the Commission under this
            subsection shall be kept confidential in a manner consistent
            with confidentiality established by the Commission pursuant to
            paragraph (8).
                ``(7) Disclosures of certain private fund information.--An
            investment adviser registered under this Act shall provide such
            reports, records, and other documents to investors, prospective
            investors, counterparties, and creditors, of any private fund
            advised by the investment adviser as the Commission, by rule or
            regulation, may prescribe as necessary or appropriate in the
            public interest and for the protection of investors or for the
            assessment of systemic risk.
                ``(8) Applicable privileges not waived.--An investment
            advisor, and investment advisor to a private fund, a private
            fund, foreign private fund advisor, a foreign private fund, an
            advisor to a venture capital fund, a venture capital fund, or
            other person shall not be compelled to waive and shall not be
            deemed to have waived any privilege otherwise applicable to any
            data or information by transferring the data or information to,
            or permitting that data or information to be used by--
                        ``(A) the Financial Services Oversight Council;
                        ``(B) the Commission;
                        ``(C) any Federal financial regulator or State
                    financial regulator, in any capacity; or
                        ``(D) any other agency of the Federal Government
                    (as defined in section 6 of title 18, United States
                    Code).
                ``(9) Non-disclosure of certain proprietary information and
            confidentiality of reports.--Any proprietary information of an
            investment adviser ascertained by the Commission from any
            report required to be filed with the Commission pursuant to
            this section 204(b) shall be subject to the same limitations on
            public disclosure as any facts ascertained during an
            examination as provided by section 210(b) of this title. The
            Commission may not compel the private fund to disclose such
            proprietary information to counterparties and creditors. For
            purposes of this section, proprietary information shall include
            sensitive, non-public information regarding the investment
            adviser's investment or trading strategies, analytical or
            research methodologies, trading data, computer hardware or
            software containing intellectual property, and any additional
            information that the Commission determines to be proprietary.
            Notwithstanding any other provision of law, the Commission
            shall not be compelled to disclose any report or information
            contained therein required to be filed with the Commission
            under this subsection. Nothing in this paragraph shall
            authorize the Commission to withhold information from the
            Congress or to prevent the Commission from complying with a
            request for information from any other Federal department or
            agency or any self-regulatory organization requesting the
            report or information for purposes within the scope of its
            jurisdiction, or complying with an order of a court of the
            United States in an action brought by the United States or the
            Commission. For purposes of section 552 of title 5, United
            States Code, this paragraph shall be considered a statute
            described in subsection (b)(3)(B) of such section.''.

    SEC. 5005. ELIMINATION OF DISCLOSURE PROVISION.

        Section 210 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-
    10) is amended by striking subsection (c).

    SEC. 5006. EXEMPTION OF AND REPORTING BY VENTURE CAPITAL FUND ADVISERS.

        Section 203 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-
    3) is amended by adding at the end the following new subsection:
        ``(l) Exemption of and Reporting by Venture Capital Fund
    Advisers.--The Commission shall identify and define the term `venture
    capital fund' and shall provide an adviser to such a fund an exemption
    from the registration requirements under this section (excluding any
    such fund whose adviser is exempt from registration pursuant to
    paragraph (7) of subsection (b)). The Commission shall require such
    advisers to maintain such records and provide to the Commission such
    annual or other reports as the Commission determines necessary or
    appropriate in the public interest or for the protection of
    investors.''.

    SEC. 5007. EXEMPTION OF AND REPORTING BY CERTAIN PRIVATE FUND ADVISERS.

        Section 203 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-
    3), as amended by section 5006, is further amended by adding at the end
    the following new subsections:
        ``(m) Exemption of and Reporting by Certain Private Fund
    Advisers.--
                ``(1) In general.--The Commission shall provide an
            exemption from the registration requirements under this section
            to any investment adviser of private funds, if each of such
            investment adviser acts solely as an adviser to private funds
            and has assets under management in the United States of less
            than $150,000,000.
                ``(2) Reporting.--The Commission shall require investment
            advisers exempted by reason of this subsection to maintain such
            records and provide to the Commission such annual or other
            reports as the Commission determines necessary or appropriate
            in the public interest or for the protection of investors.
        ``(n) Registration and Examination of Mid-sized Private Fund
    Advisers.--In prescribing regulations to carry out the requirements of
    this section with respect to investment advisers acting as investment
    advisers to mid-sized private funds, the Commission shall take into
    account the size, governance, and investment strategy of such funds to
    determine whether they pose systemic risk, and shall provide for
    registration and examination procedures with respect to the investment
    advisers of such funds which reflect the level of systemic risk posed
    by such funds.''.

    SEC. 5008. CLARIFICATION OF RULEMAKING AUTHORITY.

        Section 211 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-
    11) is amended--
                (1) by amending subsection (a) to read as follows:
        ``(a) The Commission shall have authority from time to time to
    make, issue, amend, and rescind such rules and regulations and such
    orders as are necessary or appropriate to the exercise of the functions
    and powers conferred upon the Commission elsewhere in this title,
    including rules and regulations defining technical, trade, and other
    terms used in this title. For the purposes of its rules and
    regulations, the Commission may--
                ``(1) classify persons and matters within its jurisdiction
            based upon, but not limited to--
                        ``(A) size;
                        ``(B) scope;
                        ``(C) business model;
                        ``(D) compensation scheme; or
                        ``(E) potential to create or increase systemic
                    risk;
                ``(2) prescribe different requirements for different
            classes of persons or matters; and
                ``(3) ascribe different meanings to terms (including the
            term `client', except the Commission shall not ascribe a
            meaning to the term `client' that would include an investor in
            a private fund managed by an investment adviser, where such
            private fund has entered into an advisory contract with such
            adviser) used in different sections of this title as the
            Commission determines necessary to effect the purposes of this
            title.''; and
                (2) by adding at the end the following new subsection:
        ``(e) The Commission and the Commodity Futures Trading Commission
    shall, after consultation with the Board of Governors of the Federal
    Reserve System, within 12 months after the date of enactment of the
    Private Fund Investment Advisers Registration Act of 2009, jointly
    promulgate rules to establish the form and content of the reports
    required to be filed with the Commission under sections 203(l), 203(m),
    and 204(b) and with the Commodity Futures Trading Commission by
    investment advisers that are registered both under the Investment
    Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.) and the Commodity
    Exchange Act (7 U.S.C. 1 et seq.).''.

    SEC. 5009. GAO STUDY.

        (a) Study Required.--The Comptroller General of the United States
    shall carry out a study to assess the annual costs on industry members
    and their investors due to the registration requirements and ongoing
    reporting requirements under this subtitle and the amendments made by
    this subtitle.
        (b) Report to the Congress.--Not later than the end of the 2-year
    period beginning on the date of the enactment of this title, the
    Comptroller General of the United States shall submit a report to the
    Congress containing the findings and determinations made by the
    Comptroller General in carrying out the study required under subsection
    (a).

    SEC. 5010. EFFECTIVE DATE; TRANSITION PERIOD.

        (a) Effective Date.--This subtitle, and the amendments made by this
    subtitle, shall take effect with respect to investment advisers after
    the end of the 1-year period beginning on the date of the enactment of
    this title.
        (b) Transition Period.--The Securities and Exchange Commission
    shall prescribe rules and regulations to the extent necessary to permit
    an investment adviser who will be required to register with the
    Securities and Exchange Commission by reason of this subtitle with the
    option of registering with the Securities and Exchange Commission
    before the date described under subsection (a).

    SEC. 5011. QUALIFIED CLIENT STANDARD.

        Section 205(e) of the Investment Advisers Act of 1940 (15 U.S.C.
    80b-5(e)) is amended by adding at the end the following: ``With respect
    to any factor used in any rule or regulation by the Commission in
    making a determination under this subsection, if the Commission uses a
    dollar amount test in connection with such factor, such as a net asset
    threshold, the Commission shall, by order, not later than 1 year after
    the date of the enactment of the Private Fund Investment Advisers
    Registration Act of 2009, and every 5 years thereafter, adjust for the
    effects of inflation on such test. Any such adjustment that is not a
    multiple of $100,000 shall be rounded to the nearest multiple of
    $100,000.''.

       Subtitle B--Accountability and Transparency in Rating Agencies Act

    SEC. 6001. SHORT TITLE.

        This subtitle may be cited as the ``Accountability and Transparency
    in Rating Agencies Act of 2009''.

    SEC. 6002. ENHANCED REGULATION OF NATIONALLY RECOGNIZED STATISTICAL
                  RATING ORGANIZATIONS.

        (a) In General.--Section 15E of the Securities Exchange Act of 1934
    (15 U.S.C. 78o-7) is amended--
                (1) in subsection (a)--
                        (A) by amending paragraph (1)(A) to read as
                    follows:
                        ``(A) In general.--Each credit rating agency shall
                    register as a nationally recognized statistical rating
                    organization for the purposes of this title (in this
                    section referred to as the `applicant'), and shall file
                    with the Commission an application for registration, in
                    such form as the Commission shall require, by rule or
                    regulation issued in accordance with subsection (n),
                    and containing the information described in
                    subparagraph (B).''.
                        (B) in paragraph (2)(A), by striking ``furnished
                    to'' and inserting ``filed with'';
                        (C) in paragraph (2)(B)(i)(II), by striking
                    ``furnished to'' and inserting ``filed with''; and
                        (D) by adding at the end of paragraph (1) the
                    following:
                        ``(F) Exemptions.--The registration requirement in
                    subparagraph (A) shall not apply to--
                                ``(i) a credit rating agency if the credit
                            rating agency--
                                        ``(I) does not engage in the
                                    provision of credit ratings to issuers
                                    of securities for a fee; and
                                        ``(II) issues credit ratings only
                                    in any bona fide newspaper, news
                                    magazine, or business or financial
                                    publication of general and regular
                                    circulation; or
                                ``(ii) such other persons as the Commission
                            may designate by rules and regulations or order
                            when in the public interest and for the
                            protection of investors.''.
                (2) in subsection (b)--
                        (A) in paragraph (1)(A), by striking ``furnished''
                    and inserting ``filed'' and by striking ``furnishing''
                    and inserting ``filing'';
                        (B) in paragraph (1)(B), by striking ``furnishing''
                    and inserting ``filing''; and
                        (C) in the first sentence of paragraph (2), by
                    striking ``furnish to'' and inserting ``file with'';
                (3) in subsection (c)--
                        (A) paragraph (2)--
                                (i) in the second sentence by inserting
                            ``including the requirements of this section,''
                            after ``Notwithstanding any other provision of
                            law,''; and
                                (ii) by inserting before the period at the
                            end of the last sentence ``, provided that this
                            paragraph does not afford a defense against any
                            action or proceeding brought by the Commission
                            to enforce the antifraud provision of the
                            securities laws'';
                        (B) by adding at the end the following new
                    paragraph:
                ``(3) Review of internal processes for determining credit
            ratings.--
                        ``(A) In general.--The Commission shall examine
                    credit ratings issued by, and the policies, procedures,
                    and methodologies employed by, each nationally
                    recognized statistical rating organization to review
                    whether--
                                ``(i) the nationally recognized statistical
                            rating organization has established and
                            documented a system of internal controls, due
                            diligence and implementation of methodologies
                            for determining credit ratings, taking into
                            consideration such factors as the Commission
                            may prescribe by rule;
                                ``(ii) the nationally recognized
                            statistical rating organization adheres to such
                            system; and
                                ``(iii) the public disclosures of the
                            nationally recognized statistical rating
                            organization required under this section about
                            its credit ratings, methodologies, and
                            procedures are consistent with such system.
                        ``(B) Manner and frequency.--The Commission shall
                    conduct reviews required by this paragraph no less
                    frequently than annually in a manner to be determined
                    by the Commission.
                ``(4) Provision of information to the commission.--Each
            nationally recognized statistical rating organization shall
            make available and maintain such records and information, for
            such a period of time, as the Commission may prescribe, by
            rule, as necessary for the Commission to conduct the reviews
            under paragraph (3).
                ``(5) Disclosures with respect to structured securities.--
                        ``(A) Regulations required.--The rules and
                    regulations prescribed by the Commission pursuant to
                    this section with respect to nationally recognized
                    statistical rating organizations shall, with respect to
                    disclosure of the procedures and methodologies by which
                    any nationally recognized statistical rating
                    organization determines credit ratings for structured
                    securities--
                                ``(i) specify the information required to
                            be disclosed to such rating organizations by
                            the sponsor, issuers, and underwriters of such
                            structured securities on the collateral
                            underlying such structured securities; and
                                ``(ii) establish and implement procedures
                            to collect and disclose information about the
                            processes used by such sponsor, issuers, and
                            underwriters to assess the accuracy and
                            integrity of their data and fraud detection.
                        ``(B) Definition.--For purposes of this paragraph,
                    the Commission shall, by rule or regulation, define the
                    term `structured securities' as appropriate in the
                    public interest and for the protection of investors.
                ``(6) Historical default rate disclosures.--The rules and
            regulations prescribed by the Commission pursuant to this
            section with respect to nationally recognized statistical
            rating organizations shall require each nationally recognized
            statistical rating organization to establish and maintain, on a
            publicly accessible Internet site, a facility to disclose, in a
            central database, the historical default rates of all classes
            of financial products rated by such organization.'';
                (4) in subsection (d)--
                        (A) in the heading, by inserting ``Fine,'' after
                    ``Censure,'';
                        (B) by striking ``shall censure'' and all that
                    follows through ``revocation'' and inserting the
                    following: ``shall censure, fine in accordance with
                    section 21B(a), place limitations on the activities,
                    functions, or operations of, suspend for a period not
                    exceeding 12 months, or revoke the registration of any
                    nationally recognized statistical rating organization
                    (or with respect to any person who is associated, who
                    is seeking to become associated, or, at the time of the
                    alleged misconduct, who was associated or was seeking
                    to become associated with a nationally recognized
                    statistical rating organization, the Commission, by
                    order, shall censure, fine in accordance with section
                    21B(a), place limitations on the activities or
                    functions of such person, suspend for a period not
                    exceeding 12 months, or bar such person from being
                    associated with a nationally recognized statistical
                    rating organization), if the Commission finds, on the
                    record after notice and opportunity for hearing, that
                    such censure, fine, placing of limitations, bar,
                    suspension, or revocation'';
                        (C) in paragraph (2), by striking ``furnished to''
                    and inserting ``filed with'';
                        (D) in paragraph (4)--
                                (i) by striking ``furnish'' and inserting
                            ``file''; and
                                (ii) by striking ``or'' at the end;
                        (E) in paragraph (5), by striking the period at the
                    end and inserting a semicolon; and
                        (F) by adding at the end the following:
                ``(6) has failed reasonably to supervise another person who
            commits a violation of the securities laws, the rules or
            regulations thereunder, or any rules of the Municipal
            Securities Rulemaking Board if such other person is subject to
            his or her supervision, except that no person shall be deemed
            to have failed reasonably to supervise any other person under
            this paragraph, if--
                        ``(A) there have been established procedures, and a
                    system for applying such procedures, which would
                    reasonably be expected to prevent and detect, insofar
                    as practicable, any such violation by such other
                    person; and
                        ``(B) such person has reasonably discharged the
                    duties and obligations incumbent upon him or her by
                    reason of such procedures and system without reasonable
                    cause to believe that such procedures and system were
                    not being complied with; or
                ``(7) fails to conduct sufficient surveillance to ensure
            that credit ratings remain current, as applicable.'';
                (5) in subsection (e), by striking paragraph (1) and
            inserting the following new paragraph (1):
                ``(1) Voluntary withdrawal.--A nationally recognized
            statistical rating organization may, upon such terms and
            conditions as the Commission may establish as necessary in the
            public interest or for the protection of investors, withdraw
            from registration by furnishing a written notice of withdrawal
            to the Commission, provided that such nationally recognized
            statistical rating organization certifies that it received less
            than $250,000,000 during its last full fiscal year in net
            revenue for providing credit ratings on securities and money
            market instruments issued in the United States.'';
                (6) by amending subsection (h) to read as follows:
        ``(h) Corporate Governance, Organization, and Management of
    Conflicts of Interest.--
                ``(1) Board of directors.--
                        ``(A) In general.--Each nationally recognized
                    statistical rating organization shall have a board of
                    directors.
                        ``(B) Independent directors.--At least \1/3\ of
                    such board, but no less than 2 of the members of the
                    board of directors, shall be independent directors. In
                    order to be considered independent for purposes of this
                    subsection, a director of a nationally recognized
                    statistical rating organization may not, other than in
                    his or her capacity as a member of the board of
                    directors or any committee thereof--
                                ``(i) accept any consulting, advisory, or
                            other compensatory fee from the nationally
                            recognized statistical rating organization; or
                                ``(ii) be a person associated with the
                            nationally recognized statistical rating
                            organization or with any affiliated company
                            thereof.
                        ``(C) Compensation and term.--The compensation of
                    the independent directors shall not be linked to the
                    business performance of the nationally recognized
                    statistical rating organization and shall be arranged
                    so as to ensure the independence of their judgment. The
                    term of office of the independent directors shall be
                    for a pre-agreed fixed period not exceeding 5 years and
                    shall not be renewable.
                        ``(D) Duties.--In addition to the overall
                    responsibility of the board of directors, the board
                    shall oversee--
                                ``(i) the establishment, maintenance, and
                            enforcement of policies and procedures for
                            determining credit ratings;
                                ``(ii) the establishment, maintenance, and
                            enforcement of policies and procedures to
                            address, manage, and disclose any conflicts of
                            interest;
                                ``(iii) the effectiveness of the internal
                            control system with respect to policies and
                            procedures for determining credit ratings; and
                                ``(iv) the compensation and promotion
                            policies and practices of the nationally
                            recognized statistical rating organization.
                ``(2) Organization policies and procedures.--Each
            nationally recognized statistical rating organization shall
            establish, maintain, and enforce written policies and
            procedures reasonably designed, taking into consideration the
            nature of the business of the nationally recognized statistical
            rating organization and affiliated persons and affiliated
            companies thereof, to address, manage, and disclose any
            conflicts of interest that can arise from such business.
                ``(3) Commission rules.--The Commission shall issue rules
            to prohibit, or require the management and disclosure of, any
            conflicts of interest relating to the issuance of credit
            ratings by a nationally recognized statistical rating
            organization, including rules regarding--
                        ``(A) conflicts of interest relating to the manner
                    in which a nationally recognized statistical rating
                    organization is compensated by the obligor, or any
                    affiliate of the obligor, for issuing credit ratings or
                    providing related services;
                        ``(B) conflicts of interest relating to business
                    relationships, ownership interests, and affiliations of
                    nationally recognized statistical rating organization
                    board members with obligors, or any other financial or
                    personal interests between a nationally recognized
                    statistical rating organization, or any person
                    associated with such nationally recognized statistical
                    rating organization, and the obligor, or any affiliate
                    of the obligor;
                        ``(C) conflicts of interest relating to any
                    affiliation of a nationally recognized statistical
                    rating organization, or any person associated with such
                    nationally recognized statistical rating organization,
                    with any person who underwrites securities, money
                    market instruments, or other instruments that are the
                    subject of a credit rating;
                        ``(D) a requirement that each nationally recognized
                    statistical rating organization disclose on such
                    organization's website a consolidated report at the end
                    of each fiscal year that shows--
                                ``(i) the percent of net revenue earned by
                            the nationally recognized statistical rating
                            organization or an affiliate of a nationally
                            recognized statistical rating organization, or
                            any person associated with a nationally
                            recognized statistical rating organization, to
                            the extent determined appropriate by the
                            Commission, for that fiscal year for providing
                            services and products other than credit rating
                            services to each person who paid for a credit
                            rating; and
                                ``(ii) the relative standing of each person
                            who paid for a credit rating that was
                            outstanding as of the end of the fiscal year in
                            terms of the amount of net revenue earned by
                            the nationally recognized statistical rating
                            organization attributable to each such person
                            and classified by the highest 5, 10, 25, and 50
                            percentiles and lowest 50 and 25 percentiles;
                        ``(E) the establishment of a system of payment for
                    credit ratings issued by each nationally recognized
                    statistical rating organization that requires that
                    payments are structured in a manner designed to ensure
                    that the nationally recognized statistical rating
                    organization conducts accurate and reliable
                    surveillance of credit ratings over time, as
                    applicable, and that incentives for reliable credit
                    ratings are in place;
                        ``(F) a requirement that a nationally recognized
                    statistical rating organization disclose with the
                    publication of a credit rating the type and number of
                    credit ratings it has provided to the person being
                    rated or affiliates of such person, the fees it has
                    billed for the credit rating, and the aggregate amount
                    of net revenue earned by the nationally recognized
                    statistical rating organization in the preceding 2
                    fiscal years attributable to the person being rated and
                    its affiliates; and
                        ``(G) any other potential conflict of interest, as
                    the Commission determines necessary or appropriate in
                    the public interest or for the protection of investors.
                ``(4) Look-back requirement.--
                        ``(A) Review by the nationally recognized
                    statistical rating organization.--Each nationally
                    recognized statistical rating organization shall
                    establish, maintain, and enforce policies and
                    procedures reasonably designed to ensure that, in any
                    case in which an employee of a person subject to a
                    credit rating of the nationally recognized statistical
                    rating organization or the issuer, underwriter, or
                    sponsor of a security or money market instrument
                    subject to a credit rating of the nationally recognized
                    statistical rating organization was employed by the
                    nationally recognized statistical rating organization
                    and participated in any capacity in determining credit
                    ratings for the person or the securities or money
                    market instruments during the 1-year period preceding
                    the date an action was taken with respect to the credit
                    rating, the nationally recognized statistical rating
                    organization shall--
                                ``(i) conduct a review to determine whether
                            any conflicts of interest of the employee
                            influenced the credit rating; and
                                ``(ii) take action to revise the rating if
                            appropriate, in accordance with such rules as
                            the Commission shall prescribe.
                        ``(B) Review by commission.--
                                ``(i) In general.--The Commission shall
                            conduct periodic reviews of the policies
                            described in subparagraph (A) and the
                            implementation of the policies at each
                            nationally recognized statistical rating
                            organization to ensure they are reasonably
                            designed and implemented to most effectively
                            eliminate conflicts of interest.
                                ``(ii) Timing of reviews.--The Commission
                            shall review the code of ethics and conflict of
                            interest policy of each nationally recognized
                            statistical rating organization--
                                        ``(I) not less frequently than
                                    annually; and
                                        ``(II) whenever such policies are
                                    materially modified or amended.
                ``(5) Report to commission on certain employment
            transitions.--
                        ``(A) Report required.--Each nationally recognized
                    statistical rating organization shall report to the
                    Commission any case such organization knows or can
                    reasonably be expected to know where a person
                    associated with such organization within the previous 5
                    years obtains employment with any obligor, issuer,
                    underwriter, or sponsor of a security or money market
                    instrument for which the organization issued a credit
                    rating during the 12-month period prior to such
                    employment, if such employee--
                                ``(i) was a senior officer of such
                            organization;
                                ``(ii) participated in any capacity in
                            determining credit ratings for such obligor,
                            issuer, underwriter, or sponsor; or
                                ``(iii) supervised an employee described in
                            clause (ii).
                        ``(B) Public disclosure.--Upon receiving such a
                    report, the Commission shall make such information
                    publicly available.'';
                (7) by amending subsection (j) to read as follows:
        ``(j) Designation of Compliance Officer.--
                ``(1) In general.--Each nationally recognized statistical
            rating organization shall designate an individual to serve as a
            compliance officer.
                ``(2) Duties.--The compliance officer shall--
                        ``(A) report directly to the board of the
                    nationally recognized statistical rating organization;
                        ``(B) review compliance with policies and
                    procedures to manage conflicts of interest and assess
                    the risk that the compliance (or lack of such
                    compliance) may compromise the integrity of the credit
                    rating process;
                        ``(C) review compliance with the internal control
                    system with respect to the procedures and methodologies
                    for determining credit ratings, including qualitative
                    methodologies and quantitative inputs used in the
                    rating process, and assess the risk that such internal
                    control system is reasonably designed to ensure the
                    integrity and quality of the credit rating process;
                        ``(D) in consultation with the board of the
                    nationally recognized statistical rating organization,
                    resolve any conflicts of interest that may arise;
                        ``(E) be responsible for administering the policies
                    and procedures required to be established pursuant to
                    this section;
                        ``(F) ensure compliance with securities laws and
                    the rules and regulations issued thereunder, including
                    rules prescribed by the Commission pursuant to this
                    section; and
                        ``(G) establish procedures--
                                ``(i) for the receipt, retention, and
                            treatment of complaints regarding credit
                            ratings, models, methodologies, and compliance
                            with the securities laws and the policies and
                            procedures required under this section;
                                ``(ii) for the receipt, retention, and
                            treatment of confidential, anonymous complaints
                            by employees, obligors, issuers, and investors;
                                ``(iii) for the remediation of non-
                            compliance issues found during compliance
                            office reviews, the reviews required under
                            paragraph (7), internal or external audit
                            findings, self-reported errors, or through
                            validated complaints; and
                                ``(iv) designed so that ratings that the
                            nationally recognized statistical rating
                            organization disseminates reflect consideration
                            of all information in a manner generally
                            consistent with the nationally recognized
                            statistical rating organization's published
                            rating methodology, including information which
                            is provided, received, or otherwise obtained
                            from obligor, issuer and non-issuer sources,
                            such as investors, the media, and other
                            interested or informed parties.
                ``(3) Limitations.--The compliance officer shall not, while
            serving in that capacity--
                        ``(A) determine credit ratings;
                        ``(B) participate in the establishment of the
                    procedures and methodologies or the qualitative
                    methodologies and quantitative inputs used to determine
                    credit ratings;
                        ``(C) perform marketing or sales functions; or
                        ``(D) participate in establishing compensation
                    levels, other than for employees working for the
                    compliance officer.
                ``(4) Annual reports required.--The compliance officer
            shall annually prepare and sign a report on the compliance of
            the nationally recognized statistical rating organization with
            the securities laws and such organization's internal policies
            and procedures, including its code of ethics and conflict of
            interest policies, in accordance with rules prescribed by the
            Commission. Such compliance report shall accompany the
            financial reports of the nationally recognized statistical
            rating organization that are required to be filed with the
            Commission pursuant to this section and shall include a
            certification that, under penalty of law, the report is
            accurate and complete.
                ``(5) Compensation.--The compensation of the compliance
            officer shall not be linked to the business performance of the
            nationally recognized statistical rating organization and shall
            be arranged so as to ensure the independence of the officer's
            judgment.'';
                (8) in subsection (k)--
                        (A) by striking ``, on a confidential basis,'';
                        (B) by striking ``furnish to'' and inserting ``file
                    with'';
                        (C) by striking ``Each nationally'' and inserting
                    the following:
                ``(1) In general.--Each nationally''; and
                        (D) by adding at the end the following new
                    paragraph:
                ``(2) Exception.--The Commission may treat as confidential
            any information provided by a nationally recognized statistical
            rating organization under this section consistent with
            applicable Federal laws or Commission rules.'';
                (9) in subsection (l)(2)(A)(i), by striking ``furnished''
            and inserting ``filed'';
                (10) by amending subsection (p) to read as follows:
        ``(p) Establishment of SEC Office.--
                ``(1) In general.--The Commission shall establish an office
            that administers the rules of the Commission with respect to
            the practices of nationally recognized statistical rating
            organizations.
                ``(2) Staffing.--The office of the Commission established
            under this subsection shall be staffed sufficiently to carry
            out fully the requirements of this section.
                ``(3) Rulemaking authority.--The Commission shall--
                        ``(A) establish, by rule, fines and other penalties
                    for any nationally recognized statistical rating
                    organization that violates the applicable requirements
                    of this title; and
                        ``(B) issue such rules as may be necessary to carry
                    out this section with respect to nationally recognized
                    statistical rating organizations.''; and
                (11) by adding after subsection (p) the following new
            subsections:
        ``(q) Transparency of Ratings Performance.--
                ``(1) Rulemaking required.--The Commission shall, by rule,
            require each nationally recognized statistical rating
            organization to publicly disclose information on initial
            ratings and subsequent changes to such ratings for the purpose
            of providing a gauge of the performance of ratings and allowing
            investors to compare performance of ratings by different
            nationally recognized statistical rating organizations.
                ``(2) Content.--The rules of the Commission under this
            subsection shall require, at a minimum, disclosures that--
                        ``(A) are comparable among nationally recognized
                    statistical rating organizations, so that investors can
                    compare rating performance across rating organizations;
                        ``(B) are clear and informative for a wide range of
                    investor sophistication;
                        ``(C) include performance information over a range
                    of years and for a variety of classes of credit
                    ratings, as determined by the Commission;
                        ``(D) are published and made freely available by
                    the nationally recognized statistical rating
                    organization, on an easily accessible portion of its
                    website and in written form when requested by
                    investors; and
                        ``(E) each nationally recognized statistical rating
                    organization include an attestation with any credit
                    rating it issues affirming that no part of the rating
                    was influenced by any other business activities, that
                    the rating was based solely on the merits of the
                    instruments being rated, and that such rating was an
                    independent evaluation of the risks and merits of the
                    instrument.
        ``(r) Credit Ratings Methodologies.--
                ``(1) In general.--The Commission shall prescribe rules, in
            the public interest and for the protection of investors, that
            require each nationally recognized statistical rating
            organization to establish, maintain, and enforce written
            procedures and methodologies and an internal control system
            with respect to such procedures and methodologies that are
            reasonably designed to--
                        ``(A) ensure that credit ratings are determined
                    using procedures and methodologies, including
                    qualitative methodologies and quantitative inputs that
                    are determined in accordance with the policies and
                    procedures of the nationally recognized statistical
                    rating organization for developing and modifying credit
                    rating procedures and methodologies;
                        ``(B) ensure that when major changes to credit
                    rating procedures and methodologies, including to
                    qualitative methodologies and quantitative inputs, are
                    made, that the changes are applied consistently to all
                    credit ratings to which the changed procedures and
                    methodologies apply and, to the extent the changes are
                    made to credit rating surveillance procedures and
                    methodologies, they are applied to current credit
                    ratings within a time period to be determined by the
                    Commission by rule, and that the reason for the change
                    is publicly disclosed;
                        ``(C) notify persons who have access to the credit
                    ratings of the nationally recognized statistical rating
                    organization, regardless of whether they are made
                    readily accessible for free or a reasonable fee, of the
                    procedure or methodology, including qualitative
                    methodologies and quantitative inputs, used with
                    respect to a particular credit rating; and
                        ``(D) notify persons who have access to the credit
                    ratings of the nationally recognized statistical rating
                    organization, regardless of whether they are made
                    readily accessible for free or a reasonable fee, when a
                    change is made to a procedure or methodology, including
                    to qualitative methodologies and quantitative inputs,
                    or an error is identified in a procedure or methodology
                    that may result in credit rating actions, and the
                    likelihood of the change resulting in current credit
                    ratings being subject to rating actions.
                ``(2) Symbols.--The Commission may prescribe rules that
            require nationally recognized statistical rating organizations
            to establish credit rating symbols that distinguish credit
            ratings for structured products from credit ratings for other
            products that the Commission determines appropriate or
            necessary in the public interest and for the protection of
            investors, provided such rules do not prevent public pension
            funds or other State regulated entities from investing in rated
            products.
                ``(3) Rating clarity and consistency.--
                        ``(A) Commission obligation.--Subject to
                    subparagraphs (B) and (C), the Commission shall
                    require, by rule, each nationally recognized
                    statistical rating organization to establish, maintain,
                    and enforce written policies and procedures reasonably
                    designed--
                                ``(i) with respect to credit ratings of
                            securities and money market instruments, to
                            assess the risk that investors in securities
                            and money market instruments may not receive
                            payment in accordance with the terms of such
                            securities and instruments;
                                ``(ii) to define clearly any credit rating
                            symbol used by that organization; and
                                ``(iii) to apply such credit rating symbol
                            in a consistent manner for all types of
                            securities and money market instruments.
                        ``(B) Additional credit factors.--Nothing in
                    subparagraph (A)--
                                ``(i) prohibits a nationally recognized
                            statistical rating organization from using
                            additional credit factors that are documented
                            and disclosed by the organization and that have
                            a demonstrated impact on the risk an investor
                            in a security or money market instrument will
                            not receive repayment in accordance with the
                            terms of issuance;
                                ``(ii) prohibits a nationally recognized
                            statistical rating organization from
                            considering credit factors that are unique to
                            municipal securities; or
                                ``(iii) prohibits a nationally recognized
                            statistical rating organization from using an
                            additional symbol with respect to the ratings
                            described in subparagraph (A)(i) for the
                            purpose of distinguishing the ratings of a
                            certain type of security or money market
                            instrument from ratings of any other types of
                            securities or money market instruments.
                        ``(C) Complementary ratings.--The Commission shall
                    not impose any requirement under subparagraph (A) that
                    prevents nationally recognized statistical rating
                    organizations from establishing ratings that are
                    complementary to the ratings described in subparagraph
                    (A)(i) and that are created to measure a discrete
                    aspect of the security's or instrument's risk.
        ``(s) Transparency of Credit Rating Methodologies and Information
    Reviewed.--
                ``(1) In general.--The Commission shall require, by rule, a
            nationally recognized statistical rating organization to
            include with the publication of each credit rating regardless
            of whether the credit rating is made readily accessible for
            free or a reasonable fee a form that discloses information
            about the assumptions underlying the procedures and
            methodologies used, and the data relied on, to determine the
            credit rating in the format prescribed in paragraph (2) and
            containing the information described in paragraph (3).
                ``(2) Format.--The Commission shall prescribe a form for
            use under paragraph (1) that--
                        ``(A) is designed in a user-friendly and helpful
                    manner for investors to understand the information
                    contained in the report;
                        ``(B) requires the nationally recognized
                    statistical rating organization to provide the content,
                    as required by paragraph (3), in a manner that is
                    directly comparable across securities; and
                        ``(C) the nationally recognized statistical rating
                    organization certifies the information on the form as
                    true and accurate.
                ``(3) Content.--The Commission shall prescribe a form that
            requires a nationally recognized statistical rating
            organization to disclose--
                        ``(A) the main assumptions included in constructing
                    procedures and methodologies, including qualitative
                    methodologies and quantitative inputs and assumptions
                    about the correlation of defaults across underlying
                    assets used in rating certain structured products;
                        ``(B) the potential shortcomings of the credit
                    ratings, and the types of risks not measured in the
                    credit ratings that the nationally recognized
                    statistical rating organization is not commenting on,
                    such as liquidity, market, and other risks;
                        ``(C) information on the certainty of the rating,
                    including information on the reliability, accuracy, and
                    quality of the data relied on in determining the
                    ultimate credit rating and a statement on the extent to
                    which key data inputs for the credit rating were
                    reliable or limited, including any limits on the reach
                    of historical data, limits in accessibility to certain
                    documents or other forms of information that would have
                    better informed the credit rating, and the completeness
                    of certain information considered;
                        ``(D) whether and to what extent third party due
                    diligence services have been utilized, and a
                    description of the information that such third party
                    reviewed in conducting due diligence services;
                        ``(E) a description of relevant data about any
                    obligor, issuer, security, or money market instrument
                    that was used and relied on for the purpose of
                    determining the credit rating;
                        ``(F) a statement containing an overall assessment
                    of the quality of information available and considered
                    in producing a credit rating for a security in relation
                    to the quality of information available to the
                    nationally recognized statistical rating organization
                    in rating similar obligors, securities, or money market
                    instruments;
                        ``(G) an explanation or measure of the potential
                    volatility for the credit rating, including any factors
                    that might lead to a change in the credit rating, and
                    the extent of the change that might be anticipated
                    under different conditions;
                        ``(H) information on the content of the credit
                    rating, including--
                                ``(i) the expected default probability; and
                                ``(ii) the loss given default;
                        ``(I) information on the sensitivity of the rating
                    to assumptions made by the nationally recognized
                    statistical rating organization, including--
                                ``(i) 5 assumptions made in the ratings
                            process that, without accounting for any other
                            factor, would have the greatest impact on a
                            rating if such assumptions were proven false or
                            inaccurate; and
                                ``(ii) an analysis, using concrete
                            examples, on how each of the 5 assumptions
                            identified under clause (i) impacts a rating;
                        ``(J) where applicable, how the nationally
                    recognized statistical rating organization used
                    servicer or remittance reports, and with what
                    frequency, to conduct surveillance of the credit
                    rating; and
                        ``(K) such additional information as may be
                    required by the Commission.
                ``(4) Due diligence services.--
                        ``(A) Certification required.--In any case in which
                    third-party due diligence services are employed by a
                    nationally recognized statistical rating organization
                    or an issuer, underwriter, or sponsor in connection
                    with the issuance of a credit rating, the firm
                    providing the due diligence services shall provide to
                    the nationally recognized statistical rating
                    organization written certification of such due
                    diligence, which shall be subject to review by the
                    Commission, and the issuer, underwriter, or sponsor
                    shall provide any reports issued by the provider of
                    such due diligence services to the nationally
                    recognized statistical rating organization.
                        ``(B) Format and content.--The Commission shall
                    establish the appropriate format and content for
                    written certifications required under subparagraph (A)
                    to ensure that providers of due diligence services
                    certify that they have conducted a thorough review of
                    data, documentation, and other relevant information
                    necessary for the nationally recognized statistical
                    rating organization to provide a reliable rating.
                        ``(C) Disclosure of certification.--The Commission
                    shall adopt rules requiring a nationally recognized
                    statistical rating organization to disclose to persons
                    who have access to the credit ratings of the nationally
                    recognized statistical rating organization regardless
                    of whether they are made readily accessible for free or
                    a reasonable fee the certification described in
                    subparagraph (A) with the publication of the applicable
                    credit rating in a manner that may permit the persons
                    to determine the adequacy and level of due diligence
                    services provided by the third party.
        ``(t) Prohibited Activities.--Beginning 180 days from the date of
    enactment of the Accountability, Reliability, and Transparency in
    Rating Agencies Act, it shall be unlawful for a nationally recognized
    statistical rating organization, or an affiliate of a nationally
    recognized statistical rating organization, or any person associated
    with a nationally recognized statistical rating organization, that
    provides a credit rating for an issuer, underwriter, or placement agent
    of a security to provide any non-rating service to that issuer,
    underwriter, or placement agent in determining a credit rating,
    including--
                ``(1) risk management advisory services;
                ``(2) advice or consultation relating to any merger, sales,
            or disposition of assets of the issuer;
                ``(3) ancillary assistance, advice, or consulting services
            unrelated to any specific credit rating issuance; and
                ``(4) such further activities or services as the Commission
            may determine as necessary or appropriate in the public
            interest or for the protection of investors.''.
        (b) Conforming Amendment.--Section 3(a)(62) of the Securities
    Exchange Act of 1934 is amended by striking subparagraph (A) and
    redesignating subparagraphs (B) and (C) as subparagraphs (A) and (B),
    respectively.

    SEC. 6003. STANDARDS FOR PRIVATE ACTIONS.

        (a) In General.--Section 21D(b)(2) of the Securities Exchange Act
    of 1934 (15 U.S.C. 78u-4(b)(2)) is amended by inserting before the
    period at the end of the following: ``, and in the case of an action
    brought under this title for money damages against a nationally
    recognized statistical rating organization, it shall be sufficient for
    purposes of pleading any required state of mind for purposes of such
    action that the complaint shall state with particularity facts giving
    rise to a strong inference that the nationally recognized statistical
    rating organization was grossly negligent in violating the securities
    laws''.
        (b) Pleading Standard.--Section 15E(m) of the Securities Exchange
    Act of 1934 (15 U.S.C. 78o-7(m)) amended to read as follows:
        ``(m) Application of Enforcement Provisions; Pleading Standard in
    Private Rights of Action.--Statements made by nationally recognized
    statistical rating organizations shall not be deemed forward looking
    statements for purposes of section 21E. In any private right of action
    commenced against a nationally recognized statistical rating
    organization under the securities laws, the same pleading standards
    with respect to gross negligence shall apply to the nationally
    recognized statistical rating organization as would apply to any other
    person in the same private right of action against such person.''.
        (c) Requirements for Liability.--Section 21D of the Securities
    Exchange Act of 1934 (15 U.S.C. 78u-4) is amended--
                (1) by redesignating subsections (c) through (f) as
            subsections (d) through (g), respectively; and
                (2) by inserting after subsection (b) the following:
        ``(c) Requirements for Liability.--A purchaser of a security given
    a rating by a nationally recognized statistical rating organization
    shall have the right to recover for damages if the process of
    determining the credit rating was--
                ``(1) grossly negligent, based on the facts and
            circumstances at the time the rating was issued; and
                ``(2) a substantial factor in the economic loss suffered by
            the investor.
    No action shall be maintained to enforce any liability created under
    this subsection unless brought within 2 years after the discovery of
    the facts constituting the violation and within 3 years after the
    initial issuance of the rating.''.

    SEC. 6004. ISSUER DISCLOSURE OF PRELIMINARY RATINGS.

        The Securities and Exchange Commission shall adopt rules under
    authority of the Securities Act of 1933 (15 U.S.C. 77a et seq.) to
    require issuers to disclose preliminary credit ratings received from
    nationally recognized statistical rating agencies on structured
    products and all forms of corporate debt.

    SEC. 6005. CHANGE TO DESIGNATION.

        The Securities Act of 1933 and the Securities Exchange Act of 1934
    are each amended by striking ``nationally recognized statistical
    rating'' each place it appears and inserting ``nationally registered
    statistical rating''.

    SEC. 6006. TIMELINE FOR REGULATIONS.

        Unless otherwise specified in this subtitle, the Securities and
    Exchange Commission shall adopt rules and regulations, as required by
    the amendments made by this subtitle, not later than 365 days after the
    date of enactment.

    SEC. 6007. ELIMINATION OF EXEMPTION FROM FAIR DISCLOSURE RULE.

        Not later than 90 days after the date of enactment of this
    subtitle, the Securities Exchange Commission shall revise Regulation FD
    (17 CFR 243.100) to remove from such regulation the exemption for
    entities whose primary business is the issuance of credit ratings (17
    CFR 243.100(b)(2)(iii)).

    SEC. 6008. ADVISORY BOARD.

        (a) Establishment.--Not later than 90 days after the date of the
    enactment of this subtitle, the Securities and Exchange Commission
    shall establish an advisory board to be known as the Credit Ratings
    Agency Advisory Board (in this section referred to as ``the Board'').
        (b) Appointment and Terms of Service.--The Board shall consist of 7
    members appointed by the Commission, no more than 2 of whom may be
    former employees of a credit rating agency. Members of the Board shall
    be prominent individuals of integrity and reputation who have a
    demonstrated commitment to the interests of investors and the public,
    and an understanding of the role that credit ratings play to a broad
    range of investors. Terms of service shall be staggered as determined
    by the Commission.
        (c) Duties.--The Board shall--
                (1) advise the Commission concerning the rules and
            regulations required by the amendments made by this subtitle;
                (2) ensure that the Commission properly and fully executes
            its oversight functions and responsibilities with the respect
            to nationally recognized statistical rating organizations and
            individual participants; and
                (3) issue an annual report to Congress detailing its work
            and recommending any additional Congressional actions necessary
            to aid the Commission and such additional reports from time to
            time as appropriate when it feels that the Commission is not
            properly executing its oversight functions.

    SEC. 6009. REMOVAL OF STATUTORY REFERENCES TO CREDIT RATINGS.

        (a) Federal Deposit Insurance Act.--The Federal Deposit Insurance
    Act (12 U.S.C. 1811 et seq.) is amended--
                (1) in section 28(d)--
                        (A) in the subsection heading, by striking ``Not of
                    Investment Grade'';
                        (B) in paragraph (1), by striking ``not of
                    investment grade'' and inserting ``that does not meet
                    standards of credit-worthiness as established by the
                    Corporation'';
                        (C) in paragraph (2), by striking ``not of
                    investment grade'';
                        (D) by striking paragraph (3) and redesignating
                    paragraph (4) as paragraph (3); and
                        (E) in paragraph (3) (as so redesignated)--
                                (i) by striking subparagraph (A) and
                            redesignating subparagraphs (B) and (C) as
                            subparagraphs (A) and (B), respectively; and
                                (ii) in subparagraph (B) (as so
                            redesignated), by striking ``not of investment
                            grade'' and inserting ``that does not meet
                            standards of credit-worthiness as established
                            by the Corporation'';
                (2) in section 28(e)--
                        (A) in the subsection heading, by striking ``Not of
                    Investment Grade'';
                        (B) in paragraph (1), by striking ``not of
                    investment grade'' and inserting ``that does not meet
                    standards of credit-worthiness as established by the
                    Corporation''; and
                        (C) in paragraphs (2) and (3), by striking ``not of
                    investment grade'' each place that it appears and
                    inserting ``that does not meet standards of credit-
                    worthiness established by the Corporation''; and
                (3) in section 7(b)(1)(E)(i), by striking ``credit rating
            entities, and other private economic'' and insert ``private
            economic, credit,''.
        (b) 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--
                (1) in the section heading, by striking ``by rating
            organization''; and
                (2) 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,''.
        (c) Investment Company Act of 1940.--Section 6(a)(5)(A)(iv)(I)
    Investment Company Act of 1940 (15 U.S.C. 80a-6(a)(5)(A)(iv)(I)) is
    amended by striking ``is rated investment grade by not less than 1
    nationally recognized statistical rating organization'' and inserting
    ``meets such standards of credit-worthiness that the Commission shall
    adopt''.
        (d) Revised Statutes.--Section 5136A of title LXII of the Revised
    Statutes of the United States (12 U.S.C. 24a) is amended--
                (1) in subsection (a)(2)(E), by striking ``any applicable
            rating'' and inserting ``standards of credit-worthiness
            established by the Comptroller of the Currency'';
                (2) in the heading for subsection (a)(3) by striking
            ``Rating or Comparable Requirement'' and inserting
            ``Requirement'';
                (3) subsection (a)(3), by amending subparagraph (A) to read
            as follows:
                        ``(A) In general.--A national bank meets the
                    requirements of this paragraph if the bank is one of
                    the 100 largest insured banks and has not fewer than 1
                    issue of outstanding debt that meets standards of
                    credit-worthiness or other criteria as the Secretary of
                    the Treasury and the Board of Governors of the Federal
                    Reserve System may jointly establish.''.
                (4) in the heading for subsection (f), by striking
            ``Maintain Public Rating or'' and inserting ``Meet Standards of
            Credit-worthiness''; and
                (5) in subsection (f)(1), by striking ``any applicable
            rating'' and inserting ``standards of credit-worthiness
            established by the Comptroller of the Currency''.
        (e) Securities Exchange Act of 1934.--Section 3(a) Securities
    Exchange Act of 1934 (15 U.S.C. 78a(3)(a)) is amended--
                (1) in paragraph (41), by striking ``is rated in one of the
            two highest rating categories by at least one nationally
            recognized statistical rating organization'' and inserting
            ``meets standards of credit-worthiness as defined by the
            Commission''; and
                (2) in paragraph (53)(A), by striking ``is rated in 1 of
            the 4 highest rating categories by at least 1 nationally
            recognized statistical rating organization'' and inserting
            ``meets standards of credit-worthiness as defined by the
            Commission''.
        (f) World Bank Discussions.--Section 3(a)(6) of the amendment in
    the nature of a substitute to the text of H.R. 4645, as ordered
    reported from the Committee on Banking, Finance and Urban Affairs on
    September 22, 1988, as enacted into law by section 555 of Public Law
    100-461, (22 U.S.C. 286hh(a)(6)), is amended by striking ``rating'' and
    inserting ``worthiness''.
        (g) Effective Date.--The amendments made by this section shall take
    effect after the end of the 6-month period beginning on the date of the
    enactment of this subtitle.

    SEC. 6010. REVIEW OF RELIANCE ON RATINGS.

        (a) Agency Review.--
                (1) Review.--Not later than 1 year after the date of the
            enactment of this subtitle, each Federal agency listed in
            paragraph (4) shall, to the extent applicable, review--
                        (A) any regulation issued by such agency that
                    requires the use of an assessment of the credit-
                    worthiness of a security or money market instrument;
                    and
                        (B) any references to or requirements in such
                    regulations regarding credit ratings.
                (2) Modifications required.--Each such agency shall modify
            any such regulations identified by the review conducted under
            paragraph (1) to remove any reference to or requirement of
            reliance on credit ratings and to substitute in such
            regulations such standard of credit-worthiness as each
            respective agency shall determine as appropriate for such
            regulations. In making such determination, such agencies shall
            seek to establish, to the extent feasible, uniform standards of
            credit-worthiness for use by each such agency, taking into
            account the entities regulated by each such agency and the
            purposes for which such entities would rely on such standards
            of credit-worthiness.
                (3) Report.--Upon conclusion of the review required under
            paragraph (1), each Federal agency listed in paragraph (4)
            shall transmit a report to Congress containing a description of
            any modification of any regulation such agency made pursuant to
            paragraph (2).
                (4) Applicable agencies.--The agencies required to conduct
            the review and report required by this subsection are--
                        (A) the Securities and Exchange Commission;
                        (B) the Federal Deposit Insurance Corporation;
                        (C) the Office of Thrift Supervision;
                        (D) the Office of the Comptroller of the Currency;
                        (E) the Board of Governors of the Federal Reserve;
                        (F) the National Credit Union Administration; and
                        (G) the Federal Housing Finance Agency.
        (b) GAO Review of Other Agencies.--
                (1) Review.--The Comptroller General shall conduct a
            comprehensive review of the use of credit ratings by Federal
            agencies other than those listed in subsection (a)(3),
            including an analysis of the provisions of law or regulation
            applicable to each such agency that refer to and require the
            use of credit ratings by the agency, and the policies and
            practices of each agency with respect to credit ratings.
                (2) Report.--Not later than 18 months after the date of the
            enactment of this subtitle, the Comptroller General shall
            transmit to Congress a report on the findings of the study
            conducted pursuant to paragraph (1), including recommendations
            for any legislation or rulemaking necessary or appropriate in
            order for such agencies to reduce their reliance on credit
            ratings.

    SEC. 6011. PUBLICATION OF RATING HISTORIES ON THE EDGAR SYSTEM.

        Not later than 180 days after the date of the enactment of this
    subtitle, the Securities and Exchange Commission shall revise its rules
    in section 240.17g-2(a) and (d) of title 17, Code of Federal
    Regulations, to require that the random sample of ratings histories of
    credit ratings required under such rules to be disclosed on the website
    of a nationally recognized statistical rating organization also be
    provided to the Commission in a format consistent with publication by
    the Commission on the EDGAR system.

    SEC. 6012. EFFECT OF RULE 436(G).

        Rule 436(g), promulgated by the Securities and Exchange Commission
    under the Securities Act of 1933, shall have no force or effect.

    SEC. 6013. STUDIES.

        (a) GAO Study.--
                (1) In general.--The Comptroller General shall conduct a
            study of--
                        (A) the implementation of this subtitle and the
                    amendments made by this subtitle by the Securities and
                    Exchange Commission;
                        (B) the appropriateness of relying on ratings for
                    use in Federal, State, and local securities and banking
                    regulations, including for determining capital
                    requirements;
                        (C) the effect of liability in private actions
                    arising under the Securities Exchange Act of 1934;
                        (D) alternative means for compensating credit
                    rating agencies that would create incentives for
                    accurate credit ratings and what, if any, statutory
                    changes would be required to permit or facilitate the
                    use of such alternative means of compensation; and
                        (E) alternative methodologies to assess credit
                    risk, including market-based measures.
                (2) Report.--Not later than 30 months after the date of
            enactment of this subtitle, the Comptroller General shall
            submit to Congress and the Securities Exchange Commission, a
            report containing the findings under the study required by
            subsection (a).
                (3) Access.--
                        (A) In general.--For purposes of conducting the
                    study described in paragraph (1), the Comptroller
                    General shall have access, upon request and with the
                    consent of the Securities and Exchange Commission, to
                    any information, data, schedules, books, accounts,
                    financial records, reports, files, electronic
                    communications, or other papers, things, or property
                    belonging to or in use by each nationally recognized
                    statistical rating organization, and to the officers,
                    directors, employees, independent public accountants,
                    financial advisors, staff and agents and
                    representatives of the organization (as related to the
                    agent's or representative's activities on behalf of the
                    organization) at such reasonable times as the
                    Comptroller General may request. The Comptroller
                    General may make and retain copies of books, records,
                    accounts, and other records as the Comptroller General
                    deems appropriate.
                        (B) Confidentiality.--The Comptroller General may
                    not disclose reasonably designated proprietary, trade
                    secret or business confidential information obtained
                    from the organization except that such information
                    shall be disclosed by the Comptroller General--
                                (i) to other Federal Government
                            departments, agencies, and officials for
                            official use upon request;
                                (ii) to committees of Congress upon
                            request; and
                                (iii) to a court in any judicial proceeding
                            under court order.
                    Nothing in this provision shall be construed to limit
                    the requirements imposed by section 1905 of title 18,
                    United States Code.
        (b) SEC Study on Assigning Credit Rating Agencies on a Rotating
    Basis.--The Securities and Exchange Commission shall undertake a study
    on creating a system whereby nationally recognized statistical rating
    organizations are assigned on a rotating basis to issuers and obligors
    seeking a credit rating. Not later than 1 year after the date of
    enactment of this subtitle, the Securities and Exchange Commission
    shall transmit to Congress a report containing the findings of the
    study.
        (c) SEC Study on Effect of New Requirements on NRSRO
    Registration.--The Securities and Exchange Commission shall conduct a
    study on the effect of the amendments made by section 2 on credit
    rating agencies seeking to register as nationally recognized
    statistical rating organizations, including whether the new
    requirements in such amendments deter credit rating agencies from
    registering as nationally recognized statistical rating organizations.
    Not later than 1 year after the date of enactment of this subtitle, the
    Commission shall transmit to the Committee on Financial Services of the
    House of Representatives and the Committee on Banking, Housing, and
    Urban Affairs of the Senate a report on the findings of such study.
        (d) Study of Credit Ratings of Different Classes of Bonds.--
                (1) Study.--The Securities and Exchange Commission shall
            conduct a study of the treatment of different classes of bonds
            (municipal versus corporate) by the nationally recognized
            statistical rating organizations. Such study shall examine--
                        (A) whether there are fundamental differences in
                    the treatment of different classes of bonds by such
                    rating organizations that cause some classes of bonds
                    to suffer from undue discrimination;
                        (B) if there are such differences, what are the
                    causes of such differences and how can they be
                    alleviated;
                        (C) whether there are factors other than risk of
                    loss that are appropriate for the credit ratings
                    agencies to consider when rating bonds, and do those
                    factors vary across different sectors;
                        (D) the types of financing arrangement used by
                    municipal issuers;
                        (E) the differing legal and regulatory regimes
                    governing disclosures for corporate bonds and municipal
                    bonds;
                        (F) the extent to which retail investors could be
                    disadvantaged by a single ratings scale; and
                        (G) practices, policies, and methodologies by the
                    nationally recognized statistical rating organizations
                    with respect to rating municipal bonds.
                (2) Report.--Within 6 months after the date of enactment of
            this subtitle, the Securities and Exchange Commission shall
            submit a report on the results of the study required by
            paragraph (1) to the Committee on Financial Services of the
            House of Representatives and the Committee on Banking, Housing,
            and Urban Development of the Senate. Such report shall include
            as assessment of each of the issues and subjects described in
            subparagraphs (A) through (G) of paragraph (1).
        (e) SEC Study on Meaningful Multi-Digit Rating Symbols.--
                (1) Study.--The Securities and Exchange Commission shall
            conduct a study on the feasibility and desirability of
            implementing a standardized rating system whereby ratings
            symbols contain multiple characters, each representing a range
            of default probabilities and loss expectations under
            standardized and increasingly severe levels of market stress.
            The study shall optimize the definitions of the symbols to
            maximize their overall usefulness for users of credit ratings.
                (2) Initial example for guidance.--An example to provide
            initial guidance for the study is a ratings symbol consisting
            of three digits, each of which corresponds to default
            probabilities under different levels of market stress as
            follows:
                        (A) The first digit represents the default
                    probability under ``normal'' market stress,
                    characterized by normal economic fluctuations in
                    addition to a 5 percent decline in asset value and 2
                    percent increase in unemployment.
                        (B) The second digit represents the default
                    probability under more severe market stress,
                    characterized a 20 percent decline in asset value and 5
                    percent increase in unemployment.
                        (C) The third digit represents the default
                    probability under extreme market stress, characterized
                    by a 50 percent decline in asset value and 10 percent
                    increase in unemployment.
                (3) Report.--Not later than 1 year after the date of the
            enactment of this subtitle, the Commission shall transmit to
            Congress a report of the study conducted pursuant to paragraph
            (1), including recommendations on whether the system similar to
            that described in paragraph (2) should be implemented and, if
            so, any necessary legislation required to implement such a
            system.
        (f) SEC Study on Ratings Standardization.--
                (1) In general.--The Securities and Exchange Commission
            shall undertake a study on the feasability and desirability
            of--
                        (A) standardizing credit ratings terminology, so
                    that all credit rating agencies issue credit ratings
                    using identical terms;
                        (B) standardizing the market stress conditions
                    under which ratings are evaluated;
                        (C) requiring a quantitative correspondence between
                    credit ratings and a range of default probabilities and
                    loss expectations under standardized conditions of
                    economic stress; and
                        (D) standardizing credit rating terminology across
                    asset classes, so that named ratings shall correspond
                    to a standard range of default probabilities and
                    expected losses independent of asset class and issuing
                    entity.
                (2) Report.--Not later than 1 year after the date of
            enactment of this subtitle, the Securities and Exchange
            Commission shall transmit to Congress a report containing the
            findings of the study and the recommendations of the
            Commission.

                      Subtitle C--Investor Protection Act

    SEC. 7001. SHORT TITLE.

        This subtitle may be cited as the ``Investor Protection Act of
    2009''.

                               PART 1--DISCLOSURE

    SEC. 7101. INVESTOR ADVISORY COMMITTEE ESTABLISHED.

        The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is
    amended by adding after section 4C the following new section:

    ``SEC. 4D. INVESTOR ADVISORY COMMITTEE.

        ``(a) Establishment and Purpose.--There is established an Investor
    Advisory Committee (in this section referred to as the `Committee') to
    advise and consult with the Commission on--
                ``(1) regulatory priorities and issues regarding new
            products, trading strategies, fee structures and the
            effectiveness of disclosures;
                ``(2) initiatives to protect investor interest; and
                ``(3) initiatives to promote investor confidence in the
            integrity of the marketplace.
        ``(b) Membership.--
                ``(1) Appointment.--The Chairman of the Commission shall
            appoint the members of the Committee, which members shall--
                        ``(A) represent the interests of individual
                    investors;
                        ``(B) represent the interests of institutional
                    investors; and
                        ``(C) use a wide range of investment approaches.
                ``(2) Members not commission employees.--Members shall not
            be considered employees or agents of the Commission solely
            because of membership on the Committee.
        ``(c) Meetings.--The Committee shall meet from time to time at the
    call of the Commission, but, at a minimum, shall meet at least twice
    each year.
        ``(d) Compensation and Travel Expenses.--Members of the Committee
    who are not full-time employees of the United States shall--
                ``(1) be entitled to receive compensation at a rate fixed
            by the Commission while attending meetings of the Committee,
            including travel time; and
                ``(2) be allowed travel expenses, including transportation
            and subsistence, while away from their homes or regular places
            of business.
        ``(e) Committee Findings.--Nothing in this section requires the
    Commission to accept, agree, or act upon the findings or
    recommendations of the Committee.
        ``(f) Authorization of Appropriations.--There is authorized to be
    appropriated to the Commission such sums as are necessary for the
    activities of the Committee.''.

