1.This Act may be cited as the Wall Street Reform and Consumer Protection Act of 2009
.
2.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.
<enum>I</enum><header>Financial stability improvement Act</header>
<section id="H0644F4EE2A5944FDB0C5C37F955773DA"><enum>1000.</enum><header>Short title; definitions</header>
<subsection id="HBEE11188F7F74312ACF21A1CA3F5F00B"><enum>(a)</enum><header>Short title</header><text display-inline="yes-display-inline">This title may be cited as the <quote><short-title>Financial Stability Improvement Act of 2009</short-title></quote>.</text> </subsection>
<subsection id="H555FBAB234D440D78FFBB71F57DA4697"><enum>(b)</enum><header>Definitions</header><text>For purposes of this title, the following definitions shall apply:</text>
<paragraph id="HD540B156BDF64B03BA27C7D6C3D41A4F"><enum>(1)</enum><text>The term <quote>Board</quote> means the Board of Governors of the Federal Reserve System.</text> </paragraph>
<paragraph id="H7EAF8C0FA0E54988B76DE6E9D49DB63E"><enum>(2)</enum><text display-inline="yes-display-inline">The term <quote>Council</quote> means the Financial Services Oversight Council established under section 1001.</text> </paragraph>
<paragraph id="HED7A5944628E4ECA822710A17CBBA1EC"><enum>(3)</enum><text display-inline="yes-display-inline">The term <quote>Federal financial regulatory agency</quote> means any agency that has a voting member of the Council as set forth in section 1001(b)(1).</text> </paragraph>
<paragraph id="H2719680A61744C0F988036874BA4F7AF"><enum>(4)</enum><text display-inline="yes-display-inline">The term <quote>financial company</quote> means a company or other entity—</text>
<subparagraph id="H5E627798C3B04C40805A2A3AD274C669"><enum>(A)</enum><text>that is—</text>
<clause id="HC6FE2EBFAA3D4698A417F09C78C15408"><enum>(i)</enum><text>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</text> </clause>
<clause display-inline="no-display-inline" id="H4123BB7935CC456F8AD868FD1FF7B1AE"><enum>(ii)</enum><text display-inline="yes-display-inline">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 <quote>foreign financial parent</quote>) after through—</text>
<subclause id="H7211F468732549229BFD32F896C91F2B"><enum>(I)</enum><text>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</text> </subclause>
<subclause id="H6BDF91EB5B35496A8B5199FBC3E0BB18"><enum>(II)</enum><text>a United States affiliate or other United States operating entity;</text> </subclause></clause></subparagraph>
<subparagraph id="HA8F7079BBAA34776926F6A090E9E615A"><enum>(B)</enum><text>that is, in whole or in part, directly or indirectly, engaged in financial activities; and</text> </subparagraph>
<subparagraph id="H0A7F64CB11C24613B2C18142491DB2AE"><enum>(C)</enum><text display-inline="yes-display-inline">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.).</text></subparagraph></paragraph>
<paragraph display-inline="no-display-inline" id="HEEA9D3C9822A48448884291AFDC6607D"><enum>(5)</enum><header>Financial holding company subject to stricter standards</header><text display-inline="yes-display-inline">The term <quote>financial holding company subject to stricter standards</quote> means—</text>
<subparagraph id="HFBFAD15863FD4FD3991C3D433B3180F4"><enum>(A)</enum><text>a financial company that has been subjected to stricter prudential standards under subtitle B; or</text> </subparagraph>
<subparagraph id="HDE9209410205437AB5F3FE1ACE0ADC55"><enum>(B)</enum><text>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.</text> </subparagraph></paragraph>
<paragraph id="H03E477ABCD074689894D0E154CF09973"><enum>(6)</enum><text display-inline="yes-display-inline">The term <quote>primary financial regulatory agency</quote> means the following:</text>
<subparagraph id="HB8DA0DB3203449C3AE80936EDB4EC074"><enum>(A)</enum><text>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.</text> </subparagraph>
<subparagraph id="HC685D3A01E71408DAC2904435C77BA1B"><enum>(B)</enum><text>The Board, with respect to—</text>
<clause id="HBD33AB1913844807AD63C6DAC2B83DD8"><enum>(i)</enum><text>any State member bank;</text> </clause>
<clause id="H383C8EE20A0645A88E205E2DA9B2B7BB"><enum>(ii)</enum><text>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;</text> </clause>
<clause id="H39736B7F75D24824AE37EB913E2308FB"><enum>(iii)</enum><text display-inline="yes-display-inline">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;</text></clause>
<clause id="HBF046733968248B9923D99E5E47214A4" display-inline="no-display-inline"><enum>(iv)</enum><text display-inline="yes-display-inline">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;</text></clause>
<clause id="HD8C4BE7F83454AFD83D71448E4999672"><enum>(v)</enum><text>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</text> </clause>
<clause id="HAE5B1D0362584C78AE5298D745E328AD"><enum>(vi)</enum><text>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.</text> </clause></subparagraph>
<subparagraph id="H67C6A0356257479E925F910C14E16C6F"><enum>(C)</enum><text>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.</text> </subparagraph>
<subparagraph id="H2EFB378603704680955053A2D320D020"><enum>(D)</enum><text>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.).</text> </subparagraph>
<subparagraph id="H7B36CF966DBA419DA7B6EC6A51913D4E"><enum>(E)</enum><text>The Securities and Exchange Commission, with respect to—</text>
<clause id="H767C6E7D47844246BC9C03F56123FBB8"><enum>(i)</enum><text>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.);</text> </clause>
<clause id="HA6D131D687FA45C88E1F6A1B86D1F30B"><enum>(ii)</enum><text>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.);</text> </clause>
<clause id="HA191FCC0899A4EE8B493B52DBD5CF192"><enum>(iii)</enum><text>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;</text> </clause>
<clause id="H0AB6A066A9D6459AA43394CFAB59B6B2"><enum>(iv)</enum><text display-inline="yes-display-inline">any clearing agency (as defined in section 3(a)(23) of the Securities Exchange Act of 1934);</text></clause>
<clause id="HD7A2C2C2A29C45938AF3D6A3741A4150" display-inline="no-display-inline"><enum>(v)</enum><text display-inline="yes-display-inline">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.);</text></clause>
<clause id="HA0E9F6988E8A4868B898096FB3F78997"><enum>(vi)</enum><text display-inline="yes-display-inline">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.);</text> </clause>
<clause id="H197671DEC64D44AA8BA19CBDE52481C1"><enum>(vii)</enum><text>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.);</text> </clause>
<clause id="HDCA3E671F13949EC867C699C1444B711"><enum>(viii)</enum><text display-inline="yes-display-inline">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</text> </clause>
<clause id="H1F028E77FA674EA3A9AEE522EBDE1CC5"><enum>(ix)</enum><text display-inline="yes-display-inline">any transfer agent registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.).</text> </clause></subparagraph>
<subparagraph id="H6955D9B7280C4875A7662D8630DDB24B"><enum>(F)</enum><text>The Commodity Futures Trading Commission, with respect to—</text>
<clause id="HAB88CA6C6C264792BF594DB0EFB959D0"><enum>(i)</enum><text display-inline="yes-display-inline">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</text> </clause>
<clause id="HFA0BAB0AFC7D4CCF8278A4B514F4CDF8"><enum>(ii)</enum><text display-inline="yes-display-inline">any derivatives clearing organization, designated contract market, or swap execution facility (as defined in the Commodity Exchange Act).</text> </clause></subparagraph>
<subparagraph id="H1940E6B2F33B4292AD80C4443F25000F"><enum>(G)</enum><text>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.</text> </subparagraph>
<subparagraph id="H3D31D415E023499880FFFB91415885CD"><enum>(H)</enum><text>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.</text> </subparagraph>
<subparagraph id="HAA1F15306F594E2893FA34206834FA69"><enum>(I)</enum><text>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.</text> </subparagraph></paragraph>
<paragraph id="H66974C80321A45D39D999AAC25D9966A"><enum>(7)</enum><header>Terms defined in other laws</header>
<subparagraph id="H94AFEAEA81B5493FAFAFB1C2642779EC"><enum>(A)</enum><header>Affiliate</header><text>The term <term>affiliate</term> has the meaning given such term in section 2(k) of the Bank Holding Company Act of 1956.</text> </subparagraph>
<subparagraph id="H154125F252B34BDD94081EAE92F8D2B0"><enum>(B)</enum><header>State member bank, state nonmember bank</header><text>The terms <term>State member bank</term> and <term>State nonmember bank</term> have the same meanings as in subsections (d)(2) and (e)(2), respectively, of section 3 of the Federal Deposit Insurance Act.</text> </subparagraph></paragraph></subsection></section>
<section id="H6DFA1B9F51044314B74291B39C9A8C72"><enum>1000A.</enum><header>Restrictions on the Federal Reserve System pending audit report</header>
<subsection id="H9215014F24F14D1888C61C37ADE8E6F7"><enum>(a)</enum><header>In general</header><text>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.</text> </subsection>
<subsection id="HAF462B911DAD44B2B56083F0AF45F1F4"><enum>(b)</enum><header>Report</header>
<paragraph id="HB1D58BE59FBA4014A8C5FDDCBF0C0835"><enum>(1)</enum><header>Required</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H6300A8E335854563ADFE679769EDDDB1"><enum>(2)</enum><header>Contents</header><text>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.</text> </paragraph></subsection></section>
<subtitle id="HC8376F7C280C4C47AAAE83FB03670017"><enum>A</enum><header>The Financial Services Oversight Council</header>
<section id="H48F0A67802C34493BAED8F18F8614893"><enum>1001.</enum><header>Financial Services Oversight Council established</header>
<subsection id="H4A986D7618D64C86B6E9F6F2F90F18D8"><enum>(a)</enum><header>Establishment</header><text>Immediately upon enactment of this title, there is established a Financial Services Oversight Council.</text> </subsection>
<subsection id="HD739D0EB800A451EBD80CB5E742F1B21"><enum>(b)</enum><header>Membership</header><text>The Council shall consist of the following:</text>
<paragraph id="H6CE61E067BBD46458ED96A2098ADE785"><enum>(1)</enum><header>Voting members</header><text>Voting members, who shall each have one vote on the Council, as follows:</text>
<subparagraph id="HDA04956B74AA4B61ADBC6FEB8A2E75F1"><enum>(A)</enum><text>The Secretary of the Treasury, who shall serve as the Chairman of the Council.</text> </subparagraph>
<subparagraph id="H9DA5A6D9A18948FA976720480D27B003"><enum>(B)</enum><text>The Chairman of the Board of Governors of the Federal Reserve System.</text> </subparagraph>
<subparagraph id="HC520C81D5FFD4579A03E829219D1B4A9"><enum>(C)</enum><text>The Comptroller of the Currency.</text> </subparagraph>
<subparagraph id="HDD360D4A37174A54B6DF04B237C506F2"><enum>(D)</enum><text>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.</text> </subparagraph>
<subparagraph id="H0165C85B87FB4E8783623730A52AFED5"><enum>(E)</enum><text>The Chairman of the Securities and Exchange Commission.</text> </subparagraph>
<subparagraph id="H0ECAE39F13004AA79285F397C0BBD129"><enum>(F)</enum><text>The Chairman of the Commodity Futures Trading Commission.</text> </subparagraph>
<subparagraph id="H3C8853BF49DD41C893513C593E187168"><enum>(G)</enum><text>The Chairperson of the Federal Deposit Insurance Corporation.</text> </subparagraph>
<subparagraph id="H019BAF68DC854FB5810B139AC55A5694"><enum>(H)</enum><text>The Director of the Federal Housing Finance Agency.</text> </subparagraph>
<subparagraph id="H1FD6EE1DAF564F2194DC64187382259F"><enum>(I)</enum><text>The Chairman of the National Credit Union Administration.</text> </subparagraph>
<subparagraph id="HA2AD0487036843159AF1D47DD85D3390" commented="no"><enum>(J)</enum><text display-inline="yes-display-inline">The head of the Consumer Financial Protection Agency.</text></subparagraph></paragraph>
<paragraph id="H89D62D20FDFC412DBB56CA6491CAB8D4"><enum>(2)</enum><header>Nonvoting members</header><text>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:</text>
<subparagraph id="H3F10B6FA47FD40C2B04B7AC4B7F85236" display-inline="no-display-inline"><enum>(A)</enum><text display-inline="yes-display-inline">The Director of the Federal Insurance Office.</text></subparagraph>
<subparagraph id="H3F340799852D4698ACED439713DD631A"><enum>(B)</enum><text>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.</text> </subparagraph>
<subparagraph id="H07BD54D6AE984A75AF758CAA1DDC9848"><enum>(C)</enum><text display-inline="yes-display-inline">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. </text></subparagraph>
<subparagraph id="H7892A72CF0EC4FCAB141E39581BF4110"><enum>(D)</enum><text>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.</text> </subparagraph></paragraph></subsection>
<subsection id="H2A279A5266D846BA9B4410376383AD0B"><enum>(c)</enum><header>Duties</header><text>The Council shall have the following duties:</text>
<paragraph id="H74AC857A2ACE4630BA0CDC246EB9B905"><enum>(1)</enum><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H429A2737F72E44F59019EA59FC3A8B2E"><enum>(2)</enum><text>To monitor the financial services marketplace to identify potential threats to the stability of the United States financial system.</text> </paragraph>
<paragraph id="HD8A9C8E876F143298FECD0E7FEE835B0"><enum>(3)</enum><text display-inline="yes-display-inline">To identify potential threats to the stability of the United States financial system that do not arise out of the financial services marketplace.</text> </paragraph>
<paragraph id="HE2848AB280C546488169785CBDC289AF"><enum>(4)</enum><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph display-inline="no-display-inline" id="HB2A3FD6D307A470BAE99DFDDE700B27B"><enum>(5)</enum><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HB4C55B43CC2E4EB4A3646D8CB11B6EBE"><enum>(6)</enum><text>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.</text> </paragraph>
<paragraph display-inline="no-display-inline" id="H114B054B65D045078782E409FE366CEB"><enum>(7)</enum><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H0558834EB35C4415BB861B2CA3039E92"><enum>(8)</enum><text>To facilitate information sharing and coordination among the members of the Council regarding financial services policy development, rulemakings, examinations, reporting requirements, and enforcement actions.</text> </paragraph>
<paragraph id="H001FC5A57FC4429281F326566CF3D239"><enum>(9)</enum><text>To provide a forum for discussion and analysis of emerging market developments and financial regulatory issues among its members.</text> </paragraph>
<paragraph id="H2BD7B6C79C364160A3DE8DC822092B91"><enum>(10)</enum><text>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.</text> </paragraph>
<paragraph id="H883AD2C2899A40219238B1C129619590"><enum>(11)</enum><text display-inline="yes-display-inline">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.</text> </paragraph></subsection></section>
<section id="H0615C20DA93446CDB74646243CE4ECFF"><enum>1002.</enum><header>Resolution of disputes among Federal financial regulatory agencies</header>
<subsection id="H40F4E8AA49A3430B9F7151358147FB08"><enum>(a)</enum><header>Request for dispute resolution</header><text>The Council shall resolve a dispute among 2 or more Federal financial regulatory agencies if—</text>
<paragraph id="HB876F8F0837C47C78E48C7C8B4D8108E"><enum>(1)</enum><text display-inline="yes-display-inline">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);</text> </paragraph>
<paragraph id="H7CDCEF1BC00544269CAF1A5D30A65295"><enum>(2)</enum><text>the disputing agencies cannot, after a demonstrated good faith effort, resolve the dispute among themselves; and</text> </paragraph>
<paragraph id="H8482C8DE656146E4BCB86BB4ED745D3E"><enum>(3)</enum><text>any of the Federal financial regulatory agencies involved in the dispute—</text>
<subparagraph id="H21C66ED038EB43D9BD4E781DBC93A37A"><enum>(A)</enum><text>provides all other disputants prior notice of its intent to request dispute resolution by the Council; and</text> </subparagraph>
<subparagraph id="HCCEF9C4E1AB844C2961C8FF395D0F935"><enum>(B)</enum><text>requests in writing, no earlier than 14 days after providing the notice described in paragraph (A), that the Council resolve the dispute.</text> </subparagraph></paragraph></subsection>
<subsection id="HEF7E3137E37C4ED1B9714F4C546BAEF9"><enum>(b)</enum><header>Council decision</header><text>The Council shall decide the dispute—</text>
<paragraph id="HACEF9414D788468081B3FD2723F3BFDB"><enum>(1)</enum><text>within a reasonable time after receiving the dispute resolution request;</text> </paragraph>
<paragraph id="H1EC03B4E89694F18B36622909C62F9C6"><enum>(2)</enum><text>after consideration of relevant information provided by each party to the dispute; and</text> </paragraph>
<paragraph id="HD295BF727F7449EC96B8AA1F9CA65DB1"><enum>(3)</enum><text>by agreeing with 1 of the disputants regarding the entirety of the matter or by determining a compromise position.</text> </paragraph></subsection>
<subsection id="H066DEB21D49D416F92448566712C56E2"><enum>(c)</enum><header>Form and binding effect</header><text>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.</text> </subsection></section>
<section id="HFFB59082D96E47E5836D8F47AEDF3975"><enum>1003.</enum><header>Technical and professional advisory committees</header><text display-inline="no-display-inline">The Council is authorized to appoint—</text>
<paragraph id="HA5A059D170C24B03BE18CF4E9F4D316C"><enum>(1)</enum><text>subsidiary working groups composed of Council members and their staff, Council staff, or a combination; and</text> </paragraph>
<paragraph id="HC2706603C07A46A6991174602CBF17ED"><enum>(2)</enum><text>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.</text> </paragraph></section>
<section id="H50F764C00DE74CB2989A985734900D61"><enum>1004.</enum><header>Financial Services Oversight Council meetings and council governance</header>
<subsection id="H3414CF8D5A7A4CBE8DB6D0C151F976D2"><enum>(a)</enum><header>Meetings</header><text>The Council shall meet as frequently as the Chairman deems necessary, but not less than quarterly.</text> </subsection>
<subsection id="H68690532830241B69FED99026B0E3E58"><enum>(b)</enum><header>Voting</header><text>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).</text> </subsection></section>
<section id="HDA35BD5021C24C83A6446A837EB94E0F"><enum>1005.</enum><header>Council staff and funding</header>
<subsection id="H73C626C28DDF4446BEB58C613368383C"><enum>(a)</enum><header>Voting members of the Council</header><text display-inline="yes-display-inline">The Secretary of the Treasury shall and all other voting members of the Council may, with the approval of the Council—</text>
<paragraph id="H25C51B8B29824AA29216D2C093BE9DCF"><enum>(1)</enum><text>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</text> </paragraph>
<paragraph id="HEE1DCE5C9C394D52867AD2B4AD304BE2"><enum>(2)</enum><text>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.</text> </paragraph></subsection>
<subsection id="HEC119752183E4C60944F4AA452FC53C8"><enum>(b)</enum><header>Other departments and agencies</header><text>In addition to the assistance prescribed in subsection (a), departments and agencies of the United States may, with the approval of the Council—</text>
<paragraph id="H2B728FD1973C469F8BF579A8B638D84F"><enum>(1)</enum><text>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</text> </paragraph>
<paragraph id="H1F70BA9869784FA58C20A73E29918FCF"><enum>(2)</enum><text>provide such services, and facilities as the other departments or agencies may determine advisable.</text> </paragraph></subsection>
<subsection id="H93B81A521E254170B3B44FC773A55369"><enum>(c)</enum><header>Staff status; council funding</header>
<paragraph id="H4E426B8294764CB0B58F02D61327BBCB"><enum>(1)</enum><header>Status</header><text>Staff detailed to the Council by the Secretary of the Treasury and other United States departments or agencies shall—</text>
<subparagraph id="H060540A1D04548518D7D16E14606E0AD"><enum>(A)</enum><text>report to and be subject to oversight by the Council during their assignment to the Council; and</text> </subparagraph>
<subparagraph id="H0C2038E1D5DE4D7FBEC7D87AE1F64E6D"><enum>(B)</enum><text>be compensated by the department of agency from which the staff was detailed.</text> </subparagraph></paragraph>
<paragraph id="HA1EB8A54364F4E939E982CFE00BFAF5E"><enum>(2)</enum><header>Funding</header><text>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.</text> </paragraph></subsection></section>
<section id="H58C2D5A8F2584888831E5C02E86D30BE"><enum>1006.</enum><header>Reports to the Congress</header>
<subsection id="H084C134EBEC042FE9DAF9321783908DD"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="HC4CC72B9B9A64698BA60BB60CA950B68"><enum>(1)</enum><text display-inline="yes-display-inline">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;</text> </paragraph>
<paragraph id="HE49C6BBC1F084CC4A6715DDCCDDCC4A3"><enum>(2)</enum><text>recommends actions that will improve financial stability;</text> </paragraph>
<paragraph display-inline="no-display-inline" id="H0D604E7A7597408CA298927AD85E2E8C"><enum>(3)</enum><text display-inline="yes-display-inline">details the size, scale, scope, concentration, activities, and interconnectedness of the 50 largest financial institutions, by total assets, in the United States;</text> </paragraph>
<paragraph display-inline="no-display-inline" id="HEA9B1547CF904714981A53F81426AF77"><enum>(4)</enum><text display-inline="yes-display-inline">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;</text> </paragraph>
<paragraph id="H43B330C902D84240BE281DBDB02A9EB4"><enum>(5)</enum><text>describes the nature and scope of any company or activities identified under subtitle B and steps taken to address them; and</text> </paragraph>
<paragraph id="HEB5F7CFD30A244E8993C0E5E1B5999EF"><enum>(6)</enum><text>describes any dispute resolutions undertaken under section 1002 and the result of such resolutions.</text> </paragraph></subsection>
<subsection display-inline="no-display-inline" id="HDD63EB5341334AE08F9562E4F6167DA1"><enum>(b)</enum><header>Evaluation of annual report by GAO</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="HBEE28DEAFECB4D2C8F98F06161759F33"><enum>(c)</enum><header>Statements by voting members of the Council</header><text display-inline="yes-display-inline">At the time each report is submitted under subsection (a), each voting member of the Council shall—</text>
<paragraph id="H2FEB51BD6F7248389137D704385705C5"><enum>(1)</enum><text display-inline="yes-display-inline">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</text> </paragraph>
<paragraph id="H33090338F9AB4299B5EA6319B2EAA685"><enum>(2)</enum><text display-inline="yes-display-inline">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.</text> </paragraph></subsection>
<subsection id="HBDA37BA8D70140D49BE8EE8D12C9C47A"><enum>(d)</enum><header>Testimony by the Chairman</header><text display-inline="yes-display-inline">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)—</text>
<paragraph id="H03A4E19D250D458C94A5C47D475E72F0"><enum>(1)</enum><text display-inline="yes-display-inline">to discuss the efforts, activities, objectives, and plans of the Council; and</text> </paragraph>
<paragraph id="H2610D7CB56DD480C9D1AC587E38AF628"><enum>(2)</enum><text>to discuss and answer questions concerning such report.</text> </paragraph></subsection>
<subsection id="H6BE5823B20AD45028437C0AB13A66502" display-inline="no-display-inline"><enum>(e)</enum><header>Study of effects Consumer Financial Protection Agency regulations and standards</header>
<paragraph id="HC91BEA7893324B0CAC5D480370A28379"><enum>(1)</enum><header>Study required</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H2009431A376F45D8B6D7B93A97756F19"><enum>(2)</enum><header>Value of nonbank products</header><text>The study shall include an evaluation and assessment of the appropriateness of using <quote>APR</quote> as a true measure of the value of all nonbank products.</text></paragraph>
<paragraph id="HA849E1B3D21C4FA1B5B0CC3DC6DA809B"><enum>(3)</enum><header>Submission</header><text display-inline="yes-display-inline">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.</text></paragraph></subsection></section>
<section id="HCB2ED9C21282456297608687CD311517"><enum>1007.</enum><header>Applicability of certain Federal laws</header>
<subsection id="H75416BF1E5E44DA0A99A411F030288DF"><enum>(a)</enum><text>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).</text> </subsection>
<subsection id="HE444A5022CB048569CCD8CE1E8D86331"><enum>(b)</enum><text>The Council shall not be deemed an <quote>agency</quote> for purposes of any State or Federal law.</text> </subsection></section>
<section display-inline="no-display-inline" id="H2364311E5A9A430A9F6C37E55A305AA8" section-type="subsequent-section"><enum>1008.</enum><header>Oversight by GAO</header>
<subsection id="H89B6FC9B23134F2780E386717A4A7EDE"><enum>(a)</enum><header>Authority to audit</header><text display-inline="yes-display-inline">The Comptroller General of the United States may audit the activities and financial transactions of—</text>
<paragraph id="H9531F31DD3234E2EA7038C9FF38E8BC1"><enum>(1)</enum><text>the Council; and</text> </paragraph>
<paragraph id="HC24C4D963BE64F429349CC5C20DEE6D3"><enum>(2)</enum><text>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.</text> </paragraph></subsection>
<subsection id="H396FA4382CFA4EE29CC1FEB7922916C1"><enum>(b)</enum><header>Access to information</header>
<paragraph id="H5C030B1724F74B3FBE3C85863C4926EE"><enum>(1)</enum><header>In general</header><text>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—</text>
<subparagraph id="HE6D2049DDE4746A09C91295AFF3DFB33"><enum>(A)</enum><text display-inline="yes-display-inline">any records or other information under the control of or used by the Council; </text> </subparagraph>
<subparagraph id="H59BDF8E965CD48DE98C879FE793DE08C"><enum>(B)</enum><text>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</text> </subparagraph>
<subparagraph id="HCEC671EAD4A742E4A41A9A525886FB62"><enum>(C)</enum><text display-inline="yes-display-inline">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.</text></subparagraph></paragraph>
<paragraph id="HAFE4EFBC0D414A2F99867AEEFB318794"><enum>(2)</enum><header>Certain information specified</header><text>Access under paragraph (1) includes access to—</text>
<subparagraph id="H2337B37DC9B94CAAB2198B972D10DD35"><enum>(A)</enum><text>information provided to the Council by its voting and nonvoting members under section 1101; and</text> </subparagraph>
<subparagraph id="HE72F0299D6EE455A9FDF03B22FA72762"><enum>(B)</enum><text>the identity of each financial holding company subject to stricter standards.</text> </subparagraph></paragraph>
<paragraph id="HE463079BD53A480693B49D686B6F2364" display-inline="no-display-inline"><enum>(3)</enum><header>Copies</header><text display-inline="yes-display-inline">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.</text></paragraph></subsection>
<subsection id="H10C1CBAA42B7471B88B5A270BA3D7FAA"><enum>(c)</enum><header>Periodic evaluations</header><text display-inline="yes-display-inline">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.</text> </subsection> </section></subtitle>
<subtitle id="HE187E1ECF2A84D3C8F0C085CF0834916"><enum>B</enum><header>Prudential regulation of companies and activities for financial stability purposes </header>
<section id="H09877B945E2E4F5BA9DDE3A716AC33A4"><enum>1100.</enum><header>Federal Reserve Board authority that of agent acting on behalf of Council</header><text display-inline="no-display-inline">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.</text></section>
<section id="H527B493B08E0497FB858DD44AA4B9EF8"><enum>1101.</enum><header>Council and Board authority to obtain information</header>
<subsection id="HAF1A4728F2EC407D96CE101955ED6600"><enum>(a)</enum><header>In general</header><text>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—</text>
<paragraph id="H1C25E263FBD542FD8126F42D356414FF"><enum>(1)</enum><text>to monitor the financial services marketplace to identify potential threats to the stability of the United States financial system;</text> </paragraph>
<paragraph id="HB2C9AB44D030431C98305B6DBEA3A1E8"><enum>(2)</enum><text>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</text> </paragraph>
<paragraph id="HEEAAE27EF10D494281BD279969A812B2"><enum>(3)</enum><text>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.</text> </paragraph></subsection>
<subsection id="H21B43B682A0949058945BCF4C8792491"><enum>(b)</enum><header>Submission by council members</header><text>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.</text> </subsection>
<subsection id="HC6EBAF5B5F15487F966FEBF06378E702"><enum>(c)</enum><header>Financial company data collection</header>
<paragraph id="H843FDD9830EE40B5ADA34613890DD321"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph>
<paragraph id="HF023575B52C8406CAF97D76DD9223DA4"><enum>(2)</enum><header>Mitigation of report burden</header><text>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.</text> </paragraph>
<paragraph id="HEC58502B14134F4F834AA06ACFCE35B4"><enum>(3)</enum><header>Mitigation requirements in case of foreign financial parents</header><text display-inline="yes-display-inline">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.</text></paragraph></subsection>
<subsection id="H4896120E83D149B994C6462D25BDDA5E"><enum>(d)</enum><header>Consultation with agencies and entities</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="HEC632164C2BF452EBC589C3D1251075F"><enum>(e)</enum><header>Additional provisions</header>
<paragraph id="HA6458B1E83FE4FF3A661759E5A97D230"><enum>(1)</enum><header>Data and Information Sharing</header><text>The Chairman of the Council, in consultation with the other members of the Council, may—</text>
<subparagraph id="H00379B6F4EB142D8B2B32CDFB2452E29"><enum>(A)</enum><text>establish procedures to share data and information collected by the Council under this section with the members of the Council;</text> </subparagraph>
<subparagraph id="H8C9D065D1ACB4651AB25E8A15773C4E0"><enum>(B)</enum><text>develop an electronic process for sharing all information collected by the Council with the Chairman of the Board on a real-time basis; </text> </subparagraph>
<subparagraph id="H15B3CE36D6974F50A61B083F81943353"><enum>(C)</enum><text>issue any regulations necessary to carry out this subsection; and</text> </subparagraph>
<subparagraph id="H5BCE16CD140C453CA57B161671DC0624"><enum>(D)</enum><text>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.</text> </subparagraph></paragraph>
<paragraph id="H78AB7FC3A7644342AB650406D860D29E"><enum>(2)</enum><header>Applicable Privileges Not Waived</header><text display-inline="yes-display-inline">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—</text>
<subparagraph id="HCEA8EB5E371F4439AD42D4D31BA6BBF2"><enum>(A)</enum><text>the Council;</text> </subparagraph>
<subparagraph id="H3FB0212E760A4109AA749B5666CAF368"><enum>(B)</enum><text>any Federal financial regulator or State financial regulator, in any capacity; or</text> </subparagraph>
<subparagraph id="H383F7E975A03497E9A3E8366CCB76A18"><enum>(C)</enum><text>any other agency of the Federal Government (as defined in section 6 of title 18, United States Code).</text> </subparagraph></paragraph>
<paragraph id="H27AF5DAE05D14410809F98BB0A78340F"><enum>(3)</enum><header>Disclosure Exemption</header><text>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.</text> </paragraph>
<paragraph id="H41C6C1A5590A4FCF999E6D185E95EE75"><enum>(4)</enum><header>Consultation With Foreign Governments</header><text>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.</text> </paragraph>
<paragraph id="H6A5ED4382E2F468898E8BB6ED067BE31"><enum>(5)</enum><header>Report</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection></section>
<section id="H770169668AC442A5AE012FC3BDF8A88C"><enum>1102.</enum><header>Council prudential regulation recommendations to Federal financial regulatory agencies; agency authority</header>
<subsection id="H8EB659A4673243D7BEB376807013E202"><enum>(a)</enum><header>In general</header><text>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.</text> </subsection>
<subsection id="HF2AAF4E3800F4A968432E497B648741E"><enum>(b)</enum><header>Agency authority to implement standards</header>
<paragraph id="H49BF490338834447B6043D50BB89BA1E"><enum>(1)</enum><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H4FC74805EC59410194D2AD242967F2A7"><enum>(2)</enum><header>Applying standards to foreign financial parents</header><text display-inline="yes-display-inline">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—</text>
<subparagraph id="H5B4AE9A8088D44A99616A79A7DC858D0"><enum>(A)</enum><text>give due regard to the principles of national treatment and equality of competitive opportunity; and</text></subparagraph>
<subparagraph id="HC32DC02686CE4B95AEE0E3E3325EA66C"><enum>(B)</enum><text>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.</text></subparagraph></paragraph></subsection>
<subsection id="H5FBBE20A24E54719A8B541CB4A862759"><enum>(c)</enum><header>Agency notice to council</header><text>A Federal financial regulatory agency shall, within 60 days of receiving a Council recommendation under this section, notify the Council in writing regarding—</text>
<paragraph id="H5D96F32CB789471790046CB1C2637911"><enum>(1)</enum><text>the actions the Federal financial regulatory agency has taken in response to the Council’s recommendation, additional actions contemplated, and timetables therefore; or</text> </paragraph>
<paragraph id="HB28601A7A4804FBD88830A64EA8919FE"><enum>(2)</enum><text>the reason the Federal financial regulatory agency has failed to respond to the Council’s request.</text> </paragraph></subsection></section>
<section id="HE8F3DEA00F0E4592923CD3A30B2F25E6"><enum>1103.</enum><header>Subjecting financial companies to stricter prudential standards for financial stability purposes</header>
<subsection id="H642C972A6F344846B16341C3CD4D3347"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="H8F7910066B5D4B9C8403064868425F1B"><enum>(1)</enum><text>material financial distress at the company could pose a threat to financial stability or the economy; or</text> </paragraph>
<paragraph id="H1BB097614BC547F9B636E3B1392FC4DB"><enum>(2)</enum><text display-inline="yes-display-inline">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.</text> </paragraph></subsection>
<subsection id="H48FA1C25D5E34FBFB34A23EC4051129B"><enum>(b)</enum><header>Criteria</header><text>In making a determination under subsection (a), the Council shall consider the following criteria:</text>
<paragraph display-inline="no-display-inline" id="HE5DFF52F264240EDAF7FFADA2D0AABB5"><enum>(1)</enum><text display-inline="yes-display-inline">The extent of the company’s leverage.</text> </paragraph>
<paragraph id="HA17DBBE6785F4B3E878D25A82E1FB369"><enum>(2)</enum><text>The extent and nature of the company’s off-balance sheet exposures.</text> </paragraph>
<paragraph id="H3D91C2540C9B4C5D950676BD97FF695C"><enum>(3)</enum><text>The extent and nature of the company’s transactions and relationships with other financial companies.</text> </paragraph>
<paragraph id="H8878A6FA9FCB474A9FCF7ECFDF5A6CFD"><enum>(4)</enum><text>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.</text></paragraph>
<paragraph id="HE35F55738B6543EAA6F066B9149F08A2" display-inline="no-display-inline"><enum>(5)</enum><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="HB39ED699663E4ABEA30705FD40EE7722" display-inline="no-display-inline"><enum>(6)</enum><text>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.</text></paragraph>
<paragraph id="HF3C28FD941004FA3AA646D68C8F7F7CA"><enum>(7)</enum><text>The nature, scope, and mix of the company’s activities.</text> </paragraph>
<paragraph display-inline="no-display-inline" id="H22F925ADC68D43CB9A41815BD8C3FEB2"><enum>(8)</enum><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HD4C20FF697494AE8ABDC9E24BFA13348" display-inline="no-display-inline"><enum>(9)</enum><text display-inline="yes-display-inline">The amount and nature of the company’s financial assets.</text></paragraph>
<paragraph id="H2A04775EC478490CB9F3B7F5C18848B4" display-inline="no-display-inline"><enum>(10)</enum><text>The amount and nature of the company’s liabilities, including the degree of reliance on short-term funding.</text></paragraph>
<paragraph id="HAF3F3FAB5E434F479B37DCBCAAB97D92"><enum>(11)</enum><text>Any other factors that the Council deems appropriate.</text> </paragraph></subsection>
<subsection display-inline="no-display-inline" id="HC14F82F215B84A1F921D5F33935A7F98"><enum>(c)</enum><header>Notification of decision</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="H41070A23C70742EF9D0D4426F04FAE31"><enum>(d)</enum><header>Periodic review and rescission of findings</header>
<paragraph id="H950FF051EE0947D79C4634AE700692CE"><enum>(1)</enum><header>Submission of assessment</header><text>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.</text> </paragraph>
<paragraph id="HC2DE746503C6473CA7A58DF992DBB5F9"><enum>(2)</enum><header>Review and rescission</header><text>The Council shall—</text>
<subparagraph id="H8DDC086D6F134931A6238D6697313EAD"><enum>(A)</enum><text>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</text> </subparagraph>
<subparagraph id="H7B95F8D0A67A4F259207FF79458C6810"><enum>(B)</enum><text display-inline="yes-display-inline">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).</text> </subparagraph></paragraph></subsection>
<subsection display-inline="no-display-inline" id="HF24063A2099E4D189EFFBE97847D9BD3"><enum>(e)</enum><header>Appeal</header>
<paragraph id="H65016CAB65EE410EAD920405DDAFE88A"><enum>(1)</enum><header>Administrative</header><text>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.</text> </paragraph>
<paragraph id="HDEE1306BC60F43398E75D5D20BE0D5CB"><enum>(2)</enum><header>Judicial review</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection>
<subsection id="H1CB21028B5894E9C9F7F7125AE1477ED"><enum>(f)</enum><header>Effect of council decision</header>
<paragraph id="H6298342482A24233B3CA9A96B8B50648" display-inline="no-display-inline"><enum>(1)</enum><header>Application of federal laws</header>
<subparagraph id="H57B47282DECD4265A66AA9A2F368A12B"><enum>(A)</enum><header>Application of bank holding company act and federal deposit insurance act</header><text>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).</text></subparagraph>
<subparagraph id="H92574FC4F51D483388FE8416BC37BB2D"><enum>(B)</enum><header>Board authority</header><text display-inline="yes-display-inline">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).</text></subparagraph></paragraph>
<paragraph id="HBC09B2DBB0B44D5687A9FCD1B1288442"><enum>(2)</enum><header>Application of activity restrictions and section 6 holding company requirements</header><text></text>
<subparagraph id="H5E9093E48F1B452ABCFA511EEAFF5612"><enum>(A)</enum><header>In general</header><text>Except as provided in subparagraphs (B) and (C)—</text>
<clause id="H3DCE2693306F4A819075CC1D5F41159E"><enum>(i)</enum><text>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 </text></clause>
<clause id="H4629CE3A27E94431AC473B55428E1104"><enum>(ii)</enum><text>such section 6 holding company shall be the financial holding company subject to stricter standards for purposes of this title.</text></clause></subparagraph>
<subparagraph id="HFE22D8EE23944D18A80DA16AF3E11A7A" display-inline="no-display-inline"><enum>(B)</enum><header>Exceptions from section 6 holding company requirements</header><text></text>
<clause id="H608AD0CFC5F6477187449A6E74733DE8"><enum>(i)</enum><header>General requirement for board to consider exceptions</header><text display-inline="yes-display-inline">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)—</text>
<subclause id="H0C81213C94824CD085D610F11C6A8F77"><enum>(I)</enum><text>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</text></subclause>
<subclause id="H9F252CCC381545FFB90EEAB83CFC0074"><enum>(II)</enum><text>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.</text></subclause></clause>
<clause id="HE4872DC365E54DC288E0CD3EED8C3BAD"><enum>(ii)</enum><header>Board determination not to exempt</header>
<subclause id="H793350E1E9374012B4F62761DF076BE9"><enum>(I)</enum><header>In general</header><text>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. </text></subclause>
<subclause id="H187E5718257E47EA9ABEE8A8F3ADCB51"><enum>(II)</enum><header>Extension of period</header><text>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.</text></subclause></clause>
<clause id="H778FEEE7780541F9B462E15C86D7D936"><enum>(iii)</enum><header>Board determination to exempt</header>
<subclause id="H36262F9BF01540009BAC75EAD8E6F639"><enum>(I)</enum><header>In general</header><text>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. </text></subclause>
<subclause id="H93FEB9592AC84ACBB55950B079021D4C"><enum>(II)</enum><header>Subsequent loss of exemption</header><text>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).</text></subclause></clause></subparagraph>
<subparagraph id="H109AA3A397E1464AA05A9CD60A0E502E" display-inline="no-display-inline"><enum>(C)</enum><header>Activities conducted abroad</header><text>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.</text></subparagraph>
<subparagraph id="HB82AEA48E2A543C29B799011D2082EEA"><enum>(D)</enum><header>Flexible application</header><text>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.</text></subparagraph> </paragraph>
<paragraph id="HC751A79499314C1588E814731D0FF91B"><enum>(3)</enum><header>Leverage limitation</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection></section>
<section id="H2312269A4DFB415C9E9FA16502074FD5"><enum>1104.</enum><header>Stricter prudential standards for certain financial holding companies for financial stability purposes</header>
<subsection id="H158B6D40A1A347F7A4B1EFAD09311FBD"><enum>(a)</enum><header>Stricter prudential standards</header>
<paragraph id="H51E9876D0DB641A8AF254CBDC4116118"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HA8D71AFC4FEA4225B599732066C57655"><enum>(2)</enum><header>Standards</header>
<subparagraph id="H7BB0786C73F148C5951D020EBDC9BB80"><enum>(A)</enum><header>Required standards</header><text>The stricter standards imposed by the Board under this section shall include—</text>
<clause id="H604F1C68606540098EFDCC4566416EC3" display-inline="no-display-inline"><enum>(i)</enum><text display-inline="yes-display-inline">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.</text></clause>
<clause id="H2735301EF90C4947A048795A2230B833"><enum>(ii)</enum><text>liquidity requirements;</text> </clause>
<clause id="HDEF4B59C48C44DD8A76D619483F971D1"><enum>(iii)</enum><text>concentration requirements (as specified in subsection (c));</text> </clause>
<clause id="H8F7AA6280415459D878C2AF4FCC175F2"><enum>(iv)</enum><text>prompt corrective action requirements (as specified in subsection (e));</text> </clause>
<clause id="H3486ADBA2CD8458DB6171BCCA75A85F0"><enum>(v)</enum><text>resolution plan requirements (as specified in subsection (f)); and</text> </clause>
<clause id="H4A246843774143179ABDDC912A5EC7CB"><enum>(vi)</enum><text>overall risk management requirements.</text> </clause> </subparagraph>
<subparagraph id="H1E3CE7B22D594332B7C272594EA69E75"><enum>(B)</enum><header>Additional standards</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="H721F51D5C3E841C9BF56929AF4A0AF58"><enum>(C)</enum><header>Consultation with Federal financial regulatory agencies and the Federal Insurance Office</header><text display-inline="yes-display-inline">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.</text></subparagraph></paragraph>
<paragraph id="H7531E65FAE6D4CD18605E582C2C56044" display-inline="no-display-inline"><enum>(3)</enum><header>Application of required standards</header><text display-inline="yes-display-inline">In imposing prudential standards under this section, the Board—</text>
<subparagraph id="H7B1A89C56ACB4B7DA2CF6900229F474B"><enum>(A)</enum><text>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</text></subparagraph>
<subparagraph id="HA2180882019C4FD1B3F8A185F4B0F277"><enum>(B)</enum><text display-inline="yes-display-inline">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.</text></subparagraph></paragraph>
<paragraph id="HD74B70EE387547C89B62D6394200CF5B"><enum>(4)</enum><header>Well capitalized and well managed</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HC3F4C491B8ED4DCFB59504077B682BCF"><enum>(5)</enum><header>Application to foreign financial companies</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HF0DF8A1E3733480FAB257BD6017D4729"><enum>(6)</enum><header>Inclusion of off balance sheet activities in computing capital requirements</header>
<subparagraph id="H1EDD9646983F4891BF12C011D701CA13"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="HAEA3103498D64FA798D9CF138C23219B"><enum>(B)</enum><header>Exemption</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="H313E0A94543543C4BEE4CE6D4E605B45"><enum>(C)</enum><header>Off balance sheet activities defined</header><text display-inline="yes-display-inline">For purposes of this paragraph, the term <quote>off balance sheet activities</quote> 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:</text>
<clause id="HC02128F97F70425081223A86D647DED9"><enum>(i)</enum><text>Direct credit substitutes in which a bank substitutes its own credit for a third party, including standby letters of credit.</text> </clause>
<clause id="HECE74AFD08E341E38F266A216528665A"><enum>(ii)</enum><text>Irrevocable letters of credit that guarantee repayment of commercial paper or tax-exempt securities.</text> </clause>
<clause id="H54952965EFDD415AA7F7C85BB08212CC"><enum>(iii)</enum><text>Risk participation in bankers’ acceptances.</text> </clause>
<clause id="HAA32427B0007450EA53510E128FCC48F"><enum>(iv)</enum><text>Sale and repurchase agreements.</text> </clause>
<clause id="HD91E8B90B803435396D8E47F56D5F39C"><enum>(v)</enum><text>Asset sales with recourse against the seller.</text> </clause>
<clause id="HA5414250787445CAADBE8A7BD663DA28"><enum>(vi)</enum><text>Interest rate swaps.</text> </clause>
<clause id="H3E1F8BDA232641129FB77B9D1657E3A0"><enum>(vii)</enum><text>Credit swaps.</text> </clause>
<clause id="HD526E46AF5DB4A3EA311C2D9154E0746"><enum>(viii)</enum><text>Commodity contracts.</text> </clause>
<clause id="H712537E2099E46EA8E0E444FE1042F27"><enum>(ix)</enum><text>Forward contracts.</text> </clause>
<clause id="HA6872B280682407AB6EDA81AF770BAA4"><enum>(x)</enum><text>Securities contracts.</text> </clause>
<clause id="H33382708462E4879BC4E89B4014F6018"><enum>(xi)</enum><text display-inline="yes-display-inline">Such other activities or transactions as the Board may, by rule, define.</text> </clause></subparagraph></paragraph></subsection>
<subsection id="HCD4B62CF678C4B7BAC6BC08E4C8F1A26"><enum>(b)</enum><header>Prudential standards at functionally regulated subsidiaries and subsidiary depository institutions</header>
<paragraph id="H07E95985C02647AFBAFF901612C7B0F0"><enum>(1)</enum><header>Board authority to recommend standards</header><text>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.</text> </paragraph>
<paragraph id="HCA21198C8FB94D4BAECCEAF796868F2A"><enum>(2)</enum><header>Agency authority to implement heightened standards and safeguards</header><text>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.</text> </paragraph>
<paragraph id="H28744792A6F843839228AF743F15D052"><enum>(3)</enum><header>Imposition of standards</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H2F8C39C2BA934A9482B9FDC7AF5B09AA"><enum>(4)</enum><header>Federal financial regulatory agency response; notice to council and board</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection>
<subsection id="H18065570B10B4A24BC2F365E6606010D"><enum>(c)</enum><header>Concentration limits for financial holding companies subject to stricter standards</header>
<paragraph id="H5CCF27D393504933BAA6E596C74A8F14"><enum>(1)</enum><header>Standards</header><text>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.</text> </paragraph>
<paragraph id="HF9909C2AEF5E4CAB871077897F7F0BD7"><enum>(2)</enum><header>Limitation on credit exposure</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H830241C07D134A6D816A004075A87E11"><enum>(3)</enum><header>Credit exposure</header><text display-inline="yes-display-inline">For purposes of this subsection and with respect to a financial holding company subject to stricter standards, the term <quote>credit exposure</quote> to a company means—</text>
<subparagraph id="HA40AA28A5E044AEB9387C4AFB0E297C3"><enum>(A)</enum><text>all extensions of credit to the company, including loans, deposits, and lines of credit;</text> </subparagraph>
<subparagraph id="HD5A48B5E6C0049BDA4E9A6E9FC5711C7"><enum>(B)</enum><text>all repurchase agreements and reverse repurchase agreement with the company;</text> </subparagraph>
<subparagraph id="H09C26D7AF58443A587056BB008839C62"><enum>(C)</enum><text>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;</text> </subparagraph>
<subparagraph id="H7F6F66A41A0A43619E266D8E18C3AAD3"><enum>(D)</enum><text>all guarantees, acceptances, or letters of credit (including endorsement or standby letters of credit) issued on behalf of the company;</text> </subparagraph>
<subparagraph id="H5C8A4DAB1FBB4A90AAE1C2CDC623DA98"><enum>(E)</enum><text>all purchases of or investment in securities issued by the company;</text> </subparagraph>
<subparagraph id="HB242B7A96D3249ADAE1122485F68DD46"><enum>(F)</enum><text>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</text> </subparagraph>
<subparagraph id="H7F7FD4CEA0134D2EAFC38D02CCE25B12"><enum>(G)</enum><text>any other similar transactions that the Board by regulation determines to be a credit exposure for purposes of this section.</text> </subparagraph></paragraph>
<paragraph id="HDF739B0D859C4365B6891199199DF896"><enum>(4)</enum><header>Attribution rule</header><text>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.</text> </paragraph>
<paragraph id="H96154BB6BFF440A0ACC762BA06E2BFB9"><enum>(5)</enum><header>Rulemaking</header><text>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.</text> </paragraph>
<paragraph display-inline="no-display-inline" id="HE4154A1A166D416BBDD4B7556AF4F743"><enum>(6)</enum><header>Exemptions</header>
<subparagraph id="HD11109B64EC34CEA8C1D2354D7075C27"><enum>(A)</enum><header>In general</header>
<clause id="H37719A5310C3460D9BB27AC75EC5BAF1"><enum>(i)</enum><header>Federal home loan banks</header><text display-inline="yes-display-inline">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.</text> </clause>
<clause id="H6E0B2AB6C53841CE8B05D587E5CB37C7"><enum>(ii)</enum><header>Applicability to other entities</header><text display-inline="yes-display-inline">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.</text> </clause></subparagraph>
<subparagraph id="H908E4C69D44D4DE69F41C437BFB38A5C"><enum>(B)</enum><header>Regulations</header><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph>
<paragraph id="HC8F05E1C61244757B5A9F9C26B966C4A"><enum>(7)</enum><header>Transition period</header><text>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.</text> </paragraph></subsection>
<subsection display-inline="no-display-inline" id="H6D21C432044043F4BD36B0B48AA7D226"><enum>(d)</enum><header>Short-term debt limits for certain financial holding companies</header>
<paragraph id="H13873CA47A9E4DFBA6A1D27EC2327092"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HD6D74EE057664D1398D10BC042850DDE"><enum>(2)</enum><header>Basis of limit</header><text>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.</text> </paragraph>
<paragraph id="H0516DD19ACE547C6A6399CADB3A2076D"><enum>(3)</enum><header>Short-term debt defined</header><text display-inline="yes-display-inline">For purposes of this subsection, the term <quote>short-term debt</quote> means such liabilities with short-dated maturity that the Board identifies by regulation, except that such term does not include insured deposits.</text> </paragraph>
<paragraph commented="no" id="HFF1F52718B554CB2AE342916A6AA397D"><enum>(4)</enum><header>Rulemaking authority</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H65D91C5BD8994FCB9F573310B1280A4A"><enum>(5)</enum><header>Authority to issue exemptions and adjustments</header><text display-inline="yes-display-inline">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).</text> </paragraph> </subsection>
<subsection id="H41642520BBB745F49E4A5D4A52EE1BE0"><enum>(e)</enum><header>Prompt corrective action for financial holding companies subject to stricter standards</header>
<paragraph id="H4DFB88B2CB3B45019D8648F5894D163D"><enum>(1)</enum><header>Prompt corrective action required</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H1ECDBC3DE05948D8B54C08F128F84654"><enum>(2)</enum><header>Definitions</header><text>For purposes of this section—</text>
<subparagraph id="H63E11EDD4D9847789E57E8DA6E33812E"><enum>(A)</enum><header>Capital categories</header>
<clause id="H6E6ED558846A4FF883EC3AEC4A33425C"><enum>(i)</enum><header>Well capitalized</header><text display-inline="yes-display-inline">A financial holding company subject to stricter standards is <quote>well capitalized</quote> if it exceeds the required minimum level for each relevant capital measure.</text> </clause>
<clause id="HC85C1D05102B4E99971AD17005EF114A"><enum>(ii)</enum><header>Undercapitalized</header><text display-inline="yes-display-inline">A financial holding company subject to stricter standards is <quote>undercapitalized</quote> if it fails to meet the required minimum level for any relevant capital measure.</text> </clause>
<clause id="H92835A4C4331471D9BD3CC2DA5453CBC"><enum>(iii)</enum><header>Significantly undercapitalized</header><text display-inline="yes-display-inline">A financial holding company subject to stricter standards is <quote>significantly undercapitalized</quote> if it is significantly below the required minimum level for any relevant capital measure. The Board shall define by rule or regulation the term <quote>significantly undercapitalized</quote> at a threshold the Board determines to be prudent for the effective monitoring, management and oversight of the financial system. </text> </clause>
<clause id="HAD860FC87614465898D2ED062ACB5BF9"><enum>(iv)</enum><header>Critically undercapitalized</header><text display-inline="yes-display-inline">A financial holding company subject to stricter standards is <quote>critically undercapitalized</quote> if it fails to meet any level specified in paragraph (4)(C)(i).</text> </clause></subparagraph></paragraph>
<paragraph id="H7B0B378ADE494313AE6138FDE9D6A830"><enum>(3)</enum><header>Other definitions</header>
<subparagraph id="H7BD21B4DE09941BAB433080686BBAE4C"><enum>(A)</enum><header>Average</header><text>The <quote>average</quote> 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.</text> </subparagraph>
<subparagraph id="H4F3D561DFCD140DAB15A34A02A7CE3C0"><enum>(B)</enum><header>Capital distribution</header><text>The term <term>capital distribution</term> means—</text>
<clause id="HDF2A99CD84EF47F48EA02F8EDDB1917B"><enum>(i)</enum><text>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;</text> </clause>
<clause id="HE463D3CE39364C9A9C8FC9DD9B653434"><enum>(ii)</enum><text>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</text> </clause>
<clause id="H915BC4233A094B88AA6BD01D38173536"><enum>(iii)</enum><text>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.</text> </clause></subparagraph>
<subparagraph id="H6ED2505E3C2349B390CDE80C7F87F724"><enum>(C)</enum><header>Capital restoration plan</header><text>The term <term>capital restoration plan</term> means a plan submitted under paragraph (6)(B).</text> </subparagraph>
<subparagraph id="H1F6C4CBDAEE947A79360133F7ED20B76"><enum>(D)</enum><header>Compensation</header><text>The term <term>compensation</term> includes any payment of money or provision of any other thing of value in consideration of employment.</text> </subparagraph>
<subparagraph id="H5DD7F6C228D14AFB8EE5716AEA5978C0"><enum>(E)</enum><header>Relevant capital measure</header><text>The term <term>relevant capital measure</term> means the measures described in paragraph (4).</text> </subparagraph>
<subparagraph id="HFFBC60E23B234C81A278E8A19312EA48"><enum>(F)</enum><header>Required minimum level</header><text>The term <term>required minimum level</term> means, with respect to each relevant capital measure, the minimum acceptable capital level specified by the Board by regulation.</text> </subparagraph>
<subparagraph id="H449333F3AD6C43128E9388124B061A9C"><enum>(G)</enum><header>Senior executive officer</header><text>The term <term>senior executive officer</term> has the same meaning as the term <term>executive officer</term> in section 22(h) of the Federal Reserve Act (12 U.S.C. 375b).</text> </subparagraph></paragraph>
<paragraph id="H3E63D90A365642B29A6E1C206CEB7030"><enum>(4)</enum><header>Capital standards</header>
<subparagraph id="H7A3783EB8D20476FA0D61E681DAF8A37"><enum>(A)</enum><header>Relevant capital measures</header>
<clause id="H3AB5EBFEA74A47AD81C49B9CF46448DE"><enum>(i)</enum><header>In general</header><text>Except as provided in clause (ii)(II), the capital standards prescribed by the Board under section 1104(a)(2) shall include—</text>
<subclause id="H8CF189B3FDCE479FB4C2091B18B1D042"><enum>(I)</enum><text>a leverage limit; and</text> </subclause>
<subclause id="H5F58B1A598D44553BB49A1366E4BF4C4"><enum>(II)</enum><text>a risk-based capital requirement.</text> </subclause></clause>
<clause id="HB4E6EFC78EDD4AFDA69F3A65B5ADB91E"><enum>(ii)</enum><header>Other capital measures</header><text>The Board may by regulation—</text>
<subclause id="H2710BCE8D9C6498B944AE2FDC4905B19"><enum>(I)</enum><text>establish any additional relevant capital measures to carry out this section; or</text> </subclause>
<subclause id="HABF533DDAA7F4B7DAF43A4CCB8179C15"><enum>(II)</enum><text>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.</text> </subclause></clause></subparagraph>
<subparagraph id="H62D989BEC02944ADA5F540AE9AA66143"><enum>(B)</enum><header>Capital categories generally</header><text>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.</text> </subparagraph>
<subparagraph id="H69A3D22F0BEC435E9FE1C0617E224E54"><enum>(C)</enum><header>Critical capital</header>
<clause id="HC26D0F815DE5448EBA31196A13A4F7B9"><enum>(i)</enum><header>Board to specify level</header>
<subclause id="HC70D19BDDEEB4D68A061FAA5233A537B"><enum>(I)</enum><header>Leverage limit</header><text>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.</text> </subclause>
<subclause id="H39C5A81023E84B9B833E9A663D2CA323"><enum>(II)</enum><header>Other relevant capital measures</header><text>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.</text> </subclause></clause>
<clause id="H89C819F856F9410BA8FE9C23EC4D4832"><enum>(ii)</enum><header>Leverage limit range</header><text>The level specified under clause (i)(I) shall require tangible equity in an amount—</text>
<subclause id="H86FC09685AB9485291388D8E1AA13965"><enum>(I)</enum><text>not less than 2 percent of total assets; and</text> </subclause>
<subclause id="H46019263B0044D37B4F981BDB4CEB9A4"><enum>(II)</enum><text>except as provided in subclause (I), not more than 65 percent of the required minimum level of capital under the leverage limit.</text> </subclause></clause></subparagraph></paragraph>
<paragraph id="H8E66B50AC1BE44C4A1846E829BA73BBE"><enum>(5)</enum><header>Capital distributions restricted</header>
<subparagraph id="H8F7FAA56D2734FD5A6977979BFC8724E"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="H4849ECD91E36431081B41D9350BFD512"><enum>(B)</enum><header>Exception</header><text>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—</text>
<clause id="H01C763FF04D04E3A88A4AADCB87D0BE5"><enum>(i)</enum><text>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</text> </clause>
<clause id="H3D8CD76223654579BE2F72803B41DB09"><enum>(ii)</enum><text display-inline="yes-display-inline">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.</text> </clause></subparagraph></paragraph>
<paragraph id="HA5BD23E8CAB54B5B82B9E3DF43480A8A"><enum>(6)</enum><header>Provisions applicable to undercapitalized financial holding company subject to stricter standards</header>
<subparagraph id="H4C8D673B9CB94D14A20589A0D26528D1"><enum>(A)</enum><header>Monitoring required</header><text>The Board shall—</text>
<clause id="H5BB5495BEF9343AAAB74723C35259497"><enum>(i)</enum><text display-inline="yes-display-inline">closely monitor the condition of any undercapitalized financial holding company subject to stricter standards;</text> </clause>
<clause id="HE226387BA4DF41C7B768D5C1B3BF9601"><enum>(ii)</enum><text display-inline="yes-display-inline">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</text> </clause>
<clause id="H65822324F6D2470EAAD3C779BE64D27F"><enum>(iii)</enum><text display-inline="yes-display-inline">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.</text> </clause></subparagraph>
<subparagraph id="H816BE421103A4F2388760E9684522E2A"><enum>(B)</enum><header>Capital restoration plan required</header>
<clause id="HB2B2F804C07F46FE87D86DAC7D730B53"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">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).</text> </clause>
<clause id="H2FCDFE0E89664C8381A8C8C11491FB7D"><enum>(ii)</enum><header>Contents of plan</header><text>The capital restoration plan shall—</text>
<subclause id="H15C32E4EE6334FC1A8B8269F83AF4A80"><enum>(I)</enum><text>specify—</text>
<item id="H14D7D25A46F94E71A8A871D91A957396"><enum>(aa)</enum><text>the steps the financial holding company subject to stricter standards will take to become well capitalized;</text> </item>
<item id="H05E28968517544C0A8795F250E176DF7"><enum>(bb)</enum><text>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;</text> </item>
<item id="HE283DFE6CB0C405F991AB7B511704861"><enum>(cc)</enum><text>how the financial holding company subject to stricter standards will comply with the restrictions or requirements then in effect under this section; and</text> </item>
<item id="HF5007D5443D14EE7BF902EC0465E2A69"><enum>(dd)</enum><text>the types and levels of activities in which the financial holding company subject to stricter standards will engage; and</text> </item></subclause>
<subclause id="H6FF6647066014FED93E9EDEA92CCD2BD"><enum>(II)</enum><text>contain such other information that the Board may require.</text> </subclause></clause>
<clause id="HD35B298774464F94BFAE58D10E44C84E"><enum>(iii)</enum><header>Criteria for accepting plan</header><text>The Board shall not accept a capital restoration plan unless it determines that the plan—</text>
<subclause id="H31A529521A8B4E239A8FF55B1B787127"><enum>(I)</enum><text>complies with clause (ii);</text> </subclause>
<subclause id="H0E4B9C8484A142C6816C29E75B8E6000"><enum>(II)</enum><text display-inline="yes-display-inline">is based on realistic assumptions, and is likely to succeed in restoring the capital of the financial holding company subject to stricter standards; and</text> </subclause>
<subclause id="HAFA291872DCF4E5F88A64417EB18A974"><enum>(III)</enum><text>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.</text> </subclause></clause>
<clause id="H62D013FF820E490A894FA9A6E429761E"><enum>(iv)</enum><header>Deadlines for submission and review of plans</header><text>The Board shall, by regulation, establish deadlines that—</text>
<subclause id="H0862EA6AD26246E9818DB239526C67DA"><enum>(I)</enum><text>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</text> </subclause>
<subclause id="H2F6D04CE495642928106E051F77620E8"><enum>(II)</enum><text>require the Board to act on capital restoration plans expeditiously, and generally not later than 60 days after the plan is submitted.</text> </subclause></clause></subparagraph>
<subparagraph id="H8283FF5EB9F54E43A6E3905016C55BE7"><enum>(C)</enum><header>Asset growth restricted</header><text display-inline="yes-display-inline">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—</text>
<clause id="HF437A8DC02F140899921B4E616AFE2D4"><enum>(i)</enum><text display-inline="yes-display-inline">the Board has accepted the capital restoration plan of the financial holding company subject to stricter standards;</text> </clause>
<clause id="HBF03634B1C0A4D59A63F5C3792549890"><enum>(ii)</enum><text>any increase in total assets is consistent with the plan; and</text> </clause>
<clause id="H463F13DE6D6B4D0CA957FB6BBA79472F"><enum>(iii)</enum><text display-inline="yes-display-inline">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.</text> </clause></subparagraph>
<subparagraph id="HE31C82C04017431F893EA0A5768AC49C"><enum>(D)</enum><header>Prior approval required for acquisitions and new lines of business</header><text display-inline="yes-display-inline">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—</text>
<clause id="H04528EC1D106487AAB95712B5A8D25C9"><enum>(i)</enum><text display-inline="yes-display-inline">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;</text> </clause>
<clause id="HEBEE09DE21304C9C83F86A79A3EE2D40"><enum>(ii)</enum><text>the Board determines that the specific proposed action is appropriate; or</text> </clause>
<clause id="H8578D7034F824B9D9726855C0A2BEA6A"><enum>(iii)</enum><text>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.</text> </clause></subparagraph>
<subparagraph id="HE9613E814A7E47D4BEB3B6D0F8088D09"><enum>(E)</enum><header>Discretionary safeguards</header><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph>
<paragraph id="H5A0AA7672D794899AA4046359C511E3C"><enum>(7)</enum><header>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</header>
<subparagraph id="H2FBC6E7A6B364092A6E03334347904D6"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">This paragraph shall apply with respect to any financial holding company subject to stricter standards that—</text>
<clause id="HCED8F721DA4043C295999294CE29F0D8"><enum>(i)</enum><text>is significantly undercapitalized; or</text> </clause>
<clause id="H70B2983995AA48B7BA640264553F85E3"><enum>(ii)</enum><text>is undercapitalized and—</text>
<subclause id="HBEAE686BDBD54B64AE624B937B784D45"><enum>(I)</enum><text>fails to submit an acceptable capital restoration plan within the time allowed by the Board under paragraph (6)(B)(iv); or</text> </subclause>
<subclause id="H6DF453318B254572BC7C49E6B05407C5"><enum>(II)</enum><text>fails in any material respect to implement a capital restoration plan accepted by the Board.</text> </subclause></clause></subparagraph>
<subparagraph id="H0EAB84769AEA40CA9EA836660E668C28"><enum>(B)</enum><header>Specific actions authorized</header><text>The Board shall carry out this paragraph by taking 1 or more of the following actions—</text>
<clause id="H77BED62C51B54263B414EEE17661C1FB"><enum>(i)</enum><header>Requiring recapitalization</header><text>Doing one or more of the following:</text>
<subclause id="HBF0B4408E0764130B8AC470888351CEC"><enum>(I)</enum><text>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.</text> </subclause>
<subclause id="HC6BB1A3A6A4F48E08DF3AA7F862AF014"><enum>(II)</enum><text>Further requiring that instruments sold under subclause (I) be voting shares.</text> </subclause>
<subclause id="HA8C08D9FDFD84E8E9F518638AE0173AA"><enum>(III)</enum><text>Requiring the financial holding company subject to stricter standards to be acquired by or combine with another company.</text> </subclause></clause>
<clause id="HE9F2BF463FBA44D5A5C9483E3AE6F873"><enum>(ii)</enum><header>Restricting transactions with affiliates</header>
<subclause id="H0BB9C939492E465CB3CB1363D8ED535D"><enum>(I)</enum><text>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.</text> </subclause>
<subclause id="H8C83BA22015F49DC80EA8C3D5C1E8932"><enum>(II)</enum><text display-inline="yes-display-inline">Further restricting the transactions of the financial holding company subject to stricter standards with affiliates and insiders.</text> </subclause></clause>
<clause id="H6850211061FD4D90ADED4EDAC42D817E"><enum>(iii)</enum><header>Restricting asset growth</header><text display-inline="yes-display-inline">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.</text> </clause>
<clause id="H465CA60229654CBFB0DD3C3F4E8D8203"><enum>(iv)</enum><header>Restricting activities</header><text>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.</text> </clause>
<clause id="H049662910D5A4EE987898F44C20A1508"><enum>(v)</enum><header>Improving management</header><text>Doing one or more of the following:</text>
<subclause id="HC248EAC9DAD742149EF14C5D0846CCCC"><enum>(I)</enum><header>New election of directors</header><text display-inline="yes-display-inline">Ordering a new election for the board of directors of the financial holding company subject to stricter standards.</text> </subclause>
<subclause id="H17349FA1C0E24102BFDB841F031A9F6D"><enum>(II)</enum><header>Dismissing directors or senior executive officers</header><text>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).</text> </subclause>
<subclause id="H9B00AFE9B5BB43C6998F886BDEE9F3AF"><enum>(III)</enum><header>Employing qualified senior executive officers</header><text>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).</text> </subclause></clause>
<clause id="HEF46448C00FB46A2A9A9BDE8CB0607FA"><enum>(vi)</enum><header>Requiring divestiture</header><text display-inline="yes-display-inline">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.</text> </clause>
<clause id="H5A0545D6010E4F319C6DB9C7D929615F"><enum>(vii)</enum><header>Requiring other action</header><text display-inline="yes-display-inline">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.</text> </clause></subparagraph>
<subparagraph id="H7F6519478D15416982D155E8056C7660"><enum>(C)</enum><header>Presumption in favor of certain actions</header><text>In complying with subparagraph (B), the Board shall take the following actions, unless the Board determines that the actions would not be appropriate:</text>
<clause id="H1744483755214A2EBC1D23E621D41BA0"><enum>(i)</enum><text>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).</text> </clause>
<clause id="H12F2B6F18E7545F1A2D72ECBA13678AA"><enum>(ii)</enum><text>The action described in subparagraph (B)(ii) (relating to restricting transactions with affiliates).</text> </clause></subparagraph>
<subparagraph id="H75D704CA247447798F570091BF9DD93B"><enum>(D)</enum><header>Senior executive officers’ compensation restricted</header>
<clause id="H76954D5AD4C44C3FA4C5F69A95C03674"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">The financial holding company subject to stricter standards shall not do any of the following without the prior written approval of the Board:</text>
<subclause id="H9597B2149CE845C6B5A01198FD217367"><enum>(I)</enum><text>Pay any bonus to any senior executive officer.</text> </subclause>
<subclause id="H4A7778EA7B8B4D0DBE18E957174BE090"><enum>(II)</enum><text>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.</text> </subclause></clause>
<clause id="HF6DE64A09ED2450B943E0029FE59F59B"><enum>(ii)</enum><header>Failing to submit plan</header><text>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.</text> </clause></subparagraph>
<subparagraph id="HD5474EFF8B1242B6AE03E2CC3E43B0D7"><enum>(E)</enum><header>Consultation with other regulators</header><text>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.</text> </subparagraph></paragraph>
<paragraph id="HE38B77D43EE34A0BBC7203F48776D863"><enum>(8)</enum><header>More stringent treatment based on other supervisory criteria</header>
<subparagraph id="H2F827C53B4E84285998E672AA68BCF16"><enum>(A)</enum><header>In general</header><text>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—</text>
<clause id="H960E2A876ADB41E380AA8A8EF2FFB57A"><enum>(i)</enum><text>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</text> </clause>
<clause id="H2AA6E35C9AE0405099836AA7E4B49841"><enum>(ii)</enum><text display-inline="yes-display-inline">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.</text> </clause></subparagraph>
<subparagraph id="H9A4A8DF14A2B49CFB22DA5DA95E0823D"><enum>(B)</enum><header>Contents of plan</header><text>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.</text> </subparagraph></paragraph>
<paragraph id="H38EE18C760FA41D2B0DB401493970942"><enum>(9)</enum><header>Implementation</header><text>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.</text> </paragraph>
<paragraph id="HD358F84B12B64593946A5D098B21FDEC"><enum>(10)</enum><header>Other authority not affected</header><text>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.</text> </paragraph>
<paragraph id="H5D9E784424CB4B2599B7A2006DF593ED"><enum>(11)</enum><header>Consultation</header><text>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.</text> </paragraph>
<paragraph id="H05F4C7FF6CEC41DC99B36A2E6BB7F687"><enum>(12)</enum><header>Administrative review of dismissal orders</header>
<subparagraph id="H2BB0948AA0C14B76A142DAE6D5A2C19F"><enum>(A)</enum><header>Timely petition required</header><text>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.</text> </subparagraph>
<subparagraph id="HA4D7E103C47245F7ADF198D5918341DB"><enum>(B)</enum><header>Procedure</header>
<clause id="H6DD18BE55693416EBEAFDE937590BEA7"><enum>(i)</enum><header>Hearing required</header><text>The Board shall give the petitioner an opportunity to—</text>
<subclause id="HFEBCB1DB5FF4494E975A40878B2464EA"><enum>(I)</enum><text>submit written materials in support of the petition; and</text> </subclause>
<subclause id="H469D75BADF4D49D49ACB6083F98B8AD1"><enum>(II)</enum><text>appear, personally or through counsel, before 1 or more members of the Board or designated employees of the Board.</text> </subclause></clause>
<clause id="H9FCA146A0D8341F9B6B4E212E14BCFF2"><enum>(ii)</enum><header>Deadline for hearing</header><text>The Board shall—</text>
<subclause id="H2E51655B415844AD9606FC1392DBB4F3"><enum>(I)</enum><text>schedule the hearing referred to in clause (i)(II) promptly after the petition is filed; and</text> </subclause>
<subclause id="H1E66FBC69F2742FFB52968DF2BD6D44D"><enum>(II)</enum><text>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.</text> </subclause></clause>
<clause id="H0F419C2C58E742E88A59C7053D75DC8C"><enum>(iii)</enum><header>Deadline for decision</header><text>Not later than 60 days after the date of the hearing, the Board shall—</text>
<subclause id="HD07A9BB474074248AED459B40646E0C0"><enum>(I)</enum><text>by order, grant or deny the petition;</text> </subclause>
<subclause id="H66F504F140F04CE582D5D921B71BA3E8"><enum>(II)</enum><text>if the order is adverse to the petitioner, set forth the basis for the order; and</text> </subclause>
<subclause id="HB852FEE42EFC4EF0B7D04C62818054CD"><enum>(III)</enum><text>notify the petitioner of the order.</text> </subclause></clause></subparagraph>
<subparagraph id="H18CC88A863E94B0FB52C95DF6C72EF0D"><enum>(C)</enum><header>Standard for review of dismissal orders</header><text display-inline="yes-display-inline">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—</text>
<clause id="HC1EADCCDA82F4068B37D25B0E42110A6"><enum>(i)</enum><text display-inline="yes-display-inline">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</text> </clause>
<clause id="H62DD67B26ABF4F9FB773FEEEBBF69A6D"><enum>(ii)</enum><text>to correct the unsafe or unsound condition or unsafe or unsound practice, to the extent that the order is based on paragraph (8)(A).</text> </clause></subparagraph></paragraph>
<paragraph display-inline="no-display-inline" id="HC0EF95FAB1904F108269B3A90F6C6A5E"><enum>(13)</enum><header>Enforcement authority for foreign financial holding company subject to stricter standards</header>
<subparagraph id="HC15BC647D7DC4D4294AD82321EB7406B"><enum>(A)</enum><header>Termination authority</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="H7853EB1ABB2A48E7813E590B4A7B9DED"><enum>(B)</enum><header>Discretion to deny hearing</header><text>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.</text> </subparagraph></paragraph></subsection>
<subsection id="H4FB171C5EBE649EBBEC9D04DA9DA8687"><enum>(f)</enum><header>Reports regarding rapid and orderly resolution and credit exposure</header>
<paragraph id="H3E1E7C72B4B440CCB32CFD7BFB302EAB"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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—</text>
<subparagraph id="H9894B8D0551747A99B90B70471439310"><enum>(A)</enum><text>its plan for rapid and orderly resolution in the event of severe financial distress;</text> </subparagraph>
<subparagraph id="HBCE6199395E84DB4BF612BF258A4E018"><enum>(B)</enum><text>the nature and extent to which the financial holding company subject to stricter standards has credit exposure to other significant financial companies; and</text> </subparagraph>
<subparagraph id="HDDA27CA593704CD7A20B0F1CD2F2010D"><enum>(C)</enum><text>the nature and extent to which other significant financial companies have credit exposure to the financial holding company subject to stricter standards.</text> </subparagraph></paragraph>
<paragraph id="H962B38B44A9B4A61A771EA0594C7E48F"><enum>(2)</enum><header>No limiting effect</header><text>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.</text> </paragraph>
<paragraph id="HF20B66E8B1C749C990DE6844CC7090A4"><enum>(3)</enum><header>Reporting triggered by stress test results</header>
<subparagraph id="H8B75A55BF0C846C2A45BF152A1329B5B"><enum>(A)</enum><header>Financial holding companies subject to stricter standards</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="H5A4F6919FFD44932860FC8BAB677DB3E"><enum>(B)</enum><header>Financial companies that are not financial holding companies subject to stricter standards</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="HF1AE5A211B7945A5A8EA8C9A3AF86370"><enum>(C)</enum><header>Transparency</header><text>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.</text> </subparagraph></paragraph></subsection>
<subsection display-inline="no-display-inline" id="H6DFF3D983C134560A0E364CDBB094F48"><enum>(g)</enum><header>Stress tests</header>
<paragraph id="HE89BBCAA330547618FD74A3247D0EF8B"><enum>(1)</enum><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HA546710A39DE4797A2C6AB5880EF82C5"><enum>(2)</enum><text>The Board shall issue regulations to define the term <quote>stress test</quote> 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.</text> </paragraph></subsection>
<subsection id="H6CE1F5EF3D0341F389E1F51D3764DB36"><enum>(h)</enum><header>Avoiding duplication</header><text>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.</text> </subsection>
<subsection id="H3B080B107388453396C71AB8E2ECDBFF"><enum>(i)</enum><header>Resolution plans required</header>
<paragraph id="H08EA802D2826406A98522803265C26E6"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H78957A04416643A995291914B599BD71"><enum>(2)</enum><header>Standards for resolution plans</header><text>The regulations required by paragraph (1) shall—</text>
<subparagraph id="HF9E269F43ED04A6B891B136FB278A9AC"><enum>(A)</enum><text display-inline="yes-display-inline">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;</text> </subparagraph>
<subparagraph id="HAB83D4545739440AA0C7B41DD6FE4D96"><enum>(B)</enum><text display-inline="yes-display-inline">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;</text> </subparagraph>
<subparagraph id="H45D537DF4762418C9BA94469D4DDC91E"><enum>(C)</enum><text display-inline="yes-display-inline">require that each plan include information detailing—</text>
<clause id="HF23AD83473804A4EB420DCF372ACFB81"><enum>(i)</enum><text>the nature and extent to which the financial holding company subject to stricter standards has credit exposure to other significant financial companies;</text> </clause>
<clause id="H225A2D0B7A644F1DA345EDF7F6884EA0"><enum>(ii)</enum><text>the nature and extent to which other significant financial companies have credit exposure to the financial holding company subject to stricter standards;</text> </clause>
<clause id="HCEB7460BF96E4775A060327696DF97D9"><enum>(iii)</enum><text display-inline="yes-display-inline">full descriptions of the financial holding company subject to stricter standards’ ownership structure, assets, liabilities, and contractual obligations; and</text> </clause>
<clause id="HF2E1BF2CD1044925804CA615D7A9BEDC"><enum>(iv)</enum><text>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</text> </clause></subparagraph>
<subparagraph id="H22DC826CDAEF4A2786A16D5E52E5C70B"><enum>(D)</enum><text>establish such other standards as the Corporation and the Board may jointly deem necessary to carry out this subsection.</text> </subparagraph></paragraph>
<paragraph id="HE72486C051344098A6297A0CABF6F83C"><enum>(3)</enum><header>Review of plans</header>
<subparagraph id="H92EDF2A971644EA19C04EB10E5D1FD34"><enum>(A)</enum><header>Submission of plans</header><text>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.</text> </subparagraph>
<subparagraph id="HD76EC10FBDFC417DA533F7ED9B805F55"><enum>(B)</enum><header>Review</header><text display-inline="yes-display-inline">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).</text> </subparagraph></paragraph>
<paragraph id="H13ADEDF3DCEA42F7B8BF9C5E13AA2D5D"><enum>(4)</enum><header>Enforcement</header>
<subparagraph id="H8C647D387A6D43B1B2A0386EEB615779"><enum>(A)</enum><header>In general</header><text>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.</text> </subparagraph>
<subparagraph id="H47EB87C79EBF49809773B62C8AAD1D30"><enum>(B)</enum><header>No limitation on Board authority</header><text>Nothing under this subsection shall be construed as limiting any enforcement authority available to the Board under any other provision of law.</text> </subparagraph></paragraph>
<paragraph id="H7C4DDB22B08A4B95B8AE44B223F88EB5"><enum>(5)</enum><header>No limiting effect on receiver</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H385DB9E9AB5842AB945302F61874EDF5"><enum>(6)</enum><header>No private right of action</header><text>No private right of action may be based on any resolution plan submitted under this section.</text> </paragraph></subsection>
<subsection id="H8FCFC430ABB247A1AE58FBE87A874A7B" display-inline="no-display-inline"><enum>(j)</enum><header>Rule of construction regarding consumer protection standards</header><text display-inline="yes-display-inline">The prudential standards imposed or recommended by the Board or the Council under this section shall not be construed as superseding—</text>
<paragraph id="HC0F948B73CF24690B771F5A350F138A3"><enum>(1)</enum><text display-inline="yes-display-inline">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</text> </paragraph>
<paragraph id="HA42A826D92FC43CA95FBCFEB6B142921"><enum>(2)</enum><text display-inline="yes-display-inline">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.</text></paragraph></subsection>
<subsection id="HBE74EC650F8D495EA7833C318C936474" display-inline="no-display-inline"><enum>(k)</enum><header>Rulemaking authority</header><text>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.</text></subsection></section>
<section display-inline="no-display-inline" id="H70C8D7BA735543798E9D0D18B5780680" section-type="subsequent-section"><enum>1105.</enum><header>Mitigation of systemic risk</header>
<subsection id="H8D8013DD75C046B2924D56B84F2B5D14"><enum>(a)</enum><header>Council authority to restrict operations and activities</header><text display-inline="yes-display-inline">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).</text> </subsection>
<subsection id="H6B4A265ABE1B49DC85B6F63FE63F736A"><enum>(b)</enum><header>Consultation with Federal financial regulatory agencies</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="HA6B4567EB67F4E5481DACAC492CA69C5"><enum>(c)</enum><header>Factors for consideration</header><text display-inline="yes-display-inline">In reaching a determination described in subsection (a), the Council shall take into consideration the following factors, as appropriate—</text>
<paragraph id="HEA2BB5750C8E428EBCDAE26AE8765EA1"><enum>(1)</enum><text>the amount and nature of the company’s financial assets;</text> </paragraph>
<paragraph id="H13160925D36F445590D5B18DEDA914E9"><enum>(2)</enum><text>the amount and nature of the company’s liabilities, including the degree of reliance on short-term funding;</text> </paragraph>
<paragraph id="HF1AF7C274058448FA0C0B78D86645FD0"><enum>(3)</enum><text>the extent and nature of the company’s off-balance sheet exposures;</text> </paragraph>
<paragraph id="H9BCDA86AA9804C8E9A524203E576D864"><enum>(4)</enum><text>the company’s reliance on leverage;</text> </paragraph>
<paragraph id="HB1F01F2D4F494B9DA3DC8C86B99C295C"><enum>(5)</enum><text>the extent and nature of the company’s transactions, relationships, and interconnectedness with other financial and non-financial companies;</text> </paragraph>
<paragraph id="HA9B8611C6C624F1F92699C6B45B25456"><enum>(6)</enum><text>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;</text> </paragraph>
<paragraph id="HE32243A04FA649A384AC7B256558C41E"><enum>(7)</enum><text>the scope, nature, size, scale, concentration, interconnectedness and mix of the company’s activities;</text> </paragraph>
<paragraph id="HD0C56C4DF03E4C1E8B4D88D60BF798B4"><enum>(8)</enum><text>the extent to which prudential regulations mitigate the risk posed; and</text> </paragraph>
<paragraph id="HBF2EBF84BBE34FED8A5E887912D984FF"><enum>(9)</enum><text>any other factors identified that the Council determines appropriate.</text> </paragraph></subsection>
<subsection id="HA3042D9663C0454AA35D8116C4BC3561"><enum>(d)</enum><header>Mitigatory actions</header>
<paragraph id="HF6C636DC49944293AF8986AB2D822F40"><enum>(1)</enum><header>In general</header><text>Mitigatory action may include—</text>
<subparagraph id="HF4DCF860156B4E649C83BF78E85F772E"><enum>(A)</enum><text>modifying the stricter prudential standards imposed pursuant to section 1104(a);</text> </subparagraph>
<subparagraph id="HA50886A27DF44F8BB04F1E555E4DD9BB"><enum>(B)</enum><text>terminating 1 or more activities;</text> </subparagraph>
<subparagraph id="H469586741F834304923F79A32C8F210A"><enum>(C)</enum><text display-inline="yes-display-inline">imposing conditions on the manner in which a financial holding company subject to stricter standards conducts 1 or more activities;</text> </subparagraph>
<subparagraph id="H282051E8E1CD46609222CA1F9B7EC2C5"><enum>(D)</enum><text>limiting the ability to merge with, acquire, consolidate with, or otherwise become affiliated with another company;</text> </subparagraph>
<subparagraph id="H17DE42ECAF974FA9984A361723F00AAF"><enum>(E)</enum><text>restricting the ability to offer a financial product or products; and</text> </subparagraph>
<subparagraph id="H8FC3E140B4424DA58C282C94AB94B197"><enum>(F)</enum><text>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.</text> </subparagraph></paragraph>
<paragraph id="HE40733BCF2124FE6AD73BE7D0FC21328"><enum>(2)</enum><header>International competitiveness considerations</header><text>In making any decision pursuant to paragraph (1), the Council shall consider—</text>
<subparagraph id="H6A99E962E6494A75A4830151A7A331FB"><enum>(A)</enum><text>the need to maintain the international competitiveness of the United States financial services industry; and</text> </subparagraph>
<subparagraph id="H87372A3ECB534C0DA3B196A3F9A7EF20"><enum>(B)</enum><text>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.</text> </subparagraph></paragraph></subsection>
<subsection id="H0A64FF05ABF94330B36470CF0809FAB9"><enum>(e)</enum><header>Due process</header>
<paragraph id="H6F7CC07D505D418C8E277E9876316154"><enum>(1)</enum><header>Notice and hearing</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HB51D82FCCD29418D90348A2818DBADB9"><enum>(2)</enum><header>Notice</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H5E290D0B7DB846D991A8FF1DC95626AA"><enum>(3)</enum><header>Submission of plan</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HEDA165FC3EC4456D8E2CF62540622030"><enum>(4)</enum><header>Approval or amendment of the plan</header><text>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.</text> </paragraph>
<paragraph id="HB45C7388EE5346EE80D6D1624DDC0FB0"><enum>(5)</enum><header>Effect of plan approval</header><text>The Council shall—</text>
<subparagraph id="H86EB229FE3EC4D5C8E82B23C52D1D611"><enum>(A)</enum><text display-inline="yes-display-inline">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</text> </subparagraph>
<subparagraph id="H9BE96526C43C4F23BD2B06C9FDE1A7C1"><enum>(B)</enum><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph></subsection>
<subsection id="H40A422C3EF5B47A69E7769AEAE0EB93E"><enum>(f)</enum><header>Treasury secretary concurrence</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="HFDED77E9137B4E6182D10F015244B990"><enum>(g)</enum><header>Failure to implement the plan</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="H2AE58A4E61E749D3AAC3164B862DB30A"><enum>(h)</enum><header>Judicial review</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="H40C667D9ECC34C1393A084BCE7F78498"><enum>(i)</enum><header>Rule of construction</header><text display-inline="yes-display-inline">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.</text></subsection></section>
<section id="H718EA8A535654CF5BF5C121E497AE280"><enum>1106.</enum><header>Subjecting activities or practices to stricter prudential standards for financial stability purposes</header>
<subsection id="HEADCD16F5DFD415F870BFEB1C1A55E96"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="H675F366973074DEE914D7056917A3E8B"><enum>(b)</enum><header>Periodic review of activity identifications</header>
<paragraph id="H4A8523711C084541B4BB8C463C7A09F8"><enum>(1)</enum><header>Submission of assessment</header><text>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.</text> </paragraph>
<paragraph id="HF5D40EDA70A046A8876BE7DDA2D4BE91"><enum>(2)</enum><header>Review and recision</header><text>The Council shall—</text>
<subparagraph id="H63F36A24244F4655BB2E091A939DCA6B"><enum>(A)</enum><text display-inline="yes-display-inline">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</text> </subparagraph>
<subparagraph id="H358881B187F5426D86F38CE8AE93B82A"><enum>(B)</enum><text>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).</text> </subparagraph></paragraph></subsection>
<subsection id="H81BD43F55C6D4E11B27EC969F676F442"><enum>(c)</enum><header>Procedure for subjecting or ceasing to subject an activity or practice to stricter prudential standards</header>
<paragraph id="HE60344C879424DF39E28A48DD7A63B83"><enum>(1)</enum><header>Council and board coordination</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H792DD5F91F1647EF85997C368E21AF0D"><enum>(2)</enum><header>Notice and opportunity for consideration of written materials</header>
<subparagraph id="H19BA0E7EAC9A4471A18EF4A1358F2364"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="HFFB068BBACA24B96B68C93BF46D802F5"><enum>(B)</enum><header>Emergency exception</header><text>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.</text> </subparagraph></paragraph>
<paragraph id="H56DD460502AC4D3BBEF76D07D942DCDF"><enum>(3)</enum><header>Form of decision</header><text>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.</text> </paragraph></subsection></section>
<section id="HAE74F4A259CD4F1CAE2E96ADAC1EB23C"><enum>1107.</enum><header>Stricter regulation of activities and practices for financial stability purposes</header>
<subsection id="H76300C56406E4CFEA0F143270C819E2F"><enum>(a)</enum><header>Prudential Standards</header>
<paragraph id="HB621A584AE544F4B905250F7E76E5B83"><enum>(1)</enum><header>Board authority to recommend</header>
<subparagraph id="HE38ADEA426014959B82676237A4B3565"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="H50E7D12953DF46AD9E09AA71BFAFFFC1"><enum>(B)</enum><header>Consultation with primary financial regulatory agencies</header><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph>
<paragraph display-inline="no-display-inline" id="H62D6AC1FFC104C13A446C411E6F5C0EC"><enum>(2)</enum><header>Criteria</header><text>The actions recommended under paragraph (1)—</text>
<subparagraph id="H0D634CD343D54596B27909CAAA0772CC"><enum>(A)</enum><text>shall be designed to maximize financial stability, taking costs to long-term financial and economic growth into account; and</text> </subparagraph>
<subparagraph id="H46F5E17271F44D97804E6EC1F9E98734"><enum>(B)</enum><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph>
<paragraph id="H11CE3B485B9E4CB0AC76B45C8095BFDE" display-inline="no-display-inline"><enum>(3)</enum><header>Exception</header><text display-inline="yes-display-inline">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.</text></paragraph></subsection>
<subsection id="H8D2C9CCC139A439AA2C2F62DE503C1F0"><enum>(b)</enum><header>Implementation of recommended standards</header>
<paragraph id="H23465C590E1041E3877DBB668737D763"><enum>(1)</enum><header>Role of primary financial regulatory agency</header><text>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.</text> </paragraph>
<paragraph id="H932DD84D8EE441B3BB8F90E2F141D9C3"><enum>(2)</enum><header>Imposition of standards</header><text>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.</text> </paragraph>
<paragraph id="HE1D78731274C4E528B2E94173E72EC71"><enum>(3)</enum><header>Primary financial regulatory agency response</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection></section>
<section id="H019573578BE04002BB66904AD41FE4B7"><enum>1108.</enum><header>Effect of rescission of identification</header>
<subsection id="H96A0019C831041EEA53C86376A5A6766"><enum>(a)</enum><header>Notice</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="HABB469AADA6E40BCB94F00C8FC903D14"><enum>(b)</enum><header>Determination of primary financial regulatory agency to continue</header><text>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.</text> </subsection></section>
<section display-inline="no-display-inline" id="HFDB6AF82E3E3476B9D99D38BEAF018FB" section-type="subsequent-section"><enum>1109.</enum><header>Emergency financial stabilization</header>
<subsection id="HA9EA500B99E84BE4A55002E42AE31B89"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="H7C37B2B321764C4B99952C812401E940"><enum>(b)</enum><header>Policies and procedures</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="HDE57701B658B404D91D8E9FDD52003B6"><enum>(c)</enum><header>Cap for guaranteed amount</header>
<paragraph id="H24605AF77CD845AC8D165BD1754705C2"><enum>(1)</enum><header>In general</header><text>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).</text></paragraph>
<paragraph id="H59817ECA79884F5C9CA22DDE4300FC04"><enum>(2)</enum><header>Additional debt guarantee authority</header><text display-inline="yes-display-inline">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. </text></paragraph></subsection>
<subsection id="HB2B67044209946CEA6B9020951458723"><enum>(d)</enum><header>Funding</header>
<paragraph id="H275BE43557D74832A9D5AEBBC8A4D617"><enum>(1)</enum><header>Administrative expenses and cost of guarantees</header><text>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.</text> </paragraph>
<paragraph id="HE92CCA829C764CDE948D80902A8F6FDD"><enum>(2)</enum><header>Fees and other charges</header><text>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.</text> </paragraph>
<paragraph id="H13107E1329A14AC8940ABFC529DE854A"><enum>(3)</enum><header>Excess funds</header><text>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).</text> </paragraph>
<paragraph id="HED05DFDBD1954D30AC3527298981B399"><enum>(4)</enum><header>Authority of corporation</header><text>For purposes of conducting a program established pursuant to this section, the Corporation—</text>
<subparagraph id="HF963B18B03394715A28F94F71C0763D7"><enum>(A)</enum><text>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;</text> </subparagraph>
<subparagraph id="HCF2140A13ED14353A83AFCF7D8409AFF"><enum>(B)</enum><text>may not borrow funds from the Deposit Insurance Fund established pursuant to section 11(a)(4) of the Federal Deposit Insurance Act; and</text> </subparagraph>
<subparagraph id="HC542483BCFAA477EAEA8F1B09518CD03"><enum>(C)</enum><text>may not borrow funds from the Systemic Dissolution Fund established pursuant to section 1609(n).</text> </subparagraph></paragraph>
<paragraph id="HB109E61EBC2B45AFB3DFBED0E94BA65E"><enum>(5)</enum><header>Back-up special assessment</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection>
<subsection id="H6B7A3AEF0FDB49429D29B9523E74AF93"><enum>(e)</enum><header>Plan for maintenance or increase of lending</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection display-inline="no-display-inline" id="H4A3538DAAF694D6DA496B9BA48F6E9C1"><enum>(f)</enum><header>Sunset of corporation’s authority</header><text>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.</text> </subsection>
<subsection id="H443F8FAB3CF64E70A725ED0DD9DAEB50"><enum>(g)</enum><header>Rule of construction</header><text display-inline="yes-display-inline">For purposes of this section, a guarantee of deposits held by insured depository institutions shall not be treated as a debt guarantee program.</text> </subsection>
<subsection id="HBAF6CC64F18548E2A1FA3A26AFC54B96"><enum>(h)</enum><header>Definitions</header><text>For purposes of this section, the following definitions apply:</text>
<paragraph id="H39AAFEB42F794EB79D2290F24684F71D"><enum>(1)</enum><header>Corporation</header><text>The term <term>Corporation</term> means the Federal Deposit Insurance Corporation.</text></paragraph>
<paragraph id="H545A92F1A15F4015BE14790D2AB0B551"><enum>(2)</enum><header>depository institution holding company</header><text display-inline="yes-display-inline">The term <quote>depository institution holding company</quote> has the meaning given the term in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813).</text> </paragraph>
<paragraph id="HD241C796CABA45D19DBC443BB81F2672"><enum>(3)</enum><header>Insured depository institution</header><text>The term <term>insured depository institution</term> has the meaning given the term in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813).</text> </paragraph>
<paragraph id="HC0CC2343BE6E4ADD90F9FD0CB46D96DD"><enum>(4)</enum><header>Solvent</header><text>The term <term>solvent</term> means assets are more than the obligations to creditors.</text> </paragraph></subsection> </section>
<section id="H4EF60E95332A4B2C83C3D3FD47C99322" display-inline="no-display-inline" section-type="subsequent-section"><enum>1110.</enum><header>Additional related amendments</header>
<subsection id="HA583DC72FF0F4B89A6046C73B3C60B2A"><enum>(a)</enum><header>Federal deposit insurance act related amendments</header>
<paragraph id="HB64440A96ECE4FAB85328E0249904B90"><enum>(1)</enum><header>Suspension of parallel federal deposit insurance act authority</header><text>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.</text></paragraph>
<paragraph id="H4EC6C378340A4CDE82ECF9C8DAAB7DE1"><enum>(2)</enum><header>Federal deposit insurance act authority preserved</header><text>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.</text></paragraph></subsection>
<subsection id="H85BDAC87FA34450CB0E1FFBDF1E3C163"><enum>(b)</enum><header>Effect of default on an fdic guarantee</header><text>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—</text>
<paragraph id="HB466CA49EAC44A68B9DCE56AF5E8E45A"><enum>(1)</enum><text>appoint itself as receiver for the insured depository institution that defaults;</text></paragraph>
<paragraph id="H8A56279BA2CD4B55AB7FBEED6EEEF49F"><enum>(2)</enum><text>with respect to any other participating company that is not an insured depository institution that defaults—</text>
<subparagraph id="HEBF5F7F67C87466E806C7BF424B3A1B5"><enum>(A)</enum><text>require consideration of whether a determination shall be made as provided in section 1603 to resolve the company under subtitle G; and</text></subparagraph>
<subparagraph id="H90EAF24275B447C59BFDFB02868BDD1A"><enum>(B)</enum><text>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.</text></subparagraph></paragraph></subsection>
<subsection id="H453C622AB3E043F6AF9B98A342D00646"><enum>(c)</enum><header>Authority to file involuntary petition for bankruptcy</header><text display-inline="yes-display-inline">Section 303 of title 11, United States Code, is amended by adding at the end the following:</text>
<quoted-block style="USC" id="H8F04669DBB864262898FFE6794C826F9" display-inline="no-display-inline">
<subsection id="H18087831AEEF4B35A778432AAE1D1BFB"><enum>(m)</enum><text display-inline="yes-display-inline">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.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HC1E623C3B13946649B945039E7CB7FFB"><enum>(d)</enum><header>Bankruptcy priority for defaults on debt guaranteed pursuant to section 1109</header><text display-inline="yes-display-inline">Section 507(a)(9) of title 11, United States Code, is amended by inserting before the period at the end the following: <quote>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</quote>. </text></subsection> </section>
<section display-inline="no-display-inline" id="HC0229FB150164CFC867872954288070C" section-type="subsequent-section"><enum>1111.</enum><header>Corporation may receive warrants when paying or risking taxpayer funds</header>
<subsection id="HFA25DADD511B408BBCD7B055D0B7AE51" display-inline="no-display-inline"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="H17F61323031F445998228152BBE34C30"><enum>(1)</enum><text display-inline="yes-display-inline">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</text> </paragraph>
<paragraph id="H73A0D4DB90FF4BC2A82E6AB609959A67"><enum>(2)</enum><text display-inline="yes-display-inline">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).</text> </paragraph></subsection>
<subsection id="H1F68046FAF494582A99193F5C90FAE1F"><enum>(b)</enum><header>Terms and conditions</header><text>The terms and conditions of any warrant or senior debt instrument required under subsection (a) shall meet the following requirements:</text>
<paragraph id="H8D66431914DE4BACAFE1B9F2CEC29DB6"><enum>(1)</enum><header>Purposes</header><text>Such terms and conditions shall, at a minimum, be designed—</text>
<subparagraph id="HEFAB5A27E1D2474785ECE957E6F4EEA1"><enum>(A)</enum><text>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</text> </subparagraph>
<subparagraph id="H354D45AFC7E14618B7F22B2E16998585"><enum>(B)</enum><text>to provide additional protection for the taxpayer against losses from such payment, extension of credit, or guarantee by the Corporation under this title.</text> </subparagraph></paragraph>
<paragraph id="H18AC7146888C461AAE0BF9A685D7A27A"><enum>(2)</enum><header>Authority to sell, exercise, or surrender</header><text>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).</text> </paragraph>
<paragraph id="HDD8460B64E6943609E2F5F2E48DE9879"><enum>(3)</enum><header>Conversion</header><text>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.</text> </paragraph>
<paragraph id="H1515F926960C40B89D80BC5A11BC6367"><enum>(4)</enum><header>Protections</header><text>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.</text> </paragraph>
<paragraph id="H9CBE3D618E7C4854901625455E430517"><enum>(5)</enum><header>Exercise price</header><text>The exercise price for any warrant issued pursuant to this subsection shall be set by the Corporation, in the interest of the taxpayers.</text> </paragraph>
<paragraph id="H17487536F19041E499AB55F311180BA8"><enum>(6)</enum><header>Sufficiency</header><text>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.</text> </paragraph></subsection>
<subsection id="H9EC184F3B997416EBD528EBA4A9746B8"><enum>(c)</enum><header>Exceptions</header>
<paragraph id="HB44C9BD43B414522AF4AF364AB586A26"><enum>(1)</enum><text>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.</text> </paragraph>
<paragraph id="HC8297970D629494E91A788F63841B1E5"><enum>(2)</enum><text>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.</text> </paragraph></subsection></section>
<section id="H5C790EF34F0F4CC6AAB52E0A201B545E"><enum>1112.</enum><header>Examinations and enforcement actions for insurance and resolutions purposes</header>
<subsection id="H0FB3A5F70A5048B5B6ED4321E32A2DA0"><enum>(a)</enum><header>Examinations for insurance and resolutions purposes</header><text>Section 10(b)(3) of the Federal Deposit Insurance Act (12 U.S.C. 1820(b)(3)) is amended by striking <quote>whenever the Board of Directors determines</quote> and all that follows through the period and inserting <quote>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.</quote>.</text> </subsection>
<subsection id="H9F21BC8928DF4674A06BC97A4CA32A54"><enum>(b)</enum><header>Enforcement authority</header><text>Section 8(t) of the Federal Deposit Insurance Act (12 U.S.C. 1818(t)) is amended—</text>
<paragraph id="H7B9221BA95C84CF18FD828189ABF9295"><enum>(1)</enum><text>in paragraph (2)—</text>
<subparagraph id="HC3661BC187814A868828B6F607B11F19"><enum>(A)</enum><text>at the end of subparagraph (B), by striking <quote>or</quote>;</text> </subparagraph>
<subparagraph id="HD34D38F0FD48438387C21CF09EB14453"><enum>(B)</enum><text>at the end of subparagraph (C), by striking the period and inserting <quote>; or</quote>; and</text> </subparagraph>
<subparagraph id="HD8FD1658AD4548EEAD6968A9FDECA179"><enum>(C)</enum><text>by inserting at the end the following new subparagraph:</text>
<quoted-block id="HDFE7E60874004692B108DAB2671AD0B4" style="OLC">
<subparagraph id="H830D83DAECCD47AF9D80C6D551118BAF"><enum>(D)</enum><text>the conduct or threatened conduct (including any acts or omissions) of the depository institution holding company poses a risk to the Deposit Insurance Fund.</text> </subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block> </subparagraph></paragraph>
<paragraph id="H85B02CF894014709BD5D235FDED7ACE5"><enum>(2)</enum><text>by adding at the end the following new paragraph:</text>
<quoted-block id="H32ABEBC721804B0DB16249E109042F2E" style="OLC">
<paragraph id="H561FEA0A1FEB4520B1FD376A2D8EC9DA"><enum>(6)</enum><text>For purposes of this subsection:</text>
<subparagraph id="H4D2B7CACCBE846F190B6B95B223058FA"><enum>(A)</enum><text>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</text> </subparagraph>
<subparagraph id="HC9768B777E9C4BE7B72CDEC3FC6B490A"><enum>(B)</enum><text>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.</text> </subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection></section>
<section display-inline="no-display-inline" id="H82D5E997D60A4BE4909AC08416B75DBF" section-type="subsequent-section"><enum>1113.</enum><header>Study of the effects of size and complexity of financial institutions on capital market efficiency and economic growth</header>
<subsection id="H972CFF80EA27407E91615F8643A8B914"><enum>(a)</enum><header>Study required</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="HCAD2452CE8E04BDBB8C9D56A57EF8A52"><enum>(1)</enum><text>explicit or implicit limits on the maximum size of banks, bank holding companies, and other large financial institutions;</text> </paragraph>
<paragraph id="H7591C002C0AE4F60B02583EAB00F3D76"><enum>(2)</enum><text>limits on the organizational complexity and diversification of large financial institutions;</text> </paragraph>
<paragraph id="H88BEE649B265468598C1B2AD2A9C7396"><enum>(3)</enum><text>requirements for operational separation between business units of large financial institutions in order to expedite resolution in case of failure;</text> </paragraph>
<paragraph id="HEEC1DABBBD7C42FFABC126FD79F6EC2C"><enum>(4)</enum><text>limits on risk transfer between business units of large financial institutions;</text> </paragraph>
<paragraph id="HDCE1EBF859A6418C9AA040225D203070"><enum>(5)</enum><text>requirements to carry contingent capital or similar mechanisms;</text> </paragraph>
<paragraph id="HA53BF7F7AF744C9FA3537DB3851894D2"><enum>(6)</enum><text>limits on commingling of commercial and financial activities by large financial institutions;</text> </paragraph>
<paragraph id="HDF31533BC120459EBEF7B243396B6073"><enum>(7)</enum><text>segregation requirements between traditional financial activities and trading or other high-risk operations in large financial institutions; and</text> </paragraph>
<paragraph id="HCD94B0A19BCC48139D101ACB4DF35158"><enum>(8)</enum><text>other limitations on the activities or structure of large financial institutions that may be useful to limit systemic risk.</text> </paragraph><continuation-text continuation-text-level="subsection">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.</continuation-text></subsection>
<subsection id="H2ED9CA3CC8A24E099CB6353E39426885"><enum>(b)</enum><header>Report</header><text>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).</text> </subsection></section>
<section display-inline="no-display-inline" id="HD9F658E9BFFE4808BACDFCA58516FAEF" section-type="subsequent-section"><enum>1114.</enum><header>Exercise of Federal Reserve authority</header>
<subsection id="H0BC3026B2E7B4645A4358AD1A6EB4326"><enum>(a)</enum><header>No decisions by federal reserve bank presidents</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="H2717C873DEEA465AAB1311CF6C4E6A0C"><enum>(b)</enum><header>Voting decisions by board</header><text display-inline="yes-display-inline">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.</text> </subsection></section>
<section display-inline="no-display-inline" id="H3075EE098D324797803B0AD3C633D6A3" section-type="subsequent-section"><enum>1115.</enum><header>Stress tests</header>
<subsection id="H5460274947DE4F8294FB877064A19450"><enum>(a)</enum><text display-inline="yes-display-inline">A financial holding company subject to stricter standards shall—</text>
<paragraph id="HDAF1B60F15B745C4855E583C303A57B7"><enum>(1)</enum><text>conduct quarterly stress tests; and</text> </paragraph>
<paragraph id="HBC21299B76544FD6B898688BF661972C"><enum>(2)</enum><text>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.</text> </paragraph></subsection>
<subsection id="HDBF054CC72904254BD3C0046CA7732D7"><enum>(b)</enum><text display-inline="yes-display-inline">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—</text>
<paragraph id="HD80ACC673D2240FABDB369073433DDC6"><enum>(1)</enum><text>conduct semiannual stress tests; and</text> </paragraph>
<paragraph id="H8F58AB2A415A47E58CFF53E9C876E2F0"><enum>(2)</enum><text>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.</text> </paragraph></subsection>
<subsection id="H6C026D06DECD4709B15E7C6DD58FB492"><enum>(c)</enum><text>A stress test under this section shall provide for testing under each of the following sets of conditions:</text>
<paragraph id="HA6116A4CAADA439CA0E2EB0C20E73F9B"><enum>(1)</enum><text>Baseline.</text> </paragraph>
<paragraph id="HB4EB6467136040FFA834B44AA871BB92"><enum>(2)</enum><text>Adverse.</text> </paragraph>
<paragraph id="H3D80022A4A3647B08490EAB19CC779FC"><enum>(3)</enum><text>Severely adverse.</text> </paragraph></subsection>
<subsection id="H7DFED5AF33FD407CB477B5923FF371F3"><enum>(d)</enum><text>The head of each primary financial regulatory agency, in coordination with the Board, shall issue regulations to define the term <quote>stress test</quote> for purposes of this section.</text> </subsection></section>
<section display-inline="no-display-inline" id="HB2392464C36D47149BE2B9E4D81FF610" section-type="subsequent-section"><enum>1116.</enum><header>Contingent Capital</header>
<subsection id="HFAB6B5C449234DE1843C7D0534D13184"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="HC51AB55FE74B4D219633B246BB636F91" display-inline="no-display-inline"><enum>(1)</enum><text display-inline="yes-display-inline">the Board determines that a specified financial company fails to meet prudential standards established by the Board; or</text></paragraph>
<paragraph id="H9B8D4030AB514B1382D8A663BB72F30B"><enum>(2)</enum><text>the Board has determined that threats to United States financial system stability make such a conversion necessary.</text> </paragraph></subsection>
<subsection id="H37AC1E16C3ED4AB0842D18A20EF2069F"><enum>(b)</enum><header>Factors to consider</header><text>In establishing regulations under this section, the Board shall consider—</text>
<paragraph id="HE368021E72FB4412865244ECC3E4C0B0"><enum>(1)</enum><text>an appropriate transition period for implementation of a conversion under this section;</text> </paragraph>
<paragraph id="HFA5BA82E1DD84DF0967917682BEC5BA0"><enum>(2)</enum><text>capital requirements applicable to the specified financial company and its subsidiaries; and</text> </paragraph>
<paragraph id="HE023F67BF16945708A2875A396058EFD"><enum>(3)</enum><text>any other factor that the Board deems appropriate.</text> </paragraph></subsection>
<subsection id="H25CC7138C0F0496C865A8B04941BBC5B"><enum>(c)</enum><header>Study required</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="HE304C1E2CED34CAFA77F6B45EA1F1A04"><enum>(1)</enum><text>an evaluation of the characteristics and amounts of convertible debt that should be required, including possible tranche structure;</text> </paragraph>
<paragraph id="HE7C779B75DEF46BCB3F419E630F3D4AE"><enum>(2)</enum><text>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;</text> </paragraph>
<paragraph id="H00909868E36D4C45832CC7D9AAB289A6"><enum>(3)</enum><text>an estimate of the costs of carrying contingent capital;</text> </paragraph>
<paragraph id="H9DEDD9655AC7430DA2DFD139CA1CF539"><enum>(4)</enum><text>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</text> </paragraph>
<paragraph id="HC05068D78CB6412B84FD101E036A4D44"><enum>(5)</enum><text>recommendations for implementing legislation.</text> </paragraph></subsection>
<subsection id="HFA10D41587534721B0EC108323B80EDD"><enum>(d)</enum><header>Report</header><text>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).</text> </subsection></section>
<section display-inline="no-display-inline" id="H84D7580CFD1E47AFB88A8C662093657D" section-type="subsequent-section"><enum>1117.</enum><header>Restriction on proprietary trading by designated financial holding companies</header>
<subsection id="H18612BC7F5774D7E8B9C580E70AC56CF"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="HF8D1EC6B4BFB4E3BB4B32C2BE62F9481"><enum>(b)</enum><header>Exceptions permitted</header><text>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—</text>
<paragraph id="HEFA4522247F84CCC88E5F1F571449A8B"><enum>(1)</enum><text>making a market in securities issued by such company;</text> </paragraph>
<paragraph id="HA8465CB054FD4D15ACAF8B113EC194DC"><enum>(2)</enum><text>hedging or managing risk;</text> </paragraph>
<paragraph id="HB165965DAE2146A3A2DD51ACF56729F0"><enum>(3)</enum><text>determining the market value of assets of such company; and</text> </paragraph>
<paragraph id="HC97B00A849A842118813A72666863906"><enum>(4)</enum><text>propriety trading for such other purposes allowed by the Board by rule.</text> </paragraph></subsection>
<subsection id="H04C23918BB6A4F2CAE2399EC7DDA6B8C"><enum>(c)</enum><header>Rulemaking authority</header><text>The primary financial regulatory agencies of banks and bank holding companies shall jointly issue regulations to carry out this section.</text> </subsection>
<subsection id="H681C75405E7C418F8E54C07EEB2B3BD8"><enum>(d)</enum><header>Effective date</header><text>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.</text> </subsection>
<subsection id="H9B69501492674EC4B7D12CF7E8B3348E"><enum>(e)</enum><header>Proprietary trading defined</header><text>For purposes of this section and with respect to a company, the term <quote>proprietary trading</quote> 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.</text> </subsection></section>
<section id="HD66C84D7AEDD4B958DF33CE6A730B1F8"><enum>1118.</enum><header>Rule of construction</header>
<subsection id="HEAF34701FB7D4090B401D93D3FEAAFE9"><enum>(a)</enum><header>Construction</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="HB758E223AD7F4BD296479DFF98D59892"><enum>(b)</enum><header>Agent responsibilities</header><text display-inline="yes-display-inline">For purposes of this subtitle, the term <quote>agent</quote> means the Board acting under section 1103(c) and coordinating with the Council in exercising authority under sections 1104 and 1107. </text> </subsection></section>
<section id="H3DD0738E8FE5440AA6327E2B5BE00C64"><enum>1119.</enum><header>Antitrust savings clause</header><text display-inline="no-display-inline">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 <quote>antitrust laws</quote> 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.</text></section></subtitle>
<subtitle id="HB86AB7B76A01404389D5685BC1F67DD3"><enum>C</enum><header>Improvements to supervision and regulation of Federal depository institutions </header>
<section id="HDDA08482BF5041B58B23924739528709"><enum>1201.</enum><header>Definitions</header><text display-inline="no-display-inline">For purposes of this subtitle, the following definitions shall apply:</text>
<paragraph id="H51971E267B81404495D8EE590118A5FC"><enum>(1)</enum><header>Board of governors</header><text>The term <term>Board of Governors</term> means the Board of Governors of the Federal Reserve System.</text> </paragraph>
<paragraph id="H186F13BF297F46868506201B5F36C4D4"><enum>(2)</enum><header>Corporation</header><text>The term <term>Corporation</term> means the Federal Deposit Insurance Corporation.</text> </paragraph>
<paragraph id="H52907609459642DD9F1D29D32F2B129E"><enum>(3)</enum><header>Office of the comptroller of the currency</header><text>The term <term>Office of the Comptroller of the Currency</term> means the office established by section 324 of the Revised Statutes (12 U.S.C. 1).</text> </paragraph>
<paragraph id="H57E3B851D3E54D67BDDDACFB719FE8FB"><enum>(4)</enum><header>Office of thrift supervision</header><text>The term <term>Office of Thrift Supervision</term> means the office established by section 3 of the Home Owners’ Loan Act (12 U.S.C. 1462a).</text> </paragraph>
<paragraph id="H5481851BFB7942189F47374D07305541"><enum>(5)</enum><header>Secretary</header><text>The term <term>Secretary</term> means the Secretary of the Treasury.</text> </paragraph>
<paragraph id="H9982E4A811194C108E9DBFA6AE7DA225"><enum>(6)</enum><header>Transfer date</header><text>The term <term>transfer date</term> has the meaning provided in section 1205.</text> </paragraph>
<paragraph id="H4370FA79E29F43318CF4F2B590374EDF"><enum>(7)</enum><header>Certain other terms</header><text>The terms <term>affiliate</term>, <term>bank holding company</term>, <term>control</term> (when used with respect to a depository institution), <quote>depository institution</quote>, <quote>Federal banking agency</quote>, <quote>Federal savings association</quote>, <quote>including</quote>, <quote>insured branch</quote>, <quote>insured depository institution</quote>, <quote>savings association</quote>, <quote>State savings association</quote>, and <quote>subsidiary</quote> have the same meanings as in section 3 of the Federal Deposit Insurance Act.</text> </paragraph></section>
<section id="H1EDC9ED526D042E8BC6BFE87AA278CDC"><enum>1202.</enum><header>Amendments to the Home Owners’ Loan Act relating to transfer of functions</header>
<subsection id="HFD77C45FFCDB41B296D9D94E9763089C"><enum>(a)</enum><header>Amendments to section 2</header><text>Section 2 of the Home Owners’ Loan Act (12 U.S.C. 1462) is amended—</text>
<paragraph id="H507CA174724D4C9297FC4F1C36D4113C"><enum>(1)</enum><text display-inline="yes-display-inline">by striking paragraph (1) and inserting the following new paragraph:</text>
<quoted-block id="H16F39E86E04F4213BBC0DA9528671F79" style="OLC">
<paragraph id="HD2A5EC07E6EA415A819F592D4843D2AB"><enum>(1)</enum><header>Board of governors</header><text>The term <term>Board of Governors</term> means the Board of Governors of the Federal Reserve System.</text> </paragraph><after-quoted-block>; and</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H5526354212C24317A327BA0A6265CFE5"><enum>(2)</enum><text display-inline="yes-display-inline">by striking paragraph (3) and inserting the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="HBFFC9CB3D2284E219B3927859F85369C" style="OLC">
<paragraph id="H3E2CBC59EBB4425DB61C807BB1EA5036"><enum>(3)</enum><text display-inline="yes-display-inline">[repealed]</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection id="H4FDD5C09DBC341CA8BAF787308233130"><enum>(b)</enum><header>Amendments to section 3</header><text>Section 3 of the Home Owners’ Loan Act (12 U.S.C. 1462a) is amended—</text>
<paragraph id="H7DB8835CB71E4AB9851441B11F5BE809"><enum>(1)</enum><text>by striking subsection (a) and inserting the following new subsection:</text>
<quoted-block id="HCC48A56025E74172A502D594DA5C9E68" style="OLC">
<subsection id="H6487EFA2D82E445E8A9A9DAE94F3D174"><enum>(a)</enum><header>Establishment of division of thrift supervision</header><text>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.</text> </subsection><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph>
<paragraph id="HC141B251B6E7478582BEFA4A9C6F7DA9"><enum>(2)</enum><text>in subsection (b)—</text>
<subparagraph id="HE39F085567EC4A94B2AE790BD4766A30"><enum>(A)</enum><text>by striking paragraph (1) and inserting the following new paragraph:</text>
<quoted-block id="H72CD37027D0D41278CF08C72BCECAEE3" style="OLC">
<paragraph id="HEDB848583D3F4F9A93404A6F9487F1A6"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph><after-quoted-block>;</after-quoted-block></quoted-block> </subparagraph>
<subparagraph id="H807F580C6E3F4849924F782BBA010E2E"><enum>(B)</enum><text>in paragraph (2), by striking <quote>Director</quote> and inserting <quote>Comptroller of the Currency</quote>; and</text> </subparagraph>
<subparagraph id="H4000F06511354BF1BC42E2FF8827FEBA"><enum>(C)</enum><text>by striking paragraphs (3) and (4);</text> </subparagraph></paragraph>
<paragraph id="H494F203B44F74BC591211654DDD6568E"><enum>(3)</enum><text>by striking subsections (c), (d), and (e) and inserting the following new subsection:</text>
<quoted-block id="H41715BB813F6451984E17265B67977DE" style="OLC">
<subsection id="H9B50F8F4DCE64DB58BBEBF612E127BB1"><enum>(c)</enum><header>Powers of the comptroller of the currency</header><text>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.</text> </subsection><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H966A988752144787BBC773F5BFEC79F8"><enum>(4)</enum><text>by redesignating subsections (f) and (i) as subsections (d) and (e), respectively;</text> </paragraph>
<paragraph id="HE81033A960544DE38DFAE24007C06C20"><enum>(5)</enum><text>in subsection (d) (as so redesignated), by striking <quote>Director</quote> each place such term appears and inserting <quote>Comptroller of the Currency</quote>;</text> </paragraph>
<paragraph id="H6E3BC86B4C184737992B5B1FA197404E"><enum>(6)</enum><text>by striking subsections (g), (h), and (j); and</text> </paragraph>
<paragraph id="H558CCE9463674F459D430FBB08B33F58"><enum>(7)</enum><text>in subsection (e) (as so redesignated), by striking <quote>compensation of the Director and other employees of the Office and all other expenses thereof</quote> and inserting <quote>expenses incurred by the Comptroller of the Currency in carrying out this Act</quote>.</text> </paragraph></subsection>
<subsection id="HAA9FB9729DF940E2A06F5EEC65D55A46"><enum>(c)</enum><header>Amendments to section 4</header><text>Section 4 of the Home Owners’ Loan Act (12 U.S.C. 1463) is amended by striking <quote>Director</quote> each time it appears and inserting <quote>Comptroller of the Currency</quote>.</text> </subsection>
<subsection id="H292A6A5A70B944A9A6C23335F5C826B5"><enum>(d)</enum><header>Amendments to section 5</header>
<paragraph id="H23E5121C2DA24ACC9413936EE50AC165"><enum>(1)</enum><header>Universal</header><text>Section 5 of the Home Owners’ Loan Act (12 U.S.C. 1464) is amended—</text>
<subparagraph id="H1764BA3E0DF84A4383DE28411AC8AA87"><enum>(A)</enum><text>by striking <quote>Director</quote> and <quote>Director of the Office of Thrift Supervision</quote> each place such terms appear and inserting <quote>Comptroller of the Currency</quote>; and</text> </subparagraph>
<subparagraph id="H515DEDD2E52348CAA30A6ED2D744C146"><enum>(B)</enum><text>by striking <quote>Director’s</quote> each place such term appears and inserting <quote>Comptroller of the Currency’s</quote>.</text> </subparagraph></paragraph>
<paragraph id="HE446D0FB249B4B1B8A7966A4D2E4CB01"><enum>(2)</enum><header>Specific provisions</header>
<subparagraph id="HCE6F1E1AD9DF4A89994F880F81C163E0"><enum>(A)</enum><text>Section 5(d)(2)(E) of the Home Owners’ Loan Act is amended by striking <quote>or the Resolution Trust Corporation, as appropriate,</quote> each place such term appears.</text> </subparagraph>
<subparagraph id="HDD565F40181847DF9C58635828A03815"><enum>(B)</enum><text>Section 5(d)(3)(B) of the Home Owners’ Loan Act is amended by striking <quote>or the Resolution Trust Corporation</quote>.</text> </subparagraph></paragraph></subsection>
<subsection id="HBA11E349A410460AA26FF5177B75B583"><enum>(e)</enum><header>Amendments to sections 8 and 9</header><text>Sections 8 and 9 of the Home Owners’ Loan Act (12 U.S.C. 1466a and 1467) are each amended by striking <quote>Director</quote> each place such term appears and inserting <quote>Comptroller of the Currency</quote>.</text> </subsection>
<subsection id="HD4A490CDFB4A434190AC8954EAD97FA3"><enum>(f)</enum><header>Technical and conforming amendments</header>
<paragraph id="HA523D04B26A5483988C49CFF14D47C62"><enum>(1)</enum><header>Section 3</header><text display-inline="yes-display-inline">The heading for section 3 of the Home Owners’ Loan Act is amended by striking <quote><header-in-text level="section" style="OLC">Director of the Office of Thrift Supervision</header-in-text></quote> and inserting <quote><header-in-text level="section" style="OLC">Division of Thrift Supervision</header-in-text></quote>.</text> </paragraph>
<paragraph id="H5A670C6A496D49538CFE830B5B657F13"><enum>(2)</enum><header>Section 5</header><text>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 <quote>OR RTC</quote>.</text> </paragraph></subsection>
<subsection id="HB63684A06E6E4890B1A454BF105ABD86"><enum>(g)</enum><header>Clerical amendment</header><text>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:</text>
<quoted-block display-inline="no-display-inline" id="HDE57B10175D44819BCCD5496E5A66420" style="OLC">
<toc regeneration="no-regeneration">
<toc-entry level="section">Sec. 3. Division of Thrift Supervision.</toc-entry> </toc> <after-quoted-block>.</after-quoted-block></quoted-block> </subsection></section>
<section id="H5552589DE68247EBAF3AF40776E59031"><enum>1203.</enum><header>Amendments to the revised statutes</header>
<subsection id="HD06945F04B164BB7863AD324AD39ED40"><enum>(a)</enum><header>Amendment to section 324</header><text>Section 324 of the Revised Statutes of the United States (12 U.S.C. 1) is amended to read as follows:</text>
<quoted-block id="HC202A2A3D11B4530B5CAA4AA63E0B6C8" style="OLC">
<section id="H0FEB2020BEAE411BB09F1E91BBA8732B"><enum>324.</enum><header>Comptroller of the Currency</header><text display-inline="no-display-inline">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.</text> </section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H0D445775E69848E0AAE729BE6CF8E236"><enum>(b)</enum><header>Amendments to section 327</header><text>Section 327 of the Revised Statutes of the United States (12 U.S.C. 4) is amended to read as follows:</text>
<quoted-block id="H890EEF1EDCAC45D28FEA0961D8E0C3D2" style="OLC">
<section id="H78E9BAD86F9641C2874502172C054311"><enum>327.</enum><header>Deputy comptrollers</header>
<subsection id="HB12058A642EF40819F5A4FB6E425A103"><enum>(a)</enum><header>Appointment</header><text>The Secretary of the Treasury shall appoint no more than 5 Deputy Comptrollers of the Currency—</text>
<paragraph id="H26D3A95CA9B2430EA13A7DA532AE8AE2"><enum>(1)</enum><text display-inline="yes-display-inline">1 of whom shall be designated the Senior Deputy Comptroller for National Banks, who shall oversee the regulation and supervision of national banks; and</text> </paragraph>
<paragraph id="H31619C3F2023425580D4C2FCCE099335"><enum>(2)</enum><text display-inline="yes-display-inline">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.</text> </paragraph></subsection>
<subsection id="H5C65A484FE0848A88A09FEE4D9B7D504"><enum>(b)</enum><header>Pay</header><text>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.</text> </subsection>
<subsection id="HE3984BEB02D44A0182399D1B9D14B096"><enum>(c)</enum><header>Oath of office; Duties</header><text>Each Deputy Comptroller shall take the oath of office and shall perform such duties as the Comptroller of the Currency shall direct.</text> </subsection>
<subsection id="H171E4B51F6614F7EB95C71BB970AC515"><enum>(d)</enum><header>Service as acting comptroller</header><text>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.</text> </subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="HE620B6BB48FF47098B81AEED8BB8A526"><enum>(c)</enum><header>Amendment to section 329</header><text>Section 329 of the Revised Statutes of the United States (12 U.S.C. 11) is amended by inserting <quote>or any Federal savings association</quote> before the period at the end.</text> </subsection>
<subsection id="H37B787DB0F9247F594D66B4035A8DD11"><enum>(d)</enum><header>Amendment to section 5240</header><text>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 <quote>Secretary of the Treasury;</quote> and all that follows through the end of the sentence, and inserting <quote>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.</quote>.</text> </subsection>
<subsection id="HDEC82855C37345118BC3370807CA411D"><enum>(e)</enum><header>Amendment to section 5240</header><text>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 <quote>pursuant to chapter 71 of title 5, United States Code,</quote> after <quote>shall,</quote>.</text></subsection>
<subsection id="H824E8AEA2C904CB592FF1BD7CFC3B4B9"><enum>(f)</enum><header>Effective date</header><text>Subsection (b) shall take effect on the date of the enactment of this Act.</text> </subsection></section>
<section id="H6BF351D951E54EB5A9E70E5010BCD5E9"><enum>1204.</enum><header>Power and duties transferred</header>
<subsection id="H9700EA717AB94C31BF8E6206A427F073"><enum>(a)</enum><header>Director of the office of thrift supervision</header>
<paragraph id="H82E9AEAE58B24847BBC9A025F0CC9650"><enum>(1)</enum><header>Transfer of functions</header><text>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.</text> </paragraph>
<paragraph id="H504B499376DA4DD3BEA8278D71CBDC36"><enum>(2)</enum><header>Comptroller’s authority</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H60AF5FEAEFDE47449BE6AE3D3C8D0054"><enum>(3)</enum><header>Functions relating to supervision of state savings associations</header>
<subparagraph id="H3334862AD14748058C8EEDD863779B92"><enum>(A)</enum><header>Transfer of functions</header><text>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.</text> </subparagraph>
<subparagraph id="H94077F537A0C4A8E8390210C9E414D88"><enum>(B)</enum><header>Corporation’s authority</header><text display-inline="yes-display-inline">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.</text></subparagraph></paragraph>
<paragraph id="HB57597848F6C4814B5B5F7252E7B0E48"><enum>(4)</enum><header>Functions relating to supervision of savings and loan holding companies</header><text></text>
<subparagraph id="H34235B75CC49490593C61D5AE0617F52"><enum>(A)</enum><header>Transfer of functions</header><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="H0D305E7E27A84980AAFC6C7DF8FEAE81"><enum>(B)</enum><header>Board authority</header><text>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.</text></subparagraph></paragraph></subsection>
<subsection id="HEEA958C657F54D5F939168BEC727783F"><enum>(b)</enum><header>Appropriate federal banking agency</header><text>Section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813) is amended in subsection (q)—</text>
<paragraph id="H07701D4B16F24DEDA7E5EE46D72AE926"><enum>(1)</enum><text>by amending paragraph (1) to read as follows:</text>
<quoted-block id="H9A83FDEBA48043FF8982D11F03E144CE" style="OLC">
<paragraph id="H53FE6F4B997C4D96B7699CEDBEF0BE19"><enum>(1)</enum><text>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;</text> </paragraph><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph>
<paragraph id="HE8F8F2B47A144CE2899B864D34FB4D5C" display-inline="no-display-inline"><enum>(2)</enum><text display-inline="yes-display-inline">in paragraph (2)(E), by striking <quote>and</quote> at the end; </text></paragraph>
<paragraph id="H6E102F5CDFAD4CB0B15A7B710A032F65"><enum>(3)</enum><text>in paragraph (2)(F), by adding <quote>and</quote> at the end after the semicolon;</text> </paragraph>
<paragraph id="H689B9E5D52524A5CB52DBD37C50926A6" display-inline="no-display-inline"><enum>(4)</enum><text>after paragraph (2)(F), by inserting the following new subparagraph:</text>
<quoted-block style="OLC" display-inline="no-display-inline" id="HE3D496D778E44486AE94A2CF87B30F84">
<subparagraph id="H0400D6C5C7D84389A5F64AC3EC6A1EDC"><enum>(G)</enum><text display-inline="yes-display-inline">any savings and loan holding company and any subsidiary of a savings and loan holding company (other than a savings association); and</text></subparagraph><after-quoted-block>;</after-quoted-block></quoted-block></paragraph>
<paragraph id="H6142DFB5C501428EB6158FBF8C890E39"><enum>(5)</enum><text>by amending paragraph (3) to read as follows:</text>
<quoted-block id="H765290B078A14F61837452FA79001979" style="OLC">
<paragraph id="H532E50CEB5B24889908AF847CA4B9E8F"><enum>(3)</enum><text>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.</text> </paragraph><after-quoted-block>; and</after-quoted-block></quoted-block> </paragraph>
<paragraph id="HCA7369728AA340F0BBA560593DE6D813"><enum>(6)</enum><text>by striking paragraph (4).</text> </paragraph></subsection>
<subsection id="H6F23E0755EE54112BA04CEDE5A9FCF55"><enum>(c)</enum><header>Transfer of consumer financial protection functions</header><text>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.</text> </subsection>
<subsection id="H9491A6D588134F939CD9E454EE0125AF"><enum>(d)</enum><header>Effective date</header><text>Subsections (a) and (b) shall become effective on the transfer date.</text> </subsection></section>
<section id="H4544EB8C6C584DF9B22E082593B2EB2E"><enum>1205.</enum><header>Transfer date</header>
<subsection id="H5F9613242DC944E88AFC19D5E8DF9114"><enum>(a)</enum><header>In general</header><text>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.</text> </subsection>
<subsection id="H120A9D5D05764FA4B0EE23BB1BDADD0A"><enum>(b)</enum><header>Extension permitted</header>
<paragraph id="HFAC81F0CD4674BB290A1745709BBF4DE"><enum>(1)</enum><header>Notice required</header><text>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—</text>
<subparagraph id="HA3C36EDC8C9D4137849CEC8624FCDB9B"><enum>(A)</enum><text>transmits to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives—</text>
<clause id="H7B0233245DBC43CBB8349F5776311A8A"><enum>(i)</enum><text>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;</text> </clause>
<clause id="HEFCC2F80BC9D4F28AF3CD6C1D08F8E7C"><enum>(ii)</enum><text>an explanation of why an extension is necessary for the orderly implementation of this subtitle; and</text> </clause>
<clause id="H95D655CEB3144D83A023C411F90836B8"><enum>(iii)</enum><text>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</text> </clause></subparagraph>
<subparagraph id="H030ECE70EE4F4ED68C10AB41FAFC0A7D"><enum>(B)</enum><text>publishes notice of that designated later date in the Federal Register.</text> </subparagraph></paragraph>
<paragraph id="HC8892784E66B42D185B7DA2E284C42E9"><enum>(2)</enum><header>Extension limited</header><text>In no case shall any date designated under paragraph (1) be later than 18 months after the date of enactment of this subtitle.</text> </paragraph>
<paragraph id="HC679D8DB52274B8EA3D2D1A46FF9834F"><enum>(3)</enum><header>Effect on references to <quote>transfer date</quote></header><text>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 <quote>transfer date</quote> shall mean the date designated by the Secretary.</text> </paragraph></subsection></section>
<section display-inline="no-display-inline" id="H4DFA5C0AF7944A1DADE2F460AC6AD9E9" section-type="subsequent-section"><enum>1206.</enum><header>Expiration of term of comptroller</header>
<subsection id="H2FA6B00066C84E399ECD19A7546925C3"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="HE529D47742444D52A59A84614D6CA18A"><enum>(b)</enum><header>Acting comptroller</header><text display-inline="yes-display-inline">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.</text> </subsection></section>
<section id="H9F0FC717B8714EEC80BA7C52EF8566A0"><enum>1207.</enum><header>Office of Thrift Supervision abolished</header><text display-inline="no-display-inline">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.</text> </section>
<section id="HF1B9E20D43DF41FBB697D30169798E5B"><enum>1208.</enum><header>Savings provisions</header>
<subsection id="H3A81034FDC6847ED92A19DC9B81C4783"><enum>(a)</enum><header>Office of thrift supervision</header>
<paragraph id="HE41C003120484BE0A4F68CC7060A1EE2"><enum>(1)</enum><header>Existing rights, duties, and obligations not affected</header><text>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.</text> </paragraph>
<paragraph id="HB1533927F5E147FDB3F78F54FA58251F"><enum>(2)</enum><header>Continuation of suits</header><text>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—</text>
<subparagraph id="H70265EB98DC1442AAE56087F2F862F41"><enum>(A)</enum><text>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</text> </subparagraph>
<subparagraph id="HF289532EEBCB43ABB2575D30B685392A"><enum>(B)</enum><text>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.</text> </subparagraph></paragraph></subsection>
<subsection id="HD8F855AF61A54C95B7F689DFEF7F2C4D"><enum>(b)</enum><header>Continuation of existing OTS orders, resolutions, determinations, agreements, regulations, etc</header><text>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—</text>
<paragraph id="H243AE7E3561945E0B983934C18967E5A"><enum>(1)</enum><text>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</text> </paragraph>
<paragraph id="H78B218383A184B53850037F900DB8F47"><enum>(2)</enum><text>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.</text> </paragraph></subsection>
<subsection display-inline="no-display-inline" id="HAFE28DEF12074103A7FF6BAEDFCAD504"><enum>(c)</enum><header>Continuation of existing OTS enforcement actions</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="HF8D701874FF247F6ABADC73B701AC248"><enum>(1)</enum><text>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</text> </paragraph>
<paragraph id="HB60A7990803D44FEB2A2D0E1516506F5"><enum>(2)</enum><text>the action had been taken by the Board, unless otherwise terminated or modified by the Board.</text> </paragraph></subsection>
<subsection id="HF9434ACDA1F0494589FB854EC3904675"><enum>(d)</enum><header>Identification of regulations continued</header>
<paragraph id="H70C7358CC4BF40F7865917693A7E7B9E"><enum>(1)</enum><header>By office of the comptroller of the currency</header><text>Not later than the transfer date, the Comptroller of the Currency shall—</text>
<subparagraph id="H2246A874A69041C595097D735F517910"><enum>(A)</enum><text>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</text> </subparagraph>
<subparagraph id="H0B6B0415CA854D79A9AA5EB1071264F4"><enum>(B)</enum><text>publish a list of such regulations in the Federal Register.</text> </subparagraph></paragraph>
<paragraph id="H4839704C1005478B97CB04F9FC7A8ACF"><enum>(2)</enum><header>By the corporation</header><text>Not later than the transfer date, the Corporation shall—</text>
<subparagraph id="H3D655DA6ACDD40D7A6565FD62B7AB564"><enum>(A)</enum><text>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</text> </subparagraph>
<subparagraph id="H1DE66A49EFD541249D9A78154AB80371"><enum>(B)</enum><text>publish a list of such regulations in the Federal Register.</text> </subparagraph></paragraph></subsection>
<subsection id="HB2C0BF7B75D3480F9238C82E7325DEFF"><enum>(e)</enum><header>Status of regulations proposed or not yet effective</header>
<paragraph id="H744D1EF0B9E04501A46C89935954D0CE"><enum>(1)</enum><header>Proposed regulations</header><text>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.</text> </paragraph>
<paragraph id="HC726EE477B844CC3B2F0250E2C3BB522"><enum>(2)</enum><header>Regulations not yet effective</header><text>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.</text> </paragraph></subsection></section>
<section id="HD1828555375A43C89638263524FA041B"><enum>1209.</enum><header>Regulations and orders</header><text display-inline="no-display-inline">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.</text> </section>
<section id="HD740C646ABDB4949A1BA75F188D29EA9"><enum>1210.</enum><header>Coordination of transition activities</header><text display-inline="no-display-inline">Before the transfer date, the Comptroller of the Currency shall—</text>
<paragraph id="HA35A5EAAA6824530BF245DF51C5CCFE6"><enum>(1)</enum><text>consult and cooperate with the Office of Thrift Supervision to facilitate the orderly transfer of functions to the Comptroller of the Currency;</text> </paragraph>
<paragraph id="H6EB8764925A44461A71441DF19452A05"><enum>(2)</enum><text>determine and redetermine, from time to time—</text>
<subparagraph id="H24B12A0C3E3A4A6199AD6A58C5E990EF"><enum>(A)</enum><text>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;</text> </subparagraph>
<subparagraph id="HFB4987689DD74A278F8A664C12D3ACBC"><enum>(B)</enum><text>what personnel are appropriate to facilitate the orderly transfer of functions by this title; and</text> </subparagraph>
<subparagraph id="HEB4F2A1F8B6643D9B6CE66E6D3F45BEA"><enum>(C)</enum><text>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</text> </subparagraph></paragraph>
<paragraph id="H1A4CEFF6835F448EADF6CE8EC85F7FCA"><enum>(3)</enum><text>take such actions as may be necessary to provide for the orderly implementation of this title.</text> </paragraph></section>
<section id="H4E28F02D1C5D4523B8147A54521044AD"><enum>1211.</enum><header>Interim responsibilities of office of the comptroller of the currency and office of thrift supervision</header>
<subsection id="HA5075070BD034F84BAA394AE7F036B72"><enum>(a)</enum><header>In general</header><text>When requested by the Comptroller of the Currency to do so before the transfer date, the Office of Thrift Supervision shall—</text>
<paragraph id="H20CA2FFAB2534F0BBF310F1098D8BAA5"><enum>(1)</enum><text>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);</text> </paragraph>
<paragraph id="H1F81A82846414B52BE8944EF7F643A1E"><enum>(2)</enum><text>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</text> </paragraph>
<paragraph id="H63E30152DFD042959A7CD0887D674DE0"><enum>(3)</enum><text>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).</text> </paragraph></subsection>
<subsection id="H226D047C4F34469196DCE2B213284000"><enum>(b)</enum><header>Notice required</header><text>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).</text> </subsection></section>
<section id="H29F4269F9BE34D24BE467DDE2CC4640A"><enum>1212.</enum><header>Employees transferred</header>
<subsection id="H3BD2662BD7FF48F3B9ECE6E0B78C53C3"><enum>(a)</enum><header>In general</header>
<paragraph id="HB92BDCBDAA3D4F1D8FB298CBDC28232E"><enum>(1)</enum><header>OTS employees</header>
<subparagraph id="HD9D11EA29ABA488BA49AA0570EAA9D67"><enum>(A)</enum><header>In general</header><text>All employees of the Office of Thrift Supervision shall be transferred to either the Comptroller of the Currency or the Corporation for employment.</text> </subparagraph>
<subparagraph id="H0C763FDF75884D8C95E5F4B65CFF941A"><enum>(B)</enum><header>Allocating employees for transfer to receiving agencies</header><text>The Director of the Office of Thrift Supervision, the Comptroller of the Currency, and the Chairperson of the Corporation shall—</text>
<clause id="H15A2A7D2BF12480B9A9D2C1122EE791A"><enum>(i)</enum><text>jointly determine the number of employees of the Office of Thrift Supervision necessary to perform or support—</text>
<subclause id="H5CD5EF67AFC747C5B3DFC0E6BA5B7917"><enum>(I)</enum><text>the functions of the Office of Thrift Supervision that are transferred to the Office of the Comptroller of the Currency by this title; and</text> </subclause>
<subclause id="H9F9D1A37EF4F493BB2127F8D17627A95"><enum>(II)</enum><text>the functions of the Office of Thrift Supervision that are transferred to the Corporation by this title;</text> </subclause></clause>
<clause id="HED90DCF34B85499B9DB522ADAA1CFF9A"><enum>(ii)</enum><text>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.</text> </clause></subparagraph></paragraph>
<paragraph id="HE9C07CBBFDF040DAA3CB0D77FF6BFFEA"><enum>(2)</enum><header>Transfer of employees performing consumer financial protection functions</header><text>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.</text> </paragraph>
<paragraph id="H523F9D9AA69A4DF6916D5F1772FAD601"><enum>(3)</enum><header>Appointment authority for excepted service transferred</header>
<subparagraph id="H92D66F4690FD4A419D641FD4E561E32B"><enum>(A)</enum><header>In general</header><text>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).</text> </subparagraph>
<subparagraph id="H8C9F36D157D7428FB433E55717A4A7B6"><enum>(B)</enum><header>Declining transfers allowed</header><text>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.</text> </subparagraph></paragraph></subsection>
<subsection id="HB0F4999B81834A25A22E420473F3CE04"><enum>(b)</enum><header>Timing of transfers and position assignments</header><text>Each employee to be transferred under this section shall—</text>
<paragraph id="H546A7CB4061B4DAFAAE18CBF89C17D3C"><enum>(1)</enum><text>be transferred not later than 90 days after the transfer date; and</text> </paragraph>
<paragraph id="HB49E9EACC0FF4EE0A07F7E25E195DF89"><enum>(2)</enum><text>receive notice of his or her position assignment not later than 120 days after the effective date of his or her transfer.</text> </paragraph></subsection>
<subsection id="HB65C18701AED49DD8C5CF4247A0CB73F"><enum>(c)</enum><header>Transfer of function</header>
<paragraph id="H3525C65C87204E83B0644EA487F9CFE5"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph>
<paragraph id="H26DC35594752493B9C2AC6C2EA878184"><enum>(2)</enum><header>Priority of this subtitle</header><text>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.</text> </paragraph></subsection>
<subsection id="H12948D29C7DC459F8F5FD0D0D8695446"><enum>(d)</enum><header>Employees’ status and eligibility</header><text>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.</text> </subsection>
<subsection id="HE19F84BF221C4E5E9740395564546B4A"><enum>(e)</enum><header>Equal status and tenure positions</header><text>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.</text> </subsection>
<subsection id="HB9D7BD1373A8447AB73EFD3B418C4F3F"><enum>(f)</enum><header>No additional certification requirements</header><text>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.</text> </subsection>
<subsection id="H3CFAC72938FE4A1BBC4880EB96D9F73E"><enum>(g)</enum><header>Personnel actions limited</header>
<paragraph commented="no" id="HEEB6F4AF9B21443FA59B84C70C5D4EB1"><enum>(1)</enum><header>3-year protection</header>
<subparagraph commented="no" id="H158AAD55C6B0452E8FA4D642F2CAED3F"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph commented="no" id="H59BB970BED154C009DFE70EE1053657E"><enum>(B)</enum><header>Affected employees</header><text>For purposes of this paragraph, the term <quote>affected employee</quote> means—</text>
<clause commented="no" id="H00CF64CC7C124754B3E38FE8D7059ED9"><enum>(i)</enum><text>an employee transferred from the Office of Thrift Supervision holding a permanent position on the day before the transfer date; and</text> </clause>
<clause commented="no" id="H8DCDA61570094ADBA679E1A754A2E3BC"><enum>(ii)</enum><text>an employee of the Office of the Comptroller of the Currency holding a permanent position on the day before the transfer date.</text> </clause> </subparagraph></paragraph>
<paragraph id="H778B121535D44A2B9EDD18E4759EFE61"><enum>(2)</enum><header>Exceptions</header><text>Paragraph (1) does not limit the right of the Office of the Comptroller of the Currency or the Corporation to—</text>
<subparagraph id="H90D0E349FC26462389AE5A2DCC751EBA"><enum>(A)</enum><text>separate an employee for cause or for unacceptable performance; or</text> </subparagraph>
<subparagraph id="H9D1BEF06FFC946CB967CEC7BEF8DFD9B"><enum>(B)</enum><text>terminate an appointment to a position excepted from the competitive service because of its confidential policy-making, policy-determining, or policy-advocating character.</text> </subparagraph></paragraph></subsection>
<subsection id="H3E8AF130D6EE44E381A119BFB81DA222"><enum>(h)</enum><header>Pay</header>
<paragraph id="H2544CA88D8FB492EA2A103CAB3075593"><enum>(1)</enum><header>1-year protection</header><text>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.</text> </paragraph>
<paragraph id="H3CF8DC7864EB49CA9F2D40195FA31092"><enum>(2)</enum><header>Exceptions</header><text>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—</text>
<subparagraph id="H9E0B288167E64BEEB8EA0608EB037D0A"><enum>(A)</enum><text>for cause;</text> </subparagraph>
<subparagraph id="H6E064203A5CB41E29194BEBB9919C505"><enum>(B)</enum><text>for unacceptable performance; or</text> </subparagraph>
<subparagraph id="HF0793C68791B41B2B3C7DA3A95363401"><enum>(C)</enum><text>with the employee’s consent.</text> </subparagraph></paragraph>
<paragraph id="H90CA8CD2A4224CA98480AE3652FE7D5A"><enum>(3)</enum><header>Protection only while employed</header><text>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.</text> </paragraph>
<paragraph id="H4F39754577964AE4BA0ED00EC42378C8"><enum>(4)</enum><header>Pay increases permitted</header><text>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.</text> </paragraph></subsection>
<subsection id="HF6AEC03A229D4E3BB152B92C544FF366"><enum>(i)</enum><header>Benefits</header>
<paragraph id="H408AD7EC0A08457AB0A472152F301824"><enum>(1)</enum><header>Retirement benefits for transferred employees</header>
<subparagraph id="HAC24A93CA36248A7AF4A89F7CAD60F38"><enum>(A)</enum><header>In general</header>
<clause id="H26C99C70F3CE4732A70B13119A05780F"><enum>(i)</enum><header>Continuation of existing retirement plan</header><text display-inline="yes-display-inline">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.</text> </clause>
<clause id="HEA6B012A5F26422D859DEE28DBBFEE4B"><enum>(ii)</enum><header>Employer’s contribution</header><text>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.</text> </clause></subparagraph>
<subparagraph id="H41C5681E7B5544198ABC41CFD5730204"><enum>(B)</enum><header>Definition</header><text>For purposes of this paragraph, the term <term>existing retirement plan</term> 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.</text> </subparagraph></paragraph>
<paragraph id="HA83AA85E81DD459D889C3ED5A0A23CD7"><enum>(2)</enum><header>Benefits other than retirement benefits</header>
<subparagraph id="H2C3C8DD408FB4FE68612E9EF1D0D9FA7"><enum>(A)</enum><header>During 1st year</header>
<clause id="HD25EBF0D872746B2B79F7C0D8C761549"><enum>(i)</enum><header>Existing plans continue</header><text>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.</text> </clause>
<clause id="H851500F9EFD54D64AB7B76F4B9E3F962"><enum>(ii)</enum><header>Employer’s contribution</header><text>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.</text> </clause></subparagraph>
<subparagraph id="H16B1858F29BC4593A38C20037AABE2EA"><enum>(B)</enum><header>Dental, vision, or life insurance after 1st year</header><text>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—</text>
<clause id="H6FC561C6DF3141C19DC99718292E2DF2"><enum>(i)</enum><text>the enhanced dental benefits program established by chapter 89A of title 5, United States Code;</text> </clause>
<clause id="HB61701AA74554DB99EDC956962DE1CFF"><enum>(ii)</enum><text>the enhanced vision benefits established by chapter 89B of title 5, United States Code; and</text> </clause>
<clause id="H87F7F05991804575A5CE464B1E98496B"><enum>(iii)</enum><text>the Federal Employees Group Life Insurance Program established by chapter 87 of title 5, United States Code, without regard to any requirement of insurability.</text> </clause></subparagraph>
<subparagraph id="H5DCF8CB74D514AC5AEEB242E51CFD2F1"><enum>(C)</enum><header>Long term care insurance after 1st year</header><text>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).</text> </subparagraph>
<subparagraph id="H92DB912DDCB9442F9C4042C449459594"><enum>(D)</enum><header>Employee’s contribution</header>
<clause id="HBC6A39447A824CF097E2E4073CC003B0"><enum>(i)</enum><header>In general</header><text>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.</text> </clause>
<clause id="HF938EDEA0B574EBD9CC91A314D3CACEE"><enum>(ii)</enum><header>Cost differential</header><text>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.</text> </clause>
<clause id="HFAE8836F373B40E09AB34AA19651D5EE"><enum>(iii)</enum><header>Funds transfer</header><text>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).</text> </clause></subparagraph>
<subparagraph id="H23D057531E6F4D5290292CE49DBB72CA"><enum>(E)</enum><header>Special provisions to ensure continuation of life insurance benefits</header>
<clause id="H387AAAB50DE343E9910B946CF05B2D67"><enum>(i)</enum><header>In general</header><text>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.</text> </clause>
<clause id="HC3C6B116B5424C9B8DFBCED4DC737795"><enum>(ii)</enum><header>Employee’s contribution</header>
<subclause id="H7346E7177A67439F991F186397AB1C7E"><enum>(I)</enum><header>In general</header><text>Subject to subclause (II), an individual enrolled in a life insurance plan under this clause shall pay any employee contribution required by the plan.</text> </subclause>
<subclause id="HF28C7F344A4E437CB7EFD5B10D05F444"><enum>(II)</enum><header>Cost differential</header><text>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.</text> </subclause>
<subclause id="H6F2E0F15E3CB441F8069B07EE2D0DF7C"><enum>(III)</enum><header>Funds transfer</header><text>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).</text> </subclause>
<subclause id="H3344FF2D3E1249E9920965033AD0AF33"><enum>(IV)</enum><header>Credit for time enrolled in other plans</header><text>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.</text> </subclause></clause></subparagraph></paragraph></subsection>
<subsection id="H2639E81C7A0B4D95860394B561755BBA"><enum>(j)</enum><header>Equitable treatment</header><text>In administering the provisions of this section, the Office of the Comptroller of the Currency and the Corporation—</text>
<paragraph id="H045B6A41C1834D6DA23B853981ACBBC1"><enum>(1)</enum><text>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;</text> </paragraph>
<paragraph id="HF0BD8C10836D4FF19AC74B8F01A5E825"><enum>(2)</enum><text>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;</text> </paragraph>
<paragraph id="H07A488556F284698B1C332584675C75B"><enum>(3)</enum><text>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</text> </paragraph>
<paragraph id="HE6BBDDEC8E2C457BB199A17F87B55387"><enum>(4)</enum><text>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.</text> </paragraph></subsection></section>
<section id="HD483431D5A86427888137508A3014173"><enum>1213.</enum><header>Property transferred</header>
<subsection id="H42F2F526A96142B6AC6131E856EEB306"><enum>(a)</enum><header>In general</header><text>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).</text> </subsection>
<subsection id="H18F7BBF7DE154127BCD434FB9D2B16F9"><enum>(b)</enum><header>Contracts related to property transferred</header><text>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.</text> </subsection>
<subsection id="H66ADCFA3E5854FC9A5FBD43D538B8883"><enum>(c)</enum><header>Preservation of property</header><text>Property identified for transfer under this section shall not be altered, destroyed, or deleted before transfer under this section.</text> </subsection>
<subsection id="HE38114B754ED47BDB71EE41610163523"><enum>(d)</enum><header>Property defined</header><text>For purposes of this section, the term <term>property</term> 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).</text> </subsection></section>
<section id="HB0C6B8A7546849F58EB1AF71432021C6"><enum>1214.</enum><header>Funds transferred</header><text display-inline="no-display-inline">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.</text> </section>
<section id="H9E45429188BA46B78E953BCF3DF74403"><enum>1215.</enum><header>Disposition of affairs</header>
<subsection id="HA09E7AB1480D4DE5B64C5E5169E84012"><enum>(a)</enum><header>In general</header><text>During the 90-day period beginning on the transfer date, the Director of the Office of Thrift Supervision—</text>
<paragraph id="H08F04D31D0D34BB0A78F40AFC1E4990D"><enum>(1)</enum><text>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—</text>
<subparagraph id="HF35107021D49455C83498B935CC967FB"><enum>(A)</enum><text>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</text> </subparagraph>
<subparagraph id="HE0D9169EBCFC458690D5ECF97A31A6BB"><enum>(B)</enum><text>manage any property of the Office of Thrift Supervision until the property is transferred under section 1213; and</text> </subparagraph></paragraph>
<paragraph id="HA3BC54FA27354CC0A1B22A57E590F257"><enum>(2)</enum><text>may take any other action necessary to wind up the affairs of the Office of Thrift Supervision relating to the transferred functions.</text> </paragraph></subsection>
<subsection id="H40912BA4A25B4706B8B0F54DFB122A84"><enum>(b)</enum><header>Authority and status of director</header>
<paragraph id="H288C57D710AA4C8E988AF502513C3F91"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph>
<paragraph id="H4E40CB6555F247A4B3AAAE3475A27DC7"><enum>(2)</enum><header>Other provisions</header><text>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—</text>
<subparagraph id="HE9CCDD6A6A67474EB01C254E61A1A99E"><enum>(A)</enum><text>treated as an officer of the United States; and</text> </subparagraph>
<subparagraph id="H1D260EF56D8541B08F80F016F5FE8F1F"><enum>(B)</enum><text>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.</text> </subparagraph></paragraph></subsection></section>
<section id="H3730419520A64D1A98087BFE3ABFA0B3"><enum>1216.</enum><header>Continuation of services</header><text display-inline="no-display-inline">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—</text>
<paragraph id="H37EA3BF123D44E6DA7452B9C8AC64D37"><enum>(1)</enum><text>continue to provide those services, subject to reimbursement, until the transfer of those functions is complete; and</text> </paragraph>
<paragraph id="H059F5B6FF98840EE9FEC127CB9577A71"><enum>(2)</enum><text>consult with any such agency to coordinate and facilitate a prompt and orderly transition.</text> </paragraph></section>
<section display-inline="no-display-inline" id="H4E7035F8FC3345AC9BB7194B2EFCB7CE" section-type="subsequent-section"><enum>1217.</enum><header>Contracting and leasing authority</header><text display-inline="no-display-inline">In addition to any powers transferred to the Comptroller of the Currency by this subtitle, the Comptroller of the Currency may—</text>
<paragraph id="HC7B55623F9E04DBB998E6E445FA48E0D"><enum>(1)</enum><text>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</text> </paragraph>
<paragraph id="HC7085D8A8C2748AF821500D2F988B374"><enum>(2)</enum><text>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.</text> </paragraph></section>
<section id="H77072D0BD10544CA996429E3E6025F22"><enum>1218.</enum><header>Treatment of savings and loan holding companies</header><text display-inline="no-display-inline">Section 10 of the Home Owners’ Loan Act (12 U.S.C. 1467a) is amended as follows:</text>
<paragraph id="HE4505E3DF139489FBD7AC786E1EEDFEF"><enum>(1)</enum><text display-inline="yes-display-inline">In subsection (a)—</text>
<subparagraph id="H5D5875323FC044E8A7D649936BADC98C"><enum>(A)</enum><text>in paragraph (1)(A), by striking <quote>Director</quote> and inserting <quote>Board</quote>;</text></subparagraph>
<subparagraph id="HF05C45C3C9B04BF6B95C26B4BB5DDA9B"><enum>(B)</enum><text>in paragraph (1)(D), by striking clause (i) and inserting: “(i) In general.—.</text>
<quoted-block style="OLC" id="HB401E893A1544F18BB95E76D32DE7E06" display-inline="no-display-inline">
<clause id="H17E1C9DB3AC44A389058AE7131B1FF0F"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">Except as provided in clause (ii), the term <quote>savings and loan holding company</quote> 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—</text>
<subclause id="H6EC726653CB54C51A2EC92F42633710E"><enum>(I)</enum><text display-inline="yes-display-inline">a fraternal beneficiary society, as defined in section 501(c)(8) of the Internal Revenue Code of 1986; or</text></subclause>
<subclause id="H4F8702060C5441BB8ABD541044FFAF10"><enum>(II)</enum><text>a company that is, together with all of its affiliates on a consolidated basis, predominantly engaged in the business of insurance.</text></subclause></clause><after-quoted-block>;</after-quoted-block></quoted-block></subparagraph>
<subparagraph id="H7FC12D7C53E44F03AF6398869177250B"><enum>(C)</enum><text display-inline="yes-display-inline">in paragraph (1)(F), by striking <quote>Director</quote> and inserting <quote>Board</quote>;</text></subparagraph>
<subparagraph id="H564D83F3779D4B84ADFC24417E635FF2"><enum>(D)</enum><text>in paragraph (1), by inserting at the end the following new subparagraph:</text>
<quoted-block style="OLC" id="HF60EBFECC09D480D8B0A587044AC0674" display-inline="no-display-inline">
<subparagraph id="HA39686B7E6984C428E43D2B08F57BF70"><enum>(K)</enum><header>Board</header><text display-inline="yes-display-inline">The term <quote>Board</quote> means the Board of Governors of the Federal Reserve System. </text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph>
<subparagraph id="HB51D58E72C2941F1AA3D18E9AC1F9015"><enum>(E)</enum><text display-inline="yes-display-inline">in paragraph (2)(D), by striking <quote>Director</quote> and inserting <quote>Board</quote>;</text></subparagraph>
<subparagraph id="H53418DE4467A492888FF64E91615020B"><enum>(F)</enum><text display-inline="yes-display-inline">in paragraph (3)(A), by striking <quote>Director</quote> and inserting <quote>Board</quote>; and</text></subparagraph>
<subparagraph id="HFDD009F403E245BE87CE4128E1FF14CB"><enum>(G)</enum><text display-inline="yes-display-inline">in paragraph (4), by striking <quote>Director</quote> and inserting <quote>Board</quote>.</text></subparagraph></paragraph>
<paragraph id="H72959E135786471691B507618A5A7963"><enum>(2)</enum><text display-inline="yes-display-inline">In subsection (b), by striking <quote>Director</quote> each place it appears and inserting <quote>Board</quote>.</text></paragraph>
<paragraph id="H56828C70E60A496D9CBB2CE63CC28E88"><enum>(3)</enum><text display-inline="yes-display-inline">In subsection (c)—</text>
<subparagraph id="H6E16A36F23BE4A8EB1ADE48D836AA8D4"><enum>(A)</enum><text>in paragraph, (2)(F)(i)—</text>
<clause id="HD3813EAFEA354D579491A63ACB85F7AE"><enum>(i)</enum><text>by striking <quote>of Governors of the Federal Reserve System</quote>; and</text></clause>
<clause id="H2E981C6CAEBD4DB18BBDBE57E229F909"><enum>(ii)</enum><text>by striking <quote>Director</quote> and inserting <quote>Board</quote>;</text></clause></subparagraph>
<subparagraph id="HC273914D54F6435DAF4CDE689E06974D"><enum>(B)</enum><text display-inline="yes-display-inline">in paragraph (2)(G), by striking <quote>Director</quote> and inserting <quote>Board</quote>;</text></subparagraph>
<subparagraph id="H7092A9AEC9004A82A43D8FD57844DC87"><enum>(C)</enum><text display-inline="yes-display-inline">in paragraph (4)(A), by striking <quote>Director</quote> and inserting <quote>Board</quote>;</text></subparagraph>
<subparagraph id="HB6B81646D9F34BCD9034A849798E468F"><enum>(D)</enum><text>in paragraph (4)(B)—</text>
<clause id="HB3B1535601D4415AA881651B82316F93"><enum>(i)</enum><text>in the heading, by striking <quote>director</quote> and inserting <quote>Board</quote>; and</text></clause>
<clause id="H79EFFBB65613445E98503CFBE09B29C7"><enum>(ii)</enum><text>by striking <quote>the Director shall</quote> and inserting <quote>the Board shall</quote>;</text></clause></subparagraph>
<subparagraph id="HCF41251D28C74163B0790C8795AE6419"><enum>(E)</enum><text>in paragraph (4)(C)—</text>
<clause id="H56E0F3EA99714353B467F49F779A7002"><enum>(i)</enum><text display-inline="yes-display-inline">in the heading, by striking <quote>director</quote> and inserting <quote>Board</quote>; and</text></clause>
<clause id="H170956E1DA734B13BBCBBBB075CB5D4C"><enum>(ii)</enum><text>by striking <quote>the Director may</quote> and inserting <quote>the Board may</quote>;</text></clause></subparagraph>
<subparagraph id="H50D8224F007F4847914BB0E318D034E9"><enum>(F)</enum><text display-inline="yes-display-inline">in paragraph (5), by striking <quote>Director</quote> and inserting <quote>Board</quote>;</text></subparagraph>
<subparagraph id="HACD6FF58D60845EA84D83AD2F7391CE2"><enum>(G)</enum><text>in paragraph (6)(D)—</text>
<clause id="H158DDD7D10FC4511B4A4D28E264EC1BA"><enum>(i)</enum><text display-inline="yes-display-inline">in the heading, by striking <quote>director</quote> and inserting <quote>Board</quote>; and</text></clause>
<clause id="H1E7AC9CDF9964396805D9A0FCF3E6FD9"><enum>(ii)</enum><text>by striking <quote>Director</quote> each place it appears and inserting <quote>Board</quote>;</text></clause></subparagraph>
<subparagraph id="HA5C7B63C7F974A52AED609D1B7459210"><enum>(H)</enum><text>in paragraph (9)(A)(ii), by inserting <quote>, 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</quote> after <quote>1956</quote>; and</text></subparagraph>
<subparagraph id="H170DD95CAFBA4C108E895793F7AE01EB"><enum>(I)</enum><text>in paragraph (9)(E), by striking <quote>Director</quote> each place it appears and inserting <quote>Board</quote>.</text></subparagraph></paragraph>
<paragraph id="H04D9D880A70E4D29BB5E17D9629439E2"><enum>(4)</enum><text display-inline="yes-display-inline">In subsection (e)—</text>
<subparagraph id="H4F1F5CE443A7480E967D11658EB2BFA0"><enum>(A)</enum><text>in paragraph (1)(A)—</text>
<clause id="H6FD97C30B0E44762A458630DC97A1581"><enum>(i)</enum><text display-inline="yes-display-inline">in clause (i), by striking <quote>Director</quote> and inserting <quote>Board</quote>;</text></clause>
<clause id="H5F31616E99B6448B8EF87E17AF8B5BA2"><enum>(ii)</enum><text display-inline="yes-display-inline">in clause (ii), by striking <quote>Director</quote> and inserting <quote>Board</quote>;</text></clause>
<clause id="H17564CDB92314B9DAF8F7B8587EBFD0D"><enum>(iii)</enum><text>in clause (iii), by striking <quote>Director</quote> each place it appears and inserting <quote>Board</quote>; and</text></clause>
<clause id="H832AF3D9BF8A486786BA425C0B803CEA"><enum>(iv)</enum><text display-inline="yes-display-inline">in clause (iv), by striking <quote>Director</quote> each place it appears and inserting <quote>Board</quote>;</text></clause></subparagraph>
<subparagraph id="H261B6259F8284E61B935618917DCDB87"><enum>(B)</enum><text display-inline="yes-display-inline">in paragraph (1)(B), by striking <quote>Director</quote> each place it appears and inserting <quote>Board</quote>;</text></subparagraph>
<subparagraph id="H8D4FB90EA8054F0C83B5881C1A25A4BB"><enum>(C)</enum><text display-inline="yes-display-inline">in paragraph (2), by striking <quote>Director</quote> each place it appears and inserting <quote>Board</quote>;</text></subparagraph>
<subparagraph id="H952E2BFFD1FF4413B9C0E848CE9178E3"><enum>(D)</enum><text display-inline="yes-display-inline">in paragraph (3), by striking <quote>Director</quote> and inserting <quote>Board</quote>;</text></subparagraph>
<subparagraph id="H759830BFB8C04ED6A332491F6C420365"><enum>(E)</enum><text display-inline="yes-display-inline">in paragraph (4)(A), by striking <quote>Director</quote> and inserting <quote>Board</quote>; and</text></subparagraph>
<subparagraph id="H83045FDE06204BD884ED73E6BB8978B6"><enum>(F)</enum><text display-inline="yes-display-inline">in paragraph (5), by striking <quote>Director</quote> each place it appears and inserting <quote>Board</quote>.</text></subparagraph></paragraph>
<paragraph id="H12E4264C41DC4DC5809555E7AA4EFDF5"><enum>(5)</enum><text display-inline="yes-display-inline">In subsection (f), by striking <quote>Director</quote> each place it appears and inserting <quote>Board</quote>.</text></paragraph>
<paragraph id="H3507698CE5774E1D904038F44895E232"><enum>(6)</enum><text display-inline="yes-display-inline">In subsection (g), by striking <quote>Director</quote> each place it appears and inserting <quote>Board</quote>.</text></paragraph>
<paragraph id="H7850330D9B1E4856A28B6C032EBC6842"><enum>(7)</enum><text>In subsection (h)—</text>
<subparagraph id="HB6C43E2C158C40618BB6780806BD9354"><enum>(A)</enum><text display-inline="yes-display-inline">in paragraph (2), by striking <quote>Director</quote> and inserting <quote>Board</quote>; and</text></subparagraph>
<subparagraph id="H4213DD6354F5455F9E61B1C4CC39852F"><enum>(B)</enum><text display-inline="yes-display-inline">in paragraph (3), by striking <quote>Director</quote> and inserting <quote>Board</quote>.</text></subparagraph></paragraph>
<paragraph id="H0370413FD08549AA9380419338EF4FE8"><enum>(8)</enum><text>In subsection (i)—</text>
<subparagraph id="H749827E002394312B9DFA67FC5053C61"><enum>(A)</enum><text display-inline="yes-display-inline">in paragraph (1)(A), by striking <quote>Director</quote> and inserting <quote>Board</quote>;</text></subparagraph>
<subparagraph id="H0B10D3DE5A54461386CF40CE0F394B65"><enum>(B)</enum><text display-inline="yes-display-inline">in paragraph (2)(B), by striking <quote>Director</quote> and inserting <quote>Board</quote>;</text></subparagraph>
<subparagraph id="H93DE0044AF1B4C8CA911E3640AD82292"><enum>(C)</enum><text display-inline="yes-display-inline">in paragraph (2)(F), by striking <quote>Director</quote> and inserting <quote>Board</quote>;</text></subparagraph>
<subparagraph id="H3C48655BDAAB45B4A2826F34247AB97A"><enum>(D)</enum><text display-inline="yes-display-inline">in paragraph (3)(B), by striking <quote>Director</quote> and inserting <quote>Board</quote>;</text></subparagraph>
<subparagraph id="H92F36AB998CA4B23A6CEC74D863F27FF"><enum>(E)</enum><text display-inline="yes-display-inline">in paragraph (3)(F), by striking <quote>Director</quote> and inserting <quote>Board</quote>;</text></subparagraph>
<subparagraph id="H7957C25E02E24AAC9283D1A23965D070"><enum>(F)</enum><text display-inline="yes-display-inline">in paragraph (4), by striking <quote>Director</quote> and inserting <quote>Board</quote>; and</text></subparagraph>
<subparagraph id="HA3A8449B38714B2F8270C9CD4510728D"><enum>(G)</enum><text display-inline="yes-display-inline">in paragraph (5), by striking <quote>Director</quote> and inserting <quote>Board</quote>.</text></subparagraph></paragraph>
<paragraph id="H77443C84799045599D02CBC17BE13894"><enum>(9)</enum><text>In subsection (j), by striking <quote>Director</quote> each place it appears and inserting <quote>Board</quote>.</text></paragraph>
<paragraph id="H449D7F89FC984709B3286A4339DA562C"><enum>(10)</enum><text>In subsection (l)—</text>
<subparagraph id="HD740F2B1D7D344949109DA2CCD616E7A"><enum>(A)</enum><text>in paragraph (1), by striking <quote>Director</quote> and inserting <quote>Board, in consultation with the Comptroller of the Currency,</quote>; and</text></subparagraph>
<subparagraph id="H7ACEB3A804EB4F0FBF70A05F9A2C97F9"><enum>(B)</enum><text display-inline="yes-display-inline">in paragraph (2), by striking <quote>Director</quote> and inserting <quote>Board, in consultation with the Comptroller of the Currency,</quote>.</text></subparagraph></paragraph>
<paragraph id="H7B14EE3D4861491BB128231FA0C4BC8C"><enum>(11)</enum><text>In subsection (m)—</text>
<subparagraph id="H4A4A7B3CC6B64D30B3422118960F5674"><enum>(A)</enum><text>in paragraph (2), by striking <quote>Director</quote> and inserting <quote>Comptroller</quote>;</text> </subparagraph>
<subparagraph id="H40D66AEF45EC4A888A5FC01E62CE1711"><enum>(B)</enum><text>in paragraph (2), by striking <quote>Director may grant</quote> and inserting <quote>Comptroller of the Currency may grant</quote>;</text> </subparagraph>
<subparagraph id="H185D9B3121744439812032610B803500"><enum>(C)</enum><text>in paragraph (2), by striking <quote>the Director deems</quote> and inserting <quote>the Comptroller deems</quote>;</text> </subparagraph>
<subparagraph id="H1981D0B38D5B44B4B478FDD5C7861BF0"><enum>(D)</enum><text>in paragraph (2)(A), by striking <quote>Director</quote> and inserting <quote>Comptroller</quote>;</text> </subparagraph>
<subparagraph id="HD75D98FAC01748B9AEF63A22A5479BB2"><enum>(E)</enum><text>in paragraph (2)(B), by striking <quote>Director</quote> and inserting <quote>Comptroller</quote>;</text> </subparagraph>
<subparagraph id="HA1FB19E7AAA54609BA282532B21ADF23"><enum>(F)</enum><text>in paragraph (2)(B)(iii), by striking <quote>Director</quote> and inserting <quote>Comptroller</quote>;</text> </subparagraph>
<subparagraph display-inline="no-display-inline" id="H83099CF5D96D4681822211FACEED3BD8"><enum>(G)</enum><text display-inline="yes-display-inline">by striking subparagraph (A) of paragraph (3) and inserting the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="H0F3F6E47FA0143B6B844AD1201700864" style="OLC">
<subparagraph id="H2BBFD7A0937340569905FEC2043702BB"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">A savings association that fails to become or remain a qualified thrift lender shall—</text>
<clause id="HB262F412C2744987A9221D27BB0AFE7F"><enum>(i)</enum><text>immediately be subject to the restrictions in subparagraph (B); and</text> </clause>
<clause id="H776EA21E69114B2CB409357F1E47F2FA"><enum>(ii)</enum><text>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).</text> </clause></subparagraph><after-quoted-block>;</after-quoted-block></quoted-block> </subparagraph>
<subparagraph id="H4143863686F647CFBF03D85DA03210A5"><enum>(H)</enum><text display-inline="yes-display-inline">by striking subclause (III) of paragraph (3)(B)(i) and inserting the following new subclause:</text>
<quoted-block display-inline="no-display-inline" id="H391907AD858B4137ACA12C17985E3554" style="OLC">
<subclause id="H37E4E4B326FE492A8DF4C1E1180AA1FD"><enum>(III) </enum><header>Dividends</header><text display-inline="yes-display-inline">The savings association shall be prohibited from paying dividends except for such dividends—</text>
<item id="H58080BA6E64F44A79F9162A47D11BB65"><enum>(aa)</enum><text>as would be permissible for a national bank;</text> </item>
<item id="HB35D36FB1EAC40B2B4E06B9E93D5C647"><enum>(bb)</enum><text>that are necessary to meet obligations of a company that controls such savings association; and</text> </item>
<item id="H37E9A0AA601B437FAE8A52152EE8A7ED"><enum>(cc)</enum><text>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.</text> </item></subclause><after-quoted-block>;</after-quoted-block></quoted-block> </subparagraph>
<subparagraph id="H4A6FDF63CC4C48D88243C6715755C2D3"><enum>(I)</enum><text>by striking clause (ii) of paragraph (3)(B);</text> </subparagraph>
<subparagraph id="HB62A45F81E654BD1A953F1B976CD82A9"><enum>(J)</enum><text>by striking subparagraphs (C) and (D) of paragraph (3) and inserting the following new subparagraphs:</text>
<quoted-block display-inline="no-display-inline" id="H94C8988687794F1E91D6922D327F7C8E" style="OLC">
<subparagraph id="H4A188CFAC113428F90DC80E9A9554F64"><enum>(C)</enum><header>Regulatory authority</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="HD0B74E5BCF824E5D9F2C9A85D0A5C535"><enum>(D)</enum><header>Requalifications</header><text></text>
<clause id="HD098F24A67EB4A57AAC570E2451D1EEE"><enum>(i)</enum><text>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.</text> </clause>
<clause id="H9F9DC0C8267F4C7EB67F79726E7EF3DA"><enum>(ii)</enum><text>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.</text> </clause></subparagraph><after-quoted-block>;</after-quoted-block></quoted-block> </subparagraph>
<subparagraph id="H54CF9F7B52B344759FF528315FAE6903"><enum>(K)</enum><text>in paragraph (4)(D) by striking <quote>Director</quote> and inserting <quote>Comptroller</quote>;</text> </subparagraph>
<subparagraph id="H863E8AA0AFB94F849B73175A316A0B51"><enum>(L)</enum><text>in paragraph (4)(E) by striking <quote>Director</quote> and inserting <quote>Comptroller</quote>; and</text> </subparagraph>
<subparagraph id="H65E6A4DFC67042B3B58F9E67F9E93011"><enum>(M)</enum><text>in paragraph (7)(B) by striking <quote>Director</quote> and inserting <quote>Comptroller</quote>.</text> </subparagraph></paragraph>
<paragraph id="H4C5B0E447C3A4DBB963A13E31BBFF8B7"><enum>(12)</enum><text>In subsection (o)—</text>
<subparagraph id="HFFDA74C12C614312826952C7692655F1"><enum>(A)</enum><text>in paragraph (3) in the heading by striking <quote><header-in-text level="subparagraph" style="OLC">Director</header-in-text></quote> and inserting <header-in-text level="subparagraph" style="OLC"><quote><header-in-text level="subparagraph" style="OLC">Board</header-in-text></quote></header-in-text>;</text> </subparagraph>