    SEC. 7102. CLARIFICATION OF THE COMMISSION'S AUTHORITY TO ENGAGE IN
                  CONSUMER TESTING.

        (a) Amendment to Securities Act of 1933.--Section 19 of the
    Securities Act of 1933 (15 U.S.C. 77s) is amended by adding at the end
    the following new subsection:
        ``(e) For the purposes of evaluating its rules and programs and for
    considering, proposing, adopting, or engaging in rules or programs, the
    Commission is authorized to gather information, communicate with
    investors or other members of the public, and engage in such temporary
    or experimental programs as the Commission in its discretion determines
    is in the public interest or for the protection of investors. The
    Commission may delegate to its staff some or all of the authority
    conferred by this subsection.''.
        (b) Amendment to Securities Exchange Act of 1934.--Section 23 of
    the Securities Exchange Act of 1934 (15 U.S.C. 78w) is amended by
    redesignating subsections (b), (c), and (d) as subsections (c), (d),
    and (e), respectively, and inserting after subsection (a) the
    following:
        ``(b) For the purposes of evaluating its rules and programs and for
    considering proposing, adopting, or engaging in rules or programs, the
    Commission is authorized to gather information, communicate with
    investors or other members of the public, and engage in such temporary
    or experimental programs as the Commission in its discretion determines
    is in the public interest or for the protection of investors. The
    Commission may delegate to its staff some or all of the authority
    conferred by this subsection.''.
        (c) Amendment to Investment Company Act of 1940.--Section 38 of the
    Investment Company Act of 1940 (15 U.S.C. 80a-38) is amended by adding
    at the end the following new subsection:
        ``(d) Gathering Information.--For the purposes of evaluating its
    rules and programs and for considering proposing, adopting, or engaging
    in rules or programs, the Commission is authorized to gather
    information, communicate with investors or other members of the public,
    and engage in such temporary or experimental programs as the Commission
    in its discretion determines is in the public interest or for the
    protection of investors. The Commission may delegate to its staff some
    or all of the authority conferred by this subsection.''.
        (d) Amendment to the Investment Advisers Act of 1940.--Section 211
    of the Investment Advisers Act of 1940 (15 U.S.C. 80b-11) (as amended
    by section 5008(2)) is further amended by adding at the end the
    following new subsection:
        ``(f) For the purposes of evaluating its rules and programs and for
    considering proposing, adopting, or engaging in rules or programs, the
    Commission is authorized to gather information, communicate with
    investors or other members of the public, and engage in such temporary
    or experimental programs as the Commission in its discretion determines
    is in the public interest or for the protection of investors. The
    Commission may delegate to its staff some or all of the authority
    conferred by this subsection.''.

    SEC. 7103. ESTABLISHMENT OF A FIDUCIARY DUTY FOR BROKERS, DEALERS, AND
                  INVESTMENT ADVISERS, AND HARMONIZATION OF REGULATION.

        (a) In General.--
                (1) Securities exchange act of 1934.--Section 15 of the
            Securities Exchange Act of 1934 (15 U.S.C. 78o) (as amended by
            section 1951(c)) is further amended by adding at the end the
            following new subsections:
        ``(m) Standard of Conduct.--
                ``(1) In general.--Notwithstanding any other provision of
            this Act or the Investment Advisers Act of 1940, the Commission
            shall promulgate rules to provide that, with respect to a
            broker or dealer, when providing personalized investment advice
            about securities to a retail customer (and such other customers
            as the Commission may by rule provide), the standard of conduct
            for such broker or dealer with respect to such customer shall
            be the same as the standard of conduct applicable to an
            investment adviser under section 211 of the Investment Advisers
            Act of 1940. The receipt of compensation based on commission or
            other standard compensation for the sale of securities shall
            not, in and of itself, be considered a violation of such
            standard applied to a broker or dealer. Nothing in this section
            shall require a broker or dealer or registered representative
            to have a continuing duty of care or loyalty to the customer
            after providing personalized investment advice about
            securities.
                ``(2) Disclosure of range of products offered.--Where a
            broker or dealer sells only proprietary or other limited range
            of products, as determined by the Commission, the Commission
            shall by rule require that such broker or dealer provide notice
            to each retail customer and obtain the consent or
            acknowledgment of the customer. The sale of only proprietary or
            other limited range of products by a broker or dealer shall
            not, in and of itself, be considered a violation of the
            standard set forth in paragraph (1).
                ``(3) Retail customer defined.--For purposes of this
            subsection, the term `retail customer' means a natural person,
            or the legal representative of such natural person, who--
                        ``(A) receives personalized investment advice about
                    securities from a broker or dealer; and
                        ``(B) uses such advice primarily for personal,
                    family, or household purposes.
        ``(n) Other Matters.--The Commission shall--
                ``(1) facilitate the provision of simple and clear
            disclosures to investors regarding the terms of their
            relationships with brokers, dealers, and investment advisers,
            including any material conflicts of interest; and
                ``(2) examine and, where appropriate, promulgate rules
            prohibiting or restricting certain sales practices, conflicts
            of interest, and compensation schemes for brokers, dealers, and
            investment advisers that the Commission deems contrary to the
            public interest and the protection of investors.''.
                (2) Investment advisers act of 1940.--Section 211 of the
            Investment Advisers Act of 1940, as amended by section 7102(d),
            is further amended by adding at the end the following new
            subsections:
        ``(g) Standard of Conduct.--
                ``(1) In general.--The Commission shall promulgate rules to
            provide that the standard of conduct for all brokers, dealers,
            and investment advisers, when providing personalized investment
            advice about securities to retail customers (and such other
            customers as the Commission may by rule provide), shall be to
            act in the best interest of the customer without regard to the
            financial or other interest of the broker, dealer, or
            investment adviser providing the advice. In accordance with
            such rules, any material conflicts of interest shall be
            disclosed and may be consented to by the customer. Such rules
            shall provide that such standard of conduct shall be no less
            stringent than the standard applicable to investment advisers
            under section 206(1) and (2) of this Act when providing
            personalized investment advice about securities, except the
            Commission shall not ascribe a meaning to the term `customer'
            that would include an investor in a private fund managed by an
            investment adviser, where such private fund has entered into an
            advisory contract with such adviser. The receipt of
            compensation based on commission or fees shall not, in and of
            itself, be considered a violation of such standard applied to a
            broker, dealer, or investment adviser.
                ``(2) Retail customer defined.--For purposes of this
            subsection, the term `retail customer' means a natural person,
            or the legal representative of such natural person, who--
                        ``(A) receives personalized investment advice about
                    securities from a broker, dealer, or investment
                    adviser; and
                        ``(B) uses such advice primarily for personal,
                    family, or household purposes.
        ``(h) Other Matters.--The Commission shall--
                ``(1) facilitate the provision of simple and clear
            disclosures to investors regarding the terms of their
            relationships with brokers, dealers, and investment advisers,
            including any material conflicts of interest; and
                ``(2) examine and, where appropriate, promulgate rules
            prohibiting or restricting certain sales practices, conflicts
            of interest, and compensation schemes for brokers, dealers, and
            investment advisers that the Commission deems contrary to the
            public interest and the protection of investors.''.
        (b) Harmonization of Enforcement.--
                (1) Securities exchange act of 1934.--Section 15 of the
            Securities Exchange Act of 1934, as amended by subsection
            (a)(1), is further amended by adding at the end the following
            new subsection:
        ``(o) Harmonization of Enforcement.--The enforcement authority of
    the Commission with respect to violations of the standard of conduct
    applicable to a broker or dealer providing personalized investment
    advice about securities to a retail customer shall include--
                ``(1) the enforcement authority of the Commission with
            respect to such violations provided under this Act; and
                ``(2) the enforcement authority of the Commission with
            respect to violations of the standard of conduct applicable to
            an investment advisor under the Investment Advisers Act of
            1940, including the authority to impose sanctions for such
            violations, and
    the Commission shall seek to prosecute and sanction violators of the
    standard of conduct applicable to a broker or dealer providing
    personalized investment advice about securities to a retail customer
    under this Act to same extent as the Commission prosecutes and
    sanctions violators of the standard of conduct applicable to an
    investment advisor under the Investment Advisers Act of 1940.''.
                (2) Investment advisers act of 1940.--Section 211 of the
            Investment Advisers Act of 1940, as amended by subsection
            (a)(2), is further amended by adding at the end the following
            new subsection:
        ``(i) Harmonization of Enforcement.--The enforcement authority of
    the Commission with respect to violations of the standard of conduct
    applicable to an investment adviser shall include--
                ``(1) the enforcement authority of the Commission with
            respect to such violations provided under this Act; and
                ``(2) the enforcement authority of the Commission with
            respect to violations of the standard of conduct applicable to
            a broker or dealer providing personalized investment advice
            about securities to a retail customer under the Securities
            Exchange Act of 1934, including the authority to impose
            sanctions for such violations, and
    the Commission shall seek to prosecute and sanction violators of the
    standard of conduct applicable to an investment advisor under this Act
    to same extent as the Commission prosecutes and sanctions violators of
    the standard of conduct applicable to a broker or dealer providing
    personalized investment advice about securities to a retail customer
    under the Securities Exchange Act of 1934.''.

    SEC. 7104. COMMISSION STUDY AND RULEMAKING ON DISCLOSURE TO RETAIL
                  CUSTOMERS BEFORE PURCHASE OF PRODUCTS OR SERVICES.

        (a) Study Required.--Prior to proposing any rules or regulations
    pursuant to subsection (b)(1) regarding the provision of documents or
    information to retail customers prior to the purchase of investment
    products or services, and within 180 days after the date of the
    enactment of this subtitle, the Securities and Exchange Commission
    shall publish a study that examines--
                (1) the nature of a ``retail customer'', taking into
            consideration the definition in section 15(k) of the Securities
            Exchange Act of 1934 (15 U.S.C. 78o), as amended by section
            7103 of this subtitle;
                (2) the range of products and services sold or provided to
            retail customers, and the sellers or providers of such products
            and services, that are within the Commission's jurisdiction;
                (3) how such products and services are sold or provided to
            retail customers, the fees charged for such products and
            services, and the conflicts of interest that may arise during
            the sales process or provision of services;
                (4) information that retail customers should receive prior
            to purchasing each product or service, and the appropriate
            person or entity to provide such information; and
                (5) ways to ensure that, where possible, reasonably similar
            products and services are subject to similar regulatory
            treatment, including with respect to information that must be
            provided to retail customers prior to the purchase of such
            products or services and how such information is provided.
        (b) Rulemaking.--
                (1) Notwithstanding any other provision of the Securities
            Act of 1933 (15 U.S.C. 77a et seq.) or the Investment Company
            Act of 1940 (15 U.S.C. 80a-1 et seq.), following completion of
            the study required by subsection (a), the Commission is
            authorized to promulgate rules to require that the appropriate
            persons or entities provide designated documents or information
            to retail customers prior to the purchase of identified
            investment products or services. Any such rules shall--
                        (A) take into account the findings of the study
                    conducted pursuant to subsection (a);
                        (B) take into consideration, to the extent
                    possible, the need for such documents and information
                    to be consistent and comparable across investment
                    products or services sold or provided to retail
                    customers; and
                        (C) reduce, to the extent possible, disruptions to
                    the purchase process for investment products and
                    services sold or provided to retail customers, by means
                    such as permitting required disclosures to be made via
                    the Internet.
                (2) Notwithstanding paragraph (1), the Commission is
            authorized to promulgate rules in connection with--
                        (A) the implementation of section 7103; and
                        (B) disclosure to retail customers other than rules
                    that require the provision of documents or information
                    to retail customers prior to the purchase of investment
                    products or services.

    SEC. 7105. BENEFICIAL OWNERSHIP AND SHORT-SWING PROFIT REPORTING.

        (a) Beneficial Ownership Reporting.--Section 13 of the Securities
    Exchange Act of 1934 (15 U.S.C. 78m) is amended--
                (1) in subsection (d)(1)--
                        (A) by inserting after ``within ten days after such
                    acquisition'' the following: ``or within such shorter
                    time as the Commission may establish by rule''; and
                        (B) by striking ``send to the issuer of the
                    security at its principal executive office, by
                    registered or certified mail, send to each exchange
                    where the security is traded, and'';
                (2) in subsection (d)(2)--
                        (A) by striking ``in the statements to the issuer
                    and the exchange, and''; and
                        (B) by striking ``shall be transmitted to the
                    issuer and the exchange and'';
                (3) in subsection (g)(1), by striking ``shall send to the
            issuer of the security and''; and
                (4) in subsection (g)(2)--
                        (A) by striking ``sent to the issuer and''; and
                        (B) by striking ``shall be transmitted to the
                    issuer and''.
        (b) Short-swing Profit Reporting.--Section 16(a) of the Securities
    Exchange Act of 1934 (15 U.S.C. 78p(a)) is amended--
                (1) in paragraph (1), by striking ``(and, if such security
            is registered on a national securities exchange, also with the
            exchange)''; and
                (2) in paragraph (2)(B), by inserting after ``officer'' the
            following: ``, or within such shorter time as the Commission
            may establish by rule''.

    SEC. 7106. REVISION TO RECORDKEEPING RULES.

        (a) Investment Company Act of 1940 Amendments.--Section 31 of the
    Investment Company Act of 1940 (15 U.S.C. 80a-30) is amended--
                (1) in subsection (a)(1), by adding at the end the
            following: ``Each person with custody or use of a registered
            investment company's securities, deposits, or credits shall
            maintain and preserve all records that relate to the person's
            custody or use of the registered investment company's
            securities, deposits, or credits for such period or periods as
            the Commission, by rules and regulations, may prescribe as
            necessary or appropriate in the public interest or for the
            protection of investors.''; and
                (2) in subsection (b), by adding at the end the following
            new paragraph:
                ``(4) Records of persons with custody or use.--
                        ``(A) In general.--Notwithstanding paragraph (1),
                    records of persons with custody or use of a registered
                    investment company's securities, deposits, or credits,
                    that relate to such custody or use, are subject at any
                    time, or from time to time, to such reasonable
                    periodic, special, or other examinations and other
                    information and document requests by representatives of
                    the Commission as the Commission deems necessary or
                    appropriate in the public interest or for the
                    protection of investors.
                        ``(B) Certain persons subject to other
                    regulation.--Persons subject to regulation and
                    examination by a Federal financial institution
                    regulatory agency (as such term is defined under
                    section 212(c)(2) of title 18, United States Code) may
                    satisfy any examination request, information request,
                    or document request described under subparagraph (A),
                    by providing the Commission with a detailed listing, in
                    writing, of the registered investment company's
                    securities, deposits, or credits within such person's
                    custody or use.''.
        (b) Investment Advisers Act of 1940 Amendment.--Section 204 of the
    Investment Advisers Act of 1940 (15 U.S.C. 80b-4) is amended by adding
    at the end the following new subsection:
        ``(d) Records of Persons With Custody or Use.--
                ``(1) In general.--Records of persons with custody or use
            of a client's securities, deposits, or credits, that relate to
            such custody or use, are subject at any time, or from time to
            time, to such reasonable periodic, special, or other
            examinations and other information and document requests by
            representatives of the Commission as the Commission deems
            necessary or appropriate in the public interest or for the
            protection of investors.
                ``(2) Certain persons subject to other regulation.--Persons
            subject to regulation and examination by a Federal financial
            institution regulatory agency (as such term is defined under
            section 212(c)(2) of title 18, United States Code) may satisfy
            any examination request, information request, or document
            request described under paragraph (1), by providing the
            Commission with a detailed listing, in writing, of the client's
            securities, deposits, or credits within such person's custody
            or use.''.

    SEC. 7107. STUDY ON ENHANCING INVESTMENT ADVISER EXAMINATIONS.

        (a) Study Required.--
                (1) In general.--The Commission shall review and analyze
            the need for enhanced examination and enforcement resources for
            investment advisers.
                (2) Areas of consideration.--The study required by this
            subsection shall examine--
                        (A) the number and frequency of examinations of
                    investment advisers by the Commission over the 5 years
                    preceding the date of the enactment of this subtitle;
                        (B) the extent to which having Congress authorize
                    the Commission to designate one or more self-regulatory
                    organizations to augment the Commission's efforts in
                    overseeing investment advisers would improve the
                    frequency of examinations of investment advisers; and
                        (C) current and potential approaches to examining
                    the investment advisory activities of dually registered
                    broker-dealers and investment advisers or affiliated
                    broker-dealers and investment advisers.
        (b) Report Required.--The Commission shall report its findings to
    the Committee on Financial Services of the House of Representatives and
    the Committee on Banking, Housing, and Urban Affairs of the Senate, not
    later than 180 days after the date of enactment of this subtitle, and
    shall use such findings to revise its rules and regulations, as
    necessary. The report shall include a discussion of regulatory or
    legislative steps that are recommended or that may be necessary to
    address concerns identified in the study.

    SEC. 7108. GAO STUDY OF FINANCIAL PLANNING.

        (a) Study Required.--The Comptroller General of the United States
    shall conduct a study on the regulation and oversight of financial
    planning.   The study shall consider--
                (1) the unique role of financial planners in providing
            comprehensive advice in investment planning, income tax
            planning, education planning, retirement planning, estate
            planning, risk management, and other areas with respect to the
            management of financial resources; and
                (2) any gaps in the regulation of financial planners given
            existing State and Federal regulation of financial planning
            activities and the need to provide related consumer protections
            for such financial planning activities.
        (b) Report.--Not later than the end of the 180-day period beginning
    on the date of the enactment of this subtitle, the Comptroller General
    of the United States shall submit to the Congress a report containing
    the findings and determinations made by the Comptroller General in
    carrying out the study required under subsection (a), including
    recommendations for the appropriate regulation of, or standards for,
    financial planners as a profession and how such regulations or
    standards should be established.

                        PART 2--ENFORCEMENT AND REMEDIES

    SEC. 7201. AUTHORITY TO RESTRICT MANDATORY PRE-DISPUTE ARBITRATION.

        (a) Amendment to Securities Exchange Act of 1934.--Section 15 of
    the Securities Exchange Act of 1934 (15 U.S.C. 78o), as amended by
    section 7103, is further amended by adding at the end the following new
    subsection:
        ``(p) Authority to Restrict Mandatory Pre-dispute Arbitration.--The
    Commission, by rule, may prohibit, or impose conditions or limitations
    on the use of, agreements that require customers or clients of any
    broker, dealer, or municipal securities dealer to arbitrate any future
    dispute between them arising under the Federal securities laws, the
    rules and regulations thereunder, or the rules of a self-regulatory
    organization if it finds that such prohibition, imposition of
    conditions, or limitations are in the public interest and for the
    protection of investors.''.
        (b) Amendment to Investment Advisers Act of 1940.--Section 205 of
    the Investment Advisers Act of 1940 (15 U.S.C. 80b-5) is amended by
    adding at the end the following new subsection:
        ``(f) Authority to Restrict Mandatory Pre-dispute Arbitration.--The
    Commission, by rule, may prohibit, or impose conditions or limitations
    on the use of, agreements that require customers or clients of any
    investment adviser to arbitrate any future dispute between them arising
    under the Federal securities laws, the rules and regulations
    thereunder, or the rules of a self-regulatory organization if it finds
    that such prohibition, imposition of conditions, or limitations are in
    the public interest and for the protection of investors.''.

    SEC. 7202. COMPTROLLER GENERAL STUDY TO REVIEW SECURITIES ARBITRATION
                  SYSTEM.

        (a) Study.--The Comptroller General of the United States shall
    conduct a study to review--
                (1) the costs to parties of an arbitration proceeding using
            the arbitration system operated by the Financial Industry
            Regulatory Authority and overseen by the Securities and
            Exchange Commission as compared to litigation;
                (2) the percentage of recovery of the total amount of a
            claim in an arbitration proceeding using the arbitration system
            operated by the Financial Industry Regulatory Authority and
            overseen by the Securities and Exchange Commission; and
                (3) other additional issues as may be raised during the
            course of the study conducted under this subsection.
        (b) Report.--Not later than 1 year after the date of enactment of
    this subtitle, the Comptroller General of the United States shall
    submit to the Committee on Financial Services of the House of
    Representatives and the Committee on Banking, Housing, and Urban
    Affairs of the Senate a report on the results of the study required by
    subsection (a), including in such report recommendations for
    improvements to the arbitration system referenced in such subsection.

    SEC. 7203. WHISTLEBLOWER PROTECTION.

        (a) In General.--The Securities Exchange Act of 1934 (15 U.S.C. 78a
    et seq.) is amended by adding after section 21E the following new
    section:

    ``SEC. 21F. SECURITIES WHISTLEBLOWER INCENTIVES AND PROTECTION.

        ``(a) In General.--In any judicial or administrative action brought
    by the Commission under the securities laws that results in monetary
    sanctions exceeding $1,000,000, the Commission, under regulations
    prescribed by the Commission and subject to subsection (b), may pay an
    award or awards not exceeding an amount equal to 30 percent, in total,
    of the monetary sanctions imposed in the action or related actions to
    one or more whistleblowers who voluntarily provided original
    information to the Commission that led to the successful enforcement of
    the action. Any amount payable under the preceding sentence shall be
    paid from the fund described in subsection (f).
        ``(b) Determination of Amount of Award; Denial of Award.--
                ``(1) Determination of amount of award.--The determination
            of the amount of an award, within the limit specified in
            subsection (a), shall be in the sole discretion of the
            Commission. The Commission may take into account the
            significance of the whistleblower's information to the success
            of the judicial or administrative action described in
            subsection (a), the degree of assistance provided by the
            whistleblower and any legal representative of the whistleblower
            in such action, the Commission's programmatic interest in
            deterring violations of the securities laws by making awards to
            whistleblowers who provide information that leads to the
            successful enforcement of such laws, and such additional
            factors as the Commission may establish by rules or
            regulations.
                ``(2) Denial of award.--No award under subsection (a) shall
            be made--
                        ``(A) to any whistleblower who is, or was at the
                    time he or she acquired the original information
                    submitted to the Commission, a member, officer, or
                    employee of any appropriate regulatory agency, the
                    Department of Justice, the Public Company Accounting
                    Oversight Board, law enforcement agency, or a self-
                    regulatory organization;
                        ``(B) to any whistleblower who is convicted of a
                    criminal violation related to the judicial or
                    administrative action for which the whistleblower
                    otherwise could receive an award under this section;
                        ``(C) to any whistleblower who gains the
                    information through the performance of an audit of
                    financial statements required under the securities
                    laws; or
                        ``(D) to any whistleblower who fails to submit
                    information to the Commission in such form as the
                    Commission may, by rule, require.
        ``(c) Representation.--
                ``(1) Permitted representation.--Any whistleblower who
            makes a claim for an award under subsection (a) may be
            represented by counsel.
                ``(2) Required representation.--Any whistleblower who makes
            a claim for an award under subsection (a) must be represented
            by counsel if the whistleblower submits the information upon
            which the claim is based anonymously. Prior to the payment of
            an award, the whistleblower must disclose his or her identity
            and provide such other information as the Commission may
            require.
        ``(d) No Contract Necessary.--No contract with the Commission is
    necessary for any whistleblower to receive an award under subsection
    (a), unless the Commission, by rule or regulation, so requires.
        ``(e) Appeals.--Any determinations under this section, including
    whether, to whom, or in what amounts to make awards, shall be in the
    sole discretion of the Commission, and any such determinations shall be
    final and not subject to judicial review.
        ``(f) Investor Protection Fund.--
                ``(1) Fund established.--There is established in the
            Treasury of the United States a fund to be known as the
            `Securities and Exchange Commission Investor Protection Fund'
            (referred to in this section as the `Fund').
                ``(2) Use of fund.--The Fund shall be available to the
            Commission, without further appropriation or fiscal year
            limitation, for the following purposes:
                        ``(A) Paying awards to whistleblowers as provided
                    in subsection (a).
                        ``(B) Funding investor education initiatives
                    designed to help investors protect themselves against
                    securities fraud or other violations of the securities
                    laws, or the rules and regulations thereunder.
                ``(3) Deposits and credits.--There shall be deposited into
            or credited to the Fund--
                        ``(A) any monetary sanction collected by the
                    Commission in any judicial or administrative action
                    brought by the Commission under the securities laws
                    that is not added to a disgorgement fund or other fund
                    pursuant to section 308 of the Sarbanes-Oxley Act of
                    2002 or otherwise distributed to victims of a violation
                    of the securities laws, or the rules and regulations
                    thereunder, underlying such action, unless the balance
                    of the Fund at the time the monetary sanction is
                    collected exceeds $100,000,000;
                        ``(B) any monetary sanction added to a disgorgement
                    fund or other fund pursuant to section 308 of the
                    Sarbanes-Oxley Act of 2002 that is not distributed to
                    the victims for whom the disgorgement fund or other
                    fund was established, unless the balance of the Fund at
                    the time the determination is made not to distribute
                    the monetary sanction to such victims exceeds
                    $100,000,000; and
                        ``(C) all income from investments made under
                    paragraph (4).
                ``(4) Investments.--
                        ``(A) Amounts in fund may be invested.--The
                    Commission may request the Secretary of the Treasury to
                    invest the portion of the Fund that is not, in the
                    Commission's judgment, required to meet the current
                    needs of the Fund.
                        ``(B) Eligible investments.--Investments shall be
                    made by the Secretary of the Treasury in obligations of
                    the United States or obligations that are guaranteed as
                    to principal and interest by the United States, with
                    maturities suitable to the needs of the Fund as
                    determined by the Commission.
                        ``(C) Interest and proceeds credited.--The interest
                    on, and the proceeds from the sale or redemption of,
                    any obligations held in the Fund shall be credited to,
                    and form a part of, the Fund.
                ``(5) Reports to congress.--Not later than October 30 of
            each year, the Commission shall transmit to the Committee on
            Banking, Housing, and Urban Affairs of the Senate, and the
            Committee on Financial Services of the House of Representatives
            a report on--
                        ``(A) the Commission's whistleblower award program
                    under this section, including a description of the
                    number of awards that were granted and the types of
                    cases in which awards were granted during the preceding
                    fiscal year;
                        ``(B) investor education initiatives described in
                    paragraph (2)(B) that were funded by the Fund during
                    the preceding fiscal year;
                        ``(C) the balance of the Fund at the beginning of
                    the preceding fiscal year;
                        ``(D) the amounts deposited into or credited to the
                    Fund during the preceding fiscal year;
                        ``(E) the amount of earnings on investments of
                    amounts in the Fund during the preceding fiscal year;
                        ``(F) the amount paid from the Fund during the
                    preceding fiscal year to whistleblowers pursuant to
                    subsection (a);
                        ``(G) the amount paid from the Fund during the
                    preceding fiscal year for investor education
                    initiatives described in paragraph (1)(B);
                        ``(H) the balance of the Fund at the end of the
                    preceding fiscal year; and
                        ``(I) a complete set of audited financial
                    statements, including a balance sheet, income
                    statement, and cash flow analysis.
        ``(g) Protection of Whistleblowers.--
                ``(1) Prohibition against retaliation.--
                        ``(A) In general.--No employer may discharge,
                    demote, suspend, threaten, harass, or in any other
                    manner discriminate against an employee, contractor, or
                    agent in the terms and conditions of employment because
                    of any lawful act done by the employee, contractor, or
                    agent in providing information to the Commission in
                    accordance with subsection (a), or in assisting in any
                    investigation or judicial or administrative action of
                    the Commission based upon or related to such
                    information.
                        ``(B) Enforcement.--
                                ``(i) Cause of action.--An individual who
                            alleges discharge or other discrimination in
                            violation of subparagraph (A) may bring an
                            action under this subsection in the appropriate
                            district court of the United States for the
                            relief provided in subparagraph (C).
                                ``(ii) Subpoenas.--A subpoena requiring the
                            attendance of a witness at a trial or hearing
                            conducted under this section may be served at
                            any place in the United States.
                                ``(iii) Statute of limitations.--An action
                            under this subsection may not be brought more
                            than 6 years after the date on which the
                            violation of subparagraph (A) occurred, or more
                            than 3 years after the date when facts material
                            to the right of action are known or reasonably
                            should have been known by the employee alleging
                            a violation of subparagraph (A), but in no
                            event after 10 years after the date on which
                            the violation occurs.
                        ``(C) Relief.--An employee, contractor, or agent
                    prevailing in any action brought under subparagraph (B)
                    shall be entitled to all relief necessary to make that
                    employee, contractor, or agent whole, including
                    reinstatement with the same seniority status that the
                    employee, contractor, or agent would have had, but for
                    the discrimination, 2 times the amount of back pay,
                    with interest, and compensation for any special damages
                    sustained as a result of the discrimination, including
                    litigation costs, expert witness fees, and reasonable
                    attorneys' fees.
                ``(2) Confidentiality.--
                        ``(A) In general.--Except as provided in
                    subparagraph (B), the Commission and any officer or
                    employee of the Commission shall not disclose any
                    information, including information provided by a
                    whistleblower to the Commission, which could reasonably
                    be expected to reveal the identity of a whistleblower,
                    except in accordance with the provisions of section
                    552a of title 5, United States Code, unless and until
                    required to be disclosed to a defendant or respondent
                    in connection with a public proceeding instituted by
                    the Commission or any entity described in subparagraph
                    (B). For purposes of section 552 of title 5, United
                    States Code, this paragraph shall be considered a
                    statute described in subsection (b)(3)(B) of such
                    section 552.
                        ``(B) Availability to government agencies.--Without
                    the loss of its status as confidential and privileged
                    in the hands of the Commission, all information
                    referred to in subparagraph (A) may, in the discretion
                    of the Commission, when determined by the Commission to
                    be necessary to accomplish the purposes of this Act and
                    protect investors, be made available to--
                                ``(i) the Attorney General of the United
                            States,
                                ``(ii) an appropriate regulatory authority,
                                ``(iii) a self-regulatory organization,
                                ``(iv) State attorneys general in
                            connection with any criminal investigation, and
                                ``(v) any appropriate State regulatory
                            authority,
                    each of which shall not disclose such information in
                    accordance with subparagraph (A).
        ``(h) Provision of False Information.--Any whistleblower who
    knowingly and willfully makes any false, fictitious, or fraudulent
    statement or representation, or makes or uses any false writing or
    document knowing the same to contain any false, fictitious, or
    fraudulent statement or entry, shall not be entitled to an award under
    this section.
        ``(i) Rulemaking Authority.--The Commission shall have the
    authority to issue such rules and regulations as may be necessary or
    appropriate to implement the provisions of this section.
        ``(j) Definitions.--For purposes of this section, the following
    terms have the following meanings:
                ``(1) Original information.--The term `original
            information' means information that--
                        ``(A) is based on the direct and independent
                    knowledge or analysis of a whistleblower;
                        ``(B) is not known to the Commission from any other
                    source, unless the whistleblower is the initial source
                    of the information; and
                        ``(C) is not based on allegations in a judicial or
                    administrative hearing, in a governmental report,
                    hearing, audit, or investigation, or from the news
                    media, unless the whistleblower is the initial source
                    of the information that resulted in the judicial or
                    administrative hearing, governmental report, hearing,
                    audit, or investigation, or the news media's report on
                    the allegations.
                ``(2) Monetary sanctions.--The term `monetary sanctions',
            when used with respect to any judicial or administrative
            action, means any monies, including but not limited to
            penalties, disgorgement, and interest, ordered to be paid, and
            any monies deposited into a disgorgement fund or other fund
            pursuant to section 308(b) of the Sarbanes-Oxley Act of 2002
            (15 U.S.C. 7246(b)), as a result of such action or any
            settlement of such action.
                ``(3) Related action.--The term `related action', when used
            with respect to any judicial or administrative action brought
            by the Commission under the securities laws, means any judicial
            or administrative action brought by an entity described in
            subsection (g)(2)(B) that is based upon the same original
            information provided by a whistleblower pursuant to subsection
            (a) that led to the successful enforcement of the Commission
            action.
                ``(4) Whistleblower.--The term `whistleblower' means an
            individual, or two or more individuals acting jointly, who
            submit information to the Commission as provided in this
            section.''.
        (b) Administration and Enforcement.--The Securities and Exchange
    Commission shall establish a separate office within the Commission to
    administer and enforce the provisions of section 21F of the Securities
    Exchange Act of 1934, as added by subsection (a). Such office shall
    report annually to Congress on its activities, whistleblower
    complaints, and the response of the Commission to such complaints.

    SEC. 7204. CONFORMING AMENDMENTS FOR WHISTLEBLOWER PROTECTION.

        (a) In General.--Each of the following provisions is amended by
    inserting ``and section 21F of the Securities Exchange Act of 1934''
    after ``the Sarbanes-Oxley Act of 2002'':
                (1) Section 20(d)(3)(A) of the Securities Act of 1933 (15
            U.S.C. 77t(d)(3)(A)).
                (2) Section 42(e)(3)(A) of the Investment Company Act of
            1940 (15 U.S.C. 80a-41(e)(3)(A)).
                (3) Section 209(e)(3)(A) of the Investment Advisers Act of
            1940 (15 U.S.C. 80b-9(e)(3)(A)).
        (b) Securities Exchange Act.--The Securities Exchange Act of 1934
    (15 U.S.C. 78a et seq.) is amended--
                (1) in section 21(d)(3)(C)(i) (15 U.S.C. 78u(d)(3)(C)(i)),
            by inserting ``and section 21F of this title'' after ``the
            Sarbanes-Oxley Act of 2002'';
                (2) in section 21A(d)(1) (15 U.S.C. 78u-1(d)(1))--
                        (A) by striking ``(subject to subsection (e))'';
                    and
                        (B) by inserting ``and section 21F of this title''
                    after ``the Sarbanes-Oxley Act of 2002''; and
                (3) in section 21A, by striking subsection (e) and
            redesignating subsections (f) and (g) as subsections (e) and
            (f), respectively.

    SEC. 7205. IMPLEMENTATION AND TRANSITION PROVISIONS FOR WHISTLEBLOWER
                  PROTECTIONS.

        (a) Implementing Rules.--The Securities and Exchange Commission
    shall issue final regulations implementing the provisions of section
    21F of the Securities Exchange Act of 1934, as added by this part, no
    later than 270 days after the date of enactment of this subtitle.
        (b) Original Information.--Information submitted to the Commission
    by a whistleblower in accordance with regulations implementing the
    provisions of section 21F of the Securities Exchange Act of 1934, as
    added by this part, shall not lose its status as original information,
    as defined in subsection (i)(1) of such section, solely because the
    whistleblower submitted such information prior to the effective date of
    such regulations, provided such information was submitted after the
    date of enactment of this subtitle, or related to insider trading
    violations for which a bounty could have been paid at the time such
    information was submitted.
        (c) Awards.--A whistleblower may receive an award pursuant to
    section 21F of the Securities Exchange Act of 1934, as added by this
    part, regardless of whether any violation of a provision of the
    securities laws, or a rule or regulation thereunder, underlying the
    judicial or administrative action upon which the award is based
    occurred prior to the date of enactment of this subtitle.

    SEC. 7206. COLLATERAL BARS.

        (a) Section 15 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, transfer
    agent, municipal financial adviser, or nationally recognized
    statistical rating organization,''.
        (b) Section 15B 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 ``12 months or bar any such person from being associated with
    a broker, dealer, investment adviser, municipal securities dealer,
    transfer agent, municipal financial adviser, or nationally recognized
    statistical rating organization,''.
        (c) Section 17A 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
    ``12 months or bar any such person from being associated with any
    transfer agent, broker, dealer, investment adviser, municipal
    securities dealer, municipal financial adviser, or nationally
    recognized statistical rating organization,''.
        (d) Section 203 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 ``12 months or
    bar any such person from being associated with an investment adviser,
    broker, dealer, municipal securities dealer, transfer agent, municipal
    financial adviser, or nationally recognized statistical rating
    organization,''.

    SEC. 7207. AIDING AND ABETTING AUTHORITY UNDER THE SECURITIES ACT AND
                  THE INVESTMENT COMPANY ACT.

        (a) Under the Securities Act of 1933.--Section 15 of the Securities
    Act of 1933 (15 U.S.C. 77o) is amended--
                (1) by striking ``Every person who'' and inserting ``(a)
            Controlling Persons.--Every person who''; and
                (2) by adding at the end the following:
        ``(b) Prosecution of Persons Who Aid and Abet Violations.--For
    purposes of any action brought by the Commission under subparagraph (b)
    or (d) of section 20, any person that knowingly or recklessly provides
    substantial assistance to another person in violation of a provision of
    this Act, or of any rule or regulation issued under this Act, shall be
    deemed to be in violation of such provision to the same extent as the
    person to whom such assistance is provided.''.
        (b) Under the Investment Company Act of 1940.--Section 48 of the
    Investment Company Act of 1940 (15 U.S.C. 80a-48) is amended by
    redesignating subsection (b) as subsection (c) and inserting after
    subsection (a) the following:
        ``(b) For purposes of any action brought by the Commission under
    subsection (d) or (e) of section 42, any person that knowingly or
    recklessly provides substantial assistance to another person in
    violation of a provision of this Act, or of any rule or regulation
    issued under this Act, shall be deemed to be in violation of such
    provision to the same extent as the person to whom such assistance is
    provided.''.

    SEC. 7208. AUTHORITY TO IMPOSE PENALTIES FOR AIDING AND ABETTING
                  VIOLATIONS OF THE INVESTMENT ADVISERS ACT.

        Section 209 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-
    9) is amended by inserting at the end the following new subsection:
        ``(f) Aiding and Abetting.--For purposes of any action brought by
    the Commission under subsection (e), any person that knowingly or
    recklessly has aided, abetted, counseled, commanded, induced, or
    procured a violation of any provision of this Act, or of any rule,
    regulation, or order hereunder, shall be deemed to be in violation of
    such provision, rule, regulation, or order to the same extent as the
    person that committed such violation.''.

    SEC. 7209. DEADLINE FOR COMPLETING EXAMINATIONS, INSPECTIONS AND
                  ENFORCEMENT ACTIONS.

        The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is
    amended by inserting after section 4D (as added by section 7101) the
    following new section:

    ``SEC. 4E. DEADLINE FOR COMPLETING ENFORCEMENT INVESTIGATIONS AND
                  COMPLIANCE EXAMINATIONS AND INSPECTIONS.

        ``(a) Enforcement Investigations.--
                ``(1) In general.--Not later than 180 days after the date
            on which Commission staff provide a written Wells notification
            to any person, the Commission staff shall either file an action
            against such person or provide notice to the Director of the
            Division of Enforcement of its intent to not file an action.
                ``(2) Exceptions for certain complex actions.--
            Notwithstanding paragraph (1), if the Director of the Division
            of Enforcement of the Commission or the Director's designee
            determines that a particular enforcement investigation is
            sufficiently complex such that a determination regarding the
            filing of an action against a person cannot be completed within
            the deadline specified in paragraph (1), the Director of the
            Division of Enforcement of the Commission or the Director's
            designee may, after providing notice to the Chairman of the
            Commission, extend such deadline as needed for one additional
            180-day period. If after the additional 180-day period the
            Director of the Division of Enforcement of the Commission or
            the Director's designee determines that a particular
            enforcement investigation is sufficiently complex such that a
            determination regarding the filing of an action against a
            person cannot be completed within the additional 180-day
            period, the Director of the Division of Enforcement of the
            Commission or the Director's designee may, after providing
            notice to and receiving approval of the Commission, extend such
            deadline as needed for one or more additional successive 180-
            day periods.
        ``(b) Compliance Examinations and Inspections.--
                ``(1) In general.--Not later than 180 days after the date
            on which Commission staff completes the on-site portion of its
            compliance examination or inspection or receives all records
            requested from the entity being examined or inspected,
            whichever is later, Commission staff shall provide the entity
            being examined or inspected with written notification
            indicating either that the examination or inspection has
            concluded, has concluded without findings, or that the staff
            requests the entity undertake corrective action.
                ``(2) Exception for certain complex actions.--
            Notwithstanding paragraph (1), if the head of any division or
            office within the Commission responsible for compliance
            examinations and inspections or his designee determines that a
            particular compliance examination or inspection is sufficiently
            complex such that a determination regarding concluding the
            examination or inspection, or regarding the staff requests the
            entity undertake corrective action, cannot be completed within
            the deadline specified in paragraph (1), the head of any
            division or office within the Commission responsible for
            compliance examinations and inspections or his designee may,
            after providing notice to the Chairman of the Commission,
            extend such deadline as needed for one additional 180-day
            period.''.

    SEC. 7210. 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 civil action instituted by the
    Commission under this title in a United States district court for any
    judicial district, subpoenas issued to compel the attendance of
    witnesses or the production of documents or tangible things (or both)
    at any hearing or trial may be served at any place within the United
    States. Rule 45(c)(3)(A)(ii) of the Federal Rules of Civil Procedure
    does not apply to a subpoena so issued.''.
        (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 civil action instituted by the
    Commission under this title in a United States district court for any
    judicial district, subpoenas issued to compel the attendance of
    witnesses or the production of documents or tangible things (or both)
    at any hearing or trial may be served at any place within the United
    States. Rule 45(c)(3)(A)(ii) of the Federal Rules of Civil Procedure
    does not apply to a subpoena so issued.''.
        (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 civil action instituted by
    the Commission under this title in a United States district court for
    any judicial district, subpoenas issued to compel the attendance of
    witnesses or the production of documents or tangible things (or both)
    at any hearing or trial may be served at any place within the United
    States. Rule 45(c)(3)(A)(ii) of the Federal Rules of Civil Procedure
    does not apply to a subpoena so issued.''.
        (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 civil action instituted by
    the Commission under this title in a United States district court for
    any judicial district, subpoenas issued to compel the attendance of
    witnesses or the production of documents or tangible things (or both)
    at any hearing or trial may be served at any place within the United
    States. Rule 45(c)(3)(A)(ii) of the Federal Rules of Civil Procedure
    does not apply to a subpoena so issued.''.

    SEC. 7211. 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 Monetary 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 $7,500 for a natural person or $75,000 for any
                    other person.
                        ``(B) Second tier.--Notwithstanding paragraph (A),
                    the maximum amount of penalty for each such act or
                    omission shall be $75,000 for a natural person or
                    $375,000 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 $150,000 for a natural person
                    or $725,000 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 Monetary 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. 7212. 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''.
        (g) Person Associated With a Public Accounting Firm.--
                (1) Sarbanes-oxley act of 2002 amendment.--Section 2(a)(9)
            of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7201(9)) is
            amended by adding at the end the following new subparagraph:
                        ``(C) Investigative and enforcement authority.--For
                    purposes of the provisions of sections 3(c), 101(c),
                    105, and 107(c) and Board or Commission rules
                    thereunder, except to the extent specifically excepted
                    by such rules, the terms defined in subparagraph (A)
                    shall include any person associated, seeking to become
                    associated, or formerly associated with a public
                    accounting firm, except--
                                ``(i) the authority to conduct an
                            investigation of such person under section
                            105(b) shall apply only with respect to any act
                            or practice, or omission to act, while such
                            person was associated or seeking to become
                            associated with a registered public accounting
                            firm; and
                                ``(ii) the authority to commence a
                            proceeding under section 105(c)(1), or impose
                            disciplinary sanctions under section 105(c)(4),
                            against such person shall apply only on--
                                        ``(I) the basis of conduct
                                    occurring while such person was
                                    associated or seeking to become
                                    associated with a registered public
                                    accounting firm; or
                                        ``(II) non-cooperation as described
                                    in section 105(b)(3) with respect to a
                                    demand in a Board investigation for
                                    testimony, documents, or other
                                    information relating to a period when
                                    such person was associated or seeking
                                    to become associated with a registered
                                    public accounting firm.''.
                (2) Securities exchange act of 1934 amendment.--Section
            21(a)(1) of the Securities Exchange Act of 1934 (15 U.S.C.
            78u(a)(1)) is amended by striking ``or a person associated with
            such a firm'' and inserting ``, a person associated with such a
            firm, or, as to any act, practice, or omission to act while
            associated with such firm, a person formerly associated with
            such a firm''.
        (h) Supervisory Personnel of an Audit Firm.--Section 105(c)(6) of
    the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7215(c)(6)) is amended--
                (1) in subparagraph (A), by striking ``the supervisory
            personnel'' and inserting ``any person who is, or at the time
            of the alleged failure reasonably to supervise was, a
            supervisory person''; and
                (2) in subparagraph (B)--
                        (A) by striking ``No associated person'' and
                    inserting ``No current or former supervisory person'';
                    and
                        (B) by striking ``any other person'' and inserting
                    ``any associated person''.
        (i) Member of the Public Company Accounting Oversight Board.--
    Section 107(d)(3) of the Sarbanes-Oxley Act of 2002 (15 U.S.C.
    7217(d)(3)) is amended by striking ``any member'' and inserting ``any
    person who is, or at the time of the alleged misconduct was, a
    member''.

    SEC. 7213. SHARING PRIVILEGED INFORMATION WITH OTHER AUTHORITIES.

        Section 24 of the Securities Exchange Act of 1934 (15 U.S.C. 78x)
    is amended--
                (1) by redesignating subsections (d) and (e) as subsections
            (e) and (f), respectively;
                (2) in subsection (e), as redesignated, by striking ``as
            provided in subsection (e)'' and inserting ``as provided in
            subsection (f)''; and
                (3) by inserting after subsection (c) the following new
            subsection:
        ``(d) Sharing Privileged Information With Other Authorities.--
                ``(1) Privileged information provided by the commission.--
            The Commission shall not be deemed to have waived any privilege
            applicable to any information by transferring that information
            to or permitting that information to be used by--
                        ``(A) any agency (as defined in section 6 of title
                    18, United States Code);
                        ``(B) any foreign securities authority;
                        ``(C) the Public Company Accounting Oversight
                    Board;
                        ``(D) any self-regulatory organization;
                        ``(E) any foreign law enforcement authority; or
                        ``(F) any State securities or law enforcement
                    authority.
                ``(2) Non-disclosure of privileged information provided to
            the commission.--The Commission shall not be compelled to
            disclose privileged information obtained from any foreign
            securities authority, or foreign law enforcement authority, if
            the authority has in good faith determined and represented to
            the Commission that the information is privileged.
                ``(3) Non-waiver of privileged information provided to the
            commission.--
                        ``(A) In general.--Federal agencies, State
                    securities and law enforcement authorities, self-
                    regulatory organizations, and the Public Company
                    Accounting Oversight Board shall not be deemed to have
                    waived any privilege applicable to any information by
                    transferring that information to or permitting that
                    information to be used by the Commission.
                        ``(B) Exception with respect to certain actions.--
                    The provisions of subparagraph (A) shall not apply to a
                    self-regulatory organization or the Public Company
                    Accounting Oversight Board with respect to information
                    used by the Commission in an action against such
                    organization.
                ``(4) Definitions.--For purposes of this subsection:
                        ``(A) The term `privilege' includes any work-
                    product privilege, attorney-client privilege,
                    governmental privilege, or other privilege recognized
                    under Federal, foreign, or State law.
                        ``(B) The term `foreign law enforcement authority'
                    means any foreign authority that is empowered under
                    foreign law to detect, investigate or prosecute
                    potential violations of law.
                        ``(C) The term `State securities or law enforcement
                    authority' means the authority of any State or
                    territory that is empowered under State or territory
                    law to detect, investigate or prosecute potential
                    violations of law.''.

    SEC. 7214. EXPANDED ACCESS TO GRAND JURY INFORMATION.

        Subsection (b) of section 3322 of title 18, United States Code, is
    amended--
                (1) in paragraph (1), by striking ``matters occurring
            before a grand jury'' and inserting ``grand jury information
            obtained'';
                (2) by redesignating paragraph (2) as paragraph (3);
                (3) in paragraph (3) (as so redesignated), by inserting
            ``or (2)'' after ``(1)''; and
                (4) by inserting after paragraph (1), the following new
            paragraph:
                ``(2) Upon motion of an attorney for the government, a
            court may direct disclosure of grand jury information obtained
            during an investigation of a securities law violation to
            identified personnel of the Securities and Exchange
            Commission--
                        ``(A) for use in relation to any matter within the
                    jurisdiction of the Commission; or
                        ``(B) to assist an attorney for the government to
                    whom matters have been disclosed under subsection
                    (a).''.

    SEC. 7215. AIDING AND ABETTING STANDARD OF KNOWLEDGE SATISFIED BY
                  RECKLESSNESS.

        Section 20(e) of the Securities Exchange Act of 1934 (15 U.S.C.
    78t(e)) is amended by inserting ``or recklessly'' after ``knowingly''.

    SEC. 7216. EXTRATERRITORIAL JURISDICTION OF THE ANTIFRAUD PROVISIONS OF
                  THE FEDERAL SECURITIES LAWS.

        (a) Under the Securities Act of 1933.--Section 22 of the Securities
    Act of 1933 (15 U.S.C. 77v(a)) is amended by adding at the end the
    following new subsection:
        ``(c) Extraterritorial Jurisdiction.--With respect to any actions
    or proceedings brought or instituted by the Commission or the United
    States, this jurisdiction includes violations of section 17(a) of this
    title, and all suits in equity and actions at law under that section,
    involving--
                ``(1) conduct within the United States that constitutes
            significant steps in furtherance of the violation, even if the
            securities transaction occurs outside the United States and
            involves only foreign investors; or
                ``(2) conduct occurring outside the United States that has
            a foreseeable substantial effect within the United States.''.
        (b) Under the Securities Exchange Act of 1934.--Section 27 of the
    Securities Exchange Act of 1934 (15 U.S.C. 78aa) is amended--
                (1) by striking ``The district'' and inserting the
            following:
        ``(a) In General.--The district''; and
                (2) by inserting at the end the following new subsection:
        ``(b) Extraterritorial Jurisdiction.--With respect to any actions
    or proceedings brought or instituted by the Commission or the United
    States, this jurisdiction includes violations of the antifraud
    provisions of this title, and all suits in equity and actions at law
    under those provisions, involving--
                ``(1) conduct within the United States that constitutes
            significant steps in furtherance of the violation, even if the
            securities transaction occurs outside the United States and
            involves only foreign investors; or
                ``(2) conduct occurring outside the United States that has
            a foreseeable substantial effect within the United States.''.
        (c) Under the Investment Advisers Act of 1940.--Section 214 of the
    Investment Advisers Act of 1940 (15 U.S.C. 80b-14) is amended--
                (1) by striking ``The district'' and inserting the
            following:
        ``(a) In General.--The district''; and
                (2) by inserting at the end the following new subsection:
        ``(b) Extraterritorial Jurisdiction.--With respect to any actions
    or proceedings brought or instituted by the Commission or the United
    States, this jurisdiction includes violations of section 206, and all
    suits in equity and actions at law under that section, involving--
                ``(1) conduct within the United States that constitutes
            significant steps in furtherance of the violation, even if the
            violation is committed by a foreign adviser and involves only
            foreign investors; or
                ``(2) conduct occurring outside the United States that has
            a foreseeable substantial effect within the United States.''.

    SEC. 7217. FIDELITY BONDING.

        Section 17(g) of the Investment Company Act of 1940 (15 U.S.C. 80a-
    17(g)) is amended to read as follows:
        ``(g) Fidelity Bonding.--
                ``(1) In general.--The Commission is authorized to require
            that a registered management company provide and maintain a
            fidelity bond against loss as to any officer or employee who
            has access to securities or funds of the company, either
            directly or through authority to draw upon such funds or to
            direct generally the disposition of such securities (unless the
            officer or employee has such access solely through his position
            as an officer or employee of a bank), in such form and amount
            as the Commission may prescribe by rule, regulation, or order
            for the protection of investors.
                ``(2) Definitions.--For purposes of this subsection:
                        ``(A) Management company.--The term `management
                    company' has the meaning given such term under section
                    4 of the Investment Company Act of 1940.
                        ``(B) Officer or employee.--The term `officer or
                    employee' means--
                                ``(i) any officer or employee of the
                            management company; and
                                ``(ii) any officer or employee of any
                            investment adviser to the management company,
                            or of any affiliated company of any such
                            investment adviser, as the Commission may
                            prescribe by rule, regulation, or order for the
                            protection of investors.
                        ``(C) Other definitions.--The terms `affiliated
                    company' and `investment adviser' shall have the
                    meaning given such terms under section 2 of the
                    Investment Company Act of 1940.''.

    SEC. 7218. ENHANCED SEC AUTHORITY TO CONDUCT SURVEILLANCE AND RISK
                  ASSESSMENT.

        (a) Securities Exchange Act of 1934 Amendments.--Section 17(b) of
    the Securities Exchange Act of 1934 (15 U.S.C. 78q(b)) is amended by
    adding at the end the following new paragraph:
                ``(5) Surveillance and risk assessment.--All persons
            described in subsection (a) of this section are subject at any
            time, or from time to time, to such reasonable periodic,
            special, or other information and document requests by
            representatives of the Commission as the Commission by rule or
            order deems necessary or appropriate to conduct surveillance or
            risk assessments of the securities markets, persons registered
            with the Commission under this title, or otherwise in
            furtherance of the purposes of this title.''.
        (b) Investment Company Act of 1940 Amendments.--Section 31(b) of
    the Investment Company Act of 1940 (15 U.S.C. 80a-30(b)), as amended by
    section 7106(a)(2), is further amended by adding at the end the
    following new paragraph:
                ``(5) Surveillance and risk assessment.--All persons
            described in paragraph (1) are subject at any time, or from
            time to time, to such reasonable periodic, special, or other
            information and document requests by representatives of the
            Commission as the Commission by rule or order deems necessary
            or appropriate to conduct surveillance or risk assessments of
            the securities markets, persons registered with the Commission
            under this title, or otherwise in furtherance of the purposes
            of this title.''.
        (c) Investment Advisers Act of 1940 Amendments.--Section 204 of the
    Investment Advisers Act of 1940 (15 U.S.C. 80b-4), as amended by
    section 7106(b), is further amended by adding at the end the following
    new subsection:
        ``(e) Surveillance and Risk Assessment.--All persons described in
    subsection (a) are subject at any time, or from time to time, to such
    reasonable periodic, special, or other information and document
    requests by representatives of the Commission as the Commission by rule
    or order deems necessary or appropriate to conduct surveillance or risk
    assessments of the securities markets, persons registered with the
    Commission under this title, or otherwise in furtherance of the
    purposes of this title.''.

    SEC. 7219. INVESTMENT COMPANY EXAMINATIONS.

        Section 31(b)(1) of the Investment Company Act of 1940 (15 U.S.C.
    80a-30) is amended to read as follows:
                ``(1) In general.--All records of each registered
            investment company, and each underwriter, broker, dealer, or
            investment adviser that is a majority-owned subsidiary of such
            a company, shall be subject at any time, or from time to time,
            to such reasonable periodic, special, or other examinations by
            representatives of the Commission as the Commission deems
            necessary or appropriate in the public interest or for the
            protection of investors.''.

    SEC. 7220. CONTROL PERSON LIABILITY UNDER THE SECURITIES EXCHANGE ACT.

        Section 20(a) of the Securities Exchange Act of 1934 (15 U.S.C.
    78t(a)) is amended by inserting after ``controlled person is liable,''
    the following: ``including to the Commission in any action brought
    under paragraph (1) or (3) of section 21(d),''.

    SEC. 7221. ENHANCED APPLICATION OF ANTI-FRAUD PROVISIONS.

        The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is
    amended--
                (1) in section 9--
                        (A) by striking ``registered on a national
                    securities exchange'' each place it appears and
                    inserting ``other than a government security'';
                        (B) in subsection (b), by striking ``by use of any
                    facility of a national securities exchange,''; and
                        (C) in subsection (c), by inserting after
                    ``unlawful for any'' the following: ``broker, dealer,
                    or'';
                (2) in section 10(a)(1), by striking ``registered on a
            national securities exchange'' and inserting ``other than a
            government security''; and
                (3) in section 15(c)(1)(A), by striking ``otherwise than on
            a national securities exchange of which it is a member''.

    SEC. 7222. SEC AUTHORITY TO ISSUE RULES ON PROXY ACCESS.

        Section 14(a) of the Securities Exchange Act of 1934 (15 U.S.C.
    78n(a)) is amended--
                (1) by inserting ``(1)'' after ``(a)''; and
                (2) by adding at the end the following:
        ``(2) The authority of the Commission to prescribe rules and
    regulations under paragraph (1) includes rules and regulations that
    require the inclusion and set procedures relating to the inclusion, in
    a solicitation of a proxy or consent or authorization by or on behalf
    of an issuer, of a nominee or nominees submitted by shareholders to
    serve on the issuer's board of directors.''.

                  PART 3--COMMISSION FUNDING AND ORGANIZATION

    SEC. 7301. AUTHORIZATION OF APPROPRIATIONS.

        Section 35 of the Securities Exchange Act of 1934 (15 U.S.C. 78kk)
    is amended to read as follows:

    ``SEC. 35. AUTHORIZATION OF APPROPRIATIONS.

        ``In addition to any other funds authorized to be appropriated to
    the Commission, there are authorized to be appropriated to carry out
    the functions, powers, and duties of the Commission--
                ``(1) for fiscal year 2010, $1,115,000,000;
                ``(2) for fiscal year 2011, $1,300,000,000;
                ``(3) for fiscal year 2012, $1,500,000,000;
                ``(4) for fiscal year 2013, $1,750,000,000;
                ``(5) for fiscal year 2014, $2,000,000,000; and
                ``(6) for fiscal year 2015, $2,250,000,000.''.

    SEC. 7302. INVESTMENT ADVISER REGULATION FUNDING.

        Section 203 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-
    3) (as amended by sections 5006 and 5007) is further amended by adding
    at the end the following new subsection:
        ``(o) Annual Assessment.--
                ``(1) In general.--The Commission shall, in accordance with
            this subsection, promulgate rules pursuant to which it may
            collect from investment advisers required to register with the
            Commission under this title, fees designed to help recover the
            cost of inspections and examinations of registered investment
            advisers conducted by the Commission pursuant to this title.
                ``(2) Fee payment required.--An investment adviser shall,
            at the time of registration with the Commission, and each
            fiscal year thereafter during which such adviser is so
            registered, pay to the Commission a fair and reasonable fee
            determined by the Commission. In determining such fee, the
            Commission shall consider objective factors such as--
                        ``(A) the investment adviser's size;
                        ``(B) the number of clients of the investment
                    adviser;
                        ``(C) the types of clients of the investment
                    adviser; and
                        ``(D) such other relevant factors as the Commission
                    determines to be appropriate.
                ``(3) Amount and use of fees.--
                        ``(A) Minimum aggregate amount.--The aggregate
                    amount of fees determined by the Commission under this
                    subsection for any fiscal year shall be greater than
                    the amount the Commission spent on inspections and
                    examinations of registered investment advisers during
                    the 2009 fiscal year.
                        ``(B) Excess fees.--The Commission may retain any
                    excess fees collected under this subsection during a
                    fiscal year for application towards the costs of
                    inspections and examinations of investment advisers in
                    future fiscal years.
                ``(4) Review and adjustment of fees.--The Commission may
            review fee rates established pursuant to this section before
            the end of any fiscal year and make any appropriate adjustments
            prior to collecting any such fee in the following fiscal year.
                ``(5) Penalty fee.--The Commission shall prescribe by rule
            or regulation an additional fee to be assessed as a penalty for
            late payment of fees required by this subsection.
                ``(6) Judicial review.--Increases or decreases in fees made
            pursuant to this section shall not be subject to judicial
            review.''.

    SEC. 7303. AMENDMENTS TO SECTION 31 OF THE SECURITIES EXCHANGE ACT OF
                  1934.

        Section 31 of the Securities Exchange Act of 1934 (15 U.S.C. 78ee)
    is amended--
                (1) in subsection (e)(2), by striking ``September 30'' and
            inserting ``September 25'';
                (2) in subsection (g), by striking ``April 30'' and
            inserting ``August 31''; and
                (3) in subsection (j)(2)--
                        (A) by striking ``5 months'' and inserting ``4
                    months''; and
                        (B) by striking ``(including fees collected during
                    such 5-month period and assessments collected under
                    subsection (d))'' and inserting ``(including fees
                    estimated to be collected under subsections (b) and (c)
                    prior to the effective date of the uniform adjusted
                    rate and assessments estimated to be collected under
                    subsection (d))''.

    SEC. 7304. COMMISSION ORGANIZATIONAL STUDY AND REFORM.

        (a) Study Required.--
                (1) In general.--Not later than the end of the 90-day
            period beginning on the date of the enactment of this subtitle,
            the Securities and Exchange Commission (hereinafter in this
            section referred to as the ``SEC'') shall hire an independent
            consultant of high caliber and with expertise in organizational
            restructuring and the operations of capital markets to examine
            the internal operations, structure, funding, and the need for
            comprehensive reform of the SEC, as well as the SEC's
            relationship with and the reliance on self-regulatory
            organizations and other entities relevant to the regulation of
            securities and the protection of securities investors that are
            under the SEC's oversight.
                (2) Specific areas for study.--The study required under
            paragraph (1) shall, at a minimum, include the study of--
                        (A) the possible elimination of unnecessary or
                    redundant units at the SEC;
                        (B) improving communications between SEC offices
                    and divisions;
                        (C) the need to put in place a clear chain-of-
                    command structure, particularly for enforcement
                    examinations and compliance inspections;
                        (D) the effect of high-frequency trading and other
                    technological advances on the market and what the SEC
                    requires to monitor the effect of such trading and
                    advances on the market;
                        (E) the SEC's hiring authorities, workplace
                    policies, and personal practices, including--
                                (i) whether there is a need to further
                            streamline hiring authorities for those who are
                            not lawyers, accountants, compliance examiners,
                            or economists;
                                (ii) whether there is a need for further
                            pay reforms;
                                (iii) the diversity of skill sets of SEC
                            employees and whether the present skill set
                            diversity efficiently and effectively fosters
                            the SEC's mission of investor protection; and
                                (iv) the application of civil service laws
                            by the SEC;
                        (F) whether the SEC's oversight and reliance on
                    self-regulatory organizations promotes efficient and
                    effective governance for the securities markets; and
                        (G) whether adjusting the SEC's reliance on self-
                    regulatory organizations is necessary to promote more
                    efficient and effective governance for the securities
                    markets.
        (b) Consultant Report.--Not later than the end of the 150-day
    period after being retained, the independent consultant hired pursuant
    to subsection (a)(1) shall issue a report to the SEC and the Congress
    containing--
                (1) a detailed description of any findings and conclusions
            made while carrying out the study required under subsection
            (a)(1); and
                (2) recommendations for legislative, regulatory, or
            administrative action that the consultant determines
            appropriate to enable the SEC and other entities on which it
            reports to perform their statutorily or otherwise mandated
            missions.
        (c) SEC Report.--Not later than the end of the 6-month period
    beginning on the date the consultant issues the report under subsection
    (b), and every 6-months thereafter during the 2-year period following
    the date on which the consultant issues such report, the SEC shall
    issue a report to the Committee on Financial Services of the House of
    Representatives and the Committee on Banking, Housing, and Urban
    Affairs of the Senate describing the SEC's implementation of the
    regulatory and administrative recommendations contained in the
    consultant's report.

    SEC. 7305. CAPITAL MARKETS SAFETY BOARD.

        There is established within the Securities and Exchange Commission
    an office to be known as the Capital Markets Safety Board whose purpose
    shall be to conduct investigations, at the direction of the Commission,
    of failed institutions registered with the Commission, to determine
    what caused such institutions to fail. Upon the conclusion of an
    investigation, the Board shall make available on the Commission's
    website a report of its findings, including recommendations regarding
    how others can avoid similar mistakes. No information that may
    compromise an ongoing Federal investigation shall be made available in
    any such report.

    SEC. 7306. REPORT ON IMPLEMENTATION OF ``POST-MADOFF REFORMS''.

        (a) In General.--Not later than 6 months after the date of the
    enactment of this subtitle, the Securities and Exchange Commission
    shall provide to the Committee on Financial Services of the House of
    Representatives and the Committee on Banking, Housing, and Urban
    Affairs of the Senate a report describing the implementation of reforms
    outlined by the Commission in the wake of the discovery of fraud by
    Bernie Madoff.
        (b) Contents of Report.--The report required by subsection (a)
    shall include an analysis of--
                (1) how many of the post-Madoff reforms have been
            implemented and to what extent; and
                (2) whether there is overlap between any of the
            Commission's reform proposals and those recommended by the
            Inspector General of the Commission.
        (c) Publication of Report.--The Commission and the Committees
    referred to in subsection (a) shall publish the report required by such
    subsection on their Web sites.

    SEC. 7307. JOINT ADVISORY COMMITTEE.

        The Securities and Exchange Commission and the Commodities Futures
    Trading Commission may jointly form and operate a joint advisory
    committee composed of members of each Commission and industry experts
    and participants. The purposes of such an advisory committee include--
                (1) considering and developing solutions to emerging and
            ongoing issues of common interest in the futures and securities
            markets;
                (2) identifying emerging regulatory risks and assess and
            quantify their implications for investors and other market
            participants, and provide recommendations for solutions;
                (3) serving as a vehicle for discussion and communication
            on regulatory issues of mutual concerns affecting each
            Commission, the regulated markets, and the industry generally;
            and
                (4) reporting regularly to each Commission and to Congress
            on its activities.

                     PART 4--ADDITIONAL COMMISSION REFORMS

    SEC. 7401. REGULATION OF SECURITIES LENDING.

        Section 10 of the Securities Exchange Act of 1934 (15 U.S.C. 78j)
    is amended by adding at the end the following new subsection:
        ``(c)(1) To effect, accept, or facilitate a transaction involving
    the loan or borrowing of securities in contravention of such rules and
    regulations as the Commission may prescribe as necessary or appropriate
    in the public interest or for the protection of investors.
        ``(2) Nothing in paragraph (1) shall be construed to limit the
    authority of an appropriate Federal banking agency (as defined in
    section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813(q))),
    the National Credit Union Administration, or any other Federal
    department or agency identified under law as having a systemic risk
    responsibility from prescribing rules or regulations to impose
    restrictions on transactions involving the loan or borrowing of
    securities in order to protect the safety and soundness of a financial
    institution or to protect the financial system from systemic risk.''.

    SEC. 7402. LOST AND STOLEN SECURITIES.

        Section 17(f)(1) of the Securities Exchange Act of 1934 (15 U.S.C.
    78q(f)(1)) is amended--
                (1) in subparagraph (A), by striking ``missing, lost,
            counterfeit, or stolen securities'' and inserting ``securities
            that are missing, lost, counterfeit, stolen, cancelled, or any
            other category of securities as the Commission, by rule, may
            prescribe''; and
                (2) in subparagraph (B), by striking ``or stolen'' and
            inserting ``stolen, cancelled, or reported in such other manner
            as the Commission, by rule, may prescribe''.

    SEC. 7403. FINGERPRINTING.

        Section 17(f)(2) of the Securities Exchange Act of 1934 (15 U.S.C.
    78q(f)(2)) is amended--
                (1) by striking ``and registered clearing agency,'' and
            inserting ``registered clearing agency, registered securities
            information processor, national securities exchange, and
            national securities association''; and
                (2) by striking ``or clearing agency,'' and inserting
            ``clearing agency, securities information processor, national
            securities exchange, or national securities association,''.

    SEC. 7404. EQUAL TREATMENT OF SELF-REGULATORY ORGANIZATION RULES.

        Section 29(a) of the Securities Exchange Act of 1934 (15 U.S.C.
    78cc(a)) is amended by striking ``an exchange required thereby'' and
    inserting ``a self-regulatory organization,''.

    SEC. 7405. CLARIFICATION THAT SECTION 205 OF THE INVESTMENT ADVISERS
                  ACT OF 1940 DOES NOT APPLY TO STATE-REGISTERED ADVISERS.

        Section 205(a) of the Investment Advisers Act of 1940 (15 U.S.C.
    80b-5(a)) is amended--
                (1) by striking ``, unless exempt from registration
            pursuant to section 203(b),'' and inserting ``registered or
            required to be registered with the Commission'';
                (2) by striking ``make use of the mails or any means or
            instrumentality of interstate commerce, directly or indirectly,
            to''; and
                (3) by striking ``to'' after ``in any way''.

    SEC. 7406. CONFORMING AMENDMENTS FOR THE REPEAL OF THE PUBLIC UTILITY
                  HOLDING COMPANY ACT OF 1935.

        (a) Securities Exchange Act of 1934.--The Securities Exchange Act
    of 1934 (15 U.S.C. 78 et seq.) is amended--
                (1) in section 3(a)(47) (15 U.S.C. 78c(a)(47)), by striking
            ``the Public Utility Holding Company Act of 1935 (15 U.S.C. 79a
            et seq.),''; and
                (2) in section 12(k) (15 U.S.C. 78l(k)), by amending
            paragraph (7) to read as follows:
                ``(7) Definition.--For purposes of this subsection, the
            term `emergency' means--
                        ``(A) a major market disturbance characterized by
                    or constituting--
                                ``(i) sudden and excessive fluctuations of
                            securities prices generally, or a substantial
                            threat thereof, that threaten fair and orderly
                            markets; or
                                ``(ii) a substantial disruption of the safe
                            or efficient operation of the national system
                            for clearance and settlement of transactions in
                            securities, or a substantial threat thereof; or
                        ``(B) a major disturbance that substantially
                    disrupts, or threatens to substantially disrupt--
                                ``(i) the functioning of securities
                            markets, investment companies, or any other
                            significant portion or segment of the
                            securities markets; or
                                ``(ii) the transmission or processing of
                            securities transactions.''.
                (3) in section 21(h)(2) (15 U.S.C. 78u(h)(2)), by striking
            ``section 18(c) of the Public Utility Holding Company Act of
            1935,''.
        (b) Trust Indenture Act of 1939.--The Trust Indenture Act of 1939
    (15 U.S.C. 77aaa et seq.) is amended--
                (1) in section 303 (15 U.S.C. 77ccc), by amending paragraph
            (17) to read as follows:
                ``(17) The terms `Securities Act of 1933' and `Securities
            Exchange Act of 1934' shall be deemed to refer, respectively,
            to such Acts, as amended, whether amended prior to or after the
            enactment of this title.'';
                (2) in section 308 (15 U.S.C. 77hhh), by striking
            ``Securities Act of 1933, the Securities Exchange Act of 1934,
            or the Public Utility Holding Company Act of 1935'' each place
            it appears and inserting ``Securities Act of 1933 or the
            Securities Exchange Act of 1934'';
                (3) in section 310 (15 U.S.C. 77jjj), by striking
            subsection (c);
                (4) in section 311 (15 U.S.C. 77kkk) by striking subsection
            (c);
                (5) in section 323(b) (15 U.S.C. 77www(b)), by striking
            ``Securities Act of 1933, or the Securities Exchange Act of
            1934, or the Public Utility Holding Company Act of 1935'' and
            inserting ``Securities Act of 1933 or the Securities Exchange
            Act of 1934''; and
                (6) in section 326 (15 U.S.C. 77zzz), by striking
            ``Securities Act of 1933, or the Securities Exchange Act of
            1934, or the Public Utility Holding Company Act of 1935,'' and
            inserting ``Securities Act of 1933 or the Securities Exchange
            Act of 1934''.
        (c) Investment Company Act of 1940.--The Investment Company Act of
    1940 (15 U.S.C. 80a-1 et seq.) is amended--
                (1) in section 2(a)(44) (15 U.S.C. 80a-2(a)(44)), by
            striking ```Public Utility Holding Company Act of 1935','';
                (2) in section 3(c) (15 U.S.C. 80a-3(c)), by amending
            paragraph (8) to read as follows:
                ``(8) [Repealed]'';
                (3) in section 38(b) (15 U.S.C. 80a-37(b)), by striking
            ``the Public Utility Holding Company Act of 1935,''; and
                (4) in section 50 (15 U.S.C. 80a-49), by striking ``the
            Public Utility Holding Company Act of 1935,''.
        (d) Investment Advisers Act of 1940.--Section 202(a)(21) of the
    Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)(21)) is amended by
    striking ```Public Utility Holding Company Act of 1935',''.

    SEC. 7407. PROMOTING TRANSPARENCY IN FINANCIAL REPORTING.

        (a) Findings.--Congress finds the following:
                (1) Transparent and clear financial reporting is integral
            to the continued growth and strength of our capital markets and
            the confidence of investors.
                (2) The increasing detail and volume of accounting,
            auditing, and reporting guidance pose a major challenge.
                (3) The complexity of accounting and auditing standards in
            the United States has added to the costs and effort involved in
            financial reporting.
        (b) Testimony Required on Reducing Complexity in Financial
    Reporting.--The Securities and Exchange Commission, the Public Company
    Accounting Oversight Board, and the standard setting body designated
    pursuant to section 19(b) of the Securities Act of 1933 shall annually
    provide oral testimony by their respective Chairpersons or a designee
    of the Chairperson, beginning in 2010, and for 5 years thereafter, to
    the Committee on Financial Services of the House of Representatives on
    their efforts to reduce the complexity in financial reporting to
    provide more accurate and clear financial information to investors,
    including--
                (1) reassessing complex and outdated accounting standards;
                (2) improving the understandability, consistency, and
            overall usability of the existing accounting and auditing
            literature;
                (3) developing principles-based accounting standards;
                (4) encouraging the use and acceptance of interactive data;
            and
                (5) promoting disclosures in ``plain English''.

    SEC. 7408. 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. 7409. PROTECTING CONFIDENTIALITY OF MATERIALS SUBMITTED TO THE
                  COMMISSION.

        (a) Securities Exchange Act of 1934.--Section 17(i) of the
    Securities Exchange Act of 1934 (as amended by section 1314(2)) is
    amended to read as follows:
        ``(i) Authority To Limit Disclosure of Information.--
                ``(1) In general.--Notwithstanding any other provision of
            law, the Commission shall not be compelled to disclose any
            information, documents, records, or reports that relate to an
            examination, surveillance, or risk assessment of a person
            subject to or described in this section, or the financial or
            operational condition of such persons, or any information
            supplied to the Commission by any domestic or foreign
            regulatory agency or self-regulatory organization that relates
            to the financial or operational condition of such persons, of
            any associated person of such persons, or any affiliate of an
            investment bank holding company.
                ``(2) Certain exceptions.--Nothing in this subsection shall
            authorize the Commission to withhold information from the
            Congress, prevent the Commission from complying with a request
            for information from any other Federal department or agency,
            the Public Company Accounting Oversight Board, or any self-
            regulatory organization requesting the information for purposes
            within the scope of its jurisdiction, or prevent the Commission
            from complying with an order of a court of the United States in
            an action brought by the United States or the Commission
            against a person subject to or described in this section to
            produce information, documents, records, or reports relating
            directly to the examination, surveillance, or risk assessment
            of that person or the financial or operational condition of
            that person or an associated or affiliated person of that
            person.
                ``(3) Treatment under section 552 of title 5, united states
            code.--For purposes of section 552 of title 5, United States
            Code, this subsection shall be considered a statute described
            in subsection (b)(3)(B) of that section.
                ``(4) Certain information to be confidential.--In
            prescribing regulations to carry out the requirements of this
            subsection, the Commission shall designate information
            described in or obtained pursuant to subparagraphs (A), (B),
            and (C) of subsection (i)(3) as confidential information for
            purposes of section 24(b)(2) of this title.''.
        (b) Investment Company Act of 1940.--Section 31(b) of the
    Investment Company Act of 1940 (15 U.S.C. 80a-30(b)), as amended by
    sections 7106(a)(2) and 7218(b)(4), is further amended by adding at the
    end the following new paragraph:
                ``(6) Confidentiality.--
                        ``(A) In general.--Notwithstanding any other
                    provision of law, the Commission shall not be compelled
                    to disclose any information, documents, records, or
                    reports that relate to an examination, surveillance, or
                    risk assessment of a person subject to or described in
                    this section.
                        ``(B) Certain exceptions.--Nothing in this
                    subsection shall authorize the Commission to withhold
                    information from the Congress, prevent the Commission
                    from complying with a request for information from any
                    other Federal department or agency, or the Public
                    Company Accounting Oversight Board requesting the
                    information for purposes within the scope of its
                    jurisdiction, or prevent the Commission from complying
                    with an order of a court of the United States in an
                    action brought by the United States or the Commission
                    against a person subject to or described in this
                    section to produce information, documents, records, or
                    reports relating directly to the examination of that
                    person or the financial or operational condition of
                    that person or an associated or affiliated person of
                    that person.
                        ``(C) Treatment under section 552 of title 5,
                    united states code.--For purposes of section 552 of
                    title 5, United States Code, this subsection shall be
                    considered a statute described in subsection (b)(3)(B)
                    of that section.''.
        (c) Investment Advisers Act of 1940.--Section 204 of the Investment
    Advisers Act of 1940 (15 U.S.C. 80b-4), as amended by sections 7106(b)
    and 7218(c), is further amended by adding at the end the following new
    subsection:
        ``(f) Confidentiality.--
                ``(1) In general.--Notwithstanding any other provision of
            law, the Commission shall not be compelled to disclose any
            information, documents, records, or reports that relate to an
            examination of a person subject to or described in this
            section.
                ``(2) Certain exceptions.--Nothing in this subsection shall
            authorize the Commission to withhold information from Congress,
            prevent the Commission from complying with a request for
            information from any other Federal department or agency, the
            Public Company Accounting Oversight Board, or a self-regulatory
            organization requesting the information for purposes within the
            scope of its jurisdiction, or prevent the Commission from
            complying with an order of a court of the United States in an
            action brought by the United States or the Commission against a
            person subject to or described in this section to produce
            information, documents, records, or reports relating directly
            to the examination of that person or the financial or
            operational condition of that person or an associated or
            affiliated person of that person.
                ``(3) Treatment under section 552 of title 5, united states
            code.--For purposes of section 552 of title 5, United States
            Code, this subsection shall be considered a statute described
            in subsection (b)(3)(B) of that section.''.

    SEC. 7410. TECHNICAL CORRECTIONS.

        (a) Securities Act of 1933.--The Securities Act of 1933 (15 U.S.C.
    77a et seq.) is amended--
                (1) in section 3(a)(4) (15 U.S.C. 77c(a)(4)), by striking
            ``individual;'' and inserting ``individual,'';
                (2) in the matter following paragraph (5) of section 11(a),
            by striking ``earning statement'' and inserting ``earnings
            statement'';
                (3) in section 18(b)(1)(C) (15 U.S.C. 77r(b)(1)(C)), by
            striking ``is a security'' and inserting ``a security'';
                (4) in section 18(c)(2)(B)(i) (15 U.S.C. 77r(c)(2)(B)(i)),
            by striking ``State, or'' and inserting ``State or'';
                (5) in section 19(d)(6)(A) (15 U.S.C. 77s(d)(6)(A)), by
            striking ``in paragraph (1) of (3)'' and inserting ``in
            paragraph (1) or (3)''; and
                (6) in section 27A(c)(1)(B)(ii) (15 U.S.C. 77z-
            2(c)(1)(B)(ii)), by striking ``business entity;'' and inserting
            ``business entity,''.
        (b) Securities Exchange Act of 1934.--The Securities Exchange Act
    of 1934 (15 U.S.C. 78 et seq.) is amended--
                (1) in section 2(1)(a) (15 U.S.C. 78b(1)(a)), by striking
            ``affected'' and inserting ``effected'';
                (2) in section 3(a)(55)(A) (15 U.S.C. 78c(a)(55)(A)), by
            striking ``section 3(a)(12) of the Securities Exchange Act of
            1934'' and inserting ``section 3(a)(12) of this Act'';
                (3) in section 3(g) (15 U.S.C. 78c(g)), by striking
            ``company, account person, or entity'' and inserting ``company,
            account, person, or entity'';
                (4) in section 10A(i)(1)(B)(i) (15 U.S.C. 78j-
            1(i)(1)(B)(i)), by striking ``nonaudit'' and inserting ``non-
            audit'';
                (5) in section 13(b)(1) (15 U.S.C. 78m(b)(1)), by striking
            ``earning statement'' and inserting ``earnings statement'';
                (6) in section 15(b)(1) (15 U.S.C. 78o(b)(1))--
                        (A) by striking the sentence beginning ``The order
                    granting'' and ending ``from such membership.'' in
                    subparagraph (B); and
                        (B) by inserting such sentence in the matter
                    following such subparagraph after ``are satisfied.'';
                (7) in section 15C(a)(2) (15 U.S.C. 78o-5(a)(2))--
                        (A) by redesignating clauses (i) and (ii) as
                    subparagraphs (A) and (B), respectively;
                        (B) by striking the sentence beginning ``The order
                    granting'' and ending ``from such membership.'' in such
                    subparagraph (B), as redesignated; and
                        (C) by inserting such sentence in the matter
                    following such redesignated subparagraph after ``are
                    satisfied.'';
                (8) in section 17(b)(1)(B) (15 U.S.C. 78q(b)(1)(B)), by
            striking ``15A(k) gives'' and inserting ``15A(k), give''; and
                (9) in section 21C(c)(2) (15 U.S.C. 78u-3(c)(2)), by
            striking ``paragraph (1) subsection'' and inserting ``Paragraph
            (1)''.
        (c) Trust Indenture Act of 1939.--The Trust Indenture Act of 1939
    (15 U.S.C. 77aaa et seq.) is amended--
                (1) in section 304(b) (15 U.S.C. 77ddd(b)), by striking
            ``section 2 of such Act'' and inserting ``section 2(a) of such
            Act'';
                (2) in section 313(a)(4) (15 U.S.C. 77mmm(a)(4)) by
            striking ``subsection (b) of section 311'' and inserting
            ``section 311(b)''; and
                (3) in section 317(a)(1) (15 U.S.C. 77qqq(a)(1)), by
            striking ``(1),'' and inserting ``(1)''.
        (d) Investment Company Act of 1940.--The Investment Company Act of
    1940 (15 U.S.C. 80a-1 et seq.) is amended--
                (1) in section 2(a)(19)(B) (15 U.S.C. 80a-2(a)(19)(B)) by
            striking ``clause (vi)'' both places it appears in the last two
            sentences and inserting ``clause (vii)'';
                (2) in section 9(b)(4)(B) (15 U.S.C. 80a-9(b)(4)(B)), by
            inserting ``or'' after the semicolon at the end;
                (3) in section 12(d)(1)(J) (15 U.S.C. 80a-12(d)(1)(J)), by
            striking ``any provision of this subsection'' and inserting
            ``any provision of this paragraph'';
                (4) in section 13(a)(3) (15 U.S.C. 80a-13(a)(3)), by
            inserting ``or'' after the semicolon at the end;
                (5) in section 17(f)(4) (15 U.S.C. 80a-17(f)(4)), by
            striking ``No such member'' and inserting ``No member of a
            national securities exchange'';
                (6) in section 17(f)(6) (15 U.S.C. 80a-17(f)(6)), by
            striking ``company may serve'' and inserting ``company, may
            serve''; and
                (7) in section 61(a)(3)(B)(iii) (15 U.S.C. 80a-
            60(a)(3)(B)(iii))--
                        (A) by striking ``paragraph (1) of section 205''
                    and inserting ``section 205(a)(1)''; and
                        (B) by striking ``clause (A) or (B) of that
                    section'' and inserting ``section 205(b)(1) or (2)''.
        (e) Investment Advisers Act of 1940.--The Investment Advisers Act
    of 1940 (15 U.S.C. 80b-1 et seq.) is amended--
                (1) in each of the following sections, by striking
            ``principal business office'' or ``principal place of
            business'' (whichever and wherever it appears) and inserting
            ``principal office and place of business'': sections
            203(c)(1)(A), 203(k)(4)(B), 213(a), 222(b), and 222(c) (15
            U.S.C. 80b-3(c)(1)(A), 80b-3(k)(4)(B), 80b-13(a), 80b-18a(b),
            and 80b-18a(c)); and
                (2) in section 206(3) (15 U.S.C. 80b-6(3)), by inserting
            ``or'' after the semicolon at the end.

    SEC. 7411. MUNICIPAL SECURITIES.

        Section 15B(b) of the Securities Exchange Act of 1934 (15 U.S.C.
    78o-4(b)) is amended--
                (1) by amending paragraph (1) to read as follows:
                ``(1) Composition of the municipal securities rulemaking
            board.--Not later than October 1, 2010, the Municipal
            Securities Rulemaking Board (hereinafter in this section
            referred to as the `Board'), shall be composed of members which
            shall perform the duties set forth in this section and shall
            consist of--
                        ``(A) a majority of independent public
                    representatives, at least one of whom shall be
                    representative of investors in municipal securities and
                    at least one of whom shall be representative of issuers
                    of municipal securities (which members are hereinafter
                    referred to as `public representatives');
                        ``(B) at least one individual who is representative
                    of municipal securities brokers and municipal
                    securities dealers which are not banks or subsidiaries
                    or departments or divisions of banks (which members are
                    hereinafter referred to as `broker-dealer
                    representatives'); and
                        ``(C) at least one individual who is representative
                    of municipal securities dealers which are banks or
                    subsidiaries or departments or divisions of banks
                    (which members are hereinafter referred to as `bank
                    representatives').''; and
                (2) by amending paragraph (2)(B) to read as follows:
                ``(B) Establish fair procedures for the nomination and
            election of members of the Board and assure fair representation
            in such nominations and elections of municipal securities
            brokers and municipal securities dealers. Such rules--
                        ``(i) shall establish requirements regarding the
                    independence of public representatives;
                        ``(ii) shall provide that the number of public
                    representatives of the Board shall at all times exceed
                    the total number of broker-dealer representatives and
                    bank representatives;
                        ``(iii) shall establish minimum knowledge,
                    experience, and other appropriate qualifications for
                    individuals to serve as public representatives, which
                    may include, among other things, prior work experience
                    in the securities, municipal finance, or municipal
                    securities industries;
                        ``(iv) shall specify the term members shall serve;
                    and
                        ``(v) may increase or decrease the number of
                    members which shall constitute the whole Board, but in
                    no case may such number be an even number.''.

    SEC. 7412. INTERESTED PERSON DEFINITION.

        Section 2(a)(19)(A) of the Investment Company Act of 1940 (15
    U.S.C. 80a-2(a)(19)(A)) is amended--
                (1) by striking clauses (v) and (vi);
                (2) by inserting after clause (iv) the following new
            clause:
                                ``(v) any natural person who is a member of
                            a class of persons who the Commission, by rule
                            or regulation, determines are unlikely to
                            exercise an appropriate degree of independence
                            as a result of--
                                        ``(I) a material business or
                                    professional relationship with such
                                    company or any affiliated person of
                                    such company; or
                                        ``(II) a close familial
                                    relationship with any natural person
                                    who is an affiliated person of such
                                    company;'';
                (3) by redesignating clause (vii) as clause (vi); and
                (4) in clause (vi), as redesignated, by striking ``two
            completed fiscal years'' and inserting ``five completed fiscal
            years''.

    SEC. 7413. RULEMAKING AUTHORITY TO PROTECT REDEEMING INVESTORS.

        Section 22(e) of the Investment Company Act of 1940 (15 U.S.C. 80a-
    22(e)) is amended by adding at the end the following: ``The Commission
    may, by rules and regulations, limit the extent to which a registered
    open-end investment company may own, hold, or invest in illiquid
    securities or other illiquid property.''.

    SEC. 7414. STUDY ON SEC REVOLVING DOOR.

        (a) Government Accountability Office Study.--The Comptroller
    General of the United States shall conduct a study that will--
                (1) review the number of employees who leave the Securities
            and Exchange Commission to work for financial institutions
            regulated by such Commission;
                (2) determine how many employees who leave the Securities
            and Exchange Commission worked on cases that involved financial
            institutions regulated by such Commission;
                (3) review the length of time employees work for the
            Securities and Exchange Commission before leaving to be
            employed by financial institutions regulated by such
            Commission;
                (4) review existing internal controls and make
            recommendations on strengthening such controls to ensure that
            employees of the Securities and Exchange Commission who are
            later employed by financial institutions did not assist such
            institutions in violating any rules or regulations of the
            Commission during the course of their employment with such
            Commission;
                (5) determine if greater post-employment restrictions are
            necessary to prevent employees of the Securities and Exchange
            Commission from being employed by financial institutions after
            employment with such Commission;
                (6) determine if the volume of employees of the Securities
            and Exchange Commission who are later employed by financial
            institutions has led to inefficiencies in enforcement;
                (7) determine if employees of the Securities and Exchange
            Commission who are later employed by financial institutions
            assisted such institutions in circumventing Federal rules and
            regulations while employed by such Commission;
                (8) review any information that may address the volume of
            employees of the Securities and Exchange Commission who are
            later employed by financial institutions, and make
            recommendations to Congress; and
                (9) review other additional issues as may be raised during
            the course of the study conducted under this subsection.
        (b) Report.--Not later than 1 year after the date of the enactment
    of this subtitle, the Comptroller General of the United States shall
    submit to the Committee on Financial Services of the House of
    Representatives and the Committee on Banking, Housing, and Urban
    Affairs of the Senate a report on the results of the study required by
    subsection (a).

    SEC. 7415. STUDY ON INTERNAL CONTROL EVALUATION AND REPORTING COST
                  BURDENS ON SMALLER ISSUERS.

        (a) Study Required.--The Government Accountability Office shall
    conduct a study evaluating the costs and benefits of complying with
    section 404(b) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7262(b)) on
    issuers who are not accelerated or large accelerated filers as defined
    by Commission Rule 12b-2. The study shall--
                (1) include recommendations, administrative reforms, and
            legislative proposals on implementation steps that could be
            taken to reduce compliance burdens on these issuers;
                (2) determine the efficacy of the Securities and Exchange
            Commission's measures to limit the cost of compliance on
            smaller issuers;
                (3) determine how to reduce the burden of complying with
            section 404(b) of the Sarbanes-Oxley Act of 2002 for companies
            whose market capitalization is less than $250,000,000 for the
            relevant reporting period while maintaining investor
            protections for such companies; and
                (4) determine whether various methods of reducing the
            compliance burden or a complete exemption for such companies
            (whose market capitalization is less than $250,000,000 for the
            relevant reporting period) from such compliance would encourage
            companies to list on exchanges in the United States in their
            initial public offerings.
        (b) Reports Required.--Not later than 9 months after the date of
    the enactment of this subtitle, the Government Accountability Office
    shall submit a report to Congress containing the findings and
    conclusions of the studies required under subsection (a), together with
    such recommendations for regulatory, legislative, or administrative
    action as may be appropriate.
        (c) Effective Date Contingent on Reports.--Requirements under
    section 404(b) of the Sarbanes-Oxley Act of 2002 on issuers described
    under subsection (a) shall not become effective until the results of
    the report are delivered, but in no case before June 1, 2011.

    SEC. 7416. ANALYSIS OF RULE REGARDING SMALLER REPORTING COMPANIES.

        (a) Findings.--Congress finds the following:
                (1) Many small businesses in cutting-edge technology
            sectors require significant capital investment to develop new
            technologies related to clean energy, drug treatments for
            terminal diseases and food production in hunger-stricken areas
            of the World.
                (2) Many technology companies conducting research do not
            meet the definition of ``smaller reporting company'' under the
            Securities and Exchange Commission's Rule 12b-2 due to
            unusually high public floats despite low or zero revenue.
                (3) The Final Report of the Advisory Committee on Smaller
            Public Companies to the Securities and Exchange Commission
            recommended that a company with a market capitalization of less
            than about $787,000,000 be considered a smallcap company and
            that the Commission provide exemptions from section 404(b) of
            the Sarbanes-Oxley Act to companies with less than $250,000,000
            in annual revenues.
        (b) Study of Using Revenue as Criteria to Define Smaller Reporting
    Company.--The Securities and Exchange Commission shall conduct a study
    of the inclusion of revenue as a criteria used in defining smaller
    reporting company as defined under the Commission's Rule 12b-2 to
    account for smaller public companies with public floats less than
    $700,000,000 and revenues less than $250,000,000. Not later than 180
    days after the date of enactment of this subtitle, the Commission shall
    provide the Committee on Financial Services of the House of
    Representatives and the Committee on Banking, Housing and Urban Affairs
    of the Senate a report of the findings of the study.

    SEC. 7417. FINANCIAL REPORTING FORUM.

        (a) Establishment.--There is hereby established a Financial
    Reporting Forum (hereinafter referred to as the ``Forum''), which shall
    consist of--
                (1) the Chairman of the Securities Exchange Commission
            (hereinafter referred to as the ``SEC'');
                (2) the head of the Financial Accounting Standards Board;
                (3) the Chairman of the Public Company Accounting Oversight
            Board;
                (4) the head of each appropriate Federal banking agency, as
            such term is defined under section 3(q) of the Federal Deposit
            Insurance Act (12 U.S.C. 1813(q));
                (5) the Administrator of the National Credit Union
            Administration;
                (6) the Secretary of the Treasury;
                (7) a representative of a non-financial institution,
            appointed by the SEC;
                (8) a representative of a financial institution, appointed
            by the SEC;
                (9) a representative of auditors, appointed by the SEC; and
                (10) a representative of investors, appointed by the SEC.
        (b) Meetings.--The Forum shall meet no less often than quarterly.
        (c) Duties.--The Forum shall meet to discuss immediate and long-
    term issues critical to financial reporting.
        (d) Reporting.--The Forum shall issue an annual report to the
    Congress detailing any determinations or findings made by the Forum
    during the previous year, including any legislative recommendations the
    Forum may have related to financial reporting matters.

    SEC. 7418. INVESTMENT ADVISERS SUBJECT TO STATE AUTHORITIES.

        Section 203A(a) of the Investment Advisers Act of 1940 (15 U.S.C.
    80b-3a(a)) is amended--
                (1) by redesignating paragraph (2) as paragraph (3); and
                (2) by inserting after paragraph (1) the following new
            paragraph:
                ``(2) Treatment of certain mid-sized investment advisers.--
            Notwithstanding paragraph (1), an investment adviser that is
            not exempt from registration under section 203 and--
                        ``(A) is regulated and examined, or required to be
                    regulated and examined, in the State where it maintains
                    its principal office and place of business; and
                        ``(B) has assets under management between--
                                ``(i) the amount specified under
                            subparagraph (A) of paragraph (1), as such
                            amount may have been adjusted by the Commission
                            pursuant to that subparagraph; and
                                ``(ii) $100,000,000, or such higher amount
                            as the Commission may, by rule, deem
                            appropriate in accordance with the purposes of
                            this title,
                    shall register with, and be subject to examination by,
                    such State. The Commission shall publish a list of the
                    States that regulate and examine, or require regulation
                    and examination of, investment advisers to which the
                    requirements of this paragraph apply. If no State in
                    which an investment adviser described in subparagraph
                    (B) is registered conducts such an examination, the
                    investment adviser must register with the Commission.
                    If, pursuant to this paragraph, an investment adviser
                    would be required to register with 5 or more States,
                    then the adviser may maintain its registration with the
                    Commission.''.

    SEC. 7419. CUSTODIAL REQUIREMENTS.

        (a) In General.--Not later than 180 days after the date of the
    enactment of this title, the Securities and Exchange Commission shall
    adopt a rule pursuant to its authority under section 211(a) of the
    Investment Advisers Act of 1940 making it unlawful under section 206(4)
    of that Act for an investment adviser registered under such Act to have
    custody of funds or securities of a client the value of which exceeds
    $10,000,000, unless--
                (1) the funds and securities are maintained with a
            qualified custodian either in a separate account for each
            client under the client's name, or in accounts that contain
            only client funds and securities under the name of the
            investment adviser as agent or trustee for the client; and
                (2) the qualified custodian does not directly or indirectly
            provide investment advice with respect to such funds or
            securities.
        (b) Exceptions.--The rule adopted under subsection (a) shall
    include such exceptions as the Commission determines in the public
    interest and consistent with the protection of investors. Any exemption
    granted under this subsection shall ensure that at least once per year,
    a client described in subsection (a) shall receive a report from an
    independent entity with a fiduciary responsibility to the client to
    verify that the assets in the client's account are in accord with those
    stated on the client's account statement.
        (c) No Limits on Other Actions.--Nothing in this section shall be
    construed to limit other actions the Securities and Exchange Commission
    may take under this Act to require the protection of client assets.

    SEC. 7420. OMBUDSMAN.

        (a) Appointment.--Not later than 180 days after the date of the
    enactment of this subtitle, the Chairman of the Securities and Exchange
    Commission shall appoint an Ombudsman who shall report directly to the
    Chairman.
        (b) Duties.--The Ombudsman appointed under subsection (a) shall--
                (1) act as a liaison between the Commission and any
            affected person with respect to any problem such person may
            have in dealing with the Commission resulting from the
            regulatory activities of the Commission;
                (2) review and make recommendations regarding Commission
            policies and procedures to encourage persons to present
            questions to the Commission regarding compliance with Federal
            securities laws; and
                (3) assure that safeguards exist to maintain
            confidentiality of communications between such persons and the
            Ombudsman.
        (c) Limitation.--In carrying out the duties under subsection (b),
    the Ombudsman shall utilize personnel of the Commission to the extent
    practicable. Nothing in this section shall be construed as replacing,
    altering, or diminishing the activities of any ombudsman or similar
    office in any other agency.
        (d) Report.--Each year, the Ombudsman shall submit a report to the
    Commission for inclusion in the annual report that describes the
    activities and evaluates the effectiveness of the Ombudsman during the
    preceding year. In that report, the Ombudsman shall include solicited
    comments and evaluations from registrants in regard to the
    effectiveness of the Ombudsman.

    SEC. 7421. NOTICE TO MISSING SECURITY HOLDERS.

        Section 17A of the Securities Exchange Act of 1934 (15 U.S.C. 78q-
    1) is amended by adding at the end the following new subsection:
        ``(g) Due Diligence for the Delivery of Dividends, Interest, and
    Other Valuable Property Rights.--
                ``(1) Revision of rules required.--The Commission shall
            revise its regulations in section 240.17Ad-17 of title 17, Code
            of Federal Regulations, as in effect on December 8, 1997, to
            extend the application of such section to brokers and dealers
            and to provide for the following:
                        ``(A) A requirement that the paying agent provide a
                    single written notification to each missing security
                    holder that the missing security holder has been sent a
                    check that has not yet been negotiated. The written
                    notification may be sent along with a check or other
                    mailing subsequently sent to the missing security
                    holder but must be provided no later than 7 months
                    after the sending of the not yet negotiated check.
                        ``(B) An exclusion for paying agents from the
                    notification requirements when the value of the not yet
                    negotiated check is less than $25.
                        ``(C) A provision clarifying that the requirements
                    described in subparagraph (A) shall have no effect on
                    State escheatment laws.
                        ``(D) For purposes of such revised regulations--
                                ``(i) a security holder shall be considered
                            a `missing security holder' if a check is sent
                            to the security holder and the check is not
                            negotiated before the earlier of the paying
                            agent sending the next regularly scheduled
                            check or the elapsing of 6 months after the
                            sending of the not yet negotiated check; and
                                ``(ii) the term `paying agent' includes any
                            issuer, transfer agent, broker, dealer,
                            investment adviser, indenture trustee,
                            custodian, or any other person that accepts
                            payments from the issuer of a security and
                            distributes the payments to the holders of the
                            security.
                ``(2) Rulemaking.--The Commission shall adopt such rules,
            regulations, and orders necessary to implement this subsection
            no later than 1 year after the date of enactment of this
            subsection. In proposing such rules, the Commission shall seek
            to minimize disruptions to current systems used by or on behalf
            of paying agents to process payment to account holders and
            avoid requiring multiple paying agents to send written
            notification to a missing security holder regarding the same
            not yet negotiated check.''.

    SEC. 7422. SHORT SALE REFORMS.

        (a) Short Sale Disclosure.--Section 13(f) of the Securities
    Exchange Act of 1934 (15 U.S.C. 78m(f)) is amended by redesignating
    paragraphs (2), (3), (4), and (5) as paragraphs (3), (4), (5), and (6),
    respectively, and inserting after paragraph (1) the following:
                ``(2)(A) Every institutional investment manager that
            effects a short sale of an equity security shall also file a
            report on a daily basis with the Commission in such form as the
            Commission, by rule, may prescribe. Such report shall include,
            as applicable, the name of the institution, the name of the
            institutional investment manager and the title, class, CUSIP
            number, number of shares or principal amount, aggregate fair
            market value of each security, and any additional information
            requested by the Commission. For purposes of section 552 of
            title 5, United States Code, this subparagraph shall be
            considered a statute described in subsection (b)(3)(B) of such
            section. The information contained in reports of an
            institutional investment manager filed with the Commission
            pursuant to this section, shall be subject to the same non-
            disclosure and confidentiality protection provided under
            section 204(b)(8) of the Investment Advisers Act of 1940.
                ``(B) The Commission shall prescribe rules providing for
            the public disclosure of the name of the issuer and the title,
            class, CUSIP number, aggregate amount of the number of short
            sales of each security, and any additional information
            determined by the Commission following the end of the reporting
            period. At a minimum, such public disclosure shall occur every
            month.''.
        (b) Short Selling Enforcement.--Section 9 of the Securities
    Exchange Act of 1934 (15 U.S.C. 78i) is amended--
                (1) by redesignating subsections (d), (e), (f), (g), (h),
            and (i) as subsections (e), (f), (g), (h), (i), and (j),
            respectively; and
                (2) inserting after subsection (c), the following new
            subsection:
        ``(d) Transactions Relating to Short Sales of Securities.--It shall
    be unlawful for any person, directly or indirectly, by the use of the
    mails or any means or instrumentality of interstate commerce, or of any
    facility of any national securities exchange, or for any member of a
    national securities exchange to effect, alone or with one or more other
    persons, a manipulative short sale of any security. The Commission
    shall issue such other rules as are necessary or appropriate to ensure
    that the appropriate enforcement options and remedies are available for
    violations of this subsection in the public interest or for the
    protection of investors.''.
        (c) Investor Notification.--Section 15 of the Securities Exchange
    Act of 1934 (15 U.S.C. 78o) is amended--
                (1) by redesignating subsections (e), (f), (g), (h), and
            (i) as subsections (f), (g), (h), (i), and (j), respectively;
            and
                (2) inserting after subsection (d) the following new
            subsection:
        ``(e) Notices to Customers Regarding Securities Lending.--Every
    registered broker or dealer shall provide notice to its customers that
    they may elect not to allow their fully paid securities to be used in
    connection with short sales. If a broker or dealer uses a customer's
    securities in connection with short sales, the broker or dealer shall
    provide notice to its customer that the broker or dealer may receive
    compensation in connection with lending the customer's securities. The
    Commission, by rule, as it deems necessary or appropriate in the public
    interest and for the protection of investors, may prescribe the form,
    content, time, and manner of delivery of any notice required under this
    paragraph.''.

    SEC. 7423. STREAMLINING OF SEC FILING PROCEDURES.

        (a) Approval Process.--Section 19(b)(2) of the Securities Exchange
    Act of 1934 (15 U.S.C. 78s(b)(2)) is amended to read as follows:
                ``(2) Filing procedures.--
                        ``(A) In general.--Within thirty-five days of the
                    date of publication of notice of the filing of a
                    proposed rule change in accordance with paragraph (1)
                    of this subsection, or within such longer period as the
                    Commission may designate up to ninety days of such date
                    if it finds such longer period to be appropriate and
                    publishes its reasons for so finding or as to which the
                    self-regulatory organization consents, the Commission
                    shall--
                                ``(i) by order approve such proposed rule
                            change; or
                                ``(ii) institute proceedings under
                            subparagraph (B) to determine whether the
                            proposed rule change should be disapproved.
                        ``(B) Proceedings.--Proceedings to determine
                    whether the proposed rule change should be disapproved
                    shall include notice of the grounds for disapproval
                    under consideration and opportunity for hearing and be
                    concluded within 200 days from the date of receipt of a
                    proper filing. At the conclusion of such proceedings
                    the Commission, by order, shall approve or disapprove
                    such proposed rule change. The Commission may extend
                    the time for conclusion of such proceedings for up to
                    60 days if it finds good cause for such extension and
                    publishes its reasons for so finding or for such longer
                    period as to which the self-regulatory organization
                    consents. The Commission shall approve a proposed rule
                    change of a self-regulatory organization if it finds
                    that such proposed rule change is consistent with the
                    requirements of this title and the rules and
                    regulations thereunder applicable to such organization.
                    The Commission shall disapprove a proposed rule change
                    of a self-regulatory organization if it does not make
                    such finding. The Commission shall not approve any
                    proposed rule change prior to the thirtieth day after
                    the date of publication of notice of the filing
                    thereof, unless the Commission finds good cause for so
                    doing and publishes its reasons for so finding.''.
        (b) Rules.--Not later than 12 months after the date of enactment of
    this Act, the Commission shall issue rules implementing a disapproval
    process for filings submitted on or after the effective date of such
    rules.

             PART 5--SECURITIES INVESTOR PROTECTION ACT AMENDMENTS

    SEC. 7501. INCREASING THE MINIMUM ASSESSMENT PAID BY SIPC MEMBERS.

        Section 4(d)(1)(C) of the Securities Investor Protection Act of
    1970 (15 U.S.C. 78ddd(d)(1)(C)) is amended by striking ``$150 per
    annum'' and inserting the following: ``0.02 percent of the gross
    revenues from the securities business of such member of SIPC''.

    SEC. 7502. INCREASING THE BORROWING LIMIT ON TREASURY LOANS.

        Section 4(h) of the Securities Investor Protection Act of 1970 (15
    U.S.C. 78ddd(h)) is amended by striking ``of not to exceed
    $1,000,000,000'' and inserting ``the lesser of $2,500,000,000 or the
    target amount of the SIPC Fund specified in the bylaws of SIPC''.

    SEC. 7503. INCREASING THE CASH LIMIT OF PROTECTION.

        Section 9 of the Securities Investor Protection Act of 1970 (15
    U.S.C. 78fff-3) is amended--
                (1) in subsection (a)(1), by striking ``$100,000 for each
            such customer'' and inserting ``the standard maximum cash
            advance amount for each such customer, as determined in
            accordance with subsection (d)''; and
                (2) by adding the following new subsections:
        ``(d) Standard Maximum Cash Advance Amount Defined.--For purposes
    of this section, the term `standard maximum cash advance amount' means
    $250,000, as such amount may be adjusted after March 31, 2010, as
    provided under subsection (e).
        ``(e) Inflation Adjustment.--
                ``(1) In general.--No later than April 1, 2010, and every 5
            years thereafter, and subject to the approval of the Commission
            as provided under section 3(e)(2), the Board of Directors of
            SIPC shall determine whether an inflation adjustment to the
            standard maximum cash advance amount is appropriate. If the
            Board of Directors of SIPC determines such an adjustment is
            appropriate, then the standard maximum cash advance amount
            shall be an amount equal to--
                        ``(A) $250,000 multiplied by
                        ``(B) the ratio of the annual value of the Personal
                    Consumption Expenditures Chain-Type Price Index (or any
                    successor index thereto), published by the Department
                    of Commerce, for the calendar year preceding the year
                    in which such determination is made, to the published
                    annual value of such index for the calendar year
                    preceding the year in which this subsection was
                    enacted.
            The index values used in calculations under this paragraph
            shall be, as of the date of the calculation, the values most
            recently published by the Department of Commerce.
                ``(2) Rounding.--If the standard maximum cash advance
            amount determined under paragraph (1) for any period is not a
            multiple of $10,000, the amount so determined shall be rounded
            down to the nearest $10,000.
                ``(3) Publication and report to the congress.--Not later
            than April 5 of any calendar year in which a determination is
            required to be made under paragraph (1)--
                        ``(A) the Commission shall publish in the Federal
                    Register the standard maximum cash advance amount; and
                        ``(B) the Board of Directors of SIPC shall submit a
                    report to the Congress stating the standard maximum
                    cash advance amount.
                ``(4) Implementation period.--Any adjustment to the
            standard maximum cash advance amount shall take effect on
            January 1 of the year immediately succeeding the calendar year
            in which such adjustment is made.
                ``(5) Inflation adjustment considerations.--In making any
            determination under paragraph (1) to increase the standard
            maximum cash advance amount, the Board of Directors of SIPC
            shall consider--
                        ``(A) the overall state of the fund and the
                    economic conditions affecting members of SIPC;
                        ``(B) the potential problems affecting members of
                    SIPC; and
                        ``(C) such other factors as the Board of Directors
                    of SIPC may determine appropriate.''.

    SEC. 7504. SIPC AS TRUSTEE IN SIPA LIQUIDATION PROCEEDINGS.

        Section 5(b)(3) of the Securities Investor Protection Act of 1970
    (15 U.S.C. 78eee(b)(3)) is amended--
                (1) by striking ``SIPC has determined that the liabilities
            of the debtor to unsecured general creditors and to
            subordinated lenders appear to aggregate less than $750,000 and
            that''; and
                (2) by striking ``five hundred'' and inserting ``five
            thousand''.

    SEC. 7505. INSIDERS INELIGIBLE FOR SIPC ADVANCES.

        Section 9(a)(4) of the Securities Investor Protection Act of 1970
    (15 U.S.C. 78fff-3(a)(4)) is amended by inserting ``an insider,'' after
    ``or net profits of the debtor,''.

    SEC. 7506. ELIGIBILITY FOR DIRECT PAYMENT PROCEDURE.

        Section 10(a)(4) of the Securities Investor Protection Act of 1970
    (15 U.S.C. 78fff-4(a)(4)) is amended by striking ``$250,000'' and
    inserting ``$850,000''.

    SEC. 7507. INCREASING THE FINE FOR PROHIBITED ACTS UNDER SIPA.

        Section 14(c) of the Securities Investor Protection Act of 1970 (15
    U.S.C. 78jjj(c)) is amended--
                (1) in paragraph (1), by striking ``$50,000'' and inserting
            ``$250,000''; and
                (2) in paragraph (2), by striking ``$50,000'' and inserting
            ``$250,000''.

    SEC. 7508. PENALTY FOR MISREPRESENTATION OF SIPC MEMBERSHIP OR
                  PROTECTION.

        Section 14 of the Securities Investor Protection Act of 1970 (15
    U.S.C. 78jjj) is amended by adding at the end the following new
    subsection:
        ``(d) Misrepresentation of SIPC Membership or Protection.--
                ``(1) In general.--Any person who falsely represents by any
            means (including, without limitation, through the Internet or
            any other medium of mass communication), with actual knowledge
            of the falsity of the representation and with an intent to
            deceive or cause injury to another, that such person, or
            another person, is a member of SIPC or that any person or
            account is protected or is eligible for protection under this
            Act or by SIPC, shall be liable for any damages caused thereby
            and shall be fined not more than $250,000 or imprisoned for not
            more than 5 years.
                ``(2) Injunctions.--Any court having jurisdiction of a
            civil action arising under this Act may grant temporary
            injunctions and final injunctions on such terms as the court
            deems reasonable to prevent or restrain any violation of
            paragraph (1). Any such injunction may be served anywhere in
            the United States on the person enjoined, shall be operative
            throughout the United States, and shall be enforceable, by
            proceedings in contempt or otherwise, by any United States
            court having jurisdiction over that person. The clerk of the
            court granting the injunction shall, when requested by any
            other court in which enforcement of the injunction is sought,
            transmit promptly to the other court a certified copy of all
            papers in the case on file in such clerk's office.''.

    SEC. 7509. FUTURES HELD IN A PORTFOLIO MARGIN SECURITIES ACCOUNT
                  PROTECTION.

        (a) SIPC Advances.--Section 9(a)(1) of the Securities Investor
    Protection Act of 1970 (15 U.S.C. 78fff-3(a)(1)) is amended by
    inserting ``or options on futures contracts'' after ``claim for
    securities''.
        (b) Definitions.--Section 16 of such Act (15 U.S.C. 78lll) is
    amended--
                (1) by amending paragraph (2) to read as follows:
                ``(2) Customer.--
                        ``(A) In general.--The term `customer' of a debtor
                    means any person (including any person with whom the
                    debtor deals as principal or agent) who has a claim on
                    account of securities received, acquired, or held by
                    the debtor in the ordinary course of its business as a
                    broker or dealer from or for the securities accounts of
                    such person for safekeeping, with a view to sale, to
                    cover consummated sales, pursuant to purchases, as
                    collateral, security, or for purposes of effecting
                    transfer. The term `customer' includes any person who
                    has a claim against the debtor arising out of sales or
                    conversions of such securities.
                        ``(B) Included persons.--The term `customer'
                    includes--
                                ``(i) any person who has deposited cash
                            with the debtor for the purpose of purchasing
                            securities; and
                                ``(ii) any person who has a claim against
                            the debtor for, or a claim against the debtor
                            arising out of sales or conversions of, cash,
                            securities, futures contracts, or options on
                            futures contracts received, acquired, or held
                            in a portfolio margining account carried as a
                            securities account pursuant to a portfolio
                            margining program approved by the Commission.
                        ``(C) Excluded persons.--The term `customer' does
                    not include--
                                ``(i) any person to the extent that the
                            claim of such person arises out of transactions
                            with a foreign subsidiary of a member of SIPC;
                                ``(ii) any person to the extent that such
                            person has a claim for cash or securities which
                            by contract, agreement, or understanding, or by
                            operation of law, is part of the capital of the
                            debtor, or is subordinated to the claims of any
                            or all creditors of the debtor, notwithstanding
                            that some ground exists for declaring such
                            contract, agreement, or understanding void or
                            voidable in a suit between the claimant and the
                            debtor; or
                                ``(iii) any person to the extent such
                            person has a claim relating to any open
                            repurchase or open reverse repurchase
                            agreement.
                    For purposes of this paragraph, the term `repurchase
                    agreement' means the sale of a security at a specified
                    price with a simultaneous agreement or obligation to
                    repurchase the security at a specified price on a
                    specified future date.'';
                (2) in paragraph (4), by inserting after the first sentence
            the following new sentence: ``In the case of portfolio
            margining accounts of customers that are carried as securities
            accounts pursuant to a portfolio margining program approved by
            the Commission, such term shall also include futures contracts
            and options on futures contracts received, acquired, or held by
            or for the account of a debtor from or for such accounts, and
            the proceeds thereof.'';
                (3) in paragraph (9), by inserting before ``Such term'' in
            the matter following subparagraph (L) the following: ``The term
            includes revenues earned by a broker or dealer in connection
            with transactions in customers' portfolio margining accounts
            carried as securities accounts pursuant to a portfolio
            margining program approved by the Commission.''; and
                (4) in paragraph (11)--
                        (A) by amending subparagraph (A) to read as
                    follows:
                        ``(A) calculating the sum which would have been
                    owed by the debtor to such customer if the debtor had
                    liquidated, by sale or purchase on the filing date--
                                ``(i) all securities positions of such
                            customer (other than customer name securities
                            reclaimed by such customer); and
                                ``(ii) all positions in futures contracts
                            and options on futures contracts held in a
                            portfolio margining account carried as a
                            securities account pursuant to a portfolio
                            margining program approved by the Commission;
                            minus''; and
                        (B) by inserting before ``In determining'' in the
                    matter following subparagraph (C) the following: ``A
                    claim for a commodity futures contract received,
                    acquired, or held in a portfolio margining account
                    pursuant to a portfolio margining program approved by
                    the Commission, or a claim for a security futures
                    contract, shall be deemed to be a claim for the mark-
                    to-market (variation) payments due with respect to such
                    contract as of the filing date, and such claim shall be
                    treated as a claim for cash.''.

    SEC. 7510. STUDY AND REPORT ON THE FEASIBILITY OF RISK-BASED
                  ASSESSMENTS FOR SIPC MEMBERS.

        (a) Study Required.--The Comptroller General of the United States
    shall conduct a study on whether the Securities Investor Protection
    Corporation (hereafter in this section referred to as ``SIPC'') should
    be required to impose assessments, on its member brokers and dealers,
    based on risk for the purpose of adequately maintaining the SIPC Fund
    and to provide additional levels of coverage on an optional basis.
        (b) Content.--The Comptroller General in conducting this study
    shall--
                (1) identify and examine available approaches, including
            modeling, to measure broker and dealer operational risk;
                (2) analyze whether the available approaches to measure
            broker and dealer operational risk can be used in managing the
            aggregate risk to the SIPC Fund;
                (3) explore whether objective measures like the volume of
            assets of the SIPC member, previous enforcement and compliance
            actions taken by regulatory bodies against the SIPC member, or
            the number of years the SIPC member has been in operation,
            among other factors, can be used to assess the probability the
            fund will incur a loss with respect to the SIPC member;
                (4) examine the impact that risk-based assessments could
            have on large and small brokers and dealers;
                (5) examine the impact that risk-based assessments could
            have on institutional and retail brokers and dealers; and
                (6) examine the feasibility of SIPC providing additional
            levels of coverage on an optional basis, what those additional
            levels of coverage should be, and the appropriate risked-based
            premium for providing additional coverage.
        (c) Consultation.--The Comptroller General in planning and
    conducting this study shall consult with the Securities and Exchange
    Commission, the Federal Deposit Insurance Corporation, SIPC, the
    Financial Industry Regulatory Authority, and any other public or
    private sector organization that the Comptroller General considers
    appropriate.
        (d) Report Required.--Not later than 1 year after the date of
    enactment of this subtitle, the Comptroller general shall submit a
    report of the results of the study required by this section to the
    Committee on Banking, Housing, and Urban Affairs of the Senate and the
    Committee on Financial Services of the House of Representatives.

                     PART 6--SARBANES-OXLEY ACT AMENDMENTS

    SEC. 7601. PUBLIC COMPANY ACCOUNTING OVERSIGHT BOARD OVERSIGHT OF
                  AUDITORS OF BROKERS AND DEALERS.