<subparagraph id="H5AB1AC5F042B44E78B4B9DFE61B88A91"><enum>(B)</enum><text>in paragraph (3)(A) by striking <quote>Director</quote> and inserting <quote>Board</quote>;</text> </subparagraph>
<subparagraph id="H96BA3C0492F247D29714AB7BEF7C081A"><enum>(C)</enum><text>in paragraph (3)(B) by striking <quote>Director</quote> and inserting <quote>Board</quote>;</text> </subparagraph>
<subparagraph id="H302FCC918FB14F0FA00D569E7F55B4CB"><enum>(D)</enum><text>in paragraph (3)(C) by striking <quote>Director</quote> and inserting <quote>Board</quote>;</text> </subparagraph>
<subparagraph id="HF4D7A90CC2274FB694EBF57C18A7C7CF"><enum>(E)</enum><text>in paragraph (3)(D) by striking <quote>Director</quote> and inserting <quote>Comptroller</quote>;</text> </subparagraph>
<subparagraph display-inline="no-display-inline" id="HA45CF99670D44F4B9DEC1111CE76096A"><enum>(F)</enum><text display-inline="yes-display-inline">in paragraph (5)(E), by striking <quote>activities described in subsection (c)(2) or (c)(9)(A)(ii)</quote> and inserting <quote>activities otherwise permissible for the company pursuant to, and in accordance with, section 4 of the Bank Holding Company Act of 1956</quote>;</text> </subparagraph>
<subparagraph id="H33F5BB75099B40A2BE13C110D305259B"><enum>(G)</enum><text>in paragraph (7) by striking <quote>chartered by the Director</quote> and inserting <quote>chartered by the Comptroller</quote>; and</text> </subparagraph>
<subparagraph id="H7A15ACC94A4F42EF8063C3F57C17DD32"><enum>(H)</enum><text>in paragraph (7) by striking <quote>regulations as the Director may</quote> and inserting <quote>regulations as the Board may</quote>.</text> </subparagraph></paragraph>
<paragraph id="H15D8BC0F17D54A3F97B0D36FC80B2CD8" display-inline="no-display-inline"><enum>(13)</enum><text display-inline="yes-display-inline">In subsections (p), (q), (r), and (s), by striking <quote>Director</quote> each place it appears and inserting <quote>Board</quote>.</text></paragraph></section>
<section id="H34A99480CB2349BF941069A0092B0374"><enum>1219.</enum><header>Practices of certain mutual thrift holding companies preserved</header>
<subsection id="HD782B091DD1F428185A504F14630DF3C"><enum>(a)</enum><header>Treatment of dividends by certain mutual holding companies</header><text>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:</text>
<quoted-block id="H33407D4C3F4B4648A83D89504DE0E90A" style="OLC">
<paragraph id="H54FC7087F4584F269F80EDD1921BC08D"><enum>(3)</enum><header>Declaration of dividends</header><text>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.</text> </paragraph>
<paragraph id="HBDB727C45FB24C3E9907B735DE8DDB44"><enum>(4)</enum><header>Waiver of dividends</header><text>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—</text>
<subparagraph id="HAFDD5D0EE0164F6DA0DE8FB7C5B3293D"><enum>(A)</enum><text>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</text> </subparagraph>
<subparagraph id="H23F4D1D5A40C4C4889CB0CE1B5D2A47A"><enum>(B)</enum><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph>
<paragraph id="H1AFCEDEB2BDC4A79A11D957E753BC227"><enum>(5)</enum><header>Standards for waiver of dividend</header><text>The Board shall not object to a notice of intent to waive dividends under paragraph (4) if—</text>
<subparagraph id="H28E31DD8D61B42AAAC41A54E8DABDFF3"><enum>(A)</enum><text>the waiver would not be detrimental to the safe and sound operation of the savings association; and</text> </subparagraph>
<subparagraph id="H9D718E6249D74132952F6FC0F1D711CB"><enum>(B)</enum><text>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.</text> </subparagraph></paragraph>
<paragraph id="H29510D0C78B74CF9A7E58C909D803156"><enum>(6)</enum><header>Resolution included in waiver notice</header><text>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.</text> </paragraph>
<paragraph id="HB32200C8E97B483FA812CF1A74CE0668" display-inline="no-display-inline"><enum>(7)</enum><header>Valuation</header>
<subparagraph id="HD9C78B240EB6434FA7B06ACDAED3974A"><enum>(A)</enum><header>In general</header><text>The Board shall consider waived dividends in determining an appropriate exchange ratio in the event of a full conversion to stock form.</text></subparagraph>
<subparagraph id="H3BDC6B9D410142978BDFB4D1DAAB3ECC"><enum>(B)</enum><header>Exception</header><text>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.</text></subparagraph></paragraph> <after-quoted-block>.</after-quoted-block></quoted-block> </subsection></section>
<section display-inline="no-display-inline" id="H39FE6CEBFF8549A6BD5AD2B4D8A4CE88" section-type="subsequent-section"><enum>1220.</enum><header>Implementation plan and reports</header>
<subsection id="HDF8C99B2BCAE4A228EDC44460B7F1B53"><enum>(a)</enum><header>Plan submission</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="H7F9DA51D7DC942B9904FA362FD202F12"><enum>(b)</enum><header>Inspectors General review of the plan</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="HCDAEDA05FE4E411BB0FF24B9FC369249"><enum>(1)</enum><text>whether the plan sufficiently takes into consideration the orderly transfer of personnel;</text> </paragraph>
<paragraph id="HA65F8AA274814FE691BD988E01CA6CA2"><enum>(2)</enum><text display-inline="yes-display-inline">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;</text> </paragraph>
<paragraph id="HD3534DB068324DC1A13739E08348020F"><enum>(3)</enum><text>whether the plan sufficiently takes into consideration the orderly transfer of authority and responsibilities;</text> </paragraph>
<paragraph id="H5CA1F22951F94A3B83B4312ED4B90827"><enum>(4)</enum><text>whether the plan sufficiently takes into consideration the effective transfer of funds;</text> </paragraph>
<paragraph id="H8F94DD3B751E42C0891DD886DED72057"><enum>(5)</enum><text>whether the plan sufficiently takes in consideration the orderly transfer of property; and</text> </paragraph>
<paragraph id="H95A125110A1A490ABBE1FD9F865A01C7"><enum>(6)</enum><text>any additional recommendations for an orderly and effective process.</text> </paragraph></subsection>
<subsection id="H03E1DE25BB104F46B8A0C0CDB1CD4F45"><enum>(c)</enum><header>Implementation reports</header><text display-inline="yes-display-inline">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.</text> </subsection></section>
<section id="HDDA4DCFA165345D48952195D468C73F4"><enum>1221.</enum><header>Composition of board of directors of the Federal Deposit Insurance Corporation</header><text display-inline="no-display-inline">Section 2 of the Federal Deposit Insurance Act (12 U.S.C. 1812) is amended—</text>
<paragraph id="H915D452F9703477CAC7FE4D813C572BF"><enum>(1)</enum><text>in subsection (a)(1)—</text>
<subparagraph id="H1A2BE75E8890455C84F4561CDFDB0955"><enum>(A)</enum><text>in subparagraph (B), by striking <quote>Director of the Office of Thrift Supervision</quote> and inserting <quote>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</quote>;</text> </subparagraph></paragraph>
<paragraph id="H0C7BDBAC297B4C3C8235C6866020FCE4"><enum>(2)</enum><text>by amending subsection (d)(2) to read as follows:</text>
<quoted-block id="H04788BF3C9344075A8A47DBEDB8F87EA" style="OLC">
<paragraph id="H993D0855A5A94FA09808C6C4B940A33E"><enum>(2)</enum><header>Acting officials may serve</header><text>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.</text> </paragraph><after-quoted-block>; and</after-quoted-block></quoted-block> </paragraph>
<paragraph id="HB211052656254B43B2F37AE48EAF8A13"><enum>(3)</enum><text>in subsection (f)(2), by striking <quote>or of the Office of Thrift Supervision</quote>.</text> </paragraph></section>
<section id="HD0ABD97CC2B74CF1A30F8D25B963A13C"><enum>1222.</enum><header>Amendments to section 3</header><text display-inline="no-display-inline">Section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813) is amended—</text>
<paragraph id="HFF1593CE7D8942A5B96D9E279720E5CE"><enum>(1)</enum><text>in subsection (b)(1)(C) (relating to the definition of the term <term>savings association</term>), by striking <quote>Director of the Office of Thrift Supervision</quote> and inserting <quote>Comptroller of the Currency</quote>;</text> </paragraph>
<paragraph id="HEC3FA1DB91A94F4B882D06AEC643F67C"><enum>(2)</enum><text>in subsection (l)(5) (relating to the definition of the term <term>deposit</term>), in the introductory text, by striking <quote>Director of the Office of Thrift Supervision,</quote>; and</text> </paragraph>
<paragraph id="H7B2D8786F18B442C90A304CB20138DE8"><enum>(3)</enum><text>in subsection (z) (relating to the definition of the term <term>Federal banking agency</term>), by striking <quote>the Director of the Office of Thrift Supervision,</quote>.</text> </paragraph></section>
<section id="H8C9B28D2FC6D4A95902EA28E63BF26E7"><enum>1223.</enum><header>Amendments to section 7</header><text display-inline="no-display-inline">Section 7(a) of the Federal Deposit Insurance Act (12 U.S.C. 1817) is amended—</text>
<paragraph id="H636F79773EA4418AA8D8E9F91B9CEE9D"><enum>(1)</enum><text>in paragraph (2)(A)—</text>
<subparagraph id="H3CAE53EF2FD44E37980F1B91830E6980"><enum>(A)</enum><text>in the first sentence, by striking <quote>the Director of the Office of Thrift Supervision</quote>;</text> </subparagraph>
<subparagraph id="HACA58B43752C4E8AA0508025B3EB9865"><enum>(B)</enum><text>in the second sentence, by striking <quote>the Director of the Office of Thrift Supervision,</quote>;</text> </subparagraph></paragraph>
<paragraph id="H9D3E7DBACE48477F801FD8062845C712"><enum>(2)</enum><text>in paragraph (3), in the first sentence, by striking <quote>, 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</quote> and inserting <quote>Comptroller of the Currency and the Chairman of the Board of Governors of the Federal Reserve System</quote>; and</text> </paragraph>
<paragraph id="H684BD5907D604F218263BBD1468D99E1"><enum>(3)</enum><text>in paragraph (7), by striking <quote>, the Director of the Office of Thrift Supervision,</quote>.</text> </paragraph></section>
<section id="H4682ABCFDDEB4C71B07E7432192F84A6"><enum>1224.</enum><header>Amendments to section 8</header><text display-inline="no-display-inline">Section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818) is amended—</text>
<paragraph id="HE8BC352B3B36460CB9192F412258CD4D"><enum>(1)</enum><text>in subsection (a)(8)(B)(ii), in the last sentence—</text>
<subparagraph id="HA59F27868772477D8B4BA1F597091163"><enum>(A)</enum><text>by striking <quote>Director of the Office of Thrift Supervision</quote> each place it appears and inserting <quote>Comptroller of the Currency</quote>; and</text> </subparagraph>
<subparagraph id="H883CD19ACA904DED8A6581521831DAD0"><enum>(B)</enum><text>by inserting <quote>the Office of Thrift Supervision, as a successor to</quote> after <quote>as a successor to</quote>;</text> </subparagraph></paragraph>
<paragraph id="HA8BF83AB93E94458A94873F7E7063513"><enum>(2)</enum><text>in subsection (o), by striking <quote>Director of the Office of Thrift Supervision</quote> and inserting <quote>Comptroller of the Currency</quote>; and</text> </paragraph>
<paragraph id="H4CE6D0FE289D4DC6B6B5DA8907736520"><enum>(3)</enum><text>in subsection (w)(3)(A), by striking <quote>Office of Thrift Supervision</quote> and inserting <quote>Office of the Comptroller of the Currency</quote>.</text> </paragraph></section>
<section id="HA752CD7FC6D741A0939CA8811FE19DD8"><enum>1225.</enum><header>Amendments to section 11</header><text display-inline="no-display-inline">Section 11 of the Federal Deposit Insurance Act (12 U.S.C. 1821) is amended—</text>
<paragraph id="H75EF1AA33589420BA79512ABCF6C506F"><enum>(1)</enum><text>in subsection (c)(6)—</text>
<subparagraph id="HB3386902330B4D97B97131E81044554A"><enum>(A)</enum><text>in the heading, by striking <quote><header-in-text level="paragraph" style="OLC">director of the office of thrift supervision</header-in-text></quote> and inserting <quote><header-in-text level="paragraph" style="OLC">Comptroller of the Currency</header-in-text></quote>;</text> </subparagraph>
<subparagraph id="H380683A91C394A8CA60452F365E36F91"><enum>(B)</enum><text>in subparagraph (A), by striking <quote>Director of the Office of Thrift Supervision</quote> and inserting <quote>Comptroller of the Currency</quote>;</text> </subparagraph>
<subparagraph id="H2DA2774DE24A4B5B893C0448D98CD496"><enum>(C)</enum><text>in subparagraph (B), by striking <quote>Director of the Office of Thrift Supervision</quote> and inserting <quote>Comptroller of the Currency</quote>;</text> </subparagraph></paragraph>
<paragraph id="H485FF4800F3B4FDD927B49DEFB71E7C9"><enum>(2)</enum><text>in subsection (d)—</text>
<subparagraph id="H12CE96D3D7B04E54A6A00B74582E21D7"><enum>(A)</enum><text>in paragraph (17)(A)—</text>
<clause id="H417878CB3D884EF5801484B2DE6854FE"><enum>(i)</enum><text>by striking <quote>, or the Director of the Office of Thrift Supervision</quote>; and</text> </clause>
<clause id="H0068BD276C1F4AFDBE79D48F99D9BD41"><enum>(ii)</enum><text>by striking <quote>appropriate</quote>; and</text> </clause></subparagraph>
<subparagraph id="HD5B221F98FA74B9CB910CC09419EE24C"><enum>(B)</enum><text>in paragraph (18)(B), by striking <quote>or the Director of the Office of Thrift Supervision</quote>; and</text> </subparagraph></paragraph>
<paragraph id="HEF4515EBB4324C5BB5745DE55490D21B"><enum>(3)</enum><text>in subsection (n)—</text>
<subparagraph id="HA37BF3A6A3754ED6AC200CB2645C0425"><enum>(A)</enum><text>in paragraph (1)(A), by striking <quote>the Director of the Office of Thrift Supervision, with respect to 1 or more insured</quote>;</text> </subparagraph>
<subparagraph id="HFC3F6B657AA141DEA0E08CD27D32E8C1"><enum>(B)</enum><text>in paragraph (2)(A), by striking <quote>the Director of the Office of Thrift Supervision</quote>;</text> </subparagraph>
<subparagraph id="H14BFC6EA12F4471B86F5BB4655675C45"><enum>(C)</enum><text>in paragraph (4)(D), by striking <quote>and the Director of the Office of Thrift Supervision, as appropriate,</quote>;</text> </subparagraph>
<subparagraph id="H20F3241D5E064F85A7DB1A428630ED7F"><enum>(D)</enum><text display-inline="yes-display-inline">in paragraph (4)(G), by striking <quote>and the Director of the Office of Thrift Supervision, as appropriate,</quote>; and</text> </subparagraph>
<subparagraph id="HE13F0EC4EDC44F2180C634960077D443"><enum>(E)</enum><text display-inline="yes-display-inline">in paragraph (12)(B), by striking <quote>or the Director of the Office of Thrift Supervision, as appropriate,</quote>.</text> </subparagraph></paragraph></section>
<section id="H54EE18B9C9FD453289651BB579F0534A"><enum>1226.</enum><header>Amendments to section 13</header><text display-inline="no-display-inline">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 <quote>Director of the Office of Thrift Supervision</quote> and inserting <quote>Comptroller of the Currency</quote>.</text> </section>
<section id="HF902E596604C4086959F63B9EBEBC260"><enum>1227.</enum><header>Amendments to section 18</header><text display-inline="no-display-inline">Section 18 of the Federal Deposit Insurance Act (12 U.S.C. 1828) is amended—</text>
<paragraph id="H35327952472B4CBD843FFE28AF4038DD"><enum>(1)</enum><text>in subsection (c)(2)—</text>
<subparagraph id="HE8AA7767DE1F4866B72E9CC89A0EB2F6"><enum>(A)</enum><text>in subparagraph (A), by striking <quote>bank;</quote> and inserting <quote>bank or a savings association; and</quote>;</text> </subparagraph>
<subparagraph id="H558045AE6587450C993E183410E8D6B6"><enum>(B)</enum><text>in subparagraph (B), by inserting <quote>and</quote> at the end after the semicolon;</text> </subparagraph>
<subparagraph id="HC9E16393C08641C998CCF66CE03B6DBC"><enum>(C)</enum><text>in subparagraph (C), by striking <quote>bank (except a savings bank supervised by the Director of the Office of Thrift Supervision); and</quote> and inserting <quote>bank or State savings association.</quote>; and</text> </subparagraph>
<subparagraph id="HA55EC3D2CF474899B4555FD354FC2E96"><enum>(D)</enum><text>by striking subparagraph (D);</text> </subparagraph></paragraph>
<paragraph id="H275463B335574FA1AAA9CA7B77DD1ACC"><enum>(2)</enum><text>in subsection (i)(2)—</text>
<subparagraph id="HA16DE506491A4CB18269EFDDB1D944E7"><enum>(A)</enum><text>by striking subparagraph (B) and inserting the following new subparagraph:</text>
<quoted-block id="H21C9DE514A8E4CFF859B51836E596192" style="OLC">
<subparagraph id="HBFEBB9F0D83F44D5BE844BF09FB94DF8"><enum>(B)</enum><text>the Corporation, if the resulting institution is to be a State nonmember insured bank or insured State savings association.</text> </subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block> </subparagraph>
<subparagraph id="H89704A2CA97A41D5BEFC6CBA55A354CE"><enum>(B)</enum><text>by striking subparagraph (C); and</text> </subparagraph></paragraph>
<paragraph id="H86A1601FD22841C7881FAC08C877E65F"><enum>(3)</enum><text>in subsection (m)—</text>
<subparagraph id="HDFABB0F5E8F14A50A3F2EDEF8118A4C1"><enum>(A)</enum><text>in paragraph (1)—</text>
<clause id="H2FA58476A7C74512B479E2D538125EE1"><enum>(i)</enum><text>in subparagraph (A), by striking <quote>Director of the Office of Thrift Supervision</quote> and inserting <quote>Comptroller of the Currency</quote>; and</text> </clause>
<clause id="H0BE770DA527646A6A2852F1BDB1BE018"><enum>(ii)</enum><text>in subparagraph (B), by striking <quote>Director of the Office of Thrift Supervision</quote> and inserting <quote>Comptroller of the Currency</quote>;</text> </clause></subparagraph>
<subparagraph id="H096E6106A6934A2DB421F8E4F36E28F7"><enum>(B)</enum><text>in paragraph (2)—</text>
<clause id="H8749E4EF7C0C4EFBACEC3F3855A7F964"><enum>(i)</enum><text>in subparagraph (A), by striking <quote>Director of the Office of Thrift Supervision</quote> and inserting <quote>Comptroller of the Currency</quote>; and</text> </clause>
<clause id="H3E458CD1FC644691A096DDF5FD60B1AD"><enum>(ii)</enum><text>in subparagraph (B)—</text>
<subclause id="H08BA9BFF72B840B882DCB4325E1C8B8B"><enum>(I)</enum><text>by striking <quote>Director of the Office of Thrift Supervision</quote> each place it appears and inserting <quote>Comptroller of the Currency</quote>; and</text> </subclause>
<subclause id="H4F6A8A6A96B4423C898F3FB0192A57B0"><enum>(II)</enum><text>by striking <quote>Director may deem appropriate</quote> and inserting <quote>Comptroller may deem appropriate</quote>; and</text> </subclause></clause></subparagraph>
<subparagraph id="H024D8AE9F2B949C7A59F1B3AB3FF4F42"><enum>(C)</enum><text>in paragraph (3)—</text>
<clause id="H20F6E1E68C694473B06F5772EAB2BEDB"><enum>(i)</enum><text>in subparagraph (A), by striking <quote>Director of the Office of Thrift Supervision</quote> and inserting <quote>Comptroller of the Currency</quote>; and</text> </clause>
<clause id="HB0A61846014D499BB4B601F6F8522066"><enum>(ii)</enum><text>in subparagraph (B), by striking <quote>Office of Thrift Supervision</quote> and inserting <quote>Comptroller of the Currency</quote>.</text> </clause></subparagraph></paragraph></section>
<section id="HB12E5E944EF34F4F8994B38E12D2FB1D"><enum>1228.</enum><header>Amendments to section 28</header><text display-inline="no-display-inline">Section 28 of the Federal Deposit Insurance Act (12 U.S.C. 1831e) is amended—</text>
<paragraph id="H56DF0F71F46B4F78AEE6918101E09A73"><enum>(1)</enum><text>in subsection (e)—</text>
<subparagraph id="H9630F272B55A4001A13F214D3B874380"><enum>(A)</enum><text>in paragraph (2)—</text>
<clause id="H87790EAFCBF44D099B558B207758B763"><enum>(i)</enum><text>in subparagraph (A)(ii), by striking <quote>Director of the Office of Thrift Supervision</quote> and inserting <quote>Comptroller of the Currency</quote>;</text> </clause>
<clause id="H915AC802282F41D19F6F8A0A0AB070E0"><enum>(ii)</enum><text>in subparagraph (C), by striking <quote>Director of the Office of Thrift Supervision</quote> and inserting <quote>Comptroller of the Currency</quote>; and</text> </clause>
<clause id="H5CE45AF6EA434A34B5DA89DBB1D14466"><enum>(iii)</enum><text>in subparagraph (F), by striking <quote>Director of the Office of Thrift Supervision</quote> and inserting <quote>Comptroller of the Currency</quote>; and</text> </clause></subparagraph>
<subparagraph id="H9081854F46ED4D2685EF3C46F8808877"><enum>(B)</enum><text>in paragraph (3)—</text>
<clause id="HFD8B100FB54445CF8467A735E0A3B585"><enum>(i)</enum><text>in subparagraph (A), by striking <quote>Director of the Office of Thrift Supervision</quote> and inserting <quote>Comptroller of the Currency</quote>; and</text> </clause>
<clause id="HB2F363F5B5A7408EB3045C2336F2FE70"><enum>(ii)</enum><text>in subparagraph (B), by striking <quote>Director of the Office of Thrift Supervision</quote> and inserting <quote>Comptroller of the Currency</quote>; and</text> </clause></subparagraph></paragraph>
<paragraph id="H36B4E294F90744F684B7ED39A2ED0E6B"><enum>(2)</enum><text>in subsection (h)(2), by striking <quote>Director of the Office of Thrift Supervision</quote> and inserting <quote>Comptroller of the Currency</quote>.</text> </paragraph></section>
<section id="H9477162C8B0D4CF1BD07DE3C60B914CF"><enum>1229.</enum><header>Amendments to the Alternative Mortgage Transaction Parity Act of 1982</header>
<subsection id="H863B38876E304FDBB40189E742D9AAD7"><enum>(a)</enum><header>Amendments to section 802</header><text>Section 802(a)(3) of the Alternative Mortgage Transaction Parity Act of 1982 (12 U.S.C. 3801(a)(3)) is amended—</text>
<paragraph id="H913170870A9C437092B047A0C7AAF237"><enum>(1)</enum><text>by striking <quote>Comptroller of the Currency,</quote> and inserting <quote>Comptroller of the Currency and</quote>; and</text> </paragraph>
<paragraph id="H705808AD39A24824BF579B07E8291BE4"><enum>(2)</enum><text>by striking <quote>, and the Director of the Office of Thrift Supervision</quote>.</text> </paragraph></subsection>
<subsection id="HB8E26BAA67BC40E2B59066445CA2927E"><enum>(b)</enum><header>Amendments to section 804</header><text>Section 804(a) of the Alternative Mortgage Transaction Parity Act of 1982 (12 U.S.C. 3803(a)) is amended—</text>
<paragraph id="H2358744916484E76AD7F242889876AAC"><enum>(1)</enum><text>by amending paragraph (1) to read as follows:</text>
<quoted-block id="HC5330531B36A49399AD993A22A0E20E6" style="OLC">
<paragraph id="H45D510E5834740D296435D70E94C72AD"><enum>(1)</enum><text>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</text> </paragraph><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph>
<paragraph id="HA111E67B1D7F41EEB166145B1FBA7710"><enum>(2)</enum><text>in paragraph (2), by striking <quote>; and</quote> and inserting a period; and</text> </paragraph>
<paragraph id="H168DB1B3F6A04552A4DFBB5A6920D91A"><enum>(3)</enum><text>by striking paragraph (3).</text> </paragraph></subsection></section>
<section id="HEF7FBC3540AA4CCF8522685A1F29B9B2"><enum>1230.</enum><header>Amendments to the Bank Holding Company Act of 1956</header><text display-inline="no-display-inline">Section 4(f)(12)(A) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(f)(12)(A)) is amended striking <quote>the Resolution Trust Corporation, the Federal Deposit Insurance Corporation, or</quote> and inserting <quote>the Federal Deposit Insurance Corporation or</quote>.</text> </section>
<section id="H5BC5342423CF46D3982C19A8F6BC7938"><enum>1231.</enum><header>Amendments to the Bank Protection Act of 1968</header><text display-inline="no-display-inline">Section 2 of the Bank Protection Act of 1968 (12 U.S.C. 1881) is amended—</text>
<paragraph id="H0CAB3BBD32034B2BAFB8AE4599625132"><enum>(1)</enum><text>in paragraph (1), by striking <quote>national banks,</quote> and inserting <quote>national banks and federal savings associations,</quote>;</text> </paragraph>
<paragraph id="H9652B5075EF949779EB92DFC5B3016D2"><enum>(2)</enum><text>in paragraph (2), by inserting <quote>and</quote> at the end;</text> </paragraph>
<paragraph id="H36FC0A791FBE494BBA665FC1C34912AF"><enum>(3)</enum><text>in paragraph (3), by striking <quote>, and</quote> and inserting a period; and</text> </paragraph>
<paragraph id="H93A5CCE0A4FA4AB48DC379BC8839F4BF"><enum>(4)</enum><text>by striking paragraph (4).</text> </paragraph></section>
<section id="H1E9BA8E27DC84BF68F7A027FC24E7150"><enum>1232.</enum><header>Amendments to the Bank Service Company Act</header><text display-inline="no-display-inline">Section 1(b) of the Bank Service Company Act (12 U.S.C. 1861(b)) is amended—</text>
<paragraph id="HAB86444349594D8C94A037A6A46339DC"><enum>(1)</enum><text>in paragraph (4), by striking <quote>insured bank,</quote> and inserting <quote>insured bank or</quote>;</text> </paragraph>
<paragraph id="H77BC60B05621423788DDFFA510A83A20"><enum>(2)</enum><text>by striking <quote>Director of the Office of Thrift Supervision</quote> and inserting <quote>Comptroller of the Currency</quote>; and</text> </paragraph>
<paragraph id="H2D48A48673E34690A5A95F299E1CE885"><enum>(3)</enum><text>by striking <quote>, the Federal Savings and Loan Insurance Corporation,</quote>.</text> </paragraph></section>
<section id="H7AF3F76800B94221A8D13BF667E11914"><enum>1233.</enum><header>Amendments to the Community Reinvestment Act of 1977</header><text display-inline="no-display-inline">Section 803 of the Community Reinvestment Act of 1977 (12 U.S.C. 2902) is amended—</text>
<paragraph id="HAE23DEFE5ED145A1ADA24BC2E8863574"><enum>(1)</enum><text>in paragraph (1)—</text>
<subparagraph id="H19A0BAC5D3114089AA08D9BAB59ABB6E"><enum>(A)</enum><text>in subparagraph (A), by striking <quote>national banks</quote> and inserting <quote>national banks or savings associations (the deposits of which are insured by the Federal Deposit Insurance Corporation)</quote>; and</text> </subparagraph>
<subparagraph id="H1CC2ABAAC57B434EB02F52AA0B483575"><enum>(B)</enum><text>in subparagraph (B), by striking <quote>and bank holding companies;</quote> and inserting <quote>, bank holding companies and savings and loan holding companies;</quote>; and</text> </subparagraph></paragraph>
<paragraph id="HE7744356C0FC4034A81B526627DAF9C9"><enum>(2)</enum><text display-inline="yes-display-inline">by striking the first paragraph (2) (relating to section 8 of the Federal Deposit Insurance Act).</text> </paragraph></section>
<section id="H0AF835150B12478F9E1C02EDB12AD0E3"><enum>1234.</enum><header>Amendments to the Depository Institution Management Interlocks Act</header>
<subsection id="HBD798A0E933A4EAAB0D156288C4020C9"><enum>(a)</enum><header>Amendment to section 207</header><text>Section 207 of the Depository Institution Management Interlocks Act (12 U.S.C. 3206) is amended—</text>
<paragraph id="H8CC7576E4A5345BB9741DAD34BD0DC0D"><enum>(1)</enum><text>in paragraph (1), by striking <quote>national banks,</quote> and inserting <quote>national banks and Federal savings associations (the deposits of which are insured by the Federal Deposit Insurance Corporation),</quote>;</text> </paragraph>
<paragraph commented="no" id="HC90A2ACB6AD74536B34C9BC580F6973F"><enum>(2)</enum><text>in paragraph (2), by striking <quote>and bank holding companies,</quote> and inserting <quote>, bank holding companies, and savings and loan holding companies,</quote>;</text> </paragraph>
<paragraph id="H3451E3F9DAF549D8B7882A310EBFE62E"><enum>(3)</enum><text>by striking paragraph (4); and</text> </paragraph>
<paragraph id="H6383E748DF044114A82EC75FA1D988C5"><enum>(4)</enum><text>by redesignating paragraphs (5) and (6) as paragraphs (4) and (5), respectively.</text> </paragraph></subsection>
<subsection id="HB1BCB8F9C70A4C0EA5A9C72D40FB7F8B"><enum>(b)</enum><header>Amendment to section 209</header><text>Section 209 of the Depository Institution Management Interlocks Act (12 U.S.C. 3207) is amended—</text>
<paragraph id="H2C3B5624F9ED4EB1A93363DE4C4D4BB8"><enum>(1)</enum><text>in paragraph (1), by striking <quote>national banks,</quote> and inserting <quote>national banks and Federal savings associations (the deposits of which are insured by the Federal Deposit Insurance Corporation),</quote>;</text> </paragraph>
<paragraph id="H629EE183AC914770BAF998096AA3A3CC"><enum>(2)</enum><text>in paragraph (2), by striking <quote>and bank holding companies,</quote> and inserting <quote>, bank holding companies, and savings and loan holding companies,</quote>;</text> </paragraph>
<paragraph id="HC2ED058ED2644A65BAB0C076FFFF81A6"><enum>(3)</enum><text>at the end of paragraph (3), by inserting <quote>and</quote> after the comma;</text> </paragraph>
<paragraph id="H873B6ADDAA65492C85904AAB43B5BB43"><enum>(4)</enum><text>by striking paragraph (4); and</text> </paragraph>
<paragraph id="H5FB692E349B14C64BD0BF4D041426692"><enum>(5)</enum><text>by redesignating paragraph (5) as paragraph (4).</text> </paragraph></subsection>
<subsection id="HFDA5655D84454E6790919E5D9FE91DE8"><enum>(c)</enum><header>Amendment to section 210</header><text>Subsection 210(a) of the Depository Institution Management Interlocks Act (12 U.S.C. 3208(a)) is amended—</text>
<paragraph id="H21AC58D48EA5435BBF44C0F6CDAF4586"><enum>(1)</enum><text>by striking <quote>his</quote> and inserting <quote>the</quote>; and</text> </paragraph>
<paragraph id="HA8BA2FEA5C9B4DD48BB62E82C4941A94"><enum>(2)</enum><text>by inserting <quote>of the Attorney General</quote> after <quote>enforcement functions</quote>.</text> </paragraph></subsection></section>
<section id="H18549E3467F84D879540501E5537F3B8"><enum>1235.</enum><header>Amendments to the Emergency Homeowners’ Relief Act</header><text display-inline="no-display-inline">Section 110 of the Emergency Homeowners’ Relief Act (12 U.S.C. 2709) is amended—</text>
<paragraph id="HA77E2989D68F4FD9BD2091A87B3135C8"><enum>(1)</enum><text>by striking the <quote>Federal Home Loan Bank Board</quote> and inserting <quote>Federal Housing Finance Agency</quote>; and</text> </paragraph>
<paragraph id="H5EC76BC1FA8E429DB4F532418566C041"><enum>(2)</enum><text>by striking <quote>the Federal Savings and Loan Insurance Corporation,</quote>.</text> </paragraph></section>
<section id="HBB6205A67C574391814A445BBAA59B65"><enum>1236.</enum><header>Amendments to the Equal Credit Opportunity Act</header><text display-inline="no-display-inline">Section 704(a) of the Equal Credit Opportunity Act (15 U.S.C. 1691c(a)) is amended—</text>
<paragraph id="HCF08373E721C4F98B6F134BAD62E92CA"><enum>(1)</enum><text>in paragraph (1)(A), by striking <quote>and Federal branches and Federal agencies of foreign banks,</quote> and inserting <quote>Federal branches and Federal agencies of foreign banks, or a savings association the deposits of which are insured by the Federal Deposit Insurance Corporation,</quote>;</text> </paragraph>
<paragraph id="H2889280A84EF42F3A42AA429612F7087"><enum>(2)</enum><text>by striking paragraph (2); and</text> </paragraph>
<paragraph id="H2E8FDA209D4A458AA02EF0013B6F7C90"><enum>(3)</enum><text>by redesignating paragraphs (3) through (9) as paragraphs (2) through (8).</text> </paragraph></section>
<section id="H8C947B7183924FA3878BCC8DB9034EC2"><enum>1237.</enum><header>Amendments to the Federal Credit Union Act</header>
<subsection id="HCE535F7C5CD74DA59B84CD7A80D5AB69"><enum>(a)</enum><header>Amendments to section 206</header><text>Section 206(g)(7) of the Federal Credit Union Act (12 U.S.C. 1786(g)(7)) is amended—</text>
<paragraph id="HB4C5BF325BB4409CBF44119364F5EA1C"><enum>(1)</enum><text>in subparagraph (A)—</text>
<subparagraph commented="no" id="HAAC06AD8D50A49068656BB8676BB0AF2"><enum>(A)</enum><text display-inline="yes-display-inline">in clause (v), by inserting <quote>and</quote> after the semicolon;</text> </subparagraph>
<subparagraph id="H150D2FC90B8D4E479653DF1B6718922C"><enum>(B)</enum><text>in clause (vi)—</text>
<clause id="H14054DEC4D7D465984066801DBB7A455"><enum>(i)</enum><text>by striking <quote>Federal Housing Finance Board</quote> and inserting <quote>Federal Housing Finance Agency</quote>; and</text> </clause>
<clause id="H938C1D0D02BA4B6E944E73BF3B7D5EC8"><enum>(ii)</enum><text>by striking <quote>; and</quote> and inserting a period; and</text> </clause></subparagraph>
<subparagraph id="H3CF3537B452C4EC5B8E915CCB98E56AF"><enum>(C)</enum><text>by striking clause (vii); and</text> </subparagraph></paragraph>
<paragraph id="H4D5F1415DF8F4DD19D878EAEE805B339"><enum>(2)</enum><text>in subparagraph (D)—</text>
<subparagraph commented="no" id="H4CBA25F4066B406EA11CA6E95F33F21E"><enum>(A)</enum><text display-inline="yes-display-inline">in clause (iii), by inserting <quote>and</quote> after the semicolon;</text> </subparagraph>
<subparagraph id="H775129326EFD4DFEB25BBE3B1D28E407"><enum>(B)</enum><text display-inline="yes-display-inline">in clause (iv), by striking <quote>; and</quote> and inserting a period; and</text> </subparagraph>
<subparagraph id="HBC263E0A4C364D6BA3C2888CCC245AEC"><enum>(C)</enum><text>by striking clause (v).</text> </subparagraph></paragraph></subsection></section>
<section id="H8814906712EF4CAAB2ED13090711E75E"><enum>1238.</enum><header>Amendments to the Federal Financial Institutions Examination Council Act of 1978</header>
<subsection id="HD0BD5E75262E4E12803896D6C6EADBD0"><enum>(a)</enum><header>Amendment to section 1002</header><text>Section 1002 of the Federal Financial Institutions Examination Council Act of 1978 (12 U.S.C. 3301) is amended by striking <quote>Federal Home Loan Bank Board</quote> and inserting <quote>Federal Housing Finance Agency</quote>.</text> </subsection>
<subsection id="HD2C4C7799B4242BE838E8BC0E4911D51"><enum>(b)</enum><header>Amendment to section 1003</header><text>Section 1003(1) of the Federal Financial Institutions Examination Council Act of 1978 (12 U.S.C. 3302(1)) is amended by striking <quote>the Office of Thrift Supervision,</quote>.</text> </subsection>
<subsection id="H68B50A05D47D4FA8A8757F2F84802847"><enum>(c)</enum><header>Amendments to section 1004</header><text>Section 1004(a) of the Federal Financial Institutions Examination Council Act of 1978 (12 U.S.C. 3303(a)) is amended—</text>
<paragraph id="HF00A396E854C4173A93C937E959B8D09"><enum>(1)</enum><text>by striking paragraph (4); and</text> </paragraph>
<paragraph id="H2683614CEEA04AFEB708E6ACA8263134"><enum>(2)</enum><text>by redesignating paragraphs (5) and (6) as paragraphs (4) and (5), respectively.</text> </paragraph></subsection></section>
<section id="H487EB0EB7C87406993665B77C89BFE0C"><enum>1239.</enum><header>Amendments to the Federal Home Loan Bank Act</header>
<subsection id="H50228C289BF64771B09771222570C91C"><enum>(a)</enum><header>Amendments to section 18</header><text>Section 18(c) of the Federal Home Loan Bank Act (12 U.S.C. 1438(c)) is amended—</text>
<paragraph id="HFAB426BFEA40460884939D020037599F"><enum>(1)</enum><text>by striking <quote>Director of the Office of Thrift Supervision</quote> each place it appears and inserting <quote>Comptroller of the Currency</quote>;</text> </paragraph>
<paragraph id="HCB146696031447BBB6A384E194B5F840"><enum>(2)</enum><text>in paragraph (1)(B), by striking <quote>and the agencies under its administration or supervision</quote>; and</text> </paragraph>
<paragraph id="H7A2734B850BF4635A5F1AD9C8E627966"><enum>(3)</enum><text>in paragraph (5), by striking <quote>and such agencies</quote>.</text> </paragraph></subsection>
<subsection id="H84DF35621B3847B3A6172945E35C2C26"><enum>(b)</enum><header>Repeal of section 21<enum-in-header>A</enum-in-header></header><text>Section 21A of the Federal Home Loan Bank Act (12 U.S.C. 1441a) is hereby repealed.</text> </subsection></section>
<section id="H857A300094C24DA9B74429C21B9C5D32"><enum>1240.</enum><header>Amendments to the Federal Reserve Act</header><text display-inline="no-display-inline">Section 19(b) of the Federal Reserve Act (12 U.S.C. 461) is amended—</text>
<paragraph id="HF7DE594C941744E4A8995DD160EAB3AC"><enum>(1)</enum><text>in paragraph (1)(F), by striking <quote>the Director of the Office of Thrift Supervision</quote> and inserting <quote>the Comptroller of the Currency</quote>; and</text> </paragraph>
<paragraph id="H46E5ABF9A2104DB1B3142280255CD0EA"><enum>(2)</enum><text>in paragraph (4)(B), by striking <quote>the Director of the Office of Thrift Supervision</quote> and inserting <quote>the Comptroller of the Currency</quote>.</text> </paragraph></section>
<section id="H13CB18B8B6D647DC8CBDD7484329956E"><enum>1241.</enum><header>Amendments to the Financial Institutions Reform, Recovery, and Enforcement Act of 1989</header>
<subsection id="HC99A78EDBCF64B419FED09C953B02DD6"><enum>(a)</enum><header>Amendments to section 302</header><text>Section 302(1) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 is amended by striking <quote>Director of the Office of Thrift Supervision</quote> and inserting <quote>Comptroller of the Currency</quote>.</text> </subsection>
<subsection id="H28CBAA5AC4364093BE98358358E87686"><enum>(b)</enum><header>Amendment to section 305</header><text>Section 305(b)(1) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 is amended by striking <quote>Director of the Office of Thrift Supervision</quote> and inserting <quote>Comptroller of the Currency</quote>.</text> </subsection>
<subsection id="HF2C92DD27DC44A948D8866F5248DDA81"><enum>(c)</enum><header>Amendment to section 308</header><text>Section 308(a) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1463 note) is amended by striking <quote>Director of the Office of Supervision</quote> and inserting <quote>Comptroller of the Currency</quote>.</text> </subsection>
<subsection id="H2EF4F8E0C02D411CADC67648F36DF951"><enum>(d)</enum><header>Amendments to section 402</header><text>Section 402 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1437 note) is amended—</text>
<paragraph id="HA1FB8B1A6F4A4B07803CCA04F65C10E5"><enum>(1)</enum><text>in subsection (a), by striking <quote>Director of the Office of Thrift Supervision</quote> and inserting <quote>Comptroller of the Currency</quote>;</text> </paragraph>
<paragraph id="H8FF2919934544DAA8F1D7330D8E11074"><enum>(2)</enum><text>in subsection (b), by striking <quote>Director of the Office of Thrift Supervision</quote> and inserting <quote>Comptroller of the Currency</quote>; and</text> </paragraph>
<paragraph id="H36D34A7044284C0684FC7C2E504A989F"><enum>(3)</enum><text>in subsection (e)—</text>
<subparagraph id="H8DDDE23E245644F9A1B586B3A3143E23"><enum>(A)</enum><text>in paragraph (1), by striking <quote>Office of Thrift Supervision</quote> and inserting <quote>Office of the Comptroller of the Currency</quote>;</text> </subparagraph>
<subparagraph id="H550A34F5E227455EBFF5EB4487939017"><enum>(B)</enum><text>in paragraph (2), by striking <quote>Director of the Office of Thrift Supervision</quote> each place it appears and inserting <quote>Comptroller of the Currency</quote>;</text> </subparagraph>
<subparagraph id="H7E8D29E90FA24E78BBA4554A040CAA31"><enum>(C)</enum><text>in paragraph (3), by striking <quote>Director of the Office of Thrift Supervision</quote> and inserting <quote>Comptroller of the Currency</quote>; and</text> </subparagraph>
<subparagraph id="HFAD5E75BF46A44D3843C43F6D3CC7A95"><enum>(D)</enum><text>in paragraph (4), by striking <quote>Director of the Office of Thrift Supervision</quote> and inserting <quote>Comptroller of the Currency</quote>.</text> </subparagraph></paragraph></subsection>
<subsection id="H88F8572471344D33906FD1759185C210"><enum>(e)</enum><header>Amendment to section 1103</header><text>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 <quote>and the Resolution Trust Corporation</quote>.</text> </subsection>
<subsection id="H9420391EF8B8427AA4C5F378BF95DD63"><enum>(f)</enum><header>Amendments to section 1205</header><text>Subsection 1205(b) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1818 note) is amended—</text>
<paragraph id="H8E5E63BD055443C6A7ECE81F7774F6C8"><enum>(1)</enum><text>in paragraph (1)—</text>
<subparagraph id="H93A231CF7EE94E4C8D396DBD28F10375"><enum>(A)</enum><text>in subparagraph (B), by striking <quote>Director of the Office of Thrift Supervision, or the Director’s designee</quote> and inserting <quote>Comptroller of the Currency, or the Comptroller’s designee</quote>;</text> </subparagraph>
<subparagraph id="H123752504AF44C4CB0EE0C5B637F4DF3"><enum>(B)</enum><text>by striking subparagraph (D); and</text> </subparagraph>
<subparagraph id="H60B5974BCD1F4AFD821CB4A4AC1F8290"><enum>(C)</enum><text>by redesignating subparagraphs (E) and (F) as subparagraphs (D) and (E), respectively;</text> </subparagraph></paragraph>
<paragraph id="HDE0A9970EEF84526962A8AB76DE8AAC7"><enum>(2)</enum><text>in paragraph (2), by striking <quote>paragraph (1)(F)</quote> and inserting <quote>paragraph (1)(E)</quote>;</text> </paragraph>
<paragraph id="HF07C6C4C2FCF4CD7B5C8BDD4426DDBE3"><enum>(3)</enum><text>in paragraph (3), by striking <quote>paragraph (1)(F)</quote> and inserting <quote>paragraph (1)(E)</quote>; and</text> </paragraph>
<paragraph id="H35D60625AF2044FB8C3F493213857BCE"><enum>(4)</enum><text>in paragraph (5), by striking <quote>through (E)</quote> and inserting <quote>through (D)</quote>.</text> </paragraph></subsection>
<subsection id="HF1F51704715242A3AF36E7FCC287BA81"><enum>(g)</enum><header>Amendments to section 1206</header><text>Section 1206(a) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1833b(a)) is amended—</text>
<paragraph id="HFB92A0668D9445D2AD1BF74200DE5FBB"><enum>(1)</enum><text>by striking <quote>the Oversight Board of the Resolution Trust Corporation</quote> and inserting <quote>and</quote>; and</text> </paragraph>
<paragraph id="HBDB7B7556B1A41788724E2D5E6DD7767"><enum>(2)</enum><text>by striking <quote>, and the Office of Thrift Supervision,</quote>.</text> </paragraph></subsection>
<subsection id="H7158ECA0FD6740EABBBCD8831911F9C4"><enum>(h)</enum><header>Amendments to section 1216</header><text>Section 1216 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1833e) is amended—</text>
<paragraph id="HF307698933A646139DF0D805C5A1296E"><enum>(1)</enum><text>in subsection (a)—</text>
<subparagraph id="HA8106BFC20E54C5BBEB0C57CFF42770D"><enum>(A)</enum><text>by striking paragraphs (2), (5), and (6);</text> </subparagraph>
<subparagraph id="H7D0C50013C47406F8E1FB1B2573D81C8"><enum>(B)</enum><text>by redesignating paragraphs (3) and (4) as paragraphs (2) and (3), respectively; and</text> </subparagraph>
<subparagraph id="HAE1A1089CBA049BD8E4A0B2C69EA9964"><enum>(C)</enum><text>in paragraph (2) (as redesignated), by adding <quote>and</quote> at the end;</text> </subparagraph></paragraph>
<paragraph id="H46185220593C4484BF688D81ED2F7A53"><enum>(2)</enum><text>in subsection (c)—</text>
<subparagraph id="HC651392C0B194F8A9A9F6C609D9FC365"><enum>(A)</enum><text>by striking <quote>the Director of the Office of Thrift Supervision,</quote> and inserting <quote>and</quote>; and</text> </subparagraph>
<subparagraph id="H012F46B360FB474BAF5BBB648A84C98D"><enum>(B)</enum><text>by striking <quote>, the Oversight Board of the Resolution Trust Corporation, and the Resolution Trust Corporation</quote>; and</text> </subparagraph></paragraph>
<paragraph id="H8A5461BA6EA3466CAE3BAF2AEA433A68"><enum>(3)</enum><text>in subsection (d)—</text>
<subparagraph id="H91F646105DC34698AEC987663E3B28FB"><enum>(A)</enum><text>by striking paragraphs (3), (5), and (6); and</text> </subparagraph>
<subparagraph id="HAFF352006767495EB8B4758BA69A8730"><enum>(B)</enum><text>by redesignating paragraphs (4), (7), and (8) as paragraphs (3), (4), and (5), respectively.</text> </subparagraph></paragraph></subsection></section>
<section id="H0E415D3FC2664CEBA948A3AF5A03958B"><enum>1242.</enum><header>Amendments to the Housing Act of 1948</header><text display-inline="no-display-inline">Section 502(c) of the Housing Act of 1948 (12 U.S.C. 1701c(c)) is amended in the introductory text by striking <quote>Director of the Office of Thrift Supervision</quote> and inserting <quote>Comptroller of the Currency </quote>.</text> </section>
<section id="H584E783DC5F94CE1ADD536F098F85861"><enum>1243.</enum><header>Amendments to the Housing and Community Development Act of 1992 and the Federal Housing Enterprises Financial Safety and Soundness Act of 1992</header>
<subsection id="H907FAB3E865C4CC5A075574BAD6743FD"><enum>(a)</enum><header>Amendments to section 543 of the Housing and Community Development Act of 1992</header><text>Section 543 of the Housing and Community Development Act of 1992 (12 U.S.C. 1707 note) is amended—</text>
<paragraph id="HB9D10DD8AAB1470EB457B15E30AE32D0"><enum>(1)</enum><text>in subsection (c)(1)—</text>
<subparagraph id="H144967752AD44C6DADD2A3AE723D1A36"><enum>(A)</enum><text>by striking subparagraphs (D) through (F); and</text> </subparagraph>
<subparagraph id="H4966DB2138154567AD268C0879756AB9"><enum>(B)</enum><text>by redesignating subparagraphs (G) and (H) as subparagraphs (D) and (E), respectively; and</text> </subparagraph></paragraph>
<paragraph id="H7DE5C473DCD146DFBB8E861CA068FC6A"><enum>(2)</enum><text>in subsection (f)—</text>
<subparagraph id="H06D2865E1BA84846A34B42061318A18F"><enum>(A)</enum><text>in paragraph (2)—</text>
<clause id="H3520E0075CBF47F0A8A866C1DD62A998"><enum>(i)</enum><text>by striking <quote>the Office of Thrift Supervision,</quote>; and</text> </clause>
<clause id="H4459620D41FA4B97B6A88775C3D355E8"><enum>(ii)</enum><text>in subparagraph (D), by striking <quote>the Office of Thrift Supervision,</quote>; and</text> </clause></subparagraph>
<subparagraph id="H8ED2C5FDB87F4414B58826A8C3A8E5E3"><enum>(B)</enum><text>in paragraph (3)—</text>
<clause id="HB05DFAF21A2B4826BE93656883315BEB"><enum>(i)</enum><text>by striking <quote>the Office of Thrift Supervision,</quote>; and</text> </clause>
<clause id="H04639B1CEA9B439DA8916228581A7E58"><enum>(ii)</enum><text>in subparagraph (D), by striking <quote>Office of Thrift Supervision,</quote> and inserting <quote>Comptroller of the Currency,</quote>.</text> </clause></subparagraph></paragraph></subsection>
<subsection id="H101ACD8F1D594ECCB3E5E2FEB4EB5E86"><enum>(b)</enum><header>Amendment to section 1315 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992</header><text>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 <quote>the Federal Deposit Insurance Corporation, and the Office of Thrift Supervision.</quote> and inserting <quote>and the Federal Deposit Insurance Corporation.</quote>.</text> </subsection>
<subsection id="H45218979311C45749A1B8ACAF0972FB3"><enum>(c)</enum><header>Amendment to section 1317 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992</header><text display-inline="yes-display-inline">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 <quote>the Federal Deposit Insurance Corporation, or the Director of the Office of Thrift Supervision</quote> and inserting <quote>or the Federal Deposit Insurance Corporation</quote>.</text> </subsection></section>
<section id="HBB373554526E448097DDEF9A294DF3E4"><enum>1244.</enum><header>Amendment to the Housing and Urban-Rural Recovery Act of 1983</header><text display-inline="no-display-inline">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 <quote>Federal Home Loan Bank Board</quote> and inserting <quote>Federal Housing Finance Agency</quote>.</text> </section>
<section id="H4FD06A7565844F41B92A225DF8850270"><enum>1245.</enum><header>Amendments to the National Housing Act</header><text display-inline="no-display-inline">Section 202(f) of the National Housing Act is amended—</text>
<paragraph id="H78681365E0F94F4DA8A5D9366B0EAE27"><enum>(1)</enum><text>by amending paragraph (5) to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H922DC2DFCE4A4967A448367026C60100" style="OLC">
<paragraph id="HD041EBE8DF4B4CFEBCBA34CA6FAA7699"><enum>(5)</enum><text display-inline="yes-display-inline">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;</text> </paragraph><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph>
<paragraph id="HCE63B79BBA9444D1A474709E2B83DFF4"><enum>(2)</enum><text>in paragraph (6), by adding <quote>and</quote> at the end;</text> </paragraph>
<paragraph id="HF4F3B33B5A9447178FA2987E22379BFA"><enum>(3)</enum><text>in paragraph (7)—</text>
<subparagraph id="H9DA5CA591B7840DD8B50E65955FC0072"><enum>(A)</enum><text>by inserting <quote>or State savings association</quote> after <quote>State bank</quote>; and</text> </subparagraph>
<subparagraph id="HCB9219EB40F94C2897B1595B0D14ECB7"><enum>(B)</enum><text>by striking <quote>; and</quote> and inserting a period; and</text> </subparagraph></paragraph>
<paragraph id="H5C9A0072F63C4E209DE896BE4134F550"><enum>(4)</enum><text>by striking paragraph (8).</text> </paragraph></section>
<section id="HFA38DCE2A50E41A798D0FCC2DFA1EF77"><enum>1246.</enum><header>Amendments to the Right to Financial Privacy Act of 1978</header><text display-inline="no-display-inline">Section 1101(7) of the Right to Financial Privacy Act of 1978 (12 U.S.C. 3401(7)) is amended by striking subparagraph (B).</text> </section>
<section id="HDE061D6979C547C19EB269149AE7FA47"><enum>1247.</enum><header>Amendments to the Balanced Budget and Emergency Deficit Control Act of 1985</header>
<subsection id="H4CAB187DE10B4427889547D410C9F61F"><enum>(a)</enum><header>Amendments to section 255</header><text>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 <quote>Office of Thrift Supervision (20–4108–0–3–373);</quote>.</text> </subsection>
<subsection id="H3FA075D534F249DDB54B56A40744059D"><enum>(b)</enum><header>Amendments to section 256</header><text>Section 256(h)(4) of the Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 906(h)(4)) is amended—</text>
<paragraph id="H8383844AAD464133AC90052AAD3E4CE2"><enum>(1)</enum><text>by striking subparagraphs (C) and (G); and</text> </paragraph>
<paragraph id="H2055F806B75040179322A57D71770942"><enum>(2)</enum><text>by redesignating subparagraphs (D), (E), (F), and (H) as subparagraphs (C) through (G), respectively.</text> </paragraph></subsection></section>
<section id="H70979BB439484B948FEE7D3F805B00BE"><enum>1248.</enum><header>Amendments to the Crime Control Act of 1990</header>
<subsection id="H845AE601BCE4426F926A30B1A0EC05C9"><enum>(a)</enum><header>Amendments to section 2539</header><text>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.</text> </subsection>
<subsection id="H99E26BC72CDE4182AAA2556A281E2C9D"><enum>(b)</enum><header>Amendment to section 2554</header><text>Section 2554(b)(2) of the Crime Control Act of 1990 (Public Law 101–647) is amended by striking <quote>Director of the Office of Thrift Supervision</quote> and inserting <quote>Comptroller of the Currency</quote>.</text> </subsection></section>
<section id="HBD3253BD5A704E96854711B952FD4558"><enum>1249.</enum><header>Amendment to the Flood Disaster Protection Act of 1973</header><text display-inline="no-display-inline">Section 3(a)(5) of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4003(a)(5)) is amended by striking <quote>the Office of Thrift Supervision,</quote>.</text> </section>
<section id="HB876D8644F894B98ADD0C8D36188E27D"><enum>1250.</enum><header>Amendment to the Investment Company Act of 1940</header><text display-inline="no-display-inline">Section 6(a)(3) of the Investment Company Act of 1940 (15 U.S.C. 80a–6(a)(3)) is amended by striking <quote>Federal Savings and Loan Insurance Corporation</quote> and inserting <quote>Comptroller of the Currency</quote>.</text> </section>
<section id="HF49773044BA6446599A70F9EF40D2EDD"><enum>1251.</enum><header>Amendment to the Neighborhood Reinvestment Corporation Act</header><text display-inline="no-display-inline">Section 606(c)(3) of the Neighborhood Reinvestment Corporation Act is amended by striking <quote>Federal Home Loan Bank Board</quote> and inserting <quote>Federal Housing Finance Agency</quote>.</text> </section>
<section id="HF1A1FCD0AC7C41C490E9BBD789390A78"><enum>1252.</enum><header>Amendments to the Securities Exchange Act of 1934</header>
<subsection id="HD363B20D90FC4A5693877C8421BD1F66"><enum>(a)</enum><header>Amendments to section 3</header><text>Section 3(a)(34) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(34)) is amended—</text>
<paragraph id="H357E3384688C419C89ADF058E96800DE"><enum>(1)</enum><text>in subparagraph (A)—</text>
<subparagraph id="HA0D1AF65C7A54E228A49851DC0AC6DFB"><enum>(A)</enum><text>in clause (i), by striking <quote>bank;</quote> and inserting <quote>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;</quote>;</text> </subparagraph>
<subparagraph id="H7E704A74CD334AE89B49C8C2A1F988CD"><enum>(B)</enum><text>in clause (iii), by adding <quote>and</quote> at the end;</text> </subparagraph>
<subparagraph id="HB5159DEA0DD9431D9D885F9253D1139E"><enum>(C)</enum><text>by striking clause (iv); and</text> </subparagraph>
<subparagraph id="HBC8EA0C324194315BFB3326F7910E1D9"><enum>(D)</enum><text>by redesignating clause (v) as clause (iv);</text> </subparagraph></paragraph>
<paragraph id="HE676C181DAFC45A69B8E964FE3F5609B"><enum>(2)</enum><text>in subparagraph (B)—</text>
<subparagraph id="H8DE384369B4341FEBDE5C75AE54E7C3B"><enum>(A)</enum><text>in clause (i), by striking <quote>bank;</quote> and inserting <quote>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;</quote>;</text> </subparagraph>
<subparagraph id="H9CC40DDAC4E240B8B57F720B0EB8BDE6"><enum>(B)</enum><text>in clause (iii), by adding <quote>and</quote> at the end;</text> </subparagraph>
<subparagraph id="HFD201DB5216D4D3791ECA5E38296627B"><enum>(C)</enum><text>by striking clause (iv); and</text> </subparagraph>
<subparagraph id="H0F4C042DA7144017BB7F32614CA78789"><enum>(D)</enum><text>by redesignating clause (v) as clause (iv);</text> </subparagraph></paragraph>
<paragraph id="H689A777C11C64D27B217192E583662C8"><enum>(3)</enum><text>in subparagraph (C)—</text>
<subparagraph id="H50C6C42087864CACA7D8C976D38BFD3F"><enum>(A)</enum><text>in clause (i), by striking <quote>bank;</quote> and inserting <quote>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;</quote>;</text> </subparagraph>
<subparagraph id="HFE1C95180C01455BA5F635191156D8F5"><enum>(B)</enum><text>in clause (iii), by adding <quote>and</quote> at the end;</text> </subparagraph>
<subparagraph id="HBEF36D3006BE419E8A38EF17FFC605DF"><enum>(C)</enum><text>by striking clause (iv); and</text> </subparagraph>
<subparagraph id="H766F042C2D9946B7BED61962348439CC"><enum>(D)</enum><text>by redesignating clause (v) as clause (iv); and</text> </subparagraph></paragraph>
<paragraph id="H0265D2FB6431447989E79341BD351E19"><enum>(4)</enum><text>in subparagraph (F)—</text>
<subparagraph id="H4F4300E1F0A249B280AE453BC06A9CA6"><enum>(A)</enum><text>in clause (i), by striking <quote>bank;</quote> and inserting <quote>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;</quote>;</text> </subparagraph>
<subparagraph id="H632C444FE31647BEB0900A6B4AEF1403"><enum>(B)</enum><text>by striking clause (ii); and</text> </subparagraph>
<subparagraph id="HC7E3A490DFA54EE2A8943820723B9AAF"><enum>(C)</enum><text>redesignating clauses (iii), (iv), and (v) as clauses (ii), (iii) and (iv), respectively.</text> </subparagraph></paragraph></subsection>
<subsection id="HDD1DAB7813C04CC6AC9EA31CACB7FDD6"><enum>(b)</enum><header>Amendments to section 15C</header><text>Section 15C of the Securities Exchange Act of 1934 (15 U.S.C. 78o–5) is amended in subsection (g)(1) by striking <quote>the Director of the Office of Thrift Supervision, the Federal Savings and Loan Insurance Corporation,</quote>.</text> </subsection></section>
<section id="H6247994F0AE54B829F846810B59E6D85"><enum>1253.</enum><header>Amendments to title 18, United States Code</header>
<subsection id="H44E254409C2448E6B83140C792335C95"><enum>(a)</enum><header>Amendment to section 212</header><text>Section 212(c)(2) of title 18, United States Code, is amended—</text>
<paragraph id="H5F19465DE08948CD988AA3876807FAAC"><enum>(1)</enum><text>by striking subparagraph (C); and</text> </paragraph>
<paragraph id="H7BF395FA0C7B473DBE6908A1B3A726FF"><enum>(2)</enum><text>by redesignating subparagraphs (D) through (H) as subparagraphs (C) through (G), respectively.</text> </paragraph></subsection>
<subsection id="HAE5FABA1A2D34C42B9A4C900DD47B104"><enum>(b)</enum><header>Amendment to section 657</header><text>Section 657 of title 18, United States Code, is amended by striking <quote>Office of Thrift Supervision, the Resolution Trust Corporation,</quote>.</text> </subsection>
<subsection id="H15EC6EE95D2D48FE8642A870468FD4D0"><enum>(c)</enum><header>Amendment to section 981</header><text>Section 981(a)(1)(D) of title 18, United States Code, is amended—</text>
<paragraph id="H44C4438EF7BE4907BB6931E720A58B09"><enum>(1)</enum><text>by striking <quote>the Resolution Trust Corporation,</quote>; and</text> </paragraph>
<paragraph id="H0C8323164133480B8E6F0790C1FAE960"><enum>(2)</enum><text>by striking <quote>or the Office of Thrift Supervision</quote>.</text> </paragraph></subsection>
<subsection id="H47098F944CD04DEC854E95421C498829"><enum>(d)</enum><header>Amendment to section 982</header><text>Section 982(a)(3) of title 18, United States Code, is amended—</text>
<paragraph id="HC1C2FA4945664FD3A528439EB7154A5A"><enum>(1)</enum><text>by striking <quote>the Resolution Trust Corporation,</quote>; and</text> </paragraph>
<paragraph id="H1E18B257BB864F6EBED75CF8DD4C55F1"><enum>(2)</enum><text>by striking <quote>or the Office of Thrift Supervision</quote>.</text> </paragraph></subsection>
<subsection id="H6C3999377E404DAAAC73BE2529436022"><enum>(e)</enum><header>Amendment to section 1006</header><text>Section 1006 of title 18, United States Code, is amended—</text>
<paragraph id="H218C3407FB3643B29062231349DE4CBB"><enum>(1)</enum><text>by striking <quote>Office of Thrift Supervision,</quote>; and</text> </paragraph>
<paragraph id="H190AABBB4C664D85A5396335068C0BDA"><enum>(2)</enum><text>by striking <quote>the Resolution Trust Corporation,</quote>.</text> </paragraph></subsection>
<subsection id="HB9F1064806454C9B928FFD120DA16FB6"><enum>(f)</enum><header>Amendment to section 1014</header><text>Section 1014 of title 18, United States Code, is amended—</text>
<paragraph id="H8F4D4D0461354DDF962DBC000B013068"><enum>(1)</enum><text>by striking <quote>the Office of Thrift Supervision,</quote>; and</text> </paragraph>
<paragraph id="HE4096DEC172243F7A228D561A00174FE"><enum>(2)</enum><text>by striking <quote>the Resolution Trust Corporation,</quote>.</text> </paragraph></subsection>
<subsection id="HDCE1FB458C3549A38A3F84AFD612AA0F"><enum>(g)</enum><header>Amendment to section 1032</header><text>Section 1032(1) of title 18, United States Code, is amended—</text>
<paragraph id="H54458761356B488CB3CACE4106626467"><enum>(1)</enum><text>by striking <quote>the Resolution Trust Corporation,</quote>; and</text> </paragraph>
<paragraph id="H93C9AAE5D2B9432A96E8B1E196BD1A74"><enum>(2)</enum><text>by striking <quote>or the Director of the Office of Thrift Supervision</quote>.</text> </paragraph></subsection></section>
<section id="HE4565B57A08B48E085E36CCCAEA6580F"><enum>1254.</enum><header>Amendments to title 31, United States Code</header>
<subsection id="H4DEBE17A05ED4C389445A3B38BE54584"><enum>(a)</enum><header>Amendment to section 309</header><text>Section 309 of title 31, United States Code, is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H3F2F4261CA0B438CB588BEB76360611F" style="USC">
<section id="H3B099819B6F7411789C66D29E37D218F"><enum>309.</enum><header>Division of Thrift Supervision</header><text display-inline="no-display-inline">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.</text> </section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="HBFC24C6B732346EF8F4113BEEADC57F8"><enum>(b)</enum><header>Amendments to section 321</header><text>Section 321 of title 31, United States Code, is amended—</text>
<paragraph id="H6A77D3BA8FC94E529E6C35A4438C7385"><enum>(1)</enum><text>in subsection (c)—</text>
<subparagraph id="H63634E2B719046FBAEA075E7B48C7013"><enum>(A)</enum><text>in paragraph (1), by adding <quote>and</quote> at the end;</text> </subparagraph>
<subparagraph id="H866BA802B9CE4308B50B64875D38657A"><enum>(B)</enum><text>in paragraph (2), by striking <quote>; and</quote> and inserting a period; and</text> </subparagraph>
<subparagraph id="H1C86D8DECFAB4AC497715D810AEEA305"><enum>(C)</enum><text>by striking paragraph (3); and</text> </subparagraph></paragraph>
<paragraph id="H3606A389C82E4F209436639B9188B285"><enum>(2)</enum><text>by striking subsection (e).</text> </paragraph></subsection>
<subsection id="H1F867129A8524F6F9AA85E5163AB1FB7"><enum>(c)</enum><header>Amendments to section 714</header><text>Section 714 of title 31, United States Code, is amended—</text>
<paragraph id="H3BE80582169C438E8828738DE3CB7966"><enum>(1)</enum><text>in subsection (a), by striking <quote>the Office of the Comptroller of the Currency, and the Office of Thrift Supervision.</quote> and inserting <quote>and the Office of the Comptroller of the Currency.</quote>;</text> </paragraph>
<paragraph id="H6C0180049EDD4CA1874107265616D926"><enum>(2)</enum><text display-inline="yes-display-inline">in subsection (b), by striking all after <quote>has consented in writing.</quote> and inserting the following: <quote>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.</quote>;</text> </paragraph>
<paragraph id="HA63ED3FB88FE45968AC82407231FF445"><enum>(3)</enum><text display-inline="yes-display-inline">in subsection (c)(1), in the first sentence, by striking <quote>subsection,</quote> and inserting <quote>subsection or in the audits or audit reports referring or relating to the Federal Reserve Board or Reserve Banks,</quote>; and</text> </paragraph>
<paragraph id="H2ADE6E34D4B14309AAB794CD035105CB"><enum>(4)</enum><text>by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="H22D630653FB44944990EE1607EB9D3DB" style="OLC">
<subsection id="H2A2A1A0F8A72479ABFC4FBECD7C6D2F7"><enum>(f)</enum><header>Audit and report of the Federal Reserve System</header>
<paragraph id="H374C05D9BDBE49F19E8005C085B7BFF8"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph>
<paragraph id="HBE9409FDB82C4BE2B566FF57FD5E9B48"><enum>(2)</enum><header>Report</header>
<subparagraph id="H2E06BD5FE0F44C01A1494829D782F4FF"><enum>(A)</enum><header>Required</header><text>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—</text>
<clause id="H0D3CD1CA5C1F41FC8AA5D07842BF1C97"><enum>(i)</enum><text>the Speaker of the House of Representatives;</text> </clause>
<clause id="H280C58402049430991DF65736C56EFE3"><enum>(ii)</enum><text>the majority and minority leaders of the House of Representatives;</text> </clause>
<clause id="HFE49EE3AF2134B93AD22E60331297C19"><enum>(iii)</enum><text>the majority and minority leaders of the Senate;</text> </clause>
<clause id="HA3D81F130ADD4A5B9FAC38D8CE903D1C"><enum>(iv)</enum><text>the Chairman and Ranking Member of the committee and each subcommittee of jurisdiction in the House of Representatives and the Senate; and</text> </clause>
<clause id="H1C848568FFFF4563A1536097C60CA499"><enum>(v)</enum><text>any other Member of Congress who requests it.</text> </clause></subparagraph>
<subparagraph id="H5A79FF4D08F14F47A837C41F3E3F368A"><enum>(B)</enum><header>Contents</header><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph>
<paragraph id="H5FD256F4C0BB4274AA8DE32522EC8DFB"><enum>(3)</enum><header>Construction</header><text display-inline="yes-display-inline">Nothing in this subsection shall be construed—</text>
<subparagraph id="H13E64C8DBFCD4C0BB273A0754E0420F9"><enum>(A)</enum><text>as interference in or dictation of monetary policy to the Federal Reserve System by the Congress or the Government Accountability Office; or</text> </subparagraph>
<subparagraph id="H99DD2A0D79D246E89C3ABFE4C803DC30"><enum>(B)</enum><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection></section>
<section display-inline="no-display-inline" id="H9B590E1AB02541F2AC49504820F2D793" section-type="subsequent-section"><enum>1255.</enum><header>Requirement for Countercyclical Capital Requirements</header><text display-inline="no-display-inline">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:</text>
<quoted-block display-inline="no-display-inline" id="HB7F654EDC1D3444F86411F82B4D27435" style="OLC">
<paragraph id="HFDEDF8BB15104A4FA31DB66526DA8417"><enum>(3)</enum><text display-inline="yes-display-inline">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.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </section>
<section id="HEC838B9205EE44D585AA7E9B67D3144D"><enum>1256.</enum><header>Transfer of authority to the Board with respect to savings and loan holding companies</header>
<subsection display-inline="no-display-inline" id="HD62B5CCDDF8D4FF2B3CAECFA27184800"><enum>(a)</enum><header>Transfer of functions</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="H20AEC8FFB29B4EBE96C9A9ECCBE3781F"><enum>(b)</enum><header>Board’s authority</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="H042749676F25486F8063F42BFC3AA69D"><enum>(c)</enum><header>Savings and loan holding company defined</header><text>The term <quote>savings and loan holding company</quote> shall have the meaning given such term under section 10 of the Home Owners’ Loan Act.</text> </subsection></section>
<section id="H173651C520F4466DBD48892FAA69296D" display-inline="no-display-inline" section-type="subsequent-section"><enum>1257.</enum><header>Effective date</header><text display-inline="no-display-inline">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.</text></section></subtitle>
<subtitle id="HAA9E35FC679540CDACF2BDC4F6EC7004"><enum>D</enum><header>Further improvements to the regulation of bank holding companies and depository institutions</header>
<section id="HE9F6F9F2AE374140A5E73D23BA0C84CC"><enum>1301.</enum><header>Treatment of industrial loan companies, savings associations, and certain other companies under the bank holding company act</header>
<subsection id="H07B83F6D62B64D98B57165B6B1E4CFBB"><enum>(a)</enum><header>Definitions</header><text>Section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 1841) is amended—</text>
<paragraph id="HBADD340CE07C49CAA7412055103C7F19"><enum>(1)</enum><text display-inline="yes-display-inline">by striking subsection (a)(1) and inserting the following:</text>
<quoted-block display-inline="no-display-inline" id="H0BFC3122CC704AFC8F61D04A24FBAF1A" style="OLC">
<subsection id="H76EAA795D4434B029EEC72CF6FB410D1"><enum>(a)</enum><header>Bank holding company</header>
<paragraph id="HAD185B4093CD41CCAE89A5B6D4D7C58D"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Except as provided in paragraph (5), the term <quote>bank holding company</quote> means—</text>
<subparagraph id="HCE30E9394997403CA439549E705361F6"><enum>(A)</enum><text>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</text> </subparagraph>
<subparagraph id="H226DA2CE486E424F949291D33D0FA2B8"><enum>(B)</enum><text>any section 6 holding company established by a company described in section 6(a)(1)(C).</text> </subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H63D080D85663488A8FA675D00D2ECDA8"><enum>(2)</enum><text>in subsection (a)(5), by adding at the end the following new subparagraph:</text>
<quoted-block id="H6B94A8D255C041FC9AC3910C2730721B" style="OLC">
<subparagraph id="HA78FB95820D24C98844C07631A6DD517"><enum>(G)</enum><text>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;</text> </subparagraph><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H0449C289C18B457882DEA0456425CE9C"><enum>(3)</enum><text>in subsection (c)(1)(A), by striking <quote>insured bank</quote> and inserting <quote>insured depository institution</quote>, and by striking <quote>section 3(h) of the Federal Deposit Insurance Act</quote> and inserting <quote>section 3(c)(2) of the Federal Deposit Insurance Act</quote>;</text> </paragraph>
<paragraph id="H6F732231564247C49C4907782DD1528B"><enum>(4)</enum><text>in subsection (c)(2)—</text>
<subparagraph id="HB58B58659D924A0E84B66284005D443D"><enum>(A)</enum><text display-inline="yes-display-inline">in subparagraph (B), by inserting before the period the following: <quote>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</quote>; and</text> </subparagraph>
<subparagraph id="H563C91127C89421F9BEEA22FACDC1770"><enum>(B)</enum><text>in subparagraph (F)(i), by inserting before the semicolon the following: <quote>, including issuing credit cards and other credit devices (including virtual or intangible devices) that function as credit cards</quote>;</text></subparagraph>
<subparagraph id="H342F2EEC095644DF9F0296926E10BDD0"><enum>(C)</enum><text display-inline="yes-display-inline">in subparagraph (F)(v), by inserting before the semicolon the following: <quote>, 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</quote>; and</text></subparagraph>
<subparagraph id="H8818334AB9EE4E689C059EF84444A236"><enum>(D)</enum><text display-inline="yes-display-inline">by striking subparagraph (H) and inserting the following:</text>
<quoted-block style="OLC" id="H1B31756FDF0F44C786D98FAD52665851" display-inline="no-display-inline">
<subparagraph id="H1F1546426F274E369BFDCC0CF0326A40"><enum>(H)</enum><text display-inline="yes-display-inline">An industrial loan company, industrial bank, or other similar institution which—</text>
<clause id="H2CF702421C8445A4A2E6AF8E078F4079"><enum>(i)</enum><text>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;</text></clause>
<clause id="HF7825A800A234F5395A986274404FD49"><enum>(ii)</enum><text>either—</text>
<subclause id="H67FC0AB43A5149C499BB70944F2A9690"><enum>(I)</enum><text>does not accept demand deposits that the depositor may withdraw by check or similar means for payment to third parties;</text></subclause>
<subclause id="HB623A3F09054445A98A0BDEA512233A2"><enum>(II)</enum><text>has total assets of less than $100,000,000; or</text></subclause>
<subclause id="HC88BA93E614547DF8DD55A0CE64ED2EE"><enum>(III)</enum><text>the control of which is not acquired by any company after August 10, 1987;</text> </subclause></clause>
<clause id="H4203D505A6984444BB57FF4521658A75"><enum>(iii)</enum><text>predominantly provides financial products and services to current and former members of the military and their families; and</text></clause>
<clause id="H55E70A53E1D74EFBAA492D3623167C71"><enum>(iv)</enum><text>is controlled by a savings and loan holding company, as defined in section 10(a) of the Home Owners’ Loan Act. </text></clause><continuation-text continuation-text-level="subparagraph">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.</continuation-text></subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block></subparagraph></paragraph>
<paragraph id="H6B4DD7EAAE014C239F3A28DE0A558BE5"><enum>(5)</enum><text>by adding at the end the following new subsection:</text>
<quoted-block id="H9D0B1B522F3E402F84CE334BEA5926A4" style="OLC">
<subsection id="H7CC01DA53E6C4B1F85F8FEAAAB7EFDA6"><enum>(r)</enum><header>Section 6 holding companies</header><text>The term <quote>section 6 holding company</quote> means a company that is required to be established as an intermediate holding company under section 6 of this Act.</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection id="HAE14227CEAB347E9B104F27904E0F50F"><enum>(b)</enum><header>Nonbanking activities exceptions</header><text>Section 4 of the Bank Holding Company Act of 1956 (12 U.S.C. 1843) is amended—</text>
<paragraph id="H3D87502FE8474EED8F958D3E041434E0"><enum>(1)</enum><text>in subsection (f)(1)(B) by striking <quote>for purposes of this Act</quote> and inserting <quote>for purposes of section 4(a)</quote>; and</text> </paragraph>
<paragraph id="H9CC912E061B54567A7CEEC4635539E4F"><enum>(2)</enum><text>in subsection (f)(2)—</text>
<subparagraph id="H35183BD127F648DD886343E8222B8C61"><enum>(A)</enum><text>in subparagraph (B)(ii), by striking <quote>; or</quote> and inserting a semicolon;</text> </subparagraph>
<subparagraph id="H1CCDD30B085C4D939FE4F7AAABEFCA10"><enum>(B)</enum><text>in subparagraph (C), by striking the period and inserting <quote>; or</quote>; and</text> </subparagraph>
<subparagraph id="HA6C0BA9B9C414AEFA1D0E6B1EC0660E7"><enum>(C)</enum><text>by adding at the end the following new subparagraph:</text>
<quoted-block id="H60724192EFC8453A9913FF7073E2D558" style="OLC">
<subparagraph id="H1DDC0FEAF9D44C558D0C3E4F10EA2D87"><enum>(D)</enum><text>such company fails to—</text>
<clause id="HEA940B1F54D74D75996B3E93D9F0ADC3"><enum>(i)</enum><text display-inline="yes-display-inline">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</text> </clause>
<clause id="HF17BFEF808784F349619AC2ADA47C1A0" display-inline="no-display-inline"><enum>(ii)</enum><text display-inline="yes-display-inline">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—</text>
<subclause id="HDD28145C1A184CE9BFB1129353449DCC"><enum>(I)</enum><text>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</text></subclause>
<subclause id="HCBAD5F311AD348BBAA1480A4A916E2D3"><enum>(II)</enum><text>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.</text></subclause></clause> </subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block> </subparagraph></paragraph>
<paragraph id="H153D9F6BB73D4EAFA80578DA52C6607B"><enum>(3)</enum><text>by inserting at the end the following new subsections:</text>
<quoted-block id="H4173C63ECB6546F9A4A30925323B7E09" style="OLC">
<subsection id="H5B16B7902EA840639E8558A24B30D7C0"><enum>(p)</enum><header>Certain companies not subject to this act</header>
<paragraph id="HD938A88832264348AFEE087C3100FEB5"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Except as provided in paragraphs (6) and (7), any company which—</text>
<subparagraph id="H09A8DBC4C269491F8A3DC94BF9258CE4"><enum>(A)</enum><text>was—</text>
<clause id="H4341A668790746FCA949619848F9A69C" commented="no"><enum>(i)</enum><text display-inline="yes-display-inline">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</text></clause>
<clause display-inline="no-display-inline" id="H61A3C7C2F9C4492A9B0177E0073905C5"><enum>(ii)</enum><text display-inline="yes-display-inline">on November 23, 2009—</text>
<subclause id="H1096133334634DA782C61E1990B1C826"><enum>(I)</enum><text>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;</text> </subclause>
<subclause id="H97DA6D75E8144C7886CE2271378F4189"><enum>(II)</enum><text display-inline="yes-display-inline">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—</text>
<item id="HA0225F87921146CA944952E534FEB108"><enum>(aa)</enum><text>that is a federally insured, State-chartered depository institution;</text> </item>
<item id="H84FE21DC8F8B4D5CAA1348F56DB97A27"><enum>(bb)</enum><text>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</text> </item>
<item id="H728696E828BC48D793416BCECC3A1437"><enum>(cc)</enum><text>that—</text>
<subitem id="H9765C3D76E7943E0B7C538CFC1D82F36"><enum>(AA)</enum><text>does not accept demand deposits that the depositor may withdraw by check or similar means for payment to third parties; or</text> </subitem>
<subitem id="H2090E8AA1AE843F9BBF57F7B211ACCAF"><enum>(BB)</enum><text>maintains total assets of less than $100,000,000; or</text> </subitem></item></subclause>
<subclause id="H901B4F348CD541568A4C3638CD23E35E"><enum>(III)</enum><text display-inline="yes-display-inline">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);</text> </subclause></clause></subparagraph>
<subparagraph id="H429133A92EE140B6B60884D37C4A5493"><enum>(B)</enum><text display-inline="yes-display-inline">was not on June 30, 2009—</text>
<clause id="H03B97476A36B4AD8842AA0DC89BA3702"><enum>(i)</enum><text>a bank holding company; or</text> </clause>
<clause id="HDDBF935CE05645B4B4F8ADD53536A6F7"><enum>(ii)</enum><text display-inline="yes-display-inline">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</text> </clause></subparagraph>
<subparagraph id="H93AFD2383DA84CAE98DA962FFFF242C0"><enum>(C)</enum><text display-inline="yes-display-inline">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,</text> </subparagraph><continuation-text continuation-text-level="paragraph">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.</continuation-text></paragraph>
<paragraph id="H2C8E0134DB4C4BD09FA29917261A5FF2"><enum>(2)</enum><header>Loss of exemption</header><text>A company described in paragraph (1) shall no longer qualify for the exemption provided under that paragraph if—</text>
<subparagraph id="H40CBE8F5D8954778905C6BA5AE6A87E9"><enum>(A)</enum><text>such company fails to—</text>
<clause id="H134CC759430B43ABA5DA2FB66ED84B35"><enum>(i)</enum><text display-inline="yes-display-inline">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</text> </clause>
<clause id="H2B1C04455C0445D6879AC38A45BFBD48"><enum>(ii)</enum><text>maintain a section 6 holding company in compliance with all the requirements for a section 6 holding company under section 6 of this Act.</text> </clause></subparagraph>
<subparagraph id="H692B7C1481C7411D840B0A91EC184CF5"><enum>(B)</enum><text display-inline="yes-display-inline">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—</text>
<clause id="HD6DCF76AAD664BD8B3C724AAFC384AE9"><enum>(i)</enum><text>shares held as a bona fide fiduciary (whether with or without the sole discretion to vote such shares);</text> </clause>
<clause id="H5BE7197F7B69463C85434FB0C1F68E11"><enum>(ii)</enum><text>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;</text> </clause>
<clause id="H70F416DA776F4F0E80B1DC50A022562B"><enum>(iii)</enum><text>shares held temporarily pursuant to an underwriting commitment in the normal course of an underwriting business;</text> </clause>
<clause id="H57A10001D24944EBAE24BABB347ADADB"><enum>(iv)</enum><text>shares held in an account solely for trading purposes;</text> </clause>
<clause id="H364D071E2BA748EB9D3F3F803B6138B8"><enum>(v)</enum><text>shares over which no control is held other than control of voting rights acquired in the normal course of a proxy solicitation;</text> </clause>
<clause id="HE7B0D79982514F7C8580B376A672CDCD"><enum>(vi)</enum><text>loans or other accounts receivable acquired from an insured depository institution in the normal course of business;</text> </clause>
<clause id="HF28B847274AA4B328D9CEA7617A3FE3C"><enum>(vii)</enum><text>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;</text> </clause>
<clause id="H66A1B514F5DC4A51AE6389E7A2F8C194"><enum>(viii)</enum><text display-inline="yes-display-inline">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;</text> </clause>
<clause id="HEF8A466D86264F6A990F90322EC1CC73"><enum>(ix)</enum><text>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</text> </clause>
<clause id="HE1D0F24C1D9E4F32866ADE7C1E8257C5"><enum>(x)</enum><text>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;</text> </clause></subparagraph>
<subparagraph id="HA0008DB54C6245839781511111567E32"><enum>(C)</enum>
<clause commented="no" display-inline="yes-display-inline" id="H71E088B798B84A009FC271EA19B16356"><enum>(i)</enum><text>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—</text>
<subclause id="H809DD615CCBA4747AD06DD9D0865F21C" indent="up1"><enum>(I)</enum><text>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); </text> </subclause>
<subclause id="HC94414C60AA6400287B938492D4ECD4D" indent="up1" display-inline="no-display-inline"><enum>(II)</enum><text display-inline="yes-display-inline">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—</text>
<item id="H068AE8BA5B9046BCA00EE1FE19D3FB0F"><enum>(aa)</enum><text>the transaction is approved by the appropriate Federal banking agency and the Board; and</text></item>
<item id="H19EF9E0C2926407EB88090C77ED2FCDE"><enum>(bb)</enum><text>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)); </text></item></subclause> </clause>
<clause id="H086224407E914DF19BE27BB690E8C458"><enum>(III)</enum><text>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</text>
<subclause id="H97851ACB358045B0AF7F59DF8E8F15F4" indent="up1"><enum>(IV)</enum><text>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.</text> </subclause></clause>
<clause id="H8FD9EFB9455B461DB8B4E34387D7CEBB" indent="up1"><enum>(ii)</enum><text>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</text> </clause></subparagraph>
<subparagraph id="HECF2D356CD3C47FB85AC8338E71DF5BE"><enum>(D)</enum><text>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.</text> </subparagraph></paragraph>
<paragraph id="HAAE982223EBA440BB9250005721946E9"><enum>(3)</enum><header>Divestiture in case of loss of exemption</header><text>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—</text>
<subparagraph id="H61CEDD50ADFF4BFDACDB7BC6AA3F7705"><enum>(A)</enum><text>either—</text>
<clause id="H4BBA1CEBB2EF4058A8BCCB0EF57C7E2C"><enum>(i)</enum><text>corrected the condition or ceased the activity that caused the company to fail to continue to qualify for the exemption; or</text> </clause>
<clause id="H7555E7A0DBEC49FCA8D458466FB21291"><enum>(ii)</enum><text>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</text> </clause></subparagraph>
<subparagraph id="HE4B5480B4515459E9C244DF13B773131"><enum>(B)</enum><text>implemented procedures that are reasonably adapted to avoid the reoccurrence of such condition or activity.</text> </subparagraph></paragraph>
<paragraph id="HFB3F281EC15D4584B709634C6A2CCFFC"><enum>(4)</enum><header>Subsection ceases to apply under certain circumstances</header><text>This subsection shall cease to apply to any company described in paragraph (1) if such company—</text>
<subparagraph id="H682D47B25D864452936083EE30432416"><enum>(A)</enum><text>registers as a bank holding company under section 2(a) of this Act;</text> </subparagraph>
<subparagraph id="H4071C405533D451EBE4BD485D32B35B6"><enum>(B)</enum><text>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</text> </subparagraph>
<subparagraph id="H1F468F40D38E409EBD1326A3D9364138"><enum>(C)</enum><text>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.</text> </subparagraph></paragraph>
<paragraph id="HBAE0C8FCA63240D097C94879FEF48F41"><enum>(5)</enum><header>Information requirement</header><text>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.</text> </paragraph>
<paragraph id="H30462E8C235B432DAEAAFDDF785F1070"><enum>(6)</enum><header>Examinations and reports</header><text>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.</text> </paragraph>
<paragraph id="H19B53115D97944B0BF30DFF3B71CB536"><enum>(7)</enum><header>Limited enforcement</header>
<subparagraph id="H0BB915860FC24C19AA343ABF648EFA30"><enum>(A)</enum><header>In general</header><text>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.</text> </subparagraph>
<subparagraph id="H9D0EE33A11E548849385DA5D1D3B1E94"><enum>(B)</enum><header>Application of other act</header><text>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).</text> </subparagraph>
<subparagraph id="H8A9EC0C6D2D94F55AF7F37824BB8CBE6"><enum>(C)</enum><header>No effect on other authority</header><text>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.</text> </subparagraph></paragraph>
<paragraph id="H6C8DF0DE81B44735B135E7EC1A6CB71A" display-inline="no-display-inline"><enum>(8)</enum><header>Unitary savings and loan holding company defined</header><text display-inline="yes-display-inline">For purposes of this subsection, the term <quote>unitary savings and loan holding company</quote> 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—</text>
<subparagraph id="H9B6FF252572447E198F3407275C6AC10"><enum>(A)</enum><text>that controls—</text>
<clause id="H228306F99FFE4010ADF3907888A0D7A7"><enum>(i)</enum><text>only 1 savings association; or</text></clause>
<clause id="HDEC75A146F7A40619399F8D4EABEA6C9"><enum>(ii)</enum><text>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));</text></clause></subparagraph>
<subparagraph id="H9B194F6771CB495FAB404E7FA03B8FB3"><enum>(B)</enum><text>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</text></subparagraph>
<subparagraph id="H38513FD9276D4254B6C2F6F22E6F332F"><enum>(C)</enum><text>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.</text></subparagraph></paragraph></subsection>
<subsection id="HCBA4FF48961948F7AAB34489C8223BDB"><enum>(q)</enum><header>Preservation of certain savings and loan holding company authorities</header><text display-inline="yes-display-inline">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:</text>
<paragraph id="HD088D0A2EF744500A856CDAA38CD5713"><enum>(1)</enum><text>Furnishing or performing management services for a savings association subsidiary of such company.</text> </paragraph>
<paragraph id="H71FC2C1441D945AE94C843F7C1E33FE7"><enum>(2)</enum><text>Conducting an insurance agency or escrow business.</text> </paragraph>
<paragraph id="H26A2746D18B74783B41FFABE29B45198"><enum>(3)</enum><text>Holding, managing, or liquidating assets owned or acquired from a savings association subsidiary of such company.</text> </paragraph>
<paragraph id="H0469E6E15BC54731A6906161B077D5A7"><enum>(4)</enum><text>Holding or managing properties used or occupied by a savings association subsidiary of such company.</text> </paragraph>
<paragraph id="H377093405A2945ADB574AB9BF87B2C00"><enum>(5)</enum><text>Acting as trustee under deed of trust.</text> </paragraph>
<paragraph id="H430D38E87F62434987C6D858A6145D6D"><enum>(6)</enum><text>Any other activity in which multiple savings and loan holding companies were authorized (by regulation) to directly engage on March 5, 1987.</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection id="H4367CBC0ED1E43EA9B6B788934B93ADE"><enum>(c)</enum><header>Section 6 holding companies</header><text>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:</text>
<quoted-block id="H12E7275412D54BF3B9CDFBE940E2C11F" style="OLC">
<section id="H19D4819C2A874D30AACD415A6CCFE014"><enum>6.</enum><header>Special-purpose holding companies</header>
<subsection id="HB3D3BD0A38264CACBD1EDFE8D9E6A4B1"><enum>(a)</enum><header>Establishment, purpose and requirements of special purpose holding companies</header>
<paragraph id="H05946D15A9414723B1269C7C8C2E6790"><enum>(1)</enum><header>Requirement</header><text>A special purpose holding company (hereafter in this section referred to as a <quote>section 6 holding company</quote>) shall be established and maintained by a company—</text>
<subparagraph id="HB5A3D89F88E941809656B7C2741B0A5B"><enum>(A)</enum><text>described in section 4(f)(1) as required by section 4(f)(2)(D) of this Act;</text> </subparagraph>
<subparagraph id="H7F1B13DD76464280B5B5AA381482C99A"><enum>(B)</enum><text>described in section 4(p)(1) as required by section 4(p)(2)(A) of this Act; or</text> </subparagraph>
<subparagraph id="H000AE01018AD4BA78460D2FE0DA26C93"><enum>(C)</enum><text>that—</text>
<clause id="HB6794F9DD6DB4280BBF6C4185A59A3E8"><enum>(i)</enum><text>is subject to stricter prudential standards under section 1103 of the Financial Stability Improvement Act of 2009;</text> </clause>
<clause id="H5D1E9B1EA37446769070B4AADAD83F81"><enum>(ii)</enum><text>is not—</text>
<subclause id="H4099252F2DE7421181CFB83BD554C691"><enum>(I)</enum><text>a bank holding company; or</text> </subclause>
<subclause id="HB91E6410B23D44FC9FCCDD793E2C34AC"><enum>(II)</enum><text>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</text> </subclause></clause>
<clause id="HF9DE3BEFE616448B81821CF89729DA2F"><enum>(iii)</enum><text>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.</text> </clause></subparagraph></paragraph>
<paragraph display-inline="no-display-inline" id="H0F4C47E1F3E6466A9FB17F6348165EA6"><enum>(2)</enum><header>Purpose</header>
<subparagraph id="H453CE87F65F144C7969FB00CA56AF7FA"><enum>(A)</enum><text display-inline="yes-display-inline">The purpose of this section is to provide for consolidated supervision of certain financial companies by the Board.</text> </subparagraph>
<subparagraph id="HC8DB4193AA89470C9BA1E946A18F7EB4" display-inline="no-display-inline"><enum>(B)</enum><text display-inline="yes-display-inline">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—</text>
<clause id="H114DD42A34E74ABAA75BEBEC666BC1A4"><enum>(i)</enum><text display-inline="yes-display-inline">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 <fraction>2/3</fraction> of the assets or <fraction>2/3</fraction> 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 </text></clause>
<clause id="HC224F08F4A334EA095AC88712A150A49"><enum>(ii)</enum><text>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.</text></clause></subparagraph>
<subparagraph id="H162D9D49F5A548E58FC550369D17341C"><enum>(C)</enum><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph>
<paragraph id="HA32EBFA1F3224624AADCB4E0FF0BEE31"><enum>(3)</enum><header>Registration</header>
<subparagraph id="H792B027CCDFA4EA281F529359F577592"><enum>(A)</enum><text>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).</text> </subparagraph>
<subparagraph id="H516876F2C7E042D4B525B59F35FF80D5"><enum>(B)</enum><text>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).</text> </subparagraph>
<subparagraph id="H0E7FCD3EC6CC46749ECF754AA2609DE1"><enum>(C)</enum><text>A section 6 holding company required to be established by a company described in paragraph (1)(C) shall be—</text>
<clause id="H7F059A2D4DB44A69ACC072FF11DF52DB"><enum>(i)</enum><text>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;</text> </clause>
<clause id="H8F02536431EA46D5AE1D698A9F27349A" display-inline="no-display-inline"><enum>(ii)</enum><text display-inline="yes-display-inline">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</text></clause>
<clause id="H9B2FDD4FF0A842EEB32DD1D1F6BEE189"><enum>(iii)</enum><text>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.</text> </clause></subparagraph></paragraph>
<paragraph id="HDF84CBD1DE254EFA9BB770764A0012FA"><enum>(4)</enum><header>Rule of construction</header><text>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.</text> </paragraph>
<paragraph id="H4700C208BDF844D18162292998EDB6B1"><enum>(5)</enum><header>Limitations on authority of commercial parent</header><text display-inline="yes-display-inline">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—</text>
<subparagraph id="HF1A9799F1D0C4977A0E833059F279351"><enum>(A)</enum><text>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</text> </subparagraph>
<subparagraph id="H718EDC8B12CA48828FB1E2D2105B8866"><enum>(B)</enum><text>not be subject to this Act, except for such provisions as are explicitly made applicable in this section.</text> </subparagraph></paragraph>
<paragraph id="H3EB36983D8E146A6B25C541AD0E64748"><enum>(6)</enum><header>Board authority</header>
<subparagraph id="H8F049B627F1E42C3B3E402F60082FCEC"><enum>(A)</enum><header>Rules and exemptions</header><text display-inline="yes-display-inline">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—</text>
<clause id="HFEB341CFC7A74F829CA6BBA7F19554E4"><enum>(i)</enum><text display-inline="yes-display-inline">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—</text>
<subclause id="HA7BB4CF55699451BBDC4E3D7F30D6952"><enum>(I)</enum>
<item commented="no" display-inline="yes-display-inline" id="H2DACDB4B4CA5453DBBEFF8F487157110"><enum>(aa)</enum><text>would facilitate the extension of credit to individuals, households, and businesses; or</text> </item>
<item id="H524C7B67DA8A4BE1BB28DDDD5733E7D4" indent="up1"><enum>(bb)</enum><text>would allow for greater efficiency, improved customer service, or other public benefits in the conduct of financial activities by affected companies;</text> </item></subclause>
<subclause id="H40CD139E0E354AECAEB1BC6C60E2C9C6"><enum>(II)</enum><text>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;</text> </subclause>
<subclause id="H231CD0133E2F48C9A8C33CBF7C93D2E6"><enum>(III)</enum><text>would not increase systemic risk or threaten the stability of the overall financial system;</text> </subclause>
<subclause id="HB0A403142DFB4DDAB60922151CA1C173"><enum>(IV)</enum><text display-inline="yes-display-inline">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</text> </subclause>
<subclause id="HA28019D54B054FD8ACC4B5404C4518E0"><enum>(V)</enum><text display-inline="yes-display-inline">would meet the financial and managerial standards for financial holding companies described in subparagraphs (A) and (B) of section 4(j)(4); and</text> </subclause></clause>
<clause id="HFE79163A3B654E5582D0FEE41DE7BA7C"><enum>(ii)</enum><text display-inline="yes-display-inline">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—</text>
<subclause id="H7EE88784D46A447B850E7C15CFD97D98"><enum>(I)</enum><text display-inline="yes-display-inline">is not consistent with the purposes of section 23A and section 23B of the Federal Reserve Act;</text> </subclause>
<subclause id="H0C851021722C490C9284B5D457A2F25F"><enum>(II)</enum><text display-inline="yes-display-inline">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;</text> </subclause>
<subclause id="H722FC433BAB44B0CB1511B1A51362700"><enum>(III)</enum><text display-inline="yes-display-inline">would increase systemic risk or threaten the stability of the overall financial system;</text> </subclause>
<subclause id="HBEA2D51332FC450BBD8912523903856C"><enum>(IV)</enum><text display-inline="yes-display-inline">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</text> </subclause>
<subclause id="HB41CA7D21B2C4D24A82151FAEFBE7BFE"><enum>(V)</enum><text display-inline="yes-display-inline">would permit an unfair, deceptive, abusive, or unsafe-and-unsound act or practice.</text> </subclause></clause></subparagraph>
<subparagraph id="HC6CA43B1A12049B1A6B03EF0F261DCE5"><enum>(B)</enum><header>Parent company reports</header><text>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.</text> </subparagraph>
<subparagraph id="HEC15F7C522574107A03AAA928C242E80"><enum>(C)</enum><header>Limited parent company enforcement</header>
<clause id="H37399C6134734BC3B60B3E3521205141"><enum>(i)</enum><header>In general</header><text>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.</text> </clause>
<clause id="H65007116AC184DE098257AFEBB16D479"><enum>(ii)</enum><header>Application of other act</header><text>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).</text> </clause>
<clause id="H4CC6AF15A8164FC999E8D1B028CD56B4"><enum>(iii)</enum><header>No effect on other authority</header><text>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.</text> </clause></subparagraph></paragraph></subsection>
<subsection id="H4F4858F3C9FA4B78BDD804152F84D4D6"><enum>(b)</enum><header>Restrictions on affiliate transactions</header>
<paragraph id="HF3B22D7A37A1480BB42876585A89C318"><enum>(1)</enum><header>Section 23A and 23B applicability</header>
<subparagraph id="H89C115D5A8A747AD964747911ED5AEF4"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="H6D3587F404FF4A719B40DF798A69F1B6"><enum>(B)</enum><header>Covered transactions</header><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph>
<paragraph id="H5DC2E286391E4670AC64D2E57E9C1D19"><enum>(2)</enum><header>Rule of construction</header><text>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.</text> </paragraph></subsection>
<subsection id="HD61EDE5419FC48BB91DB70B721798F3A"><enum>(c)</enum><header>Tying provisions</header><text>A company that directly or indirectly controls a section 6 holding company shall be—</text>
<paragraph id="H05998FFF5CCA4F17BE1F4A3CA00B220B"><enum>(1)</enum><text>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</text> </paragraph>
<paragraph id="H70E785B4C7C94E8DAFDEA1F790464344"><enum>(2)</enum><text>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.</text> </paragraph></subsection>
<subsection id="HE5E38C3649DE499A9259BCBBF33B865E"><enum>(d)</enum><header>Financial holding company requirements</header><text>A section 6 holding company shall be subject to—</text>
<paragraph id="H3780E2DB00024E8995B73FBEE4CA8897"><enum>(1)</enum><text>the conditions for engaging in expanded financial activities in section 4(l); and</text> </paragraph>
<paragraph id="HFBDB8D7B4BFA45FD8BEC7F1D791FDEF7"><enum>(2)</enum><text>the provisions applicable to financial holding companies that fail to meet certain requirements in section 4(m).</text> </paragraph></subsection>
<subsection id="H815269F0DA4B455382D6E4CA4DE2E0FF"><enum>(e)</enum><header>Independence of section 6 holding company</header>
<paragraph id="H6E686D51185349F48EF18DF3886AA18E"><enum>(1)</enum><text>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.</text> </paragraph>
<paragraph id="H9321B63AD62B4EB2910D5A15ADDE8591"><enum>(2)</enum><text>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.</text> </paragraph>
<paragraph id="HB2EF9FB0EAF14098AAC7689DA96E99B7"><enum>(3)</enum><text display-inline="yes-display-inline">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.</text> </paragraph></subsection>
<subsection id="HF3464FE72EF44C4A8FFC23627263F934"><enum>(f)</enum><header>Source of strength</header><text>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.</text> </subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection> </section>
<section id="H8CD20046CC3344698B224C9F9C3E9961"><enum>1302.</enum><header>Registration of certain companies as bank holding companies</header><text display-inline="no-display-inline">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:</text>
<quoted-block id="H21C92108B10C417CA5F8D26B50D933F1" style="OLC">
<subsection id="H2D62FB36C1D74394BB26EC8CA012CE33"><enum>(h)</enum><header>Conversion to bank holding company by operation of law</header>
<paragraph id="H07E513095E4444769BB8214435C46E65"><enum>(1)</enum><header>Conversion by operation of law</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H00FB38F3DE8848BCA844F52CAAAEC548"><enum>(2)</enum><header>Compliance with bank holding company act</header><text>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.</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </section>
<section id="H8A79CCA04ACB472387F38A8502E4BB1B"><enum>1303.</enum><header>Reports and examinations of bank holding companies; regulation of functionally regulated subsidiaries</header>
<subsection id="H18BDBE9B65FD4F6190CB310CED67637D"><enum>(a)</enum><header>Reports of bank holding companies</header><text>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:</text>
<quoted-block id="HDB415B9FF20C4735B865067E46796544" style="OLC">
<subparagraph id="H8C1E29689A9B4B5081B556E9EBD40EA3"><enum>(A)</enum><header>In general</header><text>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.</text> </subparagraph>
<subparagraph id="H565B1861605144CB8C25F5FC733E8221"><enum>(B)</enum><header>Use of existing reports</header>
<clause id="HE58E1A0CDE7F4C98A342BD97F466D742"><enum>(i)</enum><header>In general</header><text>The Board shall, to the fullest extent possible, use—</text>
<subclause id="H2B08121A57144A5CACC1BD3F7E7EFF10"><enum>(I)</enum><text>reports that a bank holding company or any subsidiary of such company has been required to provide to other Federal or State regulatory agencies;</text> </subclause>
<subclause id="HD950DD00843748D4932033BADEFAAAC0"><enum>(II)</enum><text>information that is otherwise required to be reported publicly; and</text> </subclause>
<subclause id="H25D9985145DD426D87432BD61F46FF00"><enum>(III)</enum><text>externally audited financial statements.</text> </subclause></clause>
<clause id="H2EABD6EC22134C50968BA5E172B3A45F"><enum>(ii)</enum><header>Availability</header><text>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).</text> </clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="HE71372FA14F3485BBA16D192DC8737E5"><enum>(b)</enum><header>Functionally regulated subsidiary</header><text>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:</text>
<quoted-block id="H38F982F593E7486E8B3F781A09167339" style="OLC">
<subparagraph id="H7EB4356C920046A6A43294B0773E16D7"><enum>(C)</enum><header>Definition</header><text>For purposes of this subsection and section 6, the term <term>functionally regulated subsidiary</term> means any subsidiary (other than a depository institution) of a bank holding company that is—</text>
<clause id="H349D3173C32145639158B8F725B1617F"><enum>(i)</enum><text>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;</text> </clause>
<clause id="HC88B5F42A0E74896BCE9078A903A0F2B"><enum>(ii)</enum><text>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;</text> </clause>
<clause id="H8A9A03591DB6442A97A68EC16BA93C54"><enum>(iii)</enum><text>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</text> </clause>
<clause id="HBBC1F1905049455BB9561D1BE4BBD14A"><enum>(iv)</enum><text>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.</text> </clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H9C90DE7D882C4EECBDED40EFA66BD667"><enum>(c)</enum><header>Examinations of bank holding companies</header><text>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:</text>
<quoted-block id="H143095C76E724DF5AABFFDCEB4DE7E4C" style="OLC">
<subparagraph id="H2D18F03E7AFF46F69E11DCAFBF9CF7BF"><enum>(A)</enum><header>In general</header><text>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.</text> </subparagraph>
<subparagraph id="HECA49E8EA270400D89279E023ED5372E"><enum>(B)</enum><header>Functionally regulated and depository institution subsidiaries</header><text>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.</text> </subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H28F84C302F0347089F34E983D52E328D"><enum>(d)</enum><header>Regulation of financial holding companies</header><text>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).</text> </subsection>
<subsection id="H93070F85705744CDAE727606A805BD2D"><enum>(e)</enum><header>Authority to regulate functionally regulated subsidiaries of bank holding companies</header><text>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).</text> </subsection></section>
<section id="H1CE73B78C3C84FE69C3DDD488352DE62"><enum>1304.</enum><header>Requirements for financial holding companies to remain well capitalized and well managed</header><text display-inline="no-display-inline">Section 4(l)(1) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(l)(1)) is amended—</text>
<paragraph id="HB4533C68351049E88A945D4C4A5DCC71"><enum>(1)</enum><text>in subparagraph (B), by striking <quote>and</quote>;</text> </paragraph>
<paragraph id="HA446DE6D846143C59020251298BFF4B3"><enum>(2)</enum><text>by redesignating subparagraph (C) as subparagraph (D);</text> </paragraph>
<paragraph id="H4BC895092B884E2896554875666D444F"><enum>(3)</enum><text>by inserting after subparagraph (B) the following new subparagraph:</text>
<quoted-block id="HA2DDEE09AF0B4512991D5790E183E839" style="OLC">
<subparagraph id="HE9EBDD829F384020AB55DCFF77A8B590"><enum>(C)</enum><text>the bank holding company is well capitalized and well managed; and</text> </subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H55937029EDC04193A7D4005E4C9E09C2"><enum>(4)</enum><text>in subparagraph (D) (as so redesignated) by amending clause (ii) to read as follows:</text>
<quoted-block id="HB9E93312BBBC4ABE8098A392B53E7EC5" style="OLC">
<clause id="H514E6707130D471BB5406F507CDBB9C2"><enum>(ii)</enum><text>a certification that the company meets the requirements of subparagraphs (A) through (C).</text> </clause><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></section>
<section id="HAE3B590FFA6940CFBFAC6BE069640E8F"><enum>1305.</enum><header>Standards for interstate acquisitions</header>
<subsection id="H440F54435B144AF5846862FBDDA9A217"><enum>(a)</enum><header>Bank holding company act of 1956 amendment</header><text>Section 3(d)(1)(A) of the Bank Holding Company Act of 1956 (12 U.S.C. 1842(d)(1)(A)) is amended—</text>
<paragraph id="HB9619CCA129444D4AD43FC007F522F41"><enum>(1)</enum><text>by striking <quote>adequately capitalized</quote> and inserting <quote>well capitalized</quote>; and</text> </paragraph>
<paragraph id="H17D29EEAB8A846AF8948CEE111A5F671"><enum>(2)</enum><text>by striking <quote>adequately managed</quote> and inserting <quote>well managed</quote>.</text> </paragraph></subsection>
<subsection id="H4C3A4C423C324A06AEB0A5663D4BB974"><enum>(b)</enum><header>Federal deposit insurance act amendment</header><text>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:</text>
<quoted-block id="HA278E316B5E845C3B6373F47959A7BEF" style="OLC">
<subparagraph id="H9711139E876D4D5EBD098BFC12603FA9"><enum>(B)</enum><text>the responsible agency determines that the resulting bank will be well capitalized and well managed upon the consummation of the transaction.</text> </subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection></section>
<section id="H57967B44CC9E40E0B6BB67F17EDC32C7"><enum>1306.</enum><header>Enhancing existing restrictions on bank transactions with affiliates</header>
<subsection id="HB9B95E8A232743EA9EDB8824669862F1"><enum>(a)</enum><text>Section 23A of the Federal Reserve Act (12 U.S.C. 371c) is amended—</text>
<paragraph id="H1C7CC6755DAE4673A786DBCAFFFE55DB"><enum>(1)</enum><text>in subsection (b)(1), by striking subparagraph (D) and inserting the following new subparagraph:</text>
<quoted-block id="HC8E35C45490D4F5195A43778CE7D49E0" style="OLC">
<subparagraph id="H79A94A58CA2D478EB2FC5B429584B7B6"><enum>(D)</enum><text>any investment fund with respect to which a member bank or affiliate thereof is an investment adviser; and</text> </subparagraph><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H8BE6E2F524334CC2B59F3D4ED03D4E0C"><enum>(2)</enum><text>in subsection (b)(7)(A), by inserting <quote>(including a purchase of assets subject to an agreement to repurchase)</quote> after <quote>affiliate</quote>;</text> </paragraph>
<paragraph id="HCFB47515F2C84FD5AEF35B8D27FBEB34"><enum>(3)</enum><text>in subsection (b)(7)(C), by striking <quote>, including assets subject to an agreement to repurchase,</quote>;</text> </paragraph>
<paragraph id="H92396105629D476F9648C100FB42A1CF"><enum>(4)</enum><text>in subsection (b)(7)(D)—</text>
<subparagraph id="HF77B37D32D444C759061C4B0427904BB"><enum>(A)</enum><text>by inserting <quote>or other debt obligations</quote> after <quote>acceptance of securities</quote>; and</text> </subparagraph>
<subparagraph id="H4B33A19D4FAF4A24BCAEDCBFF1BEFFFE"><enum>(B)</enum><text>by striking <quote>or</quote> after the semicolon;</text> </subparagraph></paragraph>
<paragraph id="H2FB60C41110E4FD4998BFE1FD5CA6473"><enum>(5)</enum><text>in subsection (b)(7), by inserting at the end the following new subparagraphs:</text>
<quoted-block id="H92D0CAA439274C708BDA594A13F6D2D8" style="OLC">
<subparagraph id="HDAC3163A9A3145F4A006335B0A719CB9"><enum>(F)</enum><text>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</text> </subparagraph>
<subparagraph id="H35410AD1F0574917B666AB466EDD0A6E"><enum>(G)</enum><text>current and potential future credit exposure to the affiliate on derivative transactions with the affiliate;</text> </subparagraph><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H4F5730622DD44FF3A588322B1A686894"><enum>(6)</enum><text>in subsection (c)(1), by striking <quote>at the time of the transaction,</quote> and inserting <quote>at all times</quote>;</text> </paragraph>
<paragraph id="HDF42F68BBD6149C8AF314E99E244A587"><enum>(7)</enum><text>in subsection (c)—</text>
<subparagraph id="H020EBAF3F3194482B8460E0DE7B387CF"><enum>(A)</enum><text>by striking paragraph (2);</text> </subparagraph>
<subparagraph id="HC0B48CF5D77A4EF0852CFCC458702040"><enum>(B)</enum><text>by redesignating paragraphs (3), (4), and (5) as paragraphs (2), (3), and (4), respectively;</text> </subparagraph></paragraph>
<paragraph id="HBA301E3A2E5A4E7E93DFC74C00D2DAD5"><enum>(8)</enum><text>in subsection (c)(3) (as so redesignated by paragraph (7)), by inserting <quote>or other debt obligations</quote> after <quote>securities</quote>;</text> </paragraph>
<paragraph id="H9CF1F3D59E04423C87A57E4CBDAD8B14"><enum>(9)</enum><text>in subsection (f)(2), by inserting at the end the following: <quote>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.</quote>; and</text> </paragraph>
<paragraph id="H0A3AD2A73A6F484D8E5791D515605604"><enum>(10)</enum><text>in subsection (f)—</text>
<subparagraph id="HD7D5F6D40891458C91AC9694A72322E9"><enum>(A)</enum><text>by redesignating paragraph (3) as paragraph (4); and</text> </subparagraph>
<subparagraph id="HFD9BAE1EE8AF469AA67D7EA60450DECB"><enum>(B)</enum><text>and inserting after paragraph (2) the following new paragraph:</text>
<quoted-block id="H1EE6A697B3BC43749D275BD3B6BD5CB2" style="OLC">
<paragraph id="H1C79D8CAB49642609F3D9D9E6B698A08"><enum>(3)</enum><header>Concurrence of the comptroller of the currency</header><text>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)).</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subparagraph></paragraph></subsection>
<subsection id="H45FAC8917FFB48FB80DE55E95D776C4C"><enum>(b)</enum><header>Technical and conforming amendment</header><text>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:</text>
<quoted-block id="HF7C7D230F79D45BBA4ADC0C257853766" style="OLC">
<paragraph id="H07802B68055143D28353CD7EDC8B97B2"><enum>(3)</enum><text>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.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection></section>
<section id="H922A2EBE82F04A57B5A570AB2EA5714A"><enum>1307.</enum><header>Eliminating exceptions for transactions with financial subsidiaries</header><text display-inline="no-display-inline">Section 23A(e) of the Federal Reserve Act (12 U.S.C. 371c(e)) is amended—</text>
<paragraph id="H6C192916C84A41AB98429BC07A3BC7AB"><enum>(1)</enum><text>by striking paragraph (3); and</text> </paragraph>
<paragraph id="HA76C1D4EAC124CD191A67D9056BE5FFC"><enum>(2)</enum><text>by redesignating paragraph (4) as paragraph (3).</text> </paragraph></section>
<section id="H182D486D58F644BEB34E3C9838B5EB6B"><enum>1308.</enum><header>Lending limits applicable to credit exposure on derivative transactions, repurchase agreements, reverse repurchase agreements, and securities lending and borrowing transactions</header><text display-inline="no-display-inline">Section 5200 of the Revised Statutes of the United States (12 U.S.C. 84) is amended—</text>
<paragraph id="H8487170D2A46410DA6AC2FC5E64A6557"><enum>(1)</enum><text>in subsection (b)(1), by striking <quote>shall include all direct or indirect</quote> and all that follows through <quote>commitment;</quote> and inserting:</text>
<quoted-block display-inline="yes-display-inline" id="H08EF3ED5107A492893CEA136753A0EA6" style="OLC"> <text>shall include—</text>
<subparagraph id="H32FA6E790A9F4D0CA317114B0CBDA4C7"><enum>(A)</enum><text>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;</text> </subparagraph>
<subparagraph id="H8ACE7B4761674A898B54BB571CAAAD2B"><enum>(B)</enum><text>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</text> </subparagraph>
<subparagraph id="H41D71A764E2942BDBC8C821896FFEBA1"><enum>(C)</enum><text>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;</text> </subparagraph><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph>
<paragraph id="HF72F7DF2BCF348BAA92F5B03B8446F49"><enum>(2)</enum><text>in subsection (b)(2) by striking the period at the end and inserting <quote>; and</quote>;</text> </paragraph>
<paragraph id="HB06AEFFC91314EE8B31D33DC4D9C699B"><enum>(3)</enum><text>in subsection (b), by inserting after paragraph (2) the following new paragraph:</text>
<quoted-block id="HE6D33A974EDF475D99D462005B98032E" style="OLC">
<paragraph id="H2470526777364E7DA1C038C7C2E1C560"><enum>(3)</enum><text>the term <term>derivative transaction</term> 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.</text> </paragraph><after-quoted-block>; and</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H6C841D867649413B9873EE3A6453BCBD"><enum>(4)</enum><text>in subsection (d), by inserting after paragraph (2) the following new paragraph:</text>
<quoted-block id="HD35B2FE4867049D7B43E5E419D46E9A3" style="OLC">
<paragraph id="HADF63E94CA004B1F8E2361C06785BC9C"><enum>(3)</enum><text>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.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></section>
<section id="H4BBC793CFBCF4450BD820BC10BA6D489"><enum>1309.</enum><header>Restriction on conversions of troubled banks and thrifts</header>
<subsection id="H987C35D483314CF1821ACB8EA80A3167"><enum>(a)</enum><header>Conversion of a national banking association to a state bank</header><text>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:</text>
<quoted-block id="H514FF9FD0D904D90A19F3E9D09FB18D6" style="OLC">
<section id="H6DA2B9FBCA7C4B4A9019FF90370CDFB9"><enum>7.</enum><header>Prohibition on certain conversions</header><text display-inline="no-display-inline">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.</text> </section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H3FD6D626979F41158E1052797E8E9FBE"><enum>(b)</enum><header>Conversion of a state bank to a national bank</header><text>Section 5154 of the Revised Statutes (12 U.S.C. 35) is amended by adding at the end the following new sentence: <quote>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.</quote>.</text> </subsection>
<subsection id="H4191723F80FC4800A706CD7E391DCDC5"><enum>(c)</enum><header>Conversion between a Federal savings association and a State savings association</header><text display-inline="yes-display-inline">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:</text>
<quoted-block display-inline="no-display-inline" id="H00F5FDA820CA485883D09EE0B9D1AC42" style="OLC">
<paragraph id="HC93413AB620F4C10B2A31CB820A2D653"><enum>(6)</enum><header>Prohibition on certain conversions</header><text display-inline="yes-display-inline">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.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection></section>
<section id="HEF6BB99CFE6E470F8475AE6EE6659D17"><enum>1310.</enum><header>Lending limits to insiders</header><text display-inline="no-display-inline">Section 22(h)(9)(D)(ii) of the Federal Reserve Act (12 U.S.C. 375b(h)(9)(D)(ii)) is amended by inserting <quote>, 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</quote> before the period at the end.</text> </section>
<section id="HE8B1DCE600714F99A099B5A934060DDB"><enum>1311.</enum><header>Limitations on purchases of assets from insiders</header>
<subsection id="H20A19573EF8C4F55856FBC6134DEFAA3"><enum>(a)</enum><text>Section 18 of the Federal Deposit Insurance Act (12 U.S.C. 1828) is amended by inserting at the end the following new subsection:</text>
<quoted-block id="HD2895FEF916D4224B65841F4E98F7152" style="OLC">
<subsection id="HD4B91E64C44D4753A6375E07F143D8D9"><enum>(y)</enum><header>General prohibition</header><text>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).</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H86CFA31138BA4917B33F236092626ED8"><enum>(b)</enum><header>FDIC rulemaking authority</header><text>The Federal Deposit Insurance Corporation may prescribe rules to implement the requirements of subsection (a) and the amendments made by subsection (a).</text> </subsection>
<subsection id="H945C06D4C1EC4630A738353F22E6E43D"><enum>(c)</enum><header>Amendments to the federal reserve act</header><text>Section 22 of the Federal Reserve Act (12 U.S.C. 375) is amended by striking subsection (d).</text> </subsection></section>
<section id="H1C01F71528CC47ECB66CDDAB4ACA1B42"><enum>1312.</enum><header>Rules regarding capital levels of bank holding companies</header><text display-inline="no-display-inline">Section 5(b) of the Bank Holding Company Act of 1956 (12 U.S.C. 1844(b)) is amended by inserting <quote>, including regulations relating to the capital levels of bank holding companies</quote> before the period at the end.</text> </section>
<section id="H127A5C6074E84F098B9EA49E052941AC"><enum>1313.</enum><header>Enhancements to factors to be considered in certain acquisitions</header>
<subsection id="H81E4874B6273479FA8BFC4C704038DEA"><enum>(a)</enum><header>Bank acquisitions</header><text>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:</text>
<quoted-block id="H04B7524618214E77BB6A56D04EC40387" style="OLC">
<paragraph id="HEE495EEF0F4A4678B4E8754CE8D4C244"><enum>(7)</enum><header>Financial stability</header><text></text>
<subparagraph id="H01E1B3CCB3E94C3586A22EE16E69FA07"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph commented="no" id="H61DCC065CCB246C793D2472ABD48A881"><enum>(B)</enum><header>Standards for approval</header><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H0E96A527F8BC4F93B737597D9D7B01EE"><enum>(b)</enum><header>Nonbank acquisitions</header>
<paragraph id="H91AD8C01041A4E42BF7662B63B2F7B1D"><enum>(1)</enum><text>Section 4(j)(2)(A) of the Bank Holding Company is amended by—</text>
<subparagraph id="H95F1F7E86639443C91F83FDE3A7558B8"><enum>(A)</enum><text>striking <quote>or</quote> before <quote>unsound banking practices</quote>; and</text> </subparagraph>
<subparagraph id="H4598D221876A4B96BD504E404F8C6CEE"><enum>(B)</enum><text>inserting before the period at the end the following: <quote>, or risk to the stability of the United States financial system or the economy of the United States</quote>.</text> </subparagraph></paragraph>
<paragraph id="H5479FA1DD12342BBB7353CF30F90A64C"><enum>(2)</enum><text>Section 4(k)(6) of the Bank Holding Company Act of 1956 is amended by striking subparagraph (B) and inserting the following new subparagraph:</text>
<quoted-block id="HB08FE45320FA4D74B14753F28A8D2591" style="OLC">
<subparagraph id="H017F2B1E88E140B4BF2C17A4819E1A1C"><enum>(B)</enum><text>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—</text>
<clause id="HDC86D86CB03E40B28FF6C0425379FE0E"><enum>(i)</enum><text>for a transaction in which the total assets to be acquired by the financial holding company exceed $25 billion; and</text> </clause>
<clause id="HEDC296E6911A400295BC2847C528C588"><enum>(ii)</enum><text>as provided in subsection (j) with regard to the acquisition of a savings association.</text> </clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H1CD20C5DDC8544F4B666D602105B56F4"><enum>(3)</enum><text>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):</text>
<quoted-block style="OLC" display-inline="no-display-inline" id="H85FBFA93475A42CB946DC0DB7386797E">
<paragraph id="HB3E3D9F6DECC4E62BE83C112C4AD6CA7"><enum>(5)</enum><header>Financial stability</header>
<subparagraph id="HBC8BCBBA38414761AFDA937B6A401234"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="HAFC7C2BD8AAD4520BC0A6F1CE4304C8A"><enum>(B)</enum><header>Standards for approval</header><text display-inline="yes-display-inline">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.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="HDCB335B1180345A980C32FADBBCCC139"><enum>(c)</enum><header>Bank merger act transactions</header><text>Section 18(c)(5) of the Federal Deposit Insurance Act (12 U.S.C. 1828(c)) is amended by—</text>
<paragraph id="HAB0D01B3720B45D1955061F60A9374C5"><enum>(1)</enum><text display-inline="yes-display-inline">in paragraph (5), by striking <quote>and</quote> before <quote>the convenience and needs of the community to be served</quote>; </text> </paragraph>
<paragraph id="HE986AE7809AA4276887E9267467E8E19"><enum>(2)</enum><text display-inline="yes-display-inline">in paragraph (5), by inserting before the period at the end the following: <quote>, 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</quote>; and</text> </paragraph>
<paragraph id="H6373DF859FAA43B792969C01646785B0"><enum>(3)</enum><text display-inline="yes-display-inline">in paragraph (7)(B), by inserting <quote>subparagraphs (A) and (B) of</quote> before <quote>paragraph</quote>. </text></paragraph></subsection></section>
<section id="H40902EE0886644688BE3913B8D99DA84"><enum>1314.</enum><header>Elimination of elective investment bank holding company framework</header><text display-inline="no-display-inline">Section 17 of the Securities Exchange Act of 1934 (15 U.S.C. 78q) is amended—</text>
<paragraph id="HFDA57ED6DDD343428A93895113FCEA58"><enum>(1)</enum><text>by striking subsection (i); and</text> </paragraph>
<paragraph id="HD67D88EB31D645DDB8605319666E000E"><enum>(2)</enum><text>by redesignating subsections (j) and (k) as subsections (i) and (j), respectively.</text> </paragraph></section>
<section id="H889078B76B294071B7FFE628FEE451BA"><enum>1315.</enum><header>Examination fees for large bank holding companies</header><text display-inline="no-display-inline">The Bank Holding Company Act of 1956 is amended by inserting after section 5 the following new section:</text>
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<section id="H2B663C5E0F6245889D6F76A11ABF54E8"><enum>5A.</enum><header>Examination fees</header><text display-inline="no-display-inline">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.</text> </section><after-quoted-block>.</after-quoted-block></quoted-block> </section>
<section id="H428C8A3D1182465F95C408D432E4A012" section-type="subsequent-section"><enum>1316.</enum><header>Mutual national banks and Federal mutual bank holding companies authorized</header>
<subsection id="H6C4272F8762A4EBAA3FB21AD3B12D5A1"><enum>(a)</enum><header>In general</header><text>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:</text>
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<section id="HA357A1C1492A47CA9D589232B8056E03"><enum>5133A.</enum><header>Mutual national banks</header>
<subsection id="H9CEA51B8B19446E3B41B780B01162FD9"><enum>(a)</enum><header>In general</header><text>Notwithstanding the section designated the <quote>Third</quote> 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.</text></subsection>
<subsection id="H27CC53F968A64894B1356C27E1B7B627"><enum>(b)</enum><header>Regulations</header>
<paragraph id="H11749E9B04AE49AEBC3065563AA5AA27"><enum>(1)</enum><header>Regulations of the Comptroller</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="HB7FE1A54BA504AEBA4AF005991F57AA2"><enum>(2)</enum><header>Applicability of capital stock requirements</header><text>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.</text></paragraph></subsection>
<subsection id="H9C03F4C63ABB455BA19ED9BC38D17B45"><enum>(c)</enum><header>Conversions</header>
<paragraph id="H86F4F780B96F4E63BB921A7FD4C5A251"><enum>(1)</enum><header>Conversion of a mutual depository to a mutual national bank</header><text>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.</text></paragraph>
<paragraph id="H4B6E72B5EC6846CA84D8EB5295F6B9EF"><enum>(2)</enum><header>Conversion to stock national bank</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H993D5363C297446FA5910BD541D11123"><enum>(3)</enum><header>Conversion to State banks</header><text>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.</text></paragraph></subsection>
<subsection id="HA9DA8EA06A2B4D198DED39CF152A1A1E"><enum>(d)</enum><header>Terminating mutuality</header><text>If a mutual national bank elects to terminate mutuality, it must do so by—</text>
<paragraph id="H21ABF5E73DE241C78F645A89564BFDA3"><enum>(1)</enum><text>liquidating; or</text></paragraph>
<paragraph id="H6F647ACA1A0745CA9954C0E0C53046FD"><enum>(2)</enum><text>converting to a national banking association operating in stock form.</text></paragraph></subsection>
<subsection id="H385139DEB0CF41D488A8BA19630345D7"><enum>(e)</enum><header>Status and rights of members</header>
<paragraph id="H85FCFC7F47984A8DAF88DE4C7BC07D60"><enum>(1)</enum><text>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.</text></paragraph>
<paragraph id="HFE2D3C14488943F9B73F8FAA9CBB2B3B"><enum>(2)</enum><text>Each member of a mutual national bank shall have the following rights:</text>
<subparagraph id="H6512E64D2C2D4180BAE87B003188A85E"><enum>(A)</enum><text>Such rights as may be agreed upon, by contract, between the member and the mutual national bank.</text></subparagraph>
<subparagraph id="H7D63EA66342D4921ABC41A0FCE42AFEF"><enum>(B)</enum><text>The right to vote for members of the board of directors of the mutual national bank.</text></subparagraph>
<subparagraph id="HF6795DBDA5394B888C63233637B8F33A"><enum>(C)</enum><text>The right to attend any meeting of members properly called by the board of directors of a mutual national bank.</text></subparagraph>
<subparagraph id="HE75846BE33044706B03271F9529CC430"><enum>(D)</enum><text>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.</text></subparagraph>
<subparagraph id="H6BF6E4AF578C49A79F419559D58B611D"><enum>(E)</enum><text>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.</text></subparagraph></paragraph>
<paragraph id="H0B5ECD12C7C74CAB9CA960273571C39F"><enum>(3)</enum><text>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.</text></paragraph></subsection>
<subsection id="HD86B077B9F12470FA63B351B28AE846A"><enum>(f)</enum><header>Proxies</header>
<paragraph id="H8F8345D13C7848088708B93D22D58EE2"><enum>(1)</enum><text>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.</text></paragraph>
<paragraph id="H58117E16EC1A4BCA98E381EE2F8989E9"><enum>(2)</enum><text>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—</text>
<subparagraph id="H45C5AF4ECC1A41B4BD45DFA41B4369D3"><enum>(A)</enum><text>terminating mutuality for a mutual national bank or a Federal mutual bank holding company;</text></subparagraph>
<subparagraph id="HAAE00A32282A4B1FA7154DEDD7408BDE"><enum>(B)</enum><text>permitting the modification of a Federal mutual bank holding company; or</text></subparagraph>
<subparagraph id="HCCF8EC90AE2648BFA4BDB6D5F3605DF2"><enum>(C)</enum><text display-inline="yes-display-inline">issuing mutual capital certificates (except when used to found a mutual national bank or a Federal mutual bank holding company de novo). </text></subparagraph></paragraph>
<paragraph id="HFD2EB45E441748C7A515A26B697C5131"><enum>(3)</enum><text>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.</text></paragraph></subsection>
<subsection id="H755D63FC8F4A4029A1130FFED8AE9F46"><enum>(g)</enum><header>Definitions</header><text>For purposes of this section, the following definitions shall apply:</text>
<paragraph id="H7D9EDE110FB34C5280FE7C73D0F3CAAE"><enum>(1)</enum><header>Insured depository institution</header><text>The term <quote>insured depository institution</quote> has the same meaning as in section 3 of the Federal Deposit Insurance Act.</text></paragraph>
<paragraph id="H82F7976EEEE349B1AE9E86A0DEDE24CD"><enum>(2)</enum><header>Mutual national bank</header><text>The term <quote>mutual national bank</quote> means a national banking association that operates in mutual form and is chartered by the Comptroller of the Currency under this section.</text></paragraph>
<paragraph id="HBF0149B41FE54A21AC1CD5AF911F04D4"><enum>(3)</enum><header>Mutual depository</header><text display-inline="yes-display-inline">The term <quote>mutual depository</quote> 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.</text></paragraph>
<paragraph id="H740BE67B5D6F4A23A66B933CE1122266"><enum>(4)</enum><header>Mutuality</header><text display-inline="yes-display-inline">The term <quote>mutuality</quote> 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.</text></paragraph>
<paragraph id="H9F8F218DC16544FF8E41D6EE45B2F5CA"><enum>(5)</enum><header>Member</header><text>The term <quote>member</quote> 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.</text></paragraph>
<paragraph id="HE27CCA690E304C69859BE7B30C00C1E7"><enum>(6)</enum><header>Tax liable depositor</header><text>The term <quote>tax liable depositor</quote> 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.</text></paragraph>
<paragraph id="HD21F3FF22C87496AA13BD30BC22B527F"><enum>(7)</enum><header>Membership rights</header><text>The term <quote>membership rights</quote> means the rights of each member under this section.</text></paragraph></subsection>
<subsection id="HA1BA5D688FAA4F979465C29175DFBB99"><enum>(h)</enum><header>Conforming references</header><text>Unless otherwise provided by the Comptroller of the Currency—</text>
<paragraph id="H9631301D72384A00B6BF5EB87CC7712E"><enum>(1)</enum><text>any reference in any Federal law to a national bank operating in stock form, including a reference to the term <quote>national banking association</quote>, <quote>member bank</quote>, <quote>national bank</quote>, <quote>national association</quote>, <quote>bank</quote>, <quote>insured bank</quote>, <quote>insured depository institution</quote>, or <quote>depository institution</quote>, shall be deemed to refer also to a mutual national bank;</text></paragraph>
<paragraph id="HCE67F1B074214A56A165BFC4F6B9A7A1"><enum>(2)</enum><text>any reference in any Federal law to the term <quote>board of directors</quote>, <quote>director</quote>, or <quote>directors</quote> of a national bank operating in stock form shall be deemed to refer also to the board of a mutual national bank; and</text></paragraph>
<paragraph id="HB3104ADEB76F44EF991B00B16FD42E0E"><enum>(3)</enum><text display-inline="yes-display-inline">any terms in Federal law that may apply only to a national bank operating in stock form, including the terms <quote>stock</quote>, <quote>shares</quote>, <quote>shares of stock</quote>, <quote>capital stock</quote>, <quote>common stock</quote>, <quote>stock certificate</quote>, <quote>stock certificates</quote>, <quote>certificates representing shares of stock</quote>, <quote>stock dividend</quote>, <quote>transferable stock</quote>, <quote>each class of stock</quote>, <quote>cumulate such shares</quote>, <quote>par value</quote>, <quote>preferred stock</quote> shall not apply to a mutual national bank, unless the Comptroller of the Currency determines that the context requires otherwise. </text></paragraph></subsection></section>
<section id="HAE014C0B682E418E836973BF53561412"><enum>5133B.</enum><header>Federal mutual bank holding companies</header>
<subsection id="H1C5CD8F383324A6FB82CC8E713E0D3E0"><enum>(a)</enum><header>Reorganization of mutual national bank as a holding company</header>
<paragraph id="HFD852997D6974991A6B693AB4132B3C3"><enum>(1)</enum><header>In general</header><text>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.</text></paragraph>
<paragraph id="H5E11658142DD4C39A9DA1DF6B79671DC"><enum>(2)</enum><header>Plan approval</header><text>Upon the approval of the reorganization plan by the appropriate bank holding company regulator and the issuance of the appropriate charters—</text>
<subparagraph id="H192AD409599F4E5B8BD4A067ECB0B983"><enum>(A)</enum><text>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</text></subparagraph>
<subparagraph id="HCBC64A2319034F25A9B99606FC22846C"><enum>(B)</enum><text>the mutual national bank shall become a Federal mutual bank holding company.</text></subparagraph></paragraph></subsection>
<subsection id="HBD1D0B9C6CA547628C0C262404703AD5"><enum>(b)</enum><header>Directors and certain account holders’ approval of plan required</header><text>This subsection does not authorize a reorganization unless—</text>
<paragraph id="H4F4572E6A9084A808D6EBCC897B34FAC"><enum>(1)</enum><text>a majority of the mutual national bank’s board of directors has approved the plan providing for such reorganization; and</text></paragraph>
<paragraph id="H93A36C16D1674CA5A69B8951AA0B0D72"><enum>(2)</enum><text>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.</text></paragraph></subsection>
<subsection id="H23CC7DDB648C412B84A9E72C90282C2B"><enum>(c)</enum><header>Ownership of depository subsidiaries</header><text>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.</text></subsection>
<subsection id="H47638DA71B2643619FEBA21F7CDD20E6"><enum>(d)</enum><header>No termination of mutuality</header><text>Neither a reorganization of a mutual depository nor a modification of a Federal mutual bank holding company shall cause a termination of mutuality.</text></subsection>
<subsection id="HA5E3C928F68645B28AA4CBBBA3ADE143"><enum>(e)</enum><header>Retention of capital</header><text>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.</text></subsection>
<subsection id="HC4AF0301A9134205925941D7DF28854C"><enum>(f)</enum><header>Terminating mutuality</header><text>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.</text></subsection>
<subsection id="H7284C82F7076449382899501741C588A"><enum>(g)</enum><header>Membership rights</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="HB2D2737D410E41C5954C3DEAD319FCBA"><enum>(h)</enum><header>Regulation</header><text>A Federal mutual bank holding company shall be—</text>
<paragraph id="H67C8B2AE352B42F597E2A98F13B73B3A"><enum>(1)</enum><text>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</text></paragraph>
<paragraph id="HCC64AC021A7A4688BDFF20C55461B4C2"><enum>(2)</enum><text>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.</text></paragraph></subsection>
<subsection id="HCA832E9C44384EE0AD9262225C6D1E40"><enum>(i)</enum><header>Capital improvement</header>
<paragraph id="HC20AE9AC94964565AE6B706FB1F3F4AA"><enum>(1)</enum><header>Pledge of stock of national bank subsidiary</header><text>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.</text></paragraph>
<paragraph id="H5A4569F7EEF3451DA5BE35ACDC3F1D28"><enum>(2)</enum><header>Issuance of nonvoting shares</header><text>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.</text></paragraph></subsection>
<subsection id="HDC3276A754884219A4D4655619553153"><enum>(j)</enum><header>Insolvency and liquidation</header>
<paragraph id="HC263E25670554EB7B6F6426273819760"><enum>(1)</enum><header>In general</header><text>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—</text>
<subparagraph id="HAB454D79D41D4419B3DAC70E084A171B"><enum>(A)</enum><text>the default of any national bank—</text>
<clause id="HA617B622AA884FDE98915CB9F61EB125"><enum>(i)</enum><text>the stock of which is owned by the Federal mutual bank holding company; and</text></clause>
<clause id="H10CA598FB3924B039D044784DA628D7C"><enum>(ii)</enum><text>that was chartered in a transaction described in subsection (a); or</text></clause></subparagraph>
<subparagraph id="H9503E940E542446AB39CF6DEBD7F2DFB"><enum>(B)</enum><text>a foreclosure on a pledge by the Federal mutual bank holding company described in subsection (i)(1).</text></subparagraph></paragraph>
<paragraph id="H95AB6BF537B2418CA39B7211DD0DE8AB"><enum>(2)</enum><header>Distribution of net proceeds</header><text>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.</text></paragraph>
<paragraph id="HE0E36AAC99C843C0917B53E1FBD66B28"><enum>(3)</enum><header>Recovery by FDIC</header><text>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.</text></paragraph></subsection>
<subsection id="HFB54FA93EC24403F913958164D0F7BAB"><enum>(k)</enum><header>Definitions</header>
<paragraph id="HFB81B0ED5B3147A5B0EF717070AC14D1"><enum>(1)</enum><header>Federal mutual bank holding company</header><text>The term <quote>Federal mutual bank holding company</quote> 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.</text></paragraph>
<paragraph id="HAD215296B13F410DBB6675941281B255"><enum>(2)</enum><header>Depository subsidiary of a federal mutual bank holding company</header><text display-inline="yes-display-inline">The term <quote>depository subsidiary of a Federal mutual bank holding company</quote> 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).</text></paragraph>
<paragraph id="HC23017F850EA478ABD153C924C4C7192"><enum>(3)</enum><header>Reorganization of a mutual depository</header><text>The term <quote>reorganization of a mutual depository</quote> means the conversion of a mutual depository into a depository subsidiary of a Federal mutual bank holding company.</text></paragraph>
<paragraph id="H0594069A645E47279C925C3BE0DB9376"><enum>(4)</enum><header>Modification of a federal mutual bank holding company</header><text display-inline="yes-display-inline">The term <quote>modification of a Federal mutual bank holding company</quote> 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.</text></paragraph>
<paragraph id="H78298835881F4834A509601EE17731CA"><enum>(5)</enum><header>Default</header><text>With respect to a national bank, the term <quote>default</quote> 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.</text></paragraph></subsection>
<subsection id="H0E951323A4F8436881D45F9EF8DD9BDA"><enum>(l)</enum><header>Conforming references</header><text>Unless otherwise provided by the appropriate bank holding company regulator—</text>
<paragraph id="HBE6269D9572842B3AAA63CD579131D35"><enum>(1)</enum><text>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;</text></paragraph>
<paragraph id="HBB2010C6FE764E4E8E4EAAE130A37DE9"><enum>(2)</enum><text>any reference in any Federal law to the term <quote>board of directors</quote>, <quote>director</quote>, or <quote>directors</quote> 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</text></paragraph>
<paragraph id="H11BFE1C564B943C7BB8564C176B7447E"><enum>(3)</enum><text>any terms in Federal law that may apply only to a national bank operating in stock form, including the terms <quote>stock</quote>, <quote>shares</quote>, <quote>shares of stock</quote>, <quote>capital stock</quote>, <quote>common stock</quote>, <quote>stock certificate</quote>, <quote>stock certificates</quote>, <quote>certificates representing shares of stock</quote>, <quote>stock dividend</quote>, <quote>transferable stock</quote>, <quote>each class of stock</quote>, <quote>cumulate such shares</quote>, <quote>par value</quote>, <quote>preferred stock</quote> shall not apply to a Federal mutual bank holding company, unless the appropriate bank holding company regulator determines that the context requires otherwise.</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H4C807253B7B14E6AB8E2A363AB1A2157"><enum>(b)</enum><header>Limitation on Federal regulation of State banks</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="HE1EAEF80172C4335A156CC6B099F75B1"><enum>(c)</enum><header>Technical amendment</header><text>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:</text>
<quoted-block id="HEC5CA200BB97425890EC0021AC8E07CE" style="OLC">
<toc regeneration="no-regeneration">
<toc-entry level="section">5133A. Mutual national banks.</toc-entry>
<toc-entry level="section">5133B. Federal mutual bank holding companies.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H80027A0D32A24459B70BC106C284F5F3"><enum>(d)</enum><header>Appropriate Federal banking agency for Federal mutual bank holding companies</header><text>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:</text>
<quoted-block id="H157E72AE189E4CC095FC080E5C6D06C4" style="OLC">
<subparagraph id="H3034DC627CF8466EB25C2CC2A95E854E"><enum>(G)</enum><text>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.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H3F701EA224284D2C970D51907AFF89B3"><enum>(e)</enum><header>Mutual holding company conversion</header>
<paragraph id="HF2D7E689984C401BAABD68DD84ADA3AC"><enum>(1)</enum><header>In general</header><text>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.</text></paragraph>
<paragraph id="HD7C88A73AD4D44DC9F7D0089AE24DD87"><enum>(2)</enum><header>Definitions</header><text>For purposes of this subsection, the following definitions shall apply:</text>
<subparagraph id="H9FB63E20A3AB468285E5AAEA6D02087A"><enum>(A)</enum><header>Federal mutual bank holding company</header><text>The term <quote>Federal mutual bank holding company</quote> has the same meaning as in section 5133B of the Revised Statutes of the United States (as added by this section); and</text></subparagraph>
<subparagraph id="HBCE7137AB8264E19B108433932A6E61A"><enum>(B)</enum><header>Mutual holding company</header><text>The term <quote>mutual holding company</quote> 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.</text></subparagraph></paragraph></subsection>
<subsection id="HBDEA3F2770DF41E385FD648B8E518C79"><enum>(f)</enum><header>Effective date</header><text>This section shall take effect on the date of enactment of this Act.</text></subsection></section>
<section id="HD625D68731FE4D2EBFED64D05C60880A" display-inline="no-display-inline" section-type="subsequent-section"><enum>1317.</enum><header> Nationwide Deposit Cap for Interstate Acquisitions</header>
<subsection id="H6C70EE6A583B4BC2A156BD331CEC07A8"><enum>(a)</enum><header>Amendments to the Bank Holding Company Act of 1956</header>
<paragraph id="H930DBA755301487D8E65B85BB9600BEA"><enum>(1)</enum><header>Concentration limit for bank holding companies</header><text>Section 3(d)(2)(A) of the Bank Holding Company Act (12 U.S.C. 1842(d)(2)(A)) is amended by striking <quote>paragraph (1)(A)</quote> and inserting <quote>subsection (a) of this section</quote>.</text></paragraph>
<paragraph id="H745859CFEE2D4B66859D4839FF2C6392"><enum>(2)</enum><header>Removal of nonbank savings association provision in light of being defined as a bank</header><text>Section 4 of the Bank Holding Company Act is amended by striking subsection (i) and insert the following new subsection:</text>
<quoted-block style="OLC" id="HA9CA6D0E38F349199213396724DCB019" display-inline="no-display-inline">
<subsection id="H21A85642FF3040EF9630974DA6A3E644"><enum>(i)</enum><text display-inline="yes-display-inline">[Repealed.]</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H05BC222C01964FA98F642D2B05A6E911"><enum>(b)</enum><header>Amendments to the Federal Deposit Insurance Act</header>
<paragraph id="H158ED205B6074C308CEDCEA58217EE2E"><enum>(1)</enum><header>In general</header><text>Section 18(e) of the Federal Deposit Insurance Act (12 U.S.C. 1828(c)) is amended—</text>
<subparagraph id="H5E1130D8AFAE448D80D117D45DAAD1A9"><enum>(A)</enum><text>by redesignating paragraph (12) as paragraph (13); and</text></subparagraph>
<subparagraph id="H244F7A8FCD6E4222BC1E370F9875A6EF"><enum>(B)</enum><text>by inserting after paragraph (11), the following new paragraph: </text>
<quoted-block style="OLC" id="H019328C5516C43B18D0E20FD85068605" display-inline="no-display-inline">
<paragraph id="H65B91A7EFBA74CDBB2772408C2BD66D6"><enum>(12)</enum><header>Nationwide deposit cap</header><text display-inline="yes-display-inline">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.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph>
<paragraph id="HE6371063D1F143828EBE15D5107345FD"><enum>(2)</enum><header>Parallel requirement</header><text>Section 44(b)(2) of the Federal Deposit Insurance Act (12 U.S.C. 1831u(b)(2)(A) is amended to read as follows: </text>
<quoted-block style="OLC" id="H4E27513BBEE24A34996B3A85BE014965" display-inline="no-display-inline">
<subparagraph id="HD57211D7369E47DA8C0D6DD7A8B1E60E"><enum>(A)</enum><header>Nationwide concentration limits</header><text>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.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H642B662517DD4E37ACC2D7A30107B1CF"><enum>(c)</enum><header>Amendments to the Home Owners’ Loan Act</header><text>Section 10(e)(2) of the Home Owners’ Loan Act (12 U.S.C. 467a(e)(2)) is amended—</text>
<paragraph id="H0C7211A0C4E546E084D2A4B53E44EA8A"><enum>(1)</enum><text>by striking <quote>or </quote> at the end of subparagraph (C); and </text></paragraph>
<paragraph id="H4347690830274402A2E2DF808D6DBAA8"><enum>(2)</enum><text>by striking the period at the end of subparagraph (D), the following new subparagraph: </text>
<quoted-block style="OLC" id="H1D5532B340D84D4CA4FF33D7A53278BC" display-inline="no-display-inline">
<subparagraph id="H076C93BE03D34AF1B07887FF14FE61B7"><enum>(E)</enum><text display-inline="yes-display-inline">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.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection></section>
<section id="H220D0D22AE54488DB9A0DE37F7403EE4" display-inline="no-display-inline" section-type="subsequent-section"><enum>1318.</enum><header>De novo branching into states</header>
<subsection id="H6E796F65571E420C929E787792DF378F"><enum>(a)</enum><header>National banks</header><text>Section 5155(g)(1)(A) of the Revised Statutes (12 U.S.C. 36(g)(1)(A)) is amended to read as follows:</text>
<quoted-block id="H013D808B83E842EDB8DFD8BA6FC31824" style="OLC">
<subparagraph id="H6CB4522BC6884A0DBDC9E69D26322B7D"><enum>(A)</enum><text>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;</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HD4D6A9EA3B694177A97C7CD713B0FA9D"><enum>(b)</enum><header>State insured banks</header><text>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:</text>
<quoted-block id="HC115043522EE4702AA771D65B3D43870" style="OLC">
<clause id="H7E8404F90B4B4D5B8267666CB5C62823"><enum>(i)</enum><text>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;</text></clause><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section> </subtitle>
<subtitle id="HA24D3E3F05514F59B5C03252172D5201"><enum>E</enum><header>Improvements to the Federal Deposit Insurance Fund</header>
<section id="H63F323984515474980BF9A3E07086D19"><enum>1401.</enum><header>Accounting for actual risk to the Deposit Insurance Fund</header>
<subsection id="HE8B513346AB242849655C1C58B255D0D"><enum>(a)</enum><text>Section 7(b)(1)(C) of the Federal Deposit Insurance Act is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HA311155EF8A647E1B6D2691605A10FE9" style="OLC">
<subparagraph id="HA250B80E758346EABED11B7ED727407B"><enum>(C)</enum><header><term>Risk-based assessment system</term> defined</header><text display-inline="yes-display-inline">For purposes of this paragraph, the term <term>risk-based assessment system</term> means a system for calculating a depository institution’s assessment based on—</text>
<clause id="HF933178F5AC84B7FBCC1C5948B2226C2"><enum>(i)</enum><text display-inline="yes-display-inline">the probability that the Deposit Insurance Fund will incur a loss with respect to the institution;</text> </clause>
<clause id="H9C1EBA02B1874B9BA4CF1B0A5CCEB0A8"><enum>(ii)</enum><text display-inline="yes-display-inline">the likely amount of any such loss;</text> </clause>
<clause id="H008079067013485591BA836DFC7EB13E"><enum>(iii)</enum><text display-inline="yes-display-inline">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—</text>
<subclause id="H659A16BFEE7342CA82837C2221EAEDC5"><enum>(I)</enum><text>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;</text> </subclause>
<subclause id="H8857E3145F0A4C169E586FE63701339E"><enum>(II)</enum><text>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</text> </subclause>
<subclause id="HC773E8759E374ED6AF4EB1319578F1E7"><enum>(III)</enum><text>any other factors the Corporation determines are relevant to assessing the risks; and</text> </subclause></clause>
<clause id="H190D8194033540D3AEB29A867F654949"><enum>(iv)</enum><text>the revenue needs of the Deposit Insurance Fund.</text> </clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H7B0EB6B66CAE407BA4365AB164652C84"><enum>(b)</enum><text>Section 7(b)(2) of the Federal Deposit Insurance Act is amended by striking subparagraph (D) and by redesignating subparagraph (E) as subparagraph (D).</text> </subsection></section>
<section id="H853D1658F0B14E2EA63871D6F967244A"><enum>1402.</enum><header>Creating a risk-focused assessment base</header><text display-inline="no-display-inline">Section 7(b)(2) of such Act, as amended, is further amended by amending subparagraph (C) to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H898BA4141E6A47879A8216535968BCAF" style="USC">
<subparagraph id="H41E1CE9E490C4EFA8E4BAC39DB3DECA6"><enum>(C)</enum><header>Assessment</header><text>The assessment of any insured depository institution imposed under this subsection shall be an amount equal to the product of—</text>
<clause id="H9CEF7DA1449E402499C2B9C5E094AF91"><enum>(i)</enum><text>an assessment rate established by the Corporation; and</text> </clause>
<clause id="HAF2DD96DBDBB4073BF9C14399919B5EC"><enum>(ii)</enum><text display-inline="yes-display-inline">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).</text> </clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </section>
<section id="H0E5D19CA3673406CA97D9F34B6C2640D"><enum>1403.</enum><header>Elimination of procyclical assessments</header><text display-inline="no-display-inline">Section 7(e) of the Federal Deposit Insurance Act is amended—</text>
<paragraph id="H4D16BD0347594036AE6DCF09406F74FF"><enum>(1)</enum><text>in paragraph (2)—</text>
<subparagraph id="H4D054DAF9338416185621CDCF07CABD0"><enum>(A)</enum><text>by amending subparagraph (B) to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HB89AE44B57A941E783989AA4587CEB4E" style="OLC">
<subparagraph id="H2D13678C0DB44512A1CDFA930F101A0C"><enum>(B)</enum><header>Limitation</header><text display-inline="yes-display-inline">The Board of Directors may, in its sole discretion, suspend or limit the declaration of payment of dividends under subparagraph (A).</text> </subparagraph><after-quoted-block>;</after-quoted-block></quoted-block> </subparagraph>
<subparagraph id="H4C304A71E057476887873826EE881B04"><enum>(B)</enum><text>by amending subparagraph (C) to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H418B1000449449F892A76992EB48C47C" style="OLC">
<subparagraph id="H2876C9E20E144C16A65906086EE61448"><enum>(C)</enum><header>Notice and opportunity for comment</header><text display-inline="yes-display-inline">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</text> </subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block> </subparagraph>
<subparagraph id="H0F896C2761104949BAE36D4234D98854"><enum>(C)</enum><text display-inline="yes-display-inline">by striking subparagraphs (D) through (G); and</text> </subparagraph></paragraph>
<paragraph id="H325A2E47E67849EE9522F794653F47E1"><enum>(2)</enum><text>in paragraph (4)(A) by striking <quote>paragraphs (2)(D) and</quote> and inserting <quote>paragraphs (2) and</quote>.</text> </paragraph></section>
<section id="HC75BE69A84C34205AD8D1F0AD534FA9C"><enum>1404.</enum><header>Enhanced access to information for deposit insurance purposes</header>
<subsection id="H75F0E44D52084CB39FDCD43347B4482A"><enum>(a)</enum><text display-inline="yes-display-inline">Section 7(a)(2)(B) of the Federal Deposit Insurance Act is amended by striking <quote>, 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,</quote>.</text> </subsection>
<subsection id="H47EFD9A06AF34AC0AFDB5E54E38CE19B"><enum>(b)</enum><text>Section 7(b)(1)(E) of the Federal Deposit Insurance Act is amended—</text>
<paragraph id="H103E81A0AFCA4EFE8114A61EDFBABC36"><enum>(1)</enum><text>in clause (i), by striking <quote>such as</quote> and inserting <quote>including</quote>; and</text> </paragraph>
<paragraph id="H67FE31BB971A4C29BCCD47157E473DDC"><enum>(2)</enum><text>by striking clause (iii).</text> </paragraph></subsection></section>
<section id="H966470563B354B9F861D6454D3818118"><enum>1405.</enum><header>Transition reserve ratio requirements to reflect new assessment base</header>
<subsection id="H7D9FE893FB44432392A1567AE72EFA80"><enum>(a)</enum><text display-inline="yes-display-inline">Section 7(b)(3)(B) of the Federal Deposit Insurance Act is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HB3EE2A90F8164763B08D4E3A3A33DE70" style="OLC">
<subparagraph id="HB673593D9E1E4982BB2FEC410D321EB6"><enum>(B)</enum><header>Minimum reserve ratio</header><text display-inline="yes-display-inline">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).</text> </subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H785DFD7331734FAF80392F59AF328427"><enum>(b)</enum><text>Section 3(y)(3) of the Federal Deposit Insurance Act is amended by inserting <quote>, or such comparable percentage of the assessment base set forth in section 7(b)(2)(C)</quote> before the period.</text> </subsection>
<subsection id="H87FEDF576CF34260B425ACAFB5A2BA40"><enum>(c)</enum><text>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.</text> </subsection></section></subtitle>
<subtitle id="H19D8D5B8FA7A4062B49D0E7F69433070"><enum>F</enum><header>Improvements to the asset-backed securitization process</header>
<section id="H4ECC66E5E26E4D5B8982F6E5B7EFD882"><enum>1501.</enum><header>Short title</header><text display-inline="no-display-inline">This subtitle may be cited as the <quote>Credit Risk Retention Act of 2009</quote>.</text> </section>
<section id="H8D880428F8B24FB8AB6C0D00F7CFE034"><enum>1502.</enum><header>Credit risk retention</header>
<subsection id="HA46D3D7F158E46779A7E9A9608728ED8"><enum>(a)</enum><header>Amendment</header><text display-inline="yes-display-inline">The Securities Act of 1933 (15 U.S.C. 77a et seq.) is amended by inserting after section 28 the following new section:</text>
<quoted-block id="H6EBDB795EA07437F92A4460FAF5FD37A" style="OLC">
<section id="HA04F8E10EE5C49828231F53B63A8E4BA"><enum>29.</enum><header>Credit risk retention</header>
<subsection id="H2388BE713DF44FEC9A4ECE5973380095"><enum>(a)</enum><header>In general</header>
<paragraph id="H153316EE9C354DA181C7A2D7CC325046"><enum>(1)</enum><header>Interest in loans made by creditors</header><text>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.</text> </paragraph>
<paragraph id="HF17664669C814C94A511FE566419772F"><enum>(2)</enum><header>Interest in assets backing asset-backed securities</header><text>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.</text> </paragraph></subsection>
<subsection id="HA68F6F2ED6DE470EAED62B9229D8D2FE"><enum>(b)</enum><header>Alternative risk retention for credit securitizers</header><text>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—</text>
<paragraph id="H2354A1A5332341F4ADF3A21B129F7784"><enum>(1)</enum><text>be consistent with helping to ensure high quality underwriting standards for creditors, taking into account other applicable laws, regulations, and standards; and</text> </paragraph>
<paragraph id="HDEFE414CFFA24C3EA2CDD9E5445BF825"><enum>(2)</enum><text>facilitate appropriate risk management practices by such creditors, improve access of consumers to credit on reasonable terms, or otherwise serve the public interest.</text> </paragraph></subsection>
<subsection id="H34A45676076E4986ABE3CCDDB8DB9044"><enum>(c)</enum><header>Standards for regulation</header><text>Regulations prescribed under subsections (a) and (b) shall—</text>
<paragraph id="H579E80A1E12B4DCBAA752B7F6D787CB9"><enum>(1)</enum><text>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;</text> </paragraph>
<paragraph display-inline="no-display-inline" id="HF89C39C86EBA412CADFB16E4FBF32263"><enum>(2)</enum><text display-inline="yes-display-inline">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—</text>
<subparagraph id="H21D18CA18FC34E9581456ADCE17313F2"><enum>(A)</enum><text display-inline="yes-display-inline">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—</text>
<clause id="H2932DA7B67D94A5B9AA627D2C57A62A4"><enum>(i)</enum><text display-inline="yes-display-inline">the credit underwriting by the creditor or the due diligence by the securitizer meets such standards as an appropriate agency prescribes; and</text> </clause>
<clause id="HC8D8D8CD7B1847E590C6951A71F24CD9"><enum>(ii)</enum><text display-inline="yes-display-inline">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</text> </clause></subparagraph>
<subparagraph id="H8C77519529B64A44AE18A6B8C29CE4C1"><enum>(B)</enum><text display-inline="yes-display-inline">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;</text> </subparagraph></paragraph>
<paragraph id="H031B2B09888F4A0185A2D70C7C1F455C"><enum>(3)</enum><text>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</text> </paragraph>
<paragraph id="H99674546E5BD45E688C3521F29BBA1BC"><enum>(4)</enum><text>set the minimum duration of the required risk retention.</text> </paragraph></subsection>
<subsection id="HCC8C23C570E645568491BB7C0523AF80"><enum>(d)</enum><header>Exemptions and adjustments</header>
<paragraph id="HD142A9699F4E45C4AC1877BF1DC307A0"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph>
<paragraph id="H206A2C3072FF4880B665E113ED5D3B8D"><enum>(2)</enum><header>Applicable standards</header><text>Any exemptions or adjustments provided under paragraph (1) shall—</text>
<subparagraph id="H01452FDF9DC24FEC9D1412DDC6A0E1E9"><enum>(A)</enum><text>be consistent with the purpose of ensuring high quality underwriting standards for creditors, taking into account other applicable laws, regulations, or standards; and</text> </subparagraph>
<subparagraph id="H60964E7351294132B017C8EC34E0EC84"><enum>(B)</enum><text>facilitate appropriate risk management practices by such creditors, improve access for consumers to credit on reasonable terms, or otherwise serve the public interest.</text> </subparagraph></paragraph></subsection>
<subsection display-inline="no-display-inline" id="HBA696C337B3345F3885464676D86C9F0"><enum>(e)</enum><header>Appropriate agency defined</header><text display-inline="yes-display-inline">For purposes of this section, the term <quote>appropriate agency</quote> means any of the following agencies with regard to the respective loans and asset-backed securities:</text>
<paragraph id="HBF2F349574394E0E81D77A7F016945A9"><enum>(1)</enum><header>Banking agencies</header><text display-inline="yes-display-inline">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).</text> </paragraph>
<paragraph id="H9E73AE6A5DA44686B32DF169507DD881"><enum>(2)</enum><header>Other agencies</header>
<subparagraph id="H34E4BBCD30C74007ADD4ABF1C87E94EC"><enum>(A)</enum><text display-inline="yes-display-inline">With regard to any mortgage insured under title II of the National Housing Act, the Secretary of Housing and Urban Development.</text> </subparagraph>
<subparagraph id="H4EBFC49AF5F045CE85DD8D5AA581A00F"><enum>(B)</enum><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="HC4160C725EAD468D942200C92AB88C74"><enum>(C)</enum><text display-inline="yes-display-inline">With regard to any loan insured by the Rural Housing Service, the Rural Housing Service.</text> </subparagraph></paragraph></subsection>
<subsection id="HBA0F60182E444E1AA2ADEE13BD64C9C2"><enum>(f)</enum><header>Joint appropriate agency regulations</header><text display-inline="yes-display-inline">All regulations prescribed by the agencies identified in subsection (e)(1) shall be prescribed jointly by such agencies.</text> </subsection>
<subsection id="HC0D34E8BC46A4CC29D65FA6BF37C5277"><enum>(g)</enum><header>Enforcement</header>
<paragraph id="H2CB4AF6C6CC7426BBBEE30F7DF76F47F"><enum>(1)</enum><text>Compliance with the requirements imposed under this section shall be enforced under—</text>
<subparagraph id="H54BF884EA02D461896B47B335E34A93B"><enum>(A)</enum><text>section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818), in the case of—</text>
<clause id="HD3CE6D05ABEB4AC58D2077E8A8E1AB4E"><enum>(i)</enum><text>national banks, and Federal branches and Federal agencies of foreign banks, by the Office of the Comptroller of the Currency;</text> </clause>
<clause id="H84CD92628E9E49F285935B8622F30565"><enum>(ii)</enum><text>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</text> </clause>
<clause id="HD95B8DA2E5E14ED59EC8567023FD99D5"><enum>(iii)</enum><text>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;</text> </clause></subparagraph>
<subparagraph id="H287B16255D1A47EB90B43FD20F53CC06"><enum>(B)</enum><text>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</text> </subparagraph>
<subparagraph id="HE6E04282E60B461E9918557DC8155069"><enum>(C)</enum><text>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.</text> </subparagraph></paragraph>
<paragraph id="H8D56222E40AF4C41B604D9CDD4D5E4A7"><enum>(2)</enum><text>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.</text> </paragraph>
<paragraph id="H6C5B8A115C9D4B45AA664A85AEED277D"><enum>(3)</enum><text>The authority of the Commission under this section shall be in addition to its existing authority to enforce the securities laws.</text> </paragraph></subsection>
<subsection display-inline="no-display-inline" id="H27C1F4066FF342AE977C5B22201C3F45"><enum>(h)</enum><header>Exclusions</header><text display-inline="yes-display-inline">Notwithstanding any other provision of this section, the requirements of this section shall not apply to any loan—</text>
<paragraph id="HAA939160C82448C480E4458C0E4475D9"><enum>(1)</enum><text display-inline="yes-display-inline">insured, guaranteed, or administered by the Secretary of Education, the Secretary of Agriculture, the Secretary of Veterans Affairs, or the Small Business Administration; or</text> </paragraph>
<paragraph id="HAB3456E33D5341EEBD1B6A5651C61153"><enum>(2)</enum><text display-inline="yes-display-inline">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.</text> </paragraph></subsection>
<subsection id="H1B926CF4A15B4F21ABA16D706052732A"><enum>(i)</enum><header>Definitions</header><text>For purposes of this section:</text>
<paragraph id="H818EDCA2AB9C4745BDF682A7248231BC"><enum>(1)</enum><text>The term <term>asset-backed security</term> has the meaning given such term in section 229.1101(c) of title 17, Code of Federal Regulations, or any successor thereto.</text> </paragraph>
<paragraph id="H69FB25FAA6534C30BFA09AD866F75BC6"><enum>(2)</enum><text>The term <term>Federal banking agencies</term> 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.</text> </paragraph>
<paragraph id="HCCE08DD2D03946C08383B798FD3459A2"><enum>(3)</enum><text>The term <term>insured depository institution</term> has the meaning given such term in section 3(c) of the Federal Deposit Insurance Act (12 U.S.C. 1813(c)).</text> </paragraph>
<paragraph id="HE0C9171E3FBC49F5856DCB892F328281"><enum>(4)</enum><text>The term <term>securitization vehicle</term> means a trust, corporation, partnership, limited liability entity, special purpose entity, or other structure that—</text>
<subparagraph id="H3C7BBBCDA98A404AA2FAD2E5B63ADF72"><enum>(A)</enum><text>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</text> </subparagraph>
<subparagraph id="HF2EC9479B4CB434784219E5D35FA2923"><enum>(B)</enum><text>holds such loans.</text> </subparagraph></paragraph>
<paragraph id="HDB8D342D757643DC9B3063F929EC4BEC"><enum>(5)</enum><text>The term <term>securitizer</term> 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.</text> </paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H8D942B079BBF41069EACDCBB059F8733"><enum>(b)</enum><header>Study on risk retention</header>
<paragraph id="H6A2EF4866E8B4673BF67630D07EC1208"><enum>(1)</enum><header>Study</header><text>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—</text>
<subparagraph id="HC12DA87088274413A9F23DA140299097"><enum>(A)</enum><text>the new credit risk retention requirements contained in the amendment made by subsection (a); and</text> </subparagraph>
<subparagraph id="H6754105172784017A94D00373A5F578B"><enum>(B)</enum><text>the Financial Accounting Statements 166 and 167 issued by the Financial Accounting Standards Board.</text> </subparagraph></paragraph>
<paragraph id="H225AB2AEE70D4D5485FC31A7FB17EEBE"><enum>(2)</enum><header>Report</header><text>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).</text> </paragraph></subsection></section>
<section id="H736F6EA6F17047738F76CB41C9CDF899"><enum>1503.</enum><header>Periodic and other reporting under the Securities Exchange Act of 1934 for asset-backed securities</header><text display-inline="no-display-inline">Section 15(d) of Securities Exchange Act of 1934 (15 U.S.C. 78o(d)) is amended—</text>
<paragraph id="H83C5D799913F4C0B86F1AA997727CFD2"><enum>(1)</enum><text>by inserting <quote>, 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),</quote> after <quote>securities of each class</quote>;</text> </paragraph>
<paragraph id="H346EE4829A084AAE86BBBF76BA61C469"><enum>(2)</enum><text>by inserting at the end the following: <quote>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.</quote>; and</text> </paragraph>
<paragraph id="H67E581B1E17547A2AFEC6A8648788C4B"><enum>(3)</enum><text>by inserting after the fifth sentence the following: <quote>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.</quote>.</text> </paragraph></section>
<section id="H18503D71E7C44FE792DD054781EA8F29"><enum>1504.</enum><header>Representations and warranties in asset-backed offerings</header><text display-inline="no-display-inline">The Commission shall prescribe regulations on the use of representations and warranties in the asset-backed securities market that—</text>
<paragraph id="HC394B725CEB8402E8677D317E838E9B4"><enum>(1)</enum><text>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</text> </paragraph>
<paragraph id="H5DF334AB9D51451AB2D4360A9B6381D2"><enum>(2)</enum><text>require disclosure on fulfilled repurchase requests across all trusts aggregated by originator, so that investors may identify asset originators with clear underwriting deficiencies.</text> </paragraph></section>
<section id="HE86044669F464AE2AA67E853EB2CD7C3"><enum>1505.</enum><header>Exempted transactions under the Securities Act of 1933</header>
<subsection id="H90A3876FA8EC43C28062CA66B4977621"><enum>(a)</enum><header>In general</header><text>Section 4 of the Securities Act of 1933 (15 U.S.C. 77d) is amended—</text>
<paragraph id="HE00A36485DEB464BB9D93CEFFCB20729"><enum>(1)</enum><text>by striking paragraph (5); and</text> </paragraph>
<paragraph id="H5A0D4E165B134AFFA2226D6E14FB57AD"><enum>(2)</enum><text>by redesignating paragraph (6) as paragraph (5).</text> </paragraph></subsection>
<subsection id="H30DE3F592F144EC08A3FC7AE450A8560"><enum>(b)</enum><header>Conforming amendment</header><text>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 <quote>4(6)</quote> and inserting <quote>4(5)</quote>.</text> </subsection></section>
<section id="HFD0E7FF83082415ABE480B721C870704"><enum>1506.</enum><header>Study on the macroeconomic effects of risk retention requirements</header>
<subsection id="H6A3A8E88CB024F1CA16BCD9D2AF70233"><enum>(a)</enum><header>Study required</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="H6AD7B1888B8748D39B3E23CD69282598"><enum>(1)</enum><text>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;</text> </paragraph>
<paragraph id="H72B537E0278B44589644D11A70C52400"><enum>(2)</enum><text>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;</text> </paragraph>
<paragraph id="H49471A2916D545EA8CEAA0FE75C47B8B"><enum>(3)</enum><text>a comparable analysis for proactively adjusting mortgage origination requirements;</text> </paragraph>
<paragraph id="H1E65B17A26E842DCA0DF059C030BDE4D"><enum>(4)</enum><text>an assessment of whether such proactive adjustments should be made by an independent regulator, or in a formulaic and transparent manner;</text> </paragraph>
<paragraph id="H8375F218A6B44339B09F67CE1D58DE57"><enum>(5)</enum><text>an assessment of whether such adjustments should take place independently or in concert with monetary policy; and</text> </paragraph>
<paragraph id="HEDB2BB6A14AB4E5F83F63221238C77BE"><enum>(6)</enum><text>recommendations for implementation and enabling legislation.</text> </paragraph></subsection>
<subsection id="HD15F4D3C4B7C4DE29A9DE6D80A951126"><enum>(b)</enum><header>Report</header><text display-inline="yes-display-inline">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).</text> </subsection></section></subtitle>
<subtitle id="H3EBFFC55A63342FFA0DB1E000C92BE1B"><enum>G</enum><header>Enhanced dissolution authority</header>
<section id="HC5BE90DFB64940BAACDE08822E7AAD81"><enum>1601.</enum><header>Short title; Purpose</header>
<subsection id="HCCBB361E2867441D9D39496A58E86267"><enum>(a)</enum><header>Short title</header><text display-inline="yes-display-inline">This subtitle may be cited as the <quote>Dissolution Authority for Large, Interconnected Financial Companies Act of 2009</quote>.</text></subsection>
<subsection id="HE8E010B6A1C64472A1D55D01EF9923D2"><enum>(b)</enum><header>Purpose</header><text>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.</text></subsection></section>
<section id="H940BC9B6AB8E4527AA5FF3763764D9F2"><enum>1602.</enum><header>Definitions</header><text display-inline="no-display-inline">For purposes of this subtitle, the following definitions shall apply:</text>
<paragraph id="HEBC8E923B5EF4C92BC04277009812BA9"><enum>(1)</enum><header>Appropriate regulatory agency</header>
<subparagraph id="HE0539972474C4060BA8322497F4A380E"><enum>(A)</enum><header>Corporation and commission</header><text>The term <term>appropriate regulatory agency</term> means—</text>
<clause id="HE90499B0A4B14EE49E108BA8229878C3"><enum>(i)</enum><text>the Corporation;</text> </clause>
<clause id="HBA4A4D5E27734124AD54AE4C3217B63A"><enum>(ii)</enum><text>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</text> </clause>
<clause id="HB80FE5689421439CA73D2D304E19DFF6"><enum>(iii)</enum><text display-inline="yes-display-inline">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.</text> </clause></subparagraph>
<subparagraph id="H064FF07FABC54D5390D371B5E09AF6E0"><enum>(B)</enum><header>Rules of construction</header><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph>
<paragraph id="HC0153D65869D48B7AE0D1B35424B217E"><enum>(2)</enum><header>Bridge financial company</header><text>The term <term>bridge financial company</term> means a new financial company organized in accordance with section 1609(h) by the Corporation.</text> </paragraph>
<paragraph id="H3FD8D21F1BDF4303879831213D2C557F"><enum>(3)</enum><header>Commission</header><text>The term <term>Commission</term> means the Securities and Exchange Commission.</text> </paragraph>
<paragraph id="HF028387B73094AEAA493FE173651DEB6"><enum>(4)</enum><header>Corporation</header><text>The term <term>Corporation</term> means the Federal Deposit Insurance Corporation.</text> </paragraph>
<paragraph id="H0D1D149D587D43AF802D99FE9B1000C9"><enum>(5)</enum><header>Covered financial company</header><text>The term <term>covered financial company</term> means a financial company for which a determination has been made pursuant to and in accordance with section 1603(b).</text> </paragraph>
<paragraph id="H0C7F89AB76714A9C9E9FA95764DA5642"><enum>(6)</enum><header>Covered subsidiary</header><text>The term <term>covered subsidiary</term> means a subsidiary covered in paragraph (9)(B)(v).</text> </paragraph>
<paragraph id="HA820109E19944DB4A8F7CCF5278F7C01"><enum>(7)</enum><header>Customer property</header><text>The term <term>customer property</term> has the meaning ascribed to it in the Securities Investor Protection Act of 1970.</text> </paragraph>
<paragraph id="H84900E47091F402580FDBE4775B8E1E1"><enum>(8)</enum><header>Federal reserve board</header><text>The term <term>Federal Reserve Board</term> means the Board of Governors of the Federal Reserve System.</text> </paragraph>
<paragraph id="HDE341D6DA1D44B0AA4D1683B4F26F8EF"><enum>(9)</enum><header>Financial company</header><text>The term <term>financial company</term> means any company that—</text>
<subparagraph id="HC0C38C3CE0BE4EB98634FE44BE71523D"><enum>(A)</enum><text>is incorporated or organized under Federal law or the laws of any State;</text> </subparagraph>
<subparagraph id="HF297FB63244D42AC85098C37DF025EFF"><enum>(B)</enum><text>is—</text>
<clause id="HEB99E501E1E847EC9C99FDC65C7596D8"><enum>(i)</enum><text>any bank holding company as defined in section 2(a) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(a));</text> </clause>
<clause display-inline="no-display-inline" id="H13E02196F55E4D75B51E1DC74A088884"><enum>(ii)</enum><text display-inline="yes-display-inline">any company that has been subjected to stricter prudential regulation under section 1103;</text> </clause>
<clause id="H5A6CA9BCCAB74C2395222F4EBEBAEECC"><enum>(iii)</enum><text display-inline="yes-display-inline">any insurance company;</text> </clause>
<clause id="H9DA3C8F7AD594B2DB553D7F61479A66C"><enum>(iv)</enum><text>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</text> </clause>
<clause id="H4ED026E17CCF4D8DAC1A16144CE83065"><enum>(v)</enum><text>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); </text> </clause></subparagraph>
<subparagraph id="HDAD484DC6DAF4D2F87B01571A94D841B" display-inline="no-display-inline"><enum>(C)</enum><text display-inline="yes-display-inline">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.); </text></subparagraph>
<subparagraph id="H309A18BCE00045868553D216A8F7DEE7"><enum>(D)</enum><text display-inline="yes-display-inline">that is not a Federal home loan bank, the Federal National Mortgage Association, or the Federal Home Loan Mortgage Corporation; and</text></subparagraph>
<subparagraph id="H70B4C2366F1F4C71ABBAEEEA64841EFE"><enum>(E)</enum><text display-inline="yes-display-inline">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)).</text></subparagraph></paragraph>
<paragraph id="H39E61DBCFFB84A3DAE45437ACD679823"><enum>(10)</enum><header>Fund</header><text display-inline="yes-display-inline">The term <term>Fund</term> means the Systemic Dissolution Fund established in accordance with section 1609(n).</text> </paragraph>
<paragraph id="H9B6CB6023F86446A8970B042F3478E6D"><enum>(11)</enum><header>Insurance company</header><text display-inline="yes-display-inline">The term <term>insurance company</term> means any entity covered by a State law designed specifically to deal with the rehabilitation, liquidation, or insolvency of an insurance company.</text> </paragraph>
<paragraph id="HE19C6440BC964011BEED37B59C9EF2D9"><enum>(12)</enum><header>Secretary</header><text>The term <term>Secretary</term> shall mean the Secretary of the Treasury.</text> </paragraph>
<paragraph id="H2FD484C160774025BF64982ECD3D6739"><enum>(13)</enum><header>State</header><text>The term <term>State</term> 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.</text> </paragraph>
<paragraph id="H8CAA2897888148FCB2E76A94CE18B4F4"><enum>(14)</enum><header>Certain other terms</header><text>The terms <term>affiliate</term>, <quote>company</quote>, <quote>control</quote>, <quote>deposit</quote>, <quote>depository institution</quote>, <quote>foreign bank</quote>, <quote>insured depository institution</quote>, and <quote>subsidiary</quote> have the same meanings as in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813).</text> </paragraph></section>
<section id="HA6F7C8D902BB4F4E90CBE72B49F4CE74"><enum>1603.</enum><header>Systemic risk determination</header>
<subsection id="H1D75B5B358824E91A712D9C6CDFFF0C0"><enum>(a)</enum><header>Written recommendation of the federal reserve board and the appropriate regulatory agency</header>
<paragraph id="HC6ECB2172CEA465EBAC378D07E2C0504" display-inline="no-display-inline"><enum>(1)</enum><header>Vote required</header>
<subparagraph id="H593AB3954F5F475AAF9E55B1A3CE0BF5"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="HD19DD70DA1A34A5B959772A5E10A7814"><enum>(B)</enum><header>Two-thirds agreement</header><text display-inline="yes-display-inline">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. </text></subparagraph></paragraph>
<paragraph id="H70B3BB58B78E4E55B4689C36981CF786"><enum>(2)</enum><header>Recommendation required</header><text>Any written recommendations made by the Federal Reserve Board and the appropriate regulatory agency under paragraph (1) shall contain the following:</text>
<subparagraph id="H9C3112ABC5D64DA099C2ABDC3C0BB006"><enum>(A)</enum><text>A description of the effect that the default of the financial company would have on economic conditions or financial stability in the United States.</text> </subparagraph>
<subparagraph id="H983FC05C03434F31A8E6E28A11E10764"><enum>(B)</enum><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="H99EDFB55C23F41889F3B6AAE74E3DCBF"><enum>(C)</enum><text>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.</text> </subparagraph></paragraph></subsection>
<subsection id="H2221D17185B24490AFABC9B6B0B54B57"><enum>(b)</enum><header>Determination by the secretary</header><text>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—</text>
<paragraph id="H43A3BB5051C440E48E9FD4FD464D8B87"><enum>(1)</enum><text>the financial company is in default or is in danger of default;</text> </paragraph>
<paragraph id="H8ED08E4612FC44DAA73DBBAB7945F30E"><enum>(2)</enum><text>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</text> </paragraph>
<paragraph id="H70B6251319614D6DBF89E134C61A05E8"><enum>(3)</enum><text>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,</text> </paragraph><continuation-text continuation-text-level="subsection">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.</continuation-text></subsection>
<subsection id="HB28CA4C5EE004C2185B7BF3F904F4DC8"><enum>(c)</enum><header>Documentation and review</header>
<paragraph id="H49A3B5C0C1D84AE0A5833AF191B39472"><enum>(1)</enum><header>In general</header><text>The Secretary shall—</text>
<subparagraph id="H223DC0AD533D41A8A134AD79F513C443"><enum>(A)</enum><text>document any determination under subsection (b); and</text> </subparagraph>
<subparagraph id="HED234381E2B9414F8C9191682ED6E04B"><enum>(B)</enum><text>retain the documentation for review under paragraph (2).</text> </subparagraph></paragraph>
<paragraph id="HAFF7FAE3759542F39A16362843557D2E"><enum>(2)</enum><header>GAO review</header><text>The Comptroller General of the United States shall review and report to the Congress on any determination under subsection (b), including—</text>
<subparagraph id="H323FA1100F7448A7B8C3A29506543886"><enum>(A)</enum><text>the basis for the determination;</text> </subparagraph>
<subparagraph id="H0BC8462D5761406B9602EB63C228DE7E"><enum>(B)</enum><text>the purpose for which any action was taken pursuant thereto; and</text> </subparagraph>
<subparagraph id="H23640701C5354EF2A4462DD05A471FBE"><enum>(C)</enum><text>the likely effect of the determination and such action on the incentives and conduct of financial companies and their creditors, counterparties, and shareholders.</text> </subparagraph></paragraph>
<paragraph id="H24418F517E814AD89E6115116D5B6CBB"><enum>(3)</enum><header>Report to congress</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection>
<subsection id="HAFD95E4973A74256B41C23F8F611ABAD"><enum>(d)</enum><header>Default or in danger of default</header><text display-inline="yes-display-inline">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:</text>
<paragraph id="H75201B5B9D7841668A468CCAA3F2A45F"><enum>(1)</enum><text display-inline="yes-display-inline">A case has been, or likely will promptly be, commenced with respect to the financial company under title 11, United States Code.</text> </paragraph>
<paragraph id="H36313D24F11046BFA2AC1B6213D6A964"><enum>(2)</enum><text display-inline="yes-display-inline">The financial company is critically undercapitalized, as such term has been or may be defined by the Federal Reserve Board.</text> </paragraph>
<paragraph id="H9A9A69E6D50A460FAC210C6F8D7FB80D"><enum>(3)</enum><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H98848900A13346D097F241E30A01F4B9"><enum>(4)</enum><text display-inline="yes-display-inline">The assets of the financial company are, or are likely to be, less than its obligations to creditors and others.</text> </paragraph>
<paragraph id="H3F98499DC7E94445B054801F9371D952"><enum>(5)</enum><text display-inline="yes-display-inline">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.</text> </paragraph></subsection></section>
<section id="H02396DAC336D4ECF9EFEDCE8D8773AA2"><enum>1604.</enum><header>Dissolution; stabilization</header>
<subsection id="H613B9A9319BA40A7AB6592A4DA1DC521"><enum>(a)</enum><header>Appointment of receiver</header>
<paragraph id="H0360CA12250F4B9C8C7872F01EABD9A0"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph>
<paragraph id="H254A07C8348C48AEB83B7D43572FB7FF"><enum>(2)</enum><header>Time limit on receivership authority</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H34E85DDC1D8040318EDE4DC6D8980521"><enum>(3)</enum><header>Extension of time limit</header><text display-inline="yes-display-inline">The time limit established in paragraph (2) may be extended by the Secretary for up to 1 additional year if—</text>
<subparagraph id="H5AB47A6B840D463FBC94EA8800DCC58F"><enum>(A)</enum><text>the Corporation has not completed the dissolution of the company within the time provided in paragraph (2); and</text></subparagraph>
<subparagraph id="H0FC7D539F6D54039B5AD3CC3006269DB"><enum>(B)</enum><text>the Secretary certifies in writing that continuation of the receivership is necessary—</text>
<clause id="HAE5A924EA7CD4234BA31FE4BE830045F"><enum>(i)</enum><text> to protect the best interests of the taxpayers of the United States; and</text></clause>
<clause id="H7CA07D6898C644029FA24C2550FE5895"><enum>(ii)</enum><text>to protect the stability of the financial system and the economy of the United States.</text></clause></subparagraph></paragraph>
<paragraph id="HB3412D9C0778458CA98CAFA39495D4B7"><enum>(4)</enum><header>Further extension</header><text display-inline="yes-display-inline">The time limit, as extended in paragraph (3), may be extended for up to 1 additional year if—</text>
<subparagraph id="H65E8A0657A6F4CA299D81C7DD8173510"><enum>(A)</enum><text>the conditions of paragraph (3) are met; and</text></subparagraph>
<subparagraph id="H08630F4DA0C94FAC89CFCF906E5B613C"><enum>(B)</enum><text>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—</text>
<clause id="H316204869DCA43E3AF09E489A75A37B1"><enum>(i)</enum><text>the basis for the determination by the Corporation that a second extension is necessary; and</text></clause>
<clause id="H96E55DFFAAAF43E195B5E70E58AC515A"><enum>(ii)</enum><text>the specific plan of the Corporation for concluding the receivership before the end of the proposed additional year.</text></clause></subparagraph></paragraph></subsection>
<subsection display-inline="no-display-inline" id="H97080AB30E0142649A62DE8606325089"><enum>(b)</enum><header>Dissolution limitations</header>
<paragraph id="H430EE3BA93D74AA1854916C08544B103"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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).</text> </paragraph>
<paragraph id="H89C74FC022A74141B3350345713D460F"><enum>(2)</enum><header>Liquidation</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HD678BAE0FC49420EA8022B19FCB3CEA4"><enum>(3)</enum><header>Assessment for excess liquidation costs</header><text>Any liquidation costs that exceed the amount of liquidated assets of the company shall be paid through assessments on large financial companies.</text> </paragraph></subsection>
<subsection id="HE9B18AB4634A46AC9273D3A3562E644F"><enum>(c)</enum><header>Consultation</header><text>The Corporation, as receiver—</text>
<paragraph id="HE82EB112AE5042CDAE0D51525D2974CE"><enum>(1)</enum><text display-inline="yes-display-inline">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;</text> </paragraph>
<paragraph id="HEB0A0F5A5F6141A4B9B7D77995E1B2E0"><enum>(2)</enum><text display-inline="yes-display-inline">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</text> </paragraph>
<paragraph id="HB5EA6021889444A2A95E513A7A312C0A"><enum>(3)</enum><text display-inline="yes-display-inline">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.</text> </paragraph></subsection>
<subsection id="H7815D86916E6488D89C773425F998DA2"><enum>(d)</enum><header>Emergency stabilization after appointment of receiver</header><text>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:</text>
<paragraph id="H314C5189C9B7479E889DDEEBFC9AE591"><enum>(1)</enum><text>Making loans to, or purchasing any debt obligation of, the covered financial company or any covered subsidiary.</text> </paragraph>
<paragraph id="HCEF8CA983C614191B64D57E9E5307D6D"><enum>(2)</enum><text>Purchasing assets of the covered financial company or any covered subsidiary directly or through an entity established by the Corporation for such purpose.</text> </paragraph>
<paragraph id="H0FBC1C5732EA4CD8BCC2798E91529893"><enum>(3)</enum><text>Assuming or guaranteeing the obligations of the covered financial company or any covered subsidiary to one or more third parties.</text> </paragraph>
<paragraph id="H066A669FDF9D4E0686C52DBC5F784291"><enum>(4)</enum><text>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.</text> </paragraph>
<paragraph id="HF24D5DD06F6C4D02B92CD4A1D78C4D13"><enum>(5)</enum><text>Selling or transferring all, or any part thereof, of such acquired assets, liabilities, or obligations of the covered financial company or any covered subsidiary.</text> </paragraph></subsection>
<subsection id="HB3BAC0885C1E46C9982E50F4E8BA9DF5"><enum>(e)</enum><header>Treatment of insurance companies and insurance company subsidiaries</header>
<paragraph id="HAF8773D60AB34191BDF5FFB90938D5DF"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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. </text> </paragraph>
<paragraph id="H678646287AE24281B3E02F675C061770"><enum>(2)</enum><header>Exception for covered subsidiaries</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H7A2BADF719944740954A4BAAF951FCC2"><enum>(3)</enum><header>Backup authority</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection>
<subsection id="H683B595CB1604FD39FF2134CC2DFBE96"><enum>(f)</enum><header>Mandatory terms and conditions for all stabilization actions</header><text>The Corporation as receiver is authorized to take the stabilization actions listed in subsection (d) only if—</text>
<paragraph id="HAB24D87FEA4641609ED3C4088FC4C83B"><enum>(1)</enum><text>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;</text> </paragraph>
<paragraph id="HEA5984BE227047CB9AF55381BE19A3C8"><enum>(2)</enum><text>the Corporation ensures that the shareholders of a covered financial company do not receive payment until after all other claims are fully paid;</text> </paragraph>
<paragraph display-inline="no-display-inline" id="H732175808B354B6F82072B1EF1BAE00F"><enum>(3)</enum><text display-inline="yes-display-inline">the Corporation ensures that any funds from taxpayers shall be repaid as part of the resolution process before payments are made to creditors;</text> </paragraph>
<paragraph id="HF7140A0D6CC24CC4BBEC3F3126C30A71"><enum>(4)</enum><text>the Corporation ensures that unsecured creditors bear losses;</text> </paragraph>
<paragraph id="HBD9E539EB7894494ADDA68C1306CF0A6"><enum>(5)</enum><text>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</text> </paragraph>
<paragraph id="H57F19D9E69C746E998FB2BD3389B6A6E"><enum>(6)</enum><text display-inline="yes-display-inline">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).</text> </paragraph></subsection>
<subsection id="HA2A27C28ADC64F3BB8683A8523D3B367"><enum>(g)</enum><header>Recoupment of funds expended for systemic stabilization purposes</header><text>Amounts expended from the Fund by the Corporation under this section shall be repaid in full to the Fund only from the following sources:</text>
<paragraph id="H8C359A580B9B487889624D5485B8B327"><enum>(1)</enum><header>Dissolution process</header><text display-inline="yes-display-inline">Amounts attributable to the proceeds of the sale of, or income from, the assets of the covered financial company.</text> </paragraph>
<paragraph id="H597F766C55844807A9AC6519BF42D0F1"><enum>(2)</enum><header>Industry assessments</header><text>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).</text> </paragraph></subsection></section>
<section id="H076B956F8461465FABBD2358EE0B76AB"><enum>1605.</enum><header>Judicial review</header><text display-inline="no-display-inline">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.</text> </section>
<section id="HC18739181AEB49F1815EF25A4270F059"><enum>1606.</enum><header>Directors not liable for acquiescing in appointment of receiver</header><text display-inline="no-display-inline">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—</text>
<paragraph id="HC2EA4ABBCC2B4EF09286D985BF715086"><enum>(1)</enum><text>the Secretary’s appointment of the Corporation as receiver for the covered financial company under section 1604; or</text> </paragraph>
<paragraph id="H17ABC7C68D5F4BA2A264EE5D527004CA"><enum>(2)</enum><text>an acquisition, combination, or transfer of assets or liabilities under section 1609.</text> </paragraph></section>
<section id="H4DDFDB022D464BADB1FF41A88524FD31"><enum>1607.</enum><header>Termination and exclusion of other actions</header>
<subsection id="H8691999F44CF40CBA8D27E0EDB35F2C1"><enum>(a)</enum><header>Termination and exclusion of bankruptcy</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="H39DAA3894CC44E9EA7AB41D013F36FAE"><enum>(b)</enum><header>Conversion to bankruptcy</header>
<paragraph id="HEAFC564385334B738703F732460FE948"><enum>(1)</enum><header>Conversion</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="HA727E3684E904CC9B92D2BC1FB4B02C8"><enum>(2)</enum><header>Bridge financial company</header><text>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).</text></paragraph></subsection>
<subsection id="HC2567425E8A344BC82D313D83458BF69" display-inline="no-display-inline"><enum>(c)</enum><header>Reporting to the Congress</header>
<paragraph id="H115DB0559B954A9284271A86EA385FCF"><enum>(1)</enum><header>In general</header>
<subparagraph id="H9F770D8471024387BBCED46B809CCD10"><enum>(A)</enum><header>Initial report</header><text>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).</text></subparagraph>
<subparagraph id="HC694BC55CE294F289AD14CA4A498C0D5"><enum>(B)</enum><header>Continuing reports</header><text display-inline="yes-display-inline">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). </text></subparagraph></paragraph>
<paragraph id="HFB6C4F863525433F8486C218E054E271"><enum>(2)</enum><header>Committees to receive reports</header><text>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.</text></paragraph>
<paragraph id="HD661E35865314E6E8E3CD838C1FAB89D"><enum>(3)</enum><header>Reporting issues</header>
<subparagraph id="HE56A8CE0E268404F903E33F2016A842E"><enum>(A)</enum><text display-inline="yes-display-inline">Why the receivership should continue instead of converting the receivership into a proceeding under chapter 7 or 11 of title 11, United States Code.</text></subparagraph>
<subparagraph id="HEF319E11E8BC438EB53DDDD1E9E9930F"><enum>(B)</enum><text>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.</text></subparagraph>
<subparagraph id="H3B295F107E8C4C2C870114F115902FA9"><enum>(C)</enum><text>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.</text></subparagraph></paragraph></subsection></section>
<section id="H435FCB521F394EC3B46453BF2C786DAA"><enum>1608.</enum><header>Rulemaking</header><text display-inline="no-display-inline">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.</text> </section>
<section id="H17D393414ADB45788E639A7479189242"><enum>1609.</enum><header>Powers and duties of corporation</header>
<subsection id="H37FD029EAC044961974FFE50D0FF6A16"><enum>(a)</enum><header>Powers and authorities</header>
<paragraph id="H4761FE116DD340039AE40C0C4B280CDB"><enum>(1)</enum><header>General powers</header>
<subparagraph id="HEE9D14E9C2B54720A5A6142A223600F3"><enum>(A)</enum><header>Successor to covered financial company</header><text>The Corporation shall, upon appointment as receiver for a covered financial company under section 1604, and by operation of law, succeed to—</text>
<clause id="H77E0CA3AC08E4E5D82F0143F3AECDD50"><enum>(i)</enum><text>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</text> </clause>
<clause id="H08358B0EC62F4893B3637B22301051C8"><enum>(ii)</enum><text>title to the books, records, and assets of any previous receiver or other legal custodian of such covered financial company.</text> </clause></subparagraph>
<subparagraph id="HEC7483A4B3D94419B778273A7FABEF6D"><enum>(B)</enum><header>Operate the covered financial company</header><text>The Corporation as receiver for a covered financial company may—</text>
<clause id="HEE8021E9D8A34894A38A85231AC89704"><enum>(i)</enum><text>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;</text> </clause>
<clause id="H52369E7497694D1B830451AE8D9BF7F3"><enum>(ii)</enum><text>collect all obligations and money due the covered financial company;</text> </clause>
<clause id="HB162894D16904F1CBA47B7F38AAB1081"><enum>(iii)</enum><text>perform all functions of the covered financial company in the name of the covered financial company;</text> </clause>
<clause id="HC88B39810ABE41C8AD922214BDC92590"><enum>(iv)</enum><text>preserve and conserve the assets and property of the covered financial company; and</text> </clause>
<clause id="HDE15DB91032C499F9AB9C96B36372EF9"><enum>(v)</enum><text>provide by contract for assistance in fulfilling any function, activity, action, or duty of the Corporation as receiver.</text> </clause></subparagraph>
<subparagraph id="HB4F648A142E24B3DA08B67818FA313CA"><enum>(C)</enum><header>Functions of covered financial company’s officers, directors, and shareholders</header>
<clause id="H8F7BC75F877F406786950A565414970D"><enum>(i)</enum><header>In general</header><text>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.</text> </clause>
<clause id="H244A08BF1AAC475BAA80D69BFE67C48A"><enum>(ii)</enum><header>Presumption</header><text>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).</text> </clause></subparagraph>
<subparagraph id="H4CD0997D3E1A49CC9E89906C29932FDA"><enum>(D)</enum><header>Additional powers as receiver</header><text>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.</text> </subparagraph>
<subparagraph id="H09D9B72DD054498A92B3D6314C3FC9C8"><enum>(E)</enum><header>Organization of new companies</header><text>The Corporation as receiver may organize a bridge financial company under subsection (h).</text> </subparagraph>
<subparagraph id="H41FE4E40D66249B399FEBF899F64D291"><enum>(F)</enum><header>Merger; transfer of assets and liabilities</header>
<clause id="HD4D500574F254F19B01BF26429B39EE8"><enum>(i)</enum><header>In general</header><text>Subject to clause (ii), the Corporation as receiver may—</text>
<subclause id="H91FA9ECB81D048FCB8495D2777319149"><enum>(I)</enum><text>merge the covered financial company with another company; or</text> </subclause>
<subclause id="H3C09EFEB25D74993A754622E38279FC9"><enum>(II)</enum><text>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.</text> </subclause></clause>
<clause id="H15CDEDDFB2984FED8405786D9CBEB722"><enum>(ii)</enum><header>Federal agency approval; antitrust review</header>
<subclause id="HE581E4EFE7CD4753B8BB519B0174C7D8"><enum>(I)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </subclause>
<subclause id="H0390209A683945EB9124BAF05D9DA73C"><enum>(II)</enum><header>Emergency</header><text display-inline="yes-display-inline">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).</text> </subclause></clause></subparagraph>
<subparagraph id="HE3EF7DABB49D47DD937F7BF239A9D8FA"><enum>(G)</enum><header>Payment of valid obligations</header><text>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.</text> </subparagraph>
<subparagraph id="HA652E8C622D14BFB84E85F039E439E88"><enum>(H)</enum><header>Subpoena authority</header>
<clause id="H6F93F31F3D6D4591AB1BFB1E55559559"><enum>(i)</enum><header>In general</header><text>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.</text> </clause>
<clause id="H81B41B380CDE4CCE8883783C7A7CB496"><enum>(ii)</enum><header>Rule of construction</header><text>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.</text> </clause></subparagraph>
<subparagraph id="HFBC276A0B1D74B9291EADB75CDCAC653"><enum>(I)</enum><header>Incidental powers</header><text>The Corporation, as receiver, may—</text>
<clause id="H36C5A2BE8E614F0AA4E8B6379E71180A"><enum>(i)</enum><text>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</text> </clause>
<clause id="H5DDFBAC7D9784FEFB2930836406B65BD"><enum>(ii)</enum><text>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.</text> </clause></subparagraph>
<subparagraph id="H04A97AF3FA03450D8D0992FC9F51F9D8"><enum>(J)</enum><header>Utilization of private sector</header><text>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.</text> </subparagraph>
<subparagraph id="H49F67C31D19B4C5C808688ADE2363595"><enum>(K)</enum><header>Shareholders and creditors of covered financial company</header><text>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).</text> </subparagraph>
<subparagraph id="H37F3A00CC890446EB7B5DDBD6F50D988"><enum>(L)</enum><header>Coordination with foreign financial authorities</header><text>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.</text> </subparagraph>
<subparagraph id="H0083547025AD48BDBE4401F363C80F72"><enum>(M)</enum><header>Appointment of Consumer Privacy Advisor</header>
<clause id="H40DAE3D695A84A56A0050159DA43D79D"><enum>(i)</enum><header>Appointment</header><text display-inline="yes-display-inline">Upon the appointment of the Corporation as receiver under section 1604(a), the Corporation shall appoint a Consumer Privacy Advisor.</text></clause>
<clause id="HFDD667F3581B41C1B7A556587DDC3BE6"><enum>(ii)</enum><header>Duties</header><text>The Consumer Privacy Advisor appointed under clause (i) shall advise the Corporation with respect to—</text>
<subclause id="H0DCCE6A1334C4FA5BD3F104B8EA27187"><enum>(I)</enum><text>the covered financial company’s consumer privacy policies;</text></subclause>
<subclause id="H2262E01B755E4B9B856DC1E0048DB6BF"><enum>(II)</enum><text>the potential losses or gains of privacy to consumers upon any sale, lease, or other transfer of material assets of the covered financial company;</text></subclause>
<subclause id="H34DCD3570F954AF6BA77270B9ABAF575"><enum>(III)</enum><text>the potential costs or benefits to consumers upon any sale, lease, or other transfer of material assets of the covered financial company; and</text></subclause>
<subclause id="HC7FA78C844EF446C9FEBCB335C5E07AB"><enum>(IV)</enum><text>the potential alternatives that would mitigate potential privacy loses or potential costs to consumers.</text></subclause></clause></subparagraph></paragraph>
<paragraph id="H087AA0C84A704A6D9FE2FB4A6525DAAB"><enum>(2)</enum><header>Authority of corporation to determine claims</header>
<subparagraph id="H94FB977304D5459C9E003EA86A4E4723"><enum>(A)</enum><header>In general</header><text>The Corporation may, as receiver, determine claims in accordance with the requirements of this subsection and regulations prescribed under paragraph (3).</text> </subparagraph>
<subparagraph id="H127DE33AF669466A810655DA377CEFCF"><enum>(B)</enum><header>Notice requirements</header><text>The receiver, in any case involving the liquidation or winding up of the affairs of a covered financial company, shall—</text>
<clause id="H19342880987349E2B07435A1DBAE5A9B"><enum>(i)</enum><text>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</text> </clause>
<clause id="H8F84AEF045E046C9B44EE86AF88C4369"><enum>(ii)</enum><text>republish such notice approximately 1 month and 2 months, respectively, after the publication under clause (i).</text> </clause></subparagraph>
<subparagraph id="HE7FB65B0E6CA45D68963BD63F101D397"><enum>(C)</enum><header>Mailing required</header><text>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—</text>
<clause id="HC425AE7C36934E718466E0CC442E5E3E"><enum>(i)</enum><text>at the creditor’s last address appearing in such books; or</text> </clause>
<clause id="H9293C6E71BD04E61815F73456BC09687"><enum>(ii)</enum><text>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.</text> </clause></subparagraph></paragraph>
<paragraph id="H86A828E7ED5243A5BAE1B55AB2117E90"><enum>(3)</enum><header>Rulemaking authority relating to determination of claims</header>
<subparagraph id="HBC2674555E31452EB83FA49590824D13"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="H2D570ACA153741E4A90DC5D383C68247"><enum>(B)</enum><header>Existing rules</header><text>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.</text> </subparagraph></paragraph>
<paragraph id="H3348E8934CF84EE58DB310A46F02C76D"><enum>(4)</enum><header>Procedures for determination of claims</header>
<subparagraph id="H543C83A8ACDE44F9B4ECA4FA2BA40550"><enum>(A)</enum><header>Determination period</header>
<clause id="HD89E1107B49643DAA965592F09B19EB7"><enum>(i)</enum><header>In general</header><text>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.</text> </clause>
<clause id="H191766C95510483081AE8173E59FBA5D"><enum>(ii)</enum><header>Extension of time</header><text>The period described in clause (i) may be extended by a written agreement between the claimant and the Corporation.</text> </clause>
<clause id="H6388DA636AFA4611B888ACB2117EC702"><enum>(iii)</enum><header>Mailing of notice sufficient</header><text>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—</text>
<subclause id="H1D9E2A3392844518A59831C78B36136A"><enum>(I)</enum><text>on the covered financial company’s books;</text> </subclause>
<subclause id="H3FB7DC8ED88045E6BFDF2C835505F57C"><enum>(II)</enum><text>in the claim filed by the claimant; or</text> </subclause>
<subclause id="H6666D1A420A74A9D91B2A9973F0D6D8B"><enum>(III)</enum><text>in documents submitted in proof of the claim.</text> </subclause></clause>
<clause id="H4CC5FCC882384C84BD2F9D96696765D6"><enum>(iv)</enum><header>Contents of notice of disallowance</header><text>If any claim filed under clause (i) is disallowed, the notice to the claimant shall contain—</text>
<subclause id="H2DF45929AE68409E841F3751D3CBA6E0"><enum>(I)</enum><text>a statement of each reason for the disallowance; and</text> </subclause>
<subclause id="H878F2717988341108A4AA22F85914DF2"><enum>(II)</enum><text>the procedures available for obtaining agency review of the determination to disallow the claim or judicial determination of the claim.</text> </subclause></clause></subparagraph>
<subparagraph id="H6CC1B887A9AF4C7C9A60E1544260CC00"><enum>(B)</enum><header>Allowance of proven claim</header><text>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.</text> </subparagraph>
<subparagraph id="HAD7DDF7F57DD4870A30C0F94BAFB3B5D"><enum>(C)</enum><header>Disallowance of claims filed after end of filing period</header>
<clause id="H1CB67B0A09FB482E812993B0B226C37E"><enum>(i)</enum><header>In general</header><text>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.</text> </clause>
<clause id="HA4B156CAF312463EA999F63555FED0AB"><enum>(ii)</enum><header>Certain exceptions</header><text>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—</text>
<subclause id="HC98C72F7A3E0427AB4B7BAB87C4D95A8"><enum>(I)</enum><text>the claimant did not receive notice of the appointment of the receiver in time to file such claim before such date; and</text> </subclause>
<subclause id="H90AF14F4C59C48F788650930C62EF6DF"><enum>(II)</enum><text>such claim is filed in time to permit payment of such claim.</text> </subclause></clause></subparagraph>
<subparagraph id="H524724D32A2E4754BD18E1B443EF95D3"><enum>(D)</enum><header>Authority to disallow claims</header>
<clause id="HA297D26324644D8DB7D67A68EC9C2DC2"><enum>(i)</enum><header>In general</header><text>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.</text> </clause>
<clause id="H47BEDCC958064B9EA614B407078F2AB9"><enum>(ii)</enum><header>Payments to less than fully secured creditors</header><text>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—</text>
<subclause id="H6EEB34C4298E4FD6BC34BC2863528E8C"><enum>(I)</enum><text>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</text> </subclause>
<subclause id="H75CC9C30410C4970AB61DE59097AC3A5"><enum>(II)</enum><text>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.</text> </subclause></clause>
<clause id="H50E622953C0A4BCA9D55FDABDC10CEAB"><enum>(iii)</enum><header>Exceptions</header><text>No provision of this paragraph shall apply with respect to—</text>
<subclause id="H18070CA47E4F4D1B8155793F1F347B71"><enum>(I)</enum><text>any extension of credit from any Federal Reserve bank, or the Corporation, to any covered financial company; or</text> </subclause>
<subclause id="HECC1EB1D46BD45AAB189844E7D42DE18"><enum>(II)</enum><text>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.</text> </subclause></clause>
<clause display-inline="no-display-inline" id="HCC91DEFD7F4B4D6E90375C1FC5996D80"><enum>(iv)</enum><header>Payments to fully secured creditors</header><text display-inline="yes-display-inline">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.</text> </clause>
<clause id="H51A32BE2571F47BFADD8F13DEEFB43F6"><enum>(v)</enum><header>Amount specified</header><text display-inline="yes-display-inline">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.</text> </clause></subparagraph>
<subparagraph id="HAE934B2F0C4F40A386FEB5285BB41547"><enum>(E)</enum><header>No judicial review of determination pursuant to subparagraph (d)</header><text>No court may review the Corporation determination pursuant to subparagraph (D) to disallow a claim.</text> </subparagraph>
<subparagraph id="H77F1573CEB284B66AD87E3A3ED1E986A"><enum>(F)</enum><header>Legal effect of filing</header>
<clause id="HA735D300F9EA410FB306055E9EAA37A8"><enum>(i)</enum><header>Statute of limitation tolled</header><text>For purposes of any applicable statute of limitations, the filing of a claim with the Corporation shall constitute a commencement of an action.</text> </clause>
<clause id="H4E82459F2F0D4DA2ADF44CE0F4791D86"><enum>(ii)</enum><header>No prejudice to other actions</header><text>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.</text> </clause></subparagraph></paragraph>
<paragraph id="H98EA50D88B1F42B79BDD4008DDEA2D2D"><enum>(5)</enum><header>Provision for judicial determination of claims</header>
<subparagraph id="H109DB9918EE648ECA701C344C7CF5989"><enum>(A)</enum><header>In general</header><text>Before the end of the 60-day period beginning on the earlier of—</text>
<clause id="H9CEAF33DCFED44C288857AD12C4FA598"><enum>(i)</enum><text>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</text> </clause>
<clause id="H67ACD2994670425A9B90805E06A0C451"><enum>(ii)</enum><text>the date of any notice of disallowance of such claim pursuant to paragraph (4)(A)(i),</text> </clause><continuation-text continuation-text-level="subparagraph">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).</continuation-text></subparagraph>
<subparagraph id="H71B796D863814E0F9E5FE28FCB675FC8"><enum>(B)</enum><header>Statute of limitations</header><text>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.</text> </subparagraph></paragraph>
<paragraph id="HA93F71FD0D2749D19929D43EBC24DB96"><enum>(6)</enum><header>Expedited determination of claims</header>
<subparagraph id="HB6F06D05BA834445ADCC842164CA6A3D"><enum>(A)</enum><header>Establishment required</header><text>The Corporation shall establish a procedure for expedited relief outside of the routine claims process established under paragraph (4) for claimants who—</text>
<clause id="HF3371EE615314006AAED17D9A5B20BFE"><enum>(i)</enum><text>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</text> </clause>
<clause id="H9F1F399A7FD843C69EAECFCFDAC95022"><enum>(ii)</enum><text>allege that irreparable injury will occur if the routine claims procedure is followed.</text> </clause></subparagraph>
<subparagraph id="H978631AE26E64517A212B51125F1E83B"><enum>(B)</enum><header>Determination period</header><text>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—</text>
<clause id="H7B1E84BCC5934E28ACCEC03FD68CAC7D"><enum>(i)</enum><text>determine—</text>
<subclause id="H2A9CC566D4824588AA67A51DBDD68421"><enum>(I)</enum><text>whether to allow or disallow such claim; or</text> </subclause>
<subclause id="H9E4B4D4154A34AEF847949871BD950DB"><enum>(II)</enum><text>whether such claim should be determined pursuant to the procedures established pursuant to paragraph (4); and</text> </subclause></clause>
<clause id="HDFFCDA43B9544441A923841242E1F33D"><enum>(ii)</enum><text>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.</text> </clause></subparagraph>
<subparagraph id="H36988B51C84F40E6BDEB1B28F2C2F183"><enum>(C)</enum><header>Period for filing or renewing suit</header><text>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—</text>
<clause id="HF5984565F45F4284BE2110AA707A53CE"><enum>(i)</enum><text>the end of the 90-day period beginning on the date of the filing of a request for expedited relief; or</text> </clause>
<clause id="H5F17F972C1164E388D1EFA3B2E0C2F53"><enum>(ii)</enum><text>the date the Corporation denies the claim.</text> </clause></subparagraph>
<subparagraph id="H51F3C8BBEEE84615B5B660709D368A6B"><enum>(D)</enum><header>Statute of limitations</header><text>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.</text> </subparagraph>
<subparagraph id="H52C8BB42191047A9ADC3A764C343EEDA"><enum>(E)</enum><header>Legal effect of filing</header>
<clause id="HA394C8B205624FED9283B568C6E6F626"><enum>(i)</enum><header>Statute of limitation tolled</header><text>For purposes of any applicable statute of limitations, the filing of a claim with the receiver shall constitute a commencement of an action.</text> </clause>
<clause id="HFC84545293FD46F0BB3B42BACCB2867C"><enum>(ii)</enum><header>No prejudice to other actions</header><text>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.</text> </clause></subparagraph></paragraph>
<paragraph id="HCA991892F06A4BC08C31B897389AC7DA"><enum>(7)</enum><header>Agreements against interest of the receiver</header><text>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.</text> </paragraph>
<paragraph id="HC96EA86FBDE74E16A904DA7468ECDA7C"><enum>(8)</enum><header>Payment of claims</header>
<subparagraph id="HEA6782AC86EF457098997407AAAA9D15"><enum>(A)</enum><header>In general</header><text>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—</text>
<clause id="H4E94AAFD13A948B4A06A48D9911F8513"><enum>(i)</enum><text>allowed by the receiver;</text> </clause>
<clause id="H6C4BE171AC4243F6900BC5F9459AC55B"><enum>(ii)</enum><text>approved by the Corporation pursuant to a final determination pursuant to paragraph (6); or</text> </clause>
<clause id="HA4FF3A4153AC4943AE0EA7BFD8CE78B4"><enum>(iii)</enum><text>determined by the final judgment of any court of competent jurisdiction.</text> </clause></subparagraph>
<subparagraph id="H092E6AE2049E44D3941CCFEA339E8B0A"><enum>(B)</enum><header>Payment of dividends on claims</header><text>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.</text> </subparagraph>
<subparagraph id="HC192A79DE4504039A2D2106EBFCF55C6"><enum>(C)</enum><header>Rulemaking authority of corporation</header><text>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.</text> </subparagraph></paragraph>
<paragraph id="HD60576C4D8D144178BAD0044052593D8"><enum>(9)</enum><header>Suspension of legal actions</header>
<subparagraph id="H24596132CC924D22B4CEC108BA943A42"><enum>(A)</enum><header>In general</header><text>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.</text> </subparagraph>
<subparagraph id="H365E629981CB4CC09A6A9BC637111446"><enum>(B)</enum><header>Grant of stay by all courts required</header><text>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.</text> </subparagraph></paragraph>
<paragraph id="HFF40FAD12CB54B0382FF03A18747635E"><enum>(10)</enum><header>Additional rights and duties</header>
<subparagraph id="H023B00A744FB4C87A9CA17E7F9EB03CF"><enum>(A)</enum><header>Prior final adjudication</header><text>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.</text> </subparagraph>
<subparagraph id="H95413299A5144F9DB0A49C139E8BFF06"><enum>(B)</enum><header>Rights and remedies of receiver</header><text>In the event of any appealable judgment, the Corporation as receiver shall—</text>
<clause id="H00B4BAD25B3C46FEA83923B0E405A81B"><enum>(i)</enum><text>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</text> </clause>
<clause id="H594EC30FAE9F48F39E518002F2FE596D"><enum>(ii)</enum><text>not be required to post any bond in order to pursue such remedies.</text> </clause></subparagraph>
<subparagraph id="HF993291F1AF84808B326FEC620FB3A93"><enum>(C)</enum><header>No attachment or execution</header><text>No attachment or execution may issue by any court upon assets in the possession of the receiver.</text> </subparagraph>
<subparagraph id="HA62ABD23CF484ABE9F25B5FEEBA2C3F3"><enum>(D)</enum><header>Limitation on judicial review</header><text>Except as otherwise provided in this subsection, no court shall have jurisdiction over—</text>
<clause id="H00DE43194A274D568117A1459B0AB0C1"><enum>(i)</enum><text>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</text> </clause>
<clause id="HD3FB9ED6842C476FB08C05F809E4B03B"><enum>(ii)</enum><text>any claim relating to any act or omission of such covered financial company or the Corporation as receiver.</text> </clause></subparagraph>
<subparagraph id="HCE80D4CE63954703A1D3579A74183138"><enum>(E)</enum><header>Disposition of assets</header><text>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—</text>
<clause id="HD1A99248A7734F1AB5548CADBE825284"><enum>(i)</enum><text>maximizes the net present value return from the sale or disposition of such assets;</text> </clause>
<clause id="H45479B2B952D4209A2E811B25ECA482A"><enum>(ii)</enum><text>minimizes the amount of any loss realized in the resolution of cases;</text> </clause>
<clause id="HB39BF18D34C1422EBACB79197E400EF2"><enum>(iii)</enum><text>minimizes the cost to the general fund of the Treasury;</text> </clause>
<clause id="H2E2B33068A174BFBA9CE7D3D9E7E0921"><enum>(iv)</enum><text>mitigates the potential for serious adverse effects to the financial system and the United States economy;</text> </clause>
<clause id="H5C9958C183FE449A813DF23212DC475D"><enum>(v)</enum><text>ensures timely and adequate competition and fair and consistent treatment of offerors; and</text> </clause>
<clause id="H525DEBD2BFEB439EA03CC933A485E108"><enum>(vi)</enum><text>prohibits discrimination on the basis of race, sex, or ethnic groups in the solicitation and consideration of offers.</text> </clause></subparagraph></paragraph>
<paragraph id="H11EFA99E08704034BE95367AB8D6F2DC"><enum>(11)</enum><header>Statute of limitations for actions brought by receiver</header>
<subparagraph id="HA73E4522C2A546D6AF584A9232066F5A"><enum>(A)</enum><header>In general</header><text>Notwithstanding any provision of any contract, the applicable statute of limitations with regard to any action brought by the Corporation as receiver shall be—</text>
<clause id="H2875F3A89B024F58A2C243ADFEDB0ED0"><enum>(i)</enum><text>in the case of any contract claim, the longer of—</text>
<subclause id="H2FEF251BAD344BF8BE3FE57018EBBB13"><enum>(I)</enum><text>the 6-year period beginning on the date the claim accrues; or</text> </subclause>
<subclause id="HE9826597F61844218FD30832F7962B3B"><enum>(II)</enum><text>the period applicable under State law; and</text> </subclause></clause>
<clause id="HFC13ABFCBC9A47D498A043614DAFBABD"><enum>(ii)</enum><text>in the case of any tort claim, the longer of—</text>
<subclause id="H755D0641A4734693A3E59B4592A164DF"><enum>(I)</enum><text>the 3-year period beginning on the date the claim accrues; or</text> </subclause>
<subclause id="HE6BFC66B20C74A358F15B1C13DD3968D"><enum>(II)</enum><text>the period applicable under State law.</text> </subclause></clause></subparagraph>
<subparagraph id="H21E41A8018CA416B80FED192D96FB9CF"><enum>(B)</enum><header>Determination of the date on which a claim accrues</header><text>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—</text>
<clause id="HB18C148026614A39A6B241FCD9FBEE0B"><enum>(i)</enum><text>the date of the appointment of the Corporation as receiver under this title; or</text> </clause>
<clause id="HCA2F00E34ECB4DF0AD9A7957D70AC1BF"><enum>(ii)</enum><text>the date on which the cause of action accrues.</text> </clause></subparagraph>
<subparagraph id="H4CB36FD3A7DF46CCA8DABEE51399589B"><enum>(C)</enum><header>Revival of expired state causes of action</header>
<clause id="H403AEEFDF2CB4A73A8B9BAC2238A7734"><enum>(i)</enum><header>In general</header><text>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.</text> </clause>
<clause id="H5A27969400F2417E8D777A69096E4E82"><enum>(ii)</enum><header>Claims described</header><text>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.</text> </clause></subparagraph></paragraph>
<paragraph id="HEFD4905AF16C4DDD99F0F1E5103FB473"><enum>(12)</enum><header>Fraudulent transfers</header>
<subparagraph id="H9AFF44F36D2141EC9A5ED41E48BAAAAC"><enum>(A)</enum><header>In general</header><text>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.</text> </subparagraph>
<subparagraph id="H0FD95C306C5D482EAB1EFC48A0E247E2" display-inline="no-display-inline"><enum>(B)</enum><header>Preferential transfers</header><text display-inline="yes-display-inline">The Corporation as receiver for any covered financial company may avoid a transfer of an interest of the covered financial company in property that—</text>
<clause id="H3531DF6FE7B742AF97DED009245F63B1"><enum>(i)</enum><text>was made to or for the benefit of a creditor; </text></clause>
<clause id="H226AC013A7DC427B993421F850247FB6"><enum>(ii)</enum><text>was made for or on account of an antecedent debt that was owed by the covered financial company before the transfer was made; </text></clause>
<clause id="H29C46315EC7D4DE3A5CAD098E18C404D"><enum>(iii)</enum><text>was made while the covered financial company was insolvent;</text></clause>
<clause id="HECF89878981B47799AF0E3B215BC4CCA"><enum>(iv)</enum><text>was made—</text>
<subclause id="H8F75B3DB9FC441D2B610D9F996E1328F"><enum>(I)</enum><text>on or within 90 days before the date on which the Corporation was appointed receiver; or </text></subclause>
<subclause id="H57C9912718D842D881DBCB055C3D0D46"><enum>(II)</enum><text>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</text></subclause></clause>
<clause id="H2AFCC1D5D4294289A628353C8E46395D"><enum>(v)</enum><text>enables such creditor to receive more than such creditor would receive in the liquidation of the covered financial company if—</text>
<subclause id="HD34FA6D0E0364823B273DB5336032366"><enum>(I)</enum><text>the transfer had not been made; and</text></subclause>
<subclause id="HE4BA63C7FD8F4DF7A6615F9763385EE4"><enum>(II)</enum><text>such creditor received payment of such debt to the extent provided by the provisions of this subtitle.</text></subclause></clause></subparagraph>
<subparagraph id="H2D631AFCAC954B8FA9FCAC10ED8C244C"><enum>(C)</enum><header>Post-receivership transactions</header><text>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.</text></subparagraph>
<subparagraph id="H1C25FA6E14ED4F3D885192FD0D25E03D"><enum>(D)</enum><header>Right of recovery</header><text>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—</text>
<clause id="HD3B57B00BAFC4744ABD4D3CCC1B52642"><enum>(i)</enum><text>the initial transferee of such transfer or the entity for whose benefit such transfer was made; or</text></clause>
<clause id="HACFF48CD5FFC46A7A59AAF77F72199F6"><enum>(ii)</enum><text>any immediate or mediate transferee of any such initial transferee.</text></clause></subparagraph>
<subparagraph id="HF1C1487BB628470C8243CB6884AABF77"><enum>(E)</enum><header>Rights of transferee or obligee</header><text>The Corporation may not recover under subparagraph (D)(ii)—</text>
<clause id="H42D703A4B8FA42C3861E737D7E0B1D19"><enum>(i)</enum><text>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 </text></clause>
<clause id="H7A3E497A52F845AB8EDB416B65BC9CCC"><enum>(ii)</enum><text>any immediate or mediate good faith transferee of such transferee.</text></clause></subparagraph>
<subparagraph id="H400E8DB7D178483B9D8FE0378A2756B4"><enum>(F)</enum><header>Defenses</header><text>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.</text></subparagraph>
<subparagraph id="HFD6E951C69E749089DF86D6740DB25D5"><enum>(G)</enum><header>Limitations on Avoiding Powers</header><text>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.</text></subparagraph>
<subparagraph id="H285BA8B31D7948258BD4C33BD75D126F"><enum>(H)</enum><header>Presumption of insolvency</header><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="HD186BEBD84F240FC90711CEA66745DE8"><enum>(I)</enum><header>Rights under this subsection</header><text>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.</text></subparagraph>
<subparagraph id="HF5639EA7022D4FFD91A1646FB6AEB9CE"><enum>(J)</enum><header>Right of recovery</header><text>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—</text>
<clause id="HBD2A4D016AD44BFF8A89BAF9E5482CE5"><enum>(i)</enum><text>the initial transferee of such transfer or the institution-affiliated party or person for whose benefit such transfer was made; or</text> </clause>
<clause id="H6FDAC6BF3481443FA07CCF2B4A954556"><enum>(ii)</enum><text>any immediate or mediate transferee of any such initial transferee.</text> </clause></subparagraph>
<subparagraph id="H9E0C2B88FA1349F39CCA903B10EB2395"><enum>(K)</enum><header>Rights of transferee or obligee</header><text>The Corporation may not recover under subparagraph (B)—</text>
<clause id="H4F81E9829A3448639B07A08FE897C412"><enum>(i)</enum><text>any transfer that takes for value, including satisfaction or securing of a present or antecedent debt, in good faith; or</text> </clause>
<clause id="H756D1DF5F98447A181769F31035FEDA7"><enum>(ii)</enum><text>any immediate or mediate good faith transferee of such transferee.</text> </clause></subparagraph>
<subparagraph id="H190215D2D7754C84B257507326CFB801"><enum>(L)</enum><header>Rights under this subsection</header><text>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.</text> </subparagraph>
<subparagraph id="HA0F816C1BD654A5EA89E1B45F56A0E75"><enum>(M)</enum><header>Definition</header><text>For purposes of this subsection, the term <term>institution affiliated party</term> means—</text>
<clause id="HBFE3252AA1254366ACBE7DC051B21A0E"><enum>(i)</enum><text>any director, officer, employee, or controlling stockholder of, or agent for, a covered financial company;</text> </clause>
<clause id="HC61E028ACCAA439AAA8F0B411239A26C"><enum>(ii)</enum><text>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</text> </clause>
<clause id="H6EEADA6CC85C47CAB732EA7C2E491929"><enum>(iii)</enum><text>any independent contractor (including any attorney, appraiser, or accountant) who knowingly or recklessly participates in—</text>
<subclause id="H41A74FE477134DF5AFACB9A955982781"><enum>(I)</enum><text>any violation of any law or regulation;</text> </subclause>
<subclause id="H95970528D8104BAFAA27BF3355C706BA"><enum>(II)</enum><text>any breach of fiduciary duty; or</text> </subclause>
<subclause id="H57228D8DF153427ABEB17B350F17771F"><enum>(III)</enum><text>any unsafe or unsound practice,</text> </subclause><continuation-text continuation-text-level="clause">which caused or is likely to cause more than a minimal financial loss to, or a significant adverse effect on, the covered financial company.</continuation-text></clause></subparagraph></paragraph>
<paragraph id="H9F45AE9E096E46F48FF7036D34231C7A"><enum>(13)</enum><header>Attachment of assets and other injunctive relief</header><text>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.</text> </paragraph>
<paragraph id="HEE5B1524D9DD416B9E0E182CC4E798EA"><enum>(14)</enum><header>Standards</header>
<subparagraph id="H3AD8A65FC2CB489883E93E29E70B9D55"><enum>(A)</enum><header>Showing</header><text>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.</text> </subparagraph>
<subparagraph id="HCC1936D039EA4CC69F6A229898EDE3B8"><enum>(B)</enum><header>State proceeding</header><text>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.</text> </subparagraph></paragraph>
<paragraph id="H0FB1AAFCBDDE45EC81DBBDA59E0CC0AA"><enum>(15)</enum><header>Treatment of claims arising from breach of contracts executed by the corporation as receiver</header><text>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.</text> </paragraph>
<paragraph id="HE5093CC3D0DA45598A73205BFC288187"><enum>(16)</enum><header>Accounting and recordkeeping requirements</header>
<subparagraph id="HAB6190B9BDC546BA9B359AD60CCFF966"><enum>(A)</enum><header>In general</header><text>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.</text> </subparagraph>
<subparagraph id="HB76AB3EED52542C187442E8BBFD79976"><enum>(B)</enum><header>Annual accounting or report</header><text>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.</text> </subparagraph>
<subparagraph id="H403C607228EB4692A03693A4D2610C72"><enum>(C)</enum><header>Availability of reports</header><text>Any report prepared pursuant to subparagraph (B) shall be made available by the Corporation upon request to any member of the public.</text> </subparagraph>
<subparagraph id="H8CD582C3172C4C1890E9E353AFB7CDE5"><enum>(D)</enum><header>Recordkeeping requirement</header>
<clause id="H6A5ED3D6075C47FEA5A1DA03E32A63EA"><enum>(i)</enum><header>In general</header><text>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.</text> </clause>
<clause id="HC00EBCE5C9FB454287F1B8A9ED194211"><enum>(ii)</enum><header>Old records</header><text>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).</text> </clause></subparagraph></paragraph></subsection>
<subsection id="HE347C8B4865C480F9D2295536369A2E1"><enum>(b)</enum><header>Priority of expenses and unsecured claims</header>
<paragraph id="H301AE9EFEED14F66B3BF5AC58A42014E"><enum>(1)</enum><header>In general</header><text>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:</text>
<subparagraph id="H6ED900BA84F04B17948B60B2DD89C984"><enum>(A)</enum><text>Administrative expenses of the receiver.</text> </subparagraph>
<subparagraph id="H0474E697ECC24250BAC21CACD06A211F"><enum>(B)</enum><text>Any amounts owed to the United States, unless the United States agrees or consents otherwise.</text></subparagraph>
<subparagraph id="H47F91F99BFB043249A28142D98C8922E"><enum>(C)</enum><text>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)).</text></subparagraph>
<subparagraph id="HE59BE61478AA471299C9DDA42E8FC05B"><enum>(D)</enum><text>Contributions to employee benefit plans, subject to the limitations in title 11, United States Code (11 U.S.C. 507(a)(5)).</text> </subparagraph>
<subparagraph id="H30B107025B664792BF87E1F2152F45C6"><enum>(E)</enum><text>Any other general or senior liability of the covered financial company (which is not a liability described under subparagraph (F) or (G)).</text> </subparagraph>
<subparagraph id="HFC4F151E98294F9983D2F123C4B6C957"><enum>(F)</enum><text>Any obligation subordinated to general creditors (which is not an obligation described under subparagraph (G)).</text> </subparagraph>
<subparagraph id="H8DA3A8178B97431FBEF5EB3A943570D7"><enum>(G)</enum><text>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.</text> </subparagraph></paragraph>
<paragraph id="HA804420335B945FCAF6BC4A25E2208E6"><enum>(2)</enum><header>Post-receivership financing priority</header><text>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).</text> </paragraph>
<paragraph id="H71FBFFB5A0E445D1BBCF50349740EEA2"><enum>(3)</enum><header>Claims of the United States</header><text>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.</text> </paragraph>
<paragraph id="H7119CA1D2D38494395251AF72ED3F543"><enum>(4)</enum><header>Creditors similarly situated</header><text display-inline="yes-display-inline">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—</text>
<subparagraph id="H5278C443C9684B33B4B5E17D1043738C"><enum>(A)</enum><text>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</text> </subparagraph>
<subparagraph id="H754500EFC2C54652916495871A974AC3"><enum>(B)</enum><text>all claimants that are similarly situated under paragraph (1) receive not less than the amount provided in subsection (d)(2).</text> </subparagraph></paragraph>
<paragraph id="H86475808E83649CFB56586C620297DAA"><enum>(5)</enum><header>Secured claims unaffected</header><text>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.</text> </paragraph>
<paragraph id="HB58913447980480F93598674AAA36120"><enum>(6)</enum><header>Definitions</header><text>As used in this subsection, the term <term>administrative expenses of the receiver</term> includes—</text>
<subparagraph id="H7D8AFD31A7864E5890E9AB5749C3DDC9"><enum>(A)</enum><text>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</text> </subparagraph>
<subparagraph id="HC35C52C9E41A4196B6A76D4515790397"><enum>(B)</enum><text>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.</text> </subparagraph></paragraph>
<paragraph id="HE6869D98098D41E6B87EB541417195FE" display-inline="no-display-inline"><enum>(7)</enum><header>Rulemaking</header><text display-inline="yes-display-inline">The Corporation shall, after following the notice and comment rulemaking requirements under the Administrative Procedure Act, prescribe rules to carry out this section.</text></paragraph></subsection>
<subsection id="HCDEBEDB6AE6A40C2A75C63AAE4882EFC"><enum>(c)</enum><header>Provisions relating to contracts entered into before appointment of receiver</header>
<paragraph id="HB404315CE9DC4B7ABBDFFC52D907AE32"><enum>(1)</enum><header>Authority to repudiate contracts</header><text>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—</text>
<subparagraph id="HF8744C6B0D0F4D2EBFED25FEAC1FD6B4"><enum>(A)</enum><text>to which the covered financial company is a party;</text> </subparagraph>
<subparagraph id="HB057325A7DF640878D5B4466034D12AB"><enum>(B)</enum><text>the performance of which the receiver, in the receiver’s discretion, determines to be burdensome; and</text> </subparagraph>
<subparagraph id="H208B80997F614151BDA84734EC7C6FA0"><enum>(C)</enum><text>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.</text> </subparagraph></paragraph>
<paragraph id="HCFCEB89BCB15487392502D881F3EAD3D"><enum>(2)</enum><header>Timing of repudiation</header><text>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.</text> </paragraph>
<paragraph id="HB0DF7B4C59DC4DB4A5A9E7ADD1E5730E"><enum>(3)</enum><header>Claims for damages for repudiation</header>
<subparagraph id="HFBCA4E5097604B09A8679308ED3B485E"><enum>(A)</enum><header>In general</header><text>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—</text>
<clause id="HAF73BC79E38F422FBD6784E950266999"><enum>(i)</enum><text>limited to actual direct compensatory damages; and</text> </clause>
<clause id="HB4ADFC4F8F744D23B1B633BEC77C0BC8"><enum>(ii)</enum><text>determined as of—</text>
<subclause id="H008D25DA3CFF4EE0B683705E44AAFBBF"><enum>(I)</enum><text>the date of the appointment of the receiver; or</text> </subclause>
<subclause id="H77D72E308DAB49308AC46640AB8495C5"><enum>(II)</enum><text>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.</text> </subclause></clause></subparagraph>
<subparagraph id="HEA707D6D3CF54233BB8DD4A16D9122A8"><enum>(B)</enum><header>No liability for other damages</header><text>For purposes of subparagraph (A), the term <term>actual direct compensatory damages</term> does not include—</text>
<clause id="H5CD6D80A6C4C43BE99A2FC8267755347"><enum>(i)</enum><text>punitive or exemplary damages;</text> </clause>
<clause id="HD87D1C1DAF994231B6CF95DAC321D6DA"><enum>(ii)</enum><text>damages for lost profits or opportunity; or</text> </clause>
<clause id="H85CDF2FE5AB04A61939E6128C694B6C3"><enum>(iii)</enum><text>damages for pain and suffering.</text> </clause></subparagraph>
<subparagraph id="H60CFDE81858748FDBB58E9398A50F54C"><enum>(C)</enum><header>Measure of damages for repudiation of qualified financial contracts</header><text>In the case of any qualified financial contract or agreement to which paragraph (8) applies, compensatory damages shall be—</text>
<clause id="H4B0F056ECB794B6AB01B264977529B5B"><enum>(i)</enum><text>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</text> </clause>
<clause id="HC30C8BEC112B40A1A50CEE8FCB768871"><enum>(ii)</enum><text>paid in accordance with this subsection and subsection (d) except as otherwise specifically provided in this subsection.</text> </clause></subparagraph></paragraph>
<paragraph id="HBB4729008601450A8ECD4F6FA9B6234A"><enum>(4)</enum><header>Leases under which the covered financial company is the lessee</header>
<subparagraph id="HFA59C58C16E7435EAF2FDC4B5300D020"><enum>(A)</enum><header>In general</header><text>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.</text> </subparagraph>
<subparagraph id="HC3D483C6FCA34D6CAF0D3031F1904AB4"><enum>(B)</enum><header>Payments of rent</header><text>Notwithstanding subparagraph (A), the lessor under a lease to which such subparagraph applies shall—</text>
<clause id="HA83143BB35CD4B7198E8C39EBF08E075"><enum>(i)</enum><text>be entitled to the contractual rent accruing before the later of the date—</text>
<subclause id="HBDAF407EEBA0424798725F78FF0994BC"><enum>(I)</enum><text>the notice of disaffirmance or repudiation is mailed; or</text> </subclause>
<subclause id="H11861EC3052F4011B1DD9C25EFE2FB7A"><enum>(II)</enum><text>the disaffirmance or repudiation becomes effective, unless the lessor is in default or breach of the terms of the lease;</text> </subclause></clause>
<clause id="H9BA61BF69A4D43A7A496C6D07633034C"><enum>(ii)</enum><text>have no claim for damages under any acceleration clause or other penalty provision in the lease; and</text> </clause>
<clause id="HF665D2A66B6C4D00B2A54754DC29FA43"><enum>(iii)</enum><text>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).</text> </clause></subparagraph></paragraph>
<paragraph id="HCEC167511EDF4F3BBA1A7F8F8BDE5BFF"><enum>(5)</enum><header>Leases under which the covered financial company is the lessor</header>
<subparagraph id="H2D5044743FF043A6B1893D25B2C9C7A2"><enum>(A)</enum><header>In general</header><text>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—</text>
<clause id="H0462F12DCE2B463E84FD01960A406CF3"><enum>(i)</enum><text>treat the lease as terminated by such repudiation; or</text> </clause>
<clause id="HBEC0B5C025F04BC19F32C9B369BFB1EA"><enum>(ii)</enum><text>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.</text> </clause></subparagraph>
<subparagraph id="H4AC14C1D733F47A9BDACAABF6B18B815"><enum>(B)</enum><header>Provisions applicable to lessee remaining in possession</header><text>If any lessee under a lease described in subparagraph (A) remains in possession of a leasehold interest pursuant to clause (ii) of such subparagraph—</text>
<clause id="H3CE5D63C0C78416E84D9505A9B3C8200"><enum>(i)</enum><text>the lessee—</text>
<subclause id="HD1D0CF992A0A443083947D0D90CC28EE"><enum>(I)</enum><text>shall continue to pay the contractual rent pursuant to the terms of the lease after the date of the repudiation of such lease;</text> </subclause>
<subclause id="H8CDA259564B14A279E90FB1FEA4599E6"><enum>(II)</enum><text>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</text> </subclause></clause>
<clause id="HC22176D2CCDB47E78481EF7F5AC9F9E5"><enum>(ii)</enum><text>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).</text> </clause></subparagraph></paragraph>
<paragraph id="H71A7D145F43646E0849143F19115507D"><enum>(6)</enum><header>Contracts for the sale of real property</header>
<subparagraph id="H4893C02E57694673B0EC7C818B7146DA"><enum>(A)</enum><header>In general</header><text>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—</text>
<clause id="H8306476EF51B475C8D22552649042F3D"><enum>(i)</enum><text>treat the contract as terminated by such repudiation; or</text> </clause>
<clause id="H985ECB8DBB454B378517D0CCD6A071F5"><enum>(ii)</enum><text>remain in possession of such real property.</text> </clause></subparagraph>
<subparagraph id="H801C53BD0ED04209951D0FC1B038237B"><enum>(B)</enum><header>Provisions applicable to purchaser remaining in possession</header><text>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—</text>
<clause id="H572AE7C2F1614E1B91009C91A55A021C"><enum>(i)</enum><text>the purchaser—</text>
<subclause id="H1FF71E0157184E418D69F9ADACE42DB6"><enum>(I)</enum><text>shall continue to make all payments due under the contract after the date of the repudiation of the contract; and</text> </subclause>
<subclause id="H049CF5FF12954EF6B87CFF314C303E73"><enum>(II)</enum><text>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</text> </subclause></clause>
<clause id="HD065CC8F1EED4292A644567A03A1E2B5"><enum>(ii)</enum><text>the receiver shall—</text>
<subclause id="H692BB50205A5446DB486655710427088"><enum>(I)</enum><text>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);</text> </subclause>
<subclause id="H5C12F334093947DFB38C5E2A808375B6"><enum>(II)</enum><text>deliver title to the purchaser in accordance with the provisions of the contract; and</text> </subclause>
<subclause id="HB5F572BB5AF44616A282604F02815F8D"><enum>(III)</enum><text>have no obligation under the contract other than the performance required under subclause (II).</text> </subclause></clause></subparagraph>
<subparagraph id="HFD692D06829F47C7B32B2A8DBADE74B9"><enum>(C)</enum><header>Assignment and sale allowed</header>
<clause id="H1ACA0B0C851F4ED9A3BFD814A687DB3A"><enum>(i)</enum><header>In general</header><text>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.</text> </clause>
<clause id="HAD54716833874039BC04875C415A6901"><enum>(ii)</enum><header>No liability after assignment and sale</header><text>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.</text> </clause></subparagraph></paragraph>
<paragraph id="HEFED77D1A1A741EE92DE5C22A0923DEB"><enum>(7)</enum><header>Provisions applicable to service contracts</header>
<subparagraph id="H95B07EC3BF2F42F4B5E5ECEF4BC79287"><enum>(A)</enum><header>Services performed before appointment</header><text>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—</text>
<clause id="HF551B1FEFE774742B43E269E5F8E8711"><enum>(i)</enum><text>a claim to be paid in accordance with subsections (a), (b), and (d); and</text> </clause>
<clause id="HB99F75695278484E85C8AAF2BDE9AFAB"><enum>(ii)</enum><text>deemed to have arisen as of the date the receiver was appointed.</text> </clause></subparagraph>
<subparagraph id="HD7D2E94C0FBC4790A717FA37C2FE5E01"><enum>(B)</enum><header>Services performed after appointment and prior to repudiation</header><text>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—</text>
<clause id="H26712C1188F44418B34F9874DAA4CEEF"><enum>(i)</enum><text>the other party shall be paid under the terms of the contract for the services performed; and</text> </clause>
<clause id="HF37F03C707BB4E54A05EF325A83D94F8"><enum>(ii)</enum><text>the amount of such payment shall be treated as an administrative expense of the receivership.</text> </clause></subparagraph>
<subparagraph id="HC0E611954978486EA146C578A92835D9"><enum>(C)</enum><header>Acceptance of performance no bar to subsequent repudiation</header><text>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.</text> </subparagraph></paragraph>
<paragraph id="HAF8A1C69B65E4CFE9E38BA3F35D0B95E"><enum>(8)</enum><header>Certain qualified financial contracts</header>
<subparagraph id="H5196839DEE244070B3BB868BA9F85CF5"><enum>(A)</enum><header>Rights of parties to contracts</header><text>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—</text>
<clause id="H1CAFE88ED7A6469692CC83938C0D32D8"><enum>(i)</enum><text>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;</text> </clause>
<clause id="HA2AB61EBCE084E35BB245DCB167BD520"><enum>(ii)</enum><text>any right under any security agreement or arrangement or other credit enhancement related to one or more qualified financial contracts described in clause (i);</text> </clause>
<clause id="H8B9D0635AD9D4AD89D90D283FCAE2676"><enum>(iii)</enum><text>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.</text> </clause></subparagraph>
<subparagraph id="HD4E42011165545478BB8884F8F0FDB89"><enum>(B)</enum><header>Applicability of other provisions</header><text>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.</text> </subparagraph>
<subparagraph id="HA0FD9141B6874C1F81F3E70282BFF786"><enum>(C)</enum><header>Certain transfers not avoidable</header>
<clause id="H726875EA47064136A85B430020A74CF6"><enum>(i)</enum><header>In general</header><text>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.</text> </clause>
<clause id="H4FF73D127C3141BE9BA64C578F535C41"><enum>(ii)</enum><header>Exception for certain transfers</header><text>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.</text> </clause></subparagraph>
<subparagraph id="HF62F6BCA6B2046428E35378393173DD7"><enum>(D)</enum><header>Certain contacts and agreements defined</header><text>For purposes of this subsection, the following definitions shall apply:</text>
<clause id="HC68D7F6231DC472687C9238F4B87EAC7"><enum>(i)</enum><header>Qualified financial contract</header><text>The term <term>qualified financial contract</term> 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.</text> </clause>
<clause id="H48D3F496133C4DEFAAE53123D103A0D9"><enum>(ii)</enum><header>Securities contract</header><text>The term <term>securities contract</term>—</text>
<subclause id="HFBD09185B6AB422789D03351A1BBED27"><enum>(I)</enum><text>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 <quote>repurchase agreement,</quote> as defined in clause (v));</text> </subclause>
<subclause id="HE856F717C5DC452BB70CA20AA911F1E4"><enum>(II)</enum><text>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;</text> </subclause>
<subclause id="H1E4E8366BDF44BF485806ACCC995C6F7"><enum>(III)</enum><text>means any option entered into on a national securities exchange relating to foreign currencies;</text> </subclause>
<subclause id="HA347C1B8D26F498D83D501E8C2B31FCE"><enum>(IV)</enum><text>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));</text> </subclause>
<subclause id="H9FA3C56535734620AFC1A2545F57B8D1"><enum>(V)</enum><text>means any margin loan;</text> </subclause>
<subclause id="HA90B71E6B70A40A5827B90DE20515D8F"><enum>(VI)</enum><text>means any extension of credit for the clearance or settlement of securities transactions;</text> </subclause>
<subclause id="HD6B40AAE06B846E2916001B3D3E7ED21"><enum>(VII)</enum><text>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;</text> </subclause>
<subclause id="HE18DE3D4E39F4C7A9D5E630D90C7FC1F"><enum>(VIII)</enum><text>means any other agreement or transaction that is similar to any agreement or transaction referred to in this clause;</text> </subclause>
<subclause id="H9159B682608949B0BCB04AFE4B00491A"><enum>(IX)</enum><text>means any combination of the agreements or transactions referred to in this clause;</text> </subclause>
<subclause id="H7468CD56D7F24631A688D605F36081B2"><enum>(X)</enum><text>means any option to enter into any agreement or transaction referred to in this clause;</text> </subclause>
<subclause id="HBF305E7BE67C4F48A376E80E48FFBDB3"><enum>(XI)</enum><text>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</text> </subclause>
<subclause id="H280CCFF043D74F55801246EE722F7F02"><enum>(XII)</enum><text>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.</text> </subclause></clause>
<clause id="HC361C17C575944058233D1D03C9D6C14"><enum>(iii)</enum><header>Commodity contract</header><text>The term <term>commodity contract</term> means—</text>
<subclause id="H2A5DF0B9BE9649BF8E73784CCECE51F9"><enum>(I)</enum><text>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;</text> </subclause>
<subclause id="H499A01AF2CDD4B2295A235386A7B61BA"><enum>(II)</enum><text>with respect to a foreign futures commission merchant, a foreign future;</text> </subclause>
<subclause id="H4BB1E2C1F317444D80F2457492EBD49D"><enum>(III)</enum><text>with respect to a leverage transaction merchant, a leverage transaction;</text> </subclause>
<subclause id="H35BCA12EDDF14C0C8E80B6CD46119C43"><enum>(IV)</enum><text>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;</text> </subclause>
<subclause id="H4B9C4875F8F24D708A6DAC369A9212AE"><enum>(V)</enum><text>with respect to a commodity options dealer, a commodity option;</text> </subclause>
<subclause id="H9050E67761B34B749310E5FB1F177F6B"><enum>(VI)</enum><text>any other agreement or transaction that is similar to any agreement or transaction referred to in this clause;</text> </subclause>
<subclause id="H8C1052F744AE4101BA34365786B5C803"><enum>(VII)</enum><text>any combination of the agreements or transactions referred to in this clause;</text> </subclause>
<subclause id="HB2209B8EB5A84BB4B4473B6D5A9C12E3"><enum>(VIII)</enum><text>any option to enter into any agreement or transaction referred to in this clause;</text> </subclause>
<subclause id="HC8D114E0AC1C49BFBCDCE3544B80E06D"><enum>(IX)</enum><text>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</text> </subclause>
<subclause id="HD9164E045BA849D9A9A050DBCF7766B6"><enum>(X)</enum><text>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.</text> </subclause></clause>
<clause id="H17815A748B33412E990CBE62DF02BD0E"><enum>(iv)</enum><header>Forward contract</header><text>The term <term>forward contract</term> means—</text>
<subclause id="HA8703F54E7F74E1092DD8BC2B493B404"><enum>(I)</enum><text>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 <quote>repurchase agreement</quote>, as defined in clause (v)), consignment, lease, swap, hedge transaction, deposit, loan, option, allocated transaction, unallocated transaction, or any other similar agreement;</text> </subclause>
<subclause id="H50E12962ACA647379C41047C3D7E985D"><enum>(II)</enum><text>any combination of agreements or transactions referred to in subclauses (I) and (III);</text> </subclause>
<subclause id="H0747EEC77A54482DA4079AB5BFBB4275"><enum>(III)</enum><text>any option to enter into any agreement or transaction referred to in subclause (I) or (II);</text> </subclause>
<subclause id="HE042B622B44246868A171EB637CA9272"><enum>(IV)</enum><text>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</text> </subclause>
<subclause id="HC1168D55DF1B434C99BB990C53D16AA8"><enum>(V)</enum><text>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.</text> </subclause></clause>
<clause id="H96A2E1F56FF547FAA9E0845FCEA60ACD"><enum>(v)</enum><header>Repurchase agreement</header><text>The term <term>repurchase agreement</term> (which definition also applies to a reverse repurchase agreement)—</text>
<subclause id="HF44C295B37584117BFD554847DF7C93A"><enum>(I)</enum><text>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;</text> </subclause>
<subclause id="HBDB14C937A6D4CA3BD9883CD09209F58"><enum>(II)</enum><text>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;</text> </subclause>
<subclause id="H718887277BF64392826E84A9FFE87518"><enum>(III)</enum><text>means any combination of agreements or transactions referred to in subclauses (I) and (IV);</text> </subclause>
<subclause id="H1444F4CFFFF34375836069AE70EE4D78"><enum>(IV)</enum><text>means any option to enter into any agreement or transaction referred to in subclause (I) or (III);</text> </subclause>
<subclause id="HC5B26EF252EF4410926B4A7AB57D22B1"><enum>(V)</enum><text>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</text> </subclause>
<subclause id="H6B7DA5ECEF41496A8271DED229B76CB4"><enum>(VI)</enum><text>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.</text> </subclause></clause>
<clause id="HB577E1E3C4C94DDC8667DDEE3CA279F8"><enum>(vi)</enum><header>Swap agreement</header><text>The term <term>swap agreement</term> means—</text>
<subclause id="HD9ADCA9713844BBFB2BD87CF09EDC15A"><enum>(I)</enum><text>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;</text> </subclause>
<subclause id="HE9FDBC1B563A491687767581A7A00B20"><enum>(II)</enum><text>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;</text> </subclause>
<subclause id="H159A21B7948340D2BBE3FF3076C9D2B0"><enum>(III)</enum><text>any combination of agreements or transactions referred to in this clause;</text> </subclause>
<subclause id="HD0BCE6C54A6D4B9EBE460D7ED973C6D8"><enum>(IV)</enum><text>any option to enter into any agreement or transaction referred to in this clause;</text> </subclause>
<subclause id="H8658E73E7BE646F8BA4557323F25FD0B"><enum>(V)</enum><text>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</text> </subclause>
<subclause id="HD8F4FDE02182408C823D850BC35302AF"><enum>(VI)</enum><text>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.</text> </subclause></clause>
<clause id="H0A16D7044BCD4BD0ABE44CFCC88EB82B"><enum>(vii)</enum><header>Definitions relating to default</header><text>When used in this paragraph and paragraph (10)—</text>
<subclause id="H5D9020E861604781AB2CA4D11482FFB6"><enum>(I)</enum><text>The term <term>default</term> 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</text> </subclause>
<subclause id="HB9EB86EC85794CEFB5B0A2B335DE3C4B"><enum>(II)</enum><text>The term <term>in danger of default</term> shall mean a covered financial company with respect to which the Corporation or appropriate State authority has determined that—</text>
<item id="HB4739178DC1140619DD8D8610B8AD2B6"><enum>(aa)</enum><text>in the opinion of the Corporation or such authority—</text>
<subitem id="H35A5CDCE761F40E1979F0500AD1F38F8"><enum>(AA)</enum><text>the covered financial company is not likely to be able to pay its obligations in the normal course of business; and</text> </subitem>
<subitem id="H4C6232C3C2884898810620F5CD30D342"><enum>(BB)</enum><text>there is no reasonable prospect that the covered financial company will be able to pay such obligations without Federal assistance; or</text> </subitem>
<subitem id="H66CA8D480297483D813624A34A62864F"><enum>(CC)</enum><text>in the opinion of the Corporation or such authority—</text> </subitem></item>
<item id="H33E1102703CC49DFBEB8077FD48A4575"><enum>(bb)</enum><text>the covered financial company has incurred or is likely to incur losses that will deplete all or substantially all of its capital; and</text> </item>
<item id="HE151B6755DF34B79AAACDC3C0F97E58D"><enum>(cc)</enum><text>there is no reasonable prospect that the capital will be replenished without Federal assistance.</text> </item></subclause></clause>
<clause id="HBBF6E37F072446C5B2986D03C2A51BC0"><enum>(viii)</enum><header>Treatment of master agreement as one agreement</header><text>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.</text> </clause>
<clause id="H5F9F8C4B08B8457CADC82D21A57260F4"><enum>(ix)</enum><header>Transfer</header><text>The term <term>transfer</term> 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.</text> </clause>
<clause id="H8F2C0806DBBA463C99E6B17530A53988"><enum>(x)</enum><header>Person</header><text>The term <term>person</term> includes any governmental entity in addition to any entity included in the definition of such term in section 1, title 1, United States Code.</text> </clause></subparagraph>
<subparagraph id="HC4FDEF5412C642489D477CFF250C18E6"><enum>(E)</enum><header>Clarification</header><text>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.</text> </subparagraph>
<subparagraph id="HD036F451E8EA4705869AB7FBDBF6334F"><enum>(F)</enum><header>Walkaway clauses not effective</header>
<clause id="H305366778FAD4588A07D16462BC0629D"><enum>(i)</enum><header>In general</header><text>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.</text> </clause>
<clause id="H668082EC07D541489BA63E1507536AB4"><enum>(ii)</enum><header>Limited suspension of certain obligations</header><text>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—</text>
<subclause id="HBEF0DF1515F6476B82C031746E458623"><enum>(I)</enum><text>the time such party receives notice that such contract has been transferred pursuant to paragraph (10)(A); or</text> </subclause>
<subclause id="H1E70DFC6CE594E4AB6238C11E174B7E5"><enum>(II)</enum><text>5:00 p.m. (eastern time) on the business day following the date of the appointment of the receiver.</text> </subclause></clause>
<clause id="HEEF592CCF0274561AA3838C07AE0CA96"><enum>(iii)</enum><header>Walkaway clause defined</header><text>For purposes of this subparagraph, the term <term>walkaway clause</term> 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.</text> </clause></subparagraph>
<subparagraph id="HC7B2BCC58D8E48C595A5B84A1D19F8B9"><enum>(G)</enum><header>Recordkeeping</header><text>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).</text> </subparagraph></paragraph>
<paragraph id="H6849846B9A224560A24756420ADEA448"><enum>(9)</enum><header>Transfer of qualified financial contracts</header>
<subparagraph id="H5F42BA1DB203491584640E3DCF9C5E8E"><enum>(A)</enum><header>In general</header><text>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—</text>
<clause id="H39707640A43C49BB9E5DBA1C71E79E92"><enum>(i)</enum><text>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—</text>
<subclause id="H349E342BB81940F495700D237BD677AE"><enum>(I)</enum><text>all qualified financial contracts between any person or any affiliate of such person and the covered financial company in default;</text> </subclause>
<subclause id="H2EBDE935E4A940C4A42BF5BA82381FA2"><enum>(II)</enum><text>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);</text> </subclause>
<subclause id="HB484F661B03A451D934CC5CD65E55E1A"><enum>(III)</enum><text>all claims of such covered financial company against such person or any affiliate of such person under any such contract; and</text> </subclause>
<subclause id="HFE1753AC8F3B42E8A9FD2BA94F786737"><enum>(IV)</enum><text>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</text> </subclause></clause>
<clause id="HB53AEA5FC3AE49DABD9E461CE56CDADE"><enum>(ii)</enum><text>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).</text> </clause></subparagraph>
<subparagraph id="HF3856583332E43EA9551310BCE128E23"><enum>(B)</enum><header>Transfer to foreign bank, financial institution, or branch or agency thereof</header><text>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.</text> </subparagraph>
<subparagraph id="HF752C997E56B42B5AC3A0AE67D39DA64"><enum>(C)</enum><header>Transfer of contracts subject to the rules of a clearing organization</header><text>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.</text> </subparagraph>
<subparagraph id="H1B7A293EEB5342FA92F9F3AB869B6DAC"><enum>(D)</enum><header>Definitions</header><text>For purposes of this paragraph, the term <term>financial institution</term> 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 <term>clearing organization</term> has the same meaning as in section 402 of the Federal Deposit Insurance Corporation Improvement Act of 1991.</text> </subparagraph></paragraph>
<paragraph id="H3B5F492A240D474793CDF4755311CC1A"><enum>(10)</enum><header>Notification of transfer</header>
<subparagraph id="HB0933A5576604457AF6BBBFBD8CD06F8"><enum>(A)</enum><header>In general</header><text>If—</text>
<clause id="H9DDAED4F284A409A8B086AFED23E7A63"><enum>(i)</enum><text>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</text> </clause>
<clause id="H8200180DDA1B43A78039F7BEF93D33A0"><enum>(ii)</enum><text>the transfer includes any qualified financial contract,</text> </clause><continuation-text continuation-text-level="subparagraph">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.</continuation-text></subparagraph>
<subparagraph id="H74E3BFE090F941B68217430A12FACD1B"><enum>(B)</enum><header>Certain rights not enforceable</header>
<clause id="H0DCF39F7D70B484B91CBAD6EF57E4DDA"><enum>(i)</enum><header>Receivership</header><text>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)—</text>
<subclause id="HDBD8A58E9A6F419E881E5B08C1EB2C3F"><enum>(I)</enum><text>until 5:00 p.m. (eastern time) on the business day following the date of the appointment of the receiver; or</text> </subclause>
<subclause id="H148E82584C554CCA9B6CE65D2CB1878C"><enum>(II)</enum><text>after the person has received notice that the contract has been transferred pursuant to paragraph (9)(A).</text> </subclause></clause>
<clause id="HE124F6EFEBD8495D82935DE882464353"><enum>(ii)</enum><header>Notice</header><text>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).</text> </clause></subparagraph>
<subparagraph id="HE219F008DDF34050905B274770859B9C"><enum>(C)</enum><header>Treatment of bridge financial company</header><text>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.</text> </subparagraph>
<subparagraph id="H81476D366F174418835058ECC6854FFF"><enum>(D)</enum><header>Business day defined</header><text>For purposes of this paragraph, the term <term>business day</term> 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.</text> </subparagraph></paragraph>
<paragraph id="HA2F7B55B47084D218AAD27856FDFD1EC"><enum>(11)</enum><header>Disaffirmance or repudiation of qualified financial contracts</header><text>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—</text>
<subparagraph id="H4BF8E97083CE42D2908EF8B567C39C6E"><enum>(A)</enum><text>disaffirm or repudiate all qualified financial contracts between—</text>
<clause id="H9EB2DB0FA5404927A199EEBB8FEB1DC6"><enum>(i)</enum><text>any person or any affiliate of such person; and</text> </clause>
<clause id="H7A836DDA4347475C91212CA5F6E69854"><enum>(ii)</enum><text>the covered financial company in default; or</text> </clause></subparagraph>
<subparagraph id="HE968557E9D5C4495A98138B117D6463E"><enum>(B)</enum><text>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).</text> </subparagraph></paragraph>
<paragraph id="HC011C4D235E748208F7861DE806E5554"><enum>(12)</enum><header>Certain security and customer interests not avoidable</header><text>No provision of this subsection shall be construed as permitting the avoidance of any—</text>
<subparagraph id="H9D9EAF4AE58B46049B86B21CF3F97ED4"><enum>(A)</enum><text>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</text> </subparagraph>
<subparagraph id="H06AB0141446C4686823AA55C96A68446"><enum>(B)</enum><text>legally enforceable interest in customer property.</text> </subparagraph></paragraph>
<paragraph id="HB3311230D49D41289BC84E137203A09E"><enum>(13)</enum><header>Authority to enforce contracts</header>
<subparagraph id="H93AF1D7C52A14B2CAEEF39C81E6E5D60"><enum>(A)</enum><header>In general</header><text>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.</text> </subparagraph>
<subparagraph id="H9CC251226E04485CBA033C3989181E3D"><enum>(B)</enum><header>Certain rights not affected</header><text>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.</text> </subparagraph>
<subparagraph id="H26D656F1319A4331A0D741B3423E4297"><enum>(C)</enum><header>Consent requirement</header>
<clause id="HAB2D04812793418C984F1A4E64A85B73"><enum>(i)</enum><header>In general</header><text>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.</text> </clause>
<clause id="H9918FEEA153A4435BBB0340436139237"><enum>(ii)</enum><header>Certain exceptions</header><text>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.</text> </clause></subparagraph></paragraph>
<paragraph id="HBFE622AEEB524EAB84DCB5209638BF67"><enum>(14)</enum><header>Exception for federal reserve banks and corporation security interest</header><text>No provision of this subsection shall apply with respect to—</text>
<subparagraph id="H6208B178469D497F96993DE98F23AAC0"><enum>(A)</enum><text>any extension of credit from any Federal Reserve bank or the Corporation to any covered financial company; or</text> </subparagraph>
<subparagraph id="H0747E4DE0B7B46B9BBB7512349568571"><enum>(B)</enum><text>any security interest in the assets of the covered financial company securing any such extension of credit.</text> </subparagraph></paragraph>
<paragraph id="HAB955531DE404F44BD31B418F1A55D44"><enum>(15)</enum><header>Savings clause</header><text>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.</text> </paragraph>
<paragraph id="H7AD7598E58914487ACFF1B692B63EB9F"><enum>(16)</enum><header>Authority regarding collective bargaining agreements</header><text display-inline="yes-display-inline">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.</text></paragraph></subsection>
<subsection id="H9369B2515636481487BBA93F29DF2FB5"><enum>(d)</enum><header>Valuation of claims in default</header>
<paragraph id="H7B6DB99643B04BC781078D958FE1E345"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph>
<paragraph id="H08FB929A820A4674B70E216DF7A17B56"><enum>(2)</enum><header>Maximum liability</header><text>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—</text>
<subparagraph id="HD3D1A6949EE2470AA0339BC77CBEF56B"><enum>(A)</enum><text>a determination had not been made under section 1603(b) with respect to the covered financial company; and</text> </subparagraph>
<subparagraph id="HAF5A329B383B4056A6706E46149BFD9F"><enum>(B)</enum><text>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.</text> </subparagraph></paragraph>
<paragraph id="H0C9873A6CB084F7F923CF780C95C6667"><enum>(3)</enum><header>Additional payments authorized</header>
<subparagraph id="HBEBBC191FA744591AFD1F816EF2D6116"><enum>(A)</enum><header>In general</header><text>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—</text>
<clause id="HB32E9B5DACD44A48B5E4F03427093628"><enum>(i)</enum><text>minimize losses to the receiver from the dissolution of the covered financial company under this section; or</text> </clause>
<clause id="HF93DF496DB4140CEB1C10B8FDA85995B"><enum>(ii)</enum><text>prevent or mitigate serious adverse effects to financial stability or the United States economy.</text> </clause></subparagraph>
<subparagraph id="H94B626F1C67A41EDAC36BBF0E4F5F012"><enum>(B)</enum><header>Manner of payment</header><text>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.</text> </subparagraph></paragraph></subsection>
<subsection id="H46C4CC84BE90474F871C61A850704891"><enum>(e)</enum><header>Limitation on court action</header><text>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.</text> </subsection>
<subsection id="HC2073BB5D2D84C0BA4EEBB711DE5C6D2"><enum>(f)</enum><header>Liability of directors and officers</header>
<paragraph id="H4B6B9D1215E548EEABC1D2CFC49C2178"><enum>(1)</enum><header>In general</header><text>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—</text>
<subparagraph id="H91373652633048CF914743C64F6DD05D"><enum>(A)</enum><text>acting as receiver of such covered financial company;</text> </subparagraph>
<subparagraph id="H6D3F4EEF7FD44BE78B404BD30F8EAF69"><enum>(B)</enum><text>acting based upon a suit, claim, or cause of action purchased from, assigned by, or otherwise conveyed by such receiver; or</text> </subparagraph>
<subparagraph id="H22D65D54AD484BE8B74F690B1D8C8BF9"><enum>(C)</enum><text>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.</text> </subparagraph></paragraph>
<paragraph id="H735A7E83B501481EA4C528445477668F"><enum>(2)</enum><header>Actions covered</header><text>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.</text> </paragraph>
<paragraph id="H115F5BFA018D4D3D9A8AA990BAE16622"><enum>(3)</enum><header>Savings clause</header><text>Nothing in this subsection shall impair or affect any right of the Corporation under other applicable law.</text> </paragraph></subsection>
<subsection id="HC1AA5F66D3294F21B4DEE235C4490EBA"><enum>(g)</enum><header>Damages</header><text>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.</text> </subsection>
<subsection id="H3198EC0036CA422BA685E41DDD26C9D0"><enum>(h)</enum><header>Bridge financial companies</header>
<paragraph id="H3AE9A8D3FA6D43388AD97B90960D89BB"><enum>(1)</enum><header>Organization</header>
<subparagraph id="HF9B3BD2A70F243FF8075691E73990444"><enum>(A)</enum><header>Purpose</header><text>The Corporation, as receiver of one or more covered financial companies may organize one or more bridge financial companies in accordance with this subsection.</text> </subparagraph>
<subparagraph id="H2CF96609897E4A7FBD311D4DA3830E61"><enum>(B)</enum><header>Authorities</header><text>Upon the creation of a bridge financial company under subparagraph (A) with respect to a covered financial company, such bridge financial company may—</text>
<clause id="H4DE502A0346F417ABF0452A88E683FC8"><enum>(i)</enum><text>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;</text> </clause>
<clause id="H1408EAEE4F41465B9A7BA3F76B0293F9"><enum>(ii)</enum><text>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</text> </clause>
<clause id="H4F04D0D2AFD749069C05F5006B1016E3"><enum>(iii)</enum><text>perform any other temporary function which the Corporation may, in its discretion, prescribe in accordance with this section.</text> </clause></subparagraph></paragraph>
<paragraph id="HDF7E4975DB4F4C1F85748CAC330988D7"><enum>(2)</enum><header>Charter and establishment</header>
<subparagraph id="HB4B9B8ECC2974C08802939A03FF5AE5E"><enum>(A)</enum><header>Establishment</header><text>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.</text> </subparagraph>
<subparagraph id="H87597179513E482E8D6078747DAA4146"><enum>(B)</enum><header>Management</header><text>Upon its establishment, a bridge financial company shall be under the management of a board of directors appointed by the Corporation.</text> </subparagraph>
<subparagraph id="H18E0E10AAFBD46DA951A07DAC549A0AE"><enum>(C)</enum><header>Articles of association</header><text>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.</text> </subparagraph>
<subparagraph id="H5FE400A95307499999FE673C2C9427CD"><enum>(D)</enum><header>Terms of charter; rights and privileges</header><text>Subject to and in accordance with the provisions of this subsection, the Corporation shall—</text>
<clause id="H3F4EC5C12EE14F4C881D3D905FFA4AFD"><enum>(i)</enum><text>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</text> </clause>
<clause id="HD56D8585ADAD44A4BB9451DC54595605"><enum>(ii)</enum><text>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.</text> </clause></subparagraph>
<subparagraph id="HC752CC84FB1A4C9DB73AAD21C09A287A"><enum>(E)</enum><header>Transfer of rights and privileges of covered financial company</header>
<clause id="H6F475A98EAD54617BE481568DAF3FE0A"><enum>(i)</enum><header>In general</header><text>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.</text> </clause>
<clause id="HEAC9F6239D704639AAC37709093DA613"><enum>(ii)</enum><header>Effective without approval</header><text>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.</text> </clause></subparagraph>
<subparagraph id="H4CD7416531C04813BE68F70DF653B937"><enum>(F)</enum><header>Corporate governance and election and designation of body of law</header><text>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.</text> </subparagraph>
<subparagraph id="H24EA5347888043E6AF7241A0823A9519"><enum>(G)</enum><header>Capital</header>
<clause id="H7120137E500F4EB4A1777DD17EA065B5"><enum>(i)</enum><header>Capital not required</header><text>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.</text> </clause>
<clause id="H447DB0B0648047CFB7F01067B2DDAC31"><enum>(ii)</enum><header>No contribution by the corporation required</header><text>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.</text> </clause>
<clause id="H19D682C8296C471D9C3BD43101586CE4"><enum>(iii)</enum><header>Authority</header><text>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.</text> </clause></subparagraph></paragraph>
<paragraph id="HB13697DEBFD24FEAA9935D16BEAC04B1"><enum>(3)</enum><header>Interests in and assets and obligations of covered financial company</header><text>Notwithstanding paragraph (1) or (2) or any other provision of law—</text>
<subparagraph id="HC54FE6731B8949DEBC496831BD861AE4"><enum>(A)</enum><text>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</text> </subparagraph>
<subparagraph id="HB2BED7BD1D534D07875C1AA3CC00B58B"><enum>(B)</enum><text>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.</text> </subparagraph></paragraph>
<paragraph id="H70E83FA108C149D09B55FD357B65D6A1"><enum>(4)</enum><header>Bridge financial company treated as being in default for certain purposes</header><text>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.</text> </paragraph>
<paragraph id="HBBF7A6D0F0E148119E5B6A09AE85530F"><enum>(5)</enum><header>Transfer of assets and liabilities</header>
<subparagraph id="HFBF4FD65DCC748CFBECA8A5E0AA40CCD"><enum>(A)</enum><header>Transfer of assets and liabilities</header><text>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).</text> </subparagraph>
<subparagraph id="H56F94696AF8D4771B1861D3C7A48465F"><enum>(B)</enum><header>Subsequent transfers</header><text>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).</text> </subparagraph>
<subparagraph id="HFBE6020D682D40318E4527A04095984A"><enum>(C)</enum><header>Treatment of trust or custody business</header><text>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.</text> </subparagraph>
<subparagraph id="HDAE0EBC43AE64F0489ADD67D235B851D"><enum>(D)</enum><header>Effective without approval</header><text>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.</text> </subparagraph>
<subparagraph id="H82BA237ADE5E43CCB423E5DA7E747EEC"><enum>(E)</enum><header>Equitable treatment of similarly situated creditors</header><text>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—</text>
<clause id="H6A5620CED14F4412B9EC2B778013146B"><enum>(i)</enum><text>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</text> </clause>
<clause id="HE553EB9FB3FA4A20999E41F715FA8FDD"><enum>(ii)</enum><text>all creditors that are similarly situated under subsection (b)(1) receive not less than the amount provided in subsection (d)(2).</text> </clause></subparagraph>
<subparagraph id="H9A1E447B2934409D9798A79A91B56686"><enum>(F)</enum><header>Limitation on transfer of liabilities</header><text>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.</text> </subparagraph></paragraph>
<paragraph id="HDFBA163CE7004212BCF6FE2CE4C47589"><enum>(6)</enum><header>Stay of judicial action</header><text>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.</text> </paragraph>
<paragraph id="H8813D5F75D524D43A46E67DE742B47A2"><enum>(7)</enum><header>Agreements against interest of the bridge financial company</header><text>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.</text> </paragraph>
<paragraph id="HC4BD3765E62B42D4853B1C323EC94D7A"><enum>(8)</enum><header>No federal status</header>
<subparagraph id="HC14471B2C98649D4B2DF015BB031694D"><enum>(A)</enum><header>Agency status</header><text>A bridge financial company is not an agency, establishment, or instrumentality of the United States.</text> </subparagraph>
<subparagraph id="HB822EB00C30C4209BCFF48EBF4331352"><enum>(B)</enum><header>Employee status</header><text>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—</text>
<clause id="H16D4FD80C6A44B18B07B6C5B8D138563"><enum>(i)</enum><text>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</text> </clause>
<clause id="H562955C8FD6A491981E368EA35742D7E"><enum>(ii)</enum><text>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.</text> </clause></subparagraph></paragraph>
<paragraph id="H0DF7FA71745946F28717E554D3638C1D" display-inline="no-display-inline"><enum>(9)</enum><header>Exempt tax status</header>
<subparagraph id="H373EF901835A4B32951A7FF0FFDB15D5"><enum>(A)</enum><header>Exemption from Federal income tax</header><text display-inline="yes-display-inline">Subsection (l) of section 501 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:</text>
<quoted-block style="OLC" display-inline="no-display-inline" id="HEB697444926148E19598F07DB880E43C">
<paragraph id="H8F3B6B6784D3417E95EB4DDC1D49ECFA"><enum>(4)</enum><text display-inline="yes-display-inline">Any bridge financial company organized under section 1609(h) of the Financial Stability Improvement Act of 2009.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph>
<subparagraph id="H3ED32C7B1F654411B9F1FC7862C71240"><enum>(B)</enum><header>Exemption from certain other taxes</header><text display-inline="yes-display-inline">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.</text></subparagraph></paragraph>
<paragraph id="H53D0DDCB9F47474E80517B1217289141"><enum>(10)</enum><header>Federal agency approval; antitrust review</header>
<subparagraph id="H97A3D540D3B44623B06753C6B1AB799A"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="HC99DB06E1EC04DF689E11A5A0F44B0C1"><enum>(B)</enum><header>Emergency</header><text display-inline="yes-display-inline">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).</text> </subparagraph></paragraph>
<paragraph id="H628EFCE853404504A00367CFDCE4A72F"><enum>(11)</enum><header>Duration of bridge financial company</header><text>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.</text> </paragraph>
<paragraph id="HDDF93E2165414B89AD852DE58E55596B"><enum>(12)</enum><header>Termination of bridge financial company status</header><text>The status of any bridge financial company as such shall terminate upon the earliest of—</text>
<subparagraph id="H7134DE8570AD4DC79F72660912870DA1"><enum>(A)</enum><text>the merger or consolidation of the bridge financial company with a company that is not a bridge financial company;</text> </subparagraph>
<subparagraph id="HD9889C1380694468B76289BECA67909F"><enum>(B)</enum><text>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;</text> </subparagraph>
<subparagraph id="HDE33F31FF0E44B5182EC7397D1433E91"><enum>(C)</enum><text>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;</text> </subparagraph>
<subparagraph id="HDB8CBFFF5A0744C7BC7E0B8C3B85046C"><enum>(D)</enum><text>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</text> </subparagraph>
<subparagraph id="H20EB19A81D8C4341BFF39C62D7FBF09C"><enum>(E)</enum><text>the expiration of the period provided in paragraph (11), or the earlier dissolution of the bridge financial company as provided in paragraph (14).</text> </subparagraph></paragraph>
<paragraph id="HFB5284EAEB58432FADFEDF10049AA1C6"><enum>(13)</enum><header>Effect of termination events</header>
<subparagraph id="HD9F79238E8DE4829AA3648225B6CDCCC"><enum>(A)</enum><header>Merger or consolidation</header><text>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.</text> </subparagraph>
<subparagraph id="HEBD1EC2EE3E84D579535EF89A0CB01C5"><enum>(B)</enum><header>Charter conversion</header><text>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.</text> </subparagraph>
<subparagraph id="H2C656E20E3E8458092DF4B6653E9E3AB"><enum>(C)</enum><header>Sale of stock</header><text>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.</text> </subparagraph>
<subparagraph id="H3FC304AB7137443C8CF00E8111C21ADF"><enum>(D)</enum><header>Assumption of liabilities and sale of assets</header><text>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.</text> </subparagraph>
<subparagraph id="H839627C0C9FC4DE1B120BB4F7A36B79A"><enum>(E)</enum><header>Amendments to charter</header><text>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.</text> </subparagraph></paragraph>
<paragraph id="H0ED190F21DDE4902B992C087C677E9EC"><enum>(14)</enum><header>Dissolution of bridge financial company</header>
<subparagraph id="H60350515F3304AE5B0EAE0A210CF0746"><enum>(A)</enum><header>In general</header><text>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)—</text>
<clause id="H4D2005DCE65E47ADAC2F9CD9B6DE2B21"><enum>(i)</enum><text>the Corporation may, in its discretion, dissolve the bridge financial company in accordance with this paragraph at any time; and</text> </clause>
<clause id="H3E9CAB0285974AB8B6285DE282F84E9C"><enum>(ii)</enum><text>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).</text> </clause></subparagraph>
<subparagraph id="HD1B687180F824E7CBA1FA545D6137A63"><enum>(B)</enum><header>Procedures</header><text>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.</text> </subparagraph></paragraph>
<paragraph id="HBD2C4FD54A204ACD9AC17336063E460F"><enum>(15)</enum><header>Authority to obtain credit</header>
<subparagraph id="H8F16E169EDA94AED91CDBB3AA7770A4D"><enum>(A)</enum><header>In general</header><text>A bridge financial company may obtain unsecured credit and issue unsecured debt.</text> </subparagraph>
<subparagraph id="H6D2CA5C6B0BA4E5D85CAE255F0EC83FB"><enum>(B)</enum><header>Inability to obtain credit</header><text>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—</text>
<clause id="H0AD1E47E5EFB4CEFA9787D05DA95AEC2"><enum>(i)</enum><text display-inline="yes-display-inline">with priority over any or all of the obligations of the bridge financial company;</text> </clause>
<clause id="HF93BF8C89A6C473087967A88071EBB89"><enum>(ii)</enum><text display-inline="yes-display-inline">secured by a lien on property of the bridge financial company that is not otherwise subject to a lien; or</text> </clause>
<clause id="H29428DD7794C4D1FA4A92BE5C57E1BCF"><enum>(iii)</enum><text>secured by a junior lien on property of the bridge financial company that is subject to a lien.</text> </clause></subparagraph>
<subparagraph id="HFF85C10A9F244D68A8F4892D96026E67"><enum>(C)</enum><header>Limitations</header>
<clause id="HF5AB76476FAE4FF6BE134ACC834B8771"><enum>(i)</enum><header>In general</header><text>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—</text>
<subclause id="H97A1645802174313A257280B82C81D48"><enum>(I)</enum><text>the bridge financial company is unable to otherwise obtain such credit or issue such debt; and</text> </subclause>
<subclause id="H6AAB0DB1D3B345A590457E22FAB0D603"><enum>(II)</enum><text>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.</text> </subclause></clause></subparagraph>
<subparagraph id="HABB23F8DC0434F4A8D106BDFB15C6F05"><enum>(D)</enum><header>Burden of proof</header><text>In any hearing under this subsection, the Corporation has the burden of proof on the issue of adequate protection.</text> </subparagraph></paragraph>
<paragraph id="H74394B44D55449518C650B276BAC551A"><enum>(16)</enum><header>Effect on debts and liens</header><text>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.</text> </paragraph></subsection>
<subsection id="HBA9B96414EC24BC1AA31BF5C8D21F979"><enum>(i)</enum><header>Sharing records</header><text>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.</text> </subsection>
<subsection id="HAA79427295424B0690D75347D10E56F7"><enum>(j)</enum><header>Expedited procedures for certain claims</header>
<paragraph id="H37022628A6A04BC7ACB22ACB59D144A5"><enum>(1)</enum><header>Time for filing notice of appeal</header><text>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.</text> </paragraph>
<paragraph id="H5C1763D02E374E9AAB84B0B4E7C76D92"><enum>(2)</enum><header>Scheduling</header><text>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.</text> </paragraph>
<paragraph id="H75784C9A719A4E2C9687B21432B22070"><enum>(3)</enum><header>Judicial discretion</header><text>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.</text> </paragraph></subsection>
<subsection id="HADA673743AE344C99703CC575738B8A2"><enum>(k)</enum><header>Foreign investigations</header><text>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—</text>
<paragraph id="H7773A09624F6463BBAF3383D6B564E4C"><enum>(1)</enum><text>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</text> </paragraph>
<paragraph id="HCF11747765654ECCB68B0CD0F3879232"><enum>(2)</enum><text>may maintain an office to coordinate foreign investigations or investigations on behalf of foreign financial authorities.</text> </paragraph></subsection>
<subsection id="HCAC8B8D96B4844E6B0CE4DA7F8352605"><enum>(l)</enum><header>Prohibition on entering secrecy agreements and protective orders</header><text>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.</text> </subsection>
<subsection id="H77ED564855FF4240994E59FEBF3F760C"><enum>(m)</enum><header>Liquidation of certain covered financial companies or bridge financial companies</header><text>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—</text>
<paragraph id="HF779A249D76D4CB486B1C2AA68CF4129"><enum>(1)</enum><text>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 <quote>customer</quote> of all <quote>customer name securities</quote> and <quote>customer property</quote> (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</text> </paragraph>
<paragraph id="H2958A1FD33FA4F27BA8D97A3E2DC1317"><enum>(2)</enum><text>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 <quote>customer</quote> of all <quote>customer property</quote> (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.</text> </paragraph></subsection>
<subsection display-inline="no-display-inline" id="H3A4C4F62B46E42DAAEBF6C143B0E6F73"><enum>(n)</enum><header>Systemic dissolution fund</header><text></text>
<paragraph id="H4B71277E158A4EDA86237A1320EBFC22"><enum>(1)</enum><header>Establishment and purpose</header>
<subparagraph id="HEF83ACFD6D5D4E23AB4730A14F41BF75"><enum>(A)</enum><header>In general</header><text>There is established in the Treasury a separate fund to be known as the <quote>Systemic Dissolution Fund</quote>—</text>
<clause id="H73CE802A7BB749BFB5ABC34DFB519C63"><enum>(i)</enum><text>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</text> </clause>
<clause id="H3EA455E1888F490D98565C59DB0F033F"><enum>(ii)</enum><text>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.</text> </clause></subparagraph>
<subparagraph id="H3427F8FDC64D4339AAC10BC4C5312D20"><enum>(B)</enum><header>Adjustment of threshold</header><text>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)).</text> </subparagraph></paragraph>
<paragraph id="H1509B2B4980C454EB0E6992CFD8D1E1E"><enum>(2)</enum><header>Authority</header><text>The Systemic Dissolution Fund shall be administered by the Corporation, which shall have exclusive authority to—</text>
<subparagraph id="HA5E590BFF2114490AB140A18C02F3121"><enum>(A)</enum><text>impose assessments on covered financial companies in accordance with paragraphs (6) through (8);</text> </subparagraph>
<subparagraph id="HB4A9458A87AA4A708E8BC2D51C361D6C"><enum>(B)</enum><text>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;</text> </subparagraph>
<subparagraph id="H5F21C78BA6E34B28B15D0DFA4CD2BCF0"><enum>(C)</enum><text>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;</text> </subparagraph>
<subparagraph id="H847079B67EA84A7DA6BBEAD9DEFC0776"><enum>(D)</enum><text>invest the Fund in accordance with section 13(a) of the Federal Deposit Insurance Act; and</text> </subparagraph>
<subparagraph id="HB5ACB777B40C4FED9A11210CCEC73863"><enum>(E)</enum><text>exercise borrowing authority as prescribed in subsection (o).</text> </subparagraph></paragraph>
<paragraph id="HDA376125677749519CCBB3DC6B7F5E1C"><enum>(3)</enum><header>Uses</header><text></text>
<subparagraph id="HE4C79948792145F09D752235D7161AB7"><enum>(A)</enum><text>The Fund shall be available to the Corporation for use with respect to the dissolution of a covered financial company to—</text>
<clause id="H4CD42E085B914873ACC5203D9E6193BE"><enum>(i)</enum><text>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;</text> </clause>
<clause id="H4D8EA45121814AB2BB45DB2FB06B4F90"><enum>(ii)</enum><text>repay such funds in accordance with subsection (o)(6); and</text> </clause>
<clause id="H13F7373B15EB4DDE842D410440B949ED"><enum>(iii)</enum><text>cover the costs of systemic stabilization actions, pursuant to subsections (d) and (f) of section 1604.</text> </clause></subparagraph>
<subparagraph id="H5309636C25D94DD281E9300DB5AD8053"><enum>(B)</enum><text>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).</text> </subparagraph></paragraph>
<paragraph id="HFEB1EDD201C44DD0B51C239A4BB27FF4"><enum>(4)</enum><header>Deposits to fund</header><text>All amounts assessed against a financial company under this section shall be deposited into the Fund.</text> </paragraph>
<paragraph id="HD18B415E1411402AAE931ECC62F1783D"><enum>(5)</enum><header>Size of fund</header><text>The Corporation shall, by rule, establish the minimum size of the Fund consistent with subparagraphs (C) and (D) of paragraph (6).</text> </paragraph>
<paragraph id="HCC76E86215F048399156D999F2B0CE3E"><enum>(6)</enum><header>Assessments</header><text></text>
<subparagraph id="H1054EE529B5948C09D4E13963395B00F"><enum>(A)</enum><header>Assessments to maintain fund</header><text>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).</text> </subparagraph>
<subparagraph id="H559AE5FDAAF64B53906D699C75314A93"><enum>(B)</enum><header>Assessments to replenish the fund</header><text>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).</text> </subparagraph>
<subparagraph id="HB359B83A146E4989AC47C3F17558CCB1"><enum>(C)</enum><header>Minimum assessment threshold</header><text></text>
<clause id="HA8B2DC7E8BD4452A84AD4818C78E26CE"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">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).</text> </clause>
<clause id="H3EDDF6C427D94C3E90D84B1B5ACDEC3E"><enum>(ii)</enum><header>Hedge funds</header><text>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).</text> </clause></subparagraph>
<subparagraph id="HC4C4F69EBD2B416393DA146F680D8ADF"><enum>(D)</enum><header>Maximum size of fund via assessments</header>
<clause id="H3AA4ACF817A148A19DE4653C9BCEE6D3"><enum>(i)</enum><header>In general</header><text>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.</text> </clause>
<clause id="HFCC3634582CE46FC8EDCE8FB4ADF7376"><enum>(ii)</enum><header>Exceptions</header><text>Any suspension of assessments under clause (i)—</text>
<subclause id="HB645C781577540F281035D6F3E714DCC"><enum>(I)</enum><text>may be set aside if the Fund falls below $150,000,000,000; and</text> </subclause>
<subclause id="HB61472E21688400598566356B2FD3449"><enum>(II)</enum><text>shall be set aside if the Fund falls below the minimum level established in subparagraph (C).</text> </subclause></clause></subparagraph>
<subparagraph id="HC8339728552248EDA2593DCB84A9352C" display-inline="no-display-inline"><enum>(E)</enum><header>Additional authorized assessments</header><text display-inline="yes-display-inline">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).</text></subparagraph></paragraph>
<paragraph id="HEC4936E1F0DA49CE8323BE3381403E6F"><enum>(7)</enum><header>Factors</header><text>The Corporation, in consultation with the Council shall establish a risk matrix to be used in establishing assessments that takes into account—</text>
<subparagraph id="H1A4DB409B1F947ABB1BD4674D80AAC86"><enum>(A)</enum><text>the actual or expected risk of losses to the Fund;</text> </subparagraph>
<subparagraph id="H29ED2EE36BEC427F83E9F6C8FD6370BD"><enum>(B)</enum><text>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;</text> </subparagraph>
<subparagraph id="H066D7C6640CC41D6848CAD7D3F4BB904"><enum>(C)</enum><text>any assessments imposed on a financial company or an affiliate of a financial company that—</text>
<clause id="H7FACF906A83B42D3B1193692176F94E5"><enum>(i)</enum><text>is an insured depository institution, assessed pursuant to section 7 or 13(c)(4)(G) of the Federal Deposit Insurance Act;</text> </clause>
<clause id="H7934A1C009334C20A341CAC43105C080"><enum>(ii)</enum><text>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);</text> </clause>
<clause id="H0B6E1A8DBCC24B05BFE54671A053E13C"><enum>(iii)</enum><text>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</text> </clause>
<clause id="H063D483BC03A4701B95D1E3AA9978C64"><enum>(iv)</enum><text>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;</text> </clause></subparagraph>
<subparagraph id="H7F90E8664219452A81F82D73AE1E32B1"><enum>(D)</enum><text>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—</text>
<clause id="HD9279E2E782E484B95BD03775DBA3C81"><enum>(i)</enum><text>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;</text> </clause>
<clause id="H36291BAA196540589E6D695BB112361F"><enum>(ii)</enum><text>the activities of the financial company and its affiliates;</text> </clause>
<clause id="H7FC4D28E5DFD4F0A98DAF1467684D279"><enum>(iii)</enum><text>the relevant market share of the financial company and its affiliates;</text> </clause>
<clause id="H13005EED0D04421FACA98017F65F29B2"><enum>(iv)</enum><text>the extent to which the financial company is leveraged;</text> </clause>
<clause id="HCA179CDCBFAC4527B62DA10307E2280D"><enum>(v)</enum><text>the potential exposure to sudden calls on liquidity precipitated by economic distress;</text> </clause>
<clause id="HABE08B5BE0134C839CB6038D93AC45BC"><enum>(vi)</enum><text>the amount, maturity, volatility, and stability of the company’s financial obligations to, and relationship with, other financial companies;</text> </clause>
<clause id="HA97BADFA6DB8475FA40685FAF7A89D8C"><enum>(vii)</enum><text>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;</text> </clause>
<clause id="HCC09B28FD8CA42B6AA9EABC9CF8BED53"><enum>(viii)</enum><text>the stability and variety of the company’s sources of funding;</text> </clause>
<clause id="H1F174156B9BE4CD29503B3CBCE3A9CE2"><enum>(ix)</enum><text>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;</text> </clause>
<clause id="H8B72BD76A71F4D1498CEFCAB8422B7D6"><enum>(x)</enum><text>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</text> </clause>
<clause id="H605877398AAE49D7BDEE5E68AEEBAA0F"><enum>(xi)</enum><text>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</text> </clause></subparagraph>
<subparagraph id="HE0F2987A49C440E48CDEEF32332FE417"><enum>(E)</enum><text>such other factors as the Corporation, in consultation with the Council, may determine to be appropriate.</text> </subparagraph></paragraph>
<paragraph id="H0456F747371F4136A1AC39E99DF11AF0"><enum>(8)</enum><header>Requirement for equitable treatment in assessments</header><text>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.</text> </paragraph>
<paragraph id="HF1D0D9B00AD4472E921716C0FEC90ABB"><enum>(9)</enum><header>Minimum comment period</header><text>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.</text> </paragraph></subsection>
<subsection id="H167BBB7F8A084B47BADD719CE6D7328D"><enum>(o)</enum><header>Borrowing authority</header><text></text>
<paragraph id="HCF033378947D491D8DB7B2B696C2C77C"><enum>(1)</enum><header>Borrowing from treasury</header>
<subparagraph id="HC5FE7E202F2B470BA6ECC16178F1828C"><enum>(A)</enum><header>In general</header><text>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.</text> </subparagraph>
<subparagraph id="H25CA2387A9A34BF0980F2CDE7F6FD6CC"><enum>(B)</enum><header>Rate of interest</header><text>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.</text> </subparagraph></paragraph>
<paragraph id="H5EE4F3872D6D484980FA6D966149D7AA"><enum>(2)</enum><header>Public debt issuances</header><text>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.</text> </paragraph>
<paragraph id="H0D066C2A916743378705C00F74E6DADC"><enum>(3)</enum><header>Borrowing authority when fund assets are less than $150,000,000,000</header><text></text>
<subparagraph id="HAB51F4F463534A009976257F3A43865E"><enum>(A)</enum><text>Subject to paragraph (B), the borrowing authority granted in paragraph (1) shall be available to the Corporation where—</text>
<clause id="HFEEDA738366F43A597D3170B4E003C2A"><enum>(i)</enum><text>the value of the Fund is less than $150,000,000,000;</text> </clause>
<clause id="H041E02144B7B43CB8743051296EBDC4D"><enum>(ii)</enum><text>the Corporation determines that the immediate dissolution of a financial company or financial companies requires more funds than are available in the Fund; and</text> </clause>
<clause id="HC85A7DC7BBF4471C9E08C409ECA69FAC"><enum>(iii)</enum><text>the Corporation has provided a specific plan for repayment under paragraph (7)(A).</text> </clause></subparagraph>
<subparagraph id="H0CA5BB913E20472CBA46CC76BAAE393D"><enum>(B)</enum><text>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.</text> </subparagraph>
<subparagraph id="H09EE862A4E394A868B0F6D7B10DBD975"><enum>(C)</enum><text>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)).</text> </subparagraph></paragraph>
<paragraph id="H9E26AD63EEC44E88879756A6FB91AFDB"><enum>(4)</enum><header>Additional borrowing authority</header><text></text>
<subparagraph id="H0BE965D9CC6141F39A4397D89964E42D"><enum>(A)</enum><text>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—</text>
<clause id="H7E3FD96E1B0543938CF17254E45C754D"><enum>(i)</enum><text>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</text> </clause>
<clause id="H96AC634C37A54850BD3795A4D531C742"><enum>(ii)</enum><text>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).</text> </clause></subparagraph>
<subparagraph id="HCB2A2876F5894604926A5C77385CFA56"><enum>(B)</enum><text>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).</text> </subparagraph></paragraph>
<paragraph id="HDAE16AFE230C4BE7A1161351E6C0CB72"><enum>(5)</enum><header>Limitations on additional borrowing authority</header><text></text>
<subparagraph id="H57B0D216A24C472289533AB3A809DD06"><enum>(A)</enum><text>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.</text> </subparagraph>
<subparagraph id="H18C0A4ED9BCC4AECB88DBA1FAE1E0019"><enum>(B)</enum><text>The amount of borrowing authority requested under subparagraph (A)(i) may not exceed $50,000,000,000.</text> </subparagraph></paragraph>
<paragraph id="HE141CE9514814B8EAC9314B452D7B9BD"><enum>(6)</enum><header>Proceeds from liquidation, repayment of funds</header><text></text>
<subparagraph id="HAE669F32D98043A39880A93A33040156"><enum>(A)</enum><header>In general</header><text>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.</text> </subparagraph>
<subparagraph id="H71B8613AA56146CF9F99473CD8782A5E"><enum>(B)</enum><header>Repayment priority</header><text>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—</text>
<clause id="HDA3F3147E05B48858D255CFB635B52BE"><enum>(i)</enum><text>first, to repay any costs incurred in exercising the borrowing authority granted in paragraph (1); and</text> </clause>
<clause id="HDE90B2135D484F919C5656DD9B169888"><enum>(ii)</enum><text display-inline="yes-display-inline">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.</text> </clause></subparagraph></paragraph>
<paragraph id="H72412A188E3B4D8187E14B57CE65DF7A"><enum>(7)</enum><header>Repayment plan and schedules required for any borrowing</header><text></text>
<subparagraph id="H43322B70A47F487EBC7E4EED5B0B24E7"><enum>(A)</enum><header>In general</header><text>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—</text>
<clause id="H4FF2A59F0A934EF184D2A256BCAC3FBA"><enum>(i)</enum><text>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</text> </clause>
<clause id="H9B88186EEF0B47D689CEC064E7583A62"><enum>(ii)</enum><text>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.</text> </clause></subparagraph>
<subparagraph id="HC773E7B552CD42F8BDA5E2963C06A9AD"><enum>(B)</enum><header>Consultation with and report to congress</header><text>The Secretary of the Treasury and the Corporation shall—</text>
<clause id="HEEF2296263414172990E137E6EAFB9EC"><enum>(i)</enum><text>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</text> </clause>
<clause id="HB184BB697E8B4C3DB766E937E39C3829"><enum>(ii)</enum><text>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).</text> </clause></subparagraph></paragraph></subsection>
<subsection id="H80922FC2721C460D9D12BA39B5231753"><enum>(p)</enum><header>Information gathering and verification; payments</header>
<paragraph id="HADB316996DC2455984E28033703F51FC"><enum>(1)</enum><header>In general</header><text>The Corporation may require each financial company to make available such information as the Corporation may require—</text>
<subparagraph id="H34B9C07739A647B8B21DAAA82F657F83"><enum>(A)</enum><text>for purposes of—</text>
<clause id="H009146329B14401999552300FCE63C10"><enum>(i)</enum><text>determining the financial company’s assessment under this section;</text> </clause>
<clause id="H257A6EF767E540CDB6498BC593E748C3"><enum>(ii)</enum><text>verifying the accuracy of information; and</text> </clause>
<clause id="H62337854AE2D4A6B86ADCCEBAD3C8F4F"><enum>(iii)</enum><text display-inline="yes-display-inline">preparing for dissolution, including a dissolution plan as required by this section; and</text> </clause></subparagraph>
<subparagraph id="H56565E359F1F417695F94924B996922F"><enum>(B)</enum><text>for such other purposes as may be appropriate and necessary to promote the orderly dissolution of the financial company.</text> </subparagraph></paragraph>
<paragraph id="H473D5451EAB745BD8DD0181A554EBFFF"><enum>(2)</enum><header>Use of existing reports</header><text>The Corporation shall, to the fullest extent possible, accept—</text>
<subparagraph id="H649FF88E88FA4CC9A53F63037680B168"><enum>(A)</enum><text>reports that a financial company has provided or been required to provide to other Federal or State supervisors or to appropriate self-regulatory organizations;</text> </subparagraph>
<subparagraph id="HC36FDDA5BC7F48A6A8B78904A62E3979"><enum>(B)</enum><text>information that is otherwise required to be reported publicly; and</text> </subparagraph>
<subparagraph id="H9EF400D43CF441EBB0BD535F0FB448F7"><enum>(C)</enum><text>externally audited financial statements.</text> </subparagraph></paragraph>
<paragraph id="H9EF0C58A922F4AD293D8266684443E67"><enum>(3)</enum><header>Authority for on-site inspection</header><text>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.</text> </paragraph>
<paragraph id="HD9B8F2C3FB6D404EAA41B5926E2B917B"><enum>(4)</enum><header>Rulemaking</header><text>The Corporation may promulgate such rules or regulations as are necessary or appropriate to implement this subsection.</text> </paragraph>
<paragraph id="H915B79063029450FB2456D2F26F30CDF"><enum>(5)</enum><header>Payments of assessments required</header>
<subparagraph id="HDC41236304FB45E19E7C11E020CBDD02"><enum>(A)</enum><header>In general</header><text>Any financial company subject to an assessment under this section shall pay to the Corporation such assessment.</text> </subparagraph>
<subparagraph id="H0924FEF9C63044A38784279F32D9D6F3"><enum>(B)</enum><header>Form of payment</header><text>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.</text> </subparagraph></paragraph>
<paragraph id="H6B2A2C1780DE4A8EA26742AEBD147C64"><enum>(6)</enum><header>Penalty for failure to timely pay assessments</header><text>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.</text> </paragraph></subsection>
<subsection id="H5F79F99C1E6A48C38CC0D3B387F7E05F"><enum>(q)</enum><header>Assessment actions</header><text></text>
<paragraph id="HED8A19A18AB94087B8784426FE4715F9"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph>
<paragraph id="HFDFC6FD3684A47E3BDBEA7CE14D00205"><enum>(2)</enum><header>Statute of limitations</header><text>Notwithstanding any other provision in Federal law, or the law of any State—</text>
<subparagraph id="HB09112F4D41F4AC78B6A3E8F1D64BE39"><enum>(A)</enum><text>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);</text> </subparagraph>
<subparagraph id="HA3DC9F1A040D4643AD0F890589F6B2F9"><enum>(B)</enum><text>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</text> </subparagraph>
<subparagraph id="H848E449306C54474BFEC4D070AE83628"><enum>(C)</enum><text>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.</text> </subparagraph></paragraph></subsection>
<subsection id="H56FDC89C14454A6888A13F3C4DC7A6E3"><enum>(r)</enum><header>Requirement to maintain systemic dissolution fund as separate fund</header><text>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.</text> </subsection>
<subsection id="H35960875E188465D8BEA43F2ED02F96C"><enum>(s)</enum><header>Congressional approval of additional borrowing authority</header><text></text>
<paragraph id="H868128D33E414BB3B63B763158CB4565"><enum>(1)</enum><header>Introduction</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HCBC6B93345214464A94AF556F27AC0A8"><enum>(2)</enum><header>Consideration in the house of representatives</header><text></text>
<subparagraph id="H6690E75AEE5247CF9EA823EDFD48EDC5"><enum>(A)</enum><header>Reporting and discharge</header><text>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.</text> </subparagraph>
<subparagraph id="H47E092053D13494B97CD8245403A31CF"><enum>(B)</enum><header>Proceeding to consideration</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="H9B50CF482AA24F94BAA2C8EE04F26843"><enum>(C)</enum><header>Consideration</header><text>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.</text> </subparagraph></paragraph>
<paragraph id="H6CF7AA4C7EC54E7E8A030A6DA0977513"><enum>(3)</enum><header>Consideration in the senate</header><text></text>
<subparagraph id="HF1553993A51345FC9560C7568C83E09D"><enum>(A)</enum><header>Placement on calendar</header><text>Upon introduction in the Senate, the joint resolution shall be placed immediately on the calendar.</text> </subparagraph>
<subparagraph id="H739CE32D9D7A485681A2C7771B3C21B7"><enum>(B)</enum><header>Floor consideration</header><text></text>
<clause id="H1B539161980D4BF696BF183D11DBD05B"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </clause>
<clause id="HD17BCB215E884FF4986D013EE225A410"><enum>(ii)</enum><header>Debate</header><text>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.</text> </clause>
<clause id="H14F42322E49D482E8A2ED7878C941A01"><enum>(iii)</enum><header>Vote on passage</header><text>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.</text> </clause>
<clause id="H3F8FAFA273DB435FA183BA9B21565980"><enum>(iv)</enum><header>Rulings of the chair on procedure</header><text>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.</text> </clause></subparagraph></paragraph>
<paragraph id="HEC3B2EECBD2D44CAB5ACDC801CF56533"><enum>(4)</enum><header>Rules relating to Senate and House of Representatives</header><text></text>
<subparagraph id="H8D17E677D6D440C9A4AEA6AB10F444B5"><enum>(A)</enum><header>Coordination with action by other house</header><text>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:</text>
<clause id="HFAB2A8BE055F4A7BB113BAF834E298EA"><enum>(i)</enum><text>The joint resolution of the other House shall not be referred to a committee.</text> </clause>
<clause id="H6C1E9C5A81D74BDDAD59DC2AEE316A76"><enum>(ii)</enum><text>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.</text> </clause></subparagraph>
<subparagraph id="H86214E51362A4C0CA1657D95C9605A6D"><enum>(B)</enum><header>Treatment of companion measures</header><text>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.</text> </subparagraph>
<subparagraph id="HC9DBCDFEDEBF48DBAD1D234139119543"><enum>(C)</enum><header>Failure of joint resolution in the Senate</header>
<clause id="HDA173D57D1A64B5AB6C5949446EA2658"><enum>(i)</enum><text>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.</text> </clause>
<clause id="HBCE33E63D7A6433AA17A7FEDD11AE6AC"><enum>(ii)</enum><text>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.</text> </clause></subparagraph>
<subparagraph id="H4B0AE62FD77B43B4A2F2D259EAB967CF"><enum>(D)</enum><header>Rules of House of Representatives and Senate</header><text>This paragraph and the preceding paragraphs are enacted by Congress—</text>
<clause id="H00CEA4062B9E4511AFAB3E94028B99D0"><enum>(i)</enum><text>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</text> </clause>
<clause id="H60A02F86C29A4B82859C6D3981E33B8B"><enum>(ii)</enum><text>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.</text> </clause></subparagraph></paragraph>
<paragraph id="HFCA47453267B4A49AB6DDF54387999C5"><enum>(5)</enum><header>Definition</header><text>In this section, the term <quote>joint resolution</quote> means only a joint resolution—</text>
<subparagraph id="H1710E99F5AD44E07A9E04905ED2D8F87"><enum>(A)</enum><text>which does not have a preamble;</text> </subparagraph>
<subparagraph id="H326D1B2F8D3D4D97AB608F92B0CB3FB2"><enum>(B)</enum><text>the title of which is as follows: <quote>Joint resolution relating to the approval of request for borrowing authority under the Financial Stability Improvement Act of 2009.</quote>; and</text> </subparagraph>
<subparagraph id="HF5C6C1B30248472BA6586BC76C4775CB"><enum>(C)</enum><text>the sole matter after the resolving clause of which is as follows: <quote>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.</quote>, the blank space being filled with the appropriate date.</text> </subparagraph></paragraph></subsection>
<subsection id="HE1F16F72319A4A918542A710E146D901"><enum>(t)</enum><header>No federal status</header>
<paragraph id="HAB5BC53EB11F40D6A7A835405C5B80A9"><enum>(1)</enum><header>Agency status</header><text>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.</text> </paragraph>
<paragraph id="H7F2AAA91492746EA8D638EF2EA4FE353"><enum>(2)</enum><header>Employee status</header><text>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—</text>
<subparagraph id="H182E8BDBB9944723BA55AAD4035D62E5"><enum>(A)</enum><text>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;</text> </subparagraph>
<subparagraph id="H7CF7F32C348645E2AC0668E593151BC6"><enum>(B)</enum><text>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.</text> </subparagraph></paragraph></subsection>
<subsection id="H346411518A69485893E825F13E609918" display-inline="no-display-inline"><enum>(u)</enum><header>Study of payment of consumer claims</header><text display-inline="yes-display-inline">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.</text></subsection></section>
<section id="H3EFE93CCE21448B8AB88D590095674CE"><enum>1610.</enum><header>Clarification of prohibition regarding concealment of assets from receiver or liquidating agent</header>
<subsection id="H91AF3FB1F00A4D18B41DBAB50A050FFF"><enum>(a)</enum><header>In general</header><text>Section 1032 of title 18, United States Code, is amended in paragraph (1) by deleting <quote>or</quote> before <quote>the National Credit Union Administration Board,</quote> and by inserting immediately thereafter <quote>or the Corporation, as defined in section 1602 of the Dissolution Authority for Large, Interconnected Financial Companies Act of 2009,</quote>.</text> </subsection>
<subsection id="HFB985E0E4831424D9216D383B20FEB65"><enum>(b)</enum><header>Conforming change</header><text>The heading of section 1032 of title 18, United States Code, is amended by striking <quote><header-in-text level="section" style="USC">of financial institution</header-in-text></quote>.</text> </subsection></section>
<section display-inline="no-display-inline" id="HBAA3223AB054411E936CC73FEB843A95" section-type="subsequent-section"><enum>1611.</enum><header>Office of Dissolution</header>
<subsection id="H3A9428B71E704AA7816587524B5F6237"><enum>(a)</enum><header>Trigger of and plan for establishment</header>
<paragraph id="H61123B33D475427096FDC7EF467976A0"><enum>(1)</enum><header>Trigger</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HFF4EB4CC839A42EEBF041728A9FEDB11"><enum>(2)</enum><header>Plan</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection>
<subsection id="HF38B1035952442A4A0422A56443929D6"><enum>(b)</enum><header>Special Deputy Inspector General</header><text display-inline="yes-display-inline">The head of the Office of Dissolution is the Special Deputy Inspector General for Dissolution (in this section referred to as the <quote>Special Deputy Inspector General</quote>), who shall be appointed by and report to the Inspector General of the Corporation.</text> </subsection>
<subsection id="H66C95D53B9E845569C6FA3F7E1AFCC68"><enum>(c)</enum><header>Duties</header>
<paragraph display-inline="no-display-inline" id="HA162F6B869EC488FB47AE2A491413CF4"><enum>(1)</enum><header>Audits and investigations</header><text display-inline="yes-display-inline">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:</text>
<subparagraph display-inline="no-display-inline" id="HBA44E0811BCB463086010F7019A5FC71"><enum>(A)</enum><text>A description of each financial company for which the Corporation has been appointed as receiver under section 1604.</text> </subparagraph>
<subparagraph display-inline="no-display-inline" id="H03DE5D7D6C864461BDE57BFB8CADEEF5"><enum>(B)</enum><text>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.</text> </subparagraph>
<subparagraph display-inline="no-display-inline" id="H38E1619DCB85485FB3311209324971A5"><enum>(C)</enum><text>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.</text> </subparagraph></paragraph>
<paragraph display-inline="no-display-inline" id="HC41C2D4D803244AF8AD4018C42B03091"><enum>(2)</enum><header>Additional duties</header>
<subparagraph id="HAC92B551AB024BC0B67B2A6AA4561BD0"><enum>(A)</enum><header>Systems, procedures, and controls</header><text>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).</text> </subparagraph>
<subparagraph id="HFC34F22B16F84F6C93331A88D618CDAD"><enum>(B)</enum><header>Reporting of criminal violations to Attorney General</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="HE0F95A228BB04EDA8E1E4B0F4D14EBBA"><enum>(C)</enum><header>Minimizing duplication of effort</header><text>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.</text> </subparagraph></paragraph>
<paragraph id="HBAF00CDE41224FA3875990D5F2FE6607"><enum>(3)</enum><header>Duties under the Inspector General Act of 1978</header><text>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.</text> </paragraph></subsection>
<subsection id="H9BD3BA4DB6134894959DFF8129FE7995"><enum>(d)</enum><header>Authorities under the Inspector General Act of 1978</header><text display-inline="yes-display-inline">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).</text> </subsection>
<subsection id="H3F768517C0C74A8C95520FFF2A62103F"><enum>(e)</enum><header>Personnel, Facilities, and Other Resources</header>
<paragraph id="HB5DACE24C6154AA4820C0528E7A8C5DA"><enum>(1)</enum><header>In general</header><text>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).</text> </paragraph>
<paragraph id="H3DF5155BB2764D6CA7CE0367493E77BA"><enum>(2)</enum><header>Additional funds</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection>
<subsection id="H3ECF2D4FCDF248EB9CA1945F90D33491"><enum>(f)</enum><header>Corrective responses to audit problems</header><text display-inline="yes-display-inline">The Chairman of the Corporation shall—</text>
<paragraph id="HBCB10DC50F0642E0B111E9106419ED67"><enum>(1)</enum><text display-inline="yes-display-inline">take action to address deficiencies identified by a report or investigation of the Special Deputy Inspector General; or</text> </paragraph>
<paragraph id="H98D8CB8681DB45918B266B31E12D74DD"><enum>(2)</enum><text>certify to the appropriate committees of Congress that no action is necessary or appropriate.</text> </paragraph></subsection>
<subsection id="HFC241B5285FD4D0BAE060F1029F9E075"><enum>(g)</enum><header>Cooperation and coordination with other entities</header><text>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.</text> </subsection>
<subsection id="HBE95EFFD9D1D4B7B89187BA54B00DDF3"><enum>(h)</enum><header>Reports</header>
<paragraph id="HDAAC43453A4844098E566EEC26DA6912"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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:</text>
<subparagraph id="H2A60852C5E5D45A2937CE4E2806FC227"><enum>(A)</enum><text>Not later than 30 days after the appointment of the Special Deputy Inspector General.</text> </subparagraph>
<subparagraph id="HB161EABE40094592BEB05B4764CD3665"><enum>(B)</enum><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="H7449080EEDD24B2484CA69648DE44BC5"><enum>(C)</enum><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph>
<paragraph id="HFB8DF73A27C34759B8EFF35402A5136D"><enum>(2)</enum><header>Content of reports</header><text display-inline="yes-display-inline">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—</text>
<subparagraph id="HA05980F0611E4CBF9FE493FFEDF5CE69"><enum>(A)</enum><text>the activities of the Special Deputy Inspector General; and</text> </subparagraph>
<subparagraph id="H1F03DC232AA440C7AE59036CE8DDEFBE"><enum>(B)</enum><text>the activities and future plans of the Corporation with respect to each financial company for which it served as receiver.</text> </subparagraph></paragraph></subsection>
<subsection id="HBCC810F12B64402A812CAB1B1BE2208C"><enum>(i)</enum><header>Termination</header><text display-inline="yes-display-inline">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).</text> </subsection></section>
<section id="HAEB28013E7714E28BA226EE438936465"><enum>1612.</enum><header>Miscellaneous provisions</header>
<subsection id="HEAD7964C29974CAB8291D23A36C91FC5"><enum>(a)</enum><header>Bankruptcy code amendments</header>
<paragraph id="H1505A484D2ED450AB1586F496BCA5E82"><enum>(1)</enum><text>Section 109(b)(2) of title 11 of the United States Code is amended by inserting <quote>covered financial company (as that term is defined in section 1602(5) of the Dissolution Authority for Large, Interconnected Financial Companies Act of 2009),</quote> after <quote>a domestic insurance company,</quote>.</text></paragraph>
<paragraph id="HA122529018B941FDA084429F6CE1403C"><enum>(2)</enum><text>Section 303 of title 11, United States Code, is amended—</text>
<subparagraph id="H63B9A5ACC6CC4C9DA0A6469DF3EED9C2"><enum>(A)</enum><text>in subsection (h)—</text>
<clause id="H462734748D504DB4B56DCEDF75FBC400"><enum>(i)</enum><text>by striking <quote>or</quote> at the end of paragraph (1);</text></clause>
<clause id="HF77E3A3318C345E1B6E3993054FDDC98"><enum>(ii)</enum><text>by striking the period at the end of paragraph (2) and inserting <quote>; or</quote>; and</text></clause>
<clause id="H5969582FA24B43449ACF250FB6DFCEEA"><enum>(iii)</enum><text>by adding at the end the following new paragraph:</text>
<quoted-block style="OLC" id="HE33ACCB3B55D479EAAC6724DD668B827" display-inline="no-display-inline">
<paragraph id="HD22DCAF310AB44439636CE3767688AF2"><enum>(3)</enum><text display-inline="yes-display-inline">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.</text></paragraph><after-quoted-block>; and</after-quoted-block></quoted-block></clause></subparagraph>
<subparagraph id="H21F72FF3FFEC465F848EAB31894637D0"><enum>(B)</enum><text>by adding at the end the following new subsection:</text>
<quoted-block style="OLC" id="HABF8504082A5427088C7D98A6B142A98" display-inline="no-display-inline">
<subsection id="H8701CA47A31B4DCBA9492C251BF4DE46"><enum>(m)</enum><text display-inline="yes-display-inline">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. </text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph>
<paragraph id="HA072B72C6D5C4A1A907D30AA76C70CDD"><enum>(3)</enum><text>Title 11, United States Code, is amended by inserting after section 303 the following new section:</text>
<quoted-block style="OLC" display-inline="no-display-inline" id="HDBC13CEA3E064EEA849A72F8CE5A14A4">
<section id="H9397EF20039C482ABA51899B1D30013A"><enum>304.</enum><header>Cases involving FDIC dissolution authority</header>
<subsection id="HAD1CA91D947F43078224E9367A4D99EE"><enum>(a)</enum><header>Appointment</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="H88F41122D33D44CBB1DD216E29EE1C2C"><enum>(b)</enum><header>Qualification</header><text>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.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H61A8BA566E8D4E3A9880A21509C9AE7C"><enum>(b)</enum><header>Federal Deposit Insurance Act and Federal Deposit Insurance Corporation Improvement Act of 1991</header>
<paragraph id="H79F77D08BF5F48C48BD5C10E3F7BFECE"><enum>(1)</enum><text>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: <quote>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.</quote>.</text> </paragraph>
<paragraph id="H0383F7B3F98F4B3D84A2D2F7720B42EB"><enum>(2)</enum><text>Section 403(a) of the Federal Deposit Insurance Corporation Improvement Act of 1991 (12 U.S.C. 4403(a)) is amended by inserting <quote>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)), </quote> after <quote>section 11(e) of the Federal Deposit Insurance Act,</quote>.</text> </paragraph></subsection></section>
<section display-inline="no-display-inline" id="HD4FB681731D44FFF810A1705A2A62818" section-type="subsequent-section"><enum>1613.</enum><header>Amendment to Federal Deposit Insurance Act</header><text display-inline="no-display-inline">The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) is amended by inserting after section 11A the following new section:</text>
<quoted-block display-inline="no-display-inline" id="H7012463F90FA4F9E8FC41320EBBA19CF" style="OLC">
<section id="H2E9B100F0033416DA6E63A1D472DAC16"><enum>11B.</enum><header>Systemic dissolution authority and fund</header>
<subsection id="H9668D8E032E7486ABCAC9C4B3ADF83B9"><enum>(a)</enum><header>Systemic dissolution authority</header><text display-inline="yes-display-inline">The Corporation shall establish a Systemic Dissolution Authority, which shall function as a subsidiary of the Corporation.</text> </subsection>
<subsection id="H45A71E5109414A3A8196062307A53E2C"><enum>(b)</enum><header>Systemic dissolution fund</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="H55A20FD5F4B342C2B5A487B65F51AA77"><enum>(c)</enum><header>Management of fund</header>
<paragraph id="HBA4C5A19A8CE4BA48FC4B605AB4564F6"><enum>(1)</enum><header>Separate maintenance</header><text display-inline="yes-display-inline">The Systemic Dissolution Fund shall be separately maintained and not commingled with any other fund of the Corporation.</text> </paragraph>
<paragraph id="H9622DE609D2C4577870D258369C29C0C"><enum>(2)</enum><header>Treatment of and accounting for assets</header><text display-inline="yes-display-inline">The assets and liabilities of the Systemic Dissolution Fund—</text>
<subparagraph id="HADEB036614AB41B68D38D1F4B6BD51F1"><enum>(A)</enum><text>shall be the assets and liabilities of the Fund and not of the Corporation; and</text> </subparagraph>
<subparagraph id="HF8C022DE0F8A44A183FCD5BA4EEF34C4"><enum>(B)</enum><text>shall not be consolidated with the assets and liabilities of the Deposit Insurance Fund or the Corporation for accounting, reporting, or any other purpose.</text> </subparagraph></paragraph></subsection>
<subsection id="H009949309EF54669B8E057231E96535E"><enum>(d)</enum><header>Rights, powers, and duties</header>
<paragraph id="HEF42AB8831F049D7B536450A609D261F"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H5FBC9F3D2E8440C1A72CC1925767EED2"><enum>(2)</enum><header>Powers as receiver for covered financial company</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H2E5166C618B4410CA36C4D2115422272"><enum>(3)</enum><header>Specific and incidental powers</header><text>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.</text> </paragraph></subsection>
<subsection id="H786EFCB7FF1941EEBEAA993204F8726F"><enum>(e)</enum><header>Staff and resources</header>
<paragraph id="HA0AF3C6F409A430EB3F099EC7E735E11"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H696FC147E9C447B788F972DCA9BBABAD"><enum>(2)</enum><header>Administrative expenses</header><text>The cost of all personnel, services, and resources provided on behalf of the Systemic Dissolution Authority shall be paid from the Systemic Dissolution Fund.</text> </paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </section>
<section id="H8FE929AB43AB465983261FA393835299" display-inline="no-display-inline"><enum>1614.</enum><header>Application of executive compensation limitations</header><text display-inline="no-display-inline">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.</text> </section>
<section id="H098CBF671A6945A4B33D26AA4E151CFF"><enum>1615.</enum><header>Study on the effect of safe harbor provisions in insolvency cases</header>
<subsection id="H3F376AEF75614FAA9EA7CE40AD2CB879"><enum>(a)</enum><header>Study</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="HC025CC0EACF144539369C3796A68E181"><enum>(1)</enum><text>how the safe harbor provisions have been applied in insolvency cases;</text></paragraph>
<paragraph id="HABC1D7C0A1E24CAA9781D3024CE02A30"><enum>(2)</enum><text>how such provisions impact the rights of parties in interest in insolvency cases;</text></paragraph>
<paragraph id="H9000EE361DBB4C6EAF76014878F00924"><enum>(3)</enum><text>whether these provisions impede or interfere with allowing a debtor a reasonable period of time to pursue rehabilitation and reorganization; and</text></paragraph>
<paragraph id="HEA82A50A2D584832A66F07BC1096673F"><enum>(4)</enum><text>whether these provisions had an adverse impact on the financial marketplace.</text></paragraph></subsection>
<subsection id="H28F315197BAE4B73A462450348356184"><enum>(b)</enum><header>Report to the Congress</header><text>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.</text></subsection></section>
<section id="H106DED7B14224B158B62778AEAE04059" display-inline="no-display-inline" section-type="subsequent-section"><enum>1616.</enum><header>Treasury study</header>
<subsection id="HEEE7DAD81E0A4DB98B8F3F29DB41864E"><enum>(a)</enum><header>Study required</header><text display-inline="yes-display-inline">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:</text>
<paragraph id="H54D9B3150C7346B88A828CCA5523B95F"><enum>(1)</enum><text display-inline="yes-display-inline">The consequences of any assessments on the overall recovery of the economy of the United States.</text></paragraph>
<paragraph id="H804F25FBB3974F808FF091B9794DBA42"><enum>(2)</enum><text>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.</text></paragraph>
<paragraph id="H7F75CF0FF3894C4DB14423C5B0E1AB8B"><enum>(3)</enum><text>The consequences of any assessments on individual sectors of the financial services industry.</text></paragraph>
<paragraph id="H1020C19160374AB1A175A3735EB982EB"><enum>(4)</enum><text>The consequences of any assessments on the financial integrity on individual firms within each sector of the financial services industry.</text></paragraph>
<paragraph id="HF3DC7C98300246E19B1383FE4C3FAEB0"><enum>(5)</enum><text>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.</text></paragraph>
<paragraph id="HC5D3F096B3EF44BBA825F6CA38FF58D8"><enum>(6)</enum><text>The implications of assessments on all relevant stakeholders, including taxpayers, depositors, insurance policyholders, investors, counterparties, and creditors. </text></paragraph>
<paragraph id="H337156EB91B64720BDDC38B294BAABE6"><enum>(7)</enum><text>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.</text></paragraph></subsection>
<subsection id="H020D9DE8387D42CC9BCE500ACC529FEE"><enum>(b)</enum><header>Report</header><text>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).</text></subsection> </section>
<section id="H7F4DF0EFE4CD4178A6EDD9171459EBFF" display-inline="no-display-inline" section-type="subsequent-section"><enum>1617.</enum><header>Priority of claims in federal deposit insurance act</header><text display-inline="no-display-inline">Section 11(d)(11)(A) of the Federal Deposit Insurance Act (12 U.S.C. 1821(d)(11)(A)) is amended—</text>
<paragraph id="H5E8BBFBF1CBA4F7DA7D4739F3C3670B3"><enum>(1)</enum><text>by redesignating clauses (iii) through (v) as clauses (iv) through (vi), respectively; and </text></paragraph>
<paragraph id="H5686E3462EA045CBB627A2445BB257EB"><enum>(2)</enum><text>by inserting after clause (ii) the following new clause (iii):</text>
<quoted-block style="OLC" display-inline="no-display-inline" id="H7785B4D6F5CB4469AA8D4AC715541B31">
<clause id="H611DAADA8A2E4C8B9D177FA9CEFADCAE"><enum>(iii)</enum><text display-inline="yes-display-inline">Any obligation of the institution owed to the Corporation as a result of the institution's default on a Corporation-guaranteed debt.</text></clause><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></section></subtitle>
<subtitle id="HEB605786D64E45C9B589F304FEC91CA3"><enum>H</enum><header>Additional improvements for financial crisis management</header>
<section id="H336DEE05F3944DD6A6665676C74A2C52"><enum>1701.</enum><header>Additional improvements for financial crisis management</header><text display-inline="no-display-inline">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:</text>
<quoted-block display-inline="no-display-inline" id="H5FC0885DA3A94FA0B26CD24844D2DBBB" style="OLC">
<subsection id="H6572D6CAE0E14194AA02C90CA81B6CDE"><enum>(c)</enum><header>Financial crisis management</header>
<paragraph id="H7704355B9AEB49B2A4FFF36B744440FD"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HDCB1FDC98C534920A4F501AAC69679C7"><enum>(2)</enum><header>Clarification of <quote>secured to the satisfaction of the Federal reserve bank</quote></header><text display-inline="yes-display-inline">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:</text>
<subparagraph id="H2FF2E657F2404A4989D816195EE7734C"><enum>(A)</enum><text display-inline="yes-display-inline">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</text> </subparagraph>
<subparagraph id="H266292789D3D4E42B04BEF55F84E0C25"><enum>(B)</enum><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph>
<paragraph id="H73ABD07A3E8A4F6C9EC0B07D73951940"><enum>(3)</enum><header>Low quality assets excluded</header><text display-inline="yes-display-inline">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:</text>
<subparagraph id="H5E5B88BA29E6413CA87640599F3B1801"><enum>(A)</enum><text>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.</text> </subparagraph>
<subparagraph id="HB33B9C51092A4D1D95D7275FF4D356D4"><enum>(B)</enum><text>An asset in a nonaccrual status.</text> </subparagraph>
<subparagraph id="H3F12E536594B400E8C84444A2F7B52FB"><enum>(C)</enum><text>An asset on which principal or interest payments are more than 30 days past due.</text> </subparagraph>
<subparagraph id="H8E6E55FF3D2C4C7DBFD9747A7F8491D7"><enum>(D)</enum><text>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.</text> </subparagraph></paragraph>
<paragraph id="H6583001F777944F09A762031379FC23F"><enum>(4)</enum><header>No single or specific beneficiaries</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H8C139303445B42B5BC631DE59FD95C47"><enum>(5)</enum><header>Evidence of unavailability of credit</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HE17FEE2602654E85A2636FE91CC5FAF9"><enum>(6)</enum><header>Congressional disapproval of additional borrowing authority</header>
<subparagraph id="HC6CECC030C0C4FAF8712EC2575A80976"><enum>(A)</enum><header>Introduction</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="H346C4D30E5214866BD00652D5422BAAB"><enum>(B)</enum><header>Consideration in the house of representatives</header>
<clause id="H9B6D05C95CF446BE924F2AFA689BBD47"><enum>(i)</enum><header>Reporting and discharge</header><text>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.</text> </clause>
<clause id="H5A331A7C602C4099BF0C3673E05DE3D3"><enum>(ii)</enum><header>Proceeding to consideration</header><text display-inline="yes-display-inline">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.</text> </clause>
<clause id="HCE01612922D44C08B521EE91053C60A4"><enum>(iii)</enum><header>Consideration</header><text>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.</text> </clause></subparagraph>
<subparagraph id="H540A41C592454CDB8A586BED3149B914"><enum>(C)</enum><header>Consideration in the senate</header>
<clause id="H82BD61EE2B154C8185F5579708FDEC51"><enum>(i)</enum><header>Placement on calendar</header><text>Upon introduction in the Senate, the joint resolution shall be placed immediately on the calendar.</text> </clause>
<clause id="HD91A50DBC9444168AFF26A1E6B6A9470"><enum>(ii)</enum><header>Floor consideration</header>
<subclause id="H36046E6505074CA0B78DE41A4E7DF813"><enum>(I)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </subclause>
<subclause id="H17FC7D8DD0EB4C5BAA87118C420FA531"><enum>(II)</enum><header>Debate</header><text>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.</text> </subclause>
<subclause id="H764166DE8DDE4F8F88520D69EECDA6C0"><enum>(III)</enum><header>Vote on passage</header><text>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.</text> </subclause>
<subclause id="HDD3C24500BF24960948693AFEFFACC80"><enum>(IV)</enum><header>Rulings of the chair on procedure</header><text>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.</text> </subclause></clause></subparagraph>
<subparagraph id="HA815761B41A3420F82AB81885FF8D1C6"><enum>(D)</enum><header>Rules relating to senate and house of representatives</header>
<clause id="HEDC6E4C7095D40568E7BF17515A92C3A"><enum>(i)</enum><header>Coordination with action by other house</header><text>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:</text>
<subclause id="H734D41D256C64DC3A9C200B9C612201D"><enum>(I)</enum><text>The joint resolution of the other House shall not be referred to a committee.</text> </subclause>
<subclause id="H08672748A8EA4FA2AB7E612C1632DD8C"><enum>(II)</enum><text>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.</text> </subclause></clause>
<clause id="H833281A54B6B4A728B8E3FC2C543872E"><enum>(ii)</enum><header>Treatment of companion measures</header><text>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.</text> </clause>
<clause id="H4E70BF3C32B94C60B90040D0F75928BB"><enum>(iii)</enum><header>Failure of joint resolution in the senate</header>
<subclause id="H17980A9F6CC4425AB03AD1581167E0AF"><enum>(I)</enum><text display-inline="yes-display-inline">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.</text> </subclause>
<subclause id="H622DDD0409C941948465E6BA7CE7BF77"><enum>(II)</enum><text>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.</text> </subclause></clause>
<clause id="HF26CEFC1444443CC8C44118D687DDAD1"><enum>(iv)</enum><header>Rules of house of representatives and senate</header><text>This paragraph and the preceding paragraphs are enacted by Congress—</text>
<subclause id="H2F994D2289AF4B82B342C26A505170BE"><enum>(I)</enum><text>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</text> </subclause>
<subclause id="H597E8F3953894D2DBDDB55684B92105A"><enum>(II)</enum><text>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.</text> </subclause></clause></subparagraph>
<subparagraph id="HA7B0136DA4614EE7B53802C72EB12C65"><enum>(E)</enum><header>Definition</header><text>In this paragraph, the term <quote>joint resolution</quote> means only a joint resolution—</text>
<clause id="HEC381B4906DF402BA7CE5481BDD3C134"><enum>(i)</enum><text>which does not have a preamble;</text> </clause>
<clause id="H8E9ED9428DEA4A959E641512BB22D378"><enum>(ii)</enum><text>the title of which is as follows: <quote>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.</quote>; and</text> </clause>
<clause id="HC180537AD76D4EC6BCDBECF0EA0C4A3A"><enum>(iii)</enum><text>the sole matter after the resolving clause of which is as follows: <quote>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</quote>, the blank space being filled with the appropriate date.</text> </clause></subparagraph>
<subparagraph id="H0B443F5418B744998A3C904655FA666B"><enum>(F)</enum><header>Nonscoring of joint resolutions of disapproval</header><text>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.</text> </subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </section>
<section id="H3318132F5B14458B8483069071DAE58D"><enum>1702.</enum><header>Certain restrictions related to foreign currency swap authority</header><text display-inline="no-display-inline">Section 14 of the Federal Reserve Act is amended by adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H9D8F64482C9F4FFBA551173A95147336" style="OLC">
<subsection id="HBCA6361837314E34B7D121B9F89A9ADC"><enum>(h)</enum><header>Certain restrictions related to foreign currency swap authority</header><text display-inline="yes-display-inline">A Federal reserve bank may not take any action pursuant to the authority provided under this section with respect to foreign currency swaps unless—</text>
<paragraph id="H1EB276A947AD4C27B5152EEBB3E7CEBE"><enum>(1)</enum><text display-inline="yes-display-inline">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</text> </paragraph>
<paragraph id="HDA0AE648C8994A4EA49737B1BF44DA28"><enum>(2)</enum><text>such action is taken with the written concurrence of the Secretary of the Treasury.</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </section>
<section id="HDFF33A2D66DE4F0D933288441694E245"><enum>1703.</enum><header>Additional oversight of financial regulatory system</header>
<subsection id="HB2738B0626EA4015BEFB32F60D8A58F5"><enum>(a)</enum><header>Council of Inspectors General on Financial Oversight</header>
<paragraph id="H921F7EF543D24DE7A257940328470E6E"><enum>(1)</enum><header>Establishment and membership</header><text display-inline="yes-display-inline">There is established a Council of Inspectors General on Financial Oversight (in this section referred to as the <quote>Council of Inspectors General</quote>) chaired by the Inspector General of the Department of the Treasury and composed of the inspectors general of the following:</text>
<subparagraph id="HE564393B92A54CE685FACA6BE94C1DA7"><enum>(A)</enum><text>The Board of Governors of the Federal Reserve System.</text> </subparagraph>
<subparagraph id="H08EFA5A7ADF8464BB23C565E0B8AA601"><enum>(B)</enum><text display-inline="yes-display-inline">The Commodity Futures Trading Commission.</text> </subparagraph>
<subparagraph id="H08816B2449FB48F28E0281D87317E680"><enum>(C)</enum><text>The Department of Housing and Urban Development.</text> </subparagraph>
<subparagraph id="H772465B05012470984AD58FCCFD19FCF"><enum>(D)</enum><text>The Department of the Treasury.</text> </subparagraph>
<subparagraph id="H125EA357821D438D98A1A3309B79E021"><enum>(E)</enum><text>The Federal Deposit Insurance Corporation.</text> </subparagraph>
<subparagraph id="HAB2907D11FB64113896C331517E21298"><enum>(F)</enum><text>The Federal Housing Finance Agency.</text> </subparagraph>
<subparagraph id="H921C16094D024E148BA39454F2DF9B21"><enum>(G)</enum><text>The National Credit Union Administration.</text> </subparagraph>
<subparagraph id="H8B4574FAD57647C8AA174002EDE78AE7"><enum>(H)</enum><text>The Securities and Exchange Commission.</text> </subparagraph>
<subparagraph commented="no" id="H1AD5CDD17D9548ADA511A1BD6DC661D4"><enum>(I)</enum><text>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))).</text> </subparagraph></paragraph>
<paragraph id="H0338E76F052F4DEAA438774C19577411"><enum>(2)</enum><header>Duties</header>
<subparagraph id="H4B128802FBA6456093DB2927DD7FDF9F"><enum>(A)</enum><header>Meetings</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="HFDFAAD116ACA46659E428E055C3C0DB7"><enum>(B)</enum><header>Annual report</header><text display-inline="yes-display-inline">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 <quote>Oversight Council</quote>) prior to the submission of its report for such year under section 1006, submit to the Oversight Council and to Congress a report including—</text>
<clause id="H592FAF9B07B8424280790CD0FEF04475"><enum>(i)</enum><text display-inline="yes-display-inline">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</text> </clause>
<clause id="H97A59B2FD51D407D95A857FDADDAE4AE"><enum>(ii)</enum><text>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.</text> </clause></subparagraph></paragraph>
<paragraph id="H9A93E3A9C8D84B96B5EFADF87883746A"><enum>(3)</enum><header>Council of Inspectors General Working Groups</header>
<subparagraph id="HD202EB6B54ED44FD860AD992641FA4A4"><enum>(A)</enum><header>Working Groups to evaluate Oversight Council</header>
<clause id="H797962D1C50F4CD0A9670DB5E39EAD30"><enum>(i)</enum><header>Convening a Working Group</header><text>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.</text> </clause>
<clause id="HBE8F9DC1494B44FD8E9965F743C8AFB9"><enum>(ii)</enum><header>Personnel and resources</header><text>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.</text> </clause>
<clause id="H296F2751FA1F4E78BEE91B6C4FB8D827"><enum>(iii)</enum><header>Reports</header><text display-inline="yes-display-inline">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.</text> </clause></subparagraph>
<subparagraph id="H4459B51F86EA45F8A497C4D383D7C0C7"><enum>(B)</enum><header>Working Groups for financial companies undergoing resolution</header>
<clause id="H0CF0303123314934A7951BEDBB0BFB7D"><enum>(i)</enum><header>Convening a Working Group</header><text>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.</text> </clause>
<clause id="H60C8510976434D89B77A32C7FB87707E"><enum>(ii)</enum><header>Personnel and resources</header><text>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.</text> </clause>
<clause id="HB5F3A88262CB44BA9B4BECE75902087A"><enum>(iii)</enum><header>Reports</header><text display-inline="yes-display-inline">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—</text>
<subclause id="H94024D3ACAC84C87A961772229C0C300"><enum>(I)</enum><text>the reasons for such financial company’s failure;</text> </subclause>
<subclause id="HB03E8634BC6545229D5231E9B0A2EC1B"><enum>(II)</enum><text>the reasons for the Secretary of the Treasury’s appointment of the Federal Deposit Insurance Corporation as receiver for such financial company; and</text> </subclause>
<subclause id="H64216C6A9C494F6485DABBDB73DB1307"><enum>(III)</enum><text>recommendations for preventing future failures of financial companies.</text> </subclause></clause></subparagraph></paragraph></subsection>
<subsection id="HCEA123B250F9408F897E150B7DF06915"><enum>(b)</enum><header>Response to report by Oversight Council</header><text display-inline="yes-display-inline">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.</text> </subsection></section></subtitle>
<subtitle id="H874F662B83734A6C923D0E174E1C53D9"><enum>I</enum><header>Miscellaneous</header>
<section id="HEE420B8309894F6E89D9032F4BC53AE2"><enum>1801.</enum><header>Inclusion of minorities and women; Diversity in agency workforce</header>
<subsection id="HD09880A51CD94B9D8FB38AAC62E11559"><enum>(a)</enum><header>Office of Minority and Women Inclusion</header>
<paragraph id="H005B017CD40F4816BB6D8A6EECB465D5"><enum>(1)</enum><header>Establishment</header><text display-inline="yes-display-inline">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 <quote>Office</quote>) 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.</text> </paragraph>
<paragraph id="H074EB0F48FF144859A78FC2D9DE7AE87"><enum>(2)</enum><header>Consolidation</header><text>Each agency that has assigned these or comparable responsibilities to existing offices shall ensure that such responsibilities are consolidated within the Office.</text> </paragraph></subsection>
<subsection id="H48D332EFD1184F57860870AECCF051A9"><enum>(b)</enum><header>Director</header>
<paragraph id="H4FCF496EC294453996180B6DE24F6BC3"><enum>(1)</enum><header>In general</header><text>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 <quote>Director</quote>), 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.</text> </paragraph>
<paragraph id="H47977270DD924E8BA49510194537CA3E"><enum>(2)</enum><header>Duties</header><text display-inline="yes-display-inline">Each Director shall—</text>
<subparagraph id="H21E17A5EF2DD4AA9AA7812780E405247"><enum>(A)</enum><text>ensure equal employment opportunity and the racial, ethnic and gender diversity of the agency’s workforce and senior management;</text> </subparagraph>
<subparagraph id="HB2D7F28FD94D46A1A2964D0E912D5AFB"><enum>(B)</enum><text>increase the participation of minority-owned and women-owned businesses in the programs and contracts of the agency;</text> </subparagraph>
<subparagraph id="HE4782B3D50384BB584C0E33AD95FA133"><enum>(C)</enum><text>provide guidance to the agency administrator to ensure that the policies and regulations of the agency strengthen minority-owned and women-owned businesses; and</text> </subparagraph>
<subparagraph id="HF7A526978F524B388BFC88AB3B523394"><enum>(D)</enum><text>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.</text> </subparagraph></paragraph></subsection>
<subsection id="H8DCFF59EC4FD497685CADB2950C43F97"><enum>(c)</enum><header>Inclusion in all levels of business activities</header>
<paragraph id="HA4D23943DBA345A58953A896D2678DF2"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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).</text> </paragraph>
<paragraph id="H1FBB9A82D5024736BC98218D22FCE2E1"><enum>(2)</enum><header>Contracts</header><text>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.</text> </paragraph>
<paragraph id="HCC0AEF2DB38849FCB5363E7ACC5473BC"><enum>(3)</enum><header>Written assurance</header><text>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.</text> </paragraph>
<paragraph id="HD83125618BAA4343897379533C496183"><enum>(4)</enum><header>Termination</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection>
<subsection id="HCDAE28563C6747E897E3B9682FA8B17B"><enum>(d)</enum><header>Applicability</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="HDB743A6422834651AC8A1B947BC012B7"><enum>(e)</enum><header>Reports</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="H0663D0CC5D6F40FBBCD310BBE7DD66B9"><enum>(1)</enum><text>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;</text> </paragraph>
<paragraph id="H3C4EFD86D7A44691A68DBEA06280965C"><enum>(2)</enum><text>the percentage of such amounts paid to businesses described in subsection (c)(1);</text> </paragraph>
<paragraph id="H898C9270C78D4B2199E6EAEE66FEE73F"><enum>(3)</enum><text>the successes achieved and challenges faced by the agency in operating minority and women outreach programs;</text> </paragraph>
<paragraph id="HAF5AE72FB18E4383A6CE8D415E93321D"><enum>(4)</enum><text>the challenges the agency may face in hiring qualified minority and women employees and contracting with qualified minority-owned and women-owned businesses; and</text> </paragraph>
<paragraph id="H20650B4A1D094D3F8A4566172223E626"><enum>(5)</enum><text>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.</text> </paragraph></subsection>
<subsection id="HABE7807845F541D99E7BB93422C5A560"><enum>(f)</enum><header>Diversity in agency workforce</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="H34204D160C2448F8802DA8251A6C73DD"><enum>(1)</enum><text>heavily recruiting at historically black colleges and universities, Hispanic-serving institutions, women's colleges, and colleges that typically serve majority minority populations;</text> </paragraph>
<paragraph id="HD7E68D5C9DC54AD6BFE567DAD5BF6853"><enum>(2)</enum><text>sponsoring and recruiting at job fairs in urban communities, and placing employment advertisements in newspapers and magazines oriented toward women and people of color;</text> </paragraph>
<paragraph id="H89ACD9324CE5499084DDADDACF39E8CE"><enum>(3)</enum><text>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;</text> </paragraph>
<paragraph id="HC78A7F511804423FBE4B871D919078F3"><enum>(4)</enum><text>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</text> </paragraph>
<paragraph id="HE834953E033A4400A610FCB37C6303CF"><enum>(5)</enum><text>such other mass media communications that the Director determines are necessary.</text> </paragraph></subsection>
<subsection id="H2F793AA9226C4612ADF784B4FEA55BEE"><enum>(g)</enum><header>Definitions</header><text>For purposes of this section:</text>
<paragraph id="H5ECBEDD2077E4818BB6FE140D7783710"><enum>(1)</enum><header>Agency</header><text display-inline="yes-display-inline">The term “agency” means—</text>
<subparagraph id="HA95F98878215417D888F13DE509F135B"><enum>(A)</enum><text>the Department of the Treasury;</text> </subparagraph>
<subparagraph id="HED9F745885984F35BD7A393F31D5FD50"><enum>(B)</enum><text>the Federal Deposit Insurance Corporation;</text> </subparagraph>
<subparagraph id="H4273C0495F2D49EF812A992D53CD8613"><enum>(C)</enum><text>the Federal Housing Finance Agency;</text> </subparagraph>
<subparagraph id="H13BF23F0CF2847178ED4E02B4F2BF967"><enum>(D)</enum><text>each of the Federal reserve banks;</text> </subparagraph>
<subparagraph id="H5ED3FFCD481440D9A3A5E69087E944E2"><enum>(E)</enum><text>the Board;</text> </subparagraph>
<subparagraph id="H200A4FAA87484E5B8B51AFB8F847EC85"><enum>(F)</enum><text>the National Credit Union Administration;</text> </subparagraph>
<subparagraph id="H5EEABE9EC0EE410A8F80E7353FAFA9E9"><enum>(G)</enum><text>the Office of the Comptroller of the Currency;</text> </subparagraph>
<subparagraph id="H549675C8B41F44B69F28D6BDC7027D44"><enum>(H)</enum><text>the Office of Thrift Supervision;</text> </subparagraph>
<subparagraph id="H905185EC55ED4106832DD4BE6570095D"><enum>(I)</enum><text>the Securities and Exchange Commission;</text> </subparagraph>
<subparagraph id="HF9D0CABF9C9A4423B6A280265DA7EE25"><enum>(J)</enum><text display-inline="yes-display-inline">the Consumer Financial Protection Agency; and</text> </subparagraph>
<subparagraph id="HDA469D93002D42989B23782DC3BB41C7"><enum>(K)</enum><text display-inline="yes-display-inline">the Federal Insurance Office,</text> </subparagraph><continuation-text continuation-text-level="paragraph">and any successors to such entities.</continuation-text></paragraph>
<paragraph id="HC5025C05456342849EC0975A1F85B98B"><enum>(2)</enum><header>Agency administrator</header><text>The term <quote>agency administrator</quote> means the head of an agency.</text> </paragraph></subsection></section>
<section id="HFAFE8C4BF02647D7959E88B929C90645" display-inline="no-display-inline" section-type="subsequent-section"><enum>1802.</enum><header>Federal Housing Finance Agency advisory role in FIEC</header><text display-inline="no-display-inline">After section 1007 of the Federal Financial Institutions Examination Council Act of 1987 (12 U.S.C. 3306) insert the following new section:</text>
<quoted-block style="OLC" display-inline="no-display-inline" id="H17309B514F7540AF928DA55E5F9BF52E">
<section id="HE0F99348DEB0461F98C1A63C2B390600"><enum>1007A.</enum><header>Federal Housing Finance Agency advisory role</header><text display-inline="no-display-inline">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.</text></section><after-quoted-block>.</after-quoted-block></quoted-block></section></subtitle>
<subtitle id="HE3065E515C1348B28D0630EA12C75619"><enum>J</enum><header>International policy coordination</header>
<section id="H4F69EB49CBBE48FCA4BA0AD356A0271D"><enum>1901.</enum><header>International policy coordination</header><text display-inline="no-display-inline">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.</text> </section></subtitle>
<subtitle id="H2ACE83F26D9145B48EB3BBBA5517F1B4"><enum>K</enum><header>International financial provisions</header>
<section id="H2FE10021B6FB4A25A7EA2809AF290389"><enum>1951.</enum><header>Access to United States financial market by foreign institutions</header>
<subsection id="H626C3521D4824414A07375F0A76C1915"><enum>(a)</enum><header>Establishment of foreign bank offices in the United States</header><text display-inline="yes-display-inline">Subsection 7(d)(3) of the International Banking Act of 1978 (12 U.S.C. 3105(d)(3)) is amended—</text>
<paragraph id="H6F194ED6E5E6414BBCF3FE1EE801CD52"><enum>(1)</enum><text>by striking <quote>and</quote> at the end of subparagraph (C);</text> </paragraph>
<paragraph id="H707AFED4D36F434BB73965D20234D68E"><enum>(2)</enum><text>by striking the period at the end of subparagraph (D) and inserting <quote>; and</quote>; and</text> </paragraph>
<paragraph id="HD6C55415FB0D441D87DCE71D0BFFC68B"><enum>(3)</enum><text>by adding at the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="HD9B33FE75AAE4D11AE228F04EFA4007B" style="OLC">
<subparagraph id="H73E73284D3C746B9A20EC72251A3B8F8"><enum>(E)</enum><text display-inline="yes-display-inline">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.</text> </subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection id="HBA49BE8519C341A581D85FD0B74AC65D"><enum>(b)</enum><header>Termination of foreign bank offices in the United States</header><text display-inline="yes-display-inline">Subsection 7(e)(1) of the International Banking Act of 1978 (12 U.S.C. 3105(e)(1)) is amended—</text>
<paragraph id="HBF96B84F8A85423997C41867AE63C8B0"><enum>(1)</enum><text>by striking <quote>or</quote> at the end of subparagraph (A);</text> </paragraph>
<paragraph id="HEE351BBD4F5A43DCA61FCE72973BDB1F"><enum>(2)</enum><text>by striking the period at the end of subparagraph (B) and inserting <quote>; or</quote>; and</text> </paragraph>
<paragraph id="H4127391EADBA4F3D8CBF52EA51AEA3E6"><enum>(3)</enum><text>by inserting after subparagraph (B), the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="H9BFFDED09A4F411D83531BD9D376795E" style="OLC">
<subparagraph id="H56842F2A69B3448D8775570D3CE92B7B"><enum>(C)</enum><text display-inline="yes-display-inline">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.</text> </subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection id="HA3B034D7514E4D1FB38AB141FD26B184"><enum>(c)</enum><header>Registration or Succession to United States Brokerage or Dealer and Termination of such Registration</header><text display-inline="yes-display-inline">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:</text>
<quoted-block display-inline="no-display-inline" id="H4FFB715644AB4F85B2F098FD9E4E4104" style="OLC">
<subsection id="HCA3FEFC893DD44A38F1B48BE313095D8"><enum>(k)</enum><header>Registration or succession to a United States broker or dealer</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="H74529E48F67142D4BE61A1F7D109C88A"><enum>(l)</enum><header>Termination of a United States broker or dealer</header><text display-inline="yes-display-inline">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.</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection></section>
<section id="H44E338AC106F4E6B8E97A11B753FE86B" display-inline="no-display-inline" section-type="subsequent-section"><enum>1952.</enum><header>Reducing TARP funds to offset costs</header><text display-inline="no-display-inline">Section 115(a)(3) of the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5225(a)(3)) is amended by striking <quote>$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</quote> and inserting <quote>$700,000,000,000, as such amount is reduced by $23,625,000,000, outstanding at any one time</quote>.</text></section></subtitle>
<subtitle id="H37C3B23792274CF8BE93C60F5C3B7A2B"><enum>L</enum><header>Securities holding companies</header>
<section id="HF262F1C183C745B8B036A96162A969C5"><enum>1961.</enum><header>Securities holding companies</header>
<subsection id="HA6A8C927AB2346D8862DAE5B3C4CE70F"><enum>(a)</enum><header>Supervision of a securities holding company not having a bank or savings association affiliate</header>
<paragraph id="H24AEBAF4DAD1455B840D2F1D9C50B87A"><enum>(1)</enum><header>In general</header><text>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—</text>
<subparagraph id="HA971964918634566B779F2E34C12E855"><enum>(A)</enum><text>a financial holding company subject to stricter standards;</text></subparagraph>
<subparagraph id="HC30C32B8924F4750959628170E5B0303"><enum>(B)</enum><text>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;</text></subparagraph>
<subparagraph id="HA91645A4590546CC9E87A07BA5760DEF"><enum>(C)</enum><text>a foreign bank, foreign company, or company that is described in section 8(a) of the International Banking Act of 1978;</text></subparagraph>
<subparagraph id="H89C35012A6024DC58B54AD9AFC337FD4"><enum>(D)</enum><text>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</text></subparagraph>
<subparagraph id="H7CA3754850C746C58B3EDEBC19DF89B9"><enum>(E)</enum><text>subject to comprehensive consolidated supervision by a foreign regulator,</text></subparagraph><continuation-text continuation-text-level="paragraph">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.</continuation-text></paragraph>
<paragraph id="H795B1E9607C9437EA950F290B013CA7E"><enum>(2)</enum><header>Registration as a supervised securities holding company</header><text>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.</text></paragraph> </subsection>
<subsection id="H596C7687E1B040F29D4472A7C5366AA1"><enum>(b)</enum><header>Supervision of securities holding companies</header>
<paragraph id="HB31C990BFCC043598292BC9329630ABA"><enum>(1)</enum><header>Recordkeeping and reporting</header>
<subparagraph id="H2614777B4556415EB6EF885EB803E891"><enum>(A)</enum><header>In general</header><text>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.</text></subparagraph>
<subparagraph id="H98BC53147CF4483F8F55D6821468DE96"><enum>(B)</enum><header>Form and contents</header><text>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—</text>
<clause id="HDA2336828E754F74AB559EAA52FB463A"><enum>(i)</enum><text>a balance sheet and income statement;</text></clause>
<clause id="H99506AEFE48044E1A086C1851DCD4AE1"><enum>(ii)</enum><text>an assessment of the consolidated capital of the supervised securities holding company;</text></clause>
<clause id="H73CDFD350E464F7F8A64EC7596ECAAD0"><enum>(iii)</enum><text>an independent auditor’s report attesting to the supervised securities holding company’s compliance with its internal risk management and internal control objectives; and</text></clause>
<clause id="H45C0645CD8B44237849030FDCA47D5BA"><enum>(iv)</enum><text>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.</text></clause></subparagraph></paragraph>
<paragraph id="H52A493B5865F4A9DBBA28CE2CAFCD4EA"><enum>(2)</enum><header>Use of existing reports</header>
<subparagraph id="H7DC31834594D437C8E497CD769391F96"><enum>(A)</enum><header>In general</header><text>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.</text></subparagraph>
<subparagraph id="H4B3BA0E6C19C4B91B4E235BAE4319363"><enum>(B)</enum><header>Availability</header><text>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.</text></subparagraph></paragraph>
<paragraph id="H537D45E289AB4DF78FFAD838688931B9"><enum>(3)</enum><header>Examination authority</header>
<subparagraph id="H9BA3BF7FF2D0490E9FE3B9131ABD3381"><enum>(A)</enum><header>Focus of examination authority</header><text>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.</text></subparagraph>
<subparagraph id="H9815A7683D7B4C6BA087C33C455CE897"><enum>(B)</enum><header>Deference to other examinations</header><text>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).</text></subparagraph></paragraph></subsection>
<subsection id="H16C734DAF26F45A494B2ABA589C07E94"><enum>(c)</enum><header>Capital and risk management</header>
<paragraph id="HF7EC7F49B51E49F7AEFEF30216287DF5"><enum>(1)</enum><text>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—</text>
<subparagraph id="H04EF65DEEEC7459D9CFD7AC773E6AF8D"><enum>(A)</enum><text>the amount and nature of the company’s financial assets;</text></subparagraph>
<subparagraph id="H7F719F92BA1B4DA6975A8C5B68700335"><enum>(B)</enum><text>the amount and nature of the company’s liabilities, including the degree of reliance on short-term funding;</text></subparagraph>
<subparagraph id="H60E1C05324DB4A4C9F35E87FED3922CC"><enum>(C)</enum><text>the extent and nature of the company’s off-balance sheet exposures;</text></subparagraph>
<subparagraph id="H1B51530CDA9646C4880575D9BE1D1D97"><enum>(D)</enum><text>the extent and nature of the company’s transactions and relationships with other financial companies;</text></subparagraph>
<subparagraph id="HEBF6E607578E45D19995A1F3A5E0ED3B"><enum>(E)</enum><text>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</text></subparagraph>
<subparagraph id="HAE5CD358349D4612A6B1C0FD5F33EC38"><enum>(F)</enum><text>the nature, scope, and mix of the company’s activities.</text></subparagraph></paragraph>
<paragraph id="H6EC012EF5F65493AA1CBB533DA35BB8F"><enum>(2)</enum><text>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.</text></paragraph>
<paragraph id="H601588A9E43D466D85A321FF88224AAE"><enum>(3)</enum><text>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.</text></paragraph></subsection>
<subsection id="H70F1217AD62D4DD481EEC9ABB54121D2"><enum>(d)</enum><header>Other provisions</header>
<paragraph id="HCC67E439517A41DF8F1EEB9D2C212ECA"><enum>(1)</enum><text>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.</text></paragraph>
<paragraph id="H330E50E332F9451D960CDE5ED34FC9DF"><enum>(2)</enum><text>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.</text></paragraph></subsection>
<subsection id="H79195AB13DEC4DD2A2791C01A95D05BD"><enum>(e)</enum><header>Definitions</header><text>For purposes of this section, the following definitions shall apply:</text>
<paragraph id="HBE99749D91A14F7C853BDAC4F2D5FB2C"><enum>(1)</enum><header>Securities holding company</header><text>The term <quote>securities holding company</quote> means—</text>
<subparagraph id="HEB52671361284F31B364446A3DCC7699"><enum>(A)</enum><text>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</text></subparagraph>
<subparagraph id="H128EE16CC9EF4AFE9D4ACCF22A6E9B15"><enum>(B)</enum><text>the associated persons of the securities holding company.</text></subparagraph></paragraph>
<paragraph id="HE551004998F84CA1A8B1A7BD15D372F0"><enum>(2)</enum><header>Supervised securities holding company</header><text>The term <quote>supervised securities holding company</quote> means any securities holding company that is supervised by the Board pursuant to this section.</text></paragraph>
<paragraph id="H12A576F70450464484BB24CB3DBC388A"><enum>(3)</enum><header>Other banking terms</header><text>The terms <quote>affiliate</quote>, <quote>bank</quote>, <quote>bank holding company</quote>, <quote>company</quote>, <quote>control</quote>, <quote>savings association</quote>, and <quote>subsidiary</quote> have the same meanings as in section 2 of the Bank Holding Company Act of 1956.</text></paragraph>
<paragraph id="HE711EF5F1230402DA04BB3C14BE9CA97"><enum>(4)</enum><header>Insured bank</header><text>The term <quote>insured bank</quote> has the same meaning as in section 13 of the Federal Deposit Insurance Act.</text></paragraph>