        (a) Definitions.--(1) Title I of the Sarbanes-Oxley Act of 2002 is
    amended by adding at the end the following new section:

    ``SEC. 110. DEFINITIONS.

        ``For the purposes of this title, and notwithstanding section 2:
                ``(1) Audit.--The term `audit' means an examination of the
            financial statements, reports, documents, procedures or
            controls, or notices, of any issuer, broker, or dealer by an
            independent public accounting firm in accordance with the rules
            of the Board or the Commission (or, for the period preceding
            the adoption of applicable rules of the Board under section
            103, in accordance with then-applicable generally accepted
            auditing and related standards for such purposes), for the
            purpose of expressing an opinion on such financial statements,
            reports, documents, procedures or controls, or notices.
                ``(2) Audit report.--The term `audit report' means a
            document, report, notice, or other record--
                        ``(A) prepared following an audit performed for
                    purposes of compliance by an issuer, broker, or dealer
                    with the requirements of the securities laws; and
                        ``(B) in which a public accounting firm either--
                                ``(i) sets forth the opinion of that firm
                            regarding a financial statement, report,
                            notice, other document, procedures, or
                            controls; or
                                ``(ii) asserts that no such opinion can be
                            expressed.
                ``(3) Professional standards.--The term `professional
            standards' means--
                        ``(A) accounting principles that are--
                                ``(i) established by the standard setting
                            body described in section 19(b) of the
                            Securities Act of 1933, as amended by this Act,
                            or prescribed by the Commission under section
                            19(a) of that Act (15 U.S.C. 17a(s)) or section
                            13(b) of the Securities Exchange Act of 1934
                            (15 U.S.C. 78a(m)); and
                                ``(ii) relevant to audit reports for
                            particular issuers, brokers, or dealers, or
                            dealt with in the quality control system of a
                            particular registered public accounting firm;
                            and
                        ``(B) auditing standards, standards for attestation
                    engagements, quality control policies and procedures,
                    ethical and competency standards, and independence
                    standards (including rules implementing title II) that
                    the Board or the Commission determines--
                                ``(i) relate to the preparation or issuance
                            of audit reports for issuers, brokers, or
                            dealers; and
                                ``(ii) are established or adopted by the
                            Board under section 103(a), or are promulgated
                            as rules of the Commission.
                ``(4) Broker.--The term `broker' means a broker (as such
            term is defined in section 3(a)(4) of the Securities Exchange
            Act of 1934 (15 U.S.C. 78c(a)(4))) that is required to file a
            balance sheet, income statement, or other financial statement
            under section 17(e)(1)(A) of such Act (15 U.S.C. 78q(e)(1)(A)),
            where such balance sheet, income statement, or financial
            statement is required to be certified by a registered public
            accounting firm.
                ``(5) Dealer.--The term `dealer' means a dealer (as such
            term is defined in section 3(a)(5) of the Securities Exchange
            Act of 1934 (15 U.S.C. 78c(a)(5))) that is required to file a
            balance sheet, income statement, or other financial statement
            under section 17(e)(1)(A) of such Act (15 U.S.C. 78q(e)(1)(A)),
            where such balance sheet, income statement, or financial
            statement is required to be certified by a registered public
            accounting firm.
                ``(6) Self-regulatory organization.--The term `self-
            regulatory organization' has the same meaning as in section
            3(a)(26) of the Securities Exchange Act of 1934 (15 U.S.C.
            78c(a)(26)).''.
        (2) The table of sections in section 1(b) of such Act is amended,
    by inserting after the item relating to section 109 the following new
    item:

    ``Sec. 110. Definitions.''.
        (b) Establishment and Administration of the Public Company
    Accounting Oversight Board.--Section 101 of such Act is amended--
                (1) by striking ``issuers'' each place it appears and
            inserting ``issuers, brokers, and dealers'';
                (2) in subsection (a), by striking ``public companies'' and
            inserting ``companies''; and
                (3) in subsection (a), by striking ``for companies the
            securities of which are sold to, and held by and for, public
            investors''.
        (c) Registration With the Board.--Section 102 of such Act is
    amended--
                (1) in subsection (a), by striking ``Beginning 180 days
            after the date of the determination of the Commission under
            section 101(d), it'' and inserting ``It'';
                (2) in subsections (a) and (b)(2)(G), by striking
            ``issuer'' each place it appears and inserting ``issuer,
            broker, or dealer''; and
                (3) in subsection (b)(2)(A), by striking ``issuers'' and
            inserting ``issuers, brokers, and dealers''.
        (d) Auditing and Independence.--Section 103(a) of such Act is
    amended--
                (1) in paragraph (1), by striking ``and such ethics
            standards'' and inserting ``such ethics standards, and such
            independence standards'';
                (2) in paragraph (2)(A)(iii), by striking ``describe in
            each audit report'' and inserting ``in each audit report for an
            issuer, describe''; and
                (3) in paragraph (2)(B)(i), by striking ``issuers'' and
            inserting ``issuers, brokers, and dealers''.
        (e) Inspections by Registered Accounting Firms.--Subsection (a) of
    Section 104 of such Act is amended--
                (1) by striking ``(a) In General.--The Board shall'' and
            inserting the following:
        ``(a) In General.--
                ``(1) The Board shall''; and
                (2) by adding at the end of such subsection the following:
                ``(2) Inspections of audit report for brokers and
            dealers.--
                        ``(A) The Board may, by rule, conduct and require a
                    program of inspection in accordance with paragraph
                    (a)(1), on a basis to be determined by the Board, of
                    registered public accounting firms that provide one or
                    more audit reports for a broker or dealer. The Board,
                    in establishing such a program, may allow for
                    differentiation among classes of brokers and dealers,
                    as appropriate.
                        ``(B) If the Board determines to establish a
                    program of inspection pursuant to subparagraph (A), the
                    Board shall consider in establishing any inspection
                    schedules whether differing schedules would be
                    appropriate with respect to registered public
                    accounting firms that issue audit reports only for one
                    or more brokers or dealers that do not receive, handle,
                    or hold customer securities or cash or are not a member
                    of the Securities Investor Protection Corporation.
                        ``(C) Any rules of the Board pursuant to this
                    paragraph shall be subject to prior approval by the
                    Commission pursuant to section 107(b) before the rules
                    become effective, including an opportunity for public
                    notice and comment.
                        ``(D) Notwithstanding anything to the contrary in
                    section 102 of this Act, a public accounting firm shall
                    not be required to register with the Board if the
                    public accounting firm is exempt from the inspection
                    program which may be established by the Board under
                    subparagraph (a)(2)(A) of this section.
                ``(3) Conforming amendment.--Section 17 (e)(1)(A) of the
            Securities Exchange Act of 1934 (15 U.S.C. 78q(e)(1)(A)) is
            amended by striking `registered public accounting firm' and
            inserting `independent public accounting firm or by a
            registered public accounting firm if registration is required
            under the Sarbanes-Oxley Act of 2002 as amended.'.''.
        (f) Investigations and Disciplinary Proceedings.--Section
    105(c)(7)(B) of such Act is amended--
                (1) in the subparagraph heading, by inserting ``, broker,
            or dealer'' after ``issuer'';
                (2) by striking ``any issuer'' each place it appears and
            inserting ``any issuer, broker, or dealer''; and
                (3) by striking ``an issuer under this subsection'' and
            inserting ``a registered public accounting firm under this
            subsection''.
        (g) Foreign Public Accounting Firms.--Section 106 of such Act is
    amended--
                (1) in subsection (a)(1), by striking ``issuer'' and
            inserting ``issuer, broker, or dealer''; and
                (2) in subsection (a)(2), by striking ``issuers'' and
            inserting ``issuers, brokers, or dealers''.
        (h) Funding.--Section 109 of such Act is amended--
                (1) in subsection (c)(2), by striking ``subsection (i)''
            and inserting ``subsection (j)'';
                (2) in subsection (d)(2), by striking ``allowing for
            differentiation among classes of issuers, as appropriate'' and
            inserting ``and among brokers and dealers in accordance with
            subsection (h), and allowing for differentiation among classes
            of issuers and brokers and dealers, as appropriate'';
                (3) in subsection (d), by inserting at the end the
            following new paragraph:
                ``(3) Brokers and dealers.--The rules of the Board under
            paragraph (1) shall provide that the allocation, assessment,
            and collection by the Board (or an agent appointed by the
            Board) of the fee established under paragraph (1) with respect
            to brokers and dealers shall not begin until the first day of
            the first full fiscal year beginning after the date of the
            enactment of this paragraph.'';
                (4) by redesignating subsections (h), (i), and (j) as
            subsections (i), (j), and (k), respectively; and
                (5) by inserting after subsection (g) the following new
            subsection:
        ``(h) Allocation of Accounting Support Fees Among Brokers and
    Dealers.--
                ``(1) In general.--Any amount due from brokers and dealers
            (or a particular class of such brokers and dealers) under this
            section to fund the budget of the Board shall be allocated
            among and payable by such brokers and dealers (or such brokers
            and dealers in a particular class, as applicable). A broker or
            dealer's allocation shall be in proportion to the broker or
            dealer's net capital compared to the total net capital of all
            brokers and dealers, in accordance with the rules of the Board.
                ``(2) Obligation to pay.--Every broker or dealer shall pay
            the share of a reasonable annual accounting support fee or fees
            allocated to such broker or dealer under this section.''.
        (i) Referral of Investigations to a Self-regulatory Organization.--
    Section 105(b)(4)(B) of the Sarbanes-Oxley Act of 2002 is amended--
                (1) by redesignating clauses (ii) and (iii) as clauses
            (iii) and (iv), respectively; and
                (2) by inserting after clause (i) the following new clause:
                                ``(ii) to a self-regulatory organization,
                            in the case of an investigation that concerns
                            an audit report for a broker or dealer that is
                            subject to the jurisdiction of such self-
                            regulatory organization;''.
        (j) Use of Documents Related to an Inspection or Investigation.--
    Section 105(b)(5)(B)(ii) of such Act is amended--
                (1) in subclause (III), by striking ``and'';
                (2) in subclause (IV), by striking the comma and inserting
            ``; and''; and
                (3) by inserting after subclause (IV) the following new
            subclause:
                                        ``(V) a self-regulatory
                                    organization, with respect to an audit
                                    report for a broker or dealer that is
                                    subject to the jurisdiction of such
                                    self-regulatory organization,''.

    SEC. 7602. FOREIGN REGULATORY INFORMATION SHARING.

        (a) Definition.--Section 2(a) of the Sarbanes-Oxley Act of 2002 (15
    U.S.C. 7201(a)) is amended by inserting after paragraph (16) the
    following:
                ``(17) Foreign auditor oversight authority.--The term
            `foreign auditor oversight authority' means any governmental
            body or other entity empowered by a foreign government to
            conduct inspections of public accounting firms or otherwise to
            administer or enforce laws related to the regulation of public
            accounting firms.''.
        (b) Availability To Share Information.--Section 105(b)(5) of the
    Sarbanes-Oxley Act of 2002 (15 U.S.C. 7215(b)(5)) is amended by adding
    at the end the following:
                        ``(C) Availability to foreign oversight
                    authorities.--When in the Board's discretion it is
                    necessary to accomplish the purposes of this Act or to
                    protect investors, and without the loss of its status
                    as confidential and privileged in the hands of the
                    Board, all information referred to in subparagraph (A)
                    that relates to a public accounting firm within the
                    inspection authority, or other regulatory or law
                    enforcement jurisdiction, of a foreign auditor
                    oversight authority may be made available to the
                    foreign auditor oversight authority if the foreign
                    auditor oversight authority provides such assurances of
                    confidentiality as the Board determines appropriate.''.
        (c) Conforming Amendment.--Section 105(b)(5)(A) of the Sarbanes-
    Oxley Act of 2002 (15 U.S.C. 7215(b)(5)(A)) is amended by striking
    ``subparagraph (B)'' and inserting ``subparagraphs (B) and (C)''.

    SEC. 7603. EXPANSION OF AUDIT INFORMATION TO BE PRODUCED AND EXCHANGED
                  WITH FOREIGN COUNTERPARTS.

        Section 106 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7216) is
    amended--
                (1) by amending subsection (b) to read as follows:
        ``(b) Production of Documents.--
                ``(1) Production by foreign firms.--If a foreign public
            accounting firm issues an audit report, performs audit work,
            conducts interim reviews, or performs material services upon
            which a registered public accounting firm relies in the conduct
            of an audit or interim review, the foreign public accounting
            firm shall produce its audit work papers and all other
            documents related to any such audit work or interim review to
            the Commission or the Board when requested by the Commission or
            the Board and the foreign public accounting firm shall be
            subject to the jurisdiction of the courts of the United States
            for purposes of enforcement of any request of such documents.
                ``(2) Other production.--Any registered public accounting
            firm that relies, in whole or in part, on the work of a foreign
            public accounting firm in issuing an audit report, performing
            audit work, or conducting an interim review, shall--
                        ``(A) produce the foreign public accounting firm's
                    audit work papers and all other documents related to
                    any such work in response to a request for production
                    by the Commission or the Board; and
                        ``(B) secure the agreement of any foreign public
                    accounting firm to such production, as a condition of
                    its reliance on the work of that foreign public
                    accounting firm.'';
                (2) by redesignating subsection (d) as subsection (g); and
                (3) by inserting after subsection (c) the following new
            subsections:
        ``(d) Service of Requests or Process.--Any foreign public
    accounting firm that performs work for a domestically registered public
    accounting firm shall furnish to the domestically firm a written
    irrevocable consent and power of attorney that designates the domestic
    firm as an agent upon whom may be served any process, pleadings, or
    other papers in any action brought to enforce this section. Any foreign
    public accounting firm that issues an audit report, performs audit
    work, performs interim reviews, or performs other material services
    upon which a registered public accounting firm relies in the conduct of
    an audit or interim review, shall designate to the Commission or the
    Board an agent in the United States upon whom may be served any
    process, pleading, or other papers in any action brought to enforce
    this section or any request by the Commission or the Board under this
    section.
        ``(e) Sanctions.--A willful refusal to comply, in whole in or in
    part, with any request by the Commission or the Board under this
    section, shall be a violation of this Act.
        ``(f) Other Means of Satisfying Production Obligations.--
    Notwithstanding any other provision of this section, the staff of the
    Commission or Board may allow foreign public accounting firms subject
    to this section to meet production obligations under this section
    though alternate means, such as through foreign counterparts of the
    Commission or Board.''.

    SEC. 7604. CONFORMING AMENDMENT RELATED TO REGISTRATION.

        Section 102(b)(3)(A) of the Sarbanes-Oxley Act of 2002 (15 U.S.C.
    7212(b)(3)(A)) is amended by striking ``by the Board'' and inserting
    ``by the Commission or the Board''.

    SEC. 7605. FAIR FUND AMENDMENTS.

        Section 308 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7246(a))
    is amended--
                (1) by amending subsection (a) 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
    or the rules and regulations thereunder, or such person agrees in
    settlement of any such action to such civil penalty, the amount of such
    civil penalty or settlement 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.'';
                (2) in subsection (b), by--
                        (A) striking ``for a disgorgement fund described in
                    subsection (a)'' and inserting ``for a disgorgement
                    fund or other fund described in subsection (a)''; and
                        (B) striking ``in the disgorgement fund'' and
                    inserting ``in such fund''; and
                (3) by striking subsection (e).

    SEC. 7606. EXEMPTION FOR NONACCELERATED FILERS.

        (a) Exemption.--Section 404 of the Sarbanes-Oxley Act of 2002 is
    amended by adding at the end the following:
        ``(c) Exemption for Smaller Issuers.--Subsection (b) shall not
    apply with respect to any audit report prepared for an issuer that is
    not an accelerated filer within the meaning Rule 12b-2 of the
    Commission (17 CFR 240.12b-2).''.
        (b) Study.--The Securities and Exchange Commission shall conduct a
    study to determine how the Commission could reduce the burden of
    complying with section 404(b) of the Sarbanes-Oxley Act of 2002 for
    companies whose market capitalization is between $75,000,000 and
    $250,000,000 for the relevant reporting period while maintaining
    investor protections for such companies. The study shall also consider
    whether any such methods of reducing the compliance burden or a
    complete exemption for such companies from compliance with such section
    would encourage companies to list on exchanges in the United States in
    their initial public offerings. Not later than 9 months after the date
    of the enactment of this subtitle, the Commission shall transmit a
    report of such study to Congress.

    SEC. 7607. WHISTLEBLOWER PROTECTION AGAINST RETALIATION BY A SUBSIDIARY
                  OF AN ISSUER.

        Section 1514A(a) of title 18, United States Code, is amended by
    inserting ``including any subsidiary or affiliate whose financial
    information is included in the consolidated financial statements of
    such company,'' after ``(15 U.S.C. 78o(d)),''.

    SEC. 7608. CONGRESSIONAL ACCESS TO INFORMATION.

        Section 101 of the Sarbanes-Oxley Act of 2002 is amended by adding
    at the end the following:
        ``(i) Congressional Access to Information.--Nothing in this section
    shall prevent the Board from responding to requests for reports from
    the Committee's specified under subsection (h) about the activities or
    programs of the Board, provided that any confidential information
    contained therein shall be subject to the provisions of section
    105(b)(5).''.

    SEC. 7609. CREATION OF OMBUDSMAN FOR THE PCAOB.

        (a) Ombudsman.--Title I of the Sarbanes-Oxley Act of 2002 (15
    U.S.C. 7211 et seq.), as amended by section 7601(a)(1), is further
    amended by adding at the end the following new section:

    ``SEC. 111. OMBUDSMAN.

        ``(a) Establishment Required.--Not later than 180 days after the
    date of enactment of the Investor Protection Act, the Board shall
    appoint an ombudsman for the Board. The Ombudsman shall report directly
    to the Chairman.
        ``(b) Duties of Ombudsman.--The ombudsman appointed in accordance
    with subsection (a) for the Board shall--
                ``(1) act as a liaison between the Board and--
                        ``(A) any registered public accounting firm or
                    issuer with respect to issues or disputes concerning
                    the preparation or issuance of any audit report with
                    respect to that issuer; and
                        ``(B) any affected registered public accounting
                    firm or issuer with respect to--
                                ``(i) any problem such firm or issuer may
                            have in dealing with the Board resulting from
                            the regulatory activities of the Board,
                            particularly with regard to the implementation
                            of section 404; and
                                ``(ii) issues caused by the relationships
                            of registered public accounting firms and
                            issuers generally;
                ``(2) assure that safeguards exist to encourage
            complainants to come forward and to preserve confidentiality;
            and
                ``(3) carry out such activities, and any other activities
            assigned by the Board, in accordance with guidelines prescribed
            by the Board.''.
        (b) Conforming Amendment.--The table of sections in section 1(b) of
    such Act is amended, by inserting after the item relating to section
    110 (as added by section 601(a)(2)) the following new item:

    ``Sec. 111. Ombudsman.''.

    SEC. 7610. AUDITING OVERSIGHT BOARD.

        The Sarbanes-Oxley Act of 2002 is amended--
                (1) in section 2(a)(5), by striking ``Public Company
            Accounting Oversight Board'' and inserting ``Auditing Oversight
            Board'';
                (2) in section 101(a), by striking ``Public Company
            Accounting Oversight Board'' and inserting ``Auditing Oversight
            Board''; and
                (3) in the heading of title I, by striking ``PUBLIC COMPANY
            ACCOUNTING OVERSIGHT BOARD'' and inserting ``AUDITING OVERSIGHT
            BOARD''.

                      PART 7--SENIOR INVESTMENT PROTECTION

    SEC. 7701. FINDINGS.

        Congress finds that--
                (1) many seniors are targeted by salespersons and advisers
            using misleading certifications and professional designations;
                (2) many certifications and professional designations used
            by salespersons and advisers represent limited training or
            expertise, and may in fact be of no value with respect to
            advising seniors on financial and estate planning matters, and
            far too often, such designations are obtained simply by
            attending a weekend seminar and passing an open book, multiple
            choice test;
                (3) many seniors have lost their life savings because
            salespersons and advisers holding a misleading designation have
            steered them toward products that were unsuitable for them,
            given their retirement needs and life expectancies;
                (4) seniors have a right to clearly know whether they are
            working with a qualified adviser who understands the products
            and is working in their best interest or a self-interested
            salesperson or adviser advocating particular products; and
                (5) many existing State laws and enforcement measures
            addressing the use of certifications, professional
            designations, and suitability standards in selling financial
            products to seniors are inadequate to protect senior investors
            from salespersons and advisers using such designations.

    SEC. 7702. DEFINITIONS.

        For purposes of this part:
                (1) Misleading designation.--The term ``misleading
            designation''--
                        (A) means the use of a purported certification,
                    professional designation, or other credential, that
                    indicates or implies that a salesperson or adviser has
                    special certification or training in advising or
                    servicing seniors; and
                        (B) does not include any legitimate certification,
                    professional designation, license, or other credential,
                    if--
                                (i) it has been offered by an academic
                            institution having regional accreditation; or
                                (ii) it meets the standards for
                            certifications, licenses, and professional
                            designations outlined by the North American
                            Securities Administrators Association (in this
                            part referred to as the ``NASAA'') Model Rule
                            on the Use of Senior-Specific Certifications
                            and Professional Designations, as in effect on
                            the date of the enactment of this subtitle, or
                            any successor thereto, or it was issued by or
                            obtained from any State.
                (2) Financial product.--The term ``financial product''
            means securities, insurance products (including insurance
            products which pay a return, whether fixed or variable), and
            bank and loan products.
                (3) Misleading or fraudulent marketing.--The term
            ``misleading or fraudulent marketing'' means the use of a
            misleading designation when selling to or advising a senior
            about the sale of a financial product.
                (4) Senior.--The term ``senior'' means any individual who
            has attained the age of 62 years or more.
                (5) State.--The term ``State'' means each of the 50 States,
            the District of Columbia, and the unincorporated territories of
            Puerto Rico and the U.S. Virgin Islands.

    SEC. 7703. GRANTS TO STATES FOR ENHANCED PROTECTION OF SENIORS FROM
                  BEING MISLED BY FALSE DESIGNATIONS.

        (a) Grant Program.--The Securities and Exchange Commission (in this
    part referred to as the ``Commission'')--
                (1) shall establish a program in accordance with this part
            to provide grants to States--
                        (A) to investigate and prosecute misleading and
                    fraudulent marketing practices; or
                        (B) to develop educational materials and training
                    aimed at reducing misleading and fraudulent marketing
                    of financial products toward seniors; and
                (2) may establish such performance objectives, reporting
            requirements, and application procedures for States and State
            agencies receiving grants under this part as the Commission
            determines are necessary to carry out and assess the
            effectiveness of the program under this part.
        (b) Use of Grant Amounts.--A grant under this part may be used
    (including through subgrants) by the State or the appropriate State
    agency designated by the State--
                (1) to fund additional staff to identify, investigate, and
            prosecute (through civil, administrative, or criminal
            enforcement actions) cases involving misleading or fraudulent
            marketing of financial products to seniors;
                (2) to fund technology, equipment, and training for
            regulators, prosecutors, and law enforcement in order to
            identify salespersons and advisers who target seniors through
            the use of misleading designations;
                (3) to fund technology, equipment, and training for
            prosecutors to increase the successful prosecution of those
            targeting seniors with the use of misleading designations;
                (4) to provide educational materials and training to
            regulators on the appropriateness of the use of designations by
            salespersons and advisers of financial products;
                (5) to provide educational materials and training to
            seniors to increase their awareness and understanding of
            designations; and
                (6) to develop comprehensive plans to combat misleading or
            fraudulent marketing of financial products to seniors.
        (c) Grant Requirements.--
                (1) Maximum.--The amount of a grant under this part may not
            exceed $1,000,000 per fiscal year per State, if all
            requirements of paragraphs (2), (3), (4), and (5) are met. Such
            amount shall be limited to $250,000 per fiscal year per State
            in any case in which the State meets the requirements of--
                        (A) paragraphs (2) and (3), but not each of
                    paragraphs (4) and (5); or
                        (B) paragraphs (4) and (5), but not each of
                    paragraphs (2) and (3).
                (2) Standard designation rules for securities.--A State
            shall have adopted rules on the appropriate use of designations
            in the offer or sale of securities or investment advice, which
            shall meet or exceed the minimum requirements of the NASAA
            Model Rule on the Use of Senior-Specific Certifications and
            Professional Designations, as in effect on the date of the
            enactment of this subtitle, or any successor thereto.
                (3) Suitability rules for securities.--A State shall have
            adopted standard rules on the suitability requirements in the
            sale of securities, which shall, to the extent practicable,
            conform to the minimum requirements on suitability imposed by
            self-regulatory organization rules under the securities laws
            (as defined in section 3 of the Securities Exchange Act of
            1934).
                (4) Application of fiduciary duty for personalized
            investment advice about securities.--Nothing in this section
            shall diminish in any manner nor supersede the standard of
            conduct applicable to all brokers, dealers and investment
            advisers providing personalized investment advice about
            securities as set forth in section 7103 of this Act.
                (5) Standard designation rules for insurance products.--A
            State shall have adopted standard rules on the appropriate use
            of designations in the sale of insurance products, which shall
            meet or exceed minimum requirements of the National Association
            of Insurance Commissioners Model Regulation on the Use of
            Senior-Specific Certifications and Professional Designations in
            the Sale of Life Insurance and Annuities, as in effect on the
            date of the enactment of this subtitle, or any successor
            thereto.
                (6) Suitability and supervision rules for annuity
            products.--A State shall have adopted rules that govern
            suitability requirements in the sale of annuities which shall
            meet or exceed the minimum requirements established by the
            National Association of Insurance Commissioners Suitability in
            Annuity Transactions Model Regulation in effect on the date of
            the enactment of this Act, or any successor thereto.

    SEC. 7704. APPLICATIONS.

        To be eligible for a grant under this part, the State or
    appropriate State agency shall submit to the Commission a proposal to
    use the grant money to protect seniors from misleading or fraudulent
    marketing techniques in the offer and sale of financial products, which
    application shall--
                (1) identify the scope of the problem;
                (2) describe how the proposed program will help to protect
            seniors from misleading or fraudulent marketing in the sale of
            financial products, including, at a minimum--
                        (A) by proactively identifying seniors who are
                    victims of misleading and fraudulent marketing in the
                    offer and sale of financial products;
                        (B) how the proposed program can assist in the
                    investigation and prosecution of those using misleading
                    or fraudulent marketing in the offer and sale of
                    financial products to seniors; and
                        (C) how the proposed program can help discourage
                    and reduce future cases of misleading or fraudulent
                    marketing in the offer and sale of financial products
                    to seniors; and
                (3) describe how the proposed program is to be integrated
            with other existing State efforts.

    SEC. 7705. LENGTH OF PARTICIPATION.

        A State receiving a grant under this part shall be provided
    assistance funds for a period of 3 years, after which the State may
    reapply for additional funding.

    SEC. 7706. AUTHORIZATION OF APPROPRIATIONS.

        There are authorized to be appropriated to carry out this part,
    $16,000,000 for each of the fiscal years 2011 through 2015.

              PART 8--REGISTRATION OF MUNICIPAL FINANCIAL ADVISORS

    SEC. 7801. MUNICIPAL FINANCIAL ADVISER REGISTRATION REQUIREMENT.

        (a) In General.--The Securities Exchange Act of 1934 (as amended by
    section 3204) is amended by inserting after section 15F (15 U.S.C. 78o-
    7) the following new section:

    ``SEC. 15G. MUNICIPAL FINANCIAL ADVISER REGISTRATION REQUIREMENT.

        ``(a)(1)(A) It shall be unlawful for any person to make use of the
    mails or any means or instrumentality of interstate commerce to act as
    a municipal financial adviser unless such person is registered as a
    municipal financial adviser in accordance with subsection (b).
        ``(B) Subparagraph (A) shall not apply to a natural person
    associated with a municipal financial adviser, as long as such adviser
    is registered in accordance with subsection (b) and is not a natural
    person.
        ``(2) The Commission, by rule or order, as it deems consistent with
    the public interest and the protection of investors, may conditionally
    or unconditionally exempt from paragraph (1) of this section any
    municipal financial adviser or class of municipal financial advisers
    specified in such rule or order.
        ``(b)(1) A municipal financial adviser may be registered by filing
    with the Commission an application for registration in such form and
    containing such information and documents concerning such municipal
    financial adviser and any persons associated with such municipal
    financial adviser as the Commission, by rule, may prescribe as
    necessary or appropriate in the public interest or for the protection
    of investors. Within 45 days of the date of the filing of such
    application (or within such longer period as to which the applicant
    consents), the Commission shall--
        ``(A) by order grant registration; or
        ``(B) institute proceedings to determine whether registration
    should be denied. Such proceedings shall include notice of the grounds
    for denial under consideration and opportunity for hearing and shall be
    concluded within 120 days of the date of the filing of the application
    for registration. At the conclusion of such proceedings, the
    Commission, by order, shall grant or deny such registration. The
    Commission may extend the time for conclusion of such proceedings for
    up to 90 days if it finds good cause for such extension and publishes
    its reasons for so finding, or for such longer period as to which the
    applicant consents.
                    The Commission shall grant such registration if the
                    Commission finds that the requirements of this section
                    are satisfied. The Commission shall deny such
                    registration if it does not make such a finding or if
                    it finds that if the applicant were so registered, its
                    registration would be subject to suspension or
                    revocation under paragraph (4).
        ``(2) An application for registration of a municipal financial
    adviser to be formed or organized may be made by a municipal financial
    adviser to which the municipal financial adviser to be formed or
    organized is to be the successor. Such application, in such form as the
    Commission, by rule, may prescribe, shall contain such information and
    documents concerning the applicant, the successor, and any persons
    associated with the applicant or the successor, as the Commission, by
    rule, may prescribe as necessary or appropriate in the public interest
    or for the protection of investors. The grant or denial of registration
    to such an applicant shall be in accordance with the procedures set
    forth in paragraph (1) of this subsection. If the Commission grants
    such registration, the registration shall terminate on the 45th day
    after the effective date thereof, unless prior thereto the successor
    shall, in accordance with such rules and regulations as the Commission
    may prescribe, adopt the application for registration as its own.
        ``(3) Any provision of this title (other than section 5 and
    subsection (a) of this section) which prohibits any act, practice, or
    course of business if the mails or any means or instrumentality of
    interstate commerce is used in connection therewith shall also prohibit
    any such act, practice, or course of business by any registered
    municipal financial adviser or any person acting on behalf of such a
    municipal financial adviser, irrespective of any use of the mails or
    any means or instrumentality of interstate commerce in connection
    therewith.
        ``(4) The Commission, by order, shall censure, place limitations on
    the activities, functions, or operations of, suspend for a period not
    exceeding 12 months, or revoke the registration of any municipal
    financial adviser if it finds, on the record after notice and
    opportunity for hearing, that such censure, placing of limitations,
    suspension, or revocation is in the public interest and that such
    municipal financial adviser, whether prior or subsequent to becoming
    such, or any person associated with such municipal financial adviser,
    whether prior or subsequent to becoming so associated--
                ``(A) has willfully made or caused to be made in any
            application for registration or report required to be filed
            with the Commission or with any other appropriate regulatory
            agency under this title, or in any proceeding before the
            Commission with respect to registration, any statement which
            was at the time and in the light of the circumstances under
            which it was made false or misleading with respect to any
            material fact, or has omitted to state in any such application
            or report any material fact which is required to be stated
            therein;
                ``(B) has been convicted within 10 years preceding the
            filing of any application for registration or at any time
            thereafter of any felony or misdemeanor or of a substantially
            equivalent crime by a foreign court of competent jurisdiction
            which the Commission finds--
                        ``(i) involves the purchase or sale of any
                    security, the taking of a false oath, the making of a
                    false report, bribery, perjury, burglary, any
                    substantially equivalent activity however denominated
                    by the laws of the relevant foreign government, or
                    conspiracy to commit any such offense;
                        ``(ii) arises out of the conduct of the business of
                    a municipal financial adviser, broker, dealer,
                    municipal securities dealer, government securities
                    broker, government securities dealer, investment
                    adviser, bank, insurance company, fiduciary, transfer
                    agent, nationally recognized statistical rating
                    organization, foreign person performing a function
                    substantially equivalent to any of the above, or entity
                    or person required to be registered under the Commodity
                    Exchange Act (7 U.S.C. 1 et seq.) or any substantially
                    equivalent foreign statute or regulation;
                        ``(iii) involves the larceny, theft, robbery,
                    extortion, forgery, counterfeiting, fraudulent
                    concealment, embezzlement, fraudulent conversion, or
                    misappropriation of funds, or securities, or
                    substantially equivalent activity however denominated
                    by the laws of the relevant foreign government; or
                        ``(iv) involves the violation of section 152, 1341,
                    1342, or 1343 or chapter 25 or 47 of title 18, United
                    States Code, or a violation of a substantially
                    equivalent foreign statute;
                ``(C) is permanently or temporarily enjoined by order,
            judgment, or decree of any court of competent jurisdiction from
            acting as a municipal financial adviser, investment adviser,
            underwriter, broker, dealer, municipal securities dealer,
            government securities broker, government securities dealer,
            transfer agent, nationally recognized statistical rating
            organization, foreign person performing a function
            substantially equivalent to any of the above, or entity or
            person required to be registered under the Commodity Exchange
            Act or any substantially equivalent foreign statute or
            regulation, or as an affiliated person or employee of any
            investment company, bank, insurance company, foreign entity
            substantially equivalent to any of the above, or entity or
            person required to be registered under the Commodity Exchange
            Act or any substantially equivalent foreign statute or
            regulation or from engaging in or continuing any conduct or
            practice in connection with any such activity, or in connection
            with the purchase or sale of any security;
                ``(D) has willfully violated any provision of the
            Securities Act of 1933, the Investment Advisers Act of 1940,
            the Investment Company Act of 1940, the Commodity Exchange Act,
            this title, the rules or regulations under any of such
            statutes, or the rules of the Municipal Securities Rulemaking
            Board, or is unable to comply with any such provision;
                ``(E) has willfully aided, abetted, counseled, commanded,
            induced, or procured the violation by any other person of any
            provision of the Securities Act of 1933, the Investment
            Advisers Act of 1940, the Investment Company Act of 1940, the
            Commodity Exchange Act, this title, the rules or regulations
            under any of such statutes, or the rules of the Municipal
            Securities Rulemaking Board, or has failed reasonably to
            supervise, with a view to preventing violations of the
            provisions of such statutes, rules, and regulations, another
            person who commits such a violation, if such other person is
            subject to his supervision. For the purposes of this
            subparagraph, no person shall be deemed to have failed
            reasonably to supervise any other person, if--
                        ``(i) there have been established procedures, and a
                    system for applying such procedures, which would
                    reasonably be expected to prevent and detect, insofar
                    as practicable, any such violation by such other
                    person; and
                        ``(ii) such person has reasonably discharged the
                    duties and obligations incumbent upon him by reason of
                    such procedures and system without reasonable cause to
                    believe that such procedures and system were not being
                    complied with;
                ``(F) is subject to any order of the Commission barring or
            suspending the right of the person to be associated with a
            municipal financial adviser;
                ``(G) has been found by a foreign financial regulatory
            authority to have--
                        ``(i) made or caused to be made in any application
                    for registration or report required to be filed with a
                    foreign financial regulatory authority, or in any
                    proceeding before a foreign financial regulatory
                    authority with respect to registration, any statement
                    that was at the time and in the light of the
                    circumstances under which it was made false or
                    misleading with respect to any material fact, or has
                    omitted to state in any application or report to the
                    foreign financial regulatory authority any material
                    fact that is required to be stated therein;
                        ``(ii) violated any foreign statute or regulation
                    regarding transactions in securities, or contracts of
                    sale of a commodity for future delivery, traded on or
                    subject to the rules of a contract market or any board
                    of trade; or
                        ``(iii) aided, abetted, counseled, commanded,
                    induced, or procured the violation by any person of any
                    provision of any statutory provisions enacted by a
                    foreign government, or rules or regulations thereunder,
                    empowering a foreign financial regulatory authority
                    regarding transactions in securities, or contracts of
                    sale of a commodity for future delivery, traded on or
                    subject to the rules of a contract market or any board
                    of trade, or has been found, by a foreign financial
                    regulatory authority, to have failed reasonably to
                    supervise, with a view to preventing violations of such
                    statutory provisions, rules, and regulations, another
                    person who commits such a violation, if such other
                    person is subject to his supervision; or
                ``(H) is subject to any final order of a State securities
            commission (or any agency or officer performing like
            functions), State authority that supervises or examines banks,
            savings associations, or credit unions, State insurance
            commission (or any agency or office performing like functions),
            an appropriate Federal banking agency (as defined in section 3
            of the Federal Deposit Insurance Act (12 U.S.C. 1813(q))), or
            the National Credit Union Administration, that--
                        ``(i) bars such person from association with an
                    entity regulated by such commission, authority, agency,
                    or officer, or from engaging in the business of
                    securities, insurance, banking, savings association
                    activities, or credit union activities; or
                        ``(ii) constitutes a final order based on
                    violations of any laws or regulations that prohibit
                    fraudulent, manipulative, or deceptive conduct.
        ``(5) Pending final determination whether any registration under
    this subsection shall be revoked, the Commission, by order, may suspend
    such registration, if such suspension appears to the Commission, after
    notice and opportunity for hearing, to be necessary or appropriate in
    the public interest or for the protection of investors. Any registered
    municipal financial adviser may, upon such terms and conditions as the
    Commission deems necessary or appropriate in the public interest or for
    the protection of investors, withdraw from registration by filing a
    written notice of withdrawal with the Commission. If the Commission
    finds that any registered municipal financial adviser is no longer in
    existence or has ceased to do business as a municipal financial
    adviser, the Commission, by order, shall cancel the registration of
    such municipal financial adviser.
        ``(6)(A) With respect to any person who is associated, who is
    seeking to become associated, or, at the time of the alleged
    misconduct, who was associated or was seeking to become associated with
    a municipal financial adviser, the Commission, by order, shall censure,
    place limitations on the activities or functions of such person, or
    suspend for a period not exceeding 12 months, or bar such person from
    being associated with a broker, dealer, investment adviser, municipal
    securities dealer, transfer agent, nationally recognized statistical
    rating organization, or municipal financial adviser, if the Commission
    finds, on the record after notice and opportunity for a hearing, that
    such censure, placing of limitations, suspension, or bar is in the
    public interest and that such person--
                ``(i) has committed or omitted any act, or is subject to an
            order or finding, enumerated in subparagraph (A), (D), (E),
            (G), or (H) of paragraph (4) of this subsection;
                ``(ii) has been convicted of any offense specified in
            subparagraph (B) of such paragraph (4) within 10 years of the
            commencement of the proceedings under this paragraph; or
                ``(iii) is enjoined from any action, conduct, or practice
            specified in subparagraph (C) of such paragraph (4).
        ``(B) It shall be unlawful--
                ``(i) for any person as to whom an order under subparagraph
            (A) is in effect, without the consent of the Commission,
            willfully to become, or to be, associated with a municipal
            financial adviser in contravention of such order; or
                ``(ii) for any municipal financial adviser to permit such a
            person, without the consent of the Commission, to become or
            remain, a person associated with the municipal financial
            adviser in contravention of such order, if such municipal
            financial adviser knew, or in the exercise of reasonable care
            should have known, of such order.
        ``(7) No registered municipal financial adviser shall act as such
    unless it meets such standards of operational capability and such
    municipal financial adviser and all natural persons associated with
    such municipal financial adviser meet such standards of training,
    experience, competence, and such other qualifications as the Commission
    finds necessary or appropriate in the public interest or for the
    protection of investors. The Commission shall establish such standards
    by rules and regulations, which may--
                ``(A) specify that all or any portion of such standards
            shall be applicable to any class of municipal financial
            advisers and persons associated with municipal financial
            advisers;
                ``(B) require persons in any such class to pass tests
            prescribed in accordance with such rules and regulations, which
            tests shall, with respect to any class of partners, officers,
            or supervisory employees (which latter term may be defined by
            the Commission's rules and regulations) engaged in the
            management of the municipal financial adviser, include
            questions relating to bookkeeping, accounting, supervision of
            employees, maintenance of records, and other appropriate
            matters; and
                ``(C) provide that persons in any such class other than
            municipal financial advisers and partners, officers, and
            supervisory employees of municipal financial advisers, may be
            qualified solely on the basis of compliance with such standards
            of training and such other qualifications as the Commission
            finds appropriate.
    The Commission, by rule, may prescribe reasonable fees and charges to
    defray its costs in carrying out this paragraph, including, but not
    limited to, fees for any test administered by it or under its
    direction.
        ``(c)(1)(A) No municipal financial adviser shall make use of the
    mails or any means or instrumentality of interstate commerce in
    connection with which such municipal financial adviser engages in any
    fraudulent, deceptive, or manipulative act or practice or violates such
    rules and regulations regarding conflicts of interest or fair
    practices, including but not limited to rules and regulations related
    to political contributions, as the Commission shall prescribe in the
    public interest or for the protection of investors or to maintain fair
    and orderly markets.
        ``(B) The Commission shall, for the purposes of this paragraph as
    the Commission finds necessary or appropriate in the public interest or
    for the protection of investors, by rules and regulations define, and
    prescribe means reasonably designed to prevent, such acts and practices
    as are fraudulent, deceptive, or manipulative.
        ``(2) If the Commission finds, after notice and opportunity for a
    hearing, that any person subject to the provisions of this section or
    any rule or regulation thereunder has failed to comply with any such
    provision, rule, or regulation in any material respect, the Commission
    may publish its findings and issue an order requiring such person, and
    any person who was a cause of the failure to comply due to an act or
    omission the person knew or should have known would contribute to the
    failure to comply, to comply, or to take steps to effect compliance,
    with such provision or such rule or regulation thereunder upon such
    terms and conditions and within such time as the Commission may specify
    in such order.
        ``(d) Every registered municipal financial adviser shall establish,
    maintain, and enforce written policies and procedures reasonably
    designed, taking into consideration the nature of such municipal
    financial adviser's business, to prevent the misuse in violation of
    this title, or the rules or regulations thereunder, of material,
    nonpublic information by such municipal financial adviser or any person
    associated with such municipal financial adviser. The Commission, as it
    deems necessary or appropriate in the public interest or for the
    protection of investors, shall adopt rules or regulations to require
    specific policies or procedures reasonably designed to prevent misuse
    in violation of this title (or the rules or regulations thereunder) of
    material, nonpublic information.
        ``(e) A municipal financial adviser and any person associated with
    such municipal financial adviser shall be deemed to have a fiduciary
    duty to any municipal securities issuer for whom such municipal
    financial adviser acts as a municipal financial adviser. A municipal
    financial adviser may not engage in any act, practice, or course of
    business which is not consistent with a municipal financial adviser's
    fiduciary duty. The Commission shall, for the purposes of this
    paragraph, by rules and regulations define, and prescribe means
    reasonably designed to prevent, such acts, practices, and courses of
    business as are not consistent with a municipal financial adviser's
    fiduciary duty to its clients.''.
        (b) Definition.--Section 3(a) of the Securities Exchange Act of
    1934 (15 U.S.C. 78c(a)) (as amended by section 3201(6)) is amended by
    adding at the end the following new paragraphs:
                ``(78) Municipal financial adviser.--
                        ``(A) The term `municipal financial adviser' means
                    a person who, for compensation, engages in the business
                    of--
                                ``(i) providing advice to a municipal
                            securities issuer with respect to--
                                        ``(I) the issuance or proposed
                                    issuance of securities, including any
                                    remarketing of municipal securities
                                    directly or indirectly by or on behalf
                                    of a municipal securities issuer;
                                        ``(II) the investment of proceeds
                                    from securities issued by such
                                    municipal securities issuer;
                                        ``(III) the hedging of any risks
                                    associated with subclause (I) or (II),
                                    including advice as to swap agreements
                                    (as defined in section 206A of the
                                    Gramm-Leach-Bliley Act regardless of
                                    whether the counterparties constitute
                                    eligible contract participants); or
                                        ``(IV) preparation of disclosure
                                    documents in connection with the
                                    issuance, proposed issuance, or
                                    previous issuance of securities issued
                                    by a municipal securities issuer,
                                    including, without limitation, official
                                    statements and documents prepared in
                                    connection with a written agreement or
                                    contract for the benefit of holders of
                                    such securities described in section
                                    240.15c2-12 of title 17, Code of
                                    Federal Regulations;
                                ``(ii) assisting a municipal securities
                            issuer in selecting or negotiating guaranteed
                            investment contracts or other investment
                            products; or
                                ``(iii) assisting any municipal securities
                            issuer in the primary offering of securities
                            not involving a public offering.
                        ``(B) Such term does not include--
                                ``(i) an attorney, if the attorney is
                            offering advice or providing services that are
                            of a traditional legal nature;
                                ``(ii) a nationally recognized statistical
                            rating organization to the extent it is
                            involved in the process of developing credit
                            ratings;
                                ``(iii) a registered broker-dealer when
                            acting as an underwriter, as such term is
                            defined in section 2(a)(11) of the Securities
                            Act of 1933 (15 U.S.C. 77b(a)(11));
                                ``(iv) a State or any political subdivision
                            thereof; or
                                ``(v) the independent accountant that
                            audits the financial statements of the
                            municipal securities issuer.
                ``(79) Municipal securities issuer.--The term `municipal
            securities issuer' means--
                        ``(A) any entity that has the ability to issue a
                    security the interest on which is excludable from gross
                    income under section 103 of the Internal Revenue Code
                    of 1986 and the regulations thereunder; or
                        ``(B) any person who receives the proceeds
                    generated from the issuance of municipal securities.
                ``(80) Person associated with a municipal financial
            adviser; associated person of a municipal financial adviser.--
            The term `person associated with a municipal financial adviser'
            or `associated person of a municipal financial adviser' means
            any partner, officer, director, or branch manager of such
            municipal financial adviser (or any person occupying a similar
            status or performing similar functions), any person directly or
            indirectly controlling, controlled by, or under common control
            with such municipal financial adviser, or any employee of such
            municipal financial adviser, except that any person associated
            with a municipal financial adviser whose functions are solely
            clerical or ministerial shall not be included in the meaning of
            such term for purposes of section 15G(b) (other than paragraph
            (6) thereof).''.

    SEC. 7802. CONFORMING AMENDMENTS.

        (a) Securities Exchange Act of 1934 .--The Securities Exchange Act
    of 1934 is amended--
                (1) in section 15(b)(4)(B)(ii) (15 U.S.C.
            78o(b)(4)(B)(ii)), by inserting ``municipal finance adviser,''
            after ``nationally recognized statistical rating
            organization,'';
                (2) in section 15(b)(4)(C) (15 U.S.C. 78o(b)(4)(C)), by
            inserting ``municipal finance adviser,'' after ``nationally
            recognized statistical rating organization,''; and
                (3) in section 17(a)(1) (15 U.S.C. 78q(a)(1)), by inserting
            ``registered municipal financial adviser,'' after ``nationally
            recognized statistical rating organization,''.
        (b) Investment Company Act of 1940.--The Investment Company Act of
    1940 is amended--
                (1) in section 2(a) (15 U.S.C. 80a-2(a)), by inserting at
            the end the following new paragraph:
                ``(54) The term `municipal finance adviser' has the same
            meaning as in section 3 of the Securities Exchange Act of
            1934.'';
                (2) in section 9(a)(1) (15 U.S.C. 80a-9(a)(1)), by
            inserting ``municipal finance adviser,'' after ``credit rating
            agency,''; and
                (3) in section 9(a)(2) (15 U.S.C. 80a-9(a)(2)), by
            inserting ``municipal finance adviser,'' after ``credit rating
            agency,''.
        (c) Investment Advisers Act of 1940.--The Investment Advisers Act
    of 1940 is amended--
                (1) in section 202(a) (15 U.S.C. 80b-2(a)), by inserting at
            the end the following new paragraph:
                ``(31) The term `municipal finance adviser' has the same
            meaning as in section 3 of the Securities Exchange Act of
            1934.'';
                (2) in section 203(e)(2)(B) (15 U.S.C. 80b-3(e)(2)(B)), by
            inserting ``municipal finance adviser,'' after ``credit rating
            agency,''; and
                (3) in section 203(e)(4) (15 U.S.C. 80b-3(e)(4)) is amended
            by inserting ``municipal finance adviser,'' after ``credit
            rating agency,''.

    SEC. 7803. EFFECTIVE DATES.

        (a) In General.--The amendments made by this part shall take effect
    30 days after the date of the enactment of this subtitle.
        (b) Effective Date and Requirements for Regulations.--
    Notwithstanding subsection (a), the Securities and Exchange Commission
    shall, within 120 days after the date of the enactment of this
    subtitle, publish for notice and public comment such regulations as are
    initially required to implement this part, and shall take final action
    with respect to such regulations not later than 270 days after the date
    of enactment of this subtitle.
        (c) Registration Date.--No person may continue to act as a
    municipal financial adviser, as such term is defined in section
    3(a)(65) of the Securities Exchange Act of 1934 (as added by this
    part), after 30 days after the date the regulations described in
    subsection (b) become effective unless such person has been registered
    as required by the amendment made by section 7701 of this part.

                       TITLE VI--FEDERAL INSURANCE OFFICE

    SEC. 8001. SHORT TITLE.

        This title may be cited as the ``Federal Insurance Office Act of
    2009''.

    SEC. 8002. FEDERAL INSURANCE OFFICE ESTABLISHED.

        (a) Establishment of Office.--Subchapter I of chapter 3 of title
    31, United States Code, is amended--
                (1) by transferring and inserting section 312 after section
            313;
                (2) by redesignating sections 313 and 312 (as so
            transferred) as sections 312 and 315, respectively; and
                (3) by inserting after section 312 (as so redesignated) the
            following new sections:

    ``SEC. 313. FEDERAL INSURANCE OFFICE.

        ``(a) Establishment of Office.--There is established the Federal
    Insurance Office as an office in the Department of the Treasury.
        ``(b) Leadership.--The Office shall be headed by a Director, who
    shall be appointed by the Secretary of the Treasury. The position of
    such Director shall be a career reserved position in the Senior
    Executive Service.
        ``(c) Functions.--
                ``(1) Authority pursuant to direction of secretary.--The
            Office shall have the authority, pursuant to the direction of
            the Secretary, as follows:
                        ``(A) To monitor the insurance industry to gain
                    expertise.
                        ``(B) To identify issues or gaps in the regulation
                    of insurers that could contribute to a systemic crisis
                    in the insurance industry or the United States
                    financial system.
                        ``(C) To monitor the extent to which traditionally
                    underserved communities and consumers, minorities (as
                    such term is defined in 24 section 1204(c) of the
                    Financial Institutions Reform, Recovery, and
                    Enforcement Act of 1989 (12 U.S.C. 1811 note)), and
                    low- and moderate-income persons have access to
                    affordable insurance products regarding all lines of
                    insurance, except health insurance.
                        ``(D) To recommend to the Financial Services
                    Oversight Council that it designate an insurer,
                    including its affiliates, as an entity subject to
                    stricter standards.
                        ``(E) To assist the Secretary in administering the
                    Terrorism Insurance Program established in the
                    Department of the Treasury under the Terrorism Risk
                    Insurance Act of 2002 (15 U.S.C. 6701 note).
                        ``(F) To coordinate Federal efforts and develop
                    Federal policy on prudential aspects of international
                    insurance matters, including representing the United
                    States as appropriate in the International Association
                    of Insurance Supervisors or any successor organization
                    and assisting the Secretary in negotiating covered
                    agreements.
                        ``(G) To determine, in accordance with subsection
                    (f), whether State insurance measures are preempted by
                    covered agreements.
                        ``(H) To consult with the States regarding
                    insurance matters of national importance and prudential
                    insurance matters of international importance.
                        ``(I) To perform such other related duties and
                    authorities as may be assigned to it by the Secretary.
                ``(2) Advisory functions.--The Office shall advise the
            Secretary on major domestic and prudential international
            insurance policy issues.
                ``(3) Advisory capacity on council.--The Director shall
            serve in an advisory capacity on the Financial Services
            Oversight Council established under the Financial Stability
            Improvement Act of 2009.
        ``(d) Scope.--The authority of the Office shall extend to all lines
    of insurance except health insurance, as determined by the Secretary in
    coordination with the Secretary of the Department of Health and Human
    Services based on section 2791 of the Public Health Service Act (42
    U.S.C. 300gg-91).
        ``(e) Gathering of Information.--
                ``(1) General.--In carrying out its functions under
            subsection (c), the Office may request, receive, and collect
            data, including financial data, and information on and from the
            insurance industry and insurers, enter into information-sharing
            agreements, analyze and disseminate data and information, and
            issue reports regarding all lines of insurance except health
            insurance.
                ``(2) Collection of information from insurers and
            affiliates.--Except as provided in paragraph (3) and subject to
            paragraph (4), the Office may require an insurer, or affiliate
            of an insurer, to submit such data or information that the
            Office may reasonably require in carrying out its functions
            under subsection (c). Notwithstanding subsection (p) and for
            the purposes of this paragraph only, the term `insurer' means
            any entity that writes insurance or reinsures risks and issues
            contracts or policies in one or more States.
                ``(3) Exception for small insurers.--Paragraph (2) shall
            not apply with respect to any insurer or affiliate thereof that
            meets a minimum size threshold that may be established by the
            Office by order or rule. Such threshold shall be appropriate to
            the particular request and need for the data or information.
                ``(4) Advance coordination.--Before collecting any data or
            information under paragraph (2) from an insurer, or affiliate
            of an insurer, the Office shall coordinate with each relevant
            Federal agency and State insurance regulator (or other relevant
            Federal or State regulatory agency, if any, in the case of an
            affiliate of an insurer) and any publicly available sources to
            determine if the information to be collected is available from,
            or may be obtained in a timely manner by, such Federal agency
            or State insurance regulator, individually or collectively,
            other regulatory agency, or publicly available sources. If the
            Director determines that such data or information is available,
            or may be obtained in a timely manner, from such an agency,
            regulator, regulatory agency, or source, the Director shall
            obtain the data or information from such agency, regulator,
            regulatory agency, or source. If the Director determines that
            such data or information is not so available, the Director may
            collect such data or information from an insurer (or affiliate)
            only if the Director complies with the requirements of
            subchapter I of chapter 35 of title 44, United States Code
            (relating to Federal information policy; commonly known as the
            Paperwork Reduction Act) in collecting such data or
            information. Notwithstanding any other provision of law, each
            such relevant Federal agency and State insurance regulator or
            other Federal or State regulatory agency is authorized to
            provide to the Office such data or information.
                ``(5) Confidentiality.--
                        ``(A) The submission of any non-publicly available
                    data and information to the Office under this
                    subsection shall not constitute a waiver of, or
                    otherwise affect, any privilege arising under Federal
                    or State law (including the rules of any Federal or
                    State Court) to which the data or information is
                    otherwise subject.
                        ``(B) Any requirement under Federal or State law to
                    the extent otherwise applicable, or any requirement
                    pursuant to a written agreement in effect between the
                    original source of any non-publicly available data or
                    information and the source of such data or information
                    to the Office, regarding the privacy or confidentiality
                    of any data or information in the possession of the
                    source to the Office, shall continue to apply to such
                    data or information after the data or information has
                    been provided pursuant to this subsection to the
                    Office.
                        ``(C) Any data or information obtained by the
                    Office may be made available to State insurance
                    regulators individually or collectively through an
                    information sharing agreement that shall comply with
                    applicable Federal law and that shall not constitute a
                    waiver of, or otherwise affect, any privilege under
                    Federal or State law (including the rules of any
                    Federal or State Court) to which the data or
                    information is otherwise subject.
                        ``(D) Section 552 of title 5, United States Code,
                    shall apply to any data or information submitted by an
                    insurer or affiliate of an insurer.
        ``(f) Preemption of State Insurance Measures.--
                ``(1) Standard.--A State insurance measure shall be
            preempted pursuant to this section or section 314 if, and only
            to the extent that the Director determines, in accordance with
            this subsection, that the measure--
                        ``(A) directly results in less favorable treatment
                    of a non-United States insurer domiciled in a foreign
                    jurisdiction that is subject to a covered agreement
                    than a United States insurer domiciled, licensed,
                    admitted, or otherwise authorized in that State; and
                        ``(B) is inconsistent with a covered agreement that
                    is entered into on a date after the date of the
                    enactment of this Act.
                ``(2) Determination.--
                        ``(A) Notice of potential inconsistency.--Before
                    making any determination of inconsistency, the Director
                    shall--
                                ``(i) notify and consult with the
                            appropriate State regarding any potential
                            inconsistency or preemption;
                                ``(ii) notify and consult with the United
                            States Trade Representative regarding any
                            potential inconsistency or preemption;
                                ``(iii) cause to be published in the
                            Federal Register notice of the issue regarding
                            the potential inconsistency or preemption,
                            including a description of each State insurance
                            measure at issue and any applicable covered
                            agreement;
                                ``(iv) provide interested parties a
                            reasonable opportunity to submit written
                            comments to the Office;
                                ``(v) consider the effect of preemption
                            on--
                                        ``(I) the protection of
                                    policyholders and policy claimants;
                                        ``(II) the maintenance of the
                                    safety, soundness, integrity, and
                                    financial responsibility of any entity
                                    involved in the business of insurance
                                    or insurance operations;
                                        ``(III) ensuring the integrity and
                                    stability of the United States
                                    financial system; and
                                        ``(IV) the creation of a gap or
                                    void in financial or market conduct
                                    regulation of any entity involved in
                                    the business of insurance or insurance
                                    operations in the United States; and
                                ``(vi) consider any comments received.
                    The Director shall provide the notifications required
                    under clauses (i), (ii), and (iii) contemporaneously.
                        ``(B) Scope of review.--For purposes of this
                    section, the Director's determination of State
                    insurance measures shall be limited to the subject
                    matter of the prudential measures applicable to the
                    business of insurance contained within the covered
                    agreement involved.
                        ``(C) Notice of determination of inconsistency.--
                    Upon making any determination of inconsistency, the
                    Director shall--
                                ``(i) notify the appropriate State of the
                            determination and the extent of the
                            inconsistency;
                                ``(ii) establish a reasonable period of
                            time, which shall not be shorter than 90 days,
                            before the determination shall become
                            effective; and
                                ``(iii) notify the Committee on Financial
                            Services of the House of Representatives and
                            the Committee on Banking, Housing, and Urban
                            Affairs of the Senate of the inconsistency.
                ``(3) Notice of effectiveness.--Upon the conclusion of the
            period referred to in paragraph (2)(C)(ii), if the basis for
            the determination of inconsistency still exists, the
            determination shall become effective and the Director shall--
                        ``(A) cause to be published notice in the Federal
                    Register that the preemption has become effective, as
                    well as the effective date; and
                        ``(B) notify the appropriate State.
                ``(4) Limitation.--No State may enforce a State insurance
            measure to the extent that it has been preempted under this
            subsection.
        ``(g) Applicability of Administrative Procedure Act.--
    Determinations of inconsistency pursuant to subsection (f)(2) shall be
    subject to the applicable provisions of subchapter II of chapter 5 of
    title 5, United States Code (relating to administrative procedure), and
    chapter 7 of such title (relating to judicial review), except that in
    any action for judicial review of a determination of inconsistency, the
    court shall determine the matter de novo.
        ``(h) Regulations, Policies, and Procedures.--The Secretary may
    issue orders, regulations, policies and procedures to implement this
    section.
        ``(i) Consultation.--The Director shall consult with State
    insurance regulators, individually and collectively, to the extent the
    Director determines appropriate, in carrying out the functions of the
    Office.
        ``(j) Savings Provisions.--Nothing in this section shall--
                ``(1) preempt any State insurance measure that governs any
            insurer's rates, premiums, underwriting or sales practices, or
            State coverage requirements for insurance, or to the
            application of the antitrust laws of any State to the business
            of insurance;
                ``(2) preempt any State insurance measure governing the
            capital or solvency of an insurer, except to the extent that
            such State insurance measure directly results in less favorable
            treatment of a non-United States insurer than a United States
            insurer;
                ``(3) be construed to alter, amend, or limit the
            responsibility of the Consumer Financial Protection Agency;
                ``(4) preempt any State insurance measure because of
            inconsistency with any agreement that is not a covered
            agreement (as such term in defined in subsection (p)); or
                ``(5) affect the preemption of any State insurance measure
            otherwise inconsistent with and preempted by Federal law.
        ``(k) Retention of Existing State Regulatory Authority.--Nothing in
    this section or section 314 shall be construed to establish a general
    supervisory or regulatory authority of the Office or the Department of
    the Treasury over the business of insurance.
        ``(l) Retention of Authority of Federal Financial Regulatory
    Agencies.--Nothing in this section or section 314 shall be construed to
    limit the authority of any Federal financial regulatory agency,
    including the authority to develop and coordinate policy, negotiate,
    and enter into agreements with foreign governments, authorities,
    regulators, and multi-national regulatory committees and to preempt
    State measures to affect uniformity with international regulatory
    agreements.
        ``(m) Retention of Authority of United States Trade
    Representative.--Nothing in this section or section 314 shall be
    construed to affect the authority of the Office of the United States
    Trade Representative pursuant to section 141 of the Trade Act of 1974
    (19 U.S.C. 2171) or any other provision of law, including authority
    over the development and coordination of United States international
    trade policy and the administration of the United States trade
    agreements program.
        ``(n) Reports to Congress.--
                ``(1) Annual report.--Beginning September 30, 2011, the
            Director shall submit a report on or before September 30 of
            each calendar year to the President and to the Committees on
            Financial Services and Ways and Means of the House of
            Representatives and the Committees on Banking, Housing, and
            Urban Affairs and Finance of the Senate on the insurance
            industry, any actions taken by the office pursuant to
            subsection (f) (regarding preemption of inconsistent State
            insurance measures).
                ``(2) Other reports.--The Director shall submit to the
            President and the Committees referred to in paragraph (1) any
            other information or reports as deemed relevant by the Director
            or as requested by the Chairman or Ranking Member of any of
            such Committees.
        ``(o) Use of Existing Resources.--To carry out this section, the
    Office may employ personnel, facilities, and other Department of the
    Treasury resources available to the Secretary and the Secretary shall
    dedicate specific personnel to the Office.
        ``(p) Definitions.--For purposes of this section and section 314,
    the following definitions shall apply:
                ``(1) Affiliate.--The term `affiliate' means, with respect
            to an insurer, any person that controls, is controlled by, or
            is under common control with the insurer.
                ``(2) Covered agreement.--The term `covered agreement'
            means a written bilateral or multilateral recognition agreement
            that--
                        ``(A) is entered into between the United States and
                    one or more foreign governments, authorities, or
                    regulatory entities; and
                        ``(B) provides for recognition of prudential
                    measures with respect to the business of insurance or
                    reinsurance that achieves a level of protection for
                    insurance or reinsurance consumers that is
                    substantially equivalent to the level of protection
                    achieved under State insurance or reinsurance
                    regulation.
                ``(3) Determination of inconsistency.--The term
            `determination of inconsistency' means a determination that a
            State insurance measure is preempted under subsection (f).
                ``(4) Federal financial regulatory agency.--The term
            `Federal financial regulatory agency' means the Department of
            the Treasury, the Board of Governors of the Federal Reserve
            System, the Office of the Comptroller of the Currency, the
            Office of Thrift Supervision, the Securities and Exchange
            Commission, the Commodity Futures Trading Commission, the
            Federal Deposit Insurance Corporation, the Federal Housing
            Finance Agency, or the National Credit Union Administration.
                ``(5) Insurer.--The term `insurer' means any person engaged
            in the business of insurance, including reinsurance.
                ``(6) Non-united states insurer.--The term `non-United
            States insurer' means an insurer that is organized under the
            laws of a jurisdiction other than a State, but does not include
            any United States branch of such an insurer.
                ``(7) Office.--The term `Office' means the Federal
            Insurance Office established by this section.
                ``(8) Secretary.--The term `Secretary' means the Secretary
            of the Treasury.
                ``(9) State.--The term `State' means any State,
            commonwealth, territory, or possession of the United States,
            the District of Columbia, the Commonwealth of Puerto Rico, the
            Commonwealth of the Northern Mariana Islands, American Samoa,
            Guam, or the United States Virgin Islands.
                ``(10) State insurance measure.--The term `State insurance
            measure' means any State law, regulation, administrative
            ruling, bulletin, guideline, or practice relating to or
            affecting prudential measures applicable to insurance or
            reinsurance.
                ``(11) State insurance regulator.--The term `State
            insurance regulator' means any State regulatory authority
            responsible for the supervision of insurers.
                ``(12) United states insurer.--The term `United States
            insurer' means--
                        ``(A) an insurer that is organized under the laws
                    of a State; or
                        ``(B) a United States branch of a non-United States
                    insurer.
        ``(q) Authorization of Appropriations.--There are authorized to be
    appropriated for the Office such sums as may be necessary for each
    fiscal year.