<paragraph id="H04E24299B4994D2FB3D23C7C7EC8CFE3"><enum>(5)</enum><header>Foreign bank</header><text>The term <quote>foreign bank</quote> has the same meaning as in section 1(b)(7) of the International Banking Act of 1978.</text></paragraph>
<paragraph id="H72EE3212493B40A09DA4EB14887AC3B9"><enum>(6)</enum><header>Associated persons</header><text>The terms <quote>person associated with a securities holding company</quote> and <quote>associated person of a securities holding company</quote> mean any person directly or indirectly controlling, controlled by, or under common control with, a securities holding company.</text></paragraph></subsection></section></subtitle>
<enum>II</enum><header>Corporate and Financial Institution Compensation Fairness Act</header>
<section id="H805FE062D6F64D8AB9C926BFAE9728E2" section-type="subsequent-section"><enum>2001.</enum><header>Short title</header><text display-inline="no-display-inline">This title may be cited as the <quote><short-title>Corporate and Financial Institution Compensation Fairness Act of 2009</short-title></quote>.</text> </section>
<section id="HF98C955904AB45B294C68FB6AFB31402"><enum>2002.</enum><header>Shareholder vote on executive compensation disclosures</header><text display-inline="no-display-inline">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:</text>
<quoted-block display-inline="no-display-inline" id="H86E896405CF34D51AE2E6C98E59F1F19" style="OLC">
<subsection id="H167B55E9A83F41C4A3C22BC00F70095F"><enum>(i)</enum><header>Annual shareholder approval of executive compensation</header>
<paragraph id="H41D57F50B1D44086B2922D1F2470A481"><enum>(1)</enum><header>Annual vote</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph commented="no" id="H2156FC489488485D973D3E8592B39D56"><enum>(2)</enum><header>Shareholder approval of golden parachute compensation</header>
<subparagraph commented="no" id="H1849CF41FA6B428EAFC247195BB7DF2E"><enum>(A)</enum><header>Disclosure</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph commented="no" id="HEF62CB55A2DE47019CB08B43C6FBF79C"><enum>(B)</enum><header>Shareholder approval</header><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph>
<paragraph id="H14FF26BEF7A74BC99035951BFFBD9AB4"><enum>(3)</enum><header>Disclosure of votes</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H4A5CE5DB4C46440BA4153DD5F213BC3B"><enum>(4)</enum><header>Rulemaking</header><text display-inline="yes-display-inline">Not later than 6 months after the date of the enactment of the <short-title>Corporate and Financial Institution Compensation Fairness Act of 2009</short-title>, the Commission shall issue final rules to implement this subsection.</text> </paragraph>
<paragraph id="H3FEAB370465E4E5B994482DC12CEEC5A"><enum>(5)</enum><header>Exemption authority</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </section>
<section id="HE09A495CC4044A1CA85277C5053C8DFA"><enum>2003.</enum><header>Compensation committee independence</header>
<subsection id="HE09F7DF71A0B459EAAF9A277AD69C843"><enum>(a)</enum><header>Standards relating to compensation committees</header><text display-inline="yes-display-inline">The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended by inserting after section 10A the following new section:</text>
<quoted-block id="HC509A2A14A154E45B6AC8957F01F9D07" style="OLC">
<section id="HB06ED16C1BAC456AA3C1783538A7BE7E"><enum>10B.</enum><header>Standards relating to compensation committees</header>
<subsection id="HC3913F5D557E49CF949A864CC823C2D0"><enum>(a)</enum><header>Commission rules</header>
<paragraph id="H1C921DE98C5149DC837FC9AA7BD15DA4"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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).</text> </paragraph>
<paragraph id="H9189A4C9CF10416DA5E4306D53392696"><enum>(2)</enum><header>Opportunity to cure defects</header><text>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.</text> </paragraph>
<paragraph id="H44A1CF40896C487EABE3C171410CEAD7"><enum>(3)</enum><header>Exemption authority</header><text>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.</text> </paragraph></subsection>
<subsection id="H98D76A3A4EEA434B8313613DEF0A5B3A"><enum>(b)</enum><header>Independence of compensation committees</header>
<paragraph id="H8D0F3916B6054ABBA8356B43BA2B5DD8"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Each member of the compensation committee of the board of directors of the issuer shall be independent.</text> </paragraph>
<paragraph id="H80C2DF2A45D942098D868E7A3E5B370E"><enum>(2)</enum><header>Criteria</header><text>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.</text> </paragraph>
<paragraph id="HE87753ACF8884EB891EBC5094973C650"><enum>(3)</enum><header>Exemption authority</header><text>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.</text> </paragraph>
<paragraph id="H82B5ADD4A6354B00A2B3F24327725448"><enum>(4)</enum><header>Definition</header><text>As used in this section, the term <term>compensation committee</term> means—</text>
<subparagraph id="H507C7AADE358410CAE45EB1D92381637"><enum>(A)</enum><text>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</text> </subparagraph>
<subparagraph id="HD78771725ADC4220B3018532A1548666"><enum>(B)</enum><text>if no such committee exists with respect to an issuer, the independent members of the entire board of directors.</text> </subparagraph></paragraph></subsection>
<subsection id="HC3548EB454FE4728855DD584FE5FA0AE"><enum>(c)</enum><header>Independence standards for compensation consultants and other committee advisors</header><text>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.</text> </subsection>
<subsection id="HCF6AD3D6EDA6486E8678AD3BE5F1DDA5"><enum>(d)</enum><header>Compensation Committee authority relating to compensation consultants</header>
<paragraph id="H12EEB30BE36B409D9C7EB3E580BB105B"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph>
<paragraph id="HA5E1B8F1F854424D8F48E098056BF770"><enum>(2)</enum><header>Disclosure</header><text display-inline="yes-display-inline">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).</text> </paragraph>
<paragraph id="H0058424FF1A347028241AEB54B238B27"><enum>(3)</enum><header>Regulations</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection>
<subsection id="HE0BADCCE880140CBBE16F195247173EE"><enum>(e)</enum><header>Authority To engage independent counsel and other advisors</header><text>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.</text> </subsection>
<subsection id="H1579DD24F9CE4A7FACB5514DF2FEE4C0"><enum>(f)</enum><header>Funding</header><text>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—</text>
<paragraph id="HE6C1256DE73046D2BD95510261399BC1"><enum>(1)</enum><text>to any compensation consultant to the compensation committee that meets the standards for independence promulgated pursuant to subsection (c); and</text> </paragraph>
<paragraph id="HEE561FC5EB734160A13CCEADA0832C8B"><enum>(2)</enum><text>to any independent counsel or other adviser to the compensation committee.</text> </paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection commented="no" id="H0C8859BA74814E29B657A45EA0A32679"><enum>(b)</enum><header>Study and review required</header>
<paragraph commented="no" id="HD6CA8683BA754DB9A0C64DD7A7EE93C9"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph>
<paragraph commented="no" id="HD387D57AD5B4421EB91DC6217588E002"><enum>(2)</enum><header>Report to Congress</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection></section>
<section display-inline="no-display-inline" id="H4FE4C529152D421EAC266FE88B5BD015" section-type="subsequent-section"><enum>2004.</enum><header>Enhanced compensation structure reporting to reduce perverse incentives</header>
<subsection id="H2D2A63D5C88D48689A2379976F7CB5B5"><enum>(a)</enum><header>Enhanced disclosure and reporting of compensation arrangements</header>
<paragraph id="HBFA88DB4EC7749D9B32C0EAC40F7192B"><enum>(1)</enum><header>In general</header><text>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—</text>
<subparagraph id="H57E3B38A78A944A6842C3B7E4450DAF5"><enum>(A)</enum><text>is aligned with sound risk management;</text> </subparagraph>
<subparagraph id="H7708A77AD29E42C5BC6729E66828F69E"><enum>(B)</enum><text>is structured to account for the time horizon of risks; and</text> </subparagraph>
<subparagraph id="H7AACBE66761F4F8FB0B60BFD043E599D"><enum>(C)</enum><text>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—</text>
<clause id="HFED3E477C6614C6980023DC9100D1DC9"><enum>(i)</enum><text>could threaten the safety and soundness of covered financial institutions; or</text> </clause>
<clause id="H191780AC169E4E67AD0A01ED06A9D429"><enum>(ii)</enum><text display-inline="yes-display-inline">could have serious adverse effects on economic conditions or financial stability.</text> </clause></subparagraph></paragraph>
<paragraph id="H06E556AE59B44E3E9D6D7916470720DF"><enum>(2)</enum><header>Rules of construction</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection>
<subsection id="HC7E994827C5E416695FA2E2616B8B736"><enum>(b)</enum><header>Prohibition on certain compensation arrangements</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="H92107ECC3B384FFCAEC2E1521A32A1CC"><enum>(1)</enum><text>could threaten the safety and soundness of covered financial institutions; or</text> </paragraph>
<paragraph id="HFD41BF9E84004602B7ADE6A9407F1762"><enum>(2)</enum><text>could have serious adverse effects on economic conditions or financial stability.</text> </paragraph></subsection>
<subsection id="H03BF1C08C7CB41B2A2ADA3A3A8163862"><enum>(c)</enum><header>Enforcement</header><text>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.</text> </subsection>
<subsection id="H82F7D94F143542E19F408EBAAE0347FB"><enum>(d)</enum><header>Definitions</header><text>As used in this section—</text>
<paragraph id="H355B320FFEB44425B9290FFCC6023DC2"><enum>(1)</enum><text>the term <term>appropriate Federal regulator</term> means—</text>
<subparagraph id="HEB8545B560C84ADCB80C89BB57278C2B"><enum>(A)</enum><text>the Board of Governors of the Federal Reserve System;</text> </subparagraph>
<subparagraph id="H0F832F5AA15F480CB2318D48BB5EAECB"><enum>(B)</enum><text>the Office of the Comptroller of the Currency;</text> </subparagraph>
<subparagraph id="H1C0626C1B33344F8886264442FC9F5E5"><enum>(C)</enum><text>the Board of Directors of the Federal Deposit Insurance Corporation;</text> </subparagraph>
<subparagraph id="H2B27AD28D6924D84920F3DCC66578E7A"><enum>(D)</enum><text>the Director of the Office of Thrift Supervision;</text> </subparagraph>
<subparagraph id="HCC527A9F732E490FB7409318F00231AB"><enum>(E)</enum><text>the National Credit Union Administration Board;</text> </subparagraph>
<subparagraph id="HA1E17C4E6A4E4A6B8320ACD681C9B508"><enum>(F)</enum><text>the Securities and Exchange Commission; and</text> </subparagraph>
<subparagraph id="HC8C4C1A950974E6D9B13024C8293DFD9"><enum>(G)</enum><text display-inline="yes-display-inline">the Federal Housing Finance Agency; and</text> </subparagraph></paragraph>
<paragraph commented="no" id="H873981030C344088A80A094535842998"><enum>(2)</enum><text>the term <term>covered financial institution</term> means—</text>
<subparagraph commented="no" id="HD3830144FE324339896DE1A7351547E3"><enum>(A)</enum><text>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);</text> </subparagraph>
<subparagraph commented="no" id="H17B90CB309B141C898E37D2198C850E9"><enum>(B)</enum><text>a broker-dealer registered under section 15 of the Securities Exchange Act of 1934 (15 U.S.C. 78o);</text> </subparagraph>
<subparagraph commented="no" id="H8B1C90D1C72A413A8A71C69AD1BB9635"><enum>(C)</enum><text display-inline="yes-display-inline">a credit union, as described in section 19(b)(1)(A)(iv) of the Federal Reserve Act;</text> </subparagraph>
<subparagraph commented="no" id="H56E9E2C0D68643579E954B9EBAB12ACD"><enum>(D)</enum><text>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));</text> </subparagraph>
<subparagraph id="H65DEB22FE7D84852BDF7B5B8EBD1F704"><enum>(E)</enum><text display-inline="yes-display-inline">the Federal National Mortgage Association;</text> </subparagraph>
<subparagraph id="H98512CA2EFCB47C8900D189E151596D2"><enum>(F)</enum><text display-inline="yes-display-inline">the Federal Home Loan Mortgage Corporation; and</text> </subparagraph>
<subparagraph commented="no" id="H291CDFC9AE124CEEBED8CE060C6D3C70"><enum>(G)</enum><text>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.</text> </subparagraph></paragraph></subsection>
<subsection id="H5B3A36DC6643412F95387B2D1780C2A4"><enum>(e)</enum><header>Exemption for certain financial institutions</header><text display-inline="yes-display-inline">The requirements of this section shall not apply to covered financial institutions with assets of less than $1,000,000,000.</text> </subsection>
<subsection id="H05A382B07529418190DC6A044A9A6E5B"><enum>(f)</enum><header>Limitation</header><text>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.</text> </subsection>
<subsection id="H84B52803C7714283864C67DE710C7C28"><enum>(g)</enum><header>GAO Study</header>
<paragraph id="HA4B8D444A5A14AFF97F802178E8211B3"><enum>(1)</enum><header>Study required</header>
<subparagraph id="H9C8BAE364E3E4643A30028D9A926101F"><enum>(A)</enum><header>In general</header><text>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.</text> </subparagraph>
<subparagraph id="H477BB3C0AD5E4B829C841ED3A931F53C"><enum>(B)</enum><header>Factors to consider</header><text>In carrying out the study required under subparagraph (A), the Comptroller General shall—</text>
<clause id="H6615956692A64C6882BAF07926892FC6"><enum>(i)</enum><text>consider compensation structures used by companies from 2000 to 2008; and</text> </clause>
<clause id="HEE22A3E5C0944F52A6FFB5B1EEE2D548"><enum>(ii)</enum><text>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.</text> </clause></subparagraph>
<subparagraph id="H768F6BE9C6C94A8EBC3EDE6A7F8DEBA0"><enum>(C)</enum><header>Determining companies that failed or nearly failed</header><text display-inline="yes-display-inline">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—</text>
<clause id="H049A80D028834F97BAE231EC1C0DDB43"><enum>(i)</enum><text>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;</text> </clause>
<clause id="H26D2D1C9AFFD481B993233D2E142AC81"><enum>(ii)</enum><text>the Federal National Mortgage Association;</text> </clause>
<clause id="H5D3AE8CFB6214976991DC6D333057476"><enum>(iii)</enum><text>the Federal Home Loan Mortgage Corporation; and</text> </clause>
<clause id="H35403AC999284A70AD2F81FCFBF4CF47"><enum>(iv)</enum><text>companies that participated in the Security and Exchange Commission’s Consolidated Supervised Entities Program as of January 2008.</text> </clause></subparagraph></paragraph>
<paragraph id="HB9C6ED647F4F42C6AB9ACF8CFCCB1CC8"><enum>(2)</enum><header>Report</header><text>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).</text> </paragraph></subsection></section>
<enum>III</enum><header>Derivative Markets Transparency and Accountability Act</header>
<section id="H88585158CE59456A9CECF2BE51FA7E74" section-type="subsequent-section"><enum>3001.</enum><header>Short title</header><text display-inline="no-display-inline">This title may be cited as the <quote><short-title>Derivative Markets Transparency and Accountability Act of 2009</short-title></quote>.</text></section>
<section id="HEEC855D9C26149468A5F57E6BDE31B5F"><enum>3002.</enum><header>Review of regulatory authority</header>
<subsection id="HCE0673D030E74A9B9857588DDB7781A7"><enum>(a)</enum><header>Consultation</header>
<paragraph id="HFFD22842FFA44EDDA2791DB9B3F1A28D"><enum>(1)</enum><header>CFTC</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="HD116C3BEBEA647299AC806D4F415F135"><enum>(2)</enum><header>SEC</header><text>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.</text></paragraph>
<paragraph id="H2A8A51FC318A491DB54441F15FE0B974"><enum>(3)</enum><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H3BBE9AA7E7EF4A7EACBBE1AA1D65513D"><enum>(4)</enum><text>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.</text></paragraph>
<paragraph id="H4AACA5191F5F4CEFB2A26DC76E4260BC"><enum>(5)</enum><text>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.</text></paragraph></subsection>
<subsection id="HD8AFDDA26AD048A78919393FE067B67A"><enum>(b)</enum><header>Limitation</header>
<paragraph id="H56747654ACE6409C95FFF10BA0057945"><enum>(1)</enum><header>CFTC</header><text>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—</text>
<subparagraph id="HF68ED3A05DA54F92AEB233A192D6978C"><enum>(A)</enum><text>security-based swaps; or</text></subparagraph>
<subparagraph id="H8420C1F2000A4F68BBB905359D1FE3A8"><enum>(B)</enum><text>with regard to their activities or functions concerning security-based swaps—</text>
<clause id="HA65B0C781070430692690A45EED9123C"><enum>(i)</enum><text>security-based swap dealers;</text></clause>
<clause id="H82F9A978A44746DBB5DFBEA8F93EA889"><enum>(ii)</enum><text>major security-based swap participants;</text></clause>
<clause id="H3AC552BDE20648B19F41E8D4767AFDE4"><enum>(iii)</enum><text>security-based swap repositories;</text></clause>
<clause id="HB703EBE76CE94437B4B44173832B8E38"><enum>(iv)</enum><text>persons associated with a security-based swap dealer or major security-based swap participant;</text></clause>
<clause id="H9EC0E8FE2E544DE3B97BA883D370B6A1"><enum>(v)</enum><text>eligible contract participants with respect to security-based swaps; or</text></clause>
<clause id="HFCA45C886A074498A0AAFE9DAFF3C416"><enum>(vi)</enum><text>swap execution facilities.</text></clause></subparagraph></paragraph>
<paragraph id="HF8CDB17D4AE44FDD92D28B404EF034DE"><enum>(2)</enum><header>SEC</header><text display-inline="yes-display-inline">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—</text>
<subparagraph id="H96D29B7226384D9998397BCE325A566C"><enum>(A)</enum><text>swaps; or</text></subparagraph>
<subparagraph id="H8732F20CE73E4C3B93F0AE28A07E4D52"><enum>(B)</enum><text>with regard to their activities or functions concerning swaps—</text>
<clause id="H6A81C28FA0BB4F959D5D74E8EACC95AE"><enum>(i)</enum><text>swap dealers;</text></clause>
<clause id="HB09733EEE3C14D7DB5055C40C7E2065D"><enum>(ii)</enum><text>major swap participants;</text></clause>
<clause id="H263F7297D69B4CDCB4E413CE6CA704DB"><enum>(iii)</enum><text>swap repositories;</text></clause>
<clause id="H86E86150DF434683BB6649F6C36E602F"><enum>(iv)</enum><text>persons associated with a swap dealer or major swap participant;</text></clause>
<clause id="H1C69CF1112814003A57FFD8C643DD165"><enum>(v)</enum><text>eligible contract participants with respect to swaps; or</text></clause>
<clause id="H6E52E60B3DB14177BA422C123A535A0E"><enum>(vi)</enum><text>swap execution facilities.</text></clause></subparagraph></paragraph></subsection>
<subsection id="H592B0D402CD94847814362ACED566E7E"><enum>(c)</enum><header>Objection to commission regulation</header>
<paragraph id="H17D1BA4D83EF448AAB5DDD1B8AC4F8C3"><enum>(1)</enum><header>Filing of petition for review</header><text>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.</text></paragraph>
<paragraph id="HF356981FAA304B62894BDCA7C201FEFF"><enum>(2)</enum><header>Transmittal of petition and record</header><text>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.</text></paragraph>
<paragraph id="H3DA1BF92395A4BA08364BA5993621B06"><enum>(3)</enum><header>Standard of review</header><text>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.</text></paragraph>
<paragraph id="H962AE2BD955F435D9EFD8E1FC7AD8D0E"><enum>(4)</enum><header>Judicial stay</header><text>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).</text></paragraph></subsection>
<subsection id="H66D93B79944C4B148695DC140B00F2DD"><enum>(d)</enum><header>Definitions</header><text display-inline="yes-display-inline">In this section, the terms <term>Prudential Regulators</term>, <term>swap</term>, <term>swap dealer</term>, <term>major swap participant</term>, <term>swap repository</term>, <term>person associated with a swap dealer or major swap participant</term>, <term>eligible contract participant</term>, <term>swap execution facility</term>, <term>security-based swap</term>, <term>security-based swap dealer</term>, <term>major security-based swap participant</term>, <term>security-based swap repository</term>, and <term>person associated with a security-based swap dealer or major security-based swap participant</term> shall have the meanings provided, respectively, in the Commodity Exchange Act, including any modification of the meanings under section 3101(b) of this Act.</text></subsection>
<subsection id="HBD88447A308F46098286DC42A8205B2B"><enum>(e)</enum>
<paragraph id="HCDA649E0D3584FCABFE017593F016C89" display-inline="yes-display-inline"><enum>(1)</enum><text display-inline="yes-display-inline">Notwithstanding subsections (b) and (c), the Commodity Futures Trading Commission and the Securities Exchange Commission shall jointly adopt rules to—</text>
<subparagraph id="HE10C6C87832C49BEB818CE4CAE17122F" indent="up1"><enum>(A)</enum><text>define the terms <term>security-based swap agreement</term> in section 3(a)(76) of the Securities Exchange Act of 1934 and <quote>swap</quote> in section 1a(35)(A)(v) of the Commodity Exchange Act;</text></subparagraph>
<subparagraph id="H651529250ED6415AB0AADA25235F9158" indent="up1"><enum>(B)</enum><text>require the maintenance of records of all activities related to transactions defined in subparagraph (A) that are not cleared; and</text></subparagraph>
<subparagraph id="HCFF69383408645D3B2E4F50C5721B6B8" indent="up1"><enum>(C)</enum><text>make available to the Securities and Exchange Commission information relating to transactions defined in subparagraph (A) that are uncleared.</text></subparagraph></paragraph>
<paragraph id="H288FD3C84125452AAE4CAF9827C1C8F5" indent="up1"><enum>(2)</enum><text>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—</text>
<subparagraph id="H19856849A9594B0394508B29C049DE28"><enum>(A)</enum><text>within a reasonable time after receiving the request;</text></subparagraph>
<subparagraph id="H4CF8230A153348508CF9DC1B4E3F73B2"><enum>(B)</enum><text>after consideration of relevant information provided by each Commission; and</text></subparagraph>
<subparagraph id="H66FBEE61E77C479DB425B1FE2BCD501C"><enum>(C)</enum><text>by agreeing with one of the Commissions regarding the entirety of the matter or by determining a compromise position.</text></subparagraph></paragraph></subsection></section>
<section id="H35B37602592B4425961A6D5C1F9D88F0"><enum>3003.</enum><header>International harmonization</header>
<subsection id="HF5D0F8BDDD8F41F3A35A8FB92C7AE2E1"><enum>(a)</enum><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="HAA6F0C26CCE344E0B06211871D2152D8"><enum>(b)</enum><text display-inline="yes-display-inline">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.</text></subsection></section>
<section id="HCD25220241C249E6AB542C9108AA6A8A"><enum>3004.</enum><header>Prohibition against government assistance</header>
<subsection id="H0F8650ECE4144560B3DED5035F811A36"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="H9828BD5E34B445D697FF7B154692B2A6"><enum>(b)</enum><header>Definition</header><text>For the purposes of this section, the term <term>Federal assistance</term> means the use of public funds for the purposes of—</text>
<paragraph id="HA89C95B4144F437F9975783A7054B236"><enum>(1)</enum><text>making loans to, or purchasing any debt obligation of, a derivatives clearing organization, a clearing agency, or a subsidiary of either;</text></paragraph>
<paragraph id="HFF5247375E52411F928BA4511C792C36"><enum>(2)</enum><text>purchasing assets of a derivatives clearing organization, a clearing agency, or a subsidiary of either;</text></paragraph>
<paragraph id="H11679DF622E244B5A08DD333D365578E"><enum>(3)</enum><text>assuming or guaranteeing the obligations of a derivatives clearing organization, a clearing agency, or a subsidiary of either; or</text></paragraph>
<paragraph id="H9CDA0DC7642A483D9B241297B10E614B"><enum>(4)</enum><text>acquiring any type of equity interest or security of a derivatives clearing organization, a clearing agency, or a subsidiary of either.</text></paragraph></subsection></section>
<section id="HCBED58B3992641158E366163D370CF3E"><enum>3005.</enum><header>Studies</header>
<subsection id="H513DC0B5AB5B4EFEABBB59CAA42E1B7F" display-inline="no-display-inline"><enum>(a)</enum><header>Study on effects of position limits on trading on exchanges in the United States</header>
<paragraph id="HD5CA4E85774946DB8929CF40F3B61434"><enum>(1)</enum><header>Study</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="HD7BDCD9CCF0F4F7DB3976BBD0C4458C8"><enum>(2)</enum><header>Report to the Congress</header><text>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).</text></paragraph>
<paragraph id="HA6863C3177B343C8A7C8585116946E7E"><enum>(3)</enum><text>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.</text></paragraph>
<paragraph id="H6273375933AD4442B87C3E19E71B5952"><enum>(4)</enum><text>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.</text></paragraph></subsection>
<subsection id="H47D0C9A24AE8430CBD688F412791B7BE" display-inline="no-display-inline"><enum>(b)</enum><header>Study on feasibility of requiring use of standardized algorithmic descriptions for financial derivatives</header>
<paragraph id="H1D8480CEAF964A4AACF5DCE9B831CAF3"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H56E791E9C2A246539FA017C2EBA2C6D2"><enum>(2)</enum><header>Goals</header><text display-inline="yes-display-inline">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:</text>
<subparagraph id="H17EAFBA2FD8B479F8738310410CDC717"><enum>(A)</enum><text>commercial users and traders of derivatives;</text></subparagraph>
<subparagraph id="HAFE3E77270424FDD9749EF607DA9C5E0"><enum>(B)</enum><text>derivative clearing houses, exchanges and electronic trading platforms;</text></subparagraph>
<subparagraph id="H02BDEC794F814CF6BAE12DFE2B55F568"><enum>(C)</enum><text>trade repositories and regulator investigations of market activities; and</text></subparagraph>
<subparagraph id="H6D50335B8F304CA583F60C3CDEAF79F5"><enum>(D)</enum><text display-inline="yes-display-inline">systemic risk regulators.</text></subparagraph><continuation-text continuation-text-level="paragraph">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. </continuation-text></paragraph>
<paragraph id="H85F74AACB1E541C1961917F8F74EE8D5"><enum>(3)</enum><header>International coordination</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H909825FA9E5F4B89BBDEBE9221ECBBBA"><enum>(4)</enum><header>Report</header><text display-inline="yes-display-inline">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).</text></paragraph></subsection>
<subsection id="HB87FD667AD4343F983E7DF0ED53B4D70"><enum>(c)</enum><header>Study of desirability and feasibility of establishing single regulator for all transactions involving financial derivatives</header>
<paragraph id="H631FCBEF636645DFB0E4FAD208F39C84"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="HDA4DE292D88D42379CA219C06324AF07"><enum>(2)</enum><header>Report to the Congress</header><text display-inline="yes-display-inline">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).</text></paragraph></subsection></section>
<section id="HB1A6627AA9474C34B7CE633E0919BD59"><enum>3006.</enum><header>Recommendations for changes to insolvency laws</header><text display-inline="no-display-inline">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—</text>
<paragraph id="HC9FF965D12FF40959FEA63A74B85C7FF"><enum>(1)</enum><text>in order to enhance the legal certainty with respect to swap participants clearing non-proprietary swap positions with a swap clearinghouse, including—</text>
<subparagraph id="HE5083168C92A4766B10E448BD543F7B0"><enum>(A)</enum><text>customer rights to recover margin deposits or custodial property held at or through an insolvent swap clearinghouse, or clearing participant; and</text></subparagraph>
<subparagraph id="H53EC3854718144DAB1D07AE2ED3352ED"><enum>(B)</enum><text>the enforceability of clearing rules relating to the portability of customer swap positions (and associated margin) upon the insolvency of a clearing participant;</text></subparagraph></paragraph>
<paragraph id="H912B1328B30C4600A8174FE8ABF403F9" display-inline="no-display-inline"><enum>(2)</enum><text display-inline="yes-display-inline">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</text></paragraph>
<paragraph id="HA5E44C3F9AA74A2AAEAAA74896E0B808"><enum>(3)</enum><text display-inline="yes-display-inline">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))).</text></paragraph></section>
<section id="H88E7B71481114C7093271F6B1BFE1F7A" display-inline="no-display-inline" section-type="subsequent-section"><enum>3007.</enum><header>Abusive swaps</header><text display-inline="no-display-inline">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.</text></section>
<section id="HBF0440C5DE044AAC8979DDDF56B1348B"><enum>3008.</enum><header>Authority to prohibit participation in swap activities</header><text display-inline="no-display-inline">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.</text></section>
<section id="HC79EE038BDE64AB0BE2193C6F3D062AF"><enum>3009.</enum><header>Memorandum</header>
<subsection id="H8F3A8D7E9E344BC48D121EE613D5EF22"><enum>(a)</enum>
<paragraph id="H4D3AE5A0CECB4707BC91C5203C30667D" display-inline="yes-display-inline"><enum>(1)</enum><text display-inline="yes-display-inline">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—</text>
<subparagraph id="HC7E2F0B28A274D17BFE2FDFAEF1BDA1A" indent="up1"><enum>(A)</enum><text>applying their respective authorities in a manner so as to ensure effective and efficient regulation in the public interest;</text></subparagraph>
<subparagraph id="H54337CDA06B24B86BAC83FE6463E9DD3" indent="up1"><enum>(B)</enum><text>resolving conflicts concerning overlapping jurisdiction between the two agencies; and</text></subparagraph>
<subparagraph id="HCF9BE22F3E2940D5A3E3A81E847E7E34" indent="up1"><enum>(C)</enum><text>avoiding, to the extent possible, conflicting or duplicative regulation.</text></subparagraph></paragraph>
<paragraph id="H241D0123220F4E8784BC5A71C813FD43" indent="up1"><enum>(2)</enum><text>Such memorandum and any subsequent amendments to the memorandum shall be promptly submitted to the appropriate committees of Congress.</text></paragraph></subsection>
<subsection id="H819FF3222E8143999E81FAEDF0617BF1"><enum>(b)</enum><text>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.</text></subsection></section>
<subtitle id="H63A477D36A8C40878783DFAA0495B74B"><enum>A</enum><header>Regulation of Swap Markets</header>
<section id="H6EB314D83E75400CAD3329F8927AE825"><enum>3101.</enum><header>Definitions</header>
<subsection id="H50529562B4E147A5B79BE3E18E2C1A3C"><enum>(a)</enum><header>Amendments to definitions in the commodity exchange act</header><text>Section 1a of the Commodity Exchange Act (7 U.S.C. 1a) is amended—</text>
<paragraph id="HA1196679BDA84BF2AB0BB7E63FC1E445"><enum>(1)</enum><text>in paragraph (12)(A)—</text>
<subparagraph id="H6355C12C467D4E4F8DFC3EA398AD23D4" display-inline="no-display-inline"><enum>(A)</enum><text>in clause (vii)(III), by striking <quote>$25,000,000</quote> and inserting <quote>$50,000,000</quote>; and</text></subparagraph>
<subparagraph id="H77596222429B4FFAA2AAEB47FE198ACC"><enum>(B)</enum><text>in clause (xi), by striking <quote>total assets in an amount</quote> and inserting <quote>amounts invested on a discretionary basis</quote>;</text></subparagraph></paragraph>
<paragraph id="H3618AE4DE9E64A00BD2D46B8FB177FC4"><enum>(2)</enum><text>in paragraph (29)—</text>
<subparagraph id="HB7C53BE37FF549529B90A43F0C0F200E"><enum>(A)</enum><text>in subparagraph (D), by striking <quote>and</quote>;</text></subparagraph>
<subparagraph id="H09C3116CAF0449438DD238F30F9B5C1D"><enum>(B)</enum><text>by redesignating subparagraph (E) as subparagraph (G); and</text></subparagraph>
<subparagraph id="HEB501D08A96548C4AA4783EA0B710F9B"><enum>(C)</enum><text>by inserting after subparagraph (D) the following:</text>
<quoted-block id="H00DA67270C6A4CDFA8EF8A01DF360606" style="OLC">
<subparagraph id="HE502AA124E9C4C05A490462374D91507"><enum>(E)</enum><text>a swap execution facility registered under section 5h;</text></subparagraph>
<subparagraph id="H627CF94ADBE74C13AA41B7D2B2C94BD0"><enum>(F)</enum><text>a swap repository; and</text></subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block></subparagraph></paragraph>
<paragraph id="H2976F5A6011D4D17964F62E1FA80A910" display-inline="no-display-inline"><enum>(3)</enum><text display-inline="yes-display-inline">by adding at the end the following:</text>
<quoted-block style="OLC" display-inline="no-display-inline" id="H0A5829096F8242A7850E1E208BD4DF83">
<paragraph id="H197EFCA1BDD74BBCB6AA480C9CA9CAD8"><enum>(35)</enum><header>Swap</header>
<subparagraph id="H72F76A8F28924F42A6921C6E86326DDE"><enum>(A)</enum><header>In general</header><text>Except as provided in subparagraph (B), the term <term>swap</term> means any agreement, contract, or transaction that—</text>
<clause id="HEE9BCDB32A4C47068881C2BA620618E0"><enum>(i)</enum><text>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;</text></clause>
<clause id="H3618A5387B6C41EDBAEB3BD33BAE095B"><enum>(ii)</enum><text>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;</text></clause>
<clause id="H2367F3D814F44C71A98478CC040460E8"><enum>(iii)</enum><text>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;</text></clause>
<clause id="HD4326A27729E4438A0B9D5BDEB9F9774"><enum>(iv)</enum><text>is, or in the future becomes, commonly known to the trade as a swap;</text></clause>
<clause id="HF526147A694A4895966C104B596E2870"><enum>(v)</enum><text display-inline="yes-display-inline">meets the definition of <quote>swap agreement</quote> 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</text></clause>
<clause id="H5EEFC54EB93E49118BD2C59D58BD08C9"><enum>(vi)</enum><text>is any combination or permutation of, or option on, any agreement, contract, or transaction described in any of clauses (i) through (v).</text></clause></subparagraph>
<subparagraph id="HF7FE1FFBEF5E41BEB28FFBBDC405DED3"><enum>(B)</enum><header>Exclusions</header><text>The term <term>swap</term> does not include—</text>
<clause id="H279900AE4CE04E55B11B975C2147167F"><enum>(i)</enum><text>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;</text></clause>
<clause id="H23A7799EDEF14C58A21D08996D1378F1"><enum>(ii)</enum><text>any sale of a nonfinancial commodity or security for deferred shipment or delivery, so long as the transaction is intended to be physically settled;</text></clause>
<clause id="HF0F3FAD9691F4A57BC321B41509C2976"><enum>(iii)</enum><text>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.);</text></clause>
<clause id="H0393450D053F41D1B7A9339B61771C3A"><enum>(iv)</enum><text>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));</text></clause>
<clause id="H3A488E0A511544768DE31388A32914F8"><enum>(v)</enum><text>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.);</text></clause>
<clause id="H5CB6AF6C06BA4F47AA0166E91CD91507"><enum>(vi)</enum><text>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;</text></clause>
<clause id="H60AB99AAC10248DBB129D0421F5B60C5"><enum>(vii)</enum><text>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));</text></clause>
<clause id="H4895B3D8CAB540F4AF2D3AF495A4A981"><enum>(viii)</enum><text>any agreement, contract, or transaction that is—</text>
<subclause id="HA81AB9AE715B40D6BCA4A8CC80C0FC61"><enum>(I)</enum><text>based on a security; and</text></subclause>
<subclause id="HF8A99A19C76340F7A9C9B76895A89084"><enum>(II)</enum><text>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;</text></subclause></clause>
<clause id="H5A7F20EDE30149C99745245DAC431E8A"><enum>(ix)</enum><text display-inline="yes-display-inline">any foreign exchange forward;</text></clause>
<clause id="H906889FC33F0467D821277CBF79A49CC"><enum>(x)</enum><text>any foreign exchange swap;</text></clause>
<clause id="HD48DE51A35684DBB9DF24808240AF644"><enum>(xi)</enum><text>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</text></clause>
<clause id="H5443071D68DD42C98E0DE74B4F482A44"><enum>(xii)</enum><text>any security-based swap.</text></clause></subparagraph>
<subparagraph id="H9BB4FE7918894DE0B3C263E907F41D3D"><enum>(C)</enum><header>Rule of construction regarding master agreements</header><text>The term <term>swap</term> 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).</text></subparagraph>
<subparagraph id="H3107FA2249994BCE9C5B9464F4057BFA"><enum>(D)</enum><header>Foreign exchange swaps and forwards exception</header>
<clause id="HDB2B29D54DB64FDDB3FFCAC07594BD6D"><enum>(i)</enum><header>In general</header><text>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.</text></clause>
<clause id="HA6E097EF348643F68999E239321C63FF"><enum>(ii)</enum><header>Scope of authority</header>
<subclause id="HE2DF8DDA34B3465EB2003FA3E06214A9"><enum>(I)</enum><text>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.</text></subclause>
<subclause id="H132B014797204813855972E2956F6DE8"><enum>(II)</enum><text>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. </text></subclause></clause>
<clause id="H91453C8FC8544D6DAD0DDD0EF4B6477A"><enum>(iii)</enum><header>Reporting</header><text>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.</text></clause>
<clause id="HA7E7E6B70D84408BAE80ABED82C7838B"><enum>(iv)</enum><header>Secretary</header><text>For purposes of this subparagraph only, the term ‘Secretary’ means the Secretary of the Treasury.</text></clause></subparagraph></paragraph>
<paragraph id="HDA4056D445BF4CE1A980FDD960A472C9" display-inline="no-display-inline"><enum>(36)</enum><header>Board</header><text>The term <term>Board</term> means the Board of Governors of the Federal Reserve System.</text></paragraph>
<paragraph id="HF2B64EF8808C47E69603F16B3D577C4E"><enum>(37)</enum><header>Security-based swap</header><text display-inline="yes-display-inline">The term <term>security-based swap</term> has the same meaning as in section 3(a)(68) of the Securities and Exchange Act of 1934.</text></paragraph>
<paragraph id="HCCEB51DF7D684A838B4933E7E9FC3B00"><enum>(38)</enum><header>Swap dealer</header>
<subparagraph id="H2EBCB541E0E64F899876B08BB08926A4"><enum>(A)</enum><header>In general</header><text>The term <term>swap dealer</term> means any person who—</text>
<clause id="H50877C87AF434E2AB872DA3D6DB97C1A"><enum>(i)</enum><text display-inline="yes-display-inline">holds itself out as a dealer in swaps;</text></clause>
<clause id="H37139E9FD74C4C63AA691F503FCC435B"><enum>(ii)</enum><text>makes a market in swaps;</text></clause>
<clause id="H488053921F8543989DFE3F5C1F7E92CD"><enum>(iii)</enum><text>regularly engages in the purchase of swaps and their resale to customers in the ordinary course of a business; or</text></clause>
<clause id="H7F4CBC57E1354AE7969429FF846CA1DF"><enum>(iv)</enum><text>engages in any activity causing the person to be commonly known in the trade as a dealer or market maker in swaps.</text></clause></subparagraph>
<subparagraph id="H6C4F32466FF0456881F3665D1F08C225"><enum>(B)</enum><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="H86BBA30A9900410697DC9278C7CE8C77"><enum>(C)</enum><header>De minimus exception</header><text display-inline="yes-display-inline">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.</text></subparagraph></paragraph>
<paragraph id="HD9C2338644C74EB0B1B7355BD09C4A2D" display-inline="no-display-inline"><enum>(39)</enum><header>Major swap participant</header>
<subparagraph id="H1A8CF29D0EC34988AA0D22481A7C6D5E"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">The term <term>major swap participant</term> means any person who is not a swap dealer, and—</text>
<clause id="HB421396F6A814E009BA525C45B267B1F"><enum>(i)</enum><text display-inline="yes-display-inline">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</text></clause>
<clause id="H20F33C6E2F444D0D94BA7C497423C7D4"><enum>(ii)</enum><text display-inline="yes-display-inline">whose outstanding swaps create substantial net counterparty exposure among the aggregate of its counterparties that could expose those counterparties to significant credit losses.</text></clause></subparagraph>
<subparagraph id="H6A3F245AA0984CE982A15D7201BC1568"><enum>(B)</enum><header>Definition of substantial net position</header><text display-inline="yes-display-inline">The Commission shall define by rule or regulation the terms <quote>substantial net position</quote>, <quote>substantial net counterparty exposure</quote>, and <quote>significant credit losses</quote> 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.</text></subparagraph>
<subparagraph id="H78DF68F99F214B96B8163C51671808BB"><enum>(C)</enum><text display-inline="yes-display-inline">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.</text></subparagraph></paragraph>
<paragraph id="H7D7432C31368482E83B340A8BB24B34A" display-inline="no-display-inline"><enum>(40)</enum><header>Major security-based swap participant</header><text display-inline="yes-display-inline">The term <term>major security-based swap participant</term> has the same meaning as in section 3(a)(67) of the Securities Exchange Act of 1934.</text></paragraph>
<paragraph id="HCB5EF83D1B4648D58631271D334C882D"><enum>(41)</enum><header>Appropriate federal banking agency</header><text>The term <term>appropriate Federal banking agency</term> has the same meaning as in section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)).</text></paragraph>
<paragraph id="H2FB8188B8DCF436CBB3C68F5EFE9888B"><enum>(42)</enum><header>Prudential regulator</header><text>The term <term>Prudential Regulator</term> means—</text>
<subparagraph id="H5395331C761B447A96D959AEA3405A36"><enum>(A)</enum><text>the Board in the case of a swap dealer, major swap participant, security-based swap dealer, or major security-based swap participant that is—</text>
<clause id="HCDE9846047904489B15B3702B5C14EA0"><enum>(i)</enum><text>a State-chartered bank that is a member of the Federal Reserve System; or</text></clause>
<clause id="H15D8E3A6F3D64685BC5A1A023F7FA655"><enum>(ii)</enum><text>a State-chartered branch or agency of a foreign bank;</text></clause></subparagraph>
<subparagraph id="H9070F5D2B97B46FC8F0998E2E5DE903A"><enum>(B)</enum><text>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—</text>
<clause id="H98F9B6A221DB4F3A993A195C7B7D7164"><enum>(i)</enum><text>a national bank; or</text></clause>
<clause id="H9E098995E472414A985A95A8D1432DB5"><enum>(ii)</enum><text>a federally chartered branch or agency of a foreign bank; and</text></clause></subparagraph>
<subparagraph id="H73D9C8E5DFB4432DBC68437E4CDA6C5A"><enum>(C)</enum><text>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.</text></subparagraph></paragraph>
<paragraph id="H34EACB70F624493F96A8F64E94AC0912" display-inline="no-display-inline"><enum>(43)</enum><header>Security-based swap dealer</header><text display-inline="yes-display-inline">The term <term>security-based swap dealer</term> has the same meaning as in section 3(a)(71) of the Securities Exchange Act of 1934.</text></paragraph>
<paragraph id="HBD8FD18474DE45FC90DD417978A256EC"><enum>(44)</enum><header>Foreign exchange forward</header><text>The term <term>foreign exchange forward</term> 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.</text></paragraph>
<paragraph id="HBAEADDF1393C4AC1B9285A2C43D454A5"><enum>(45)</enum><header>Foreign exchange swap</header><text>The term <term>foreign exchange swap</term> 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.</text></paragraph>
<paragraph id="H1B71BE84E21446109CB6633313C000E0"><enum>(46)</enum><header>Person associated with a security-based swap dealer or major security-based swap participant</header><text display-inline="yes-display-inline">The term <term>person associated with a security-based swap dealer or major security-based swap participant</term> or <term>associated person of a security-based swap dealer or major security-based swap participant</term> has the same meaning as in section 3(a)(70) of the Securities Exchange Act of 1934.</text></paragraph>
<paragraph id="HBC7C434A9F09489096D737F6BBC41A0E"><enum>(47)</enum><header>Person associated with a swap dealer or major swap participant</header><text>The term <term>person associated with a swap dealer or major swap participant</term> or <term>associated person of a swap dealer or major swap participant</term> 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).</text></paragraph>
<paragraph id="H20E336805C96402490BD0F47DEC6F375"><enum>(48)</enum><header>Swap repository</header><text display-inline="yes-display-inline">The term <term>swap repository</term> 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.</text></paragraph>
<paragraph id="H8C82E8B6D7D54D108714DD4B0EA4528E"><enum>(49)</enum><header>Swap execution facility</header><text display-inline="yes-display-inline">The term <term>swap execution facility</term> 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.</text></paragraph>
<paragraph id="H1C5298B077154A588CD5232214DE35A3"><enum>(50)</enum><header>Derivative</header><text display-inline="yes-display-inline">The term <term>derivative</term> means—</text>
<subparagraph id="HD770A4B213AE416593FD6F36AB84395B"><enum>(A)</enum><text>a contract of sale of a commodity for future delivery; or</text></subparagraph>
<subparagraph id="HC7E1E966606B4283A607A28F5DC2EC1C"><enum>(B)</enum><text>a swap.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H685CDA6D192245748B898DB3B9CD1E79"><enum>(b)</enum><header>Authority to further define terms</header><text display-inline="yes-display-inline">The Commodity Futures Trading Commission shall adopt a rule further defining the terms <term>swap</term>, <term>swap dealer</term>, <term>major swap participant</term>, and <term>eligible contract participant</term> for the purpose of including transactions and entities that have been structured to evade this title.</text></subsection>
<subsection id="H6CEA4455F6D4447F93FF9770129674C0"><enum>(c)</enum><header>Exemptions</header><text>Section 4(c) of the Commodity Exchange Act (7 U.S.C. 4(c)) is amended by adding at the end the following: <quote>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 <short-title>Derivative Markets Transparency and Accountability Act of 2009</short-title>, 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.</quote>.</text></subsection></section>
<section id="HF9CCD44F600246459F98A8EBE463DBDE"><enum>3102.</enum><header>Jurisdiction</header>
<subsection id="H5E803CFCC18941288A2618D25A3215EE"><enum>(a)</enum><header>Exclusive jurisdiction</header><text>Section 2(a)(1) of the Commodity Exchange Act (7 U.S.C. 2(a)(1)) is amended—</text>
<paragraph id="H532D83D227014F2ABC1668944F2B29AE"><enum>(1)</enum><text>in the 1st sentence of subparagraph (A)—</text>
<subparagraph id="H491086C8FE894C9DB959543B1FF02275"><enum>(A)</enum><text>by striking <quote>(c) through (i)</quote> and inserting <quote>(c) and (f)</quote>;</text></subparagraph>
<subparagraph id="H108F7208B6B745BEBB1C452E0FDB641C"><enum>(B)</enum><text>by inserting <quote>swaps, or</quote> before <quote>contracts of sale</quote>;</text></subparagraph>
<subparagraph id="HFE646654A8B944A89F0CE4BCFFD91F2D"><enum>(C)</enum><text display-inline="yes-display-inline">by striking <quote>derivatives transaction execution facility</quote> and inserting <quote>swap execution facility</quote>; and</text></subparagraph>
<subparagraph id="H03E9F7057AB34172815C60DE23532E2D"><enum>(D)</enum><text>by striking <quote>5a</quote> and inserting <quote>5h</quote>; and</text></subparagraph></paragraph>
<paragraph id="H91CD64A6A7BA42A786068585E5D64533"><enum>(2)</enum><text>by adding at the end the following:</text>
<quoted-block style="OLC" id="H2C7D017DC5C243FFA2E535DA8ABA6E26" display-inline="no-display-inline">
<subparagraph id="HA14BE640C1A148E59675A0293AE3B201"><enum>(G)</enum>
<clause id="H0C58BDCC4C16492EB0F4EC44C1F5BB22" display-inline="yes-display-inline"><enum>(i)</enum><text>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.</text></clause>
<clause id="H93BDFC600E1747F18796535AD234935A" indent="up1"><enum>(ii)</enum><text display-inline="yes-display-inline">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).</text></clause></subparagraph>
<subparagraph id="H6A04F08B92FE4C968B84C3E57242B3C9"><enum>(H)</enum>
<clause id="HAEE6102AF5034138ADBEE81CCF355248" display-inline="yes-display-inline"><enum>(i)</enum><text>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—</text>
<subclause id="HCF95DA6E3C1F422EA05BDB4CEAEB7B10" indent="up1"><enum>(I)</enum><text>not executed, traded, or cleared on a registered entity or trading facility; and</text></subclause>
<subclause id="HD8202CACA16B48538DA32148FC7732B6" indent="up1"><enum>(II)</enum><text>entered into pursuant to a tariff or rate schedule approved by the Federal Energy Regulatory Commission.</text></subclause></clause>
<clause id="HA3CF245426FC4019894AABA3D51AF136" indent="up1"><enum>(ii)</enum><text>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).</text></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H835C3948043D4C929513BE7ED5F2F0B6"><enum>(b)</enum><header>Additions</header><text>Section 2(c)(2)(A) of such Act (7 U.S.C. 2(c)(2)(A)) is amended—</text>
<paragraph id="H2ABDE83C251C4D8BA58B3DF39C074C6D"><enum>(1)</enum><text>in clause (i) by striking <quote>or</quote> at the end;</text></paragraph>
<paragraph id="H1969B6F2D7CF4B3EA220F163F34B77A3"><enum>(2)</enum><text>by redesignating clause (ii) as clause (iii); and</text></paragraph>
<paragraph id="HC10F09F301674D49A840C9B10A14300B"><enum>(3)</enum><text>by inserting after clause (i) the following:</text>
<quoted-block id="H4ADB8A2F8D8C4D51965D12BBDCB0F945" style="OLC">
<subsection id="HDE5C2933291B4605AE90161F4629AFAA" indent="down3"><enum>(ii)</enum><text>a swap; or</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H21B00945720549B8BA48A554013B19CB"><enum>(c)</enum><text display-inline="yes-display-inline">Section 12(e) of such Act (7 U.S.C. 16(e)) is amended—</text>
<paragraph id="H022F7AE4D38C419AA39C5AC5BB39EC18"><enum>(1)</enum><text>in paragraph (1)(B), by inserting <quote>or (3)</quote> after <quote>paragraph (2)</quote>;</text></paragraph>
<paragraph id="H533913687E424E50A0C0122427EE4982"><enum>(2)</enum><text>in paragraph (2), by striking subparagraphs (A) and (B) and inserting the following:</text>
<quoted-block style="OLC" id="H0DDEF31AD321418ABFEF62B013A3E894" display-inline="no-display-inline">
<subparagraph id="H252D9FD80B154DEABD6006C1FCBF43E5"><enum>(A)</enum><text display-inline="yes-display-inline">a swap; and</text></subparagraph>
<subparagraph id="H0E0C3A78E97E45D59E1EFE851490EC6F"><enum>(B)</enum><text display-inline="yes-display-inline">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).</text></subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph>
<paragraph id="HDBB310210AA344DEB4275F5164FAD193"><enum>(3)</enum><text>by adding at the end the following:</text>
<quoted-block style="OLC" id="H524BFEF0CBD14C8585303CCBA6D5F885" display-inline="no-display-inline">
<paragraph id="H798BF7B4387F4E9C8222190F9786D29A"><enum>(3)</enum><text display-inline="yes-display-inline">A swap may not be regulated as an insurance contract under State law.</text></paragraph>
<paragraph id="HA2E9552E777546D3BB2D1F5BABB012FF"><enum>(4)</enum><text display-inline="yes-display-inline">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—</text>
<subparagraph id="H2F39225FB5144F92BC7CB848CB811FA8"><enum>(A)</enum><text>have a direct and significant connection with activities in or effect on United States commerce; or</text></subparagraph>
<subparagraph id="H21E613F8D4464192BC23064A85504B29"><enum>(B)</enum><text>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.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="HD986280A5B8C4433BDB191C5B97C1861"><enum>(d)</enum><text display-inline="yes-display-inline">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. </text></subsection></section>
<section id="HD3FE263EB59946E3B0E6AAEBFDC2097D"><enum>3103.</enum><header>Clearing and execution transparency</header>
<subsection id="H869A37D66CA94DD0B0B982B060C196E6"><enum>(a)</enum><header>Clearing and execution transparency requirements</header>
<paragraph id="HC48B5795D4D84318BC3E21FFC7A8EA10"><enum>(1)</enum><text display-inline="yes-display-inline">Section 2 of the Commodity Exchange Act (7 U.S.C. 2) is amended by striking subsections (d), (e), (g), and (h).</text></paragraph>
<paragraph id="HAC98B2A804894C28BE5DE24188ED00C2"><enum>(2)</enum>
<subparagraph id="HC15452643C8D49DD83E6E0AD1BAFADCE" display-inline="yes-display-inline"><enum>(A)</enum><text>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.</text></subparagraph>
<subparagraph id="H4CA2BDABD58B41839D87C1EABDDF30E4" indent="up1"><enum>(B)</enum><text>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.</text></subparagraph></paragraph>
<paragraph id="H0FF66533E6D747B38CB4AFA43D823247"><enum>(3)</enum><text>Section 2 of such Act (7 U.S.C. 2) is further amended by inserting after subsection (c) the following:</text>
<quoted-block id="H09EB43C16F814A6E80A57AC824FF2143" style="OLC">
<subsection id="HBB1B5BBAB14A468D85D2AD4720D66F95"><enum>(d)</enum><header>Swaps</header><text>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.</text></subsection>
<subsection id="H5422039C9F894DF2825C5EF64EC05835"><enum>(e)</enum><header>Limitation on participation</header><text>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.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="H17BA4BCD1B3B4E5F85E2E465DCBAB30A"><enum>(4)</enum><text>Section 2 of such Act (7 U.S.C. 2) is further amended by inserting after subsection (i) the following:</text>
<quoted-block id="H657C2BA5C74841F9BDFBF95CFE5FB333" style="OLC">
<subsection id="HDD68546E8AD340BBAE270111B4E20B79"><enum>(j)</enum><header>Clearing requirement</header>
<paragraph id="H1F436F4B27004935A2192116158316C4"><enum>(1)</enum><header>In general</header>
<subparagraph id="H1B83175CE3E240AF9231E10FD3817495"><enum>(A)</enum><header>Standard for clearing</header><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="H35E2AFA5B3E741D080FA92C37DF8400E"><enum>(B)</enum><header>Open access</header><text display-inline="yes-display-inline">The rules of a derivatives clearing organization described in subparagraph (A) shall—</text>
<clause id="H312E7785DB504719BF64A1D2CF1E3045"><enum>(i)</enum><text display-inline="yes-display-inline">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</text></clause>
<clause id="H6E205C3D62D240A39AEB4A10C886DB7C"><enum>(ii)</enum><text>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.</text></clause></subparagraph></paragraph>
<paragraph id="H47754928510F45B191C99562B0C25DDA"><enum>(2)</enum><header>Commission review</header>
<subparagraph id="H0268546272D9478D953FD07B54EEA95F"><enum>(A)</enum><header>Commission-initiated review</header>
<clause id="H4517E6ECD9F84008B0817E5AEE07BB76"><enum>(i)</enum><text display-inline="yes-display-inline">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.</text></clause>
<clause id="H4F74164D7E6F41C6B60DA64B326083D2"><enum>(ii)</enum><text>The Commission shall provide at least a 30-day public comment period regarding any determination made under clause (i).</text></clause></subparagraph>
<subparagraph id="HD60B93A7107149AE9F46DBAFC705C963"><enum>(B)</enum><header>Swap submissions</header>
<clause id="H6D42F6A7B131437AB005C6FF6B193989"><enum>(i)</enum><text display-inline="yes-display-inline">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.</text></clause>
<clause id="H7D0AD63C057A4BBAAB7AA2C3DC9D4BCF"><enum>(ii)</enum><text>The Commission shall—</text>
<subclause id="HD5E5130D6E6D496FB66A14A84C98C8C4"><enum>(I)</enum><text>make available to the public any submission received under clause (i);</text></subclause>
<subclause id="H8937EC19FE7E4EF2B601BE2463FB4F65"><enum>(II)</enum><text display-inline="yes-display-inline">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</text></subclause>
<subclause id="HD2D1F574C682490689F8C894D88D8370"><enum>(III)</enum><text>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.</text></subclause></clause></subparagraph>
<subparagraph id="HD7013037609847F38A141CC2391D033C"><enum>(C)</enum><header>Deadline</header><text>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.</text></subparagraph>
<subparagraph id="H8D46AF4A211F401BB0D0102C46C668DD" display-inline="no-display-inline"><enum>(D)</enum><header>Determination</header>
<clause id="HEC95736BB4CA4947896B4FB17AEA506B"><enum>(i)</enum><text>In reviewing a submission made under subparagraph (B), the Commission shall review whether the submission is consistent with section 5b(c)(2).</text></clause>
<clause id="H27BB62F03CF24F2EB1E51CD29E28ED5C"><enum>(ii)</enum><text display-inline="yes-display-inline">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:</text>
<subclause id="HD972CE9B629141AE933918B82D5B5DA4"><enum>(I)</enum><text>The existence of significant outstanding notional exposures, trading liquidity and adequate pricing data.</text></subclause>
<subclause id="HED200F1A68B247E69E34814B7D7FE1DA"><enum>(II)</enum><text>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.</text></subclause>
<subclause id="HEA157FFCFA5F48839799196CFB47F54F"><enum>(III)</enum><text>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.</text></subclause>
<subclause id="HAABCF08D0D0443AE93A145F65A5271FC"><enum>(IV)</enum><text display-inline="yes-display-inline">The effect on competition, including appropriate fees and charges applied to clearing.</text></subclause>
<subclause id="H7429D55268D64C8EBC73530AE6319BF4"><enum>(V)</enum><text>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.</text></subclause></clause>
<clause id="H366735E5B26A4D63960197C1767FF826" display-inline="no-display-inline"><enum>(iii)</enum><text display-inline="yes-display-inline">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.</text></clause></subparagraph>
<subparagraph id="H3704624AF97F44E3942B03A840EF7367"><enum>(E)</enum><header>Rules</header><text display-inline="yes-display-inline">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.</text></subparagraph></paragraph>
<paragraph id="HAED6FAE0C7EA469EBBD77A88C6EC870E"><enum>(3)</enum><header>Stay of clearing requirement</header>
<subparagraph id="HD6B2B21B29914D96A48EA4F8459C4FFD"><enum>(A)</enum><text>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.</text></subparagraph>
<subparagraph id="HD72D76EE795D4D35B8BDC134DEA90AD7"><enum>(B)</enum><header>Deadline</header><text>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.</text></subparagraph>
<subparagraph id="H2AC4C6FE07814173A88072EE8945E49C"><enum>(C)</enum><header>Determination</header><text>Upon completion of the review undertaken pursuant to subparagraph (A), the Commission may—</text>
<clause id="H0EAC6C510A4A41909185083C5781BE77"><enum>(i)</enum><text>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</text></clause>
<clause id="H3DCC071FF91C479E9BBF3F3062569CC0"><enum>(ii)</enum><text>determine that the clearing requirement of paragraph (1) shall not apply to the swap, or group, category, type or class of swaps.</text></clause></subparagraph>
<subparagraph id="H7A883EB0CF174F21B5C3EF95C4A9407E"><enum>(D)</enum><header>Rules</header><text display-inline="yes-display-inline">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.</text></subparagraph></paragraph>
<paragraph id="HD86787895F7144B787F135DC48D74100"><enum>(4)</enum><header>Prevention of evasion</header><text>The Commission may prescribe rules under this subsection, or issue interpretations of the rules, as necessary to prevent evasions of this subsection.</text></paragraph>
<paragraph id="H27CAEA72F8274E90B56CB73803B3F13E"><enum>(5)</enum><header>Required reporting</header>
<subparagraph id="H4BF68666178540069830235A76C1C4BD"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="HE061A92659E3402399E9A5FF263F3E4A"><enum>(B)</enum><header>Swap dealer designation</header><text display-inline="yes-display-inline">With regard to swaps where only 1 counterparty is a swap dealer, the swap dealer shall report the swap as required by this paragraph.</text></subparagraph></paragraph>
<paragraph id="H792E1BE11BEF415EADC2852E9A97ED1E"><enum>(6)</enum><header>Reporting transition rules</header><text>Rules adopted by the Commission under this section shall provide for the reporting of data, as follows:</text>
<subparagraph id="HD03C4FE18D014679B7CD4A38FD355D2F"><enum>(A)</enum><text>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</text></subparagraph>
<subparagraph id="H1093F4B97E7C4BC49C4082F879E4AE8E"><enum>(B)</enum><text>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—</text>
<clause id="H6859F9E5FF32478BAC5D96D4F64E9C1B"><enum>(i)</enum><text>90 days after such effective date; or</text></clause>
<clause id="H7E7CEC2E8E114D5FA8080928DF187D49"><enum>(ii)</enum><text>such other time after entering into the swap as the Commission may prescribe by rule or regulation.</text></clause></subparagraph></paragraph>
<paragraph id="HF8841C461001452C9D5CA3CF382B16BA"><enum>(7)</enum><header>Clearing transition rules</header>
<subparagraph id="HF122F2143E01483E8ED5DCB03A1F87A5"><enum>(A)</enum><text display-inline="yes-display-inline">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).</text></subparagraph>
<subparagraph id="HEF8CF35B88AB481CB77B6F9124F398CB"><enum>(B)</enum><text display-inline="yes-display-inline">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).</text></subparagraph></paragraph>
<paragraph id="H9592D4DA1B0242C9A61308FCACE9A409"><enum>(8)</enum><header>Exceptions</header>
<subparagraph id="H359E133DA2654F97AB1B9BE04D9CD541"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">The requirements of paragraph (1) shall not apply to a swap if one of the counterparties to the swap—</text>
<clause id="HCFB337D02D934D2AB6C386531BC7CD71"><enum>(i)</enum><text display-inline="yes-display-inline">is not a swap dealer or major swap participant;</text></clause>
<clause id="HE020A468A5F643F68EDCA745E7EB5CD6"><enum>(ii)</enum><text display-inline="yes-display-inline">is using swaps to hedge or mitigate commercial risk, including operating or balance sheet risk; and</text></clause>
<clause id="HB550055E4A824E9EB7DBA469EC4FFCD8"><enum>(iii)</enum><text display-inline="yes-display-inline">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.</text></clause></subparagraph>
<subparagraph id="H2BA04677E5284735AE5D405F2ABC453F"><enum>(B)</enum><header>Abuse of exception</header><text>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.</text></subparagraph>
<subparagraph id="HDC899E9AD83F4D3F94EE04E54F778B6F"><enum>(C)</enum><header>Option to clear</header><text display-inline="yes-display-inline">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).</text></subparagraph></paragraph></subsection>
<subsection id="H564C4A4FD4C349D0AF67AF47721FFFFF"><enum>(k)</enum><header>Execution transparency</header>
<paragraph id="H5E0068E1ED564FFFB5CC0490A6B9C593"><enum>(1)</enum><header>Requirement</header><text>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.</text></paragraph>
<paragraph id="HE5A28D3051084141A43B64F825CABBEC"><enum>(2)</enum><header>Exceptions</header><text>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.</text></paragraph>
<paragraph id="HFDA71E32336042FABFDE7BC40C2EFD9D"><enum>(3)</enum><header>Agricultural swaps</header><text>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.</text></paragraph>
<paragraph id="H4D55C7587DE84F4DB983BEBE5AAF70AE"><enum>(4)</enum><header>Required reporting</header><text display-inline="yes-display-inline">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).</text></paragraph>
<paragraph id="H2DFDA0341F35404593F09E0A2588A980"><enum>(5)</enum><header>Exchange trading</header><text>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.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H6B98D589AE174480BB693E8AF6D68FFA"><enum>(b)</enum><header>Derivatives clearing organizations</header>
<paragraph id="H18807E49A0504D59AF77679C95D1F17E"><enum>(1)</enum><text>Subsections (a) and (b) of section 5b of such Act (7 U.S.C. 7a–1) are amended to read as follows:</text>
<quoted-block id="H6512A32F9F434096A6D5DA027DCC9013" style="OLC">
<subsection id="HCD558D093A1F49479E93BB7E02DC4D4F"><enum>(a)</enum><header>Registration requirement</header>
<paragraph id="H415C32827D9B4164BF5506F797B3CBF9"><enum>(1)</enum><header>In general</header><text>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—</text>
<subparagraph id="H88F49785D1D94D86A35F1A3D9ACDE95F"><enum>(A)</enum><text>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—</text>
<clause id="H73DEC4C3D0714434BBB0DC54F9A4BE55"><enum>(i)</enum><text>excluded from this Act by section 2(a)(1)(C)(i), 2(c), or 2(f); or</text></clause>
<clause id="H7AF30D880D3A4198A038A870D975DC93"><enum>(ii)</enum><text>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</text></clause></subparagraph>
<subparagraph id="HECF2AEAB863B4874B7CD16B97FAB3C8F"><enum>(B)</enum><text>a swap.</text></subparagraph></paragraph>
<paragraph id="H0BFB47D57BEF4B18969180B6CB5B7FDE"><enum>(2)</enum><header>Existing banks and clearing agencies</header><text display-inline="yes-display-inline">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.</text></paragraph></subsection>
<subsection id="HFD6E5599DAA446E1830DA5DCAC02AC54"><enum>(b)</enum><header>Voluntary registration</header><text>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.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="HD5AFA84923F74A77BB415E0354C7663F"><enum>(2)</enum><text>Section 5b of such Act (7 U.S.C. 7a–1) is amended by adding at the end the following:</text>
<quoted-block id="H21533A6B72BE4157A59988E7CC193A22" style="OLC">
<subsection id="HF7A675D7B1734E03BB8CC0DD5728D2F0"><enum>(g)</enum><header>Rules</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="H86D97D06E382424094FD02D8FB2E62B9"><enum>(h)</enum><header>Exemptions</header>
<paragraph id="HDEF5C1BA4F1C475A8F7A281F3A70EAD1"><enum>(1)</enum><header>In general</header><text>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.</text></paragraph>
<paragraph id="H1CE036BDB647417AAA6431F8BDD310CD"><enum>(2)</enum><text display-inline="yes-display-inline">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.</text></paragraph></subsection>
<subsection id="HA515E9802BA7426FAE37F21A76B496F9"><enum>(i)</enum><header>Designation of compliance officer</header>
<paragraph id="H5DCD2165655141FEBBDA20A2D4EC9557"><enum>(1)</enum><header>In general</header><text>Each derivatives clearing organization shall designate an individual to serve as a compliance officer.</text></paragraph>
<paragraph id="HB59FF51CB446454DBA4753B6F7D38AB1"><enum>(2)</enum><header>Duties</header><text>The compliance officer—</text>
<subparagraph id="HF35A2C071B6B4FF883180080A72B8BBF"><enum>(A)</enum><text>shall report directly to the board or to the senior officer of the derivatives clearing organization; and</text></subparagraph>
<subparagraph id="HA667D2FED15F4A1D8264DA86B69C2318"><enum>(B)</enum><text>shall—</text>
<clause id="H90819F4C9ABD4F9EB2A64D706A3D9D68"><enum>(i)</enum><text>review compliance with the core principles in section 5b(c)(2).</text></clause>
<clause id="H178BD50DA092400CAC9D9A9DBDDB6FA8"><enum>(ii)</enum><text>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;</text></clause>
<clause id="H345D3990F3984CC785AB313D0E9B9D33"><enum>(iii)</enum><text>be responsible for administering the policies and procedures required to be established pursuant to this section; and</text></clause>
<clause id="HED0A78C2F51546D480DE2BF6C50DE56E"><enum>(iv)</enum><text>ensure compliance with this Act and the rules and regulations issued under this Act; and</text></clause></subparagraph>
<subparagraph id="H9A968D2894A3472FBE4BAB4781D891F1"><enum>(C)</enum><text>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.</text></subparagraph></paragraph>
<paragraph id="HA95D353A34BC42D1A737C729B85A8DA6"><enum>(3)</enum><header>Annual reports required</header><text>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.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="HC6E15B866A0D418385FEB099C209C528"><enum>(3)</enum><text>Section 5b(c)(2) of such Act (7 U.S.C. 7a–1(c)(2)) is amended to read as follows:</text>
<quoted-block id="H64633476118B4B45AA3405A653DB4D4B" style="OLC">
<paragraph id="HD43B8B1010A34A6D904F1752AF2E3FA0"><enum>(2)</enum><header>Core principles for derivatives clearing organizations</header>
<subparagraph id="HF2A2ABBE7A594BE9BBD61478AC6BD2AB"><enum>(A)</enum><header>In general</header><text>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.</text></subparagraph>
<subparagraph id="H385CF1A975DA4EE59D8AF1788225169B"><enum>(B)</enum><header>Financial resources</header>
<clause id="H5A9257E4977D4438949633DCF1A456E5"><enum>(i)</enum><text>The derivatives clearing organization shall have adequate financial, operational, and managerial resources to discharge the responsibilities of the organization.</text></clause>
<clause id="H0C826CD58EC84D019E106CE927545447"><enum>(ii)</enum><text>The financial resources of the derivatives clearing organization shall at a minimum exceed the total amount that would—</text>
<subclause id="H6122E2B50A524AE29D21852869DFBAE0"><enum>(I)</enum><text>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</text></subclause>
<subclause id="HDA96D98584C34B4FAE177DABA69C7E08"><enum>(II)</enum><text>enable the organization to cover the operating costs of the organization for a period of 1 year, calculated on a rolling basis.</text></subclause></clause></subparagraph>
<subparagraph id="H34438EFDB23D488BBD4D5DF59A29F6A9"><enum>(C)</enum><header>Participant and product eligibility</header>
<clause id="H6BDC72AFEC444788A9AFA9BF5271C724"><enum>(i)</enum><text>The derivatives clearing organization shall establish—</text>
<subclause id="HEC2546EB54264672B5F558C4B81AD2A8"><enum>(I)</enum><text>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</text></subclause>
<subclause id="H833C51B99B0440838E535A6A36284860"><enum>(II)</enum><text>appropriate standards for determining eligibility of agreements, contracts, or transactions submitted to the organization for clearing.</text></subclause></clause>
<clause id="H36F1D6929DDA454D9A7CE73F94A9D877"><enum>(ii)</enum><text>The derivatives clearing organization shall have procedures in place to verify that participation and membership requirements are met on an ongoing basis.</text></clause>
<clause id="HE6F85DF464F741CA8398D8D6947B048D"><enum>(iii)</enum><text display-inline="yes-display-inline">The participation and membership requirements of the derivatives clearing organization shall be objective, publicly disclosed, and permit fair and open access.</text></clause></subparagraph>
<subparagraph id="H7B72095E97F64BBB805A53D8E9484763"><enum>(D)</enum><header>Risk management</header>
<clause id="H80C133B667934AD49FBE00D1A90B1489"><enum>(i)</enum><text>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.</text></clause>
<clause id="HFE82B230122149468A4A51496A9C27C7"><enum>(ii)</enum><text>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.</text></clause>
<clause id="HF9CB5BF989624B9DA60CB4D6E68167BB"><enum>(iii)</enum><text>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.</text></clause>
<clause id="HAA1FAD27CF784D9AA18DAFD571E97C02"><enum>(iv)</enum><text>Margin required from all members and participants shall be sufficient to cover potential exposures in normal market conditions.</text></clause>
<clause id="HEAAE76CDAEBF4616B99AFDC7BD37FA48"><enum>(v)</enum><text>The models and parameters used in setting margin requirements shall be risk-based and reviewed regularly.</text></clause></subparagraph>
<subparagraph id="HCF1FE31E1A4E4E0689F8E78A19D8E2D7"><enum>(E)</enum><header>Settlement procedures</header><text>The derivatives clearing organization shall—</text>
<clause id="H3674A56AEF6A4CD3B275BE3A661498FF"><enum>(i)</enum><text>complete money settlements on a timely basis, and not less than once each business day;</text></clause>
<clause id="H37703775A3E34D419A0204D8162D6EB5"><enum>(ii)</enum><text>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;</text></clause>
<clause id="HD4BFF2A3F1384101B54B35E0AD41F71F"><enum>(iii)</enum><text>ensure money settlements are final when effected;</text></clause>
<clause id="H5645F9DC60814D32A8A05067CDBDBE6D"><enum>(iv)</enum><text>maintain an accurate record of the flow of funds associated with each money settlement;</text></clause>
<clause id="H3891404576A5473EAAC9D91DC77F3E76"><enum>(v)</enum><text>have the ability to comply with the terms and conditions of any permitted netting or offset arrangements with other clearing organizations; and</text></clause>
<clause id="H5EE99EE34DFC4855A6CF596CDA48E11E"><enum>(vi)</enum><text>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.</text></clause></subparagraph>
<subparagraph id="HBA28443102FB483895F9495448E89493"><enum>(F)</enum><header>Treatment of funds</header>
<clause id="HBCFB0CF5440D4ACBA3E9A1C91B6328A1"><enum>(i)</enum><text>The derivatives clearing organization shall have standards and procedures designed to protect and ensure the safety of member and participant funds and assets.</text></clause>
<clause id="HE23EC0E0D1E0409D89E2A5C8049D4954"><enum>(ii)</enum><text>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.</text></clause>
<clause id="H99050DD119834F7490EC15E109B2670E"><enum>(iii)</enum><text>Assets and funds invested by the derivatives clearing organization shall be held in instruments with minimal credit, market, and liquidity risks.</text></clause></subparagraph>
<subparagraph id="HD0872AD40CA94A56A6CB53A97AD10901"><enum>(G)</enum><header>Default rules and procedures</header>
<clause id="HCEA972EBCAE74C11AFE95E45B31A495C"><enum>(i)</enum><text>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.</text></clause>
<clause id="H22B97A68B1EB48D9B16569F3E55CE994"><enum>(ii)</enum><text>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.</text></clause>
<clause id="HA30044682B0E4FC7899FF4DB8383152E"><enum>(iii)</enum><text>The default procedures shall be publicly available.</text></clause></subparagraph>
<subparagraph id="HA3375EB9FB2B40FDB5A3A53142094FF3"><enum>(H)</enum><header>Rule enforcement</header><text>The derivatives clearing organization shall—</text>
<clause id="HAABEDD8F87C240B7A5B48FD1A9084F52"><enum>(i)</enum><text>maintain adequate arrangements and resources for the effective monitoring and enforcement of compliance with rules of the organization and for resolution of disputes; and</text></clause>
<clause id="HCD5C45A7AD6546A385BEF03BACB0B069"><enum>(ii)</enum><text>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.</text></clause></subparagraph>
<subparagraph id="H90D26C48FEA9408BB714AFAD7E14659D"><enum>(I)</enum><header>System safeguards</header><text>The derivatives clearing organization shall—</text>
<clause id="HA7AEB501C0494BDC8AB5515A1736EFD4"><enum>(i)</enum><text>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;</text></clause>
<clause id="H6F88B32AE13B403C875945D07D623E17"><enum>(ii)</enum><text>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</text></clause>
<clause id="H95F9D372B773446194633E84FF8B8462"><enum>(iii)</enum><text>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.</text></clause></subparagraph>
<subparagraph id="H60BD187E8B194199A3C4134F5337FE6F"><enum>(J)</enum><header>Reporting</header><text>The derivatives clearing organization shall provide to the Commission all information necessary for the Commission to conduct oversight of the organization.</text></subparagraph>
<subparagraph id="H2D562F789510459EA51034F4BA2E31BF"><enum>(K)</enum><header>Recordkeeping</header><text>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.</text></subparagraph>
<subparagraph id="HF05CBB8A292C404BA48406BEBFE5C5B7"><enum>(L)</enum><header>Public information</header>
<clause id="HE5970E65D574455AA4AE741CB064036B"><enum>(i)</enum><text>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.</text></clause>
<clause id="H98AFEC5C95674D2DAAF5D407EE979F9C"><enum>(ii)</enum><text>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.</text></clause>
<clause id="H5F1950A244E44BF49D4E5431F5935814"><enum>(iii)</enum><text>The derivatives clearing organization shall disclose publicly and to the Commission information concerning—</text>
<subclause id="H7CFDC2C152A14FEDA11791ACB02947E3"><enum>(I)</enum><text>the terms and conditions of contracts, agreements, and transactions cleared and settled by the organization;</text></subclause>
<subclause id="HB3CFDEA2C8D14747A0AE175F5E1DF5BF"><enum>(II)</enum><text>clearing and other fees that the organization charges the members of, and participants in, the organization;</text></subclause>
<subclause id="HA9485D420C99417784EACDF496B68AAE"><enum>(III)</enum><text>the margin-setting methodology and the size and composition of the financial resource package of the organization;</text></subclause>
<subclause id="H20C0169FECBC496CA4F092BDC3D50F3F"><enum>(IV)</enum><text>other information relevant to participation in the settlement and clearing activities of the organization; and</text></subclause>
<subclause id="H75709BA2A723478099C48B6E0485A1F2"><enum>(V)</enum><text>daily settlement prices, volume, and open interest for all contracts settled or cleared by the organization.</text></subclause></clause></subparagraph>
<subparagraph id="H0025A6CEAC3E4703A44B5203B2EC3E09"><enum>(M)</enum><header>Information-sharing</header><text>The derivatives clearing organization shall—</text>
<clause id="H2EC955EAB8D0451FB357FCACAD0B1DE5"><enum>(i)</enum><text>enter into and abide by the terms of all appropriate and applicable domestic and international information-sharing agreements; and</text></clause>
<clause id="H5E5B64E857B64CB685CB0A5B7FBA4644"><enum>(ii)</enum><text>use relevant information obtained from the agreements in carrying out the risk management program of the organization.</text></clause></subparagraph>
<subparagraph id="H25A6E668D12040399D3FB76D6B5B062A"><enum>(N)</enum><header>Antitrust considerations</header><text>The derivatives clearing organization shall avoid—</text>
<clause id="HE329B696C5EE4599BE7A8011906147A8"><enum>(i)</enum><text>adopting any rule or taking any action that results in any unreasonable restraint of trade; or</text></clause>
<clause id="H5A62C5FB780643A68FB738D8137318E2"><enum>(ii)</enum><text>imposing any material anticompetitive burden.</text></clause></subparagraph>
<subparagraph id="H8E7776591BF54D85B7C25F4B63DFB054"><enum>(O)</enum><header>Governance fitness standards</header>
<clause id="H089354572F6842659A9CCD6F81771B49"><enum>(i)</enum><text>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.</text></clause>
<clause id="HD8AE48C8AA754148B8BBD2D8D61D589C"><enum>(ii)</enum><text>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.</text></clause></subparagraph>
<subparagraph id="HD9F04C1582F54A808E93869877FFAF6F"><enum>(P)</enum><header>Conflicts of interest</header><text>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.</text></subparagraph>
<subparagraph id="H49ED808AC2994DB9B6B3076D91184979"><enum>(Q)</enum><header>Composition of the boards</header><text>The derivatives clearing organization shall ensure that the composition of the governing board or committee includes market participants.</text></subparagraph>
<subparagraph id="H614F790BC4D64357BB78B093B2D40C2D"><enum>(R)</enum><header>Legal risk</header><text>The derivatives clearing organization shall have a well founded, transparent, and enforceable legal framework for each aspect of its activities.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="H2FA25A10909F48A29DB90ED340074A37"><enum>(4)</enum><text>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:</text>
<quoted-block id="H3A9F0EBD6EED4A8FB71A94F288B04780" style="OLC">
<subsection id="H05900D2CAB31437DBED54B3D7A656DD3"><enum>(j)</enum><header>Reporting</header>
<paragraph id="HD727EC833A6D4015B7731BE91F94207E"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="HFE945A4F3B7D43A0BB851FF77F39C20E"><enum>(2)</enum><header>Public information</header><text>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).</text></paragraph>
<paragraph id="HE9D2A4BDDA4E48BAA19BFF7D14C0CEC5"><enum>(3)</enum><text display-inline="yes-display-inline">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.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="HABD7B76838DF4AF08EFC6E8DF6F3CFB9"><enum>(5)</enum><text>Section 8(e) of such Act (7 U.S.C. 12(e)) is amended in the last sentence by inserting <quote>central bank and ministries</quote> after <quote>department</quote> each place it appears.</text></paragraph></subsection>
<subsection id="HC8EE223077ED435F91087D43C7B3DA90"><enum>(c)</enum><header>Legal certainty for identified banking products</header>
<paragraph id="H3A5998BD9FB6489D9F9042B23EFC0F7D"><enum>(1)</enum><header>Repeal</header><text>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.</text></paragraph>
<paragraph id="H5D443F35EE904D86BBCD6AF7159DC70C"><enum>(2)</enum><header>Legal certainty</header><text>Section 403 of the Legal Certainty for Bank Products Act of 2000 (7 U.S.C. 27a) is amended to read as follows:</text>
<quoted-block style="OLC" id="H50E1BEC0C1D44E8287641BC19A4C0233" display-inline="no-display-inline">
<section id="HC6DEF36F24B94A3E992C5D6CD69F7AE1"><enum>403.</enum><header>Exclusion of identified banking product</header>
<subsection id="HF28CD5EEE61745788C50E6EDC6984D23"><enum>(a)</enum><header>Exclusion</header><text display-inline="yes-display-inline">Except as provided in subsection (b) or (c)—</text>
<paragraph id="HE8E60E063E114627A11F3C525E377FDE"><enum>(1)</enum><text>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</text></paragraph>
<paragraph id="H7D9215613EDE47EF8F3E8CD7D9BCE87E"><enum>(2)</enum><text display-inline="yes-display-inline">the definitions of <quote>security-based swap</quote> in section 3(a)(68) of the Securities Exchange Act of 1934 and <quote>security-based swap agreement</quote> in section 3(a)(76) of the Securities Exchange Act of 1934 do not include any identified banking product.</text></paragraph></subsection>
<subsection id="H2D7D35AD43F3493D967E7A23731D6456"><enum>(b)</enum><header>Exception</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="HA76F2A1D0DCD4890B48411E789ED5D9D"><enum>(1)</enum><text display-inline="yes-display-inline">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</text></paragraph>
<paragraph id="HB523DEC105C54F26A4419CBAFE767603"><enum>(2)</enum><text>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.).</text></paragraph></subsection>
<subsection id="H7D51B8C03EDA4DE38C6DC840E02C4760"><enum>(c)</enum><header>Exception</header><text display-inline="yes-display-inline">The exclusions in subsection (a) shall not apply to an identified banking product that—</text>
<paragraph id="HF55596FD253E4299ACB417C79FBEE7BB"><enum>(1)</enum><text>is a product of a bank that is not under the regulatory jurisdiction of an appropriate Federal banking agency;</text></paragraph>
<paragraph id="H31C93150509341FFAB1262B3A204C9DB"><enum>(2)</enum><text>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</text></paragraph>
<paragraph id="H4F4306EDEB484A7EB066030D4BD055D9"><enum>(3)</enum><text>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.).</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection></section>
<section id="H6CA8106E1C444F8FA122F3DB7593A9C5"><enum>3104.</enum><header>Public reporting of aggregate swap data</header><text display-inline="no-display-inline">Section 8 of the Commodity Exchange Act (7 U.S.C. 12) is amended by adding at the end the following:</text>
<quoted-block id="HA2E8F234B8D3460E926718390B129991" style="OLC">
<subsection id="H2788D110504341C08ED2071D5E889B36"><enum>(j)</enum><header>Public reporting of aggregate swap data</header>
<paragraph id="H4ACCD65966D24142AB421DB206A97C6F"><enum>(1)</enum><header>In general</header><text>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).</text></paragraph>
<paragraph id="H75A4DB50491049B4A56AAF0B6852819E"><enum>(2)</enum><header>Designee of the commission</header><text>The Commission may designate a derivatives clearing organization or a swap repository to carry out the public reporting described in paragraph (1).</text></paragraph>
<paragraph id="H08524FE6076B4843A47C1CE61F2F660F"><enum>(3)</enum><header>Sources of information</header><text>The sources of the information to be publicly reported as described in paragraph (1) are—</text>
<subparagraph id="H45F77964212A4689858F244E1B101241"><enum>(A)</enum><text>derivatives clearing organizations pursuant to section 5b(j)(2);</text></subparagraph>
<subparagraph id="HBEDFA281A8AD4B2D8FEC875C06C15EA1"><enum>(B)</enum><text>swap repositories pursuant to section 21(c)(3); and</text></subparagraph>
<subparagraph id="H2909834450894BC391D91BEAB1F2D69E"><enum>(C)</enum><text>reports received by the Commission pursuant to section 4r.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section id="HE8F13071E3EA41FB9AF9E98A29A8F2E0"><enum>3105.</enum><header>Swap repositories</header><text display-inline="no-display-inline">The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by inserting after section 20 the following:</text>
<quoted-block style="OLC" id="HA2CBED438DE740689C4DACEA62CB88AE" display-inline="no-display-inline">
<section id="H126ABA08D83C45E8BADC11B6CB9F566A"><enum>21.</enum><header>Swap repositories</header>
<subsection id="H74E93339ACFF4DCEBFF71BA15D40E1EA"><enum>(a)</enum><header>Registration requirement</header>
<paragraph id="H6082C31EE4804264983362338FA609F1"><enum>(1)</enum><header>In general</header><text>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.</text></paragraph>
<paragraph id="H086A96BC691C4F2F95013A4656A28596"><enum>(2)</enum><header>Inspection and examination</header><text>Registered swap repositories shall be subject to inspection and examination by any representative of the Commission.</text></paragraph></subsection>
<subsection id="HD5BB07F756784B93BAB5DF28271ACC22"><enum>(b)</enum><header>Standard setting</header>
<paragraph id="H72B5A088E7DD479E8A2F9E53AF87F209"><enum>(1)</enum><header>Data identification</header><text>The Commission shall prescribe standards that specify the data elements for each swap that shall be collected and maintained by each registered swap repository.</text></paragraph>
<paragraph id="H4CAF5BF8DF214F10A2B0AFF3B4D64B57"><enum>(2)</enum><header>Data collection and maintenance</header><text>The Commission shall prescribe data collection and data maintenance standards for swap repositories.</text></paragraph>
<paragraph id="HDEDD421DDFEF43AB9C6D7A761351D55E"><enum>(3)</enum><header>Comparability</header><text>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.</text></paragraph></subsection>
<subsection id="H7830946196664AFBBC61269E52F475FF"><enum>(c)</enum><header>Duties</header><text>A swap repository shall—</text>
<paragraph id="HA3D0471129E54DD787EE82D388DC0CDE"><enum>(1)</enum><text>accept data prescribed by the Commission for each swap under subsection (b);</text></paragraph>
<paragraph id="HED7F418260074B4B8597B86DFDDB2415"><enum>(2)</enum><text>maintain the data in such form and manner and for such period as may be required by the Commission;</text></paragraph>
<paragraph id="HA4D88165F6CB48B49B7B854F70320D4E"><enum>(3)</enum><text>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</text></paragraph>
<paragraph id="HDFA14290F2ED45D595DF045A18C2B60B"><enum>(4)</enum><text>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.</text></paragraph></subsection>
<subsection id="H7168F6CC2559448CA309E93E34246509"><enum>(d)</enum><header>Rules</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="HF05AABBA45D9433AB70CCA0235247794"><enum>(e)</enum><header>Exemptions</header><text>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.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section id="H1704392BE539494096549027726EB5AD"><enum>3106.</enum><header>Reporting and recordkeeping</header><text display-inline="no-display-inline">The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by inserting after section 4q the following:</text>
<quoted-block style="OLC" id="HDD993CC3E175412CABA7BE1D54CF87D6" display-inline="no-display-inline">
<section id="H04F72E1C82AF4CCA8277E75C3FAF8E21"><enum>4r.</enum><header>Reporting and recordkeeping for certain swaps</header>
<subsection id="H137F949205A041BBB06A7732AF70B0ED"><enum>(a)</enum><header>In general</header><text>Any person who enters into a swap and—</text>
<paragraph id="H8776E56970F44A3E9D8A65800BC42EA6"><enum>(1)</enum><text>did not have the swap cleared in accordance with section 2(j)(1); and</text></paragraph>
<paragraph id="H21F2BA10F81843629EE83C0B058CB348"><enum>(2)</enum><text>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,</text></paragraph><continuation-text continuation-text-level="subsection">shall meet the requirements in subsection (b).</continuation-text></subsection>
<subsection id="HC0D26787C1FB4D79A21DEE81CC222C66"><enum>(b)</enum><header>Reports</header><text>Any person described in subsection (a) shall—</text>
<paragraph id="H391C388A2AB8409DB3BFC59E28B60475"><enum>(1)</enum><text>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</text></paragraph>
<paragraph id="HDEF107F4249B435DAFCABB9071882DAE"><enum>(2)</enum><text>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.</text></paragraph></subsection>
<subsection id="H1B502D1711AD46B2976C38806801DCAF"><enum>(c)</enum><header>Identical data</header><text>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.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section id="HB992256E40074042875CFE373B47591E"><enum>3107.</enum><header>Registration and regulation of swap dealers and major swap participants</header><text display-inline="no-display-inline">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:</text>
<quoted-block style="OLC" id="HA51EF2EC2DF043E39488722B41B522E0" display-inline="no-display-inline">
<section id="H318C893C337547C19E5E439C921CE0CC"><enum>4s.</enum><header>Registration and regulation of swap dealers and major swap participants</header>
<subsection id="H2055E00C82B34537965D52D8419F6CF8"><enum>(a)</enum><header>Registration</header>
<paragraph id="HE5CF029EB4874AEF98595C9B56B073D0"><enum>(1)</enum><text>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.</text></paragraph>
<paragraph id="H98F308882481431FAEAE8FD66748C8D9"><enum>(2)</enum><text>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.</text></paragraph></subsection>
<subsection id="HB568FBAF672C4C44B2D9CD41F9EF4E4E"><enum>(b)</enum><header>Requirements</header>
<paragraph id="H2F3F1A6AEAF84DFBB1605033FF62DE58"><enum>(1)</enum><header>In general</header><text>A person shall register as a swap dealer or major swap participant by filing a registration application with the Commission.</text></paragraph>
<paragraph id="H3D21E89AACE84595B7F99C2FC7985F0E"><enum>(2)</enum><header>Contents</header><text>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.</text></paragraph>
<paragraph id="H2B1A0249C95B47BC80C01B4340F22E08"><enum>(3)</enum><header>Expiration</header><text>Each registration shall expire at such time as the Commission may by rule or regulation prescribe.</text></paragraph>
<paragraph id="H30225D82160D45F08DEADBC0C8B7F9DA"><enum>(4)</enum><header>Rules</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H1FE62C4F0E684CFCAA8BE7F216AC2EA1"><enum>(5)</enum><header>Transition</header><text>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 <short-title>Derivative Markets Transparency and Accountability Act of 2009</short-title>.</text></paragraph>
<paragraph id="HD08C0008FD6D44448515DB66B857FF6A"><enum>(6)</enum><header>Statutory disqualification</header><text>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.</text></paragraph></subsection>
<subsection id="H2440C1A8B9904F8BB910A0625E2BCA85"><enum>(c)</enum><header>Rules</header>
<paragraph id="HDD547354CCCA4104928F70FA4937A99D"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H0E9C94865CF7463A97299985D9901F8F"><enum>(2)</enum><header>Exception for prudential requirements</header><text>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.</text></paragraph></subsection>
<subsection id="H2F9658C8B4094DBE8F316FB4C9D8AADB"><enum>(d)</enum><header>Capital and margin requirements</header>
<paragraph id="HC9CBB00A6C454F789C33AFC72C6BFA48"><enum>(1)</enum><header>In general</header>
<subparagraph id="H2615423F33304B40ACB571419CD8B23B"><enum>(A)</enum><header>Bank swap dealers and major swap participants</header><text>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:</text>
<clause id="HC942146E736B403EB9FCC7B5A0CD78E1"><enum>(i)</enum><text>help ensure the safety and soundness of the swap dealer or major swap participant; and</text></clause>
<clause id="H8181800601A24C53BEC0C6879D62CC22"><enum>(ii)</enum><text display-inline="yes-display-inline">are appropriate for the risk associated with the non-cleared swaps held as a swap dealer or major swap participant.</text></clause></subparagraph>
<subparagraph id="HFCA84D0E455E4D7C835FC6DA7745B478"><enum>(B)</enum><header>Non-bank swap dealers and major swap participants</header><text>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—</text>
<clause id="H8A48ED6BEF1C4BE79BE1C960865E831A"><enum>(i)</enum><text>help ensure the safety and soundness of the swap dealer or major swap participant; and</text></clause>
<clause id="H1A907C15F626492DABC1FC926C3731B7"><enum>(ii)</enum><text display-inline="yes-display-inline">are appropriate for the risk associated with the non-cleared swaps held as a swap dealer or major swap participant.</text></clause></subparagraph></paragraph>
<paragraph id="H9EEDFD1AADD6445B85EEA2D61C6E8CFD"><enum>(2)</enum><header>Rules</header>
<subparagraph id="H929A772B847548FCB72BA4F12DCCC444"><enum>(A)</enum><header>Bank swap dealers and major swap participants</header><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="HE5D43EAAA48649DAA03D0C5C902D6C65"><enum>(B)</enum><header>Non-bank swap dealers and major swap participants</header><text display-inline="yes-display-inline">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.</text></subparagraph></paragraph>
<paragraph id="HDA6EA3F3D01249D29B7536BAFA944A2A"><enum>(3)</enum><header>Authority</header><text display-inline="yes-display-inline">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.</text></paragraph></subsection>
<subsection id="H005DBAE454C74BC1A7257C7040B5AA1F"><enum>(e)</enum><header>Reporting and recordkeeping</header>
<paragraph id="H75DECB1F2DB749A49006F17870F65026"><enum>(1)</enum><header>In general</header><text>Each registered swap dealer and major swap participant—</text>
<subparagraph id="H1F11B45F1F3A4B48A0F8A91984DB5DE1"><enum>(A)</enum><text>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;</text></subparagraph>
<subparagraph id="H404D27B11EF84AAEBD94449D5591EB88"><enum>(B)</enum><text>for which—</text>
<clause id="HE83EDA0B00924FD19BD2E89F662BA5A3"><enum>(i)</enum><text>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;</text></clause>
<clause id="H8EEEB55717E842AEBED9406DC786E184"><enum>(ii)</enum><text>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;</text></clause></subparagraph>
<subparagraph id="H650E3D05CF8A43E6A778C82F7C9743C6"><enum>(C)</enum><text>shall keep the books and records open to inspection and examination by any representative of the Commission; and</text></subparagraph>
<subparagraph id="H34AD79ECCD18434888CD6D4F350FBBDB"><enum>(D)</enum><text display-inline="yes-display-inline">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.</text></subparagraph></paragraph>
<paragraph id="HE32570766A0F41FC8648C90F4D4E40E0"><enum>(2)</enum><header>Rules</header><text display-inline="yes-display-inline">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.</text></paragraph></subsection>
<subsection id="H315E75F91B7C491687B31BB0FDDF4FF4"><enum>(f)</enum><header>Daily trading records</header>
<paragraph id="H54AEC784780B460A9B9C905D8EE6C695"><enum>(1)</enum><header>In general</header><text>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.</text></paragraph>
<paragraph id="HE61111CB52784D6983B17B9348C09712"><enum>(2)</enum><header>Information requirements</header><text>The daily trading records shall include such information as the Commission shall prescribe by rule or regulation.</text></paragraph>
<paragraph id="H2B9C45DE5FD64088B3AA763CE3941E8F"><enum>(3)</enum><header>Customer records</header><text>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.</text></paragraph>
<paragraph id="H4045B386633F4639BCE212DDB0851E90"><enum>(4)</enum><header>Audit trail</header><text>Each registered swap dealer and major swap participant shall maintain a complete audit trail for conducting comprehensive and accurate trade reconstructions.</text></paragraph>
<paragraph id="H67D76344933342839D94458BB5612748"><enum>(5)</enum><header>Rules</header><text display-inline="yes-display-inline">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.</text></paragraph></subsection>
<subsection id="HBD89C3F1C3DE4732AE5CEC71E60C13FB"><enum>(g)</enum><header>Business conduct standards</header>
<paragraph id="H0CEB8B06BA934A1D91F7352C0B92A468"><enum>(1)</enum><header>In general</header><text>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—</text>
<subparagraph id="H542F423AEF754DF18D4BC3269ACD6996"><enum>(A)</enum><text>fraud, manipulation, and other abusive practices involving swaps (including swaps that are offered but not entered into);</text></subparagraph>
<subparagraph id="H7400A8F8E2054316827B9399214E85FC"><enum>(B)</enum><text>diligent supervision of its business as a swap dealer;</text></subparagraph>
<subparagraph id="H18075ABD2EC540BBA607EC3440701941"><enum>(C)</enum><text>adherence to all applicable position limits; and</text></subparagraph>
<subparagraph id="HCE1594D400734ECBAA9845097A59CA34"><enum>(D)</enum><text>such other matters as the Commission shall determine to be necessary or appropriate.</text></subparagraph></paragraph>
<paragraph id="H47748CD171A949A2B037CFBDBE8B0108"><enum>(2)</enum><header>Business conduct requirements</header><text>Business conduct requirements adopted by the Commission shall—</text>
<subparagraph id="HEADAF771E89445DCB0F1A467ED7718F6"><enum>(A)</enum><text>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;</text></subparagraph>
<subparagraph id="HDD33A5090CF84E8A829A9F7A7739CEB5"><enum>(B)</enum><text>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—</text>
<clause id="HCF7FD86C7308484D8DE72F7539E45689"><enum>(i)</enum><text>information about the material risks and characteristics of the swap;</text></clause>
<clause id="H1F1A0A02D69F44B5820E97A86E09DBCC" display-inline="no-display-inline"><enum>(ii)</enum><text display-inline="yes-display-inline">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</text></clause>
<clause id="H7E6FDA7E469443D38104895D7BADB7FD"><enum>(iii)</enum><text>any other material incentives or conflicts of interest that the swap dealer or major swap participant may have in connection with the swap; and</text></clause></subparagraph>
<subparagraph id="H79A6DC06341145E5B99A4639CB7146B6"><enum>(C)</enum><text>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.</text></subparagraph></paragraph>
<paragraph id="H1D256F437777426BBBEB3D3163433F78"><enum>(3)</enum><header>Rules</header><text display-inline="yes-display-inline">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.</text></paragraph></subsection>
<subsection id="HD21BE1CE175848AAB3FBE05C112DA9AC"><enum>(h)</enum><header>Documentation standards</header>
<paragraph id="H1438B3E432E74CAE84CE37004FEA33BC"><enum>(1)</enum><header>In general</header><text>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.</text></paragraph>
<paragraph id="H8B9143A6B47C405E9B9EC7FD22353F19"><enum>(2)</enum><header>Rules</header><text display-inline="yes-display-inline">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.</text></paragraph></subsection>
<subsection id="HE9BA437F50754C90848F8D466C5768BF"><enum>(i)</enum><header>Dealer responsibilities</header><text>Each registered swap dealer and major swap participant at all times shall comply with the following requirements:</text>
<paragraph id="H0346861313BA4DBAB062EA474DD2FE3C"><enum>(1)</enum><header>Monitoring of trading</header><text>The swap dealer or major swap participant shall monitor its trading in swaps to prevent violations of applicable position limits.</text></paragraph>
<paragraph id="H27B9EA8433CA477E97660C709AE8787E"><enum>(2)</enum><header>Disclosure of general information</header><text>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—</text>
<subparagraph id="H2AFD48F3BB4840E7AC7D69B0C2C171D1"><enum>(A)</enum><text>terms and conditions of its swaps;</text></subparagraph>
<subparagraph id="HCD519EDE6F204BFC95ACC9E2BB6CAFC4"><enum>(B)</enum><text>swap trading operations, mechanisms, and practices;</text></subparagraph>
<subparagraph id="HAD7856C555564F3189C3C50156AC62AB"><enum>(C)</enum><text>financial integrity protections relating to swaps; and</text></subparagraph>
<subparagraph id="HC013721A614F4C1FBAD2B41C57599B14"><enum>(D)</enum><text>other information relevant to its trading in swaps.</text></subparagraph></paragraph>
<paragraph id="H8539B48DCEC54CAE8C99FC92BB68EC46"><enum>(3)</enum><header>Ability to obtain information</header><text>The swap dealer or major swap participant shall—</text>
<subparagraph id="H7651CF589B0E409E8FD7178780CD7C87"><enum>(A)</enum><text>establish and enforce internal systems and procedures to obtain any necessary information to perform any of the functions described in this section; and</text></subparagraph>
<subparagraph id="H376ED59A6D4C434BBE2BE464F8376844"><enum>(B)</enum><text>provide the information to the Commission or to the Prudential Regulator for the swap dealer or major swap participant, as applicable, upon request.</text></subparagraph></paragraph>
<paragraph id="H4F226DD7453C4FBF937E1BB6739B9B3B"><enum>(4)</enum><header>Conflicts of interest</header><text>The swap dealer and major swap participant shall implement conflict-of-interest systems and procedures that—</text>
<subparagraph id="HF6D4EBE93EE24F21A1B4926BA2B8CAA3"><enum>(A)</enum><text>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</text></subparagraph>
<subparagraph id="H374DD47F1C6C4E419390DB2B3CDF5E0D"><enum>(B)</enum><text>address such other issues as the Commission determines appropriate.</text></subparagraph></paragraph>
<paragraph id="HEE9784601FC94746B246A990F902AA66"><enum>(5)</enum><header>Antitrust considerations</header><text>The swap dealer or major swap participant shall avoid—</text>
<subparagraph id="H74CC364441214AE1B1618C7E1285A7B9"><enum>(A)</enum><text>adopting any processes or taking any actions that result in any unreasonable restraints of trade; or</text></subparagraph>
<subparagraph id="H1765B36A4455472A911F9241FA0AF3C7"><enum>(B)</enum><text>imposing any material anticompetitive burden on trading.</text></subparagraph></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section id="H4550D07828B8472787C7C96A8A99D8B4"><enum>3108.</enum><header>Conflicts of interest</header><text display-inline="no-display-inline">Section 4d of the Commodity Exchange Act (7 U.S.C. 6d) is amended by—</text>
<paragraph id="H39CF241F4C534ABA8BEA95289BE2CBD1"><enum>(1)</enum><text>redesignating subsection (c) as subsection (d); and</text></paragraph>
<paragraph id="H9E6AF414C58D4266BD03420430A01AA3"><enum>(2)</enum><text>inserting after subsection (b) the following:</text>
<quoted-block id="HAEE6594C62954A0F8220277F04CAFE11" style="OLC">
<subsection id="HAC06D771B89D414B89FB3CED3332C63A"><enum>(c)</enum><header>Conflicts of interest</header><text>The Commission shall require that futures commission merchants and introducing brokers implement conflict-of-interest systems and procedures that—</text>
<paragraph id="HA3010485B07E4B1896666EF644F39401"><enum>(1)</enum><text>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</text></paragraph>
<paragraph id="H3BE967AC34A54C988D6EECEDDD0D3402"><enum>(2)</enum><text>address such other issues as the Commission determines appropriate.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></section>
<section id="H1EC4ADC22E0B49BE8A57D0EA295B9B05"><enum>3109.</enum><header>Swap execution facilities</header><text display-inline="no-display-inline">The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by inserting after section 5g the following:</text>
<quoted-block id="H2A0D1A03346548DF8047AD5170B5BD4D" style="OLC">
<section id="H514C071FB3F94132B1889D10A773853A"><enum>5h.</enum><header>Swap execution facilities</header>
<subsection id="HA753FCE4A83F4CC59C177E2A3D2E9B9D"><enum>(a)</enum><header>Registration</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="H01BD728A6BD143BDB294CDF91C7B6625"><enum>(b)</enum><header>Requirements for trading</header>
<paragraph id="H70B1B13C14AD4BD88028024350227DB7"><enum>(1)</enum><text>A swap execution facility that is registered under subsection (a) may make available for trading any swap.</text></paragraph>
<paragraph id="H01E7C8CFF8BC44C7B36979448AE13D8E"><enum>(2)</enum><header>Rules for trading through the facility</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H2A0FEA44924240E39083A63FC6A8CC83"><enum>(3)</enum><header>Agricultural swaps</header><text display-inline="yes-display-inline">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.</text></paragraph></subsection>
<subsection id="HC1E70C68C517449A866CE8BDA74890F2"><enum>(c)</enum><header>Trading by contract markets</header><text>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.</text></subsection>
<subsection id="H56CD96981A83415089FA0E04BD3CD15A"><enum>(d)</enum><header>Core principles for swap execution facilities</header>
<paragraph id="H83C7866C4F854AC7B5036BD32E775789"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H1AC3757B37C54DCABE47E2F62FB29D8D"><enum>(2)</enum><header>Compliance with rules</header><text>The swap execution facility shall—</text>
<subparagraph id="H5D93B50F594245B2B257873013BD7023"><enum>(A)</enum><text>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</text></subparagraph>
<subparagraph id="H29F5970932DD44D1AC5C90545381FE46"><enum>(B)</enum><text>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—</text>
<clause id="H3500ABF10C954CEEA386BB4A59A1C8D8"><enum>(i)</enum><text>provide market participants with impartial access to the market; and</text></clause>
<clause id="H53ACA2DCEAB8438BAB729DA4F426ADDA"><enum>(ii)</enum><text>capture information that may be used in establishing whether rule violations have occurred.</text></clause></subparagraph></paragraph>
<paragraph id="H3D87C8C5B476446A904753900C4894A5"><enum>(3)</enum><header>Swaps not readily susceptible to manipulation</header><text>The swap execution facility shall permit trading only in swaps that are not readily susceptible to manipulation.</text></paragraph>
<paragraph id="HF357B16322784C8BA8294A8AC7B98A1A"><enum>(4)</enum><header>Monitoring of trading</header><text>The swap execution facility shall—</text>
<subparagraph id="H9F81F720EC37437A828090D7B980A832"><enum>(A)</enum><text display-inline="yes-display-inline">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</text></subparagraph>
<subparagraph id="HAD2BA68D88324E1D9904DE1BAEE08FAD"><enum>(B)</enum><text>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.</text></subparagraph></paragraph>
<paragraph id="H8573DF0604E7410AB85F9318C9379785"><enum>(5)</enum><header>Ability to obtain information</header><text>The swap execution facility shall—</text>
<subparagraph id="HDB6C2FE37188402DB597F4A49CE52589"><enum>(A)</enum><text>establish and enforce rules that will allow the facility to obtain any necessary information to perform any of the functions described in this section;</text></subparagraph>
<subparagraph id="H4BE961F882B9496884D14460AC5B2A4F"><enum>(B)</enum><text>provide the information to the Commission upon request; and</text></subparagraph>
<subparagraph id="HC90BCA780627438A82AF083494D70ABE"><enum>(C)</enum><text>have the capacity to carry out such international information-sharing agreements as the Commission may require.</text></subparagraph></paragraph>
<paragraph id="H7B16F215A79C475CA7BD819F7FFFD676"><enum>(6)</enum><header>Position limits or accountability</header>
<subparagraph id="HE919574D4F3345039E51B00AB87AF4BA"><enum>(A)</enum><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="H381DD400ABB64AE6854891986E4B4713"><enum>(B)</enum><text>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—</text>
<clause id="H11E60D6EE8B646CC900649F70D5CED77"><enum>(i)</enum><text>may set a position limitation at a level that is lower than the Commission limitation; and</text></clause>
<clause id="HFA83ABA913B94651B9154D05F2E29EC0"><enum>(ii)</enum><text>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.</text></clause></subparagraph></paragraph>
<paragraph id="H919EA43214B045A993885962C895A668"><enum>(7)</enum><header>Financial integrity of transactions</header><text display-inline="yes-display-inline">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).</text></paragraph>
<paragraph id="H065D7804B9D84B3BA56C04309EE77406"><enum>(8)</enum><header>Emergency authority</header><text>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.</text></paragraph>
<paragraph id="H831E253F2C4C4E00BED38723728C332D"><enum>(9)</enum><header>Timely publication of trading information</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="HAA4FB687489C4DD2A7B0E0FBA12C7CA8"><enum>(10)</enum><header>Recordkeeping and reporting</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H7092D6E552D44A57A7C41AA63607C881"><enum>(11)</enum><header>Antitrust considerations</header><text>The swap execution facility shall avoid—</text>
<subparagraph id="H7469869D85CD47559F67E7C646072E3C"><enum>(A)</enum><text>adopting any rules or taking any actions that result in any unreasonable restraints of trade; or</text></subparagraph>
<subparagraph id="HDB1AEE91931E495A8EEA9EDBE3DCA8B6"><enum>(B)</enum><text>imposing any material anticompetitive burden on trading on the swap execution facility.</text></subparagraph></paragraph>
<paragraph id="H8BA4304AA7204B34B9049F9EBF7E1000"><enum>(12)</enum><header>Conflicts of interest</header><text>The swap execution facility shall—</text>
<subparagraph id="HB7B3DC98E18A4AAAAAE3DEEBCCC4C5A5"><enum>(A)</enum><text>establish and enforce rules to minimize conflicts of interest in its decision-making process; and</text></subparagraph>
<subparagraph id="H53DBD7CABC34416894200F74ED454D97"><enum>(B)</enum><text>establish a process for resolving the conflicts of interest.</text></subparagraph></paragraph>
<paragraph id="H7B93892BA7B64AD3AE4EECDDEA6CC836"><enum>(13)</enum><header>Financial resources</header>
<subparagraph id="H0925A6812E9C4AAD9604088F170ED9CF"><enum>(A)</enum><text>The swap execution facility shall have adequate financial, operational, and managerial resources to discharge its responsibilities.</text></subparagraph>
<subparagraph id="H494AC98F9609442AB7C536ED6ECDDBB3"><enum>(B)</enum><text>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.</text></subparagraph></paragraph>
<paragraph id="HFFFE7D55F15E44B392E4DCA4D71A06FB"><enum>(14)</enum><header>System safeguards</header><text>The swap execution facility shall—</text>
<subparagraph id="HD5B6C0B2774D4DCAA6B6021F3AA8F2C3"><enum>(A)</enum><text>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;</text></subparagraph>
<subparagraph id="HEB263F64901C48389572CB1ADA177EE4"><enum>(B)</enum><text>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</text></subparagraph>
<subparagraph id="H3E4341EF1D0045238993A1F6E2182F9F"><enum>(C)</enum><text>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.</text></subparagraph></paragraph>
<paragraph id="H8647DE888D1C4E4EBA7D18BDCDFDB86E"><enum>(15)</enum><header>Designation of compliance officer</header>
<subparagraph id="HCDD90BFCDBA642A19C3976D99F6385DB"><enum>(A)</enum><header>In general</header><text>Each swap execution facility shall designate an individual to serve as a compliance officer.</text></subparagraph>
<subparagraph id="HA42A4D98EA8441E4A6D84167307AE7F8"><enum>(B)</enum><header>Duties</header><text>The compliance officer—</text>
<clause id="HB7E5685F48C4460C9C816F537AD31B85"><enum>(i)</enum><text>shall report directly to the board or to the senior officer of the facility;</text></clause>
<clause id="HC5FB1E2620E74164A1172B120BB414F3"><enum>(ii)</enum><text>shall—</text>
<subclause id="HEE82193F70D745849F1087703688C358"><enum>(I)</enum><text>review compliance with the core principles in this subsection;</text></subclause>
<subclause id="HDA7DAA26F9D04CC0A87010E89C43601C"><enum>(II)</enum><text>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;</text></subclause>
<subclause id="H39CF518A12054E57851AC246F5D3A028"><enum>(III)</enum><text>be responsible for administering the policies and procedures required to be established pursuant to this section; and</text></subclause>
<subclause id="H9909BBCC2A534CC8986673F2087580A9"><enum>(IV)</enum><text>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</text></subclause></clause>
<clause id="H286EA39F42DE4D97A444A8ACC6929858"><enum>(iii)</enum><text>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.</text></clause></subparagraph>
<subparagraph id="H42C2F0579D9F4052AB7B8A5CB76FD73F"><enum>(C)</enum><header>Annual reports required</header><text>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.</text></subparagraph></paragraph></subsection>
<subsection id="H3EA649764C15489E968547D5FCAA68DB"><enum>(e)</enum><header>Exemptions</header><text>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.</text></subsection>
<subsection id="H42231DA256AD43A78A867F887F0852FC"><enum>(f)</enum><header>Rules</header><text display-inline="yes-display-inline">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.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section id="HC0754E7C0467429EBEBC51F7E0332AF6"><enum>3110.</enum><header>Derivatives transaction execution facilities and exempt boards of trade</header>
<subsection id="HC3986F6232F141EE9D731F73650B1E3B"><enum>(a)</enum><text display-inline="yes-display-inline">Sections 5a and 5d of the Commodity Exchange Act (7 U.S.C. 1 et seq.) are repealed.</text></subsection>
<subsection id="H81E145CCF294484DAA30FE4ABA922E98"><enum>(b)</enum>
<paragraph id="HFED768FE64A54BEB88BF2450257A883F" display-inline="yes-display-inline"><enum>(1)</enum><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H7CC5DD2DC03E41BF943B262A57623046" indent="up1"><enum>(2)</enum><text display-inline="yes-display-inline">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.</text></paragraph></subsection></section>
<section id="H7EC3FE900E9E410EB27FF5A72E7C8B5B"><enum>3111.</enum><header>Designated contract markets</header>
<subsection id="H44849C08947E4001B6EEF718F777D61B"><enum>(a)</enum><text>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:</text>
<quoted-block id="HEA39AE3C63FF4AFB92658F8B196CDECA" style="OLC">
<paragraph id="HE3F09115BD4E44BDB600626EB5AAFED9"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="HE1355255AE5545A1AF74C7E973CB7644"><enum>(2)</enum><header>Compliance with rules</header>
<subparagraph id="H775FB6AF66E34058AC0BF0084AD908FE"><enum>(A)</enum><text>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.</text></subparagraph>
<subparagraph id="H5BBB37C1597D4791B9E3129FDAE7C212"><enum>(B)</enum><text>The board of trade shall have the capacity to detect, investigate, and apply appropriate sanctions to, any person or entity that violates the rules.</text></subparagraph>
<subparagraph id="H22DCB737F0BB4362BE5E414981CB5C1E"><enum>(C)</enum><text>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.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H9C2C0F739A33432296470B09D11F6ADA"><enum>(b)</enum><text>Section 5(d) of such Act (7 U.S.C. 7(d)) is amended by striking paragraphs (4) and (5) and inserting the following:</text>
<quoted-block style="OLC" id="H62CC980E6F054F8C8B4A33A4D9FD3114" display-inline="no-display-inline">
<paragraph id="HA1D948CC4577425E9581E0C17C701BC6"><enum>(4)</enum><header>Prevention of market disruption</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H20688751E3774323ADC51B9FAD161E86"><enum>(5)</enum><header>Position limitations or accountability</header>
<subparagraph id="H5E44079281C14D82922F5C262B4D2C54"><enum>(A)</enum><text>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.</text></subparagraph>
<subparagraph id="H454438295DC8478A9CF819D5A1662C48"><enum>(B)</enum><text>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.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HD4C502ABB4DE4552B3BE56EB847FCF0C" display-inline="no-display-inline"><enum>(c)</enum><text>Section 5(d) of such Act (7 U.S.C. 7(d)) is amended by striking paragraph (7) and inserting the following:</text>
<quoted-block style="OLC" id="HF831AE37A82441FFBF57C63DEF8A7B21" display-inline="no-display-inline">
<paragraph id="H95FD01B288D74DB7B24B980BB2B277CF"><enum>(7)</enum><header>Availability of general information</header><text display-inline="yes-display-inline">The board of trade shall make available to market authorities, market participants, and the public accurate information concerning—</text>
<subparagraph id="HC269126F8E274F638B13379D78203FA7"><enum>(A)</enum><text>the terms and conditions of the contracts of the contract market; and</text></subparagraph>
<subparagraph id="H0881EEF0C9F24404AD775B943BAF7AD0"><enum>(B)</enum><text>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.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HC31CFC12220E4039B98964561FA26B05" display-inline="no-display-inline"><enum>(d)</enum><text>Section 5(d) of such Act (7 U.S.C. 7(d)) is amended by striking paragraph (9) and inserting the following:</text>
<quoted-block style="OLC" id="H9930178965374435998F856E55101699" display-inline="no-display-inline">
<paragraph id="HC618C5957AA34F94A607921A4E1021DE"><enum>(9)</enum><header>Execution of transactions</header>
<subparagraph id="HB6E414FB9DB14AABBF1DEDDF20519583"><enum>(A)</enum><text>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.</text></subparagraph>
<subparagraph id="H15D0A48DD1ED4C028743288523329F65"><enum>(B)</enum><text>The rules may authorize, for bona fide business purposes—</text>
<clause id="HEC34CC19472F44199360F4BBC5088171"><enum>(i)</enum><text>transfer trades or office trades;</text></clause>
<clause id="H20FEED2CAB8246D3BDD5821F12D4D95D"><enum>(ii)</enum><text>an exchange of—</text>
<subclause id="H2C5690B568514E7195BE5FA6D4A6F4AB"><enum>(I)</enum><text>futures in connection with a cash commodity transaction;</text></subclause>
<subclause id="H519860B6FC904B29B69BFACB83653800"><enum>(II)</enum><text>futures for cash commodities; or</text></subclause>
<subclause id="H73BB75E3BC1944E1AA8DDA26E7CFC623"><enum>(III)</enum><text>futures for swaps; or</text></subclause></clause>
<clause id="H7BDFBC6D465D4A3FBF84A17D6059CE48"><enum>(iii)</enum><text>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.</text></clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H847680C14095435B99B93674C502D500"><enum>(e)</enum><text display-inline="yes-display-inline">Section 5(d)(17) of such Act (7 U.S.C. 7(d)(17)) is amended by adding at the end the following: <quote>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.</quote>.</text></subsection>
<subsection id="H7020681691C143E4A928950DFE2C747E"><enum>(f)</enum><text>Section 5(d) of such Act (7 U.S.C. 7(d)) is amended by adding at the end the following:</text>
<quoted-block id="H6684D03F73F54DD98FC2A6C85A5092CD" style="OLC">
<paragraph id="HA6E3C38E106E4EE9BEBB6A37E1D377C3"><enum>(19)</enum><header>Financial resources</header><text>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.</text></paragraph>
<paragraph id="H74E829C90DD34C748A3275C444DB3715"><enum>(20)</enum><header>System safeguards</header><text>The board of trade shall—</text>
<subparagraph id="H8B952917421F4C36B80B200EB30A8471"><enum>(A)</enum><text>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;</text></subparagraph>
<subparagraph id="H48D377757FFF4AB6B92D5FE994F9CADF"><enum>(B)</enum><text>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</text></subparagraph>
<subparagraph id="HF873575D33C74C8C9290A371FAE7181C"><enum>(C)</enum><text>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.</text></subparagraph></paragraph>
<paragraph id="H95868C10A8BC43FC8AE9FDC1E7E215DA"><enum>(21)</enum><header>Diversity of boards of directors</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H2149D3AA12144CD88F7043377870660B"><enum>(22)</enum><header>Disciplinary procedures</header><text display-inline="yes-display-inline">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.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H7F8273B5BA7843CA83E7053D1326C45C"><enum>(g)</enum><text>Section 5 of such Act (7 U.S.C. 7) is amended by striking subsection (b).</text></subsection></section>
<section id="HD6395B6A19CB4CA296F18184142987CC"><enum>3112.</enum><header>Margin</header>
<subsection id="HAF3B738D769D49D28E79F5060343C32D"><enum>(a)</enum><text display-inline="yes-display-inline">Section 8a(7)(C) of the Commodity Exchange Act (7 U.S.C. 12a(7)(C)) is amended by striking <quote>, excepting the setting of levels of margin</quote>.</text></subsection>
<subsection id="H8E1F57429B4A4172AC201CB69C0E04B7" display-inline="no-display-inline"><enum>(b)</enum><text display-inline="yes-display-inline">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:</text>
<quoted-block style="OLC" display-inline="no-display-inline" id="H03E085554D83466EB8FC10CFE17FDF2D">
<subparagraph id="HB38814A0BAAF43AFBC8DDCD0BCC631CE"><enum>(D)</enum><text display-inline="yes-display-inline">margin requirements, provided that such rules, regulations, or orders shall—</text>
<clause id="H3A44666F5392401D8F1BAF978DA1A595"><enum>(i)</enum><text>be limited to protecting the financial integrity of the derivatives clearing organization;</text></clause>
<clause id="H8396EACA464D4BB9A55B30F20ABE8778"><enum>(ii)</enum><text>be designed for risk management purposes in order to protect the financial integrity of transactions; and</text></clause>
<clause id="H132A256B824547F9A8BA12B6F13DB9BC"><enum>(iii)</enum><text>not set specific margin amounts.</text></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section>
<section id="H3619BE4DCC69412485ECB52607DB4F29"><enum>3113.</enum><header>Position limits</header>
<subsection id="H941C3796006949E4BCFFBB7599A552F7"><enum>(a)</enum><text>Section 4a(a) of the Commodity Exchange Act (7 U.S.C. 6a(a)) is amended by—</text>
<paragraph id="H3A0E791B1D8D4C63B99FDF419461365C"><enum>(1)</enum><text>inserting <quote>(1)</quote> after <quote>(a)</quote>;</text></paragraph>
<paragraph id="H3E6D9604BACE442B889887C2CD330974"><enum>(2)</enum><text>striking <quote>on electronic trading facilities with respect to a significant price discovery contract</quote> in the first sentence and inserting <quote>swaps that perform or affect a significant price discovery function with respect to registered entities</quote>;</text></paragraph>
<paragraph id="H2E30C1F7655948D4AF395023E33EFE38"><enum>(3)</enum><text>inserting <quote>, including any group or class of traders,</quote> in the second sentence after <quote>held by any person</quote>;</text></paragraph>
<paragraph id="HD30C81B12FAA4C18B2871B4659F5FA3D"><enum>(4)</enum><text>striking <quote>on an electronic trading facility with respect to a significant price discovery contract,</quote> in the second sentence and inserting <quote>swaps that perform or affect a significant price discovery function with respect to registered entities,</quote>; and</text></paragraph>
<paragraph id="H4F1FCC69440F4F88B89ECAA14C84A2BD"><enum>(5)</enum><text>inserting at the end the following:</text>
<quoted-block id="H9BD111EFACF04B96A4B8DD981F83E24B" style="OLC">
<paragraph id="H1F721D93ED6F49F1AD28E95F1A22B3D9"><enum>(2)</enum>
<subparagraph id="H1D01C89ECB4D4588BF1911002E6FA22E" display-inline="yes-display-inline"><enum>(A)</enum><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="H350976E5204840579219A2394FDD2A73" indent="up1"><enum>(B)</enum>
<clause id="HD8E9E7E1A7584F2CA74F159395EC9401" display-inline="yes-display-inline"><enum>(i)</enum><text>For exempt commodities, the limits shall be established within 180 days after the date of the enactment of this paragraph.</text></clause>
<clause id="HF74C4B316CA946A9AAD607DE96670A9F" indent="up1"><enum>(ii)</enum><text>For agricultural commodities, the limits shall be established within 270 days after the date of the enactment of this paragraph.</text></clause></subparagraph>
<subparagraph id="HCFE3FC7A281145358D1B1D3CFADC5FE8" indent="up1"><enum>(C)</enum><text display-inline="yes-display-inline">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.</text></subparagraph></paragraph>
<paragraph id="H154AA4E407344480AA76D132D2040203"><enum>(3)</enum><text>In establishing the limits required in paragraph (2), the Commission, as appropriate, shall set limits—</text>
<subparagraph id="H886CECB25B9645BEA110E01FF3489C69"><enum>(A)</enum><text>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</text></subparagraph>
<subparagraph id="H8BE7145ED6E04132BD576B708FFCDA2D"><enum>(B)</enum><text>to the maximum extent practicable, in its discretion—</text>
<clause id="H1D0F8F4B9B6E4A00A6602D606BB32F28"><enum>(i)</enum><text>to diminish, eliminate, or prevent excessive speculation as described under this section;</text></clause>
<clause id="H6A4B46A2B8454A2881FE978A2343AA2C"><enum>(ii)</enum><text>to deter and prevent market manipulation, squeezes, and corners;</text></clause>
<clause id="H72B95EE44DE14BA0B772E742C6016FBC"><enum>(iii)</enum><text>to ensure sufficient market liquidity for bona fide hedgers; and</text></clause>
<clause id="H9D280329BAEA4703938F90636F2905FD"><enum>(iv)</enum><text>to ensure that the price discovery function of the underlying market is not disrupted.</text></clause></subparagraph></paragraph>
<paragraph id="H7556975FA2AA451490511EBE53A3F855"><enum>(4)</enum>
<subparagraph id="HA607B256CB224214ADE4E8A188AE9716" display-inline="yes-display-inline"><enum>(A)</enum><text>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).</text></subparagraph>
<subparagraph id="H6F4F1B2723B54C06B34A07D9BD8D90FF" indent="up1"><enum>(B)</enum><text>Each public hearing held pursuant to subparagraph (A) shall, at a minimum providing there is sufficient interest, receive recommendations from—</text>
<clause id="H4C208AB7321340759B8CF7C6CD6DEB30"><enum>(i)</enum><text>7 predominantly commercial short hedgers of the actual physical commodity for future delivery;</text></clause>
<clause id="H89551F9B914D406EBDF24855A01F2BED"><enum>(ii)</enum><text>7 predominantly commercial long hedgers of the actual physical commodity for future delivery;</text></clause>
<clause id="H3D1DA11FD1C74265A8BC60ADD414729A"><enum>(iii)</enum><text>4 non-commercial participants in markets for commodities for future delivery; and</text></clause>
<clause id="H0288EF9E58DD4CEEB1017DC23B3CEE80"><enum>(iv)</enum><text>each designated contract market upon which a contract in the commodity for future delivery is traded.</text></clause></subparagraph>
<subparagraph id="HB7FFBA43AA33454DA7CF0D58E506CFE7" indent="up1"><enum>(C)</enum><text>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.</text></subparagraph></paragraph>
<paragraph id="H4253F1D060A947BAAA44A0064FD680FF"><enum>(5)</enum><header>Significant price discovery function</header><text>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:</text>
<subparagraph id="H9ADA827CB2DE4F8FBCF6B3047C462F0F"><enum>(A)</enum><header>Price linkage</header><text>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;</text></subparagraph>
<subparagraph id="HA5E23520B51B4CF7BD253B4D5FF18048"><enum>(B)</enum><header>Arbitrage</header><text>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;</text></subparagraph>
<subparagraph id="H6BECE0EC98E147BF83EA22810F1D99EA"><enum>(C)</enum><header>Material price reference</header><text>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;</text></subparagraph>
<subparagraph id="H75BBFE8EA9044500B99BD2757CD53E02"><enum>(D)</enum><header>Material liquidity</header><text>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</text></subparagraph>
<subparagraph id="H75CFC99C03F44D0CA9ED7563D701FDFA"><enum>(E)</enum><header>Other material factors</header><text>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.</text></subparagraph></paragraph>
<paragraph id="H643D8616AAFE44DC9147820E4C1541FF" display-inline="no-display-inline"><enum>(6)</enum><header>Economically equivalent contracts</header>
<subparagraph id="H77728F317226497E97ED2CA5BD0B6A95"><enum>(A)</enum><text display-inline="yes-display-inline">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).</text></subparagraph>
<subparagraph id="HDFA2199094A74BF09B4DD6A9FCA027BD"><enum>(B)</enum><text>In establishing limits pursuant to subparagraph (A), the Commission shall—</text>
<clause id="H0A1577A4163D48F9BDC292EEAA9A4CB9"><enum>(i)</enum><text>develop the limits concurrently with limits established under paragraph (2), and the limits shall have similar requirements as under paragraph (3)(B); and</text></clause>
<clause id="H66481D5256B041E6982AD5E71743C61E"><enum>(ii)</enum><text>establish the limits simultaneously with limits established under paragraph (2).</text></clause></subparagraph></paragraph>
<paragraph id="H6DACC308DD8944648A0B2B52C15A0ED6"><enum>(7)</enum><header>Aggregate position limits</header><text>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—</text>
<subparagraph id="H49E0A3035CD94CDFB3BE5425B06545A2"><enum>(A)</enum><text>contracts listed by designated contract markets;</text></subparagraph>
<subparagraph id="H371B8DA1636E4A22B7E490E886745651"><enum>(B)</enum><text display-inline="yes-display-inline">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</text></subparagraph>
<subparagraph id="H72DA35D7A0F44D6885616B8A4E3BF0B2"><enum>(C)</enum><text>swap contracts that perform or affect a significant price discovery function with respect to regulated entities.</text></subparagraph></paragraph>
<paragraph id="HAB51A8C85E734D4884C4404B3614C5FC"><enum>(8)</enum><header>Exemptions</header><text display-inline="yes-display-inline">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.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H0EB6607C8A6E44328CD045FA4B1813F3"><enum>(b)</enum><text>Section 4a(b) of such Act (7 U.S.C. 6a(b)) is amended—</text>
<paragraph id="H6A1895516ADF4D76BA6746FCFB43217C"><enum>(1)</enum><text>in paragraph (1), by striking <quote>or derivatives transaction execution facility or facilities or electronic trading facility</quote> and inserting <quote>or swap execution facility or facilities</quote>; and</text></paragraph>
<paragraph id="H346389BA0F3B4AC69BF853C6C7728173"><enum>(2)</enum><text>in paragraph (2), by striking <quote>or derivatives transaction execution facility or facilities or electronic trading facility</quote> and inserting <quote>or swap execution facility</quote>.</text></paragraph></subsection>
<subsection id="HD1A5AA91732A41CCBB7759579EA9F9AC"><enum>(c)</enum><text display-inline="yes-display-inline">Section 4a(c) of such Act is amended—</text>
<paragraph id="HB7B109A5FA4148F49A9B750DE1AC1440"><enum>(1)</enum><text>by inserting <quote>(1)</quote> after <quote>(c)</quote>; and</text></paragraph>
<paragraph id="H44DA1A5D581B48FE8177E4321F50B84B"><enum>(2)</enum><text>by adding after and below the end the following:</text>
<quoted-block style="OLC" id="H5D083AB0738A430B91D65FC939359DB0" display-inline="no-display-inline">
<paragraph id="HD355CE04E76B44408FC16D494C0447F7"><enum>(2)</enum><text display-inline="yes-display-inline">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—</text>
<subparagraph id="H98352802483A4AE0B029E107BB6B7758"><enum>(A)</enum>
<clause id="H00F3E555DF564A7CAFBA7D41FD124CA3" display-inline="yes-display-inline"><enum>(i)</enum><text>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;</text></clause>
<clause id="H2537E9798724450C800536F39FDF72BA" indent="up1"><enum>(ii)</enum><text>is economically appropriate to the reduction of risks in the conduct and management of a commercial enterprise; and</text></clause>
<clause id="H58864E864D8948F79316DBD2019E2981" indent="up1"><enum>(iii)</enum><text>arises from the potential change in the value of—</text>
<subclause id="H2B8906B6A4ED4ABA92D024824BCEF704"><enum>(I)</enum><text>assets that a person owns, produces, manufactures, processes, or merchandises or anticipates owning, producing, manufacturing, processing, or merchandising;</text></subclause>
<subclause id="HC4E4EFA98B90416FA8B25915679C21C0"><enum>(II)</enum><text>liabilities that a person owns or anticipates incurring; or</text></subclause>
<subclause id="HB0DAD57082774D0E8B119E499999D864"><enum>(III)</enum><text>services that a person provides, purchases, or anticipates providing or purchasing; or</text></subclause></clause></subparagraph>
<subparagraph id="H5055706DBC0842F8B6CC07D10B903280"><enum>(B)</enum><text>reduces risks attendant to a position resulting from a swap that—</text>
<clause id="HBBE2793A12E846BDA19C333E50EA20B5" display-inline="no-display-inline"><enum>(i)</enum><text>was executed opposite a counterparty for which the transaction would qualify as a bona fide hedging transaction pursuant to subparagraph (A); or</text></clause>
<clause id="H391111830B1747C58B11C203581D3545"><enum>(ii)</enum><text>meets the requirements of subparagraph (A).</text></clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H170C80908DE34AE5B1FDD7DDFB230C59"><enum>(d)</enum><text>This section shall become effective on the date of its enactment.</text></subsection></section>
<section id="H454C76BADD7A4A0CA5CC49CD66680724"><enum>3114.</enum><header>Enhanced authority over registered entities</header>
<subsection id="H3062C7E4FB1147898ABCF7EB649750BA"><enum>(a)</enum><text>Section 5c(a) of the Commodity Exchange Act (7 U.S.C. 7a–2(a)) is amended—</text>
<paragraph id="HF60D2D95CAB644D5AF235DF15C97B56B"><enum>(1)</enum><text>in paragraph (1), by striking <quote>5a(d) and 5b(c)(2)</quote> and inserting <quote>5b(c)(2) and 5h(e)</quote>; and</text></paragraph>
<paragraph id="H6CDCA6C830A54B09BD3E44680F52E846"><enum>(2)</enum><text>in paragraph (2), by striking <quote>shall not</quote> and inserting <quote>may</quote>.</text></paragraph></subsection>
<subsection id="H6664A33F785A4F229616062CA2A3AD73"><enum>(b)</enum><text display-inline="yes-display-inline">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 <quote>or swap execution facility</quote> after <quote>contract market</quote> each place it appears.</text></subsection>
<subsection id="H1D837A17983B421B93CA8A54988565BE"><enum>(c)</enum><text>Section 5c(c)(1) of such Act (7 U.S.C. 7a–2(c)(1)) is amended—</text>
<paragraph id="HAB0AE5B8C1914BD28A802DB77CB09E99"><enum>(1)</enum><text>by inserting <quote>(A)</quote> after <header-in-text level="subsection" style="OLC"><quote>In general.—</quote></header-in-text>; and</text></paragraph>
<paragraph id="H6127C9A246BA4B03A06F968A65BF7310"><enum>(2)</enum><text>by adding at the end the following:</text>
<quoted-block id="H400971F235B44C88B6B27A4C7C708A2B" style="OLC">
<subparagraph id="H81A617F7F93D4DE7BE23C6DF69AA8DAD" indent="up1"><enum>(B)</enum><text display-inline="yes-display-inline">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).</text></subparagraph>
<subparagraph id="H7D86EAF6A65546D6881843E035D51CFD" indent="up1"><enum>(C)</enum>
<clause id="HD9E6C643AFC2420886ECABBA9B3978FC" display-inline="yes-display-inline"><enum>(i)</enum><text>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.</text></clause>
<clause id="H69B5404A92814502A4261412BC4ABE09" indent="up1"><enum>(ii)</enum><text display-inline="yes-display-inline">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.</text></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H818A76AFE77C4933BB1E7CAADD8D5BBC"><enum>(d)</enum><text>Section 5c(d) of such Act (7 U.S.C. 7a–2(d)) is repealed.</text></subsection></section>
<section id="H5F76716F09DB4A9D83D30BF8445B63BC"><enum>3115.</enum><header>Foreign boards of trade</header>
<subsection id="H2BF1C8EFAA1A420E9542EF7D6302B3F3"><enum>(a)</enum><header>In general</header><text>Section 4 of the Commodity Exchange Act (7 U.S.C. 6) is amended by adding at the end the following:</text>
<quoted-block id="H80D3174BF67C4AC29D8735A8305B3B69" style="OLC">
<subsection id="H3E395AD60A6740F2B722F1C2AA8C250D"><enum>(e)</enum><header>Foreign boards of trade</header>
<paragraph id="HD48D5F8B229F4527AF269FFBC947C715"><enum>(1)</enum><header>In general</header><text>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—</text>
<subparagraph id="H13DF735CC23E462C9306F91BDF70D0EC"><enum>(A)</enum><text>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</text></subparagraph>
<subparagraph id="HB0CA3DFBF2E94E9F82058C1C887D5F18"><enum>(B)</enum><text>the foreign board of trade (or the foreign futures authority that oversees the foreign board of trade)—</text>
<clause id="H9AB65BAA8B7C496A962BE760A6991654"><enum>(i)</enum><text>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;</text></clause>
<clause id="HFDDDBF8DD2F24A9582EA0EF7099102FA"><enum>(ii)</enum><text>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;</text></clause>
<clause id="H436D53B33872499DABCA935EFC745CEC"><enum>(iii)</enum><text>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—</text>
<subclause id="HF17B6B5F45514529B53F459DBE6283D9"><enum>(I)</enum><text>the information that the foreign board of trade will make publicly available;</text></subclause>
<subclause id="H406B4BC9FFB140449E5B07575512E7BE"><enum>(II)</enum><text>the position limits that the foreign board of trade or foreign futures authority will adopt and enforce;</text></subclause>
<subclause id="H4149B73C07F84F76B3B9CD1D07B0357D"><enum>(III)</enum><text>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</text></subclause>
<subclause id="HFEC1F4BB85EA48668C5A8317A8729139"><enum>(IV)</enum><text>any other area of interest expressed by the Commission to the foreign board of trade or foreign futures authority;</text></subclause></clause>
<clause id="HF9C18A9AAB0F4DE1988688137101232C"><enum>(iv)</enum><text>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</text></clause>
<clause id="HD91FAE11A9B948299633AF557ED316CD"><enum>(v)</enum><text>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.</text></clause></subparagraph></paragraph>
<paragraph id="H31AC81F8BC874EBA95C44B83C247639D"><enum>(2)</enum><header>Existing foreign boards of trade</header><text>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.</text></paragraph>
<paragraph id="H10CA445968EA494CB8A0F87F132C4F94"><enum>(3)</enum><header>Persons located in the united states</header></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HBAF314F99E0942B3BF9EC9B2AB37E4AB"><enum>(b)</enum><header>Liability of registered persons trading on a foreign board of trade</header>
<paragraph id="HAAE41DEAA3DD4E2BA4FB486A417E2CEE"><enum>(1)</enum><text>Section 4(a) of such Act (7. U.S.C. 6(a)) is amended by inserting <quote>or by subsection (f)</quote> after <quote>Unless exempted by the Commission pursuant to subsection (c)</quote>; and</text></paragraph>
<paragraph id="HE26EA18A89AE4433BEDD1CAA626ED420"><enum>(2)</enum><text>Section 4 of such Act (7 U.S.C. 6) is further amended by adding at the end the following:</text>
<quoted-block id="H83D924C40FA143288DCBBE00BC6FAF2D" style="OLC">
<subsection id="HE292FD9CA212404088057368CF417B28"><enum>(f)</enum>
<paragraph id="H49A2D93AF8374630BA1EDB21BE598639" display-inline="yes-display-inline"><enum>(1)</enum><text>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—</text>
<subparagraph id="HC1086CF89E174DF892BEAB048F4D3556" indent="up1"><enum>(A)</enum><text>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—</text>
<clause id="HD64B769591174D8F898152254C105530"><enum>(i)</enum><text display-inline="yes-display-inline">legally organized under the laws of a foreign country;</text></clause>
<clause id="H1A145C69CACB427DB99227A0036041DE"><enum>(ii)</enum><text>authorized to act as a board of trade by a foreign futures authority; and</text></clause>
<clause id="H2123F4C9F8BC467292698D2645D57584"><enum>(iii)</enum><text>subject to regulation by the foreign futures authority; and</text></clause></subparagraph>
<subparagraph id="H9488764DA4104F4A99B251112993875F" indent="up1"><enum>(B)</enum><text>has not been determined by the Commission to be operating in violation of subsection (a).</text></subparagraph></paragraph>
<paragraph id="H97CF2563EC0448BE8DA36923B32C8821" indent="up1"><enum>(2)</enum><text>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).</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H30141F09CD39487F8D2AFDB6C4EE1D9C"><enum>(c)</enum><header>Contract enforcement for foreign futures contracts</header><text>Section 22(a) of such Act (7 U.S.C. 25(a)) is amended by adding at the end the following:</text>
<quoted-block id="H210BD6BF8890496782AAC218E0039ED8" style="OLC">
<paragraph id="H3CB941FF9ED54CE4BAAA6FFB2D67A28E"><enum>(5)</enum><header>Contract enforcement for foreign futures contracts</header><text>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.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section>
<section id="H4C07D54D4FC24AE78F544E121E49F3F1"><enum>3116.</enum><header>Legal certainty for swaps</header><text display-inline="no-display-inline">Section 22(a)(4) of the Commodity Exchange Act (7 U.S.C. 25(a)(4)) is amended to read as follows:</text>
<quoted-block id="H1CF316790B354A3793462C1ED9C29447" style="OLC">
<paragraph id="H22E4487269884B76A5410BAD689D30AB"><enum>(4)</enum><header>Contract enforcement between eligible counterparties</header>
<subparagraph id="HDCA0AB057FCA4546929FDA2A4CE0EF91"><enum>(A)</enum><text>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</text></subparagraph>
<subparagraph id="H397E2E79F8344116807EEA6CF47F93CE"><enum>(B)</enum><text display-inline="yes-display-inline">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.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section id="H36646F884F0C4AD1BD3DD78347094E9C"><enum>3117.</enum><header>FDICIA amendments</header><text display-inline="no-display-inline">Sections 408 and 409 of the Federal Deposit Insurance Corporation Improvement Act of 1991 (12 U.S.C. 4421 and 4422) are repealed.</text></section>
<section id="H23E318D70C114358B06C5E4BB939805E"><enum>3118.</enum><header>Enforcement authority</header>
<subsection id="HD53F0BFE7BAD4DF79E4EDD1FA8D28F3E"><enum>(a)</enum><text display-inline="yes-display-inline">The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by inserting after section 4b the following:</text>
<quoted-block id="HE2D119E4599F4DB0A246FDC8E3476B55" style="OLC">
<section id="HABA227D004D94882AE8C170DBEE456C4"><enum>4b–1.</enum><header>Enforcement authority</header>
<subsection id="HDBFA538C38D34113859B993D74AF68E7"><enum>(a)</enum><header>CFTC</header><text>Except as provided in subsection (b), the Commission shall have exclusive authority to enforce the provisions of subtitle A of the <short-title>Derivative Markets Transparency and Accountability Act of 2009</short-title> with respect to any person.</text></subsection>
<subsection id="HD2729E2744B248C7BAEAD46C1EEFD188"><enum>(b)</enum><header>Prudential regulators</header><text>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.</text></subsection>
<subsection id="H2EF9C3946EA54702846E6E88CEA6EF1A"><enum>(c)</enum><header>Referral</header>
<paragraph id="HA13AA6B5766A4322946B02BC1D82EF0C" display-inline="yes-display-inline"><enum>(1)</enum><text>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.</text></paragraph>
<paragraph id="H6B8B1089ADF640CFABF853176A3CB301" indent="up1"><enum>(2)</enum><text display-inline="yes-display-inline">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.</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HD5F24E9808D641468A52E9B77BD1A764"><enum>(b)</enum>
<paragraph id="H1E1127EE340B459A865DDE95B586365B" display-inline="yes-display-inline"><enum>(1)</enum><text display-inline="yes-display-inline">Section 4c(a) of such Act (7 U.S.C. 6c(a)) is amended by adding at the end the following:</text>
<quoted-block style="OLC" id="HF89DE0973B244731974E5A150E22E3E0" display-inline="no-display-inline">
<paragraph id="HC910CDE0A8B442139C829D66AD162A5E"><enum>(3)</enum><header>Disruptive practices</header><text display-inline="yes-display-inline">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—</text>
<subparagraph id="HA39194B546764139ABB4D57C6835F4FD"><enum>(A)</enum><text>violates bids and offers (intentionally bidding at a price higher than the lowest offer, or offering at a price lower than the highest bid);</text></subparagraph>
<subparagraph id="H1A63B75F854747D99759042BD8EB7054"><enum>(B)</enum><text display-inline="yes-display-inline">is, is of the character of, or is commonly known to the trade as <quote>marking the close</quote> (bidding or offering during or near the market’s closing period with the intent to influence the settlement price);</text></subparagraph>
<subparagraph id="H2606DD34677C4D3DAACD091700496A45"><enum>(C)</enum><text>is, is of the character of, or is commonly known to the trade as <quote>spoofing</quote> (bidding or offering with the intent to cancel the bid or offer before execution); or</text></subparagraph>
<subparagraph id="HE4914A32D6014613A1424ADA8A5EB260"><enum>(D)</enum><text>constitutes uneconomic trading (trading that has no legitimate economic purpose but for the effect on price).</text></subparagraph></paragraph>
<paragraph id="HF573F34CC60045D6826960769E377504"><enum>(4)</enum><text>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.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="HA5C5AF923A864273B37E9286A243351B" indent="up1"><enum>(2)</enum><text display-inline="yes-display-inline">The amendment made by paragraph (1) shall become effective upon enactment.</text></paragraph></subsection></section>
<section id="H7AF7214930544B9892B92D2968CCEFEA"><enum>3119.</enum><header>Enforcement</header>
<subsection id="HC1E8F62C9EA04B879802372C53C371C6"><enum>(a)</enum><text>Section 4b(a)(2) of the Commodity Exchange Act (7 U.S.C. 6b(a)(2)) is amended by striking <quote>or other agreement, contract, or transaction subject to paragraphs (1) and (2) of section 5a(g),</quote> and inserting <quote>or swap,</quote>.</text></subsection>
<subsection id="H2556CB31493B4AD995BBF7075A1E745C"><enum>(b)</enum><text>Section 4b(b) of such Act (7 U.S.C. 6b(b)) is amended by striking <quote>or other agreement, contract or transaction subject to paragraphs (1) and (2) of section 5a(g),</quote> and inserting <quote>or swap,</quote>.</text></subsection>
<subsection id="H7EC80B6A3ED14FE19A25113B6E5E7E84"><enum>(c)</enum><text>Section 4c(a) of such Act (7 U.S.C. 6c(a)) is amended by inserting <quote>or swap</quote> before <quote>if the transaction is used or may be used</quote>.</text></subsection>
<subsection id="H12F38DE670AA49DDB9F67FCD02FCFFAE"><enum>(d)</enum><text>Section 9(a)(2) of such Act (7 U.S.C. 13(a)(2)) is amended by inserting <quote>or of any swap,</quote> before <quote>or to corner</quote>.</text></subsection>
<subsection id="HED62EADAD91A4F8097613FC0FB6E5D0A"><enum>(e)</enum><text>Section 9(a)(4) of such Act (7 U.S.C. 13(a)(4)) is amended by inserting <quote>swap repository,</quote> before <quote>or futures association</quote>.</text></subsection>
<subsection id="HC5F8BBB708DF4746B1D68C21A382D100"><enum>(f)</enum><text>Section 9(e)(1) of such Act (7 U.S.C. 13(e)(1)) is amended by inserting <quote>swap repository,</quote> before <quote>or registered futures association</quote> and by inserting <quote>, or swaps,</quote> before <quote>on the basis</quote>.</text></subsection>
<subsection id="HC914AF8447FC44108F09CD92C81E4010"><enum>(g)</enum><text display-inline="yes-display-inline">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:</text>
<quoted-block id="H9426D5848D8D4A3AA7D3BD71057F6860" style="OLC">
<paragraph id="HE242C1A39B03471C99326D24760381AE"><enum>(6)</enum><text display-inline="yes-display-inline">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 <short-title>Derivative Markets Transparency and Accountability Act of 2009</short-title>.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section>
<section id="HC8EF63CBFC9145BF95796FEC03068661"><enum>3120.</enum><header>Retail commodity transactions</header>
<subsection id="HE0A77C72730C434CB3957A9E605AA418"><enum>(a)</enum><text display-inline="yes-display-inline">Section 2(c) of the Commodity Exchange Act (7 U.S.C. 2(c)) is amended—</text>
<paragraph id="H46C9074409CD40E1A89F5CE84FE49302"><enum>(1)</enum><text>in paragraph (1), by striking <quote>(other than section 5a (to the extent provided in section 5a(g)), 5b, 5d, or 12(e)(2)(B))</quote> and inserting <quote>(other than section 5b or 12(e)(2)(B))</quote>; and</text></paragraph>
<paragraph id="HAC251E72B624436EA892278D8F8A4F13"><enum>(2)</enum><text>in paragraph (2), by inserting after subparagraph (C) the following:</text>
<quoted-block id="H5265755B106D4855B591ABB471ED388A" style="OLC">
<subparagraph id="H26FF9B76B0F0443BAC93DD812E242124"><enum>(D)</enum><header>Retail commodity transactions</header>
<clause id="HC56F7ED6E8534CFDAB1FE31C2550D328"><enum>(i)</enum><text display-inline="yes-display-inline">This subparagraph shall apply to, and the Commission shall have jurisdiction over, any agreement, contract, or transaction in any commodity that is—</text>
<subclause id="HC871A1BBF51B4D23BE4893DDAE907BDC"><enum>(I)</enum><text>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</text></subclause>
<subclause id="H901AE947A34B4CB89D481401E286C32B"><enum>(II)</enum><text>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.</text></subclause></clause>
<clause id="H7472F1D765FB4F089415885CF77BBDB4"><enum>(ii)</enum><text>Clause (i) shall not apply to—</text>
<subclause id="HDC95447ABA8347B1B71AE9F0C9BBF3B6"><enum>(I)</enum><text>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);</text></subclause>
<subclause id="H9C752385602D40D8923A5DFE69B988F4"><enum>(II)</enum><text>any security;</text></subclause>
<subclause id="HF6A897DDEE054DFDB09BDE5E55FB8CA5"><enum>(III)</enum><text>a contract of sale that—</text>
<item id="H78CB7ED4DB7E4BDE96890EB915A16FA5"><enum>(aa)</enum><text>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</text></item>
<item id="HCC8AB476535B437E93983D5C03D80733"><enum>(bb)</enum><text>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.</text></item></subclause>
<subclause id="HE12765A7754947248221B625A3880362"><enum>(IV)</enum><text>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</text></subclause>
<subclause id="H28E91045B43B4B009FB189BD5224C5E1"><enum>(V)</enum><text>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)).</text></subclause></clause>
<clause id="H798F02E8E0B542D98224649A8AD4E6C4"><enum>(iii)</enum><text>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.</text></clause>
<clause id="H704088F6350C4085809F0BFECC22006F"><enum>(iv)</enum><text>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;</text></clause>
<clause id="HAFAB82C2BAC045C18648B53EBA3D5D38"><enum>(v)</enum><text>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;</text></clause>
<clause id="HCB227A91A6D54D2FBB78E7381FCCFB64"><enum>(vi)</enum><text>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.</text></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="HD136FBB2F8314C438AFAFB078551746A"><enum>(b)</enum><text display-inline="yes-display-inline">The amendments made by subsection (a) shall become effective on the date of the enactment of this section.</text></subsection></section>
<section id="HCC86840D71374DBF855C49D0B498C92D"><enum>3121.</enum><header>Large swap trader reporting</header><text display-inline="no-display-inline">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:</text>
<quoted-block id="H03795912A6B348389AB060DA12841165" style="OLC">
<section id="H862FDEDD77984097BF446381D88774FF"><enum>4t.</enum><header>Large swap trader reporting</header>
<subsection id="H1E93697865AB4A3087B525FBFB2D34CA"><enum>(a)</enum><text>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—</text>
<paragraph id="HF6CD15C181D54D7EA13769BC45CEDFF2"><enum>(1)</enum><text>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</text></paragraph>
<paragraph id="H2624D002560A41349A00CD59F7DA12C0"><enum>(2)</enum><text>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,</text></paragraph><continuation-text continuation-text-level="subsection">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.</continuation-text></subsection>
<subsection id="HDF0EE54633B647309BB543D3D1A88AB4"><enum>(b)</enum><text>The books and records shall show complete details concerning all transactions and positions as the Commission may by rule or regulation prescribe.</text></subsection>
<subsection id="H08065201E8C04FE49F213F0AB97CED66"><enum>(c)</enum><text>The books and records shall be open at all times to inspection and examination by any representative of the Commission.</text></subsection>
<subsection id="HEA33AA8C076A4B4F92FBBB2948B9CD0F"><enum>(d)</enum><text>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.</text></subsection>
<subsection id="H3FB369FAF88941C09C63AC08FA69BFF8"><enum>(e)</enum><text>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).</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section id="H5A7020E2F4994887B313FE9629162EF1"><enum>3122.</enum><header>Segregation of assets held as collateral in swap transactions</header><text display-inline="no-display-inline">The Commodity Exchange Act (7 U.S.C. 1 et seq.) is further amended by inserting after section 4t the following:</text>
<quoted-block style="OLC" id="HDC791F5CE00440428B34F56C77C5CDFE" display-inline="no-display-inline">
<section id="H3EBC963326374B5098718AD4590142EC"><enum>4u.</enum><header>Segregation of assets held as collateral in over-the-counter swap transactions</header>
<subsection id="H11906B5692864F6488DF107F693C983A"><enum>(a)</enum><header>Segregation</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="H1A002195D02147A3B59812CE2BD3EC63"><enum>(b)</enum><header>Further audit reporting</header><text>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.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section id="HADEF7EA207984199953CC5AA66B73DF7"><enum>3123.</enum><header>Other authority</header><text display-inline="no-display-inline">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.</text></section>
<section id="HC15B57533B8F4A60801F8E944D8C27DF"><enum>3124.</enum><header>Antitrust</header><text display-inline="no-display-inline">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 <term>antitrust laws</term> 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.</text></section>
<section id="HB649132CC9F941D49B2FAD869ACEC7B1"><enum>3125.</enum><header>Review of prior actions</header><text display-inline="no-display-inline">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.</text></section>
<section id="HBFCE0B8BBA4844E5A0FB500B0E56CD66"><enum>3126.</enum><header>Expedited process</header><text display-inline="no-display-inline">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.</text></section>
<section id="HC4F6D8F52D2F470AA2F41B6C585218BD"><enum>3127.</enum><header>Effective date</header>
<subsection id="H88A839A37E574504A27A57D93E692F5E"><enum>(a)</enum><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="H9AB21A3F65774A0F8F05233124902E08"><enum>(b)</enum><text>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.</text></subsection></section></subtitle>
<subtitle id="H59FD1F324C664AF59E0EBDEF8BB8D250"><enum>B</enum><header>Regulation of Security-Based Swap Markets</header>
<section id="HF2F11766A476400B802108128FE3756A"><enum>3201.</enum><header>Definitions under the Securities Exchange Act of 1934</header>
<subsection id="H6611479C9C6A458BA145A11FA0A7EFE4"><enum>(a)</enum><header>Definitions</header><text display-inline="yes-display-inline">Section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)) is amended—</text>
<paragraph id="H547A4E15F96B40FCB62620E41AE256E0"><enum>(1)</enum><text>in paragraph (5)(A) and (B), by inserting <quote>(but not security-based swaps, other than security-based swaps with or for persons that are not eligible contract participants)</quote> after the word <quote>securities</quote> in each place it appears;</text></paragraph>
<paragraph id="HF18DD3BDA49B46C6B4CEEB2F0FA3CBFD"><enum>(2)</enum><text>in paragraph (10), by inserting <quote>security-based swap,</quote> after <quote>security future,</quote>;</text></paragraph>
<paragraph id="H6BB6174F01CC4671B0CF62C089CF25D7"><enum>(3)</enum><text>in paragraph (13), by adding at the end the following: <quote>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.</quote>;</text></paragraph>
<paragraph id="H605EABFECAD84E4888BFEA4F81723AB5"><enum>(4)</enum><text>in paragraph (14), by adding at the end the following: <quote>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.</quote>;</text></paragraph>
<paragraph id="HCD2E7A87BD024FFE84E661F811E1294E"><enum>(5)</enum><text>in paragraph (39)—</text>
<subparagraph id="H4307E0700BA84FF1819E5C102EA6B88B"><enum>(A)</enum><text>by striking <quote>or government securities dealer</quote> and adding <quote>government securities dealer, security-based swap dealer or major security-based swap participant</quote> in its place in subparagraph (B)(i)(I);</text></subparagraph>
<subparagraph id="H7BC76DEF2073460B8C44E0EB6DFF568D"><enum>(B)</enum><text>by adding <quote>security-based swap dealer, major security-based swap participant,</quote> after <quote>government securities dealer,</quote> in subparagraph (B)(i)(II);</text></subparagraph>
<subparagraph id="H559CC1FA7BFB42C988DF78EA83EC62A3"><enum>(C)</enum><text>by striking <quote>or government securities dealer</quote> and adding <quote>government securities dealer, security-based swap dealer or major security-based swap participant</quote> in its place in subparagraph (C); and</text></subparagraph>
<subparagraph id="HD3B1D397567C4A3B82EEC8B905C0DCF0"><enum>(D)</enum><text>by adding <quote>security-based swap dealer, major security-based swap participant,</quote> after <quote>government securities dealer,</quote> in subparagraph (D); and</text></subparagraph></paragraph>
<paragraph id="H2F1C78001B7B42FDBB7FD4E4AEA29985"><enum>(6)</enum><text>by adding at the end the following:</text>
<quoted-block id="HB5E387BCC14841F2A7ECCE92C9EDA6E8" style="OLC">
<paragraph id="H51B0EA0C4FE447EE998F835FA76D79A7"><enum>(65)</enum><header>Eligible contract participant</header><text>The term <term>eligible contract participant</term> has the same meaning as in section 1a(12) of the Commodity Exchange Act (7 U.S.C. 1a(12)).</text></paragraph>
<paragraph id="H0CAB5B8DFDEB41E1891A5E742B5D8CB0"><enum>(66)</enum><header>Major swap participant</header><text>The term <term>major swap participant</term> has the same meaning as in section 1a(39) of the Commodity Exchange Act (7 U.S.C. 1a(39)).</text></paragraph>
<paragraph id="H199DD8758F8F4E33ABEC9BA2CEDC20EC"><enum>(67)</enum><header>Major security-based swap participant</header>
<subparagraph id="H46ABE334D0D94CF5BAAD395DF1EB8EA7" display-inline="no-display-inline"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">The term <term>major security-based swap participant</term> means any person who is not a security-based swap dealer, and—</text>
<clause id="HA9DC4196D4D748F4A4672D9B905E770C"><enum>(i)</enum><text display-inline="yes-display-inline">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</text></clause>
<clause id="H7FAE14220015469DAE260430C17E4332"><enum>(ii)</enum><text>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.</text></clause></subparagraph>
<subparagraph id="H8B0FB57D062843C88AD32276960C2FEC"><enum>(B)</enum><header>Definition of <quote>substantial net position</quote></header><text>The Commission shall define by rule or regulation the terms <term>substantial net position</term>, <term>substantial net counterparty exposure</term>, and <term>significant credit losses</term> 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.</text></subparagraph>
<subparagraph id="H0DB4C17C75674B7BA75705B33EF9D471"><enum>(C)</enum><text display-inline="yes-display-inline">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.</text></subparagraph></paragraph>
<paragraph id="H4BD539FBD5C347ADA07D03DACE23E925"><enum>(68)</enum><header>Security-based swap</header>
<subparagraph id="HCFFA9FD249FA4AD28F934EA9CA866088"><enum>(A)</enum><header>In general</header><text>Except as provided in subparagraph (B), the term <term>security-based swap</term> means any agreement, contract, or transaction that would be a swap under section 1a(35) of the Commodity Exchange Act, and that—</text>
<clause id="H728B4CAC00E24F868822C3BFCCB0697B"><enum>(i)</enum><text>is primarily based on an index that is a narrow-based security index, including any interest therein or based on the value thereof;</text></clause>
<clause id="HE9F431645E304E0E8D23759963E57D31"><enum>(ii)</enum><text>is primarily based on a single security or loan, including any interest therein or based on the value thereof; or</text></clause>
<clause id="H5CABC0A09FB94DF181BEA69D2AA815DB"><enum>(iii)</enum><text>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.</text></clause></subparagraph>
<subparagraph id="H85E73B8A06B04B43814CB701CB61C039"><enum>(B)</enum><header>Rule of construction regarding master agreements</header><text>The term <term>security-based swap</term> 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).</text></subparagraph>
<subparagraph id="H609BBF22FC624AA5BEF792FACB0BB915"><enum>(C)</enum><header>Exclusion</header><text display-inline="yes-display-inline">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.</text></subparagraph></paragraph>
<paragraph id="HD6E4E884FBD440A984B2FC425A42BC4A"><enum>(69)</enum><header>Swap</header><text>The term <term>swap</term> has the same meaning as in section 1a(35) of the Commodity Exchange Act (7 U.S.C. 1a(35)).</text></paragraph>
<paragraph id="HB9B80F677C7D4BD1B61B01B296D40ACE"><enum>(70)</enum><header>Person associated with a security-based swap dealer or major security-based swap participant</header><text>The term <term>person associated with a security-based swap dealer or major security-based swap participant</term> or <term>associated person of a security-based swap dealer or major security-based swap participant</term> 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).</text></paragraph>
<paragraph id="H8D292561388A49969085FE75D22EF76E"><enum>(71)</enum><header>Security-based swap dealer</header>
<subparagraph id="H55DE039115224B8A9E33428D6ED4D0F2"><enum>(A)</enum><header>In general</header><text>The term <term>security-based swap dealer</term> means any person that—</text>
<clause id="H2C613EEFDD444C8E8F8AA525F14F81BD"><enum>(i)</enum><text display-inline="yes-display-inline">holds itself out as a dealer in security-based swaps;</text></clause>
<clause id="H3D37202B88554A308B4B0DFC7533D7C9"><enum>(ii)</enum><text>makes a market in security-based swaps;</text></clause>
<clause id="HE0DAE846806340A7BFE7101B4CADA4D4"><enum>(iii)</enum><text>regularly engages in the purchase of security-based swaps and their resale to customers in the ordinary course of a business; or</text></clause>
<clause id="H878765FAC0BD4AD6819860EE180041E3"><enum>(iv)</enum><text>engages in any activity causing it to be commonly known in the trade as a dealer or market maker in security-based swaps.</text></clause></subparagraph>
<subparagraph id="HD2A17A1E3DEE48279BDBA3045EEE3D6E"><enum>(B)</enum><header>Designation by type or class</header><text>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.</text></subparagraph>
<subparagraph id="H359AB97AB2074E67AAB7457023CE8FA9"><enum>(C)</enum><header>De minimus exception</header><text>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.</text></subparagraph></paragraph>
<paragraph id="HB0BDEC4A1BD6407F906424825D37D189"><enum>(72)</enum><header>Appropriate Federal banking agency</header><text>The term <term>appropriate Federal banking agency</term> has the same meaning as in section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)).</text></paragraph>
<paragraph id="H11E1112951F14F20BDF146B478D20CB6"><enum>(73)</enum><header>Board</header><text>The term <term>Board</term> means the Board of Governors of the Federal Reserve System.</text></paragraph>
<paragraph id="HE74F9C3FED064B72AB36BB9B8FD23986"><enum>(74)</enum><header>Prudential regulator</header><text>The term <term>Prudential Regulator</term> means—</text>
<subparagraph id="HC911C9EA1F0E4008B68160B5D98821D6"><enum>(A)</enum><text>the Board in the case of a swap dealer, major swap participant, security-based swap dealer or major security-based swap participant that is—</text>
<clause id="HBBA5F83A0B48478F827B5096BEB0F39A"><enum>(i)</enum><text>a State-chartered bank that is a member of the Federal Reserve System; or</text></clause>
<clause id="H96B7B8AD0CB640FB8AFCB5733B93A8ED"><enum>(ii)</enum><text>a State-chartered branch or agency of a foreign bank;</text></clause></subparagraph>
<subparagraph id="H925FB3E97AF042A290D79B28D6A33B67"><enum>(B)</enum><text>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—</text>
<clause id="H00DABF82765A42A091D11FD54AA7ACEA"><enum>(i)</enum><text>a national bank; or</text></clause>
<clause id="HE90954A766CD45639CA4EACC1356661E"><enum>(ii)</enum><text>a federally chartered branch or agency of a foreign bank; and</text></clause></subparagraph>
<subparagraph id="HE364AE9F9D3643E39714013335F05462"><enum>(C)</enum><text>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.</text></subparagraph></paragraph>
<paragraph id="HC2EA2DB7F6CD4730A5E2FFD6EFDCA25F"><enum>(75)</enum><header>Swap dealer</header><text>The term <term>swap dealer</term> has the same meaning as in section 1a(38) of the Commodity Exchange Act (7 U.S.C. 1a(38)).</text></paragraph>
<paragraph id="H5B7F213383AC465BA33BE28B3F0062A4"><enum>(76)</enum><header>Security-based swap agreement</header>
<subparagraph id="H02203041D9534B62ACB801FB1AC54793"><enum>(A)</enum><header>In general</header><text>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 <term>security-based swap agreement</term> 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.</text></subparagraph>
<subparagraph id="H0F763FF121A94CC6A4AD1CC16FDAAF15"><enum>(B)</enum><header>Exclusions</header><text>The term <term>security-based swap agreement</term> does not include any security-based swap.</text></subparagraph></paragraph>
<paragraph id="H01CF8DC850B34481809F38C04B985029"><enum>(76)</enum><header>Security-based swap repository</header><text display-inline="yes-display-inline">The term <term>security-based swap repository</term> 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.</text></paragraph>
<paragraph id="HE3CF4FFE44B140649347860E0517AF3D"><enum>(77)</enum><header>Swap execution facility</header><text display-inline="yes-display-inline">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.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H6031E36A1214448F898C75085F834EFE"><enum>(b)</enum><header>Authority to further define terms</header><text display-inline="yes-display-inline">The Securities and Exchange Commission may adopt a rule further defining the terms <term>security-based swap</term>, <term>security-based swap dealer</term>, <term>major security-based swap participant</term>, and <term>eligible contract participant</term> 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.</text></subsection></section>
<section id="H06C60CB990224380856F51543EBE1972"><enum>3202.</enum><header>Repeal of prohibition on regulation of security-based swaps</header>
<subsection id="H1A87517821AE4E149F84167125C61DC8"><enum>(a)</enum><header>Repeal of law</header><text>Section 206B of the Gramm-Leach-Bliley Act (15 U.S.C. 78c note) is repealed.</text></subsection>
<subsection id="H948E27456435454EB2561B54AE680DB2"><enum>(b)</enum><header>Conforming Amendments to the Securities Act of 1933</header>
<paragraph id="H7DE5D4ACEB5A4E208738EB0FE0F453D0"><enum>(1)</enum><text>Section 2A(b) of the Securities Act of 1933 (15 U.S.C. 77b–1) is amended by striking <quote>(as defined in section 206B of the Gramm-Leach-Bliley Act)</quote> each place that such term appears.</text></paragraph>
<paragraph id="H0B0C0536F39D470FB8D530E5A89EC54E"><enum>(2)</enum><text>Section 17 of the Securities Act of 1933 (15 U.S.C. 77q) is amended—</text>
<subparagraph id="H1DD30DB1E22848BFB656BD1A918C4328"><enum>(A)</enum><text>in subsection (a)—</text>
<clause id="H4EB5BFA4227146CF981C52C359A22BFF"><enum>(i)</enum><text>by inserting <quote>(including security-based swaps)</quote> after <quote>securities</quote>; and</text></clause>
<clause id="HD676F3CF61184973988E04219CE43D37"><enum>(ii)</enum><text>by striking <quote>206B of the Gramm-Leach-Bliley Act</quote> and inserting <quote>3(a)(76) of the Securities Exchange Act of 1934</quote>; and</text></clause></subparagraph>
<subparagraph id="H08DDA58ACBEB49B09A10E86011C66661"><enum>(B)</enum><text>in subsection (d), by striking <quote>206B of the Gramm-Leach-Bliley Act</quote> and inserting <quote>3(a)(76) of the Securities Exchange Act of 1934</quote>.</text></subparagraph></paragraph></subsection>
<subsection id="H92F8929D99A94718BAC8138C42375AEB"><enum>(c)</enum><header>Conforming amendments to the securities exchange act of 1934</header><text>The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended as follows:</text>
<paragraph id="HD5E644ADFF0C49A6A212AD7449D32152"><enum>(1)</enum><text>Section 3A (15 U.S.C. 78c–1) is amended by striking <quote>(as defined in section 206B of the Gramm-Leach-Bliley Act)</quote> each place that the term appears.</text></paragraph>
<paragraph id="H8AD5502B5ED64CE9A7931699140DE5EB"><enum>(2)</enum><text>Section 9(a) (15 U.S.C. 78i(a)) is amended by striking paragraphs (2) through (5) and inserting:</text>
<quoted-block id="H846161F65CA249AA91B684F443F20E7E" style="OLC">
<paragraph id="H9CDBB2B528B94DCDA14AD29101ACB0E5" indent="up1"><enum>(2)</enum><text>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.</text></paragraph>
<paragraph id="HE514A2ECF33C43FF9384013228E858BC" indent="up1"><enum>(3)</enum><text>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.</text></paragraph>
<paragraph id="H8BB3DF9F5D984EB1B61569EC6B832789" indent="up1"><enum>(4)</enum><text>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.</text></paragraph>
<paragraph id="H79A6BF8C6481442ABC525561BACD9065" indent="up1"><enum>(5)</enum><text>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.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="H907741FFD52346BA8C57611D2344DC86"><enum>(3)</enum><text display-inline="yes-display-inline">Section 9(i) (15 U.S.C. 78i(i)) is amended by striking <quote>(as defined in section 206B of the Gramm-Leach-Bliley Act)</quote>;</text></paragraph>
<paragraph id="H70EBB7DBB63C45B185D5C6A8C455E2C4"><enum>(4)</enum><text>Section 10 (15 U.S.C. 78j) is amended by striking <quote>(as defined in section 206B of the Gramm-Leach-Bliley Act)</quote> each place that the term appears.</text></paragraph>
<paragraph id="HE310AB9BD72C4E519D557C3B0DE1E1AF"><enum>(5)</enum><text>Section 15(c)(1) is amended—</text>
<subparagraph id="H06244186E69044C7A5D750E1C6FB86A3"><enum>(A)</enum><text>in subparagraph (A), by striking <quote>, or any security-based swap agreement (as defined in section 206B of the Gramm-Leach-Bliley Act),</quote>; and</text></subparagraph>
<subparagraph id="H49721F63171C4320AD50C72142BF5DEF"><enum>(B)</enum><text>in subparagraphs (B) and (C), by striking <quote>agreement (as defined in section 206B of the Gramm-Leach-Bliley Act)</quote> in each place that the term appears.</text></subparagraph></paragraph>
<paragraph id="H537C83793DB1484082EA04B55AE6D3C1"><enum>(6)</enum><text>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 <quote>(as defined in section 206B of the Gramm-Leach-Bliley Act)</quote>.</text></paragraph>
<paragraph id="H95FC3B3AC212477D9A95D72F54B06C23"><enum>(7)</enum><text>Section 16 (15 U.S.C. 78p) is amended—</text>
<subparagraph id="HF9BA1128AB1342CE866E7B69C3F9E31E"><enum>(A)</enum><text>in subsection (a)(2)(C), by striking <quote>(as defined in section 206(b) of the Gramm-Leach-Bliley Act (15 U.S.C. 78c note))</quote>;</text></subparagraph>
<subparagraph id="HB0563A72A7DE4FD2AB3044540BA518DF"><enum>(B)</enum><text>in subsection (b), by striking <quote>(as defined in section 206B of the Gramm-Leach-Bliley Act)</quote> in each place that the term appears; and</text></subparagraph>
<subparagraph id="H6D7E25FF93C645B6BDBA91005A5E5782"><enum>(C)</enum><text>in subsection (g), by striking <quote>(as defined in section 206B of the Gramm-Leach-Bliley Act)</quote>;</text></subparagraph></paragraph>
<paragraph id="HE19368F55E2D44EB9A19C8CA2D145198"><enum>(8)</enum><text>Section 20 (15 U.S.C. 78t) is amended—</text>
<subparagraph id="H93F21C1018534678A223285FFAF5573F"><enum>(A)</enum><text>in subsection (d), by striking <quote>(as defined in section 206B of the Gramm-Leach-Bliley Act)</quote>; and</text></subparagraph>
<subparagraph id="H05BF545B77D14E4CA1A71D726ABCD2CD"><enum>(B)</enum><text>in subsection (f), by striking <quote>(as defined in section 206B of the Gramm-Leach-Bliley Act)</quote>; and</text></subparagraph></paragraph>
<paragraph id="H401377DDA83F4880AEAE368CE86DD3CF"><enum>(9)</enum><text>Section 21A (15 U.S.C. 78u–1) is amended—</text>
<subparagraph id="HCA2DBFB742CD456A830AB3094F736572"><enum>(A)</enum><text>in subsection (a)(1), by striking <quote>(as defined in section 206B of the Gramm-Leach-Bliley Act)</quote>; and</text></subparagraph>
<subparagraph id="H688E7F5B98484E8BB8BA449A16FE0AAB"><enum>(B)</enum><text>in subsection (g), by striking <quote>(as defined in section 206B of the Gramm-Leach-Bliley Act)</quote>.</text></subparagraph></paragraph></subsection></section>
<section id="HD123621C0F794AE18156C6C902F54F9D"><enum>3203.</enum><header>Amendments to the Securities Exchange Act of 1934</header>
<subsection id="H80062058AE954F46B16B4E4FC34E4CEC"><enum>(a)</enum><header>Clearing for security-based swaps</header><text>The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended by adding the following section after section 3A:</text>
<quoted-block style="OLC" id="H46818561C6C7480290A96EF53C7EF92E" display-inline="no-display-inline">
<section id="H84D9CEC23C564872B9E6D9D42AC9A105"><enum>3B.</enum><header>Clearing for security-based swaps</header>
<subsection id="H97F62A1D160E4EDC81CA4124474B98FA"><enum>(a)</enum><header>In general</header>
<paragraph id="H681BCFAB4B004A4BB2C2B6E2DBFBDA0E"><enum>(1)</enum><header>Standard for clearing</header><text>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.</text></paragraph>
<paragraph id="H2EEA833E91AD4D1EA79FB8B2B040C096"><enum>(2)</enum><header>Open access</header><text>The rules of a clearing agency described in paragraph (1) shall—</text>
<subparagraph id="H2326842FFB1341899308394FB8BC1F46"><enum>(A)</enum><text>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</text></subparagraph>
<subparagraph id="HF5D7872E1B6F45568616618D2DF2CB9E"><enum>(B)</enum><text>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.</text></subparagraph></paragraph></subsection>
<subsection id="H65A323AB912F471A8FD42798A2C80F1B"><enum>(b)</enum><header>Commission review</header>
<paragraph id="HE9767729739F400FA199E1060B3EF814"><enum>(1)</enum><header>Commission-initiated review</header>
<subparagraph id="H2EA3BB2DD33A4A85BF8097C47206F643"><enum>(A)</enum><text>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.</text></subparagraph>
<subparagraph id="H452371E81AF04237909440564F161DFE"><enum>(B)</enum><text>The Commission shall provide at least a 30-day public comment period regarding any determination under subparagraph (A).</text></subparagraph></paragraph>
<paragraph id="H42D462E8CC0F42E5820558B5A582EB52"><enum>(2)</enum><header>Swap submissions</header>
<subparagraph id="HE30D3EF2FC804287A96EB7FE76341B4F"><enum>(A)</enum><text>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.</text></subparagraph>
<subparagraph id="H098505E8D23846F6BB82D080A62BED0A"><enum>(B)</enum><text>The Commission shall—</text>
<clause id="H13A2FAC8C51641F0A196477F000D4D83"><enum>(i)</enum><text>make available to the public any submission received under subparagraph (A);</text></clause>
<clause id="H344D72EC0F3D4DB29544DEA81FC6EF59"><enum>(ii)</enum><text>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</text></clause>
<clause id="H376903B5DFFB4AB3AC6E06F792636485"><enum>(iii)</enum><text>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.</text></clause></subparagraph></paragraph>
<paragraph id="H9574CB33D0E241438371552426E3D6ED"><enum>(3)</enum><header>Deadline</header><text>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.</text></paragraph>
<paragraph id="HEEB196E8141D46A39D2BB9F0C0F3B0BC"><enum>(4)</enum><header>Determination</header>
<subparagraph id="HA43B42009E1F4245BF63887A42370AE6"><enum>(A)</enum><text>In reviewing a submission made under paragraph (2), the Commission shall review whether the submission is consistent with section 5b(c)(2).</text></subparagraph>
<subparagraph id="HD3B867D05CA94C28A82FF5C77F7E27B1"><enum>(B)</enum><text>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:</text>
<clause id="H72FCDB2977F9437AA4BD71AF21616819"><enum>(i)</enum><text>The existence of significant outstanding notional exposures, trading liquidity and adequate pricing data.</text></clause>
<clause id="H9B2C4A835A3F4F2E9CA5288DB0586D42"><enum>(ii)</enum><text>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.</text></clause>
<clause id="H1BF66E23089B411E9061D9D6CE5DD211"><enum>(iii)</enum><text>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.</text></clause>
<clause id="HD21FB9A5E36340608CB0B31CA69A8B0E"><enum>(iv)</enum><text>The effect on competition, including appropriate fees and charges applied to clearing.</text></clause>
<clause id="H58D46471927D4796A87DA7BC643BDEA2"><enum>(v)</enum><text>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.</text></clause></subparagraph>
<subparagraph id="H244B50C26ECA4A94A05E6E2D06BEF6F0"><enum>(C)</enum><text>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.</text></subparagraph></paragraph>
<paragraph id="H82CF2C22A7B14409A19DC957E8D7D060"><enum>(5)</enum><header>Rules</header><text>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.</text></paragraph></subsection>
<subsection id="HEAD42331E8E54417A9150715067D835F"><enum>(c)</enum><header>Stay of clearing requirement</header>
<paragraph id="HA4C9F3A8F2F24A6898F4AF6F53326FFD"><enum>(1)</enum><text>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.</text></paragraph>
<paragraph id="H9CF44C9443C845B292C3BA9E8037A4A8"><enum>(2)</enum><header>Deadline</header><text>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.</text></paragraph>
<paragraph id="HC12469EA78C541FDB68D7BC7F70FC3D2"><enum>(3)</enum><header>Determination</header><text>Upon completion of the review undertaken pursuant to paragraph (1), the Commission may—</text>
<subparagraph id="H4724DADFD0114B24AD585D4F6CC96210"><enum>(A)</enum><text>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</text></subparagraph>
<subparagraph id="HC0730DAC9B9E481F8DF6757537CE8556"><enum>(B)</enum><text>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.</text></subparagraph></paragraph>
<paragraph id="HA684FD32A79D4E848E1466146B19091B"><enum>(4)</enum><header>Rules</header><text>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.</text></paragraph></subsection>
<subsection id="H49129660C42840C3B53F3EF1908E19A2"><enum>(d)</enum><header>Prevention of evasion</header><text>The Commission may prescribe rules under this subsection, or issue interpretations of the rules, as necessary to prevent evasions of this section.</text></subsection>
<subsection id="H51BDA2FAD91147FA99BDF075F13DF714"><enum>(e)</enum><header>Required reporting</header>
<paragraph id="HBB6368251EB34135B066E19BB206751A"><enum>(1)</enum><header>In general</header><text>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.</text></paragraph>
<paragraph id="H07A8CB00811F49CAB809C3090DE2021E"><enum>(2)</enum><header>Swap dealer designation</header><text>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.</text></paragraph></subsection>
<subsection id="HD34108A7B5BD4335A54761ACF6A5063D"><enum>(f)</enum><header>Reporting transition rules</header><text>Rules adopted by the Commission under this section shall provide for the reporting of data, as follows:</text>
<paragraph id="HC9AD54635BF74489BEE9B40B174A8680"><enum>(1)</enum><text>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</text></paragraph>
<paragraph id="HAB80D87395A346C99B26440C908EA2A1"><enum>(2)</enum><text>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—</text>
<subparagraph id="H97C1823381B74E4F8DF4DE568BCC2A7E"><enum>(A)</enum><text>90 days after such effective date; or</text></subparagraph>
<subparagraph id="HB5DC6F9F0489467EA9BB23FA99ADC656"><enum>(B)</enum><text>such other time after entering into the security-based swap as the Commission may prescribe by rule or regulation.</text></subparagraph></paragraph></subsection>
<subsection id="HEA40D775C0F3414F8C71A92749F34A3F"><enum>(g)</enum><header>Clearing transition rules</header>
<paragraph id="H1BB331B301AB4D348B862C23B7E04270"><enum>(1)</enum><text>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).</text></paragraph>
<paragraph id="H9799ECACEE764375A4803643B96CDFA7"><enum>(2)</enum><text>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).</text></paragraph></subsection>
<subsection id="H0117AF91DB004E348735A5A00F589171"><enum>(h)</enum><header>Exceptions</header>
<paragraph id="H1C56CBDFEA9846F3BED5B48378590EDD"><enum>(1)</enum><header>In general</header><text>The requirements of subsection (a)(1) shall not apply to a security-based swap if one of the counterparties to the security-based swap—</text>
<subparagraph id="HF2FAE11199CF429197EC52AFC29C99CD"><enum>(A)</enum><text>is not a security-based swap dealer or major security-based swap participant;</text></subparagraph>
<subparagraph id="H386C08287B784A57B77E1D6693386C3D"><enum>(B)</enum><text>is using security-based swaps to hedge or mitigate commercial risk, including operating or balance sheet risk; and</text></subparagraph>
<subparagraph id="H5F30A367D6F84380A594F0FE0CE74C2C"><enum>(C)</enum><text>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.</text></subparagraph></paragraph>
<paragraph id="H0B3B8A6EF2BB45ECABDB2A961C3555C5"><enum>(2)</enum><header>Abuse of exception</header><text>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.</text></paragraph>
<paragraph id="H27C3DD1D0E3B4386A6BDF44329CF23EA"><enum>(3)</enum><header>Option to clear</header><text>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).</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HEAFA45F6CA60490085AB5F70DC8A575A" commented="no"><enum>(b)</enum><header>Clearing agency requirements</header><text>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:</text>
<quoted-block id="H52023D5D82844FDAA8A7F7A076A43D6A" style="OLC">
<subsection id="HD8F305F7C89C4B17A43BB237D270C9CF" commented="no"><enum>(g)</enum><header>Registration requirement</header><text>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.</text></subsection>
<subsection id="HF0C8020037AE4A7D846D4E8B7CA224C7" commented="no"><enum>(h)</enum><header>Voluntary registration</header><text>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.</text></subsection>
<subsection id="HE4D16E39990F4534AD7DCC7A901642FC" commented="no"><enum>(i)</enum><header>Existing banks and derivatives clearing organizations</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="H682FB6433DA043DCA2E91941C259F573" commented="no"><enum>(j)</enum><header>Reporting</header>
<paragraph id="HC13381F4ADAE4E939781C8AFDC9C4890" commented="no"><enum>(1)</enum><header>In general</header><text>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.</text></paragraph>
<paragraph id="HDB407387E4BE4B4BBBB38F9B5786AE0B" commented="no"><enum>(2)</enum><header>Public information</header><text>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.</text></paragraph></subsection>
<subsection id="HB951F56B2987496FA0FAA0F3E0CD0C85" commented="no"><enum>(k)</enum><header>Designation of compliance officer</header>
<paragraph id="HC92C423EE331491B85E116CE3603A993" commented="no"><enum>(1)</enum><header>In general</header><text>Each clearing agency that clears security-based swaps shall designate an individual to serve as a compliance officer.</text></paragraph>
<paragraph id="H23F62449068B4E52953016D386224210" commented="no"><enum>(2)</enum><header>Duties</header><text>The compliance officer shall—</text>
<subparagraph id="HADF29F9E4B9C412B82E73BB47E29D879" commented="no"><enum>(A)</enum><text>report directly to the board or to the senior officer of the clearing agency;</text></subparagraph>
<subparagraph id="H9C71802A0D9C435F8A15038D8B252AA9" commented="no"><enum>(B)</enum><text>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;</text></subparagraph>
<subparagraph id="HB43E9921B9F94DA8B4A310341D25F7A9" commented="no"><enum>(C)</enum><text>be responsible for administering the policies and procedures required to be established pursuant to this section;</text></subparagraph>
<subparagraph id="HEFA1BB348ACB47499D7269B18E01D3FB" commented="no"><enum>(D)</enum><text>ensure compliance with securities laws and the rules and regulations issued thereunder, including rules prescribed by the Commission pursuant to this section; and</text></subparagraph>
<subparagraph id="H3B7871744AE04FFA80A106AE9681AC52" commented="no"><enum>(E)</enum><text>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.</text></subparagraph></paragraph>
<paragraph id="HA789E585A9504F6A9412EAFCFA20A635" commented="no"><enum>(3)</enum><header>Annual reports required</header><text>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.</text></paragraph></subsection>
<subsection id="HE42CACFC3A784AE6850EBC4894F89081" display-inline="no-display-inline"><enum>(l)</enum><header>Standards for clearing agencies clearing swap transactions</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="H45E2E25EB3D34E5CBE65D0B56F0C575A" commented="no"><enum>(m)</enum><header>Rules</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="H00A3BB7841A74F8390176C407E75E7F8" commented="no"><enum>(n)</enum><header>Exemptions</header>
<paragraph id="HA8D0224D166245458475554955175393" commented="no"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H7988A01C79E347CAAD5831465A162C0E" commented="no"><enum>(2)</enum><text display-inline="yes-display-inline">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.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H5B74B9BA34A448809036468E8D856C4B"><enum>(c)</enum><header>Execution of security-based swaps</header><text>The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended by inserting after section 5 the following:</text>
<quoted-block id="H1B861B4E03C94283AD55096A44FA9E9A" style="OLC">
<section id="H6995D40197AF49DE9244E6465D6DA01E"><enum>5A.</enum><header>Execution of security-based swaps</header>
<subsection id="H1615F167E2E04E22B0256C028CC4FD7A"><enum>(a)</enum><header>Execution transparency</header>
<paragraph id="HCD3BAD230363431A9D69641C5C2E3BE3"><enum>(1)</enum><header>Requirement</header><text>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.</text></paragraph>
<paragraph id="H535C075781924CA9BEE62A4F59559E62"><enum>(2)</enum><header>Exceptions</header><text>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.</text></paragraph>
<paragraph id="HB846B2128C1640949797FE2F7C21F002"><enum>(3)</enum><header>Required reporting</header><text>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).</text></paragraph></subsection>
<subsection id="HFA79B264AECE4F458AFB15786991611B"><enum>(b)</enum><header>Exchange trading</header><text>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.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HFF1DBD8492A44FFBB0041EA70F618F0C"><enum>(d)</enum><header>Swap execution facilities</header><text>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:</text>
<quoted-block style="OLC" id="HABBD003673E34E23B993103C1B4D363F" display-inline="no-display-inline">
<section id="H5B12A95EE79E4FD78E73F98B4254A117"><enum>3C.</enum><header>Swap execution facilities</header>
<subsection id="HB280F7B440CF47DCB4C30D1E823BD1D7"><enum>(a)</enum><header>Registration</header><text>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.</text></subsection>
<subsection id="H734AD4E4749A47B1BBDA4C9041D62721"><enum>(b)</enum><header>Requirements for trading</header>
<paragraph id="H7058B50479E747F1BAAA4500C36E9DDC"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">A swap execution facility that is registered under subsection (a) may list for trading any security-based swap.</text></paragraph>
<paragraph id="H6ED7EB45380E4FFD99D45A7E4763B924"><enum>(2)</enum><header>Rules for trading through the facility</header><text display-inline="yes-display-inline">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.</text></paragraph></subsection>
<subsection id="HC8856CEA3DB94BB092C6E66C1129835C"><enum>(c)</enum><header>Trading by exchanges</header><text>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.</text></subsection>
<subsection id="H6AD202F89A9C4180BD68D21B319CBB99"><enum>(d)</enum><header>Core principles for swap execution facilities</header>
<paragraph id="HCF319EB8008446B7AB63384CA64D9009"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="HDDDAFCE74A994342ACAC3B77ECBCF70D"><enum>(2)</enum><header>Compliance with rules</header><text>The swap execution facility shall—</text>
<subparagraph id="H6554609C447B4EE4AA769FFA089FBE34"><enum>(A)</enum><text>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</text></subparagraph>
<subparagraph id="H55898B4501D74B87B7700B75D266EB86"><enum>(B)</enum><text>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—</text>
<clause id="H72CEFD63E1C84B659E09D8160F914978"><enum>(i)</enum><text>provide market participants with impartial access to the market; and</text></clause>
<clause id="HD160504B40794D82B7D7E18C921D4709"><enum>(ii)</enum><text>capture information that may be used in establishing whether rule violations have occurred.</text></clause></subparagraph></paragraph>
<paragraph id="H7B5CC69CE2604DFAAFA5A434C73905F8"><enum>(3)</enum><header>Security-based swaps not readily susceptible to manipulation</header><text>The swap execution facility shall permit trading only in security-based swaps that are not readily susceptible to manipulation.</text></paragraph>
<paragraph id="H4277AFD397E34540B4A3C2C706ABEC0B"><enum>(4)</enum><header>Monitoring of trading</header><text display-inline="yes-display-inline">The swap execution facility shall—</text>
<subparagraph id="HB5B385AAC0174979A2BEB034DB4DF7B3"><enum>(A)</enum><text>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</text></subparagraph>
<subparagraph id="HDD244EDBA5C343F59FDB5F916B998EEB"><enum>(B)</enum><text>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.</text></subparagraph></paragraph>
<paragraph id="HFEE63293169F48A2B6B4D388C0287E84"><enum>(5)</enum><header>Ability to obtain information</header><text>The swap execution facility shall—</text>
<subparagraph id="H7796305B4F2C41AD9BFEA911110C5EC9"><enum>(A)</enum><text>establish and enforce rules that will allow the facility to obtain any necessary information to perform any of the functions described in this section;</text></subparagraph>
<subparagraph id="HE508AF1D4D104DB88C29F472BEBD6B60"><enum>(B)</enum><text>provide the information to the Commission upon request; and</text></subparagraph>
<subparagraph id="HD3815C8F9C5D42D4AE78809EE805FC2F"><enum>(C)</enum><text>have the capacity to carry out such international information-sharing agreements as the Commission may require.</text></subparagraph></paragraph>
<paragraph id="H89D2FEBDD6AF4AF09C653C976804CF75"><enum>(6)</enum><header>Financial integrity of transactions</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H9340C4F117B848A8B5C2FD75E7DE2D36"><enum>(7)</enum><header>Emergency authority</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H82025C53487248EB933F17D53DF2FB22"><enum>(8)</enum><header>Timely publication of trading information</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="HE4E55C8DC9264C608C069D0A67ACD785"><enum>(9)</enum><header>Recordkeeping and reporting</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="HBB70D605F8084375A24AE89F6B95EFE9"><enum>(10)</enum><header>Conflicts of interest</header><text display-inline="yes-display-inline">The swap execution facility shall—</text>
<subparagraph id="H2E6A71A807854827B7C87D823D6DA6A0"><enum>(A)</enum><text>establish and enforce rules to minimize conflicts of interest in its decision-making process; and</text></subparagraph>
<subparagraph id="H9831210D485040DFB3F7BDD2C57C7BF6"><enum>(B)</enum><text>establish a process for resolving the conflicts of interest.</text></subparagraph></paragraph>
<paragraph id="HD54C99A2FFEA4550A86209B54ED72C7A"><enum>(11)</enum><header>Financial resources</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H2AF2EC5946A64DE9A2F8A442D7CE42CA"><enum>(12)</enum><header>System safeguards</header><text>The swap execution facility shall—</text>
<subparagraph id="H0774C8B1A57942629B6D12E3F9A8E7C3"><enum>(A)</enum><text>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;</text></subparagraph>
<subparagraph id="H5E0E27EF2E09467F847AF9E52C8B3A53"><enum>(B)</enum><text>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</text></subparagraph>
<subparagraph id="H0484FBD478DC49E2BFB62DF68959389D"><enum>(C)</enum><text>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.</text></subparagraph></paragraph>
<paragraph id="H3E8EEFFC3C9B456D8310EC054D4700E0"><enum>(13)</enum><header>Designation of compliance officer</header>
<subparagraph id="H436E5C3B7D084EFA85D9BCD1E921E5B9"><enum>(A)</enum><header>In general</header><text>Each swap execution facility shall designate an individual to serve as a compliance officer.</text></subparagraph>
<subparagraph id="HD537E5A60F334E468283BC48F69FE181"><enum>(B)</enum><header>Duties</header><text>The compliance officer—</text>
<clause id="H88DFF12697804B7F8FA7A6E00F60F98A"><enum>(i)</enum><text>shall report directly to the board or to the senior officer of the facility; and</text></clause>
<clause id="HD97276F85461475C9A02F2CCA6B45FED"><enum>(ii)</enum><text>shall—</text>
<subclause id="HC1AA08DDE3B348BDBD0312E53D35E412"><enum>(I)</enum><text>review compliance with the core principles in section 3B(e).</text></subclause>
<subclause id="H45921F0317C340059D3CAA96C06EDE6A"><enum>(II)</enum><text>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;</text></subclause>
<subclause id="H6910AC2062F849F186F2490E6BC06671"><enum>(III)</enum><text>be responsible for administering the policies and procedures required to be established pursuant to this section; and</text></subclause>
<subclause id="H5F0A4C27A6B8496D86583FB9EDB2E8CB"><enum>(IV)</enum><text>ensure compliance with securities laws and the rules and regulations issued thereunder, including rules prescribed by the Commission pursuant to this section; and</text></subclause></clause>
<clause id="H870BE549D9AC444B9F35218C38DA1653"><enum>(iii)</enum><text>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.</text></clause></subparagraph>
<subparagraph id="HCE8529E314B84ECDBEF8E5C5E52FB9C6"><enum>(C)</enum><header>Annual reports required</header><text>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.</text></subparagraph></paragraph></subsection>
<subsection id="HED1693DBD37A4651A1F0E7D17BF6A465"><enum>(e)</enum><header>Exemptions</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="H5758C70750ED426996E2533FF889E455"><enum>(f)</enum><header>Rules</header><text display-inline="yes-display-inline">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.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HEC96E6E9390145A395857DE20C231554" display-inline="no-display-inline" commented="no"><enum>(e)</enum><header>Segregation of assets held as collateral in swap transactions</header><text display-inline="yes-display-inline">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:</text>
<quoted-block style="OLC" id="HC03C03BB15E44B53AC45DDF18BE6A7E6" display-inline="no-display-inline">
<section id="H619375BECED24E83934793D786E4C677" commented="no"><enum>3D.</enum><header>Segregation of assets held as collateral in security-based swap transactions</header>
<subsection id="H83272D65B511467BA1FC683901F6E2E6" commented="no"><enum>(a)</enum><header>Over-the-counter swaps</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="HE490856505894DB790E2E8FE54843100"><enum>(b)</enum><header>Further audit reporting</header><text>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.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HE5C0510E8F824B0F92570F63D3735BC3"><enum>(f)</enum><header>Trading in security-based swaps</header><text>Section 6 of the Securities Exchange Act of 1934 (15 U.S.C. 78f) is amended by adding at the end the following:</text>
<quoted-block id="HA07A08B166464A63A6A10A69ECEA3821" style="OLC">
<subsection id="H402BED558D7B482297FE05EBB9127B72"><enum>(l)</enum><text>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).</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HA50600979A43476785017671A54FB409"><enum>(g)</enum><header>Additions of security-based swaps to certain enforcement provisions</header><text>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:</text>
<quoted-block style="OLC" id="H13B840BF75484D57B8C7DFF71E02FD8E" display-inline="no-display-inline">
<paragraph id="HF9C2272489384D748657BBB7537F87CB"><enum>(1)</enum><text>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</text></paragraph>
<paragraph id="H30B16869EC8D495BA02B745CAFCFBC68"><enum>(2)</enum><text>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</text></paragraph>
<paragraph id="HEC312E5193084E8F96647675B8CF5E7E"><enum>(3)</enum><text>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.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HF94A8EBC47CD458493EA3B25DF4DAC01"><enum>(h)</enum><header>Rulemaking authority to prevent fraud, manipulation and deceptive conduct in security-based swaps</header><text>Section 9 of the Securities Exchange Act of 1934 (15 U.S.C. 78i) is amended by adding at the end the following:</text>
<quoted-block style="OLC" id="H80D4B7A01A9D4D8394A3054D3092FBC8" display-inline="no-display-inline">
<subsection id="H408AFA1E9FE148EEA9B3EE5905C58FAA"><enum>(i)</enum><text>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.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H5F3CFE882805400BB6BF799EF27F6C68"><enum>(i)</enum><header>Position limits and position accountability for security-based swaps</header><text>The Securities Exchange Act of 1934 is amended by inserting after section 10A (15 U.S.C. 78j–1) the following new section:</text>
<quoted-block style="OLC" id="H2BC80AAA2B4B4EF7A329482A1329E020" display-inline="no-display-inline">
<section id="H5EE47277D9DA4D639966E51A44D3B177"><enum>10B.</enum><header>Position limits and position accountability for security-based swaps and large trader reporting</header>
<subsection id="H2C899F76187848D69F9866376EF4E599"><enum>(a)</enum><header>Position limits</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="HCEC1A6C80AE2480FA1B08944939DD8BF"><enum>(1)</enum><text>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</text></paragraph>
<paragraph id="H849603974AAB4965852288A9A05872CF"><enum>(2)</enum><text>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.</text></paragraph></subsection>
<subsection id="H44BD4BFA77854906B50B8E0B9822125D"><enum>(b)</enum><header>Exemptions</header><text>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.</text></subsection>
<subsection id="H6DDD8DB00D0A4ECFAA2BDD83F39A3F25"><enum>(c)</enum><header>SRO Rules</header>
<paragraph id="H637BCE3BBA204EA78E23C0E7FD5B8649"><enum>(1)</enum><header>In general</header><text>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—</text>
<subparagraph id="H649E9FA8248C45E98260EF36946A087C"><enum>(A)</enum><text>to adopt rules regarding the size of positions in any security-based swap that may be held by—</text>
<clause id="HA44CC2C0AEA5418594ABD5C013D1BD9A"><enum>(i)</enum><text>any member of such self-regulatory organization; or</text></clause>
<clause id="HEB84820001864CACBDBDD90988FE6D13"><enum>(ii)</enum><text>any person for whom a member of such self-regulatory organization effects transactions in such security-based swap; and</text></clause></subparagraph>
<subparagraph id="HC77C714F9F794B1BAED419385E59480F"><enum>(B)</enum><text>to adopt rules reasonably designed to ensure compliance with requirements prescribed by the Commission under subsection (c)(1)(A).</text></subparagraph></paragraph>
<paragraph id="H3BAC00CBBA234897BF9611379D608E07"><enum>(2)</enum><header>Requirement to aggregate positions</header><text>In establishing such limits, the self-regulatory organization may require such member or person to aggregate positions in—</text>
<subparagraph id="H84E990C9B1614245AA3E4D94802EC3FC"><enum>(A)</enum><text>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</text></subparagraph>
<subparagraph id="H8C58BC9521CE4C16B1ADBC015C6F2259"><enum>(B)</enum>
<clause id="H5B0D24DA6A2940958F8703A926FFFE5A" display-inline="yes-display-inline"><enum>(i)</enum><text>any security-based swap; and</text></clause>
<clause id="HA1AFB37D290D4210A3A15607495E797F" indent="up1"><enum>(ii)</enum><text>any security-based swap and any other instrument relating to the same security or group or index of securities.</text></clause></subparagraph></paragraph></subsection>
<subsection id="HDB7F1BABE6484937846C3575A23F3A5E"><enum>(d)</enum><header>Large trader reporting</header><text display-inline="yes-display-inline">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.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HB5A399D6B69048F4BAB067BFF200DF77"><enum>(j)</enum><header>Public reporting and repositories for security-based swaps</header><text>Section 13 of the Securities Exchange Act of 1934 (15 U.S.C. 78m) is amended by adding at the end the following:</text>
<quoted-block style="OLC" id="HFFB87CE6A931447D8B8FDE8A57C013F2" display-inline="no-display-inline">
<subsection id="H803B631BBA924AA7A3BE621ED116BF0B"><enum>(m)</enum><header>Public reporting of aggregate security-based swap data</header>
<paragraph id="H425367A13A994633A13927D7BAD21479"><enum>(1)</enum><header>In general</header><text>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).</text></paragraph>
<paragraph id="HDDAF2DDC64984165B2D29471BC9AEAC2"><enum>(2)</enum><header>Designee of the commission</header><text>The Commission may designate a clearing agency or a security-based swap repository to carry out the public reporting described in paragraph (1).</text></paragraph>
<paragraph id="H7286F6025FDA48739B88CD14573D0AD4"><enum>(3)</enum><header>Sources of information</header><text>The sources of the information to be publicly reported as described in paragraph (1) are—</text>
<subparagraph id="H40C1CD2BC8F645FF817F6AB5AFB228BC"><enum>(A)</enum><text>clearing agencies pursuant to section 3A;</text></subparagraph>
<subparagraph id="HC29DCC6AF927445E97524D7EBC4D6371"><enum>(B)</enum><text>security-based swap repositories pursuant to subsection (n); and</text></subparagraph>
<subparagraph id="HD6CD3440B46D4AB3BEBE9CABB017E3E2"><enum>(C)</enum><text>reports received by the Commission pursuant to section 13A.</text></subparagraph></paragraph></subsection>
<subsection id="HF826E64453564AC7A53F367C8C3131D2"><enum>(n)</enum><header>Security-based swap repositories</header>
<paragraph id="H4EBA29F6026640BD9ABB4AA20174199D"><enum>(1)</enum><header>Registration requirement</header>
<subparagraph id="HDDF6DDE03E774E30A369A7B9135470A9"><enum>(A)</enum><header>In general</header><text>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.</text></subparagraph>
<subparagraph id="HC11938CF89D2432CA58E3C06F0768D0A"><enum>(B)</enum><header>Inspection and examination</header><text>Registered security-based swap repositories shall be subject to inspection and examination by any representatives of the Commission.</text></subparagraph></paragraph>
<paragraph id="HF5D2867558C64948B553495C2B1A5C50"><enum>(2)</enum><header>Standard setting</header>
<subparagraph id="H2C159ADE6BAC4531A5A4C1D188B20A22"><enum>(A)</enum><header>Data identification</header><text>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.</text></subparagraph>
<subparagraph id="HEA799AACF8624DA1AE07B05A780F2773"><enum>(B)</enum><header>Data collection and maintenance</header><text>The Commission shall prescribe data collection and data maintenance standards for security-based swap repositories.</text></subparagraph>
<subparagraph id="HB9B6146ED1A24C39914AB8B9BED3D74D"><enum>(C)</enum><header>Comparability</header><text>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.</text></subparagraph></paragraph>
<paragraph id="HC420F1E771704648AEC4E3B74779FDF2"><enum>(3)</enum><header>Duties</header><text>A security-based swap repository shall—</text>
<subparagraph id="H260DD52695BA4C7185610E739A64F132"><enum>(A)</enum><text>accept data prescribed by the Commission for each security-based swap under this paragraph (2);</text></subparagraph>
<subparagraph id="H9D981488F4274AD3965CF34BCF5EF68B"><enum>(B)</enum><text>maintain such data in such form and manner and for such period as may be required by the Commission;</text></subparagraph>
<subparagraph id="HD131BFA5CC27436E9E426782B52E300D"><enum>(C)</enum><text>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</text></subparagraph>
<subparagraph id="H56EA156245BA493799C393E5976E4601"><enum>(D)</enum><text>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.</text></subparagraph></paragraph>
<paragraph id="H772F2EDAC3F241BA96AF4167E4A7D4C9"><enum>(4)</enum><header>Rules</header><text>Not later than 1 year after the date of the enactment of the <short-title>Derivative Markets Transparency and Accountability Act of 2009</short-title>, 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.</text></paragraph>
<paragraph id="H3669B156A9494B52B64C6214CB0D235F"><enum>(5)</enum><header>Exemptions</header><text display-inline="yes-display-inline">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.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section>
<section id="HD89B676A7009400DB12D3C9BF5456464"><enum>3204.</enum><header>Registration and regulation of swap dealers and major swap participants</header><text display-inline="no-display-inline">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:</text>
<quoted-block style="OLC" id="HD830FFF35E8F4A8A88FCAB4D1BDA2255" display-inline="no-display-inline">
<section id="HB7315DA81EBA49B4BDE5EF046F542CC9"><enum>15F.</enum><header>Registration and regulation of security-based swap dealers and major security-based swap participants</header>
<subsection id="H09B591B57F2A47C1B90177FAC28DFF03"><enum>(a)</enum><header>Registration</header>
<paragraph id="H066B08896E5E42AEBCC4571AC4D598BD"><enum>(1)</enum><text>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.</text></paragraph>
<paragraph id="HFC0C273AB5F04333917EB855FC92170E"><enum>(2)</enum><text>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.</text></paragraph></subsection>
<subsection id="H492E83B7CADA4036AB0D903284183D73"><enum>(b)</enum><header>Requirements</header>
<paragraph id="HB4CF1768A7114C8E9F87538A22B0C1D8"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">A person shall register as a security-based swap dealer or major security-based swap participant by filing a registration application with the Commission.</text></paragraph>
<paragraph id="H49008BC52C294C539B22C9D1D05DF275"><enum>(2)</enum><header>Contents</header><text>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.</text></paragraph>
<paragraph id="HEC69041FA2BF42DD8D43B109638590D2"><enum>(3)</enum><header>Expiration</header><text>Each registration shall expire at such time as the Commission may by rule or regulation prescribe.</text></paragraph>
<paragraph id="H5463D0ECE3004A3CAA3D3F521B6C1E85"><enum>(4)</enum><header>Rules</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H45E92C57D4354F59AC6AB85F9DCFA137"><enum>(5)</enum><header>Transition</header><text>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 <short-title>Derivative Markets Transparency and Accountability Act of 2009</short-title>.</text></paragraph></subsection>
<subsection id="H3062D15705BC4679A11F7D30CB49B7FC"><enum>(c)</enum><header>Rules</header>
<paragraph id="H63A171D5884043C5A778743A8742614E"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H996543D5D84D49BE8D9DDFF51392F9B9"><enum>(2)</enum><header>Exception for prudential requirements</header><text>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.</text></paragraph></subsection>
<subsection id="H106F8C5E70434302B3BDC9FFDA4D4A32"><enum>(d)</enum><header>Capital and margin requirements</header>
<paragraph id="HA591561A1200482BB7E90474561CF709"><enum>(1)</enum><header>In general</header>
<subparagraph id="H165503C5416A4B989E0E31B6816BF7FC"><enum>(A)</enum><header>Bank security-based swap dealers and major security-based swap participants</header><text>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—</text>
<clause id="HE0B7794ED1D6490FBAA294776CE28D96"><enum>(i)</enum><text>help ensure the safety and soundness of the security-based swap dealer or major security-based swap participant; and</text></clause>
<clause id="HD03E6A90B4A94111A4A4FE062B5F500C"><enum>(ii)</enum><text display-inline="yes-display-inline">are appropriate for the risk associated with the non-cleared swaps held as a swap dealer or major swap participant.</text></clause></subparagraph>
<subparagraph id="H8C02DCABFE604C32AFA86731291702D0"><enum>(B)</enum><header>Non-bank security-based swap dealers and major security-based swap participants</header><text>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—</text>
<clause id="HA92A6813415E4A8BAE0FE903E939A673"><enum>(i)</enum><text>help ensure the safety and soundness of the security-based swap dealer or major security-based swap participant; and</text></clause>
<clause id="H8A10C9A353D84004B4A9F443549CC972"><enum>(ii)</enum><text display-inline="yes-display-inline">are appropriate for the risk associated with the non-cleared swaps held as the swap dealer or major swap participant.</text></clause></subparagraph></paragraph>
<paragraph id="H61D73C791FE14C2BA44A602764CAC50F"><enum>(2)</enum><header>Rules</header>
<subparagraph id="H8D76194FBDDF46E793ABD47EB14CB86F"><enum>(A)</enum><header>Bank security-based swap dealers and major security-based swap participants</header><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="H7C2BA6F438564B9EB06366BD5E428AFF"><enum>(B)</enum><header>Non-bank security-based swap dealers and major security-based swap participants</header><text>Not later than 1 year after the date of the enactment of the <short-title>Derivative Markets Transparency and Accountability Act of 2009</short-title>, 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.</text></subparagraph></paragraph>
<paragraph id="HB93513CBFBC14128A978F10F79ED83AF"><enum>(3)</enum><header>Authority</header><text display-inline="yes-display-inline">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.</text></paragraph></subsection>
<subsection id="HA83D8B2230094F3497080349242B0919"><enum>(e)</enum><header>Reporting and recordkeeping</header>
<paragraph id="H9F98D25DF1E2400DAB15A079F8E87B70"><enum>(1)</enum><header>In general</header><text>Each registered security-based swap dealer and major security-based swap participant—</text>
<subparagraph id="HED69BC87EC504884A8B55D01A4D34743"><enum>(A)</enum><text>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;</text></subparagraph>
<subparagraph id="H40A1A355BF564E32BFB1DA8E151389E1"><enum>(B)</enum><text>for which—</text>
<clause id="H9EBBBA4A136943BDBE6F04B251181718"><enum>(i)</enum><text>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;</text></clause>
<clause id="H9730D8ED789D4E649825BBC3EEBEA993"><enum>(ii)</enum><text>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</text></clause></subparagraph>
<subparagraph id="H01A72189F23347E2947012A1FA814A13"><enum>(C)</enum><text>shall keep such books and records open to inspection and examination by any representative of the Commission.</text></subparagraph></paragraph>
<paragraph id="H6256E77ECA884DD6B9B6FE7AEB667474"><enum>(2)</enum><header>Rules</header><text>Not later than 1 year after the date of enactment of the <short-title>Derivative Markets Transparency and Accountability Act of 2009</short-title>, the Commission shall adopt rules governing reporting and recordkeeping for security-based swap dealers and major security-based swap participants.</text></paragraph></subsection>
<subsection id="H6D840B6759554573AA514121B6E0F712"><enum>(f)</enum><header>Daily trading records</header>
<paragraph id="H250768189D90444F8ED19756B86026C3"><enum>(1)</enum><header>In general</header><text>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.</text></paragraph>
<paragraph id="HA26A9F814E1B4D97BFAFD5F335290AB3"><enum>(2)</enum><header>Information requirements</header><text>The daily trading records shall include such information as the Commission shall prescribe by rule or regulation.</text></paragraph>
<paragraph id="H3C75E02EB8594EEEA86E1309F4FA9396"><enum>(3)</enum><header>Customer records</header><text>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.</text></paragraph>
<paragraph id="H3DD4D403CF894C0EB997400228B9BCAA"><enum>(4)</enum><header>Audit trail</header><text>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.</text></paragraph>
<paragraph id="HB0016792312543AF9FB4F0A27895095E"><enum>(5)</enum><header>Rules</header><text>Not later than 1 year after the date of the enactment of the <short-title>Derivative Markets Transparency and Accountability Act of 2009</short-title>, the Commission shall adopt rules governing daily trading records for security-based swap dealers and major security-based swap participants.</text></paragraph></subsection>
<subsection id="HF5A236DCE11443CAB7695142F1064A3A"><enum>(g)</enum><header>Business conduct standards</header>
<paragraph id="HF8A8A35720E84E338F4BF7702474A7F7"><enum>(1)</enum><header>In general</header><text>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—</text>
<subparagraph id="H6C92782C012F4191A7BE83E876C04C44"><enum>(A)</enum><text>fraud, manipulation, and other abusive practices involving security-based swaps (including security-based swaps that are offered but not entered into);</text></subparagraph>
<subparagraph id="H889B2F282DDF4E8EBE4641CDD1B0BB4D"><enum>(B)</enum><text>diligent supervision of its business as a security-based swap dealer;</text></subparagraph>
<subparagraph id="H0E38187D456F4D9D93578F72C75CEF0F"><enum>(C)</enum><text>adherence to all applicable position limits; and</text></subparagraph>
<subparagraph id="HE573F80B8AA2402299F97F4AADE5C24E"><enum>(D)</enum><text>such other matters as the Commission shall determine to be necessary or appropriate.</text></subparagraph></paragraph>
<paragraph id="H339076C09FB74E1DA1EF81C369EC1794"><enum>(2)</enum><header>Business conduct requirements</header><text>Business conduct requirements adopted by the Commission shall—</text>
<subparagraph id="H1644D1A508364BE68067D312A2349583"><enum>(A)</enum><text>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;</text></subparagraph>
<subparagraph id="HB860DBD88D764FA2B44A9859A5B10BAE"><enum>(B)</enum><text>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:</text>
<clause id="H9DC91B8CCCA549309C49DB47E58163AF"><enum>(i)</enum><text>information about the material risks and characteristics of the security-based swap;</text></clause>
<clause id="HA39451ED5882466BA49053B78AB3CCBF" display-inline="no-display-inline"><enum>(ii)</enum><text display-inline="yes-display-inline">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</text></clause>
<clause id="HD10FF77AFB8B495FA21E7330D3750676"><enum>(iii)</enum><text>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</text></clause></subparagraph>
<subparagraph id="H3E8AC173E76742598EA53C97DC57F67C"><enum>(C)</enum><text>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.</text></subparagraph></paragraph>
<paragraph id="HBD3D8A2B7A074291B14056DF715B4069"><enum>(3)</enum><header>Rules</header><text>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 <short-title>Derivative Markets Transparency and Accountability Act of 2009</short-title>.</text></paragraph></subsection>
<subsection id="H7C36D2CB839B448F936F5FD8E25B378C"><enum>(h)</enum><header>Documentation standards</header>
<paragraph id="H08FE7502C70A40AD94D16FB5C5BA34DE"><enum>(1)</enum><header>In general</header><text>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.</text></paragraph>
<paragraph id="HC21C1FB7F5D244F7BA1B73E097BE2560"><enum>(2)</enum><header>Rules</header><text>Not later than 1 year after the date of enactment of the <short-title>Derivative Markets Transparency and Accountability Act of 2009</short-title>, 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.</text></paragraph></subsection>
<subsection id="H8A11B79AFA7D46AAB282F2D9C10F3095"><enum>(i)</enum><header>Dealer responsibilities</header><text>Each registered security-based swap dealer and major security-based swap participant at all times shall comply with the following requirements:</text>
<paragraph id="HE1828115F9684B7C930A8E4115BCB17B"><enum>(1)</enum><header>Monitoring of trading</header><text>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.</text></paragraph>
<paragraph id="HDBB165FC35334396A95A51A09C16D416"><enum>(2)</enum><header>Disclosure of general information</header><text>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—</text>
<subparagraph id="H2EB530F95847470FA7D63810217E4CDE"><enum>(A)</enum><text>terms and conditions of its security-based swaps;</text></subparagraph>
<subparagraph id="H9B9256598C664497A10F8A30E11B4570"><enum>(B)</enum><text>security-based swap trading operations, mechanisms, and practices;</text></subparagraph>
<subparagraph id="H9CA71638B14749ACB9CC02F65ABEB983"><enum>(C)</enum><text>financial integrity protections relating to security-based swaps; and</text></subparagraph>
<subparagraph id="H753619727DC44109AE5BB26324B85FC6"><enum>(D)</enum><text>other information relevant to its trading in security-based swaps.</text></subparagraph></paragraph>
<paragraph id="H38ECB6475A3D4C94BBD6137E836476B3"><enum>(3)</enum><header>Ability to obtain information</header><text>The security-based swap dealer or major swap security-based participant shall—</text>
<subparagraph id="HA7145DCAAD7245A689A204B48CC247D6"><enum>(A)</enum><text>establish and enforce internal systems and procedures to obtain any necessary information to perform any of the functions described in this section; and</text></subparagraph>
<subparagraph id="H6567CD0D6A7F4D2786176A6721B2C00D"><enum>(B)</enum><text>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.</text></subparagraph></paragraph>
<paragraph id="H40A2476D4D28425F94766DDAE5D1141C"><enum>(4)</enum><header>Conflicts of interest</header><text>The security-based swap dealer and major security-based swap participant shall implement conflict-of-interest systems and procedures that—</text>
<subparagraph id="H726F5CB22A13412ABABA33C02D204AF9"><enum>(A)</enum><text>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</text></subparagraph>
<subparagraph id="HFD737AA8FFD74E0E8562F032090F6FA6"><enum>(B)</enum><text>address such other issues as the Commission determines appropriate.</text></subparagraph></paragraph> </subsection>
<subsection id="HCD2CA14A9CDC4DD7849C591BA46D87F1"><enum>(j)</enum><header>Statutory disqualification</header><text>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.</text></subsection>
<subsection id="H7D296911EDF346708020BEA6861D5B48"><enum>(k)</enum><header>Enforcement and administrative proceeding authority</header>
<paragraph id="H1F25A2752999429E8F2351F8F07BD8C5"><enum>(1)</enum><header>Primary enforcement authority</header>
<subparagraph id="H8164C0EF1319475AB84BB8D13A9E83D1"><enum>(A)</enum><header>SEC</header><text>Except as provided in subparagraph (B), the Commission shall have exclusive authority to enforce the amendments made by subtitle B of the <short-title>Derivative Markets Transparency and Accountability Act of 2009</short-title> with respect to any person.</text></subparagraph>
<subparagraph id="H3E84FDDB73044F76A60B9A4BEC6756B5"><enum>(B)</enum><header>Prudential regulators</header><text>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.</text></subparagraph>
<subparagraph id="HB1709E81EF6E4BE8AB360B3EF8CB62F2"><enum>(C)</enum><header>Referral</header>
<clause id="H4CEDE1EE6E1C4C33A0ACA7D486B17BFA"><enum>(i)</enum><header>Violations of nonprudential requirements</header><text>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.</text></clause>
<clause id="H349ADBA4D0DC4E6C9B5A04626F835A59"><enum>(ii)</enum><header>Violations of prudential requirements</header><text display-inline="yes-display-inline">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.</text></clause></subparagraph></paragraph>
<paragraph id="HA8A7AC18FFA946C69A31EB05322753F5"><enum>(2)</enum><header>Censure, denial, suspension; notice and hearing</header><text>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—</text>
<subparagraph id="H3661E473E8634DD6894D9BB164F43134"><enum>(A)</enum><text>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);</text></subparagraph>
<subparagraph id="H8EE3FC4657BB40F3BCB873BFFD236E4F"><enum>(B)</enum><text>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;</text></subparagraph>
<subparagraph id="HB8BABD87B8E14714A41F3F5E8AE2E6F2"><enum>(C)</enum><text>is enjoined from any action, conduct, or practice specified in subparagraph (C) of such paragraph (4);</text></subparagraph>
<subparagraph id="H10009EE63D634453B5B46747C812DD1E"><enum>(D)</enum><text>is subject to an order or a final order specified in subparagraph (F) or (H), respectively, of such paragraph (4); or</text></subparagraph>
<subparagraph id="H25F6E5540A1041D6BDA2E5E2380ECC76"><enum>(E)</enum><text>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).</text></subparagraph></paragraph>
<paragraph id="HDDE1846D8A7346D3A83F60E6856E3B27"><enum>(3)</enum><header>Associated persons</header><text>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—</text>
<subparagraph id="H46058A188360477498224BE95E542008"><enum>(A)</enum><text>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);</text></subparagraph>
<subparagraph id="H4E771CFDA8284B95849490E6C3FDC855"><enum>(B)</enum><text>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;</text></subparagraph>
<subparagraph id="H4536A58506BA4C5CB570F40D3E494F56"><enum>(C)</enum><text>is enjoined from any action, conduct, or practice specified in subparagraph (C) of such paragraph (4);</text></subparagraph>
<subparagraph id="H45415736144E4ACEA7B3378BBBC8F2DB"><enum>(D)</enum><text>is subject to an order or a final order specified in subparagraph (F) or (H), respectively, of such paragraph (4); or</text></subparagraph>
<subparagraph id="H61D905EA96A543E7B3101C245823C36E"><enum>(E)</enum><text>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).</text></subparagraph></paragraph>
<paragraph id="H3C8EFC0725384C83A57871E368478D57"><enum>(4)</enum><header>Unlawful conduct</header><text>It shall be unlawful—</text>
<subparagraph id="H2A4BAEB45BB94DFABBC76512E15BA707"><enum>(A)</enum><text>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</text></subparagraph>
<subparagraph id="H7F5BADFC34804BBFB398BE2F8519D7B4"><enum>(B)</enum><text>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.</text></subparagraph></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section id="HA63FBC564FF8401A9112F9C73D96031A"><enum>3205.</enum><header>Reporting and recordkeeping</header>
<subsection id="HE7341666A7A74C3590D40D637AAA9FC9"><enum>(a)</enum><text>The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended by inserting after section 13 the following section:</text>
<quoted-block id="HB5159782173843628417F9F9D5787491" style="OLC">
<section id="HAB77BE429DB74B548E371FF0C819CD7A"><enum>13A.</enum><header>Reporting and recordkeeping for certain security-based swaps</header>
<subsection id="H5C0B2B225443453CA87ACBADA4F484FC"><enum>(a)</enum><header>In general</header><text>Any person who enters into a security-based swap and—</text>
<paragraph id="HF861F1405C294FD5A0C9DA8DCE905E20"><enum>(1)</enum><text>did not clear the security-based swap in accordance with section 3A; and</text></paragraph>
<paragraph id="HBC48A628A562496697F33CEA1EAA0AB3"><enum>(2)</enum><text>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),</text></paragraph><continuation-text continuation-text-level="subsection">shall meet the requirements in subsection (b).</continuation-text></subsection>
<subsection id="H6E90DC47AEEB4732B9CB998062132BE0"><enum>(b)</enum><header>Reports</header><text>Any person described in subsection (a) shall—</text>
<paragraph id="H4F048A1F2ABF47C4A55CC1FD4C43CD6E"><enum>(1)</enum><text>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</text></paragraph>
<paragraph id="HA516F002734A477C95F7813AF42D2C5A"><enum>(2)</enum><text>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.</text></paragraph></subsection>
<subsection id="HBAA23AA74B7745E2BBD63146DD932F23"><enum>(c)</enum><header>Identical data</header><text>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).</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H0B5C9B95C66844DDA81D88EB4A4C763F"><enum>(b)</enum><header>Beneficial ownership reporting</header>
<paragraph id="H93A3454016B041339DEA4ED82AD2F894"><enum>(1)</enum><text>Section 13(d)(1) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(d)(1)) is amended by inserting <quote>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</quote> after <quote>Alaska Native Claims Settlement Act,</quote>; and</text></paragraph>
<paragraph id="H781E7E248553402DA74CBF4B0DAFF978"><enum>(2)</enum><text>Section 13(g)(1) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(g)(1)) is amended by inserting <quote>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</quote> after <quote>subsection (d)(1) of this section</quote>.</text></paragraph></subsection>
<subsection id="H723DC9856E3C4970B948902C22244EE6"><enum>(c)</enum><header>Reports by institutional investment managers</header><text>Section 13(f)(1) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(f)(1)) is amended by inserting <quote>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,</quote> after <quote>subsection (d)(1) of this section</quote>.</text></subsection>
<subsection id="H0EFEEDBD58164740B84F31AE0E7F9DDE"><enum>(d)</enum><header>Administrative proceeding authority</header><text>Section 15(b)(4) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(b)(4)) is amended—</text>
<paragraph id="HAA77E275EBF24FA2A8630A62E766B84F"><enum>(1)</enum><text>in subparagraph (C), by adding <quote>security-based swap dealer, major security-based swap participant,</quote> after <quote>government securities dealer,</quote>; and</text></paragraph>
<paragraph id="H5269F1A6CFA74479A11E0DD784E9890B"><enum>(2)</enum><text>in subparagraph (F), by adding <quote>, or security-based swap dealer, or a major security-based swap participant</quote> after <quote>or dealer</quote>.</text></paragraph></subsection>
<subsection id="H014E19843CF84866AB5FC7B4F9A4D87E" display-inline="no-display-inline"><enum>(e)</enum><header>Derivatives beneficial ownership</header><text>Section 13 of the Securities Exchange Act of 1934 (15 U.S.C. 78m) is amended by adding at the end the following:</text>
<quoted-block style="OLC" display-inline="no-display-inline" id="HA821DE0D8B4F411190072CC4BB718457">
<subsection id="H8102853007734B47B86C52AFA8EB9AB2"><enum>(o)</enum><header>Beneficial ownership</header><text display-inline="yes-display-inline">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.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section>
<section id="H49955960E99E47E2B4C769D878544335"><enum>3206.</enum><header>State gaming and bucket shop laws</header><text display-inline="no-display-inline">Section 28(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78bb(a)) is amended to read as follows:</text>
<quoted-block id="H0AE47BE429CF4D46AFA36FB868B5D9BD" style="OLC">
<subsection id="H068215C64B5C4BEB869070914C28E2D4"><enum>(a)</enum><text>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 <quote>bucket shops</quote> 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.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section id="HDA38AA2945FA4E2A81F11B0FA692F2B7"><enum>3207.</enum><header>Amendments to the Securities Act of 1933; treatment of security-based swaps</header>
<subsection id="H5B91A141F6B046119E0B3929970197A6"><enum>(a)</enum><header>Definitions</header><text>Section 2(a) of the Securities Act of 1933 (15 U.S.C. 77b(a)) is amended—</text>
<paragraph id="HB368EC2FF832472D912C04D6E3468F07"><enum>(1)</enum><text>in paragraph (1), by inserting <quote>security-based swap,</quote> after <quote>security future,</quote>;</text></paragraph>
<paragraph id="H00C01CB2C11E4D42B535BC34F16C13C4"><enum>(2)</enum><text>in paragraph (3) by adding at the end the following: <quote>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.</quote>; and</text></paragraph>
<paragraph id="H23C25BA56939494DB6CF67B607D77BF4"><enum>(3)</enum><text>by adding at the end the following:</text>
<quoted-block id="HA964B9B7377D41BFB718988197B4B634" style="OLC">
<paragraph id="H7D199B5D3DEB4CD891A1D9C3C19B5B83"><enum>(17)</enum><text>The terms <term>swap</term> and <term>security-based swap</term> 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.</text></paragraph>
<paragraph id="H568F23DA391342138AA2DB62BBA6077F"><enum>(18)</enum><text>The terms <term>purchase</term> or <term>sale</term> 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.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="HC057355F0DF24E888C43FB4862C1A389" display-inline="no-display-inline"><enum>(b)</enum><header>Exemption from registration</header><text display-inline="yes-display-inline">Section 3(a) of the Securities Act of 1933 is amended by adding at the end the following:</text>
<quoted-block style="OLC" display-inline="no-display-inline" id="HFD874C25A99E4E06BC3BD1DA9ED6524F">
<paragraph id="HB8A4AD97A6764E93B2B946EB8FC4BB4F"><enum>(15)</enum><text display-inline="yes-display-inline">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.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H3B107B73265749979C971C3BB633C618"><enum>(c)</enum><header>Registration of security-based swaps</header><text>Section 5 of the Securities Act of 1933 (15 U.S.C. 77e) is amended by adding at the end the following:</text>
<quoted-block id="H8708916B41EF427DB58A168D471301E3" style="OLC">
<subsection id="H1A349022717D487F83CB241511C71F1F"><enum>(d)</enum><text>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)).</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section>
<section id="H7F37A7C57592401D930B5000FD0B6528"><enum>3208.</enum><header>Other authority</header><text display-inline="no-display-inline">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.</text></section>
<section id="H8ADDB42DF9644DB7A86429F43069D878"><enum>3209.</enum><header>Jurisdiction</header>
<subsection id="H72D0ED8F8E2F4342899BFCC1E5D579F7"><enum>(a)</enum><text display-inline="yes-display-inline">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:</text>
<quoted-block id="HF047E1949E6D4E98BE33DCAEFB09B89B" style="OLC">
<subsection id="HCCBC916D3C5A4A6B958EDB1FD6C9E026"><enum>(c)</enum><header>Derivatives</header><text>The Commission shall not grant exemptions from the security-based swap provisions of the <short-title>Derivative Markets Transparency and Accountability Act of 2009</short-title>, except as expressly authorized under the provisions of that Act.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H20F3DE4518B848E2A1486A77ED96788F"><enum>(b)</enum><text display-inline="yes-display-inline">Section 30 of the Securities Exchange Act of 1934 is amended by adding at the end the following:</text>
<quoted-block style="OLC" id="H0596C1F2902C4EC0840D84F821E0B5AE" display-inline="no-display-inline">
<subsection id="H2EE30716471C4E75BBA40F66EC1D6230"><enum>(c)</enum><text display-inline="yes-display-inline">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.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section>
<section id="H716AA1959F824355B4EF14F19E157F2B"><enum>3210.</enum><header>Effective date</header>
<subsection id="HD78FCCC0BD8848FBA8EDCA4EEF83F653"><enum>(a)</enum><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="HB14A38F551B64ECDB6D6ED70657A4E8E"><enum>(b)</enum><text>Subsection (a) shall not preclude the Securities Exchange Commission from any rulemaking required to implement the provisions of this subtitle.</text></subsection></section></subtitle>
<subtitle id="HEE4E7C52466341DCB5A4DA313D79DC20"><enum>C</enum><header>Improved financial and commodity markets oversight and accountability</header>
<section id="HD47828FA72254FC4B45B050252F42D48"><enum>3301.</enum><header>Elevation of certain Inspectors General to appointment pursuant to section 3 of the Inspector General Act of 1978</header>
<subsection id="H17620D63492146C2936CFDDD891357B7"><enum>(a)</enum><header>Inclusion in certain definitions</header><text>Section 12 of the Inspector General Act of 1978 (5 U.S.C. App.) is amended—</text>
<paragraph id="HCFF842E63C714BF78097CF59BF43B844"><enum>(1)</enum><text display-inline="yes-display-inline">in paragraph (1), by striking <quote>or the Federal Cochairpersons of the Commissions established under section 15301 of title 40, United States Code;</quote> and inserting <quote>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;</quote>; and</text></paragraph>
<paragraph id="H0C930E0B613F4C4FB57F3C74CA7F25CC"><enum>(2)</enum><text display-inline="yes-display-inline">in paragraph (2), by striking <quote>or the Commissions established under section 15301 of title 40, United States Code,</quote> and inserting <quote>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,</quote>.</text></paragraph></subsection>
<subsection id="H9895A451174447D5B8203B7BD83990AA"><enum>(b)</enum><header>Exclusion from definition of designated Federal entity</header><text>Section 8G(a)(2) of the Inspector General Act of 1978 (5 U.S.C. App.) is amended—</text>
<paragraph id="H607B4595AB0B450DBDA6B7E6A1DE7214"><enum>(1)</enum><text>by striking <quote>the Board of Governors of the Federal Reserve System,</quote>;</text></paragraph>
<paragraph id="HE745240B35EE45FFA474F0632AAC28D0"><enum>(2)</enum><text display-inline="yes-display-inline">by striking <quote>the Commodity Futures Trading Commission,</quote>;</text></paragraph>
<paragraph id="HB69870AA6A2540D0A76116B2B99C89DA"><enum>(3)</enum><text display-inline="yes-display-inline">by striking <quote>the National Credit Union Administration,</quote>; and</text></paragraph>
<paragraph id="HBF3369E0A33F4E04A31B634A7A18D1C7"><enum>(4)</enum><text display-inline="yes-display-inline">by striking <quote>the Pension Benefit Guaranty Corporation, the Securities and Exchange Commission,</quote>.</text></paragraph></subsection></section>
<section id="H4AAA0C08927E419A8B32B91C2F81EC49"><enum>3302.</enum><header>Continuation of provisions relating to personnel</header>
<subsection id="H7A79B55624BE4992A60CB6998847FF1B"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">The Inspector General Act of 1978 (5 U.S.C. App.) is amended by inserting after section 8L the following:</text>
<quoted-block style="OLC" id="H46B7047FEE944C9DA11AB819C9B49C67" display-inline="no-display-inline">
<section id="HEB320798A4764BA9AD2AAD0E339738C9"><enum>8M.</enum><header>Special provisions concerning certain establishments</header>
<subsection id="H28A10D252D82429EB5DA810839945211"><enum>(a)</enum><header>Definition</header><text display-inline="yes-display-inline">For purposes of this section, the term <term>covered establishment</term> 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.</text></subsection>
<subsection id="H4DF635F185524F0BBDDDBD052AA0AB78"><enum>(b)</enum><header>Provisions relating to all covered establishments</header>
<paragraph id="H239184D63F174CCC92BF17F4FB6FE693"><enum>(1)</enum><header>Provisions relating to Inspectors General</header><text>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).</text></paragraph>
<paragraph id="H7AEF700440B34D3D85966318E9BA3704"><enum>(2)</enum><header>Provisions relating to other personnel</header><text>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.</text></paragraph></subsection>
<subsection id="H4CF7CF8227D64F70948C250971509463"><enum>(c)</enum><header>Provision relating to the Board of Governors of the Federal Reserve System</header><text>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.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H12368ADC59434D538BCA9894ED0F2C1F"><enum>(b)</enum><header>Conforming amendment</header><text>Paragraph (3) of section 8G(g) of the Inspector General Act of 1978 (5 U.S.C. App.) is repealed.</text></subsection></section>
<section id="H4A6B0875DAFF43DA8F80D7B0EC83155A"><enum>3303.</enum><header>Corrective responses by heads of certain establishments to deficiencies identified by Inspectors General</header><text display-inline="no-display-inline">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—</text>
<paragraph id="HCA0FE743AF214615BF40B66B04F66FD9"><enum>(1)</enum><text>take action to address deficiencies identified by a report or investigation of the Inspector General of the establishment concerned; or</text></paragraph>
<paragraph id="H126CE52DBF9E48A184CAEA4C943CB4F2"><enum>(2)</enum><text>certify to both Houses of Congress that no action is necessary or appropriate in connection with a deficiency described in paragraph (1).</text></paragraph></section>
<section id="H2E60FB2B667D4AFA9E534665E08B08F8"><enum>3304.</enum><header>Effective date; transition rule</header>
<subsection id="HF34DDC4A2EE94DCEA31DF2C4124EA380"><enum>(a)</enum><header>Effective date</header><text display-inline="yes-display-inline">This subtitle and the amendments made by this subtitle shall take effect 30 days after the date of the enactment of this subtitle.</text></subsection>
<subsection id="H23B9E65758B94FA18B08CE4C821E2F3D"><enum>(b)</enum><header>Transition rule</header><text display-inline="yes-display-inline">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.)—</text>
<paragraph id="H6805F44DCE4748AA8828E784F34544A0"><enum>(1)</enum><text display-inline="yes-display-inline">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</text></paragraph>
<paragraph id="HCB7B9350359941789620C2A90028D32C"><enum>(2)</enum><text display-inline="yes-display-inline">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.</text></paragraph></subsection></section>
<section id="H5F2E1D7857C440F99EE936E8AFF49C40" display-inline="no-display-inline" section-type="subsequent-section"><enum>3305.</enum><header>Authority of the Commodity Futures Trading Commission to define <quote>commercial risk</quote>, <quote>operating risk</quote>, and <quote>balance sheet risk</quote></header>
<subsection id="HA23AF95C1A6949F0A4BC24A36F0B62F8"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">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:</text>
<quoted-block style="OLC" display-inline="no-display-inline" id="H6E58078D256D4E35AEC5BD71932CCC0D">
<paragraph id="H4EEF094CE2A94B808B9CF6B14E0982D3"><enum>(51)</enum><header>Commercial risk; operating risk; balance sheet risk</header><text display-inline="yes-display-inline">The terms <quote>commercial risk</quote>, <quote>operating risk</quote>, and <quote>balance sheet risk</quote> shall have such meanings as the Commission may prescribe.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HA0D29EDB47E7473C80D7B22B4982CED1"><enum>(b)</enum><header>Effective date</header><text>The amendment made by subsection (a) shall take effect as if included in subtitle A.</text></subsection> </section>
<section id="HABD61D69D1C04D9999090CA79BB91A05" display-inline="no-display-inline" section-type="subsequent-section"><enum>3306. </enum><header>Conflicts of interest in clearing organizations</header>
<subsection id="H987071C7CF684D2F901854FE5693208C"><enum>(a)</enum><header>Commodity Exchange Act</header>
<paragraph id="HD3B107ABB2C54B3AB2438A2AC98A2633"><enum>(1)</enum><header>Definition of restricted owner</header><text display-inline="yes-display-inline">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:</text>
<quoted-block style="OLC" id="HF7B2F971C7774CAE8CA72B54CF53FDD6" display-inline="no-display-inline">
<paragraph id="H52D8776540124A42AB503985B5549FE5"><enum>(51)</enum><header>Restricted owner</header><text display-inline="yes-display-inline">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.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="H1CA404A06AF8439096DE867A88E0BAA5"><enum>(2)</enum><header>Conflicts of interest</header>
<subparagraph id="H72C86BC693C4436C9D2C2C8EAB62432B"><enum>(A)</enum><text display-inline="yes-display-inline">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: <quote>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.</quote>.</text></subparagraph>
<subparagraph id="H695A0DAD02CB49C08BE27F7EF258CD4A"><enum>(B)</enum><text display-inline="yes-display-inline">Section 4s(g)(1) of the Commodity Exchange Act (as added by the preceding provisions of this Act) is amended—</text>
<clause id="H4B94E8D111044493A817B53E30C08050" display-inline="no-display-inline"><enum>(i)</enum><text display-inline="yes-display-inline">by striking <quote>and</quote> at the end of subparagraph (C); and</text></clause>
<clause id="H3D74BF9571B646398B4E5EA9DDF9D1CF"><enum>(ii)</enum><text>by redesignating subparagraph (D) as subparagraph (E) and insert after subparagraph (C) the following:</text>
<quoted-block style="OLC" id="H06E4FE8828564759B774E808481B1E77" display-inline="no-display-inline">
<subparagraph id="HA2D0893D5B324618AD2864F86C9E676D"><enum>(D)</enum><text>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</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></clause></subparagraph>
<subparagraph id="HEE83C59A40B54357BDC422D709C9BD6E"><enum>(C)</enum><text display-inline="yes-display-inline">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:</text>
<quoted-block style="OLC" id="H56275E4C2A8D4166983FAAA3D2D4CF43" display-inline="no-display-inline">
<subparagraph id="H8A3DFC2A759A4F7BB4B85BBE87BF3C30"><enum>(C)</enum><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="H72A83E5A218D4297B9D27ED9DFDB2C24"><enum>(D)</enum><text>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.</text></subparagraph> <after-quoted-block>.</after-quoted-block></quoted-block></subparagraph>
<subparagraph id="H11C80A43F8DC471D9AE49BC4201C4430"><enum>(D)</enum><text display-inline="yes-display-inline">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:</text>
<quoted-block style="OLC" id="HB7237D3F0EB8421D88CEB23E75CC28D6" display-inline="no-display-inline">
<paragraph id="HBD36B9328C1B41F2AD769E11C0953989"><enum>(15)</enum><header>Conflicts of interest</header>
<subparagraph id="H44ADBA7C9E964BCB85A761428DD691CB"><enum>(A)</enum><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="H321AED99D4684E54B6A7D43353916029"><enum>(B)</enum><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="H6BC1085EFBBE4EDE9A4BA185DF5AA51F"><enum>(C)</enum><text>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.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph></subsection>
<subsection id="HE29116DA31B541CFB10549D45897BEB3"><enum>(b)</enum><header>Securities Exchange Act of 1934</header>
<paragraph id="HF38D39A23E4046D982BF34DFBEDBF87B"><enum>(1)</enum><header>Definition of restricted owner</header><text display-inline="yes-display-inline">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:</text>
<quoted-block style="OLC" id="H96DA1FB849994D5183DDBB2F13F4C005" display-inline="no-display-inline">
<paragraph id="HF5BA4DB71C8B49C69510FE83A22F7A76"><enum>(78)</enum><header>Restricted owner</header><text display-inline="yes-display-inline">The term <quote>restricted owner</quote> has the same meaning as in section 1a(51) of the Commodity Exchange Act. </text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="HA5B7D509A0B24B28853A850ACBC340A3"><enum>(2)</enum><header>Conflicts of interest</header>
<subparagraph id="HA7AE12BF40394A84B40E828ED770CDFE"><enum>(A)</enum><text>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:</text>
<quoted-block style="OLC" id="HABBCAC45A82D4432A6C3851ABADC846D" display-inline="no-display-inline">
<quoted-block-continuation-text quoted-block-continuation-text-level="section">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.</quoted-block-continuation-text><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph>
<subparagraph id="H09EF945C4DDB443FA6F06E4D888CCAC6"><enum>(B)</enum><text display-inline="yes-display-inline">Section 15F(g)(1) of the Securities Exchange Act of 1934 (as added by the preceding provisions of this Act) is amended—</text>
<clause id="H99488631F8A04F93A5FEDB8341BD0A8D"><enum>(i)</enum><text>in subparagraph (C), strike <quote>and</quote>; and</text></clause>
<clause id="H1BEF3890293A4EEEBFB5FCA0B46D2F92"><enum>(ii)</enum><text>insert after subparagraph (C) the following (and redesignate the succeeding subparagraph accordingly):</text>
<quoted-block style="OLC" id="H83F5A4AA790E4C828D788094AD7830CB" display-inline="no-display-inline">
<subparagraph id="H8A180DF8D014423C941D6309AC3D9DEC"><enum>(D)</enum><text display-inline="yes-display-inline">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</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></clause></subparagraph>
<subparagraph id="HCE49BC2502844A42B14F191292949E6E"><enum>(C)</enum><text>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:</text>
<quoted-block style="OLC" display-inline="no-display-inline" id="H4FB9D65891F241C887A89BE1A67F1281">
<paragraph id="H22B62874BDBE4DE8952EF69BB09A7D23"><enum>(10)</enum><text display-inline="yes-display-inline">The rules of the exchange minimize conflicts of interest in its decision-making process and establish a process for resolving such conflicts of interest.</text></paragraph>
<paragraph id="HA116024B74AB4D9B8EDEE63F82F244E1"><enum>(11)</enum><text>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.</text></paragraph>
<paragraph id="HE5DDE72B03DB4D50AAFE1D8F4A0CE11B"><enum>(12)</enum><text display-inline="yes-display-inline">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.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph>
<subparagraph id="HAA60AC2E17FE4186920350516E6CA76B"><enum>(D)</enum><text display-inline="yes-display-inline">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:</text>
<quoted-block style="OLC" id="H841A64FA5D8944A6A57BF8AC302E5BDD" display-inline="no-display-inline">
<subparagraph id="H44DCC53F21DB491F89D62962D856D281"><enum>(J)</enum><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="H4560ACFC4FE34E51B8F05838B4E5896F"><enum>(K)</enum><text>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.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </subparagraph></paragraph></subsection></section>
<section id="H9179442B841B4EA986DE27E3CD65FC0F" display-inline="no-display-inline" section-type="subsequent-section"><enum>3307.</enum><header>Definitions of major swap participant and major security-based swap participant</header>
<subsection id="H02F6F3325719459F928DF4F191E96ECF"><enum>(a)</enum><header>Major swap participant</header><text display-inline="yes-display-inline">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:</text>
<quoted-block style="OLC" id="HE8C00156A7654AD0BF0DC5F6D7E2593B" display-inline="no-display-inline">
<paragraph id="HC18DD7510A7F49A9B01160A6E00AD412"><enum>(39)</enum><header>Major swap participant</header>
<subparagraph id="H6B0A8E5550CD49FCBD83668D5F89CA8B"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">The term <term>major swap participant</term> means any person who is not a swap dealer, and—</text>
<clause id="H810A8879099245689994292BBDE03946"><enum>(i)</enum><text>maintains a substantial net position in outstanding swaps, excluding positions held primarily for hedging, reducing or otherwise mitigating its commercial risk; or</text></clause>
<clause id="H0E56BB55F6D94370B2550ED5F3EF03A8"><enum>(ii)</enum><text>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.</text></clause></subparagraph>
<subparagraph id="H7F1719AD4C364E628163D38AFEAF39D7"><enum>(B)</enum><header>Definition of substantial net position</header><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="HB553030E75C348E890326E6F85E926C3"><enum>(C)</enum><text display-inline="yes-display-inline">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.</text></subparagraph></paragraph> <after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H632B34C0B57446CF9F58A8BCE7A6F5E2"><enum>(b)</enum><header>Major security-based swap participant</header><text display-inline="yes-display-inline">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:</text>
<quoted-block style="OLC" display-inline="no-display-inline" id="H18EAB9F0D9EE4D08B50C002176EED6B3">
<paragraph id="HCCB266E7B3FD4B28B5DD26794A4EA8B1"><enum>(67)</enum><header>Major security-based swap participant</header>
<subparagraph id="H4A6F227916C74E12BC4D62517083C4D7"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">The term <term>major security-based swap participant</term> means any person who is not a security-based swap dealer, and—</text>
<clause id="HE91679DCD1B14511ACD3E0CC32436F2E"><enum>(i)</enum><text>maintains a substantial net position in outstanding security-based swaps, excluding positions held primarily for hedging, reducing or otherwise mitigating its commercial risk; or</text></clause>
<clause id="H067563B55353424AA921C9EFE20B899E"><enum>(ii)</enum><text>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.</text></clause></subparagraph>
<subparagraph id="H67ECEF56ADF9494BA10670FEA2D35264"><enum>(B)</enum><header>Definition of substantial net position</header><text display-inline="yes-display-inline">The Commission shall define by rule or regulation the term <quote>substantial net position</quote> 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.</text></subparagraph>
<subparagraph id="H79078D15C5834597A4C80A13D059559F"><enum>(C)</enum><text display-inline="yes-display-inline">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.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HC66669FC5FFF431AA893141139E795C2"><enum>(c)</enum><header>Effective dates</header>
<paragraph id="H859B4221D5774012B6A5B0AF33AE111A"><enum>(1)</enum><header>Major swap participant</header><text display-inline="yes-display-inline">The amendment made by subsection (a)(1) shall take effect as if included in subtitle A.</text></paragraph>
<paragraph id="HFD77B84642984483A6AAAB50F1164935"><enum>(2)</enum><header>Major security-based swap participant</header><text display-inline="yes-display-inline">The amendment made by subsection (a)(2) shall take effect as if included in subtitle B.</text></paragraph></subsection></section> </subtitle>
<enum>IV</enum><header>Consumer Financial Protection Agency Act</header>
<section id="HCC662C0F73D046A48812CC5D92E558D9" section-type="subsequent-section"><enum>4001.</enum><header>Short title</header><text display-inline="no-display-inline">This title may be cited as the <quote><short-title>Consumer Financial Protection Agency Act of 2009</short-title></quote>.</text> </section>
<section id="HD2BFE9A3DDDB445E82F1613C32748E33"><enum>4002.</enum><header>Definitions</header><text display-inline="no-display-inline">For the purposes of subtitles A through F of this title, the following definitions shall apply:</text>
<paragraph id="H792D894BAC2B466399DC4051CC4513BC"><enum>(1)</enum><header>Affiliate</header><text>The term <quote>affiliate</quote> means any person that controls, is controlled by, or is under common control with another person.</text> </paragraph>
<paragraph id="HE8576DECE4FB474B930F8EF613EEFD65" display-inline="no-display-inline"><enum>(2)</enum><header>Agency</header><text display-inline="yes-display-inline">The term <quote>Agency</quote> means—</text>
<subparagraph id="H96C6A18694FA44129CCF57933A4A20EC"><enum>(A)</enum><text>before the Agency conversion date, the Consumer Financial Protection Agency; and</text></subparagraph>
<subparagraph id="H904E4D7CB3134A488252E29B7D0FA584"><enum>(B)</enum><text display-inline="yes-display-inline">on and after the Agency conversion date, the commission established under section 4103.</text></subparagraph></paragraph>
<paragraph id="H5AE5D56474504884AC34600A7BB954D8"><enum>(3)</enum><header>Bank holding company</header><text>The term <quote>bank holding company</quote> has the same meaning as in section 2(a) of the Bank Holding Company Act of 1956.</text> </paragraph>
<paragraph id="H9F55AB02035F4CF98D51A0E068310445"><enum>(4)</enum><header>Board</header><text display-inline="yes-display-inline">Except when used in connection with the term <quote>Board of Governors</quote>, the term <quote>Board</quote> means the Consumer Financial Protection Oversight Board.</text> </paragraph>
<paragraph id="H1709B06285BF4421A11ABEC0B2529077"><enum>(5)</enum><header>Board of governors</header><text>The term <quote>Board of Governors</quote> means the Board of Governors of the Federal Reserve System.</text> </paragraph>
<paragraph id="H826D49DCA1014C91950A99B5DEAA6D03"><enum>(6)</enum><header>Business of insurance</header><text>The term <quote>business of insurance</quote> 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.</text> </paragraph>
<paragraph id="H5C8EEBC81BBA4041BC3D6F4508999AB6"><enum>(7)</enum><header>Consumer</header><text>The term <quote>consumer</quote> means an individual or an agent, trustee, or representative acting on behalf of an individual.</text> </paragraph>
<paragraph id="H6E9C1A1963E242E2A94951A40EE0AE37"><enum>(8)</enum><header>Consumer financial product or service</header><text>The term <quote>consumer financial product or service</quote> 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.</text> </paragraph>
<paragraph id="H22F974CAC6494F4E88B8B29CCF7F9969"><enum>(9)</enum><header>Covered person</header>
<subparagraph id="H8F2955229B9940CA930B55C93E28F42B"><enum>(A)</enum><header>In general</header><text>The term <quote>covered person</quote> means any person who engages directly or indirectly in a financial activity, in connection with the provision of a consumer financial product or service.</text> </subparagraph>
<subparagraph id="HD9BA9D21452047E29723DA75AF840C85"><enum>(B)</enum><header>Exclusion</header><text>The term <quote>covered person</quote> 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.</text> </subparagraph></paragraph>
<paragraph id="HF25F2718CE3942338A275A7D227363BC"><enum>(10)</enum><header>Credit</header><text>The term <quote>credit</quote> 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.</text> </paragraph>
<paragraph id="H02BA9E9966BE4E8A86224BDED4E29265"><enum>(11)</enum><header>Credit union</header><text>The term <quote>credit union</quote> means a Federal credit union or a State credit union as defined in section 101 of the Federal Credit Union Act.</text> </paragraph>
<paragraph id="H9D3CA2EE386840E09D97F0FB014D0ADF"><enum>(12)</enum><header>Deposit</header><text>The term <quote>deposit</quote>—</text>
<subparagraph id="H18D77FBA0EF243F1B4D42459F2E69DE3"><enum>(A)</enum><text>has the same meaning as in section 3(l) of the Federal Deposit Insurance Act; and</text> </subparagraph>
<subparagraph id="H03233AB8CABC435FB889A665A0DE0D81"><enum>(B)</enum><text>includes a share in a member account (as defined in section 101(5) of the Federal Credit Union Act) at a credit union.</text> </subparagraph></paragraph>
<paragraph id="H2BEC2F9C52A84F46AA55F2BC3A881784" display-inline="no-display-inline"><enum>(13)</enum><header>Deposit-taking, money acceptance, or money movement activity</header><text display-inline="yes-display-inline">The term <quote>deposit-taking, money acceptance, or money movement activities</quote> means— </text>
<subparagraph id="H9DC319CD6C6E450383BCB8F71F2E5168"><enum>(A)</enum><text display-inline="yes-display-inline">the acceptance of deposits, the maintenance of deposit accounts, or the provision of services related to the acceptance of deposits;</text> </subparagraph>
<subparagraph id="H39378747D0A84B2DB89800FD450D434C"><enum>(B)</enum><text>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</text> </subparagraph>
<subparagraph id="H0EB92C59B2E744CC86E8D47817D51D3E"><enum>(C)</enum><text>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.</text> </subparagraph></paragraph>
<paragraph id="H5151860E91A745E8AE7B4742C401B0C5"><enum>(14)</enum><header>Designated transfer date</header><text>The term <quote>designated transfer date</quote> has the meaning provided in section 4602.</text> </paragraph>
<paragraph id="H38191E1D6D8A44E18F9B0DDCA05D6DFC" display-inline="no-display-inline"><enum>(15)</enum><header>Director</header><text display-inline="yes-display-inline">The term <quote>Director</quote> means—</text>
<subparagraph id="H64B65CAA1EC24D15A5CC848C8D071E81"><enum>(A)</enum><text>before the Agency conversion date, the Director of the Agency; and</text></subparagraph>
<subparagraph id="H22726D4FFD4A4FAEA3D020D269AAF0A4"><enum>(B)</enum><text display-inline="yes-display-inline">on and after the Agency conversion date, the commission established under section 4103.</text></subparagraph></paragraph>
<paragraph id="HA2D9B1F895EB4C33B7F2F1BB5691CCCB"><enum>(16)</enum><header>Enumerated consumer laws</header><text>The term <quote>enumerated consumer laws</quote> means each of the following:</text>
<subparagraph id="H53F7E0575DC647F6901F9649B4E0509E"><enum>(A)</enum><text>The Alternative Mortgage Transaction Parity Act (12 U.S.C. 3801 et seq.).</text> </subparagraph>
<subparagraph id="H7A271BD1178649C1AEDAC04679ED4809"><enum>(B)</enum><text>The Electronic Funds Transfer Act (15 U.S.C. 1693 et seq.).</text> </subparagraph>
<subparagraph id="H466D21A25BF84D2CAA79CF6FA79A9FB3"><enum>(C)</enum><text>The Equal Credit Opportunity Act (15 U.S.C. 1691 et seq.).</text> </subparagraph>
<subparagraph id="H62FFB267BD35496DA20782FF66A20E14"><enum>(D)</enum><text display-inline="yes-display-inline">The Fair Credit Reporting Act (15 U.S.C. 1681 et seq.), except with respect to sections 615(e) and 628 of such Act.</text> </subparagraph>
<subparagraph id="H118DE19C862F492FA8F671B89C090E6E"><enum>(E)</enum><text>The Fair Debt Collection Practices Act (15 U.S.C. 1692 et seq.).</text> </subparagraph>
<subparagraph id="H564578BFF5CB4372A2D2DE61543F9CD0"><enum>(F)</enum><text>Subsections (b), (c), (d), (e), and (f) of section 43 of the Federal Deposit Insurance Act (12 U.S.C. 1831t).</text> </subparagraph>
<subparagraph id="H3671AF46CC0642678552969B546FD2B5"><enum>(G)</enum><text display-inline="yes-display-inline">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).</text> </subparagraph>
<subparagraph id="HB398494B54D945999CAC8835F83B4646"><enum>(H)</enum><text display-inline="yes-display-inline">The Homeowners Protection Act of 1998.</text> </subparagraph>
<subparagraph id="HD7C7A0E45A7944D38BE6A19D5DB16865"><enum>(I)</enum><text>The Home Mortgage Disclosure Act (12 U.S.C. 2801 et seq.).</text> </subparagraph>
<subparagraph id="HB896291945274426ABFABA6D100862EC"><enum>(J)</enum><text>The Real Estate Settlement Procedures Act (12 U.S.C. 2601 et seq.).</text> </subparagraph>
<subparagraph id="HC90E0679BCB44FB48B02DF58B7F829AF"><enum>(K)</enum><text>The Secure and Fair Enforcement for Mortgage Licensing Act (12 U.S.C. 5101 et seq.).</text> </subparagraph>
<subparagraph id="HDEE9FF0D24F947CE81FC876555E0B7A1"><enum>(L)</enum><text>The Truth in Lending Act (15 U.S.C. 1601 et seq.).</text> </subparagraph>
<subparagraph id="H49A97DB9F6E7475C9880DFEB7259F882"><enum>(M)</enum><text>The Truth in Savings Act (12 U.S.C. 4301 et seq.).</text> </subparagraph>
<subparagraph id="HE5A3A4BDEFEA4346B31DDD31CDC8C41A"><enum>(N)</enum><text display-inline="yes-display-inline">Section 626 of the Omnibus Appropriations Act, 2009 (Public Law 111–8).</text></subparagraph>
<subparagraph id="H0687501ED97D40EDBA5E0B76EAF33BD9" commented="no"><enum>(O)</enum><text>The Unlawful Internet Gambling Enforcement Act of 2006.</text></subparagraph></paragraph>
<paragraph id="H16850A7C8B9B4868BCCD5F4F2C5EAD46"><enum>(17)</enum><header>Federal banking agency</header><text>The term <quote>Federal banking agency</quote> 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 <quote>Federal banking agencies</quote> means all of such agencies.</text> </paragraph>
<paragraph id="H92BE0DA50D5C4D7E8C3ED2AD447F8A8D"><enum>(18)</enum><header>Fair lending</header><text display-inline="yes-display-inline">The term <quote>fair lending</quote> means fair, equitable, and nondiscriminatory access to credit for both individuals and communities.</text> </paragraph>
<paragraph id="H1AE9281E9A2E4AC88F603131E8B164D6"><enum>(19)</enum><header>Financial activity</header>
<subparagraph id="HC1EF58D383684E9092B6B6004C8F5091"><enum>(A)</enum><header>In general</header><text>The term <quote>financial activity</quote> means any of the following activities:</text>
<clause id="H6276822B2DC343B2AC54B698295CB86A"><enum>(i)</enum><text display-inline="yes-display-inline">Deposit-taking, money acceptance, or money movement activities.</text> </clause>
<clause id="HF2EAA2FA3F6747318C6C2E96AEE3C855"><enum>(ii)</enum><text>Extending credit and servicing loans, including—</text>
<subclause id="H12CCC29146B041138B112DADD2EC5F48"><enum>(I)</enum><text display-inline="yes-display-inline">acquiring, purchasing, selling, brokering, or servicing loans or other extensions of credit; and</text> </subclause>
<subclause id="HD02BB7401AC04164839796186CDCBC84"><enum>(II)</enum><text>engaging in any other activity usual in connection with extensions of credit or servicing loans, including performing appraisals of real estate and personal property.</text> </subclause></clause>
<clause id="H0728D4122B144F8AA8D5615E13489303"><enum>(iii)</enum><text>Check cashing and check-guaranty services, including—</text>
<subclause id="HE1D0BA6CE5124EE2ADA784D7789BC923"><enum>(I)</enum><text>authorizing a subscribing merchant to accept personal checks tendered by the merchant’s customers in payment for goods and services; and</text> </subclause>
<subclause id="HEB4958C3E09945D7B797134347896BB9"><enum>(II)</enum><text>purchasing from a subscribing merchant validly authorized checks that are subsequently dishonored.</text> </subclause></clause>
<clause id="H15C3DBB466734A0294A557D925A9053D"><enum>(iv)</enum><text display-inline="yes-display-inline">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.</text> </clause>
<clause id="H89D8E5F8D1154B6E9575FF79E67704DD"><enum>(v)</enum><text>Collection of debt related to any consumer financial product or service.</text> </clause>
<clause id="HC23656413A89416182F440AEEB4A3A5B"><enum>(vi)</enum><text>Providing real estate settlement services.</text> </clause>
<clause id="H55140B85516540468C33E2E126B983A4"><enum>(vii)</enum><text>Leasing personal or real property or acting as agent, broker, or adviser in leasing such property if—</text>
<subclause id="H8E8BA06FDEAF47C18151BFEA5FEFE234"><enum>(I)</enum><text>the lease is on a non-operating basis;</text> </subclause>
<subclause id="H4D84EA4116AC495FB84263896A7E56AC"><enum>(II)</enum><text>the initial term of the lease is at least 90 days; and</text> </subclause>
<subclause id="HF747940A5B74475A92D0348D9BC84A08"><enum>(III)</enum><text>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.</text> </subclause></clause>
<clause display-inline="no-display-inline" id="HC04F1A29C0914503881F2BF6D151E443"><enum>(viii)</enum><text display-inline="yes-display-inline">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).</text> </clause>
<clause id="HC51FCB91BA7848299AF5AF9FFEF4D72F"><enum>(ix)</enum><text display-inline="yes-display-inline">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—</text>
<subclause id="H0FC99F739C3642AD909FE829AEEF5650"><enum>(I)</enum><text>providing financial and other related advisory services;</text> </subclause>
<subclause id="HFAB6D6515D4246EC97F1759FBE8549F7"><enum>(II)</enum><text>providing educational courses, and instructional materials to consumers on individual financial management matters;</text> </subclause>
<subclause id="HC13118B8D89B4EAB847AA96846FA1C1B"><enum>(III)</enum><text display-inline="yes-display-inline">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</text> </subclause>
<subclause id="H0D17D4CAE46746D5A3CBF79AEA318AE9"><enum>(IV)</enum><text>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.</text> </subclause></clause>
<clause id="H31829FD4891E47B382EE625BA6FDCCA0"><enum>(x)</enum><text display-inline="yes-display-inline">For purposes of this title, the following shall not be considered acting as financial adviser:</text>
<subclause id="HC48105C09A0844759FD94F0E5DEE9938"><enum>(I)</enum><text display-inline="yes-display-inline">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.</text> </subclause>
<subclause id="H4163C8D2DDC24A3D943D373ECEDDE74E"><enum>(II)</enum><text>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.</text> </subclause></clause>
<clause id="H8836089FF85D404AA9A1017AD032D3DB" display-inline="no-display-inline"><enum>(xi)</enum><text display-inline="yes-display-inline">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 <quote>financial activity</quote> with respect to financial data processing—</text>
<subclause id="H8E74A03FC8EE4475A6291E068FC16133"><enum>(I)</enum><text>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</text></subclause>
<subclause id="H48F029A58C814495B7AA0DBE67CAA681"><enum>(II)</enum><text>if the person—</text>
<item id="HDE5EEEFE97794AD184A05513F7CD100A"><enum>(aa)</enum><text>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;</text></item>
<item id="HFA52AC7B5614450096D2EF55235D2D4E"><enum>(bb)</enum><text>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</text></item>
<item id="HA0DF81D5018D4AA8AD6D4B2462BF55FC"><enum>(cc)</enum><text>does not provide a material service to any covered person in connection with the provision of a consumer financial product or service.</text></item></subclause></clause>
<clause id="H041CEC437D2947E283847992A82323F2"><enum>(xii)</enum><text>Money transmitting.</text> </clause>
<clause id="H0A677EFF4A3D45FDB5F068DA996D6ED8"><enum>(xiii)</enum><text display-inline="yes-display-inline">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.</text> </clause>
<clause id="HE658C6E431204C1A97170F7976A9CFCD"><enum>(xiv)</enum><text>Acting as a money services business.</text> </clause>
<clause id="HE96AD2C3FAFE432987E98A8A00DA4C4B"><enum>(xv)</enum><text>Acting as a custodian of money or any financial instrument.</text> </clause>
<clause display-inline="no-display-inline" id="H76AED7B916414E64AFFF1BB435B5EADB"><enum>(xvi)</enum>
<subclause commented="no" display-inline="yes-display-inline" id="H7B85E4537EA44D469A62E20E4415E143"><enum>(I)</enum><text>Any other activity that the Director defines, by regulation, as a financial activity after finding that—</text>
<item id="H084F9A1BF4364FDEBBB6C02A1275B162"><enum>(aa)</enum><text display-inline="yes-display-inline">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;</text></item>
<item id="HA563610950A243F5BEACFE440E06F1B3"><enum>(bb)</enum><text>the activity is incidental or complementary to any other financial activity regulated by the Agency; or</text> </item>
<item id="H77239BCB9C4E45439D0E4A78A504ECB3"><enum>(cc)</enum><text display-inline="yes-display-inline">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.</text> </item></subclause>
<subclause id="HEEF536CC9C0E4F7CBEDA64DB05BA3C1F" indent="up1"><enum>(II)</enum><text display-inline="yes-display-inline">For purposes of subclause (I)(bb), the following activities provided to a covered person shall not be <quote>incidental or complementary</quote>:</text>
<item id="H2059B29287FC446D980F08DE0E651550"><enum>(aa)</enum><text>Providing information products or services to a covered person for identity authentication.</text> </item>
<item id="H5B853D6BA1F747E7864EB813673AC7F4"><enum>(bb)</enum><text display-inline="yes-display-inline">Providing information products or services for fraud or identify theft detection, prevention, or investigation.</text> </item>
<item id="HFA0425B7A37F4A87A88A192040A65AA4"><enum>(cc)</enum><text>Providing document retrieval or delivery services.</text> </item>
<item id="H9F7FDB6737784B5883B2FFB61EB600A8"><enum>(dd)</enum><text>Providing public records information retrieval.</text> </item>
<item id="H0A3C2624185C4D838271EA8A9F57BE1B"><enum>(ee)</enum><text display-inline="yes-display-inline">Providing information products or services for anti-money laundering activities.</text> </item></subclause></clause></subparagraph>
<subparagraph id="HA3D91873FAE34EB58BD135F68DF2BA50"><enum>(B)</enum><header>Exceptions</header><text display-inline="yes-display-inline">The term <quote>financial activity</quote> 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.</text> </subparagraph></paragraph>
<paragraph id="H01C4B27116124D6E93FE02620C9ACBD3"><enum>(20)</enum><header>Financial product or service</header><text display-inline="yes-display-inline">The term <quote>financial product or service</quote> means any product or service that, directly or indirectly, results from or is related to engaging in 1 or more financial activities.</text> </paragraph>
<paragraph id="HF0C9680025E243FC8B0934EB520B6A81"><enum>(21)</enum><header>Foreign exchange</header><text>The term <quote>foreign exchange</quote> means the exchange, for compensation, of currency of the United States or of a foreign government for currency of another government.</text> </paragraph>
<paragraph display-inline="no-display-inline" id="H0CCC81C6FBDB4D4EAE41415ED1EB8D43"><enum>(22)</enum><header>Insured credit union</header><text display-inline="yes-display-inline">The term “insured credit union” has the same meaning as in section 101 of the National Credit Union Act.</text> </paragraph>
<paragraph id="HB814C3004F954050ABF6B4D5560435BF"><enum>(23)</enum><header>Insured depository institution</header><text display-inline="yes-display-inline">The term <quote>insured depository institution</quote> 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.</text> </paragraph>
<paragraph id="H6E1E5C9D40D74B78B2E9F935949FA508"><enum>(24)</enum><header>Money services business</header><text>The term <quote>money services business</quote> means a person that—</text>
<subparagraph id="H04ADBE4297C54C2B8780C9C1D17592F4"><enum>(A)</enum><text>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</text> </subparagraph>
<subparagraph id="H4BCFFDB759A945B280DCC9353C18EF1C"><enum>(B)</enum><text>issues payment instruments or stored value.</text> </subparagraph></paragraph>
<paragraph id="H69090F377E124D339C01738CCA67374A"><enum>(25)</enum><header>Money transmitting</header><text>The term <quote>money transmitting</quote> 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.</text> </paragraph>
<paragraph id="H3FD9992A0453470E9F3CFDE4E96650C7"><enum>(26)</enum><header>Payment instrument</header><text>The term <quote>payment instrument</quote> means a check, draft, warrant, money order, traveler’s check, electronic instrument, or other instrument, payment of money, or monetary value (other than currency).</text> </paragraph>
<paragraph id="HFA469AF2020E421F8E3747495D731144"><enum>(27)</enum><header>Person</header><text>The term <quote>person</quote> means an individual, partnership, company, corporation, association (incorporated or unincorporated), trust, estate, cooperative organization, or other entity.</text> </paragraph>
<paragraph id="HBFBE15340972489C96ED8043B560B31A"><enum>(28)</enum><header>Person regulated by a State insurance regulator</header><text>The term <quote>person regulated by a State insurance regulator</quote> means any person who is—</text>
<subparagraph id="H2554E5CC871848EB800CF9D7F7694825"><enum>(A)</enum><text>engaged in the business of insurance; and</text> </subparagraph>
<subparagraph id="H3846FA13D2D44AF0850B0F8575CD25E5"><enum>(B)</enum><text>subject to regulation by any State insurance regulator,</text> </subparagraph><continuation-text continuation-text-level="paragraph">but only to the extent that such person acts in such capacity.</continuation-text></paragraph>
<paragraph id="HD453C76F545F44F483D6319F74D64861"><enum>(29)</enum><header>Person regulated by the Commodity Futures Trading Commission</header><text display-inline="yes-display-inline">The term <quote>person regulated by the Commodity Futures Trading Commission</quote> 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.</text> </paragraph>
<paragraph id="H3768E64DA7BD478AB8CF8424309E49C6"><enum>(30)</enum><header>Person regulated by the Securities and Exchange Commission</header><text>The term <quote>person regulated by the Securities and Exchange Commission</quote> means—</text>
<subparagraph id="HE6518F66F2EA43ED8AC01CAD911C548B"><enum>(A)</enum><text>a broker or dealer that is required to be registered under the Securities Exchange Act of 1934;</text> </subparagraph>
<subparagraph id="HC47180933A194056BCD1026776CF2B2B"><enum>(B)</enum><text>an investment adviser that is registered under the Investment Advisers Act of 1940;</text> </subparagraph>
<subparagraph id="H92707368DF5940D9B821363A0ECBA707" display-inline="no-display-inline"><enum>(C)</enum><text display-inline="yes-display-inline">an investment company that—</text>
<clause id="H9BB0C3744A7B47E8AE44E84A077B1014"><enum>(i)</enum><text>is required to be registered under the Investment Company Act of 1940; or </text></clause>
<clause id="H7CD0D2C5A73E478BB327A2D60283DD06"><enum>(ii)</enum><text>is excepted from the definition of investment company under section 3(c) of such Act, or any successor provision;</text></clause></subparagraph>
<subparagraph id="H183A2EB212144A018C1F612BBFF40796"><enum>(D)</enum><text display-inline="yes-display-inline">a national securities exchange that is required to be registered under the Securities Exchange Act of 1934;</text> </subparagraph>
<subparagraph id="HE2C375D7C2534A98A23A7B5271D2FD01"><enum>(E)</enum><text>a transfer agent that is required to be registered under the Securities Exchange Act of 1934;</text> </subparagraph>
<subparagraph id="HFBF121341E874B3C8BDE6DC6099E4889"><enum>(F)</enum><text>a clearing corporation that is required to be registered under the Securities Exchange Act of 1934;</text> </subparagraph>
<subparagraph id="H5CC87B76146C420A88B3CC5042E1986F"><enum>(G)</enum><text display-inline="yes-display-inline">any municipal securities dealer that is registered with the Securities and Exchange Commission;</text> </subparagraph>
<subparagraph id="HB3CB5DED74DE4B478AB8537AC0DDECB5"><enum>(H)</enum><text>any self-regulatory organization that is registered with the Securities and Exchange Commission;</text> </subparagraph>
<subparagraph id="H8202E183D3564701BFCBA8A937AC3AF5"><enum>(I)</enum><text>any national securities exchange or other entity that is required to be registered under the Securities Exchange Act of 1934; and</text> </subparagraph>
<subparagraph id="H0E66F018E12947DD964EF31EB819D67E"><enum>(J)</enum><text>the Municipal Securities Rulemaking Board,</text> </subparagraph><continuation-text continuation-text-level="paragraph">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.</continuation-text></paragraph>
<paragraph id="HEE25CB09E845463A880A67AADA0272B6"><enum>(31)</enum><header>Provision of a consumer financial product or service</header><text>The terms <quote>provision of a consumer financial product or service</quote> and <quote>providing a consumer financial product or service</quote> mean the advertisement, marketing, solicitation, sale, disclosure, delivery, or account maintenance or servicing of a consumer financial product or service.</text> </paragraph>
<paragraph id="HD646F403D3FA4D7881617D018948B779"><enum>(32)</enum><header>Person that performs income tax preparation activities for consumers</header><text display-inline="yes-display-inline">The term <quote>person that performs income tax preparation activities for consumers</quote> means—</text>
<subparagraph id="H9248308E46E04C6B8DE73C9CECCBBD92"><enum>(A)</enum><text>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;</text> </subparagraph>
<subparagraph id="H2A1F7C404C6349C4AB70C039612CC756"><enum>(B)</enum><text>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</text> </subparagraph>
<subparagraph id="H1F09708D8A0F452FA1F2D2A4E6FC641B"><enum>(C)</enum><text>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.</text> </subparagraph></paragraph>
<paragraph id="HE2AE24D7C18C496EAA0EF46C666E6731"><enum>(33)</enum><header>Related person</header>
<subparagraph id="HE5CD5573140645F2B21D633CC10EC8BE"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">The term <quote>related person</quote>, when used in connection with a covered person that is not a bank holding company, credit union, depository institution, means—</text>
<clause id="H23F5CF0651654113830F9758E1914372"><enum>(i)</enum><text>any director, officer, employee charged with managerial responsibility, or controlling stockholder of, or agent for, such covered person;</text> </clause>
<clause id="H8020D125E0A246CFBC10CE21CB147C90"><enum>(ii)</enum><text>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</text> </clause>
<clause id="HD970C0834293446FB011D8180FA5AB1C"><enum>(iii)</enum><text>any independent contractor (including any attorney, appraiser, or accountant), with respect to such covered person, who knowingly or recklessly participates in any—</text>
<subclause id="H1FAE9662313847A583576194CA9507DE"><enum>(I)</enum><text>violation of any law or regulation; or</text> </subclause>
<subclause id="HCF3727D7D22A443A8A82C4C4C60F29A3"><enum>(II)</enum><text>breach of fiduciary duty.</text> </subclause></clause></subparagraph>
<subparagraph id="H01E326220BDD4584917CF66F7F21AE8E"><enum>(B)</enum><header>Treatment of a related person as a covered person</header><text>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.</text> </subparagraph></paragraph>
<paragraph id="HBF93479A32384C83911146A1D487E95A"><enum>(34)</enum><header>Secretary</header><text>The term <quote>Secretary</quote> means the Secretary of the Treasury.</text> </paragraph>
<paragraph id="HB5F3D9190BC3463087FDCAF78B313CD8"><enum>(35)</enum><header>Service provider</header>
<subparagraph id="HB7D768B223DB4257ACD9F2417B4C2AAC"><enum>(A)</enum><header>In general</header><text>The term <quote>service provider</quote> 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—</text>
<clause id="H61B45A396CA446E98D801CB0A9815676"><enum>(i)</enum><text>facilitates the design of, or operations relating to the provision of, the consumer financial product or service;</text> </clause>
<clause id="H5A528E73E09149868FA1940C3C1AADA1"><enum>(ii)</enum><text>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</text> </clause>
<clause id="HB1992533A61D4C77BB13E4DC451D1595"><enum>(iii)</enum><text>processes transactions relating to the consumer financial product or service.</text> </clause></subparagraph>
<subparagraph id="H822F063823F04E8889B003F4E6E28AEC"><enum>(B)</enum><header>Exceptions</header><text>The term <quote>service provider</quote> shall not apply to a person solely by virtue of such person providing or selling to a covered person—</text>
<clause id="H3F928310DBA843D0BF894EEB132CA0E0"><enum>(i)</enum><text>a support service of a type provided to businesses generally or a similar ministerial service;</text> </clause>
<clause id="H6ABAFE79768E4E38B2BBCB5AAFFC8C7C"><enum>(ii)</enum><text>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</text> </clause>
<clause id="H28FD26188B6F4AAFA2879B19057E1B4F"><enum>(iii)</enum><text>time or space for an advertisement for a consumer financial product or service through print, newspaper, or electronic media.</text> </clause></subparagraph></paragraph>
<paragraph id="H9CB9118B51CC494F936F8557641A1E5B"><enum>(36)</enum><header>State</header><text display-inline="yes-display-inline">The term <quote>State</quote> 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)).</text> </paragraph>
<paragraph id="HB4577DFB061F482C90AF0AC76673D08B"><enum>(37)</enum><header>Stored value</header><text display-inline="yes-display-inline">The term <quote>stored value</quote>—</text>
<subparagraph id="H09CC9F10DFAF4EC5BA3CB7EBED179B8E"><enum>(A)</enum><text>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</text> </subparagraph>
<subparagraph id="H66342DAB412C493CB17E2997ECB9A4CE"><enum>(B)</enum><text>includes a prepaid debit card or product (other than a card or product used solely for telephone services) or any other similar product,</text> </subparagraph><continuation-text continuation-text-level="paragraph">regardless of whether the amount of the funds or monetary value may be increased or reloaded.</continuation-text></paragraph>
<paragraph id="H0A568C2293A9463D83AA7F0A5974250C"><enum>(38)</enum><header>Agency conversion date</header><text display-inline="yes-display-inline">The term <quote>Agency conversion date</quote> means the date that is 2 years after the designated transfer date.</text></paragraph></section>
<subtitle id="H3693502E6B164DE9A81F981D60E74185"><enum>A</enum><header>Establishment of the Agency</header>
<section id="HA886682556E148BB959DA751DF20EB4C"><enum>4101.</enum><header>Establishment of the Consumer Financial Protection Agency</header>
<subsection id="H039C5106E4E74B8CB0EB9F90D7BA1AFD"><enum>(a)</enum><header>Agency established</header><text>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.</text> </subsection>
<subsection id="HAF5F835EA5BC419E935F33C07941A8AA" display-inline="no-display-inline"><enum>(b)</enum><header>Agency structure</header>
<paragraph id="H3C6A8A46123F49FD9CC5741B54FF63B4"><enum>(1)</enum><header>Initial structure</header><text display-inline="yes-display-inline">The Agency shall be led by a Director or Acting Director, established pursuant to section 4102, until the day before the Agency conversion date.</text></paragraph>
<paragraph id="H06B109C80FF14A30AA9A8DFA3CA79D25"><enum>(2)</enum><header>Subsequent structure</header><text display-inline="yes-display-inline">On and after the Agency conversion date, the Agency shall consist of the commission established under section 4103.</text></paragraph></subsection>
<subsection id="H33FEB026E9E74ACDABFAD9BD3FC5C3C0"><enum>(c)</enum><header>Principal office</header><text>The principal office of the Agency shall be located in the city of Washington, District of Columbia, at 1 or more sites.</text> </subsection></section>
<section display-inline="no-display-inline" id="H5648F247B7AB4FFD88705CD8A2AFD553" section-type="subsequent-section"><enum>4102.</enum><header>Director</header>
<subsection id="H623D1A3CA26D4991BF395ECC77E59352"><enum>(a)</enum><header>Establishment of position</header>
<paragraph id="HAF8D3EBD22B64407A1F0EDAEEBD9D07E"><enum>(1)</enum><header>In general</header><text>There is hereby established the position of the Director of the Agency who shall be the head of the Agency.</text> </paragraph>
<paragraph id="HF97D1FF8E0E04C41A7D802CAA3310671"><enum>(2)</enum><header>Authority to prescribe regulations</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection>
<subsection id="H7DECA045123A4A089A3CB6B414103D0C"><enum>(b)</enum><header>Appointment; term</header>
<paragraph id="H991D0A83EFC344ADA432FE4F8866BF7E"><enum>(1)</enum><header>Nomination</header><text display-inline="yes-display-inline">Within 60 days after the date of enactment of this title, the President shall nominate the Director, from among individuals who—</text>
<subparagraph id="H4707932583DA421B980276C8DE67EB80" commented="no"><enum>(A)</enum><text>are citizens of the United States; and</text></subparagraph>
<subparagraph id="HA0CAE5B9C2C04C409D39B0F5F4E2508F" commented="no"><enum>(B)</enum><text>have strong competencies and experiences related to consumer financial protection.</text></subparagraph></paragraph>
<paragraph id="HF24877D81B1D4E36B1B67C2C8E6461B2" display-inline="no-display-inline"><enum>(2)</enum><header>Appointment subject to confirmation</header><text display-inline="yes-display-inline">The Director nominated under paragraph (1) shall be appointed by and with the advice and consent of the Senate.</text></paragraph>
<paragraph id="H1BF492B5C9AE4FB49830E3D088464DBB" commented="no"><enum>(3)</enum><header>Acting Director before Senate confirmation</header><text>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.</text></paragraph>
<paragraph id="H1D9E503811BC4D4C86259C48FC3E3D8A"><enum>(4)</enum><header>Term</header><text display-inline="yes-display-inline">The Director shall be appointed for a term that ends on the Agency conversion date.</text> </paragraph>
<paragraph id="H408A17F0032F48B69AD1BB6D10849E25"><enum>(5)</enum><header>Removal</header><text>The Director may be removed before the end of a term only for cause.</text> </paragraph>
<paragraph id="H61C6E773DB5F48CFB27464BCCCC3A0C6"><enum>(6)</enum><header>Vacancy</header>
<subparagraph id="H4187A951322D406796952CF90E43DD2F"><enum>(A)</enum><header> In general</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="HFB466F6BB02E4A37BE2B2CB817D40D8F"><enum>(B)</enum><header>Acting director</header>
<clause id="H86D3662847784EFFBCAA2798FCF5FEA4"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </clause>
<clause id="H6C63855CF2EC4C7F93E7C644E3E857C4"><enum>(ii)</enum><header>Authority of acting director</header><text display-inline="yes-display-inline">Any individual serving as Acting Director under this subparagraph shall be vested with all authority, duties, and privileges of the Director.</text> </clause></subparagraph></paragraph>
<paragraph id="H35B71312343440F69757BDE3AD971FB0"><enum>(7)</enum><header>Service after end of term</header><text display-inline="yes-display-inline">An individual may serve as Director after the expiration of the term for which appointed until a successor Director has been appointed and qualified.</text> </paragraph> </subsection>
<subsection id="H63273A3B389B4915919F1A6146863C94"><enum>(c)</enum><header>Prohibition on financial interests</header><text display-inline="yes-display-inline">The Director shall not have a direct or indirect financial interest in any covered person.</text> </subsection>
<subsection id="H3D94E768B2EA491BB9E76F813FBDABFE"><enum>(d)</enum><header>Compensation</header><text display-inline="yes-display-inline">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.</text></subsection></section>
<section id="H067B9D910D5047CF9D658506D331175F"><enum>4103.</enum><header>Establishment and composition of the commission</header>
<subsection id="HEE1A047312164654BD8B7AF2A3E55347"><enum>(a)</enum><header>Establishment of the commission</header>
<paragraph id="HF40C2441ACF24016B3184E3784DA13B9"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">On the Agency conversion date, there shall be established a commission (hereinafter in this section referred to as the <quote>Commission</quote>) 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.</text></paragraph>
<paragraph id="HF80CA7250F464B05845D49997A32C9DA"><enum>(2)</enum><header>Authority to prescribe regulations</header><text>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.</text></paragraph></subsection>
<subsection id="HC2C543578B4F40C0ACB1712E4454E5C6"><enum>(b)</enum><header>Composition of the Commission</header>
<paragraph id="HAD80F051E19B471893E05C7FED2AACEE"><enum>(1)</enum><header>In general</header><text>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—</text>
<subparagraph id="H719DCF02C3C64A048AD1456A4EF95C51"><enum>(A)</enum><text>are citizens of the United States; and</text></subparagraph>
<subparagraph id="HF4B4CA695F8F4531A5647B118B67EB31"><enum>(B)</enum><text>have strong competencies and experiences related to consumer financial protection.</text></subparagraph></paragraph>
<paragraph id="H3B7D10C11735481B876C2FEA9217D9B8"><enum>(2)</enum><header>Initial appointments</header>
<subparagraph id="HBCCE689B70F44E1093C0A25E0C2F66B4"><enum>(A)</enum><header>In general</header><text>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.</text></subparagraph>
<subparagraph id="H9DA37E0FD80F4572B3A5D6B64ED3F466"><enum>(B)</enum><header>Staggering</header><text>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.</text></subparagraph></paragraph>
<paragraph id="H175F5BC548E24A94BC31383CBE68FE33"><enum>(3)</enum><header>Terms</header>
<subparagraph id="HA66A6D85B48D4B848B9CAFEE6BE00160"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">Except as provided in subsection (d)(1), each member of the Commission, including the Chair, shall serve for a term of 5 years.</text></subparagraph>
<subparagraph id="HC520217CD45C410199F6D721B84ABC6A"><enum>(B)</enum><header>Removal for cause</header><text>The President may remove any member of the Commission only for inefficiency, neglect of duty, or malfeasance in office.</text></subparagraph>
<subparagraph id="H99E003E2E2DB450EA29374AF2BE30750"><enum>(C)</enum><header>Vacancies</header><text>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.</text></subparagraph>
<subparagraph id="H081E134E0A834FFF914DC5B3E02D99DA"><enum>(D)</enum><header>Continuation of service</header><text>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.</text></subparagraph>
<subparagraph id="H1F0883D3FBFE46489F47079629645D7C"><enum>(E)</enum><header>Other employment prohibited</header><text>No member of the Commission shall engage in any other business, vocation, or employment.</text></subparagraph></paragraph></subsection>
<subsection id="HC3D7C34B674F49D9B4B268487381FA2C" display-inline="no-display-inline"><enum>(c)</enum><header>Affiliation</header><text>With respect to members appointed pursuant to subsection (b), not more than 3 shall be members of any one political party.</text></subsection>
<subsection id="H5322CA12B2E34F8784C5BD13AD55B010"><enum>(d)</enum><header>Chair of the Commission</header>
<paragraph id="HE8F19FBF492645C2AB5FD1EA9FEEC106"><enum>(1)</enum><header>Appointment</header>
<subparagraph id="HD9E1DDDC4D864D949371D3310F86BC6D"><enum>(A)</enum><header>Initial Chair</header><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="H000CA46829494AD3A1EB4C75F643F2A5"><enum>(B)</enum><header>Subsequent Chairs</header><text>Subsequent chairs shall be appointed by the President from among the members of the Commission to serve as the Chair.</text></subparagraph></paragraph>
<paragraph id="HCBB13E2B1EF447F5ABB1437811594578"><enum>(2)</enum><header>Authority</header><text>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—</text>
<subparagraph id="H7A2D1AC92B1042F7A1267533B5AE6683"><enum>(A)</enum><text>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);</text></subparagraph>
<subparagraph id="H4897B0B227844708A5C6C4C3AC92E0E6"><enum>(B)</enum><text>the distribution of business among personnel appointed and supervised by the Chair and among administrative units of the Agency; and</text></subparagraph>
<subparagraph id="H02C93168845D452F824FFD7C3B4DA98B"><enum>(C)</enum><text>the use and expenditure of funds.</text></subparagraph></paragraph>
<paragraph id="H0CF6255592CF4C9FA95A0EBD81799A1F"><enum>(3)</enum><header>Limitation</header><text>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.</text></paragraph>
<paragraph id="H0A26434BD11041BAA3C051C51C5E256E"><enum>(4)</enum><header>Requests or estimates related to appropriations</header><text>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.</text></paragraph> </subsection>
<subsection id="H70E45EB7FB054252B7C0EAB225207B00" display-inline="no-display-inline"><enum>(e)</enum><header>No impairment by reason of vacancies</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="H9D8939F4D3874B199FA65400B4E0CA97"><enum>(f)</enum><header>Seal</header><text>The Commission shall have an official seal.</text></subsection>
<subsection id="HFE4A3C1920794B5BA328ACAB7B67633B"><enum>(g)</enum><header>Compensation</header>
<paragraph id="H94EE429ED0E0467EA90528B276A53848"><enum>(1)</enum><header>Chair</header><text>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.</text></paragraph>
<paragraph id="HE18BE2158FAB4A55902341875CA374B1"><enum>(2)</enum><header>Other members of the Commission</header><text>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.</text></paragraph></subsection>
<subsection id="H8974C14C2F4F4EC7A9096652E59C9339"><enum>(h)</enum><header>Initial quorum established</header><text>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.</text></subsection>
<subsection id="H221975FAFFBF4266A16CFCBECD734C7F"><enum>(i)</enum><header>Definitions</header><text>Notwithstanding section 4002, for purposes of this section:</text>
<paragraph id="HBDB3A5DD05D04627A2B56E91E454264B"><enum>(1)</enum><header>Agency</header><text>The term <quote>Agency</quote> means the Consumer Financial Protection Agency.</text></paragraph>
<paragraph id="H90271BC4F82047559247FAA6AC41AD15"><enum>(2)</enum><header>Director</header><text>The term <quote>Director</quote> means the Director of the Agency.</text></paragraph></subsection></section>
<section id="HA90FB34558AF48F9883355DA681AC720"><enum>4104.</enum><header>Consumer Financial Protection Oversight Board</header>
<subsection id="H984775DE0FAB42E593130C74BBEB3039"><enum>(a)</enum><header>Established</header><text display-inline="yes-display-inline">There is hereby established the Consumer Financial Protection Oversight Board as an instrumentality of the United States.</text> </subsection>
<subsection id="H140D1741DB274A2296023C162EAB8203"><enum>(b)</enum><header>Duties and powers</header>
<paragraph id="H57CAB23E17FB45AA9B732079B8F1472C"><enum>(1)</enum><header>Duty to advise director</header><text>The Board shall advise the Director on—</text>
<subparagraph id="HDA70E28EB1ED481CAFDC7272A08D09AD"><enum>(A)</enum><text>the consistency of a proposed regulation of the Director with prudential, market, or systemic objectives administered by the agencies that comprise the Board;</text> </subparagraph>
<subparagraph id="H1921D7442A10449E9EAF09DFB32C869E"><enum>(B)</enum><text>the overall strategies and policies in carrying out the duties of the Director under this title; and</text> </subparagraph>
<subparagraph id="HC45F25DD6C5B4D219E8339F4D3686B97"><enum>(C)</enum><text display-inline="yes-display-inline">actions the Director can take to enhance and ensure that all consumers are subject to robust financial protection.</text> </subparagraph></paragraph>
<paragraph id="H3E6FBB7F51E446A69A45C13D9BACFA2F"><enum>(2)</enum><header>Limitation on powers</header><text>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.</text> </paragraph></subsection>
<subsection id="H246CD8428E354219A7AB417FBAA60DCF"><enum>(c)</enum><header>Composition</header><text>The Board shall be comprised of 7 members as follows:</text>
<paragraph id="H6989CC28AA7240DFB00E6D346F853DE2"><enum>(1)</enum><text>The Chairman of the Board of Governors.</text> </paragraph>
<paragraph id="HFD456B99BB6B412AA3EB9ECFD39148FA"><enum>(2)</enum><text display-inline="yes-display-inline">The head of the agency responsible for chartering and regulating national banks.</text> </paragraph>
<paragraph id="HF3D448A5B8A9466AA81DD8128C02579F"><enum>(3)</enum><text display-inline="yes-display-inline">The Chairperson of the Federal Deposit Insurance Corporation.</text> </paragraph>
<paragraph id="HBDE5A9A7E3F54DC7A900DE01EC359393"><enum>(4)</enum><text>The Chairman of the National Credit Union Administration.</text> </paragraph>
<paragraph id="HE4C3D7CD57DE4B6DACEC8BB0DD91610F"><enum>(5)</enum><text>The Chairman of the Federal Trade Commission.</text> </paragraph>
<paragraph id="H458F57C8635649F39F2FE9A8E0EE7D08"><enum>(6)</enum><text>The Secretary of Housing and Urban Development.</text> </paragraph>
<paragraph id="HFCD9EF3266634AC895505DFC5BBC9530"><enum>(7)</enum><text display-inline="yes-display-inline">The Chairman of the liaison committee of representatives of State agencies to the Financial Institutions Examination Council.</text> </paragraph></subsection>
<subsection display-inline="no-display-inline" id="H80139B273859487B9181830C5640114A"><enum>(d)</enum><header>Representative of additional interests</header>
<paragraph id="HFDAE218D7A554F8097436B77ED36C0E1"><enum>(1)</enum><header>Composition</header><text>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.</text> </paragraph>
<paragraph id="H90875DD5062E451685656DADDE66FCB2"><enum>(2)</enum><header>Affiliation</header><text>With respect to members appointed pursuant to paragraph (1), not more than 3 shall be members of any one political party.</text> </paragraph></subsection>
<subsection id="HBC12AEA22AD54D888A602F4418E5E44C"><enum>(e)</enum><header>Meetings</header>
<paragraph id="HF5B86B08723846F283E3EB33BF2252B1"><enum>(1)</enum><header>In general</header><text>The Board shall meet upon notice by the Director, but in no event shall the Board meet less frequently than once every 3 months.</text> </paragraph>
<paragraph id="H1FBAD8BDC4AC4ED2AB4333BF8A6D5F96"><enum>(2)</enum><header>Special meetings</header><text>Any member of the Board may, upon giving written notice to the Director, require a special meeting of the Board.</text> </paragraph></subsection>
<subsection id="H773FFA0EE9F6440EA61C35CC8C7FE1B0"><enum>(f)</enum><header>Prohibition on additional compensation</header><text display-inline="yes-display-inline">Members of the Board may not receive additional pay, allowances, or benefits by reason of their service on the Board.</text> </subsection>
<subsection id="H9CF14E849E5C47199CA118E6358FFC9F"><enum>(g)</enum><header>Complaints related to required offering of specific financial products or services</header><text display-inline="yes-display-inline">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.</text> </subsection></section>
<section id="HBEB3D17B32EE4F6A9C3C6185595D3FCB"><enum>4105.</enum><header>Executive and administrative powers</header><text display-inline="no-display-inline">The Director may exercise all executive and administrative functions of the Agency, including to—</text>
<paragraph id="H3DD348FF78734F3C8EA824BBD9A4070F"><enum>(1)</enum><text>establish regulations for conducting the Agency’s general business in a manner not inconsistent with this title;</text> </paragraph>
<paragraph id="H8BC56B24DAC54BFEB16A9FFDCFCF0487"><enum>(2)</enum><text>bind the Agency and enter into contracts;</text> </paragraph>
<paragraph id="HEA446FD0E8EC41CCA9835DA592B75267"><enum>(3)</enum><text display-inline="yes-display-inline">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;</text> </paragraph>
<paragraph id="H3269D0F3143A49F08F1E87F714A5A510"><enum>(4)</enum><text>coordinate and oversee the operation of all administrative, enforcement, and research activities of the Agency;</text> </paragraph>
<paragraph id="H08D84FC6CD4E41E38A1EAD6FB871DBF1"><enum>(5)</enum><text>adopt and use a seal;</text> </paragraph>
<paragraph id="H6FFF96B37CDF47D59A6494B4A923EF8D"><enum>(6)</enum><text>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;</text> </paragraph>
<paragraph id="HF39ACD836CA94A228FC74080956ABCDD"><enum>(7)</enum><text>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;</text> </paragraph>
<paragraph id="HA00CFB079EB84F3BAE796B23A961571D"><enum>(8)</enum><text>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</text> </paragraph>
<paragraph id="H6391CCAAE4E0442B83FA8EE729DC5646"><enum>(9)</enum><text>perform such other functions as may be authorized or required by law.</text> </paragraph></section>
<section id="HC3377474486A4E5C8BE0D42CC0295E4F"><enum>4106.</enum><header>Administration</header>
<subsection id="HF0597A0131C74A93B6C5AEF87BF284DC"><enum>(a)</enum><header>Officers</header><text>The Director shall appoint the following officials:</text>
<paragraph id="H416639D3F99645AEA9242EE5FC6EF885"><enum>(1)</enum><text>A secretary, who shall be charged with maintaining the records of the Agency and performing such other activities as the Director directs.</text> </paragraph>
<paragraph id="H2360B95DFD3B48A58BD522BF0F560978"><enum>(2)</enum><text>A general counsel, who shall be charged with overseeing the legal affairs of the Agency and performing such other activities as the Director directs.</text> </paragraph>
<paragraph id="H39B0693F7DBB4E65A524A2C5BDD50F9D"><enum>(3)</enum><text>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).</text> </paragraph>
<paragraph id="HA0F3A3F0455543EDADEA9B4C30AF4FF9"><enum>(4)</enum><text display-inline="yes-display-inline">An Ombudsperson, who shall—</text>
<subparagraph id="H687ABAD6D3654D5BAD738AEBBA6C29A4"><enum>(A)</enum><text display-inline="yes-display-inline">develop and maintain expertise in and understanding of the law relating to consumer financial products;</text> </subparagraph>
<subparagraph id="HFCB22F98C8DB453AAA994D582B1D144F"><enum>(B)</enum><text>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;</text> </subparagraph>
<subparagraph id="HA991CF305C5E42729440DB11D9A8F04F"><enum>(C)</enum><text>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;</text> </subparagraph>
<subparagraph id="HD686E7A02D344F5686CE9589CE0C91E1"><enum>(D)</enum><text>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;</text> </subparagraph>
<subparagraph id="H8313FDBD3C324B85B7B7FCC3E4F7887F"><enum>(E)</enum><text>provide information to private citizens, civic groups, Federal agencies, State agencies, and other interested parties regarding the rights of those parties under this title;</text> </subparagraph>
<subparagraph id="HD17A679B9019452F964B23642469C002"><enum>(F)</enum><text>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;</text> </subparagraph>
<subparagraph id="H6FE974B4C6D64944AAC2E6CF7FEA5199"><enum>(G)</enum><text>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</text> </subparagraph>
<subparagraph id="HBD641245C54F472BAB0255B75C451189"><enum>(H)</enum><text>perform such other duties as the Director may delegate to the Ombudsperson.</text> </subparagraph></paragraph></subsection>
<subsection id="H47F8FF25D5C2499D91DC2F061B70CE59"><enum>(b)</enum><header>Personnel</header>
<paragraph id="HF3C63D099CA0457C95A19CBD9F9AC9DB"><enum>(1)</enum><header>Appointment</header><text display-inline="yes-display-inline">The Director may fix the number of, and appoint and direct, all employees of the Agency.</text></paragraph>
<paragraph id="H2DB2AE5331C14CAF8791DDF847A68835"><enum>(2)</enum><header>Compensation</header>
<subparagraph id="H0CF922E82F7548A991FCE12520228BA9"><enum>(A)</enum><header>Pay</header><text>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.</text> </subparagraph>
<subparagraph id="H156CC15FF28F4DE799F537FD278DB116"><enum>(B)</enum><header>Benefits</header><text>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.</text> </subparagraph>
<subparagraph id="HE2A18B08F4B244BCA6888E54B54CE957"><enum>(C)</enum><header>Minimum standard</header><text>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.</text> </subparagraph></paragraph></subsection>
<subsection id="H5FBEAF542BC6440EB40ACFDDE03DB353"><enum>(c)</enum><header>Specific functional units</header>
<paragraph id="HF4B7D84AD553486AB729F9876C1C822D"><enum>(1)</enum><header>Research</header><text display-inline="yes-display-inline">The Agency shall establish a unit whose functions shall include—</text>
<subparagraph id="H0EECCF99CD7048A393F22325CD4492EE"><enum>(A)</enum><text>conducting research on consumer financial counseling and education, including—</text>
<clause id="HE4B02A92EAEB4194B0A2CD2F4C11F5C5"><enum>(i)</enum><text>on the topics of debt, credit, savings, financial product usage, and financial planning;</text> </clause>
<clause id="H5F64826E1C2B459DB3AE8A27996C81CC"><enum>(ii)</enum><text display-inline="yes-display-inline">exploring effective methods, tools, and approaches; and</text> </clause>
<clause id="HDE3C0C67C2B749D18A95D466656B97FD"><enum>(iii)</enum><text>identifying ways to incorporate new technology for the delivery and evaluation of financial counseling and education efforts;</text> </clause></subparagraph>
<subparagraph id="H25093193D28647679921449926171075"><enum>(B)</enum><text>researching, analyzing, and reporting on—</text>
<clause id="H2273F24E6C384B7EA04E897EA916ADA2"><enum>(i)</enum><text>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;</text> </clause>
<clause id="HE07155B1C3D148F98F5CA0BC5F40590A"><enum>(ii)</enum><text>consumer awareness, understanding, and use of disclosures and communications regarding consumer financial products or services;</text> </clause>
<clause id="H3B286D59476F40DEADAAF9DBEBB31E78"><enum>(iii)</enum><text>consumer awareness and understanding of costs, risks, and benefits of consumer financial products or services;</text> </clause>
<clause id="HEF0B2B30DC18484CAA4F6579A0236615"><enum>(iv)</enum><text display-inline="yes-display-inline">consumer behavior with respect to consumer financial products or services, including performance on mortgage loan; </text> </clause>
<clause id="HAA7F2D7490D948928A57F99C770B5C23"><enum>(v)</enum><text display-inline="yes-display-inline">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</text> </clause>
<clause id="H39F06A59E906463398D19B42252DCB4E"><enum>(vi)</enum><text display-inline="yes-display-inline">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;</text></clause></subparagraph>
<subparagraph id="HE687D9FB66C14250BAF50618C0720E83"><enum>(C)</enum><text display-inline="yes-display-inline">identifying priorities for consumer financial education efforts, based on consumer complaints, research or analysis conducted pursuant to subparagraph (A), or other information; and</text> </subparagraph>
<subparagraph id="H47429CDB280C49CAAC89236F71C9D672"><enum>(D)</enum><text>testing and identifying methods of educating consumers to determine which methods are most effective.</text> </subparagraph></paragraph>
<paragraph id="H66A2DEC5F45546FB8B43FD6653C71926"><enum>(2)</enum><header>Community affairs</header><text>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.</text> </paragraph>
<paragraph id="HDD240A0ED72B41A1AE6F9C6FD8F08CD1"><enum>(3)</enum><header>Consumer complaints</header>
<subparagraph id="H0C483C2E654A476CA7B73E689FA0DB57"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="HE6426BF5404A4197ADED154909C840A5"><enum>(B)</enum><header>Coordination</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="H62A17CE1DA6145E59946A05B3F7EABFB"><enum>(C)</enum><header>Data sharing required</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="H22A894C965344A69A80FB95178FF9438"><enum>(D)</enum><header>Consumer complaint Web site</header><text display-inline="yes-display-inline">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).</text></subparagraph></paragraph>
<paragraph id="H9A77E16B0DA04AED876688EB174794A1"><enum>(4)</enum><header>Consumer financial education</header>
<subparagraph id="H4EC785AFB6844CDEA3D67E81EF78EB9E"><enum>(A)</enum><header>In general</header><text>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.</text> </subparagraph>
<subparagraph id="HBF98761C957C4C5087C39D89BDDB65EF"><enum>(B)</enum><header>Director</header><text>The Office of Financial Literacy shall be headed by a director.</text> </subparagraph>
<subparagraph id="H7784509216A14F72B29CA74CFB4DB354"><enum>(C)</enum><header>Duties</header><text>Such unit shall—</text>
<clause id="H1C87ACA75A2D4D1BA45CB0F48A9AA3D1"><enum>(i)</enum><text display-inline="yes-display-inline">develop goals for programs to be provided by persons that provide consumer financial education and counseling, including programs through which such persons—</text>
<subclause id="H394A231580D64E99A7AC2E59152A0FCC"><enum>(I)</enum><text>provide one-on-one financial counseling;</text> </subclause>
<subclause id="H9196B06A51DB4590AC6818159E70BF21"><enum>(II)</enum><text>help individuals understand basic banking and savings tools;</text> </subclause>
<subclause id="H4B4A31CEC49E416EA1607A3698CFF3E3"><enum>(III)</enum><text>help individuals understand their credit history and credit score;</text> </subclause>
<subclause id="HA698DE3FFCB14A658EF690BB2D754528"><enum>(IV)</enum><text>assist individuals in efforts to plan for major purchases, reduce their debt, and improve their financial stability; and</text> </subclause>
<subclause id="HFD666884BD214BB0B395625206222372"><enum>(V)</enum><text>work with individuals to design plans for long-term savings;</text> </subclause></clause>
<clause id="HE0DC8A05EC3B479380FB12BA7EBF19A9"><enum>(ii)</enum><text>develop recommendations regarding effective certification of persons providing programs, or performing the activities, described in clause (i), including recommendations regarding—</text>
<subclause id="H7465DB08F75243ECB3917F1C9C87E0F4"><enum>(I)</enum><text display-inline="yes-display-inline">certification processes and standards for certification;</text> </subclause>
<subclause id="H012B82A8646641CFBD7DFFC40B26FCE6"><enum>(II)</enum><text>appropriate certifying bodies; and</text> </subclause>
<subclause id="H8305B1A4516744EEB386DF8CDAA9F074"><enum>(III)</enum><text>mechanisms for funding the certification processes;</text> </subclause></clause>
<clause id="HF80504380B6644E89E68A80A9DADA9B0"><enum>(iii)</enum><text>develop a technology tool to collect data on financial education and counseling outcomes; and</text> </clause>
<clause id="H383E9488D4C342A99364B4BD41AB086F"><enum>(iv)</enum><text>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.</text> </clause></subparagraph>
<subparagraph id="H6F8BFC158D2E43A68C61B66021CE7BD9"><enum>(D)</enum><header>Coordination</header><text display-inline="yes-display-inline">Such unit shall coordinate with other units within the Agency in carrying out its functions, including—</text>
<clause id="H1E8A10CD55884578BEF4738757243B3B"><enum>(i)</enum><text>working with the unit established under paragraph (2) to—</text>
<subclause id="HDC8B90879B8C46B486AE7FCEDB6142D5"><enum>(I)</enum><text>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</text> </subclause>
<subclause id="H784416646F534436A1EBAC30F7CBEFED"><enum>(II)</enum><text>develop a marketing strategy to promote financial education and one-on-one counseling; and</text> </subclause></clause>
<clause id="H8E496B739FC64C9285251ACC99E39A3F"><enum>(ii)</enum><text>working with the unit established under paragraph (1) to conduct research related to consumer financial education and counseling.</text> </clause></subparagraph></paragraph></subsection>
<subsection display-inline="no-display-inline" id="HF9FFB3B2618D4832B7DC329E3F7D2CDE"><enum>(d)</enum><header>Single toll-free telephone number for consumer complaints and inquiries</header>
<paragraph id="H19BDC4BE66064F69874210A992ECF9E6"><enum>(1)</enum><header>Call intake system</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H7D80B73B4A0A494A987D7C86970C7C19"><enum>(2)</enum><header>Routing calls to states</header><text>To the extent practicable, State agencies may receive appropriate call transfers from the system established under paragraph (1) if—</text>
<subparagraph id="HFF8308FC66FF4EE0B15532A87632038B"><enum>(A)</enum><text>the State agency's system has the functional capacity to receive calls routed by the system; and</text> </subparagraph>
<subparagraph id="HC93521B923D54D59B54E8F81203CB252"><enum>(B)</enum><text>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.</text> </subparagraph></paragraph></subsection>
<subsection id="HE3A2C11932F046B5B374A0DFF3E1C563"><enum>(e)</enum><header>Report to the Congress</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="HA174A9DA4A1648ED9089B8C830DBDAA1"><enum>(1)</enum><text display-inline="yes-display-inline">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</text> </paragraph>
<paragraph id="H11F6D56A00E245858CAD99C71DF6BA28"><enum>(2)</enum><text>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.</text> </paragraph> </subsection>
<subsection id="H3615C35749244FCBA12FC7D84EA271FF"><enum>(f)</enum><header>Office of Financial Protection for Older Americans</header>
<paragraph id="H0E5160B006CB4EF98523983C616A366B"><enum>(1)</enum><header>Establishment</header><text display-inline="yes-display-inline">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 <quote>seniors</quote>) 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.</text></paragraph>
<paragraph id="H8C0329291550458BBBCEBDBB9BC7B6F3"><enum>(2)</enum><header>Director</header><text display-inline="yes-display-inline">The Office of Financial Protection for Older Americans shall be headed by a director.</text></paragraph>
<paragraph id="HA2701C5D2206486881723E745A4C6004"><enum>(3)</enum><header>Duties</header><text>Such unit shall perform the following duties:</text>
<subparagraph id="H04479EBEE9A249DFB8EB66A058555912"><enum>(A)</enum><text display-inline="yes-display-inline">Develop goals for programs that provide seniors financial literacy and counseling, including programs that—</text>
<clause id="H7EF04276C07B4D69ADF46A359BD6C53B"><enum>(i)</enum><text display-inline="yes-display-inline">help seniors recognize warning signs of unfair and deceptive practices, protect themselves from such practices;</text></clause>
<clause id="HFBA78738567E4BE3BA9BACA1840E099A"><enum>(ii)</enum><text display-inline="yes-display-inline">provide one-on-one financial counseling on issues including long-term savings and later-life economic security; and</text></clause>
<clause id="HC524EDD471C048B5AEFA70E9AA8D7144"><enum>(iii)</enum><text display-inline="yes-display-inline">provide personal consumer credit advocacy to respond to consumer problems caused by unfair and deceptive practices.</text></clause></subparagraph>
<subparagraph id="H683B1291E98D4033B362941EBD679C01"><enum>(B)</enum><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="H9C92B2F18313442B9997391195F720D8"><enum>(C)</enum><text display-inline="yes-display-inline">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—</text>
<clause id="H343FB487F3254AD3B24225BD75263387"><enum>(i)</enum><text>disseminating information regarding the legitimacy of certifications of financial advisers who advise seniors;</text></clause>
<clause id="H0098232B9A32470DAEB70CFCDB5B79FD"><enum>(ii)</enum><text>methods in which a senior can identify the financial advisor most appropriate for the senior’s needs; and</text></clause>
<clause id="H38AB494249E84C70B4F1233C6C8BFFB9"><enum>(iii)</enum><text>methods in which a senior can verify a financial advisor’s credentials.</text> </clause></subparagraph>
<subparagraph id="H953B329653184940944D69B8C68D6342"><enum>(D)</enum><text display-inline="yes-display-inline">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—</text>
<clause id="HBD07BBE2B2F94D3B8E47CA3E4B6E6631"><enum>(i)</enum><text>protecting themselves from unfair and deceptive practices;</text></clause>
<clause id="HB94856098987446E92D2C7F7DBF3DB4D"><enum>(ii)</enum><text>long-term savings; and</text></clause>
<clause id="H3F03F9C52DBB47E8B15C48D7A25356C8"><enum>(iii)</enum><text>planning for retirement and long-term care.</text></clause></subparagraph>
<subparagraph id="H5F5440E7AC114C17A30B41E5F85A186F"><enum>(E)</enum><text display-inline="yes-display-inline">Coordinate consumer protection efforts of seniors with other Federal agencies and State regulators, as appropriate, to promote consistent, effective, and efficient enforcement.</text></subparagraph>
<subparagraph id="H871D7D7FCC4840F08C5B9004A4CAC82E"><enum>(F)</enum><text display-inline="yes-display-inline">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).</text></subparagraph></paragraph> </subsection>
<subsection id="H28410F32BE4E4476895535DBCA1A7678"><enum>(g)</enum><header>Office of Fair Lending and Equal Opportunity</header>
<paragraph id="H3A1D4B76BFB8439D990BD7332872B297"><enum>(1)</enum><header>Establishment</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HDE13CFD5758B4E01B1D2AE332F558E40"><enum>(2)</enum><header>Functions</header><text display-inline="yes-display-inline">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:</text>
<subparagraph id="H8D80141E77C54E3C9BBE2FBA3B708847"><enum>(A)</enum><text>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.</text> </subparagraph>
<subparagraph id="H3B935AE796EC4BFC9437B321B59DC121"><enum>(B)</enum><text>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.</text> </subparagraph>
<subparagraph id="H67BEBD89143544F9AF9C6F1720101AF9"><enum>(C)</enum><text>Working with private industry, fair lending, civil rights, consumer and community advocates on the promotion of fair lending compliance and education.</text> </subparagraph>
<subparagraph id="H8C2AA3477BD049DEB026A762738BD564"><enum>(D)</enum><text>Providing annual reports to the Congress on the Agency’s efforts to fulfill its fair lending mandate.</text> </subparagraph></paragraph>
<paragraph id="H5F2A83A0B39D4FE38B2C7B32AA11A1EA"><enum>(3)</enum><header>Administration of office</header><text>There is hereby established the position of Assistant Director of the Agency for Fair Lending and Equal Opportunity who—</text>
<subparagraph id="H08D5CCB395F0499081ECDAE1DB42574F"><enum>(A)</enum><text>shall be appointed by the Director;</text> </subparagraph>
<subparagraph id="HB522EB04CB264499B738FF6997099A76"><enum>(B)</enum><text display-inline="yes-display-inline">shall carry out such duties as the Director may delegate to such Assistant Director; and</text> </subparagraph>
<subparagraph id="H5D4CDB5117834DFE9498C9B48A237591"><enum>(C)</enum><text display-inline="yes-display-inline">shall serve as the Director of the Office of Fair Lending and Equal Opportunity.</text> </subparagraph></paragraph>
<paragraph id="HD19000921D1E45599DD0AE1AD5386FAE"><enum>(4)</enum><header>Prohibitions on participation in programs with respect to certain indicted organizations</header>
<subparagraph id="HA35A1F7308F5488BBBC52C4B9886C6C1"><enum>(A)</enum><header>Prohibition</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="H8132531611D441749E9EB467BE8C8CA9"><enum>(B)</enum><header>Covered organization</header><text>In this paragraph, the term <quote>covered organization</quote> means any of the following:</text>
<clause id="HE4568457D84A4FC3981C1DB6935FB018"><enum>(i)</enum><text>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.</text> </clause>
<clause id="H72256600357343F5A66AC2048E76E40F"><enum>(ii)</enum><text>Any organization that had its State corporate charter terminated due to its failure to comply with Federal or State lobbying disclosure requirements.</text> </clause>
<clause id="H00BE3F01F84847B3B760CB7168B75EB2"><enum>(iii)</enum><text>Any organization that has filed a fraudulent form with any Federal or State regulatory agency.</text> </clause>
<clause id="HAEED75BBC2224251B5187671776EDE44"><enum>(iv)</enum><text>Any organization that—</text>
<subclause id="H9A68F6F6DD424821A6DD2E3F59D91F75"><enum>(I)</enum><text>employs any applicable individual, in a permanent or temporary capacity;</text> </subclause>
<subclause id="H33C2E89A8A91446D8F5FE851E6787320"><enum>(II)</enum><text>has under contract or retains any applicable individual; or</text> </subclause>
<subclause id="HE2CA671A5CE6449397070889BAFE0D3A"><enum>(III)</enum><text>has any applicable individual acting on the organization’s behalf or with the express or apparent authority of the organization.</text> </subclause></clause></subparagraph>
<subparagraph id="H4E868A001BBE47768FF2EE99A8752392"><enum>(C)</enum><header>Additional definitions</header><text>In this paragraph:</text>
<clause id="HC16E6AFDB28D4B2A9729BA89A2D5691E"><enum>(i)</enum><text>The term <quote>organization</quote> includes the Association of Community Organizations for Reform Now (in this paragraph referred to as <quote>ACORN</quote>) and any ACORN-related affiliate.</text> </clause>
<clause id="H49859582C9194855B1787C3892476017"><enum>(ii)</enum><text display-inline="yes-display-inline">The term <quote>ACORN-related affiliate</quote> means any of the following:</text>
<subclause id="HCE0D2F3CAE3A4B468F340FDA78896A43"><enum>(I)</enum><text>Any State chapter of ACORN registered with the Secretary of State’s office in that State.</text> </subclause>
<subclause id="HF8E9E03B9C7B4FE0A8AA599BFD8C96F4"><enum>(II)</enum><text>Any organization that shares directors, employees, or independent contractors with ACORN.</text> </subclause>
<subclause id="H96807009A5D44AF8BFC0ED0527ADB3B3"><enum>(III)</enum><text>Any organization that has a financial stake in ACORN.</text> </subclause>
<subclause id="H8FDC990E4FA4479BB7818DB2956EB7DC"><enum>(IV)</enum><text>Any organization whose finances, whether federally funded, donor-funded, or raised through organizational goods and services, are shared or controlled by ACORN.</text> </subclause></clause>
<clause id="H862C746CB07E43869CE7180916481775"><enum>(iii)</enum><text>The term <quote>applicable individual</quote> means an individual who has been indicted for a violation under Federal or State law relating to an election for Federal or State office.</text> </clause></subparagraph>
<subparagraph id="H650EB92512E041C2BBB5B7737DBE2A4B"><enum>(D)</enum><header>Revision of federal acquisition regulation</header><text>The Federal Acquisition Regulation shall be revised to carry out the provisions of this paragraph relating to contracts.</text> </subparagraph>
<subparagraph id="HA1CB907419F2415AB2D5D7687D5A4496"><enum>(E)</enum><header>Severability</header><text>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.</text> </subparagraph></paragraph></subsection></section>
<section id="HAEA888DA92D84FEC82FFD38A712D2117"><enum>4107.</enum><header>Consumer Advisory Board</header>
<subsection id="HFFB9DB3F79694A3C8DFBB84D9CF43799"><enum>(a)</enum><header>Establishment required</header><text>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.</text> </subsection>
<subsection display-inline="no-display-inline" id="HF754C4740F7F40448AC8A6E12C1E6FFF"><enum>(b)</enum><header>Membership</header>
<paragraph id="H3CB77DEB75D349F59913084498704D14"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">In appointing the members of the Consumer Advisory Board, the Director shall seek—</text>
<subparagraph id="HF78B53FB6C7646A28330E879ACA1B489"><enum>(A)</enum><text>to assemble experts in financial services, community development, fair lending and civil rights, consumer protection, and consumer financial products or services; and</text> </subparagraph>
<subparagraph id="H9B79EDC001374262A2C5BCBEBC35CABA"><enum>(B)</enum><text>to represent the interests of covered persons and consumers.</text> </subparagraph></paragraph>
<paragraph id="H7C23826AE94C4CE8AB77EB999BFC5658"><enum>(2)</enum><header>Prohibition on membership with respect to certain indicted organizations</header><text>The director may not appoint an employee of a covered organization (as defined in section 4105(f)(4)(B)) to the Consumer Advisory Board.</text> </paragraph></subsection>
<subsection id="H697F477E9A0949A0AC5BF755BDA1524E"><enum>(c)</enum><header>Political affiliation</header><text>Not more than 1 more than half of the members of the Consumer Advisory Board may be members of the same political party.</text> </subsection>
<subsection id="H86E48A7556B747C0A59414A27477F289"><enum>(d)</enum><header>Meetings</header><text>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.</text> </subsection>
<subsection id="H3A6F917C420D4EA5832F54DDB9CD6A74"><enum>(e)</enum><header>Compensation and travel expenses</header><text>Members of the Consumer Advisory Board who are not full-time employees of the United States shall—</text>
<paragraph id="H0EC3750CC5C24221BCAA496F84122933"><enum>(1)</enum><text>be entitled to receive compensation at a rate fixed by the Director while attending meetings of the Consumer Advisory Board, including travel time; and</text> </paragraph>
<paragraph id="H3C0C368A0C4B4879A39E3C8761845DF3"><enum>(2)</enum><text>be allowed travel expenses, including transportation and subsistence, while away from their homes or regular places of business.</text> </paragraph></subsection></section>
<section id="HB1516AE9ADCA46CD9F37D287F3A9E657"><enum>4108.</enum><header>Coordination</header>
<subsection id="HC14C678497CC4FA9942CB82A45EE39CD"><enum>(a)</enum><header>Coordination with other federal agencies and state regulators</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="HC10D15FD9FCC4F748C0CA7CEA8075406"><enum>(b)</enum><header>Coordination of consumer education initiatives</header>
<paragraph id="HED1396816FBA4AAE8EA1F965CAFD7B69"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph>
<paragraph id="HEDCDB4F463EB4D13B1180C9DD672072A"><enum>(2)</enum><header>Goals of coordination</header><text>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.</text> </paragraph></subsection>
<subsection id="HD45AFF2F71D24AC687C9A9964267C273"><enum>(c)</enum><header>Coordination</header><text display-inline="yes-display-inline">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.</text> </subsection></section>
<section id="H3718C80DA7004CDB8B30F70D24C82301"><enum>4109.</enum><header>Reports to the Congress</header>
<subsection id="H4E7EB00693814F6EACF79BCE0F051833"><enum>(a)</enum><header>Reports required</header><text>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.</text> </subsection>
<subsection id="H95BD9FE80AD84693AD4F951672275D31"><enum>(b)</enum><header>Contents</header><text>The reports required by subsection (a) shall include—</text>
<paragraph id="H8CF08E3891E1419A8A03F5D3BADC2515"><enum>(1)</enum><text>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;</text> </paragraph>
<paragraph id="H69778AAB96444D579484090CFE495DFA" display-inline="no-display-inline"><enum>(2)</enum><text display-inline="yes-display-inline">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; </text></paragraph>
<paragraph id="H61F72A614C36423E81CE1162FA46ADC8"><enum>(3)</enum><text>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;</text> </paragraph>
<paragraph id="HA082EF312F8342AE95A287F5B260C082"><enum>(4)</enum><text display-inline="yes-display-inline">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;</text> </paragraph>
<paragraph id="H60AF3EA3E62548F4B38CDBA1BC8A9AB8"><enum>(5)</enum><text>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;</text> </paragraph>
<paragraph id="H67A0D0E5B75449C5AADFC730C39763A9" display-inline="no-display-inline"><enum>(6)</enum><text display-inline="yes-display-inline">an analysis of the Agency’s efforts to increase workforce and contracting diversity consistent with subtitle I of title I of this Act;</text></paragraph>
<paragraph id="HC56403A462564BD487FAE03E1E6C130D"><enum>(7)</enum><text display-inline="yes-display-inline">an analysis of the Agency’s efforts to fulfill the fair lending mission of the Agency; and</text> </paragraph>
<paragraph id="H64374DB0071D41F289CD5B3C0BF94C3C"><enum>(8)</enum><text display-inline="yes-display-inline">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—</text>
<subparagraph id="HC88DBC97856E493BBBE5050DD08DE86B"><enum>(A)</enum><text>the difficulties and hardships encountered with respect to coordinating with other Federal and State government entities;</text> </subparagraph>
<subparagraph id="H7A2A3A9CA35E4077AFD4CD15758E1B9A"><enum>(B)</enum><text>the regulatory and enforcement limitations placed on the Agency by this title;</text> </subparagraph>
<subparagraph id="HD202C362C2CA4A8F8C1096B50B84706F"><enum>(C)</enum><text>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</text> </subparagraph>
<subparagraph id="H8772940E8D294C068FA010073C18CFC2"><enum>(D)</enum><text>legislative and administrative recommendations with respect to solving or alleviating identified difficulties.</text> </subparagraph></paragraph></subsection>
<subsection id="HFF32BDB93D2B47689ACF1B0427D1831E"><enum>(c)</enum><header>Annual appearance before the congress</header><text display-inline="yes-display-inline">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)—</text>
<paragraph id="H3F139968A0224A36BDBAEE13BCBD6FE2"><enum>(1)</enum><text>to discuss the efforts, activities, objectives and plans of the Agency; and</text> </paragraph>
<paragraph id="H817697BD81124587BE1843E6D13C7DB8"><enum>(2)</enum><text>discuss and answer questions concerning such report.</text> </paragraph></subsection></section>
<section id="H7BF1C80CF2B348098F55CE43B938B1ED" display-inline="no-display-inline" section-type="subsequent-section"><enum>4110.</enum><header>GAO small business studies</header>
<subsection id="HB9C3B4E8DF314806AB811636036E1B7B"><enum>(a)</enum><header>Studies required</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="H456B58EA9D1049B491975719C2642B4D"><enum>(b)</enum><header>Report</header><text>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. </text></subsection></section>
<section id="H9F09537A80B546ECBE0D7A997DBA65FC"><enum>4111.</enum><header>Funding; fees and assessments; penalties and fines</header>
<subsection id="H87761D787CE240CDA2DE4769C3883719"><enum>(a)</enum><header>Transfer of funds from the board of governors</header>
<paragraph id="HA87F19E609C04ABBBD3E960630E79F9A"><enum>(1)</enum><header>Transfer required</header><text>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.</text> </paragraph>
<paragraph id="HDB601058146C4405BA1BFC5B27FF40C4"><enum>(2)</enum><header>Procedures</header><text>The Board of Governors, in consultation with the Agency, shall make appropriate arrangements to transfer funds to the Director in accordance with this subsection.</text> </paragraph></subsection>
<subsection id="H98965BC62EEF49FE87A1E182F0FC0484"><enum>(b)</enum><header>Fees and assessments</header>
<paragraph id="HA958D5087E0C42278DD6A53665BD1B6F"><enum>(1)</enum><header>Assessment required</header>
<subparagraph id="H8E8F3E853BAC4243A006380E4C0CC3CB"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="H5ADD6773C43E453BADB2AF0741DC7B1E"><enum>(B)</enum><header>Basis for assessment</header><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph>
<paragraph id="H1DD9ACFE0AE4464B9B32E3DC5E9A939C"><enum>(2)</enum><header>Regulations</header>
<subparagraph id="H776FA46E5E7E4D57903F01145B113665"><enum>(A)</enum><header>In general</header><text>The Director shall prescribe regulations to govern the imposition and collection of fees and assessments.</text> </subparagraph>
<subparagraph id="HBB45389FAAB44440BA6D08BB34506877"><enum>(B)</enum><header>Factors required to be addressed</header><text>Regulations prescribed by the Director under this subsection shall specify and define—</text>
<clause id="HC8F8825D27B44818A6D7FDAA8CF37F33"><enum>(i)</enum><text>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);</text> </clause>
<clause id="H620D1D4A7F014F729F88045065891EF2"><enum>(ii)</enum><text>the amount and frequency of fees or assessments; and</text> </clause>
<clause id="H1EA1AC3937864691A8E14B5CCCFDEDD5"><enum>(iii)</enum><text>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.</text> </clause></subparagraph></paragraph>
<paragraph id="H0C6E94D0B1434D7A9A3171B21B608ECB"><enum>(3)</enum><header>Assessments on depository institution covered persons</header>
<subparagraph id="HA58CD592B63341DDA9027421EDF6CF67"><enum>(A)</enum><header>Depository institution covered person defined</header><text>For purposes of this section, the term <quote>depository institution covered person</quote> means a covered person that is an insured depository institution or credit union.</text> </subparagraph>
<subparagraph id="H557F52AFBC5846CC9F9B729E2871966B"><enum>(B)</enum><header>Assessments</header>
<clause id="HC2B96F03DBE94AC2BE990F30CDA9AEDA"><enum>(i)</enum><header>Fees required</header><text display-inline="yes-display-inline">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.</text> </clause>
<clause display-inline="no-display-inline" id="H41D6D289FAE74399909BDE525B7F8744"><enum>(ii)</enum><header>Limitation on certain fees</header><text>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).</text> </clause>
<clause id="H524D98E3917D4A0D8F2ABFA89C026AD0"><enum>(iii)</enum><header>Basis for fee amounts</header><text>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.</text> </clause></subparagraph>
<subparagraph id="H23968A00A6E64F66A52F9B47A413C469"><enum>(C)</enum><header>Coordination during implementation period</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="H61A966D485564579986076D34ED99078"><enum>(D)</enum><header>Marginal assessment rate</header>
<clause id="H85FCACEACEB8493FA3639F5865722C44"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </clause>
<clause id="HF5CF8047876B46C2BF347670DC976253"><enum>(ii)</enum><header>Rule of construction</header><text display-inline="yes-display-inline">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.</text> </clause></subparagraph>
<subparagraph id="HAE918A4E935F4E40BE3A37793ECE3434"><enum>(E)</enum><header>Limitations on assessments</header>
<clause id="H87138BC082A441139485D06DD25478D2"><enum>(i)</enum><header>Assessments for administrative costs</header><text display-inline="yes-display-inline">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.</text> </clause>
<clause id="HBC7EE1989EF44021844D3FB033324DB7"><enum>(ii)</enum><header>Amounts paid for consumer compliance supervision</header><text display-inline="yes-display-inline">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.</text> </clause></subparagraph></paragraph>
<paragraph id="H093B04CDBD854706B9ABA16064B81E8D"><enum>(4)</enum><header>Assessments on nondepository covered persons</header>
<subparagraph id="H9C5E944312E941B39758806C764D79D0"><enum>(A)</enum><header>Nondepository covered person defined</header><text>For purposes of this section, the term <quote>nondepository covered person</quote>—</text>
<clause id="H095108A227D143A5B06FA08A9B1211A8"><enum>(i)</enum><text>means a covered person that is not a credit union or insured depository institution; and</text> </clause>
<clause id="HC64AB566A5304C9A835BC9FF3DDC74E7"><enum>(ii)</enum><text>includes any bank holding company.</text> </clause></subparagraph>
<subparagraph id="H360E592298704620A1605F8F99997224"><enum>(B)</enum><header>Assessments</header>
<clause id="H30ECD3D306534F56A4DBDDC4FCF8E192"><enum>(i)</enum><header>Fees required</header><text>The Director shall assess fees for registration, examination, and supervision of nondepository covered persons.</text> </clause>
<clause id="H60222B5C4AFE40E790C03B163459D327"><enum>(ii)</enum><header>Basis for fee amounts</header><text>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.</text> </clause>
<clause id="H83171FA8298140208CE8A6CC80917C5B"><enum>(iii)</enum><header>Registration fee minimums</header><text>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.</text> </clause></subparagraph>
<subparagraph id="H293CE213A13C497382269CC2B4E6CE4A"><enum>(C)</enum><header>Nondepository covered person assessment not less than for depository covered persons</header><text>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.</text> </subparagraph>
<subparagraph id="H1B87904E7DAF4F18AEA807F8D9312DEE"><enum>(D)</enum><header>Offsetting collections</header><text display-inline="yes-display-inline">Fees assessed under this paragraph—</text>
<clause id="H7969829185DE4A39B89FCEEF163B36E5"><enum>(i)</enum><text>shall not be collected for any fiscal year except to the extent provided in advance in appropriation Acts; and</text></clause>
<clause id="H509CD799F3D54DE585B3C00CFB36FE81"><enum>(ii)</enum><text>shall be deposited and credited as offsetting collections to the account providing appropriations to the Agency.</text></clause></subparagraph></paragraph></subsection>
<subsection id="H3F3FFA755C464E18BC854A09C17E0A6C"><enum>(c)</enum><header>Authorization of appropriations</header>
<paragraph id="H9E4849236059425EBE7F11E69771C1F9"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H1B41A5F23CE0404BB2046683E14E4C49"><enum>(2)</enum><header>Apportionment</header><text>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.</text> </paragraph>
<paragraph id="H1D164BA3FD624DAB86D7BB86771426BE"><enum>(3)</enum><header>Other available funds taken into account</header><text>Sums appropriated under this subsection shall take into account such other sums available to the Agency under this section.</text> </paragraph></subsection>
<subsection id="H9830E321BE304BCF915D98D6350D8E30"><enum>(d)</enum><header>Consumer financial protection agency depository institution fund</header>
<paragraph id="HB66D09B0B3E64CAE8F3A2AF3AD60944A"><enum>(1)</enum><header>Establishment</header>
<subparagraph id="H309EBC0A79A047338ECAC65362550B19"><enum>(A)</enum><header>In general</header><text>There is established in the Treasury a separate fund to be known as the <quote>Consumer Financial Protection Agency Depository Institution Fund</quote> (hereafter in this section referred to as the <quote>CFPA Depository Fund</quote>).</text> </subparagraph>
<subparagraph id="HA138C6B9DA0E4B428F27D2BE6EDE968E"><enum>(B)</enum><header>Amounts in fund not available for certain purposes</header><text>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.</text> </subparagraph></paragraph>
<paragraph id="HAA32CAD5D231416E967D47B0E02B8CF8"><enum>(2)</enum><header>All transferred funds deposited</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H63FB91A1927A474E869DD2B7049162AD"><enum>(3)</enum><header>All applicable supervisory fees and assessments deposited</header><text display-inline="yes-display-inline">The Director shall deposit all amounts received from assessments under subsection (b)(3) in the CFPA Depository Fund.</text> </paragraph></subsection>
<subsection id="H9C567C8C765348CD9968441843FEFE01"><enum>(e)</enum><header>Consumer financial protection agency nondepository institution fund</header>
<paragraph id="H2814987D2CDD43A3B0CFC388898E680F"><enum>(1)</enum><header>Establishment</header>
<subparagraph id="HC9DC9CB37571446DAC7904F67ADBEAC2"><enum>(A)</enum><header>In general</header><text>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 <quote>CFPA Nondepository Fund</quote>).</text> </subparagraph>
<subparagraph id="H7EC4433FCF454F76B39CE9B37129268E"><enum>(B)</enum><header>Amounts in fund not available for certain purposes</header><text>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.</text> </subparagraph></paragraph>
<paragraph id="H2967E621F4CD443481477CCC44A0A7CF"><enum>(2)</enum><header>All applicable supervisory fees and assessments deposited</header><text>The Director shall deposit all amounts received from assessments under subsection (b)(4) in the CFPA Nondepository Fund.</text> </paragraph></subsection>
<subsection id="HD39575A371DA418A948DB28C5F57FEAC"><enum>(f)</enum><header>General provisions relating to funds</header>
<paragraph id="HD301A6D060CE4433A479BB2BC980C1E2"><enum>(1)</enum><header>Maintenance of funds</header>
<subparagraph id="HAA7A6387E8F9405C9D1389B768C2A197"><enum>(A)</enum><header>Agency funds maintained by treasury</header><text>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—</text>
<clause id="H71B04E919DCB47179AFB88F855D234C5"><enum>(i)</enum><text>maintained and administered by the Secretary; and</text> </clause>
<clause id="H6703962E2E104CC5A69A1B7F08413159"><enum>(ii)</enum><text>maintained separately and not commingled.</text> </clause></subparagraph>
<subparagraph id="HA8B55D1DB8754A3BAB7C8F2695418839"><enum>(B)</enum><header>Agency’s authority</header><text>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.</text> </subparagraph>
<subparagraph id="H05582AB9DACA4BE295E27B1F8FA0BBBD"><enum>(C)</enum><header>Accounting requirements</header>
<clause id="HAE44FED34DEF40B5978F2757524923BC"><enum>(i)</enum><header>Accounting for use of facilities and resources</header><text>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—</text>
<subclause id="HBB7697093FAC4E7AA272CA25EA574FF1"><enum>(I)</enum><text>with respect to depository institution covered persons, to the CFPA Depository Fund; and</text> </subclause>
<subclause id="HF02AF4DDE067495DABD9004A004E51EB"><enum>(II)</enum><text>with respect to nondepository covered persons, to the CFPA Nondepository fund.</text> </subclause></clause></subparagraph>
<subparagraph id="H6F6DA74643E64AFF83D5E289AB389A80"><enum>(D)</enum><header>Allocation of administrative expenses</header><text>Any personnel, administrative, or other overhead expense of the Agency shall be allocated—</text>
<clause id="H04C363488CFB4434867DFB0255529C6B"><enum>(i)</enum><text>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;</text> </clause>
<clause id="H9BAFF25A37C541C7AEB924D2E3A88183"><enum>(ii)</enum><text>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;</text> </clause>
<clause id="HF51D7C9807724390BEA710E0E9083FC1"><enum>(iii)</enum><text display-inline="yes-display-inline">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</text> </clause>
<clause id="H3B399B43D0BE435DB983D771CC07D28B"><enum>(iv)</enum><text display-inline="yes-display-inline">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—</text>
<subclause id="HE405D1564B644953B76DC318C57D1C53"><enum>(I)</enum><text>the aggregate assets of all depository institution covered persons bears to the aggregate assets of all covered persons; and</text> </subclause>
<subclause id="H2D12F309B37F46F6B58F053B23DAB146"><enum>(II)</enum><text display-inline="yes-display-inline">the aggregate assets of all nondepository covered persons bears to the aggregate assets of all covered persons.</text> </subclause></clause></subparagraph>
<subparagraph id="HA94BFA1DEA864E2BAB6D3CAB9747DF46"><enum>(E)</enum><header>Agency fund</header><text display-inline="yes-display-inline">The <quote>Agency fund</quote> 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).</text> </subparagraph></paragraph>
<paragraph id="H6CC6572DD1DC41E0B52384D2DB4CA0F6"><enum>(2)</enum><header>Investment</header>
<subparagraph id="H56CE31FC98374592B9BA4CF7EC84E2F8"><enum>(A)</enum><header>Amounts in funds may be invested</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="H51B706B0E2F34F1C940E0C59AF391C9A"><enum>(B)</enum><header>Eligible investments</header><text>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.</text> </subparagraph>
<subparagraph id="H37B46F632B9740F4848F07FE8C67CFDE"><enum>(C)</enum><header>Interest and proceeds credited</header><text>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.</text> </subparagraph></paragraph>
<paragraph id="HAB89ED13581B4D7094E7378A27290BC9" display-inline="no-display-inline"><enum>(3)</enum><header>Exception</header><text display-inline="yes-display-inline">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.</text></paragraph> </subsection>
<subsection id="H2CC5DAA9254B43558A592E25F2319946"><enum>(g)</enum><header>Penalties and fines</header>
<paragraph id="H68733C04C73442AB88B66DD4C76DED90"><enum>(1)</enum><header>Establishment of victims relief fund</header><text>There is established in the Treasury of the United States a fund to be known as the <quote>Consumer Financial Protection Agency Civil Penalty Fund</quote> (hereafter in this section referred to as the <quote>Civil Penalty Fund</quote>).</text> </paragraph>
<paragraph id="H3DACDAC38B0843FEA54158C8FD24B02D"><enum>(2)</enum><header>Deposits</header><text>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.</text> </paragraph>
<paragraph id="H082814F2926A4658A73DB6F7DFBBCF1E"><enum>(3)</enum><header>Payment to victims</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H239111DA55204CF990FEF34D775429D5"><enum>(4) </enum><header>Financial education and counseling program</header>
<subparagraph id="H13AD3CE89CE14CB3AA13EEA5A983BF91"><enum>(A)</enum><header>In general</header><text>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).</text></subparagraph>
<subparagraph id="HCE6EA439406046CF937A390345A30B65"><enum>(B)</enum><header>Memorandum of understanding</header><text display-inline="yes-display-inline">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).</text></subparagraph>
<subparagraph id="H5D59F26A7A6C4D52939989FD542E4B4B"><enum>(C)</enum><header>Assistance for individuals at financial risk</header><text display-inline="yes-display-inline">Section 1132 of the Housing and Economic Recovery Act of 2008 (12 U.S.C. 1701) is amended—</text>
<clause id="H7CD6A78FA85B425486C39B9656A78C01"><enum>(i)</enum><text>in subsection (a), by striking <quote>prospective homebuyers</quote> each place that term appears and inserting <quote>individuals at financial risk</quote>; </text></clause>
<clause id="H933E30AA6BB34C368C9B9BB4E6A579E2"><enum>(ii)</enum><text>in subsection (b)—</text>
<subclause id="H2A0F4B138BDE45DC8A93A4199BEE5530"><enum>(I)</enum><text>in paragraph (1), by striking <quote>prospective homebuyers</quote> and inserting <quote>individuals at financial risk</quote>; and</text></subclause>
<subclause id="H3273CA2151AE4320AE5D73F45FD70AE4"><enum>(II)</enum><text>by adding at the end the following:</text>
<quoted-block style="OLC" id="HDEE2A34E4781432C83A104D013274049" display-inline="no-display-inline">
<paragraph id="H7C55CA9D25804B208908B661004EE2B9"><enum>(3)</enum><header>Determination of financial risk</header><text display-inline="yes-display-inline">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).</text></paragraph><after-quoted-block>; and</after-quoted-block></quoted-block></subclause></clause>
<clause id="H5AA386E4AFCC4FDA940516D18330768D"><enum>(iii)</enum><text display-inline="yes-display-inline">in subsection (c)(1)—</text>
<subclause id="H434471AADD684D8080310D2FF16E1C86"><enum>(I)</enum><text>in subparagraph (A), by striking <quote>or</quote>;</text></subclause>
<subclause id="HD54721731FE54A9896C5806150FB3605"><enum>(II)</enum><text>in subparagraph (B), by striking the period and inserting <quote>; or</quote>; and</text></subclause>
<subclause id="HD7E6EC2D7BBD426FBE7544E434251F1F"><enum>(III)</enum><text>by adding at the end the following:</text>
<quoted-block style="OLC" id="H3775CE9B03F2440EA4ABE73ECDAEEDCB" display-inline="no-display-inline">
<subparagraph id="HB382203FB7354B7CAA2B6A814E807676"><enum>(C)</enum><text display-inline="yes-display-inline">a nonprofit corporation that—</text>
<clause id="H0F9C9E1CBB5041F785A4442205277865"><enum>(i)</enum><text>is exempt from taxation under section 501(c)(3) of the Internal Revenue Code of 1986; and</text></clause>
<clause id="HF5B0394C060643B5867E3F07837FAB04"><enum>(ii)</enum><text display-inline="yes-display-inline">specializes or has expertise in working with individuals at financial risk.</text></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </subclause></clause></subparagraph></paragraph></subsection>
<subsection id="H234DC88A7F614FA891390708A8B0F0AF" display-inline="no-display-inline"><enum>(h)</enum><header>Assessments for certain nondepository institution covered persons</header>
<paragraph id="HF68F8852565D48C883FF3EAE6EF92D9C"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Notwithstanding any other provision of this Act, a nondepository institution covered person shall not be subject to assessments by the Agency if—</text>
<subparagraph id="HF8FBF02232E14368995C9479F137B372"><enum>(A)</enum><text>the assets that are financial activities of that nondepository covered person represent less than a substantial portion of its total assets; and</text></subparagraph>
<subparagraph id="HAA5AAC7C59344B60BE7538C283C64B27"><enum>(B)</enum><text>the gross revenues derived from financial activities of that nondepository covered person are less than a substantial portion of its gross revenues.</text></subparagraph></paragraph>
<paragraph id="H63E76D5CD6E640B8BC424BEF948FB4E5"><enum>(2)</enum><header>Extensive consumer financial products or services operations</header><text>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. </text> </paragraph></subsection></section>
<section id="H0055B89E00244FA2B651925ED78D8EA8"><enum>4112.</enum><header>Amendments relating to other administrative provisions</header>
<subsection id="HA1870103C4CE4F7D867E2B255A6E6A58"><enum>(a)</enum><header>Act of October 28, 1974</header><text display-inline="yes-display-inline">Section 111 of Public Law 93–495 (12 U.S.C. 250) is amended by inserting <quote>the Consumer Financial Protection Agency,</quote> after <quote>Federal Deposit Insurance Corporation,</quote>.</text> </subsection>
<subsection id="H9D470949590A4683A1804F9AFB3611A1"><enum>(b)</enum><header>Paperwork Reduction Act</header><text display-inline="yes-display-inline">Section 2(5) of the Paperwork Reduction Act (44 U.S.C. 3502(5)) by inserting <quote>the Consumer Financial Protection Agency,</quote> after <quote>the Securities and Exchange Commission,</quote>.</text> </subsection></section>
<section id="H88AD81F5F33D4B89934E4F6639C86D2E" display-inline="no-display-inline" section-type="subsequent-section"><enum>4113.</enum><header>Oversight by GAO</header>
<subsection id="HBB67AB5E14184B368B04CB25A8CC49E5"><enum>(a)</enum><header>Authority</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="H44FDD5EFA8C6480EADA155C488B541B7"><enum>(b)</enum><header>Access</header><text>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.</text></subsection></section>
<section id="HB8B3C01C84A843F0ADEE07540CEFE377"><enum>4114.</enum><header>Effective date</header><text display-inline="no-display-inline">This subtitle shall take effect on the date of the enactment of this title.</text> </section></subtitle>
<subtitle id="H5B8351FA410C4B29AADA1E6DC0928FBD"><enum>B</enum><header>General Powers of the Director and Agency</header>
<section id="H3EF4D4EB4A8A4F2AB43152BD88722530"><enum>4201.</enum><header>Mandate and objectives</header>
<subsection id="HB81180926A91449990715376A8E93105"><enum>(a)</enum><header>Mandate</header><text>The Director shall seek to promote transparency, simplicity, fairness, accountability, and equal access in the market for consumer financial products or services.</text> </subsection>
<subsection id="H864B3475ECED44739340A95447F8E93C"><enum>(b)</enum><header>Objectives</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="H22CB3E08CCAB448188A37D54DA8C56E0"><enum>(1)</enum><text>consumers have and can use the information they need to make responsible decisions about consumer financial products or services;</text> </paragraph>
<paragraph id="HDA212A5346824232A3E9915B4E6E4261"><enum>(2)</enum><text>consumers are protected from abuse, unfairness, deception, and discrimination;</text> </paragraph>
<paragraph id="HC3F817D778B74F7596B95B8689EBEFE8"><enum>(3)</enum><text>markets for consumer financial products or services operate fairly and efficiently with ample room for sustainable growth and innovation; and</text> </paragraph>
<paragraph id="HF2E321A110EA4AD1BD2F549C6BD13CB1"><enum>(4)</enum><text>traditionally underserved consumers and communities have equal access to responsible financial services.</text> </paragraph></subsection></section>
<section id="HB085A450288546F6A2C81F64495DA1EF"><enum>4202.</enum><header>Authorities</header>
<subsection id="H8C3D0F5C96B14408B198DD73A269FA20"><enum>(a)</enum><header>In general</header><text>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.</text> </subsection>
<subsection id="H3560FE81049645D9A78C10BBD424D335"><enum>(b)</enum><header>Rulemaking, orders, and guidance</header>
<paragraph id="H047F12E147044D6C982A81593E87A792"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph>
<paragraph id="H9124085267FB453DA13859C51B95C6B5"><enum>(2)</enum><header>Standards for rulemaking</header><text>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—</text>
<subparagraph id="HF89C5171013E487CAF960000FEE2AB62"><enum>(A)</enum><text display-inline="yes-display-inline">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</text></subparagraph>
<subparagraph id="HCBCB6994D2174EDB8A17DD9ACA521A93"><enum>(B)</enum><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph>
<paragraph id="H5B196BE817C34140BAF92257FCCBEC02"><enum>(3)</enum><header>Exemptions</header>
<subparagraph id="HB27B136D0B434624BD7C9E081F057EA8"><enum>(A)</enum><header>In general</header><text>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).</text> </subparagraph>
<subparagraph id="H16398FA4020A448083344C20129197D4"><enum>(B)</enum><header>Factors</header><text>In issuing an exemption by regulation or order as permitted in subparagraph (A), the Director shall as appropriate take into consideration the following:</text>
<clause id="H5C8DF53D5FDD4708B7E802B504E07F72"><enum>(i)</enum><text>The total assets of the covered person.</text> </clause>
<clause id="HCF1159C14F0A4FC2BB714E55F4BBE7A7"><enum>(ii)</enum><text>The volume of transactions involving consumer financial products or services in which the covered person engages.</text> </clause>
<clause id="H4550332E2D8B451EB0D506FD4EC80D78"><enum>(iii)</enum><text>The extent to which the covered person engages in 1 or more financial activities.</text> </clause>
<clause id="H838CD8D49F7C45999FF9881FD8C88245"><enum>(iv)</enum><text>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.</text> </clause></subparagraph>
<subparagraph id="H59096C83F0CB424BA4785DE0E96AD602"><enum>(C)</enum><header>Rule of construction</header><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph></subsection>
<subsection id="H22AB91306378496D8A569071D306DB2D"><enum>(c)</enum><header>Examinations and reports</header>
<paragraph id="HCA559AA11C2D48159327CDD764A3D7F8"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H944604C746DA4300963F59E4D230F5DE"><enum>(2)</enum><header>Examination program</header><text display-inline="yes-display-inline">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:</text>
<subparagraph id="HE6FB472999044DC9A74C265FD369B1A9"><enum>(A)</enum><text>The asset size of the covered persons.</text> </subparagraph>
<subparagraph id="H59282C3DAFC844C4A8E535E86D4EEEC9"><enum>(B)</enum><text>The volume of transactions involving consumer financial products or services in which the covered persons engage.</text> </subparagraph>
<subparagraph id="HEF91BF31C8BA46879AD964DBF47A1140"><enum>(C)</enum><text>The risks to consumers created by the provision of such consumer financial products or services.</text> </subparagraph>
<subparagraph id="H4A157B162D6F44CBBEE7B04F8C6B831B"><enum>(D)</enum><text>In the case of State-chartered institutions, the extent to which such institutions are subject to oversight by State authorities for consumer protection.</text> </subparagraph></paragraph>
<paragraph id="HCAAB76F4F57D417F980B14019806BB1C"><enum>(3)</enum><header>Coordination</header><text>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.</text> </paragraph>
<paragraph display-inline="no-display-inline" id="HB6D9268FA8964EB49C93CD552AC4BBE7"><enum>(4)</enum><header>Reports</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HDC063C915AD3497D975612B8B86C9426"><enum>(5)</enum><header>Content of reports</header><text>The reports authorized in paragraph (4) may include such information as necessary to keep the Agency informed as to—</text>