    ``SEC. 314. COVERED AGREEMENTS.

        ``(a) Authority.--The Secretary and the United States Trade
    Representative are authorized, jointly, to negotiate and enter into
    covered agreements on behalf of the United States.
        ``(b) Requirements for Consultation With Congress.--
                ``(1) In general.--Before initiating negotiations to enter
            into a covered agreement under subsection (a), during such
            negotiations, and before entering into any such agreement, the
            Secretary and the United States Trade Representative shall
            jointly consult with the Committee on Financial Services and
            the Committee on Ways and Means of the House of Representatives
            and the Committee on Banking, Housing, and Urban Affairs and
            the Committee on Finance of the Senate.
                ``(2) Scope.--The consultation described in paragraph (1)
            shall include consultation with respect to--
                        ``(A) the nature of the agreement;
                        ``(B) how and to what extent the agreement will
                    achieve the applicable purposes, policies, priorities,
                    and objectives of section 313 and this section; and
                        ``(C) the implementation of the agreement,
                    including the general effect of the agreement on
                    existing State laws.
        ``(c) Submission and Layover Provisions.--A covered agreement under
    subsection (a) may enter into force with respect to the United States
    only if--
                ``(1) the Secretary and the United States Trade
            Representative jointly submit to the congressional committees
            specified in subsection (b)(1), on a day on which both Houses
            of Congress are in session, a copy of the final legal text of
            the agreement; and
                ``(2) a period of 90 calendar days beginning on the date on
            which the copy of the final legal text of the agreement is
            submitted to the congressional committees under paragraph (1)
            has expired.''.
        (b) Duties of Secretary.--Section 321(a) of title 31, United States
    Code, is amended--
                (1) in paragraph (7), by striking ``and'' at the end;
                (2) in paragraph (8)(C), by striking the period at the end
            and inserting ``; and''; and
                (3) by adding at the end the following new paragraph:
                ``(9) advise the President on major domestic and
            international prudential policy issues in connection with all
            lines of insurance except health insurance.''.
        (c) Clerical Amendment.--The table of sections for subchapter I of
    chapter 3 of title 31, United States Code, is amended by striking the
    item relating to section 312 and inserting the following new items:

    ``Sec. 312. Terrorism and Financial Intelligence.
    ``Sec. 313. Federal Insurance Office.
    ``Sec. 314. Covered agreements.
    ``Sec. 315. Continuing in office.''.

    SEC. 8003. REPORT ON GLOBAL REINSURANCE MARKET.

        Not later than September 30, 2011, the Director of the Federal
    Insurance Office appointed under section 313(b) of title 31, United
    States Code (as amended by section 8002(a)(3) of this title) shall
    submit to the Committee on Financial Services of the House of
    Representatives and the Committee on Banking, Housing, and Urban
    Affairs of the Senate a report describing the breadth and scope of the
    global reinsurance market and the critical role such market plays in
    supporting insurance in the United States.

    SEC. 8004. STUDY ON MODERNIZATION AND IMPROVEMENT OF INSURANCE
                  REGULATION IN THE UNITED STATES.

        (a) Study.--The Director of the Federal Insurance Office appointed
    under section 313(b) of title 31, United States Code (as amended by
    section 8002(a)(3) of this title) shall conduct a study on how to
    modernize and improve the system of insurance regulation in the United
    States. Such study shall include consideration of the following:
                (1) Effective systemic risk regulation with respect to
            insurance.
                (2) Strong capital standards and an appropriate match
            between capital allocation and liabilities for all risk.
                (3) Meaningful and consistent consumer protection for
            insurance products and practices.
                (4) Increased national uniformity through either a Federal
            charter or effective action by the States.
                (5) Improved regulation of insurance companies and
            affiliates on a consolidated basis, including affiliates
            outside of the traditional insurance business.
                (6) International coordination.
                (7) Geographic disparities in access to and cost of
            insurance products.
        (b) Report.--Not later than 1 year after the date of the enactment
    of this Act, the Director shall submit to the Committee on Financial
    Services of the House of Representatives and the Committee on Banking,
    Housing, and Urban Affairs of the Senate a report containing--
                (1) the results of the study conducted under subsection
            (a); and
                (2) any Federal or State legislative, administrative, or
            regulatory recommendations that the Director considers
            appropriate with respect to such study to modernize and improve
            the system of insurance regulation in the United States.
        (c) Consultation.--In carrying out subsections (a) and (b), the
    Director shall consult with State insurance commissioners, consumer
    organizations, representatives of the insurance industry,
    policyholders, and other persons, as the Director considers
    appropriate.

    SEC. 8005. SENSE OF CONGRESS REGARDING SIMPLIFIED MORTGAGE CONTRACT
                  SUMMARIES.

        It is the sense of Congress that mortgage lenders should provide
    loan applicants with a simplified summary of their loan contracts,
    including an easy-to-read list of the basic loan terms, payment
    information, the existence of prepayment penalties or balloon payments,
    and escrow information.

           TITLE VII--MORTGAGE REFORM AND ANTI-PREDATORY LENDING ACT

    SEC. 9000. SHORT TITLE; DESIGNATION AS ENUMERATED CONSUMER LAW.

        (a) Short Title.--This title may be cited as the ``Mortgage Reform
    and Anti-Predatory Lending Act''.
        (b) Designation as Enumerated Consumer Law Under the Purview of the
    Consumer Financial Protection Agency.--Subtitles A, B, C, and E and
    sections 9501, 9502, and 9506, and the amendments made by such
    subtitles and sections, shall be enumerated consumer laws, as defined
    in section 4002(16), and come under the purview of the Consumer
    Financial Protection Agency for purposes of title IV, including the
    transfer of functions and personnel under subtitle F of title IV and
    the savings provisions of such subtitle.

          Subtitle A--Residential Mortgage Loan Origination Standards

    SEC. 9001. DEFINITIONS.

        Section 103 of the Truth in Lending Act (15 U.S.C. 1602) is amended
    by adding at the end the following new subsection:
        ``(cc) Definitions Relating to Mortgage Origination and Residential
    Mortgage Loans.--
                ``(1) Commission.--Unless otherwise specified, the term
            `Commission' means the Federal Trade Commission.
                ``(2) Federal banking agencies.--The term `Federal banking
            agencies' means the Board of Governors of the Federal Reserve
            System, the Comptroller of the Currency, the Director of the
            Office of Thrift Supervision, the Federal Deposit Insurance
            Corporation, and the National Credit Union Administration
            Board. All rule writing by the `Federal banking agencies' as
            designated by the Mortgage Reform and Anti-Predatory Lending
            Act will be coordinated through the Financial Institutions
            Examination Council in consultation with the Chairman of the
            State Liaison Committee.
                ``(3) Mortgage originator.--The term `mortgage
            originator'--
                        ``(A) means any person who, for direct or indirect
                    compensation or gain, or in the expectation of direct
                    or indirect compensation or gain--
                                ``(i) takes a residential mortgage loan
                            application;
                                ``(ii) assists a consumer in obtaining or
                            applying to obtain a residential mortgage loan;
                            or
                                ``(iii) offers or negotiates terms of a
                            residential mortgage loan;
                        ``(B) includes any person who represents to the
                    public, through advertising or other means of
                    communicating or providing information (including the
                    use of business cards, stationery, brochures, signs,
                    rate lists, or other promotional items), that such
                    person can or will provide any of the services or
                    perform any of the activities described in subparagraph
                    (A);
                        ``(C) does not include any person who is (i) not
                    otherwise described in subparagraph (A) or (B) and who
                    performs purely administrative or clerical tasks on
                    behalf of a person who is described in any such
                    subparagraph, or (ii) an employee of a retailer of
                    manufactured homes who is not described in clause (i)
                    or (iii) of subparagraph (A) and who does not advise a
                    consumer on loan terms (including rates, fees, and
                    other costs);
                        ``(D) does not include a person or entity that only
                    performs real estate brokerage activities and is
                    licensed or registered in accordance with applicable
                    State law, unless such person or entity is compensated
                    for performing such brokerage activities by a lender, a
                    mortgage broker, or other mortgage originator or by any
                    agent of such lender, mortgage broker, or other
                    mortgage originator;
                        ``(E) does not include, with respect to a
                    residential mortgage loan, a person, estate, or trust
                    that provides mortgage financing for the sale of 1
                    property in any 36-month period, provided that such
                    loan--
                                ``(i) is fully amortizing;
                                ``(ii) is with respect to a sale for which
                            the seller determines in good faith and
                            documents that the buyer has a reasonable
                            ability to repay the loan;
                                ``(iii) has a fixed rate or an adjustable
                            rate that is adjustable after 5 or more years,
                            subject to reasonable annual and lifetime
                            limitations on interest rate increases; and
                                ``(iv) meets any other criteria the Federal
                            banking agencies may prescribe; and
                        ``(F) does not include a servicer or servicer
                    employees, agents and contractors, including but not
                    limited to those who offer or negotiate terms of a
                    residential mortgage loan for purposes of
                    renegotiating, modifying, replacing and subordinating
                    principal of existing mortgages where borrowers are
                    behind in their payments, in default or have a
                    reasonable likelihood of being in default or falling
                    behind.
                ``(4) Nationwide mortgage licensing system and registry.--
            The term `Nationwide Mortgage Licensing System and Registry'
            has the same meaning as in the Secure and Fair Enforcement for
            Mortgage Licensing Act of 2008.
                ``(5) Other definitions relating to mortgage originator.--
            For purposes of this subsection, a person `assists a consumer
            in obtaining or applying to obtain a residential mortgage loan'
            by, among other things, advising on residential mortgage loan
            terms (including rates, fees, and other costs), preparing
            residential mortgage loan packages, or collecting information
            on behalf of the consumer with regard to a residential mortgage
            loan.
                ``(6) Residential mortgage loan.--The term `residential
            mortgage loan' means any consumer credit transaction that is
            secured by a mortgage, deed of trust, or other equivalent
            consensual security interest on a dwelling or on residential
            real property that includes a dwelling, other than a consumer
            credit transaction under an open end credit plan or, for
            purposes of sections 129B and 129C and section 128(a) (16),
            (17), and (18), and 128(f) and any regulations promulgated
            thereunder, an extension of credit relating to a plan described
            in section 101(53D) of title 11, United States Code.
                ``(7) Secretary.--The term `Secretary', when used in
            connection with any transaction or person involved with a
            residential mortgage loan, means the Secretary of Housing and
            Urban Development.
                ``(8) Securitization vehicle.--The term `securitization
            vehicle' means a trust, corporation, partnership, limited
            liability entity, special purpose entity, or other structure
            that--
                        ``(A) is the issuer, or is created by the issuer,
                    of mortgage pass-through certificates, participation
                    certificates, mortgage-backed securities, or other
                    similar securities backed by a pool of assets that
                    includes residential mortgage loans; and
                        ``(B) holds such loans.
                ``(9) Securitizer.--The term `securitizer' means the person
            that transfers, conveys, or assigns, or causes the transfer,
            conveyance, or assignment of, residential mortgage loans,
            including through a special purpose vehicle, to any
            securitization vehicle, excluding any trustee that holds such
            loans solely for the benefit of the securitization vehicle.
                ``(10) Servicer.--The term `servicer' has the same meaning
            as in section 6(i)(2) of the Real Estate Settlement Procedures
            Act of 1974.''.

    SEC. 9002. RESIDENTIAL MORTGAGE LOAN ORIGINATION.

        (a) In General.--Chapter 2 of the Truth in Lending Act (15 U.S.C.
    1631 et seq.) is amended by inserting after section 129A the following
    new section:
    ``Sec. 129B. Residential mortgage loan origination
        ``(a) Finding and Purpose.--
                ``(1) Finding.--The Congress finds that economic
            stabilization would be enhanced by the protection, limitation,
            and regulation of the terms of residential mortgage credit and
            the practices related to such credit, while ensuring that
            responsible, affordable mortgage credit remains available to
            consumers.
                ``(2) Purpose.--It is the purpose of this section and
            section 129C to assure that consumers are offered and receive
            residential mortgage loans on terms that reasonably reflect
            their ability to repay the loans and that are understandable
            and not unfair, deceptive or abusive.
        ``(b) Duty of Care.--
                ``(1) Standard.--Subject to regulations prescribed under
            this subsection, each mortgage originator shall, in addition to
            the duties imposed by otherwise applicable provisions of State
            or Federal law--
                        ``(A) be qualified and, when required, registered
                    and licensed as a mortgage originator in accordance
                    with applicable State or Federal law, including the
                    Secure and Fair Enforcement for Mortgage Licensing Act
                    of 2008;
                        ``(B) with respect to each consumer seeking or
                    inquiring about a residential mortgage loan, diligently
                    work to present the consumer with a range of
                    residential mortgage loan products for which the
                    consumer likely qualifies and which are appropriate to
                    the consumer's existing circumstances, based on
                    information known by, or obtained in good faith by, the
                    originator;
                        ``(C) make full, complete, and timely disclosure to
                    each such consumer in writing, the receipt and
                    understanding of which shall be acknowledged by the
                    signature of the mortgage originator and the consumer,
                    of--
                                ``(i) the comparative costs and benefits of
                            each residential mortgage loan product offered,
                            discussed, or referred to by the originator
                            (and such comparative costs and benefits for
                            each such product shall be presented side by
                            side and the disclosures for each such product
                            shall have equal prominence);
                                ``(ii) the nature of the originator's
                            relationship to the consumer (including the
                            cost of the services to be provided by the
                            originator and a statement that the mortgage
                            originator is or is not acting as an agent for
                            the consumer, as the case may be); and
                                ``(iii) any relevant conflicts of interest
                            between the originator and the consumer;
                        ``(D) certify to the creditor, with respect to any
                    transaction involving a residential mortgage loan, that
                    the mortgage originator has fulfilled all requirements
                    applicable to the originator under this section with
                    respect to the transaction; and
                        ``(E) include on all loan documents any unique
                    identifier of the mortgage originator provided by the
                    Nationwide Mortgage Licensing System and Registry.
                ``(2) Clarification of extent of duty to present range of
            products and appropriate products.--
                        ``(A) No duty to offer products for which
                    originator is not authorized to take an application.--
                    Paragraph (1)(B) shall not be construed as requiring--
                                ``(i) a mortgage originator to present to
                            any consumer any specific residential mortgage
                            loan product that is offered by a creditor
                            which does not accept consumer referrals from,
                            or consumer applications submitted by or
                            through, such originator; or
                                ``(ii) a creditor to offer products that
                            the creditor does not offer to the general
                            public.
                        ``(B) Appropriate loan product.--For purposes of
                    paragraph (1)(B), a residential mortgage loan shall be
                    presumed to be appropriate for a consumer if--
                                ``(i) the mortgage originator determines in
                            good faith, based on then existing information
                            and without undergoing a full underwriting
                            process, that the consumer has a reasonable
                            ability to repay and, in the case of a
                            refinancing of an existing residential mortgage
                            loan, receives a net tangible benefit, as
                            determined in accordance with regulations
                            prescribed under subsections (a) and (b) of
                            section 129C; and
                                ``(ii) the loan does not have predatory
                            characteristics or effects (such as equity
                            stripping and excessive fees and abusive terms)
                            as determined in accordance with regulations
                            prescribed under paragraph (4).
                ``(3) Rules of construction.--No provision of this
            subsection shall be construed as--
                        ``(A) creating an agency or fiduciary relationship
                    between a mortgage originator and a consumer if the
                    originator does not hold himself or herself out as such
                    an agent or fiduciary; or
                        ``(B) restricting a mortgage originator from
                    holding himself or herself out as an agent or fiduciary
                    of a consumer subject to any additional duty,
                    requirement, or limitation applicable to agents or
                    fiduciaries under any Federal or State law.
                ``(4) Regulations.--
                        ``(A) In general.--The Federal banking agencies, in
                    consultation with the Secretary, and the Commission,
                    shall jointly prescribe regulations to--
                                ``(i) further define the duty established
                            under paragraph (1);
                                ``(ii) implement the requirements of this
                            subsection;
                                ``(iii) establish the time period within
                            which any disclosure required under paragraph
                            (1) shall be made to the consumer; and
                                ``(iv) establish such other requirements
                            for any mortgage originator as such regulatory
                            agencies may determine to be appropriate to
                            meet the purposes of this subsection.
                        ``(B) Complementary and nonduplicative
                    disclosures.--The agencies referred to in subparagraph
                    (A) shall endeavor to make the required disclosures to
                    consumers under this subsection complementary and
                    nonduplicative with other disclosures for mortgage
                    consumers to the extent such efforts--
                                ``(i) are practicable; and
                                ``(ii) do not reduce the value of any such
                            disclosure to recipients of such disclosures.
                ``(5) Compliance procedures required.--The Federal banking
            agencies shall prescribe regulations requiring depository
            institutions to establish and maintain procedures reasonably
            designed to assure and monitor the compliance of such
            depository institutions, the subsidiaries of such institutions,
            and the employees of such institutions or subsidiaries with the
            requirements of this section and the registration procedures
            established under section 1507 of the Secure and Fair
            Enforcement for Mortgage Licensing Act of 2008.''.
        (b) Clerical Amendment.--The table of sections for chapter 2 of the
    Truth in Lending Act is amended by inserting after the item relating to
    section 129 the following new items:

    ``129A. Fiduciary duty of servicers of pooled residential mortgages.
    ``129B. Residential mortgage loan origination.''.

    SEC. 9003. PROHIBITION ON STEERING INCENTIVES.

        Section 129B of the Truth in Lending Act (as added by section
    102(a)) is amended by inserting after subsection (b) the following new
    subsection:
        ``(c) Prohibition on Steering Incentives.--
                ``(1) In general.--For any mortgage loan, the total amount
            of direct and indirect compensation from all sources permitted
            to a mortgage originator may not vary based on the terms of the
            loan (other than the amount of the principal).
                ``(2) Restructuring of financing origination fee.--
                        ``(A) In general.--For any mortgage loan, a
                    mortgage originator may not arrange for a consumer to
                    finance through rate any origination fee or cost except
                    bona fide third party settlement charges not retained
                    by the creditor or mortgage originator.
                        ``(B) Exception.--Notwithstanding paragraph
                    subparagraph (A), a mortgage originator may arrange for
                    a consumer to finance through rate an origination fee
                    or cost if--
                                ``(i) the mortgage originator does not
                            receive any other compensation from the
                            consumer except the compensation that is
                            financed through rate; and
                                ``(ii) the mortgage is a qualified
                            mortgage.
                ``(3) Regulations.--The Federal banking agencies, in
            consultation with the Secretary and the Commission, shall
            jointly prescribe regulations to prohibit--
                        ``(A) mortgage originators from steering any
                    consumer to a residential mortgage loan that--
                                ``(i) the consumer lacks a reasonable
                            ability to repay (in accordance with
                            regulations prescribed under section 129C(a));
                                ``(ii) in the case of a refinancing of a
                            residential mortgage loan, does not provide the
                            consumer with a net tangible benefit (in
                            accordance with regulations prescribed under
                            section 129C(b)); or
                                ``(iii) has predatory characteristics or
                            effects (such as equity stripping, excessive
                            fees, or abusive terms);
                        ``(B) mortgage originators from steering any
                    consumer from a residential mortgage loan for which the
                    consumer is qualified that is a qualified mortgage (as
                    defined in section 129C(c)(3)) to a residential
                    mortgage loan that is not a qualified mortgage;
                        ``(C) abusive or unfair lending practices that
                    promote disparities among consumers of equal credit
                    worthiness but of different race, ethnicity, gender, or
                    age;
                        ``(D) mortgage originators from assessing excessive
                    points and fees (as such term is described under
                    section 103(aa)(4) of the Truth in Lending Act (15
                    U.S.C. 1602(aa)(4))) to a consumer for the origination
                    of a residential mortgage loan based on such consumer's
                    decision to finance all or part of the payment through
                    the rate for such points and fees; and
                        ``(E) mortgage originators from--
                                ``(i) mischaracterizing the credit history
                            of a consumer or the residential mortgage loans
                            available to a consumer;
                                ``(ii) mischaracterizing or suborning the
                            mischaracterization of the appraised value of
                            the property securing the extension of credit;
                            or
                                ``(iii) if unable to suggest, offer, or
                            recommend to a consumer a loan that is not more
                            expensive than a loan for which the consumer
                            qualifies, discouraging a consumer from seeking
                            a home mortgage loan secured by a consumer's
                            principal dwelling from another mortgage
                            originator.
                ``(4) Rules of construction.--No provision of this
            subsection shall be construed as--
                        ``(A) permitting any yield spread premium or other
                    similar compensation that would, for any mortgage loan,
                    permit the total amount of direct and indirect
                    compensation from all sources permitted to a mortgage
                    originator to vary based on the terms of the loan
                    (other than the amount of the principal);
                        ``(B) affecting the mechanism for providing the
                    total amount of direct and indirect compensation
                    permitted to a mortgage originator;
                        ``(C) limiting or affecting the amount of
                    compensation received by a creditor upon the sale of a
                    consummated loan to a subsequent purchaser;
                        ``(D) restricting a consumer's ability to finance,
                    at the option of the consumer, including through
                    principal or rate, any origination fees or costs
                    permitted under this subsection, or the mortgage
                    originator's ability to receive such fees or costs
                    (including compensation) from any person, so long as
                    such fees or costs were limited by agreement with the
                    consumer and were fully and clearly disclosed to the
                    consumer earlier in the application process as required
                    by 129B(b)(1)(C)(i) and do not vary based on the terms
                    of the loan (other than the amount of the principal) or
                    the consumer's decision about whether to finance such
                    fees or costs; or
                        ``(E) prohibiting incentive payments to a mortgage
                    originator based on the number of residential mortgage
                    loans originated within a specified period of time.''.

    SEC. 9004. LIABILITY.

        Section 129B of the Truth in Lending Act is amended by inserting
    after subsection (c) (as added by section 103) the following new
    subsection:
        ``(d) Liability for Violations.--
                ``(1) In general.--For purposes of providing a cause of
            action for any failure by a mortgage originator to comply with
            any requirement imposed under this section and any regulation
            prescribed under this section, subsections (a) and (b) of
            section 130 shall be applied with respect to any such failure
            by substituting `mortgage originator' for `creditor' each place
            such term appears in each such subsection.
                ``(2) Maximum.--The maximum amount of any liability of a
            mortgage originator under paragraph (1) to a consumer for any
            violation of this section shall not exceed the greater of
            actual damages or an amount equal to 3 times the total amount
            of direct and indirect compensation or gain accruing to the
            mortgage originator in connection with the residential mortgage
            loan involved in the violation, plus the costs to the consumer
            of the action, including a reasonable attorney's fee.''.

    SEC. 9005. REGULATIONS.

        (a) Discretionary Regulatory Authority.--Section 129B of the Truth
    in Lending Act is amended by inserting after subsection (d) (as added
    by section 104) the following new subsection:
        ``(e) Discretionary Regulatory Authority.--
                ``(1) In general.--The Federal banking agencies shall, by
            regulations issued jointly, prohibit or condition terms, acts
            or practices relating to residential mortgage loans that the
            agencies find to be abusive, unfair, deceptive, predatory,
            inconsistent with reasonable underwriting standards, necessary
            or proper to ensure that responsible, affordable mortgage
            credit remains available to consumers in a manner consistent
            with the purposes of this section and section 129B, necessary
            or proper to effectuate the purposes of this section and
            section 129C, to prevent circumvention or evasion thereof, or
            to facilitate compliance with such sections, or are not in the
            interest of the borrower.
                ``(2) Application.--The regulations prescribed under
            paragraph (1) shall be applicable to all residential mortgage
            loans and shall be applied in the same manner as regulations
            prescribed under section 105.
        ``(f) Section 129B and any regulations promulgated thereunder do
    not apply to an extension of credit relating to a plan described in
    section 101(53D) of title 11, United States Code.''.
        (b) Effective Date.--The regulations required or authorized to be
    prescribed under this subtitle or the amendments made by this
    subtitle--
                (1) shall be prescribed in final form before the end of the
            12-month period beginning on the date of the enactment of this
            Act; and
                (2) shall take effect not later than 18 months after the
            date of the enactment of this Act.
        (c) Technical and Conforming Amendments.--Section 129(l)(2) of the
    Truth in Lending Act (15 U.S.C. 1639(l)(2)) is amended by inserting
    ``referred to in section 103(aa)'' after ``loans'' each place such term
    appears.

    SEC. 9006. STUDY OF SHARED APPRECIATION MORTGAGES.

        (a) Study.--The Secretary of Housing and Urban Development, in
    consultation with the Secretary of the Treasury and other relevant
    agencies, shall conduct a comprehensive study to determine prudent
    statutory and regulatory requirements sufficient to provide for the
    widespread use of shared appreciation mortgages to strengthen local
    housing markets, provide new opportunities for affordable
    homeownership, and enable homeowners at risk of foreclosure to
    refinance or modify their mortgages.
        (b) Report.--Not later than the expiration of the 6-month period
    beginning on the date of the enactment of this Act, the Secretary of
    Housing and Urban Development shall submit a report to the Congress on
    the results of the study, which shall include recommendations for the
    regulatory and legislative requirements referred to in subsection (a).

                  Subtitle B--Minimum Standards For Mortgages

    SEC. 9101. ABILITY TO REPAY.

        (a) In General.--Chapter 2 of the Truth in Lending Act (15 U.S.C.
    1631 et seq.) is amended by inserting after section 129B (as added by
    section 102(a)) the following new section:
    ``Sec. 129C. Minimum standards for residential mortgage loans
        ``(a) Ability To Repay.--
                ``(1) In general.--In accordance with regulations
            prescribed jointly by the Federal banking agencies, in
            consultation with the Commission, no creditor may make a
            residential mortgage loan unless the creditor makes a
            reasonable and good faith determination based on verified and
            documented information that, at the time the loan is
            consummated, the consumer has a reasonable ability to repay the
            loan, according to its terms, and all applicable taxes,
            insurance, and assessments.
                ``(2) Multiple loans.--If the creditor knows, or has reason
            to know, that 1 or more residential mortgage loans secured by
            the same dwelling will be made to the same consumer, the
            creditor shall make a reasonable and good faith determination,
            based on verified and documented information, that the consumer
            has a reasonable ability to repay the combined payments of all
            loans on the same dwelling according to the terms of those
            loans and all applicable taxes, insurance, and assessments.
                ``(3) Basis for determination.--A determination under this
            subsection of a consumer's ability to repay a residential
            mortgage loan shall include consideration of the consumer's
            credit history, current income, expected income the consumer is
            reasonably assured of receiving, current obligations, debt-to-
            income ratio, employment status, and other financial resources
            other than the consumer's equity in the dwelling or real
            property that secures repayment of the loan.
                ``(4) Income verification.--In order to safeguard against
            fraudulent reporting, any consideration of a consumer's income
            history in making a determination under this subsection shall
            include the verification of such income by the use of--
                        ``(A) Internal Revenue Service transcripts of tax
                    returns provided by a third party; or
                        ``(B) such other similar method that quickly and
                    effectively verifies income documentation by a third
                    party as the Federal banking agencies may jointly
                    prescribe.
                ``(5) Nonstandard loans.--
                        ``(A) Variable rate loans that defer repayment of
                    any principal or interest.--For purposes of
                    determining, under this subsection, a consumer's
                    ability to repay a variable rate residential mortgage
                    loan that allows or requires the consumer to defer the
                    repayment of any principal or interest, the creditor
                    shall use a fully amortizing repayment schedule.
                        ``(B) Interest-only loans.--For purposes of
                    determining, under this subsection, a consumer's
                    ability to repay a residential mortgage loan that
                    permits or requires the payment of interest only, the
                    creditor shall use the payment amount required to
                    amortize the loan by its final maturity.
                        ``(C) Calculation for negative amortization.--In
                    making any determination under this subsection, a
                    creditor shall also take into consideration any balance
                    increase that may accrue from any negative amortization
                    provision.
                        ``(D) Calculation process.--For purposes of making
                    any determination under this subsection, a creditor
                    shall calculate the monthly payment amount for
                    principal and interest on any residential mortgage loan
                    by assuming--
                                ``(i) the loan proceeds are fully disbursed
                            on the date of the consummation of the loan;
                                ``(ii) the loan is to be repaid in
                            substantially equal monthly amortizing payments
                            for principal and interest over the entire term
                            of the loan with no balloon payment, unless the
                            loan contract requires more rapid repayment
                            (including balloon payment), in which case the
                            calculation shall be made (I) in accordance
                            with regulations prescribed by the Federal
                            banking agencies, with respect to any loan
                            which has an annual percentage rate that does
                            not exceed the average prime offer rate for a
                            comparable transaction, as of the date the
                            interest rate is set, by 1.5 or more percentage
                            points for a first lien residential mortgage
                            loan; and by 3.5 or more percentage points for
                            a subordinate lien residential mortgage loan;
                            or (II) using the contract's repayment
                            schedule, with respect to a loan which has an
                            annual percentage rate, as of the date the
                            interest rate is set, that is at least 1.5
                            percentage points above the average prime offer
                            rate for a first lien residential mortgage
                            loan; and 3.5 percentage points above the
                            average prime offer rate for a subordinate lien
                            residential mortgage loan; and
                                ``(iii) the interest rate over the entire
                            term of the loan is a fixed rate equal to the
                            fully indexed rate at the time of the loan
                            closing, without considering the introductory
                            rate.
                        ``(E) Refinance of hybrid loans with current
                    lender.--In considering any application for refinancing
                    an existing hybrid loan by the creditor into a standard
                    loan to be made by the same creditor in any case in
                    which the sole net-tangible benefit to the mortgagor
                    would be a reduction in monthly payment and the
                    mortgagor has not been delinquent on any payment on the
                    existing hybrid loan, the creditor may--
                                ``(i) consider the mortgagor's good
                            standing on the existing mortgage;
                                ``(ii) consider if the extension of new
                            credit would prevent a likely default should
                            the original mortgage reset and give such
                            concerns a higher priority as an acceptable
                            underwriting practice; and
                                ``(iii) offer rate discounts and other
                            favorable terms to such mortgagor that would be
                            available to new customers with high credit
                            ratings based on such underwriting practice.
                ``(6) Fully-indexed rate defined.--For purposes of this
            subsection, the term `fully indexed rate' means the index rate
            prevailing on a residential mortgage loan at the time the loan
            is made plus the margin that will apply after the expiration of
            any introductory interest rates.
                ``(7) Reverse mortgages.--This subsection shall not apply
            with respect to any reverse mortgage''.
        (b) Clerical Amendment.--The table of sections for chapter 2 of the
    Truth in Lending Act is amended by inserting after the item relating to
    section 129B (as added by section 102(b)) the following new item:

    ``129C. Minimum standards for residential mortgage loans.''.

    SEC. 9102. NET TANGIBLE BENEFIT FOR REFINANCING OF RESIDENTIAL MORTGAGE
                  LOANS.

        Section 129C of the Truth in Lending Act (as added by section
    9101(a)) is amended by inserting after subsection (a) the following new
    subsection:
        ``(b) Net Tangible Benefit for Refinancing of Residential Mortgage
    Loans.--
                ``(1) In general.--In accordance with regulations
            prescribed under paragraph (3), no creditor may extend credit
            in connection with any residential mortgage loan that involves
            a refinancing of a prior existing residential mortgage loan
            unless the creditor reasonably and in good faith determines, at
            the time the loan is consummated and on the basis of
            information known by or obtained in good faith by the creditor,
            that the refinanced loan will provide a net tangible benefit to
            the consumer.
                ``(2) Certain loans providing no net tangible benefit.--A
            residential mortgage loan that involves a refinancing of a
            prior existing residential mortgage loan shall not be
            considered to provide a net tangible benefit to the consumer if
            the costs of the refinanced loan, including points, fees and
            other charges, exceed the amount of any newly advanced
            principal without any corresponding changes in the terms of the
            refinanced loan that are advantageous to the consumer.
                ``(3) Net tangible benefit.--The Federal banking agencies
            shall jointly prescribe regulations defining the term `net
            tangible benefit' for purposes of this subsection.''.

    SEC. 9103. SAFE HARBOR AND REBUTTABLE PRESUMPTION.

        Section 129C of the Truth in Lending Act is amended by inserting
    after subsection (b) (as added by section 9102) the following new
    subsection:
        ``(c) Presumption of Ability To Repay and Net Tangible Benefit.--
                ``(1) In general.--Any creditor with respect to any
            residential mortgage loan, and any assignee or securitizer of
            such loan, may presume that the loan has met the requirements
            of subsections (a) and (b), if the loan is a qualified
            mortgage.
                ``(2) Definitions.--For purposes of this subsection, the
            following definitions shall apply:
                        ``(A) Qualified mortgage.--The term `qualified
                    mortgage' means any residential mortgage loan--
                                ``(i) that does not allow a consumer to
                            defer repayment of principal or interest, or is
                            not otherwise deemed a `non-traditional
                            mortgage' under guidance, advisories, or
                            regulations prescribed by the Federal Banking
                            Agencies;
                                ``(ii) that does not provide for a
                            repayment schedule that results in negative
                            amortization at any time;
                                ``(iii) for which the terms are fully
                            amortizing and which does not result in a
                            balloon payment, where a `balloon payment' is a
                            scheduled payment that is more than twice as
                            large as the average of earlier scheduled
                            payments;
                                ``(iv) which has an annual percentage rate
                            that does not exceed the average prime offer
                            rate for a comparable transaction, as of the
                            date the interest rate is set--
                                        ``(I) by 1.5 or more percentage
                                    points, in the case of a first lien
                                    residential mortgage loan having a
                                    original principal obligation amount
                                    that is equal to or less than the
                                    amount of the maximum limitation on the
                                    original principal obligation of
                                    mortgage in effect for a residence of
                                    the applicable size, as of the date of
                                    such interest rate set, pursuant to the
                                    sixth sentence of section 305(a)(2) the
                                    Federal Home Loan Mortgage Corporation
                                    Act (12 U.S.C. 1454(a)(2));
                                        ``(II) by 2.5 or more percentage
                                    points, in the case of a first lien
                                    residential mortgage loan having a
                                    original principal obligation amount
                                    that is more than the amount of the
                                    maximum limitation on the original
                                    principal obligation of mortgage in
                                    effect for a residence of the
                                    applicable size, as of the date of such
                                    interest rate set, pursuant to the
                                    sixth sentence of section 305(a)(2) the
                                    Federal Home Loan Mortgage Corporation
                                    Act (12 U.S.C. 1454(a)(2)); and
                                        ``(III) by 3.5 or more percentage
                                    points, in the case of a subordinate
                                    lien residential mortgage loan;
                                ``(v) for which the income and financial
                            resources relied upon to qualify the obligors
                            on the loan are verified and documented;
                                ``(vi) in the case of a fixed rate loan,
                            for which the underwriting process is based on
                            a payment schedule that fully amortizes the
                            loan over the loan term and takes into account
                            all applicable taxes, insurance, and
                            assessments;
                                ``(vii) in the case of an adjustable rate
                            loan, for which the underwriting is based on
                            the maximum rate permitted under the loan
                            during the first seven years, and a payment
                            schedule that fully amortizes the loan over the
                            loan term and takes into account all applicable
                            taxes, insurance, and assessments;
                                ``(viii) that does not cause the consumer's
                            total monthly debts, including amounts under
                            the loan, to exceed a percentage established by
                            regulation of the consumer's monthly gross
                            income or such other maximum percentage of such
                            income as may be prescribed by regulation under
                            paragraph (4), and such rules shall also take
                            into consideration the consumer's income
                            available to pay regular expenses after payment
                            of all installment and revolving debt;
                                ``(ix) for which the total points and fees
                            payable in connection with the loan do not
                            exceed 2 percent of the total loan amount,
                            where `points and fees' means points and fees
                            as defined by Section 103(aa)(4) of the Truth
                            in Lending Act (15 U.S.C. 1602(aa)(4)); and
                                ``(x) for which the term of the loan does
                            not exceed 30 years, except as such term may be
                            extended under paragraph (4).
                        ``(B) Average prime offer rate.--The term `average
                    prime offer rate' means an annual percentage rate that
                    is derived from average interest rates, points, and
                    other loan pricing terms currently offered to consumers
                    by a representative sample of creditors for mortgage
                    transactions that have low risk pricing
                    characteristics.
                        ``(C) Reverse mortgages.--For purposes of this
                    subsection, the term `qualified mortgage' includes any
                    reverse mortgage that is insured by the Federal Housing
                    Administration or complies with the condition
                    established in subparagraph (A)(iv).
                ``(3) Publication of average prime offer rate and apr
            thresholds.--The Board--
                        ``(A) shall publish, and update at least weekly,
                    average prime offer rates;
                        ``(B) may publish multiple rates based on varying
                    types of mortgage transactions; and
                        ``(C) shall adjust the thresholds of 1.50
                    percentage points in paragraph (2)(A)(iv)(I), 2.50
                    percentage points in paragraph (2)(A)(iv)(II), and 3.50
                    percentage points in paragraph (2)(A)(v)(III), as
                    necessary to reflect significant changes in market
                    conditions and to effectuate the purposes of the
                    Mortgage Reform and Anti-Predatory Lending Act.
                ``(4) Regulations.--
                        ``(A) In general.--The Federal banking agencies
                    shall jointly prescribe regulations to carry out the
                    purposes of this subsection.
                        ``(B) Revision of safe harbor criteria.--
                                ``(i) In general.--The Federal banking
                            agencies may jointly prescribe regulations that
                            revise, add to, or subtract from the criteria
                            that define a qualified mortgage upon a finding
                            that such regulations are necessary or proper
                            to ensure that responsible, affordable mortgage
                            credit remains available to consumers in a
                            manner consistent with the purposes of this
                            section, necessary and appropriate to
                            effectuate the purposes of this section and
                            section 129B, to prevent circumvention or
                            evasion thereof, or to facilitate compliance
                            with such sections.
                                ``(ii) Loan definition.--The following
                            agencies shall, in consultation with the
                            Federal banking agencies, prescribe rules
                            defining the types of loans they insure,
                            guarantee or administer, as the case may be,
                            that are Qualified Mortgages for purposes of
                            subsection (c)(1)(A) upon a finding that such
                            rules are consistent with the purposes of this
                            section and section 129B, to prevent
                            circumvention or evasion thereof, or to
                            facilitate compliance with such sections--
                                        ``(I) The Department of Housing and
                                    Urban Development, with regard to
                                    mortgages insured under title II of the
                                    National Housing Act (12 U.S.C. 1707 et
                                    seq.);
                                        ``(II) The Secretary of Veterans
                                    Affairs, with regard to a loan made or
                                    guaranteed by the Secretary of Veterans
                                    Affairs;
                                        ``(III) The Secretary of
                                    Agriculture, with regard loans
                                    guaranteed by the Secretary of
                                    Agriculture pursuant to 42 U.S.C.
                                    1472(h);
                                        ``(IV) The Federal Housing Finance
                                    Agency, with regard to loans meeting
                                    the conforming loan standards of the
                                    Federal National Mortgage Corporation
                                    or the Federal Home Loan Mortgage
                                    Corporation; and
                                        ``(V) The Rural Housing Service,
                                    with regard to loans insured by the
                                    Rural Housing Service.''.

    SEC. 9104. LIABILITY.

        Section 129C of the Truth in Lending Act is amended by inserting
    after subsection (c) (as added by section 9103) the following new
    subsection:
        ``(d) Liability for Violations.--
                ``(1) In general.--
                        ``(A) Rescission.--In addition to any other
                    liability under this title for a violation by a
                    creditor of subsection (a) or (b) (for example under
                    section 130) and subject to the statute of limitations
                    in paragraph (9), a civil action may be maintained
                    against a creditor for a violation of subsection (a) or
                    (b) with respect to a residential mortgage loan for the
                    rescission of the loan, and such additional costs as
                    the obligor may have incurred as a result of the
                    violation and in connection with obtaining a rescission
                    of the loan, including a reasonable attorney's fee.
                        ``(B) Cure.--A creditor shall not be liable for
                    rescission under subparagraph (A) with respect to a
                    residential mortgage loan if, no later than 90 days
                    after the receipt of notification from the consumer
                    that the loan violates subsection (a) or (b), the
                    creditor, acting in good faith, a cure.
                ``(2) Limited assignee and securitizer liability.--
            Notwithstanding sections 125(e) and 131 and except as provided
            in paragraph (3), a civil action which may be maintained
            against a creditor with respect to a residential mortgage loan
            for a violation of subsection (a) or (b) may be maintained
            against any assignee or securitizer of such residential
            mortgage loan, who has acted in good faith, for the following
            liabilities only:
                        ``(A) Rescission of the loan.
                        ``(B) Such additional costs as the obligor may have
                    incurred as a result of the violation and in connection
                    with obtaining a rescission of the loan, including a
                    reasonable attorney's fee.
                ``(3) Assignee and securitizer exemption.--No assignee or
            securitizer of a residential mortgage loan that has exercised
            reasonable due diligence in complying with the requirements of
            subsections (a) and (b), consistent with reasonable due
            diligence practices prescribed by the Federal banking agencies,
            shall be liable under paragraph (2) with respect to such loan
            if, no later than 90 days after the receipt of notification
            from the consumer that the loan violates subsection (a) or (b),
            the assignee or securitizer provides a cure so that the loan
            satisfies the requirements of subsections (a) and (b).
                ``(4) Absent parties.--
                        ``(A) Absent creditor.--Notwithstanding the
                    exemption provided in paragraph (3), if the creditor
                    with respect to a residential mortgage loan made in
                    violation of subsection (a) or (b) has ceased to exist
                    as a matter of law or has filed for bankruptcy
                    protection under title 11, United States Code, or has
                    had a receiver, conservator, or liquidating agent
                    appointed, a consumer may maintain a civil action
                    against an assignee to cure the residential mortgage
                    loan, plus the costs and reasonable attorney's fees
                    incurred in obtaining such remedy.
                        ``(B) Absent creditor and assignee.--
                    Notwithstanding the exemption provided in paragraph
                    (3), if the creditor with respect to a residential
                    mortgage loan made in violation of subsection (a) or
                    (b) and each assignee of such loan have ceased to exist
                    as a matter of law or have filed for bankruptcy
                    protection under title 11, United States Code, or have
                    had receivers, conservators, or liquidating agents
                    appointed, the consumer may maintain the civil action
                    referred to in subparagraph (A) against the
                    securitizer.
                ``(5) Cure defined.--For purposes of this subsection, the
            term `cure' means, with respect to a residential mortgage loan
            that violates subsection (a) or (b), the modification or
            refinancing, at no cost to the consumer, of the loan to provide
            terms that satisfy the requirements of subsections (a) and (b)
            and the payment of such additional costs as the obligor may
            have incurred in connection with obtaining a cure of the loan,
            including a reasonable attorney's fee.
                ``(6) Disagreement over cure.--If any creditor, assignee,
            or securitizer and a consumer fail to reach agreement on a cure
            with respect to a residential mortgage loan that violates
            subsection (a) or (b), or the consumer fails to accept a cure
            proffered by a creditor, assignee, or securitizer--
                        ``(A) the creditor, assignee, or securitizer may
                    provide the cure; and
                        ``(B) the consumer may challenge the adequacy of
                    the cure during the 6-month period beginning when the
                    cure is provided.
            If the consumer's challenge, under this paragraph, of a cure is
            successful, the creditor, assignee, or securitizer shall be
            liable to the consumer for rescission of the loan and such
            additional costs under paragraph (2).
                ``(7) Inability to provide or obtain rescission.--If a
            creditor, assignee, or securitizer cannot provide, or a
            consumer cannot obtain, rescission under paragraph (1) or (2),
            the liability of such creditor, assignee, or securitizer shall
            be met by providing the financial equivalent of a rescission,
            together with such additional costs as the obligor may have
            incurred as a result of the violation and in connection with
            obtaining a rescission of the loan, including a reasonable
            attorney's fee.
                ``(8) No class actions against assignee or securitizer
            under paragraph (2).--Only individual actions may be brought
            against an assignee or securitizer of a residential mortgage
            loan for a violation of subsection (a) or (b).
                ``(9) Statute of limitations.--The liability of a creditor,
            assignee, or securitizer under this subsection shall apply in
            any original action against a creditor under paragraph (1) or
            an assignee or securitizer under paragraph (2) which is brought
            before--
                        ``(A) in the case of any residential mortgage loan
                    other than a loan to which subparagraph (B) applies,
                    the end of the 3-year period beginning on the date the
                    loan is consummated; or
                        ``(B) in the case of a residential mortgage loan
                    that provides for a fixed interest rate for an
                    introductory period and then resets or adjusts to a
                    variable rate or that provides for a nonamortizing
                    payment schedule and then converts to an amortizing
                    payment schedule, the earlier of--
                                ``(i) the end of the 1-year period
                            beginning on the date of such reset,
                            adjustment, or conversion; or
                                ``(ii) the end of the 6-year period
                            beginning on the date the loan is consummated.
                ``(10) Trustees, pools, and investors in pools excluded.--
            In the case of residential mortgage loans acquired or
            aggregated for the purpose of including such loans in a pool of
            assets held for the purpose of issuing or selling instruments
            representing interests in such pools including through a
            securitization vehicle, the terms `assignee' and `securitizer',
            as used in this section, do not include the securitization
            vehicle, any trustee that holds such loans solely for the
            benefit of the securitization vehicle, the pools of such loans
            or any original or subsequent purchaser of any interest in the
            securitization vehicle or any instrument representing a direct
            or indirect interest in such pool.
        ``(e) Obligation of Securitizers, and Preservation of Borrower
    Remedies.--
                ``(1) Obligation to retain access.--Any securitizer of a
            residential mortgage loan sold or to be sold as part of a
            securitization vehicle shall, in any document or contract
            providing for the transfer, conveyance, or the establishment of
            such securitization vehicle, reserve the right and preserve the
            ability--
                        ``(A) to identify and obtain access to any such
                    loan;
                        ``(B) to acquire any such loan in the event of a
                    violation of subsection (a) or (b) of this section; and
                        ``(C) to provide to the consumer any and all
                    remedies provided for under this title for any
                    violation of this title.
                ``(2) Additional damages.--Any creditor, assignee, or
            securitizer of a residential mortgage loan that is subject to a
            remedy under subsection (d) and has failed to comply with
            paragraph (1) shall be subject to additional exemplary or
            punitive damages not to exceed the original principal balance
            of such loan.
                ``(3) Contact information notice.--The servicer with
            respect to a residential mortgage loan shall provide a written
            notice to a consumer identifying the name and contact
            information of the creditor or any assignee or securitizer who
            should be contacted by the consumer for any reason concerning
            the consumer's rights with respect to the loan. Such notice
            shall be provided--
                        ``(A) upon request of the consumer;
                        ``(B) whenever there is a change in ownership of a
                    residential mortgage loan; or
                        ``(C) on a regular basis, not less than annually.
        ``(f) Rules To Establish Process.--The Board shall promulgate rules
    to govern the rescission process established for violations of
    subsections (a) and (b) of this section. Such rules shall provide that
    notice given to a servicer or holder is sufficient notice regardless of
    the identity of the party or the parties liable under this title.''.

    SEC. 9105. DEFENSE TO FORECLOSURE.

        Section 129C of the Truth in Lending Act is amended by inserting
    after subsection (f) (as added by section 9104) the following new
    subsections:
        ``(g) Defense to Foreclosure.--Notwithstanding any other provision
    of law--
                ``(1) when the holder of a residential mortgage loan or
            anyone acting for such holder initiates a judicial or
            nonjudicial foreclosure--
                        ``(A) a consumer who has the right to rescind under
                    this section with respect to such loan against the
                    creditor or any assignee or securitizer may assert such
                    right as a defense to foreclosure or counterclaim to
                    such foreclosure against the holder, or
                        ``(B) if the foreclosure proceeding begins after
                    the end of the period during which a consumer may bring
                    an action for rescission under subsection (d) and the
                    consumer would have had a valid basis for such an
                    action if it had been brought before the end of such
                    period, the consumer may seek actual damages incurred
                    by reason of the violation which gave rise to the right
                    of rescission, together with costs of the action,
                    including a reasonable attorney's fee against the
                    creditor or any assignee or securitizer; and
                ``(2) such holder or anyone acting for such holder or any
            other applicable third party may sell, transfer, convey, or
            assign a residential mortgage loan to a creditor, any assignee,
            or any securitizer, or their designees, subject to the rights
            of the consumer described in this subsection, to effect a
            rescission or cure.''.

    SEC. 9106. ADDITIONAL STANDARDS AND REQUIREMENTS.

        (a) In General.--Section 129C of the Truth in Lending Act is
    amended by inserting after subsection (g) (as added by section 9105)
    the following new subsections:
        ``(h) Prohibition on Certain Prepayment Penalties.--
                ``(1) Prohibited on certain loans.--A residential mortgage
            loan that is not a `qualified mortgage' may not contain terms
            under which a consumer must pay a prepayment penalty for paying
            all or part of the principal after the loan is consummated. For
            purposes of this subsection, a `qualified mortgage' may not
            include a residential mortgage loan that has an adjustable
            rate.
                ``(2) Phased-out penalties on qualified mortgages.--A
            qualified mortgage (as defined in subsection (c)) may not
            contain terms under which a consumer must pay a prepayment
            penalty for paying all or part of the principal after the loan
            is consummated in excess of the following limitations:
                        ``(A) During the 1-year period beginning on the
                    date the loan is consummated, the prepayment penalty
                    shall not exceed an amount equal to 3 percent of the
                    outstanding balance on the loan.
                        ``(B) During the 1-year period beginning after the
                    period described in subparagraph (A), the prepayment
                    penalty shall not exceed an amount equal to 2 percent
                    of the outstanding balance on the loan.
                        ``(C) During the 1-year period beginning after the
                    1-year period described in subparagraph (B), the
                    prepayment penalty shall not exceed an amount equal to
                    1 percent of the outstanding balance on the loan.
                        ``(D) After the end of the 3-year period beginning
                    on the date the loan is consummated, no prepayment
                    penalty may be imposed on a qualified mortgage.
                ``(3) Option for no prepayment penalty required.--A
            creditor may not offer a consumer a residential mortgage loan
            product that has a prepayment penalty for paying all or part of
            the principal after the loan is consummated as a term of the
            loan without offering the consumer a residential mortgage loan
            product that does not have a prepayment penalty as a term of
            the loan.
        ``(i) Single Premium Credit Insurance Prohibited.--No creditor may
    finance, directly or indirectly, in connection with any residential
    mortgage loan or with any extension of credit under an open end
    consumer credit plan secured by the principal dwelling of the consumer
    (other than a reverse mortgage), any credit life, credit disability,
    credit unemployment or credit property insurance, or any other
    accident, loss-of-income, life or health insurance, or any payments
    directly or indirectly for any debt cancellation or suspension
    agreement or contract, except that--
                ``(1) insurance premiums or debt cancellation or suspension
            fees calculated and paid in full on a monthly basis shall not
            be considered financed by the creditor; and
                ``(2) this subsection shall not apply to credit
            unemployment insurance for which the unemployment insurance
            premiums are reasonable, the creditor receives no direct or
            indirect compensation in connection with the unemployment
            insurance premiums, and the unemployment insurance premiums are
            paid pursuant to another insurance contract and not paid to an
            affiliate of the creditor.
        ``(j) Arbitration.--
                ``(1) In general.--No residential mortgage loan and no
            extension of credit under an open end consumer credit plan
            secured by the principal dwelling of the consumer, other than a
            reverse mortgage, may include terms which require arbitration
            or any other nonjudicial procedure as the method for resolving
            any controversy or settling any claims arising out of the
            transaction.
                ``(2) Post-controversy agreements.--Subject to paragraph
            (3), paragraph (1) shall not be construed as limiting the right
            of the consumer and the creditor, any assignee, or any
            securitizer to agree to arbitration or any other nonjudicial
            procedure as the method for resolving any controversy at any
            time after a dispute or claim under the transaction arises.
                ``(3) No waiver of statutory cause of action.--No provision
            of any residential mortgage loan or of any extension of credit
            under an open end consumer credit plan secured by the principal
            dwelling of the consumer (other than a reverse mortgage), and
            no other agreement between the consumer and the creditor
            relating to the residential mortgage loan or extension of
            credit referred to in paragraph (1), shall be applied or
            interpreted so as to bar a consumer from bringing an action in
            an appropriate district court of the United States, or any
            other court of competent jurisdiction, pursuant to section 130
            or any other provision of law, for damages or other relief in
            connection with any alleged violation of this section, any
            other provision of this title, or any other Federal law.
        ``(k) Mortgages With Negative Amortization.--No creditor may extend
    credit to a borrower in connection with a consumer credit transaction
    under an open or closed end consumer credit plan secured by a dwelling
    or residential real property that includes a dwelling, other than a
    reverse mortgage, that provides or permits a payment plan that may, at
    any time over the term of the extension of credit, result in negative
    amortization unless, before such transaction is consummated--
                ``(1) the creditor provides the consumer with a statement
            that--
                        ``(A) the pending transaction will or may, as the
                    case may be, result in negative amortization;
                        ``(B) describes negative amortization in such
                    manner as the Federal banking agencies shall prescribe;
                        ``(C) negative amortization increases the
                    outstanding principal balance of the account; and
                        ``(D) negative amortization reduces the consumer's
                    equity in the dwelling or real property; and
                ``(2) in the case of a first-time borrower with respect to
            a residential mortgage loan that is not a qualified mortgage,
            the first-time borrower provides the creditor with sufficient
            documentation to demonstrate that the consumer received
            homeownership counseling from organizations or counselors
            certified by the Secretary of Housing and Urban Development as
            competent to provide such counseling.''.
        (b) Conforming Amendment Relating to Enforcement.--Section 108(a)
    of the Truth in Lending Act (15 U.S.C. 1607(a)) is amended by inserting
    after paragraph (6) the following new paragraph:
                ``(7) sections 21B and 21C of the Securities Exchange Act
            of 1934, in the case of a broker or dealer, other than a
            depository institution, by the Securities and Exchange
            Commission.''.
        (c) Protection Against Loss of Anti-deficiency Protection.--Section
    129C of the Truth in Lending Act is amended by inserting after
    subsection (k) (as added by subsection (a) of this section) the
    following new subsection (and designated succeeding subsections
    accordingly):
        ``(l) Protection Against Loss of Anti-deficiency Protection.--
                ``(1) Definition.--For purposes of this subsection, the
            term `anti-deficiency law' means the law of any State which
            provides that, in the event of foreclosure on the residential
            property of a consumer securing a mortgage, the consumer is not
            liable, in accordance with the terms and limitations of such
            State law, for any deficiency between the sale price obtained
            on such property through foreclosure and the outstanding
            balance of the mortgage.
                ``(2) Notice at time of consummation.--In the case of any
            residential mortgage loan that is, or upon consummation will
            be, subject to protection under an anti-deficiency law, the
            creditor or mortgage originator shall provide a written notice
            to the consumer describing the protection provided by the anti-
            deficiency law and the significance for the consumer of the
            loss of such protection before such loan is consummated.
                ``(3) Notice before refinancing that would cause loss of
            protection.--In the case of any residential mortgage loan that
            is subject to protection under an anti-deficiency law, if a
            creditor or mortgage originator provides an application to a
            consumer, or receives an application from a consumer, for any
            type of refinancing for such loan that would cause the loan to
            lose the protection of such anti-deficiency law, the creditor
            or mortgage originator shall provide a written notice to the
            consumer describing the protection provided by the anti-
            deficiency law and the significance for the consumer of the
            loss of such protection before any agreement for any such
            refinancing is consummated.''.
        (d) Policy Regarding Acceptance of Partial Payment.--Section 129C
    of the Truth in Lending Act is amended by inserting after subsection
    (l) (as added by subsection (c)) the following new subsection:
        ``(m) Policy Regarding Acceptance of Partial Payment.--In the case
    of any residential mortgage loan, a creditor shall disclose prior to
    settlement or, in the case of a person becoming a creditor with respect
    to an existing residential mortgage loan, at the time such person
    becomes a creditor--
                ``(1) the creditor's policy regarding the acceptance of
            partial payments; and
                ``(2) if partial payments are accepted, how such payments
            will be applied to such mortgage and if such payments will be
            placed in escrow.''.