<subparagraph id="H6DA42DF961854280B379736EA751BFFC"><enum>(A)</enum><text>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</text> </subparagraph>
<subparagraph id="H64BB0ADCFA764B5AB5321E85ED62D2D9"><enum>(B)</enum><text>matters related to the provision of consumer financial products or services including the servicing or maintenance of accounts or extensions of credit.</text> </subparagraph></paragraph>
<paragraph id="H74E09BE814614589876FE92AF048E032"><enum>(6)</enum><header>Use of existing reports</header><text>In general, the Agency shall, to the fullest extent possible, use—</text>
<subparagraph id="H46534AEBBE01445EA2B8370A1D545A0C"><enum>(A)</enum><text display-inline="yes-display-inline">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</text> </subparagraph>
<subparagraph id="HF5027DFD3DA54B87B53A3978D2B56221"><enum>(B)</enum><text>information that has been reported publicly.</text> </subparagraph></paragraph>
<paragraph id="HC7301CAAD57F44C791190B121C9DFF9F"><enum>(7)</enum><header>Access by the agency to reports of other regulators</header>
<subparagraph id="H3D37FE02ABFD44FC91D21AE7340468F9"><enum>(A)</enum><header>Examination and financial condition reports</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="HCA309040ED6946CBB6478305297B9F6D"><enum>(B)</enum><header>Provision of other reports to agency</header><text>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.</text> </subparagraph></paragraph>
<paragraph display-inline="no-display-inline" id="HF3CECE6DA3B14A54AEB6199756142FF9"><enum>(8)</enum><header>Access by other regulators to reports of the agency</header>
<subparagraph id="H14B296D26F054B96837179BBDAE37E34"><enum>(A)</enum><header>Examination reports</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="H3323EEDB7529456AB0FB6AEF91DF4586"><enum>(B)</enum><header>Provision of other reports to other regulators</header><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph>
<paragraph id="H027C065E9B864495975061A60BAB069E"><enum>(9)</enum><header>Preservation of authority</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HA0608BCC46C140F69939F766B57B5349"><enum>(10)</enum><header>Reports of tax law noncompliance</header><text display-inline="yes-display-inline">The Director shall provide the Commissioner of Internal Revenue with any report of examination or related information identifying possible tax law noncompliance.</text> </paragraph>
<paragraph id="H6FE3458ACB61487CA58BF55613BE7E7F"><enum>(11)</enum><header>Delegation</header>
<subparagraph id="HA950F5E298ED49E48478CC96D5D198F9"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="HC06C81CD8C67493D9B65A5060E1E9055"><enum>(B)</enum><header>Standard for delegation</header><text>The Director shall provide such delegation if, in the Director’s sole discretion, the Director determines that—</text>
<clause id="HCB2439F1D4C74E68A1A84FD05CB20F65"><enum>(i)</enum><text>the delegation is consistent with the public interest;</text> </clause>
<clause id="H12B7FA824FBB464C93528348DFA7E9DB"><enum>(ii)</enum><text display-inline="yes-display-inline">the appropriate agency is capable of enforcing compliance with this title, and with any regulation prescribed under this title; and</text> </clause>
<clause id="H917F3BE488BA4FCAAD0A49C91D178283"><enum>(iii)</enum><text>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.</text> </clause></subparagraph>
<subparagraph id="HC7DE28296B4D4A9FAC21B4B30FE3B78D"><enum>(C)</enum><header>Effect of delegation</header><text display-inline="yes-display-inline">The insured depository institution or insured credit union shall be subject to the examination process described in section 4203(b).</text> </subparagraph>
<subparagraph id="HF853566466744E07A8279ED0C051D2D3"><enum>(D)</enum><header>No effect on enforcement</header><text>The Director’s delegation authority under this paragraph shall not apply to the Director’s enforcement responsibilities under subsection (e).</text> </subparagraph></paragraph></subsection>
<subsection id="H64191099743643639FB43BD3AD1A8174"><enum>(d)</enum><header>Exclusive rulemaking and examination authority</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="H78CDD5820FEE4FEDA8343D01D34C0100"><enum>(e)</enum><header>Primary enforcement authority</header>
<paragraph id="H69A41226219D45E3A70DD4E6C390E36E"><enum>(1)</enum><header>The agency to have primary enforcement authority</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H31162F1ECBB143338817B56262A8DE3C" display-inline="no-display-inline"><enum>(2)</enum><header>Coordination with the Federal Trade Commission</header>
<subparagraph id="HD6D464A196D74919A86C1687192355AB"><enum>(A)</enum><header>Notice</header><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="H681BDD8523EF41AD89DAE7E71CF3AD20"><enum>(B)</enum><header>Intervention by either entity</header><text>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—</text>
<clause id="HD1C2108ED78A474FAF1773BDA35906A3"><enum>(i)</enum><text>be heard on all matters arising in such enforcement action; and</text></clause>
<clause id="HE56D1058451745979CA315457725F6A8"><enum>(ii)</enum><text>file petitions for appeal in such enforcement action.</text></clause></subparagraph>
<subparagraph id="H9A0228D1A2864429A24EDC7F73A1D85C"><enum>(C)</enum><header>Pendency of action</header><text>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.</text></subparagraph>
<subparagraph id="HED9A71CDBF184D0AB0B9D2EA77328372"><enum>(D)</enum><header>Agreements between entities</header>
<clause id="HEC2439A2333E46399AF22F40A02BEA1C"><enum>(i)</enum><header>Negotiations authorized</header><text>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.</text></clause>
<clause id="HBA3167BD2D6D479C9A7D4E152084A00E"><enum>(ii)</enum><header>Scope of negotiated agreement</header><text>The terms of any agreement negotiated pursuant to clause (i) may modify or supersede the provisions of subparagraphs (A), (B), and (C).</text></clause></subparagraph></paragraph>
<paragraph display-inline="no-display-inline" id="H144730EC6D184E16AD257D322DD59DD0"><enum>(3)</enum><header>Coordination with other federal agency</header>
<subparagraph id="H86E9CABCEDAF4C89A8257F752026035D"><enum>(A)</enum><header>Referral</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="HF49C3D78C42A46D8A8659F80176144F5"><enum>(B)</enum><header>Backstop enforcement authority of other federal agency</header><text>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.</text> </subparagraph></paragraph>
<paragraph display-inline="no-display-inline" id="H69B1956E32B24DE2819F5B4C97BF0B67"><enum>(4)</enum><header>Institutions subject to special examination and enforcement procedures</header><text display-inline="yes-display-inline">This subsection shall not apply to institutions subject to section 4203.</text> </paragraph></subsection>
<subsection display-inline="no-display-inline" id="H629E5374AFD14933B92E59213202C27B"><enum>(f)</enum><header>Preservation of other authority</header>
<paragraph id="HE78F234E1867485DA8E6D790DF6BB213"><enum>(1)</enum><header>Attorney General</header><text display-inline="yes-display-inline">No provision of this title shall be construed as affecting any authority of the Attorney General.</text> </paragraph>
<paragraph id="HB9C31D3B1C9240869837E15734B1B36F"><enum>(2)</enum><header>Secretary of the Treasury</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H94C031A045E04125BC71F3A1A5EC1B29"><enum>(3)</enum><header>Fair Housing Act</header><text display-inline="yes-display-inline">No provision of this title shall be construed as affecting any authority arising under the Fair Housing Act.</text> </paragraph></subsection>
<subsection id="HC894F4D1241F4B12BEB6B9344D9D23AC"><enum>(g)</enum><header>Effect on other authority</header><text>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.</text> </subsection>
<subsection id="H0B7C2B9A3D754384A2F454BFC7656D12"><enum>(h)</enum><header>Preservation of Federal Trade Commission authority</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="HF71DF12F12054BFC9A1A791C330F050F"><enum>(i)</enum><header>Preservation of Farm Credit Administration Authority</header><text display-inline="yes-display-inline">No provision of this title shall be construed as modifying, limiting, or otherwise affecting the authority of the Farm Credit Administration. </text></subsection></section>
<section id="HEEF3AC8FCD384906BCFDCC16CD4B4B56"><enum>4203.</enum><header>Examination and enforcement for small banks, thrifts, and credit unions</header><text display-inline="yes-display-inline"></text>
<subsection id="H8C036BD196284183A83A26E102A2E29B"><enum>(a)</enum><header>Scope of institutions subject to this section</header>
<paragraph id="H6554AD655D7E460C8B564908DFC2206F"><enum>(1)</enum><header>Institutions covered</header><text>This section shall apply to—</text>
<subparagraph id="H0BE9EE651F284B44BFBC1735766887B0"><enum>(A)</enum><text>any insured depository institution with total assets of $10,000,000,000 or less; or</text> </subparagraph>
<subparagraph id="HEB5E89874A4A4031B0A728B5BFB292B1"><enum>(B)</enum><text display-inline="yes-display-inline">any insured credit union with total assets of $10,000,000,000 or less.</text> </subparagraph></paragraph>
<paragraph id="H62CCBF126CA743039CA2F58DABCF6225"><enum>(2)</enum><header>Appropriate agency</header><text>For purposes of this title, the term <quote>appropriate agency</quote> means—</text>
<subparagraph id="H3CC62627CC7E47619ECBF2832FF64C1C"><enum>(A)</enum><text>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</text> </subparagraph>
<subparagraph id="H8EC129F518124F1BB57345AE6DE521D5"><enum>(B)</enum><text>in the case of an insured credit union, the National Credit Union Administration.</text> </subparagraph></paragraph></subsection>
<subsection id="HC43A7ED85FBD40FE9A84FCCD6147AE8C"><enum>(b)</enum><header>Examinations</header>
<paragraph id="HFF4AEBB01F204E1FA27E375A884FAE99"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph>
<paragraph id="HBE0406F24D984140B205D8750EE5E5DE"><enum>(2)</enum><header>Agency role in examinations</header>
<subparagraph id="H50592EA252A0415E8BEC00C1FE6DB83A"><enum>(A)</enum><text>The appropriate agency shall provide all reports, records, and documentation related to the examination process to the Agency on a timely and ongoing basis.</text> </subparagraph>
<subparagraph id="H768A318E5FBC499CA00AD214A50DC645"><enum>(B)</enum><text>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.</text> </subparagraph></paragraph></subsection>
<subsection id="HF6EB5E55068F4C8D8F499AF691E3EDC5"><enum>(c)</enum><header>Enforcement</header>
<paragraph id="H684A8CDB7FDB4B8BBAEDBA1E7C0BF368"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph>
<paragraph id="HBB435557FBDF45FCB7AF6285F7BF47D5"><enum>(2)</enum><header>Coordination with appropriate agency</header>
<subparagraph id="HF440A3A83A3045B1A25FAE5B8387E528"><enum>(A)</enum><header>Referral</header>
<clause id="HCC51801B3A354B7A8CEAF9C4735E5878"><enum>(i)</enum><header>In general</header><text>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.</text> </clause>
<clause id="HDC20E3E5CAEA490D8FE38935D0893EC3"><enum>(ii)</enum><header>Explanation</header><text>Any recommendation under clause (i) shall be accompanied by a written explanation of the concerns giving rise to the recommendation.</text> </clause></subparagraph>
<subparagraph id="H9783B807F6CA41F6A3597E555ED106BF"><enum>(B)</enum><header>Backstop enforcement authority of agency</header><text>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.</text> </subparagraph></paragraph></subsection>
<subsection id="HE8B63AE6C5264FA6AFB60310EAE28FA8"><enum>(d)</enum><header>Actions arising out of consumer complaint system</header><text>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.</text> </subsection>
<subsection id="HC4142BE8B83C474FB21B26F829CFC889"><enum>(e)</enum><header>Removal of appropriate agency for particular institution</header>
<paragraph id="H8BE11B5D64D9456C833DBD44C5A91BC4"><enum>(1)</enum><header>Heightened supervision</header><text display-inline="yes-display-inline">The Director—</text>
<subparagraph id="H30E3D601CD3F4A0FB8928571786110B2"><enum>(A)</enum><text>may provide notice to an appropriate agency that the Director is considering issuing a removal order under paragraph (2); and</text> </subparagraph>
<subparagraph id="H140D042B3B034E77AEE88C83EB58F0C2"><enum>(B)</enum><text>shall have an Agency examiner participate in the examination process under subsection (b) for at least 1 examination cycle.</text> </subparagraph></paragraph>
<paragraph id="H275AC7FFC0A1447B991264EF5A7E28B8"><enum>(2)</enum><header>Removal by order</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H22708CBE41FF4059A7DC0F4B74F40B09"><enum>(3)</enum><header>Agency authority upon removal</header><text>Upon removal pursuant to paragraph (2), the Agency shall examine and enforce against such institution as if the institution were subject to section 4202.</text> </paragraph>
<paragraph id="H38FB3B80B8284CE69FC657DC1518CAF4"><enum>(4)</enum><header>Effective date</header><text display-inline="yes-display-inline">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).</text> </paragraph>
<paragraph id="H26E098E4827041FEAA71FE1F50392B93"><enum>(5)</enum><header>Automatic appeal</header><text>An order issued by the Director pursuant to paragraph (2) shall be automatically appealed to the Secretary.</text> </paragraph>
<paragraph id="H6FDAAE18B8E644239DED5797C9EB2CA7"><enum>(6)</enum><header>Decision by the Secretary of the Treasury</header>
<subparagraph id="HE754BEA62F9B4A61AEE2F2BDC959A66E"><enum>(A)</enum><header>Determination</header><text display-inline="yes-display-inline">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).</text> </subparagraph>
<subparagraph id="H5DD124D45B294A479BA6BC9A763E2ED4"><enum>(B)</enum><header>Rule of construction</header><text>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).</text> </subparagraph></paragraph>
<paragraph id="H803EFE2A99F9469A9EB878E5F2B4E2F3"><enum>(7)</enum><header>Regulations</header><text display-inline="yes-display-inline">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):</text>
<subparagraph id="HD3DE1AFC3FC44749BFC72AB73E12C0AC"><enum>(A)</enum><text>Reports of examination of such institution.</text> </subparagraph>
<subparagraph id="H8CBE66865A5342BF94B94F224EBC3D02"><enum>(B)</enum><text>Any enforcement actions taken by an appropriate agency against such institution and the results of those actions.</text> </subparagraph>
<subparagraph id="H62AFE6D02BCF4EB58B93639853F115AD"><enum>(C)</enum><text>Consumer complaints issued against such institution.</text> </subparagraph>
<subparagraph id="H851B1E98EBF7455D9416C8EEFC87D024"><enum>(D)</enum><text>Actions taken by State attorneys general and private rights of action against such institution.</text> </subparagraph></paragraph></subsection>
<subsection id="H5D73BA4906A54EB4AE4B63E4DD792E6F"><enum>(f)</enum><header>Policies and procedures</header><text>Within 180 days after the designated transfer date, the Agency and the appropriate agency shall develop policies and procedures for implementing this section.</text> </subsection>
<subsection id="H98280F6ED97749C7A4C62E069578DB31"><enum>(g)</enum><header>Assessments</header>
<paragraph id="HC422043DCF5045A0B6718CB33419F3CB"><enum>(1)</enum><header>Limitation on certain fees</header><text>The Agency shall not assess examination fees on an institution referred to in subsection (a).</text> </paragraph>
<paragraph id="H300464C5E87145669CE2F52BB25F7D34"><enum>(2)</enum><header>Rule of construction</header><text>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.</text> </paragraph></subsection>
<subsection id="HBF9CB0C80459436385FEDFCDA3013C4D" display-inline="no-display-inline"><enum>(h)</enum><header>Assistive Division for Community Financial Institutions</header>
<paragraph id="HA32D2A52754740DB8B88248E87A94671"><enum>(1)</enum><header>Establishment; purpose</header><text display-inline="yes-display-inline">There is established in the Agency an office to be known as the <quote>Assistive Division for Community Financial Institutions</quote> 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.</text></paragraph>
<paragraph id="H1731200B6E2A4AE3A9885E7A646B955C"><enum>(2)</enum><header>Additional duties</header><text display-inline="yes-display-inline">The Assistive Division for Community Financial Institutions shall also—</text>
<subparagraph id="HD4242EF1B83B4434B44F02AD5C728652"><enum>(A)</enum><text display-inline="yes-display-inline">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;</text></subparagraph>
<subparagraph id="HD445463A30BA493D9D6C0E1075C6505A"><enum>(B)</enum><text>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;</text></subparagraph>
<subparagraph id="HD10A66A6FDDF49FEBAAB863E86C7C617"><enum>(C)</enum><text display-inline="yes-display-inline">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</text></subparagraph>
<subparagraph id="H39559362EC1B41E99F3B546F3F9195C2"><enum>(D)</enum><text display-inline="yes-display-inline">perform other duties and exercise such other powers set by the Director.</text></subparagraph></paragraph></subsection></section>
<section display-inline="no-display-inline" id="HA2FA653F7DEB4C868C586E3FBE4FA685" section-type="subsequent-section"><enum>4204.</enum><header>Simultaneous and coordinated supervisory action</header>
<subsection id="H19C3E7EF60C04B0994EC7560A655164D"><enum>(a)</enum><header>Examinations</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="HDA00FFCCBC4A4861A04F2C243B8B99B7"><enum>(1)</enum><text>coordinate the scheduling of examinations of the insured depository institution, and credit union, or other covered person;</text> </paragraph>
<paragraph id="H261024994B1E45BD90F218C61CC7BA6D"><enum>(2)</enum><text display-inline="yes-display-inline">conduct simultaneous examinations of each insured depository institution, credit union or other covered person, unless such institution requests examinations to be conducted separately;</text> </paragraph>
<paragraph id="H7BD2BB8C0E154DEF93589C9877E909DB"><enum>(3)</enum><text>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</text> </paragraph>
<paragraph id="HDA7E5F18626347CABDC6D165CD8F675A"><enum>(4)</enum><text>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.</text> </paragraph></subsection>
<subsection display-inline="no-display-inline" id="H4FE9EA50271D4D4F99D6DFDD0CA0C430"><enum>(b)</enum><header>Coordination with State bank supervisors</header><text>The Agency shall pursue arrangements and agreements with State bank supervisors to coordinate examinations consistent with subsection (a).</text> </subsection>
<subsection id="H747B5F04033341C7A9B96ADB393976B8"><enum>(c)</enum><header>Resolution of conflict in supervision</header>
<paragraph id="HA8D28A13DE8240FCA7A80966D492F1A8"><enum>(1)</enum><header>Request of depository institution</header>
<subparagraph id="HBE808E105D624D2CAAA350148B02C213"><enum>(A)</enum><header>In general</header><text>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.</text> </subparagraph>
<subparagraph id="H38BF0834A37F4389B1787CE0D5C2D2A3"><enum>(B)</enum><header>Limitation</header><text>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.</text> </subparagraph></paragraph>
<paragraph id="HA493623F1EF248618374711CD98A2522"><enum>(2)</enum><header>Joint statement</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection>
<subsection id="H37BA8B3196E74744AF60A43A856A0722"><enum>(d)</enum><header>Appeals to governing panel</header>
<paragraph id="H13C84DEA773C434D82293E4A7EEA17A2"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H23D2AAF556BF4B77B3DDC8E40493C004"><enum>(2)</enum><header>Timetable</header><text>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).</text> </paragraph></subsection>
<subsection id="H8A85C5303C7544568E44C0B43A45021F"><enum>(e)</enum><header>Composition of governing panel</header><text>The governing panel for an appeal under this section shall be composed of—</text>
<paragraph id="HE5590596D0A34CE69829E9A1BD2F4095"><enum>(1)</enum><text>2 individuals—</text>
<subparagraph id="HD46B2E16AAB84935AAEA53BF913625EB"><enum>(A)</enum><text>1 of whom is a representative from the Agency;</text> </subparagraph>
<subparagraph id="H596B70A4FFCE4F0A93321214AC18E2BA"><enum>(B)</enum><text>1 of whom is a representative of the Federal banking agency which received the request to which the appeal relates; and</text> </subparagraph>
<subparagraph id="H62C6D14CA32746748FFB76F679B93C5A"><enum>(C)</enum><text>neither of whom—</text>
<clause id="H5A7C6DFD02964A46B965B16B86C67303"><enum>(i)</enum><text>have participated in the material supervisory determinations under appeal; and</text> </clause>
<clause id="HD0DC2EEB09974A15B7007E5A20D4E828"><enum>(ii)</enum><text display-inline="yes-display-inline">report directly or indirectly to the individual who made the supervisory determinations under appeal; and</text> </clause></subparagraph></paragraph>
<paragraph id="H40E355D66A6C4131A1C5C140256E486D"><enum>(2)</enum><text>1 individual who is a representative from—</text>
<subparagraph id="H16B966CBC4B542B0A7C8D61230B85CAB"><enum>(A)</enum><text>the Federal banking agency that heads the Financial Institution Examination Council; or</text> </subparagraph>
<subparagraph id="HAF8605FF83C64E039E5E3D5D32A3238D"><enum>(B)</enum><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph></subsection>
<subsection id="H8A2747AD51384577B5005CA5AFE31F1A"><enum>(f)</enum><header>Conduct of appeal</header>
<paragraph id="HA545890D96964C52B2E46E29F2B33AB5"><enum>(1)</enum><header>Content of filing appeal</header><text>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.</text> </paragraph>
<paragraph id="H4AD77414C7694724BC2B80951AF45F2A"><enum>(2)</enum><header>Appearance</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HC89667E1E2FF4019A3049ACE4AD74580"><enum>(3)</enum><header>Requests for additional information</header><text>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.</text> </paragraph>
<paragraph id="H37765AB657334EFFAB700D8F3B36E856"><enum>(4)</enum><header>Final written determinations</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H2557A4C61F4B4821B8D657E8605440F0"><enum>(5)</enum><header>Public information</header><text>A redacted copy of any determination by a governing panel convened under this section shall be made public upon the issuance of such determination.</text> </paragraph></subsection>
<subsection id="H0D47BCCFF8B240D6960510385E396EF7"><enum>(g)</enum><header>Prohibition against retaliation</header><text>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.</text> </subsection>
<subsection id="HA52E92E61F834013BE5A848766DD560D"><enum>(h)</enum><header>Material supervisory determination defined</header><text>For purposes of this section, the term <quote>material supervisory determination</quote>—</text>
<paragraph id="H77F9D16434A240498EF9EC5ED2B4783F"><enum>(1)</enum><text>includes any action relating to any supervision or examinations; and</text> </paragraph>
<paragraph id="HC11DDE3D22994535B14088F5202E1375"><enum>(2)</enum><text>does not include—</text>
<subparagraph id="HEE04A0EF2FE949B38D99DA10D48C6FDF"><enum>(A)</enum><text>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</text> </subparagraph>
<subparagraph id="H399C98F282614B1B87889530960AD1D0"><enum>(B)</enum><text display-inline="yes-display-inline">any regulation or guidance, or order of general applicability.</text> </subparagraph></paragraph></subsection></section>
<section id="H1A0BE4637B394E2CB14EB50CE7ECBEC1"><enum>4205.</enum><header>Limitations on authority of agency and director</header>
<subsection id="HD547E7C6D9B0471D97B81CD326498C43"><enum>(a)</enum><header>Exclusion for merchants, retailers, and sellers of nonfinancial services</header>
<paragraph id="H9F455246A80D4B26B8A72D5FA70F62BC"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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—</text>
<subparagraph id="HD3DBE2551BF4443D92F82E560703080E"><enum>(A)</enum><text>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</text></subparagraph>
<subparagraph id="HA5EBA449DD7C43038C5DCF3986850DCD"><enum>(B)</enum><text>collection of debt, directly by the merchant, retailer, or seller of nonfinancial services, arising from such credit extended. </text></subparagraph><continuation-text continuation-text-level="paragraph">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.</continuation-text></paragraph>
<paragraph id="HCE419B21DB6741A7820366F05020491E"><enum>(2)</enum><header>Exception for existing authority</header><text>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.</text></paragraph>
<paragraph id="H9AC61E5579654378B5EE7DBAD9049850"><enum>(3)</enum><header>Rule of construction</header><text>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. </text></paragraph>
<paragraph id="H3B2E70890E7841EEB5105C29DB829E5A"><enum>(4)</enum><header>Exclusion not applicable to certain credit transactions</header><text>Paragraph (1) shall not apply to—</text>
<subparagraph id="HC9B637C9396B40358266099E49E3EC9F"><enum>(A)</enum><text>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; </text></subparagraph>
<subparagraph id="HB9B07CF2BF2C43E4805B25169F734766"><enum>(B)</enum><text>any credit transaction—</text>
<clause id="HD7D3772EE8DF4EB79D872D47291AB4EB"><enum>(i)</enum><text>in which the credit provided significantly exceeds the market value of the product or service provided; and</text></clause>
<clause id="HE5AC77173EEA449B895ADF1253CC6911"><enum>(ii)</enum><text>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</text></clause></subparagraph>
<subparagraph id="H7EAD3BC723794C9B8EBC5378AB22F368" display-inline="no-display-inline"><enum>(C)</enum><text display-inline="yes-display-inline">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—</text>
<clause id="HE019D8BD703A47D19235A63245E01A68"><enum>(i)</enum><text>the extension of retail credit or retail leases is provided directly to consumers; and</text></clause>
<clause id="HABEEC48718CA4AF19A9443DE34098A79"><enum>(ii)</enum><text>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.</text></clause></subparagraph></paragraph></subsection>
<subsection id="HDC02DE3055BC498794C71689740B00C5"><enum>(b)</enum><header>Exclusion for persons regulated by the securities and exchange commission</header>
<paragraph id="H0B5DA69A036F4B9A860C55761AB321D7"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H9B68436B8B7B44C39F6E524CBA8E9F03"><enum>(2)</enum><header>Consultation and coordination</header><text>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.</text> </paragraph></subsection>
<subsection id="H002B2A7B3F45407AA8E0AA68D297AABE"><enum>(c)</enum><header>Exclusion for persons regulated by the commodity futures trading commission</header>
<paragraph id="HBAE4AB21AE1240CFA73BF8EE417CCDCB"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HCF4D7C4663114AE8AD03F992ED937A33"><enum>(2)</enum><header>Consultation and coordination</header><text>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.</text> </paragraph></subsection>
<subsection id="HD12207AEAD214662AE4FBB0931A87EFD" display-inline="no-display-inline"><enum>(d)</enum><header>Persons regulated by a State securities commission</header>
<paragraph id="HE0E31895FA1B4F49880BE54B9E23C658"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="HC16C036F43DF4409A40B189C6C2FB562"><enum>(2)</enum><header>Description of activities</header><text>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.</text></paragraph></subsection>
<subsection id="HF4A39981A3EB4EB0B2A2DF84DED0C8AE"><enum>(e)</enum><header>Exclusion for persons regulated by a State insurance regulator</header>
<paragraph id="HF26DA0A9A74348E1AEB87EC7F2E249C5"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph display-inline="no-display-inline" id="H52F404A4BFA64F4FBBAB1FB34DFEEA46"><enum>(2)</enum><header>Description of activities</header><text>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.</text> </paragraph>
<paragraph id="H5EA04A25180E45349C623442512AF311"><enum>(3)</enum><header>Preservation of certain authorities</header><text display-inline="yes-display-inline">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.</text></paragraph> </subsection>
<subsection id="HA28AD330F8234743B3FA68A942FF0E38"><enum>(f)</enum><header>Exclusion for persons regulated by the Federal Housing Finance Agency</header><text display-inline="yes-display-inline">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 <quote>person regulated by the Federal Housing Finance Agency</quote> means any Federal home loan bank, and any joint office of 1 or more Federal home loan banks.</text> </subsection>
<subsection id="HB9F42AAD2A074A7F8FE361C5BCDD227B" display-inline="no-display-inline"><enum>(g)</enum><header>Exclusion for Persons Regulated by the Farm Credit Administration</header><text display-inline="yes-display-inline">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 <quote>person regulated by the Farm Credit Administration</quote> means any Farm Credit System Institution.</text> </subsection>
<subsection id="HF8F7B077E67F418A8A9567657152D5FD" display-inline="no-display-inline"><enum>(h)</enum><header>Employee benefit and compensation plans and certain other arrangements under the Internal Revenue Code of 1986</header>
<paragraph id="HECB68D7660A543909B10292E622EC0AE"><enum>(1)</enum><header>Authority retained by other agencies</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H72643A39CBD24389A58AC625EF105A9A"><enum>(2)</enum><header>Activities not constituting financial activities</header><text>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.</text></paragraph>
<paragraph id="HEF79A00ACB2D46C1813FAD2C0229CD90"><enum>(3)</enum><header>Regulatory coordination</header><text>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.</text></paragraph>
<paragraph id="HA42DED7691BC44A1AF2101497E94ED3C"><enum>(4)</enum><header>Specified plan or arrangement</header><text>For purposes of this subsection, the term <quote>specified plan or arrangement</quote> 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.</text></paragraph></subsection>
<subsection id="H7F382C4C67494B479B73D617D396A10F"><enum>(i)</enum><header>Exclusion for accountants and tax preparers</header>
<paragraph id="HA10FF6F90C5A4B5B992B221A85F9B56A"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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—</text>
<subparagraph id="H7ABF7F772E814FB6B29D9D9C45EC4A64"><enum>(A)</enum><text display-inline="yes-display-inline">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</text> </subparagraph>
<subparagraph id="H74B69C0A045F4576A674A9B8730AAEA9"><enum>(B)</enum><text>any person other than a person described in subparagraph (A) that performs income tax preparation activities for consumers.</text> </subparagraph> </paragraph>
<paragraph id="HF2FA43E88B3B442DBAAD9E87FB1D58F6" display-inline="no-display-inline"><enum>(2)</enum><header>Certain activities not excluded</header>
<subparagraph id="H1475D3EB4EB148F0A75323CFE159344B"><enum>(A)</enum><header>In general</header><text>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).</text></subparagraph>
<subparagraph id="HF7977993923640E2AFA29065A05C9D51"><enum>(B)</enum><header>Definition</header><text>For purposes of subparagraph (A), the term <quote>extension of credit</quote> shall not include an ordinary account receivable.</text></subparagraph></paragraph>
<paragraph id="H6232997FCFA148968F68DC1E3A85DE1D"><enum>(3)</enum><header>Description of activities</header><text display-inline="yes-display-inline">Paragraph (1) shall not apply to—</text>
<subparagraph id="H3251ECF3F43B4A3CA361523B09C3ED76"><enum>(A)</enum><text>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);</text> </subparagraph>
<subparagraph id="H170DCF38B3D7482DABD96CCE489E5FC8"><enum>(B)</enum><text>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</text> </subparagraph>
<subparagraph id="H7EEDD992B0894AE0B9309A390F1ECC3B"><enum>(C)</enum><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph></subsection>
<subsection id="H7CB5465E80E146F8B3C45A26FED1BDBB"><enum>(j)</enum><header>Exclusion for real estate licensees</header>
<paragraph id="H3C4D37EED23D4CDAB24AE3AA9CE7AC17"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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—</text>
<subparagraph id="H532CC2D5029345C7A0018FDDEC3C4435"><enum>(A)</enum><text>acts as a real estate agent or broker for a buyer, seller, lessor, or lessee of real property;</text> </subparagraph>
<subparagraph id="H26A06B5DC2534B4F8A461A5D09AECD6B"><enum>(B)</enum><text>brings together parties interested in the sale, purchase, lease, rental, or exchange of real property;</text> </subparagraph>
<subparagraph id="H3FE8BF28F7EA4EB1AB4FB8BC255753E9"><enum>(C)</enum><text>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);</text> </subparagraph>
<subparagraph id="H409A449C819B4EE78722B66627434C14"><enum>(D)</enum><text>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</text> </subparagraph>
<subparagraph id="HDDB4593F029D4EFD86D766618D7ACB52"><enum>(E)</enum><text>offers to engage in any activity, or act in any capacity, described in subparagraph (A), (B), (C), or (D).</text> </subparagraph></paragraph>
<paragraph display-inline="no-display-inline" id="H9710312D9AB144FE9AE28A96DC67DDAD"><enum>(2)</enum><header>Description of activities</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection>
<subsection id="HC5BF63E45C3549CAA7C8DCF46C4DC48B"><enum>(k)</enum><header>Exclusion for auto dealers</header>
<paragraph id="H37E52E1D1044419AA20F1FF51428B338"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HC26AB44CC02E4393BB07927CD13409E6"><enum>(2)</enum><header>Certain functions excepted</header><text display-inline="yes-display-inline">The provisions of paragraph (1) shall not apply to any person to the extent that person—</text>
<subparagraph id="H5C0C609BA3FD4F0DA4A762ED375F71E4"><enum>(A)</enum><text display-inline="yes-display-inline">provides consumers with any services related to residential mortgages; or</text> </subparagraph>
<subparagraph id="HED3F27F0DFF14E0A9E56A527C265B305"><enum>(B)</enum><text display-inline="yes-display-inline">operates a line of business that involves the extension of retail credit or retail leases involving motor vehicles, and in which—</text>
<clause id="HDBFDC666D19544D8ABA88F4E072531AC"><enum>(i)</enum><text display-inline="yes-display-inline">the extension of retail credit or retail leases is routinely provided directly to consumers; and</text> </clause>
<clause id="H94B4B91ECFE74406A625726A3460E51E"><enum>(ii)</enum><text display-inline="yes-display-inline">the contract governing such extension of retail credit or retail leases is not routinely assigned to a third party finance or leasing source.</text> </clause></subparagraph></paragraph>
<paragraph id="HC5857F62970D48C9A99549E94E5C25DA"><enum>(3)</enum><header>No impact on prior authority</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HEA6DF297860E4D2081C5018C22FC99E7"><enum>(4)</enum><header>No transfer of certain authority</header><text display-inline="yes-display-inline">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).</text> </paragraph>
<paragraph id="H5D5BFC33731A4712A9DBF1E3442072A6"><enum>(5)</enum><header>Definitions</header><text display-inline="yes-display-inline">For purposes of this subsection:</text>
<subparagraph id="HAB15009CC7574C32A395D7F396E9C306"><enum>(A)</enum><header>Motor vehicle</header><text display-inline="yes-display-inline">The term <quote>motor vehicle</quote> means any self-propelled vehicle designed for transporting persons or property on a street, highway, or other road.</text> </subparagraph>
<subparagraph id="HB0FC48EB287840CDBAE76BD34A04CBEB"><enum>(B)</enum><header>Motor vehicle dealer</header><text display-inline="yes-display-inline">The term <quote>motor vehicle dealer</quote> 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.</text> </subparagraph></paragraph></subsection>
<subsection id="HD6DB6346FCC24ADF84AF3A7429F8CFA6"><enum>(l)</enum><header>No authority to impose usury limit</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="H056E70F7129E421C9F6EE68CC2FCBDFA"><enum>(m)</enum><header>Exclusion for manufactured home retailers and modular home retailers</header>
<paragraph id="H23BE29DD3BFD40C7BCA54929049B7E31"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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—</text>
<subparagraph id="HA323B9BB117B4E89863FDDCF990AF919"><enum>(A)</enum><text display-inline="yes-display-inline">acts as an agent or broker for a buyer or seller of a manufactured home or a modular home;</text> </subparagraph>
<subparagraph id="H889E6126FD7347589A323F61F9C18C48"><enum>(B)</enum><text>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</text> </subparagraph>
<subparagraph id="H3665691C991440C2935CD3035EEB7A4E"><enum>(C)</enum><text>offers to engage in any activity described in subparagraph (A) or (B).</text> </subparagraph></paragraph>
<paragraph id="H960F479D0FBA4EF4A7F05A64AD9B8B28"><enum>(2)</enum><header>Description of activities</header><text>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.</text> </paragraph>
<paragraph id="HFEADA82CB1EC42759CD8D3C10D322291"><enum>(3)</enum><header>Definitions</header><text display-inline="yes-display-inline">For purposes of this subsection:</text>
<subparagraph id="HDB18DA97D32F46E4A4F331E458D8AF29"><enum>(A)</enum><header>Manufactured home</header><text>The term <quote>manufactured home</quote> 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).</text> </subparagraph>
<subparagraph id="HB2D2F9803475452794DC8AB24CB32D4E"><enum>(B)</enum><header>Modular home</header><text>The term <quote>modular home</quote> 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.</text> </subparagraph></paragraph></subsection>
<subsection id="H0A0B724538DB4F0FA7C2489630F4EE8A" display-inline="no-display-inline"><enum>(n)</enum><header>Exclusion for practice of law</header>
<paragraph id="HC4D0AB1651074EF5B7A2872E2BF89C28"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H9C65795FE503493CBFC252E3E5C9A253"><enum>(2)</enum><header>Rule of construction</header>
<subparagraph id="HD5B14F35C7814BF28B9E189FE58EEE21"><enum>(A)</enum><header>In general</header><text>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—</text>
<clause id="H700B03ABA17D488F9F1E029CBBF2A5EA"><enum>(i)</enum><text>part of the practice of law; or</text></clause>
<clause id="H95884CBDCC90449CAB1F191371A4E401"><enum>(ii)</enum><text>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.</text></clause></subparagraph>
<subparagraph id="HDD955120508F4D5483DDE24ED0F82D62"><enum>(B)</enum><header>Construction</header><text>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.</text></subparagraph></paragraph>
<paragraph id="H28FF3F573BD248F9B76774C7ACDC1B97"><enum>(3)</enum><header>Exception</header><text display-inline="yes-display-inline">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—</text>
<subparagraph id="H423A6E91F94E4E63A78C82268B900A9B"><enum>(A)</enum><text>the preparation and filing of a bankruptcy petition; or </text></subparagraph>
<subparagraph id="HA146A738DB024971A8FEA8DDFA7F6EAC"><enum>(B)</enum><text>court proceedings to avoid a foreclosure.</text></subparagraph></paragraph></subsection>
<subsection id="HDD3CF2A4DA924767A14A2A07AFC7B6B7" display-inline="no-display-inline"><enum>(o)</enum><header>Exclusion for pawnbrokers</header>
<paragraph id="HD9B8BC1EC37C43389F0EE47200188422"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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—</text>
<subparagraph id="HAFD7ADF597D446A092FEB26F7E98FE76"><enum>(A)</enum><text>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</text></subparagraph>
<subparagraph id="H7EEEF61F95034FCEB81841E66F2E74C8"><enum>(B)</enum><text>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.</text></subparagraph></paragraph>
<paragraph id="HF676DFB300724B88BBB2097405F37FD8"><enum>(2)</enum><header>Rule of construction</header>
<subparagraph id="HBCDED4D108E14BC68B0643B278D6B991"><enum>(A)</enum><header>FTC authority preserved</header><text>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).</text></subparagraph>
<subparagraph id="H0E328B8BD80E4B7DB825A5E61A283217"><enum>(B)</enum><header>Exercise of rulemaking authority</header><text>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.</text></subparagraph></paragraph></subsection>
<subsection id="H21931A6247614E0EAAC4FF428FA24068" display-inline="no-display-inline"><enum>(p)</enum><header>Exclusion for certain consumer reporting agencies</header>
<paragraph id="H7FE72A1F7E154126A93AE2DA649A73DC"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H5FFE230382E84A3E9A08059871C2A6F5"><enum>(2)</enum><header>Description of activities</header><text>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.</text></paragraph></subsection>
<subsection id="H07FC6E6B81814BA49D42287135575DB4" display-inline="no-display-inline"><enum>(q)</enum><header>Limited authority of the Agency to obtain information</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="HAAD07B197D444D2893553DFB94626EF4"><enum>(r)</enum><header>Exclusion for Activities Relating to Charitable Contributions</header>
<paragraph id="H99524A3BFF3846F1A693A7AFD5BD964B"><enum>(1)</enum><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H50924EC411624C5188F2A5E12A49C381"><enum>(2)</enum><text>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.</text></paragraph></subsection></section>
<section id="HA953C7660E7B4FA2962DDD0423E50C8D"><enum>4206.</enum><header>Collection of information; confidentiality regulations</header>
<subsection id="HF0206F9F4C9F4AA1B7F751C6B37B0644"><enum>(a)</enum><header>Collection of information</header>
<paragraph id="H82E84AB5F37D491AB9BC34ED63C0ED61"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph>
<paragraph id="HB2A84EC4532042EF9E9B2453763ABAED"><enum>(2)</enum><header>Specific authority</header><text>In order to gather such information, the Director shall have the power—</text>
<subparagraph id="HD208FF0BB006455C87F2FD4FFE420CAE"><enum>(A)</enum><text>to gather and compile information;</text> </subparagraph>
<subparagraph id="H2A04C990AB114ED5BBBB0397EBD6667E"><enum>(B)</enum><text>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</text> </subparagraph>
<subparagraph id="H4005913CA3BC48A9B7DDA3BC5EBC386F"><enum>(C)</enum><text>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.</text> </subparagraph></paragraph></subsection>
<subsection id="H26DE66B3617F49B682363D27FAD928A7"><enum>(b)</enum><header>Confidentiality regulations</header><text>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.</text> </subsection>
<subsection id="H139C39C117314F4C9693E33F611515EB"><enum>(c)</enum><header>Privacy considerations</header><text display-inline="yes-display-inline">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.</text> </subsection></section>
<section id="H93A0AB709048461FA42BA4BD3B6DE59A"><enum>4207.</enum><header>Monitoring; assessments of significant regulations; reports</header>
<subsection id="HEE2DF4A64353442392EE9B30B9393BDD"><enum>(a)</enum><header>Monitoring</header>
<paragraph id="HB7F460D5E34747608D804727528AB02E"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph>
<paragraph id="HEEBCA4DB2BAA47EBBEB6EFA69463A07D"><enum>(2)</enum><header>Means of monitoring</header><text>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.</text> </paragraph>
<paragraph id="H7A2378945B4F4A858D2370BF88208170"><enum>(3)</enum><header>Considerations</header><text>In allocating the resources of the Agency to perform the monitoring required by this section, the Director may consider, among other factors—</text>
<subparagraph id="H638EED0DF6CB413689F4110DA6EC90B0"><enum>(A)</enum><text>likely risks and costs to consumers associated with buying or using a type of consumer financial product or service;</text> </subparagraph>
<subparagraph id="H010F8A7F75974600B60E13DF4E751A21"><enum>(B)</enum><text>consumers’ understanding of the risks of a type of consumer financial product or service;</text> </subparagraph>
<subparagraph id="H56995B9502134A429B054FEBD06C07D0"><enum>(C)</enum><text>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;</text> </subparagraph>
<subparagraph id="H46B506255D6B4C75AF4263C4FF625B79"><enum>(D)</enum><text>rates of growth in the provision of a consumer financial product or service;</text> </subparagraph>
<subparagraph id="HA1FE61F5294348A7B4D867A8337F6BC2"><enum>(E)</enum><text>extent, if any, to which the risks of a consumer financial product or service may disproportionately affect traditionally underserved consumers, if any; or</text> </subparagraph>
<subparagraph id="H206708F6BD3B44C498959643484F9C68"><enum>(F)</enum><text>types, number, and other pertinent characteristics of covered persons that provide the product or service.</text> </subparagraph></paragraph>
<paragraph id="H765EC330631E4360A5265D36AA4D151B"><enum>(4)</enum><header>Reports</header><text>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.</text> </paragraph></subsection>
<subsection id="HF90FFDD08D654DE9BA85CBB3A94A3989"><enum>(b)</enum><header>Assessment of significant regulations</header>
<paragraph id="HEB7CFE4674E7449586CA57240FDB7125"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph>
<paragraph id="H38D3F2A267664592A99DD41492ABB928"><enum>(2)</enum><header>Basis for assessment</header><text>The assessment shall reflect available evidence and any data that the Agency reasonably may collect.</text> </paragraph>
<paragraph id="HFB717D495C6F4458A056E735D18354BB"><enum>(3)</enum><header>Reports</header><text>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.</text> </paragraph>
<paragraph id="H59FC9290D4164CACAF928F4A7931A316"><enum>(4)</enum><header>Public comment required</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection>
<subsection id="H1C5909773B474F8E9E5E7A1745329D61"><enum>(c)</enum><header>Information gathering</header><text>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.</text> </subsection></section>
<section id="H0C68A188BF814971B3B8D6BE563DA6D8"><enum>4208.</enum><header>Authority to restrict mandatory predispute arbitration</header>
<subsection id="H482029A3723841AD9ECC259F6C152945"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="HBD28AB23894A4ABDA3F2AFB3D716939B"><enum>(b)</enum><header>Effective date</header><text display-inline="yes-display-inline">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.</text> </subsection></section>
<section id="H79F1B46AD232493D96D5E9E0C82EAE0E"><enum>4209.</enum><header>Registration and supervision of nondepository covered persons</header>
<subsection id="H04EB5B0CD94645D99D4C5D2FBBE3A5A2"><enum>(a)</enum><header>Risk-based programs</header>
<paragraph id="H5EBB110CA0734860825FA963092DD89E"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph>
<paragraph id="H1E02B28FCDB146B2B35236A5F7A9674D"><enum>(2)</enum><header>Basis for programs</header><text>The risk-based supervisory programs established pursuant to paragraph (1) shall be based on—</text>
<subparagraph id="H8E93F3832FC1415C8D3D9703DCE01D9D"><enum>(A)</enum><text>relevant registration and reporting information about such covered persons, as determined by the Agency; and</text> </subparagraph>
<subparagraph id="H89EC48479C3845E4BE09F4206CCE2835"><enum>(B)</enum><text>the Agency’s assessment of risks posed to consumers in the relevant geographic markets and markets for consumer financial products and services.</text> </subparagraph></paragraph></subsection>
<subsection id="H31D7773DBFF04B79A7AAE0E3C05C706A"><enum>(b)</enum><header>Registration</header>
<paragraph id="H240CC24608344879BCCD8B9BE30A7064"><enum>(1)</enum><header>In general</header><text>The Director shall prescribe regulations regarding registration requirements for covered persons that are not credit unions or depository institutions.</text> </paragraph>
<paragraph id="HD998AF333C574C87B2801C8A7146E319"><enum>(2)</enum><header>Consultation with state agencies</header><text>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.</text> </paragraph>
<paragraph id="HBA3B712756454311AF6B5D4FABBB3784"><enum>(3)</enum><header>Exception for related persons</header><text>The Agency shall not impose requirements regarding the registration of a related person.</text> </paragraph>
<paragraph id="H1C71B7CAC15F4CAB80E0DA62C9FC09EE"><enum>(4)</enum><header>Registration information</header><text>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.</text> </paragraph></subsection>
<subsection id="HD5A771B95F5D4C80BFACD1D38BDE0806"><enum>(c)</enum><header>Reporting requirements</header>
<paragraph id="H5E4C264F49014E4BA0B40B2350EF5C37"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H91C028CD28EC4CFAAC556FBE69C3655D"><enum>(2)</enum><header>Consistency of reporting requirements and risk-based standards</header><text>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.</text> </paragraph>
<paragraph id="HFBA8763F2B724C84AFD356E9733CE69F"><enum>(3)</enum><header>Contents of reports</header><text>Reporting requirements imposed under this paragraph may include information regarding—</text>
<subparagraph id="H475FB2BEA1C0406A898797FD8F61CF76"><enum>(A)</enum><text>the nature of the covered person’s business;</text> </subparagraph>
<subparagraph id="H1C887D8EC7B74E849504ED7A8322E1F1"><enum>(B)</enum><text>the covered person’s name, legal form, ownership and management structure, and related persons;</text> </subparagraph>
<subparagraph id="HFD95704607324BE0872E2E681CDEA1A2"><enum>(C)</enum><text>the covered person’s locations of operation;</text> </subparagraph>
<subparagraph id="HB17147673A1A4509B3552CBA75A0A29E"><enum>(D)</enum><text>the covered person’s types and number of consumer financial products and services provided by the covered person;</text> </subparagraph>
<subparagraph id="H934EFCBA915C46D6AAC34EF21D613E63"><enum>(E)</enum><text>compliance with any requirement imposed or enforced by the Agency, including any requirement relating to registration, licensing, fees, or assessments; and</text> </subparagraph>
<subparagraph id="H0E847E6969034896A4FBA69F3E6646F2"><enum>(F)</enum><text>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.</text> </subparagraph></paragraph>
<paragraph id="H0178FAEA95704D85996F905A38BB1CBE" display-inline="no-display-inline"><enum>(4)</enum><header>Consultation with the Federal Trade Commission</header><text display-inline="yes-display-inline">In developing and implementing report requirements under this subsection, the Agency shall consult with the Federal Trade Commission, where appropriate.</text></paragraph>
<paragraph id="H9EA50C37A95743AA8EBBBBF84A9C72E1"><enum>(5)</enum><header> Exception for related persons</header><text display-inline="yes-display-inline">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.</text> </paragraph> </subsection>
<subsection id="H315D64A7DCAC4492B7738857F48A69E1"><enum>(d)</enum><header>Examinations</header>
<paragraph id="H0A01FF9F3C3C4CD7839B1492823DD511"><enum>(1)</enum><header>Examinations required</header><text>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).</text> </paragraph>
<paragraph id="H76387CDF8CB9490981ABE4BB814500D7"><enum>(2)</enum><header>Examination standards and procedures</header><text>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.</text> </paragraph></subsection>
<subsection id="H13C052E4C2A444928F2CC5C24B6CA729"><enum>(e)</enum><header>Authority to collect information regarding fees or assessments</header><text>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.</text> </subsection></section>
<section id="HAA0237B669C54D23A814F40FC7D94BD3"><enum>4210.</enum><header>Effective date</header><text display-inline="no-display-inline">This subtitle shall take effect on the designated transfer date.</text> </section></subtitle>
<subtitle id="HE8CCA56E4E0C4B02965E2AC3F966FB8B"><enum>C</enum><header>Specific Authorities</header>
<section id="HC6E51433B7AA4A7F84AAE993C7917DF9"><enum>4301.</enum><header>Prohibiting unfair, deceptive, or abusive acts or practices</header>
<subsection id="HD55DBDD5287E459FAF262D101DB56E0F"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="H13F79CA6B896430C82F79805749F9CA0"><enum>(b)</enum><header>Regulations</header>
<paragraph id="H7741C3A77051483792027F445E60B822"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H0BBBAB212E144A9D9278F50436297DBF"><enum>(2)</enum><header>Includes prevention measures</header><text>Regulations prescribed under this section may include requirements for the purpose of preventing such acts or practices.</text> </paragraph></subsection>
<subsection id="H78C02ECA149A475190A3C1092D5EF191" display-inline="no-display-inline"><enum>(c)</enum><header>Unfair, deceptive, or abusive acts or practices defined</header>
<paragraph id="HA05351D870954C6D81F958AF8D574B13"><enum>(1)</enum><header>Unfair acts or practices</header><text display-inline="yes-display-inline">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. </text></paragraph>
<paragraph id="H5C88FE9D4B0A452B91B7AE8C7A8A1E6F"><enum>(2)</enum><header>Deceptive acts or practices</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H771045C51DFA42B19B5F4D326513CCEF"><enum>(3)</enum><header>Abusive acts or practices</header><text>The Director and the Agency may determine that an act or practice is abusive only if the Director finds that—</text>
<subparagraph id="HBBC4440ED1B2400984FDA484395371C2"><enum>(A)</enum><text>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</text></subparagraph>
<subparagraph id="H65F67B3482664AA9A2C09F492CAF4883"><enum>(B)</enum><text>the widespread use of the act or practice is reasonably likely to contribute to instability and greater risk in the financial system.</text></subparagraph></paragraph>
<paragraph id="H59CA1B8636E14D24B448E1C4D8395A5F" display-inline="no-display-inline"><enum>(4)</enum><header>Consider as unfair certain practices with regard to the provision of credit scores</header><text display-inline="yes-display-inline">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.</text></paragraph></subsection>
<subsection id="HE9B3F42953F04AE585A026BBAF86ACEC"><enum>(d)</enum><header>Consultation</header><text display-inline="yes-display-inline">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.</text> </subsection></section>
<section id="H47A78830AA1940F6823D221A4E3A50FA"><enum>4302.</enum><header>Disclosures</header>
<subsection id="HD7F7E5A3484142D49358B21DE61A3E60"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="H789CE68DA8854D57907ECFAE83F8B9D0"><enum>(b)</enum><header>Coordination with other laws</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="H4127DE19FA8C407F9DED47DAE6535CB4"><enum>(c)</enum><header>Compliance</header>
<paragraph id="HBC45AE664016408B961E497C55659D63"><enum>(1)</enum><header>Model disclosures</header><text>The Agency may provide model disclosures to facilitate compliance with the requirements of regulations prescribed under this section.</text> </paragraph>
<paragraph id="H981FDBBE218A409F967172D254F71D39"><enum>(2)</enum><header>Per se compliance</header><text>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.</text> </paragraph>
<paragraph id="H2EF63E813E4B4FB0A50A90672651EEE1"><enum>(3)</enum><header>Additional guidance</header><text>The Agency may issue exemptions, no action letters, and other guidance to promote compliance with disclosures requirements of regulations prescribed under this section.</text> </paragraph></subsection>
<subsection id="H425EEE4279B74394870BD51909E04965"><enum>(d)</enum><header>Combined mortgage loan disclosure</header><text>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.</text> </subsection></section>
<section id="H6278EAFB8603487A9113B41BD3A37D23"><enum>4303.</enum><header>Sales practices</header><text display-inline="no-display-inline">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.</text> </section>
<section id="HCA6F224F746949D7BE3EBBE10829AF65"><enum>4304.</enum><header>Pilot disclosures</header>
<subsection id="H2F29F313D45848E6A79C559AF3B736BF"><enum>(a)</enum><header>Pilot disclosures</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="H23E884B9AF9644AABBDF3B7D634A71CA"><enum>(b)</enum><header>Standards</header><text>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.</text> </subsection>
<subsection id="H64A493255AA044F882A9F7EB179AF6EF"><enum>(c)</enum><header>Transparency</header><text>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.</text> </subsection></section>
<section id="HE0C81627392B49B0847F32D45FC462FB"><enum>4305.</enum><header>Adopting operational standards to deter unfair, deceptive, or abusive practices</header>
<subsection id="H0F233CF80F614E8ABE83206C4ABA4C39"><enum>(a)</enum><header>Authority To prescribe standards</header><text>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—</text>
<paragraph id="H52A40D27C6D04EA097DFB6D3B43A35DE"><enum>(1)</enum><text>background checks for principals, officers, directors, or key personnel;</text> </paragraph>
<paragraph id="HAC3359F73C784421BABCA15FCC5E233A"><enum>(2)</enum><text>registration, licensing, or certification;</text> </paragraph>
<paragraph id="H76B9EAE19C83435C980080DEB7EB1E86"><enum>(3)</enum><text>bond or other appropriate financial requirements to provide reasonable assurance of ability to perform its obligations to consumers;</text> </paragraph>
<paragraph id="H88C2CBAB7C8C4B66BD90C254173FE1F3"><enum>(4)</enum><text>creating and maintaining records of transactions or accounts; or</text> </paragraph>
<paragraph id="HA4EF3CA43AFE487398E5CDCAF8CAC809"><enum>(5)</enum><text>procedures and operations relating to the provision of, or maintenance of accounts for, consumer financial products or services.</text> </paragraph></subsection>
<subsection id="H21F60EED0D274B65B50C82BED29AE92E"><enum>(b)</enum><header>Agency authority to prescribe standards</header>
<paragraph id="H5AD1F8DA82B4447A9062A54F8F94FEB0"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HB9BDFABDABDA4A9ABC85F125F1EA1D23"><enum>(2)</enum><header>Registration and licensing standards</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HE8DE4E1F80C548D7976FAC3FB7BDA11D"><enum>(3)</enum><header>Enforcement of standards</header><text>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.</text> </paragraph></subsection>
<subsection id="H40DC4DCC0C434EADAA9DBE0CE08B0D2C"><enum>(c)</enum><header>Consultation</header><text display-inline="yes-display-inline">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.</text> </subsection></section>
<section id="H6F2D49834EA84AA1ACFFF01842AFF3E8"><enum>4306.</enum><header>Duties</header>
<subsection id="H0FB6883C319C4B7C907ADAE662C05B91"><enum>(a)</enum><header>In general</header>
<paragraph id="HE6F6FA267BCF45AEB997F9B193AA4384"><enum>(1)</enum><header>Regulations ensuring fair dealing with consumers</header><text>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.</text> </paragraph>
<paragraph id="H948B56D04F43405E8569723E81552DFC"><enum>(2)</enum><header>Considerations for duties</header><text>In prescribing such regulations, the Director shall consider whether—</text>
<subparagraph id="HC548D5516FC841FB9529DC5395074610"><enum>(A)</enum><text>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;</text> </subparagraph>
<subparagraph id="HE2F20CBA490F4567AAB0EC9078980456"><enum>(B)</enum><text>the covered person, employee, agent, or independent contractor provides the consumer with advice with respect to any aspect of the transaction;</text> </subparagraph>
<subparagraph id="H6821BD4E339246F083821F7CA8DA6CBA"><enum>(C)</enum><text>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;</text> </subparagraph>
<subparagraph id="H9921564B36984F9B892BA3513C014BBF"><enum>(D)</enum><text>the benefits to consumers of imposing a particular duty would outweigh the costs; and</text> </subparagraph>
<subparagraph id="HF916465CF9214F3490D102DB66C4252D"><enum>(E)</enum><text>any other factors as the Director considers appropriate.</text> </subparagraph></paragraph>
<paragraph id="H2D9A54AFEB844406B4FE11D3B52E4782"><enum>(3)</enum><header>Duties relating to compensation practices</header>
<subparagraph id="H669F3B1EB68D4EF0A807F15C044E851A"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="HEDA6B93029234922A32234170C201CDE"><enum>(B)</enum><header>No compensation caps</header><text>The Director may not prescribe a limit on the total dollar amount of compensation paid to any person.</text> </subparagraph>
<subparagraph id="HF3D9FD82122B41838C006229B8A40A88"><enum>(C)</enum><header>Disparity treatment prohibited</header><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph>
<paragraph id="H5488404631314DE7ABB321ADE210BEEB"><enum>(4)</enum><header>Requirement to include disclaimer on public statements</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection>
<subsection id="H043D105AADC842C48F236ABDCE35EF2C"><enum>(b)</enum><header>Administrative proceedings</header>
<paragraph id="H9B9E14011B054F2187EA0305596D83BB"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph>
<paragraph id="H586232FB1519466DB50FA8E7C2336304"><enum>(2)</enum><header>Exclusivity of remedy</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H7044735EE94C4768BECAB3605B4E6134"><enum>(3)</enum><header>Rule of construction</header><text>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.</text> </paragraph></subsection>
<subsection id="H29F2070CCA6C4FFDB18D0E7809A82562"><enum>(c)</enum><header>Exclusions</header><text>This section shall not be construed as authorizing the Director to prescribe regulations applicable to—</text>
<paragraph id="H2ED918F577A5453F8335FB4CA457C8FD"><enum>(1)</enum><text>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</text> </paragraph>
<paragraph id="HC93F51EF24FF4CB3BEC063C752F86575"><enum>(2)</enum><text>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.</text> </paragraph></subsection></section>
<section id="HAB3C155D2BF94098B500FA37D76CF71F"><enum>4307.</enum><header>Consumer rights to access information</header>
<subsection id="HC604A3D2A5364911AC03CB962A0E8805"><enum>(a)</enum><header>In general</header><text>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.</text> </subsection>
<subsection id="HFCCC283808084094BA44B6FB93C542FE"><enum>(b)</enum><header>Exceptions</header><text>A covered person shall not be required by this section to make available to the consumer—</text>
<paragraph id="H58D60BDC91B64C0F8CF2C657E255177B"><enum>(1)</enum><text>any confidential commercial information, including an algorithm used to derive credit scores or other risk scores or predictors;</text> </paragraph>
<paragraph id="H5DAB9B2C83E843DA938F2D3EA34AA744"><enum>(2)</enum><text>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;</text> </paragraph>
<paragraph id="H15D5158C790D476AA689BC39BD17E1B0"><enum>(3)</enum><text display-inline="yes-display-inline">any information required to be kept confidential by any other law (including section 6103 of the Internal Revenue Code of 1986); or</text> </paragraph>
<paragraph id="H009EDC493D904FF6AA04F457DBF0B612"><enum>(4)</enum><text>any information that the covered person cannot retrieve in the ordinary course of its business with respect to that information.</text> </paragraph></subsection>
<subsection id="HCEF413D2B49449FC9BB14E517BDBF340"><enum>(c)</enum><header>No duty To maintain records</header><text>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.</text> </subsection>
<subsection id="H2281A6F90E084904A0FE54F7F4CA0B98"><enum>(d)</enum><header>Standardized formats for data</header><text>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.</text> </subsection>
<subsection id="H77A9EE4333904C74A883DA623BD4F958"><enum>(e)</enum><header>Consultation</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="H65D10BF1376A4689B864ABA4248F0A5F"><enum>(1)</enum><text>impose substantively similar requirements on covered persons;</text> </paragraph>
<paragraph id="H8295403F7387446BAC0F361AE026DC20"><enum>(2)</enum><text>take into account conditions under which covered persons do business both in the United States and in other countries; and</text> </paragraph>
<paragraph id="H725EFA9C0ECE43FCA644C6553D516681"><enum>(3)</enum><text>do not require or promote the use of any particular technology in order to develop systems for compliance.</text> </paragraph></subsection></section>
<section id="H3DD44069DCF94BD1AC165EECFC86A6A1"><enum>4308.</enum><header>Prohibited acts</header><text display-inline="no-display-inline">It shall be unlawful for any person—</text>
<paragraph id="HFD8FAA1CE45945DCAED5DA850E719861"><enum>(1)</enum><text display-inline="yes-display-inline">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;</text> </paragraph>
<paragraph id="H420944012EA34D9EB97E2B0EC65ADB20"><enum>(2) </enum><text display-inline="yes-display-inline">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</text> </paragraph>
<paragraph id="HAD8242AD8D3D4A67876F530F0C87E2F7"><enum>(3)</enum><text display-inline="yes-display-inline">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. </text> </paragraph><continuation-text continuation-text-level="subsection">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)).</continuation-text></section>
<section id="H17E329FE157A4B6EBB7D700C673A5966"><enum>4309.</enum><header>Treatment of remittance transfers</header>
<subsection display-inline="no-display-inline" id="H18034B4EBFBE42A882277DEC16FE8CC6"><enum>(a)</enum><header>Disclosures required for remittance transfers</header>
<paragraph id="H3223CB36F4A346A3A02DB65B668FE118"><enum>(1)</enum><header>In general</header><text>Each remittance transfer provider shall make disclosures to consumers, as specified by this section and by regulation prescribed by the Director.</text> </paragraph>
<paragraph id="HA40E7BB474CD438E9939C59A93EFF8A5"><enum>(2)</enum><header>Specific disclosures</header><text>In addition to any other disclosures applicable under this title, a remittance transfer provider shall—</text>
<subparagraph id="H460E316339B94713A968914969D7719A"><enum>(A)</enum><text>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—</text>
<clause id="H0918CBD62F7546F0B965AD1F63E4B037"><enum>(i)</enum><text>the total amount in United States dollars that will be required to be paid by the consumer in connection with the remittance transfer;</text> </clause>
<clause id="H3B7598A39E704522BDFF6794ED39075E"><enum>(ii)</enum><text>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;</text> </clause>
<clause id="H012DCFA428EE43E8BE4E05B2AC13B19F"><enum>(iii)</enum><text>the fee charged by the remittance transfer provider for the remittance transfer;</text> </clause>
<clause id="H73A116D4A6EF468790E14999039986AA"><enum>(iv)</enum><text>any exchange rate to be used by the remittance transfer provider for the remittance transfer, unless the exchange rate is not fixed on send;</text> </clause>
<clause id="H6ED834DF57BF40D985898F1EF7EDA3DC"><enum>(v)</enum><text>the amount of time for which the information specified in this subparagraph (A) will be in effect;</text> </clause>
<clause id="HB9CCD3477CCA42C1A676A6FC625C91F3"><enum>(vi)</enum><text>the expected time interval within which the funds being transferred will be made available to the recipient; and</text> </clause>
<clause id="H29C409E603804F54B635269219FF61F5"><enum>(vii)</enum><text>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;</text> </clause></subparagraph>
<subparagraph id="H45C13B62EB4747A6AF1B564D57B5FA48"><enum>(B)</enum><text>at the time at which the consumer makes payment in connection with the remittance transfer, a receipt in writing disclosing clearly and conspicuously—</text>
<clause id="H8C325F585AD342D7BB3A27503109AADE"><enum>(i)</enum><text>the information described in subparagraph (A);</text> </clause>
<clause id="HD2775F90530D489A9E1CAA290A30872A"><enum>(ii)</enum><text>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;</text> </clause>
<clause id="HE5DD74FA48614BEDAE018F49AF259671"><enum>(iii)</enum><text>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;</text> </clause>
<clause id="HE32D5A7A24EA4E8090540C2A8F2D71B6"><enum>(iv)</enum><text>the name and telephone number or address of the designated recipient, if provided to the remittance transfer provider by the consumer;</text> </clause>
<clause id="H6A05F614DA1F4F0491EBAAF7F83A7D26"><enum>(v)</enum><text>information about the rights of the consumer under this section to cancel the remittance transfer, to resolve errors and to receive refunds;</text> </clause>
<clause id="H0410A1B56E0F46469DF163FC79F035AA"><enum>(vi)</enum><text>appropriate contact information for the remittance transfer provider;</text> </clause>
<clause id="HFA43BB42C4C94DC2BF4BB7DBC078BDE3"><enum>(vii)</enum><text>a transaction reference number unique to that remittance transfer; and</text> </clause>
<clause id="H31961BC3C8BE4E88814DE8E3F6597C45"><enum>(viii)</enum><text>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;</text> </clause></subparagraph>
<subparagraph id="H9958F9EC873946EC83D2524823781E05"><enum>(C)</enum><text>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</text> </subparagraph>
<subparagraph id="HEE3708C968614C9BB15F43FFA72BD3C2"><enum>(D)</enum><text>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.</text> </subparagraph><continuation-text continuation-text-level="paragraph">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.</continuation-text></paragraph>
<paragraph id="HB6CB458C7FCF49B78974B6F990438249"><enum>(3)</enum><header>Exemption</header><text>Notwithstanding requirements under paragraph (2)(A)(ii), (2)(A)(iv), or (2)(B)(i), no such disclosure is required—</text>
<subparagraph id="H50DEA282F9EA4BA79411B60FD6AD8D72"><enum>(A)</enum><text>because of the requirements of another law, including the law of another country;</text> </subparagraph>
<subparagraph id="H37C3A3E229E0462E85750327828BD332"><enum>(B)</enum><text>because the transfer is being routed through the Directo a México offered by the Federal reserve banks; or</text> </subparagraph>
<subparagraph id="H758EAD854ECC47479C385ACD0EE43C96"><enum>(C)</enum><text>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.</text> </subparagraph></paragraph>
<paragraph id="H21F6498E2A3F44CE8CF9110D5DC7F7C6"><enum>(4)</enum><header>Provision of toll-free number and web access</header><text></text>
<subparagraph id="HF357080A1C454C3EA3E2C0C77ACA13FC"><enum>(A)</enum><text>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.</text> </subparagraph>
<subparagraph id="H10BE8402F92D40D7902F74C75A94BB0E"><enum>(B)</enum><text>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).</text> </subparagraph></paragraph>
<paragraph id="H778F64FB4C484F50B2F565E0F3778739"><enum>(5)</enum><header>Alternative methods of disclosure</header><text>Subject to subsection (e)(2), a remittance transfer provider may—</text>
<subparagraph id="HD4206751D39C4C7CB539E739A49A4A01"><enum>(A)</enum><text>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;</text> </subparagraph>
<subparagraph id="H2E84AF71F5CD4D929AA883B00005B9F1"><enum>(B)</enum><text>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</text> </subparagraph>
<subparagraph id="H9F3917BD063A437086516ECB5A93FF7B"><enum>(C)</enum><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph></subsection>
<subsection id="HA64188725B7E4525BD3ED5871F2E9A1A"><enum>(b)</enum><header>Written foreign language disclosures</header><text></text>
<paragraph id="H5DC2EC8565C947BFBDFDDBAF643F41B3"><enum>(1)</enum><header>In general</header><text>The disclosures required under subsections (a)(2)(A) and (a)(2)(B)(i) shall be made in English and—</text>
<subparagraph id="H3EE1C3CFF5BF4DD1B2512AE9A71970BA"><enum>(A)</enum><text>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</text> </subparagraph>
<subparagraph id="H408E98D682DD4F3197CE978EE3CFF80E"><enum>(B)</enum><text>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.</text> </subparagraph></paragraph>
<paragraph id="HB0A9A67E8FD14772895C52AB06475DCD"><enum>(2)</enum><header>Disputes concerning terms</header><text>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.</text> </paragraph></subsection>
<subsection id="H67094B68222D455094C96CBD18CA148F"><enum>(c)</enum><header>Remittance transfer cancellations, refunds, and errors</header>
<paragraph id="H290F5706C8924AC796ABF3E07838A421"><enum>(1)</enum><header>Cancellations</header><text></text>
<subparagraph id="H34A1DEAED0C94D17B6767A56934A93CC"><enum>(A)</enum><text>After receiving the receipt required under subsection (a)(2)(B), a consumer may cancel the currency transaction—</text>
<clause id="HFBD0AE07B5B64E9FA39ED3A627A4EEE2"><enum>(i)</enum><text>before leaving the premises of the remittance transfer provider where the consumer received the receipt; and</text> </clause>
<clause id="H4D57A20E367849409B223CA45B0D6578"><enum>(ii)</enum><text>not later than 30 minutes after the time the consumer initiated the remittance transfer with the remittance transfer provider.</text> </clause></subparagraph>
<subparagraph id="H2A0F66DF1ECE4FC78C213C92EDEC6BAF"><enum>(B)</enum><text>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.</text> </subparagraph>
<subparagraph id="H719C008F47654A06900DB9D857B41EED"><enum>(C)</enum><text>A consumer may not cancel a remittance transfer after the remittance transfer provider has sent the funds to the recipient.</text> </subparagraph>
<subparagraph id="HBA19699C5003487AA5F06F38E762932D"><enum>(D)</enum><text>A remittance transfer provider shall not be required to provide a refund if providing a refund would violate State or Federal law.</text> </subparagraph></paragraph>
<paragraph id="H3A2DB5EDE8254FB0B36C64B65A00129E"><enum>(2)</enum><header>Refunds</header>
<subparagraph id="H1D22D28EDF814994B3F7DDD0A63014D3"><enum>(A)</enum><text>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—</text>
<clause id="H5202474E58DE49AC8A8F7E26EB6EFDC5"><enum>(i)</enum><text>refund to the consumer the total amount in U.S. dollars that was paid by the consumer in connection with such remittance transfer;</text> </clause>
<clause id="HE2ACA7F9F72842A78DAA13932267AFBE"><enum>(ii)</enum><text>promptly transmit the remittance transfer in accordance with the terms in the written receipt provided to the consumer pursuant to subsection (a)(2)(B);</text> </clause>
<clause id="HD8A56938BA6E4290BE533B2C783E042B"><enum>(iii)</enum><text>provide such other remedy, as determined appropriate by rule of the Director for the protection of consumers; or</text> </clause>
<clause id="H88E6F874FDB847F7B13ABC93247CCB40"><enum>(iv)</enum><text>demonstrate to the consumer that the proceeds of the remittance transfer were made available to the recipient of the remittance provider.</text> </clause></subparagraph>
<subparagraph id="H93270AC762F74D9287C82D8311BEE1D8"><enum>(B)</enum><text>A remittance transfer provider shall not be required to provide a refund if providing a refund would violate State or Federal law.</text> </subparagraph></paragraph>
<paragraph id="H35B7F2D5976B48DF9E940F5C73704FE9"><enum>(3)</enum><header>Error resolution</header>
<subparagraph id="H551E87516B3D4BE9998583C2592FC175"><enum>(A)</enum><header>In general</header><text>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.</text> </subparagraph>
<subparagraph id="HAD4DB7B19ACB47649EA32DB8FD34821F"><enum>(B)</enum><header>Remedies</header><text>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—</text>
<clause id="H122B0B40131C42E4AC0DDCA4A46117BD"><enum>(i)</enum><text>as applicable to the error and as designated by the consumer—</text>
<subclause id="H079FE40078A24050B7F1BE01EB84807A"><enum>(I)</enum><text>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;</text> </subclause>
<subclause id="H29CEC99C28944EC6AAFE4270CC88FCA2"><enum>(II)</enum><text>make available to the designated recipient, without additional cost to the designated recipient or to the consumer, the amount appropriate to resolve the error; </text> </subclause>
<subclause id="HFA93E9320F6B418BADC5432F6FE97F41"><enum>(III)</enum><text>provide such other remedy, as determined appropriate by regulation of the Director for the protection of consumers; or</text> </subclause></clause>
<clause id="H4437FB86FC4548529A04BD9EC693BCFC"><enum>(ii)</enum><text>demonstrate to the consumer that there was no error.</text> </clause></subparagraph></paragraph>
<paragraph id="H368ED453133440759D20BCC80DD9078B"><enum>(4)</enum><header>Regulations</header><text>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.</text> </paragraph></subsection>
<subsection id="H03D36A6CA65543A2A22169129D95056E"><enum>(d)</enum><header>Enforcement authority</header><text>The Director shall have the sole authority to enforce the provisions of this section, and any regulations established pursuant to this section.</text> </subsection>
<subsection id="HFC7C2FE3EBDA4536B4723D47EF12A6C1"><enum>(e)</enum><header>Applicability of other provisions of law</header>
<paragraph id="H57E3647E82FD4DA190671E8D73C54C5F"><enum>(1)</enum><header>Applicability of title 18 and title 31 provisions</header><text>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.</text> </paragraph>
<paragraph id="H1C62D181B45940838BDC0465AC517232"><enum>(2)</enum><header>Rule of construction</header><text>Nothing in this section shall be construed—</text>
<subparagraph id="H425A6E72B4C545D585903B242EFC3601"><enum>(A)</enum><text display-inline="yes-display-inline">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</text> </subparagraph>
<subparagraph id="HB0322087367E4542BCFCA1BF8020E2A2"><enum>(B)</enum><text>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.</text> </subparagraph></paragraph></subsection>
<subsection id="HE46F06A179FA4BCD96FC16C41010F3B3"><enum>(f)</enum><header>Definitions</header><text>For purposes of this section, the following definitions shall apply:</text>
<paragraph id="H42423565044948B9A1CFB6C364B660BB"><enum>(1)</enum><header>Depository institution</header><text>the term <quote>depository institution</quote> has the same meaning as in section 3 of the Federal Deposit Insurance Act and includes a credit union.</text> </paragraph>
<paragraph id="H8482D7D5A6A34EC686DED8944DCDB316"><enum>(2)</enum><header>Not fixed on send</header><text>The term <quote>not fixed on send</quote> 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.</text> </paragraph>
<paragraph id="HC02237999C204EA89EF44D248C8D0BE6"><enum>(3)</enum><header>Remittance transfer</header><text display-inline="yes-display-inline">The term <quote>remittance transfer</quote> 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.</text> </paragraph>
<paragraph id="HF169E307CE234781A63FF9B452423EB2"><enum>(4)</enum><header>Remittance transfer provider</header><text>The term <quote>remittance transfer provider</quote> 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.</text> </paragraph></subsection>
<subsection id="H0A4C4596770E4A848D3392E5D369F448"><enum>(g)</enum><header>Model disclosures</header>
<paragraph id="H07D1FE5E4A2C443587453BCC067BA5F0"><enum>(1)</enum><header>Publication</header><text>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.</text> </paragraph>
<paragraph id="HF0F11F83B24F4CE0B06AACF62B1BECA4"><enum>(2)</enum><header>Languages to be used in model disclosures</header><text>The Director shall make these disclosures available within 1 year of the effective date of this title—</text>
<subparagraph id="HACF091C76AB9433C816EC72E93B51406"><enum>(A)</enum><text>in English; and</text> </subparagraph>
<subparagraph id="H44EF4F3A08F44C70841B70CA790207A0"><enum>(B)</enum><text>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.</text> </subparagraph></paragraph>
<paragraph id="HB9C7A4CC74544994AA0F5C5C9A5E14C5"><enum>(3)</enum><header>Use of automated equipment</header><text>In establishing model forms under this subsection, the Director shall consider the use by lessors of data processing or similar automated equipment.</text> </paragraph>
<paragraph id="H2E1FA069F18A4A4DA897D8D2B22C7FD0"><enum>(4)</enum><header>Use optional</header><text>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.</text> </paragraph>
<paragraph id="H29B1A31E210445CF8AC1F306F459AE8D"><enum>(5)</enum><header>Effect of use</header><text>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.</text> </paragraph></subsection>
<subsection id="HA3642B8FD17D4DD58B9143A9447A0BF0"><enum>(h)</enum><header>Regulation and exemption authority</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="H32E37CD284D04620962A36F0ACFC7098"><enum>(i)</enum><header>Applicability of State law</header>
<paragraph id="H08B2107901AA4BF391D38296B74A4A21"><enum>(1)</enum><text>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.</text> </paragraph>
<paragraph id="H4812C893FF52487190517C3F11BD2387"><enum>(2)</enum><text>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.</text> </paragraph>
<paragraph id="HA7861CC437FE46CE881F743EFD6EC004"><enum>(3)</enum><text>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.</text> </paragraph>
<paragraph id="HFFA00CBF9DF3424188D384519EAAC329"><enum>(4)</enum><text>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.</text> </paragraph></subsection>
<subsection id="H943C626A0EE04B0D9CE5D99C02026F61"><enum>(j)</enum><header>Federal Credit Union Act amendment</header><text>Paragraph (12)(A) of section 107 of the Federal Credit Union Act (12 U.S.C. 1757(12)(A)) is amended by inserting <quote>and remittance transfers, as defined in section 4309 of the Consumer Financial Protection Agency Act of 2009</quote> after <quote>and domestic electronic fund transfers</quote>.</text> </subsection>
<subsection display-inline="no-display-inline" id="HF6C57769B09D46A79A238E5D8D65B6D2"><enum>(k)</enum><header>Automated clearinghouse system</header>
<paragraph id="H8855740EA1914038A2A91BEA900F04FA"><enum>(1)</enum><header>Expansion of system</header><text>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—</text>
<subparagraph id="HE3CCD174C0CF404CAAFE42D154A73B1E"><enum>(A)</enum><text>the volume and dollar amount of remittance transfers to those countries;</text> </subparagraph>
<subparagraph id="H558380FF13E9465EBD6A7086C4CDDB61"><enum>(B)</enum><text>the significance of the volume of such transfers, relative to the external financial flows of the receiving country; and</text> </subparagraph>
<subparagraph id="HDF8E71A711824169B6080BCAD5B65141"><enum>(C)</enum><text>the feasibility of such an expansion.</text> </subparagraph></paragraph>
<paragraph id="HBD8B5BBF65F34D9680F63C4E0F4A0E71"><enum>(2)</enum><header>Report to the Congress</header><text>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.</text> </paragraph></subsection>
<subsection id="HCEF8A756DA744D49B2555CA6C2815CE4"><enum>(l)</enum><header>Regulatory guidance on remittance transfers</header>
<paragraph id="H14778B8948C64E3E914000EF3A81DE00"><enum>(1)</enum><header>Provision of guidelines to institutions</header><text>The Director shall provide guidelines to all remittance transfer providers regarding—</text>
<subparagraph id="HFC546023937245A389B7094AC98844C2"><enum>(A)</enum><text>the offering of low-cost remittance transfers;</text> </subparagraph>
<subparagraph id="HBABABBCBC25B419F9635986782400EBE"><enum>(B)</enum><text>the availability of agency services to remittance transfer providers;</text> </subparagraph>
<subparagraph id="H8B042A6778714C28B909A3ACB50686A2"><enum>(C)</enum><text>compliance with the provisions of this title; and</text> </subparagraph>
<subparagraph id="H618D726EEC5C47F8B53892C6856E1EE9"><enum>(D)</enum><text>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.</text> </subparagraph></paragraph>
<paragraph id="H3C83272464D64376BAA057E0BD3A1AF2"><enum>(2)</enum><header>Content of guidelines</header><text>Guidelines provided to remittance transfer providers under this section shall include—</text>
<subparagraph id="H0843DA6E466E416E90941F32D91D6831"><enum>(A)</enum><text>information as to the methods of providing remittance transfer services;</text> </subparagraph>
<subparagraph id="H4D6BAEE79EA846139B2086551B53DB39"><enum>(B)</enum><text>the potential economic opportunities in providing low-cost remittance transfers; and</text> </subparagraph>
<subparagraph id="HF9EAAC073B4B421884DB3AF0572DB20D"><enum>(C)</enum><text>the potential value to depository institutions of broadening their financial bases to include persons that use remittance transfers.</text> </subparagraph></paragraph>
<paragraph id="H57AB8281A75641BEA23499537F8DD94A"><enum>(3)</enum><header>Assistance to financial literacy commission</header><text>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.</text> </paragraph></subsection>
<subsection id="HD30EE1ACA1AC49F08E4E1F50D2E9BFE3"><enum>(m)</enum><header>Report on feasibility of and impediments to use of remittance history in calculation of credit score</header><text>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—</text>
<paragraph id="H83419E01D4E042858FA8AB059B0A8DDB"><enum>(1)</enum><text>the manner in which a consumer’s remittance history could be used to enhance a consumer’s credit score;</text> </paragraph>
<paragraph id="H78825DA08D5448FA9EC711FF18EECF9A"><enum>(2)</enum><text>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</text> </paragraph>
<paragraph id="H71F4E9A0B5C44E9CA8BB2DEF7F3C6D27"><enum>(3)</enum><text>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)).</text> </paragraph></subsection>
<subsection id="H1BD80D6D096842139D1A72DE212B030C"><enum>(n)</enum><header>Effective date</header><text>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.</text> </subsection></section>
<section id="H9B19BDCF49ED453797BC9998C701DDEE"><enum>4310.</enum><header>Effective date</header><text display-inline="no-display-inline">This subtitle shall take effect on the designated transfer date.</text> </section>
<section id="H34E4D062C98042A08AFF45E1687076C7"><enum>4311.</enum><header>No authority to require the offering of financial products or services</header><text display-inline="no-display-inline">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.</text> </section>
<section id="H1007A8869DB1491686B36F2F68B1677B"><enum>4312.</enum><header>Appraisal independence requirements</header>
<subsection id="H4AC72E27DAFD4D83A9F8495DA6939B6F"><enum>(a)</enum><header>Promulgation of new requirements</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="HCDEA7973111E46BBBBDFF76D5325B797"><enum>(b)</enum><header>Certain regulation requirements</header><text display-inline="yes-display-inline">Regulations promulgated by the Negotiated Rulemaking Committee under this section—</text>
<paragraph id="H38A898D5C49E4D498EF2F243D58B31DC"><enum>(1)</enum><text>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—</text>
<subparagraph id="HC6C5A32ED0524C8BB4D44BFF224B537A"><enum>(A)</enum><text>licensed or registered in accordance with section 1501 et seq. of the SAFE Mortgage Licensing Act of 2008; and</text> </subparagraph>
<subparagraph id="HDE231B7A78BA461B865F3C776EC050CF"><enum>(B)</enum><text>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—</text>
<clause id="H420B1CAA83D442E88B85EE3C67013515"><enum>(i)</enum><text>consider additional, appropriate property information;</text> </clause>
<clause id="H8B5115EB4D224E03AC9574C164A3CAA8"><enum>(ii)</enum><text>provide further detail, substantiation, or explanation for the appraiser’s value conclusion; or</text> </clause>
<clause id="H5E853E01EE244E42BBDA434A23D9C95F"><enum>(iii)</enum><text>correct errors in the appraisal report; and</text> </clause></subparagraph></paragraph>
<paragraph id="H4B6D8EDDC4D3480C972DF3C033573C95"><enum>(2)</enum><text>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.</text> </paragraph></subsection>
<subsection id="HADFCDAD1E22F4371968E4668ED4D0485"><enum>(c)</enum><header>Sunset</header><text display-inline="yes-display-inline">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.</text> </subsection></section>
<section id="HF45D8570B6404A95B9CF6A91BF825AF3" display-inline="no-display-inline" section-type="subsequent-section"><enum>4313.</enum><header>Overdraft protection notice requirements</header><text display-inline="no-display-inline">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.</text></section>
<section id="H260333257CE8483E80BC062ED87946A0"><enum>4314.</enum><header>Review, report, and program with respect to exchange facilitators</header>
<subsection id="H44E9344837BA4F638050283CAB71E06A"><enum>(a)</enum><header>Review</header><text display-inline="yes-display-inline">The Director shall review all Federal laws and regulations relating to the protection of persons who utilize exchange facilitators.</text></subsection>
<subsection id="H6A15BA2E6D1F4DF8BB0AE2326FD49A98"><enum>(b)</enum><header>Report</header><text>Not later than 180 days after the effective date of this subtitle, the Director shall submit to Congress a report describing—</text>
<paragraph id="HA30A865AAD7C4B8AB40CD1647658AC45"><enum>(1)</enum><text display-inline="yes-display-inline">recommendations for legislation to ensure the appropriate protection of persons who utilize exchange facilitators;</text></paragraph>
<paragraph id="H925C38B0319E42D5BEAFE34EBE1AB0D0"><enum>(2)</enum><text>recommendations for updating the regulations of Federal departments and agencies to ensure the appropriate protection of such persons; and</text></paragraph>
<paragraph id="HA5BDF8114F8447999627693DEA086429"><enum>(3)</enum><text>recommendations for Agency regulations to ensure the appropriate protection of such persons.</text></paragraph></subsection>
<subsection id="H694DD1691D8E4553B3D038A02AC29AA9"><enum>(c)</enum><header>Program</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="H558F9FA6018C41E18F0F56568F98611E"><enum>(d)</enum><header>Exchange facilitator defined</header><text>In this section, the term <quote>exchange facilitator</quote> means a person that—</text>
<paragraph id="HBD95E731EC6247CEB2294B9EE39D22C5"><enum>(1)</enum><text>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)); </text></paragraph>
<paragraph id="HD3B836D98BBE48F09D9F1CB16AFAEDB5"><enum>(2)</enum><text>maintains an office for the purpose of soliciting business as an exchange facilitator; or</text></paragraph>
<paragraph id="H1473C515DD624EB4AF34902B059C5AF0"><enum>(3)</enum><text>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.</text></paragraph></subsection></section>
<section id="HD2D462E12E26401E968A8987B6743651" display-inline="no-display-inline" section-type="subsequent-section"><enum>4315.</enum><header>Regulation of person-to-person lending</header>
<subsection id="HF1A114A7249047F0B1547120EF67DC0E"><enum>(a)</enum><header>Scope of exemption from Federal securities regulation</header><text display-inline="yes-display-inline">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:</text>
<quoted-block style="OLC" display-inline="no-display-inline" id="H121E06F56B2D4B4EB6366E385579229C">
<paragraph id="H2A3DC4905B7F49B785F1F1461DCB44FF"><enum>(15)</enum><header>Person-to-person lending</header>
<subparagraph id="HBA713A80A51B40628595CDEFF45A1151" display-inline="no-display-inline"><enum>(A)</enum><header>In general</header><text>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.</text></subparagraph>
<subparagraph id="HF19C16FF7E4E4ADBB6E577C800E98178" display-inline="no-display-inline"><enum>(B)</enum><header>Definitions</header><text> For purposes of this paragraph:</text>
<clause id="H482B8D5EED484EAD8DD0A6D483454822"><enum>(i)</enum><header>Consumer loan</header><text>The term <quote>consumer loan</quote> means a loan made to a natural person, the proceeds of which are intended primarily for personal, family, educational, household, or business use.</text></clause>
<clause id="H47E427110FF44269964B91347C980537"><enum>(ii)</enum><header>Person-to-person lending platform</header>
<subclause id="H7102CC4B1BFF4090B99316445D9309F0"><enum>(I)</enum><header>In general</header><text>The term <quote>person-to-person lending platform</quote> 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.</text></subclause>
<subclause id="H89989B460FC84F5095EB7CA064C2E943"><enum>(II)</enum><header>Prohibition on multiple loans in a single transaction</header><text display-inline="yes-display-inline">The term <quote>person-to-person lending platform</quote> 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.</text></subclause></clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HCC89B1C4E244448F8AE8220488E8DCF9"><enum>(b)</enum><header>Regulation by the Agency</header>
<paragraph id="HAB6706A3955C4BD2BCD2ED4A977CDA3F"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H63F36539D8DD4684A6AC496057E4DA75"><enum>(2)</enum><header>Interim requirements</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H23EE9ED3BEF74F91B112B8CE8BD11AED"><enum>(3)</enum><header>Definitions</header><text>For purposes of this subsection, the terms <quote>consumer loan</quote>, <quote>person-to-person lending platform</quote>, <quote>prospectus</quote>, and <quote>registration statement</quote> shall have the meaning given such term under the Securities Act of 1933.</text> </paragraph></subsection>
<subsection id="H1F061B879F0143A8B896331065643D74"><enum>(c)</enum><header>Rulemaking</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="H9269CBA1A94C413DAF70CD5E8E2CA8B7"><enum>(d)</enum><header>Effective date</header><text>Notwithstanding section 4310, this section shall take effect on the date of the enactment of this title.</text></subsection></section>
<section id="H83F7EB3B78524155A354F26911E72061" display-inline="no-display-inline" section-type="subsequent-section"><enum>4316.</enum><header>Treatment of reverse mortgages</header>
<subsection id="HD888EF5CBFC14D62923F8A846AFA360D"><enum>(a)</enum><header>In general</header><text>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.</text></subsection>
<subsection id="H30B03B4F56014DBCA1AA762ACC6B5836"><enum>(b)</enum><header>Regulations</header><text>In prescribing regulations under subsection (a), the Director shall ensure that such regulations shall—</text>
<paragraph id="HD14EE60F18E841729BC93A5673858DAD"><enum>(1)</enum><text display-inline="yes-display-inline">include requirements for—</text>
<subparagraph id="H8BFB805D0EEA414691E96CDCC8A88847"><enum>(A)</enum><text>the purpose of preventing unlawful, unfair, deceptive or abusive acts and practices in connection with a reverse mortgage transaction; and</text></subparagraph>
<subparagraph id="H4F533B1C2462448FB3063FCDACC5CEC8"><enum>(B)</enum><text>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;</text></subparagraph></paragraph>
<paragraph id="HCA24A62C9232482A961C8837BD90BE95"><enum>(2)</enum><text display-inline="yes-display-inline">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</text></paragraph>
<paragraph id="HDF19BC793F5F41EAA36092D74624AA72"><enum>(3)</enum><text display-inline="yes-display-inline">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.</text></paragraph></subsection>
<subsection id="H1C76720E6C86482EA7B8E5CD2FCF57EB"><enum>(c)</enum><header>Consultation</header><text>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—</text>
<paragraph id="HAC2BD12CAC8246B7B0F75117441EF320"><enum>(1)</enum><text>imposes substantially similar requirements on all covered persons; and</text></paragraph>
<paragraph id="HB7F0DAF2C63F48329E1D76CB2B1DF3DA"><enum>(2)</enum><text>is consistent with prudential, consumer protection, civil rights, market or systemic objectives administered by such agencies or supervisors.</text></paragraph></subsection>
<subsection id="H70B95F48488E40FA8AC3BE5FD4F1A0FE"><enum>(d)</enum><header>Deadline for rulemaking</header><text>The Director shall commence the rulemaking required under subsection (a) not later than 12 months after the date of the enactment of this Act.</text></subsection></section> </subtitle>
<subtitle id="H6B9FC432579340C698B028226261FB5F"><enum>D</enum><header>Preservation of State Law</header>
<section id="H437B6E77ACD24BD89BD4D47B675AD1D1"><enum>4401.</enum><header>Relation to State law</header>
<subsection id="H865BBEA99CD04FA3B65E56EF27830394"><enum>(a)</enum><header>In general</header>
<paragraph id="H94A892D143424D908B60840068FF04E8"><enum>(1)</enum><header>Rule of construction</header><text>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.</text> </paragraph>
<paragraph id="H6FE58224C52D4A93BACA6D1601284C08"><enum>(2)</enum><header>Greater protection under state law</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection>
<subsection id="H86E7625535534EA0B5E829E1FAF8DB5B"><enum>(b)</enum><header>Relation to other provisions of enumerated consumer laws that relate to state law</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="H85F8E4E3E38E4EF6B63A4217095CC243"><enum>(c)</enum><header>Additional consumer protection regulations in response to state action</header>
<paragraph id="H48F67BD73BE34724864DB944274824F9"><enum>(1)</enum><header>Notice of proposed rule required</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H5BA920A2F187473C8C5393078DE55904"><enum>(2)</enum><header>Agency considerations required for issuance of final regulation</header><text>Before prescribing a final regulation based upon a notice issued pursuant to paragraph (1), the Agency shall take into account whether—</text>
<subparagraph id="H833450E6508842D38037A8AC8C45370B"><enum>(A)</enum><text>the proposed regulation would afford greater protection to consumers than any existing regulation; </text></subparagraph>
<subparagraph id="HB63444D827DE475F85FD6DD4B9683D70"><enum>(B)</enum><text>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 </text></subparagraph>
<subparagraph id="H6F306382247145E7AA333401D8FC4BC2"><enum>(C)</enum><text>a Federal banking agency has advised that the proposed regulation is likely to present an unacceptable safety and soundness risk to insured depository institutions.</text></subparagraph></paragraph>
<paragraph id="H981B2A75B59246AF8FCAF93C25B90544"><enum>(3)</enum><header>Explanation of considerations</header><text>The Agency—</text>
<subparagraph id="H6D4B27EB9D9642378EE5BE76D2A9CD58"><enum>(A)</enum><text>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 </text></subparagraph>
<subparagraph id="H2CCEBC67B40141E88EAE95F23476F555"><enum>(B)</enum><text>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. </text></subparagraph></paragraph>
<paragraph id="HB3C59813425B40B0B3AB540A4AECEA87"><enum>(4)</enum><header>Reservation of authority</header><text>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. </text></paragraph>
<paragraph id="H7A17837F2DFB4C84B0866B72A25FF661"><enum>(5)</enum><header>Rule of construction</header><text>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. </text></paragraph>
<paragraph id="H680F1AE32A914BDD9718E029EE31CD29"><enum>(6)</enum><header>Definition</header><text>For purposes of this section, the term <quote>consumer protection regulation</quote> 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.</text></paragraph></subsection></section>
<section id="H3D9D9F29E6F248EE9B4AE3F0DC83161B"><enum>4402.</enum><header>Preservation of enforcement powers of States</header>
<subsection id="H69251883A89944E7B378149CF139AA98"><enum>(a)</enum><header>In general</header>
<paragraph id="HBD3D6405A0F848868C73FAA7D3E51A14"><enum>(1)</enum><header>Action by state</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H3E18B0C92DAA406190A65D42B90AEEDA"><enum>(2)</enum><header>Rule of construction</header><text>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.</text> </paragraph></subsection>
<subsection id="H3AF0488401E745CA844B438DE150699A"><enum>(b)</enum><header>Consultation required</header>
<paragraph id="H3CACD2AB05D047AE90C71B11CEF71529"><enum>(1)</enum><header>Notice</header>
<subparagraph id="H7220ECE5275444F7A3F38D15E3413A61"><enum>(A)</enum><header>In general</header><text>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.</text> </subparagraph>
<subparagraph id="H75382706143F4FA8957D82E8895FCCEE"><enum>(B)</enum><header>Emergency action</header><text>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.</text> </subparagraph>
<subparagraph id="HD37FBDE3F4C34081AD960BC0D96E03E7"><enum>(C)</enum><header>Contents of notice</header><text>The notification required under this section shall, at a minimum, describe—</text>
<clause id="HEA56B49107344C3FA814AA1D1240FE3C"><enum>(i)</enum><text>the identity of the parties;</text> </clause>
<clause id="H710E7CCDDB0842E796F4A68E9B5AE2F6"><enum>(ii)</enum><text>the alleged facts underlying the proceeding; and</text> </clause>
<clause id="H03B1F31B3AB143D294D16655C38E1C1C"><enum>(iii)</enum><text>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.</text> </clause></subparagraph></paragraph>
<paragraph id="HBB00E477EA6F48B8B7809BC9CCB8EC70"><enum>(2)</enum><header>Agency response</header><text>In any action described in paragraph (1), the Agency may—</text>
<subparagraph id="HA52C3662A1054257B8ABA17FEED09C35"><enum>(A)</enum><text>intervene in the action as a party;</text> </subparagraph>
<subparagraph id="H8584D1BF5EA641528437AA1D1D83200F"><enum>(B)</enum><text>upon intervening—</text>
<clause id="HBCB1B57A146B41E0838FD0F0B8F7F4B7"><enum>(i)</enum><text>remove the action to the appropriate United States district court, if the action was not originally brought there; and</text> </clause>
<clause id="HA1F1A55168D54FE5BE9D36E60934DFF7"><enum>(ii)</enum><text>be heard on all matters arising in the action; and</text> </clause></subparagraph>
<subparagraph id="H54367A303F004483932F5EB3689B60FE"><enum>(C)</enum><text>appeal any order or judgment to the same extent as any other party in the proceeding may.</text> </subparagraph></paragraph></subsection>
<subsection id="H8A68DD50C88745EA8DF7FCD99D7017FE"><enum>(c)</enum><header>Regulations</header><text>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.</text> </subsection>
<subsection id="H6F7D16E8D5F14B69B9A3A7853FB86719"><enum>(d)</enum><header>Preservation of state authority</header>
<paragraph id="H67DFD7A8D70441B2BE1F53ED76AE4027"><enum>(1)</enum><header>State claims</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HB6CF326C80584C8DAE259CDF01FB702D"><enum>(2)</enum><header>State securities regulators</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H27FD4D726FA3450F8571A580A1503143"><enum>(3)</enum><header>State insurance regulators</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection></section>
<section id="HB34857B5E6594E30A91D051F2C87063D"><enum>4403.</enum><header>Preservation of existing contracts</header><text display-inline="no-display-inline">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.</text> </section>
<section id="H12DD7629262E4340AC0E487F0FD2F0CB"><enum>4404.</enum><header>State law preemption standards for national banks and subsidiaries clarified</header>
<subsection id="HA6C2ACA9D42F434C9E330D1F9A6BF392"><enum>(a)</enum><header>In general</header><text>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:</text>
<quoted-block id="H40B42315451941A18303E4CD41BF16A3" style="OLC">
<section id="H43A10CE12D014A699936F0A8D9E08859"><enum>5136C.</enum><header>State law preemption standards for national banks and subsidiaries clarified</header>
<subsection id="HC671B039384841ED9779D2F7BDA2A154"><enum>(a)</enum><header>Definitions</header><text display-inline="yes-display-inline">For purposes of this section, the following definitions shall apply:</text>
<paragraph id="H80BBB41C3447441AA139340D882B09BC"><enum>(1)</enum><header>National bank</header><text>The term <quote>national bank</quote> includes—</text>
<subparagraph id="H88660C2815764823AF04299555E08163"><enum>(A)</enum><text>any bank organized under the laws of the United States; and</text> </subparagraph>
<subparagraph id="H167874C564394EA8A217EA6EDA3EE562"><enum>(B)</enum><text>any Federal branch established in accordance with the International Banking Act of 1978.</text> </subparagraph></paragraph>
<paragraph id="H66C91903F85F4FB799BD51B4B9E3CACF"><enum>(2)</enum><header>State consumer financial laws</header><text display-inline="yes-display-inline">The term <quote>State consumer financial law</quote> 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.</text> </paragraph>
<paragraph id="H000A033DBA76498CB3FA017F10522097"><enum>(3)</enum><header>Other definitions</header><text>The terms <quote>affiliate</quote>, <quote>subsidiary</quote>, <quote>includes</quote>, and <quote>including</quote> have the same meaning as in section 3 of the Federal Deposit Insurance Act.</text> </paragraph></subsection>
<subsection id="H85BCC4F125B04CCC808008A3006BDB83"><enum>(b)</enum><header>Preemption standard</header>
<paragraph id="H8AAFC93244A0482289DB6FD0FBD1001F"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">State consumer financial laws are preempted only if—</text>
<subparagraph id="H996D8F391BB24B7589F60D2E1CADFBC8"><enum>(A)</enum><text display-inline="yes-display-inline">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;</text> </subparagraph>
<subparagraph id="H4C4876203F6448A68920BDDEE1897C4D" display-inline="no-display-inline"><enum>(B)</enum><text>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</text></subparagraph>
<subparagraph id="HF96385A1EAE143F5A62B955FA40899CE"><enum>(C)</enum><text display-inline="yes-display-inline">the State consumer financial law is preempted by Federal law other than this Act.</text> </subparagraph></paragraph>
<paragraph id="H596B56EEB1C34C019FEAC15236114451" display-inline="no-display-inline"><enum>(2)</enum><header>Savings clause</header><text>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.</text></paragraph>
<paragraph id="H43BE5B92F9464E3BB5E6C785C21047EF" display-inline="no-display-inline"><enum>(3)</enum><header>Case-by-case determination</header>
<subparagraph id="HC44956DA992F4919B6BB8AE5C186D308"><enum>(A)</enum><header>Definition</header><text display-inline="yes-display-inline">The term <quote>case-by-case determination pursuant to this section</quote> 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.</text></subparagraph>
<subparagraph id="H7E8F82D182D34AB799A1F81BAD5A4F79"><enum>(B)</enum><header>Consultation</header><text display-inline="yes-display-inline">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.</text></subparagraph></paragraph>
<paragraph id="H4F58558E9E55449688BDC4F0CF24CF6A"><enum>(4)</enum><header>Rule of construction</header><text display-inline="yes-display-inline">This Act does not occupy the field in any area of State law.</text></paragraph>
<paragraph id="HDC2886FDAA754184B5B8B9699D6CAF32"><enum>(5)</enum><header>Standards of review</header>
<subparagraph id="HEC50CD9C0E214AC591073C167233EFCD"><enum>(A)</enum><header>Preemption</header><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="H67B702B9C54D463C84BEF6B6DD2A0A17"><enum>(B)</enum><header>Savings clause</header><text>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. </text></subparagraph></paragraph>
<paragraph id="H7714633038C04CD7BF780C696345C812"><enum>(6)</enum><header>Comptroller determination not delegable</header><text>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.</text></paragraph> </subsection>
<subsection id="H715E833ACD8D41698587E76392C46789"><enum>(c)</enum><header>Substantial evidence</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="HDED5A62F1FAB4002A2ED58A5560071DB"><enum>(d)</enum><header>Other Federal laws</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="H38D20F3546C44643AF9E9865487A97F3"><enum>(e)</enum><header>Periodic review of preemption determinations</header><text>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)).</text> </subsection>
<subsection id="H0AA102CED8104677963616CDE0140500"><enum>(f)</enum><header>Application of state consumer financial law to subsidiaries and affiliates</header><text>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.</text> </subsection>
<subsection id="HAF848AC0EDFB4F9786608D766BE0ECC0"><enum>(g)</enum><header>Preservation of powers related to charging interest</header><text display-inline="yes-display-inline">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 <quote>interest</quote> under such provision.</text></subsection>
<subsection id="H5DF70B5E13664642B2B38FC50463AC1C"><enum>(h)</enum><header>Transparency of occ preemption determinations</header><text>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.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H07ED67B33AC74566A740737C4C7208E9"><enum>(b)</enum><header>Clerical amendment</header><text>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:</text>
<quoted-block id="H687A5E051FA04E80BEA50FCFAECCCF95" style="OLC">
<toc regeneration="no-regeneration">
<toc-entry level="section">5136C. State law preemption standards for national banks and subsidiaries clarified.</toc-entry> </toc> <after-quoted-block>.</after-quoted-block></quoted-block> </subsection></section>
<section id="HE1897002CD18408681F2C21947226B59"><enum>4405.</enum><header>Visitorial standards</header><text display-inline="no-display-inline">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:</text>
<quoted-block id="H891AC53A49DA4EDBAD567DD3F650C2C6" style="OLC">
<subsection id="HFECD165218EA4967880413C3679453C9"><enum>(g)</enum><header>Visitorial powers</header>
<paragraph id="H55FB879DE9D641DD915A47DD5C531478"><enum>(1)</enum><header>Rule of construction</header><text display-inline="yes-display-inline">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—</text>
<subparagraph id="HCB4260D6FEE5437A98412AEAE5837D04"><enum>(A)</enum><text>to enforce any applicable Federal or State law, as authorized by such law; or</text> </subparagraph>
<subparagraph id="HD3A6C9E2371D4CAEB69B1B66DBF2E766"><enum>(B)</enum><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph>
<paragraph id="H5C5A04F106E548D387B1639BB2345A30"><enum>(2)</enum><header>Consultation</header><text display-inline="yes-display-inline">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).</text> </paragraph></subsection>
<subsection id="H40F11C85B05E41E7A60E7DA2CFE99B45"><enum>(h)</enum><header>Enforcement actions</header><text display-inline="yes-display-inline">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.</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </section>
<section id="H1DE6029E0F234AD1A229F8259B2B3C5E"><enum>4406.</enum><header>Clarification of law applicable to nondepository institution subsidiaries</header><text display-inline="no-display-inline">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:</text>
<quoted-block id="H1FD8A5E4C81B44689C3CA7D75F9359D6" style="OLC">
<subsection id="H69F8A25E83FA43B09E4702E0A06462D7"><enum>(i)</enum><header>Clarification of law applicable to nondepository institution subsidiaries and affiliates of national banks</header>
<paragraph id="H03297F49F9D944879AC58BEB782051F2"><enum>(1)</enum><header>Definitions</header><text>For purposes of this section, the following definitions shall apply:</text>
<subparagraph id="H4AFC03879F5643FC91920B5925FFAC58"><enum>(A)</enum><header>Depository institution, subsidiary, affiliate</header><text>The terms <quote>depository institution</quote>, <quote>subsidiary</quote>, and <quote>affiliate</quote> have the same meanings as in section 3 of the Federal Deposit Insurance Act.</text> </subparagraph>
<subparagraph id="H7BF4B9307AED4C1D8E3B9F7753C25350"><enum>(B)</enum><header>Nondepository institution</header><text>The term <quote>nondepository institution</quote> means any entity that is not a depository institution.</text> </subparagraph></paragraph>
<paragraph id="HF22DA2E9A04E469585AF0B2B52028FBB"><enum>(2)</enum><header>In general</header><text>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.</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </section>
<section id="HA803E7AA3154422EA1461E369E06907D"><enum>4407.</enum><header>State law preemption standards for Federal savings associations and subsidiaries clarified</header>
<subsection id="H084BECD41F3748E099FA4262B212E06F"><enum>(a)</enum><header>In general</header><text>The Home Owners’ Loan Act (12 U.S.C. 1461 et seq.) is amended by inserting after section 5 the following new section:</text>
<quoted-block id="HA54DFE48C6F44C20A17C9F53158A5E18" style="OLC">
<section id="H480944A1C0764B958A7CB247ED1D8176"><enum>6.</enum><header>State law preemption standards for Federal savings associations clarified</header>
<subsection id="H16B77CB711754542BFF4D8B0E4AC4120"><enum>(a)</enum><header>State consumer financial law defined</header><text display-inline="yes-display-inline">For purposes of this section, the term <quote>State consumer financial law</quote> 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.</text> </subsection>
<subsection id="HEA7B35ED467643DD93FE46F1EC9F57A1"><enum>(b)</enum><header>Preemption standard</header>
<paragraph id="H90A90B6D6C254162B1D70B25984B9A64"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">State consumer financial laws are preempted only if—</text>
<subparagraph id="H8FF3244E638B4D90AE0A59B082EBA352"><enum>(A)</enum><text display-inline="yes-display-inline">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;</text> </subparagraph>
<subparagraph id="H0C983BE01AD54AF48641C53A4291FE43" display-inline="no-display-inline"><enum>(B)</enum><text>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</text></subparagraph>
<subparagraph id="H5BBE97C81D1B457CBFF9211654D5540F"><enum>(C)</enum><text display-inline="yes-display-inline">the State consumer financial law is preempted by Federal law other than this Act.</text> </subparagraph></paragraph>
<paragraph id="H66ADFEB6D66049D087F826A1CDF5A088" display-inline="no-display-inline"><enum>(2)</enum><header>Savings clause</header><text>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.</text></paragraph>
<paragraph id="H6C570AAFAD954E49B82402EC4FA83572" display-inline="no-display-inline"><enum>(3)</enum><header>Case-by-case determination</header>
<subparagraph id="H2D4F9F1CBCBF4EEE857BD4750EF2B09A"><enum>(A)</enum><header>Definition</header><text display-inline="yes-display-inline">The term <quote>case-by-case determination pursuant to this section</quote> 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.</text></subparagraph>
<subparagraph id="HA99100863786412C8327E6DA5522B6A3"><enum>(B)</enum><header>Consultation</header><text display-inline="yes-display-inline">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.</text></subparagraph></paragraph>
<paragraph id="HC6A93C7BF5D54B1EAC6D21B5C3EABD79"><enum>(4)</enum><header>Rule of construction</header><text>This Act does not occupy the field in any area of State law.</text></paragraph>
<paragraph id="H3CCE0CCCEFA141F8B1AF229AE3E192EC" display-inline="no-display-inline"><enum>(5)</enum><header>Standards of review</header>
<subparagraph id="H6C782E82235F4537802014BE7E34DCD2"><enum>(A)</enum><header>Preemption</header><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="H58BBADD2E0BA4132AFA77234DE63FB8B"><enum>(B)</enum><header>Savings clause</header><text>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. </text></subparagraph></paragraph>
<paragraph id="H4B62297FF04D40D781A361634DD137A6"><enum>(6)</enum><header>OTS determination not delegable</header><text>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.</text></paragraph> </subsection>
<subsection id="HB58F8D9C5E8A40C185103EBA28AF61A7"><enum>(c)</enum><header>Other Federal law</header><text>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.</text> </subsection>
<subsection id="H2903F7C7B5D14703B6EADC1FD130001D"><enum>(d)</enum><header>Substantial evidence</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="H2C66F4FCAD6843E98CCA15BEC891E684"><enum>(e)</enum><header>Periodic review of preemption determinations</header><text display-inline="yes-display-inline">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)).</text> </subsection>
<subsection id="H25F1E24F656340EA9CAC6389337153DE"><enum>(f)</enum><header>Application of state consumer financial law to subsidiaries and affiliates</header><text>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.</text> </subsection>
<subsection id="H0F25784BEA5246D49A16C5DCB0183636"><enum>(g)</enum><header>Preservation of powers related to charging of interest</header><text>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 <quote>interest</quote> under such provision.</text></subsection>
<subsection id="HAF4946B92AE24BE9B255C29EBC098338"><enum>(h)</enum><header>Transparency of OTS preemption determinations</header><text>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.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H08F10D9C36AC4F518156B1AEEE3DF7F5"><enum>(b)</enum><header>Clerical amendment</header><text>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:</text>
<quoted-block id="H002F01A1F6174E18929EFDB28D216941" style="OLC">
<toc regeneration="no-regeneration">
<toc-entry level="section">Sec. 6. State law preemption standards for Federal savings associations clarified.</toc-entry> </toc> <after-quoted-block>.</after-quoted-block></quoted-block> </subsection></section>
<section id="HCD79AA77D9CE42F797D8C05ADCA8D25A"><enum>4408.</enum><header>Visitorial standards</header><text display-inline="no-display-inline">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:</text>
<quoted-block id="HEC6A6CF0860E4F07BEDDF2E405736D78" style="OLC">
<subsection id="HFA78C34A56B3486EB4D181A8D5C8F970"><enum>(g)</enum><header>Visitorial powers</header>
<paragraph id="H3D748604C5774C9DABA13CE4B7B41BFA"><enum>(1)</enum><header>In general</header><text>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—</text>
<subparagraph id="H5F33587DFF974C0C81140C16548266F5"><enum>(A)</enum><text>to enforce any applicable Federal or State law, as authorized by such law; or</text> </subparagraph>
<subparagraph id="HE6A88E965C994C24957C079794D48B3D"><enum>(B)</enum><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph>
<paragraph id="H3E80D83118DC41F8A7F629010C65912E"><enum>(2)</enum><header>Consultation</header><text display-inline="yes-display-inline">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).</text> </paragraph></subsection>
<subsection id="H45E9A8C1FBE54CE3863D08B4FB860A79"><enum>(h)</enum><header>Enforcement actions</header><text display-inline="yes-display-inline">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.</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </section>
<section id="H9FEF350C338C4EB5971CD3C264D0E961"><enum>4409.</enum><header>Clarification of law applicable to nondepository institution subsidiaries</header><text display-inline="no-display-inline">Section 6 of the Home Owners’ Loan Act is amended by adding after subsection (h) (as added by section 4408) the following new subsection:</text>
<quoted-block id="H590EB9AEC17043E39D4BB5ACC5116FEC" style="OLC">
<subsection id="HBB3DD261821541AFA3F5F062EB477D9A"><enum>(i)</enum><header>Clarification of law applicable to nondepository institution subsidiaries and affiliates of federal savings associations</header>
<paragraph id="HE0DD341D8ED249A18C80D67672AD5781"><enum>(1)</enum><header>Definitions</header><text>For purposes of this section, the following definitions shall apply:</text>
<subparagraph id="H4A3F326417334683B28B09F9552CF562"><enum>(A)</enum><header>Depository institution, subsidiary, affiliate</header><text>The terms <quote>depository institution</quote>, <quote>subsidiary</quote>, and <quote>affiliate</quote> have the same meanings as in section 3 of the Federal Deposit Insurance Act.</text> </subparagraph>
<subparagraph id="HD1F1055C29E44BA1B9B781444B8F5CD2"><enum>(B)</enum><header>Nondepository institution</header><text>The term <quote>nondepository institution</quote> means any entity that is not a depository institution.</text> </subparagraph></paragraph>
<paragraph id="HD5E0F0ED093B40DBA0633C5734E0D019"><enum>(2)</enum><header>In general</header><text>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.</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </section>
<section id="HFBBADBBE47E14A31BD0142BF10A16076"><enum>4410.</enum><header>Effective date</header><text display-inline="no-display-inline">This subtitle shall take effect on the designated transfer date.</text> </section></subtitle>
<subtitle id="H0B09258603BF4976AB2DF2B6DA36D4CF"><enum>E</enum><header>Enforcement Powers</header>
<section id="H21AF2C81276648249D605AFE453E0ADF"><enum>4501.</enum><header>Definitions</header><text display-inline="no-display-inline">For purposes of this subtitle, the following definitions shall apply:</text>
<paragraph id="HC8E3DE7FB43C468C86A4CED41C06D29E"><enum>(1)</enum><header>Agency investigation</header><text>The term <quote>Agency investigation</quote> 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.</text> </paragraph>
<paragraph id="H0221FA23774843089D0C17D05550CE49"><enum>(2)</enum><header>Agency investigator</header><text>The term <quote>Agency investigator</quote> 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.</text> </paragraph>
<paragraph id="H169866E622444514A1945E1AD2D6F353" display-inline="no-display-inline"><enum>(3)</enum><header>Covered employee</header><text display-inline="yes-display-inline">The term <quote>covered employee</quote> means any individual performing tasks related to the provision of a financial product or service to a consumer.</text></paragraph>
<paragraph id="H829268473C164A189A0836E619C84E9F"><enum>(4)</enum><header>Custodian</header><text>The term <quote>custodian</quote> means the custodian or any deputy custodian designated by the Agency.</text> </paragraph>
<paragraph id="HB405D9C8AD3E4B4D8EE5F2C3BB6A0CE0"><enum>(5)</enum><header>Documentary material</header><text display-inline="yes-display-inline">The term <quote>documentary material</quote> 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.</text> </paragraph>
<paragraph id="HDB8E954C3B1041348FF5893C127D2387"><enum>(6)</enum><header>Violation</header><text>The term <quote>violation</quote> 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.</text> </paragraph></section>
<section id="HCBBD0CD34DD2453F826C74371F7E5F0A"><enum>4502.</enum><header>Investigations and administrative discovery</header>
<subsection id="HE2BAB1A736E0448A909992B050C52759"><enum>(a)</enum><header>Joint investigations</header>
<paragraph id="H6D16D689C36240B59E52935972AE6400"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">The Agency or, where appropriate, an Agency representative may engage in joint investigations and requests for information.</text> </paragraph>
<paragraph id="H1EE10FD0158544098D2A86E4EA9D1B30"><enum>(2)</enum><header>Fair lending</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection>
<subsection id="H6336BBF8B8FA4090800CDD2903025D40"><enum>(b)</enum><header>Subpoenas</header>
<paragraph id="H3D1F2024DE20408F872E6722E2D1AA46"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph>
<paragraph id="HDD37740305404A7F9BDD1FD29FE52579"><enum>(2)</enum><header>Failure to obey</header><text display-inline="yes-display-inline">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.</text> </paragraph> </subsection>
<subsection id="H48FB4E0DC84D4C99A48596DD626904DC"><enum>(c)</enum><header>Demands</header>
<paragraph id="HFCD40AE56A8A42C88BBF0F544D40827B"><enum>(1)</enum><header>In general</header><text>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—</text>
<subparagraph id="H085FC090E4C24C6C9705AEB78CD83DE0"><enum>(A)</enum><text display-inline="yes-display-inline">produce such documentary material for inspection and copying or reproduction in the form or medium requested by the Agency;</text> </subparagraph>
<subparagraph id="HED41DDE5E9C84EC7B9CCF14C31E7E649"><enum>(B)</enum><text>submit such tangible things;</text> </subparagraph>
<subparagraph id="H529CB28E96E34C96BF981281366FE799"><enum>(C)</enum><text>file written reports or answers to questions;</text> </subparagraph>
<subparagraph id="HEBAF86C0D0F243DEB82CE09EB2F46ADD"><enum>(D)</enum><text>give oral testimony concerning documentary material or other information; or</text> </subparagraph>
<subparagraph id="H63D4C7AB52DF42ABA78A69B687A5FA3A"><enum>(E)</enum><text>furnish any combination of such material, answers, or testimony.</text> </subparagraph></paragraph>
<paragraph id="H5203F04C147B4016B2E696350F1400B5"><enum>(2)</enum><header>Requirements</header><text>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.</text> </paragraph>
<paragraph id="HDF841697441646B6AD9986116B2DE3F5"><enum>(3)</enum><header>Production of documents</header><text>Each civil investigative demand for the production of documentary material shall—</text>
<subparagraph id="H81010037A849415B84A47F5F7F0BD8DB"><enum>(A)</enum><text>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;</text> </subparagraph>
<subparagraph id="H17622A18FDCC4576A6723CDDA87FA967"><enum>(B)</enum><text>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</text> </subparagraph>
<subparagraph id="HF200C3A9B5844CC4848BC042F334B332"><enum>(C)</enum><text>identify the custodian to whom such material shall be made available.</text> </subparagraph></paragraph>
<paragraph id="HD86852684B7E44F49824486423814CE2"><enum>(4)</enum><header>Production of things</header><text>Each civil investigative demand for the submission of tangible things shall—</text>
<subparagraph id="HF2748C728BF04EA38C699F910796CC2A"><enum>(A)</enum><text>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;</text> </subparagraph>
<subparagraph id="HC0B615851B0240D5B00E44EB90867AA1"><enum>(B)</enum><text>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</text> </subparagraph>
<subparagraph id="H280015A13A594C7D964EF151C4924770"><enum>(C)</enum><text>identify the custodian to whom such things shall be submitted.</text> </subparagraph></paragraph>
<paragraph id="HCFEF48CA6F15436E9A1392D014FD58F3"><enum>(5)</enum><header>Demand for written reports or answers</header><text>Each civil investigative demand for written reports or answers to questions shall—</text>
<subparagraph id="H2ECF0C6DDD214AC091D3A25A5EA18291"><enum>(A)</enum><text>propound with definiteness and certainty the reports to be produced or the questions to be answered;</text> </subparagraph>
<subparagraph id="H8F215C0ACB8E4C8286EB405E5E0440DB"><enum>(B)</enum><text>prescribe a date or dates at which time written reports or answers to questions shall be submitted; and</text> </subparagraph>
<subparagraph id="HF40E60EA80D5455A8E3567D9190387D6"><enum>(C)</enum><text>identify the custodian to whom such reports or answers shall be submitted.</text> </subparagraph></paragraph>
<paragraph id="H8662E4F91C444CB38BB54A56EF73C24F"><enum>(6)</enum><header>Oral testimony</header><text>Each civil investigative demand for the giving of oral testimony shall—</text>
<subparagraph id="HDD0B3D56FC404CABA43573C4507BC5A8"><enum>(A)</enum><text>prescribe a date, time, and place at which oral testimony shall be commenced; and</text> </subparagraph>
<subparagraph id="H8D1485096CCD4197BF2F9D87158060B1"><enum>(B)</enum><text>identify a Agency investigator who shall conduct the investigation and the custodian to whom the transcript of such investigation shall be submitted.</text> </subparagraph></paragraph>
<paragraph id="HDAECD6BF79EC4780AF86DC006C2E9736"><enum>(7)</enum><header>Service</header>
<subparagraph id="HE2C845FAC3814A2AB4EA44B1E6B06501"><enum>(A)</enum><text>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.</text> </subparagraph>
<subparagraph id="HB795394BF03A4B32B6106B79ED0344CA"><enum>(B)</enum><text>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.</text> </subparagraph> </paragraph>
<paragraph id="H2955C6F2C19F497E8D796CAFA4B7F881"><enum>(8)</enum><header>Method of service</header><text>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—</text>
<subparagraph id="H6361CF2087C14DDA977BC82E8672FC42"><enum>(A)</enum><text>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;</text> </subparagraph>
<subparagraph id="H8F4D66B2F2FC48AD9E9485F3E49858F9"><enum>(B)</enum><text>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</text> </subparagraph>
<subparagraph id="H5B1E842E7602457AA0FEEC1B2D253661"><enum>(C)</enum><text>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.</text> </subparagraph></paragraph>
<paragraph id="H9BBFC0C696964AF2B936A03EAE6397CF"><enum>(9)</enum><header>Proof of service</header>
<subparagraph id="H9F3EB03C58264FFEB03C02E029EBF708"><enum>(A)</enum><text>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.</text> </subparagraph>
<subparagraph id="HD14EA15AF71841E7ADE333D4A0F63E4C"><enum>(B)</enum><text>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.</text> </subparagraph></paragraph>
<paragraph id="HDF30049EA5104211B04ACBF6DEA2F112"><enum>(10)</enum><header>Production of documentary material</header><text>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.</text> </paragraph>
<paragraph id="H3D56170CD4964C5A94D44340266BCA1B"><enum>(11)</enum><header>Submission of tangible things</header><text>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.</text> </paragraph>
<paragraph id="H021804BFDAF948488B6A382F85F4C151"><enum>(12)</enum><header>Separate answers</header><text>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.</text> </paragraph>
<paragraph id="H2901C6468FEE4A1A99C20EAFC41EE0CC"><enum>(13)</enum><header>Testimony</header>
<subparagraph id="H39F6CF89C6B4485A8567D2C13CF1CED5"><enum>(A)</enum><header>Procedure</header>
<clause id="HA6EBC045BF8F4EA1BAFE0BF66690635E"><enum>(i)</enum><header>Oath and recordation</header><text display-inline="yes-display-inline">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.</text> </clause>
<clause id="HDAA83F3BB64344409ADEC0F0B3BFD242"><enum>(ii)</enum><header>Transcriptions</header><text>The testimony shall be taken stenographically and transcribed.</text> </clause>
<clause id="HB7D9683B46734B3CBEDD5C6B4734E310"><enum>(iii)</enum><header>Copy to custodian</header><text>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.</text> </clause></subparagraph>
<subparagraph id="H37C564EFD1734F51A63EAE2421594D65"><enum>(B)</enum><header>Parties present</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="H1A6F6DE8DC60449E9A8E1E8D8B178C1E"><enum>(C)</enum><header>Location</header><text>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.</text> </subparagraph>
<subparagraph id="H17E890404D02472C9F8F004E51DC7539"><enum>(D)</enum><header>Attorney representation</header>
<clause id="HF63F4862FD2B47C38D0F9C24B85F9457"><enum>(i)</enum><header>In general</header><text>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.</text> </clause>
<clause id="HE5DDD9465A174989AE2F2C7247B44437"><enum>(ii)</enum><header>Confidential advice</header><text>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.</text> </clause>
<clause id="HAC132E34B04340CBB91C00102A5719A0"><enum>(iii)</enum><header>Objections</header><text>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.</text> </clause>
<clause id="H47D7F60E19494A6B9624D56D56F45C97"><enum>(iv)</enum><header>Refusal to answer</header><text display-inline="yes-display-inline">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.</text> </clause>
<clause id="H81F651ED59384E5A97AB825DB6D7F8B5"><enum>(v)</enum><header>Petition for order</header><text>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.</text> </clause>
<clause id="H5AF1BB3BCE1D4F5FA0594666ABAF7E68"><enum>(vi)</enum><header>Basis for compelling testimony</header><text>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.</text> </clause></subparagraph>
<subparagraph id="H4D6FA5C84DB34F74BF5A6E1011955147"><enum>(E)</enum><header>Transcripts</header>
<clause id="H839AB873E0E3448D8E95B1DE2FD06F11"><enum>(i)</enum><header>Right to examine</header><text>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.</text> </clause>
<clause id="H0F53A8E0EE284FD2AEC319AD39FCA352"><enum>(ii)</enum><header>Reading the transcript</header><text>The transcript shall be read to or by the witness, unless such examination and reading are waived by the witness.</text> </clause>
<clause id="H036BC4F8C471427C801D27F39FA5379E"><enum>(iii)</enum><header>Request for changes</header><text>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.</text> </clause>
<clause id="H024DA197552D4CD280CEF243F00E77FF"><enum>(iv)</enum><header>Signature</header><text>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.</text> </clause>
<clause id="HF93DB264B2784FF784AC87638AA1DA95"><enum>(v)</enum><header>Agency action in lieu of signature</header><text display-inline="yes-display-inline">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.</text> </clause></subparagraph>
<subparagraph id="H148F9A9A0D754867B3AC315976B6B62F"><enum>(F)</enum><header>Certification by investigator</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="H3FABBE87F7FA44FF8FC915D81070343A"><enum>(G)</enum><header>Copy of transcript</header><text>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.</text> </subparagraph>
<subparagraph id="HB4D3DFF7A51E419CAC105B125C60BD8F"><enum>(H)</enum><header>Witness fees</header><text>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.</text> </subparagraph></paragraph></subsection>
<subsection id="H4262A97587404342AB0BC21AD7B0DC4A"><enum>(d)</enum><header>Confidential treatment of demand material</header>
<paragraph id="HB5B3C4BFD0A44880A84037023EF49087"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph>
<paragraph id="HF62FAED8D1B94EE681314D65E9C22FD1"><enum>(2)</enum><header>Disclosure to congress</header><text>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.</text> </paragraph></subsection>
<subsection id="H715FF4F70BE94FD981FE0455EEC09DA1"><enum>(e)</enum><header>Petition for enforcement</header>
<paragraph id="H74C95AED94B84B7B847FC0DA772F75BD"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph>
<paragraph id="H8EA635512333405B96079DD501F71E56"><enum>(2)</enum><header>Service of process</header><text>All process of any court to which application may be made as provided in this subsection may be served in any judicial district.</text> </paragraph></subsection>
<subsection id="HC5C929117C104DDA86842BCE4EC70E10"><enum>(f)</enum><header>Petition for order modifying or setting aside demand</header>
<paragraph id="H2C2DB2D7CB5747678ABDF77F261FE168"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph>
<paragraph id="H4361305BA8CB48648550905455E31A6B"><enum>(2)</enum><header>Compliance during pendency</header><text>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.</text> </paragraph>
<paragraph id="H054AB9B4D27F48F09772F4816E246F4A"><enum>(3)</enum><header>Specific grounds</header><text>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.</text> </paragraph></subsection>
<subsection id="H7517912DEC5D4B01846B522AADEE8E5E"><enum>(g)</enum><header>Custodial control</header><text>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.</text> </subsection>
<subsection id="H2727346476154E92BF02E52E46095692"><enum>(h)</enum><header>Jurisdiction of court</header>
<paragraph id="H22345F05D99E47F29C659F886C0CD54B"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph>
<paragraph id="H76AA593F056144B28A9861132DE0F956"><enum>(2)</enum><header>Appeal</header><text>Any final order so entered shall be subject to appeal pursuant to section 1291 of title 28, United States Code.</text> </paragraph></subsection></section>
<section id="H54AD6A0C7794464685588EB1E59CEB86"><enum>4503.</enum><header>Hearings and adjudication proceedings</header>
<subsection id="HE1EBB75805904D538322B1FD2F2C2AA8"><enum>(a)</enum><header>In general</header><text>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—</text>
<paragraph id="HC934429A322945CC96CB54804C12AA7A"><enum>(1)</enum><text>the provisions of this title, including any regulations prescribed by the Director under this title; and</text> </paragraph>
<paragraph id="H09B21495D78C4095B617C858A114E72D"><enum>(2)</enum><text>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.</text> </paragraph></subsection>
<subsection id="HB169652C62F5442EA053042BC039ADAD"><enum>(b)</enum><header>Special rules for cease-and-desist proceedings</header>
<paragraph id="HE96FD138EE34405FA154141045893DD2"><enum>(1)</enum><header>Issuance</header>
<subparagraph id="H8CAFA805CB194431970ACF6903671ECB"><enum>(A)</enum><header>Notice of charges</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="HBE35CB6EDED3407E81BAEB86A9B57F52"><enum>(B)</enum><header>Contents of notice</header><text>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.</text> </subparagraph>
<subparagraph id="HD771903228644518B5E4908F9093FC77"><enum>(C)</enum><header>Time of hearing</header><text>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.</text> </subparagraph>
<subparagraph id="H4FB37D713FA64C81828497F10750E0AC"><enum>(D)</enum><header>Nonappearance deemed to be consent to order</header><text>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.</text> </subparagraph>
<subparagraph id="HF7F243C5AB1B4434AB0EC876F4342915"><enum>(E)</enum><header>Issuance of order</header><text>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.</text> </subparagraph>
<subparagraph id="H4EDF2AD9595B4CCEB24CD63FD683B0FB"><enum>(F)</enum><header>Includes requirement for corrective action</header><text>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.</text> </subparagraph></paragraph>
<paragraph id="HB9E7BB6EAA714BE98FAC4CCB98D03F1B"><enum>(2)</enum><header>Effectiveness of order</header><text>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.</text> </paragraph>
<paragraph id="H9E53B1AFF4314070BE2C42E793EAA12C"><enum>(3)</enum><header>Decision and appeal</header>
<subparagraph id="H6DC3929639A44A728B1B03B9A4D0A668"><enum>(A)</enum><header>Place of and procedures for hearing</header><text>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.</text> </subparagraph>
<subparagraph id="HBCBA0C85F619436CBCF4F8636609698C"><enum>(B)</enum><header>Time limit for decision</header><text>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—</text>
<clause id="H0AD21D70833E41298BD69E17A0F147FE"><enum>(i)</enum><text>render its decision (which shall include findings of fact upon which its decision is predicated) and shall issue; and</text> </clause>
<clause id="HD3118CB200B84AFFAE06F3466D351971"><enum>(ii)</enum><text>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.</text> </clause></subparagraph>
<subparagraph id="HDAC51FAB443648F7AC5DD485C3717742"><enum>(C)</enum><header>Modification of order generally</header><text>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.</text> </subparagraph>
<subparagraph id="HBFDCB97058F4452BBA81D3AD1C4F0349"><enum>(D)</enum><header>Modification of order after filing record on appeal</header><text>Upon such filing of the record, the Agency may modify, terminate, or set aside any such order with permission of the court.</text> </subparagraph></paragraph>
<paragraph id="HA5DEA75297524B519DBC0E76E9948723"><enum>(4)</enum><header>Appeal to court of appeals</header>
<subparagraph id="H3C23E410183A40CCBC165A47D2F09D00"><enum>(A)</enum><header>In general</header><text>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.</text> </subparagraph>
<subparagraph id="H5D526A9F25A844CDB1AEFF3480278AF3"><enum>(B)</enum><header>Transmittal of copy to the Agency</header><text>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.</text> </subparagraph>
<subparagraph id="H322E49F8556A45099C4321C971931FC8"><enum>(C)</enum><header>Jurisdiction of court</header><text>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.</text> </subparagraph>
<subparagraph id="H7DF95F84C43E48D4AAE2BE33C088B18A"><enum>(D)</enum><header>Scope of review</header><text>Review of such proceedings shall be had as provided in chapter 7 of title 5 of the United States Code.</text> </subparagraph>
<subparagraph id="H5615B35D613046468EEA85410E4981AF"><enum>(E)</enum><header>Finality</header><text>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.</text> </subparagraph></paragraph>
<paragraph id="H27624C9D53F947AA86CDF494C709D18B"><enum>(5)</enum><header>No stay</header><text>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.</text> </paragraph></subsection>
<subsection id="H32C50C3E16024BFD8CE4512DE3A7E70F"><enum>(c)</enum><header>Special rules for temporary cease-and-desist proceedings</header>
<paragraph id="HE0EC6E6150A04FD1A77C66B4637B6C39"><enum>(1)</enum><header>Issuance</header>
<subparagraph id="H62527C59C5A34BE296B8140BA0F0FC6D"><enum>(A)</enum><header>In general</header><text>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.</text> </subparagraph>
<subparagraph id="H95D6284885B5485CBC8C01E389268B08"><enum>(B)</enum><header>Other requirements</header><text>Any temporary order issued under this paragraph may include any requirement authorized under this subtitle.</text> </subparagraph>
<subparagraph id="H4836B4A10D864E6DA8BC049E16916068"><enum>(C)</enum><header>Effect date of order</header><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph>
<paragraph id="HCA6C19C1520F407B8AA1FFDC9B70998B"><enum>(2)</enum><header>Appeal</header><text>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.</text> </paragraph>
<paragraph id="H937C3560A22E44A8BE3A26BF42B42059"><enum>(3)</enum><header>Incomplete or inaccurate records</header>
<subparagraph id="HCF03CDA32D7B49EAA6FB2CC424039A2F"><enum>(A)</enum><header>Temporary order</header><text>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—</text>
<clause id="H7D0087C88AB343749D3089EA00DBCBAC"><enum>(i)</enum><text>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</text> </clause>
<clause id="H16E8A40099774D0FAE24952DE32F619F"><enum>(ii)</enum><text>affirmative action to restore such books or records to a complete and accurate state, until the completion of the proceedings under subsection (b)(1).</text> </clause></subparagraph>
<subparagraph id="HF184A8FC7B6B47C788FE34F65D50EDDC"><enum>(B)</enum><header>Effective period</header><text>Any temporary order issued under subparagraph (A)—</text>
<clause id="HF9B99E2CA24C47FD887DEA87661D6FDC"><enum>(i)</enum><text>shall take effect upon service; and</text> </clause>
<clause id="H6ECB604F70974401BA78905A7C1FC09C"><enum>(ii)</enum><text>unless set aside, limited, or suspended by a court in proceedings under paragraph (2), shall remain in effect and enforceable until the earlier of—</text>
<subclause id="H2E6D171773C94E3C9C2B6E86EC0F914F"><enum>(I)</enum><text>the completion of the proceeding initiated under subsection (b) in connection with the notice of charges; or</text> </subclause>
<subclause id="H4C0A4EBBC4C64A36AFF899ACC80278C7"><enum>(II)</enum><text>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.</text> </subclause></clause></subparagraph></paragraph></subsection>
<subsection id="HEB4E2AD9AE494CF8B852293012BA094F"><enum>(d)</enum><header>Special rules for enforcement of orders</header>
<paragraph id="HC133AAF123A243318898C97752B42EC3"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph>
<paragraph id="H892218BA087C4FBF9663B1FE8AC246EA"><enum>(2)</enum><header>Exception</header><text>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.</text> </paragraph></subsection>
<subsection id="H7684CD0C08B24648A5005D5AE38C31B8"><enum>(e)</enum><header>Regulations</header><text>The Director shall prescribe regulations establishing such procedures as may be necessary to carry out this section.</text> </subsection></section>
<section id="H976CD47309AC439D96DBE3E594FD5437"><enum>4504.</enum><header>Litigation authority</header>
<subsection id="HF25F53363F5D49D382A8ED7BC3E791EC"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="HCE05395D763E4BAE958469046A81A3D9"><enum>(b)</enum><header>Representation</header><text>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.</text> </subsection>
<subsection id="HCE3C3610608848598C7F6EF7013318A8"><enum>(c)</enum><header>Compromise of actions</header><text>The Agency may compromise or settle any action if such compromise is approved by the court.</text> </subsection>
<subsection id="H6EF927308D81417DBEFB7B32C0DAFC5E"><enum>(d)</enum><header>Notice to the attorney general</header><text>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.</text> </subsection>
<subsection id="H44B0FDD9D6094D2BBD34E200DE808644"><enum>(e)</enum><header>Appearance before the supreme court</header><text>The Agency may represent itself in its own name before the Supreme Court of the United States, if—</text>
<paragraph id="HA4539AE48B4C4FB4BE71074CD78F2B73"><enum>(1)</enum><text>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</text> </paragraph>
<paragraph id="HE819FB07BA4E482693281616DAF41A1C"><enum>(2)</enum><text>the Attorney General concurs with such request or fails to take action within 60 days of the Agency’s request.</text> </paragraph></subsection>
<subsection id="H47280F1D9DA44273A14CE44866E65783"><enum>(f)</enum><header>Forum</header><text>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.</text> </subsection>
<subsection id="H02118A7E93EA407A8BD2470C6A6E0FD3"><enum>(g)</enum><header>Time for bringing action</header>
<paragraph id="HBCF4E1A28DF445A7BD285B5E15F99690"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H6683B9D0C1CC4A9CBDCBC6F3C86964A4"><enum>(2)</enum><header>Limitations under other federal laws</header>
<subparagraph id="H72F3EF0C6C9A4215BD8278000BA6E0EB"><enum>(A)</enum><text>For purposes of this section, an action arising under this title shall not include claims arising solely under enumerated consumer laws.</text> </subparagraph>
<subparagraph id="HD4F2CCD151014A91A86FDEC39C5562E4"><enum>(B)</enum><text>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.</text> </subparagraph>
<subparagraph id="H0E078791325049699D15944A436F3062"><enum>(C)</enum><text>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.</text> </subparagraph></paragraph></subsection></section>
<section id="HE456BA35C8BD421B89E606F5A449D9A7"><enum>4505.</enum><header>Relief available</header>
<subsection id="HE27BCF2476F84B4C8DB1D17EFB6D2CC4"><enum>(a)</enum><header>Administrative proceedings or court actions</header>
<paragraph id="H53F84B7F19B244EAB488FAC0AF9655D0"><enum>(1)</enum><header>Jurisdiction</header><text>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.</text> </paragraph>
<paragraph id="H6043C8E76F994900B52F45C468843AC7"><enum>(2)</enum><header>Relief</header><text>Such relief may include—</text>
<subparagraph id="H43C9F9CF8B0F4D7ABDCC234436133B53"><enum>(A)</enum><text>rescission or reformation of contracts;</text> </subparagraph>
<subparagraph id="H75CDC9541FF44162A4CA2DBFD3128385"><enum>(B)</enum><text>refund of moneys or return of real property;</text> </subparagraph>
<subparagraph id="H7866E7CF66A34CE8988418164DE6B9F1"><enum>(C)</enum><text>restitution;</text> </subparagraph>
<subparagraph id="HDF46E7CF821947EFAF0A96AF7EAFFA03"><enum>(D)</enum><text>disgorgement or compensation for unjust enrichment;</text> </subparagraph>
<subparagraph id="HF0EE88153DC143599E9405FE94047716"><enum>(E)</enum><text>payment of damages;</text> </subparagraph>
<subparagraph id="HBEC10DF8537C401FA1038D67561416EE"><enum>(F)</enum><text>public notification regarding the violation, including the costs of notification;</text> </subparagraph>
<subparagraph id="H70D883FAF9A14072AD9F394301E5D775"><enum>(G)</enum><text>limits on the activities or functions of the person; and</text> </subparagraph>
<subparagraph id="HBB86D212E8A84691B8AE62905F1959E2"><enum>(H)</enum><text>civil money penalties under subsection (c).</text> </subparagraph></paragraph>
<paragraph id="H729A1B577C8D43CC84DDBB8550FD9CD0"><enum>(3)</enum><header>No exemplary or punitive damages</header><text>Nothing in this subsection shall be construed as authorizing the imposition of exemplary or punitive damages.</text> </paragraph></subsection>
<subsection id="HBDA09D111FE34959950A55E4A3C9C8A3"><enum>(b)</enum><header>Recovery of costs</header><text>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.</text> </subsection>
<subsection id="H198B6FF517EF432BBC46A18BD0FE26AD"><enum>(c)</enum><header>Civil money penalty in court and administrative actions</header>
<paragraph id="H9EEE1F0F48044E74B1297187913159C6"><enum>(1)</enum><text display-inline="yes-display-inline">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:</text>
<subparagraph id="H6F4D757E6622477B936CDE5F3C008713"><enum>(A)</enum><header>First tier</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="HE0C828B46589475B9FFEEF4A82FCAC90"><enum>(B)</enum><header>Second tier</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="H03646185A23F4BAC9549D838D1154BFC"><enum>(C)</enum><header>Third tier</header><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph>
<paragraph id="HB1635BBAF7434019B1DD40C9C2AC1AE7"><enum>(2)</enum><header>Mitigating factors</header><text>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—</text>
<subparagraph id="H29FF91CBE0B6436FB0874A003A00D956"><enum>(A)</enum><text>the size of financial resources and good faith of the person charged;</text> </subparagraph>
<subparagraph id="H7B4A3683E5BA492FAED89F04974D8B4A"><enum>(B)</enum><text>the gravity of the violation or failure to pay;</text> </subparagraph>
<subparagraph id="H1E1AD5D3258F415B808ADE6115E354CA"><enum>(C)</enum><text>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;</text> </subparagraph>
<subparagraph id="HF6F17C52E3A44D689CC1B312CB3C5984"><enum>(D)</enum><text>the history of previous violations; and</text> </subparagraph>
<subparagraph id="H2CBC82BAD9F547808CADA6594FB6B647"><enum>(E)</enum><text>such other matters as justice may require.</text> </subparagraph></paragraph>
<paragraph id="H50B5EAE74FF64921ABA60DABF4425954"><enum>(3)</enum><header>Authority to modify or remit penalty</header><text>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.</text> </paragraph>
<paragraph id="HC9D092BA08334FC1954D798D857941B5"><enum>(4)</enum><header>Notice and hearing</header><text display-inline="yes-display-inline">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—</text>
<subparagraph id="H47DA265CBC2D4CC8A9FBE519250E4E4A"><enum>(A)</enum><text>the Agency gives notice and an opportunity for a hearing to the person accused of the violation; or</text> </subparagraph>
<subparagraph id="H11724D56351C4B7AACC779260F0FDBBF"><enum>(B)</enum><text>the appropriate court has ordered such assessment and entered judgment in favor of the Agency.</text> </subparagraph></paragraph></subsection></section>
<section id="H033909898918499E9A8249C1AFA77859"><enum>4506.</enum><header>Referrals for criminal proceedings</header><text display-inline="no-display-inline">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.</text> </section>
<section id="HB730C4EEC467465EA10C3E5F8BDA5F80"><enum>4507.</enum><header>Employee protection</header>
<subsection id="H615A2F465D8241DC94055737C71A00E5"><enum>(a)</enum><text>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—</text>
<paragraph id="HA27E985E59F944CF816F14099E11C9D6"><enum>(1)</enum><text>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</text></paragraph>
<paragraph id="H28E80D056DAA431EB90716BE3216EE23"><enum>(2)</enum><text>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.</text></paragraph></subsection>
<subsection id="H7EC08FA6D2294FA38BAB307D494EEAAD"><enum>(b)</enum>
<paragraph id="H0D342C6E4D0540199BDB9A38CDBA825D" display-inline="yes-display-inline"><enum>(1)</enum><text>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).</text></paragraph>
<paragraph id="H55517C7948CC418B82B6355C04AE4C9E" indent="up1"><enum>(2)</enum>
<subparagraph id="H9633F1C40F1A4EDB81FA057673F91AB2" display-inline="yes-display-inline"><enum>(A)</enum><text>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.</text></subparagraph>
<subparagraph id="H7A04B895A03244E69C6BA00EEDF75E4E" indent="up1"><enum>(B)</enum>
<clause id="H9A37AC9C530F49AA88A168CAE2696F2A" display-inline="yes-display-inline" indent="up2"><enum>(i)</enum><text>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.</text></clause></subparagraph>
<subparagraph id="H27698FACD0934F04A985505C92AA3F61" indent="up1"><enum>(ii)</enum><text>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.</text></subparagraph>
<subparagraph id="H920ABC2D9BB04A809A5EAD0CE009E025" indent="up1"><enum>(iii)</enum><text>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.</text></subparagraph>
<subparagraph id="HB6550CAFD12E4B16B6F67E2A43AD221D" indent="up1"><enum>(iv)</enum><text>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.</text></subparagraph></paragraph>
<paragraph id="H06EAF6F2B6724683B52C697755024C7D" indent="up1"><enum>(3)</enum>
<subparagraph id="H2163051831684BB996E94C29288DB759" display-inline="yes-display-inline"><enum>(A)</enum><text>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.</text> </subparagraph>
<subparagraph id="H0C7063D80FDB4D94BB4D9A57D93FC5CC" indent="up1"><enum>(B)</enum><text>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—</text>
<clause id="HBBD9638E9BDD4428A1BBAF20FE3C1ECD"><enum>(i)</enum><text>to take affirmative action to abate the violation;</text></clause>
<clause id="H1A21019E26B844D68D1C1E4322A31B4F"><enum>(ii)</enum><text>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</text></clause>
<clause id="HA13B480B0B0D49CBBF8F76586BB0192A"><enum>(iii)</enum><text>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.</text></clause></subparagraph>
<subparagraph id="H38BD0B9F04BE4D899C2F5EE6B56A84EF" indent="up1"><enum>(C)</enum><text>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.</text></subparagraph></paragraph>
<paragraph id="HFF5EEBC725C641AD846FB214D4188566" indent="up1"><enum>(4)</enum><text>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—</text>
<subparagraph id="HFB155E57839649BD8E697F36A7C12286"><enum>(A)</enum><text>reinstatement with the same seniority status that the employee would have had, but for the discharge or discrimination;</text></subparagraph>
<subparagraph id="HE55F58E888B0422DA33F7666794A3BCE"><enum>(B)</enum><text>the amount of back pay, with interest; and</text></subparagraph>
<subparagraph id="HB58D09703DC546609990EA3B016A837C"><enum>(C)</enum><text>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.</text></subparagraph></paragraph>
<paragraph id="HE09DBDECC2B74B078DC45880C800E537" indent="up1"><enum>(5)</enum>
<subparagraph id="HAD8F4BC020454204B88D1E857F3F1042" display-inline="yes-display-inline"><enum>(A)</enum><text>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.</text></subparagraph></paragraph>
<paragraph id="HC4035CBFE68343C1897D8882C4802FB1" indent="up1"><enum>(B)</enum><text>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.</text></paragraph>
<paragraph id="HD6B8901AC58B405DB634508A7B48DE12" indent="up1"><enum>(6)</enum><text>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.</text></paragraph>
<paragraph id="H284C06E502A148508F14470A74B4513A" indent="up1"><enum>(7)</enum>
<subparagraph id="H7C6CD38815A94F97AB0B530E3F602490" display-inline="yes-display-inline"><enum>(A)</enum><text>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.</text></subparagraph>
<subparagraph id="HCE1C8EC6C77A4DA895629C6B27B51972" indent="up1"><enum>(B)</enum><text>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.</text> </subparagraph></paragraph> </subsection>
<subsection id="H21DB427B29564B9DB788BC49D8E44830"><enum>(c)</enum><text>Any nondiscretionary duty imposed by this section shall be enforceable in a mandamus proceeding brought under section 1361 of title 28, United States Code.</text></subsection>
<subsection id="H0A29A1C0A01A4B4BA3CA6317BCCDBE8A"><enum>(d)</enum>
<paragraph id="H566A95FF034E40EE9EB80C8BDDDF8A45" display-inline="yes-display-inline"><enum>(1)</enum><text>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.</text></paragraph>
<paragraph id="HE952FDC65FB0436793084D225FD32DFA" indent="up1"><enum>(2)</enum><text>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.</text></paragraph></subsection>
<subsection id="H498272253848429A90D438CD0601EB45"><enum>(e)</enum><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="HAA9126701DAA4CF6AF1944FF75FE4AB1"><enum>(f)</enum><text display-inline="yes-display-inline">Any employer receiving covered funds shall post notice of the rights and remedies provided under this section.</text></subsection></section>
<section id="HC961FB459A60442CBB00A107840435E5" display-inline="no-display-inline" section-type="subsequent-section"><enum>4508.</enum><header>No private right of action</header><text display-inline="no-display-inline">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.</text></section>
<section id="HB7D9380D968B4F5DB003B5B2B7DCF7AA"><enum>4509.</enum><header>Effective date</header><text display-inline="no-display-inline">This subtitle shall take effect on the designated transfer date.</text> </section> </subtitle>
<subtitle id="H75776DED962F4EDDA5F628B2C127C85A"><enum>F</enum><header>Transfer of Functions and Personnel; Transitional Provisions</header>
<section id="HCE1939CEC2054EC3AD74EACFBC7F3D3B"><enum>4601.</enum><header>Transfer of certain functions</header>
<subsection id="HDE008F1603464D7287B6EDB36F6086A2"><enum>(a)</enum><header>In general</header><text>Except as provided in subsection (b), consumer financial protection functions are transferred as follows:</text>
<paragraph id="H4E7AEFD1219B4E86A0F254A3714B3E35"><enum>(1)</enum><header>Board of governors</header>
<subparagraph id="H749D2F5DB189419DAF8EEF7201C54903"><enum>(A)</enum><header>Transfer of functions</header><text>All consumer financial protection functions of the Board of Governors are transferred to the Director.</text> </subparagraph>
<subparagraph id="H9F36B4CEC69B4D3BA02C598AFB63133B"><enum>(B)</enum><header>Board of governors’ authority</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="H7547EA2121234090B4332C60563FED00"><enum>(C)</enum><header>Retention of Consumer Advisory Council</header>
<clause id="H69A84B0BD8FD425FA37B3FEB4DA5D0B3"><enum>(i)</enum><header>Retention and continuation</header><text display-inline="yes-display-inline">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.</text></clause>
<clause id="HFC881990893040EBAE96D0F7E0563E09"><enum>(ii)</enum><header>Additional functions</header><text display-inline="yes-display-inline">In addition to the functions performed by the Consumer Advisory Council as of the designated transfer date, the Consumer Advisory Council shall—</text>
<subclause id="HF0C3ECF5997D487ABF3C5BB198CA76F3"><enum>(I)</enum><text>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;</text></subclause>
<subclause id="H5CE99F5D915448C2A39DB24A87731CFE"><enum>(II)</enum><text display-inline="yes-display-inline">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</text></subclause>
<subclause id="H38533776219A4C19BCAF71474DC4CB7A"><enum>(III)</enum><text>call for information and make recommendations in regard to consumer protection regulations.</text></subclause></clause>
<clause id="HF61F32735F66449297DCD3B921868092"><enum>(iii)</enum><header>Response to recommendations</header><text>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.</text></clause></subparagraph></paragraph>
<paragraph id="H4538AB7736D346F989B3511BA1F6214C"><enum>(2)</enum><header>Comptroller of the currency</header>
<subparagraph id="HBCD32838CC924AC9BDC24319EE4BA2FA"><enum>(A)</enum><header>Transfer of functions</header><text display-inline="yes-display-inline">All consumer financial protection functions of the Comptroller of the Currency are transferred to the Director.</text> </subparagraph>
<subparagraph id="H7B2BDA76E33D42A79F43C570C9872603"><enum>(B)</enum><header>Comptroller’s authority</header><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph>
<paragraph id="H6910101448F8437D9A3121E50EE341B3"><enum>(3)</enum><header>Director of the office of thrift supervision</header>
<subparagraph id="HD160B7F4C9DE4952AF1CFEA0CA7F1A3F"><enum>(A)</enum><header>Transfer of functions</header><text display-inline="yes-display-inline">All consumer financial protection functions of the Director of the Office of Thrift Supervision are transferred to the Director.</text> </subparagraph>
<subparagraph id="HE4FADD071974473B8E72221C2448BDD8"><enum>(B)</enum><header>Director’s authority</header><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph>
<paragraph id="H8FDBC78DFC6646BAA2A64E1AAAD0DAAB"><enum>(4)</enum><header>Federal deposit insurance corporation</header>
<subparagraph id="H9AF772957ABA4A219CBDA6D7C6DE470B"><enum>(A)</enum><header>Transfer of functions</header><text display-inline="yes-display-inline">All consumer financial protection functions of the Federal Deposit Insurance Corporation are transferred to the Director.</text> </subparagraph>
<subparagraph id="H55A1FF3FD3BD49D2B296404D780E6419"><enum>(B)</enum><header>Corporation’s authority</header><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph>
<paragraph id="HA2B899DD32BE4499AA8DC6EC0AB60FA0"><enum>(5)</enum><header>Federal trade commission</header>
<subparagraph id="HB9CE1D7EF4B54180A5B0185033EE9B38"><enum>(A)</enum><header>Transfer of functions</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="H4A1470ABBF31450BAE0259F875645C1E"><enum>(B)</enum><header>Federal Trade Commission authority</header><text display-inline="yes-display-inline">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.</text></subparagraph> </paragraph>
<paragraph id="H11B58F1E4B4142C68E5A6E5073DBD501"><enum>(6)</enum><header>National credit union administration</header>
<subparagraph id="H50817F56FEE242518C2DCA66CCE287A5"><enum>(A)</enum><header>Transfer of functions</header><text display-inline="yes-display-inline">All consumer financial protection functions of the National Credit Union Administration are transferred to the Director.</text> </subparagraph>
<subparagraph id="HCB002CB05A58471FB8D9B88312A9EBE1"><enum>(B)</enum><header>National credit union administration’s authority</header><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph>
<paragraph id="H2584E38165674ED98D431523B022FBDB"><enum>(7)</enum><header>Secretary of housing and urban development</header>
<subparagraph id="H6363B352B67343A6B0E0E05276C0DC59"><enum>(A)</enum><header>Transfer of functions</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="H394F11B9B0C343BBB651B9B78C401F70"><enum>(B)</enum><header>Secretary of hud’s authority</header><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph></subsection>
<subsection id="H1166E7C8BCC447AC90F9824F7C49A6F3"><enum>(b)</enum><header>Transfers of functions subject to enforcement authority remaining with transferor agencies</header><text display-inline="yes-display-inline">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).</text> </subsection>
<subsection id="HE4BC01763AD34B88B84CCDBF32D7CE80"><enum>(c)</enum><header>Termination of authority of transferor agencies To collect fees for consumer financial protection purposes</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="H66666D39DD5C455882DDE64F6CDC8C22"><enum>(d)</enum><header>Consumer financial protection functions defined</header><text display-inline="yes-display-inline">For purposes of this subtitle, the term <quote>consumer financial protection functions</quote> 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.</text> </subsection>
<subsection id="H02024F322E8349BCA470723205FEA1B4"><enum>(e)</enum><header>Effective date</header><text>Subsections (a) and (b) shall take effect on the designated transfer date.</text> </subsection></section>
<section id="H292C3974327144228EF338E640446D93" display-inline="no-display-inline" section-type="subsequent-section"><enum>4602.</enum><header>Designated transfer date</header><text display-inline="no-display-inline">The designated transfer date shall be 180 days after the date of enactment of this title.</text></section>
<section id="H6EA44E6C7F4B44B880582C904136E1E1"><enum>4603.</enum><header>Savings provisions</header>
<subsection id="HF9F2BC910F124EE0A0BA16C6F9DC66B2"><enum>(a)</enum><header>Board of governors</header>
<paragraph id="HAAF91B6621E6401994D901C0ED8CD132"><enum>(1)</enum><header>Existing rights, duties, and obligations not affected</header><text>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—</text>
<subparagraph id="H4F82FDE39D004268B189DCEC27556BFE"><enum>(A)</enum><text display-inline="yes-display-inline">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</text> </subparagraph>
<subparagraph id="H44875968915C4C3DAE226DC19C0F55C8"><enum>(B)</enum><text>existed on the day before the designated transfer date.</text> </subparagraph></paragraph>
<paragraph id="H503806F974A140CA8E561937906E9898"><enum>(2)</enum><header>Continuation of suits</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection>
<subsection id="H9305D6B53F8E4E97B742064519703135"><enum>(b)</enum><header>Federal deposit insurance corporation</header>
<paragraph id="H81E60905549842C89569D43EA4B3DB5C"><enum>(1)</enum><header>Existing rights, duties, and obligations not affected</header><text>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—</text>
<subparagraph id="H23E3043B7E094B7BB1263F6749505655"><enum>(A)</enum><text display-inline="yes-display-inline">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</text> </subparagraph>
<subparagraph id="H688AC0C75FFA4C42BCEC0847CFC5616E"><enum>(B)</enum><text>existed on the day before the designated transfer date.</text> </subparagraph></paragraph>
<paragraph id="HF173D516DDE447C9BAB10A4A5C7A0293"><enum>(2)</enum><header>Continuation of suits</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection>
<subsection id="H6FFC4A0B97F5458AB816834201B094CD"><enum>(c)</enum><header>Federal Trade Commission</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="H9AA71396F6D64170B07110B05EE8C42A"><enum>(1)</enum><text display-inline="yes-display-inline">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</text> </paragraph>
<paragraph id="HF577D954E4004E00A30147974F775537"><enum>(2)</enum><text>existed on the day before the designated transfer date.</text> </paragraph> </subsection>
<subsection id="H16A87278D4D54A51BB6DCD2F347A036C"><enum>(d)</enum><header>National credit union administration</header>
<paragraph id="H50D89163405F4D51B224B0C8BFF45BA8"><enum>(1)</enum><header>Existing rights, duties, and obligations not affected</header><text>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—</text>
<subparagraph id="H5A6DBE3F7407459CBFB9E688321AA5E8"><enum>(A)</enum><text display-inline="yes-display-inline">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</text> </subparagraph>
<subparagraph id="H48F5215C50B1496F981394E4E6D680B9"><enum>(B)</enum><text>existed on the day before the designated transfer date.</text> </subparagraph></paragraph>
<paragraph id="H2D9457A7F17640E986412ADF864A07DF"><enum>(2)</enum><header>Continuation of suits</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection>
<subsection id="H240DC855996A468B83A33CC984CF03D8"><enum>(e)</enum><header>Comptroller of the Currency</header>
<paragraph id="H572ECBACAD4F45588C9A280177C0EB70"><enum>(1)</enum><header>Existing rights, duties, and obligations not affected</header><text>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—</text>
<subparagraph id="H33A4056B597C4DB19C6E0C842903F7E3"><enum>(A)</enum><text display-inline="yes-display-inline">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</text> </subparagraph>
<subparagraph id="HA762436B3DC5494BA54B0011A148ABAD"><enum>(B)</enum><text>existed on the day before the designated transfer date.</text> </subparagraph></paragraph>
<paragraph id="H68E4942E46844FA385AA716BF78D2A7D"><enum>(2)</enum><header>Continuation of suits</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection>
<subsection id="H003F794D619141E3A19570BE0E4E5FE8"><enum>(f)</enum><header>Director of the office of thrift supervision</header>
<paragraph id="H1E0F469B6E2E4F219A08D319251A2D3F"><enum>(1)</enum><header>Existing rights, duties, and obligations not affected</header><text>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—</text>
<subparagraph id="H117BB8CD69AD4686B51BCED586256F70"><enum>(A)</enum><text display-inline="yes-display-inline">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</text> </subparagraph>
<subparagraph id="HAB3D55C07D80489FA21E64ABCE88D645"><enum>(B)</enum><text>that existed on the day before the designated transfer date.</text> </subparagraph></paragraph>
<paragraph id="HB2BA0881FDAC4BF98ADC153A45DE0688"><enum>(2)</enum><header>Continuation of suits</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection>
<subsection id="H34360B5D24844928BEC267D4C6AFF093"><enum>(g)</enum><header>Secretary of housing and urban development</header>
<paragraph id="HF1ADD2266B834182801F13169946847B"><enum>(1)</enum><header>Existing rights, duties, and obligations not affected</header><text display-inline="yes-display-inline">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—</text>
<subparagraph id="H1C5C3F1804314E2487853F1E806B3F65"><enum>(A)</enum><text display-inline="yes-display-inline">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</text> </subparagraph>
<subparagraph id="HEC8E298A487944C6B547D4E25599E809"><enum>(B)</enum><text>that existed on the day before the designated transfer date.</text> </subparagraph></paragraph>
<paragraph id="HF2CC9856F8434155AAA83F965D400BF0"><enum>(2)</enum><header>Continuation of suits</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection>
<subsection id="H9BA4D8503FE044A4A466D6AEDDC0E9E3"><enum>(h)</enum><header>Continuation of existing orders, regulations, determinations, agreements, and resolutions</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="H9A9CAB6BF313423A8F64930601D27FC9"><enum>(i)</enum><header>Identification of regulations continued</header><text display-inline="yes-display-inline">Not later than the designated transfer date, the Director—</text>
<paragraph id="H979DE5C21D834935B424E34A761E5469"><enum>(1)</enum><text display-inline="yes-display-inline">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</text> </paragraph>
<paragraph id="HC69273875F8C48E9A2FE831B90A073E9"><enum>(2)</enum><text>shall publish a list of such regulations in the Federal Register.</text> </paragraph></subsection>
<subsection id="HB5B95C9CAD1246A6962B0F5F292187FD"><enum>(j)</enum><header>Status of regulations proposed or not yet effective</header>
<paragraph id="H41493B27A8B34FFBB4238BE8931F9BE1"><enum>(1)</enum><header>Proposed regulations</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H53A39012DE664411A8BDBF2D0BA48FC2"><enum>(2)</enum><header>Regulations not yet effective</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection></section>
<section id="H848F4813EAC146B1815AB257B1CF3F99"><enum>4604.</enum><header>Transfer of certain personnel</header>
<subsection id="HC285D185A263460F8AC281FDEB2A7DEC"><enum>(a)</enum><header>In general</header>
<paragraph id="H7DDA353FEB7344C5B87BD7394FA583AB"><enum>(1)</enum><header>Certain federal reserve system employees transferred</header>
<subparagraph id="HBACAA113EFBC493785478890CDD1CEA7"><enum>(A)</enum><header>Identifying employees for transfer</header><text display-inline="yes-display-inline">The Director and the Board of Governors shall—</text>
<clause id="H8094DCAEE60343799C5F8CB3BFEC5543"><enum>(i)</enum><text display-inline="yes-display-inline">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</text> </clause>
<clause id="H3B0AFF5490F4469C8B0DAD0E382DCB6B"><enum>(ii)</enum><text display-inline="yes-display-inline">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.</text> </clause></subparagraph>
<subparagraph id="H248C305820A346D6840F4B183EA3D916"><enum>(B)</enum><header>Identified employees transferred</header><text>All employees of the Board of Governors identified under subparagraph (A)(ii) shall be transferred to the Agency for employment.</text> </subparagraph>
<subparagraph id="HA183044FEA1D467492CCCECE57EF768C"><enum>(C)</enum><header>Federal reserve bank employees</header><text>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).</text> </subparagraph></paragraph>
<paragraph id="HB98E7C69567947958ADEC3D7AC791182"><enum>(2)</enum><header>Certain fdic employees transferred</header>
<subparagraph id="H7A1641B700E64C1F9CCDD14FE1BEF6EA"><enum>(A)</enum><header>Identifying employees for transfer</header><text display-inline="yes-display-inline">The Director and the Board of Directors of the Federal Deposit Insurance Corporation shall—</text>
<clause id="H28EAE67CAF01485C96D08FF1FD6CB5B4"><enum>(i)</enum><text display-inline="yes-display-inline">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</text> </clause>
<clause id="H0B84247F17234B1BAF6D0A938A5AE165"><enum>(ii)</enum><text display-inline="yes-display-inline">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.</text> </clause></subparagraph>
<subparagraph id="H48060CB35C7044409097D3345E29E1F6"><enum>(B)</enum><header>Identified employees transferred</header><text>All employees of the Corporation identified under subparagraph (A)(ii) shall be transferred to the Agency for employment.</text> </subparagraph></paragraph>
<paragraph id="HECA9DE98088F4CF5A8EAF4F618D0C530"><enum>(3)</enum><header>Certain ncua employees transferred</header>
<subparagraph id="H868EAB503F92423999A218D09BA44C9B"><enum>(A)</enum><header>Identifying employees for transfer</header><text display-inline="yes-display-inline">The Director and the National Credit Union Administration Board shall—</text>
<clause id="H43F3D6FB1C9B497EAA075711786C87A3"><enum>(i)</enum><text display-inline="yes-display-inline">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</text> </clause>
<clause id="H5ACF62540D7C4BF3A7B741DF6BEE237E"><enum>(ii)</enum><text display-inline="yes-display-inline">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.</text> </clause></subparagraph>
<subparagraph id="H29F0141D40BA412A85E9E9BF656589A9"><enum>(B)</enum><header>Identified employees transferred</header><text>All employees of the National Credit Union Administration identified under subparagraph (A)(ii) shall be transferred to the Agency for employment.</text> </subparagraph></paragraph>
<paragraph id="H69EFB39F1F3649048F610A5E20FD793C"><enum>(4)</enum><header>Certain hud employees transferred</header>
<subparagraph id="HEA38FDE18CC645B286AAF7BA52944340"><enum>(A)</enum><header>Identifying employees for transfer</header><text display-inline="yes-display-inline">The Director and the Secretary of Housing and Urban Development shall—</text>
<clause id="H58E3EB9480BF42ABA31DE5BA8FA49787"><enum>(i)</enum><text display-inline="yes-display-inline">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</text> </clause>
<clause id="H041E891379D54F63AF67C9B4AB93A5B8"><enum>(ii)</enum><text display-inline="yes-display-inline">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.</text> </clause></subparagraph>
<subparagraph id="H556708B5885C4D65A0BCE7CFC146D888"><enum>(B)</enum><header>Identified employees transferred</header><text display-inline="yes-display-inline">All employees of the Department of Housing and Urban Development identified under subparagraph (A)(ii) shall be transferred to the Agency for employment.</text> </subparagraph></paragraph>
<paragraph id="HFFF6A15DB5E741E285E344D19C483FFC"><enum>(5)</enum><header>Appointment authority for excepted service and senior executive service transferred</header>
<subparagraph id="H976BA2BEDF1542F79E7E825884045D17"><enum>(A)</enum><header>In general</header><text>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).</text> </subparagraph>
<subparagraph id="HD6B63D637B874B92B81675D630405DBC"><enum>(B)</enum><header>Declining transfers allowed</header><text>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).</text> </subparagraph></paragraph></subsection>
<subsection id="HBFA7DF937F3A4C528296D44675CB8C5D"><enum>(b)</enum><header>Timing of transfers and position assignments</header><text>Each employee to be transferred under this section shall—</text>
<paragraph id="H0F716BE287294214B1E4004B94CF5DEC"><enum>(1)</enum><text>be transferred not later than 90 days after the designated transfer date; and</text> </paragraph>
<paragraph id="H268DB1C627AA441DBB67B3C5845AA4E4"><enum>(2)</enum><text>receive notice of such employee’s position assignment not later than 120 days after the effective date of the employee’s transfer.</text> </paragraph></subsection>
<subsection id="H29D2232B852C41DEB1C475B2500BE676"><enum>(c)</enum><header>Transfer of function</header>
<paragraph id="H77EA1BEA088C4792A2C78D2F4AC5A12A"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph>
<paragraph id="H891DBED13C05436F8A9B4B49ADC1338F"><enum>(2)</enum><header>Priority of this title</header><text>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.</text> </paragraph></subsection>
<subsection id="H4C2F4D7E8C7F4141A6CED1B794469EDB"><enum>(d)</enum><header>Equal status and tenure positions</header>
<paragraph id="HAFD8AE38BCB4485E8F7B6EDE2C763CF7"><enum>(1)</enum><header>Employees transferred from fdic, ftc, hud, ncua, occ, and ots</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H52A0934737344C5D9F57D30D44DF5A71"><enum>(2)</enum><header>Employees transferred from the federal reserve system</header>
<subparagraph id="HF431869DE4B54483B368ACBFF96082C3"><enum>(A)</enum><header>Comparability</header><text>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.</text> </subparagraph>
<subparagraph id="H8972249820E8491982C92674ADCCB93F"><enum>(B)</enum><header>Service periods credited</header><text>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.</text> </subparagraph></paragraph></subsection>
<subsection id="H0A9791A2E5F54C06A5757415F104C7ED"><enum>(e)</enum><header>Additional certification requirements limited</header><text>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.</text> </subsection>
<subsection id="H9E572B9DEC8349778BD2B79112E002DB"><enum>(f)</enum><header>Personnel actions limited</header>
<paragraph id="H739999EF0F80427CB32CE86915701258"><enum>(1)</enum><header>5-year protection</header><text>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.</text> </paragraph>
<paragraph id="H71E98B9D48274B7A96BA23942633ED91"><enum>(2)</enum><header>Exceptions</header><text>Paragraph (1) shall not be construed as limiting the right of the Director to—</text>
<subparagraph id="H74724F02E1754A958AAF872D767E4FD5"><enum>(A)</enum><text>separate an employee for cause or for unacceptable performance;</text> </subparagraph>
<subparagraph id="HB8B4F1E9E72B4E8693C428C7D2BCB657"><enum>(B)</enum><text>terminate an appointment to a position excepted from the competitive service because of its confidential policy-making, policy-determining, or policy-advocating character; or</text> </subparagraph>
<subparagraph id="H22D797B2A47140FB947FFBA65046AB71"><enum>(C)</enum><text>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.</text> </subparagraph></paragraph></subsection>
<subsection id="H08E56A81589443CFA26E20E873CBA13C"><enum>(g)</enum><header>Pay</header>
<paragraph id="HF541FBC90F6941559581DE52D509E0C2"><enum>(1)</enum><header>1-year protection</header><text>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.</text> </paragraph>
<paragraph id="HE2C90E851608474E881853840B19E266"><enum>(2)</enum><header>Exceptions</header><text>Paragraph (1) shall not be construed as limiting the right of the Agency to reduce the rate of basic pay of a transferred employee—</text>
<subparagraph id="H9D779B41C7504E9786BE0DA7192E0260"><enum>(A)</enum><text>for cause;</text> </subparagraph>
<subparagraph id="H5AB06CCDBE3B4B13B89A2FF83BB6DCE3"><enum>(B)</enum><text>for unacceptable performance; or</text> </subparagraph>
<subparagraph id="HF7A3ADC4B38D434EBF55362092C64CB2"><enum>(C)</enum><text>with the employee’s consent.</text> </subparagraph></paragraph>
<paragraph id="HCBB4BECB0DB64BCB8200DC659941F82B"><enum>(3)</enum><header>Protection only while employed</header><text>Paragraph (1) applies to a transferred employee only while that employee remains employed by the Agency.</text> </paragraph>
<paragraph id="H9B6C3C851DAF47B0843414E2AF9D624B"><enum>(4)</enum><header>Pay increases permitted</header><text>Paragraph (1) shall not be construed as limiting the authority of the Agency to increase a transferred employee’s pay.</text> </paragraph></subsection>
<subsection id="H309123EBA55E4365B69BCFD49E21364A"><enum>(h)</enum><header>Reorganization</header>
<paragraph id="H55FD47BBB60E4938A5223ABC5F3D81E9"><enum>(1)</enum><header>Between 1st and 3rd year</header>
<subparagraph id="H4F885EF3EE294653B8590671047CF3D6"><enum>(A)</enum><header>In general</header><text>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—</text>
<clause id="HF31FD7AF09E74B0D875A59F2DB06BF1C"><enum>(i)</enum><text>that reorganization shall be deemed a <quote>major reorganization</quote> for purposes of affording affected employees retirement under section 8336(d)(2) or 8414(b)(1)(B) of title 5, United States Code;</text> </clause>
<clause id="H79FA17B721F3406481F1AC425211DD47"><enum>(ii)</enum><text>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</text> </clause>
<clause id="HA74FE232247645FD9689D974F750031B"><enum>(iii)</enum><text>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—</text>
<subclause id="H361D19CAF09840E3B5C2ECDBAF2E596B"><enum>(I)</enum><text>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;</text> </subclause>
<subclause id="H52EF14457DBC447C8C42CE92662328B8"><enum>(II)</enum><text>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</text> </subclause>
<subclause id="HEFEAA72747E545AC924EBD213EBF54DF"><enum>(III)</enum><text>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.</text> </subclause></clause></subparagraph>
<subparagraph id="H436718CA01194844B787604451B821D0"><enum>(B)</enum><header>Service credit for reductions in force</header><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph>
<paragraph id="HDB5AC094D7CA4468BE551B1D5FACFFD7"><enum>(2)</enum><header>After 3rd year</header>
<subparagraph id="H31C5EE05983B468B964EABAABA42D7F0"><enum>(A)</enum><header>In general</header><text>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.</text> </subparagraph>
<subparagraph id="H29059418FDE64D84B6ADFFD5A9412EE4"><enum>(B)</enum><header>Service credit for reductions in force</header><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph></subsection>
<subsection id="H1DC9EAE0FAD24381916D91BB86532A61"><enum>(i)</enum><header>Benefits</header>
<paragraph id="H1E80EDECE8934875B8952D6A8E9F0AA3"><enum>(1)</enum><header>Retirement benefits for transferred employees</header>
<subparagraph id="H21F643080D8749BC97CD584BAF9F3FA6"><enum>(A)</enum><header>In general</header>
<clause id="HF7A40B45DE034043B4B48473272FE52D"><enum>(i)</enum><header>Continuation of existing retirement plan</header><text>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.</text> </clause>
<clause id="HA6B61709BBBB4931BB97EE9871B36434"><enum>(ii)</enum><header>Employer’s contribution</header><text>The Director shall pay any employer contributions to the existing retirement plan of each transferred employee as required under that plan.</text> </clause></subparagraph>
<subparagraph id="H4D4601340CB7403F967BA83ED00BAD8D"><enum>(B)</enum><header>Option for employees transferred from federal reserve system to be subject to federal employee retirement program</header>
<clause id="H0ADDDBA822DA4728AC4B05012CEC4561"><enum>(i)</enum><header>Election</header><text>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.</text> </clause>
<clause id="HFA2E8E3F80554451915A6757E3860666"><enum>(ii)</enum><header>Effective date of coverage</header><text>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.</text> </clause></subparagraph>
<subparagraph id="H432A966F8AA94C01BA3A28AB9977C3E0"><enum>(C)</enum><header>Agency participation in federal reserve system retirement plan</header>
<clause id="HDDDA9A669F684E48BA87799619D0718C"><enum>(i)</enum><header>Separate account in federal reserve system retirement plan established</header><text>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).</text> </clause>
<clause id="H32E8FEB911B1420CA0C864F4E09476EA"><enum>(ii)</enum><header>Funds attributable to transferred employees remaining in federal reserve system retirement plan transferred</header><text>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).</text> </clause>
<clause id="H7C7E9380B3C64E2EA8FDBC6BAC36606B"><enum>(iii)</enum><header>Employer contributions deposited</header><text>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).</text> </clause>
<clause id="H83B797CC67EC446C87154FD7C6F47483"><enum>(iv)</enum><header>Account administration</header><text>The Director shall administer the account established under clause (i) as a participating employer in the Federal Reserve System retirement plan.</text> </clause></subparagraph>
<subparagraph id="H68DC01922B0449A2877ED77AB53AB9E7"><enum>(D)</enum><header>Definitions</header><text>For purposes of this paragraph, the following definitions shall apply:</text>
<clause id="HA2A0F5D1305F43CB916020EE85B39F1A"><enum>(i)</enum><header>Existing retirement plan</header><text>The term <quote>existing retirement plan</quote> 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.</text> </clause>
<clause id="H50FC0E43DBE843FCBF73A127F5D3B778"><enum>(ii)</enum><header>Federal employee retirement plan</header><text>The term <quote>Federal employee retirement program</quote> means the retirement program for Federal employees established by chapters 83 and 84 of title 5, United States Code.</text> </clause></subparagraph></paragraph>
<paragraph id="H498EA91083044116869E0158D9761956"><enum>(2)</enum><header>Benefits other than retirement benefits for transferred employees</header>
<subparagraph id="H59FFE759D4464D6EAC246673A2F254C4"><enum>(A)</enum><header>During 1st year</header>
<clause id="H87BDE2B652FB44EE80F86A5E89C0AD02"><enum>(i)</enum><header>Existing plans continue</header><text>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.</text> </clause>
<clause id="H2CDB3A466F114EBD8E6A5B356F7A6141"><enum>(ii)</enum><header>Employer’s contribution</header><text>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.</text> </clause></subparagraph>
<subparagraph id="H2E4E8690E5A44C78B1A03B007CB6F926"><enum>(B)</enum><header>Dental, vision, or life insurance after 1st year</header><text>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—</text>
<clause id="H6400A837FBE34833A1E883484B2F104E"><enum>(i)</enum><text>the enhanced dental benefits established by chapter 89A of title 5, United States Code;</text> </clause>
<clause id="H91565141E64149A48DE967670FA9259A"><enum>(ii)</enum><text>the enhanced vision benefits established by chapter 89B of title 5, United States Code; and</text> </clause>
<clause id="HF595DC8282B444958A662398D7538F54"><enum>(iii)</enum><text>the Federal Employees Group Life Insurance Program established by chapter 87 of title 5, United States Code, without regard to any requirement of insurability.</text> </clause></subparagraph>
<subparagraph id="HF22160EFB4D3469E9B0AEDEB75CAFCA7"><enum>(C)</enum><header>Long-term care insurance after 1st year</header><text>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).</text> </subparagraph>
<subparagraph id="HB025AE95CAC046A3BDEC074EC214E646"><enum>(D)</enum><header>Employee’s contribution</header><text>An individual enrolled in the Federal Employees Health Benefits program shall pay any employee contribution required by the plan.</text> </subparagraph>
<subparagraph id="H5D1D2EB608C1426585179AFD56D72CEB"><enum>(E)</enum><header>Additional funding</header><text>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.</text> </subparagraph>
<subparagraph id="H90076289E3E54CD2BCFEC98E0DA01673"><enum>(F)</enum><header>Credit for time enrolled in other plans</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="H66C4A0EF2BE3452C8CE9911F5CBA4DB0"><enum>(G)</enum><header>Special provisions to ensure continuation of life insurance benefits</header>
<clause id="H7FE4C0AA0284406781ECCDEF236FA9F4"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </clause>
<clause id="H56FFFDC0218D4E2399BA018A6DF19106"><enum>(ii)</enum><header>Employee’s contribution</header><text>An individual enrolled in a life insurance plan under this clause shall pay any employee contribution required by the plan.</text> </clause>
<clause id="HDC830A9289844BE88037E98718799356"><enum>(iii)</enum><header>Additional funding</header><text>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).</text> </clause>
<clause id="HE405C34162044CC9AEB6F4646BAE175C"><enum>(iv)</enum><header>Credit for time enrolled in other plans</header><text display-inline="yes-display-inline">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.</text> </clause></subparagraph></paragraph></subsection>
<subsection id="HAF275DA6F3D74B8E97C7715D76834D5A"><enum>(j)</enum><header>Implementation of uniform pay and classification system</header><text>Not later than 2 years after the designated transfer date, the Director shall implement a uniform pay and classification system for all transferred employees.</text> </subsection>
<subsection id="HC942A25C583741B6BA41B012651DC265"><enum>(k)</enum><header>Equitable treatment</header><text>In administering the provisions of this section, the Director—</text>
<paragraph id="HB810AB1D396F4FAAA342FE834AB8BA7D"><enum>(1)</enum><text display-inline="yes-display-inline">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</text> </paragraph>
<paragraph id="H6E910B32B0C94807AAF115815B984D1B"><enum>(2)</enum><text display-inline="yes-display-inline">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.</text> </paragraph></subsection>
<subsection id="H00694E02C051450FB4C2D24E3D39DDA3"><enum>(l)</enum><header>Implementation</header><text>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.</text> </subsection></section>
<section id="H1963B6513CCF4B6EB026495CC047F04E"><enum>4605.</enum><header>Incidental transfers</header>
<subsection id="H856FE7BA20C44255B876A65A5894B272"><enum>(a)</enum><header>Incidental transfers authorized</header><text>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.</text> </subsection>
<subsection id="HAB39263FCFCF45B1B8EF605882972C9F"><enum>(b)</enum><header>Sunset</header><text>The authority provided in this section shall terminate 5 years after the date of the enactment of this title.</text> </subsection></section>
<section id="HB8913F2979BF444A95D2EA0AA9068E17"><enum>4606.</enum><header>Interim authority of the Secretary</header>
<subsection id="H137D86E1134D4FAEA18CF4CFA7021A41"><enum>(a)</enum><header>In general</header><text>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.</text> </subsection>
<subsection id="H3188A266C869483B87936A237631B236"><enum>(b)</enum><header>Interim administrative services by the department of the treasury</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="H2D102D6F4FBF499195CEE21EBF9CE993"><enum>(c)</enum><header>Interim funding for the department of the treasury</header><text>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.</text> </subsection></section> </subtitle>
<subtitle id="H0D279020439F44608161696565F79F22"><enum>G</enum><header>Regulatory Improvements</header>
<section display-inline="no-display-inline" id="HE2526DE24E694A6A801E4EA939399F6D"><enum>4701.</enum><header>Collection of deposit account data</header>
<subsection id="H7F1BF73E4DDF45A7AC035DBCABBA6006"><enum>(a)</enum><header>Purpose</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="HE74224A1719A4FA49DA0E5B9FE822769"><enum>(b)</enum><header>In general</header>
<paragraph id="H00B08302008244859AFE06839FE99992"><enum>(1)</enum><header>Records required</header><text>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.</text> </paragraph>
<paragraph id="HED8FBBE2A642451B90CB83C61D41DE3E"><enum>(2)</enum><header>Geo-coded addresses of depositors</header><text>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.</text> </paragraph>
<paragraph id="HA1E9B26AC7B94FDE9A3B91F1E0D3058F"><enum>(3)</enum><header>Identification of depositor type</header><text>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.</text> </paragraph>
<paragraph id="HAC7AF9B5947C4EC984E9FA8CD2403A41"><enum>(4)</enum><header>Public availability</header>
<subparagraph id="H38E22453692048D99E33AEFF54EA07DC"><enum>(A)</enum><header>In general</header><text>The following information shall be publicly available on an annual basis—</text>
<clause id="H31F8F06331E84C489DA74904F0FFE810"><enum>(i)</enum><text>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;</text> </clause>
<clause id="H4E21CC2D493C4FC9AA132D9E05739C65"><enum>(ii)</enum><text>the type of deposit account including whether the account was a checking or savings account; </text> </clause>
<clause id="H00B63DA086DE4D7F91FB8D2D0C5A6AFE"><enum>(iii)</enum><text>data on the number and dollar amounts of the accounts, presented by census tract location of the residential and commercial customers; and</text> </clause>
<clause id="HFB234C59C74C479CB90C1A447BDDBA36"><enum>(iv)</enum><text display-inline="yes-display-inline">any other data deemed appropriate by the Director.</text> </clause></subparagraph>
<subparagraph id="HD048721A39484932A252588D3DBCD79B"><enum>(B)</enum><header>Protection of identity</header><text>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.</text> </subparagraph></paragraph></subsection>
<subsection id="H0D49AC1936C949E3A0B995AE334409D5"><enum>(c)</enum><header>Availability of information</header>
<paragraph id="HD082D6C300A7465C881CA209E39B6BC6"><enum>(1)</enum><header>Submission to agencies</header><text>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.</text> </paragraph>
<paragraph id="HAA899D29021540C5A9A49B7A4C405059"><enum>(2)</enum><header>Availability of information</header><text>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.</text> </paragraph></subsection>
<subsection id="HA72610D787624695B42243911B2EC79E"><enum>(d)</enum><header>Agency use</header><text>The Director—</text>
<paragraph id="H599DBA91EFF04262B80F2F8249D8EEEF"><enum>(1)</enum><text>shall assess the distribution of residential and commercial accounts at such financial institution across income and minority level of census tracts; and</text> </paragraph>
<paragraph id="HA2A4412EFF394DA8A490EE70C0E976A8"><enum>(2)</enum><text>may use the data for any other purpose as permitted by law.</text> </paragraph></subsection>
<subsection id="H5C9A1738232D44F589ADE451E4CB5B1F"><enum>(e)</enum><header>Regulations and guidance</header>
<paragraph id="H10814E85A76B470DAF6ABC2F3FB383B3"><enum>(1)</enum><header>In general</header><text>The Director shall prescribe such regulations and issue guidance as may be necessary to carry out, enforce, and compile data pursuant to this section.</text> </paragraph>
<paragraph id="HE8C4B9B997FF48D481FBB8E98CB320AE"><enum>(2)</enum><header>Data compilation regulations</header><text>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.</text> </paragraph></subsection>
<subsection id="H35D8DF71DF5D4DA8B4719BD1989730FD"><enum>(f)</enum><header>Definitions</header><text>For purposes of this section, the following definitions shall apply:</text>
<paragraph id="H0BF241BB54E4401A9E3E401BDA8023E1"><enum>(1)</enum><header>Agency</header><text>The term <quote>Agency</quote> means the Consumer Financial Protection Agency.</text> </paragraph>
<paragraph id="H0358340A51784046AB16571ECA9270C8"><enum>(2)</enum><header>Credit union</header><text>The term <quote>credit union</quote> 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).</text> </paragraph>
<paragraph id="HDF9E76A1284F44A8AE26EE0F8C3BE354"><enum>(3)</enum><header>Deposit account</header><text>The term <quote>deposit account</quote> includes any checking account, savings account, credit union share account, and other type of account as defined by the Director.</text> </paragraph>
<paragraph id="H97519FFD4492406D8B4B5B02401007A5"><enum>(4)</enum><header>Director</header><text>The term <quote>Director</quote> means the Director of the Agency.</text> </paragraph>
<paragraph id="HC94D102FA3B6462DB9441A7A24934F45"><enum>(5)</enum><header>Federal banking agency</header><text>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 <quote>Federal banking agencies</quote> means all of those agencies.</text> </paragraph>
<paragraph id="H6D45AE5481574DE38465C3AB44260584"><enum>(6)</enum><header>Financial institution</header><text>The term <quote>financial institution</quote>—</text>
<subparagraph id="H3EAD776C07924283BA3C11D38B81D0D5"><enum>(A)</enum><text>has the meaning given to the term <quote>insured depository institution</quote> in section 3(c)(2) of the Federal Deposit Insurance Act; and</text> </subparagraph>
<subparagraph id="H960B60CFD43F409DB5C5CF9F9532E092"><enum>(B)</enum><text>includes any credit union.</text> </subparagraph></paragraph></subsection>
<subsection id="HBC185BF83F104E6A8296BA72A1D92CBD"><enum>(g)</enum><header>Effective date</header><text>This section shall take effect on the designated transfer date.</text> </subsection></section>
<section id="H830BB6AECF4A46A5AD9488C1BC2E8DDD"><enum>4702.</enum><header>Small business data collection</header>
<subsection id="HE2BB77A064F44051BC92222FFE6EDFEC"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">The Equal Credit Opportunity Act (15 U.S.C. 1691 et seq.) is amended by inserting after section 704A the following new section:</text>
<quoted-block display-inline="no-display-inline" id="HA168860DD41D4D8E943455CE6256A0A8" style="USC">
<section id="H846C76504AA048FE85DB52E17F9FE8E2"><enum>704B.</enum><header>Small business loan data collection</header>
<subsection id="H607B933C035C47DFBF21C1CBDB9CA6E3"><enum>(a)</enum><header>Purpose</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="H681C3CBFB53244B4A92812AA1E9900B3"><enum>(b)</enum><header>In general</header><text>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—</text>
<paragraph id="H1683E2552C25446C9C2156804ACC226D"><enum>(1)</enum><text>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</text> </paragraph>
<paragraph id="H382EAA4E29F34451A8FDF9317001C047"><enum>(2)</enum><text>maintain a record of the responses to such inquiry separate from the application and accompanying information.</text> </paragraph></subsection>
<subsection id="H30D9D390BC844263803ACBF9DE0103B6"><enum>(c)</enum><header>Right to refuse</header><text>Any applicant for credit may refuse to provide any information requested pursuant to subsection (b) in connection with any application for credit.</text> </subsection>
<subsection id="HE6537A6F93D3474B98D1094AE506E6C0"><enum>(d)</enum><header>No access by underwriters</header>
<paragraph id="H1629A2726E784247B621FF225B0E2C75"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph>
<paragraph id="HEB84C1033FF649FE95E75EC485874439"><enum>(2)</enum><header>Exception</header><text>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.</text> </paragraph></subsection>
<subsection id="HBC0E1CC1340A451A98CB5E1961600B9F"><enum>(e)</enum><header>Form and manner of information</header>
<paragraph id="H319C67CB125E4098A746D56D5A9F52B5"><enum>(1)</enum><header>In general</header><text>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).</text> </paragraph>
<paragraph id="HC9E509871D294F2E91AF3F1D25C87542"><enum>(2)</enum><header>Itemization</header><text>Information compiled and maintained under paragraph (1) shall also be itemized in order to clearly and conspicuously disclose the following:</text>
<subparagraph id="H47F3A5FA8C054905A3F78C173943079F"><enum>(A)</enum><text>The number of the application and the date the application was received.</text> </subparagraph>
<subparagraph id="HF49E9155599943BAB9CB80014EA3F206"><enum>(B)</enum><text>The type and purpose of the loan or other credit being applied for.</text> </subparagraph>
<subparagraph id="H232C31858F0843D3A6E5A66DA9A0CF03"><enum>(C)</enum><text>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.</text> </subparagraph>
<subparagraph id="HC8FC66431F214303BDFAC5288C2F4C36"><enum>(D)</enum><text>The type of action taken with respect to such application and the date of such action.</text> </subparagraph>
<subparagraph id="H5CA591FBDDDF4CF78267F757858165CF"><enum>(E)</enum><text>The census tract in which is located the principal place of business of the small business loan applicant.</text> </subparagraph>
<subparagraph id="H3E710F8E2CF149488C72AB86A617BD33"><enum>(F)</enum><text>The gross annual revenue of the business in the last fiscal year of the small business loan applicant preceding the date of the application.</text> </subparagraph>
<subparagraph id="H6CA900896D1549B0BE600CBC3326592B"><enum>(G)</enum><text>The race, sex, and ethnicity of the principal owners of the business.</text> </subparagraph>
<subparagraph id="HE3193862D44F40E3B4B09318FF1A15AD"><enum>(H)</enum><text>Any additional data the Agency determines would aid in fulfilling the purposes of this section.</text> </subparagraph></paragraph>
<paragraph id="HBEAB0131C8204E6595AFB01893649CDC"><enum>(3)</enum><header>Inclusion of personally identifiable information prohibited</header><text>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.</text> </paragraph>
<paragraph id="HAEFE672BA06D4FCAB0E9027B7B8F186D"><enum>(4)</enum><header>Discretion to delete or modify publicly available data</header><text>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.</text> </paragraph></subsection>
<subsection id="H375A08D696E844A99EF641E49EA5893E"><enum>(f)</enum><header>Availability of information</header>
<paragraph id="HE74DAD0E929F40D4A9CCFDF13A2F3321"><enum>(1)</enum><header>Submission to agency</header><text>The data required to be compiled and maintained under this section by any financial institution shall be submitted annually to the Agency.</text> </paragraph>
<paragraph id="H093A31970E7F48F7A6E6AFE4B686447E"><enum>(2)</enum><header>Availability of information</header>
<subparagraph id="HABF117B9410340C098CC3574E685FC45"><enum>(A)</enum><header>In general</header><text>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.</text> </subparagraph>
<subparagraph id="H0C4AC292BA4C4C69891C4CF99EB5A44A"><enum>(B)</enum><header>Annual disclosure to the public</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="HEA56493C8A4D4BE697AAAB432EEC8F4D"><enum>(C)</enum><header>Procedures</header><text display-inline="yes-display-inline">The procedures for disclosing data compiled and maintained under this section to the public shall be determined by the Agency by regulation.</text> </subparagraph></paragraph>
<paragraph id="H1FF8E6909E86486790BDD2DD3CB3E9FE"><enum>(3)</enum><header>Compilation of aggregate data</header>
<subparagraph id="HD0572F5661AE426BA4480447644B278E"><enum>(A)</enum><header>In general</header><text>The Agency may, in the discretion of the Agency, compile for the Agency’s own use compilations of aggregate data.</text> </subparagraph>
<subparagraph id="H1A137CC434BA4212B93933A6AC42207E"><enum>(B)</enum><header>Public availability of aggregate data</header><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph></subsection>
<subsection id="HCCBEC80EFA3849DE884A67B29AA740F4"><enum>(g)</enum><header>Definitions</header><text>For purposes of this section, the following definitions shall apply:</text>
<paragraph id="HCC50D1B04DB2446997B09B93F683EF2C"><enum>(1)</enum><header>Financial institution</header><text>The term <quote>financial institution</quote> means any partnership, company, corporation, association (incorporated or unincorporated), trust, estate, cooperative organization, or other entity that engages in any financial activity.</text> </paragraph>
<paragraph id="HAE60D2B8E61E448093919CDE0013E881"><enum>(2)</enum><header>Minority-owned business</header><text>The term <quote>minority-owned business</quote> means a business—</text>
<subparagraph id="H5ADAD49516AA44ACBA797963E501BE13"><enum>(A)</enum><text>more than 50 percent of the ownership or control of which is held by 1 or more minority individuals; and</text> </subparagraph>
<subparagraph id="HBACC2E0BC1DC46708C92C4D290BDAF31"><enum>(B)</enum><text>more than 50 percent of the net profit or loss of which accrues to 1 or more minority individuals.</text> </subparagraph></paragraph>
<paragraph id="H3DF3414A2DA94F6A847527C710B968C1"><enum>(3)</enum><header>Women-owned business</header><text>The term <quote>women-owned business</quote> means a business—</text>
<subparagraph id="HEDC5D4350F3E4E45A424E38C89A6AD6F"><enum>(A)</enum><text>more than 50 percent of the ownership or control of which is held by 1 or more women; and</text> </subparagraph>
<subparagraph id="H69995F8397B140BBA81816DA9B81E9C1"><enum>(B)</enum><text>more than 50 percent of the net profit or loss of which accrues to 1 or more women.</text> </subparagraph></paragraph>
<paragraph id="H3CC51E1CAE004F40BC261166D6072E6A"><enum>(4)</enum><header>Minority</header><text>The term <quote>minority</quote> has the meaning given to such term by section 1204(c)(3) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.</text> </paragraph>
<paragraph id="HD309AEA063F042F1AFAC23F8A7566820"><enum>(5)</enum><header>Small business loan</header><text>The term ‘small business loan’ shall be defined by the Agency, which may take into account—</text>
<subparagraph id="HEE6836ABAD4B46769E46522173FF8B68"><enum>(A)</enum><text>the gross revenues of the borrower;</text> </subparagraph>
<subparagraph id="HC17ED4ED39BF4140AF8BA858CA350C87"><enum>(B)</enum><text>the total number of employees of the borrower;</text> </subparagraph>
<subparagraph id="H296E967B6B784187A70E72EBA0ED2691"><enum>(C)</enum><text>the industry in which the borrower has its primary operations; and</text> </subparagraph>
<subparagraph id="HFEAF4DE6EF6246388A5436C6ECD1E838"><enum>(D)</enum><text>the size of the loan.</text> </subparagraph></paragraph></subsection>
<subsection id="H56BA7DBDFB9B4C84B084AC7954FDE1AE"><enum>(h)</enum><header>Agency action</header>
<paragraph id="H42DC1DB7590B4CB8BCA68446FCE0246C"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph>
<paragraph id="H4358AA38EAC34BE38DD4213685539B2A"><enum>(2)</enum><header>Exceptions</header><text>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.</text> </paragraph>
<paragraph id="H7E480BD7F8274D36A4C3A5FAD4FA518C"><enum>(3)</enum><header>Guidance</header><text>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.</text> </paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H5B0830B3E6D145929E8EB9D70A4E9407"><enum>(b)</enum><header>Technical and conforming amendment</header><text display-inline="yes-display-inline">Section 701(b) of the Equal Credit Opportunity Act (15 U.S.C. 1691(b)) is amended—</text>
<paragraph id="H66E78D37B161435A90BE763721DA3F93"><enum>(1)</enum><text>by striking <quote>or</quote> after the semicolon at the end of paragraph (3);</text> </paragraph>
<paragraph id="H42BD0A37B5344F48AF331BBF7554C164"><enum>(2)</enum><text>by striking the period at the end of paragraph (4) and inserting <quote>; or</quote>; and</text> </paragraph>
<paragraph id="H39A86D2ACB674B3891974BBDE059BCAA"><enum>(3)</enum><text>by inserting after paragraph (4), the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H087A85FE88C3447680B38FC5B785C089" style="OLC">
<paragraph id="H97B19A825A7E4276A609B95818D1B0C1"><enum>(5)</enum><text display-inline="yes-display-inline">to make an inquiry under section 704B in accordance with the requirements of such section.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection id="H438E96FAC2FF44CC9A3ACB5B62A8DF68"><enum>(c)</enum><header>Clerical amendment</header><text display-inline="yes-display-inline">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:</text>
<quoted-block display-inline="no-display-inline" id="H17722DED5AC945CFB21CEB14FC4D5036" style="OLC">
<toc regeneration="no-regeneration">
<toc-entry level="section">704<enum-in-header>B</enum-in-header>. Small business loan data collection.</toc-entry> </toc> <after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H2AB0CA4DF9E1473C9970054A2E83AFF3"><enum>(d)</enum><header>Effective date</header><text display-inline="yes-display-inline">This section shall take effect on the designated transfer date.</text> </subsection></section>
<section id="H3EFDA935E7EE4E29A8274A6AE5BB3A04"><enum>4703.</enum><header>Annual financial autopsy</header>
<subsection id="HAC4756F17CB9443392FA28F2559BE3CF"><enum>(a)</enum><header>Study required</header><text display-inline="yes-display-inline">Not later than March 31 of each calendar year, the Director shall—</text>
<paragraph id="H5BAF480D9F774F57A94F3ED1F7ED5C93"><enum>(1)</enum><text display-inline="yes-display-inline">conduct a scientific sampling of foreclosures and bankruptcies during the previous calendar year in each State or territory of the United States; and</text> </paragraph>
<paragraph id="HF25828687A2D4169B2B3A735E85F859A"><enum>(2)</enum><text>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.</text> </paragraph></subsection>
<subsection id="HE372BEFCB8E144E0A83A5F726E2B9FD7"><enum>(b)</enum><header>Report</header><text>After the completion of each study required under subsection (a), the Director shall submit a report to the Congress containing—</text>
<paragraph id="H5B24B94EB71E472AB28BC5B2A77F1DFE"><enum>(1)</enum><text>any conclusions made by the Director in carrying out such study;</text> </paragraph>
<paragraph id="H1FEAAD2E66CB446B9B304CA9AC62FD93"><enum>(2)</enum><text display-inline="yes-display-inline">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</text> </paragraph>
<paragraph id="HE5370CF4C3DB4783BB62D4642C76080E"><enum>(3)</enum><text>any recommendations the Director has for legislation that would reduce the underlying causes of bankruptcies and foreclosures identified in such study.</text> </paragraph></subsection></section>
<section id="H01DA052D4BE24144BE85276B1132A4F3" display-inline="no-display-inline" section-type="subsequent-section"><enum>4704.</enum><header>Reporting of mortgage data by State</header>
<subsection id="H73327E5CF3B94B92B3CFB2AE99ED2762"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Section 104(a) of the Helping Families Save Their Homes Act of 2009 (division A of Public Law 111–22) is amended—</text>
<paragraph id="H10D50E3287854BD397B05C0D277E960A"><enum>(1)</enum><text>in paragraph (2), by striking <quote>resulting</quote> and inserting <quote>in each State that result</quote>;</text></paragraph>
<paragraph id="HCBEFA5E15DA44366826F04B4C5E8E656"><enum>(2)</enum><text>in paragraph (3), by inserting <quote>each State for</quote> after <quote>modifications in</quote>; and</text></paragraph>
<paragraph id="H381A71E28AD94705AB62B22F8426D3E2"><enum>(3)</enum><text>in paragraph (4), by inserting <quote>in each State</quote> after <quote>total number of loans</quote>.</text></paragraph></subsection>
<subsection id="H288BD184EF7D45188B28684060F2EBB9"><enum>(b)</enum><header>Conforming amendment</header><text display-inline="yes-display-inline">Section 104(b)(1)(A) of such Act is amended by adding at the end the following sentence: <quote>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.</quote>.</text> </subsection></section></subtitle>
<subtitle id="HF902343C93404860B58847B53CDB31C6"><enum>H</enum><header>Conforming Amendments</header>
<section id="HC6DDD294276044C9841EE7EF9727E291"><enum>4801.</enum><header>Amendments to the Inspector General Act of 1978</header>
<subsection id="HB8FACB40F2264DC0960F5D7B2CFFE1C9"><enum>(a)</enum><header>Establishment</header><text>Section 8G(a)(2) of the Inspector General Act of 1978 (5 U.S.C. App.) is amended by inserting <quote>the Consumer Financial Protection Agency,</quote> before <quote>the Consumer Product Safety Commission,</quote>.</text> </subsection>
<subsection id="HE4657C2942A54849A45D97B6EFBF6AB1"><enum>(b)</enum><header>Effective date</header><text>This section shall take effect on the date of the enactment of this title.</text> </subsection></section>
<section id="H7D2FF947BACE4B6196DF6B2E93045E71"><enum>4802.</enum><header>Amendments to the Privacy Act of 1974</header>
<subsection id="HC77E319AFFC84DC792B8E799627296B6"><enum>(a)</enum><header>Applicability</header><text>Section 552a of title 5, United States Code, is amended by adding at the end the following new subsection:</text>
<quoted-block id="H0728E01776454DF594C4D5646F711789" style="OLC">
<subsection id="HF11F8428F3974E689C5061A87C7C2CF2"><enum>(w)</enum><header>Applicability to consumer financial protection agency</header><text>Except as provided in the Consumer Financial Protection Agency Act of 2009, this section shall apply with respect to the Consumer Financial Protection Agency.</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H227DFC4CCBD84D47984086BA8B8BDBD0"><enum>(b)</enum><header>Effective date</header><text>This section shall take effect on the date of the enactment of this title.</text> </subsection></section>
<section id="HF61D755765544DCFA737907181D87A64"><enum>4803.</enum><header>Amendments to the Alternative Mortgage Transaction Parity Act of 1982</header>
<subsection id="H45529F3203D14E34A38C2DA08A6E49C0"><enum>(a)</enum><header>Section 803<enum-in-header>(1)</enum-in-header></header><text>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).</text> </subsection>
<subsection id="HC279EA94C7DC4E15BF49AE0C9BACA580"><enum>(b)</enum><header>Section 804<enum-in-header>(a)</enum-in-header></header><text>Section 804(a) of the Alternative Mortgage Transaction Parity Act of l982 (12 U.S.C. 3803(a)) is amended—</text>
<paragraph display-inline="no-display-inline" id="H48ED6D044F7F4DD69BC5E1E8BC71FF0A"><enum>(1)</enum><text display-inline="yes-display-inline">in paragraphs (1), (2), and (3), by inserting <quote>on or before the designated transfer date, as determined in section 4602 of the Consumer Financial Protection Agency Act of 2009</quote> after <quote>transactions made</quote> each place such term appears;</text> </paragraph>
<paragraph id="H95051BB57AD24ABDA8847FAAC79A2843"><enum>(2)</enum><text>in paragraph (2), by striking <quote>and</quote> at the end;</text> </paragraph>
<paragraph id="HB4894D92D35A4EEB8C33F22A46978B25"><enum>(3)</enum><text>in paragraph (3), by striking the period at the end and inserting <quote>; and</quote>; and</text> </paragraph>
<paragraph id="HE7ED9A7DEB224E5FB94BEE2D73B3C3A1"><enum>(4)</enum><text>by adding at the end the following new paragraph:</text>
<quoted-block id="HC1A66A6DDD9146F3BB90E4983A8E65F7" style="OLC">
<paragraph id="HA08A14C1B74144FBA2E3FB2AF78E4B4C"><enum>(4)</enum><text>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.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection id="HAB224F8B03984FDB9F8C8325D09F6D5B"><enum>(c)</enum><header>Section 804</header><text display-inline="yes-display-inline">Section 804 of the Alternative Mortgage Transaction Parity Act of l982 (12 U.S.C. 3803) is amended—</text>
<paragraph id="H50FD1D34FA664E0182E6D58F3E2A4068"><enum>(1)</enum><text>by striking subsection (c) and inserting the following new subsection:</text>
<quoted-block id="HD555E67DE3F841CA8A6F23A850CC630A" style="OLC">
<subsection id="H1BEB1A1587E343BDBE889F8DF3DBAAD8"><enum>(c)</enum><header>Effect of state law</header>
<paragraph id="H68CB2E24EDA64453892258E3678415D7"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph>
<paragraph id="H0C2087FDBBFC47789FC8B7D6E8906CAB"><enum>(2)</enum><header>Rule of construction</header><text>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.</text> </paragraph></subsection><after-quoted-block>; and</after-quoted-block></quoted-block> </paragraph>
<paragraph id="HD295222AAD10455DB1BCD471FD7160B7"><enum>(2)</enum><text>by adding at the end the following new subsection:</text>
<quoted-block id="HBC8C2ECF6991425CB69B0FA4A8B9CEF6" style="OLC">
<subsection id="HC8CC5CD777554D0F874D1783F90CA9FB"><enum>(d)</enum><header>Duties of Consumer Financial Protection Agency</header><text>The Consumer Financial Protection Agency shall—</text>
<paragraph id="H6DFAC7A361D64EC7A4AE1270D1062DDC"><enum>(1)</enum><text>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);</text> </paragraph>
<paragraph id="H2BD5F2EE2F86445888A4941074D6FE70"><enum>(2)</enum><text>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</text> </paragraph>
<paragraph id="HC5AFA1AAD3744ED0909316971FE3E6B0"><enum>(3)</enum><text>prescribe regulations under subsection (a)(4) after the designated transfer date, as determined under such Act.</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection id="H9A7F29D01C564C049AAB6ECA44DF5408"><enum>(d)</enum><header>Effective date and scope of application</header>
<paragraph id="H252DA6C73B4243C881EFA0162F55A96D"><enum>(1)</enum><header>Effective date</header><text display-inline="yes-display-inline">This section shall take effect on the designated transfer date.</text> </paragraph>
<paragraph id="H14CC7245C6194B28A1E0168B1AD157CF"><enum>(2)</enum><header>Scope of application</header><text>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.</text> </paragraph></subsection></section>
<section id="HBF647B051CC842958FE2A32513A1C23C"><enum>4804.</enum><header>Amendments to the Consumer Credit Protection Act</header>
<subsection id="H062D4F2E9390457EA64FD1CC00F51D5D"><enum>(a)</enum><header>Truth in Lending Act</header>
<paragraph id="H8ACCF8155B4B48AB83C0D90501F8CDEA"><enum>(1)</enum><header>Section 103</header><text>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:</text>
<quoted-block display-inline="no-display-inline" id="HA50454D4D5DB4D6E93DBBFF7D58CC5B7" style="OLC">
<subsection id="H3E79032F68674478AA8D52675FC3E0DA"><enum>(b)</enum><header>Agency definitions</header>
<paragraph id="H55BBBA98916B4865B14394F8F38C7102"><enum>(1)</enum><header>Board</header><text display-inline="yes-display-inline">The term <quote>Board</quote> means the <quote>Board of Governors of the Federal Reserve System</quote>.</text> </paragraph>
<paragraph id="H6A40992621EC409587019B74D809F548"><enum>(2)</enum><header>Agency</header><text display-inline="yes-display-inline">The term <quote>Agency</quote> means the Consumer Financial Protection Agency.</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H191869037C7947439BBB38147E5C17CE"><enum>(2)</enum><header>Universal amendment relating to Board of Governors of the Federal Reserve System</header>
<subparagraph id="HD5941E49A0674921BF42F94532AAE515"><enum>(A)</enum><header>In general</header><text>Except as provided in subparagraph (B), the Truth in Lending Act (15 U.S.C. 1601 et seq.) is amended by striking <quote>Board</quote> each place such term appears, including in chapters 4 and 5 relating to credit billing and consumer leases, and inserting <quote>Agency</quote>.</text> </subparagraph>
<subparagraph id="H12F6C2667104493BA1933C61948DBE63"><enum>(B)</enum><header>Exceptions</header><text display-inline="yes-display-inline">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 <quote>Board</quote> when used in reference to the Federal Deposit Insurance Corporation or the National Credit Union Administration.</text> </subparagraph></paragraph>
<paragraph id="HD67EAFC77F3146A2B2DDBFAAF3F842C0"><enum>(3)</enum><header>Section 105</header><text>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: <quote>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.</quote>.</text> </paragraph>
<paragraph id="HC28DF18323B24D08B9D1BE00D1BE0431"><enum>(4)</enum><header>Section 108</header><text>Section 108 of the Truth in Lending Act (15 U.S.C. 1607) is amended—</text>
<subparagraph id="HA5F41DD89AD3442B9A0C07D9A0DDC77A"><enum>(A)</enum><text>by striking subsection (a) and inserting the following new subsection:</text>
<quoted-block id="H02A3C6F79FD7410A89AD581711AD99F3" style="OLC">
<subsection id="HB3BC65C97F004347914FF9ED4E945A93"><enum>(a)</enum><header>Enforcing agencies</header><text>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:</text>
<paragraph id="H9FA0AD8A92D946B5A4FE0E0DCDF9AC4A"><enum>(1)</enum><text>Under section 8 of the Federal Deposit Insurance Act, in the case of—</text>
<subparagraph id="HC23031D5E55E43C0A75E67C8A2BBEDF2"><enum>(A)</enum><text display-inline="yes-display-inline">national banks, and Federal branches and Federal agencies of foreign banks, by the head of the agency responsible for chartering and regulating national banks;</text> </subparagraph>
<subparagraph id="HDD363B4ECA5D42B0A43C9F3A537C5586"><enum>(B)</enum><text>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;</text> </subparagraph>
<subparagraph id="H3976E5B188154E8CB704AE3496663732"><enum>(C)</enum><text display-inline="yes-display-inline">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</text> </subparagraph>
<subparagraph id="HD40EDA12F21347D59AD22FC232C8679F"><enum>(D)</enum><text>Federal savings associations and savings and loan holding companies, by the Director of the Office of Thrift Supervision.</text> </subparagraph></paragraph>
<paragraph id="HAD52E44B2E5B48C8A8B690A0CB2D98AB"><enum>(2)</enum><text>Under subtitle E of the Consumer Financial Protection Agency Act of 2009, by the Agency.</text> </paragraph>
<paragraph id="H2D5E7A0076FC486FAFA091CC5614BAEB"><enum>(3)</enum><text>Under the Federal Credit Union Act, by the head of the agency responsible for chartering and regulating Federal credit unions.</text> </paragraph>
<paragraph id="HB34290EB30CB49A19220D92D2A9B85CE"><enum>(4)</enum><text>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.</text> </paragraph>
<paragraph id="H378FB27E3E9B4D1F8A4EE9CE82FDEF93"><enum>(5)</enum><text>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.</text> </paragraph>
<paragraph id="H39F5CF1A3B1F4525A8FCFC0E2BA2A6B1"><enum>(6)</enum><text>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.</text> </paragraph></subsection><after-quoted-block>; and</after-quoted-block></quoted-block> </subparagraph>
<subparagraph id="H0F7E31513E454C7D996FBDB5EAA9805B"><enum>(B)</enum><text display-inline="yes-display-inline">by striking subsection (c) and inserting the following new subsection:</text>
<quoted-block id="H4837133416984C36A66F671C2E813739" style="OLC">
<subsection id="H47F84F92554640A3A024C8D97A033F22"><enum>(c)</enum><header>Overall enforcement authority of the Federal Trade Commission</header><text display-inline="yes-display-inline">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.</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subparagraph></paragraph>
<paragraph id="H3A81E47B631E4A0FB99A0FE2576BBB10"><enum>(5)</enum><header>Universal amendment relating to the Federal Trade Commission</header>
<subparagraph id="H37CCFE0EB27F457FB71B50846DEFDFBB"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">Except as provided in subparagraph (B) (and except for any insertion of <quote>Federal Trade Commission</quote> made by this subtitle), the Truth in Lending Act (15 U.S.C. 1601 et seq.) is amended by striking <quote>Federal Trade Commission</quote> each place such term appears and inserting <quote>Agency</quote>.</text> </subparagraph>
<subparagraph id="HEDF20683752748D88F8C59B1AB346429"><enum>(B)</enum><header>Exceptions</header><text display-inline="yes-display-inline">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)).</text> </subparagraph></paragraph>
<paragraph id="H69986DF8465F4065AE9F0E510E6C6B41"><enum>(6)</enum><header>Section 127</header><text>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:</text>
<quoted-block id="H53665FF5A3724C44B4F12C623C3A0BC0" style="OLC">
<subparagraph id="H4CD810ED7521480182D236E854F4E51E"><enum>(C)</enum><text>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: <quote>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].</quote> A creditor who is subject to this subparagraph shall not be subject to subparagraph (A) or (B).</text> </subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph>
<paragraph id="HE3D6C5C3270E4C8799B33B2532735FFF"><enum>(7)</enum><header>Section 129</header><text>Section 129(m) of the Truth in Lending Act (15 U.S.C. 1639(m)) is amended to read as follows:</text>
<quoted-block id="H3FAA977EA1004ED180229CBD68846DA3" style="OLC">
<subsection id="H189095BFFFD14EEF8BAF10BC13F27291"><enum>(m)</enum><header>Civil penalties in federal trade commission enforcement actions</header><text>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.</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph>
<paragraph id="HCD70EA4599C34D4388B45FDD90E9AE48"><enum>(8)</enum><header>Section 149</header><text display-inline="yes-display-inline">Section 149(b) of the Truth in Lending Act (15 U.S.C. 1665d(b)) is amended by inserting <quote>the Federal Trade Commission,</quote> after <quote>in consultation with</quote>. </text></paragraph></subsection>
<subsection id="H2CB186690AF046BC8DEFFCB4EB1BE4C1"><enum>(b)</enum><header>Fair Credit Reporting Act</header>
<paragraph id="H4F5700FDAC614EC7B5EFAFEDB7F000F6"><enum>(1)</enum><header>Section 603</header><text>Section 603 of the Fair Credit Reporting Act (15 U.S.C. 1681a) is amended—</text>
<subparagraph id="HA433E1A9DCD64D2B8FEEC3C436D72EC4"><enum>(A)</enum><text>by redesignating subsections (w) and (x) as subsections (x) and (y), respectively; and</text> </subparagraph>
<subparagraph id="H3D9FCC30458D46218A26ADB543926C72"><enum>(B)</enum><text>by inserting after subsection (v) the following new subsection:</text>
<quoted-block id="H82F54DBBA6F44242BCD7914B473A4713" style="OLC">
<subsection id="HE5E2C4EB82E848058DA893EC52CA2DF9"><enum>(w)</enum><header>Agency</header><text>The term <quote>Agency</quote> means the Consumer Financial Protection Agency.</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subparagraph></paragraph>
<paragraph id="H78D81E43CD7240C6871A0F8C9A90E745"><enum>(2)</enum><header>Universal amendments relating to the Federal Trade Commission</header><text display-inline="yes-display-inline">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 <quote>Federal Trade Commission</quote> made by this subtitle), the Fair Credit Reporting Act (15 U.S.C. 1681a) is amended—</text>
<subparagraph id="HCF7B4D19745A4393AFCE66F6781AB2D2"><enum>(A)</enum><text>by striking <quote>Federal Trade Commission</quote> each place such term appears and inserting <quote>Agency</quote>;</text> </subparagraph>
<subparagraph id="H9965847EDBC24048AAB1E67C770C5AA2"><enum>(B)</enum><text display-inline="yes-display-inline">by striking <quote>Commission</quote> each place such term appears (other than in connection with the term amended in subparagraph (A)) and inserting <quote>Agency</quote>; and</text> </subparagraph>
<subparagraph id="HAE11C0D007D74020AE2A61974CAD11C0"><enum>(C)</enum><text>by striking <quote>Federal banking agencies, the National Credit Union Administration, and the Commission shall jointly</quote> each place such term appears in sections 605(h)(2) and 623(a)(8)(A) and inserting <quote>Agency shall</quote>.</text> </subparagraph></paragraph>
<paragraph id="H4617A9CAB1D04DBF86FB18E0C97E3075"><enum>(3)</enum><header>Section 603</header><text>Section 603(k)(2) of the Fair Credit Reporting Act (15 U.S.C. 1681a(k)(2)) is amended by striking <quote>Board of Governors of the Federal Reserve System</quote> and inserting <quote>Agency</quote>.</text> </paragraph>
<paragraph id="HBBF0A6A4B3BC4318B4B2B811C1C86CD4"><enum>(4)</enum><header>Section 604</header><text>Subsection 604(g) of the Fair Credit Reporting Act (15 U.S.C. 1681b(g)) is amended—</text>
<subparagraph id="HEF5F7AF529014A93A476467C29C5F8A1"><enum>(A)</enum><text display-inline="yes-display-inline">by striking subparagraph (C) of paragraph (3) and inserting the following new subparagraph:</text>
<quoted-block id="HCBB0E477DC504E07B14CDE6BC2617EAC" style="OLC">
<subparagraph id="H1BFD9948C8284CC3B51529447ACBC9D1"><enum>(C)</enum><text>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).</text> </subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block> </subparagraph>
<subparagraph id="H6FA932DD74A54A9094A50D858FFA39B0"><enum>(B)</enum><text display-inline="yes-display-inline">by striking paragraph (5) and inserting the following new paragraph:</text>
<quoted-block id="HA3A1E44E6DA44A80A1E8316F35E100FC" style="OLC">
<paragraph id="HC09EE39F4F304375B938F7ED10595224"><enum>(5)</enum><header>Regulations required</header><text>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.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subparagraph></paragraph>
<paragraph id="H17B0017D16EF4C07A1215A238F74393B" display-inline="no-display-inline"><enum>(5)</enum><header>Section 609</header><text>Section 609(d)(1) of the Fair Credit Reporting Act (15 U.S.C. 1681g(d)(1)) is amended by inserting <quote>the Federal Trade Commission,</quote> after <quote>in consultation with</quote>.</text></paragraph>
<paragraph id="HCBAAEC18289B432785DC4601301944B1"><enum>(6)</enum><header>Section 611</header><text display-inline="yes-display-inline">Section 611(e) of the Fair Credit Reporting Act (15 U.S.C. 1681i(e)) is amended—</text>
<subparagraph id="HCED2EDA3665C4AA68CB09AAD76377473"><enum>(A)</enum><text display-inline="yes-display-inline">by amending paragraph (2) to read as follows:</text>
<quoted-block id="H2859CD3EFD4F4FD38855A29D57E2C9C9" style="OLC">
<paragraph id="HB0A954B12AAB4657B7CA812C33B46CAC"><enum>(2)</enum><header>Exclusion</header><text>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).</text> </paragraph><after-quoted-block>; and</after-quoted-block></quoted-block></subparagraph>
<subparagraph id="HE84C4C1AF39B463397FCB9F937E0685D" commented="no"><enum>(B)</enum><text display-inline="yes-display-inline">in the heading of paragraph (3) by inserting <quote><header-in-text level="paragraph" style="OLC">Consumer reporting</header-in-text></quote> before <header-in-text level="paragraph" style="OLC"><quote>agency</quote></header-in-text>.</text></subparagraph></paragraph>
<paragraph id="H93B4C70CF2764329B2E77AED86BE0782" display-inline="no-display-inline"><enum>(7)</enum><header>Section 615</header><text display-inline="yes-display-inline">Section 615 of the Fair Credit Reporting Act (15 U.S.C. 1681m) is amended—</text>
<subparagraph id="H3466C0729BE44C0784CEC46584E04DE6"><enum>(A)</enum><text>in subsection (d)(2)(B), by inserting <quote>the Federal Trade Commission,</quote> after <quote>in consultation with</quote>;</text></subparagraph>
<subparagraph id="H973427FF5CBF40BABDDB18590891B3B8"><enum>(B)</enum><text>in subsection (e)(1), by striking <quote>and the Commission</quote> and inserting <quote>the Federal Trade Commission, the Securities and Exchange Commission, and the Commodities Futures Trading Commission</quote>; and</text></subparagraph>
<subparagraph id="HB447C5D5FE96414899716C69185F847E"><enum>(C)</enum><text>by striking subparagraph (A) of subsection (h)(6) and inserting the following:</text>
<quoted-block id="H350242F447D64053BAFC3255F3F6493C" style="OLC">
<subparagraph id="H4E927E86B65F429BBA00DB4AEF7E894C"><enum>(A)</enum><header>Rules required</header><text>The Agency shall prescribe rules.</text> </subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph>
<paragraph id="H3C70A4FC6BF54D039DD519F1EB178900"><enum>(8)</enum><header>Section 621</header><text>Section 621 of the Fair Credit Reporting Act (15 U.S.C. 1681s) is amended—</text>
<subparagraph id="H81925B604A6144C386C1F5DF870EFDE3"><enum>(A)</enum><text>by striking subsection (a) and inserting the following new subsection:</text>
<quoted-block id="H5E9CE814B6504E44AE17B012C67DBB95" style="OLC">
<subsection id="HA3FCC1E4D4AB46BBBC886A00374B2C64"><enum>(a)</enum><header>Enforcement by Federal Trade Commission</header>
<paragraph id="H9FED267E540C4DC1A612A4578E33AF96"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HDDC89B81039F4CCD8829BB98222A0A46"><enum>(2)</enum><header>Civil money penalties</header>
<subparagraph id="H32EDD09C8A624595B781878FDB8A74B7"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="H000C8605D921413AB36B8963F9D2457D"><enum>(B)</enum><header>Factors in determining amount</header><text>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.</text> </subparagraph></paragraph>
<paragraph id="HDB337D744A3343869886A7343326E84B"><enum>(3)</enum><header>Exception</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection><after-quoted-block>;</after-quoted-block></quoted-block> </subparagraph>
<subparagraph id="H0038D2A5B0FE41DE845EDD2C3566E564"><enum>(B)</enum><text display-inline="yes-display-inline">by striking subsection (b) and inserting the following new subsection:</text>
<quoted-block id="HC6576D1373184FE3A8E8E40774AC5B6C" style="OLC">
<subsection id="H5FCBFAB6B13D4942B47B92852C16F693"><enum>(b)</enum><header>Enforcement by other agencies</header><text>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:</text>
<paragraph id="H6C1D76A5055945E9BFACF351E128AC59"><enum>(1)</enum><text>Under section 8 of the Federal Deposit Insurance Act, in the case of—</text>
<subparagraph id="HE5C389FA5E6943E0BE5DA0DA830A6E9A"><enum>(A)</enum><text>national banks, and Federal branches and Federal agencies of foreign banks, by the head of the agency responsible for chartering and regulating national banks;</text> </subparagraph>
<subparagraph id="H36637F61D20843E48AC871DA8F2308C0"><enum>(B)</enum><text>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;</text> </subparagraph>
<subparagraph id="H1069EE929317416CA45754ADABC71A75"><enum>(C)</enum><text display-inline="yes-display-inline">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</text> </subparagraph>
<subparagraph id="HF0950083FF354F43913AE83A75DE1EDA"><enum>(D)</enum><text>Federal savings associations and savings and loan holding companies, by the Director of the Office of Thrift Supervision.</text> </subparagraph></paragraph>
<paragraph id="HE18F7D06DD234E13BBF0AEBA12C0150E"><enum>(2)</enum><text>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.</text> </paragraph>
<paragraph id="HBF735E995E28421581066CDA6490CCF3"><enum>(3)</enum><text>Under the Federal Credit Union Act, by the National Credit Union Administration Board with respect to any Federal credit union.</text> </paragraph>
<paragraph id="H47B566EF068E4E63AADF4F046AFB0B74"><enum>(4)</enum><text>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.</text> </paragraph>
<paragraph id="HE0106FCE22874588A27C3E3CFDE16915"><enum>(5)</enum><text>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.</text> </paragraph>
<paragraph id="H474BB2DFAEAB48188EA55B630C56CAC0"><enum>(6)</enum><text>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.</text> </paragraph>
<paragraph id="H2F1C83DFCBAB498E8809A6146C7903FB"><enum>(7)</enum><text display-inline="yes-display-inline">Under the Commodity Exchange Act, with respect to a person subject to the jurisdiction of the Commodity Futures Trading Commission.</text> </paragraph>
<paragraph id="H1210D5859DE04AE3B6F22A01B4FA58CD"><enum>(8)</enum><text display-inline="yes-display-inline">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.</text> </paragraph><continuation-text continuation-text-level="subsection">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.</continuation-text></subsection><after-quoted-block>;</after-quoted-block></quoted-block> </subparagraph>
<subparagraph id="H965594FBF18F47B28C5F659CC821D0E2" display-inline="no-display-inline"><enum>(C)</enum><text>in paragraph (2) of subsection (c)—</text>
<clause id="H573E27FBEB72438D82B3D03EB62D8D6B"><enum>(i)</enum><text>by inserting <quote>the Agency and</quote> before <quote>the Federal Trade Commission</quote> in the first sentence;</text></clause>
<clause id="H5C7125FA7BA3449CB06FC878D5F44643"><enum>(ii)</enum><text>by inserting <quote>Agency and the Federal Trade</quote> after <quote>provide the</quote>; and</text></clause>
<clause id="H2D5DBC7D4C2349A4ADCAC07A29B0F5C7"><enum>(iii)</enum><text>by inserting <quote>Agency,</quote> before <quote>Federal Trade Commission</quote> in the second sentence;</text></clause></subparagraph>
<subparagraph id="H6BC9202DA83A487E8ABF485CC5CA6B2D" display-inline="no-display-inline"><enum>(D)</enum><text>in paragraph (4) of subsection (c)—</text>
<clause id="HD8574998272041978128870A213818AC"><enum>(i)</enum><text>by inserting <quote>Agency</quote>, before <quote>the Federal Trade Commission</quote>; and</text></clause>
<clause id="H78296E4F6CA04F94BA9BF20BDF26C553"><enum>(ii)</enum><text>inserting <quote>Agency, the Federal Trade</quote> after <quote>complaint of the</quote>;</text></clause></subparagraph>
<subparagraph id="HAA9A82D800B24A599816BD9E478B70DB"><enum>(E)</enum><text>in paragraph (2) of subsection (f), by inserting <quote>the Federal Trade Commission</quote> after <quote>in consultation with</quote>;</text></subparagraph>
<subparagraph id="H129702325A8D45B0AA319DF893B9A655" display-inline="no-display-inline"><enum>(F)</enum><text>by striking subsection (e) and inserting the following new subsection:</text>
<quoted-block id="H5887D46D6C20454582C6EB51542D1203" style="OLC">
<subsection id="H6ED2A7F95554402FAEF1B42AD98A1896"><enum>(e)</enum><header>Regulatory authority</header><text display-inline="yes-display-inline">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.</text> </subsection><after-quoted-block>; and</after-quoted-block></quoted-block></subparagraph>
<subparagraph id="H64DB78A544594A3D936880DDB4CB7D6C"><enum>(G)</enum><text>in the heading of subsection (g) by striking <quote><header-in-text level="subsection" style="OLC">FTC</header-in-text></quote>.</text></subparagraph> </paragraph>
<paragraph id="H8B04B5243F8B447281BA81A2BB3BA469"><enum>(8)</enum><header>Section 623</header><text>Section 623 of the Fair Credit Reporting Act (15 U.S.C. 1681s–2) is amended—</text>
<subparagraph id="H0E1CBB76A8424146B6676853391E66E1"><enum>(A)</enum><text>by amending subparagraph (a)(7)(D) to read as follows:</text>
<quoted-block id="HBAC01D1C2E4A411DBDE0F56686B41DEA" style="OLC">
<subparagraph id="H06551248DAAD4E5199197DC3C6362087"><enum>(D)</enum><header>Model disclosure</header>
<clause id="HBE5DC94798CA4851A4FC4F8F3C28EB85"><enum>(i)</enum><header>Duty of agency to prepare</header><text>The Agency shall prescribe a brief model disclosure a financial institution may use to comply with subparagraph (A), which shall not exceed 30 words.</text> </clause>
<clause id="H5F6309B2C1044A3C9C5F944A68EF5A92"><enum>(ii)</enum><header>Use of model not required</header><text>No provision of this paragraph shall be construed as requiring a financial institution to use any such model form prescribed by the Agency.</text> </clause>
<clause id="H2433D6A16B6E4FB993DABF2A8A79D1A7"><enum>(iii)</enum><header>Compliance using model</header><text>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.</text> </clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </subparagraph>
<subparagraph id="HD39A700726B041FA932CE2C4B2776501"><enum>(B)</enum><text>by amending subsection (e) to read as follows:</text>
<quoted-block id="H1EBE6919D10347A6839FAC9D345E5FE3" style="OLC">
<subsection id="HFF23D519C85E4E66AF2E7CC12DC976D1"><enum>(e)</enum><header>Accuracy guidelines and regulations required</header>
<paragraph id="HA80510FCF6E84946B8B22451D5AC7DC6"><enum>(1)</enum><header>Guidelines</header><text>The Agency shall, with respect to the entities that are subject to its enforcement authority under section 621—</text>
<subparagraph id="H17B9482043B542D49126491890C2DFEC"><enum>(A)</enum><text>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</text> </subparagraph>
<subparagraph id="HD96A3685AA1A4A8493A33164A9BDECFA"><enum>(B)</enum><text>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).</text> </subparagraph></paragraph>
<paragraph id="HAE07699EF27F4E4496E6DA3FB17A8FD6"><enum>(2)</enum><header>Criteria</header><text>In developing the guidelines required by paragraph (1)(A), the Agency shall—</text>
<subparagraph id="HB405086B446F4A6E9BCA475367CED4DD"><enum>(A)</enum><text>identify patterns, practices, and specific forms of activity that can compromise the accuracy and integrity of information furnished to consumer reporting agencies;</text> </subparagraph>
<subparagraph id="HF1A2370071EA4703BD71C16146FE9DCD"><enum>(B)</enum><text>review the methods (including technological means) used to furnish information relating to consumers to consumer reporting agencies;</text> </subparagraph>
<subparagraph id="H0148B78AE6A34DD79CA7CE95BDB335E5"><enum>(C)</enum><text>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</text> </subparagraph>
<subparagraph id="HBFFD67EBBA91407C81E77505AB4B0DA8"><enum>(D)</enum><text>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.</text> </subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subparagraph></paragraph> </subsection>
<subsection id="HD15AD0FD39EB4BC08906E6D27A78F996"><enum>(c)</enum><header>Equal Credit Opportunity Act</header>
<paragraph id="H17A84BA163DF4A64838BBDC21AB79E1B"><enum>(1)</enum><header>Section 701</header><text display-inline="yes-display-inline">Section 701 of the Equal Credit Opportunity Act (15 U.S.C. 1691) is amended by striking <quote>Board</quote> each place such term appears and inserting <quote>Agency</quote>.</text> </paragraph>
<paragraph id="HDEF12EDAB509448AB33765FABCF67476"><enum>(2)</enum><header>Section 702</header><text>Section 702(c) of the Equal Credit Opportunity Act (15 U.S.C. 1691a) is amended to read as follows:</text>
<quoted-block id="H5855AAA1CEA04949BFA9C5AA94E12846" style="OLC">
<subsection id="HDA387C89E7504CEC8A7E9402EC7EB48F"><enum>(c)</enum><text>The term <quote>Agency</quote> means the Consumer Financial Protection Agency.</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H856922CBCFB64D9D88ABFEC4086305F7"><enum>(3)</enum><header>Section 703</header><text display-inline="yes-display-inline">Section 703 of the Equal Credit Opportunity Act (15 U.S.C. 1691b) is amended—</text>
<subparagraph id="H2AFE12B025E74346A62753CAFAA1A4CA"><enum>(A)</enum><text>by striking subsection (b);</text> </subparagraph>
<subparagraph id="H12C9D5C4539348F9BE4687A80315DA09"><enum>(B)</enum><text>in subsection (a)—</text>
<clause id="H30874A4C5345480E945A69653BF35A3A"><enum>(i)</enum><text>by striking <quote>(1)</quote>; and</text> </clause>
<clause id="H1AD2638EB918479D88BF3507617AF045"><enum>(ii)</enum><text>by redesignating paragraphs (2), (3), (4), and (5) as subsections (b), (c), (d), and (e), respectively;</text> </clause></subparagraph>
<subparagraph id="H58F07071D4614E6D9CE18905C609EBE3"><enum>(C)</enum><text>in subsection (c) (as so redesignated)—</text>
<clause id="H9400B2C6546B47CE91581437988FCBD9"><enum>(i)</enum><text>by striking <quote>paragraph (2)</quote> and inserting <quote>subsection (b)</quote>; and</text> </clause>
<clause id="H2B610F0DCDF1430CA766CC55680EF53D"><enum>(ii)</enum><text display-inline="yes-display-inline">by striking <quote>such paragraph</quote> and inserting <quote>such subsection</quote>;</text> </clause></subparagraph>
<subparagraph id="H00546194C8EC45589D19C77ECF3C839D"><enum>(D)</enum><text>in subsection (d) (as so redesignated)—</text>
<clause id="HD9E97D4999804D0096D06A8EF58D6C32"><enum>(i)</enum><text>by striking <quote>subsection</quote> and inserting <quote>section</quote>;</text> </clause>
<clause id="H901A420DFF5947A18EE0C3D6720D6C97"><enum>(ii)</enum><text>by striking <quote>Act</quote> and inserting <quote>title</quote>; and</text> </clause>
<clause id="H6737431DC80B425CB2F04FFD7C6435F5"><enum>(iii)</enum><text display-inline="yes-display-inline">by striking <quote>this paragraph</quote> and inserting <quote>this subsection</quote>; and</text> </clause></subparagraph>
<subparagraph id="H6AC35BB5C1DA4209A0C6C52FEDC67450"><enum>(E)</enum><text display-inline="yes-display-inline">by striking <quote>Board</quote> each place such term appears in such section and inserting <quote>Agency</quote>.</text> </subparagraph></paragraph>
<paragraph id="HC72F378AF6D94B5591346F6289D5A408"><enum>(4)</enum><header>Section 704</header><text>Section 704 of the Equal Credit Opportunity Act (15 U.S.C. 1691c) is amended—</text>
<subparagraph id="H1CF95A6C8956468DB88AE9BEB89A966A"><enum>(A)</enum><text>in subsection (a)—</text>
<clause id="HF955B7EF6C3046E38F0FAC90B57B7780"><enum>(i)</enum><text>in the matter preceding paragraph (1), by striking <quote>Compliance</quote> and inserting <quote>Subject to section 4202 of the Consumer Financial Protection Agency Act of 2009, compliance</quote>;</text> </clause>
<clause id="H5E6F1FC0FB4344438465165EEE49A7AA"><enum>(ii)</enum><text>in paragraph (1)(A), by striking <quote>Office of the Comptroller of the Currency</quote> and inserting <quote>head of the agency responsible for chartering and regulating national banks</quote>;</text> </clause>
<clause id="H956C22EDBA64420DB7033104020E5D58" display-inline="no-display-inline"><enum>(iii)</enum><text display-inline="yes-display-inline">in paragraph (1)(B)—</text>
<subclause id="H3473BBF2ECF94D4385F8AFEFB10CA608"><enum>(I)</enum><text>by inserting <quote>of Governors of the Federal Reserve System</quote> after <quote>Board</quote>; and</text></subclause>
<subclause id="H31BE54CAEE164F05BAA9E33508C60132"><enum>(II)</enum><text>by striking <quote>and</quote> after the semicolon; </text></subclause></clause>
<clause id="H2595D1B0F85C4CF29919EB8710D86CF3"><enum>(iv)</enum><text>in paragraph (1)(C), by inserting <quote>and</quote> after the semicolon;</text> </clause>
<clause id="H71D6AFA1416548AEB3070AF17E305C67"><enum>(v)</enum><text>by inserting after subparagraph (C) of paragraph (1) the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="HCB6E6895A31041F0BC3109E5DE133439" style="OLC">
<subparagraph id="HF69D65D09EEE423390EE888A34B1BCAA"><enum>(D)</enum><text display-inline="yes-display-inline">savings associations and savings and loan holding companies by the Director of the Office of Thrift Supervision;</text> </subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block> </clause>
<clause id="HBA260C93666C4653B63BDA839B03C142"><enum>(vi)</enum><text>by amending paragraph (2) to read as follows:</text>
<quoted-block id="H20BCCCDF3A4C4051BFE51429C4415EA6" style="OLC">
<paragraph id="H756605B8B06C487C818BA81B04808402"><enum>(2)</enum><text>Subtitle E of the Consumer Financial Protection Agency Act of 2009, by the Agency.</text> </paragraph><after-quoted-block>;</after-quoted-block></quoted-block> </clause></subparagraph>
<subparagraph id="HB1B3771662F6423AA4C5270BCE8A9553"><enum>(B)</enum><text>by striking subsection (c) and inserting the following new subsection:</text>
<quoted-block id="H26B6E92A725A4B9596B5C3D432A43A0D" style="OLC">
<subsection id="HC2F82B888E4F4851A5F9A663D1505E64"><enum>(c)</enum><header>Overall enforcement authority of Federal Trade Commission</header><text display-inline="yes-display-inline">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.</text> </subsection><after-quoted-block>; and</after-quoted-block></quoted-block> </subparagraph>
<subparagraph id="HC65F820C161D410DBD568F25CEB71577"><enum>(C)</enum><text>in subsection (d), by striking <quote>Board</quote> and inserting <quote>Agency</quote>.</text> </subparagraph></paragraph>
<paragraph id="HDDFB163D044049A2871711F4CA1F423C"><enum>(5)</enum><header>Section 704<enum-in-header>A</enum-in-header></header><text>Section 704A(a)(1) of the Equal Credit Opportunity Act (15 U.S.C. 1691c–1(a)(1)) is amended in by striking <quote>Board</quote> and inserting <quote>Agency</quote>.</text> </paragraph>
<paragraph id="HCE97209D9E53420DB6A285FFB93FDB86"><enum>(6)</enum><header>Section 705</header><text>Section 705 of the Equal Credit Opportunity Act (15 U.S.C. 1691d) is amended—</text>
<subparagraph id="H6345FF90EC644DD4B76C72587188D8FA"><enum>(A)</enum><text>in subsection (f), by striking <quote>Board</quote> each place such term appears and inserting <quote>Agency</quote>; and</text> </subparagraph>
<subparagraph id="HC7E78F1F684143BFA86FFB90A3F71654"><enum>(B)</enum><text>in subsection (g), by striking <quote>Board</quote> and inserting <quote>Agency</quote>.</text> </subparagraph></paragraph>
<paragraph id="HBFBEA3EC3D64420CB99D0EB6CF6C7A39"><enum>(7)</enum><header>Section 706</header><text>Section 706 of the Equal Credit Opportunity Act (15 U.S.C. 1691e) is amended—</text>
<subparagraph id="HFFCEF8FB6AA14A8CB5A3610986500BD2"><enum>(A)</enum><text>in subsection (e)—</text>
<clause id="H343B1798B7B14A22A2E2E61FF03A4E2E"><enum>(i)</enum><text>by striking <quote>Board</quote> each place such term appears and inserting <quote>Agency</quote>; and</text> </clause>
<clause id="H09BC8F67696647898495ED0C38277A67"><enum>(ii)</enum><text>by striking <quote>Federal Reserve System</quote> and inserting <quote>Consumer Financial Protection Agency</quote>;</text> </clause></subparagraph>
<subparagraph id="HBCB0B2BDB2124973951F1554957D67E6"><enum>(B)</enum><text>in subsection (f), by striking <quote>two years</quote> each place such term appears and inserting <quote>5 years</quote>;</text> </subparagraph>
<subparagraph id="H4B77A1F58CA5458385A52839929CF326"><enum>(C)</enum><text>in subsection (g)—</text>
<clause id="HEA675B0A9BF14D1487725BDD0EC3DCE4"><enum>(i)</enum><text>by striking <quote>The agencies having</quote>, in the 1st sentence, and inserting <quote>The Agency and the agencies having</quote>;</text> </clause>
<clause id="HD6A33D168BA44070AB7890EDABBF5135"><enum>(ii)</enum><text>by striking <quote>Each agency referred</quote>, in the 2nd sentence, and inserting <quote>The Agency and each agency referred</quote>;</text> </clause>
<clause id="HB342086E9A334983AB1527D25CBEE649"><enum>(iii)</enum><text display-inline="yes-display-inline">by striking <quote>Each such agency</quote>, in the 3rd sentence, and inserting <quote>The Agency and each such agency</quote>; and</text> </clause>
<clause id="H74649BAA43124BCE9D34A4B485170B30"><enum>(iv)</enum><text display-inline="yes-display-inline">by striking <quote>whenever the agency</quote> in the 3rd sentence, and inserting <quote>whenever the Agency or an agency having responsibility for administrative enforcement under section 704</quote>; and</text> </clause></subparagraph>
<subparagraph id="H9614FD0D4484486AB1E26C9534C37FC0"><enum>(D)</enum><text>in subsection (k)—</text>
<clause id="H5F6ED1A5FC77440695B81ED559244FA1"><enum>(i)</enum><text>by striking <quote>Whenever an agency</quote> and inserting <quote>Whenever the Agency or an agency</quote>; and</text> </clause>
<clause id="HC171C06AC4874416AEA96C0B018D334C"><enum>(ii)</enum><text>by striking <quote>the agency shall notify</quote> and inserting <quote>the Agency, or an agency referred to in any such paragraph, as the case may be, shall notify</quote>.</text> </clause></subparagraph></paragraph>
<paragraph id="H75E5C34C997F4DFAB83EAD9E718B264F"><enum>(8)</enum><header>Section 707</header><text>Section 707 of the Equal Credit Opportunity Act (15 U.S.C. 1691f) is amended by striking <quote>Board</quote> each place such term appears and inserting <quote>Agency</quote>.</text> </paragraph></subsection>
<subsection id="HE9C6ECE917AB4554BA16B0392D831C55"><enum>(d)</enum><header>Fair Debt Collection Practices Act</header>
<paragraph id="HC84244706FBA4E3BA61775A638D01096"><enum>(1)</enum><header>Section 803</header><text>Section 803 of the Fair Debt Collection Practices Act (15 U.S.C. 1692a) is amended—</text>
<subparagraph id="H9401F13B67B748019B9E00BA2F6CEAD6"><enum>(A)</enum><text>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</text> </subparagraph>
<subparagraph id="H5F86CC82307D4F30AD2C0DE38C467717"><enum>(B)</enum><text>by inserting before paragraph (2) (as so redesignated) the following new paragraph:</text>
<quoted-block id="HA23A30E869D244A492845F0A9DA6382A" style="OLC">
<paragraph id="HCCDB24B09F6F4DC9B853340641244AA8"><enum>(1)</enum><text>The term <quote>Agency</quote> means the Consumer Financial Protection Agency.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subparagraph></paragraph>
<paragraph id="H3B363BB8DF01463AA15E6412390CA6C4"><enum>(2)</enum><header>Section 813</header><text>Section 813(e) of the Fair Debt Collection Practices Act (15 U.S.C. 1692k(e)) is amended by striking <quote>Commission</quote> and inserting <quote>Agency</quote>.</text> </paragraph>
<paragraph id="H36F9D7E1CBEC45058A073FE6BC0BE713"><enum>(3)</enum><header>Section 814</header><text>Section 814 of the Fair Debt Collection Practices Act (15 U.S.C. 1692l) is amended—</text>
<subparagraph id="H4A1B81F7AB214DE89C2A532C1C0EEEEE"><enum>(A)</enum><text>by striking subsection (a) and inserting the following new subsection:</text>
<quoted-block id="H42129153DDBD4A96B373F07D154B20BB" style="OLC">
<subsection id="H6846E1D118904F6887587EB7FC00D5A2"><enum>(a)</enum><header>Federal Trade Commission</header><text display-inline="yes-display-inline">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.</text> </subsection><after-quoted-block>;</after-quoted-block></quoted-block> </subparagraph>
<subparagraph id="HAED5719ED6054383BBE6D78B383836EC"><enum>(B)</enum><text>in subsection (b)—</text>
<clause id="H2EEF184E34A241D18C6058FBD1B36637"><enum>(i)</enum><text>in the matter preceding paragraph (1), by striking <quote>Compliance</quote> and inserting <quote><header-in-text level="subsection" style="OLC">Enforcement by other agency.—</header-in-text>Subject to section 4202 of the Consumer Financial Protection Agency Act of 2009, compliance</quote>;</text> </clause>
<clause id="HF0F6796455BD48C2BD52FE53B35D75A2"><enum>(ii)</enum><text>in paragraph (1)(A), by striking <quote>Office of the Comptroller of the Currency;</quote> and inserting <quote>head of the agency responsible for chartering and regulating national banks;</quote>;</text> </clause>
<clause id="HC6246DF8CA1948649FE69AB30C887DE7"><enum>(iii)</enum><text>in paragraph (1)(B), by striking <quote>and</quote> after the semicolon;</text> </clause>
<clause id="H4001DB1387334CAD9E73903A7BEE96A6"><enum>(iv)</enum><text>in paragraph (1)(C), by inserting <quote>and</quote> after the semicolon;</text> </clause>
<clause id="H2D5DFDB6FBD44C5D8D7D0AC704451EC1"><enum>(v)</enum><text>by inserting after subparagraph (C) of paragraph (1) the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="H0EB8E60802B8436BA3B6D5CC90BDC4FA" style="OLC">
<subparagraph id="HBF7584FE474746698665E52138B36D41"><enum>(D)</enum><text display-inline="yes-display-inline">savings associations and savings and loan holding companies by the Director of the Office of Thrift Supervision;</text> </subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block> </clause>
<clause id="HB721607669614E2E9F357517E8A8C9C9"><enum>(vi)</enum><text>by striking paragraph (2) and inserting the following new paragraph:</text>
<quoted-block id="HBD193D1143BE4E548234A2F6969503F8" style="OLC">
<paragraph id="HE3F568B6854846D9BDC993015661870C"><enum>(2)</enum><text>subtitle E of the Consumer Financial Protection Agency Act of 2009, by the Agency;</text> </paragraph><after-quoted-block>; and</after-quoted-block></quoted-block> </clause></subparagraph>
<subparagraph id="HA8A74B7971634830A2F6929493FB9B22"><enum>(C)</enum><text>by striking subsection (d) and inserting the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H5A54581549804E4CA724B31057ED2D9A" style="OLC">
<subsection id="HBC156417D9B14AACA6F7DA80CE088B61"><enum>(d)</enum><header>Regulations</header><text display-inline="yes-display-inline">The Agency may prescribe regulations with respect to the collection of debts by any debt collector.</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subparagraph></paragraph>
<paragraph id="H3D1409C712464F80ABC370C2C562575E"><enum>(4)</enum><header>Section 815</header><text>Section 815 (15 U.S.C. 1692m) is amended—</text>
<subparagraph id="H051495DFD7F74B74AA33C6599BD11314"><enum>(A)</enum><text>in the section heading, by striking <quote><header-in-text level="section" style="USC">Commission</header-in-text></quote> and inserting <quote><header-in-text level="section" style="USC">Agency</header-in-text></quote>; and</text> </subparagraph>
<subparagraph id="H41DE35756CE9474096EBBB6CC7C0CA45"><enum>(B)</enum><text>by striking <quote>Commission</quote> each place such term appears and inserting <quote>Agency</quote>.</text> </subparagraph></paragraph>
<paragraph id="H12D209C678EB472F8CB7993265AABCC2"><enum>(5)</enum><header>Section 817</header><text display-inline="yes-display-inline">Section 817 (15 U.S.C. 1692o) is amended by striking <quote>Commission</quote> each place such term appears and inserting <quote>Agency</quote>.</text> </paragraph></subsection>
<subsection id="H4C4F0870560D4F55BD3729BD5E827E3A"><enum>(e)</enum><header>Electronic Fund Transfer Act</header>
<paragraph id="H61078E360DC845DABE9816912CFE0B6E"><enum>(1)</enum><header>Section 903</header><text>Section 903 of the Electronic Fund Transfer Act (15 U.S.C. 1693a) is amended—</text>
<subparagraph id="H958585871E8B449781AB34BB25D348EC"><enum>(A)</enum><text>by striking paragraph (3) and inserting the following new paragraph:</text>
<quoted-block id="H24550A7106C2460EA8654A31C53EE0CE" style="OLC">
<paragraph id="H9C75CA77C93F43D88738BA8DC61E3C91"><enum>(3)</enum><text>the term <quote>Agency</quote> means the Consumer Financial Protection Agency;</text> </paragraph><after-quoted-block>; and</after-quoted-block></quoted-block> </subparagraph>
<subparagraph id="H8233B7DB9AFD4E3B86D03D9E372BD35F"><enum>(B)</enum><text>in paragraph (6), by striking <quote>Board</quote> and inserting <quote>Agency</quote>.</text> </subparagraph></paragraph>
<paragraph id="HFEC8ACCED712486BBE5EFF01C166F896"><enum>(2)</enum><header>Section 904</header><text display-inline="yes-display-inline">Section 904 of the Electronic Fund Transfer Act (15 U.S.C. 1693b) is amended by striking <quote>Board</quote> each place such term appears and inserting <quote>Agency</quote>.</text> </paragraph>
<paragraph id="H6905B79449814458B0B5274D22F53A3D"><enum>(3)</enum><header>Section 905</header><text display-inline="yes-display-inline">Section 905 of the Electronic Fund Transfer Act (15 U.S.C. 1693c) is amended by striking <quote>Board</quote> each place such term appears and inserting <quote>Agency</quote>.</text> </paragraph>
<paragraph id="HCFECDA0CE44941739AE5E1D829944871"><enum>(4)</enum><header>Section 906</header><text>Section 906(b) of the Electronic Fund Transfer Act (15 U.S.C. 1693d(b)) is amended by striking <quote>Board</quote> and inserting <quote>Agency</quote>.</text> </paragraph>
<paragraph id="HE9659E08308C4D3B9283061E8C28F793"><enum>(5)</enum><header>Section 907</header><text>Section 907(b) of the Electronic Fund Transfer Act (15 U.S.C. 1693e(b)) is amended by striking <quote>Board</quote> and inserting <quote>Agency</quote>.</text> </paragraph>
<paragraph id="HD73BE6FA9B8F4EEFA534A279DB579C04"><enum>(6)</enum><header>Section 908</header><text>Section 908(f)(7) of the Electronic Fund Transfer Act (15 U.S.C. 1693f(f)(7)) is amended by striking <quote>Board</quote> and inserting <quote>Agency</quote>.</text> </paragraph>
<paragraph id="HBFB001DEA9154C5BA156CA1A4B95EF00"><enum>(7)</enum><header>Section 910</header><text>Section 910(a)(1)(E) of the Electronic Fund Transfer Act (15 U.S.C. 1693h(a)(1)(E)) is amended by striking <quote>Board</quote> and inserting <quote>Agency</quote>.</text> </paragraph>
<paragraph id="H6004B11494004B388EE423E08506E4E5"><enum>(8)</enum><header>Section 911</header><text>Section 911(b)(3) of the Electronic Fund Transfer Act (15 U.S.C. 1693i(b)(3) is amended by striking <quote>Board</quote> and inserting <quote>Agency</quote>.</text> </paragraph>
<paragraph id="H4BEA1685274F48BAA91100D558A5DD47"><enum>(9)</enum><header>Section 915</header><text>Section 915(d) of the Electronic Fund Transfer Act (15 U.S.C. 1693m(d)) is amended—</text>
<subparagraph display-inline="no-display-inline" id="H362A1D4B0FCB46F48614000F4B9A3A60"><enum>(A)</enum><text>by striking <quote>Board</quote> each place such term appears and inserting <quote>Agency</quote>; and</text> </subparagraph>
<subparagraph id="H31F78ED3935B4820A719CA1F6DCA5AFA"><enum>(B)</enum><text>by striking <quote>Federal Reserve System</quote> and inserting <quote>Consumer Financial Protection Agency</quote>.</text> </subparagraph></paragraph>
<paragraph id="H0A63326A70AE4248A75ED9B308630098"><enum>(10)</enum><header>Section 917</header><text>Section 917 of the Electronic Fund Transfer Act (15 U.S.C. 1693o) is amended—</text>
<subparagraph id="H7D16F00A7A4A46908A86FCD4A7F2E702"><enum>(A)</enum><text>in subsection (a)—</text>
<clause id="H13993211B77345BE860E2F04CA610070"><enum>(i)</enum><text>by striking <quote>Compliance</quote> and inserting <quote>Subject to section 4202 of the Consumer Financial Protection Agency Act of 2009, compliance</quote>;</text> </clause>
<clause id="H9DF180B77D3F46A1A514EF5FED252CD4"><enum>(ii)</enum><text>in paragraph (1)(A), by striking <quote>Office of the Comptroller of the Currency</quote> and inserting <quote>head of the agency responsible for chartering and regulating national banks</quote>; </text> </clause>
<clause id="H5182E799395143EFAF944160A23214F8" display-inline="no-display-inline"><enum>(iii)</enum><text display-inline="yes-display-inline">in paragraph (l)(B), by inserting <quote>of Governors of the Federal Reserve System</quote> after <quote>Board</quote>; and</text></clause>
<clause id="H8FB2AC5CADD34D748481FB9EA547EF98"><enum>(iv)</enum><text>by striking paragraph (2) and inserting:</text>
<quoted-block id="H0750A8B99C2E4DAA81E6825E59A24541" style="OLC">
<paragraph id="H209035937B51419DA1974264004B5380"><enum>(2)</enum><text>subtitle E of the Consumer Financial Protection Agency Act of 2009, by the Agency;</text> </paragraph><after-quoted-block>; and</after-quoted-block></quoted-block> </clause></subparagraph>
<subparagraph id="H3336DE8707414EF484C1C6E7D4E4343C"><enum>(B)</enum><text>by striking subsection (c) and inserting the following new subsection:</text>
<quoted-block id="H09410D3671EB4718B3E442E3092A4043" style="OLC">
<subsection id="H8EAC64D0C4EF4748B313335062C0A169"><enum>(c)</enum><header>Overall enforcement authority of the Federal Trade Commission</header><text display-inline="yes-display-inline">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.</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subparagraph></paragraph>
<paragraph id="H798483AD4E7640CD842FDFD7D120FF87"><enum>(11)</enum><header>Section 918</header><text display-inline="yes-display-inline">Section 918 of the Electronic Fund Transfer Act (15 U.S.C. 1693p) is amended by striking <quote>Board</quote> each place such term appears and inserting <quote>Agency</quote>.</text> </paragraph>
<paragraph id="H7FB5A903425B4911A0385C6C125DA505"><enum>(12)</enum><header>Section 919</header><text display-inline="yes-display-inline">Section 919 of the Electronic Fund Transfer Act (15 U.S.C. 1693q) is amended by striking <quote>Board</quote> each place such term appears and inserting <quote>Agency</quote>.</text> </paragraph>
<paragraph id="H738198CC8A7849BAA23177B753458024"><enum>(13)</enum><header>Section 920</header><text display-inline="yes-display-inline">Section 920 of the Electronic Fund Transfer Act (15 U.S.C. 1693r) is amended by striking <quote>Board</quote> each place such term appears and inserting <quote>Agency</quote>.</text> </paragraph></subsection>
<subsection id="HCAF0B65DCF584DA2AED589AB061E82BC"><enum>(f)</enum><header>Amendments to HOEPA relating to the Truth in Lending Act</header><text>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—</text>
<paragraph id="H99BBA3C3AAC940C1896B40B81786A92E"><enum>(1)</enum><text>in subsection (a), by striking <quote>Board of Governors of the Federal Reserve System, in consultation with the Consumer Advisory Council of the Board,</quote> and inserting <quote>Consumer Financial Protection Agency, in consultation with the Advisory Board to the Agency</quote>; and</text> </paragraph>
<paragraph id="HCE35B6036041408F8C73EB0185037947"><enum>(2)</enum><text display-inline="yes-display-inline">in subsection (b), by striking <quote>Board of Governors of the Federal Reserve System</quote> and inserting <quote>Consumer Financial Protection Agency</quote>.</text> </paragraph></subsection>
<subsection id="H4732383410584FEBAD0E4DF244E063E7"><enum>(g)</enum><header>Amendment to the Fair and Accurate Credit Transactions Act of 2003 relating to the Fair Credit Reporting Act</header><text display-inline="yes-display-inline">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 <quote>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</quote> and inserting <quote>The Consumer Financial Protection Agency, with respect to a person subject to the enforcement authority of the Agency, the Commodity Futures Trading Commission, and</quote>.</text> </subsection></section>
<section id="H737D830C63A54FC99898619ACB58A8FD"><enum>4805.</enum><header>Amendments to the Expedited Funds Availability Act</header>
<subsection id="H95A56093FE844C10856EAEC9322537BA"><enum>(a)</enum><header>Section 605</header><text display-inline="yes-display-inline">Section 605(f)(1) of the Expedited Funds Availability Act (12 U.S.C. 4004(f)(1)) is amended by inserting <quote>, in consultation with the Director of the Consumer Financial Protection Agency,</quote> after <quote>Board</quote>.</text> </subsection>
<subsection id="H1A5D197807934960A261049A473F57FA"><enum>(b)</enum><header>Section 609</header><text display-inline="yes-display-inline">Section 609(a) of the Expedited Funds Availability Act (12 U.S.C. 4008(a)) is amended by inserting <quote>, in consultation with the Director of the Consumer Financial Protection Agency,</quote> after <quote>Board</quote>.</text> </subsection></section>
<section id="H602234F009A54B85B7728F75D17B1BCB"><enum>4806.</enum><header>Amendments to the Federal Deposit Insurance Act</header>
<subsection id="HB8DF5E47A2F54B3C9B2EC7038C821B50"><enum>(a)</enum><header>Section 8</header><text>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:</text>
<quoted-block id="HC6B16B8CE53F4904AB8EBE56457C0FF8" style="OLC">
<paragraph id="H6976596F0C3B494EBEA6C8DACB08024E"><enum>(7)</enum><header>Referral to consumer financial protection commission</header><text>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.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H30E401F14CE2460B84EE86E60219E044"><enum>(b)</enum><header>Section 43</header><text>Section 43 of the Federal Deposit Insurance Act (12 U.S.C. 1831t) is amended—</text>
<paragraph id="H058E1CA4331940AD82B10670571DA547"><enum>(1)</enum><text>in subsection (c), by striking <quote>Federal Trade Commission</quote> and inserting <quote>Agency</quote>;</text> </paragraph>
<paragraph id="H7B8D3CB9C9444673B7074622CF6C5166"><enum>(2)</enum><text>in subsection (d), by striking <quote>Federal Trade Commission</quote> and inserting <quote>Agency</quote>;</text> </paragraph>
<paragraph id="H66C0F841A2A547329E93EEC46DC003CA"><enum>(3)</enum><text>in subsection (e)—</text>
<subparagraph id="H289B81A6EB5F4BBEA244B61221BA2637"><enum>(A)</enum><text>in paragraph (2)(B), by striking <quote>Federal Trade Commission</quote> and inserting <quote>Agency</quote>; and</text> </subparagraph>
<subparagraph id="HB63E5614526445E29D1462B5E562F535"><enum>(B)</enum><text>by adding at the end the following new paragraph:</text>
<quoted-block id="HC2D09B1E0C1E483088654BFE3892DC07" style="OLC">
<paragraph id="H3E8B564F21AA40819A545F541F3D75FD"><enum>(5)</enum><header>Agency</header><text>The term <quote>Agency</quote> means the Consumer Financial Protection Agency.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subparagraph></paragraph></subsection>
<subsection id="H5E39B9CDE57541F4A7203A8EFA6BE71E"><enum>(c)</enum><header>Section 43<enum-in-header>(f)</enum-in-header></header><text>Section 43(f) of the Federal Deposit Insurance Act (12 U.S.C. 1831t(f)) is amended—</text>
<paragraph id="H84CDDB68D25A437A922538E1F20599A1"><enum>(1)</enum><text>by striking paragraph (1) and inserting the following new paragraph:</text>
<quoted-block id="H6F3E63FCB60F428FA149FFA7A63759C2" style="OLC">
<paragraph id="H256005AD5E2C4F9C889B367E4C13FCEB"><enum>(1)</enum><header>Limited enforcement authority</header><text display-inline="yes-display-inline">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).</text> </paragraph><after-quoted-block>; and</after-quoted-block></quoted-block> </paragraph>
<paragraph id="HF680AFD8D03D4076BBBE7C9C69F92A82"><enum>(2)</enum><text display-inline="yes-display-inline">in paragraph (2), by striking subparagraph (C) and inserting the following new subparagraph:</text>
<quoted-block id="H9AA212453384401CA8AB85A548FD0B48" style="OLC">
<subparagraph id="H934AFCA0892D4310A94709BC4E6055B0"><enum>(C)</enum><header>Limitation on state action while federal action pending</header><text>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.</text> </subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection></section>
<section id="H830C889EBECC4D468AA4080DB7D75014"><enum>4807.</enum><header>Amendments to the Gramm-Leach-Bliley Act</header>
<subsection id="H109B0CC8FBC940D3B74B17B46E75F130"><enum>(a)</enum><header>Section 501</header><text display-inline="yes-display-inline">Section 501(b) of the Gramm-Leach-Bliley Act (15 U.S.C. 6801(b)) is amended by inserting <quote>(other than the Consumer Financial Protection Agency)</quote> after <quote>title</quote>.</text></subsection>
<subsection id="HDC0365A12AB14436A66E32E82EA4602C"><enum>(b)</enum><header>Section 502</header><text display-inline="yes-display-inline">Section 502(e)(5) of the Gramm-Leach-Bliley Act (15 U.S.C. 6802(e)(5)) is amended by inserting <quote>the Consumer Financial Protection Agency, </quote> after <quote>(including</quote>.</text></subsection>
<subsection id="HFACB5D2C125D4C388862FDAD9687EAB9" display-inline="no-display-inline"><enum>(c)</enum><header>Section 503</header><text>Section 503(e)(1) of the Gramm-Leach-Bliley Act (15 U.S.C. 6803(e)(1)) is amended—</text>
<paragraph id="H108B4A82733D4926B0F18E1E1CCBB677"><enum>(1)</enum><text>by inserting <quote>Consumer Financial Protection Agency in consultation with the other</quote> before <quote>agencies</quote>; and</text></paragraph>
<paragraph id="H1F2CA26D59364D9A87C51012F1624BA0"><enum>(2)</enum><text>by striking <quote>jointly</quote>.</text></paragraph></subsection>
<subsection id="H3F5A00C0021A4225A88630DEAD0E36A9"><enum>(d)</enum><header>Section 504</header><text>Section 504(a)(1) of the Gramm-Leach-Bliley Act (15 U.S.C. 6804(a)(1)) is amended—</text>
<paragraph id="H7D4D6EDF9A494F46B0F2619AE42A79B7"><enum>(1)</enum><text>by striking <quote>The Federal banking agencies, the National Credit Union Administration, the Secretary of the Treasury,</quote> and inserting <quote>The Consumer Financial Protection Agency and</quote>; </text> </paragraph>
<paragraph id="H59545CC7AD1242309953923E1E443A70"><enum>(2)</enum><text>by striking <quote>, and the Federal Trade Commission</quote>; and</text> </paragraph>
<paragraph id="HC0D157637E8B482FAA95162FAEF0589E"><enum>(3)</enum><text display-inline="yes-display-inline">by inserting <quote>the Federal banking agencies, the National Credit Union Administration, the Secretary of the Treasury, the Federal Trade Commission, and</quote> before <quote>representatives of State insurance authorities</quote>.</text></paragraph></subsection>
<subsection id="H0DC636A2595042EC9466636642CD69DA"><enum>(e)</enum><header>Section 505</header>
<paragraph id="H84C7A0AEAAFF480FAD89DB5F5141BF9F"><enum>(1)</enum><text>Section 505(a) of the Gramm-Leach-Bliley Act (15 U.S.C. 6805(a)) is amended—</text>
<subparagraph id="H7B1B127DFD2540C9A36C9AED907BF1B9"><enum>(A)</enum><text>in the matter preceding paragraph (1), by striking <quote>This subtitle and the regulations prescribed thereunder shall be enforced by</quote> and inserting <quote>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,</quote>; and</text> </subparagraph>
<subparagraph id="HDA76922D57B545FB96D4526BB868D970"><enum>(B)</enum><text>by inserting after paragraph (7) the following new paragraph:</text>
<quoted-block id="H2A57413EE56B4910A49A346F389855AC" style="OLC">
<paragraph id="H70C9AB6C215646E6914448BAFF8FFDA8"><enum>(8)</enum><text>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.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subparagraph></paragraph>
<paragraph id="H555927E71842468F9576E9E1E1C69D98"><enum>(2)</enum><text>Section 505(b)(1) of the Gramm-Leach-Bliley Act (15 U.S.C. 6805(b)(1)) is amended by inserting <quote>, other than the Consumer Financial Protection Agency,</quote> after <quote>described in subsection (a)</quote>.</text> </paragraph></subsection>
<subsection id="H0C65F2FFA33B4CEDA992921C46D41DF2" display-inline="no-display-inline"><enum>(f)</enum><header>Section 507</header><text display-inline="yes-display-inline">Subsection 507(b) of the Gramm-Leach-Bliley Act (15 U.S.C. 6807(b)) is amended by striking <quote>Federal Trade Commission</quote> and inserting <quote>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</quote>. </text></subsection></section>
<section id="H2956F4296CC04A7DB9792704B1E35D79"><enum>4808.</enum><header>Amendments to the Home Mortgage Disclosure Act of 1975</header>
<subsection id="H2F7668E0530F4969823368444F81D706"><enum>(a)</enum><header>Section 303</header><text>Section 303 of the Home Mortgage Disclosure Act of 1975 (12 U.S.C. 2802) is amended—</text>
<paragraph id="HFB49A989CC6B42F0831523298065A73F"><enum>(1)</enum><text>by redesignating paragraphs (1), (2), (3), (4), (5), and (6) as paragraphs (2), (3), (4), (5), (6), and (7), respectively; and</text> </paragraph>
<paragraph id="HF5C8D11693B6494F990C8546526BBBE0"><enum>(2)</enum><text>by inserting before paragraph (2) (as so redesignated) the following new paragraph:</text>
<quoted-block id="H34C99B4397C742C2A016C191344E3201" style="OLC">
<paragraph id="H6AA6ED5F1EC0482E92D4FEDE6BC1C303"><enum>(1)</enum><text>The term <quote>Agency</quote> means the Consumer Financial Protection Agency.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection id="H40EFDFB323CE48F6A7D1D38D876EEF56"><enum>(b)</enum><header>Universal amendment relating to Agency</header><text>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 <quote>Board</quote> each place such term appears and inserting <quote>Agency</quote>.</text> </subsection>
<subsection id="HDC29B99FDC44403889A4BA22E518A064"><enum>(c)</enum><header>Section 304</header><text>Section 304 of the Home Mortgage Disclosure Act of 1975 (12 U.S.C. 2803(h)) is amended—</text>
<paragraph id="HD74FE510871E4712B83DA809D37B0589"><enum>(1)</enum><text>in subsection (b)—</text>
<subparagraph id="HFD959E9705D74843A2D38D9E18CF6A8E"><enum>(A)</enum><text>by striking <quote>and</quote> after the semicolon at the end of paragraph (3);</text> </subparagraph>
<subparagraph id="H9D476B5DA87D415FB3C574A0A0849F4B"><enum>(B)</enum><text>by striking <quote>and gender</quote> in paragraph (4), and inserting <quote>age, and gender</quote>;</text> </subparagraph>
<subparagraph id="HAC8171313DAF44AFBB585C84FB1B2E6D"><enum>(C)</enum><text display-inline="yes-display-inline">by striking the period at the end of paragraph (4) and inserting a semicolon; and</text> </subparagraph>
<subparagraph id="HE5655C6A94444C11ABE86B38571F227F"><enum>(D)</enum><text>by inserting after paragraph (4) the following new paragraphs:</text>
<quoted-block id="HF70DBD2200E84C7ABBA36D418178322B" style="OLC">
<paragraph id="H343511D9B2C446A8A618DC73A50D455F"><enum>(5)</enum><text>the number and dollar amount of mortgage loans grouped according to the following measurements:</text>
<subparagraph id="HBD4631D0194B4057887A7AB6F71C950E"><enum>(A)</enum><text>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));</text> </subparagraph>
<subparagraph id="H19AF94D8E3EC42F8BD7F229CFABFD6B9"><enum>(B)</enum><text>the difference between the annual percentage rate associated with the loan and a benchmark rate or rates for all loans;</text> </subparagraph>
<subparagraph id="H0CF76AB9B1E64776BE5D429562C118EA"><enum>(C)</enum><text>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</text> </subparagraph>
<subparagraph id="H874ECE761CAB405EA63F82FE0A1798E8"><enum>(D)</enum><text>such other information as the Agency may require; and</text> </subparagraph></paragraph>
<paragraph id="HE05A4B72973644CAB3491AECA104E4E2"><enum>(6)</enum><text>the number and dollar amount of mortgage loans and completed applications grouped according to the following measurements:</text>
<subparagraph id="H661E177F354C46D9A9E825D043BB42F7"><enum>(A)</enum><text>the value of the real property pledged or proposed to be pledged as collateral;</text> </subparagraph>
<subparagraph id="H1A7A4AB7F1AC42A7A78EA7A88CE55A2B"><enum>(B)</enum><text>the actual or proposed term in months of any introductory period after which the rate of interest may change;</text> </subparagraph>
<subparagraph id="H583A25D0FF124B8DBC638FACE06B0264"><enum>(C)</enum><text>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;</text> </subparagraph>
<subparagraph id="H46BCF91A99764D5494A3BE2F69154948"><enum>(D)</enum><text>the actual or proposed term in months of the mortgage loan;</text> </subparagraph>
<subparagraph id="HD0CF79BB87374487A2DF0BAF2B43B3F2"><enum>(E)</enum><text>the channel through which application was made, including retail, broker, and other relevant categories;</text> </subparagraph>
<subparagraph id="H229A1A0823FF483ABF9DA22B5F9931DD"><enum>(F)</enum><text>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;</text> </subparagraph>
<subparagraph id="H9F50547C8C144DE2A6698636C3190B30"><enum>(G)</enum><text>as the Agency may determine to be appropriate, a universal loan identifier;</text> </subparagraph>
<subparagraph id="H9754CF3A5A6341E8815B9049DA011966"><enum>(H)</enum><text>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;</text> </subparagraph>
<subparagraph id="H23799FB8DB704395A25C7D0BBE66F1A4"><enum>(I)</enum><text display-inline="yes-display-inline">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</text> </subparagraph>
<subparagraph id="H03384CBD956F4F4E87D19C00CC78DA75"><enum>(J)</enum><text>such other information as the Agency may require.</text> </subparagraph></paragraph><after-quoted-block>;</after-quoted-block></quoted-block> </subparagraph></paragraph>
<paragraph id="H406E7714BDFA45DAA24FF22C196CBC02"><enum>(2)</enum><text display-inline="yes-display-inline">by striking subsection (h) and inserting the following new subsection:</text>
<quoted-block id="HEC29FBABDBC84590B34FD3AAEAE36201" style="OLC">
<subsection id="H9C4AEA31981B494D8D2F6B75656B0ACC"><enum>(h)</enum><header>Submission to agencies</header>
<paragraph id="HB637037578BF415AB22F6FD909E25D23"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HE6B1530DB8E6434589C94A3F15B9CBFA"><enum>(2)</enum><header>Regulations</header><text>Notwithstanding the requirement of section 304(a)(2)(A) for disclosure by census tract, the Agency, in cooperation with other appropriate regulators, including—</text>
<subparagraph id="H26B83D458EF2432097A5AE0054CE7972"><enum>(A)</enum><text>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;</text> </subparagraph>
<subparagraph id="HF27272D74F094B76B2C937F25E45B072"><enum>(B)</enum><text>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;</text> </subparagraph>
<subparagraph id="H6E6FD3453EB941D399530C1383E01C02"><enum>(C)</enum><text>the Director of the Office of Thrift Supervision for Federal savings associations and savings and loan holding companies;</text> </subparagraph>
<subparagraph id="H495DC7D459F3484B9A407FC694AFCAF3"><enum>(D)</enum><text>the National Credit Union Administration Board for credit unions; and</text> </subparagraph>
<subparagraph id="H8302E5C2B25448AEA6E3816383132EEB"><enum>(E)</enum><text>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),</text> </subparagraph><continuation-text continuation-text-level="paragraph">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.</continuation-text></paragraph>
<paragraph id="HE8391C3908ED47DF8DD27E9F09ACA574"><enum>(3)</enum><header>Required disclosures</header><text>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.</text> </paragraph>
<paragraph id="H4A8DEFA2FA494E5B8682CB079BEC949D"><enum>(4)</enum><header>Additional data or explanations</header><text>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.</text> </paragraph></subsection><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H6218F31DDEDE41F99F6648FFBBD5F30F"><enum>(3)</enum><text>in subsection (i), by striking <quote>subsection (b)(4)</quote> and inserting <quote>paragraphs (4), (5), and (6) of subsection (b)</quote>;</text> </paragraph>
<paragraph id="H6966D43D2E3441CBA8CF959C0909B477"><enum>(4)</enum><text>in subsection (j)—</text>
<subparagraph id="H3518F5BC21E342B2BF32CC3A0E63BB1E"><enum>(A)</enum><text display-inline="yes-display-inline">by striking <quote>(as</quote> where such term appears in paragraph (1) and inserting <quote>(containing loan-level and application-level information relating to disclosures required under subsections (a) and (b) and as otherwise</quote>;</text> </subparagraph>
<subparagraph id="H2186D22A441D4ED483890DC1DCFCF985"><enum>(B)</enum><text display-inline="yes-display-inline">by striking <quote>in the format in which such information is maintained by the institution</quote> where such term appears in paragraph (2)(A), and inserting <quote>in such formats as the Agency may require</quote>; and</text> </subparagraph>
<subparagraph id="H179DA69061B04E5694CAF20069B37D69"><enum>(C)</enum><text>by striking paragraph (3) and inserting the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H85314231B46E432DAE2C82E11F388BE5" style="OLC">
<paragraph id="HE0E177CFF30D4FCEA691F6B7311A77A7"><enum>(3)</enum><header>Change of form not required</header><text display-inline="yes-display-inline">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.</text> </paragraph><after-quoted-block>; and</after-quoted-block></quoted-block> </subparagraph></paragraph>
<paragraph id="H5980BBE8DD3546D1B0F81E651A170A6E"><enum>(5)</enum><text>by striking paragraph (2) of subsection (m) and inserting the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H623A88862F3C48A887DD9D959811BC85" style="OLC">
<paragraph id="HA2D0EF19631045BABE576278F30A5884"><enum>(2)</enum><header>Form of information</header><text display-inline="yes-display-inline">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.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection id="HC85A27B762B845A082BB9B0D2AC5E3B7"><enum>(d)</enum><header>Section 305</header><text>Section 305 of the Home Mortgage Disclosure Act of 1975 (12 U.S.C. 2804) is amended—</text>
<paragraph id="H76E4DFD176F9478A9FB409E72B96F53A"><enum>(1)</enum><text>by striking subsection (b) and inserting the following new subsection:</text>
<quoted-block id="H68C254D949C24443B3E219A97A4D193A" style="OLC">
<subsection id="H7A9C9C7082BD4ACD87B24DDEAA651F36"><enum>(b)</enum><header>Powers of certain other agencies</header><text>Compliance with the requirements imposed under this title shall be enforced under—</text>
<paragraph id="H1BF5C12945604E77AD8518B981F5D004"><enum>(1)</enum><text>section 8 of the Federal Deposit Insurance Act, in the case of—</text>
<subparagraph id="H6D41DD76AFDF4B948695C1FAD4B0146D"><enum>(A)</enum><text>national banks, and Federal branches and Federal agencies of foreign banks, by the head of the agency responsible for chartering and regulating national banks;</text> </subparagraph>
<subparagraph id="HB6828D2C99DD4791BE5BA4E5A24537AF"><enum>(B)</enum><text>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;</text> </subparagraph>
<subparagraph id="HC889F3387C404FC7A9AC65A83DE760C7"><enum>(C)</enum><text>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</text> </subparagraph>
<subparagraph id="H2CCE440568E94F6089A87E2B805D7CF6"><enum>(D)</enum><text display-inline="yes-display-inline">Federal savings associations, and savings and loan holding companies, by the Director of the Office of Thrift Supervision;</text> </subparagraph></paragraph>
<paragraph id="H2AB6EDB1C53E4AD6A4182FB87796673A"><enum>(2)</enum><text>subtitle E of the Consumer Financial Protection Agency Act of 2009, by the Agency;</text> </paragraph>
<paragraph id="H8FD81EEE80614B1DB4C2A78B861685F5"><enum>(3)</enum><text>the Federal Credit Union Act, by the Administrator of the National Credit Union Administration with respect to any credit union; and</text> </paragraph>
<paragraph id="HDFDD7576482B42C0B0B46D9112E3CD88"><enum>(4)</enum><text>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).</text> </paragraph><continuation-text continuation-text-level="subsection">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.</continuation-text></subsection><after-quoted-block>; and</after-quoted-block></quoted-block> </paragraph>
<paragraph id="HFA470587C8FB4FA4A976F4D456EFF78C"><enum>(2)</enum><text>by inserting at the end of section 305 the following new subsection:</text>
<quoted-block id="H45330D4D29AB42EF94EE83657583D277" style="OLC">
<subsection id="H51FBFF2A66FC43969CE4D726F0F886C7"><enum>(d)</enum><header>Overall enforcement authority of the consumer financial protection agency</header><text>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.</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection id="HC7D7493220604A5EB432F9BB0AC24DE4"><enum>(e)</enum><header>Section 306</header><text>Subsection 306(b) of the Home Mortgage Disclosure Act of 1975 (12 U.S.C. 2805(b)) is amended to read as follows:</text>
<quoted-block id="H8C5886FBA80945F5A932674ADCFDB0ED" style="OLC">
<subsection id="H4DF6DA0702244B54BFB9E0A8AA7663E3"><enum>(b)</enum><text>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.</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="HC03BC4920B844CDB97C2F716316C6CC9"><enum>(f)</enum><header>Section 307</header><text>Section 307 of the Home Mortgage Disclosure Act of 1975 (12 U.S.C. 2806) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H5521D83F1A404AB687B8956E15CA5674" style="OLC">
<section id="H03AD4973EE3E46958C3AFC744A11E9DD"><enum>307.</enum><header>Research and improved methods</header>
<subsection id="HAF5F6E7BDB514E9982BFEB66BD42A5DD"><enum>(a)</enum><header>Enhanced compliance in economical manner</header>
<paragraph id="H37F5FA2BE38F479495A2BD043426E7B3"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph>
<paragraph id="H3E40B47979C0442ABBBEB4481653C426"><enum>(2)</enum><header>Authorization of appropriation</header><text>There is authorized to be appropriated such sums as may be necessary to carry out this subsection.</text> </paragraph>
<paragraph id="H3652D34FF3714E4E91C14DE4C21D7EBD"><enum>(3)</enum><header>Authority of agency</header><text>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.</text> </paragraph></subsection>
<subsection display-inline="no-display-inline" id="HD7858263B60748B8ADA66B69F3FE28E7"><enum>(b)</enum><header>Recommendations to the Congress</header><text>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.</text> </subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection></section>
<section commented="no" id="H52DEBDA3F75F4D04ADC46D8345144EA1"><enum>4809.</enum><header>Amendments to division D of the Omnibus Appropriations Act, 2009</header>
<subsection commented="no" id="H2C22824789D0451499FC465F53062F1E"><enum>(a)</enum><text>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—</text>
<paragraph commented="no" id="H106E6566015D4C76877BD4ED58E18571"><enum>(1)</enum><text>by striking by paragraph (1) and inserting the following new paragraph:</text>
<quoted-block id="H33A31414A64643AEA2D58F4167E0CE2A" style="OLC">
<paragraph commented="no" display-inline="yes-display-inline" id="H615C6D7EB52A41AE9D845A716CD0F654"><enum>“(1)</enum><text>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.</text> </paragraph><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph>
<paragraph commented="no" id="HEFD96AE6E73049E996AF7938AE7EE4A4"><enum>(2)</enum><text>by striking paragraph (2);</text> </paragraph>
<paragraph commented="no" id="H7E10C2BCFCD6482A8CD36C41786A153F"><enum>(3)</enum><text>by striking paragraph (3); and</text> </paragraph>
<paragraph commented="no" id="HD6CE33AD4087489AAD9451EC0094B20F"><enum>(4)</enum><text>by striking paragraph (4) and inserting the following new paragraph:</text>
<quoted-block id="HEE00F6094357435D8257F7C764000B14" style="OLC">
<paragraph commented="no" id="H7FEEF0438EFF47D28CA84785289268EC" indent="up1"><enum>(2)</enum><text>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.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection commented="no" id="HAEDA194C234E4F53BE20A3706BE49333"><enum>(b)</enum><text display-inline="yes-display-inline">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 <quote>primary Federal regulator</quote> each place it appears and inserting <quote>Consumer Financial Protection Agency</quote>.</text> </subsection></section>
<section id="HA1DD43BD530B409C9769CA42882E325C"><enum>4810.</enum><header>Amendments to the Homeowners Protection Act of 1998</header><text display-inline="no-display-inline">Section 10 of the Homeowners Protection Act of 1998 (12 U.S.C. 4909) is amended—</text>
<paragraph id="HF17B2A81ED6246AAAED75E22396FC929"><enum>(1)</enum><text>in the matter preceding paragraph (1) of subsection (a), by striking <quote>Compliance</quote> and inserting <quote>Subject to section 4202 of the Consumer Financial Protection Agency Act of 2009, compliance</quote>;</text> </paragraph>
<paragraph id="H683CCD094E3F48789CC8E39D5C38B4D9"><enum>(2)</enum><text>in subsection (a)(2), by striking <quote>and</quote> after the semicolon at the end;</text> </paragraph>
<paragraph id="H88F6F2C63ED24D75B2661230B010EC45"><enum>(3)</enum><text>in subsection (a)(3), by striking the period at the end and inserting <quote>; and</quote>;</text> </paragraph>
<paragraph id="H34DB5C1FEA8F4531B585D145BE46F0AD"><enum>(4)</enum><text>by inserting after subsection (a)(3), the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H385DCDB5B03041828C658FA4485F67BA" style="OLC">
<paragraph id="H4B0CDBB29CAA443993C81938659B9E91"><enum>(4) </enum><text display-inline="yes-display-inline">subtitle E of the Consumer Financial Protection Agency Act of 2009, by the Consumer Financial Protection Agency.</text> </paragraph><after-quoted-block>; and</after-quoted-block></quoted-block> </paragraph>
<paragraph id="HA177AE0E5E3B4F6BA845B4B6FF937965"><enum>(5)</enum><text display-inline="yes-display-inline">in subsection (b)(2), by inserting <quote>, subject to section 4202 of the Consumer Financial Protection Agency Act of 2009</quote> before the period at the end.</text> </paragraph></section>
<section id="HD2206145ED7C49ABA92D3F3B8328DAE8"><enum>4811.</enum><header>Amendments to the Real Estate Settlement Procedures Act of 1974</header>
<subsection id="HF4D4F2E7BD8C4149B5A264F85CDAE3C0"><enum>(a)</enum><header>Section 3</header><text>Section 3 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2602) is amended—</text>
<paragraph id="HFBBF1833EDFA4A978CE1F957E058EF35"><enum>(1)</enum><text>in paragraph (7), by striking <quote>and</quote> after the semicolon at the end;</text> </paragraph>
<paragraph id="H0E2DFAB0E7574B1D9EFBD282B0B67C90"><enum>(2)</enum><text>in paragraph (8), by striking the period at the end and inserting <quote>; and</quote>; and</text> </paragraph>
<paragraph id="H12260973F8274D49B1F1E012F4789EE4"><enum>(3)</enum><text>by adding at the end the following new paragraph:</text>
<quoted-block id="H53BD51CE839D41ECA77477589ABE3D82" style="OLC">
<paragraph id="H3033E63B7A5C4619B02E158CEAD1CC0D"><enum>(9)</enum><text>the term <quote>Agency</quote> means the Consumer Financial Protection Agency.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection id="H3E0EAEEB464A4836AA463C4D400856C7"><enum>(b)</enum><header>Section 4</header><text display-inline="yes-display-inline">Section 4 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2603) is amended—</text>
<paragraph id="HD4595919257C4EB8AACC4E05265204C1"><enum>(1)</enum><text>in subsection (a), by striking the first sentence and inserting the following: <quote>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.</quote>;</text> </paragraph>
<paragraph id="HEF1778D3C52A4260A5FE38A9ECC746E0"><enum>(2)</enum><text>by striking <quote>Secretary</quote> each place such term appears and inserting <quote>Agency</quote>; and</text> </paragraph>
<paragraph id="HD5D648B206314FFEAFAD8ACF312CCC13"><enum>(3)</enum><text>by striking <quote>form</quote> each place such term appears and inserting <quote>forms</quote>.</text> </paragraph></subsection>
<subsection id="HC7E05EFA845F4D979ED64B7C15B00D51"><enum>(c)</enum><header>Section 5</header><text>Section 5 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2604) is amended—</text>
<paragraph id="HEC9EB04744AD4A538196249030A4CBCD"><enum>(1)</enum><text>by striking <quote>Secretary</quote> each place such term appears, and inserting <quote>Agency</quote>; and</text> </paragraph>
<paragraph id="HCF1DA7A7F67A476FBD378A7639F5A59A"><enum>(2)</enum><text>by striking the first sentence of subsection (a), and inserting <quote>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.</quote>.</text> </paragraph></subsection>
<subsection id="HEDADEA5F0C154F8C830CF3F78B897635"><enum>(d)</enum><header>Section 6</header><text>Section 6(j)(3) of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2605(j)(3)) is amended—</text>
<paragraph id="HBF6795BDC650409FB3C98010FBFD5821"><enum>(1)</enum><text>by striking <quote>Secretary</quote> and inserting <quote>Director of the Agency</quote>; and</text> </paragraph>
<paragraph id="HC107D08A39EF400C86032A2CE01B18E3"><enum>(2)</enum><text>by striking <quote>by regulations that shall take effect not later than April 20, 1991,</quote> and inserting <quote>by regulation,</quote>.</text> </paragraph></subsection>
<subsection id="HC8E493158300462BA26872F70A7AAC29"><enum>(e)</enum><header>Section 7</header><text>Section 7 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2606) is amended by striking <quote>Secretary</quote> and inserting <quote>the Director of the Agency</quote>.</text> </subsection>
<subsection id="H2D827AE9270A482B8F19941F59DC6155"><enum>(f)</enum><header>Section 8</header><text>Section 8 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2607) is amended—</text>
<paragraph id="H0B588FCB72634CA58E146EF26B57D120"><enum>(1)</enum><text display-inline="yes-display-inline">in subsection (c)(5), by striking <quote>prescribed by the Secretary</quote> and inserting <quote>prescribed by the Director of the Agency</quote>; and</text> </paragraph>
<paragraph id="HC4F683918FC14210B2B46392297C1EF4"><enum>(2)</enum><text>in subsection (d)(4)—</text>
<subparagraph id="H2215B5E0EC534A6383A62CAD30F1A457"><enum>(A)</enum><text>by striking <quote>The Secretary,</quote> and inserting <quote>The Agency, the Secretary,</quote>; and</text> </subparagraph>
<subparagraph id="HAFCE94DF0AF24D78A2181B6C2772A8CF"><enum>(B)</enum><text>by adding at the end the following new sentence:<quote>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.</quote>.</text> </subparagraph></paragraph></subsection>
<subsection id="H6874B2458FC6416491533339296DF6D7"><enum>(g)</enum><header>Section 10</header><text>Section 10(d) of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2609(d)) is amended by striking <quote>Secretary</quote> and inserting <quote>Agency</quote>.</text> </subsection>
<subsection id="HB7929A5F4DDA4D7A8DE1A590353084B5"><enum>(h)</enum><header>Section 16</header><text>Section 16 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2614) is amended by inserting <quote>the Agency,</quote> before <quote>the Secretary</quote>.</text> </subsection>
<subsection id="HAD420E856F224EB88A125423740B9FD8"><enum>(i)</enum><header>Section 18</header><text>Section 18 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2616) is amended by striking <quote>Secretary</quote> each place such term appears and inserting <quote>Agency</quote>.</text> </subsection>
<subsection id="H7F7E36E962CA489BB92B8672325C11E1"><enum>(j)</enum><header>Section 19</header><text>Section 19 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2617) is amended—</text>
<paragraph id="H5C411AB56AF54184B344AFD41CB74165"><enum>(1)</enum><text>in the section heading, by striking <quote><header-in-text level="section" style="traditional">secretary</header-in-text></quote> and inserting <quote><header-in-text level="section" style="traditional">agency</header-in-text></quote>; and</text> </paragraph>
<paragraph id="HA3916016D0064A4DB6FF5522FBB354CA"><enum>(2)</enum><text>by striking <quote>Secretary</quote> each place such term appears and inserting <quote>Agency</quote>.</text> </paragraph></subsection></section>
<section id="HB210A58A593C423AB7668B334CB05AF9"><enum>4812.</enum><header>Amendments to the Right to Financial Privacy Act of 1978</header>
<subsection id="H0E8A84E7B999494B94A74E548AC82801"><enum>(a)</enum><header>Amendments to section 1101</header><text>Section 1101 of the Right to Financial Privacy Act of 1978 (12 U.S.C. 3401) is amended—</text>
<paragraph id="H6069555450A84B0D9C44258E0B077C5C"><enum>(1)</enum><text>by striking paragraph (1) and inserting the following new paragraph:</text>
<quoted-block id="H480C57FF2E67454D800085C73140FFBF" style="OLC">
<paragraph id="HE030338EAE19471F8AC1719BBE0C1D35"><enum>(1)</enum><text><quote>financial institution</quote> 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;</text> </paragraph><after-quoted-block>; and</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H727B02F6ACBF4E2D927E8E37055E10FE"><enum>(2)</enum><text>in paragraph (7), by inserting after subparagraph (A) the following new subparagraph:</text>
<quoted-block id="H37916C8A90DF425CBD65F09B752B0CA7" style="OLC">
<subparagraph id="HBE080A1DC1A446ACBCDDFC4D802B393E"><enum>(B)</enum><text>the Consumer Financial Protection Agency;</text> </subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection id="H92E55FE2AA2847A4B0F729DAC84310D7"><enum>(b)</enum><header>Amendments to section 1112</header><text>Section 1112(e) of the Right to Financial Privacy Act of 1978 (12 U.S.C. 3412) is amended by striking <quote>and the Commodity Futures Trading Commission is permitted</quote> and inserting <quote>the Commodity Futures Trading Commission, and the Consumer Financial Protection Agency is permitted</quote>.</text> </subsection>
<subsection id="H3E9A31DE122A47458009D69A46E682BF"><enum>(c)</enum><header>Amendments to section 1113</header><text>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—</text>
<quoted-block id="H20DD13180117424BB213BDD3DF743B2E" style="OLC">
<subsection id="HEEB03D74FB334536BC196F4D14195D78"><enum>(r)</enum><header>Disclosure to the consumer financial protection agency</header><text>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.</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection></section>
<section id="HA3FFDF63BC414432B63417738DADD01F"><enum>4813.</enum><header>Amendments to the Secure and Fair Enforcement for Mortgage Licensing Act of 2008</header>
<subsection id="HDCA33BC76F224FCB9ADABAA6CF2AF787"><enum>(a)</enum><header>Section 1503</header><text display-inline="yes-display-inline">Section 1503 of the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (12 U.S.C. 5102) is amended—</text>
<paragraph id="HEFEEF7F94EE24D23AD27FBA479E2465E"><enum>(1)</enum><text display-inline="yes-display-inline">by striking paragraph (9);</text> </paragraph>
<paragraph id="H51D6E216CF3841F2A358C7F4F8E9C0A2"><enum>(2)</enum><text>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));</text> </paragraph>
<paragraph id="HB166320B48C14290805C74C273015EAB"><enum>(3)</enum><text>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;</text> </paragraph>
<paragraph id="H6968F27F107E4DFCB110645B68AD69D4"><enum>(4)</enum><text>by inserting before paragraph (2) the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="HCE0327FB375B477884DB0EFE7943D337" style="OLC">
<paragraph id="H45A7358AEA89481EA013B5F7835D9154"><enum>(1)</enum><header>Agency</header><text display-inline="yes-display-inline">The term <quote>Agency</quote> means the Consumer Financial Protection Agency.</text> </paragraph><after-quoted-block>; and</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H6391091BBF7E457DB42760E46AC6D051"><enum>(5)</enum><text display-inline="yes-display-inline">by inserting after paragraph (2) the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H5CE704B5E5664E24A146F720E1ADBE3F" style="OLC">
<paragraph id="H243CED68540945CF85A3A5994C9D5096"><enum>(3)</enum><header>Director</header><text display-inline="yes-display-inline">The term <quote>Director</quote> means the Director of the Agency.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection id="H9A26BB8024494861BC09E7040EF74409"><enum>(b)</enum><header>Universal amendments relating to Agency</header><text display-inline="yes-display-inline">The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (12 U.S.C. 5101 et seq.) is amended—</text>
<paragraph id="H3638D881B64D402885A0DCBBB40182C0"><enum>(1)</enum><text display-inline="yes-display-inline">by striking <quote>Federal banking agencies</quote> 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 <quote>Agency</quote>; and</text> </paragraph>
<paragraph id="H37D32AE9CAB3419ABBD67F0129DD8A42"><enum>(2)</enum><text display-inline="yes-display-inline">by striking <quote>Secretary</quote> each place such term appears (other than in connection with a reference that is specifically amended by another provision of this section) and inserting <quote>Director</quote>.</text> </paragraph></subsection>
<subsection id="H7FF070D0BE9745DCBA8428C1AC6E966C"><enum>(c)</enum><header>Section 1507</header><text display-inline="yes-display-inline">Section 1507 of the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (12 U.S.C. 5106) is amended—</text>
<paragraph id="H2A7EDD1CA8F741C9B841C3AD54BBFAAF"><enum>(1)</enum><text>in subsection (a)—</text>
<subparagraph id="HF639D3F72D1E41AC95F95A7BE9B27021"><enum>(A)</enum><text>by striking paragraph (1) and inserting the following new paragraph:</text>
<quoted-block id="HBD4DE61D73624A37BB96FC93388FCB46" style="OLC">
<paragraph id="H4BC9481757F64F4FB5B4029C159BC3A6"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </paragraph><after-quoted-block>; and</after-quoted-block></quoted-block> </subparagraph>
<subparagraph id="H47F7B09485084610ADBC5F99D8784C45"><enum>(B)</enum><text display-inline="yes-display-inline">by striking <quote>appropriate Federal banking agency and the Farm Credit Administration</quote> in paragraph (2) and inserting <quote>Agency</quote>; and</text> </subparagraph></paragraph>
<paragraph id="HF8F99CDFA51141A0AD3D1175B2D0ACF5"><enum>(2)</enum><text>in subsection (b), by striking <quote>Federal banking agencies, through the Financial Institutions Examination Council, and the Farm Credit Administration</quote> each place such term appears and inserting <quote>Agency</quote>.</text> </paragraph></subsection>
<subsection id="H7ADFCB908418497DAD96624A38328625"><enum>(d)</enum><header>Section 1508</header>
<paragraph id="H7B46B1CF491C48288929299E35BF47BD"><enum>(1)</enum><header>In general</header><text>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:</text>
<quoted-block id="H6EFF2212587241BE8508F70F2EA3D40C" style="OLC">
<subsection id="H12678E1D5A9F4BF6B5BBFA91C251232F"><enum>(f)</enum><header>Regulations</header>
<paragraph id="H215D321F838C48A19CBC1D55A2658CC9"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph>
<paragraph id="H9C021C322F004271B6C79ACE9B04B726"><enum>(2)</enum><header>Factors taken into account</header><text>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.</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph>
<paragraph id="HE5CD9F93BA50436D87D17FF9545E5AE3"><enum>(2)</enum><header>Clerical amendment</header><text display-inline="yes-display-inline">The heading for section 1508 of the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 is amended by striking <quote><header-in-text level="section" style="OLC">Secretary of Housing and Urban Development</header-in-text></quote> and inserting <quote><header-in-text level="section" style="OLC">Consumer Financial Protection Agency</header-in-text></quote>.</text> </paragraph></subsection>
<subsection id="H62E6AC7D838646A78617EAAF3C7D6F70"><enum>(e)</enum><header>Section 1510</header><text display-inline="yes-display-inline">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:</text>
<quoted-block id="HBA68BAEF75114045B59AAE134450F1F0" style="OLC">
<section id="H33584D37A753465D82823DFE9EC2425D"><enum>1510.</enum><header>Fees</header><text display-inline="no-display-inline">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.</text> </section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="HC0D78C10118D457EB47715E604C90A62"><enum>(f)</enum><header>Section 1513</header><text display-inline="yes-display-inline">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:</text>
<quoted-block id="HF25EAC61D3604C7880C99509C2F54E71" style="OLC">
<section id="HE2655ED0DB9C4E78AE784356ED51BBD3"><enum>1513.</enum><header>Liability provisions</header><text display-inline="no-display-inline">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.</text> </section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H263137FF31554159AB5EC79E616D3E61"><enum>(g)</enum><header>Section 1514</header><text>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 <quote><header-in-text level="section" style="OLC">under HUD backup licensing system</header-in-text></quote> and inserting <quote><header-in-text level="section" style="OLC">by the Agency</header-in-text></quote>.</text> </subsection></section>
<section id="HF62339E725C444668965FD3F581CFA1F"><enum>4814.</enum><header>Amendments to the Truth in Savings Act</header>
<subsection id="H032464AB9E5341529F5A8965D845F526"><enum>(a)</enum><header>Section 263</header><text>Section 263 of the Truth in Savings Act (12 U.S.C. 4302) is amended in subsection (b) by striking <quote>Board</quote> each place such term appears and inserting <quote>Agency</quote>.</text> </subsection>
<subsection id="H95E22F0658184C2C8A132C04943EBDC4"><enum>(b)</enum><header>Section 265</header><text display-inline="yes-display-inline">Section 265 of the Truth in Savings Act (12 U.S.C. 4304) is amended by striking <quote>Board</quote> each place such term appears and inserting <quote>Agency</quote>.</text> </subsection>
<subsection id="HF2637FA5FD024BADBE281DC6540CB15E"><enum>(c)</enum><header>Section 266</header><text>Section 266(e) of the Truth in Savings Act is amended (12 U.S.C. 4305) by striking <quote>Board</quote> and inserting <quote>Agency</quote>.</text> </subsection>
<subsection id="H74D1393370BB4AC2B62EA2A05335CBE0"><enum>(d)</enum><header>Section 269</header><text display-inline="yes-display-inline">Section 269 of the Truth in Savings Act (12 U.S.C. 4308) is amended by striking <quote>Board</quote> each place such term appears and inserting <quote>Agency</quote>.</text> </subsection>
<subsection id="HABC10F78B66F468F92DEB52A88B56483"><enum>(e)</enum><header>Section 270</header><text>Section 270 of the Truth in Savings Act (12 U.S.C. 4309) is amended—</text>
<paragraph id="H70F05F3A97054713AAC3721A16D173A1"><enum>(1)</enum><text>in subsection (a)—</text>
<subparagraph id="HC292C0A94124494A8E83CF98FFD4058F"><enum>(A)</enum><text>by striking <quote>Compliance</quote> and inserting <quote>Subject to section 4202 of the Consumer Financial Protection Agency Act of 2009, compliance</quote>;</text> </subparagraph>
<subparagraph id="H600964F9323F4C0FBF79F42A118E7072"><enum>(B)</enum><text>by striking subparagraph (A) of paragraph (1) and inserting the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="H69310370B5404D26A8274D392F093923" style="OLC">
<subparagraph id="H9ACFCB6D540C405D840D51B60FF02554"><enum>(A)</enum><text display-inline="yes-display-inline">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;</text> </subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block> </subparagraph>
<subparagraph id="HE730A5E4DAC44015AA8C3E9E19DFDFF5"><enum>(C)</enum><text>by adding at the end, the following new paragraph:</text>
<quoted-block id="H855F8783DBA644E58BDAAA3FFAF8A86A" style="OLC">
<paragraph id="H5BE81D445EA54531ABDD77E38F799827"><enum>(3)</enum><text>subtitle E of the Consumer Financial Protection Agency Act of 2009, by the Agency.</text> </paragraph><after-quoted-block>; and</after-quoted-block></quoted-block> </subparagraph></paragraph>
<paragraph id="H7CD195884F3542E0A3B2C1DC81F2C14A"><enum>(2)</enum><text>in subsection (c)—</text>
<subparagraph id="H4CBC3DE051004CABA1AAEC73515C778D"><enum>(A)</enum><text>in the subsection heading, by striking <quote><header-in-text level="subsection" style="OLC">board</header-in-text></quote> and insert <quote><header-in-text level="subsection" style="OLC">agency</header-in-text></quote>; and</text> </subparagraph>
<subparagraph id="HBB0921CCABF646B89EF3B8EAD6600823"><enum>(B)</enum><text>by striking <quote>Board</quote> and inserting <quote>Agency</quote>.</text> </subparagraph></paragraph></subsection>
<subsection id="HAB10CE5C5036482380BFDB8A4F8C84AD"><enum>(f)</enum><header>Section 272</header><text>Section 272 of the Truth in Savings Act (12 U.S.C. 4311) is amended—</text>
<paragraph id="H8386524AC91040E1B108583D23018582"><enum>(1)</enum><text>in subsection (a), by striking <quote>Board</quote> and inserting <quote>Agency</quote>; and</text> </paragraph>
<paragraph id="H524F5AD716D047B681F39176F32E49E8"><enum>(2)</enum><text>in subsection (b), by striking <quote>regulation prescribed by the Board</quote> each place such term appears and inserting <quote>regulation prescribed by the Agency</quote>.</text> </paragraph></subsection>
<subsection id="H0811EB4A8C314DC49ABBCA6BCD935BA4"><enum>(g)</enum><header>Section 273</header><text>Section 273 of the Truth in Savings Act (12 U.S.C. 4312) is amended in the last sentence by striking <quote>Board</quote> and inserting <quote>Agency</quote>.</text> </subsection>
<subsection id="H43BA4F638C5F438DA0342F1FAD9EEFFE"><enum>(h)</enum><header>Section 274</header><text>Section 274 of the Truth in Savings Act (12 U.S.C. 4313) is amended—</text>
<paragraph id="HA154D18E2C2C4C15AF7D57BA2F91D35D"><enum>(1)</enum><text>in paragraph (2) by striking <quote>Board</quote> and inserting <quote>Agency</quote>; and</text> </paragraph>
<paragraph id="H59F071721D7041B6B00B9D32E28999B7"><enum>(2)</enum><text>by striking paragraph (4) and inserting the following new paragraph:</text>
<quoted-block id="H0208DF4BCE7D47CABAB02EB1137FEE9B" style="OLC">
<paragraph id="H621795D041AA414CB843663F73B6B9C5"><enum>(4)</enum><header>Agency</header><text>The term <quote>Agency</quote> means the Consumer Financial Protection Agency.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection></section>
<section id="H2D67E9FAB74145469DD4901001E39C65" display-inline="no-display-inline" section-type="subsequent-section"><enum>4815.</enum><header>Amendments to the Telemarketing and Consumer Fraud Abuse and Prevention Act</header>
<subsection id="H6A0F1AAD83F44086AEBFB5B25BB7596D"><enum>(a)</enum><text display-inline="yes-display-inline">Section 4 of the Telemarketing and Consumer Fraud Abuse and Prevention Act (15 U.S.C. 6102) is amended—</text>
<paragraph id="H0294CC9F99D9476D837A52A272AE393A"><enum>(1)</enum><text>in subsection (b)—</text>
<subparagraph id="HCF9ACCBD291C4DBAAB563B3B9FA59555"><enum>(A)</enum><text>by inserting <quote>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</quote> after <quote>Commission</quote> each of the first 2 places it appears; and</text></subparagraph>
<subparagraph id="HE6130936C192447CB3888027A3B182C7"><enum>(B)</enum><text>by inserting <quote>or the Consumer Financial Protection Agency</quote> after <quote>Commission</quote> the last place it appears; and</text></subparagraph></paragraph>
<paragraph id="HF3CAE9DBBA44444584C1679FA70C0547"><enum>(2)</enum><text>in subsection (d), by inserting <quote>or the Consumer Financial Protection Agency</quote> after <quote>Commission</quote> each place such term appears.</text></paragraph></subsection>
<subsection id="H0565AFF0DD53498EAC1B14834DF8205C"><enum>(b)</enum><text>Section 5 of the Telemarketing and Consumer Fraud Abuse and Prevention Act (15 U.S.C. 6102) is amended—</text>
<paragraph id="HB126A8A2FBF244CDB0E635C95E31E248"><enum>(1)</enum><text>in subsection (b)—</text>
<subparagraph id="HBE723E7627EB453EA6BE3CFB3A43F954"><enum>(A)</enum><text>by inserting <quote>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</quote> after <quote>Commission</quote> each of the first 2 places it appears; and</text></subparagraph>
<subparagraph id="HDD4307B819A64A52A528F14D2524A953"><enum>(B)</enum><text>by inserting <quote>or the Consumer Financial Protection Agency</quote> after <quote>Commission</quote> the last place it appears; and</text></subparagraph></paragraph>
<paragraph id="HDF2506A240BE414B90DF1EAD777C7074"><enum>(2)</enum><text>in subsection (c), by inserting <quote>or the Consumer Financial Protection Agency</quote> after <quote>Commission</quote> each place such term appears.</text></paragraph></subsection>
<subsection id="H3A113F9698044737971F078D645207F6"><enum>(c)</enum><text>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:</text>
<quoted-block style="OLC" display-inline="no-display-inline" id="H762E0D079D0F43E7A70C2FB710903C3E">
<subsection id="HFF4A2180ADDF45B4837330FDCDA05A88"><enum>(c)</enum><header>Enforcement by the Consumer Financial Protection Agency</header><text display-inline="yes-display-inline">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.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section>
<section id="H833B03F112C04E13BF3387A3FC5C9B92"><enum>4816.</enum><header>Membership in Financial Literacy and Education Commission</header><text display-inline="no-display-inline">Section 513(c)(1) of the Financial Literacy and Education Improvement Act (20 U.S.C. 9702(c)(1)) is amended—</text>
<paragraph id="H92210860C95746D086B34D2A979398DB"><enum>(1)</enum><text>in subparagraph (B), by striking <quote>and</quote> at the end;</text> </paragraph>
<paragraph id="HADDC5C158311442E900B3AEC06A58C0D"><enum>(2)</enum><text>by redesignating subparagraph (C) as subparagraph (D); and</text> </paragraph>
<paragraph id="HB7FB88C7389048B3AF3523FA46153C1F"><enum>(3)</enum><text>by inserting after subparagraph (B) the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="H4E264830DDEC47679350B41901EFA122" style="OLC">
<subparagraph id="H236A7734AA3744E899D7414DEBAF29C4"><enum>(C)</enum><text display-inline="yes-display-inline">the Director of the Consumer Financial Protection Agency; and</text> </subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></section>
<section id="HF2DDD0043EF74ABB999FFB86411A73BF"><enum>4817.</enum><header>Effective date</header><text display-inline="no-display-inline">The amendments made by sections 4803 through 4815 shall take effect on the designated transfer date.</text> </section>
<section id="HEAD12B55596541A793BA89B6C65953F0"><enum>4818.</enum><header>Amendments to Truth in Lending Act</header>
<subsection id="H10DD9C90295D4CE08EFC6BEEEC987FD8"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Section 128(e) of the Truth in Lending Act is amended—</text>
<paragraph id="HF4A0DF83841C4AF4A4FF20462DE0A939"><enum>(1)</enum><text>by striking paragraph (3) and inserting the following new paragraph (3):</text>
<quoted-block style="OLC" id="H31B99197DAC64A1BAAA1D2A3FD2907FA" display-inline="no-display-inline">
<paragraph id="HA05A29010E034D3EAC28DD1C59CD92CE"><enum>(3)</enum><header>Institutional certification required</header>
<subparagraph id="H86D83398EC234EAF8BB00700241B71B0" display-inline="yes-display-inline"><enum>(A)</enum><text display-inline="yes-display-inline">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—</text>
<clause id="H54BDEFD68A274B1D87A237B65F9D0E34" indent="up1"><enum>(i)</enum><text>of the enrollment status of the borrower;</text></clause>
<clause id="HE5B9AF7BC91A43BCA850C9ED32B92ABB" indent="up1"><enum>(ii)</enum><text>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;</text></clause>
<clause id="H21FE40F8534841C5813D25C3261D5A97" indent="up1"><enum>(iii)</enum><text display-inline="yes-display-inline">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</text></clause>
<clause id="H3F68A898B4DE471A9FD30F83C08A6D93" indent="up1"><enum>(iv)</enum><text>that the institution has—</text>
<subclause id="H42F7C5096D6F44018F64EFB33285EC4A"><enum>(I)</enum><text>informed the borrower—</text>
<item id="HC8F543BAEE17442D95F4DB1395C752CE" commented="no" display-inline="no-display-inline"><enum>(aa)</enum><text display-inline="yes-display-inline">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;</text></item>
<item id="H43731B35F70B4D859945A052187363FD" commented="no"><enum>(bb)</enum><text display-inline="yes-display-inline">of the borrower’s ability to select a private educational lender of the borrower’s choice;</text></item>
<item id="H4D3CB011F7884188A938492817D442C4" commented="no"><enum>(cc)</enum><text>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</text></item>
<item id="HC2F88B47BE3A4FD0BB1AB1D141506612" commented="no"><enum>(dd)</enum><text display-inline="yes-display-inline">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;</text></item></subclause>
<subclause id="HE7BF868FDC0C48FD861E10827EBA43D6" commented="no"><enum>(II)</enum><text>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</text></subclause>
<subclause id="HB3CC80C9D7734B28ACD5F3F14F7D8CE9" commented="no" display-inline="no-display-inline"><enum>(III)</enum><text>counseled the borrower on the borrower’s financial aid options.</text></subclause></clause></subparagraph>
<subparagraph id="HE42EE033639E43BB8F25DA409DC1C520" indent="up1"><enum>(B)</enum><text>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.</text></subparagraph> </paragraph><after-quoted-block>;</after-quoted-block></quoted-block></paragraph>
<paragraph id="H2FF6FBD4473E46C7A1923BA5826D5274"><enum>(2)</enum><text>by redesignating paragraphs (9), (10), and (11) as paragraphs (10), (11), and (12), respectively; and</text></paragraph>
<paragraph id="HE87ACEFA412E47169EE10DA58DFACBAA"><enum>(3)</enum><text>by inserting after paragraph (8) the following new paragraph (9):</text>
<quoted-block style="OLC" id="HBA78D0C303244B83AA3E8489E7F5D6CD" display-inline="no-display-inline">
<paragraph id="H72E70770042A4D219410D53CE7AC6288"><enum>(9)</enum><header>Provision of information</header><text display-inline="yes-display-inline">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.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H1E6FBC01BE3B4E55B9DE95CFEAC7CFA0"><enum>(b)</enum><header>Regulations</header>
<paragraph id="H5AB2307FD6A840F98B8E29B47714F702"><enum>(1)</enum><header>Deadline for regulations</header><text>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.</text></paragraph>
<paragraph id="HF83316FE71F545A29EA70CA7F558AECC"><enum>(2)</enum><header>Effective date</header><text display-inline="yes-display-inline">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).</text></paragraph></subsection>
<subsection id="H2DC07300B2AC4DBE81353E005A9990F0"><enum>(c)</enum><header>Study and report on private education loans and private educational lenders</header>
<paragraph id="HEBAF27DEC13C4694B4102D8087B0512A"><enum>(1)</enum><header>Report</header><text display-inline="yes-display-inline">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).</text></paragraph>
<paragraph id="H991A76D77E294176B1F138AB05C69975"><enum>(2)</enum><header>Content</header><text display-inline="yes-display-inline">The report required by this subsection shall examine, at a minimum, the following:</text>
<subparagraph id="H29352ACF5E904794BA48BFB224CF353F"><enum>(A)</enum><text>the growth and changes of the private education loan market in the United States;</text></subparagraph>
<subparagraph id="HCDD2D882B02040EA80D0D582D748C627"><enum>(B)</enum><text>factors influencing such growth and changes;</text></subparagraph>
<subparagraph id="HF37E4FE29A3B4EBEBF3B333827E1CA4A"><enum>(C)</enum><text>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;</text></subparagraph>
<subparagraph id="H68114131A7BF46CB8DB1A08951A8DA48"><enum>(D)</enum><text>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;</text></subparagraph>
<subparagraph id="HFEE8B97ECCED43EC992088E31816B01B"><enum>(E)</enum><text>the characteristics of private educational lenders, including whether such creditors are for-profit, non-profit, or institutions of higher education;</text></subparagraph>
<subparagraph id="HB6C43DD5F5EF4C178F1F9DC373C6A9AC"><enum>(F)</enum><text display-inline="yes-display-inline">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);</text></subparagraph>
<subparagraph id="H1B09B4C76D524FC387AEF214E6FC55E9"><enum>(G)</enum><text>the terms, conditions, and pricing of private education loans;</text></subparagraph>
<subparagraph id="H4A1B5681627C4E6A9467F46C5882CF80"><enum>(H)</enum><text display-inline="yes-display-inline">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;</text></subparagraph>
<subparagraph id="H34C490E76A2E446AB9F8FDDB5EC6FF43"><enum>(I)</enum><text>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</text></subparagraph>
<subparagraph id="H57200FF98F8C4B40A6AE4434191F0D0A"><enum>(J)</enum><text>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.</text></subparagraph></paragraph></subsection>
<subsection id="HE95891D0FE9A4236AF7D654D3F398FC4"><enum>(d)</enum><header>Report</header><text> 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.</text></subsection></section></subtitle>
<subtitle commented="no" id="HD1AA13B8BC2D43CEB90FE3BAF6E8FEF2"><enum>I</enum><header>Improvements to the Federal Trade Commission Act</header>
<section commented="no" id="HA141795800944572BFFE69FBD82E0AB4" section-type="subsequent-section"><enum>4901.</enum><header>Amendments to the Federal Trade Commission Act</header>
<subsection commented="no" id="HFF54CED96FA946029785F29DC6D3248F"><enum>(a)</enum><text>Section 5(m)(1)(A) of the Federal Trade Commission Act (15 U.S.C. 45(m)(1)(A)) is amended—</text>
<paragraph commented="no" id="HABE9FAEDFE5C4504B5F6BFD5BD95F9F0"><enum>(1)</enum><text>by inserting <quote>this Act or</quote> after <quote>violates</quote> the first place such term appears; </text> </paragraph>
<paragraph id="H9FB119DEADC74496B06F417F07C0B9CF" display-inline="no-display-inline"><enum>(2)</enum><text display-inline="yes-display-inline">by inserting a comma after <quote>under this Act</quote>;</text></paragraph>
<paragraph id="H8D67460AB61C4BEBAF382E4E680DAAB2" display-inline="no-display-inline"><enum>(3)</enum><text>by inserting a comma after <quote>subsection (a)(1))</quote>; and </text></paragraph>
<paragraph commented="no" id="H6A93BBFC93FC41A1881FAEB49A4E8E86"><enum>(4)</enum><text>by inserting <quote>a violation of this Act or is</quote> before <quote>prohibited</quote>.</text> </paragraph></subsection>
<subsection commented="no" id="H6DF4E17ACC22402286ED28800B3F4FC4"><enum>(b)</enum><text>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:</text>
<quoted-block display-inline="no-display-inline" id="H37176B0F2EF64E7E8FCFD9BEAA111923" style="OLC">
<subsection commented="no" id="H51EC8C0D0752487B9CDDF2273102A2E1"><enum>(o)</enum><header>Unlawful assistance</header><text display-inline="yes-display-inline">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)).</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection commented="no" id="H9AF1F05046B24E5584DC24A66F62108D"><enum>(c)</enum><text display-inline="yes-display-inline">Section 18 of the Federal Trade Commission Act (15 U.S.C. 57a) is amended—</text>
<paragraph id="HD531D33BEB6941ABA75CB7565D4BA924"><enum>(1)</enum><text display-inline="yes-display-inline">in subsection (a)(1), by striking <quote>(h)</quote> and inserting <quote>(f)</quote>;</text></paragraph>
<paragraph commented="no" id="H463F274B6A334F34BEE75F7C75163987"><enum>(2)</enum><text display-inline="yes-display-inline">by amending subsection (b) to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HD4CA505F07A74DB7878FB696EB1B21B8" style="OLC">
<subsection commented="no" id="H2D9BE3188E8D4F69868BCA69392E5AEE"><enum>(b)</enum><header>Procedure applicable</header><text display-inline="yes-display-inline">When prescribing a rule under subsection (a)(1)(B) of this section, the Commission shall proceed in accordance with section 553 of title 5.</text> </subsection><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H6C48872F4C774E97BCE220351852CCBE" display-inline="no-display-inline"><enum>(3)</enum><text display-inline="yes-display-inline">by striking subsection (c); </text></paragraph>
<paragraph id="H69B6D84483344FD3A8B868D29AB8372F"><enum>(4)</enum><text>in subsection (d), by striking <quote>(d)(1) The Commission’s</quote> and all that follows through the end of paragraph (2) and by redesignating paragraph (3) of such subsection as subsection (c);</text></paragraph>
<paragraph id="H92F826736AD24422B5446DA58E80A042"><enum>(5)</enum><text>In such subsection (c) (as so redesignated), by inserting <quote>prescribed</quote> after <quote>any rule</quote>; </text></paragraph>
<paragraph id="HE1D3DA005EA94A79B62388DE1C8559BE" display-inline="no-display-inline"><enum>(6)</enum><text>by striking subsections (f), (i), and (j) and redesignating subsections (e), (g), and (h) as subsections (d), (e), and (f), respectively; </text></paragraph>
<paragraph id="H9F97F08210CD4B2F89D2F99DEE80A4F7" display-inline="no-display-inline"><enum>(7)</enum><text display-inline="yes-display-inline">in subsection (c) (as redesignated), by inserting <quote>prescribed</quote> after <quote>rule</quote>; and</text></paragraph>
<paragraph commented="no" id="HC15B57AA563D4C5F8969652D6E181168"><enum>(8)</enum><text>in subsection (d) (as redesignated)—</text>
<subparagraph id="HA490D9CF8178426893998EB62B002FAE"><enum>(A)</enum><text display-inline="yes-display-inline">in paragraph (1)(A) by striking <quote>promulgated</quote> and inserting <quote>prescribed</quote>;</text></subparagraph>
<subparagraph commented="no" id="HA86C862E333A44F1AB947B9F16CC72BE"><enum>(B)</enum><text>in paragraph (1)(B), by striking <quote>the transcript required by subsection (c)(5),</quote>;</text> </subparagraph>
<subparagraph id="H1C0A1E45864A4F20BD6C172A62800D3F"><enum>(C)</enum> <text display-inline="yes-display-inline">in paragraph (3), by striking <quote>The court shall hold unlawful</quote> and all that follows through the end of the paragraph; and</text></subparagraph>
<subparagraph id="HE8EB0F0E5CCD4F5FA554F4ED23EF69FF"><enum>(D)</enum><text>by striking paragraphs (4) and (5) and inserting the following:</text>
<quoted-block style="traditional" id="HC88385F131DD4324A5B2E76C952EB1AE" display-inline="no-display-inline">
<paragraph id="HBA205E4E7AB1452DB245B9519BBFC246" indent="up1"><enum>(4)</enum><text display-inline="yes-display-inline">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.</text></paragraph><after-quoted-block>; and</after-quoted-block></quoted-block></subparagraph></paragraph>
<paragraph id="HF55F754C58374757A5D187EE33D8AE66"><enum>(9)</enum><text>in subsection (e)(2) (as so redesignated), by striking <quote>class or persons</quote> and inserting <quote>class of persons</quote>.</text> </paragraph></subsection>
<subsection id="H0488C160F5F7438591F6B5CB74063801" display-inline="no-display-inline"><enum>(d)</enum><text>Section 16(a)(2) of the Federal Trade Commission Act (15 U.S.C. 56(a)(2)) is amended—</text>
<paragraph id="H6B68EA50259E4ABF8965F809920B8047"><enum>(1)</enum><text>in subparagraph (D), by striking <quote>; or</quote> and inserting a semicolon; and</text></paragraph>
<paragraph id="H5B8809A8C91D48B1AF44FA13F2493843"><enum>(2)</enum><text>by inserting after subparagraph (E) the following:</text>
<quoted-block style="OLC" display-inline="no-display-inline" id="HD502381BC9AB4C60B865F8699ACB8CA5">
<subparagraph id="HEB090F5B75C84EE6BBF8C7662BFBD90F"><enum>(F)</enum><text display-inline="yes-display-inline">to obtain a civil penalty authorized under any provision of law enforced by the Commission.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H43CA9E9C7AC64EE3BD6405A15B73D287"><enum>(e)</enum><text display-inline="yes-display-inline">Section 5(l) of the Federal Trade Commission Act (15 U.S.C. 45(l)) is amended in the first sentence by inserting <quote>the Commission or</quote> after <quote>brought by</quote>.</text></subsection></section></subtitle>
<subtitle id="H2DD13A251B1848D8814B8FCB796CDAE7"><enum>J</enum><header>Miscellaneous</header>
<section id="HC32FA35F1DE4425CA778FE2BAD22B8E9"><enum>4951.</enum><header>Requirements for State-licensed loan originators</header><text display-inline="no-display-inline">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:</text>
<quoted-block style="OLC" display-inline="no-display-inline" id="HA28337D0952C49E69270343BBDA6FC19">
<quoted-block-continuation-text quoted-block-continuation-text-level="paragraph">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. </quoted-block-continuation-text><after-quoted-block>.</after-quoted-block></quoted-block></section></subtitle>
<enum>V</enum><header>Capital Markets</header>
<subtitle id="HF7AAB3487FBD4F8BAB386D72877DEB68"><enum>A</enum><header>Private Fund Investment Advisers Registration Act</header>
<section id="HE8FD2649B2914D618FE965F6C1D20779" section-type="subsequent-section"><enum>5001.</enum><header>Short title</header><text display-inline="no-display-inline">This subtitle may be cited as the <quote>Private Fund Investment Advisers Registration Act of 2009</quote>.</text> </section>
<section id="H5801F154D7914CC2969225ACF6345652"><enum>5002.</enum><header>Definitions</header><text display-inline="no-display-inline">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:</text>
<quoted-block display-inline="no-display-inline" id="H041FBA6FDDFE481E972A988153AD6F1D" style="OLC">
<paragraph id="H673E96C341D54281B2DE68A75C73070D"><enum>(29)</enum><header>Private fund</header><text>The term <quote>private fund</quote> 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.</text> </paragraph>
<paragraph id="H85D590A2AC2E49DAABEA5656A2868B05"><enum>(30)</enum><header>Foreign private fund adviser</header><text display-inline="yes-display-inline">The term <quote>foreign private fund adviser</quote> means an investment adviser who—</text>
<subparagraph id="H41BBCC19524D494AB4888039D5275E01"><enum>(A)</enum><text>has no place of business in the United States;</text> </subparagraph>
<subparagraph id="HB0ABB017588E4995B555CD5A8F19EE90"><enum>(B)</enum><text>during the preceding 12 months has had—</text>
<clause id="H1F0BE61DE634469C8E6A079F95F2BEFA"><enum>(i)</enum><text display-inline="yes-display-inline">in total, fewer than 15 clients and investors in the United States in private funds advised by the investment adviser; and</text></clause>
<clause id="H59E81B20521B4BFEB2C70633B7358BCB"><enum>(ii)</enum><text display-inline="yes-display-inline">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</text> </clause></subparagraph>
<subparagraph id="H20733249719A409A889B973C1D59488E"><enum>(C)</enum><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </section>
<section id="H2B46BAD195A144639F5122C290069C32"><enum>5003.</enum><header>Elimination of private adviser exemption; Limited exemption for foreign private fund advisers; Limited intrastate exemption</header>
<subsection id="HF7D8479DBAFE441D8EC473894EC80BAA"><enum>(a)</enum><header>Exemption</header><text display-inline="yes-display-inline">Section 203(b) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–3(b)) is amended—</text>
<paragraph id="H7665339D89E5444780E6A937B295AA78"><enum>(1)</enum><text display-inline="yes-display-inline">in paragraph (1), by inserting <quote>, except an investment adviser who acts as an investment adviser to any private fund,</quote> after <quote>any investment adviser</quote>;</text> </paragraph>
<paragraph id="HCE2DBF46D0DA4722A13B8C82CBFA4955"><enum>(2)</enum><text>by amending paragraph (3) to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HFF847D600D7E4B6F8C611E38FCF359CC" style="OLC">
<paragraph id="H5A9FF4D34F1745918DF3599DA8EC5675"><enum>(3)</enum><text display-inline="yes-display-inline">any investment adviser that is a foreign private fund adviser;</text> </paragraph><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph>
<paragraph id="HECC091F711094A2C91C935341EF665A5"><enum>(3)</enum><text>in paragraph (5), by striking <quote>or</quote> at the end;</text> </paragraph>
<paragraph id="H72CB760B063049FA93CBEDD6821E2D0B"><enum>(4)</enum><text>in paragraph (6)—</text>
<subparagraph id="H28D94803268A450EA5C16BAE93EBB185"><enum>(A)</enum><text display-inline="yes-display-inline">in subparagraph (A), by striking <quote>or</quote>;</text> </subparagraph>
<subparagraph id="H985FA1460DAE4C5188BC0F6F908AFD42"><enum>(B)</enum><text>in subparagraph (B), by striking the period at the end and adding <quote>; or</quote>; and</text> </subparagraph>
<subparagraph id="H0D7882D29DA3464FB435E277664D0712"><enum>(C)</enum><text>by adding at the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="H22B22B62F32A4DDB94A65184AC2C7E1C" style="OLC">
<subparagraph id="H5EBBF594EA934350B912B4E04E220CBF"><enum>(C)</enum><text display-inline="yes-display-inline">a private fund; or</text> </subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block> </subparagraph></paragraph>
<paragraph id="H2DBA466A1F3A4FB3A6D4AE774EA2D727"><enum>(5)</enum><text>by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="HD3C58ECAD87D4D7190945C22FF9588B0" style="traditional">
<paragraph id="HCA98F5505B964BF5A399C8F773FDBC9B"><enum>(7)</enum><text display-inline="yes-display-inline">any investment adviser who solely advises—</text>
<subparagraph id="H346D91CEC3CA4B909B6C8177C686F79C"><enum>(A)</enum><text>small business investment companies licensed under the Small Business Investment Act of 1958;</text> </subparagraph>
<subparagraph id="H738EBE021E7C463CA2E630ADD98278FD"><enum>(B)</enum><text>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</text> </subparagraph>
<subparagraph id="HED8874176E2E4955BAEBAB3B533D9763"><enum>(C)</enum><text>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.</text> </subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection id="H08B587B3E4DA482091D02A93896E7AED" display-inline="no-display-inline"><enum>(b)</enum><header>Consideration of risk</header><text display-inline="yes-display-inline">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:</text>
<quoted-block style="OLC" display-inline="no-display-inline" id="H79C0AC634CBB4579B7E547FF8D18DB6D">
<paragraph id="HD02E10F48CCB4A21AD5DC07E68821F9D"><enum>(3)</enum><text display-inline="yes-display-inline">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.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section>
<section id="HB6A474F5DAE945CCBE8C51920743E07E"><enum>5004.</enum><header>Collection of data</header><text display-inline="no-display-inline">Section 204 of the Investment Advisers Act of 1940 (15 U.S.C. 80b–4) is amended—</text>
<paragraph id="H36BEFB494EAA4452B7B2542D4BC36409"><enum>(1)</enum><text>by redesignating subsections (b) and (c) as subsections (c) and (d), respectively; and</text> </paragraph>
<paragraph id="HE77D925040274398A5CBC7ED2DF425BD"><enum>(2)</enum><text>by inserting after subsection (a) the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H119152482A97428B881E42978E027212" style="OLC">
<subsection id="H4F5C7DECA91F49F1A3A3D88283881E36"><enum>(b)</enum><header>Records and reports of private funds</header>
<paragraph id="HAD77EFC906DD409CA162AD6E0F21F49A"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HDDDBA45997C14810A808D9A58B4EDA38"><enum>(2)</enum><header>Required information</header><text display-inline="yes-display-inline">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—</text>
<subparagraph id="HEA6E1A2B700A4A3A85218885234BFBD6"><enum>(A)</enum><text>the amount of assets under management;</text> </subparagraph>
<subparagraph id="H757D18178EE544EA8D7B9018497A0562"><enum>(B)</enum><text>the use of leverage (including off-balance sheet leverage);</text> </subparagraph>
<subparagraph id="H82A4CDE96CC14A02A8D8D5A54257DEBE"><enum>(C)</enum><text>counterparty credit risk exposures;</text> </subparagraph>
<subparagraph id="H1B4FE674926B433090EF7C5E13B4FEAC"><enum>(D)</enum><text>trading and investment positions;</text> </subparagraph>
<subparagraph id="HF63127DF6B4A40939FFE749B0BBA5465"><enum>(E)</enum><text>trading practices; and</text> </subparagraph>
<subparagraph id="H2591A29B13684776AE2238D9A81AF7C5"><enum>(F)</enum><text>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.</text> </subparagraph></paragraph>
<paragraph id="HFCA70DC7CA8641849F57DD7D783C3AEA"><enum>(3)</enum><header>Optional information</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HFB8B0DEFE94F49EDB358F25667FAE46F"><enum>(4)</enum><header>Maintenance of records</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HEB18341E5C97434CA918DCD30DDE6BD7"><enum>(5)</enum><header>Examination of records</header>
<subparagraph id="HA11ED24FB3D1464AA1A6D6A7E0547735"><enum>(A)</enum><header>Periodic and special examinations</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="H3F18AFD7D45048DBBF7A3A5CBD0BC32A"><enum>(B)</enum><header>Availability of records</header><text>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.</text> </subparagraph></paragraph>
<paragraph id="H354C9882CE3B4B3DB9329FFFCDC43910"><enum>(6)</enum><header>Information sharing</header><text display-inline="yes-display-inline">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).</text> </paragraph>
<paragraph id="HA7949990FCE142A0BCC273A9BB93554C"><enum>(7)</enum><header>Disclosures of certain private fund information</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HF1CBB4D023424A158D5791AA38CA3009" display-inline="no-display-inline"><enum>(8)</enum><header>Applicable privileges not waived</header><text display-inline="yes-display-inline">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—</text>
<subparagraph id="H12177130D8EB474696383B21D5A94FE5"><enum>(A)</enum><text>the Financial Services Oversight Council;</text></subparagraph>
<subparagraph id="HF9F7E6F6883443D8BC9047E2B4BE6EDF"><enum>(B)</enum><text>the Commission;</text></subparagraph>
<subparagraph id="H9966737F44B64ECEB790730D0067185A"><enum>(C)</enum><text>any Federal financial regulator or State financial regulator, in any capacity; or</text></subparagraph>
<subparagraph id="HD1DCAC8B81EE4C15AED4A5FCE69D8A84"><enum>(D)</enum><text>any other agency of the Federal Government (as defined in section 6 of title 18, United States Code).</text></subparagraph></paragraph>
<paragraph id="HB1BBC89878184EE1BEE185F90B962281" commented="no" display-inline="no-display-inline"><enum>(9)</enum><header>Non-disclosure of certain proprietary information and confidentiality of reports</header><text display-inline="yes-display-inline">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.</text></paragraph> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></section>
<section id="HABABED5A14794071B25A05E501FFFD3F"><enum>5005.</enum><header>Elimination of disclosure provision</header><text display-inline="no-display-inline">Section 210 of the Investment Advisers Act of 1940 (15 U.S.C. 80b–10) is amended by striking subsection (c).</text> </section>
<section id="H68060DA14B26405CB49D0D1C671A57ED"><enum>5006.</enum><header>Exemption of and reporting by venture capital fund advisers</header><text display-inline="no-display-inline">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:</text>
<quoted-block display-inline="no-display-inline" id="H1755242EE4FE4A9B91A7F07531A00E21" style="OLC">
<subsection id="H95B7B2D883A140DAA7CBB9A4C9EFDE81"><enum>(l)</enum><header>Exemption of and reporting by venture capital fund advisers</header><text display-inline="yes-display-inline">The Commission shall identify and define the term <quote>venture capital fund</quote> 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.</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </section>
<section id="HA060936FDB63401488DFBC9E135BC853"><enum>5007.</enum><header>Exemption of and reporting by certain private fund advisers</header><text display-inline="no-display-inline">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:</text>
<quoted-block display-inline="no-display-inline" id="HBABF3AC501E84F79AC3CB27AC915E587" style="OLC">
<subsection id="H7E56EFA5752E4028B2DEA2999165129A"><enum>(m)</enum><header>Exemption of and reporting by certain private fund advisers</header>
<paragraph id="H0A22FFCDDE0B4F91BFD992A314E361F9"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HE8614A8884F84BAAB7421E791E6E407E"><enum>(2)</enum><header>Reporting</header><text>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.</text> </paragraph></subsection>
<subsection id="H9433F50960AF48A0832A5CC21025BEB9"><enum>(n)</enum><header>Registration and examination of mid-sized private fund advisers</header><text>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.</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </section>
<section id="H09190976BA1D42189FC16B09201F3C46"><enum>5008.</enum><header>Clarification of rulemaking authority</header><text display-inline="no-display-inline">Section 211 of the Investment Advisers Act of 1940 (15 U.S.C. 80b–11) is amended—</text>
<paragraph id="HD1E9683932B24E26838FB53DFF3A4947"><enum>(1)</enum><text>by amending subsection (a) to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HEA72D8A92DD041C69326AD48500AA9F8" style="OLC">
<subsection id="HF82678503DBF4A358EF1B97C0DA6F3BB"><enum>(a)</enum><text display-inline="yes-display-inline">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—</text>
<paragraph id="H0BEAF010856046C0BFCFD9A8EAE8A895"><enum>(1)</enum><text display-inline="yes-display-inline">classify persons and matters within its jurisdiction based upon, but not limited to—</text>
<subparagraph id="H07341DF4C1764764B66AF67953AA3DD9"><enum>(A)</enum><text>size;</text> </subparagraph>
<subparagraph id="HCA696E12155A4D66B0D7492624B52AF7"><enum>(B)</enum><text>scope;</text> </subparagraph>
<subparagraph id="HC2A1F3DEA9DD4193AC67A0B9064F3F0B"><enum>(C)</enum><text>business model;</text> </subparagraph>
<subparagraph id="HD59D8D0BC8864D8BAE1369EC6234D0DD"><enum>(D)</enum><text>compensation scheme; or</text> </subparagraph>
<subparagraph id="H5C32A19D1943480B847DA1866E6E21A7"><enum>(E)</enum><text>potential to create or increase systemic risk;</text> </subparagraph></paragraph>
<paragraph id="H8192C425A1894C5DA9CB0E90F39BA005"><enum>(2)</enum><text>prescribe different requirements for different classes of persons or matters; and</text> </paragraph>
<paragraph id="H4682233FE9F347F7B1FD09E5FE602E05"><enum>(3)</enum><text display-inline="yes-display-inline">ascribe different meanings to terms (including the term <quote>client</quote>, except the Commission shall not ascribe a meaning to the term <quote>client</quote> 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.</text> </paragraph></subsection><after-quoted-block>; and</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H7A1AC35DD549481E97416642D5A06341"><enum>(2)</enum><text display-inline="yes-display-inline">by adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="HE45F939FF8DB415AAEEE607621F2C140" style="OLC">
<subsection id="H7CBB38B104464B2283588B2687B0AFC5"><enum>(e)</enum><text display-inline="yes-display-inline">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.).</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></section>
<section id="H68B1B3674CCE488291875064F231D05F"><enum>5009.</enum><header>GAO study</header>
<subsection id="HD7B41782D5B54402B2A7C1AF19EDB55F"><enum>(a)</enum><header>Study required</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="H215F0444CC67421D8ABE2818F4732C29"><enum>(b)</enum><header>Report to the Congress</header><text>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).</text> </subsection></section>
<section display-inline="no-display-inline" id="H1AC3CF3866AF42968EB792F00B765ED5" section-type="subsequent-section"><enum>5010.</enum><header>Effective date; Transition period</header>
<subsection id="H6997D3F0C4DC4055AC792028FA0F88E2"><enum>(a)</enum><header>Effective date</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="H28D43D7995BC4DE4ABF6D7E2203BE137"><enum>(b)</enum><header>Transition period</header><text display-inline="yes-display-inline">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).</text> </subsection></section>
<section id="H061280A13C3B4DFBA67167B2294768D9"><enum>5011.</enum><header>Qualified client standard</header><text display-inline="no-display-inline">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: <quote>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.</quote>.</text> </section></subtitle>
<subtitle commented="no" id="HA8D1B6FDE0754AC19CF3C1570DA42618"><enum>B</enum><header>Accountability and Transparency in Rating Agencies Act</header>
<section commented="no" id="H9A480F686A80462897642610A37DD1DF" section-type="subsequent-section"><enum>6001.</enum><header>Short title</header><text display-inline="no-display-inline">This subtitle may be cited as the <quote><short-title>Accountability and Transparency in Rating Agencies Act</short-title> of 2009</quote>.</text> </section>
<section commented="no" id="HA04572DF7A944AB697F976A53503C20A"><enum>6002.</enum><header>Enhanced regulation of nationally recognized statistical rating organizations</header>
<subsection id="H0A9E4D36A8464787AC3A049621F7FD8D"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Section 15E of the Securities Exchange Act of 1934 (15 U.S.C. 78o–7) is amended—</text>
<paragraph commented="no" id="HA13D71A3B0614A6E8F9F1EA0CBD2E160"><enum>(1)</enum><text display-inline="yes-display-inline">in subsection (a)—</text>
<subparagraph id="HB9016A9865B14E4D8AAE3364229E4FC1"><enum>(A)</enum><text display-inline="yes-display-inline">by amending paragraph (1)(A) to read as follows:</text>
<quoted-block style="OLC" display-inline="no-display-inline" id="HB2E96932012F4B8CBE01F13A695F2499">
<subparagraph id="H8E329DD8F50E4AB280249D18492CA203"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">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).</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph>
<subparagraph commented="no" id="H466ED6F34D2D4C3D87293C442FE6EF7C"><enum>(B)</enum><text>in paragraph (2)(A), by striking <quote>furnished to</quote> and inserting <quote>filed with</quote>; </text> </subparagraph>
<subparagraph commented="no" id="H5BB09149141146D1B80E9D5A953A7FAB"><enum>(C)</enum><text>in paragraph (2)(B)(i)(II), by striking <quote>furnished to</quote> and inserting <quote>filed with</quote>; and</text> </subparagraph>
<subparagraph id="H305D370FF1AD47B7B5D55ED7898971C0"><enum>(D)</enum><text display-inline="yes-display-inline">by adding at the end of paragraph (1) the following:</text>
<quoted-block style="OLC" display-inline="no-display-inline" id="H2F585952C02E4BE4BFE7DD612CAF5EC8">
<subparagraph id="H7FC046513C7340EDBAC26B5C9B282FA9"><enum>(F)</enum><header>Exemptions</header><text display-inline="yes-display-inline">The registration requirement in subparagraph (A) shall not apply to—</text>
<clause id="HBBA14718D5B94F3FB3134006B338EB1F"><enum>(i)</enum><text>a credit rating agency if the credit rating agency—</text>
<subclause id="H896A9767324E4AFB9B9ACFAC085CAFBF"><enum>(I)</enum><text>does not engage in the provision of credit ratings to issuers of securities for a fee; and</text></subclause>
<subclause id="H1F2A3299CADA4C3A9C9153DA13833236"><enum>(II)</enum><text>issues credit ratings only in any bona fide newspaper, news magazine, or business or financial publication of general and regular circulation; or</text></subclause></clause>
<clause id="H10553F79FB854E938488B1D0409361DA"><enum>(ii)</enum><text>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.</text></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph>
<paragraph commented="no" id="HEA208D04281A44B0A6F5C366663B327D"><enum>(2)</enum><text>in subsection (b)—</text>
<subparagraph commented="no" id="H01E7B2553C224E03A12CAC283B439210"><enum>(A)</enum><text>in paragraph (1)(A), by striking <quote>furnished</quote> and inserting <quote>filed</quote> and by striking <quote>furnishing</quote> and inserting <quote>filing</quote>;</text> </subparagraph>
<subparagraph commented="no" id="H659C6EB5C9004BDB88C6264580657845"><enum>(B)</enum><text>in paragraph (1)(B), by striking <quote>furnishing</quote> and inserting <quote>filing</quote>; and</text> </subparagraph>
<subparagraph commented="no" id="H62A38EAD7E174E95A6A13DE7820551BF"><enum>(C)</enum><text>in the first sentence of paragraph (2), by striking <quote>furnish to</quote> and inserting <quote>file with</quote>;</text> </subparagraph></paragraph>
<paragraph commented="no" id="HDDC3E291FD7549578705BF04D1802F13"><enum>(3)</enum><text>in subsection (c)—</text>
<subparagraph commented="no" id="HB1BB1F2D30F84857960BE093CAD72593"><enum>(A)</enum><text display-inline="yes-display-inline">paragraph (2)—</text>
<clause commented="no" id="H2E7F878D29834E2DA2A3DC912B9CAC57"><enum>(i)</enum><text>in the second sentence by inserting <quote>including the requirements of this section,</quote> after <quote>Notwithstanding any other provision of law,</quote>; and</text> </clause>
<clause commented="no" id="HBEDF802A5BA642AEB0540CECB273B60B"><enum>(ii)</enum><text display-inline="yes-display-inline">by inserting before the period at the end of the last sentence <quote>, 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</quote>;</text> </clause></subparagraph>
<subparagraph commented="no" id="H3D0588810C8D4EDEAA92B6390EC3ED51"><enum>(B)</enum><text>by adding at the end the following new paragraph:</text>
<quoted-block id="H7817807534CE4BEBA76C262B4CD37F46" style="OLC">
<paragraph commented="no" id="H36756A9943F54FF6930DC84ADC4D03A3"><enum>(3)</enum><header>Review of internal processes for determining credit ratings</header>
<subparagraph commented="no" id="H899BE2FBBAB14672B1206D692238DAED"><enum>(A)</enum><header>In general</header><text>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—</text>
<clause commented="no" id="H25A4CC1B404E45DDB8AF6190CF6E676D"><enum>(i)</enum><text>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;</text> </clause>
<clause commented="no" id="H2B1BA949B6AA423DAC49C59447A145E5"><enum>(ii)</enum><text>the nationally recognized statistical rating organization adheres to such system; and</text> </clause>
<clause commented="no" id="H12FFE84FCEE548A0B975B67C9D635AAC"><enum>(iii)</enum><text>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.</text> </clause></subparagraph>
<subparagraph commented="no" id="H4447235B893B403FA29FA2672CDE9789"><enum>(B)</enum><header>Manner and frequency</header><text>The Commission shall conduct reviews required by this paragraph no less frequently than annually in a manner to be determined by the Commission.</text> </subparagraph></paragraph>
<paragraph commented="no" id="H0C64DE6D978942F29969C56CFB0A3B41"><enum>(4)</enum><header>Provision of information to the commission</header><text>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).</text> </paragraph>
<paragraph commented="no" id="HF14891BD5DF349459489820D113B34F8"><enum>(5)</enum><header>Disclosures with respect to structured securities</header>
<subparagraph commented="no" id="H6CBF3B62235C4007BC8044F533EA2F45"><enum>(A)</enum><header>Regulations required</header><text display-inline="yes-display-inline">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—</text>
<clause commented="no" id="HFCF2C91733C74BCBB558FA83A895591E"><enum>(i)</enum><text display-inline="yes-display-inline">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</text> </clause>
<clause commented="no" id="H587EA7BE6D0D4460A9E1381D734FD787"><enum>(ii)</enum><text display-inline="yes-display-inline">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.</text> </clause></subparagraph>
<subparagraph commented="no" id="H941FA021E47F451593EAC794BB3EBF0C"><enum>(B)</enum><header>Definition</header><text display-inline="yes-display-inline">For purposes of this paragraph, the Commission shall, by rule or regulation, define the term <quote>structured securities</quote> as appropriate in the public interest and for the protection of investors.</text> </subparagraph></paragraph>
<paragraph commented="no" id="HDE0B4D2A848145BD97964506E5E02034"><enum>(6)</enum><header>Historical default rate disclosures</header><text display-inline="yes-display-inline">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.</text> </paragraph><after-quoted-block>;</after-quoted-block></quoted-block> </subparagraph></paragraph>
<paragraph commented="no" id="H3EC3CE90392D4B199B58D262AC26A070"><enum>(4)</enum><text>in subsection (d)—</text>
<subparagraph commented="no" id="H6E8BB2B2073B405E859CB7446DA6A9B2"><enum>(A)</enum><text>in the heading, by inserting <quote><header-in-text level="subsection" style="OLC">Fine,</header-in-text></quote> after <quote><header-in-text level="subsection" style="OLC">Censure,</header-in-text></quote>;</text> </subparagraph>
<subparagraph commented="no" id="H457E57FED90949CB8F8991093E9A38B8"><enum>(B)</enum><text>by striking <quote>shall censure</quote> and all that follows through <quote>revocation</quote> and inserting the following: <quote>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</quote>;</text> </subparagraph>
<subparagraph commented="no" id="HC517DD366BD447D2A2E0CAD9C10058AD"><enum>(C)</enum><text display-inline="yes-display-inline">in paragraph (2), by striking <quote>furnished to</quote> and inserting <quote>filed with</quote>;</text> </subparagraph>
<subparagraph commented="no" id="HD161E3FBCD88419CA9B66E4585FCD3FA"><enum>(D)</enum><text>in paragraph (4)—</text>
<clause commented="no" id="HAC942FA31AE341CB8FEAD3BE434C65ED"><enum>(i)</enum><text>by striking <quote>furnish</quote> and inserting <quote>file</quote>; and</text> </clause>
<clause commented="no" id="HC8239848AD704B66B24772F027114D5B"><enum>(ii)</enum><text>by striking <quote>or</quote> at the end;</text> </clause></subparagraph>
<subparagraph commented="no" id="HFBDC478C08DA44769076244099B3444F"><enum>(E)</enum><text>in paragraph (5), by striking the period at the end and inserting a semicolon; and</text> </subparagraph>
<subparagraph commented="no" id="HBCA0F3D8999F4BB2A305122DA4471169"><enum>(F)</enum><text>by adding at the end the following:</text>
<quoted-block id="HFA07E548AB074508A5174D20FB535BA4" style="OLC">
<paragraph commented="no" id="H24CDAA99B26946709B285C46EB798593"><enum>(6)</enum><text display-inline="yes-display-inline">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—</text>
<subparagraph commented="no" id="H41BA562071184CFE9EC6D61921CCD130"><enum>(A)</enum><text>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</text> </subparagraph>
<subparagraph commented="no" id="HBABBD1A6FDCB4BB6BA01677F7BF2DB5C"><enum>(B)</enum><text display-inline="yes-display-inline">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</text> </subparagraph></paragraph>
<paragraph commented="no" id="H9F061850F3EF4620A62A58413C59FE41"><enum>(7)</enum><text>fails to conduct sufficient surveillance to ensure that credit ratings remain current, as applicable.</text> </paragraph><after-quoted-block>; </after-quoted-block></quoted-block> </subparagraph></paragraph>
<paragraph id="H230D6B86642B47958B16C6DD46890122" display-inline="no-display-inline"><enum>(5)</enum><text display-inline="yes-display-inline">in subsection (e), by striking paragraph (1) and inserting the following new paragraph (1):</text>
<quoted-block style="OLC" display-inline="no-display-inline" id="HB0CB83CDD18D4A2A8BAA086CA0AE7C4C">
<paragraph id="H1D81D7AD77014971AF5DA9C81AE24E5F"><enum>(1)</enum><header>Voluntary withdrawal</header><text display-inline="yes-display-inline">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.</text></paragraph><after-quoted-block>;</after-quoted-block></quoted-block></paragraph>
<paragraph commented="no" id="HF8377EF228084DF28583530866722413"><enum>(6)</enum><text>by amending subsection (h) to read as follows:</text>
<quoted-block id="H5605D917FC86468D867B33D29A383DF3" style="OLC">
<subsection commented="no" id="H84EADD3623924F95A223104CA062CFA0"><enum>(h)</enum><header>Corporate governance, organization, and management of conflicts of interest</header>
<paragraph commented="no" id="H1CE12A5B6E2B4EE39BD4D033F4EFC118"><enum>(1)</enum><header>Board of directors</header>