    SEC. 9107. RULE OF CONSTRUCTION.

        Except as otherwise expressly provided in section 129B or 129C of
    the Truth in Lending Act (as added by this subtitle), no provision of
    such section 129B or 129C shall be construed as superseding, repealing,
    or affecting any duty, right, obligation, privilege, or remedy of any
    person under any other provision of the Truth in Lending Act or any
    other provision of Federal or State law.

    SEC. 9108. EFFECT ON STATE LAWS.

        (a) In General.--Except as provided in subsection (b), section
    129C(d) of the Truth in Lending Act (as added by section 9104) shall
    supersede any State law to the extent that it provides additional
    remedies against any assignee, securitizer, or securitization vehicle
    for a violation of subsection (a) or (b) of section 129C of such Act or
    any other State law the terms of which address the specific subject
    matter of subsection (a) (determination of ability to repay) or (b)
    (requirement of a net tangible benefit) of section 129C of such Act,
    and the remedies described in section 129C(d) shall constitute the sole
    remedies against any assignee, securitizer, or securitization vehicle
    for such violations.
        (b) Rules of Construction.--No provision of this section shall be
    construed as limiting--
                (1) the application of any State law, or the availability
            of remedies under such law, against a creditor for a particular
            residential mortgage loan regardless of whether such creditor
            also acts as an assignee, securitizer, or securitization
            vehicle for such loan;
                (2) the application of any State law, or the availability
            of remedies under such law, against an assignee, securitizer,
            or securitization vehicle under State law, other than a
            provision of such law the terms of which address the specific
            subject matter of subsection (a) (determination of ability to
            repay) or (b) (requirement of a net tangible benefit) of
            section 129C of such Act;
                (3)(A) the application of any State law, or the
            availability of remedies under such law, against an assignee,
            securitizer or securitization vehicle for its participation in
            or direction of the credit or underwriting decisions of a
            creditor relating to the making of a residential mortgage loan;
            or
                (B) the ability of a consumer to assert any rights against
            or obtain any remedies from an assignee, securitizer or
            securitization vehicle with respect to a residential mortgage
            loan as a defense to foreclosure under section 129C(g);
                (4) the availability of any equitable remedies, including
            injunctive relief, under State law; or
                (5) notwithstanding paragraph (2), the availability of any
            remedies under State law against any assignee, securitizer or
            securitization vehicle that--
                        (A) are in addition to those remedies provided for
                    in section 129C; and
                        (B) were in effect on the date of enactment of this
                    Act.

    SEC. 9109. REGULATIONS.

        Regulations required or authorized to be prescribed under this
    subtitle or the amendments made by this subtitle--
                (1) shall be prescribed in final form before the end of the
            12-month period beginning on the date of the enactment of this
            Act; and
                (2) shall take effect not later than 18 months after the
            date of the enactment of this Act.

    SEC. 9110. AMENDMENTS TO CIVIL LIABILITY PROVISIONS.

        (a) Increase in Amount of Civil Money Penalties for Certain
    Violations.--Section 130(a)(2) of the Truth in Lending Act (15 U.S.C.
    1640(a)(2)) is amended--
                (1) by striking ``$100'' and inserting ``$200'';
                (2) by striking ``$1,000'' and inserting ``$2,000''; and
                (3) by striking ``$500,000'' and inserting ``$1,000,000''.
        (b) Statute of Limitations Extended for Section 129 Violations.--
    Section 130(e) of the Truth in Lending Act (15 U.S.C. 1640(e)) is
    amended--
                (1) in the first sentence, by striking ``Any action'' and
            inserting ``Except as provided in the subsequent sentence, any
            action''; and
                (2) by inserting after the first sentence the following new
            sentence: ``Any action under this section with respect to any
            violation of section 129 may be brought in any United States
            district court, or in any other court of competent
            jurisdiction, before the end of the 3-year period beginning on
            the date of the occurrence of the violation.''.

    SEC. 9111. LENDER RIGHTS IN THE CONTEXT OF BORROWER DECEPTION.

        Section 130 of the Truth in Lending Act is amended by adding at the
    end the following new subsection:
        ``(k) Exemption From Liability and Rescission in Case of Borrower
    Fraud or Deception.--In addition to any other remedy available by law
    or contract, no creditor, assignee, or securitizer shall be liable to
    an obligor under this section, nor shall it be subject to the right of
    rescission of any obligor under 129B, if such obligor, or co-obligor,
    knowingly, or willfully and with actual knowledge furnished material
    information known to be false for the purpose of obtaining such
    residential mortgage loan.''.

    SEC. 9112. SIX-MONTH NOTICE REQUIRED BEFORE RESET OF HYBRID ADJUSTABLE
                  RATE MORTGAGES.

        (a) In General.--Chapter 2 of the Truth in Lending Act (15 U.S.C.
    1631 et seq.) is amended by inserting after section 128 the following
    new section:
    ``Sec. 128A. Reset of hybrid adjustable rate mortgages
        ``(a) Hybrid Adjustable Rate Mortgages Defined.--For purposes of
    this section, the term `hybrid adjustable rate mortgage' means a
    consumer credit transaction secured by the consumer's principal
    residence with a fixed interest rate for an introductory period that
    adjusts or resets to a variable interest rate after such period.
        ``(b) Notice of Reset and Alternatives.--During the 1-month period
    that ends 6 months before the date on which the interest rate in effect
    during the introductory period of a hybrid adjustable rate mortgage
    adjusts or resets to a variable interest rate or, in the case of such
    an adjustment or resetting that occurs within the first 6 months after
    consummation of such loan, at consummation, the creditor or servicer of
    such loan shall provide a written notice, separate and distinct from
    all other correspondence to the consumer, that includes the following:
                ``(1) Any index or formula used in making adjustments to or
            resetting the interest rate and a source of information about
            the index or formula.
                ``(2) An explanation of how the new interest rate and
            payment would be determined, including an explanation of how
            the index was adjusted, such as by the addition of a margin.
                ``(3) A good faith estimate, based on accepted industry
            standards, of the creditor or servicer of the amount of the
            monthly payment that will apply after the date of the
            adjustment or reset, and the assumptions on which this estimate
            is based.
                ``(4) A list of alternatives consumers may pursue before
            the date of adjustment or reset, and descriptions of the
            actions consumers must take to pursue these alternatives,
            including--
                        ``(A) refinancing;
                        ``(B) renegotiation of loan terms;
                        ``(C) payment forbearances; and
                        ``(D) pre-foreclosure sales.
                ``(5) The names, addresses, telephone numbers, and Internet
            addresses of counseling agencies or programs reasonably
            available to the consumer that have been certified or approved
            and made publicly available by the Secretary of Housing and
            Urban Development or a State housing finance authority (as
            defined in section 1301 of the Financial Institutions Reform,
            Recovery, and Enforcement Act of 1989).
                ``(6) The address, telephone number, and Internet address
            for the State housing finance authority (as so defined) for the
            State in which the consumer resides.''.
        (b) Clerical Amendment.--The table of sections for chapter 2 of the
    Truth in Lending Act is amended by inserting after the item relating to
    section 128 the following new item:

    ``128A. Reset of hybrid adjustable rate mortgages.''.

    SEC. 9113. REQUIRED DISCLOSURES.

        Section 128(a) of Truth in Lending Act (15 U.S.C. 1638(a)) is
    amended by adding at the end the following new paragraphs:
                ``(16) In the case of a variable rate residential mortgage
            loan for which an escrow or impound account will be established
            for the payment of all applicable taxes, insurance, and
            assessments--
                        ``(A) the amount of initial monthly payment due
                    under the loan for the payment of principal and
                    interest, and the amount of such initial monthly
                    payment including the monthly payment deposited in the
                    account for the payment of all applicable taxes,
                    insurance, and assessments; and
                        ``(B) the amount of the fully indexed monthly
                    payment due under the loan for the payment of principal
                    and interest, and the amount of such fully indexed
                    monthly payment including the monthly payment deposited
                    in the account for the payment of all applicable taxes,
                    insurance, and assessments.
                ``(17) In the case of a residential mortgage loan, the
            aggregate amount of settlement charges for all settlement
            services provided in connection with the loan, the amount of
            charges that are included in the loan and the amount of such
            charges the borrower must pay at closing, the approximate
            amount of the wholesale rate of funds in connection with the
            loan, and the aggregate amount of other fees or required
            payments in connection with the loan.
                ``(18) In the case of a residential mortgage loan, the
            aggregate amount of fees paid to the mortgage originator in
            connection with the loan, the amount of such fees paid directly
            by the consumer, and any additional amount received by the
            originator from the creditor.
                ``(19) In the case of a residential mortgage loan, the
            total amount of interest that the consumer will pay over the
            life of the loan as a percentage of the principal of the loan.
            Such amount shall be computed assuming the consumer makes each
            monthly payment in full and on-time, and does not make any
            over-payments.''.

    SEC. 9114. DISCLOSURES REQUIRED IN MONTHLY STATEMENTS FOR RESIDENTIAL
                  MORTGAGE LOANS.

        Section 128 of the Truth in Lending Act (15 U.S.C. 1638) is amended
    by adding at the end the following new subsection:
        ``(f) Periodic Statements for Residential Mortgage Loans.--
                ``(1) In general.--The creditor, assignee, or servicer with
            respect to any residential mortgage loan shall transmit to the
            obligor, for each billing cycle, a statement setting forth each
            of the following items, to the extent applicable, in a
            conspicuous and prominent manner:
                        ``(A) The amount of the principal obligation under
                    the mortgage.
                        ``(B) The current interest rate in effect for the
                    loan.
                        ``(C) The date on which the interest rate may next
                    reset or adjust.
                        ``(D) The amount of any prepayment fee to be
                    charged, if any.
                        ``(E) A description of any late payment fees.
                        ``(F) A telephone number and electronic mail
                    address that may be used by the obligor to obtain
                    information regarding the mortgage.
                        ``(G) The names, addresses, telephone numbers, and
                    Internet addresses of counseling agencies or programs
                    reasonably available to the consumer that have been
                    certified or approved and made publicly available by
                    the Secretary of Housing and Urban Development or a
                    State housing finance authority (as defined in section
                    1301 of the Financial Institutions Reform, Recovery,
                    and Enforcement Act of 1989).
                        ``(H) Such other information as the Board may
                    prescribe in regulations.
                ``(2) Development and use of standard form.--The Federal
            banking agencies shall jointly develop and prescribe a standard
            form for the disclosure required under this subsection, taking
            into account that the statements required may be transmitted in
            writing or electronically.''.

    SEC. 9115. LEGAL ASSISTANCE FOR FORECLOSURE-RELATED ISSUES.

        (a) Establishment.--The Secretary of Housing and Urban Development
    (hereafter in this section referred to as the ``Secretary'' shall
    establish a program for making grants for providing a full range of
    foreclosure legal assistance to low- and moderate-income homeowners and
    tenants related to home ownership preservation, home foreclosure
    prevention, and tenancy associated with home foreclosure.
        (b) Competitive Allocation.--The Secretary shall allocate amounts
    made available for grants under this section to State and local legal
    organizations on the basis of a competitive process. For purposes of
    this subsection ``State and local legal organizations'' are those State
    and local organizations whose primary business or mission is to provide
    legal assistance.
        (c) Priority to Certain Areas.--In allocating amounts in accordance
    with subsection (b), the Secretary shall give priority consideration to
    State and local legal organizations that are operating in the 100
    metropolitan statistical areas (as that term is defined by the Director
    of the Office of Management and Budget) with the highest home
    foreclosure rates.
        (d) Legal Assistance.--
                (1) In general.--Any State or local legal organization that
            receives financial assistance pursuant to this section may use
            such amounts only to assist--
                        (A) homeowners of owner-occupied homes with
                    mortgages in default, in danger of default, or subject
                    to or at risk of foreclosure; and
                        (B) tenants at risk of or subject to eviction as a
                    result of foreclosure of the property in which such
                    tenant resides.
                (2) Commence use within 90 days.--Any State or local legal
            organization that receives financial assistance pursuant to
            this section shall begin using any financial assistance
            received under this section within 90 days after receipt of the
            assistance.
                (3) Prohibition on class actions.--No funds provided to a
            State or local legal organization under this section may be
            used to support any class action litigation.
                (4) Limitation on legal assistance.--Legal assistance
            funded with amounts provided under this section shall be
            limited to mortgage-related default, eviction, or foreclosure
            proceedings, without regard to whether such foreclosure is
            judicial or nonjudicial.
                (5) Effective date.--Notwithstanding section 9116, this
            subsection shall take effect on the date of the enactment of
            this Act.
        (e) Limitation on Distribution of Assistance.--
                (1) In general.--None of the amounts made available under
            this section shall be distributed to--
                        (A) any organization which has been convicted for a
                    violation under Federal law relating to an election for
                    Federal office; or
                        (B) any organization which employs applicable
                    individuals.
                (2) Definition of applicable individuals.--In this
            subsection, the term ``applicable individual'' means an
            individual who--
                        (A) is--
                                (i) employed by the organization in a
                            permanent or temporary capacity;
                                (ii) contracted or retained by the
                            organization; or
                                (iii) acting on behalf of, or with the
                            express or apparent authority of, the
                            organization; and
                        (B) has been convicted for a violation under
                    Federal law relating to an election for Federal office.
        (f) Authorization of Appropriations.--There are authorized to be
    appropriated to the Secretary $35,000,000 for each of fiscal years 2009
    through 2012 for grants under this section.

    SEC. 9116. EFFECTIVE DATE.

        The amendments made by this subtitle shall apply to transactions
    consummated on or after the effective date of the regulations specified
    in section 9109.

    SEC. 9117. REPORT BY THE GAO.

        (a) Report Required.--The Comptroller General shall conduct a study
    to determine the effects the enactment of this Act will have on the
    availability and affordability of credit for consumers, small
    businesses, homebuyers, and mortgage lending, including the effect--
                (1) on the mortgage market for mortgages that are not
            within the safe harbor provided in the amendments made by this
            subtitle;
                (2) on the ability of prospective homebuyers to obtain
            financing;
                (3) on the ability of homeowners facing resets or
            adjustments to refinance--for example, do they have fewer
            refinancing options due to the unavailability of certain loan
            products that were available before the enactment of this Act;
                (4) on minorities' ability to access affordable credit
            compared with other prospective borrowers;
                (5) on home sales and construction;
                (6) of extending the rescission right, if any, on
            adjustable rate loans and its impact on litigation;
                (7) of State foreclosure laws and, if any, an investor's
            ability to transfer a property after foreclosure;
                (8) of expanding the existing provisions of the Home
            Ownership and Equity Protection Act of 1994;
                (9) of prohibiting prepayment penalties on high-cost
            mortgages; and
                (10) of establishing counseling services under the
            Department of Housing and Urban Development and offered through
            the Office of Housing Counseling.
        (b) Report.--Before the end of the 1-year period beginning on the
    date of the enactment of this Act, the Comptroller General shall submit
    a report to the Congress containing the findings and conclusions of the
    Comptroller General with respect to the study conducted pursuant to
    subsection (a).
        (c) Examination Related to Certain Credit Risk Retention
    Provisions.--The report required by subsection (b) shall also include
    an analysis by the Comptroller General of the effect on the capital
    reserves and funding of lenders of credit risk retention provisions for
    non-qualified mortgages, including an analysis of the exceptions and
    adjustments authorized in section 129C(l)(3)(A) of the Truth in Lending
    Act and a recommendation on whether a uniform standard is needed.
        (d) Analysis of Credit Risk Retention Provisions.--The report
    required by subsection (b) shall also include--
                (1) an analysis by the Comptroller General of whether the
            credit risk retention provisions have significantly reduced
            risks to the larger credit market of the repackaging and
            selling of securitized loans on a secondary market; and
                (2) recommendations to the Congress on adjustments that
            should be made, or additional measures that should be
            undertaken.

    SEC. 9118. STATE ATTORNEY GENERAL ENFORCEMENT AUTHORITY.

        Section 130(e) of the Truth in Lending Act (15 U.S.C. 1640(e)) is
    amended by striking ``section 129 may also'' and inserting ``section
    129, 129B, or 129C of this Act may also''.

                        Subtitle C--High-Cost Mortgages

    SEC. 9201. DEFINITIONS RELATING TO HIGH-COST MORTGAGES.

        (a) High-cost Mortgage Defined.--Section 103(aa) of the Truth in
    Lending Act (15 U.S.C. 1602(aa)) is amended by striking all that
    precedes paragraph (2) and inserting the following:
        ``(aa) High-cost Mortgage.--
                ``(1) Definition.--
                        ``(A) In general.--The term `high-cost mortgage',
                    and a mortgage referred to in this subsection, means a
                    consumer credit transaction that is secured by the
                    consumer's principal dwelling, other than a reverse
                    mortgage transaction, if--
                                ``(i) in the case of a credit transaction
                            secured--
                                        ``(I) by a first mortgage on the
                                    consumer's principal dwelling, the
                                    annual percentage rate at consummation
                                    of the transaction will exceed by more
                                    than 6.5 percentage points (8.5
                                    percentage points, if the dwelling is
                                    personal property and the transaction
                                    is for less than $50,000) the average
                                    prime offer rate, as defined in section
                                    129C(c)(2)(B), for a comparable
                                    transaction; or
                                        ``(II) by a subordinate or junior
                                    mortgage on the consumer's principal
                                    dwelling, the annual percentage rate at
                                    consummation of the transaction will
                                    exceed by more than 8.5 percentage
                                    points the average prime offer rate, as
                                    defined in section 129C(c)(2)(B), for a
                                    comparable transaction;
                                ``(ii) the total points and fees payable in
                            connection with the transaction exceed--
                                        ``(I) in the case of a transaction
                                    for $20,000 or more, 5 percent of the
                                    total transaction amount; or
                                        ``(II) in the case of a transaction
                                    for less than $20,000, the lesser of 8
                                    percent of the total transaction amount
                                    or $1,000 (or such other dollar amount
                                    as the Board shall prescribe by
                                    regulation); or
                                ``(iii) the credit transaction documents
                            permit the creditor to charge or collect
                            prepayment fees or penalties more than 36
                            months after the transaction closing or such
                            fees or penalties exceed, in the aggregate,
                            more than 2 percent of the amount prepaid.
                        ``(B) Introductory rates taken into account.--For
                    purposes of subparagraph (A)(i), the annual percentage
                    rate of interest shall be determined based on the
                    following interest rate:
                                ``(i) In the case of a fixed-rate
                            transaction in which the annual percentage rate
                            will not vary during the term of the loan, the
                            interest rate in effect on the date of
                            consummation of the transaction.
                                ``(ii) In the case of a transaction in
                            which the rate of interest varies solely in
                            accordance with an index, the interest rate
                            determined by adding the index rate in effect
                            on the date of consummation of the transaction
                            to the maximum margin permitted at any time
                            during the transaction agreement.
                                ``(iii) In the case of any other
                            transaction in which the rate may vary at any
                            time during the term of the loan for any
                            reason, the interest charged on the transaction
                            at the maximum rate that may be charged during
                            the term of the transaction.''.
        (b) Adjustment of Percentage Points.--Section 103(aa)(2) of the
    Truth in Lending Act (15 U.S.C. 1602(aa)(2)) is amended by striking
    subparagraph (B) and inserting the following new subparagraph:
                        ``(B) An increase or decrease under subparagraph
                    (A)--
                                ``(i) may not result in the number of
                            percentage points referred to in paragraph
                            (1)(A)(i)(I) being less than 6 percentage
                            points or greater than 10 percentage points;
                            and
                                ``(ii) may not result in the number of
                            percentage points referred to in paragraph
                            (1)(A)(i)(II) being less than 8 percentage
                            points or greater than 12 percentage points.''.
        (c) Points and Fees Defined.--
                (1) In general.--Section 103(aa)(4) of the Truth in Lending
            Act (15 U.S.C. 1602(aa)(4)) is amended--
                        (A) by striking subparagraph (B) and inserting the
                    following:
                        ``(B) all compensation paid directly or indirectly
                    by a consumer or creditor to a mortgage originator from
                    any source, including a mortgage originator that
                    originates a loan in the name of the creditor in a
                    table-funded transaction;'';
                        (B) in subparagraph (C)(ii), by inserting ``except
                    where applied to the charges set forth in section
                    106(e)(1) where a creditor may receive indirect
                    compensation solely as a result of obtaining
                    distributions of profits from an affiliated entity
                    based on its ownership interest in compliance with
                    section 8(c)(4) of the Real Estate Settlement
                    Procedures Act of 1974'' before the semicolon at the
                    end;
                        (C) in subparagraph (C)(iii), by striking ``; and''
                    and inserting ``, except as provided for in clause
                    (ii);'';
                        (D) by redesignating subparagraph (D) as
                    subparagraph (G); and
                        (E) by inserting after subparagraph (C) the
                    following new subparagraphs:
                        ``(D) premiums or other charges payable at or
                    before closing for any credit life, credit disability,
                    credit unemployment, or credit property insurance, or
                    any other accident, loss-of-income, life or health
                    insurance, or any payments directly or indirectly for
                    any debt cancellation or suspension agreement or
                    contract, except that insurance premiums or debt
                    cancellation or suspension fees calculated and paid in
                    full on a monthly basis shall not be considered
                    financed by the creditor;
                        ``(E) except as provided in subsection (cc), the
                    maximum prepayment fees and penalties which may be
                    charged or collected under the terms of the credit
                    transaction;
                        ``(F) all prepayment fees or penalties that are
                    incurred by the consumer if the loan refinances a
                    previous loan made or currently held by the same
                    creditor or an affiliate of the creditor; and''.
                (2) Calculation of points and fees for open-end consumer
            credit plans.--Section 103(aa) of the Truth in Lending Act (15
            U.S.C. 1602(aa)) is amended--
                        (A) by redesignating paragraph (5) as paragraph
                    (6); and
                        (B) by inserting after paragraph (4) the following
                    new paragraph:
                ``(5) Calculation of points and fees for open-end consumer
            credit plans.--In the case of open-end consumer credit plans,
            points and fees shall be calculated, for purposes of this
            section and section 129, by adding the total points and fees
            known at or before closing, including the maximum prepayment
            penalties which may be charged or collected under the terms of
            the credit transaction, plus the minimum additional fees the
            consumer would be required to pay to draw down an amount equal
            to the total credit line.''.
        (d) Bona Fide Discount Loan Discount Points.--Section 103 of the
    Truth in Lending Act (15 U.S.C. 1602) is amended by inserting after
    subsection (cc) (as added by section 101) the following new subsection:
        ``(dd) Bona Fide Discount Points and Prepayment Penalties.--For the
    purposes of determining the amount of points and fees for purposes of
    subsection (aa), either the amounts described in paragraph (1) or (2)
    of the following paragraphs, but not both, shall be excluded:
                ``(1) Up to and including 2 bona fide discount points
            payable by the consumer in connection with the mortgage, but
            only if the interest rate from which the mortgage's interest
            rate will be discounted does not exceed by more than 1
            percentage point--
                        ``(A) the required net yield for a 90-day standard
                    mandatory delivery commitment for a reasonably
                    comparable loan from either the Federal National
                    Mortgage Association or the Federal Home Loan Mortgage
                    Corporation, whichever is greater; or
                        ``(B) if secured by a personal property loan, the
                    average rate on a loan in connection with which
                    insurance is provided under title I of the National
                    Housing Act (12 U.S.C. 1702 et seq.).
                ``(2) Unless 2 bona fide discount points have been excluded
            under paragraph (1), up to and including 1 bona fide discount
            point payable by the consumer in connection with the mortgage,
            but only if the interest rate from which the mortgage's
            interest rate will be discounted does not exceed by more than 2
            percentage points--
                        ``(A) the required net yield for a 90-day standard
                    mandatory delivery commitment for a reasonably
                    comparable loan from either the Federal National
                    Mortgage Association or the Federal Home Loan Mortgage
                    Corporation, whichever is greater; or
                        ``(B) if secured by a personal property loan, the
                    average rate on a loan in connection with which
                    insurance is provided under title I of the National
                    Housing Act (12 U.S.C. 1702 et seq.).
                ``(3) For purposes of paragraph (1), the term `bona fide
            discount points' means loan discount points which are knowingly
            paid by the consumer for the purpose of reducing, and which in
            fact result in a bona fide reduction of, the interest rate or
            time-price differential applicable to the mortgage.
                ``(4) Paragraphs (1) and (2) shall not apply to discount
            points used to purchase an interest rate reduction unless the
            amount of the interest rate reduction purchased is reasonably
            consistent with established industry norms and practices for
            secondary mortgage market transactions.''.

    SEC. 9202. AMENDMENTS TO EXISTING REQUIREMENTS FOR CERTAIN MORTGAGES.

        (a) Prepayment Penalty Provisions.--Section 129(c)(2) of the Truth
    in Lending Act (15 U.S.C. 1639(c)(2)) is hereby repealed.
        (b) No Balloon Payments.--Section 129(e) of the Truth in Lending
    Act (15 U.S.C. 1639(e)) is amended to read as follows:
        ``(e) No Balloon Payments.--No high-cost mortgage may contain a
    scheduled payment that is more than twice as large as the average of
    earlier scheduled payments. This subsection shall not apply when the
    payment schedule is adjusted to the seasonal or irregular income of the
    consumer or in the case of a balance due under the customary terms of a
    reverse mortgage.''.

    SEC. 9203. ADDITIONAL REQUIREMENTS FOR CERTAIN MORTGAGES.

        (a) Additional Requirements for Certain Mortgages.--Section 129 of
    the Truth in Lending Act (15 U.S.C. 1639) is amended--
                (1) by redesignating subsections (j), (k) and (l) as
            subsections (n), (o) and (p) respectively; and
                (2) by inserting after subsection (i) the following new
            subsections:
        ``(j) Recommended Default.--No creditor shall recommend or
    encourage default on an existing loan or other debt prior to and in
    connection with the closing or planned closing of a high-cost mortgage
    that refinances all or any portion of such existing loan or debt.
        ``(k) Late Fees.--
                ``(1) In general.--No creditor may impose a late payment
            charge or fee in connection with a high-cost mortgage--
                        ``(A) in an amount in excess of 4 percent of the
                    amount of the payment past due;
                        ``(B) unless the loan documents specifically
                    authorize the charge or fee;
                        ``(C) before the end of the 15-day period beginning
                    on the date the payment is due, or in the case of a
                    loan on which interest on each installment is paid in
                    advance, before the end of the 30-day period beginning
                    on the date the payment is due; or
                        ``(D) more than once with respect to a single late
                    payment.
                ``(2) Coordination with subsequent late fees.--If a payment
            is otherwise a full payment for the applicable period and is
            paid on its due date or within an applicable grace period, and
            the only delinquency or insufficiency of payment is
            attributable to any late fee or delinquency charge assessed on
            any earlier payment, no late fee or delinquency charge may be
            imposed on such payment.
                ``(3) Failure to make installment payment.--If, in the case
            of a loan agreement the terms of which provide that any payment
            shall first be applied to any past due principal balance, the
            consumer fails to make an installment payment and the consumer
            subsequently resumes making installment payments but has not
            paid all past due installments, the creditor may impose a
            separate late payment charge or fee for any principal due
            (without deduction due to late fees or related fees) until the
            default is cured.
        ``(l) Acceleration of Debt.--No high-cost mortgage may contain a
    provision which permits the creditor to accelerate the indebtedness,
    except when repayment of the loan has been accelerated by default in
    payment, or pursuant to a due-on-sale provision, or pursuant to a
    material violation of some other provision of the loan document
    unrelated to payment schedule.
        ``(m) Restriction on Financing Points and Fees.--No creditor may
    directly or indirectly finance, in connection with any high-cost
    mortgage, any of the following:
                ``(1) Any prepayment fee or penalty payable by the consumer
            in a refinancing transaction if the creditor or an affiliate of
            the creditor is the noteholder of the note being refinanced.
                ``(2) Any points or fees.''.
        (b) Prohibitions on Evasions.--Section 129 of the Truth in Lending
    Act (15 U.S.C. 1639) is amended by inserting after subsection (p) (as
    so redesignated by subsection (a)(1)) the following new subsection:
        ``(q) Prohibitions on Evasions, Structuring of Transactions, and
    Reciprocal Arrangements.--A creditor may not take any action in
    connection with a high-cost mortgage--
                ``(1) to structure a loan transaction as an open-end credit
            plan or another form of loan for the purpose and with the
            intent of evading the provisions of this title; or
                ``(2) to divide any loan transaction into separate parts
            for the purpose and with the intent of evading provisions of
            this title.''.
        (c) Modification or Deferral Fees.--Section 129 of the Truth in
    Lending Act (15 U.S.C. 1639) is amended by inserting after subsection
    (q) (as added by subsection (b) of this section) the following new
    subsection:
        ``(r) Modification and Deferral Fees Prohibited.--
                ``(1) Creditors.--A creditor may not charge a consumer any
            fee to modify, renew, extend, or amend a high-cost mortgage, or
            to defer any payment due under the terms of such mortgage,
            unless the modification, renewal, extension or amendment
            results in a lower annual percentage rate on the mortgage for
            the consumer and then only if the amount of the fee is
            comparable to fees imposed for similar transactions in
            connection with consumer credit transactions that are secured
            by a consumer's principal dwelling and are not high-cost
            mortgages.
                ``(2) Third parties.--A third-party may not charge a
            consumer any fee to--
                        ``(A) modify, renew, extend, or amend a high-cost
                    mortgage, or defer any payment due under the terms of
                    such mortgage;
                        ``(B) negotiate with a creditor on behalf of a
                    consumer, the modification, renewal, extension, or
                    amendment of a high-cost mortgage; or
                        ``(C) negotiate with a creditor on behalf of a
                    consumer, the deferral of any payment due under the
                    terms of such mortgage,
            unless the modification renewal, extension or amendment results
            in a significantly lower annual percentage rate on the
            mortgage, or a significant reduction in the amount of the
            outstanding principal on the mortgage, for the consumer and
            then only if the amount of the fee is comparable to fees
            imposed for similar transactions in connection with consumer
            credit transactions that are secured by a consumer's principal
            dwelling and are not high-cost mortgages.
                ``(3) Enforcement.--Section 130 shall be applied for
            purposes of paragraph (2) by--
                        ``(A) substituting `third party' for `creditor'each
                    place such term appears; and
                        ``(B) substituting `any fee charged by a third
                    party' for `finance charge' each place such term
                    appears.''.
        (d) Payoff Statement.--Section 129 of the Truth in Lending Act (15
    U.S.C. 1639) is amended by inserting after subsection (r) (as added by
    subsection (c) of this section) the following new subsection:
        ``(s) Payoff Statement.--
                ``(1) Fees.--
                        ``(A) In general.--Except as provided in
                    subparagraph (B), no creditor or servicer may charge a
                    fee for informing or transmitting to any person the
                    balance due to pay off the outstanding balance on a
                    high-cost mortgage.
                        ``(B) Transaction fee.--When payoff information
                    referred to in subparagraph (A) is provided by
                    facsimile transmission or by a courier service, a
                    creditor or servicer may charge a processing fee to
                    cover the cost of such transmission or service in an
                    amount not to exceed an amount that is comparable to
                    fees imposed for similar services provided in
                    connection with consumer credit transactions that are
                    secured by the consumer's principal dwelling and are
                    not high-cost mortgages.
                        ``(C) Fee disclosure.--Prior to charging a
                    transaction fee as provided in subparagraph (B), a
                    creditor or servicer shall disclose that payoff
                    balances are available for free pursuant to
                    subparagraph (A).
                        ``(D) Multiple requests.--If a creditor or servicer
                    has provided payoff information referred to in
                    subparagraph (A) without charge, other than the
                    transaction fee allowed by subparagraph (B), on 4
                    occasions during a calendar year, the creditor or
                    servicer may thereafter charge a reasonable fee for
                    providing such information during the remainder of the
                    calendar year.
                ``(2) Prompt delivery.--Payoff balances shall be provided
            within 5 business days after receiving a request by a consumer
            or a person authorized by the consumer to obtain such
            information.
                ``(3) Services considered assignee.--For the purposes of
            this subsection, a servicer shall be considered an assignee
            under the Truth in Lending Act.''.
        (e) Pre-Loan Counseling Required.--Section 129 of the Truth in
    Lending Act (15 U.S.C. 1639) is amended by inserting after subsection
    (s) (as added by subsection (d) of this section) the following new
    subsection:
        ``(t) Pre-Loan Counseling.--
                ``(1) In general.--A creditor may not extend credit to a
            consumer under a high-cost mortgage without first receiving
            certification from a counselor that is approved by the
            Secretary of Housing and Urban Development, or at the
            discretion of the Secretary, a State housing finance authority,
            that the consumer has received counseling on the advisability
            of the mortgage. Such counselor shall not be employed by the
            creditor or an affiliate of the creditor or be affiliated with
            the creditor.
                ``(2) Disclosures required prior to counseling.--No
            counselor may certify that a consumer has received counseling
            on the advisability of the high-cost mortgage unless the
            counselor can verify that the consumer has received each
            statement required (in connection with such loan) by this
            section or the Real Estate Settlement Procedures Act of 1974
            with respect to the transaction.
                ``(3) Regulations.--The Board may prescribe such
            regulations as the Board determines to be appropriate to carry
            out the requirements of paragraph (1).''.
        (f) Flipping Prohibited.--Section 129 of the Truth in Lending Act
    (15 U.S.C. 1639) is amended by inserting after subsection (t) (as added
    by subsection (e)) the following new subsection:
        ``(u) Flipping.--
                ``(1) In general.--No creditor may knowingly or
            intentionally engage in the unfair act or practice of flipping
            in connection with a high-cost mortgage.
                ``(2) Flipping defined.--For purposes of this subsection,
            the term `flipping' means the making of a loan or extension of
            credit in the form a high-cost mortgage to a consumer which
            refinances an existing mortgage when the new loan or extension
            of credit does not have reasonable, net tangible benefit (as
            determined in accordance with regulations prescribed under
            section 129C(b)) to the consumer considering all of the
            circumstances, including the terms of both the new and the
            refinanced loans or credit, the cost of the new loan or credit,
            and the consumer's circumstances.
        ``(v) Corrections and Unintentional Violations.--A creditor or
    assignee in a high cost loan who, when acting in good faith, fails to
    comply with any requirement under this section will not be deemed to
    have violated such requirement if the creditor or assignee establishes
    that either--
                ``(1) within 30 days of the loan closing and prior to the
            institution of any action, the consumer is notified of or
            discovers the violation, appropriate restitution is made, and
            whatever adjustments are necessary are made to the loan to
            either, at the choice of the consumer--
                        ``(A) make the loan satisfy the requirements of
                    this chapter; or
                        ``(B) in the case of a high-cost mortgage, change
                    the terms of the loan in a manner beneficial to the
                    consumer so that the loan will no longer be a high-cost
                    mortgage; or
                ``(2) within 60 days of the creditor's discovery or receipt
            of notification of an unintentional violation or bona fide
            error as described in subsection (c) and prior to the
            institution of any action, the consumer is notified of the
            compliance failure, appropriate restitution is made, and
            whatever adjustments are necessary are made to the loan to
            either, at the choice of the consumer--
                        ``(A) make the loan satisfy the requirements of
                    this chapter; or
                        ``(B) in the case of a high-cost mortgage, change
                    the terms of the loan in a manner beneficial so that
                    the loan will no longer be a high-cost mortgage.''.

    SEC. 9204. REGULATIONS.

        (a) In General.--The Board of Governors of the Federal Reserve
    System shall publish regulations implementing this subtitle and the
    amendments made by this subtitle in final form before the end of the 6-
    month period beginning on the date of the enactment of this Act.
        (b) Consumer Mortgage Education.--
                (1) Regulations.--The Board of Governors of the Federal
            Reserve System may prescribe regulations requiring or
            encouraging creditors to provide consumer mortgage education to
            prospective customers or direct such customers to qualified
            consumer mortgage education or counseling programs in the
            vicinity of the residence of the consumer.
                (2) Coordination with state law.--No requirement
            established by the Board of Governors of the Federal Reserve
            System pursuant to paragraph (1) shall be construed as
            affecting or superseding any requirement under the law of any
            State with respect to consumer mortgage counseling or
            education.

    SEC. 9205. EFFECTIVE DATE.

        The amendments made by this subtitle shall take effect at the end
    of the 6-month period beginning on the date of the enactment of this
    Act and shall apply to mortgages referred to in section 103(aa) of the
    Truth in Lending Act (15 U.S.C. 1602(aa)) for which an application is
    received by the creditor after the end of such period.

                    Subtitle D--Office of Housing Counseling

    SEC. 9301. SHORT TITLE.

        This subtitle may be cited as the ``Expand and Preserve Home
    Ownership Through Counseling Act''.

    SEC. 9302. ESTABLISHMENT OF OFFICE OF HOUSING COUNSELING.

        Section 4 of the Department of Housing and Urban Development Act
    (42 U.S.C. 3533) is amended by adding at the end the following new
    subsection:
        ``(g) Office of Housing Counseling.--
                ``(1) Establishment.--There is established, in the
            Department, the Office of Housing Counseling.
                ``(2) Director.--There is established the position of
            Director of Housing Counseling. The Director shall be the head
            of the Office of Housing Counseling and shall be appointed by,
            and shall report to, the Secretary. Such position shall be a
            career-reserved position in the Senior Executive Service.
                ``(3) Functions.--
                        ``(A) In general.--The Director shall have primary
                    responsibility within the Department for all activities
                    and matters relating to homeownership counseling and
                    rental housing counseling, including--
                                ``(i) research, grant administration,
                            public outreach, and policy development
                            relating to such counseling; and
                                ``(ii) establishment, coordination, and
                            administration of all regulations,
                            requirements, standards, and performance
                            measures under programs and laws administered
                            by the Department that relate to housing
                            counseling, homeownership counseling (including
                            maintenance of homes), mortgage-related
                            counseling (including home equity conversion
                            mortgages and credit protection options to
                            avoid foreclosure), and rental housing
                            counseling, including the requirements,
                            standards, and performance measures relating to
                            housing counseling.
                        ``(B) Specific functions.--The Director shall carry
                    out the functions assigned to the Director and the
                    Office under this section and any other provisions of
                    law. Such functions shall include establishing rules
                    necessary for--
                                ``(i) the counseling procedures under
                            section 106(g)(1) of the Housing and Urban
                            Development Act of 1968 (12 U.S.C.
                            1701x(h)(1));
                                ``(ii) carrying out all other functions of
                            the Secretary under section 106(g) of the
                            Housing and Urban Development Act of 1968,
                            including the establishment, operation, and
                            publication of the availability of the toll-
                            free telephone number under paragraph (2) of
                            such section;
                                ``(iii) contributing to the preparation and
                            distribution of home buying information
                            booklets pursuant to section 5 of the Real
                            Estate Settlement Procedures Act of 1974 (12
                            U.S.C. 2604);
                                ``(iv) carrying out the certification
                            program under section 106(e) of the Housing and
                            Urban Development Act of 1968 (12 U.S.C.
                            1701x(e));
                                ``(v) carrying out the assistance program
                            under section 106(a)(4) of the Housing and
                            Urban Development Act of 1968, including
                            criteria for selection of applications to
                            receive assistance;
                                ``(vi) carrying out any functions regarding
                            abusive, deceptive, or unscrupulous lending
                            practices relating to residential mortgage
                            loans that the Secretary considers appropriate,
                            which shall include conducting the study under
                            section 6 of the Expand and Preserve Home
                            Ownership Through Counseling Act;
                                ``(vii) providing for operation of the
                            advisory committee established under paragraph
                            (4) of this subsection;
                                ``(viii) collaborating with community-based
                            organizations with expertise in the field of
                            housing counseling; and
                                ``(ix) providing for the building of
                            capacity to provide housing counseling services
                            in areas that lack sufficient services,
                            including underdeveloped areas that lack basic
                            water and sewer systems, electricity services,
                            and safe, sanitary housing.
                ``(4) Advisory committee.--
                        ``(A) In general.--The Secretary shall appoint an
                    advisory committee to provide advice regarding the
                    carrying out of the functions of the Director.
                        ``(B) Members.--Such advisory committee shall
                    consist of not more than 12 individuals, and the
                    membership of the committee shall equally represent the
                    mortgage and real estate industry, including consumers
                    and housing counseling agencies certified by the
                    Secretary.
                        ``(C) Terms.--Except as provided in subparagraph
                    (D), each member of the advisory committee shall be
                    appointed for a term of 3 years. Members may be
                    reappointed at the discretion of the Secretary.
                        ``(D) Terms of initial appointees.--As designated
                    by the Secretary at the time of appointment, of the
                    members first appointed to the advisory committee, 4
                    shall be appointed for a term of 1 year and 4 shall be
                    appointed for a term of 2 years.
                        ``(E) Prohibition of pay; travel expenses.--Members
                    of the advisory committee shall serve without pay, but
                    shall receive travel expenses, including per diem in
                    lieu of subsistence, in accordance with applicable
                    provisions under subchapter I of chapter 57 of title 5,
                    United States Code.
                        ``(F) Advisory role only.--The advisory committee
                    shall have no role in reviewing or awarding housing
                    counseling grants.
                ``(5) Scope of homeownership counseling.--In carrying out
            the responsibilities of the Director, the Director shall ensure
            that homeownership counseling provided by, in connection with,
            or pursuant to any function, activity, or program of the
            Department addresses the entire process of homeownership,
            including the decision to purchase a home, the selection and
            purchase of a home, issues arising during or affecting the
            period of ownership of a home (including refinancing, default
            and foreclosure, and other financial decisions), and the sale
            or other disposition of a home.''.

    SEC. 9303. COUNSELING PROCEDURES.

        (a) In General.--Section 106 of the Housing and Urban Development
    Act of 1968 (12 U.S.C. 1701x) is amended by adding at the end the
    following new subsection:
        ``(g) Procedures and Activities.--
                ``(1) Counseling procedures.--
                        ``(A) In general.--The Secretary shall establish,
                    coordinate, and monitor the administration by the
                    Department of Housing and Urban Development of the
                    counseling procedures for homeownership counseling and
                    rental housing counseling provided in connection with
                    any program of the Department, including all
                    requirements, standards, and performance measures that
                    relate to homeownership and rental housing counseling.
                        ``(B) Homeownership counseling.--For purposes of
                    this subsection and as used in the provisions referred
                    to in this subparagraph, the term `homeownership
                    counseling' means counseling related to homeownership
                    and residential mortgage loans. Such term includes
                    counseling related to homeownership and residential
                    mortgage loans that is provided pursuant to--
                                ``(i) section 105(a)(20) of the Housing and
                            Community Development Act of 1974 (42 U.S.C.
                            5305(a)(20));
                                ``(ii) in the United States Housing Act of
                            1937--
                                        ``(I) section 9(e) (42 U.S.C.
                                    1437g(e));
                                        ``(II) section 8(y)(1)(D) (42
                                    U.S.C. 1437f(y)(1)(D));
                                        ``(III) section 18(a)(4)(D) (42
                                    U.S.C. 1437p(a)(4)(D));
                                        ``(IV) section 23(c)(4) (42 U.S.C.
                                    1437u(c)(4));
                                        ``(V) section 32(e)(4) (42 U.S.C.
                                    1437z-4(e)(4));
                                        ``(VI) section 33(d)(2)(B) (42
                                    U.S.C. 1437z-5(d)(2)(B));
                                        ``(VII) sections 302(b)(6) and
                                    303(b)(7) (42 U.S.C. 1437aaa-1(b)(6),
                                    1437aaa-2(b)(7)); and
                                        ``(VIII) section 304(c)(4) (42
                                    U.S.C. 1437aaa-3(c)(4));
                                ``(iii) section 302(a)(4) of the American
                            Homeownership and Economic Opportunity Act of
                            2000 (42 U.S.C. 1437f note);
                                ``(iv) sections 233(b)(2) and 258(b) of the
                            Cranston-Gonzalez National Affordable Housing
                            Act (42 U.S.C. 12773(b)(2), 12808(b));
                                ``(v) this section and section 101(e) of
                            the Housing and Urban Development Act of 1968
                            (12 U.S.C. 1701x, 1701w(e));
                                ``(vi) section 220(d)(2)(G) of the Low-
                            Income Housing Preservation and Resident
                            Homeownership Act of 1990 (12 U.S.C.
                            4110(d)(2)(G));
                                ``(vii) sections 422(b)(6), 423(b)(7),
                            424(c)(4), 442(b)(6), and 443(b)(6) of the
                            Cranston-Gonzalez National Affordable Housing
                            Act (42 U.S.C. 12872(b)(6), 12873(b)(7),
                            12874(c)(4), 12892(b)(6), and 12893(b)(6));
                                ``(viii) section 491(b)(1)(F)(iii) of the
                            McKinney-Vento Homeless Assistance Act (42
                            U.S.C. 11408(b)(1)(F)(iii));
                                ``(ix) sections 202(3) and 810(b)(2)(A) of
                            the Native American Housing and Self-
                            Determination Act of 1996 (25 U.S.C. 4132(3),
                            4229(b)(2)(A));
                                ``(x) in the National Housing Act--
                                        ``(I) in section 203 (12 U.S.C.
                                    1709), the penultimate undesignated
                                    paragraph of paragraph (2) of
                                    subsection (b), subsection (c)(2)(A),
                                    and subsection (r)(4);
                                        ``(II) subsections (a) and (c)(3)
                                    of section 237 (12 U.S.C. 1715z-2); and
                                        ``(III) subsections (d)(2)(B) and
                                    (m)(1) of section 255 (12 U.S.C. 1715z-
                                    20);
                                ``(xi) section 502(h)(4)(B) of the Housing
                            Act of 1949 (42 U.S.C. 1472(h)(4)(B));
                                ``(xii) section 508 of the Housing and
                            Urban Development Act of 1970 (12 U.S.C. 1701z-
                            7); and
                                ``(xiii) section 106 of the Energy Policy
                            Act of 1992 (42 U.S.C. 12712 note).
                        ``(C) Rental housing counseling.--For purposes of
                    this subsection, the term `rental housing counseling'
                    means counseling related to rental of residential
                    property, which may include counseling regarding future
                    homeownership opportunities and providing referrals for
                    renters and prospective renters to entities providing
                    counseling and shall include counseling related to such
                    topics that is provided pursuant to--
                                ``(i) section 105(a)(20) of the Housing and
                            Community Development Act of 1974 (42 U.S.C.
                            5305(a)(20));
                                ``(ii) in the United States Housing Act of
                            1937--
                                        ``(I) section 9(e) (42 U.S.C.
                                    1437g(e));
                                        ``(II) section 18(a)(4)(D) (42
                                    U.S.C. 1437p(a)(4)(D));
                                        ``(III) section 23(c)(4) (42 U.S.C.
                                    1437u(c)(4));
                                        ``(IV) section 32(e)(4) (42 U.S.C.
                                    1437z-4(e)(4));
                                        ``(V) section 33(d)(2)(B) (42
                                    U.S.C. 1437z-5(d)(2)(B)); and
                                        ``(VI) section 302(b)(6) (42 U.S.C.
                                    1437aaa-1(b)(6));
                                ``(iii) section 233(b)(2) of the Cranston-
                            Gonzalez National Affordable Housing Act (42
                            U.S.C. 12773(b)(2));
                                ``(iv) section 106 of the Housing and Urban
                            Development Act of 1968 (12 U.S.C. 1701x);
                                ``(v) section 422(b)(6) of the Cranston-
                            Gonzalez National Affordable Housing Act (42
                            U.S.C. 12872(b)(6));
                                ``(vi) section 491(b)(1)(F)(iii) of the
                            McKinney-Vento Homeless Assistance Act (42
                            U.S.C. 11408(b)(1)(F)(iii));
                                ``(vii) sections 202(3) and 810(b)(2)(A) of
                            the Native American Housing and Self-
                            Determination Act of 1996 (25 U.S.C. 4132(3),
                            4229(b)(2)(A)); and
                                ``(viii) the rental assistance program
                            under section 8 of the United States Housing
                            Act of 1937 (42 U.S.C. 1437f).
                ``(2) Standards for materials.--The Secretary, in
            consultation with the advisory committee established under
            subsection (g)(4) of the Department of Housing and Urban
            Development Act, shall establish standards for materials and
            forms to be used, as appropriate, by organizations providing
            homeownership counseling services, including any recipients of
            assistance pursuant to subsection (a)(4).
                ``(3) Mortgage software systems.--
                        ``(A) Certification.--The Secretary shall provide
                    for the certification of various computer software
                    programs for consumers to use in evaluating different
                    residential mortgage loan proposals. The Secretary
                    shall require, for such certification, that the
                    mortgage software systems take into account--
                                ``(i) the consumer's financial situation
                            and the cost of maintaining a home, including
                            insurance, taxes, and utilities;
                                ``(ii) the amount of time the consumer
                            expects to remain in the home or expected time
                            to maturity of the loan; and
                                ``(iii) such other factors as the Secretary
                            considers appropriate to assist the consumer in
                            evaluating whether to pay points, to lock in an
                            interest rate, to select an adjustable or fixed
                            rate loan, to select a conventional or
                            government-insured or guaranteed loan and to
                            make other choices during the loan application
                            process.
                    If the Secretary determines that available existing
                    software is inadequate to assist consumers during the
                    residential mortgage loan application process, the
                    Secretary shall arrange for the development by private
                    sector software companies of new mortgage software
                    systems that meet the Secretary's specifications.
                        ``(B) Use and initial availability.--Such certified
                    computer software programs shall be used to supplement,
                    not replace, housing counseling. The Secretary shall
                    provide that such programs are initially used only in
                    connection with the assistance of housing counselors
                    certified pursuant to subsection (e).
                        ``(C) Availability.--After a period of initial
                    availability under subparagraph (B) as the Secretary
                    considers appropriate, the Secretary shall take
                    reasonable steps to make mortgage software systems
                    certified pursuant to this paragraph widely available
                    through the Internet and at public locations, including
                    public libraries, senior-citizen centers, public
                    housing sites, offices of public housing agencies that
                    administer rental housing assistance vouchers, and
                    housing counseling centers.
                        ``(D) Budget compliance.--This paragraph shall be
                    effective only to the extent that amounts to carry out
                    this paragraph are made available in advance in
                    appropriations Acts.
                ``(4) National public service multimedia campaigns to
            promote housing counseling.--
                        ``(A) In general.--The Director of Housing
                    Counseling shall develop, implement, and conduct
                    national public service multimedia campaigns designed
                    to make persons facing mortgage foreclosure, persons
                    considering a subprime mortgage loan to purchase a
                    home, elderly persons, persons who face language
                    barriers, low-income persons, minorities, and other
                    potentially vulnerable consumers aware that it is
                    advisable, before seeking or maintaining a residential
                    mortgage loan, to obtain homeownership counseling from
                    an unbiased and reliable sources and that such
                    homeownership counseling is available, including
                    through programs sponsored by the Secretary of Housing
                    and Urban Development.
                        ``(B) Contact information.--Each segment of the
                    multimedia campaign under subparagraph (A) shall
                    publicize the toll-free telephone number and website of
                    the Department of Housing and Urban Development through
                    which persons seeking housing counseling can locate a
                    housing counseling agency in their State that is
                    certified by the Secretary of Housing and Urban
                    Development and can provide advice on buying a home,
                    renting, defaults, foreclosures, credit issues, and
                    reverse mortgages.
                        ``(C) Authorization of appropriations.--There are
                    authorized to be appropriated to the Secretary, not to
                    exceed $3,000,000 for fiscal years 2009, 2010, and
                    2011, for the development, implementation, and conduct
                    of national public service multimedia campaigns under
                    this paragraph.
                        ``(D) Foreclosure rescue education programs.--
                                ``(i) In general.--Ten percent of any funds
                            appropriated pursuant to the authorization
                            under subparagraph (C) shall be used by the
                            Director of Housing Counseling to conduct an
                            education program in areas that have a high
                            density of foreclosure. Such program shall
                            involve direct mailings to persons living in
                            such areas describing--
                                        ``(I) tips on avoiding foreclosure
                                    rescue scams;
                                        ``(II) tips on avoiding predatory
                                    lending mortgage agreements;
                                        ``(III) tips on avoiding for-profit
                                    foreclosure counseling services; and
                                        ``(IV) local counseling resources
                                    that are approved by the Department of
                                    Housing and Urban Development.
                                ``(ii) Program emphasis.--In conducting the
                            education program described under clause (i),
                            the Director of Housing Counseling shall also
                            place an emphasis on serving communities that
                            have a high percentage of retirement
                            communities or a high percentage of low-income
                            minority communities.
                                ``(iii) Terms defined.--For purposes of
                            this subparagraph:
                                        ``(I) High density of
                                    foreclosures.--An area has a `high
                                    density of foreclosures' if such area
                                    is one of the metropolitan statistical
                                    areas (as that term is defined by the
                                    Director of the Office of Management
                                    and Budget) with the highest home
                                    foreclosure rates.
                                        ``(II) High percentage of
                                    retirement communities.--An area has a
                                    `high percentage of retirement
                                    communities' if such area is one of the
                                    metropolitan statistical areas (as that
                                    term is defined by the Director of the
                                    Office of Management and Budget) with
                                    the highest percentage of residents
                                    aged 65 or older.
                                        ``(III) High percentage of low-
                                    income minority communities.--An area
                                    has a `high percentage of low-income
                                    minority communities' if such area
                                    contains a higher-than-normal
                                    percentage of residents who are both
                                    minorities and low-income, as defined
                                    by the Director of Housing Counseling.
                ``(5) Education programs.--The Secretary shall provide
            advice and technical assistance to States, units of general
            local government, and nonprofit organizations regarding the
            establishment and operation of, including assistance with the
            development of content and materials for, educational programs
            to inform and educate consumers, particularly those most
            vulnerable with respect to residential mortgage loans (such as
            elderly persons, persons facing language barriers, low-income
            persons, minorities, and other potentially vulnerable
            consumers), regarding home mortgages, mortgage refinancing,
            home equity loans, home repair loans, and where appropriate by
            region, any requirements and costs associated with obtaining
            flood or other disaster-specific insurance coverage.''.
        (b) Conforming Amendments to Grant Program for Homeownership
    Counseling Organizations.--Section 106(c)(5)(A)(ii) of the Housing and
    Urban Development Act of 1968 (12 U.S.C. 1701x(c)(5)(A)(ii)) is
    amended--
                (1) in subclause (III), by striking ``and'' at the end;
                (2) in subclause (IV) by striking the period at the end and
            inserting ``; and''; and
                (3) by inserting after subclause (IV) the following new
            subclause:
                                        ``(V) notify the housing or
                                    mortgage applicant of the availability
                                    of mortgage software systems provided
                                    pursuant to subsection (g)(3).''.

    SEC. 9304. GRANTS FOR HOUSING COUNSELING ASSISTANCE.

        Section 106(a) of the Housing and Urban Development Act of 1968 (12
    U.S.C. 1701x(a)(3)) is amended by adding at the end the following new
    paragraph:
        ``(4) Homeownership and Rental Counseling Assistance.--
                ``(A) In general.--The Secretary shall make financial
            assistance available under this paragraph to HUD-approved
            housing counseling agencies and State housing finance agencies.
                ``(B) Qualified entities.--The Secretary shall establish
            standards and guidelines for eligibility of organizations
            (including governmental and nonprofit organizations) to receive
            assistance under this paragraph, in accordance with
            subparagraph (D).
                ``(C) Distribution.--Assistance made available under this
            paragraph shall be distributed in a manner that encourages
            efficient and successful counseling programs and that ensures
            adequate distribution of amounts for rural areas having
            traditionally low levels of access to such counseling services,
            including areas with insufficient access to the Internet. In
            distributing such assistance, the Secretary may give priority
            consideration to entities serving areas with the highest home
            foreclosure rates.
                ``(D) Limitation on distribution of assistance.--
                        ``(i) In general.--None of the amounts made
                    available under this paragraph shall be distributed
                    to--
                                ``(I) any organization which has been
                            convicted for a violation under Federal law
                            relating to an election for Federal office; or
                                ``(II) any organization which employs
                            applicable individuals.
                        ``(ii) Definition of applicable individuals.--In
                    this subparagraph, the term `applicable individual'
                    means an individual who--
                                ``(I) is--
                                        ``(aa) employed by the organization
                                    in a permanent or temporary capacity;
                                        ``(bb) contracted or retained by
                                    the organization; or
                                        ``(cc) acting on behalf of, or with
                                    the express or apparent authority of,
                                    the organization; and
                                ``(II) has been convicted for a violation
                            under Federal law relating to an election for
                            Federal office.
                ``(E) Grantmaking process.--In making assistance available
            under this paragraph, the Secretary shall consider appropriate
            ways of streamlining and improving the processes for grant
            application, review, approval, and award.
                ``(F) Authorization of appropriations.--There are
            authorized to be appropriated $45,000,000 for each of fiscal
            years 2009 through 2012 for--
                        ``(i) the operations of the Office of Housing
                    Counseling of the Department of Housing and Urban
                    Development;
                        ``(ii) the responsibilities of the Director of
                    Housing Counseling under paragraphs (2) through (5) of
                    subsection (g); and
                        ``(iii) assistance pursuant to this paragraph for
                    entities providing homeownership and rental
                    counseling.''.

    SEC. 9305. REQUIREMENTS TO USE HUD-CERTIFIED COUNSELORS UNDER HUD
                  PROGRAMS.

        Section 106(e) of the Housing and Urban Development Act of 1968 (12
    U.S.C. 1701x(e)) is amended--
                (1) by striking paragraph (1) and inserting the following
            new paragraph:
                ``(1) Requirement for assistance.--An organization may not
            receive assistance for counseling activities under subsection
            (a)(1)(iii), (a)(2), (a)(4), (c), or (d) of this section, or
            under section 101(e), unless the organization, or the
            individuals through which the organization provides such
            counseling, has been certified by the Secretary under this
            subsection as competent to provide such counseling.'';
                (2) in paragraph (2)--
                        (A) by inserting ``and for certifying
                    organizations'' before the period at the end of the
                    first sentence; and
                        (B) in the second sentence by striking ``for
                    certification'' and inserting ``, for certification of
                    an organization, that each individual through which the
                    organization provides counseling shall demonstrate,
                    and, for certification of an individual,'';
                (3) in paragraph (3), by inserting ``organizations and''
            before ``individuals'';
                (4) by redesignating paragraph (3) as paragraph (5); and
                (5) by inserting after paragraph (2) the following new
            paragraphs:
                ``(3) Requirement under hud programs.--Any homeownership
            counseling or rental housing counseling (as such terms are
            defined in subsection (g)(1)) required under, or provided in
            connection with, any program administered by the Department of
            Housing and Urban Development shall be provided only by
            organizations or counselors certified by the Secretary under
            this subsection as competent to provide such counseling.
                ``(4) Outreach.--The Secretary shall take such actions as
            the Secretary considers appropriate to ensure that individuals
            and organizations providing homeownership or rental housing
            counseling are aware of the certification requirements and
            standards of this subsection and of the training and
            certification programs under subsection (f).''.

    SEC. 9306. STUDY OF DEFAULTS AND FORECLOSURES.

        The Secretary of Housing and Urban Development shall conduct an
    extensive study of the root causes of default and foreclosure of home
    loans, using as much empirical data as are available. The study shall
    also examine the role of escrow accounts in helping prime and nonprime
    borrowers to avoid defaults and foreclosures, and the role of computer
    registries of mortgages, including those used for trading mortgage
    loans. Not later than 12 months after the date of the enactment of this
    Act, the Secretary shall submit to the Congress a preliminary report
    regarding the study. Not later than 24 months after such date of
    enactment, the Secretary shall submit a final report regarding the
    results of the study, which shall include any recommended legislation
    relating to the study, and recommendations for best practices and for a
    process to identify populations that need counseling the most.

    SEC. 9307. DEFAULT AND FORECLOSURE DATABASE.

        (a) Establishment.--The Secretary of Housing and Urban Development,
    in consultation with the Federal agencies responsible for regulation of
    banking and financial institutions involved in residential mortgage
    lending and servicing, shall establish and maintain a database of
    information on foreclosures and defaults on mortgage loans for one- to
    four-unit residential properties and shall make such information
    publicly available.
        (b) Census Tract Data.--Information in the database shall be
    collected, aggregated, and made available on a census tract basis.
        (c) Requirements.--Information collected and made available through
    the database shall include--
                (1) the number and percentage of such mortgage loans that
            are delinquent by more than 30 days;
                (2) the number and percentage of such mortgage loans that
            are delinquent by more than 90 days;
                (3) the number and percentage of such properties that are
            real estate-owned;
                (4) number and percentage of such mortgage loans that are
            in the foreclosure process;
                (5) the number and percentage of such mortgage loans that
            have an outstanding principal obligation amount that is greater
            than the value of the property for which the loan was made; and
                (6) such other information as the Secretary considers
            appropriate.

    SEC. 9308. DEFINITIONS FOR COUNSELING-RELATED PROGRAMS.

        Section 106 of the Housing and Urban Development Act of 1968 (12
    U.S.C. 1701x), as amended by the preceding provisions of this subtitle,
    is further amended by adding at the end the following new subsection:
        ``(h) Definitions.--For purposes of this section:
                ``(1) Nonprofit organization.--The term `nonprofit
            organization' has the meaning given such term in section 104(5)
            of the Cranston-Gonzalez National Affordable Housing Act (42
            U.S.C. 12704(5)), except that subparagraph (D) of such section
            shall not apply for purposes of this section.
                ``(2) State.--The term `State' means each of the several
            States, the Commonwealth of Puerto Rico, the District of
            Columbia, the Commonwealth of the Northern Mariana Islands,
            Guam, the Virgin Islands, American Samoa, the Trust Territories
            of the Pacific, or any other possession of the United States.
                ``(3) Unit of general local government.--The term `unit of
            general local government' means any city, county, parish, town,
            township, borough, village, or other general purpose political
            subdivision of a State.
                ``(4) HUD-approved counseling agency.--The term `HUD-
            approved counseling agency' means a private or public nonprofit
            organization that is--
                        ``(A) exempt from taxation under section 501(c) of
                    the Internal Revenue Code of 1986; and
                        ``(B) certified by the Secretary to provide housing
                    counseling services.
                ``(5) State housing finance agency.--The term `State
            housing finance agency' means any public body, agency, or
            instrumentality specifically created under State statute that
            is authorised to finance activities designed to provide housing
            and related facilities throughout an entire State through land
            acquisition, construction, or rehabilitation.''.

    SEC. 9309. ACCOUNTABILITY AND TRANSPARENCY FOR GRANT RECIPIENTS.

        Section 106 of the Housing and Urban Development Act of 1968 (12
    U.S.C. 1701x), as amended by the preceding provisions of this subtitle,
    is further amended by adding at the end the following:
        ``(i) Accountability for Recipients of Covered Assistance.--
                ``(1) Tracking of funds.--The Secretary shall--
                        ``(A) develop and maintain a system to ensure that
                    any organization or entity that receives any covered
                    assistance uses all amounts of covered assistance in
                    accordance with this section or section 9115 of the
                    Mortgage Reform and Anti-Predatory Lending Act, as
                    applicable, the regulations issued under this section
                    or such section 9115, as applicable, and any
                    requirements or conditions under which such amounts
                    were provided; and
                        ``(B) require any organization or entity, as a
                    condition of receipt of any covered assistance, to
                    agree to comply with such requirements regarding
                    covered assistance as the Secretary shall establish,
                    which shall include--
                                ``(i) appropriate periodic financial and
                            grant activity reporting, record retention, and
                            audit requirements for the duration of the
                            covered assistance to the organization or
                            entity to ensure compliance with the
                            limitations and requirements of this section or
                            section 9115 of the Mortgage Reform and Anti-
                            Predatory Lending Act, as applicable, the
                            regulations under this section or such section
                            9115, as applicable, and any requirements or
                            conditions under which such amounts were
                            provided; and
                                ``(ii) any other requirements that the
                            Secretary determines are necessary to ensure
                            appropriate administration and compliance.
                ``(2) Misuse of funds.--If any organization or entity that
            receives any covered assistance is determined by the Secretary
            to have used any covered assistance in a manner that is
            materially in violation of this section or section 9115 of the
            Mortgage Reform and Anti-Predatory Lending Act, as applicable,
            the regulations issued under this section or such section 9115,
            as applicable, or any requirements or conditions under which
            such assistance was provided--
                        ``(A) the Secretary shall require that, within 12
                    months after the determination of such misuse, the
                    organization or entity shall reimburse the Secretary
                    for such misused amounts and return to the Secretary
                    any such amounts that remain unused or uncommitted for
                    use; and
                        ``(B) such organization or entity shall be
                    ineligible, at any time after such determination, to
                    apply for or receive any further covered assistance.
            The remedies under this paragraph are in addition to any other
            remedies that may be available under law.
                ``(3) Covered assistance.--For purposes of this subsection,
            the term `covered assistance' means any grant or other
            financial assistance provided under--
                        ``(A) this section; or
                        ``(B) section 9115 of the Mortgage Reform and Anti-
                    Predatory Lending Act.''.

    SEC. 9310. UPDATING AND SIMPLIFICATION OF MORTGAGE INFORMATION BOOKLET.

        Section 5 of the Real Estate Settlement Procedures Act of 1974 (12
    U.S.C. 2604) is amended--
                (1) in the section heading, by striking ``special'' and
            inserting ``home buying'';
                (2) by striking subsections (a) and (b) and inserting the
            following new subsections:
        ``(a) Preparation and Distribution.--The Director of the Consumer
    Financial Protection Agency (hereafter in this section referred to as
    the `Director') shall prepare, at least once every 5 years, a booklet
    to help consumers applying for federally related mortgage loans to
    understand the nature and costs of real estate settlement services. The
    Director shall prepare the booklet in various languages and cultural
    styles, as the Director determines to be appropriate, so that the
    booklet is understandable and accessible to homebuyers of different
    ethnic and cultural backgrounds. The Director shall distribute such
    booklets to all lenders that make federally related mortgage loans. The
    Director shall also distribute to such lenders lists, organized by
    location, of homeownership counselors certified under section 106(e) of
    the Housing and Urban Development Act of 1968 (12 U.S.C. 1701x(e)) for
    use in complying with the requirement under subsection (c) of this
    section.
        ``(b) Contents.--Each booklet shall be in such form and detail as
    the Director shall prescribe and, in addition to such other information
    as the Director may provide, shall include in plain and understandable
    language the following information:
                ``(1) A description and explanation of the nature and
            purpose of the costs incident to a real estate settlement or a
            federally related mortgage loan. The description and
            explanation shall provide general information about the
            mortgage process as well as specific information concerning, at
            a minimum--
                        ``(A) balloon payments;
                        ``(B) prepayment penalties;
                        ``(C) the advantages of prepayment; and
                        ``(D) the trade-off between closing costs and the
                    interest rate over the life of the loan.
                ``(2) An explanation and sample of the uniform settlement
            statement required by section 4.
                ``(3) A list and explanation of lending practices,
            including those prohibited by the Truth in Lending Act or other
            applicable Federal law, and of other unfair practices and
            unreasonable or unnecessary charges to be avoided by the
            prospective buyer with respect to a real estate settlement.
                ``(4) A list and explanation of questions a consumer
            obtaining a federally related mortgage loan should ask
            regarding the loan, including whether the consumer will have
            the ability to repay the loan, whether the consumer
            sufficiently shopped for the loan, whether the loan terms
            include prepayment penalties or balloon payments, and whether
            the loan will benefit the borrower.
                ``(5) An explanation of the right of rescission as to
            certain transactions provided by sections 125 and 129 of the
            Truth in Lending Act.
                ``(6) A brief explanation of the nature of a variable rate
            mortgage and a reference to the booklet entitled `Consumer
            Handbook on Adjustable Rate Mortgages', published by the
            Director, or to any suitable substitute of such booklet that
            the Director may subsequently adopt pursuant to such section.
                ``(7) A brief explanation of the nature of a home equity
            line of credit and a reference to the pamphlet required to be
            provided under section 127A of the Truth in Lending Act.
                ``(8) Information about homeownership counseling services
            made available pursuant to section 106(a)(4) of the Housing and
            Urban Development Act of 1968 (12 U.S.C. 1701x(a)(4)), a
            recommendation that the consumer use such services, and
            notification that a list of certified providers of
            homeownership counseling in the area, and their contact
            information, is available.
                ``(9) An explanation of the nature and purpose of escrow
            accounts when used in connection with loans secured by
            residential real estate and the requirements under section 10
            of this Act regarding such accounts.
                ``(10) An explanation of the choices available to buyers of
            residential real estate in selecting persons to provide
            necessary services incidental to a real estate settlement.
                ``(11) An explanation of a consumer's responsibilities,
            liabilities, and obligations in a mortgage transaction.
                ``(12) An explanation of the nature and purpose of real
            estate appraisals, including the difference between an
            appraisal and a home inspection.
                ``(13) Notice that the Office of Housing of the Department
            of Housing and Urban Development has made publicly available a
            brochure regarding loan fraud and a World Wide Web address and
            toll-free telephone number for obtaining the brochure.
    The booklet prepared pursuant to this section shall take into
    consideration differences in real estate settlement procedures that may
    exist among the several States and territories of the United States and
    among separate political subdivisions within the same State and
    territory.'';
                (3) in subsection (c), by inserting at the end the
            following new sentence: ``Each lender shall also include with
            the booklet a reasonably complete or updated list of
            homeownership counselors who are certified pursuant to section
            106(e) of the Housing and Urban Development Act of 1968 (12
            U.S.C. 1701x(e)) and located in the area of the lender.''; and
                (4) in subsection (d), by inserting after the period at the
            end of the first sentence the following: ``The lender shall
            provide the HUD-issued booklet in the version that is most
            appropriate for the person receiving it.''.

    SEC. 9311. HOME INSPECTION COUNSELING.

        (a) Public Outreach.--
                (1) In general.--The Secretary of Housing and Urban
            Development (in this section referred to as the ``Secretary'')
            shall take such actions as may be necessary to inform potential
            homebuyers of the availability and importance of obtaining an
            independent home inspection. Such actions shall include--
                        (A) publication of the HUD/FHA form HUD 92564-CN
                    entitled ``For Your Protection: Get a Home
                    Inspection'', in both English and Spanish languages;
                        (B) publication of the HUD/FHA booklet entitled
                    ``For Your Protection: Get a Home Inspection'', in both
                    English and Spanish languages;
                        (C) development and publication of a HUD booklet
                    entitled ``For Your Protection--Get a Home Inspection''
                    that does not reference FHA-insured homes, in both
                    English and Spanish languages; and
                        (D) publication of the HUD document entitled ``Ten
                    Important Questions To Ask Your Home Inspector'', in
                    both English and Spanish languages.
                (2) Availability.--The Secretary shall make the materials
            specified in paragraph (1) available for electronic access and,
            where appropriate, inform potential homebuyers of such
            availability through home purchase counseling public service
            announcements and toll-free telephone hotlines of the
            Department of Housing and Urban Development. The Secretary
            shall give special emphasis to reaching first-time and low-
            income homebuyers with these materials and efforts.
                (3) Updating.--The Secretary may periodically update and
            revise such materials, as the Secretary determines to be
            appropriate.
        (b) Requirement for FHA-approved Lenders.--Each mortgagee approved
    for participation in the mortgage insurance programs under title II of
    the National Housing Act shall provide prospective homebuyers, at first
    contact, whether upon pre-qualification, pre-approval, or initial
    application, the materials specified in subparagraphs (A), (B), and (D)
    of subsection (a)(1).
        (c) Requirements for HUD-approved Counseling Agencies.--Each
    counseling agency certified pursuant by the Secretary to provide
    housing counseling services shall provide each of their clients, as
    part of the home purchase counseling process, the materials specified
    in subparagraphs (C) and (D) of subsection (a)(1).
        (d) Training.--Training provided the Department of Housing and
    Urban Development for housing counseling agencies, whether such
    training is provided directly by the Department or otherwise, shall
    include--
                (1) providing information on counseling potential
            homebuyers of the availability and importance of getting an
            independent home inspection;
                (2) providing information about the home inspection
            process, including the reasons for specific inspections such as
            radon and lead-based paint testing;
                (3) providing information about advising potential
            homebuyers on how to locate and select a qualified home
            inspector; and
                (4) review of home inspection public outreach materials of
            the Department.

    SEC. 9312. WARNINGS TO HOMEOWNERS OF FORECLOSURE RESCUE SCAMS.

        (a) Assistance to NRC.--Notwithstanding any other provision of law,
    of any amounts made available for any fiscal year pursuant to section
    106(a)(4)(F) of the Housing and Urban Development Act of 1968 (12
    U.S.C. 1701x(a)(4)(F)) (as added by section 9304 of this title), 10
    percent shall be used only for assistance to the Neighborhood
    Reinvestment Corporation for activities, in consultation with servicers
    of residential mortgage loans, to provide notice to borrowers under
    such loans who are delinquent with respect to payments due under such
    loans that makes such borrowers aware of the dangers of fraudulent
    activities associated with foreclosure.
        (b) Notice.--The Neighborhood Reinvestment Corporation, in
    consultation with servicers of residential mortgage loans, shall use
    the amounts provided pursuant to subsection (a) to carry out activities
    to inform borrowers under residential mortgage loans--
                (1) that the foreclosure process is complex and can be
            confusing;
                (2) that the borrower may be approached during the
            foreclosure process by persons regarding saving their home and
            they should use caution in any such dealings;
                (3) that there are Federal Government and nonprofit
            agencies that may provide information about the foreclosure
            process, including the Department of Housing and Urban
            Development;
                (4) that they should contact their lender immediately,
            contact the Department of Housing and Urban Development to find
            a housing counseling agency certified by the Department to
            assist in avoiding foreclosure, or visit the Department's
            website regarding tips for avoiding foreclosure; and
                (5) of the telephone number of the loan servicer or
            successor, the telephone number of the Department of Housing
            and Urban Development housing counseling line, and the Uniform
            Resource Locators (URLs) for the Department of Housing and
            Urban Development Web sites for housing counseling and for tips
            for avoiding foreclosure.

                         Subtitle E--Mortgage Servicing

    SEC. 9401. ESCROW AND IMPOUND ACCOUNTS RELATING TO CERTAIN CONSUMER
                  CREDIT TRANSACTIONS.

        (a) In General.--Chapter 2 of the Truth in Lending Act (15 U.S.C.
    1631 et seq.) is amended by inserting after section 129C (as added by
    section 9101) the following new section:

    ``SEC. 129D. ESCROW OR IMPOUND ACCOUNTS RELATING TO CERTAIN CONSUMER
                  CREDIT TRANSACTIONS.

        ``(a) In General.--Except as provided in subsection (b), (c), or
    (d) , a creditor, in connection with the formation or consummation of a
    consumer credit transaction secured by a first lien on the principal
    dwelling of the consumer, other than a consumer credit transaction
    under an open end credit plan or a reverse mortgage, shall establish,
    before the consummation of such transaction, an escrow or impound
    account for the payment of taxes and hazard insurance, and, if
    applicable, flood insurance, mortgage insurance, ground rents, and any
    other required periodic payments or premiums with respect to the
    property or the loan terms, as provided in, and in accordance with,
    this section.
        ``(b) When Required.--No impound, trust, or other type of account
    for the payment of property taxes, insurance premiums, or other
    purposes relating to the property may be required as a condition of a
    real property sale contract or a loan secured by a first deed of trust
    or mortgage on the principal dwelling of the consumer, other than a
    consumer credit transaction under an open end credit plan or a reverse
    mortgage, except when--
                ``(1) any such impound, trust, or other type of escrow or
            impound account for such purposes is required by Federal or
            State law;
                ``(2) a loan is made, guaranteed, or insured by a State or
            Federal governmental lending or insuring agency;
                ``(3) the transaction is secured by a first mortgage or
            lien on the consumer's principal dwelling having an original
            principal obligation amount that--
                        ``(A) does not exceed the amount of the maximum
                    limitation on the original principal obligation of
                    mortgage in effect for a residence of the applicable
                    size, as of the date such interest rate set, pursuant
                    to the sixth sentence of section 305(a)(2) the Federal
                    Home Loan Mortgage Corporation Act (12 U.S.C.
                    1454(a)(2)), and the annual percentage rate will exceed
                    the average prime offer rate for a comparable
                    transaction by 1.5 or more percentage points; or
                        ``(B) exceeds the amount of the maximum limitation
                    on the original principal obligation of mortgage in
                    effect for a residence of the applicable size, as of
                    the date such interest rate set, pursuant to the sixth
                    sentence of section 305(a)(2) the Federal Home Loan
                    Mortgage Corporation Act (12 U.S.C. 1454(a)(2)), and
                    the annual percentage rate will exceed the average
                    prime offer rate for a comparable transaction by 2.5 or
                    more percentage points; or
                ``(4) so required pursuant to regulation.
        ``(c) Duration of Mandatory Escrow or Impound Account.--An escrow
    or impound account established pursuant to subsection (b), shall remain
    in existence for a minimum period of 5 years, beginning with the date
    of the consummation of the loan, and until such borrower has sufficient
    equity in the dwelling securing the consumer credit transaction so as
    to no longer be required to maintain private mortgage insurance, or
    such other period as may be provided in regulations to address
    situations such as borrower delinquency, unless the underlying mortgage
    establishing the account is terminated.
        ``(d) Limited Exemptions for Loans Secured by Shares in a
    Cooperative and for Certain Condominium Units.--Escrow accounts need
    not be established for loans secured by shares in a cooperative.
    Insurance premiums need not be included in escrow accounts for loans
    secured by condominium units, where the condominium association has an
    obligation to the condominium unit owners to maintain a master policy
    insuring condominium units.
        ``(e) Clarification on Escrow Accounts for Loans Not Meeting
    Statutory Test.--For mortgages not covered by the requirements of
    subsection (b), no provision of this section shall be construed as
    precluding the establishment of an impound, trust, or other type of
    account for the payment of property taxes, insurance premiums, or other
    purposes relating to the property--
                ``(1) on terms mutually agreeable to the parties to the
            loan;
                ``(2) at the discretion of the lender or servicer, as
            provided by the contract between the lender or servicer and the
            borrower; or
                ``(3) pursuant to the requirements for the escrowing of
            flood insurance payments for regulated lending institutions in
            section 102(d) of the Flood Disaster Protection Act of 1973.
        ``(f) Administration of Mandatory Escrow or Impound Accounts.--
                ``(1) In general.--Except as may otherwise be provided for
            in this title or in regulations prescribed by the Board, escrow
            or impound accounts established pursuant to subsection (b)
            shall be established in a federally insured depository
            institution.
                ``(2) Administration.--Except as provided in this section
            or regulations prescribed under this section, an escrow or
            impound account subject to this section shall be administered
            in accordance with--
                        ``(A) the Real Estate Settlement Procedures Act of
                    1974 and regulations prescribed under such Act;
                        ``(B) the Flood Disaster Protection Act of 1973 and
                    regulations prescribed under such Act; and
                        ``(C) the law of the State, if applicable, where
                    the real property securing the consumer credit
                    transaction is located.
                ``(3) Applicability of payment of interest.--If prescribed
            by applicable State or Federal law, each creditor shall pay
            interest to the consumer on the amount held in any impound,
            trust, or escrow account that is subject to this section in the
            manner as prescribed by that applicable State or Federal law.
                ``(4) Penalty coordination with respa.--Any action or
            omission on the part of any person which constitutes a
            violation of the Real Estate Settlement Procedures Act of 1974
            or any regulation prescribed under such Act for which the
            person has paid any fine, civil money penalty, or other damages
            shall not give rise to any additional fine, civil money
            penalty, or other damages under this section, unless the action
            or omission also constitutes a direct violation of this
            section.
        ``(g) Disclosures Relating to Mandatory Escrow or Impound
    Account.--In the case of any impound, trust, or escrow account that is
    subject to this section, the creditor shall disclose by written notice
    to the consumer at least 3 business days before the consummation of the
    consumer credit transaction giving rise to such account or in
    accordance with timeframes established in prescribed regulations the
    following information:
                ``(1) The fact that an escrow or impound account will be
            established at consummation of the transaction.
                ``(2) The amount required at closing to initially fund the
            escrow or impound account.
                ``(3) The amount, in the initial year after the
            consummation of the transaction, of the estimated taxes and
            hazard insurance, including flood insurance, if applicable, and
            any other required periodic payments or premiums that reflects,
            as appropriate, either the taxable assessed value of the real
            property securing the transaction, including the value of any
            improvements on the property or to be constructed on the
            property (whether or not such construction will be financed
            from the proceeds of the transaction) or the replacement costs
            of the property.
                ``(4) The estimated monthly amount payable to be escrowed
            for taxes, hazard insurance (including flood insurance, if
            applicable) and any other required periodic payments or
            premiums.
                ``(5) The fact that, if the consumer chooses to terminate
            the account at the appropriate time in the future, the consumer
            will become responsible for the payment of all taxes, hazard
            insurance, and flood insurance, if applicable, as well as any
            other required periodic payments or premiums on the property
            unless a new escrow or impound account is established.
                ``(6) Such other information as the Federal banking
            agencies jointly determine necessary for the protection of the
            consumer.
        ``(h) Definitions.--For purposes of this section, the following
    definitions shall apply:
                ``(1) Flood insurance.--The term `flood insurance' means
            flood insurance coverage provided under the national flood
            insurance program pursuant to the National Flood Insurance Act
            of 1968.
                ``(2) Hazard insurance.--The term `hazard insurance' shall
            have the same meaning as provided for `hazard insurance',
            `casualty insurance', `homeowner's insurance', or other similar
            term under the law of the State where the real property
            securing the consumer credit transaction is located.''.
        (b) Implementation.--
                (1) Regulations.--The Board of Governors of the Federal
            Reserve System, the Comptroller of the Currency, the Director
            of the Office of Thrift Supervision, the Federal Deposit
            Insurance Corporation, the National Credit Union Administration
            Board, (hereafter in this title referred to as the ``Federal
            banking agencies'') and the Federal Trade Commission shall
            prescribe, in final form, such regulations as determined to be
            necessary to implement the amendments made by subsection (a)
            before the end of the 180-day period beginning on the date of
            the enactment of this Act.
                (2) Effective date.--The amendments made by subsection (a)
            shall only apply to covered mortgage loans consummated after
            the end of the 1-year period beginning on the date of the
            publication of final regulations in the Federal Register.
        (c) Clerical Amendment.--The table of sections for chapter 2 of the
    Truth in Lending Act is amended by inserting after the item relating to
    section 129C (as added by section 9101) the following new item:

    ``129D. Escrow or impound accounts relating to certain consumer credit
                                transactions.''.

    SEC. 9402. DISCLOSURE NOTICE REQUIRED FOR CONSUMERS WHO WAIVE ESCROW
                  SERVICES.

        (a) In General.--Section 129D of the Truth in Lending Act (as added
    by section 9401) is amended by adding at the end the following new
    subsection:
        ``(i) Disclosure Notice Required for Consumers Who Waive Escrow
    Services.--
                ``(1) In general.--If--
                        ``(A) an impound, trust, or other type of account
                    for the payment of property taxes, insurance premiums,
                    or other purposes relating to real property securing a
                    consumer credit transaction is not established in
                    connection with the transaction; or
                        ``(B) a consumer chooses, and provides written
                    notice to the creditor or servicer of such choice, at
                    any time after such an account is established in
                    connection with any such transaction and in accordance
                    with any statute, regulation, or contractual agreement,
                    to close such account,
            the creditor or servicer shall provide a timely and clearly
            written disclosure to the consumer that advises the consumer of
            the responsibilities of the consumer and implications for the
            consumer in the absence of any such account.
                ``(2) Disclosure requirements.--Any disclosure provided to
            a consumer under paragraph (1) shall include the following:
                        ``(A) Information concerning any applicable fees or
                    costs associated with either the non-establishment of
                    any such account at the time of the transaction, or any
                    subsequent closure of any such account.
                        ``(B) A clear and prominent notice that the
                    consumer is responsible for personally and directly
                    paying the non-escrowed items, in addition to paying
                    the mortgage loan payment, in the absence of any such
                    account, and the fact that the costs for taxes,
                    insurance, and related fees can be substantial.
                        ``(C) A clear explanation of the consequences of
                    any failure to pay non-escrowed items, including the
                    possible requirement for the forced placement of
                    insurance by the creditor or servicer and the
                    potentially higher cost (including any potential
                    commission payments to the servicer) or reduced
                    coverage for the consumer in the event of any such
                    creditor-placed insurance.
                        ``(D) Such other information as the Federal banking
                    agencies jointly determine necessary for the protection
                    of the consumer.''.
        (b) Implementation.--
                (1) Regulations.--The Federal banking agencies and the
            Federal Trade Commission shall prescribe, in final form, such
            regulations as such agencies determine to be necessary to
            implement the amendments made by subsection (a) before the end
            of the 180-day period beginning on the date of the enactment of
            this Act.
                (2) Effective date.--The amendments made by subsection (a)
            shall only apply in accordance with the regulations established
            in paragraph (1) and beginning on the date occurring 180-days
            after the date of the publication of final regulations in the
            Federal Register.

    SEC. 9403. REAL ESTATE SETTLEMENT PROCEDURES ACT OF 1974 AMENDMENTS.

        (a) Servicer Prohibitions.--Section 6 of the Real Estate Settlement
    Procedures Act of 1974 (12 U.S.C. 2605) is amended by adding at the end
    the following new subsections:
        ``(k) Servicer Prohibitions.--
                ``(1) In general.--A servicer of a federally related
            mortgage shall not--
                        ``(A) obtain force-placed hazard insurance unless
                    there is a reasonable basis to believe the borrower has
                    failed to comply with the loan contract's requirements
                    to maintain property insurance;
                        ``(B) charge fees for responding to valid qualified
                    written requests (as defined in regulations which the
                    Secretary shall prescribe) under this section;
                        ``(C) fail to take timely action to respond to a
                    borrower's requests to correct errors relating to
                    allocation of payments, final balances for purposes of
                    paying off the loan, or avoiding foreclosure, or other
                    standard servicer's duties;
                        ``(D) fail to respond within 10 business days to a
                    request from a borrower to provide the identity,
                    address, and other relevant contact information about
                    the owner assignee of the loan; or
                        ``(E) fail to comply with any other obligation
                    found by the Secretary, by regulation, to be
                    appropriate to carry out the consumer protection
                    purposes of this Act.
                ``(2) Force-placed insurance defined.--For purposes of this
            subsection and subsections (l) and (m), the term `force-placed
            insurance' means hazard insurance coverage obtained by a
            servicer of a federally related mortgage when the borrower has
            failed to maintain or renew hazard insurance on such property
            as required of the borrower under the terms of the mortgage.
        ``(l) Requirements for Force-placed Insurance.--A servicer of a
    federally related mortgage shall not be construed as having a
    reasonable basis for obtaining force-placed insurance unless the
    requirements of this subsection have been met.
                ``(1) Written notices to borrower.--A servicer may not
            impose any charge on any borrower for force-placed insurance
            with respect to any property securing a federally related
            mortgage unless--
                        ``(A) the servicer has sent, by first-class mail, a
                    written notice to the borrower containing--
                                ``(i) a reminder of the borrower's
                            obligation to maintain hazard insurance on the
                            property securing the federally related
                            mortgage;
                                ``(ii) a statement that the servicer does
                            not have evidence of insurance coverage of such
                            property;
                                ``(iii) a clear and conspicuous statement
                            of the procedures by which the borrower may
                            demonstrate that the borrower already has
                            insurance coverage; and
                                ``(iv) a statement that the servicer may
                            obtain such coverage at the borrower's expense
                            if the borrower does not provide such
                            demonstration of the borrower's existing
                            coverage in a timely manner;
                        ``(B) the servicer has sent, by first-class mail, a
                    second written notice, at least 30 days after the
                    mailing of the notice under subparagraph (A) that
                    contains all the information described in each clause
                    of such subparagraph; and
                        ``(C) the servicer has not received from the
                    borrower any demonstration of hazard insurance coverage
                    for the property securing the mortgage by the end of
                    the 15-day period beginning on the date the notice
                    under subparagraph (B) was sent by the servicer.
                ``(2) Sufficiency of demonstration.--A servicer of a
            federally related mortgage shall accept any reasonable form of
            written confirmation from a borrower of existing insurance
            coverage, which shall include the existing insurance policy
            number along with the identity of, and contact information for,
            the insurance company or agent.
                ``(3) Termination of force-placed insurance.--Within 15
            days of the receipt by a servicer of confirmation of a
            borrower's existing insurance coverage, the servicer shall--
                        ``(A) terminate the force-placed insurance; and
                        ``(B) refund to the consumer all force-placed
                    insurance premiums paid by the borrower during any
                    period during which the borrower's insurance coverage
                    and the force-placed insurance coverage were each in
                    effect, and any related fees charged to the consumer's
                    account with respect to the force-placed insurance
                    during such period.
                ``(4) Clarification with respect to flood disaster
            protection act.--No provision of this section shall be
            construed as prohibiting a servicer from providing simultaneous
            or concurrent notice of a lack of flood insurance pursuant to
            section 102(e) of the Flood Disaster Protection Act of 1973.
        ``(m) Limitations on Force-placed Insurance Charges.--All charges
    for force-placed insurance premiums shall be bona fide and reasonable
    in amount.''.
        (b) Increase in Penalty Amounts.--Section 6(f) of the Real Estate
    Settlement Procedures Act of 1974 (12 U.S.C. 2605(f)) is amended--
                (1) in paragraphs (1)(B) and (2)(B), by striking ``$1,000''
            each place such term appears and inserting ``$2,000''; and
                (2) in paragraph (2)(B)(i), by striking ``$500,000'' and
            inserting ``$1,000,000''.
        (c) Decrease in Response Times.--Section 6(e) of the Real Estate
    Settlement Procedures Act of 1974 (12 U.S.C. 2605(e)) is amended--
                (1) in paragraph (1)(A), by striking ``20 days'' and
            inserting ``5 days'';
                (2) in paragraph (2), by striking ``60 days'' and inserting
            ``30 days''; and
                (3) by adding at the end the following new paragraph:
                ``(4) Limited extension of response time.--The 30-day
            period described in paragraph (2) may be extended for not more
            than 15 days if, before the end of such 30-day period, the
            servicer notifies the borrower of the extension and the reasons
            for the delay in responding.''.
        (d) Prompt Refund of Escrow Accounts Upon Payoff.--Section 6(g) of
    the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2605(g))
    is amended by adding at the end the following new sentence: ``Any
    balance in any such account that is within the servicer's control at
    the time the loan is paid off shall be promptly returned to the
    borrower within 20 business days or credited to a similar account for a
    new mortgage loan to the borrower with the same lender.''.

    SEC. 9404. TRUTH IN LENDING ACT AMENDMENTS.

        (a) Requirements for Prompt Crediting of Home Loan Payments.--
    Chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et seq.) is
    amended by inserting after section 129E (as added by section 9502) the
    following new section (and by amending the table of contents
    accordingly):

    ``SEC. 129F. REQUIREMENTS FOR PROMPT CREDITING OF HOME LOAN PAYMENTS.

        ``(a) In General.--In connection with a consumer credit transaction
    secured by a consumer's principal dwelling, no servicer shall fail to
    credit a payment to the consumer's loan account as of the date of
    receipt, except when a delay in crediting does not result in any charge
    to the consumer or in the reporting of negative information to a
    consumer reporting agency, except as required in subsection (b).
        ``(b) Exception.--If a servicer specifies in writing requirements
    for the consumer to follow in making payments, but accepts a payment
    that does not conform to the requirements, the servicer shall credit
    the payment as of 5 days after receipt.''.
        (b) Requests for Payoff Amounts.--Chapter 2 of such Act is further
    amended by inserting after section 129F (as added by subsection (a))
    the following new section (and by amending the table of contents
    accordingly):

    ``SEC. 129G. REQUESTS FOR PAYOFF AMOUNTS OF HOME LOAN.

        ``A creditor or servicer of a home loan shall send an accurate
    payoff balance within a reasonable time, but in no case more than 7
    business days, after the receipt of a written request for such balance
    from or on behalf of the borrower.''.

    SEC. 9405. ESCROWS INCLUDED IN REPAYMENT ANALYSIS.

        Section 128(b) of the Truth in Lending Act (15 U.S.C. 1638(b)) is
    amended by adding at the end the following new paragraph:
                ``(4) Repayment analysis required to include escrow
            payments.--
                        ``(A) In general.--In the case of any consumer
                    credit transaction secured by a first mortgage or lien
                    on the principal dwelling of the consumer, other than a
                    consumer credit transaction under an open end credit
                    plan or a reverse mortgage, for which an impound,
                    trust, or other type of account has been or will be
                    established in connection with the transaction for the
                    payment of property taxes, hazard and flood (if any)
                    insurance premiums, or other periodic payments or
                    premiums with respect to the property, the information
                    required to be provided under subsection (a) with
                    respect to the number, amount, and due dates or period
                    of payments scheduled to repay the total of payments
                    shall take into account the amount of any monthly
                    payment to such account for each such repayment in
                    accordance with section 10(a)(2) of the Real Estate
                    Settlement Procedures Act of 1974.
                        ``(B) Assessment value.--The amount taken into
                    account under subparagraph (A) for the payment of
                    property taxes, hazard and flood (if any) insurance
                    premiums, or other periodic payments or premiums with
                    respect to the property shall reflect the taxable
                    assessed value of the real property securing the
                    transaction after the consummation of the transaction,
                    including the value of any improvements on the property
                    or to be constructed on the property (whether or not
                    such construction will be financed from the proceeds of
                    the transaction), if known, and the replacement costs
                    of the property for hazard insurance, in the initial
                    year after the transaction.''.

                        Subtitle F--Appraisal Activities

    SEC. 9501. PROPERTY APPRAISAL REQUIREMENTS.

        Chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et seq.) is
    amended by inserting after 129G (as added by section 9404(b)) the
    following new section:

    ``SEC. 129H PROPERTY APPRAISAL REQUIREMENTS.

        ``(a) In General.--A creditor may not extend credit in the form of
    a subprime mortgage to any consumer without first obtaining a written
    appraisal of the property to be mortgaged prepared in accordance with
    the requirements of this section.
        ``(b) Appraisal Requirements.--
                ``(1) Physical property visit.--An appraisal of property to
            be secured by a subprime mortgage does not meet the requirement
            of this section unless it is performed by a qualified appraiser
            who conducts a physical property visit of the interior of the
            mortgaged property.
                ``(2) Second appraisal under certain circumstances.--
                        ``(A) In general.--If the purpose of a subprime
                    mortgage is to finance the purchase or acquisition of
                    the mortgaged property from a person within 180 days of
                    the purchase or acquisition of such property by that
                    person at a price that was lower than the current sale
                    price of the property, the creditor shall obtain a
                    second appraisal from a different qualified appraiser.
                    The second appraisal shall include an analysis of the
                    difference in sale prices, changes in market
                    conditions, and any improvements made to the property
                    between the date of the previous sale and the current
                    sale.
                        ``(B) No cost to applicant.--The cost of any second
                    appraisal required under subparagraph (A) may not be
                    charged to the applicant.
                ``(3) Qualified appraiser defined.--For purposes of this
            section, the term `qualified appraiser' means a person who--
                        ``(A) is, at a minimum, certified or licensed by
                    the State in which the property to be appraised is
                    located; and
                        ``(B) performs each appraisal in conformity with
                    the Uniform Standards of Professional Appraisal
                    Practice and title XI of the Financial Institutions
                    Reform, Recovery, and Enforcement Act of 1989, and the
                    regulations prescribed under such title, as in effect
                    on the date of the appraisal.
        ``(c) Free Copy of Appraisal.--A creditor shall provide 1 copy of
    each appraisal conducted in accordance with this section in connection
    with a subprime mortgage to the applicant without charge, and at least
    3 days prior to the transaction closing date.
        ``(d) Consumer Notification.--At the time of the initial mortgage
    application, the applicant shall be provided with a statement by the
    creditor that any appraisal prepared for the mortgage is for the sole
    use of the creditor, and that the applicant may choose to have a
    separate appraisal conducted at their own expense.
        ``(e) Violations.--In addition to any other liability to any person
    under this title, a creditor found to have willfully failed to obtain
    an appraisal as required in this section shall be liable to the
    applicant or borrower for the sum of $2,000.
        ``(f) Subprime Mortgage Defined.--For purposes of this section, the
    term `subprime mortgage' means a residential mortgage loan, other than
    a reverse mortgage loan insured by the Federal Housing Administration,
    secured by a principal dwelling with an annual percentage rate that
    exceeds the average prime offer rate for a comparable transaction, as
    of the date the interest rate is set--
                ``(1) by 1.5 or more percentage points, in the case of a
            first lien residential mortgage loan having an original
            principal obligation amount that does not exceed the amount of
            the maximum limitation on the original principal obligation of
            mortgage in effect for a residence of the applicable size, as
            of the date of such interest rate set, pursuant to the sixth
            sentence of section 305(a)(2) the Federal Home Loan Mortgage
            Corporation Act (12 U.S.C. 1454(a)(2));
                ``(2) by 2.5 or more percentage points, in the case of a
            first lien residential mortgage loan having an original
            principal obligation amount that exceeds the amount of the
            maximum limitation on the original principal obligation of
            mortgage in effect for a residence of the applicable size, as
            of the date of such interest rate set, pursuant to the sixth
            sentence of section 305(a)(2) the Federal Home Loan Mortgage
            Corporation Act (12 U.S.C. 1454(a)(2)); and
                ``(3) by 3.5 or more percentage points for a subordinate
            lien residential mortgage loan.''.

    SEC. 9502. UNFAIR AND DECEPTIVE PRACTICES AND ACTS RELATING TO CERTAIN
                  CONSUMER CREDIT TRANSACTIONS.

        (a) In General.--Chapter 2 of the Truth in Lending Act (15 U.S.C.
    1631 et seq.) is amended by inserting after section 129D (as added by
    section 9401(a)) the following new section:

    ``SEC. 129E. UNFAIR AND DECEPTIVE PRACTICES AND ACTS RELATING TO
                  CERTAIN CONSUMER CREDIT TRANSACTIONS.

        ``(a) In General.--It shall be unlawful, in extending credit or in
    providing any services for a consumer credit transaction secured by the
    principal dwelling of the consumer, to engage in any unfair or
    deceptive act or practice as described in or pursuant to regulations
    prescribed under this section.
        ``(b) Appraisal Independence.--For purposes of subsection (a),
    unfair and deceptive practices shall include--
                ``(1) any appraisal of a property offered as security for
            repayment of the consumer credit transaction that is conducted
            in connection with such transaction in which a person with an
            interest in the underlying transaction compensates, coerces,
            extorts, colludes, instructs, induces, bribes, or intimidates a
            person conducting or involved in an appraisal, or attempts, to
            compensate, coerce, extort, collude, instruct, induce, bribe,
            or intimidate such a person, for the purpose of causing the
            appraised value assigned, under the appraisal, to the property
            to be based on any factor other than the independent judgment
            of the appraiser;
                ``(2) mischaracterizing, or suborning any
            mischaracterization of, the appraised value of the property
            securing the extension of the credit;
                ``(3) seeking to influence an appraiser or otherwise to
            encourage a targeted value in order to facilitate the making or
            pricing of the transaction; and
                ``(4) withholding or threatening to withhold timely payment
            for an appraisal report or for appraisal services rendered.
        ``(c) Exceptions.--The requirements of subsection (b) shall not be
    construed as prohibiting a mortgage lender, mortgage broker, mortgage
    banker, real estate broker, appraisal management company, employee of
    an appraisal management company, consumer, or any other person with an
    interest in a real estate transaction from asking an appraiser to
    provide 1 or more of the following services:
                ``(1) Consider additional, appropriate property
            information, including the consideration of additional
            comparable properties to make or support an appraisal.
                ``(2) Provide further detail, substantiation, or
            explanation for the appraiser's value conclusion.
                ``(3) Correct errors in the appraisal report.
        ``(d) Prohibitions on Conflicts of Interest.--No certified or
    licensed appraiser conducting, and no appraisal management company
    procuring or facilitating, an appraisal in connection with a consumer
    credit transaction secured by the principal dwelling of a consumer may
    have a direct or indirect interest, financial or otherwise, in the
    property or transaction involving the appraisal.
        ``(e) Mandatory Reporting.--Any mortgage lender, mortgage broker,
    mortgage banker, real estate broker, appraisal management company,
    employee of an appraisal management company, or any other person
    involved in a real estate transaction involving an appraisal in
    connection with a consumer credit transaction secured by the principal
    dwelling of a consumer who has a reasonable basis to believe an
    appraiser is failing to comply with the Uniform Standards of
    Professional Appraisal Practice, is violating applicable laws, or is
    otherwise engaging in unethical or unprofessional conduct, shall refer
    the matter to the applicable State appraiser certifying and licensing
    agency.
        ``(f) No Extension of Credit.--In connection with a consumer credit
    transaction secured by a consumer's principal dwelling, a creditor who
    knows, at or before loan consummation, of a violation of the appraisal
    independence standards established in subsections (b) or (d) shall not
    extend credit based on such appraisal unless the creditor documents
    that the creditor has acted with reasonable diligence to determine that
    the appraisal does not materially misstate or misrepresent the value of
    such dwelling.
        ``(g) Rulemaking Proceedings.--The Board, the Comptroller of the
    Currency, the Director of the Office of Thrift Supervision, the Federal
    Deposit Insurance Corporation, the National Credit Union Administration
    Board, and the Federal Trade Commission--
                ``(1) shall, for purposes of this section, jointly
            prescribe regulations no later than 180 days after the date of
            the enactment of this section, and where such regulations have
            an effective date of no later than 1 year after the date of the
            enactment of this section, defining with specificity acts or
            practices which are unfair or deceptive in the provision of
            mortgage lending services for a consumer credit transaction
            secured by the principal dwelling of the consumer or mortgage
            brokerage services for such a transaction and defining any
            terms in this section or such regulations; and
                ``(2) may jointly issue interpretive guidelines and general
            statements of policy with respect to unfair or deceptive acts
            or practices in the provision of mortgage lending services for
            a consumer credit transaction secured by the principal dwelling
            of the consumer and mortgage brokerage services for such a
            transaction, within the meaning of subsections (a), (b), (c),
            (d), (e), and (f).
        ``(h) Penalties.--
                ``(1) First violation.--In addition to the enforcement
            provisions referred to in section 130, each person who violates
            this section shall forfeit and pay a civil penalty of not more
            than $10,000 for each day any such violation continues.
                ``(2) Subsequent violations.--In the case of any person on
            whom a civil penalty has been imposed under paragraph (1),
            paragraph (1) shall be applied by substituting `$20,000' for
            `$10,000' with respect to all subsequent violations.
                ``(3) Assessment.--The agency referred to in subsection (a)
            or (c) of section 108 with respect to any person described in
            paragraph (1) shall assess any penalty under this subsection to
            which such person is subject.''.
        (b) Clerical Amendment.--The table of sections for chapter 2 of the
    Truth in Lending Act is amended by inserting after the item relating to
    section 129D (as added by section 9401(c)) the following new item:

    ``129E. Unfair and deceptive practices and acts relating to certain
                                consumer credit transactions.''.

    SEC. 9503. AMENDMENTS RELATING TO APPRAISAL SUBCOMMITTEE OF FIEC,
                  APPRAISER INDEPENDENCE MONITORING, APPROVED APPRAISER
                  EDUCATION, APPRAISAL MANAGEMENT COMPANIES, APPRAISER
                  COMPLAINT HOTLINE, AUTOMATED VALUATION MODELS, AND BROKER
                  PRICE OPINIONS.

        (a) Consumer Protection Mission.--
                (1) Purposes.--Section 1101 of the Financial Institutions
            Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3331)
            is amended by inserting ``and to provide the Appraisal
            Subcommittee with a consumer protection mandate'' before the
            period at the end.
                (2) Functions of appraisal subcommittee.--Section 1103(a)
            of the Financial Institutions Reform, Recovery, and Enforcement
            Act of 1989 (12 U.S.C. 3332(a)) is amended--
                        (A) by striking ``and'' at the end of paragraph
                    (3); and
                        (B) by amending paragraph (4) to read as follows:
                ``(4) monitor the efforts of, and requirements established
            by, States and the Federal financial institutions regulatory
            agencies to protect consumers from improper appraisal practices
            and the predations of unlicensed appraisers in consumer credit
            transactions that are secured by a consumer's principal
            dwelling; and''.
                (3) Threshold levels.--Section 1112(b) of the Financial
            Institutions Reform, Recovery, and Enforcement Act of 1989 (12
            U.S.C. 3341(b)) is amended by inserting before the period the
            following: ``, and that such threshold level provides
            reasonable protection for consumers who purchase 1-4 unit
            single-family residences. In determining whether a threshold
            level provides reasonable protection for consumers, each
            Federal financial institutions regulatory agency shall consult
            with consumer groups and convene a public hearing''.
        (b) Annual Report of Appraisal Subcommittee.--Section 1103(a) of
    the Financial Institutions Reform, Recovery, and Enforcement Act of
    1989 (12 U.S.C. 3332(a)) is amended at the end by inserting the
    following new paragraph:
                ``(5) transmit an annual report to the Congress not later
            than January 31 of each year that describes the manner in which
            each function assigned to the Appraisal Subcommittee has been
            carried out during the preceding year. The report shall also
            detail the activities of the Appraisal Subcommittee, including
            the results of all audits of State appraiser regulatory
            agencies, and provide an accounting of disapproved actions and
            warnings taken in the previous year, including a description of
            the conditions causing the disapproval and actions taken to
            achieve compliance.''.
        (c) Open Meetings.--Section 1104(b) of the Financial Institutions
    Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3333(b)) is
    amended by inserting ``in public session after notice in the Federal
    Register'' after ``shall meet''.
        (d) Regulations.--Section 1106 of the Financial Institutions
    Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3335) is
    amended--
                (1) by inserting ``prescribe regulations after notice and
            opportunity for comment,'' after ``hold hearings''; and
                (2) at the end by inserting ``Any regulations prescribed by
            the Appraisal Subcommittee shall (unless otherwise provided in
            this title) be limited to the following functions: temporary
            practice, national registry, information sharing, and
            enforcement. For purposes of prescribing regulations, the
            Appraisal Subcommittee shall establish an advisory committee of
            industry participants, including appraisers, lenders, consumer
            advocates, and government agencies, and hold meetings as
            necessary to support the development of regulations.''.
        (e) Appraisals and Appraisal Reviews.--Section 1113 of the
    Financial Institutions Reform, Recovery, and Enforcement Act of 1989
    (12 U.S.C. 3342) is amended--
                (1) by striking ``In determining'' and inserting ``(a) In
            General.--In determining'';
                (2) in subsection (a) (as designated by paragraph (1)), by
            inserting before the period the following: ``, where a complex
            1-to-4 unit single family residential appraisal means an
            appraisal for which the property to be appraised, the form of
            ownership, the property characteristics, or the market
            conditions are atypical''; and
                (3) by adding at the end the following new subsection:
        ``(b) Appraisals and Appraisal Reviews.--All appraisals performed
    at a property within a State shall be prepared by appraisers licensed
    or certified in the State where the property is located. All appraisal
    reviews, including appraisal reviews by a lender, appraisal management
    company, or other third party organization, shall be performed by an
    appraiser who is duly licensed or certified by a State appraisal
    board.''.
        (f) Appraisal Management Services.--
                (1) Supervision of third party providers of appraisal
            management services.--Section 1103(a) of the Financial
            Institutions Reform, Recovery, and Enforcement Act of 1989 (12
            U.S.C. 3332(a)) (as previously amended by this section) is
            further amended--
                        (A) by amending paragraph (1) to read as follows:
                ``(1) monitor the requirements established by States--
                        ``(A) for the certification and licensing of
                    individuals who are qualified to perform appraisals in
                    connection with federally related transactions,
                    including a code of professional responsibility; and
                        ``(B) for the registration and supervision of the
                    operations and activities of an appraisal management
                    company;''; and
                        (B) by adding at the end the following new
                    paragraph:
                ``(7) maintain a national registry of appraisal management
            companies that either are registered with and subject to
            supervision of a State appraiser certifying and licensing
            agency or are operating subsidiaries of a Federally regulated
            financial institution.''.
                (2) Appraisal management company minimum qualifications.--
            Title XI of the Financial Institutions Reform, Recovery, and
            Enforcement Act of 1989 (12 U.S.C. 3331 et seq.) is amended by
            adding at the end the following new section (and amending the
            table of contents accordingly):

    ``SEC. 1124. APPRAISAL MANAGEMENT COMPANY MINIMUM QUALIFICATIONS.

        ``(a) In General.--The Appraiser Qualifications Board of the
    Appraisal Foundation shall establish minimum qualifications to be
    applied by a State in the registration of appraisal management
    companies. Such qualifications shall include a requirement that such
    companies--
                ``(1) register with and be subject to supervision by a
            State appraiser certifying and licensing agency in each State
            in which such company operates;
                ``(2) verify that only licensed or certified appraisers are
            used for federally related transactions;
                ``(3) require that appraisals coordinated by an appraisal
            management company comply with the Uniform Standards of
            Professional Appraisal Practice; and
                ``(4) require that appraisals are conducted independently
            and free from inappropriate influence and coercion pursuant to
            the appraisal independence standards established under section
            129E of the Truth in Lending Act.
        ``(b) Exception for Federally Regulated Financial Institutions.--
    The requirements of subsection (a) shall not apply to an appraisal
    management company that is a subsidiary owned and controlled by a
    financial institution and regulated by a federal financial institution
    regulatory agency. In such case, the appropriate federal financial
    institutions regulatory agency shall, at a minimum, develop regulations
    affecting the operations of the appraisal management company to--
                ``(1) verify that only licensed or certified appraisers are
            used for federally related transactions;
                ``(2) require that appraisals coordinated by an institution
            or subsidiary providing appraisal management services comply
            with the Uniform Standards of Professional Appraisal Practice;
            and
                ``(3) require that appraisals are conducted independently
            and free from inappropriate influence and coercion pursuant to
            the appraisal independence standards established under section
            129E of the Truth in Lending Act.
        ``(c) Registration Limitations.--An appraisal management company
    shall not be registered by a State if such company, in whole or in
    part, directly or indirectly, is owned by any person who has had an
    appraiser license or certificate refused, denied, cancelled,
    surrendered in lieu of revocation, or revoked in any State.
    Additionally, each person that owns more than 10 percent of an
    appraisal management company shall be of good moral character, as
    determined by the State appraiser certifying and licensing agency, and
    shall submit to a background investigation carried out by the State
    appraiser certifying and licensing agency.
        ``(d) Regulations.--The Appraisal Subcommittee shall promulgate
    regulations to implement the minimum qualifications developed by the
    Appraiser Qualifications Board under this section, as such
    qualifications relate to the State appraiser certifying and licensing
    agencies. The Appraisal Subcommittee shall also promulgate regulations
    for the reporting of the activities of appraisal management companies
    in determining the payment of the annual registry fee.
        ``(e) Effective Date.--
                ``(1) In general.--No appraisal management company may
            perform services related to a federally related transaction in
            a State after the date that is 36 months after the date of the
            enactment of this section unless such company is registered
            with such State or subject to oversight by a federal financial
            institutions regulatory agency.
                ``(2) Extension of effective date.--Subject to the approval
            of the Council, the Appraisal Subcommittee may extend by an
            additional 12 months the requirements for the registration and
            supervision of appraisal management companies if it makes a
            written finding that a State has made substantial progress in
            establishing a State appraisal management company registration
            and supervision system that appears to conform with the
            provisions of this title.''.
                (3) State appraiser certifying and licensing agency
            authority.--Section 1117 of the Financial Institutions Reform,
            Recovery, and Enforcement Act of 1989 (12 U.S.C. 3346) is
            amended by adding at the end the following: ``The duties of
            such agency may additionally include the registration and
            supervision of appraisal management companies.''.
                (4) Appraisal management company definition.--Section 1121
            of the Financial Institutions Reform, Recovery, and Enforcement
            Act of 1989 (12 U.S.C. 3350) is amended by adding at the end
            the following:
                ``(11) Appraisal management company.--The term `appraisal
            management company' means, in connection with valuing
            properties collateralizing mortgage loans or mortgages
            incorporated into a securitization, any external third party
            authorized either by a creditor of a consumer credit
            transaction secured by a consumer's principal dwelling or by an
            underwriter of or other principal in the secondary mortgage
            markets, that oversees a network or panel of more than 15
            certified or licensed appraisers in a State or 25 or more
            nationally within a given year--
                        ``(A) to recruit, select, and retain appraisers;
                        ``(B) to contract with licensed and certified
                    appraisers to perform appraisal assignments;
                        ``(C) to manage the process of having an appraisal
                    performed, including providing administrative duties
                    such as receiving appraisal orders and appraisal
                    reports, submitting completed appraisal reports to
                    creditors and underwriters, collecting fees from
                    creditors and underwriters for services provided, and
                    reimbursing appraisers for services performed; or
                        ``(D) to review and verify the work of
                    appraisers.''.
        (g) State Agency Reporting Requirement.--Section 1109(a) of the
    Financial Institutions Reform, Recovery, and Enforcement Act of 1989
    (12 U.S.C. 3338(a)) is amended--
                (1) by striking ``and'' after the semicolon in paragraph
            (1);
                (2) by redesignating paragraph (2) as paragraph (4); and
                (3) by inserting after paragraph (1) the following new
            paragraphs:
                ``(2) transmit reports on sanctions, disciplinary actions,
            license and certification revocations, and license and
            certification suspensions on a timely basis to the national
            registry of the Appraisal Subcommittee;
                ``(3) transmit reports on a timely basis of supervisory
            activities involving appraisal management companies or other
            third-party providers of appraisals and appraisal management
            services, including investigations initiated and disciplinary
            actions taken; and''.
        (h) Registry Fees Modified.--
                (1) In general.--Section 1109(a) of the Financial
            Institutions Reform, Recovery, and Enforcement Act of 1989 (12
            U.S.C. 3338(a)) is amended--
                        (A) by amending paragraph (4) (as modified by
                    section 9503(g)) to read as follows:
                ``(4) collect--
                        ``(A) from such individuals who perform or seek to
                    perform appraisals in federally related transactions,
                    an annual registry fee of not more than $40, such fees
                    to be transmitted by the State agencies to the Council
                    on an annual basis; and
                        ``(B) from an appraisal management company that
                    either has registered with a State appraiser certifying
                    and licensing agency in accordance with this title or
                    operates as a subsidiary of a federally regulated
                    financial institution, an annual registry fee of--
                                ``(i) in the case of such a company that
                            has been in existence for more than a year, $25
                            multiplied by the number of appraisers working
                            for or contracting with such company in such
                            State during the previous year, but where such
                            $25 amount may be adjusted, up to a maximum of
                            $50, at the discretion of the Appraisal
                            Subcommittee, if necessary to carry out the
                            Subcommittee's functions under this title; and
                                ``(ii) in the case of such a company that
                            has not been in existence for more than a year,
                            $25 multiplied by an appropriate number to be
                            determined by the Appraisal Subcommittee, and
                            where such number will be used for determining
                            the fee of all such companies that were not in
                            existence for more than a year, but where such
                            $25 amount may be adjusted, up to a maximum of
                            $50, at the discretion of the Appraisal
                            Subcommittee, if necessary to carry out the
                            Subcommittee's functions under this title.'';
                            and
                        (B) by amending the matter following paragraph (4),
                    as redesignated, to read as follows:
    ``Subject to the approval of the Council, the Appraisal Subcommittee
    may adjust the dollar amount of registry fees under paragraph (4)(A),
    up to a maximum of $80 per annum, as necessary to carry out its
    functions under this title. The Appraisal Subcommittee shall consider
    at least once every 5 years whether to adjust the dollar amount of the
    registry fees to account for inflation. In implementing any change in
    registry fees, the Appraisal Subcommittee shall provide flexibility to
    the States for multi-year certifications and licenses already in place,
    as well as a transition period to implement the changes in registry
    fees. In establishing the amount of the annual registry fee for an
    appraisal management company, the Appraisal Subcommittee shall have the
    discretion to impose a minimum annual registry fee for an appraisal
    management company to protect against the under reporting of the number
    of appraisers working for or contracted by the appraisal management
    company.''.
                (2) Incremental revenues.--Incremental revenues collected
            pursuant to the increases required by this subsection shall be
            placed in a separate account at the United States Treasury,
            entitled the ``Appraisal Subcommittee Account''.
        (i) Grants and Reports.--Section 1109(b) of the Financial
    Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
    3348(b)) is amended--
                (1) by striking ``and'' after the semicolon in paragraph
            (3);
                (2) by striking the period at the end of paragraph (4) and
            inserting a semicolon;
                (3) by adding at the end the following new paragraphs:
                ``(5) to make grants to State appraiser certifying and
            licensing agencies to support the efforts of such agencies to
            comply with this title, including--
                        ``(A) the complaint process, complaint
                    investigations, and appraiser enforcement activities of
                    such agencies; and
                        ``(B) the submission of data on State licensed and
                    certified appraisers and appraisal management companies
                    to the National appraisal registry, including
                    information affirming that the appraiser or appraisal
                    management company meets the required qualification
                    criteria and formal and informal disciplinary actions;
                    and
                ``(6) to report to all State appraiser certifying and
            licensing agencies when a license or certification is
            surrendered, revoked, or suspended.''.
    Obligations authorized under this subsection may not exceed 75 percent
    of the fiscal year total of incremental increase in fees collected and
    deposited in the ``Appraisal Subcommittee Account'' pursuant to
    subsection (h).
        (j) Criteria.--Section 1116 of the Financial Institutions Reform,
    Recovery, and Enforcement Act of 1989 (12 U.S.C. 3345) is amended--
                (1) in subsection (c), by inserting ``whose criteria for
            the licensing of a real estate appraiser currently meet or
            exceed the minimum criteria issued by the Appraisal
            Qualifications Board of The Appraisal Foundation for the
            licensing of real estate appraisers'' before the period at the
            end; and
                (2) by striking subsection (e) and inserting the following
            new subsection:
        ``(e) Minimum Qualification Requirements.--Any requirements
    established for individuals in the position of `Trainee Appraiser' and
    `Supervisory Appraiser' shall meet or exceed the minimum qualification
    requirements of the Appraiser Qualifications Board of The Appraisal
    Foundation. The Appraisal Subcommittee shall have the authority to
    enforce these requirements.''.
        (k) Monitoring of State Appraiser Certifying and Licensing
    Agencies.--Section 1118 of the Financial Institutions Reform, Recovery,
    and Enforcement Act of 1989 (12 U.S.C. 3347) is amended--
                (1) by amending subsection (a) to read as follows:
        ``(a) In General.--The Appraisal Subcommittee shall monitor each
    State appraiser certifying and licensing agency for the purposes of
    determining whether such agency--
                ``(1) has policies, practices, funding, staffing, and
            procedures that are consistent with this title;
                ``(2) processes complaints and completes investigations in
            a reasonable time period;
                ``(3) appropriately disciplines sanctioned appraisers and
            appraisal management companies;
                ``(4) maintains an effective regulatory program; and
                ``(5) reports complaints and disciplinary actions on a
            timely basis to the national registries on appraisers and
            appraisal management companies maintained by the Appraisal
            Subcommittee.
    The Appraisal Subcommittee shall have the authority to remove a State
    licensed or certified appraiser or a registered appraisal management
    company from a national registry on an interim basis pending State
    agency action on licensing, certification, registration, and
    disciplinary proceedings. The Appraisal Subcommittee and all agencies,
    instrumentalities, and Federally recognized entities under this title
    shall not recognize appraiser certifications and licenses from States
    whose appraisal policies, practices, funding, staffing, or procedures
    are found to be inconsistent with this title. The Appraisal
    Subcommittee shall have the authority to impose sanctions, as described
    in this section, against a State agency that fails to have an effective
    appraiser regulatory program. In determining whether such a program is
    effective, the Appraisal Subcommittee shall include an analyses of the
    licensing and certification of appraisers, the registration of
    appraisal management companies, the issuance of temporary licenses and
    certifications for appraisers, the receiving and tracking of submitted
    complaints against appraisers and appraisal management companies, the
    investigation of complaints, and enforcement actions against appraisers
    and appraisal management companies. The Appraisal Subcommittee shall
    have the authority to impose interim actions and suspensions against a
    State agency as an alternative to, or in advance of, the derecognition
    of a State agency.''.
                (2) in subsection (b)(2), by inserting after ``authority''
            the following: ``or sufficient funding''.
        (l) Reciprocity.--Subsection (b) of section 1122 of the Financial
    Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
    3351(b)) is amended to read as follows:
        ``(b) Reciprocity.--A State appraiser certifying or licensing
    agency shall issue a reciprocal certification or license for an
    individual from another State when--
                ``(1) the appraiser licensing and certification program of
            such other State is in compliance with the provisions of this
            title; and
                ``(2) the appraiser holds a valid certification from a
            State whose requirements for certification or licensing meet or
            exceed the licensure standards established by the State where
            an individual seeks appraisal licensure.''.
        (m) Consideration of Professional Appraisal Designations.--Section
    1122(d) of the Financial Institutions Reform, Recovery, and Enforcement
    Act of 1989 (12 U.S.C. 3351(d)) is amended by striking ``shall not
    exclude'' and all that follows through the end of the subsection and
    inserting the following: ``may include education achieved, experience,
    sample appraisals, and references from prior clients. Membership in a
    nationally recognized professional appraisal organization may be a
    criteria considered, though lack of membership therein shall not be the
    sole bar against consideration for an assignment under these
    criteria.''.
        (n) Appraiser Independence.--Section 1122 of the Financial
    Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
    3351) is amended by adding at the end the following new subsection:
        ``(g) Appraiser Independence Monitoring.--The Appraisal
    Subcommittee shall monitor each State appraiser certifying and
    licensing agency for the purpose of determining whether such agency's
    policies, practices, and procedures are consistent with the purposes of
    maintaining appraiser independence and whether such State has adopted
    and maintains effective laws, regulations, and policies aimed at
    maintaining appraiser independence.''.
        (o) Appraiser Education.--Section 1122 of the Financial
    Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
    3351) is amended by inserting after subsection (g) (as added by
    subsection (l) of this section) the following new subsection:
        ``(h) Approved Education.--The Appraisal Subcommittee shall
    encourage the States to accept courses approved by the Appraiser
    Qualification Board's Course Approval Program.''.
        (p) Appraisal Complaint Hotline.--Section 1122 of the Financial
    Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
    3351), as amended by this section, is further amended by adding at the
    end the following new subsection:
        ``(i) Appraisal Complaint National Hotline.--If, 1 year after the
    date of the enactment of this subsection, the Appraisal Subcommittee
    determines that no national hotline exists to receive complaints of
    non-compliance with appraisal independence standards and Uniform
    Standards of Professional Appraisal Practice, including complaints from
    appraisers, individuals, or other entities concerning the improper
    influencing or attempted improper influencing of appraisers or the
    appraisal process, the Appraisal Subcommittee shall establish and
    operate such a national hotline, which shall include a toll-free
    telephone number and an email address. If the Appraisal Subcommittee
    operates such a national hotline, the Appraisal Subcommittee shall
    refer complaints for further action to appropriate governmental bodies,
    including a State appraiser certifying and licensing agency, a
    financial institution regulator, or other appropriate legal
    authorities. For complaints referred to State appraiser certifying and
    licensing agencies or to Federal regulators, the Appraisal Subcommittee
    shall have the authority to follow up such complaint referrals in order
    to determine the status of the resolution of the complaint.''.
        (q) Automated Valuation Models.--Title XI of the Financial
    Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
    3331 et seq.), as amended by this section, is further amended by adding
    at the end the following new section (and amending the table of
    contents accordingly):

    ``SEC. 1125. AUTOMATED VALUATION MODELS USED TO VALUE CERTAIN
                  MORTGAGES.

        ``(a) In General.--Automated valuation models shall adhere to
    quality control standards designed to--
                ``(1) ensure a high level of confidence in the estimates
            produced by automated valuation models;
                ``(2) protect against the manipulation of data;
                ``(3) seek to avoid conflicts of interest; and
                ``(4) require random sample testing and reviews, where such
            testing and reviews are performed by an appraiser who is
            licensed or certified in the State where the testing and
            reviews take place.
        ``(b) Adoption of Regulations.--The Appraisal Subcommittee and its
    member agencies, in consultation with the Appraisal Standards Board of
    the Appraisal Foundation and other interested parties, shall promulgate
    regulations to implement the quality control standards required under
    this section.
        ``(c) Enforcement.--Compliance with regulations issued under this
    subsection shall be enforced by--
                ``(1) with respect to a financial institution, or
            subsidiary owned and controlled by a financial institution and
            regulated by a Federal financial institution regulatory agency,
            the Federal financial institution regulatory agency that acts
            as the primary Federal supervisor of such financial institution
            or subsidiary; and
                ``(2) with respect to other persons, the Appraisal
            Subcommittee.
        ``(d) Automated Valuation Model Defined.--For purposes of this
    section, the term `automated valuation model' means any computerized
    model used by mortgage originators and secondary market issuers to
    determine the collateral worth of a mortgage secured by a consumer's
    principal dwelling.''.
        (r) Broker Price Opinions.--Title XI of the Financial Institutions
    Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3331 et seq.),
    as amended by this section, is further amended by adding at the end the
    following new section (and amending the table of contents accordingly):

    ``SEC. 1126. BROKER PRICE OPINIONS.

        ``(a) General Prohibition.--In conjunction with the purchase of a
    consumer's principal dwelling, broker price opinions may not be used as
    the primary basis to determine the value of a piece of property for the
    purpose of a loan origination of a residential mortgage loan secured by
    such piece of property.
        ``(b) Broker Price Opinion Defined.--For purposes of this section,
    the term `broker price opinion' means an estimate prepared by a real
    estate broker, agent, or sales person that details the probable selling
    price of a particular piece of real estate property and provides a
    varying level of detail about the property's condition, market, and
    neighborhood, and information on comparable sales, but does not include
    an automated valuation model, as defined in section 1125(c).''.
        (s) Amendments to Appraisal Subcommittee.--Section 1011 of the
    Federal Financial Institutions Examination Council Act of 1978 (12
    U.S.C. 3310) is amended--
                (1) in the first sentence, by adding before the period the
            following: ``and the Federal Housing Finance Agency''; and
                (2) by inserting at the end the following: ``At all times
            at least one member of the Appraisal Subcommittee shall have
            demonstrated knowledge and competence through licensure,
            certification, or professional designation within the appraisal
            profession.''.
        (t) Technical Corrections.--
                (1) Section 1119(a)(2) of the Financial Institutions
            Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
            3348(a)(2)) is amended by striking ``council,'' and inserting
            ``Council,''.
                (2) Section 1121(6) of the Financial Institutions Reform,
            Recovery, and Enforcement Act of 1989 (12 U.S.C. 3350(6)) is
            amended by striking ``Corporations,'' and inserting
            ``Corporation,''.
                (3) Section 1121(8) of the Financial Institutions Reform,
            Recovery, and Enforcement Act of 1989 (12 U.S.C. 3350(8)) is
            amended by striking ``council'' and inserting ``Council''.
                (4) Section 1122 of the Financial Institutions Reform,
            Recovery, and Enforcement Act of 1989 (12 U.S.C. 3351) is
            amended--
                        (A) in subsection (a)(1) by moving the left margin
                    of subparagraphs (A), (B), and (C) 2 ems to the right;
                    and
                        (B) in subsection (c)--
                                (i) by striking ``Federal Financial
                            Institutions Examination Council'' and
                            inserting ``Financial Institutions Examination
                            Council''; and
                                (ii) by striking ``the council's
                            functions'' and inserting ``the Council's
                            functions''.

    SEC. 9504. STUDY REQUIRED ON IMPROVEMENTS IN APPRAISAL PROCESS AND
                  COMPLIANCE PROGRAMS.

        (a) Study.--The Comptroller General shall conduct a comprehensive
    study on possible improvements in the appraisal process generally, and
    specifically on the consistency in and the effectiveness of, and
    possible improvements in, State compliance efforts and programs in
    accordance with title XI of the Financial Institutions Reform,
    Recovery, and Enforcement Act of 1989. In addition, this study shall
    examine the existing exemptions to the use of certified appraisers
    issued by Federal financial institutions regulatory agencies. The study
    shall also review the threshold level established by Federal regulators
    for compliance under title XI and whether there is a need to revise
    them to reflect the addition of consumer protection to the purposes and
    functions of the Appraisal Subcommittee. The study shall additionally
    examine the quality of different types of mortgage collateral
    valuations produced by broker price opinions, automated valuation
    models, licensed appraisals, and certified appraisals, among others,
    and the quality of appraisals provided through different distribution
    channels, including appraisal management companies, independent
    appraisal operations within a mortgage originator, and fee-for-service
    appraisals. The study shall also include an analysis and statistical
    breakdown of enforcement actions taken during the last 10 years against
    different types of appraisers, including certified, licensed,
    supervisory, and trainee appraisers. Furthermore, the study shall
    examine the benefits and costs, as well as the advantages and
    disadvantages, of establishing a national repository to collect data
    related to real estate property collateral valuations performed in the
    United States.
        (b) Report.--Before the end of the 18-month period beginning on the
    date of the enactment of this Act, the Comptroller General shall submit
    a report on the study under subsection (a) to the Committee on
    Financial Services of the House of Representatives and the Committee on
    Banking, Housing, and Urban Affairs of the Senate, together with such
    recommendations for administrative or legislative action, at the
    Federal or State level, as the Comptroller General may determine to be
    appropriate.
        (c) Additional Study Required.--The Comptroller General shall
    conduct an additional study to determine the effects that the changes
    to the seller-guide appraisal requirements of Fannie Mae and Freddie
    Mac contained in the Home Valuation Code of Conduct have on small
    business, like mortgage brokers and independent appraisers, and
    consumers, including the effect on the--
                (1) quality and costs of appraisals;
                (2) length of time for obtaining appraisals;
                (3) impact on consumer protection, especially regarding
            maintaining appraisal independence, abating appraisal
            inflation, and mitigating acts of appraisal fraud;
                (4) structure of the appraisal industry, especially
            regarding appraisal management companies, fee-for-service
            appraisers, and the regulation of appraisal management
            companies by the states; and
                (5) impact on mortgage brokers and other small business
            professionals in the financial services industry.
        (d) Additional Report.--Before the end of the 6-month period
    beginning on the date of the enactment of this Act, the Comptroller
    General shall submit an additional report to the Committee on Financial
    Services of the House of Representatives and the Committee on Banking,
    Housing, and Urban Affairs of the Senate containing the findings and
    conclusions of the Comptroller General with respect to the study
    conducted pursuant to subsection (c). Such additional report shall take
    into consideration the Small Business Administration's views on how
    small businesses are affected by the Home Valuation Code of Conduct.

    SEC. 9505. EQUAL CREDIT OPPORTUNITY ACT AMENDMENT.

        Subsection (e) of section 701 of the Equal Credit Opportunity Act
    (15 U.S.C. 1691) is amended to read as follows:
        ``(e) Copies Furnished to Applicants.--
                ``(1) In general.--Each creditor shall furnish to an
            applicant a copy of any and all written appraisals and
            valuations developed in connection with the applicant's
            application for a loan that is secured or would have been
            secured by a first lien on a dwelling promptly upon completion,
            but in no case later than 3 days prior to the closing of the
            loan, whether the creditor grants or denies the applicant's
            request for credit or the application is incomplete or
            withdrawn.
                ``(2) Waiver.--The applicant may waive the 3 day
            requirement provided for in paragraph (1), except where
            otherwise required in law.
                ``(3) Reimbursement.--The applicant may be required to pay
            a reasonable fee to reimburse the creditor for the cost of the
            appraisal, except where otherwise required in law.
                ``(4) Free copy.--Notwithstanding paragraph (3), the
            creditor shall provide a copy of each written appraisal or
            valuation at no additional cost to the applicant.
                ``(5) Notification to applicants.--At the time of
            application, the creditor shall notify an applicant in writing
            of the right to receive a copy of each written appraisal and
            valuation under this subsection.
                ``(6) Regulations.--The Board shall prescribe regulations
            to implement this subsection within 1 year of the date of the
            enactment of this subsection.
                ``(7) Valuation defined.--For purposes of this subsection,
            the term `valuation' shall include any estimate of the value of
            a dwelling developed in connection with a creditor's decision
            to provide credit, including those values developed pursuant to
            a policy of a government sponsored enterprise or by an
            automated valuation model, a broker price opinion, or other
            methodology or mechanism.''.

    SEC. 9506. REAL ESTATE SETTLEMENT PROCEDURES ACT OF 1974 AMENDMENT
                  RELATING TO CERTAIN APPRAISAL FEES.

        Section 4 of the Real Estate Settlement Procedures Act of 1974 is
    amended by adding at the end the following new subsection:
        ``(c) The standard form described in subsection (a) shall include,
    in the case of an appraisal coordinated by an appraisal management
    company (as such term is defined in section 1121(11) of the Financial
    Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
    3350(11))), a clear disclosure of--
                ``(1) the fee paid directly to the appraiser by such
            company; and
                ``(2) the administration fee charged by such company.''.

     Subtitle G--Sense of Congress Regarding the Importance of Government
                          Sponsored Enterprises Reform

    SEC. 9601. SENSE OF CONGRESS REGARDING THE IMPORTANCE OF GOVERNMENT-
                  SPONSORED ENTERPRISES REFORM TO ENHANCE THE PROTECTION,
                  LIMITATION, AND REGULATION OF THE TERMS OF RESIDENTIAL
                  MORTGAGE CREDIT.

        (a) Findings.--The Congress finds as follows:
                (1) The Government-sponsored enterprises, Federal National
            Mortgage Association (Fannie Mae) and the Federal Home Loan
            Mortgage Corporation (Freddie Mac), were chartered by Congress
            to ensure a reliable and affordable supply of mortgage funding,
            but enjoy a dual legal status as privately owned corporations
            with Government mandated affordable housing goals.
                (2) In 1996, the Department of Housing and Urban
            Development required that 42 percent of Fannie Mae's and
            Freddie Mac's mortgage financing should go to borrowers with
            income levels below the median for a given area.
                (3) In 2004, the Department of Housing and Urban
            Development revised those goals, increasing them to 56 percent
            of their overall mortgage purchases by 2008, and additionally
            mandated that 12 percent of all mortgage purchases by Fannie
            Mae and Freddie Mac be ``special affordable'' loans made to
            borrowers with incomes less than 60 percent of an area's median
            income, a target that ultimately increased to 28 percent for
            2008.
                (4) To help fulfill those mandated affordable housing
            goals, in 1995 the Department of Housing and Urban Development
            authorized Fannie Mae and Freddie Mac to purchase subprime
            securities that included loans made to low-income borrowers.
                (5) After this authorization to purchase subprime
            securities, subprime and near-prime loans increased from 9
            percent of securitized mortgages in 2001 to 40 percent in 2006,
            while the market share of conventional mortgages dropped from
            78.8 percent in 2003 to 50.1 percent by 2007 with a
            corresponding increase in subprime and Alt-A loans from 10.1
            percent to 32.7 percent over the same period.
                (6) In 2004 alone, Fannie Mae and Freddie Mac purchased
            $175,000,000,000 in subprime mortgage securities, which
            accounted for 44 percent of the market that year, and from 2005
            through 2007, Fannie Mae and Freddie Mac purchased
            approximately $1,000,000,000,000 in subprime and Alt-A loans,
            while Fannie Mae's acquisitions of mortgages with less than 10
            percent down payments almost tripled.
                (7) According to data from the Federal Housing Finance
            Agency (FHFA) for the fourth quarter of 2008, Fannie Mae and
            Freddie Mac own or guarantee 75 percent of all newly originated
            mortgages, and Fannie Mae and Freddie Mac currently own 13.3
            percent of outstanding mortgage debt in the United States and
            have issued mortgage-backed securities for 31.0 percent of the
            residential debt market, a combined total of 44.3 percent of
            outstanding mortgage debt in the United States.
                (8) On September 7, 2008, the FHFA placed Fannie Mae and
            Freddie Mac into conservatorship, with the Treasury Department
            subsequently agreeing to purchase at least $200,000,000,000 of
            preferred stock from each enterprise in exchange for warrants
            for the purchase of 79.9 percent of each enterprise's common
            stock.
                (9) The conservatorship for Fannie Mae and Freddie Mac has
            potentially exposed taxpayers to upwards of $5,300,000,000,000
            worth of risk.
                (10) The hybrid public-private status of Fannie Mae and
            Freddie Mac is untenable and must be resolved to assure that
            consumers are offered and receive residential mortgage loans on
            terms that reasonably reflect their ability to repay the loans
            and that are understandable and not unfair, deceptive, or
            abusive.
        (b) Sense of the Congress.--It is the sense of the Congress that
    efforts to enhance by the protection, limitation, and regulation of the
    terms of residential mortgage credit and the practices related to such
    credit would be incomplete without enactment of meaningful structural
    reforms of Fannie Mae and Freddie Mac.

                    Subtitle H--Reports and Data Collection

    SEC. 9701. GAO STUDY REPORT ON GOVERNMENT EFFORTS TO COMBAT MORTGAGE
                  FORECLOSURE RESCUE SCAMS AND LOAN MODIFICATION FRAUD.

        (a) Study.--The Comptroller General of the United States shall
    conduct a study of the current inter-agency efforts of the Secretary of
    the Treasury, the Secretary of Housing and Urban Development, the
    Attorney General, and the Federal Trade Commission to crackdown on
    mortgage foreclosure rescue scams and loan modification fraud in order
    to advise the Congress to the risks and vulnerabilities of emerging
    schemes in the loan modification arena.
        (b) Report.--
                (1) In general.--The Comptroller General shall submit a
            report to the Congress on the study conducted under subsection
            (a) containing such recommendations for legislative and
            administrative actions as the Comptroller General may determine
            to be appropriate in addition to the recommendations required
            under paragraph (2).
                (2) Specific topics.--The report made under paragraph (1)
            shall include--
                        (A) an evaluation of the effectiveness of the
                    inter-agency task force current efforts to combat
                    mortgage foreclosure rescue scams and loan modification
                    fraud scams;
                        (B) specific recommendations on agency or
                    legislative action that are essential to properly
                    protect homeowners from mortgage foreclosure rescue
                    scams and loan modification fraud scams; and
                        (C) the adequacy of financial resources that the
                    Federal Government is allocating to--
                                (i) crackdown on loan modification and
                            foreclosure rescue scams; and
                                (ii) the education of homeowners about
                            fraudulent scams relating to loan modification
                            and foreclosure rescues.

    SEC. 9702. REPORTING OF MORTGAGE DATA BY STATE.

        (a) In General.--Section 104(a) of the Helping Families Save Their
    Homes Act of 2009 (division A of Public Law 111-22) is amended--
                (1) in paragraph (2), by striking ``resulting'' and
            inserting ``in each State that result'';
                (2) in paragraph (3), by inserting ``each State for'' after
            ``modifications in''; and
                (3) in paragraph (4), by inserting ``in each State'' after
            ``total number of loans''.
        (b) Conforming Amendment.--Section 104(b)(1)(A) of such Act is
    amended by adding at the end the following sentence: ``Not later than
    60 days after the date of the enactment of the Wall Street Reform and
    Consumer Protection Act of 2009, the Comptroller of the Currency and
    the Director of the Office of Thrift Supervision shall update such
    requirements to reflect amendments made to this section by such Act.''.

                  Subtitle I--Multifamily Mortgage Resolution

    SEC. 9801. MULTIFAMILY MORTGAGE RESOLUTION PROGRAM.

        (a) Establishment.--The Secretary of Housing and Urban Development
    shall develop a program under this subsection to ensure the protection
    of current and future tenants and at-risk multifamily properties, where
    feasible, based on criteria that may include--
                (1) creating sustainable financing of such properties, that
            may take into consideration such factors as--
                        (A) the rental income generated by such properties;
                    and
                        (B) the preservation of adequate operating
                    reserves;
                (2) maintaining the level of Federal, State, and city
            subsidies in effect as of the date of the enactment of this
            Act;
                (3) providing funds for rehabilitation; and
                (4) facilitating the transfer of such properties, when
            appropriate and with the agreement of owners, to responsible
            new owners and ensuring affordability of such properties.
        (b) Coordination.--The Secretary of Housing and Urban Development
    may, in carrying out the program developed under this section,
    coordinate with the Secretary of the Treasury, the Federal Deposit
    Insurance Corporation, the Board of Governors of the Federal Reserve
    System, the Federal Housing Finance Agency, and any other Federal
    Government agency that the Secretary considers appropriate.
        (c) Definition.--For purposes of this section, the term
    ``multifamily properties'' means a residential structure that consists
    of 5 or more dwelling units.

        Subtitle J--Study of Effect of Drywall Presence on Foreclosures

    SEC. 9901. STUDY OF EFFECT OF DRYWALL PRESENCE ON FORECLOSURES.

        (a) Study.--The Secretary of Housing and Urban Development, in
    consultation with the Secretary of the Treasury, shall conduct a study
    of the effect on residential mortgage loan foreclosures of--
                (1) the presence in residential structures subject to such
            mortgage loans of drywall that was imported from China during
            the period beginning with 2004 and ending at the end of 2007;
            and
                (2) the availability of property insurance for residential
            structures in which such drywall is present.
        (b) Report.--Not later than the expiration of the 120-day period
    beginning on the date of the enactment of this Act, the Secretary of
    Housing and Urban Development shall submit to the Congress a report on
    the study conducted under subsection (a) containing its findings,
    conclusions, and recommendations.

                Subtitle K--Home Affordable Modification Program

    SEC. 9911. HOME AFFORDABLE MODIFICATION PROGRAM GUIDELINES.

        (a) Net Present Value Input Data.--The Secretary of the Treasury
    (in this section referred to as the ``Secretary'') shall revise the
    supplemental directives and other guidelines for the Home Affordable
    Modification Program of the Making Home Affordable initiative of the
    Secretary of the Treasury, authorized under the Emergency Economic
    Stabilization Act of 2008 (Public Law 110-343), to require each
    mortgage servicer participating in such program to provide each
    borrower under a mortgage whose request for a mortgage modification
    under the Program is denied with all borrower-related and mortgage-
    related input data used in any net present value (NPV) analyses
    performed in connection with the subject mortgage. Such input data
    shall be provided to the borrower at the time of such denial.
        (b) Web-based Site for NPV Calculator and Application.--
                (1) NPV calculator.--In carrying out the Home Affordable
            Modification Program, the Secretary shall establish and
            maintain a site on the World Wide Web that provides a
            calculator for net present value analyses of a mortgage, based
            on the Secretary's methodology for calculating such value, that
            mortgagors can use to enter information regarding their own
            mortgages and that provides a determination after entering such
            information regarding a mortgage of whether such mortgage would
            be accepted or rejected for modification under the Program,
            using such methodology.
                (2) Disclosure.-- Such Web site shall also prominently
            disclose that each mortgage servicer participating in such
            Program may use a method for calculating net present value of a
            mortgage that is different than the method used by such
            calculator.
                (3) Application.-- The Secretary shall make a reasonable
            effort to include on such World Wide Web site a method for
            homeowners to apply for a mortgage modification under the Home
            Affordable Modification Program.
        (c) Public Availability of NPV Methodology, Computer Model, and
    Variables.--The Secretary shall make publicly available, including by
    posting on a World Wide Web site of the Secretary--
                (1) the Secretary's methodology and computer model,
            including all formulae used in such computer model, used for
            calculating net present value of a mortgage that is used by the
            calculator established pursuant to subsection (b); and
                (2) all variables used in such net present value analysis.

                   Subtitle L--Making Home Affordable Program

    SEC. 9921. PUBLIC AVAILABILITY OF INFORMATION.

        (a) Revisions to Program Guidelines.--The Secretary of the Treasury
    (in this section referred to as the ``Secretary'') shall revise the
    guidelines for the Home Affordable Modification Program of the Making
    Home Affordable initiative of the Secretary of the Treasury, authorized
    under the Emergency Economic Stabilization Act of 2008 (Public Law 110-
    343), to provide that the data being collected by the Secretary from
    each mortgage servicer and lender participating in the Program is made
    public in accordance with subsection (b).
        (b) Public Availability.--Data shall be made available according to
    the following guidelines:
                (1) Not more than 14 days after each monthly deadline for
            submission of data by mortgage servicers and lenders
            participating in the Program, reports shall be made publicly
            available by means of a World Wide Web site of the Secretary,
            and by submitting a report to the Congress, that shall includes
            the following information:
                        (A) The number of requests for mortgage
                    modifications under the Program that the servicer or
                    lender has received.
                        (B) The number of requests for mortgage
                    modifications under the Program that the servicer or
                    lender has processed.
                        (C) The number of requests for mortgage
                    modifications under the Program that the servicer or
                    lender has approved.
                        (D) The number of requests for mortgage
                    modifications under the Program that the servicer or
                    lender has denied.
                (2) Not more than 60 days after each monthly deadline for
            submission of data by mortgage servicers and lenders
            participating in the Program, the Secretary shall make data
            tables available to the public at the individual record level.
            The Secretary shall issue regulations prescribing--
                        (A) the procedures for disclosing such data to the
                    public; and
                        (B) such deletions as the Secretary may determine
                    to be appropriate to protect any privacy interest of
                    any mortgage modification applicant, including the
                    deletion or alteration of the applicant's name and
                    identification number.

            TITLE VIII--FORECLOSURE AVOIDANCE AND AFFORDABLE HOUSING

    SEC. 10001. EMERGENCY MORTGAGE RELIEF.

        (a) Use of TARP Funds.--Using the authority available under
    sections 101(a) and 115(a) of division A of the Emergency Economic
    Stabilization Act of 2008 (12 U.S.C. 5211(a), 5225(a)), the Secretary
    of the Treasury shall transfer to the Secretary of Housing and Urban
    Development $3,000,000,000, and the Secretary of Housing and Urban
    Development shall credit such amount to the Emergency Homeowners'
    Relief Fund, which such Secretary shall establish pursuant to section
    107 of the Emergency Housing Act of 1975 (12 U.S.C. 2706), as such Act
    is amended by this section, for use for emergency mortgage assistance
    in accordance with title I of such Act.
        (b) Reauthorization of Emergency Mortgage Relief Program.--Title I
    of the Emergency Housing Act of 1975 is amended--
                (1) in section 103 (12 U.S.C. 2702)--
                        (A) in paragraph (2)--
                                (i) by striking ``have indicated'' and all
                            that follows through ``regulation of the
                            holder'' and insert ``have certified'';
                                (ii) by striking ``(such as the volume of
                            delinquent loans in its portfolio)''; and
                                (iii) by striking ``, except that such
                            statement'' and all that follows through
                            ``purposes of this title''; and
                        (B) in paragraph (4), by inserting ``or medical
                    conditions'' after ``adverse economic conditions'';
                (2) in section 104 (12 U.S.C. 2703)--
                        (A) in subsection (b), by striking ``, but such
                    assistance'' and all that follows through the period at
                    the end and inserting the following: ``. The amount of
                    assistance provided to a homeowner under this title
                    shall be an amount that the Secretary determines is
                    reasonably necessary to supplement such amount as the
                    homeowner is capable of contributing toward such
                    mortgage payment, except that the aggregate amount of
                    such assistance provided for any homeowner shall not
                    exceed $50,000.'';
                        (B) in subsection (d), by striking ``interest on a
                    loan or advance''and all that follows through the end
                    of the subsection and inserting the following: ``(1)
                    the rate of interest on any loan or advance of credit
                    insured under this title shall be fixed for the life of
                    the loan or advance of credit and shall not exceed the
                    rate of interest that is generally charged for
                    mortgages on single-family housing insured by the
                    Secretary of Housing and Urban Development under title
                    II of the National Housing Act at the time such loan or
                    advance of credit is made, and (2) no interest shall be
                    charged on interest which is deferred on a loan or
                    advance of credit made under this title. In
                    establishing rates, terms and conditions for loans or
                    advances of credit made under this title, the Secretary
                    shall take into account a homeowner's ability to repay
                    such loan or advance of credit.''; and
                        (C) in subsection (e), by inserting after the
                    period at the end of the first sentence the following:
                    ``Any eligible homeowner who receives a grant or an
                    advance of credit under this title may repay the loan
                    in full, without penalty, by lump sum or by installment
                    payments at any time before the loan becomes due and
                    payable.'';
                (3) in section 105 (12 U.S.C. 2704)--
                        (A) by striking subsection (b);
                        (B) in subsection (e)--
                                (i) by inserting ``and emergency mortgage
                            relief payments made under section 106'' after
                            ``insured under this section''; and
                                (ii) by striking ``$1,500,000,000 at any
                            one time'' and inserting ``$3,000,000,000'';
                        (C) by redesignating subsections (c), (d), and (e)
                    as subsections (b), (c), and (d), respectively; and
                        (D) by adding at the end the following new
                    subsection:
        ``(e) The Secretary shall establish underwriting guidelines or
    procedures to allocate amounts made available for loans and advances
    insured under this section and for emergency relief payments made under
    section 106 based on the likelihood that a mortgagor will be able to
    resume mortgage payments, pursuant to the requirement under section
    103(5).'';
                (4) in section 107--
                        (A) by striking ``(a)''; and
                        (B) by striking subsection (b);
                (5) in section 108 (12 U.S.C. 2707), by adding at the end
            the following new subsection:
        ``(d) Coverage of Existing Programs.--The Secretary shall allow
    funds to be administered by a State that has an existing program that
    is determined by the Secretary to provide substantially similar
    assistance to homeowners. After such determination is made such State
    shall not be required to modify such program to comply with the
    provisions of this title.'';
                (6) in section 109 (12 U.S.C. 2708)--
                        (A) in the section heading, by striking
                    ``authorization and'';
                        (B) by striking subsection (a);
                        (C) by striking ``(b)''; and
                        (D) by striking ``1977'' and inserting ``2011'';
                (7) by striking sections 110, 111, and 113 (12 U.S.C. 2709,
            2710, 2712); and
                (8) by redesignating section 112 (12 U.S.C. 2711) as
            section 110.

    SEC. 10002. ADDITIONAL ASSISTANCE FOR NEIGHBORHOOD STABILIZATION
                  PROGRAM.

        Using the authority made available under sections 101(a) and 115(a)
    of division A of the Emergency Economic Stabilization Act of 2008 (12
    U.S.C. 5211(a), 5225(a)), the Secretary of the Treasury shall transfer
    to the Secretary of Housing and Urban Development $1,000,000,000, and
    the Secretary of Housing and Urban Development shall use such amounts
    for assistance to States and units of general local government for the
    redevelopment of abandoned and foreclosed homes, in accordance with the
    same provisions applicable under the second undesignated paragraph
    under the heading ``Community Planning and Development--Community
    Development Fund'' in title XII of division A of the American Recovery
    and Reinvestment Act of 2009 (Public Law 111-5; 123 Stat. 217) to
    amounts made available under such second undesignated paragraph, except
    as follows:
                (1) Notwithstanding the matter of such second undesignated
            paragraph that precedes the first proviso, amounts made
            available by this section shall remain available until
            expended.
                (2) The 3rd, 4th, 5th, 6th, 7th, and 15th provisos of such
            second undesignated paragraph shall not apply to amounts made
            available by this section.
                (3) Amounts made available by this section shall be
            allocated based on a funding formula for such amounts
            established by the Secretary in accordance with section 2301(b)
            of the Housing and Economic Recovery Act of 2008 (42 U.S.C.
            5301 note), except that--
                        (A) notwithstanding paragraph (2) of such section
                    2301(b), the formula shall be established not later
                    than 30 days after the date of the enactment of this
                    Act;
                        (B) the Secretary may not establish any minimum
                    grant amount or size for grants to States;
                        (C) the Secretary may establish a minimum grant
                    amount for direct allocations to units of general local
                    government located within a State, which shall not
                    exceed $1,000,000; and
                        (D) each State and local government receiving grant
                    amounts shall establish procedures to create
                    preferences for the development of affordable rental
                    housing for properties assisted with amounts made
                    available by this section.
                (4) Paragraph (1) of section 2301(c) of the Housing and
            Economic Recovery Act of 2008 shall not apply to amounts made
            available by this section.
                (5) Section 2302 of the Housing and Economic Recovery Act
            of 2008 shall not apply to amounts made available by this
            section.
                (6) The fourth proviso from the end of such second
            undesignated paragraph shall be applied to amounts made
            available by this section by substituting ``2013'' for
            ``2012''.
                (7) Notwithstanding section 2301(a) of the Housing and
            Economic Recovery Act of 2008, the term ``State'' means any
            State of the United States, the District of Columbia, the
            Commonwealth of Puerto Rico, the Commonwealth of the Northern
            Mariana Islands, Guam, the Virgin Islands, American Samoa, and
            other territory or possession of the United States for purposes
            of this section and title III of division B of such Act, as
            applied to amounts made available by this section.
                (8)(A) None of the amounts made available by this section
            shall be distributed to--
                        (i) any organization which has been convicted for a
                    violation under Federal law relating to an election for
                    Federal office; or
                        (ii) any organization which employs applicable
                    individuals.
                (B) In this paragraph, the term ``applicable individual''
            means an individual who--
                        (i) is--
                                (I) employed by the organization in a
                            permanent or temporary capacity;
                                (II) contracted or retained by the
                            organization; or
                                (III) acting on behalf of, or with the
                            express or apparent authority of, the
                            organization; and
                        (ii) has been convicted for a violation under
                    Federal law relating to an election for Federal office.

                TITLE IX--NONADMITTED AND REINSURANCE REFORM ACT

    SEC. 10051. SHORT TITLE.

        This title may be cited as the ``Nonadmitted and Reinsurance Reform
    Act of 2009''.

    SEC. 10052. EFFECTIVE DATE.

        Except as otherwise specifically provided in this title, this title
    shall take effect upon the expiration of the 12-month period beginning
    on the date of the enactment of this Act.

                       Subtitle A--Nonadmitted Insurance

    SEC. 10101. REPORTING, PAYMENT, AND ALLOCATION OF PREMIUM TAXES.

        (a) Home State's Exclusive Authority.-- No State other than the
    home State of an insured may require any premium tax payment for
    nonadmitted insurance.
        (b) Allocation of Nonadmitted Premium Taxes.--
                (1) In general.--The States may enter into a compact or
            otherwise establish procedures to allocate among the States the
            premium taxes paid to an insured's home State described in
            subsection (a).
                (2) Effective date.--Except as expressly otherwise provided
            in such compact or other procedures, any such compact or other
            procedures--
                        (A) if adopted on or before the expiration of the
                    330-day period that begins on the date of the enactment
                    of this Act, shall apply to any premium taxes that, on
                    or after such date of enactment, are required to be
                    paid to any State that is subject to such compact or
                    procedures; and
                        (B) if adopted after the expiration of such 330-day
                    period, shall apply to any premium taxes that, on or
                    after January 1 of the first calendar year that begins
                    after the expiration of such 330-day period, are
                    required to be paid to any State that is subject to
                    such compact or procedures.
                (3) Report.--Upon the expiration of the 330-day period
            referred to in paragraph (2), the NAIC may submit a report to
            the Committee on Financial Services and Committee on the
            Judiciary of the House of Representatives and the Committee on
            Banking, Housing, and Urban Affairs of the Senate identifying
            and describing any compact or other procedures for allocation
            among the States of premium taxes that have been adopted during
            such period by any States.
                (4) Nationwide system.--The Congress intends that each
            State adopt nationwide uniform requirements, forms, and
            procedures, such as an interstate compact, that provides for
            the reporting, payment, collection, and allocation of premium
            taxes for nonadmitted insurance consistent with this section.
        (c) Allocation Based on Tax Allocation Report.-- To facilitate the
    payment of premium taxes among the States, an insured's home State may
    require surplus lines brokers and insureds who have independently
    procured insurance to annually file tax allocation reports with the
    insured's home State detailing the portion of the nonadmitted insurance
    policy premium or premiums attributable to properties, risks or
    exposures located in each State. The filing of a nonadmitted insurance
    tax allocation report and the payment of tax may be made by a person
    authorized by the insured to act as its agent.

    SEC. 10102. REGULATION OF NONADMITTED INSURANCE BY INSURED'S HOME
                  STATE.

        (a) Home State Authority.--Except as otherwise provided in this
    section, the placement of nonadmitted insurance shall be subject to the
    statutory and regulatory requirements solely of the insured's home
    State.
        (b) Broker Licensing.--No State other than an insured's home State
    may require a surplus lines broker to be licensed in order to sell,
    solicit, or negotiate nonadmitted insurance with respect to such
    insured.
        (c) Enforcement Provision.--With respect to section 10101 and
    subsections (a) and (b) of this section, any law, regulation,
    provision, or action of any State that applies or purports to apply to
    nonadmitted insurance sold to, solicited by, or negotiated with an
    insured whose home State is another State shall be preempted with
    respect to such application.
        (d) Workers' Compensation Exception.--This section may not be
    construed to preempt any State law, rule, or regulation that restricts
    the placement of workers' compensation insurance or excess insurance
    for self-funded workers' compensation plans with a nonadmitted insurer.

    SEC. 10103. PARTICIPATION IN NATIONAL PRODUCER DATABASE.

        After the expiration of the 2-year period beginning on the date of
    the enactment of this Act, a State may not collect any fees relating to
    licensing of an individual or entity as a surplus lines broker in the
    State unless the State has in effect at such time laws or regulations
    that provide for participation by the State in the national insurance
    producer database of the NAIC, or any other equivalent uniform national
    database, for the licensure of surplus lines brokers and the renewal of
    such licenses.

    SEC. 10104. UNIFORM STANDARDS FOR SURPLUS LINES ELIGIBILITY.

        A State may not--
                (1) impose eligibility requirements on, or otherwise
            establish eligibility criteria for, nonadmitted insurers
            domiciled in a United States jurisdiction, except in
            conformance with such requirements and criteria in sections
            5A(2) and 5C(2)(a) of the Non-Admitted Insurance Model Act,
            unless the State has adopted nationwide uniform requirements,
            forms, and procedures developed in accordance with section
            10101(b) of this title that include alternative nationwide
            uniform eligibility requirements; and
                (2) prohibit a surplus lines broker from placing
            nonadmitted insurance with, or procuring nonadmitted insurance
            from, a nonadmitted insurer domiciled outside the United States
            that is listed on the Quarterly Listing of Alien Insurers
            maintained by the International Insurers Department of the
            NAIC.

    SEC. 10105. STREAMLINED APPLICATION FOR COMMERCIAL PURCHASERS.

        A surplus lines broker seeking to procure or place nonadmitted
    insurance in a State for an exempt commercial purchaser shall not be
    required to satisfy any State requirement to make a due diligence
    search to determine whether the full amount or type of insurance sought
    by such exempt commercial purchaser can be obtained from admitted
    insurers if--
                (1) the broker procuring or placing the surplus lines
            insurance has disclosed to the exempt commercial purchaser that
            such insurance may or may not be available from the admitted
            market that may provide greater protection with more regulatory
            oversight; and
                (2) the exempt commercial purchaser has subsequently
            requested in writing the broker to procure or place such
            insurance from a nonadmitted insurer.

    SEC. 10106. GAO STUDY OF NONADMITTED INSURANCE MARKET.

        (a) In General.--The Comptroller General of the United States shall
    conduct a study of the nonadmitted insurance market to determine the
    effect of the enactment of this subtitle on the size and market share
    of the nonadmitted insurance market for providing coverage typically
    provided by the admitted insurance market.
        (b) Contents.--The study shall determine and analyze--
                (1) the change in the size and market share of the
            nonadmitted insurance market and in the number of insurance
            companies and insurance holding companies providing such
            business in the 18-month period that begins upon the effective
            date of this Act;
                (2) the extent to which insurance coverage typically
            provided by the admitted insurance market has shifted to the
            nonadmitted insurance market;
                (3) the consequences of any change in the size and market
            share of the nonadmitted insurance market, including
            differences in the price and availability of coverage available
            in both the admitted and nonadmitted insurance markets;
                (4) the extent to which insurance companies and insurance
            holding companies that provide both admitted and nonadmitted
            insurance have experienced shifts in the volume of business
            between admitted and nonadmitted insurance; and
                (5) the extent to which there has been a change in the
            number of individuals who have nonadmitted insurance policies,
            the type of coverage provided under such policies, and whether
            such coverage is available in the admitted insurance market.
        (c) Consultation With NAIC.--In conducting the study under this
    section, the Comptroller General shall consult with the NAIC.
        (d) Report.--The Comptroller General shall complete the study under
    this section and submit a report to the Committee on Financial Services
    of the House of Representatives and the Committee on Banking, Housing,
    and Urban Affairs of the Senate regarding the findings of the study not
    later than 30 months after the effective date of this Act.

    SEC. 10107. DEFINITIONS.

        For purposes of this subtitle, the following definitions shall
    apply:
                (1) Admitted insurer.--The term ``admitted insurer'' means,
            with respect to a State, an insurer licensed to engage in the
            business of insurance in such State.
                (2) Affiliate.--The term ``affiliate'' means, with respect
            to an insured, any entity that controls, is controlled by, or
            is under common control with the insured.
                (3) Affiliated group.--The term ``affiliated group'' means
            any group of entities that are all affiliated.
                (4) Control.--An entity has ``control'' over another entity
            if--
                        (A) the entity directly or indirectly or acting
                    through one or more other persons owns, controls or has
                    the power to vote 25 percent or more of any class of
                    voting securities of the other entity; or
                        (B) the entity controls in any manner the election
                    of a majority of the directors or trustees of the other
                    entity.
                (5) Exempt commercial purchaser.--The term ``exempt
            commercial purchaser'' means any person purchasing commercial
            insurance that, at the time of placement, meets the following
            requirements:
                        (A) The person employs or retains a qualified risk
                    manager to negotiate insurance coverage.
                        (B) The person has paid aggregate nationwide
                    commercial property and casualty insurance premiums in
                    excess of $100,000 in the immediately preceding 12
                    months.
                        (C)(i) The person meets at least one of the
                    following criteria:
                                        (I) The person possesses a net
                                    worth in excess of $20,000,000, as such
                                    amount is adjusted pursuant to clause
                                    (ii).
                                        (II) The person generates annual
                                    revenues in excess of $50,000,000, as
                                    such amount is adjusted pursuant to
                                    clause (ii).
                                        (III) The person employs more than
                                    500 full time or full time equivalent
                                    employees per individual insured or is
                                    a member of an affiliated group
                                    employing more than 1,000 employees in
                                    the aggregate.
                                        (IV) The person is a not-for-profit
                                    organization or public entity
                                    generating annual budgeted expenditures
                                    of at least $30,000,000, as such amount
                                    is adjusted pursuant to clause (ii).
                                        (V) The person is a municipality
                                    with a population in excess of 50,000
                                    persons.
                                (ii) Effective on the fifth January 1
                            occurring after the date of the enactment of
                            this Act and each fifth January 1 occurring
                            thereafter, the amounts in subclauses (I),
                            (II), and (IV) of clause (i) shall be adjusted
                            to reflect the percentage change for such 5-
                            year period in the Consumer Price Index for All
                            Urban Consumers published by the Bureau of
                            Labor Statistics of the Department of Labor.
                (6) Home state.--
                        (A) In general.--Except as provided in subparagraph
                    (B), the term ``home State'' means, with respect to an
                    insured--
                                (i) the State in which an insured maintains
                            its principal place of business or, in the case
                            of an individual, the individual's principal
                            residence; or
                                (ii) if 100 percent of the insured risk is
                            located out of the State referred to in
                            subparagraph (A), the State to which the
                            greatest percentage of the insured's taxable
                            premium for that insurance contract is
                            allocated.
                        (B) Affiliated groups.--If more than one insured
                    from an affiliated group are named insureds on a single
                    nonadmitted insurance contract, the term ``home State''
                    means the home State, as determined pursuant to
                    subparagraph (A), of the member of the affiliated group
                    that has the largest percentage of premium attributed
                    to it under such insurance contract.
                (7) Independently procured insurance.--The term
            ``independently procured insurance'' means insurance procured
            directly by an insured from a nonadmitted insurer.
                (8) NAIC.--The term ``NAIC'' means the National Association
            of Insurance Commissioners or any successor entity.
                (9) Nonadmitted insurance.--The term ``nonadmitted
            insurance'' means any property and casualty insurance permitted
            to be placed directly or through a surplus lines broker with a
            nonadmitted insurer eligible to accept such insurance.
                (10) Non-admitted insurance model act.--The term ``Non-
            Admitted Insurance Model Act'' means the provisions of the Non-
            Admitted Insurance Model Act, as adopted by the NAIC on August
            3, 1994, and amended on September 30, 1996, December 6, 1997,
            October 2, 1999, and June 8, 2002.
                (11) Nonadmitted insurer.--The term ``nonadmitted insurer''
            means, with respect to a State, an insurer not licensed to
            engage in the business of insurance in such State.
                (12) Qualified risk manager.--The term ``qualified risk
            manager'' means, with respect to a policyholder of commercial
            insurance, a person who meets all of the following
            requirements:
                        (A) The person is an employee of, or third party
                    consultant retained by, the commercial policyholder.
                        (B) The person provides skilled services in loss
                    prevention, loss reduction, or risk and insurance
                    coverage analysis, and purchase of insurance.
                        (C) The person--
                                (i)(I) has a bachelor's degree or higher
                            from an accredited college or university in
                            risk management, business administration,
                            finance, economics, or any other field
                            determined by a State insurance commissioner or
                            other State regulatory official or entity to
                            demonstrate minimum competence in risk
                            management; and
                                        (II)(aa) has three years of
                                    experience in risk financing, claims
                                    administration, loss prevention, risk
                                    and insurance analysis, or purchasing
                                    commercial lines of insurance; or
                                                (bb) has one of the
                                            following designations:

                                                        (AA) a designation
                                                    as a Chartered Property
                                                    and Casualty
                                                    Underwriter (in this
                                                    subparagraph referred
                                                    to as ``CPCU'') issued
                                                    by the American
                                                    Institute for CPCU/
                                                    Insurance Institute of
                                                    America;

                                                        (BB) a designation
                                                    as an Associate in Risk
                                                    Management (ARM) issued
                                                    by the American
                                                    Institute for CPCU/
                                                    Insurance Institute of
                                                    America;

                                                        (CC) a designation
                                                    as Certified Risk
                                                    Manager (CRM) issued by
                                                    the National Alliance
                                                    for Insurance Education
                                                    & Research;

                                                        (DD) a designation
                                                    as a RIMS Fellow (RF)
                                                    issued by the Global
                                                    Risk Management
                                                    Institute; or

                                                        (EE) any other
                                                    designation,
                                                    certification, or
                                                    license determined by a
                                                    State insurance
                                                    commissioner or other
                                                    State insurance
                                                    regulatory official or
                                                    entity to demonstrate
                                                    minimum competency in
                                                    risk management;

                                (ii)(I) has at least seven years of
                            experience in risk financing, claims
                            administration, loss prevention, risk and
                            insurance coverage analysis, or purchasing
                            commercial lines of insurance; and
                                        (II) has any one of the
                                    designations specified in subitems (AA)
                                    through (EE) of clause (i)(II)(bb);
                                (iii) has at least 10 years of experience
                            in risk financing, claims administration, loss
                            prevention, risk and insurance coverage
                            analysis, or purchasing commercial lines of
                            insurance; or
                                (iv) has a graduate degree from an
                            accredited college or university in risk
                            management, business administration, finance,
                            economics, or any other field determined by a
                            State insurance commissioner or other State
                            regulatory official or entity to demonstrate
                            minimum competence in risk management.
                (13) Premium tax.--The term ``premium tax'' means, with
            respect to surplus lines or independently procured insurance
            coverage, any tax, fee, assessment, or other charge imposed by
            a government entity directly or indirectly based on any payment
            made as consideration for an insurance contract for such
            insurance, including premium deposits, assessments,
            registration fees, and any other compensation given in
            consideration for a contract of insurance.
                (14) Surplus lines broker.--The term ``surplus lines
            broker'' means an individual, firm, or corporation which is
            licensed in a State to sell, solicit, or negotiate insurance on
            properties, risks, or exposures located or to be performed in a
            State with nonadmitted insurers.
                (15) State.--The term ``State'' includes any State of the
            United States, the District of Columbia, the Commonwealth of
            Puerto Rico, Guam, the Northern Mariana Islands, the Virgin
            Islands, and American Samoa.

                            Subtitle B--Reinsurance

    SEC. 10201. REGULATION OF CREDIT FOR REINSURANCE AND REINSURANCE
                  AGREEMENTS.

        (a) Credit for Reinsurance.--If the State of domicile of a ceding
    insurer is an NAIC-accredited State, or has financial solvency
    requirements substantially similar to the requirements necessary for
    NAIC accreditation, and recognizes credit for reinsurance for the
    insurer's ceded risk, then no other State may deny such credit for
    reinsurance.
        (b) Additional Preemption of Extraterritorial Application of State
    Law.--In addition to the application of subsection (a), all laws,
    regulations, provisions, or other actions of a State that is not the
    domiciliary State of the ceding insurer, except those with respect to
    taxes and assessments on insurance companies or insurance income, are
    preempted to the extent that they--
                (1) restrict or eliminate the rights of the ceding insurer
            or the assuming insurer to resolve disputes pursuant to
            contractual arbitration to the extent such contractual
            provision is not inconsistent with the provisions of title 9,
            United States Code;
                (2) require that a certain State's law shall govern the
            reinsurance contract, disputes arising from the reinsurance
            contract, or requirements of the reinsurance contract;
                (3) attempt to enforce a reinsurance contract on terms
            different than those set forth in the reinsurance contract, to
            the extent that the terms are not inconsistent with this
            subtitle; or
                (4) otherwise apply the laws of the State to reinsurance
            agreements of ceding insurers not domiciled in that State.

    SEC. 10202. REGULATION OF REINSURER SOLVENCY.

        (a) Domiciliary State Regulation.--If the State of domicile of a
    reinsurer is an NAIC-accredited State or has financial solvency
    requirements substantially similar to the requirements necessary for
    NAIC accreditation, such State shall be solely responsible for
    regulating the financial solvency of the reinsurer.
        (b) Nondomiciliary States.--
                (1) Limitation on financial information requirements.--If
            the State of domicile of a reinsurer is an NAIC-accredited
            State or has financial solvency requirements substantially
            similar to the requirements necessary for NAIC accreditation,
            no other State may require the reinsurer to provide any
            additional financial information other than the information the
            reinsurer is required to file with its domiciliary State.
                (2) Receipt of information.--No provision of this section
            shall be construed as preventing or prohibiting a State that is
            not the State of domicile of a reinsurer from receiving a copy
            of any financial statement filed with its domiciliary State.

    SEC. 10203. DEFINITIONS.

        For purposes of this subtitle, the following definitions shall
    apply:
                (1) Ceding insurer.--The term ``ceding insurer'' means an
            insurer that purchases reinsurance.
                (2) Domiciliary state.--The terms ``State of domicile'' and
            ``domiciliary State'' means, with respect to an insurer or
            reinsurer, the State in which the insurer or reinsurer is
            incorporated or entered through, and licensed.
                (3) Reinsurance.--The term ``reinsurance'' means the
            assumption by an insurer of all or part of a risk undertaken
            originally by another insurer.
                (4) Reinsurer.--
                        (A) In general.--The term ``reinsurer'' means an
                    insurer to the extent that the insurer--
                                (i) is principally engaged in the business
                            of reinsurance;
                                (ii) does not conduct significant amounts
                            of direct insurance as a percentage of its net
                            premiums; and
                                (iii) is not engaged in an ongoing basis in
                            the business of soliciting direct insurance.
                        (B) Determination.--A determination of whether an
                    insurer is a reinsurer shall be made under the laws of
                    the State of domicile in accordance with this
                    paragraph.
                (5) State.--The term ``State'' includes any State of the
            United States, the District of Columbia, the Commonwealth of
            Puerto Rico, Guam, the Northern Mariana Islands, the Virgin
            Islands, and American Samoa.

                        Subtitle C--Rule of Construction

    SEC. 10301. RULE OF CONSTRUCTION.

        Nothing in this title or amendments to this title shall be
    construed to modify, impair, or supersede the application of the
    antitrust laws. Any implied or actual conflict between this title and
    any amendments to this title and the antitrust laws shall be resolved
    in favor of the operation of the antitrust laws.

    SEC. 10302. SEVERABILITY.

        If any section or subsection of this title, or any application of
    such provision to any person or circumstance, is held to be
    unconstitutional, the remainder of this title, and the application of
    the provision to any other person or circumstance, shall not be
    affected.

           TITLE X--INTEREST-BEARING TRANSACTION ACCOUNTS AUTHORIZED

    SEC. 11001. INTEREST-BEARING TRANSACTION ACCOUNTS AUTHORIZED.

        (a) Repeal of Prohibition on Payment of Interest on Demand
    Deposits.--
                (1) Federal reserve act.--Section 19(i) of the Federal
            Reserve Act (12 U.S.C. 371a) is amended to read as follows:
        ``(i) [Repealed]''.
                (2) Home owners' loan act.--The first sentence of section
            5(b)(1)(B) of the Home Owners' Loan Act (12 U.S.C.
            1464(b)(1)(B)) is amended by striking ``savings association may
            not--'' and all that follows through ``(ii) permit any'' and
            inserting ``savings association may not permit any''.
                (3) Federal deposit insurance act.--Section 18(g) of the
            Federal Deposit Insurance Act (12 U.S.C. 1828(g)) is amended to
            read as follows:
        ``(g) [Repealed]''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    take effect at the end of the 1-year period beginning on the date of
    the enactment of this Act.

                Passed the House of Representatives December 11, 2009.

                Attest:

                                                                     Clerk.
    111th CONGRESS

      1st Session

                                   H. R. 4173

    _______________________________________________________________________

                                     AN ACT

     To provide for financial regulatory reform, to protect consumers and
      investors, to enhance Federal understanding of insurance issues, to
       regulate the over-the-counter derivatives markets, and for other
                                   purposes.