<subparagraph commented="no" id="HA8BF76A53CEF4E9988CAA857CFEA2235"><enum>(A)</enum><header>In general</header><text>Each nationally recognized statistical rating organization shall have a board of directors.</text> </subparagraph>
<subparagraph commented="no" id="H6BCAC7DB9D7643469D66265809192CC1"><enum>(B)</enum><header>Independent directors</header><text>At least <fraction>1/3</fraction> 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—</text>
<clause commented="no" id="H90426F2EF5BB48AA90BDCE01E2644214"><enum>(i)</enum><text>accept any consulting, advisory, or other compensatory fee from the nationally recognized statistical rating organization; or</text> </clause>
<clause commented="no" id="HBE454F1D9D974840803F152B3537F59E"><enum>(ii)</enum><text>be a person associated with the nationally recognized statistical rating organization or with any affiliated company thereof.</text> </clause></subparagraph>
<subparagraph commented="no" id="H4F2BE72792C642A09E654C42C583AF21"><enum>(C)</enum><header>Compensation and term</header><text>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.</text> </subparagraph>
<subparagraph commented="no" id="H95356A7EF8D3479CB712D40E93AD8081"><enum>(D)</enum><header>Duties</header><text>In addition to the overall responsibility of the board of directors, the board shall oversee—</text>
<clause commented="no" id="H12EB1D4B4F9A4E7691FF9072955C75F2"><enum>(i)</enum><text>the establishment, maintenance, and enforcement of policies and procedures for determining credit ratings;</text> </clause>
<clause commented="no" id="HA7D724DD8CA74CEBAC3FEB70BD238606"><enum>(ii)</enum><text>the establishment, maintenance, and enforcement of policies and procedures to address, manage, and disclose any conflicts of interest;</text> </clause>
<clause commented="no" id="HB1F021937A574A8082C8FF7571C0DE28"><enum>(iii)</enum><text>the effectiveness of the internal control system with respect to policies and procedures for determining credit ratings; and</text> </clause>
<clause commented="no" id="HD3A85F8C5DB64FDB912E793E91CF9EA9"><enum>(iv)</enum><text>the compensation and promotion policies and practices of the nationally recognized statistical rating organization.</text> </clause></subparagraph></paragraph>
<paragraph commented="no" id="H035D77FF45A14150A99E216E3649A9BC"><enum>(2)</enum><header>Organization policies and procedures</header><text>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.</text> </paragraph>
<paragraph commented="no" id="HFBA5BC4AA441465B96FA0B06040A626E"><enum>(3)</enum><header>Commission rules</header><text>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—</text>
<subparagraph commented="no" id="HB15266238B9F4BB59F5A73E0A9AD2648"><enum>(A)</enum><text>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;</text> </subparagraph>
<subparagraph commented="no" id="H683DDC5E11B24DF7B38E3DDFBABD640A"><enum>(B)</enum><text>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;</text> </subparagraph>
<subparagraph commented="no" id="H0E958CC2E1A64148A05AC2E13B16A2EB"><enum>(C)</enum><text display-inline="yes-display-inline">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;</text> </subparagraph>
<subparagraph commented="no" id="HA00F873F32D741F3BDBDA3CD889E6EF3"><enum>(D)</enum><text display-inline="yes-display-inline">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—</text>
<clause commented="no" id="H83708B04DD0C4EA4AE61138C47264E5F"><enum>(i)</enum><text display-inline="yes-display-inline">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</text> </clause>
<clause commented="no" id="H8927E120643D478685A97767CF513709"><enum>(ii)</enum><text display-inline="yes-display-inline">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;</text> </clause></subparagraph>
<subparagraph commented="no" id="H02C2EC904CBE49C1BB9FD41FDC3AAF15"><enum>(E)</enum><text>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;</text> </subparagraph>
<subparagraph commented="no" id="H3231105470374C3DBA9AF042FF54AC90"><enum>(F)</enum><text display-inline="yes-display-inline">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</text> </subparagraph>
<subparagraph commented="no" id="H23A590DDF107409EB9A191C9BF81A7A6"><enum>(G)</enum><text>any other potential conflict of interest, as the Commission determines necessary or appropriate in the public interest or for the protection of investors.</text> </subparagraph></paragraph>
<paragraph commented="no" id="HC362895D22F146AD9D9BD1275AB969F1"><enum>(4)</enum><header>Look-back requirement</header>
<subparagraph commented="no" id="H63AE4665F05C433291754D5FF3E0409E"><enum>(A)</enum><header>Review by the nationally recognized statistical rating organization</header><text display-inline="yes-display-inline">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—</text>
<clause commented="no" id="H8A7D2CC0E5C0433495486156D3FF4025"><enum>(i)</enum><text>conduct a review to determine whether any conflicts of interest of the employee influenced the credit rating; and</text> </clause>
<clause commented="no" id="HA84154E4EB334860B9A51EB83DCAF436"><enum>(ii)</enum><text>take action to revise the rating if appropriate, in accordance with such rules as the Commission shall prescribe.</text> </clause></subparagraph>
<subparagraph commented="no" id="H7778D27C871F4439B77250B7C6B0E077"><enum>(B)</enum><header>Review by commission</header>
<clause commented="no" id="H7F4BCB425D5E45AB888FA80829704D98"><enum>(i)</enum><header>In general</header><text>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.</text> </clause>
<clause commented="no" id="H30F9B2DC164548E38E28D607EC7FF20D"><enum>(ii)</enum><header>Timing of reviews</header><text>The Commission shall review the code of ethics and conflict of interest policy of each nationally recognized statistical rating organization—</text>
<subclause commented="no" id="H1CF9AA7132F84130B83D0FFA2C7390F9"><enum>(I)</enum><text>not less frequently than annually; and</text> </subclause>
<subclause commented="no" id="H272F96134BBA4C449E313BE00D27EB11"><enum>(II)</enum><text>whenever such policies are materially modified or amended.</text> </subclause></clause></subparagraph></paragraph>
<paragraph commented="no" id="H2A5744B6E023402FBB4237D99742F212"><enum>(5)</enum><header>Report to Commission on certain employment transitions</header>
<subparagraph commented="no" id="H4FE0A418CF7C40499DA0D6291354423C"><enum>(A)</enum><header>Report required</header><text>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—</text>
<clause commented="no" id="H0617B757820642F895B8992591F79495"><enum>(i)</enum><text>was a senior officer of such organization;</text> </clause>
<clause commented="no" id="H76B0A380598C4DE2AF00EC5B75D4FD69"><enum>(ii)</enum><text>participated in any capacity in determining credit ratings for such obligor, issuer, underwriter, or sponsor; or</text> </clause>
<clause commented="no" id="HC424C09DAC9E4B1F905022D761EFF900"><enum>(iii)</enum><text display-inline="yes-display-inline">supervised an employee described in clause (ii).</text> </clause></subparagraph>
<subparagraph commented="no" id="H521C713F439144ECB6D6B8F65A9FEC0F"><enum>(B)</enum><header>Public disclosure</header><text display-inline="yes-display-inline">Upon receiving such a report, the Commission shall make such information publicly available.</text> </subparagraph></paragraph></subsection><after-quoted-block>; </after-quoted-block></quoted-block> </paragraph>
<paragraph commented="no" id="H4D62C31D721C4D0AA4085E8181EFB8B4"><enum>(7)</enum><text>by amending subsection (j) to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HF6DBB2DA00704270A9D79C8B44347326" style="OLC">
<subsection commented="no" id="H976C7A82E3764D4BA686BD1BF1AA1F02"><enum>(j)</enum><header>Designation of compliance officer</header>
<paragraph commented="no" id="HE8453BC173A94D4388D714E4C9CE94A5"><enum>(1)</enum><header>In general</header><text>Each nationally recognized statistical rating organization shall designate an individual to serve as a compliance officer.</text> </paragraph>
<paragraph commented="no" id="H243608C144974F29BB6257733FF503F1"><enum>(2)</enum><header>Duties</header><text>The compliance officer shall—</text>
<subparagraph commented="no" id="HB091E3FCCD97479886ADD8C9566EA980"><enum>(A)</enum><text>report directly to the board of the nationally recognized statistical rating organization;</text> </subparagraph>
<subparagraph commented="no" id="HCCC68A18EB3044BDBCB6B8D688EDE1F5"><enum>(B)</enum><text>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;</text> </subparagraph>
<subparagraph commented="no" id="H3BCC761890214C81A98D9BB4BB837716"><enum>(C)</enum><text display-inline="yes-display-inline">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;</text> </subparagraph>
<subparagraph commented="no" id="H60A996935DEE44FEAA5877C0D3CA7A1C"><enum>(D)</enum><text>in consultation with the board of the nationally recognized statistical rating organization, resolve any conflicts of interest that may arise;</text> </subparagraph>
<subparagraph commented="no" id="H52DF10D5433845CAB19988C174031DF0"><enum>(E)</enum><text>be responsible for administering the policies and procedures required to be established pursuant to this section;</text> </subparagraph>
<subparagraph commented="no" id="H7B6345D7CD6C4744921EB866483D7C16"><enum>(F)</enum><text>ensure compliance with securities laws and the rules and regulations issued thereunder, including rules prescribed by the Commission pursuant to this section; and</text> </subparagraph>
<subparagraph commented="no" id="HFAA55BC1171B4E8A8E8843DDC6ABCAD4"><enum>(G)</enum><text display-inline="yes-display-inline">establish procedures—</text>
<clause commented="no" id="H33EC48708EA241AB87DD17F3830CE393"><enum>(i)</enum><text>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;</text> </clause>
<clause commented="no" id="HC90E98EBD5604E508C60018B458CED32"><enum>(ii)</enum><text display-inline="yes-display-inline">for the receipt, retention, and treatment of confidential, anonymous complaints by employees, obligors, issuers, and investors;</text> </clause>
<clause commented="no" id="HD4B86AF904B94C56ACB3D44FC18A1E70"><enum>(iii)</enum><text>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</text> </clause>
<clause commented="no" id="H9E27DB6723CA40FC8E559AC254DF0731"><enum>(iv)</enum><text display-inline="yes-display-inline">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.</text> </clause></subparagraph></paragraph>
<paragraph commented="no" id="H162DE602477B4B7EBFB4688A585461C3"><enum>(3)</enum><header>Limitations</header><text>The compliance officer shall not, while serving in that capacity—</text>
<subparagraph commented="no" id="HACD2CF8F456B428EAFB9F94EEC760833"><enum>(A)</enum><text>determine credit ratings;</text> </subparagraph>
<subparagraph commented="no" id="H3B7A873AC6E947DC8C90E77BBE7CB459"><enum>(B)</enum><text display-inline="yes-display-inline">participate in the establishment of the procedures and methodologies or the qualitative methodologies and quantitative inputs used to determine credit ratings;</text> </subparagraph>
<subparagraph commented="no" id="HDDC1A0BD8A2B45F498C32E3595045506"><enum>(C)</enum><text>perform marketing or sales functions; or</text> </subparagraph>
<subparagraph commented="no" id="H137324D8B0A14C2492C30CCB05BE90E8"><enum>(D)</enum><text>participate in establishing compensation levels, other than for employees working for the compliance officer.</text> </subparagraph></paragraph>
<paragraph commented="no" id="HD7ED8C6E71D04F9CBDE310086D31C195"><enum>(4)</enum><header>Annual reports required</header><text>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.</text> </paragraph>
<paragraph commented="no" id="H89C7499A675A47C78C5FA274E0FB43B5"><enum>(5)</enum><header>Compensation</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection><after-quoted-block>; </after-quoted-block></quoted-block> </paragraph>
<paragraph commented="no" id="HDEA18E09669D4887A0FC3E1AFAA2A364"><enum>(8)</enum><text>in subsection (k)—</text>
<subparagraph commented="no" id="H83CD4E089D0742A981526CF59782B9C5"><enum>(A)</enum><text>by striking <quote>, on a confidential basis,</quote>;</text> </subparagraph>
<subparagraph commented="no" id="H5CB900EECE0F4BF2BCD70EDFFF7EF730"><enum>(B)</enum><text>by striking <quote>furnish to</quote> and inserting <quote>file with</quote>;</text> </subparagraph>
<subparagraph commented="no" id="HA90F87E4A2DB4511B0F52F64501270C6"><enum>(C)</enum><text>by striking <quote>Each nationally</quote> and inserting the following:</text>
<quoted-block id="H2B59AB07CED249209F914B26F702323C" style="OLC">
<paragraph commented="no" id="H8A7F43B2FBF743D7B43C674B4D892C17"><enum>(1)</enum><header>In general</header><text>Each nationally</text> </paragraph><after-quoted-block>; and</after-quoted-block></quoted-block> </subparagraph>
<subparagraph commented="no" id="H83791EA501404AECB52F78A77748BBF4"><enum>(D)</enum><text>by adding at the end the following new paragraph:</text>
<quoted-block id="HF1E3A2CCD1F9472DA26AEB3BA0F4DD38" style="OLC">
<paragraph commented="no" id="H2D5AD4A798CA420780C6FEED0C4C2DE6"><enum>(2)</enum><header>Exception</header><text display-inline="yes-display-inline">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.</text> </paragraph><after-quoted-block>;</after-quoted-block></quoted-block> </subparagraph></paragraph>
<paragraph commented="no" id="H2A7127B7AA9F4D4A87EC4F46B12F5276"><enum>(9)</enum><text display-inline="yes-display-inline">in subsection (l)(2)(A)(i), by striking <quote>furnished</quote> and inserting <quote>filed</quote>;</text> </paragraph>
<paragraph commented="no" id="H119762E94624445EB3A69CDBED2C14FA"><enum>(10)</enum><text>by amending subsection (p) to read as follows:</text>
<quoted-block id="H65C0DCADE2D947EE87BA388719072C57" style="OLC">
<subsection commented="no" id="HD7F22E4ECB474A04ACE5D784AEB0BF7B"><enum>(p)</enum><header>Establishment of SEC office</header>
<paragraph commented="no" id="H132F8D4ADE374C299C1FC5A3A374BC58"><enum>(1)</enum><header>In general</header><text>The Commission shall establish an office that administers the rules of the Commission with respect to the practices of nationally recognized statistical rating organizations.</text> </paragraph>
<paragraph commented="no" id="H886B63B2B7BA46C48BAED73F185D7AB8"><enum>(2)</enum><header>Staffing</header><text display-inline="yes-display-inline">The office of the Commission established under this subsection shall be staffed sufficiently to carry out fully the requirements of this section.</text> </paragraph>
<paragraph commented="no" id="H6E64422614494CE7A566849668F45188"><enum>(3)</enum><header>Rulemaking authority</header><text>The Commission shall—</text>
<subparagraph commented="no" id="H94DFF2AE4D7843658DD1F3B9FC530CCA"><enum>(A)</enum><text>establish, by rule, fines and other penalties for any nationally recognized statistical rating organization that violates the applicable requirements of this title; and</text> </subparagraph>
<subparagraph commented="no" id="H95DC00DBA06545EBAFFF95F48067FC28"><enum>(B)</enum><text>issue such rules as may be necessary to carry out this section with respect to nationally recognized statistical rating organizations.</text> </subparagraph></paragraph></subsection><after-quoted-block>; and</after-quoted-block></quoted-block> </paragraph>
<paragraph commented="no" id="H2EB29A53FC5549CFAC005A9D5D1B084D"><enum>(11)</enum><text>by adding after subsection (p) the following new subsections:</text>
<quoted-block id="HCF142955B24C48C7A34FF767724C2664" style="OLC">
<subsection commented="no" id="HA4264CA2F4674CDE89DFB56D9C8B1E0F"><enum>(q)</enum><header>Transparency of ratings performance</header>
<paragraph commented="no" id="H7CB40FCEAB4E4ACDAAD1888F026DA4A4"><enum>(1)</enum><header>Rulemaking required</header><text>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.</text> </paragraph>
<paragraph commented="no" id="HC87CEA227AB04E55B450C5FA2C202A22"><enum>(2)</enum><header>Content</header><text>The rules of the Commission under this subsection shall require, at a minimum, disclosures that—</text>
<subparagraph commented="no" id="HA8EA09E3991640C6ACFE3464573DDE77"><enum>(A)</enum><text>are comparable among nationally recognized statistical rating organizations, so that investors can compare rating performance across rating organizations;</text> </subparagraph>
<subparagraph commented="no" id="H2762612F125E46DFB93A503578FFAF72"><enum>(B)</enum><text>are clear and informative for a wide range of investor sophistication;</text> </subparagraph>
<subparagraph commented="no" id="H7AF43F3A5F6B4022A9698158FE43165C"><enum>(C)</enum><text>include performance information over a range of years and for a variety of classes of credit ratings, as determined by the Commission;</text> </subparagraph>
<subparagraph commented="no" id="H6B761956D4284ED3AFF4BFD8C8F8BDAF"><enum>(D)</enum><text>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</text> </subparagraph>
<subparagraph commented="no" id="H859D116F219640E1BC547116358D58BC"><enum>(E)</enum><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph></subsection>
<subsection commented="no" id="H6A6F3293C265496B9C7F9125BC71E83B"><enum>(r)</enum><header>Credit ratings methodologies</header>
<paragraph commented="no" id="HFCC2096C545B4B7AA2C99D1DAF8B8C8B"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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—</text>
<subparagraph commented="no" id="H72F8375B1D1A4A68B027E9AE20B176A7"><enum>(A)</enum><text display-inline="yes-display-inline">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;</text> </subparagraph>
<subparagraph commented="no" id="H79F7DAF14ADC43A597DE6EA909D57D21"><enum>(B)</enum><text display-inline="yes-display-inline">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;</text> </subparagraph>
<subparagraph commented="no" id="H74D8C3170A654276AD6361C5D8556BDE"><enum>(C)</enum><text display-inline="yes-display-inline">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</text> </subparagraph>
<subparagraph commented="no" id="H00B8FAA100F042E99D64D188F82AE939"><enum>(D)</enum><text display-inline="yes-display-inline">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.</text> </subparagraph> </paragraph>
<paragraph id="H4DA1B68577F34D7BA87AD95FBE4597F5" display-inline="no-display-inline"><enum>(2)</enum><header>Symbols</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph commented="no" id="H52051182CF7E4AE6BF7F0D3C1BF115D8"><enum>(3)</enum><header>Rating clarity and consistency</header>
<subparagraph commented="no" id="H351C9E509038413C9541190F0018F1D6"><enum>(A)</enum><header>Commission obligation</header><text>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—</text>
<clause commented="no" id="H52421719D7F14AB5AA02F018CC2351C6"><enum>(i)</enum><text>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;</text> </clause>
<clause commented="no" id="H2BC41AEE421A4CB9B7374BCC7C93675F"><enum>(ii)</enum><text>to define clearly any credit rating symbol used by that organization; and</text> </clause>
<clause commented="no" id="H52E097A1673946938676F3ACBC48B6B0"><enum>(iii)</enum><text>to apply such credit rating symbol in a consistent manner for all types of securities and money market instruments.</text> </clause></subparagraph>
<subparagraph commented="no" id="H2D12EF40814943168C13572BE8FA4FCD"><enum>(B)</enum><header>Additional credit factors</header><text>Nothing in subparagraph (A)—</text>
<clause commented="no" id="H1356410C50FC4AB5AD57EF82B0E4DA76"><enum>(i)</enum><text>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;</text> </clause>
<clause commented="no" id="H967D96D9A465473BB2530340B1D4BEEA"><enum>(ii)</enum><text>prohibits a nationally recognized statistical rating organization from considering credit factors that are unique to municipal securities; or</text> </clause>
<clause commented="no" id="HA3FABDD335C94A07B099BFB7B0C0B082"><enum>(iii)</enum><text display-inline="yes-display-inline">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.</text> </clause></subparagraph>
<subparagraph commented="no" id="H92611B7AC7DE4FDBA68BF31CB563F254"><enum>(C)</enum><header>Complementary ratings</header><text>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.</text> </subparagraph></paragraph> </subsection>
<subsection commented="no" id="H220B33EC000141E3A6B2C6782C0EAF63"><enum>(s)</enum><header>Transparency of credit rating methodologies and information reviewed</header>
<paragraph commented="no" id="H3EB2D5AF51DE41B7AE17446C9C62A7A9"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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).</text> </paragraph>
<paragraph commented="no" id="HEC62C7D1D607403FA5B15065827F4F65"><enum>(2)</enum><header>Format</header><text>The Commission shall prescribe a form for use under paragraph (1) that—</text>
<subparagraph commented="no" id="H366C9E2959AB4C5E941FBD6DB3AB01AD"><enum>(A)</enum><text>is designed in a user-friendly and helpful manner for investors to understand the information contained in the report;</text> </subparagraph>
<subparagraph commented="no" id="HFBEBD1560DAC4034B34B987C488C0B3E"><enum>(B)</enum><text>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</text> </subparagraph>
<subparagraph commented="no" id="H6D63CFA6327E4B3D85FCAE3C3FB33023"><enum>(C)</enum><text display-inline="yes-display-inline">the nationally recognized statistical rating organization certifies the information on the form as true and accurate.</text> </subparagraph></paragraph>
<paragraph commented="no" id="H97F37929EA194FA282D714A25849EFC3"><enum>(3)</enum><header>Content</header><text display-inline="yes-display-inline">The Commission shall prescribe a form that requires a nationally recognized statistical rating organization to disclose—</text>
<subparagraph commented="no" id="H48DD4C37F1A84EC993AC00BAE58D9BAD"><enum>(A)</enum><text display-inline="yes-display-inline">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;</text> </subparagraph>
<subparagraph commented="no" id="H45386CBD041845E285051A28C91143A0"><enum>(B)</enum><text>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;</text> </subparagraph>
<subparagraph commented="no" id="HE61CDBF61040490BB8F066DF47334ECB"><enum>(C)</enum><text>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;</text> </subparagraph>
<subparagraph commented="no" id="H0B065DE5B73449DB91386CF81B5A00C9"><enum>(D)</enum><text>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;</text> </subparagraph>
<subparagraph commented="no" id="H00F77D60D5034ED9ACD4A68E043BD6F9"><enum>(E)</enum><text>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;</text> </subparagraph>
<subparagraph commented="no" id="H1F6E1EA6237343BE83FF95988E32944F"><enum>(F)</enum><text>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;</text> </subparagraph>
<subparagraph commented="no" id="H7E93581A7B764B988607B04904B8C0E4"><enum>(G)</enum><text>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;</text> </subparagraph>
<subparagraph commented="no" id="H0156E2C2A8AB4774AD11B4D170A5BAA7"><enum>(H)</enum><text>information on the content of the credit rating, including—</text>
<clause commented="no" id="HFB767F4D1C2D4BD7AABCD5D423E7474A"><enum>(i)</enum><text>the expected default probability; and</text> </clause>
<clause commented="no" id="H1161E4B26EF0488E99884DB923847348"><enum>(ii)</enum><text>the loss given default;</text> </clause></subparagraph>
<subparagraph commented="no" id="HDD61A09118F4448CB229D337969E427C"><enum>(I)</enum><text display-inline="yes-display-inline">information on the sensitivity of the rating to assumptions made by the nationally recognized statistical rating organization, including—</text>
<clause commented="no" id="HED02A6A951CF4BF48AA06C8E868571CE"><enum>(i)</enum><text display-inline="yes-display-inline">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</text> </clause>
<clause commented="no" id="HEF43089303364A91A728DB5BBCE5D1E8"><enum>(ii)</enum><text display-inline="yes-display-inline">an analysis, using concrete examples, on how each of the 5 assumptions identified under clause (i) impacts a rating;</text> </clause></subparagraph>
<subparagraph commented="no" id="H0DC401BFBFAC4FDB83F8C2CA05970854"><enum>(J)</enum><text>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</text> </subparagraph>
<subparagraph commented="no" id="H7B61ACE7CBB14288963A52D6918FF786"><enum>(K)</enum><text>such additional information as may be required by the Commission.</text> </subparagraph></paragraph>
<paragraph commented="no" id="HBE5F250B7C1D4176894D4E38B51E6009"><enum>(4)</enum><header>Due diligence services</header><text display-inline="yes-display-inline"></text>
<subparagraph commented="no" id="HD4E055497953498C8C6F8A1ABA1261BF"><enum>(A)</enum><header>Certification required</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph commented="no" id="HF2DA6E1CB5B144F8A8BE27C3D9776A60"><enum>(B)</enum><header>Format and content</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph commented="no" id="HECF9EDAA42A64C16A0B02736DD22D6FB"><enum>(C)</enum><header>Disclosure of certification</header><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph></subsection>
<subsection commented="no" id="H4253B69C4FB54FDFAFF46A456FB8DB91"><enum>(t)</enum><header>Prohibited activities</header><text display-inline="yes-display-inline">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—</text>
<paragraph commented="no" id="H072F3C5EACBE4488A99E45D3C25D52ED"><enum>(1)</enum><text>risk management advisory services;</text> </paragraph>
<paragraph commented="no" id="HD65D8FDEAF4848BE9C9DB482F2AC7E03"><enum>(2)</enum><text>advice or consultation relating to any merger, sales, or disposition of assets of the issuer;</text> </paragraph>
<paragraph commented="no" id="HE35AC7A69E9F4741AD2811C893068CC2"><enum>(3)</enum><text>ancillary assistance, advice, or consulting services unrelated to any specific credit rating issuance; and</text> </paragraph>
<paragraph commented="no" id="H1571E66785434C23BD4A16CF1FE341E7"><enum>(4)</enum><text>such further activities or services as the Commission may determine as necessary or appropriate in the public interest or for the protection of investors.</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph> </subsection>
<subsection id="H85D3B2419964482F93F648F54F3914F8" display-inline="no-display-inline"><enum>(b)</enum><header>Conforming amendment</header><text display-inline="yes-display-inline">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.</text></subsection></section>
<section commented="no" id="HA279FF34EAAD4A44B6CA1FE785C18064"><enum>6003.</enum><header>Standards for private actions</header>
<subsection commented="no" id="H6FDDC892CD94484C8AB7017C17451762"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">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: <quote>, 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</quote>.</text> </subsection>
<subsection commented="no" id="H8DC2B12CB5B84498955AFCF0ECF43DF1"><enum>(b)</enum><header>Pleading standard</header><text display-inline="yes-display-inline">Section 15E(m) of the Securities Exchange Act of 1934 (15 U.S.C. 78o–7(m)) amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H123517F45CF4477B9D26FE3C1203BA6A" style="OLC">
<subsection commented="no" id="H69957BEC8F4C44A79FC70BCDE4CE57F9"><enum>(m)</enum><header>application of enforcement provisions; pleading standard in private rights of action</header><text display-inline="yes-display-inline">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.</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H2DA0AD6C0F2141F0BFB71863C61ACC59"><enum>(c)</enum><header>Requirements for liability</header><text display-inline="yes-display-inline">Section 21D of the Securities Exchange Act of 1934 (15 U.S.C. 78u–4) is amended—</text>
<paragraph id="HE974B12911514F13AD29DD34C909D2FE"><enum>(1)</enum><text>by redesignating subsections (c) through (f) as subsections (d) through (g), respectively; and</text></paragraph>
<paragraph id="H167BE80F6E4A4A6DB586B61D5C93EB51"><enum>(2)</enum><text>by inserting after subsection (b) the following:</text>
<quoted-block style="OLC" display-inline="no-display-inline" id="H451CF6E00C864DFB927C0C8825122F56">
<subsection id="HB4FF86CC6DA649B38EAF9F7598FA3A0D"><enum>(c)</enum><header>Requirements for liability</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="HBDB206D3D25E483FB2D66EE8EF724DC2"><enum>(1)</enum><text>grossly negligent, based on the facts and circumstances at the time the rating was issued; and</text></paragraph>
<paragraph id="HDE075DFFC31A4E7983553B980872CC65"><enum>(2)</enum><text>a substantial factor in the economic loss suffered by the investor.</text></paragraph><continuation-text continuation-text-level="subsection">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.</continuation-text></subsection><after-quoted-block>.</after-quoted-block></quoted-block><continuation-text continuation-text-level="subsection"></continuation-text></paragraph></subsection></section>
<section commented="no" id="HB5C47D2408EA4F22BF4799A9979AD009"><enum>6004.</enum><header>Issuer disclosure of preliminary ratings</header><text display-inline="no-display-inline">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.</text> </section>
<section commented="no" id="H050A1FDF95A74F6297A27A3BA110A89F"><enum>6005.</enum><header>Change to designation</header><text display-inline="no-display-inline">The Securities Act of 1933 and the Securities Exchange Act of 1934 are each amended by striking <quote>nationally recognized statistical rating</quote> each place it appears and inserting <quote>nationally registered statistical rating</quote>.</text> </section>
<section commented="no" id="H1F77621190BC44599A6550F1A9F024C4"><enum>6006.</enum><header>Timeline for regulations</header><text display-inline="no-display-inline">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.</text> </section>
<section commented="no" id="H36287618F44641ED9B7041B7B7D9F8AF"><enum>6007.</enum><header>Elimination of exemption from fair disclosure rule</header><text display-inline="no-display-inline">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)).</text> </section>
<section commented="no" id="H5997055DA4CD48DEBF3D627C52D5EFB0"><enum>6008.</enum><header>Advisory Board</header>
<subsection commented="no" id="H41F5CFE9C2D94C69B85D69A49B72999E"><enum>(a)</enum><header>Establishment</header><text display-inline="yes-display-inline">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 <quote>the Board</quote>).</text> </subsection>
<subsection commented="no" id="H772DC1A90543477081EBFF5D83711F97"><enum>(b)</enum><header>Appointment and terms of service</header><text>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.</text> </subsection>
<subsection commented="no" id="HA3966A7151934C749949AD2761BC9DFD"><enum>(c)</enum><header>Duties</header><text>The Board shall—</text>
<paragraph commented="no" id="H1DB6DAAADE65483E85002730D2788CEB"><enum>(1)</enum><text>advise the Commission concerning the rules and regulations required by the amendments made by this subtitle;</text> </paragraph>
<paragraph commented="no" id="H6F78959E4CC34F6B994EDFB22EA43F32"><enum>(2)</enum><text display-inline="yes-display-inline">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</text> </paragraph>
<paragraph commented="no" id="H9A2149EF0CC1402EAF34AE7D8B52181C"><enum>(3)</enum><text display-inline="yes-display-inline">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.</text> </paragraph></subsection></section>
<section commented="no" id="H5007444185134269B1448800DE6F52DE"><enum>6009.</enum><header>Removal of statutory references to credit ratings</header>
<subsection commented="no" id="H5036331D50324AB88CB1BD3564FC6544"><enum>(a)</enum><header>Federal Deposit Insurance Act</header><text display-inline="yes-display-inline">The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) is amended—</text>
<paragraph commented="no" id="H330B178D961240E19A2E64136B53F45A"><enum>(1)</enum><text>in section 28(d)—</text>
<subparagraph commented="no" id="HA38B1CE8D6FE498780C2F28C607E1A77"><enum>(A)</enum><text>in the subsection heading, by striking <quote><header-in-text level="subsection" style="OLC">not of investment grade</header-in-text></quote>;</text> </subparagraph>
<subparagraph commented="no" id="HA936380D0A1A4F149C3A2339ADD06A01"><enum>(B)</enum><text>in paragraph (1), by striking <quote>not of investment grade</quote> and inserting <quote>that does not meet standards of credit-worthiness as established by the Corporation</quote>;</text> </subparagraph>
<subparagraph commented="no" id="H77D518F4EBE1494DB21F20CACB796387"><enum>(C)</enum><text>in paragraph (2), by striking <quote>not of investment grade</quote>;</text> </subparagraph>
<subparagraph commented="no" id="H20E08F2554984EC397F421CEA7327448"><enum>(D)</enum><text>by striking paragraph (3) and redesignating paragraph (4) as paragraph (3); and</text> </subparagraph>
<subparagraph commented="no" id="H5D16EB90B5C04C66B6F8927E0DFE6202"><enum>(E)</enum><text>in paragraph (3) (as so redesignated)—</text>
<clause commented="no" id="H7FE2BF40146A450090A41AC3C8DD78E5"><enum>(i)</enum><text>by striking subparagraph (A) and redesignating subparagraphs (B) and (C) as subparagraphs (A) and (B), respectively; and</text> </clause>
<clause commented="no" id="H5CB477DF557244F2B605D60EC1E1B183"><enum>(ii)</enum><text>in subparagraph (B) (as so redesignated), by striking <quote>not of investment grade</quote> and inserting <quote>that does not meet standards of credit-worthiness as established by the Corporation</quote>;</text> </clause></subparagraph></paragraph>
<paragraph commented="no" id="H95B499D4063F48E7836E824F2156BA37"><enum>(2)</enum><text>in section 28(e)—</text>
<subparagraph commented="no" id="H9DBEDDEE4EC0488389E174B81BE88676"><enum>(A)</enum><text>in the subsection heading, by striking <quote><header-in-text level="subsection" style="OLC">not of investment grade</header-in-text></quote>;</text> </subparagraph>
<subparagraph commented="no" id="HDAD08AE3C8D8488494C8011A2774AFCA"><enum>(B)</enum><text display-inline="yes-display-inline">in paragraph (1), by striking <quote>not of investment grade</quote> and inserting <quote>that does not meet standards of credit-worthiness as established by the Corporation</quote>; and</text> </subparagraph>
<subparagraph commented="no" id="H029A36CCB26945BBA1CA55A4E4F6219C"><enum>(C)</enum><text>in paragraphs (2) and (3), by striking <quote>not of investment grade</quote> each place that it appears and inserting <quote>that does not meet standards of credit-worthiness established by the Corporation</quote>; and</text> </subparagraph></paragraph>
<paragraph commented="no" id="H5E70538D27684D189350E8F9C9294388"><enum>(3)</enum><text>in section 7(b)(1)(E)(i), by striking <quote>credit rating entities, and other private economic</quote> and insert <quote>private economic, credit,</quote>.</text> </paragraph></subsection>
<subsection commented="no" id="H107A056DDFBA4952AC03026EAC529E5E"><enum>(b)</enum><header>Federal Housing Enterprises Financial Safety and Soundness Act of 1992</header><text display-inline="yes-display-inline">Section 1319 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4519) is amended—</text>
<paragraph commented="no" id="H05174101499F4ABDA60B1F5FD8224D12"><enum>(1)</enum><text>in the section heading, by striking <quote><header-in-text level="section" style="OLC">by rating organization</header-in-text></quote>; and</text> </paragraph>
<paragraph commented="no" id="HB13AFAD0BC464F399597803C49C75088"><enum>(2)</enum><text>by striking <quote>that is a nationally recognized statistical rating organization, as such term is defined in section 3(a) of the Securities Exchange Act of 1934,</quote>.</text> </paragraph></subsection>
<subsection commented="no" id="H85657FA889454F64816E9B7E3F9E4822"><enum>(c)</enum><header>Investment Company Act of 1940</header><text display-inline="yes-display-inline">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 <quote>is rated investment grade by not less than 1 nationally recognized statistical rating organization</quote> and inserting <quote>meets such standards of credit-worthiness that the Commission shall adopt</quote>.</text> </subsection>
<subsection commented="no" id="HBF1556D0EE7D4F278B08F362DC436984"><enum>(d)</enum><header>Revised Statutes</header><text display-inline="yes-display-inline">Section 5136A of title LXII of the Revised Statutes of the United States (12 U.S.C. 24a) is amended—</text>
<paragraph commented="no" id="HE9383C787D7F4BA0B624725D8254B5F7"><enum>(1)</enum><text>in subsection (a)(2)(E), by striking <quote>any applicable rating</quote> and inserting <quote>standards of credit-worthiness established by the Comptroller of the Currency</quote>;</text> </paragraph>
<paragraph commented="no" id="H77F6C9783BF342C6A72928760967CFB4"><enum>(2)</enum><text>in the heading for subsection (a)(3) by striking <quote><header-in-text level="subsection" style="OLC">Rating or comparable requirement</header-in-text></quote> and inserting <quote><header-in-text level="subsection" style="OLC">Requirement</header-in-text></quote>;</text> </paragraph>
<paragraph commented="no" id="HDD3B78E78EC946DFBF26D47668135DD9"><enum>(3)</enum><text>subsection (a)(3), by amending subparagraph (A) to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HD738D7369BAB4001865BD0BAFCC851FF" style="OLC">
<subparagraph commented="no" id="HC9C26B269A8D41A3B1D3BCFAD198887F"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph>
<paragraph commented="no" id="H2006EFA33778490498F4E16D3721BE15"><enum>(4)</enum><text>in the heading for subsection (f), by striking <quote><header-in-text level="subsection" style="OLC">maintain public rating or</header-in-text></quote> and inserting <quote><header-in-text level="subsection" style="OLC">meet standards of credit-worthiness</header-in-text></quote>; and</text> </paragraph>
<paragraph commented="no" id="HC48FDB4F1C7544B9B830514DCA0E45EE"><enum>(5)</enum><text display-inline="yes-display-inline">in subsection (f)(1), by striking <quote>any applicable rating</quote> and inserting <quote>standards of credit-worthiness established by the Comptroller of the Currency</quote>.</text> </paragraph></subsection>
<subsection commented="no" id="H8DC50A3032BF449792940D35F900FB59"><enum>(e)</enum><header>Securities Exchange Act of 1934</header><text display-inline="yes-display-inline">Section 3(a) Securities Exchange Act of 1934 (15 U.S.C. 78a(3)(a)) is amended—</text>
<paragraph commented="no" id="HD9E585056FD74A77A12729FF17A62C10"><enum>(1)</enum><text>in paragraph (41), by striking <quote>is rated in one of the two highest rating categories by at least one nationally recognized statistical rating organization</quote> and inserting <quote>meets standards of credit-worthiness as defined by the Commission</quote>; and</text> </paragraph>
<paragraph commented="no" id="H84AC4D2F80334BADAEA7F7689B684607"><enum>(2)</enum><text display-inline="yes-display-inline">in paragraph (53)(A), by striking <quote>is rated in 1 of the 4 highest rating categories by at least 1 nationally recognized statistical rating organization</quote> and inserting <quote>meets standards of credit-worthiness as defined by the Commission</quote>.</text> </paragraph></subsection>
<subsection commented="no" id="H5323FF49B5724ECDB93AAD7B50B972FE"><enum>(f)</enum><header>World Bank discussions</header><text display-inline="yes-display-inline">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 <quote>rating</quote> and inserting <quote>worthiness</quote>.</text> </subsection>
<subsection commented="no" id="HB352F61017C34A29BF2DEFFE854B5574"><enum>(g)</enum><header>Effective date</header><text>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.</text> </subsection></section>
<section commented="no" id="HFB928092F980433DB3C142B92B4B8EA6"><enum>6010.</enum><header>Review of reliance on ratings</header>
<subsection commented="no" id="H8FB707BAAD0748E78B56FD6339DBCAC1"><enum>(a)</enum><header>Agency Review</header>
<paragraph commented="no" id="HC7B59CD994CA4F97B932370C85BFCEB3"><enum>(1)</enum><header>Review</header><text>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—</text>
<subparagraph commented="no" id="HEEAD43920C9343629D0DF8651C401C23"><enum>(A)</enum><text>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</text> </subparagraph>
<subparagraph commented="no" id="H58D99E9C6F4146FB8852D704AF3F35BB"><enum>(B)</enum><text display-inline="yes-display-inline">any references to or requirements in such regulations regarding credit ratings.</text> </subparagraph></paragraph>
<paragraph commented="no" id="HC1B07AFF23AF4403A395D93675D4EDDE"><enum>(2)</enum><header>Modifications required</header><text>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.</text> </paragraph>
<paragraph commented="no" id="H45092B4AECB04C008F08A45CAA84A0BC"><enum>(3)</enum><header>Report</header><text>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).</text> </paragraph>
<paragraph commented="no" id="HD3F206C41B444FA1979E5C8862BE5232"><enum>(4)</enum><header>Applicable agencies</header><text>The agencies required to conduct the review and report required by this subsection are—</text>
<subparagraph commented="no" id="H8E7548A438E544279DCAE4D387C77400"><enum>(A)</enum><text display-inline="yes-display-inline">the Securities and Exchange Commission;</text> </subparagraph>
<subparagraph commented="no" id="HBD9C73F3E383456AB731791CBFEE2209"><enum>(B)</enum><text>the Federal Deposit Insurance Corporation;</text> </subparagraph>
<subparagraph commented="no" id="H9CDA2CD3C85A4B20954230D926768A10"><enum>(C)</enum><text>the Office of Thrift Supervision;</text> </subparagraph>
<subparagraph commented="no" id="HD8892CEA6EAC49D39A43A8A252C63E5D"><enum>(D)</enum><text>the Office of the Comptroller of the Currency;</text> </subparagraph>
<subparagraph commented="no" id="HDA2D39DCD1F5408B8B7370417516E0E2"><enum>(E)</enum><text>the Board of Governors of the Federal Reserve;</text> </subparagraph>
<subparagraph commented="no" id="H697F9BF9BDCB41CC86A002EB507C0AFF"><enum>(F)</enum><text>the National Credit Union Administration; and</text> </subparagraph>
<subparagraph commented="no" id="H7F68340C503643638A4D98ED235B5B69"><enum>(G)</enum><text>the Federal Housing Finance Agency.</text> </subparagraph></paragraph></subsection>
<subsection commented="no" id="H932BE6F0C12F477E85F9801189EF1948"><enum>(b)</enum><header>GAO review of other agencies</header>
<paragraph commented="no" id="HEE5E48333E724FC7AB8DB14BAF971344"><enum>(1)</enum><header>Review</header><text>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.</text> </paragraph>
<paragraph commented="no" id="HCD2047908C4642188478E84E9EBA626F"><enum>(2)</enum><header>Report</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection></section>
<section commented="no" id="H739B8121FA394E6181EE724913C748D0"><enum>6011.</enum><header>Publication of rating histories on the EDGAR system</header><text display-inline="no-display-inline">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.</text> </section>
<section commented="no" id="H0C2724004A7044ABBBF33ECDBCC1ED88"><enum>6012.</enum><header>Effect of Rule 436(g)</header><text display-inline="no-display-inline">Rule 436(g), promulgated by the Securities and Exchange Commission under the Securities Act of 1933, shall have no force or effect.</text> </section>
<section commented="no" id="H5EDCC079F63B4CDFB6ED1B3D132291E5"><enum>6013.</enum><header>Studies</header>
<subsection commented="no" id="HFBEA49BD0D024D92BDEB87DE2BF777F4"><enum>(a)</enum><header>GAO Study</header>
<paragraph commented="no" id="HDC9F21B32EEA426A9C305CA44F120B8A"><enum>(1)</enum><header>In general</header><text>The Comptroller General shall conduct a study of—</text>
<subparagraph commented="no" id="H7581D435729347C28955F5A67E88C6F7"><enum>(A)</enum><text>the implementation of this subtitle and the amendments made by this subtitle by the Securities and Exchange Commission;</text> </subparagraph>
<subparagraph commented="no" id="HDC0056A6CFA244048B10C2F3BE650155"><enum>(B)</enum><text>the appropriateness of relying on ratings for use in Federal, State, and local securities and banking regulations, including for determining capital requirements; </text> </subparagraph>
<subparagraph commented="no" id="H52FA0F69BA39410888EC2BBCA4F4C992"><enum>(C)</enum><text>the effect of liability in private actions arising under the Securities Exchange Act of 1934;</text> </subparagraph>
<subparagraph commented="no" id="H09301DC2E74B4B08AA1AC3790585B819"><enum>(D)</enum><text>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</text> </subparagraph>
<subparagraph commented="no" id="H6B7AEE4932754F3E9553987ABB22C4DA"><enum>(E)</enum><text>alternative methodologies to assess credit risk, including market-based measures.</text> </subparagraph></paragraph>
<paragraph commented="no" id="HA7FACE8940B24A4EBD7C6805058525BC"><enum>(2)</enum><header>Report</header><text>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).</text> </paragraph>
<paragraph id="HFF7EB3BCD2E94A809A5EA36F932D12DE"><enum>(3)</enum><header>Access</header>
<subparagraph id="H59F9C4E4499449F0A39B2E2E008FF715"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="H0062C86F5EEE4A7BA8D60C32659D851D"><enum>(B)</enum><header>Confidentiality</header><text>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—</text>
<clause id="H0C7E4B5691A746D38567DDDD11735E78"><enum>(i)</enum><text>to other Federal Government departments, agencies, and officials for official use upon request;</text></clause>
<clause id="H5A435DFD3F404B7D8AF61342C11C846F"><enum>(ii)</enum><text>to committees of Congress upon request; and</text></clause>
<clause id="H7647E9B2A622413883AE5D8704BFE7D9"><enum>(iii)</enum><text>to a court in any judicial proceeding under court order. </text></clause><continuation-text continuation-text-level="subparagraph">Nothing in this provision shall be construed to limit the requirements imposed by section 1905 of title 18, United States Code.</continuation-text></subparagraph></paragraph></subsection>
<subsection commented="no" id="HE6E25490C6AF41368C9977944E7D1CF7"><enum>(b)</enum><header>SEC Study on assigning credit rating agencies on a rotating basis</header><text>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.</text> </subsection>
<subsection commented="no" id="HA469D32E4DE64F21BF63BBD102032081"><enum>(c)</enum><header>SEC Study on effect of new requirements on NRSRO registration</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection commented="no" id="H107D9E85EEDC4949A96780766CB45057"><enum>(d)</enum><header>Study of credit ratings of different classes of bonds</header>
<paragraph commented="no" id="H6A899D30A7774E4C9BDBEAF2110A0026"><enum>(1)</enum><header>Study</header><text>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—</text>
<subparagraph commented="no" id="H68309D4448E44CB6BDC727630D0EAE51"><enum>(A)</enum><text display-inline="yes-display-inline">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;</text> </subparagraph>
<subparagraph commented="no" id="H796307BC5ED94D0D86BD29FC2A94393B"><enum>(B)</enum><text display-inline="yes-display-inline">if there are such differences, what are the causes of such differences and how can they be alleviated;</text> </subparagraph>
<subparagraph commented="no" id="HA09E4598794E4AB8B22E8AF1860A9384"><enum>(C)</enum><text display-inline="yes-display-inline">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;</text> </subparagraph>
<subparagraph commented="no" id="H584D3E72316841D49CCA4B71AC6890C7"><enum>(D)</enum><text display-inline="yes-display-inline">the types of financing arrangement used by municipal issuers;</text> </subparagraph>
<subparagraph commented="no" id="H314BA60A20D042B6AF092402A234C4D4"><enum>(E)</enum><text display-inline="yes-display-inline">the differing legal and regulatory regimes governing disclosures for corporate bonds and municipal bonds;</text> </subparagraph>
<subparagraph commented="no" id="H6128752BB29D47D7A98418C1BAFDC46F"><enum>(F)</enum><text>the extent to which retail investors could be disadvantaged by a single ratings scale; and</text> </subparagraph>
<subparagraph commented="no" id="HAFC84186315F450BA4074708B3C330B3"><enum>(G)</enum><text>practices, policies, and methodologies by the nationally recognized statistical rating organizations with respect to rating municipal bonds.</text> </subparagraph></paragraph>
<paragraph commented="no" id="HEE6C634FBB244B9DA563D086478EA0BC"><enum>(2)</enum><header>Report</header><text display-inline="yes-display-inline">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).</text> </paragraph></subsection>
<subsection commented="no" id="H5749BF8F64BE4CBF8AC7627EFD83EFD5"><enum>(e)</enum><header>SEC study on Meaningful Multi-Digit Rating Symbols</header>
<paragraph commented="no" id="H5EA6E962E608419D9290C79E16CC236F"><enum>(1)</enum><header>Study</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph commented="no" id="H4CB444C145AE4BF1AF9CCFAADC6BBED1"><enum>(2)</enum><header>Initial example for guidance</header><text display-inline="yes-display-inline">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:</text>
<subparagraph commented="no" id="H471EE0D1EF4848FA81D0300D25183397"><enum>(A)</enum><text display-inline="yes-display-inline">The first digit represents the default probability under <quote>normal</quote> market stress, characterized by normal economic fluctuations in addition to a 5 percent decline in asset value and 2 percent increase in unemployment.</text> </subparagraph>
<subparagraph commented="no" id="H2896C461FDC441509FB735046A4E6CC6"><enum>(B)</enum><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph commented="no" id="H1B3ADE11EBE04AB5827712A3900BB7BA"><enum>(C)</enum><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph>
<paragraph commented="no" id="HC5201CD86FD24CE0A38FDB8C1E3B861B"><enum>(3)</enum><header>Report</header><text>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.</text> </paragraph></subsection>
<subsection commented="no" id="HC01CBB0470474C89AE99A1908BB94204"><enum>(f)</enum><header>SEC Study on ratings standardization</header>
<paragraph commented="no" id="H106A274192D047E2B80CCE595CCD9BE1"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">The Securities and Exchange Commission shall undertake a study on the feasability and desirability of—</text>
<subparagraph commented="no" id="H6CA65C79A5CC4EF5B84057D7BB188BAE"><enum>(A)</enum><text display-inline="yes-display-inline">standardizing credit ratings terminology, so that all credit rating agencies issue credit ratings using identical terms;</text> </subparagraph>
<subparagraph commented="no" id="H808A8BB8C13244628DD492BFA776D564"><enum>(B)</enum><text>standardizing the market stress conditions under which ratings are evaluated;</text> </subparagraph>
<subparagraph commented="no" id="H11FD61BF9EAA45978472FF229325BB57"><enum>(C)</enum><text display-inline="yes-display-inline">requiring a quantitative correspondence between credit ratings and a range of default probabilities and loss expectations under standardized conditions of economic stress; and</text> </subparagraph>
<subparagraph commented="no" id="H79C0E0D65FAC4B5F9D64FCE08649CF29"><enum>(D)</enum><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph>
<paragraph commented="no" id="H89FB638AE3E2416F95F7B97FA44286CA"><enum>(2)</enum><header>Report</header><text>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.</text> </paragraph></subsection></section></subtitle>
<subtitle id="HA08A79349BC5440193530B33027FF56A"><enum>C</enum><header>Investor Protection Act</header>
<section id="HF4F00203C7D64F0BA5FEE65A0E7000E1" section-type="subsequent-section"><enum>7001.</enum><header>Short title</header><text display-inline="no-display-inline">This subtitle may be cited as the <quote>Investor Protection Act of 2009</quote>.</text> </section>
<part id="H7291FD4DAA9745B188FE5B4C8A3E27B7"><enum>1</enum><header>Disclosure</header>
<section id="H14BD4E288F394F489E1F9B8E67F2B638"><enum>7101.</enum><header>Investor Advisory Committee established</header><text display-inline="no-display-inline">The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended by adding after section 4C the following new section:</text>
<quoted-block id="H0F431AF91DD042D58B0C9CC9818ECE10" style="OLC">
<section id="HC4222BDDA44C4710AA55959FA3707935"><enum>4D.</enum><header>Investor Advisory Committee</header>
<subsection id="H001BAC4304F248B78C6EBD5F7D13A609"><enum>(a)</enum><header>Establishment and purpose</header><text display-inline="yes-display-inline">There is established an Investor Advisory Committee (in this section referred to as the <quote>Committee</quote>) to advise and consult with the Commission on—</text>
<paragraph id="HA829BDC78C6948FD9D288B7002A75C33"><enum>(1)</enum><text>regulatory priorities and issues regarding new products, trading strategies, fee structures and the effectiveness of disclosures;</text> </paragraph>
<paragraph id="HD51205BF76144DCEA935A2A2FF1274B7"><enum>(2)</enum><text>initiatives to protect investor interest; and</text> </paragraph>
<paragraph id="HD9A87A312907471CB7E14627B7104556"><enum>(3)</enum><text>initiatives to promote investor confidence in the integrity of the marketplace.</text> </paragraph></subsection>
<subsection id="HA64BF9E30E174621BE25297C4BDD7115"><enum>(b)</enum><header>Membership</header>
<paragraph id="H9297A65EE65B45668D4E0C44F98A8F34"><enum>(1)</enum><header>Appointment</header><text>The Chairman of the Commission shall appoint the members of the Committee, which members shall—</text>
<subparagraph id="H385A75FA20D74A9AB51B90AB360EC592"><enum>(A)</enum><text>represent the interests of individual investors;</text> </subparagraph>
<subparagraph id="H3A09EADC3EBD4215B47EC5FB093436AB"><enum>(B)</enum><text>represent the interests of institutional investors; and</text> </subparagraph>
<subparagraph commented="no" id="H3E9AE44FB0054B6AA1622735D60C6126"><enum>(C)</enum><text>use a wide range of investment approaches.</text> </subparagraph></paragraph>
<paragraph id="HD2A03C6076304400B72313D571523727"><enum>(2)</enum><header>Members not commission employees</header><text>Members shall not be considered employees or agents of the Commission solely because of membership on the Committee.</text> </paragraph></subsection>
<subsection id="HC7545B78D8144A95916D2AECB45163FB"><enum>(c)</enum><header>Meetings</header><text>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.</text> </subsection>
<subsection id="H0748E25588F34544B1B4B604CFA3202C"><enum>(d)</enum><header>Compensation and travel expenses</header><text display-inline="yes-display-inline">Members of the Committee who are not full-time employees of the United States shall—</text>
<paragraph id="H0861207A39AC40FDA3D4405675F1F1FD"><enum>(1)</enum><text>be entitled to receive compensation at a rate fixed by the Commission while attending meetings of the Committee, including travel time; and</text> </paragraph>
<paragraph id="HB33FCD600F074921A4DBE6E71BC43AB4"><enum>(2)</enum><text>be allowed travel expenses, including transportation and subsistence, while away from their homes or regular places of business.</text> </paragraph></subsection>
<subsection id="H78A939D92E0943A1AAC23B634602A0B5"><enum>(e)</enum><header>Committee findings</header><text display-inline="yes-display-inline">Nothing in this section requires the Commission to accept, agree, or act upon the findings or recommendations of the Committee.</text> </subsection>
<subsection id="H92B668B12152444CACDF09A2123D897B"><enum>(f)</enum><header>Authorization of appropriations</header><text display-inline="yes-display-inline">There is authorized to be appropriated to the Commission such sums as are necessary for the activities of the Committee.</text> </subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </section>
<section id="H8280A22885184F0FA043AE73901B48ED"><enum>7102.</enum><header>Clarification of the Commission’s authority to engage in consumer testing</header>
<subsection id="HBBF9D67C5B754DF6A34626E297723D65"><enum>(a)</enum><header>Amendment to Securities Act of 1933</header><text>Section 19 of the Securities Act of 1933 (15 U.S.C. 77s) is amended by adding at the end the following new subsection:</text>
<quoted-block id="H3F35A6EF1B2644269A67FC8D6672ECAD" style="OLC">
<subsection id="H84B46863FBBD49E89D22B1E12F58E759"><enum>(e)</enum><text>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.</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H16B8314C00DE42229B7BA041FE268B72"><enum>(b)</enum><header>Amendment to Securities Exchange Act of 1934</header><text>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:</text>
<quoted-block id="HA36345E537C0418690E80C4923AE7BB3" style="OLC">
<subsection id="HB815BDDBC1634D9EB7B21D5224A83D86"><enum>(b)</enum><text>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.</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="HDC9801499E7A4BC988147AA8CD4E7BC8"><enum>(c)</enum><header>Amendment to Investment Company Act of 1940</header><text>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:</text>
<quoted-block id="HAD622A51EDD647418BE8C97934724D19" style="OLC">
<subsection id="H431E2578866C4D46B56B26825F290058"><enum>(d)</enum><header>Gathering information</header><text>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.</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H09661EC1F5A04DCC9890E361FA993767"><enum>(d)</enum><header>Amendment to the Investment Advisers Act of 1940</header><text>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:</text>
<quoted-block id="H6CFC3A8AD31C4977BF28FC061C389B27" style="OLC">
<subsection id="H7DF91353DC3C4CFC88481442F1589803"><enum>(f)</enum><text>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.</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection></section>
<section id="H62AAFAC9FB28457BAFBBADB259B799CD"><enum>7103.</enum><header>Establishment of a fiduciary duty for brokers, dealers, and investment advisers, and harmonization of regulation</header>
<subsection id="H5C01255A634F4B648A914F359D6FFFEA"><enum>(a)</enum><header>In general</header>
<paragraph id="H1B32A8CD391B4FC2BBD39C593872257F"><enum>(1)</enum><header>Securities Exchange Act of 1934</header><text>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:</text>
<quoted-block display-inline="no-display-inline" id="HE1DB4E14E9764E2B84BB8E40A4A3362A" style="OLC">
<subsection id="H1D68483EBFE6426D8E576E2BDEBAB376"><enum>(m)</enum><header>Standard of conduct</header>
<paragraph id="HF681F34BD3C64C7785E3023513950AD9"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H0D31B81A82EA44479C7E887234E2072E"><enum>(2)</enum><header>Disclosure of range of products offered</header><text display-inline="yes-display-inline">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).</text> </paragraph>
<paragraph id="H55D0B860583B4F72BB4F286A37F6C134"><enum>(3)</enum><header>Retail customer defined</header><text display-inline="yes-display-inline">For purposes of this subsection, the term <term>retail customer</term> means a natural person, or the legal representative of such natural person, who—</text>
<subparagraph id="H91667E66DC5D4CB2B579EA1FEAE992F0"><enum>(A)</enum><text>receives personalized investment advice about securities from a broker or dealer; and</text> </subparagraph>
<subparagraph id="HB07950C71A4340C3BB99F78902C5225A"><enum>(B)</enum><text>uses such advice primarily for personal, family, or household purposes.</text> </subparagraph></paragraph></subsection>
<subsection id="H64856D7591454C4CB088217C9E4266BE"><enum>(n)</enum><header>Other matters</header><text display-inline="yes-display-inline">The Commission shall—</text>
<paragraph id="H6EB9F599AA3B427984277FB829C1A8FE"><enum>(1)</enum><text>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</text> </paragraph>
<paragraph id="H904EB24AB76D425887292E87B44ED5F0"><enum>(2)</enum><text>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.</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph>
<paragraph id="HE637991ABB4441E5ACB30FBF3F145C8E"><enum>(2)</enum><header>Investment Advisers Act of 1940</header><text>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:</text>
<quoted-block display-inline="no-display-inline" id="H5B357B0503BA4F24ACC3D56992FE2D80" style="OLC">
<subsection id="HE33C890E435B4A61A7C9799FCFC10C94"><enum>(g)</enum><header>Standard of conduct</header>
<paragraph id="H9D1082A065B947289EC2A0ED275FC344"><enum>(1)</enum><header>In general</header><text>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 <quote>customer</quote> 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.</text> </paragraph>
<paragraph id="H91662E6FF8D7461F8DFA368108F67F52"><enum>(2)</enum><header>Retail customer defined</header><text display-inline="yes-display-inline">For purposes of this subsection, the term <term>retail customer</term> means a natural person, or the legal representative of such natural person, who—</text>
<subparagraph id="H05A1F613892C4F37876A628B4B3A5526"><enum>(A)</enum><text>receives personalized investment advice about securities from a broker, dealer, or investment adviser; and</text> </subparagraph>
<subparagraph id="HC57E40437B604085811125BBBF3DB218"><enum>(B)</enum><text>uses such advice primarily for personal, family, or household purposes.</text> </subparagraph></paragraph></subsection>
<subsection display-inline="no-display-inline" id="HA4003922CA0B46079F9AB99FDF80E321"><enum>(h)</enum><header>Other matters</header><text display-inline="yes-display-inline">The Commission shall—</text>
<paragraph id="H3B3C1069EF4E49B8A0EC20996CEF4D00"><enum>(1)</enum><text>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</text> </paragraph>
<paragraph id="H0ECCA15138E441BDBE9492295246A197"><enum>(2)</enum><text>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.</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection id="H257398DD703441A68BCDACD16EE55E2D"><enum>(b)</enum><header>Harmonization of enforcement</header>
<paragraph id="HA8BB2244445E40E98797C571B5B32FAC"><enum>(1)</enum><header>Securities Exchange Act of 1934</header><text>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:</text>
<quoted-block display-inline="no-display-inline" id="H7929C6D568364F1D99CB82557677E3DC" style="OLC">
<subsection id="H01CB1B26E67149279D62C7EA44580463"><enum>(o)</enum><header>Harmonization of enforcement</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="H0A74A8C3E6874A1C85412F9458D7C5F2"><enum>(1)</enum><text display-inline="yes-display-inline">the enforcement authority of the Commission with respect to such violations provided under this Act; and</text> </paragraph>
<paragraph id="H397B142EC4B4480BB7EDE7C4716A0B92"><enum>(2)</enum><text display-inline="yes-display-inline">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</text> </paragraph><continuation-text continuation-text-level="subsection">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.</continuation-text></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph>
<paragraph id="HBDC1F2C2564447C0B8556AD9E071A280"><enum>(2)</enum><header>Investment Advisers Act of 1940</header><text display-inline="yes-display-inline">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:</text>
<quoted-block display-inline="no-display-inline" id="H0B72AD9E70A442DF927F485A4A4460A4" style="OLC">
<subsection id="H4C17889DCB52431DA97B0E3EEA4FCC71"><enum>(i)</enum><header>Harmonization of enforcement</header><text display-inline="yes-display-inline">The enforcement authority of the Commission with respect to violations of the standard of conduct applicable to an investment adviser shall include—</text>
<paragraph id="H358924CD7BE94F529E1DFB45675D739A"><enum>(1)</enum><text display-inline="yes-display-inline">the enforcement authority of the Commission with respect to such violations provided under this Act; and</text> </paragraph>
<paragraph id="H46AD760772A14AB48530E8007C02612B"><enum>(2)</enum><text display-inline="yes-display-inline">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</text> </paragraph><continuation-text continuation-text-level="subsection">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.</continuation-text></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection></section>
<section id="HA9CB4DF44E6B40709709B6FE5D7B2ACD"><enum>7104.</enum><header>Commission study and rulemaking on disclosure to retail customers before purchase of products or services</header>
<subsection id="H95A43E9A35FD4FCDB7C648A1025EF463"><enum>(a)</enum><header>Study required</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="H36694EB19879453DB8E9FC8121A8E695"><enum>(1)</enum><text display-inline="yes-display-inline">the nature of a <quote>retail customer</quote>, 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;</text> </paragraph>
<paragraph id="HBCAFCC3C4FEE46D3A34994479F0C3D15"><enum>(2)</enum><text>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;</text> </paragraph>
<paragraph id="HA48DFDF61BEA4C0BA771AB433C687AD8"><enum>(3)</enum><text>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;</text> </paragraph>
<paragraph id="HB5B977C4A39F4CED92BDA27EB8CBE2B3"><enum>(4)</enum><text>information that retail customers should receive prior to purchasing each product or service, and the appropriate person or entity to provide such information; and</text> </paragraph>
<paragraph id="H9883B33F22374CC08D4FBF91B445664A"><enum>(5)</enum><text>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.</text> </paragraph></subsection>
<subsection id="H33BC140BF94B45F4A10D54AB77BB00BD"><enum>(b)</enum><header>Rulemaking</header>
<paragraph id="HE116CD9C4CAD45C78494420CBB5B286B"><enum>(1)</enum><text display-inline="yes-display-inline">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—</text>
<subparagraph id="HD68871D232244A06A0E642DBB3C9DAF7"><enum>(A)</enum><text>take into account the findings of the study conducted pursuant to subsection (a);</text> </subparagraph>
<subparagraph id="H7FA088AAD2AE43E09C96131542AA9451"><enum>(B)</enum><text display-inline="yes-display-inline">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</text> </subparagraph>
<subparagraph id="H6344BCD4D9AB4F209A8C43FD44627318"><enum>(C)</enum><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph>
<paragraph id="HCEC4A7FA088F4078B1283CD9AFF254CC"><enum>(2)</enum><text>Notwithstanding paragraph (1), the Commission is authorized to promulgate rules in connection with—</text>
<subparagraph id="HBAC86ED4A30244E3981A975A5896E174"><enum>(A)</enum><text>the implementation of section 7103; and</text> </subparagraph>
<subparagraph id="H5E158C5CE37649AD8CBBBC12D5B567F7"><enum>(B)</enum><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph></subsection></section>
<section id="H7AA78A6C3B0247718D0CA4B6C610B708"><enum>7105.</enum><header>Beneficial ownership and short-swing profit reporting</header>
<subsection id="H22973D75A8FC43D986DAD6872BC0B83B"><enum>(a)</enum><header>Beneficial ownership reporting</header><text display-inline="yes-display-inline">Section 13 of the Securities Exchange Act of 1934 (15 U.S.C. 78m) is amended—</text>
<paragraph id="HABB1ED9334074FF0B0EA6F198FBDBB3C"><enum>(1)</enum><text display-inline="yes-display-inline">in subsection (d)(1)—</text>
<subparagraph id="H27411468676C4A6B9B3C689EA12EA1C8"><enum>(A)</enum><text>by inserting after <quote>within ten days after such acquisition</quote> the following: <quote>or within such shorter time as the Commission may establish by rule</quote>; and</text> </subparagraph>
<subparagraph id="H3795D02C6B8D457CA6E6BF68263555FD"><enum>(B)</enum><text>by striking <quote>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</quote>;</text> </subparagraph></paragraph>
<paragraph id="H0C6F049B46D249E4B48DEC9703875F2A"><enum>(2)</enum><text>in subsection (d)(2)—</text>
<subparagraph id="HDCA1CE6689FD4FBDA9BAD69091409C2B"><enum>(A)</enum><text>by striking <quote>in the statements to the issuer and the exchange, and</quote>; and</text> </subparagraph>
<subparagraph id="H25ADA23F67B94B78AF17131FAD38E871"><enum>(B)</enum><text>by striking <quote>shall be transmitted to the issuer and the exchange and</quote>;</text> </subparagraph></paragraph>
<paragraph id="HBF6BAF3E5A324521A93F3D90B2A55E56"><enum>(3)</enum><text>in subsection (g)(1), by striking <quote>shall send to the issuer of the security and</quote>; and</text> </paragraph>
<paragraph id="H1076FA0D9319478D86E55D8EEBC73CF4"><enum>(4)</enum><text>in subsection (g)(2)—</text>
<subparagraph id="HE11356315D5A4743AED75AD4F3AA2558"><enum>(A)</enum><text>by striking <quote>sent to the issuer and</quote>; and</text> </subparagraph>
<subparagraph id="H62782C8C521243A59A41C860FB40F693"><enum>(B)</enum><text>by striking <quote>shall be transmitted to the issuer and</quote>.</text> </subparagraph></paragraph></subsection>
<subsection id="H324246CE2D16445ABB6ED620D9ABD1BE"><enum>(b)</enum><header>Short-swing profit reporting</header><text display-inline="yes-display-inline">Section 16(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78p(a)) is amended—</text>
<paragraph id="H1B617EBEF4EF458C821041BB8D203D13"><enum>(1)</enum><text>in paragraph (1), by striking <quote>(and, if such security is registered on a national securities exchange, also with the exchange)</quote>; and</text> </paragraph>
<paragraph id="H4791A95F8FDB446D95C96E3CC999F9A1"><enum>(2)</enum><text display-inline="yes-display-inline">in paragraph (2)(B), by inserting after <quote>officer</quote> the following: <quote>, or within such shorter time as the Commission may establish by rule</quote>.</text> </paragraph></subsection></section>
<section id="H935E22F9BC984799B86598879E07D943"><enum>7106.</enum><header>Revision to recordkeeping rules</header>
<subsection id="HB87A956C8E7F4FC0ACE817928965A247"><enum>(a)</enum><header>Investment Company Act of 1940 amendments</header><text display-inline="yes-display-inline">Section 31 of the Investment Company Act of 1940 (15 U.S.C. 80a–30) is amended—</text>
<paragraph id="H6A0AF222D37C4226909005157D8E3EC9"><enum>(1)</enum><text>in subsection (a)(1), by adding at the end the following: <quote>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.</quote>; and</text> </paragraph>
<paragraph id="HEF05CCEF20B24411B80EEEB8863BCC86"><enum>(2)</enum><text>in subsection (b), by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H2166786DEB6040C99BB639B0B164D869" style="OLC">
<paragraph id="H81A033105F3243B0B6596949EC3F04CA"><enum>(4)</enum><header>Records of persons with custody or use</header>
<subparagraph id="HC5AFF20A47274C64AD698816A24CB605"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="H836953FB5AE548E0B611AF9685B7E353"><enum>(B)</enum><header>Certain persons subject to other regulation</header><text>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.</text> </subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection id="H6B3F34DC65A047BC8B193B45B7CAC569"><enum>(b)</enum><header>Investment Advisers Act of 1940 amendment</header><text display-inline="yes-display-inline">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:</text>
<quoted-block display-inline="no-display-inline" id="H4674865D1F714648A459ACE926470623" style="OLC">
<subsection id="H8E91046463CF4375A5599D2C58D74A63"><enum>(d)</enum><header>Records of persons with custody or use</header>
<paragraph id="H39E88DEFAE6F49969BB2D76FCCA210A9"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HCA7D99CB78FF4FF99AA108DB5590645C"><enum>(2)</enum><header>Certain persons subject to other regulation</header><text>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.</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection></section>
<section id="H027C44333CE04571BA599028C081716D"><enum>7107.</enum><header>Study on enhancing investment adviser examinations</header>
<subsection id="H9BCA70EB3AC24187ADA91CB49CF156F5"><enum>(a)</enum><header>Study required</header>
<paragraph id="H0B40801C8E9F4D6FBB5180983607A2DA"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">The Commission shall review and analyze the need for enhanced examination and enforcement resources for investment advisers.</text> </paragraph>
<paragraph id="H75601C2620F145E4ADA737521CB291AA"><enum>(2)</enum><header>Areas of consideration</header><text>The study required by this subsection shall examine—</text>
<subparagraph id="HB829F3D3BA334280B1B768AFDEFC6F3B"><enum>(A)</enum><text>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;</text> </subparagraph>
<subparagraph id="H9E4F587A162B46BF875669299C65F7E1"><enum>(B)</enum><text>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</text> </subparagraph>
<subparagraph id="H65DC5E70603A45D7A7B567870EBA15BB"><enum>(C)</enum><text>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.</text> </subparagraph></paragraph></subsection>
<subsection id="H1B36092127D64A05AC2292C3EA476D5C"><enum>(b)</enum><header>Report required</header><text>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.</text> </subsection></section>
<section id="H332D904779CB42B891A3BE0CCD724E0C"><enum>7108.</enum><header>GAO study of financial planning</header>
<subsection id="H98E04FDEEDBF44B49D9BE0A752AE9884"><enum>(a)</enum><header>Study required</header><text display-inline="yes-display-inline">The Comptroller General of the United States shall conduct a study on the regulation and oversight of financial planning. The study shall consider—</text>
<paragraph id="H2B9BC48B69EA4604A3DE364BDBC0E127"><enum>(1)</enum><text>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</text> </paragraph>
<paragraph id="H377FAA7C009648A7AADA64734616CEF0"><enum>(2)</enum><text>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.</text> </paragraph></subsection>
<subsection id="H7CD1F4165DDE4C46B059D147C8695A26"><enum>(b)</enum><header>Report</header><text display-inline="yes-display-inline">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.</text> </subsection></section></part>
<part id="H19E7C5B188DD4758B1CFDC197CA3F780"><enum>2</enum><header>Enforcement and Remedies</header>
<section id="H9E5ECD0B3C7E4AD38D62F2AB66DA4BDE"><enum>7201.</enum><header>Authority to restrict mandatory pre-dispute arbitration</header>
<subsection id="H278AC07F39AB45579BB74167EBFCC23B"><enum>(a)</enum><header>Amendment to Securities Exchange Act of 1934</header><text>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:</text>
<quoted-block id="HD6F85DAC7AAD4983AF5E46B13E308243" style="OLC">
<subsection id="H1C3888E2BB8442DEA150E94B08D2295E"><enum>(p)</enum><header>Authority to restrict mandatory pre-dispute arbitration</header><text>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.</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H9F4EFE6580E64422ABEC1E995B2CA0DB"><enum>(b)</enum><header>Amendment to Investment Advisers Act of 1940</header><text>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:</text>
<quoted-block id="H48B8231A8196447FBEB027222459B380" style="OLC">
<subsection id="HFF4F8DE2CCC5407A82761F903033E135"><enum>(f)</enum><header>Authority to restrict mandatory pre-dispute arbitration</header><text>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.</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection></section>
<section id="H2AD829988B5A450EA66721D6FC5A548E"><enum>7202.</enum><header>Comptroller General study to review securities arbitration system</header>
<subsection id="HEE09C49B93A442CB80647F56CEF21D48"><enum>(a)</enum><header>Study</header><text display-inline="yes-display-inline">The Comptroller General of the United States shall conduct a study to review—</text>
<paragraph id="H4488CB908DA442EBA7CD5EBA12FF6AB9"><enum>(1)</enum><text display-inline="yes-display-inline">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;</text> </paragraph>
<paragraph id="HFE90F2F2255B45EF8F224B40BDC75AC0"><enum>(2)</enum><text display-inline="yes-display-inline">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</text> </paragraph>
<paragraph id="H4AC7907E67D347C4B83B8427E0A5B1DF"><enum>(3)</enum><text display-inline="yes-display-inline">other additional issues as may be raised during the course of the study conducted under this subsection.</text> </paragraph></subsection>
<subsection id="H8F6A63B045F74D78BF95833A072D1C57"><enum>(b)</enum><header>Report</header><text display-inline="yes-display-inline">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.</text> </subsection></section>
<section id="H6DCF1CBB880D46778B983686A44F8BBF"><enum>7203.</enum><header>Whistleblower protection</header>
<subsection id="HFF647013BEAD447BA77168B5A3007EF4"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended by adding after section 21E the following new section:</text>
<quoted-block display-inline="no-display-inline" id="H293B5324C4E0431CA2ECC24168E9058F" style="OLC">
<section id="H219C6B731FB54477A8C79D09CC806CB7"><enum>21F.</enum><header>Securities whistleblower incentives and protection</header>
<subsection id="HA5FAC1FEB08341D090DD77854C3410EF"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">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).</text> </subsection>
<subsection id="H5338B897501E4983B13B94FE35849425"><enum>(b)</enum><header>Determination of amount of award; denial of award</header>
<paragraph id="HB1FC50FE0E304E4D80E7EEF282DF1F84"><enum>(1)</enum><header>Determination of amount of award</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HE0352DBD2EE64DC2A634CD3E8E39AE60"><enum>(2)</enum><header>Denial of award</header><text display-inline="yes-display-inline">No award under subsection (a) shall be made—</text>
<subparagraph id="H2E502935329E43648CCE561E261A153E"><enum>(A)</enum><text display-inline="yes-display-inline">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;</text> </subparagraph>
<subparagraph id="H3D3A9F36B14F49B386CF6957DF1D57A4"><enum>(B)</enum><text>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;</text></subparagraph>
<subparagraph id="HFCB298AAE47F46AC846087C902CDC78E" commented="no" display-inline="no-display-inline"><enum>(C)</enum><text display-inline="yes-display-inline">to any whistleblower who gains the information through the performance of an audit of financial statements required under the securities laws; or</text></subparagraph>
<subparagraph id="H7AE6110B1CDB4D5AB0445D5D9C28BC5F"><enum>(D)</enum><text>to any whistleblower who fails to submit information to the Commission in such form as the Commission may, by rule, require.</text> </subparagraph></paragraph></subsection>
<subsection id="H33A40DB30DCD4AFDA7EF8BE01457B7B3"><enum>(c)</enum><header>Representation</header>
<paragraph id="H9B03033BBC534887904914CDBDC417B8"><enum>(1)</enum><header>Permitted representation</header><text display-inline="yes-display-inline">Any whistleblower who makes a claim for an award under subsection (a) may be represented by counsel.</text> </paragraph>
<paragraph id="H35C4EF6300744F68A3F9C217A33175E6"><enum>(2)</enum><header>Required representation</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection>
<subsection id="H084AB99A7CA141F898AB23981EF0C1B4"><enum>(d)</enum><header>No contract necessary</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="H8F39BC3DC7A244E69362DD123BB42DC8"><enum>(e)</enum><header>Appeals</header><text>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.</text> </subsection>
<subsection id="HF0CC3923F23B4A0B8FA163561FEB961D"><enum>(f)</enum><header>Investor protection fund</header>
<paragraph id="HD366B6663BFA405BB4B8E03AD076AE35"><enum>(1)</enum><header>Fund established</header><text>There is established in the Treasury of the United States a fund to be known as the <quote>Securities and Exchange Commission Investor Protection Fund</quote> (referred to in this section as the <quote>Fund</quote>).</text> </paragraph>
<paragraph id="H9AD500AC9B594FFC98D5EC8993393282"><enum>(2)</enum><header>Use of fund</header><text>The Fund shall be available to the Commission, without further appropriation or fiscal year limitation, for the following purposes:</text>
<subparagraph commented="no" id="H57A7641CBE9A47638E4D878B2F6A7849"><enum>(A)</enum><text>Paying awards to whistleblowers as provided in subsection (a).</text> </subparagraph>
<subparagraph commented="no" id="H156F847FC3264C2EBEE19FE2BD306E99"><enum>(B)</enum><text>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.</text> </subparagraph></paragraph>
<paragraph id="H1ED7E92CFA74431EAAA20FA4C579C25D"><enum>(3)</enum><header>Deposits and credits</header><text>There shall be deposited into or credited to the Fund—</text>
<subparagraph id="H2449CB1871D94D5ABB8000EDC17F750B"><enum>(A)</enum><text>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;</text> </subparagraph>
<subparagraph id="H340713EF464840998633A7A3E2A89B41"><enum>(B)</enum><text>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</text> </subparagraph>
<subparagraph id="H13216818440A41C8B169FA2D61A23630"><enum>(C)</enum><text>all income from investments made under paragraph (4).</text> </subparagraph></paragraph>
<paragraph id="H9E7B5B91876B43F5BB896AB09CA81E2A"><enum>(4)</enum><header>Investments</header>
<subparagraph id="HEA46E91BC80948A390E368CE106EADA1"><enum>(A)</enum><header>Amounts in fund may be invested</header><text>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.</text> </subparagraph>
<subparagraph id="HAFA4063846C74EABB7E53F040738E4C0"><enum>(B)</enum><header>Eligible investments</header><text>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.</text> </subparagraph>
<subparagraph id="H177C780D6521420F8C5264CCCD022C02"><enum>(C)</enum><header>Interest and proceeds credited</header><text>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.</text> </subparagraph></paragraph>
<paragraph id="H36E5821112084925991E2914AFD16012"><enum>(5)</enum><header>Reports to Congress</header><text>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—</text>
<subparagraph id="H4B64157598FD44D696FEE3E640DDDB52"><enum>(A)</enum><text>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;</text> </subparagraph>
<subparagraph id="H50E1D8718AF34D2B96EC4F0E12F0A9EB"><enum>(B)</enum><text>investor education initiatives described in paragraph (2)(B) that were funded by the Fund during the preceding fiscal year;</text> </subparagraph>
<subparagraph id="HF5A2055D906B4DF4AE44D97736C5E60F"><enum>(C)</enum><text>the balance of the Fund at the beginning of the preceding fiscal year;</text> </subparagraph>
<subparagraph id="HEC79EBA272DD412BA5CA259BDF52A574"><enum>(D)</enum><text>the amounts deposited into or credited to the Fund during the preceding fiscal year;</text> </subparagraph>
<subparagraph id="H27B409F89D734677A0DA0FC9742253AB"><enum>(E)</enum><text>the amount of earnings on investments of amounts in the Fund during the preceding fiscal year;</text> </subparagraph>
<subparagraph id="H10E1079F4A48451183C8D5AD0D29E899"><enum>(F)</enum><text>the amount paid from the Fund during the preceding fiscal year to whistleblowers pursuant to subsection (a);</text> </subparagraph>
<subparagraph id="H0A8E0083A2324F6993086BC4B9131393"><enum>(G)</enum><text>the amount paid from the Fund during the preceding fiscal year for investor education initiatives described in paragraph (1)(B);</text> </subparagraph>
<subparagraph id="H81B14AA38097407AAA24DC25650EC6F3"><enum>(H)</enum><text>the balance of the Fund at the end of the preceding fiscal year; and</text> </subparagraph>
<subparagraph id="H66D87634E37B4527BF6125DAF7E39160"><enum>(I)</enum><text>a complete set of audited financial statements, including a balance sheet, income statement, and cash flow analysis.</text> </subparagraph></paragraph></subsection>
<subsection id="HBD9DE8400AD0480B9F589C3D45C0EE72"><enum>(g)</enum><header>Protection of whistleblowers</header>
<paragraph id="HCC2E13E3434C4F93AE5779DB8F2BC08F"><enum>(1)</enum><header>Prohibition against retaliation</header>
<subparagraph id="HB995014E510840C19F088FF49FF8AA3F"><enum>(A)</enum><header>In general</header><text>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.</text> </subparagraph>
<subparagraph id="HAEFEA9FFE92B41BDAB1A2A581AE807D4"><enum>(B)</enum><header>Enforcement</header>
<clause id="HF06D152835474B7AB5946EE2BCF5DDD2"><enum>(i)</enum><header>Cause of action</header><text>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).</text> </clause>
<clause id="H756771DC0F04484B88D381E5CFBA4775"><enum>(ii)</enum><header>Subpoenas</header><text>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.</text> </clause>
<clause id="H3DD787765A6E4471ACC62DEF2A7F35EF"><enum>(iii)</enum><header>Statute of limitations</header><text>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.</text> </clause></subparagraph>
<subparagraph id="H86ED9FEFF0C64257AAC69F885ACF9EA8"><enum>(C)</enum><header>Relief</header><text display-inline="yes-display-inline">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.</text></subparagraph></paragraph>
<paragraph id="HD6A788D5F2914C4394597C38A477FDED"><enum>(2)</enum><header>Confidentiality</header>
<subparagraph id="HF93AE01EB5A54EC996E9CFBE4521D7F5"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="H240E8B3C6C8942888B6EE953FF2FAEC4"><enum>(B)</enum><header>Availability to government agencies</header><text>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—</text>
<clause id="HBE7574DF72D2454491EB4E673760CBD7"><enum>(i)</enum><text>the Attorney General of the United States,</text></clause>
<clause id="H455FF0B378A140DAA0CF8BC782BCF685"><enum>(ii)</enum><text>an appropriate regulatory authority,</text></clause>
<clause id="H68856FEE17824714A16769CF8DC4B815"><enum>(iii)</enum><text>a self-regulatory organization,</text></clause>
<clause id="H847B87C4662240E7B8716128E1659507"><enum>(iv)</enum><text>State attorneys general in connection with any criminal investigation, and</text></clause>
<clause id="HCD5F4986905B4D3199CAA2A36BAF19EC"><enum>(v)</enum><text>any appropriate State regulatory authority, </text></clause><continuation-text continuation-text-level="subparagraph">each of which shall not disclose such information in accordance with subparagraph (A).</continuation-text></subparagraph></paragraph> </subsection>
<subsection id="HC4015D89365F4C6AB7B93A53DA6EDC6B"><enum>(h)</enum><header>Provision of false information</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="HA6890F94AF734E5992F8149C4173A2FD"><enum>(i)</enum><header>Rulemaking authority</header><text>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.</text> </subsection>
<subsection id="H3F624F4918544E4F9FB9DECBC7398B55"><enum>(j)</enum><header>Definitions</header><text>For purposes of this section, the following terms have the following meanings:</text>
<paragraph id="H6A8763241AB84B09905C9A5BEE3DA8E9"><enum>(1)</enum><header>Original information</header><text>The term <quote>original information</quote> means information that—</text>
<subparagraph id="H4F802D1C83E54C54B732155A7616FE86"><enum>(A)</enum><text>is based on the direct and independent knowledge or analysis of a whistleblower;</text> </subparagraph>
<subparagraph id="HB9DA076CE2034933AB7E1512B4981E09"><enum>(B)</enum><text>is not known to the Commission from any other source, unless the whistleblower is the initial source of the information; and</text> </subparagraph>
<subparagraph id="HAE51B730E7FD42058964454D24446773"><enum>(C)</enum><text>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.</text> </subparagraph></paragraph>
<paragraph id="H53B38187F3AB482EA8391220EF848DBD"><enum>(2)</enum><header>Monetary sanctions</header><text>The term <quote>monetary sanctions</quote>, 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.</text> </paragraph>
<paragraph id="HED2A40A2829E404AB5143F8BABBF92D8"><enum>(3)</enum><header>Related action</header><text>The term <quote>related action</quote>, 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.</text> </paragraph>
<paragraph id="H94EC286DAF0447DF9486E56364C02647"><enum>(4)</enum><header>Whistleblower</header><text>The term <quote>whistleblower</quote> means an individual, or two or more individuals acting jointly, who submit information to the Commission as provided in this section.</text> </paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="HDF13BBD29239475BAB8498E998151E6E"><enum>(b)</enum><header>Administration and enforcement</header><text display-inline="yes-display-inline">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.</text> </subsection></section>
<section id="HA19D83A4D8514556BA5BBB1ABDFCA484"><enum>7204.</enum><header>Conforming amendments for whistleblower protection</header>
<subsection id="HAD768150B5B6412CA088CF209352A0E5"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Each of the following provisions is amended by inserting <quote>and section 21F of the Securities Exchange Act of 1934” after “the Sarbanes-Oxley Act of 2002</quote>:</text>
<paragraph id="H57C4F4BAB4A047729E3711768AD2BF03"><enum>(1)</enum><text>Section 20(d)(3)(A) of the Securities Act of 1933 (15 U.S.C. 77t(d)(3)(A)).</text> </paragraph>
<paragraph id="H28939D87D75742F48F7349171C17B9CD"><enum>(2)</enum><text display-inline="yes-display-inline">Section 42(e)(3)(A) of the Investment Company Act of 1940 (15 U.S.C. 80a–41(e)(3)(A)).</text> </paragraph>
<paragraph id="HCBDAC1101E164C4F9F96452F0585FC93"><enum>(3)</enum><text display-inline="yes-display-inline">Section 209(e)(3)(A) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–9(e)(3)(A)).</text> </paragraph></subsection>
<subsection id="H434F5F8D51554603AE10909A3782A0E5"><enum>(b)</enum><header>Securities Exchange Act</header><text>The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended—</text>
<paragraph id="HB9B30107AC324FE78D5413A8A2C6BFD1"><enum>(1)</enum><text display-inline="yes-display-inline">in section 21(d)(3)(C)(i) (15 U.S.C. 78u(d)(3)(C)(i)), by inserting <quote>and section 21F of this title</quote> after <quote>the Sarbanes-Oxley Act of 2002</quote>;</text> </paragraph>
<paragraph id="H36E52D96CAA841979AFCDFAD60EEE38C"><enum>(2)</enum><text>in section 21A(d)(1) (15 U.S.C. 78u–1(d)(1))—</text>
<subparagraph id="H6CA242C0B7F24D6A87EF508AB7F66D00"><enum>(A)</enum><text>by striking <quote>(subject to subsection (e))</quote>; and</text> </subparagraph>
<subparagraph id="HD7EFE6B9307940C38A3C6EB2D383F200"><enum>(B)</enum><text>by inserting <quote>and section 21F of this title</quote> after <quote>the Sarbanes-Oxley Act of 2002</quote>; and</text> </subparagraph></paragraph>
<paragraph id="HF7A7974060564D36804FC54AF307BA7E"><enum>(3)</enum><text>in section 21A, by striking subsection (e) and redesignating subsections (f) and (g) as subsections (e) and (f), respectively.</text> </paragraph></subsection></section>
<section id="HAF123AC3E9664E939D663463FA1482E5"><enum>7205.</enum><header>Implementation and transition provisions for whistleblower protections</header>
<subsection id="H845A60E1A9F442E7A1786C16B346A283"><enum>(a)</enum><header>Implementing rules</header><text>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.</text> </subsection>
<subsection id="H9DBA9323C9EE40C9B4A585652D0EFF99"><enum>(b)</enum><header>Original information</header><text>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.</text> </subsection>
<subsection id="H468F444FDD5B414694914235C8AB5B9D"><enum>(c)</enum><header>Awards</header><text display-inline="yes-display-inline">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.</text> </subsection></section>
<section id="H48F3BB5FBB494FCD8E7C532AA6DB8AF7"><enum>7206.</enum><header>Collateral bars</header>
<subsection id="H7BBF856D236343FEADBA3D6A63B3B981"><enum>(a)</enum><header>Section 15 of the Securities Exchange Act of 1934</header><text display-inline="yes-display-inline">Section 15(b)(6)(A) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(b)(6)(A)) is amended by striking <quote>12 months, or bar such person from being associated with a broker or dealer,</quote> and inserting <quote>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,</quote>.</text> </subsection>
<subsection id="H17995FB662F0476DB96819532C214131"><enum>(b)</enum><header>Section 15B of the Securities Exchange Act of 1934</header><text>Section 15B(c)(4) of the Securities Exchange Act of 1934 (15 U.S.C. 78o–4(c)(4)) is amended by striking <quote>twelve months or bar any such person from being associated with a municipal securities dealer, </quote> and inserting <quote>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,</quote>.</text> </subsection>
<subsection id="HD47F22AA72844451ACCF46250B528531"><enum>(c)</enum><header>Section 17A of the Securities Exchange Act of 1934</header><text>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 <quote>twelve months or bar any such person from being associated with the transfer agent, </quote> and inserting <quote>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,</quote>.</text> </subsection>
<subsection id="HD3C32BDAAA1D4CC7AD69094F8547BDB2"><enum>(d)</enum><header>Section 203 of the Investment Advisers Act of 1940</header><text>Section 203(f) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–3(f)) is amended by striking <quote>twelve months or bar any such person from being associated with an investment adviser, </quote> and inserting <quote>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,</quote>.</text> </subsection></section>
<section id="HE11678D89995445B908EE3D660A6CA67"><enum>7207.</enum><header>Aiding and abetting authority under the Securities Act and the Investment Company Act</header>
<subsection id="H20BD8A267F234D47BC46381F51409E16"><enum>(a)</enum><header>Under the securities act of 1933</header><text>Section 15 of the Securities Act of 1933 (15 U.S.C. 77o) is amended—</text>
<paragraph id="H25BE86B480D94159A0781A88945CEF09"><enum>(1)</enum><text>by striking <quote>Every person who</quote> and inserting <quote>(a) <header-in-text level="subsection" style="OLC">Controlling persons</header-in-text>.—Every person who</quote>; and</text> </paragraph>
<paragraph id="H0267D93D3EEB4824910FD5DD433D5E40"><enum>(2)</enum><text>by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="H9EF168B11A44456792829FAD047A7AD2" style="OLC">
<subsection id="HD9F61F0F7B9948E9B25C725F5B010555"><enum>(b)</enum><header>Prosecution of persons who aid and abet violations</header><text>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.</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection id="HEEF9D6D57465442BB037372D47082EA3"><enum>(b)</enum><header>Under the Investment Company Act of 1940</header><text>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:</text>
<quoted-block display-inline="no-display-inline" id="H13406DD83D2B47B28A884AB7C71B1946" style="traditional">
<subsection id="H61BC0B2F8F084E2288EC3F2FE8DCF56A"><enum>(b)</enum><text>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.</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection></section>
<section id="HFFA4F8F78937414A991BFC13257817A0"><enum>7208.</enum><header>Authority to impose penalties for aiding and abetting violations of the Investment Advisers Act</header><text display-inline="no-display-inline">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:</text>
<quoted-block id="HF071475E8EEB4CC28B94401979F8FBDA" style="OLC">
<subsection id="H94DDEDB5A852444FA869718C74D8C183"><enum>(f)</enum><header>Aiding and abetting</header><text>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.</text> </subsection> <after-quoted-block>.</after-quoted-block></quoted-block> </section>
<section id="H59418BE40F0C4261A20E5982F41FA6C0"><enum>7209.</enum><header>Deadline for completing examinations, inspections and enforcement actions</header><text display-inline="no-display-inline">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:</text>
<quoted-block display-inline="no-display-inline" id="H2FE564A01BCF43A9A8D7ABC46C123102" style="OLC">
<section id="H0105621279F54C1CB2130883804CBD8F"><enum>4E.</enum><header>Deadline for completing enforcement investigations and compliance examinations and inspections</header>
<subsection id="H5C443A2DF94540EBA39D3463268A2ED7"><enum>(a)</enum><header>Enforcement investigations</header>
<paragraph id="H98F47DCCC4B341E6A9DF844ABDCB1E8A"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H4A065AE8FFF14F53BB1751E1706B4995"><enum>(2)</enum><header>Exceptions for certain complex actions</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection>
<subsection id="H2C7D66E46D724900BD26F121F879B99D"><enum>(b)</enum><header>Compliance examinations and inspections</header>
<paragraph id="HFE5F772BC1D84980BA4FFAD2157A1F22"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HF6613AA7995547B293BFEA5BBF9BAB0F"><enum>(2)</enum><header>Exception for certain complex actions</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </section>
<section id="H9518DE2FC319478188E7450CB9D36862"><enum>7210.</enum><header>Nationwide service of subpoenas</header>
<subsection id="HFE8A2B35FDD54FB29D9EBEB069439C79"><enum>(a)</enum><header>Securities Act of 1933</header><text>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: <quote>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.</quote>.</text></subsection>
<subsection id="H04717E36FF874A17AD0F361A292DBA49"><enum>(b)</enum><header>Securities Exchange Act of 1934</header><text>Section 27 of the Securities Exchange Act of 1934 (15 U.S.C. 78aa) is amended by inserting after the third sentence the following: <quote>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.</quote>.</text></subsection>
<subsection id="HA3443985A1CC4757A86830B4D3EB7CC8"><enum>(c)</enum><header>Investment Company Act of 1940</header><text>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: <quote>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.</quote>.</text></subsection>
<subsection id="HD106B2BBD03843ADBF8C68C391D42B5B"><enum>(d)</enum><header>Investment Advisers Act of 1940</header><text>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: <quote>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.</quote>.</text></subsection></section>
<section id="H45D2030E94C64716B6D0BB889EB04DE8"><enum>7211.</enum><header>Authority to impose civil penalties in cease and desist proceedings</header>
<subsection id="H5211CA734F0547A0A243F6E91DC2998B"><enum>(a)</enum><header>Under the Securities Act of 1933</header><text>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:</text>
<quoted-block id="HAB63F741A4204ECE8817CB7E4324F7B8" style="OLC">
<subsection id="HC60C314CC68C4FFF8871D14753042885"><enum>(g)</enum><header>Authority to impose monetary penalties</header>
<paragraph id="HD2B585AEC9054915885159DFAB5C042D"><enum>(1)</enum><header>Grounds for imposing</header><text>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—</text>
<subparagraph id="H9884F83670D949D4927DD4080B0088DF"><enum>(A)</enum><text>such person—</text>
<clause id="H2C465C6D511E4CFFAC6FC9FFA1E7004C"><enum>(i)</enum><text>is violating or has violated any provision of this title, or any rule or regulation thereunder; or</text> </clause>
<clause id="HC78C4CA25C4D4050834491388874166B"><enum>(ii)</enum><text>is or was a cause of the violation of any provision of this title, or any rule or regulation thereunder; and</text> </clause></subparagraph>
<subparagraph id="HA42C736942E547EDA7F11A9A410FA460"><enum>(B)</enum><text>such penalty is in the public interest.</text> </subparagraph></paragraph>
<paragraph id="HBE426361AE2E42C5ABA32BDDD2755F30"><enum>(2)</enum><header>Maximum amount of penalty</header>
<subparagraph id="H7402A85C569C4FDC82737D2B9D8FD724"><enum>(A)</enum><header>First tier</header><text>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.</text> </subparagraph>
<subparagraph id="HC1B4402FD9D34F71B13426BAB779649B"><enum>(B)</enum><header>Second tier</header><text>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.</text> </subparagraph>
<subparagraph id="H223E14D443AB456E8C0C4B8648C95044"><enum>(C)</enum><header>Third tier</header><text>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—</text>
<clause id="HC82CD06B5FEB41B5B4F82AD1E524230F"><enum>(i)</enum><text>the act or omission described in paragraph (1) involved fraud, deceit, manipulation, or deliberate or reckless disregard of a regulatory requirement; and</text> </clause>
<clause id="HDD168D68E1944C689D14DBF847933DA5"><enum>(ii)</enum><text>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.</text> </clause></subparagraph></paragraph>
<paragraph id="H36C6BABDBBCD47E6AB7AF9B0150180EE"><enum>(3)</enum><header>Evidence concerning ability to pay</header><text>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.</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H4283D9A8CED34D6B963745F247265C74"><enum>(b)</enum><header>Under the Securities Exchange Act of 1934</header><text>Subsection (a) of section 21B of the Securities Exchange Act of 1934 (15 U.S.C. 78u–2(a)) is amended—</text>
<paragraph id="H79C4261BE2B3497B86A1844F27C0DD35"><enum>(1)</enum><text>by striking <quote>(a) <header-in-text level="subsection" style="OLC">Commission Authority To Assess Money Penalties</header-in-text>.—In any proceeding</quote> and inserting the following:</text>
<quoted-block id="H421EC9F1DE4C45F4B76FEC002C08A2C8" style="OLC">
<subsection id="H5BAE7335E1AA4418AEA69DBE7675FF8F"><enum>(a)</enum><header>Commission authority to assess monetary penalties</header>
<paragraph id="HDE662E482F6D42A1B88417B43C2ED7D1"><enum>(1)</enum><header>In general</header><text>In any proceeding</text> </paragraph></subsection><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H4803BA864B1449A8858581A8C81A101D"><enum>(2)</enum><text>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</text> </paragraph>
<paragraph id="HAC1EA8F0AC4D4ACBA2C2FF1D32A7CACB"><enum>(3)</enum><text>by adding at the end of such subsection the following new paragraph:</text>
<quoted-block id="H2DE5C3E2D2BD4AF89C267FF03C8BE36D" style="OLC">
<paragraph id="HE5F46A42C5A4482F9C3070406458D350"><enum>(2)</enum><header>Cease-and-desist proceedings</header><text>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—</text>
<subparagraph id="H09781673BD694673A6B32EE71F9C713A"><enum>(A)</enum><text>is violating or has violated any provision of this title, or any rule or regulation thereunder; or</text> </subparagraph>
<subparagraph id="HBA6B6AA30AEB4193A44D644A84032BDB"><enum>(B)</enum><text>is or was a cause of the violation of any provision of this title, or any rule or regulation thereunder.</text> </subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection id="H4797D51CCA2741CFA590F293F4BDBF59"><enum>(c)</enum><header>Under the Investment Company Act of 1940</header><text>Paragraph (1) of section 9(d) of the Investment Company Act of 1940 (15 U.S.C. 80a–9(d)(1)) is amended—</text>
<paragraph id="H3899756A31964394B15C7B8C8B36169E"><enum>(1)</enum><text>by striking <quote>(1) <header-in-text level="paragraph" style="OLC">Authority of commission</header-in-text>.—In any proceeding</quote> and inserting the following:</text>
<quoted-block id="H1A4BA7AB61C241A0AC35C0175BCA08A2" style="OLC">
<paragraph id="H45EE6951EF9843B1BBA895D4BE60C227"><enum>(1)</enum><header>Authority of commission</header>
<subparagraph id="H89E64A1FC6E04641A7AC40D8DC9D33E3"><enum>(A)</enum><header>In general</header><text>In any proceeding</text> </subparagraph></paragraph><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H4DBFD460735F40E69EACA5A2966A66F3"><enum>(2)</enum><text>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</text> </paragraph>
<paragraph id="H3E01988DF792414BB49B433DF8EC95FB"><enum>(3)</enum><text>by adding at the end of such paragraph the following new subparagraph:</text>
<quoted-block id="HCD377BCA425D44389FC33ED06EAE60DE" style="OLC">
<subparagraph id="H866E8D9E26254301A2BD230CCB19375A"><enum>(B)</enum><header>Cease-and-desist proceedings</header><text>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—</text>
<clause id="H7E94505F0D1E4E0191D42B1FD4FB6654"><enum>(i)</enum><text>is violating or has violated any provision of this title, or any rule or regulation thereunder; or</text> </clause>
<clause id="HBE2EC0E9E0604AAAA712CA4EA6EBCBD5"><enum>(ii)</enum><text>is or was a cause of the violation of any provision of this title, or any rule or regulation thereunder.</text> </clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection id="HFB55F348D0974ED2B5ADDF6F3C8BEDF6"><enum>(d)</enum><header>Under the Investment Advisers Act of 1940</header><text>Paragraph (1) of section 203(i) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–3(i)(1)) is amended—</text>
<paragraph id="HA7F658C05BE443119AD83814C8726A6C"><enum>(1)</enum><text>by striking <quote>(1) <header-in-text level="paragraph" style="OLC">Authority of commission</header-in-text>.—In any proceeding</quote> and inserting the following:</text>
<quoted-block id="H2558F63FAD1D427DA96F5A064CDDDCAC" style="OLC">
<paragraph id="H47A3BC1C0DC848778141ED5AADA16939"><enum>(1)</enum><header>Authority of commission</header>
<subparagraph id="H3BF59E40B5C849D9A426D93262FC72DB"><enum>(A)</enum><header>In general</header><text>In any proceeding</text> </subparagraph></paragraph><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H46E62A7581D8403F8E8DEA0DA9696F33"><enum>(2)</enum><text>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</text> </paragraph>
<paragraph id="H97856327FE0642C1BDD8D657F136E082"><enum>(3)</enum><text>by adding at the end of such paragraph the following new subparagraph:</text>
<quoted-block id="H67893AE3E258448EB4C9F126ED1731AF" style="OLC">
<subparagraph id="HDDECB6DDA03648FF95A2F8303AD795E4"><enum>(B)</enum><header>Cease-and-desist proceedings</header><text>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—</text>
<clause id="H3BA51EAAECFB47388ABA9FC85A80BA85"><enum>(i)</enum><text>is violating or has violated any provision of this title, or any rule or regulation thereunder; or</text> </clause>
<clause id="H6F3C366997374C4F861B98436F4539B2"><enum>(ii)</enum><text>is or was a cause of the violation of any provision of this title, or any rule or regulation thereunder.</text> </clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection></section>
<section display-inline="no-display-inline" id="H97E34DB45CFB4AD388A64A765E8678E7" section-type="subsequent-section"><enum>7212.</enum><header>Formerly associated persons</header>
<subsection id="H8575B5A2EB9E433695D375A483C1EDFD"><enum>(a)</enum><header>Member or employee of the municipal securities rulemaking board</header><text>Section 15B(c)(8) of the Securities Exchange Act of 1934 (15 U.S.C. 78o–4(c)(8)) is amended by striking <quote>any member or employee</quote> and inserting <quote>any person who is, or at the time of the alleged misconduct was, a member or employee</quote>.</text> </subsection>
<subsection id="H77CCD95099AA40D8A277AB6833AB4383"><enum>(b)</enum><header>Person associated with a government securities broker or dealer</header><text>Section 15C of the Securities Exchange Act of 1934 (15 U.S.C. 78o–5) is amended—</text>
<paragraph id="H406298164F0849C7BDBD638C113E5671"><enum>(1)</enum><text>in subsection (c)(1)(C), by striking <quote>or seeking to become associated,</quote> and inserting <quote>seeking to become associated, or, at the time of the alleged misconduct, associated or seeking to become associated</quote>;</text> </paragraph>
<paragraph id="H3CA85EAA6AEC473FAEB2CBB10319CC6C"><enum>(2)</enum><text>in subsection (c)(2)(A), by inserting <quote>, seeking to become associated, or, at the time of the alleged misconduct, associated or seeking to become associated</quote> after <quote>any person associated</quote>; and</text> </paragraph>
<paragraph id="HC648D96FCD264605B372BD229B6F597B"><enum>(3)</enum><text>in subsection (c)(2)(B), by inserting <quote>, seeking to become associated, or, at the time of the alleged misconduct, associated or seeking to become associated</quote> after <quote>any person associated</quote>.</text> </paragraph></subsection>
<subsection id="H91C044BDEEAD4707A5E938864DA99E8C"><enum>(c)</enum><header>Person associated with a member of a national securities exchange or registered securities association</header><text>Section 21(a)(1) of the Securities Exchange Act of 1934 (15 U.S.C. 78u(a)(1)) is amended by inserting <quote>, or, as to any act or practice, or omission to act, while associated with a member, formerly associated</quote> after <quote>member or a person associated</quote>.</text> </subsection>
<subsection id="HCE0B33447DB846689F3EE3CAF9356534"><enum>(d)</enum><header>Participant of a registered clearing agency</header><text>Section 21(a)(1) of the Securities Exchange Act of 1934 (15 U.S.C. 78u(a)(1)) is amended by inserting <quote>or, as to any act or practice, or omission to act, while a participant, was a participant,</quote> after <quote>in which such person is a participant,</quote>.</text> </subsection>
<subsection id="H97040679DA904E318E88E6CC9F9B6B77"><enum>(e)</enum><header>Officer or director of a self-regulatory organization</header><text>Section 19(h)(4) of the Securities Exchange Act of 1934 (15 U.S.C. 78s(h)(4)) is amended—</text>
<paragraph id="H170BB9F24B7E47CFA6D3DBCBC14AA99F"><enum>(1)</enum><text>by striking <quote>any officer or director</quote> and inserting <quote>any person who is, or at the time of the alleged misconduct was, an officer or director</quote>; and</text> </paragraph>
<paragraph id="H8DE41C9CC9F3462281F6AAC18AFB496B"><enum>(2)</enum><text>by striking <quote>such officer or director</quote> and inserting <quote>such person</quote>.</text> </paragraph></subsection>
<subsection id="HBEBC4D09C611453EB9E57B8198A37DD9"><enum>(f)</enum><header>Officer or director of an investment company</header><text>Section 36(a) of the Investment Company Act of 1940 (15 U.S.C. 80a–35(a)) is amended—</text>
<paragraph id="H258CFEA33D3E460888CE5CB51044A0BC"><enum>(1)</enum><text>by striking <quote>a person serving or acting</quote> and inserting <quote>a person who is, or at the time of the alleged misconduct was, serving or acting</quote>; and</text> </paragraph>
<paragraph id="HDBFD371DB3C042FEA5B106C5DA6C1571"><enum>(2)</enum><text>by striking <quote>such person so serves or acts</quote> and inserting <quote>such person so serves or acts, or at the time of the alleged misconduct, so served or acted</quote>.</text> </paragraph></subsection>
<subsection id="H29C174D65BFE4D338E640AE1EB086551"><enum>(g)</enum><header>Person associated with a public accounting firm</header>
<paragraph id="H2DEC8D8CC6274B7AAC35C0DCE25F4CEA"><enum>(1)</enum><header>Sarbanes-Oxley Act of 2002 amendment</header><text>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:</text>
<quoted-block display-inline="no-display-inline" id="H055CD7D07A604F079C806623652383B8" style="OLC">
<subparagraph id="HBAC2CD0BCE67400E935FD20F89C20D2A"><enum>(C)</enum><header>Investigative and enforcement authority</header><text display-inline="yes-display-inline">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—</text>
<clause id="HC382DEFB9E174500B0203CF6E8373005"><enum>(i)</enum><text>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</text> </clause>
<clause id="H074C2BC4E91E49E4AC8653C081850D4E"><enum>(ii)</enum><text>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—</text>
<subclause id="H6C9221D7BA614E9FA35ABFC8C6A31893"><enum>(I)</enum><text>the basis of conduct occurring while such person was associated or seeking to become associated with a registered public accounting firm; or</text> </subclause>
<subclause id="HBE41D52EADD246A1BE5B1DD4AC4619F8"><enum>(II)</enum><text display-inline="yes-display-inline">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.</text> </subclause></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H518C4B248F1E4CE281D58F0C396D0CF7"><enum>(2)</enum><header>Securities Exchange Act of 1934 amendment</header><text display-inline="yes-display-inline">Section 21(a)(1) of the Securities Exchange Act of 1934 (15 U.S.C. 78u(a)(1)) is amended by striking <quote>or a person associated with such a firm</quote> 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”.</text> </paragraph></subsection>
<subsection id="H73E907AE57984225AF49F476D64D8E09"><enum>(h)</enum><header>Supervisory personnel of an audit firm</header><text>Section 105(c)(6) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7215(c)(6)) is amended—</text>
<paragraph id="H557529CD82764464A62BB795B407AC10"><enum>(1)</enum><text>in subparagraph (A), by striking <quote>the supervisory personnel</quote> and inserting <quote>any person who is, or at the time of the alleged failure reasonably to supervise was, a supervisory person</quote>; and</text> </paragraph>
<paragraph id="HD5D194A3D4C34712A8262F9288C58C7E"><enum>(2)</enum><text>in subparagraph (B)—</text>
<subparagraph id="H68C4C78F0BFA4076A1B3F5C1BEC21CCC"><enum>(A)</enum><text>by striking <quote>No associated person</quote> and inserting <quote>No current or former supervisory person</quote>; and</text> </subparagraph>
<subparagraph id="H5DFAE56A1B8D4C448FDE2C19C9144F5F"><enum>(B)</enum><text>by striking <quote>any other person</quote> and inserting <quote>any associated person</quote>.</text> </subparagraph></paragraph></subsection>
<subsection id="H65EE5B033612487CB39C5D74810B2444"><enum>(i)</enum><header>Member of the Public Company Accounting Oversight Board</header><text>Section 107(d)(3) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7217(d)(3)) is amended by striking <quote>any member</quote> and inserting <quote>any person who is, or at the time of the alleged misconduct was, a member</quote>.</text> </subsection></section>
<section id="H0FBBC51D2E4F42928EDABB49261BD836"><enum>7213.</enum><header>Sharing privileged information with other authorities</header><text display-inline="no-display-inline">Section 24 of the Securities Exchange Act of 1934 (15 U.S.C. 78x) is amended—</text>
<paragraph id="H1810B49E403240C7AEF236DD7F31692E"><enum>(1)</enum><text display-inline="yes-display-inline">by redesignating subsections (d) and (e) as subsections (e) and (f), respectively;</text> </paragraph>
<paragraph id="H82592D65EE134A1C8CD394BE6C886CC5"><enum>(2)</enum><text display-inline="yes-display-inline">in subsection (e), as redesignated, by striking <quote>as provided in subsection (e)</quote> and inserting <quote>as provided in subsection (f)</quote>; and</text> </paragraph>
<paragraph id="HA353866EFAD74BB783CD0366582222A6"><enum>(3)</enum><text display-inline="yes-display-inline">by inserting after subsection (c) the following new subsection:</text>
<quoted-block id="H1E71837FBE274CEB95D2F8F2F55D9722" style="OLC">
<subsection id="H7ED0F8653CEE4B27BAEBBC12643D24B1"><enum>(d)</enum><header>Sharing privileged information with other authorities</header>
<paragraph id="H084F6233AAA7442FA94192EBA8A4C258"><enum>(1)</enum><header>Privileged information provided by the commission</header><text>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—</text>
<subparagraph id="H7B1A9187746C46BCB823EA31BD007587"><enum>(A)</enum><text>any agency (as defined in section 6 of title 18, United States Code);</text> </subparagraph>
<subparagraph id="H2688597FF5E04F27AA2E6B91A2B02A3C"><enum>(B)</enum><text>any foreign securities authority;</text> </subparagraph>
<subparagraph id="HAD5D3404CCFA48EBA0D102EE7F939137"><enum>(C)</enum><text display-inline="yes-display-inline">the Public Company Accounting Oversight Board;</text> </subparagraph>
<subparagraph id="H84351CFE6F744B7C817BC2FBDA014F8F"><enum>(D)</enum><text>any self-regulatory organization;</text> </subparagraph>
<subparagraph id="H862410C69DBD4CC0ABBD4779708AFE6A"><enum>(E)</enum><text>any foreign law enforcement authority; or</text> </subparagraph>
<subparagraph id="H668C620B704B40E9949F4473BFC27050"><enum>(F)</enum><text>any State securities or law enforcement authority.</text> </subparagraph></paragraph>
<paragraph id="H973579C4B9AC4E3D9338A7E33A8E7C4B"><enum>(2)</enum><header>Non-disclosure of privileged information provided to the commission</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HF48B3D81D4F84F268AD8C54DA1177913"><enum>(3)</enum><header>Non-waiver of privileged information provided to the commission</header>
<subparagraph id="HE5BF36EF19C74016BD352E026CA3FA4D"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="HC111182984854502BCC981CBFFA000B7"><enum>(B)</enum><header>Exception with respect to certain actions</header><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph>
<paragraph id="HCCB46B73405343FAA795C54E1276DDA3"><enum>(4)</enum><header>Definitions</header><text>For purposes of this subsection:</text>
<subparagraph id="H3ED2DDDC64AE4B7ABC6D6BA278C4823A"><enum>(A)</enum><text>The term <term>privilege</term> includes any work-product privilege, attorney-client privilege, governmental privilege, or other privilege recognized under Federal, foreign, or State law.</text> </subparagraph>
<subparagraph id="H6546414C0524443B893EF0DAE8CEA25B"><enum>(B)</enum><text>The term <term>foreign law enforcement authority</term> means any foreign authority that is empowered under foreign law to detect, investigate or prosecute potential violations of law.</text> </subparagraph>
<subparagraph id="HA154AD112EA44D9FA5E12FD6FCBA7BCF"><enum>(C)</enum><text>The term <term>State securities or law enforcement authority</term> 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.</text> </subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></section>
<section id="H445F063D807E4A5CBFC2A17550AC046A" display-inline="no-display-inline" section-type="subsequent-section"><enum>7214.</enum><header>Expanded access to grand jury information</header><text display-inline="no-display-inline">Subsection (b) of section 3322 of title 18, United States Code, is amended—</text>
<paragraph id="H255D43E6F6AD4C6AAF7E4B895272E6FE"><enum>(1)</enum><text display-inline="yes-display-inline">in paragraph (1), by striking <quote>matters occurring before a grand jury</quote> and inserting <quote>grand jury information obtained</quote>;</text></paragraph>
<paragraph id="HEA14FD1AA2E849A284E5AD8DE1B406EA"><enum>(2)</enum><text>by redesignating paragraph (2) as paragraph (3);</text></paragraph>
<paragraph id="H566AB3603CE8406F9603CAC6798FD941"><enum>(3)</enum><text>in paragraph (3) (as so redesignated), by inserting <quote>or (2)</quote> after <quote>(1)</quote>; and</text></paragraph>
<paragraph id="HAD9D9F15F2624538806138B8277943E9"><enum>(4)</enum><text>by inserting after paragraph (1), the following new paragraph:</text>
<quoted-block style="OLC" display-inline="no-display-inline" id="HB6C5673C33CC4983807236740D5BB7C2">
<paragraph id="HF16AA34A45E24D0A8A4F9C69504AC86C"><enum>(2)</enum><text display-inline="yes-display-inline">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—</text>
<subparagraph id="H5AA217C00B2744708A440145CF8AAB93"><enum>(A)</enum><text display-inline="yes-display-inline">for use in relation to any matter within the jurisdiction of the Commission; or </text></subparagraph>
<subparagraph id="H68B61082884E48CF8E3A91F5301EE5A3"><enum>(B)</enum><text>to assist an attorney for the government to whom matters have been disclosed under subsection (a).</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></section>
<section id="HD2955FB13639426B8F12EE5291F80471"><enum>7215.</enum><header>Aiding and abetting standard of knowledge satisfied by recklessness</header><text display-inline="no-display-inline">Section 20(e) of the Securities Exchange Act of 1934 (15 U.S.C. 78t(e)) is amended by inserting “or recklessly” after “knowingly”.</text> </section>
<section id="H0DAB1B836D24425C987701A749D128D1"><enum>7216.</enum><header>Extraterritorial jurisdiction of the antifraud provisions of the Federal securities laws</header>
<subsection id="H33357A6C68CF4D9DB314739EF99B7C32"><enum>(a)</enum><header>Under the Securities Act of 1933</header><text display-inline="yes-display-inline">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:</text>
<quoted-block display-inline="no-display-inline" id="H43D8A7CACC7043ADAB175FFA5BB25040" style="OLC">
<subsection id="H5CD12338AEB14E8D9851BCF7E428DE8E"><enum>(c)</enum><header>Extraterritorial jurisdiction</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="H3FFFDD35788E4F6AACA3A399077AA5AB"><enum>(1)</enum><text>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</text> </paragraph>
<paragraph id="H9DFB1E86A0D94F0888F4E0E767351ED5"><enum>(2)</enum><text>conduct occurring outside the United States that has a foreseeable substantial effect within the United States.</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="HE385AE111B7B44588A26B068FE80CD5D"><enum>(b)</enum><header>Under the Securities Exchange Act of 1934</header><text display-inline="yes-display-inline">Section 27 of the Securities Exchange Act of 1934 (15 U.S.C. 78aa) is amended—</text>
<paragraph id="H518DCC88BD474A4C9153C196BD3A25D1"><enum>(1)</enum><text>by striking <quote>The district</quote> and inserting the following:</text>
<quoted-block display-inline="no-display-inline" id="H5F1E8A78B3C446249CF7E58614A10D74" style="OLC">
<subsection id="HE309451F92954E90B702D22373F32F74"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">The district</text> </subsection><after-quoted-block>; and</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H744095C2CB3A4019B9DAFF024B1191CF"><enum>(2)</enum><text>by inserting at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H87C8A328EBD5436882E24504ADD4073B" style="OLC">
<subsection id="H305B457BAC434369948D46819F79FF92"><enum>(b)</enum><header>Extraterritorial jurisdiction</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="H1B1D1898A58049219B6AF3EB1A65153B"><enum>(1)</enum><text>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</text> </paragraph>
<paragraph id="H9783AF82CEE14843B9C6C2D05D5338BD"><enum>(2)</enum><text>conduct occurring outside the United States that has a foreseeable substantial effect within the United States.</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection id="H93D957D19AB64599AEAD691734A728C7"><enum>(c)</enum><header>Under the Investment Advisers Act of 1940</header><text display-inline="yes-display-inline">Section 214 of the Investment Advisers Act of 1940 (15 U.S.C. 80b–14) is amended—</text>
<paragraph display-inline="no-display-inline" id="H70FC8263CFFC4937964AD1366A92067D"><enum>(1)</enum><text>by striking <quote>The district</quote> and inserting the following:</text>
<quoted-block display-inline="no-display-inline" id="HE4C6C51AA711417F9C7775B7E8D507E1" style="OLC">
<subsection id="H769FF2F1772E4B399A89381CF352AB62"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">The district</text> </subsection><after-quoted-block>; and</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H01A95D62083B446AA257671056CA7A5A"><enum>(2)</enum><text>by inserting at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H6DE77532437D41BE99394D2E3A030514" style="OLC">
<subsection id="H20DD6A5D81924CAF9B4EAE0C5C575E49"><enum>(b)</enum><header>Extraterritorial jurisdiction</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="H1FC86FCA892441DC8BDB6B0D15D4F02E"><enum>(1)</enum><text>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</text> </paragraph>
<paragraph id="HEA41E434D19B4C8896B3AAD74BFC5AA5"><enum>(2)</enum><text>conduct occurring outside the United States that has a foreseeable substantial effect within the United States.</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection></section>
<section id="HDF81CB088FC542D780AFD99F694C3E9F"><enum>7217.</enum><header>Fidelity bonding</header><text display-inline="no-display-inline">Section 17(g) of the Investment Company Act of 1940 (15 U.S.C. 80a–17(g)) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H905C300DE597442A9A04D329BFACA5C9" style="OLC">
<subsection id="HA97893FC6C3349E99CD2F7F5CEBC34E9"><enum>(g)</enum><header>Fidelity bonding</header>
<paragraph id="HB5A0EED1A71447D4945609925D0B5FCF"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H11CFA49790C246D7BDE713AB38E2E17D"><enum>(2)</enum><header>Definitions</header><text>For purposes of this subsection:</text>
<subparagraph id="H8A978C0138DD4058AF8A44885B0A5E1F"><enum>(A)</enum><header>Management company</header><text display-inline="yes-display-inline">The term <quote>management company</quote> has the meaning given such term under section 4 of the Investment Company Act of 1940.</text> </subparagraph>
<subparagraph id="HAEDEADF60F524303B133DBFBBF80E21C"><enum>(B)</enum><header>Officer or employee</header><text>The term <term>officer or employee</term> means—</text>
<clause id="HC455C45A05C743C1AADEB62354617A25"><enum>(i)</enum><text>any officer or employee of the management company; and</text> </clause>
<clause id="H56631D6F607948C09DE15E5D8A068429"><enum>(ii)</enum><text display-inline="yes-display-inline">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.</text> </clause></subparagraph>
<subparagraph id="HDB2BDC4835034A338702390E8E68F657"><enum>(C)</enum><header>Other definitions</header><text display-inline="yes-display-inline">The terms <quote>affiliated company</quote> and <quote>investment adviser</quote> shall have the meaning given such terms under section 2 of the Investment Company Act of 1940.</text> </subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </section>
<section id="HF98491175A1147E8809FC1813FC0152A"><enum>7218.</enum><header>Enhanced SEC authority to conduct surveillance and risk assessment</header>
<subsection id="HDAD93049273A4D1B95E4A62291A6643A"><enum>(a)</enum><header>Securities Exchange Act of 1934 amendments</header><text display-inline="yes-display-inline">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:</text>
<quoted-block display-inline="no-display-inline" id="H3390FB87E6874527B2D6E905A915DA92" style="OLC">
<paragraph id="HE53B973948044D968D4BA1960F833CC4"><enum>(5)</enum><header>Surveillance and risk assessment</header><text display-inline="yes-display-inline">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.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H21B62C8352B44D7A892ACE273E0B3286"><enum>(b)</enum><header>Investment Company Act of 1940 amendments</header><text display-inline="yes-display-inline">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:</text>
<quoted-block display-inline="no-display-inline" id="H21D2D5E72AE44EF3A8971D9532FB6301" style="OLC">
<paragraph id="H35DE6E28D99649F59457985DE2C00E77"><enum>(5)</enum><header>Surveillance and risk assessment</header><text display-inline="yes-display-inline">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.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="HE88032DC93D34379A8DABBCF9C1FE2D2"><enum>(c)</enum><header>Investment Advisers Act of 1940 amendments</header><text>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:</text>
<quoted-block display-inline="no-display-inline" id="H59877F15C586474194D81373A8822B0C" style="OLC">
<subsection id="H62B078566DA5493CB2A4A7D969A9413F"><enum>(e)</enum><header>Surveillance and risk assessment</header><text display-inline="yes-display-inline">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.</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection></section>
<section id="H40E8AA22656446B98CDB2F54187607D2"><enum>7219.</enum><header>Investment company examinations</header><text display-inline="no-display-inline">Section 31(b)(1) of the Investment Company Act of 1940 (15 U.S.C. 80a–30) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H3E9D05D7FD764D2EB4A9AB784E2FE9E5" style="OLC">
<paragraph id="HE944D6FD99464F3AA5767416194735F8"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </section>
<section id="H990ADACA504C4E1E991142DBE4B7C387"><enum>7220.</enum><header>Control person liability under the Securities Exchange Act</header><text display-inline="no-display-inline">Section 20(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78t(a)) is amended by inserting after <quote>controlled person is liable,</quote> the following: <quote>including to the Commission in any action brought under paragraph (1) or (3) of section 21(d),</quote>.</text> </section>
<section id="H84C0C3FE972B47A4B27F0C1AA444F64C"><enum>7221.</enum><header>Enhanced application of anti-fraud provisions</header><text display-inline="no-display-inline">The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended—</text>
<paragraph id="H34ECCD6A1EE941C3A198CCB8FD6623FD"><enum>(1)</enum><text>in section 9—</text>
<subparagraph id="HC1910BCCF4B44E06870C75FC91EDFCA2"><enum>(A)</enum><text>by striking <quote>registered on a national securities exchange</quote> each place it appears and inserting <quote>other than a government security</quote>;</text> </subparagraph>
<subparagraph id="HB4B9CC92F0A142F5BF80F89C089995E9"><enum>(B)</enum><text>in subsection (b), by striking <quote>by use of any facility of a national securities exchange,</quote>; and</text> </subparagraph>
<subparagraph id="H645A93AE4DDD4D979056FD8283CD070E"><enum>(C)</enum><text>in subsection (c), by inserting after <quote>unlawful for any</quote> the following: <quote>broker, dealer, or</quote>;</text> </subparagraph></paragraph>
<paragraph id="HE9F35EC4764B4300B60E38DB9212CA45"><enum>(2)</enum><text display-inline="yes-display-inline">in section 10(a)(1), by striking <quote>registered on a national securities exchange</quote> and inserting <quote>other than a government security</quote>; and</text> </paragraph>
<paragraph id="HBCC3AD1C39AE48C8BD95BCA98EB49C9C"><enum>(3)</enum><text>in section 15(c)(1)(A), by striking <quote>otherwise than on a national securities exchange of which it is a member</quote>.</text> </paragraph></section>
<section id="HD914993D997C4D689354E2D7B9331BDD"><enum>7222.</enum><header>SEC authority to issue rules on proxy access</header><text display-inline="no-display-inline">Section 14(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78n(a)) is amended—</text>
<paragraph id="H5D991B7676FC4E08B45D1FF17D0AF891"><enum>(1)</enum><text>by inserting <quote>(1)</quote> after <quote>(a)</quote>; and</text> </paragraph>
<paragraph id="H44E5D5A8FD69471F816C0D9A70F9A57F"><enum>(2)</enum><text>by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="H299818AD5AAE4B66A759E3F0D7CB3313" style="traditional">
<paragraph id="HD146789484634E3BBADCEF7DAE501541" indent="up1"><enum>(2)</enum><text display-inline="yes-display-inline">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.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></section></part>
<part id="HAEB48D3F922E45E68CEE0884C653C3E2"><enum>3</enum><header>Commission funding and organization</header>
<section commented="no" id="H397F02C711BF4564B6D424138C4C7190"><enum>7301.</enum><header>Authorization of appropriations</header><text display-inline="no-display-inline">Section 35 of the Securities Exchange Act of 1934 (15 U.S.C. 78kk) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H492DC444CC824456935DAA1BF841705B" style="OLC">
<section commented="no" id="HF6B6E35C61B94A308FF4A0FEE582A50D"><enum>35.</enum><header>Authorization of appropriations</header><text display-inline="no-display-inline">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—</text>
<paragraph commented="no" id="HD46D71C0A5654DC6A2ED1232C7B83D5B"><enum>(1)</enum><text>for fiscal year 2010, $1,115,000,000;</text> </paragraph>
<paragraph commented="no" id="H08D9E7BD55284D7AAB28E9B53B45253A"><enum>(2)</enum><text>for fiscal year 2011, $1,300,000,000;</text> </paragraph>
<paragraph commented="no" display-inline="no-display-inline" id="HDAB02E2A6E1649E8A7C52DD19E26467A"><enum>(3)</enum><text>for fiscal year 2012, $1,500,000,000;</text> </paragraph>
<paragraph commented="no" display-inline="no-display-inline" id="HA0A5F11D242D4C32BB1BB15D6F7FCCE3"><enum>(4)</enum><text>for fiscal year 2013, $1,750,000,000;</text> </paragraph>
<paragraph commented="no" display-inline="no-display-inline" id="H4E1E3103036146DDBC983EAAFCB58745"><enum>(5)</enum><text>for fiscal year 2014, $2,000,000,000; and</text> </paragraph>
<paragraph id="H3739DCE12CC243B5AF56D2C017FB0162"><enum>(6)</enum><text>for fiscal year 2015, $2,250,000,000.</text> </paragraph></section><after-quoted-block>.</after-quoted-block></quoted-block> </section>
<section commented="no" id="H54300DCB53494DEFA60C4F7D107707DB"><enum>7302.</enum><header>Investment adviser regulation funding</header><text display-inline="no-display-inline">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:</text>
<quoted-block display-inline="no-display-inline" id="HBB685E12238A40C09EF656F06782C236" style="OLC">
<subsection id="H28D682241CB14866BD16CC2059575975"><enum>(o)</enum><header>Annual assessment</header>
<paragraph id="H3DD80DBB60D34E7986B0754B0EA580FC"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H5C392915601F4F96B9875A3767DD5366"><enum>(2)</enum><header>Fee payment required</header><text>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—</text>
<subparagraph id="H013F351491FF46129CF6BFB06BF965C3"><enum>(A)</enum><text>the investment adviser’s size;</text> </subparagraph>
<subparagraph id="HACAAEAEC16DC439088F3B14F9A6ED3E5"><enum>(B)</enum><text>the number of clients of the investment adviser;</text> </subparagraph>
<subparagraph id="H73FCCD0B38C44109BF121395A00D73DF"><enum>(C)</enum><text>the types of clients of the investment adviser; and</text> </subparagraph>
<subparagraph id="H86B5C67EE4204EE18F8C90D1FE6AE969"><enum>(D)</enum><text>such other relevant factors as the Commission determines to be appropriate.</text> </subparagraph></paragraph>
<paragraph commented="no" id="H435905AC9A34406BA3546EBB3C476A1A"><enum>(3)</enum><header>Amount and use of fees</header>
<subparagraph commented="no" id="HDA8C403E6D5548658B14CE275C36467E"><enum>(A)</enum><header>Minimum aggregate amount</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph commented="no" id="HDF1FE9BD053F4DFFB7E98849428932AB"><enum>(B)</enum><header>Excess fees</header><text>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.</text> </subparagraph></paragraph>
<paragraph id="H5734B103A2B243B988952AE964D2141B"><enum>(4)</enum><header>Review and adjustment of fees</header><text>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.</text> </paragraph>
<paragraph id="H283F349556ED45D5B7E24456271C9144"><enum>(5)</enum><header>Penalty fee</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HB25961AA8BA34B31B85B52410B285D0B"><enum>(6)</enum><header>Judicial review</header><text>Increases or decreases in fees made pursuant to this section shall not be subject to judicial review.</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </section>
<section id="H66A230ED50314C8A8AD2B3EA8632766C"><enum>7303.</enum><header>Amendments to section 31 of the Securities Exchange Act of 1934</header><text display-inline="no-display-inline">Section 31 of the Securities Exchange Act of 1934 (15 U.S.C. 78ee) is amended—</text>
<paragraph id="H4687FF9210854A14923E51119AD1AC2A"><enum>(1)</enum><text>in subsection (e)(2), by striking <quote>September 30</quote> and inserting <quote>September 25</quote>;</text> </paragraph>
<paragraph id="HA82A041E9190439C8B42AFD4E0FE25CC"><enum>(2)</enum><text>in subsection (g), by striking <quote>April 30</quote> and inserting <quote>August 31</quote>; and</text> </paragraph>
<paragraph id="H40D29AC10CB14AEB8AEE3C36F99D3925"><enum>(3)</enum><text>in subsection (j)(2)—</text>
<subparagraph id="H8B636FAFA69D483D804E8C85D56EFF4E"><enum>(A)</enum><text>by striking <quote>5 months</quote> and inserting <quote>4 months</quote>; and</text> </subparagraph>
<subparagraph id="HE4D4D80FF48D4FCA80CD0A54FC6646B9"><enum>(B)</enum><text>by striking <quote>(including fees collected during such 5-month period and assessments collected under subsection (d))</quote> and inserting <quote>(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))</quote>.</text> </subparagraph></paragraph></section>
<section id="H47F38FEEA9464A3EB886A771C3967D6A"><enum>7304.</enum><header>Commission organizational study and reform</header>
<subsection id="HDE9FB97596BD43DDA21A6CA07B840C87"><enum>(a)</enum><header>Study required</header>
<paragraph id="HB1CC5C3BDBC44282AEE9C8174DBACE56"><enum>(1)</enum><header>In general</header><text>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 <quote>SEC</quote>) 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.</text> </paragraph>
<paragraph id="HBE6E0582530648848A554BB907EDC8FD"><enum>(2)</enum><header>Specific areas for study</header><text>The study required under paragraph (1) shall, at a minimum, include the study of—</text>
<subparagraph id="H284A9D96F88341CCAE56355515A095EA"><enum>(A)</enum><text display-inline="yes-display-inline">the possible elimination of unnecessary or redundant units at the SEC;</text> </subparagraph>
<subparagraph id="HD2C29B2448404163A09C0A19A600200B"><enum>(B)</enum><text>improving communications between SEC offices and divisions;</text> </subparagraph>
<subparagraph id="H9EC716944B414B7491B13E64D4996B28"><enum>(C)</enum><text display-inline="yes-display-inline">the need to put in place a clear chain-of-command structure, particularly for enforcement examinations and compliance inspections;</text> </subparagraph>
<subparagraph id="HC282F99276D3483ABA2FC8713EBAD618"><enum>(D)</enum><text display-inline="yes-display-inline">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;</text> </subparagraph>
<subparagraph id="HFF0FC9290E3E479994CFEE972E6B1076"><enum>(E)</enum><text>the SEC’s hiring authorities, workplace policies, and personal practices, including—</text>
<clause id="H2812B062F2C54CD38F679D8C97F01543"><enum>(i)</enum><text>whether there is a need to further streamline hiring authorities for those who are not lawyers, accountants, compliance examiners, or economists;</text> </clause>
<clause id="H1C05756F6956431B8D3CAAAFCEFF44EE"><enum>(ii)</enum><text>whether there is a need for further pay reforms;</text> </clause>
<clause id="H8BB6EC53E36B4C48AD71DD75925769E8"><enum>(iii)</enum><text display-inline="yes-display-inline">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</text> </clause>
<clause id="H6FDD599A0F2047D4BD9A5037BC781C84"><enum>(iv)</enum><text>the application of civil service laws by the SEC;</text> </clause></subparagraph>
<subparagraph id="H10271A38620949388AEB3E9F02373BCB"><enum>(F)</enum><text>whether the SEC’s oversight and reliance on self-regulatory organizations promotes efficient and effective governance for the securities markets; and</text> </subparagraph>
<subparagraph id="H27A6C1284DC746EC8EA5D92E60D63668"><enum>(G)</enum><text display-inline="yes-display-inline">whether adjusting the SEC’s reliance on self-regulatory organizations is necessary to promote more efficient and effective governance for the securities markets.</text> </subparagraph></paragraph></subsection>
<subsection id="HAEEF1646BFF14326A7C407DD6F823F63"><enum>(b)</enum><header>Consultant report</header><text>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—</text>
<paragraph id="HA83E2062BE454BEE9C416F44E1F65DE7"><enum>(1)</enum><text display-inline="yes-display-inline">a detailed description of any findings and conclusions made while carrying out the study required under subsection (a)(1); and</text> </paragraph>
<paragraph id="H5120CF7CCF3047C9BCA6331E2E01202C"><enum>(2)</enum><text>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.</text> </paragraph></subsection>
<subsection id="HBB2025CC06B9439192FC88DDCCE5746B"><enum>(c)</enum><header>SEC report</header><text>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.</text> </subsection></section>
<section id="HFA5F2EE9A15846A19A19B50453F6978D"><enum>7305.</enum><header>Capital Markets Safety Board</header><text display-inline="no-display-inline">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.</text> </section>
<section id="HE82AFB7CEBBD4A69BC0DBE90A39DD4BF"><enum>7306.</enum><header>Report on implementation of <quote>post-Madoff reforms</quote></header>
<subsection id="HAD5B2A6D255D4DE68667FE170950E711"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="H711ED581F8854E9DA8E28BAED0DE72B5"><enum>(b)</enum><header>Contents of report</header><text>The report required by subsection (a) shall include an analysis of—</text>
<paragraph id="HC3ACC30EB50B49FFBEA887680A25D6D4"><enum>(1)</enum><text>how many of the post-Madoff reforms have been implemented and to what extent; and</text> </paragraph>
<paragraph id="HA18126EAB87C43B692B6F7E573646089"><enum>(2)</enum><text>whether there is overlap between any of the Commission’s reform proposals and those recommended by the Inspector General of the Commission.</text> </paragraph></subsection>
<subsection id="HAC0FAA55FA324DA09858C4DC09E1680A"><enum>(c)</enum><header>Publication of report</header><text>The Commission and the Committees referred to in subsection (a) shall publish the report required by such subsection on their Web sites.</text> </subsection></section>
<section id="H9626E95ECBEA4BB1ADD4D84320ABACE1"><enum>7307.</enum><header>Joint Advisory Committee</header><text display-inline="no-display-inline">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—</text>
<paragraph id="H6951D056494344B8B3D6C19F9DF3E01F"><enum>(1)</enum><text>considering and developing solutions to emerging and ongoing issues of common interest in the futures and securities markets;</text> </paragraph>
<paragraph id="HD0998438B7284B5292ACA5199A5289BB"><enum>(2)</enum><text>identifying emerging regulatory risks and assess and quantify their implications for investors and other market participants, and provide recommendations for solutions;</text> </paragraph>
<paragraph id="H5DFFB670EB4C4A1A80E93DF6695D760E"><enum>(3)</enum><text>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</text> </paragraph>
<paragraph id="H54699C731DAD4F56ACB92126A04723E2"><enum>(4)</enum><text>reporting regularly to each Commission and to Congress on its activities.</text> </paragraph></section></part>
<part id="H27267C7E5E1243598AF866E5ABCEC5A8"><enum>4</enum><header>Additional Commission reforms</header>
<section id="H3BF76CD7049648168528A332AD9CD297"><enum>7401.</enum><header>Regulation of securities lending</header><text display-inline="no-display-inline">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:</text>
<quoted-block display-inline="no-display-inline" id="H970298985CE14DEAA90234EBFA378E66" style="OLC">
<subsection id="H507B8B8FC9F54A51837847C98F72EEA5"><enum>(c)</enum>
<paragraph commented="no" display-inline="yes-display-inline" id="HEB17B0E9317E4FD8AAD3E312E83CDB3E"><enum>(1)</enum><text>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.</text> </paragraph>
<paragraph id="H6FBA72C8CE874A55B2B2E3504765ED78" indent="up1"><enum>(2)</enum><text display-inline="yes-display-inline">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.</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </section>
<section id="HC15BEFA99DD24D639292E9F6DD410BD0"><enum>7402.</enum><header>Lost and stolen securities</header><text display-inline="no-display-inline">Section 17(f)(1) of the Securities Exchange Act of 1934 (15 U.S.C. 78q(f)(1)) is amended—</text>
<paragraph id="H8E186A4D08FD4368B4E072B562C3BFFF"><enum>(1)</enum><text display-inline="yes-display-inline">in subparagraph (A), by striking <quote>missing, lost, counterfeit, or stolen securities</quote> and inserting <quote>securities that are missing, lost, counterfeit, stolen, cancelled, or any other category of securities as the Commission, by rule, may prescribe</quote>; and</text> </paragraph>
<paragraph id="HF7AAE1DD32B143D0B6F878E8B5FC9557"><enum>(2)</enum><text>in subparagraph (B), by striking <quote>or stolen</quote> and inserting <quote>stolen, cancelled, or reported in such other manner as the Commission, by rule, may prescribe</quote>.</text> </paragraph></section>
<section id="H178A476736B14960A80E9B176C9E5086"><enum>7403.</enum><header>Fingerprinting</header><text display-inline="no-display-inline">Section 17(f)(2) of the Securities Exchange Act of 1934 (15 U.S.C. 78q(f)(2)) is amended—</text>
<paragraph id="H424DE62B23A6441BB38EE6A75FC48DB3"><enum>(1)</enum><text>by striking <quote>and registered clearing agency,</quote> and inserting <quote>registered clearing agency, registered securities information processor, national securities exchange, and national securities association</quote>; and</text> </paragraph>
<paragraph commented="no" id="H54BCAE1CFD064C29B920B6BFB7DEFE98"><enum>(2)</enum><text>by striking <quote>or clearing agency,</quote> and inserting <quote>clearing agency, securities information processor, national securities exchange, or national securities association,</quote>.</text> </paragraph></section>
<section id="H98FDC85CE5234E698E55B46DEF949185"><enum>7404.</enum><header>Equal treatment of self-regulatory organization rules</header><text display-inline="no-display-inline">Section 29(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78cc(a)) is amended by striking <quote>an exchange required thereby</quote> and inserting <quote>a self-regulatory organization,</quote>.</text> </section>
<section id="H9E34091C58C14589B84FE05E69B2E736"><enum>7405.</enum><header>Clarification that section 205 of the Investment Advisers Act of 1940 does not apply to State-registered advisers</header><text display-inline="no-display-inline">Section 205(a) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–5(a)) is amended—</text>
<paragraph id="H036CB9E550304524AFA8CC2DD9944F97"><enum>(1)</enum><text>by striking <quote>, unless exempt from registration pursuant to section 203(b),</quote> and inserting <quote>registered or required to be registered with the Commission</quote>;</text> </paragraph>
<paragraph id="H1F39B303FA7343988A266C6D00C60486"><enum>(2)</enum><text>by striking <quote>make use of the mails or any means or instrumentality of interstate commerce, directly or indirectly, to</quote>; and</text> </paragraph>
<paragraph id="H055B0E0A7E454A7EA553C01E1D1A816A"><enum>(3)</enum><text>by striking <quote>to</quote> after <quote>in any way</quote>.</text> </paragraph></section>
<section id="H8F04E070BE3742C09D02BF968C500D5A"><enum>7406.</enum><header>Conforming amendments for the repeal of the Public Utility Holding Company Act of 1935</header>
<subsection id="H6DDE4D29D104415CACD3A048C80D64BB"><enum>(a)</enum><header>Securities Exchange Act of 1934</header><text display-inline="yes-display-inline">The Securities Exchange Act of 1934 (15 U.S.C. 78 et seq.) is amended—</text>
<paragraph id="H204FE61F263D49F8B881D5C92081E81A"><enum>(1)</enum><text>in section 3(a)(47) (15 U.S.C. 78c(a)(47)), by striking <quote>the Public Utility Holding Company Act of 1935 (15 U.S.C. 79a et seq.),</quote>; and</text> </paragraph>
<paragraph id="H03A88EDAB9E549F49C31BF1E18E4E27B"><enum>(2)</enum><text>in section 12(k) (15 U.S.C. 78l(k)), by amending paragraph (7) to read as follows: </text>
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<paragraph id="H615B925FB0DA408FBAF44A1F708C3971"><enum>(7)</enum><header>Definition</header><text>For purposes of this subsection, the term <term>emergency</term> means—</text>
<subparagraph id="HC2E52A9B550C4E64A62EA449F945C9D4"><enum>(A)</enum><text>a major market disturbance characterized by or constituting—</text>
<clause id="H5380DB6381D349CC89B646F766760AE1"><enum>(i)</enum><text>sudden and excessive fluctuations of securities prices generally, or a substantial threat thereof, that threaten fair and orderly markets; or</text> </clause>
<clause id="H9035BA5AFEE1434C87761D0EFEA7B580"><enum>(ii)</enum><text>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</text> </clause></subparagraph>
<subparagraph id="HE056818CF09847B8A25BED98795FB028"><enum>(B)</enum><text>a major disturbance that substantially disrupts, or threatens to substantially disrupt—</text>
<clause id="H09421BB1D4F64ECDABCD09E1EE3F9E44"><enum>(i)</enum><text>the functioning of securities markets, investment companies, or any other significant portion or segment of the securities markets; or</text> </clause>
<clause id="H8FDDD20E08FD4E2894899DD5AC300950"><enum>(ii)</enum><text>the transmission or processing of securities transactions.</text> </clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H7758A23E2CED4948B07574255422A693"><enum>(3)</enum><text>in section 21(h)(2) (15 U.S.C. 78u(h)(2)), by striking <quote>section 18(c) of the Public Utility Holding Company Act of 1935,</quote>.</text> </paragraph></subsection>
<subsection id="H8A9C25C91B4C42DEA78A0F6DB452DA4C"><enum>(b)</enum><header>Trust Indenture Act of 1939</header><text display-inline="yes-display-inline">The Trust Indenture Act of 1939 (15 U.S.C. 77aaa et seq.) is amended—</text>
<paragraph id="HAB6AAED5FE764119ACE5ECA396DC78CF"><enum>(1)</enum><text display-inline="yes-display-inline">in section 303 (15 U.S.C. 77ccc), by amending paragraph (17) to read as follows:</text>
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<paragraph id="H1CF606A7A61E400CA27402DD93780626"><enum>(17)</enum><text>The terms <term>Securities Act of 1933</term> and <term>Securities Exchange Act of 1934</term> shall be deemed to refer, respectively, to such Acts, as amended, whether amended prior to or after the enactment of this title.</text> </paragraph><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H441C79B6F4A441FB86A65A4E61BC449A"><enum>(2)</enum><text display-inline="yes-display-inline">in section 308 (15 U.S.C. 77hhh), by striking <quote>Securities Act of 1933, the Securities Exchange Act of 1934, or the Public Utility Holding Company Act of 1935</quote> each place it appears and inserting <quote>Securities Act of 1933 or the Securities Exchange Act of 1934</quote>;</text> </paragraph>
<paragraph id="HEE9B8F06EDE144BBABB7D56F92CC14B6"><enum>(3)</enum><text display-inline="yes-display-inline">in section 310 (15 U.S.C. 77jjj), by striking subsection (c);</text> </paragraph>
<paragraph id="HB0A2237282D14CFD8F420DCCBA3DF238"><enum>(4)</enum><text display-inline="yes-display-inline">in section 311 (15 U.S.C. 77kkk) by striking subsection (c);</text> </paragraph>
<paragraph id="HD3725D3E04234D20B8BED8531DEEB710"><enum>(5)</enum><text display-inline="yes-display-inline">in section 323(b) (15 U.S.C. 77www(b)), by striking <quote>Securities Act of 1933, or the Securities Exchange Act of 1934, or the Public Utility Holding Company Act of 1935</quote> and inserting <quote>Securities Act of 1933 or the Securities Exchange Act of 1934</quote>; and</text> </paragraph>
<paragraph id="HBA1365B96FD148F98591A877A803637C"><enum>(6)</enum><text display-inline="yes-display-inline">in section 326 (15 U.S.C. 77zzz), by striking <quote>Securities Act of 1933, or the Securities Exchange Act of 1934, or the Public Utility Holding Company Act of 1935,</quote> and inserting <quote>Securities Act of 1933 or the Securities Exchange Act of 1934</quote>.</text> </paragraph></subsection>
<subsection id="H2F20ADF59F6E478F99392C18BEDB4BFF"><enum>(c)</enum><header>Investment Company Act of 1940</header><text display-inline="yes-display-inline">The Investment Company Act of 1940 (15 U.S.C. 80a–1 et seq.) is amended—</text>
<paragraph id="H9DE859BF09654CC2B533BE388BA79E60"><enum>(1)</enum><text display-inline="yes-display-inline">in section 2(a)(44) (15 U.S.C. 80a–2(a)(44)), by striking <quote><quote>Public Utility Holding Company Act of 1935</quote>,</quote>;</text> </paragraph>
<paragraph id="H2AEBC9D59596446AB16526108F083F87"><enum>(2)</enum><text display-inline="yes-display-inline">in section 3(c) (15 U.S.C. 80a–3(c)), by amending paragraph (8) to read as follows:</text>
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<paragraph id="HB1A43619F02243A3A182CE19AD7F3ADE"><enum>(8)</enum><text>[Repealed]</text> </paragraph><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H4AC6ECB0AB0A4C10BE6C35427E46805C"><enum>(3)</enum><text display-inline="yes-display-inline">in section 38(b) (15 U.S.C. 80a–37(b)), by striking <quote>the Public Utility Holding Company Act of 1935,</quote>; and</text> </paragraph>
<paragraph id="H2083DA2813F24BD5AF10D97E114354EF"><enum>(4)</enum><text display-inline="yes-display-inline">in section 50 (15 U.S.C. 80a–49), by striking <quote>the Public Utility Holding Company Act of 1935,</quote>.</text> </paragraph></subsection>
<subsection id="HC4399B778D3D498DA51FDB3D1E66879F"><enum>(d)</enum><header>Investment Advisers Act of 1940</header><text display-inline="yes-display-inline">Section 202(a)(21) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–2(a)(21)) is amended by striking <quote><quote>Public Utility Holding Company Act of 1935</quote>,</quote>.</text> </subsection></section>
<section id="H5004C8ADF6CD424CB409B16768F793CC"><enum>7407.</enum><header>Promoting transparency in financial reporting</header>
<subsection id="H0EAB35BBDBFD46969DF7A58DE70EF76A"><enum>(a)</enum><header>Findings</header><text>Congress finds the following:</text>
<paragraph id="HB4ECEA92CD4942AAB4118E3DA100C167"><enum>(1)</enum><text>Transparent and clear financial reporting is integral to the continued growth and strength of our capital markets and the confidence of investors.</text> </paragraph>
<paragraph id="H762815B5575D46CC90A2035925347A2D"><enum>(2)</enum><text>The increasing detail and volume of accounting, auditing, and reporting guidance pose a major challenge.</text> </paragraph>
<paragraph id="HFA93CF79EF3842CE8BAF27589D69712C"><enum>(3)</enum><text>The complexity of accounting and auditing standards in the United States has added to the costs and effort involved in financial reporting.</text> </paragraph></subsection>
<subsection id="HEE3F35C2B8D44118B93CE2DCBF2A328C"><enum>(b)</enum><header>Testimony required on reducing complexity in financial reporting</header><text>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—</text>
<paragraph id="HC9024ED9FE3C428A90E6C7E502241EC0"><enum>(1)</enum><text>reassessing complex and outdated accounting standards;</text> </paragraph>
<paragraph id="H0DB72462D27E438C8D5120914BDA5B3B"><enum>(2)</enum><text>improving the understandability, consistency, and overall usability of the existing accounting and auditing literature;</text> </paragraph>
<paragraph id="HF2EF291BD24442E59B63850AA5CCABB4"><enum>(3)</enum><text>developing principles-based accounting standards;</text> </paragraph>
<paragraph id="H78B75047FFCE4801A9D7CF50864506B4"><enum>(4)</enum><text>encouraging the use and acceptance of interactive data; and</text> </paragraph>
<paragraph id="H9FEFB2865DCA4944A590B48E3F04300A"><enum>(5)</enum><text>promoting disclosures in <quote>plain English</quote>.</text> </paragraph></subsection></section>
<section id="H34F5F74628A74EB6B1BC38E17DCE120A"><enum>7408.</enum><header>Unlawful margin lending</header><text display-inline="no-display-inline">Section 7(c)(1)(A) of the Securities Exchange Act of 1934 (15 U.S.C. 78g(c)(1)(A)) is amended by striking <quote>; and</quote> and inserting <quote>; or</quote>.</text> </section>
<section id="H7BCEC2D19AF04C7883E89E1EF7C9156A"><enum>7409.</enum><header>Protecting confidentiality of materials submitted to the Commission</header>
<subsection id="H8CD6C0E3449045F2ACF4403AA00E8DD3"><enum>(a)</enum><header>Securities Exchange Act of 1934</header><text>Section 17(i) of the Securities Exchange Act of 1934 (as amended by section 1314(2)) is amended to read as follows:</text>
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<subsection id="H1E9132EDDCF04007BC21E6E86114F7AE"><enum>(i)</enum><header>Authority To limit disclosure of information</header>
<paragraph id="H22E0D334D6FA46F79D6247BD35AF920C"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph>
<paragraph id="HE51C157328C74EABAFF3F33D4D7CFE5C"><enum>(2)</enum><header>Certain exceptions</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H680A0E037F33480C908AC6F9563EE139"><enum>(3)</enum><header>Treatment under section 552 of title 5, United States Code</header><text>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.</text> </paragraph>
<paragraph id="H6BDB4B4A7EB743ABAB56C4F3D0E1717D"><enum>(4)</enum><header>Certain information to be confidential</header><text>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.</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="HA5C4145E871B4A988F4814D01AA8EF1D"><enum>(b)</enum><header>Investment Company Act of 1940</header><text>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:</text>
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<paragraph id="HE74D2EBCDB7C428EB60B1E327FE7253F"><enum>(6)</enum><header>Confidentiality</header>
<subparagraph id="H158F63B1FF20469CB8E6159B372EB778"><enum>(A)</enum><header>In general</header><text>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.</text> </subparagraph>
<subparagraph id="H317F586233874D6185D4F776D069A3E8"><enum>(B)</enum><header>Certain exceptions</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="H542BD347D58A4145A61CBC9B41C5CF63"><enum>(C)</enum><header>Treatment under section 552 of title 5, United States Code</header><text>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.</text> </subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="HC5F28408BA45417C8031749FBFAA43EF"><enum>(c)</enum><header>Investment Advisers Act of 1940</header><text>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:</text>
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<subsection commented="no" id="H3F6B8376B55E4DD49D34085F70843C85"><enum>(f)</enum><header>Confidentiality</header>
<paragraph id="HCBFFD0D50C8C4F75890006616970A7D0"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph>
<paragraph id="H50103BC6D32343BF907763E3E0ED4531"><enum>(2)</enum><header>Certain exceptions</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H952E506B3B46482380D8F71A9E1982DF"><enum>(3)</enum><header>Treatment under section 552 of title 5, United States Code</header><text>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.</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection></section>
<section id="H79739D74984C44E5AE3EFCCAEA44BC0C"><enum>7410.</enum><header>Technical corrections</header>
<subsection id="HC2AE5D9F1B074BD6A5E038EEEBC8507D"><enum>(a)</enum><header>Securities Act of 1933</header><text display-inline="yes-display-inline">The Securities Act of 1933 (15 U.S.C. 77a et seq.) is amended—</text>
<paragraph id="HAEF9CA68B1774E4FA7378EF8894C50BD"><enum>(1)</enum><text>in section 3(a)(4) (15 U.S.C. 77c(a)(4)), by striking <quote>individual;</quote> and inserting <quote>individual,</quote>;</text> </paragraph>
<paragraph id="H3C5248CD2A384A0F9D73B08BBB2AF07F"><enum>(2)</enum><text display-inline="yes-display-inline">in the matter following paragraph (5) of section 11(a), by striking <quote>earning statement</quote> and inserting <quote>earnings statement</quote>;</text> </paragraph>
<paragraph id="H203F52CEB0BD4EDFA0F4372735DE4F3B"><enum>(3)</enum><text display-inline="yes-display-inline">in section 18(b)(1)(C) (15 U.S.C. 77r(b)(1)(C)), by striking <quote>is a security</quote> and inserting <quote>a security</quote>;</text> </paragraph>
<paragraph id="H43C4BB6C45A94301A015251AB0EFCB6D"><enum>(4)</enum><text display-inline="yes-display-inline">in section 18(c)(2)(B)(i) (15 U.S.C. 77r(c)(2)(B)(i)), by striking <quote>State, or</quote> and inserting <quote>State or</quote>;</text> </paragraph>
<paragraph id="H57D75B907E2747BF81DCBEF9232EE538"><enum>(5)</enum><text display-inline="yes-display-inline">in section 19(d)(6)(A) (15 U.S.C. 77s(d)(6)(A)), by striking <quote>in paragraph (1) of (3)</quote> and inserting <quote>in paragraph (1) or (3)</quote>; and</text> </paragraph>
<paragraph id="H1B6EA2F70FEB486FA30EA2C18D501992"><enum>(6)</enum><text display-inline="yes-display-inline">in section 27A(c)(1)(B)(ii) (15 U.S.C. 77z–2(c)(1)(B)(ii)), by striking <quote>business entity;</quote> and inserting <quote>business entity,</quote>.</text> </paragraph></subsection>
<subsection id="H252C6C524C3B49A7A60EAC32E97F844A"><enum>(b)</enum><header>Securities Exchange Act of 1934</header><text display-inline="yes-display-inline">The Securities Exchange Act of 1934 (15 U.S.C. 78 et seq.) is amended—</text>
<paragraph id="H9BE8A7790D3845E8B6EC4CEAA2349943"><enum>(1)</enum><text>in section 2(1)(a) (15 U.S.C. 78b(1)(a)), by striking <quote>affected</quote> and inserting <quote>effected</quote>;</text> </paragraph>
<paragraph id="H5C295E211FAF4B76BAB2A5AD703D7E37"><enum>(2)</enum><text display-inline="yes-display-inline">in section 3(a)(55)(A) (15 U.S.C. 78c(a)(55)(A)), by striking <quote>section 3(a)(12) of the Securities Exchange Act of 1934</quote> and inserting <quote>section 3(a)(12) of this Act</quote>;</text> </paragraph>
<paragraph id="HCC6EC9828EC14857A8D8ADE4490A0389"><enum>(3)</enum><text display-inline="yes-display-inline">in section 3(g) (15 U.S.C. 78c(g)), by striking <quote>company, account person, or entity</quote> and inserting <quote>company, account, person, or entity</quote>;</text> </paragraph>
<paragraph id="H3443564521174ABF939E236EC552D2A9"><enum>(4)</enum><text display-inline="yes-display-inline">in section 10A(i)(1)(B)(i) (15 U.S.C. 78j–1(i)(1)(B)(i)), by striking <quote>nonaudit</quote> and inserting <quote>non-audit</quote>;</text> </paragraph>
<paragraph id="H2F861FFFABE949909EF56DFE8BDD2CC3"><enum>(5)</enum><text display-inline="yes-display-inline">in section 13(b)(1) (15 U.S.C. 78m(b)(1)), by striking <quote>earning statement</quote> and inserting <quote>earnings statement</quote>;</text> </paragraph>
<paragraph id="H97FFFA55A9584AE09D9709218655441D"><enum>(6)</enum><text display-inline="yes-display-inline">in section 15(b)(1) (15 U.S.C. 78o(b)(1))—</text>
<subparagraph id="H1A7BC9C343BD46F88B10E6D9BC4EC9C1"><enum>(A)</enum><text>by striking the sentence beginning <quote>The order granting</quote> and ending <quote>from such membership.</quote> in subparagraph (B); and</text> </subparagraph>
<subparagraph id="H341652C3D2204DD99B296FE6BE420D12"><enum>(B)</enum><text>by inserting such sentence in the matter following such subparagraph after <quote>are satisfied.</quote>;</text> </subparagraph></paragraph>
<paragraph id="HE413AD31F30E4215BEA1F40875907892"><enum>(7)</enum><text display-inline="yes-display-inline">in section 15C(a)(2) (15 U.S.C. 78o–5(a)(2))—</text>
<subparagraph commented="no" id="HCF99345B30B946058E25DC151C39FE46"><enum>(A)</enum><text>by redesignating clauses (i) and (ii) as subparagraphs (A) and (B), respectively;</text> </subparagraph>
<subparagraph id="HEFD64B64F9054809BE7D617F46000575"><enum>(B)</enum><text>by striking the sentence beginning <quote>The order granting</quote> and ending <quote>from such membership.</quote> in such subparagraph (B), as redesignated; and</text> </subparagraph>
<subparagraph id="H6063754925634F00B93524DCCFEA1EA4"><enum>(C)</enum><text>by inserting such sentence in the matter following such redesignated subparagraph after <quote>are satisfied.</quote>;</text> </subparagraph></paragraph>
<paragraph id="HFEF36E40803E443CAB406B633256F696"><enum>(8)</enum><text display-inline="yes-display-inline">in section 17(b)(1)(B) (15 U.S.C. 78q(b)(1)(B)), by striking <quote>15A(k) gives</quote> and inserting <quote>15A(k), give</quote>; and</text> </paragraph>
<paragraph id="HD151E177D65D48E48ACE55C81846D5DC"><enum>(9)</enum><text display-inline="yes-display-inline">in section 21C(c)(2) (15 U.S.C. 78u–3(c)(2)), by striking <quote>paragraph (1) subsection</quote> and inserting <quote>Paragraph (1)</quote>.</text> </paragraph></subsection>
<subsection id="H5C50DD93049842D7920C7AEF99DCF9BD"><enum>(c)</enum><header>Trust Indenture Act of 1939</header><text display-inline="yes-display-inline">The Trust Indenture Act of 1939 (15 U.S.C. 77aaa et seq.) is amended—</text>
<paragraph id="H1CE0F25804504BB093930988718857DF"><enum>(1)</enum><text display-inline="yes-display-inline">in section 304(b) (15 U.S.C. 77ddd(b)), by striking <quote>section 2 of such Act</quote> and inserting <quote>section 2(a) of such Act</quote>;</text> </paragraph>
<paragraph id="HCDA353B028ED4C78BFFD6E8123097BF1"><enum>(2)</enum><text display-inline="yes-display-inline">in section 313(a)(4) (15 U.S.C. 77mmm(a)(4)) by striking <quote>subsection (b) of section 311</quote> and inserting <quote>section 311(b)</quote>; and</text> </paragraph>
<paragraph id="H602ABCE60CB745FCBA26C42BE2CF6EE1"><enum>(3)</enum><text display-inline="yes-display-inline">in section 317(a)(1) (15 U.S.C. 77qqq(a)(1)), by striking <quote>(1),</quote> and inserting <quote>(1)</quote>.</text> </paragraph></subsection>
<subsection id="HFA10593449F04461A645B6F87FD255E0"><enum>(d)</enum><header>Investment Company Act of 1940</header><text display-inline="yes-display-inline">The Investment Company Act of 1940 (15 U.S.C. 80a–1 et seq.) is amended—</text>
<paragraph id="H2852E2E15616449FA537841A97B0E1F1"><enum>(1)</enum><text display-inline="yes-display-inline">in section 2(a)(19)(B) (15 U.S.C. 80a–2(a)(19)(B)) by striking <quote>clause (vi)</quote> both places it appears in the last two sentences and inserting <quote>clause (vii)</quote>;</text> </paragraph>
<paragraph id="HDD668EA322884B93B84F54349A88CC68"><enum>(2)</enum><text display-inline="yes-display-inline">in section 9(b)(4)(B) (15 U.S.C. 80a–9(b)(4)(B)), by inserting <quote>or</quote> after the semicolon at the end;</text> </paragraph>
<paragraph id="H53128F19299340FB9219D89C3FB0C20C"><enum>(3)</enum><text display-inline="yes-display-inline">in section 12(d)(1)(J) (15 U.S.C. 80a–12(d)(1)(J)), by striking <quote>any provision of this subsection</quote> and inserting <quote>any provision of this paragraph</quote>;</text> </paragraph>
<paragraph id="HE5E7581993094C66908B2E7F9268D870"><enum>(4)</enum><text display-inline="yes-display-inline">in section 13(a)(3) (15 U.S.C. 80a–13(a)(3)), by inserting <quote>or</quote> after the semicolon at the end;</text> </paragraph>
<paragraph id="H31804F1BD70140419F5EC5043CD478C4"><enum>(5)</enum><text display-inline="yes-display-inline">in section 17(f)(4) (15 U.S.C. 80a–17(f)(4)), by striking <quote>No such member</quote> and inserting <quote>No member of a national securities exchange</quote>;</text> </paragraph>
<paragraph id="HF925785B17B348BC99D3A88D8DD10508"><enum>(6)</enum><text display-inline="yes-display-inline">in section 17(f)(6) (15 U.S.C. 80a–17(f)(6)), by striking <quote>company may serve</quote> and inserting <quote>company, may serve</quote>; and</text> </paragraph>
<paragraph id="HC7C48E52BC474BA3B48CB261E1FEABDE"><enum>(7)</enum><text display-inline="yes-display-inline">in section 61(a)(3)(B)(iii) (15 U.S.C. 80a–60(a)(3)(B)(iii))—</text>
<subparagraph id="H1A555BE1CB8A447FB67ACC1B40B45A66"><enum>(A)</enum><text>by striking <quote>paragraph (1) of section 205</quote> and inserting <quote>section 205(a)(1)</quote>; and</text> </subparagraph>
<subparagraph id="H000C271AEF6B411EA4352AED2B79B21F"><enum>(B)</enum><text>by striking <quote>clause (A) or (B) of that section</quote> and inserting <quote>section 205(b)(1) or (2)</quote>.</text> </subparagraph></paragraph></subsection>
<subsection id="H7F122406989F453E9A7DF2C4BBD28593"><enum>(e)</enum><header>Investment Advisers Act of 1940</header><text display-inline="yes-display-inline">The Investment Advisers Act of 1940 (15 U.S.C. 80b–1 et seq.) is amended—</text>
<paragraph id="HEA4DD079965F4634AA0844D06C11D231"><enum>(1)</enum><text display-inline="yes-display-inline">in each of the following sections, by striking <quote>principal business office</quote> or <quote>principal place of business</quote> (whichever and wherever it appears) and inserting <quote>principal office and place of business</quote>: 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</text> </paragraph>
<paragraph id="H386304AC46B348FBAA9981AEF173221C"><enum>(2)</enum><text display-inline="yes-display-inline">in section 206(3) (15 U.S.C. 80b–6(3)), by inserting <quote>or</quote> after the semicolon at the end.</text> </paragraph></subsection></section>
<section id="H66951BD6BA1F4EE7B82A3C41D640995C"><enum>7411.</enum><header>Municipal securities</header><text display-inline="no-display-inline">Section 15B(b) of the Securities Exchange Act of 1934 (15 U.S.C. 78o–4(b)) is amended—</text>
<paragraph id="H4775900A48834E4CA18F2EDF06AF15CB"><enum>(1)</enum><text display-inline="yes-display-inline">by amending paragraph (1) to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H92C245155BE84C25B9CB54EC81DA8117" style="OLC">
<paragraph id="HC0B5E75D2110451FB9D8B9161C62744C"><enum>(1)</enum><header>Composition of the Municipal Securities Rulemaking Board</header><text display-inline="yes-display-inline">Not later than October 1, 2010, the Municipal Securities Rulemaking Board (hereinafter in this section referred to as the <quote>Board</quote>), shall be composed of members which shall perform the duties set forth in this section and shall consist of—</text>
<subparagraph id="H4467DD280A1943AC954BCDE5017B72D9"><enum>(A)</enum><text>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 <quote>public representatives</quote>);</text> </subparagraph>
<subparagraph id="H88A1003DCCBC411F80C1637A98F0725D"><enum>(B)</enum><text>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 <quote>broker-dealer representatives</quote>); and</text> </subparagraph>
<subparagraph id="HEBDB75CD0DD54746A70A5CFFB5839498"><enum>(C)</enum><text>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 <quote>bank representatives</quote>).</text> </subparagraph></paragraph><after-quoted-block>; and</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H92061088ED954A4AA6D53E743779E635"><enum>(2)</enum><text>by amending paragraph (2)(B) to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H39444551894A4504B106E617E76DAE3E" style="OLC">
<subparagraph id="HAAF4A7B723F940D38E3A2CDC286A22F0" indent="up1"><enum>(B)</enum><text display-inline="yes-display-inline">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—</text>
<clause id="HDBD360C84A9C4A0C99BDC183F83AB01B"><enum>(i)</enum><text>shall establish requirements regarding the independence of public representatives;</text> </clause>
<clause id="H20D80847D651446CBC6CD04712B09195"><enum>(ii)</enum><text>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;</text> </clause>
<clause id="H0B1014BB5D0A4505B6860D5B705EEB87"><enum>(iii)</enum><text display-inline="yes-display-inline">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;</text> </clause>
<clause id="H5F9FBF3F72F74E4A87EB2CFED71A0D2F"><enum>(iv)</enum><text>shall specify the term members shall serve; and</text> </clause>
<clause id="HAD679146E05F4F088024A273466F0ADB"><enum>(v)</enum><text>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.</text> </clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></section>
<section id="HD8084283FD464F2B95E4C1153BAC9D8C"><enum>7412.</enum><header>Interested person definition</header><text display-inline="no-display-inline">Section 2(a)(19)(A) of the Investment Company Act of 1940 (15 U.S.C. 80a–2(a)(19)(A)) is amended—</text>
<paragraph id="HE0259CE21A5442B0908F33A1BB2C696E"><enum>(1)</enum><text display-inline="yes-display-inline">by striking clauses (v) and (vi);</text> </paragraph>
<paragraph id="H8DCB0E4C00244568853FE6EA8761AE63"><enum>(2)</enum><text>by inserting after clause (iv) the following new clause:</text>
<quoted-block display-inline="no-display-inline" id="HD0F676224A6849369859EAC6E9DC9A6A" style="OLC">
<clause id="H9770C49778F348BB95455091C40DD9E4"><enum>(v)</enum><text display-inline="yes-display-inline">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—</text>
<subclause id="H0055920E702F4FAFAA56991C7510686D"><enum>(I)</enum><text>a material business or professional relationship with such company or any affiliated person of such company; or</text> </subclause>
<subclause id="H6C2D113A07724BEA8614A47AEBB54750"><enum>(II)</enum><text>a close familial relationship with any natural person who is an affiliated person of such company;</text> </subclause></clause><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph>
<paragraph id="HBDD350A689864FAC849CEF038A4614DE"><enum>(3)</enum><text>by redesignating clause (vii) as clause (vi); and</text> </paragraph>
<paragraph id="H81E8149AA68A4F40B662747E1965A482"><enum>(4)</enum><text>in clause (vi), as redesignated, by striking <quote>two completed fiscal years</quote> and inserting <quote>five completed fiscal years</quote>.</text> </paragraph></section>
<section id="H058A83BB0E7F4E2EA1804D8F563C46D3"><enum>7413.</enum><header>Rulemaking authority to protect redeeming investors</header><text display-inline="no-display-inline">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: <quote>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.</quote>.</text> </section>
<section id="H7F0A6B3AFA74406FB36AE54B29D636DE"><enum>7414.</enum><header>Study on SEC revolving door</header>
<subsection id="HF675FBFADD2B43D89FF5950ED03C2CA0"><enum>(a)</enum><header>Government Accountability Office study</header><text display-inline="yes-display-inline">The Comptroller General of the United States shall conduct a study that will—</text>
<paragraph id="H292C2832C5E647C7ADE98FE4502592D3"><enum>(1)</enum><text display-inline="yes-display-inline">review the number of employees who leave the Securities and Exchange Commission to work for financial institutions regulated by such Commission;</text> </paragraph>
<paragraph id="H424FE69AD453403FA3688CA3FDE2B494"><enum>(2)</enum><text>determine how many employees who leave the Securities and Exchange Commission worked on cases that involved financial institutions regulated by such Commission;</text> </paragraph>
<paragraph id="H942CBF33E5B24DC5AE1B727860BFFDFB"><enum>(3)</enum><text display-inline="yes-display-inline">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;</text> </paragraph>
<paragraph id="H5F5B8371450E442BAC9C86E01A9AC25D"><enum>(4)</enum><text display-inline="yes-display-inline">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;</text> </paragraph>
<paragraph id="HFD2D1783870249498D226BFF2307D06A"><enum>(5)</enum><text display-inline="yes-display-inline">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;</text> </paragraph>
<paragraph id="HF1EA630583B7404F8E06EAB21CAE4F82"><enum>(6)</enum><text display-inline="yes-display-inline">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;</text> </paragraph>
<paragraph id="HA4F34799E2D04DC1A1DBD008D34D603D"><enum>(7)</enum><text display-inline="yes-display-inline">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;</text> </paragraph>
<paragraph id="H96F8B45BAF9F4A478B1E22CA9C8C87E6"><enum>(8)</enum><text display-inline="yes-display-inline">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</text> </paragraph>
<paragraph id="H141B8B8DA49F415F8AFB632EB4B4D1F8"><enum>(9)</enum><text>review other additional issues as may be raised during the course of the study conducted under this subsection.</text> </paragraph></subsection>
<subsection id="H37E4BF195E7247CD91ED9F246EA11F05"><enum>(b)</enum><header>Report</header><text display-inline="yes-display-inline">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).</text> </subsection></section>
<section id="H16EA43F092AD4136B6C11448F4648BCB"><enum>7415.</enum><header>Study on internal control evaluation and reporting cost burdens on smaller issuers</header>
<subsection id="HA48D40E9CF024218898595B3FDA0D161"><enum>(a)</enum><header>Study required</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="H0339F9DC63914319B38C8D1AAEFA68F3"><enum>(1)</enum><text>include recommendations, administrative reforms, and legislative proposals on implementation steps that could be taken to reduce compliance burdens on these issuers; </text> </paragraph>
<paragraph id="H2019748E740A47819AD1A3B7F538D9CE"><enum>(2)</enum><text>determine the efficacy of the Securities and Exchange Commission’s measures to limit the cost of compliance on smaller issuers;</text></paragraph>
<paragraph id="H37CDE4A835C04CA6A91A115FBD17759F"><enum>(3)</enum><text display-inline="yes-display-inline">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 </text></paragraph>
<paragraph id="H985F4DDD34E44430B0F14BD432E4C285"><enum>(4)</enum><text>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. </text> </paragraph></subsection>
<subsection id="HA70BB12FD27048C19491BB414C54497F"><enum>(b)</enum><header>Reports required</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="HB29D91433DBF45EA817FF8AB800732B5"><enum>(c)</enum><header>Effective date contingent on reports</header><text display-inline="yes-display-inline">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.</text></subsection></section>
<section id="HC08FD27A582547D79D1E59021E26B5AF"><enum>7416.</enum><header>Analysis of rule regarding smaller reporting companies</header>
<subsection commented="no" id="H46D6D4D90A95485C9920BE1C7CA99B3B"><enum>(a)</enum><header>Findings</header><text display-inline="yes-display-inline">Congress finds the following:</text>
<paragraph commented="no" id="H3998C459E0384CDFAB6FF3677763E16A"><enum>(1)</enum><text>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.</text> </paragraph>
<paragraph commented="no" id="H138027E5C916400E8DD9F19C59C8AAB1"><enum>(2)</enum><text>Many technology companies conducting research do not meet the definition of <quote>smaller reporting company</quote> under the Securities and Exchange Commission’s Rule 12b–2 due to unusually high public floats despite low or zero revenue.</text> </paragraph>
<paragraph commented="no" id="H7AA8B26F22B444808993E40E0163D7E0"><enum>(3)</enum><text>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.</text> </paragraph></subsection>
<subsection commented="no" id="H37D6D04A46A4473384238A1A092B720A"><enum>(b)</enum><header>Study of using revenue as criteria to define smaller reporting company</header><text display-inline="yes-display-inline">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.</text> </subsection></section>
<section id="H16A8228B30834A6E8E09698A7C5944A4"><enum>7417.</enum><header>Financial Reporting Forum</header>
<subsection id="H5E631E093D9F464EAC5F88219C201FEB"><enum>(a)</enum><header>Establishment</header><text display-inline="yes-display-inline">There is hereby established a Financial Reporting Forum (hereinafter referred to as the <quote>Forum</quote>), which shall consist of—</text>
<paragraph id="H57774CC124684A57ADA843A66A207C5B"><enum>(1)</enum><text display-inline="yes-display-inline">the Chairman of the Securities Exchange Commission (hereinafter referred to as the <quote>SEC</quote>);</text> </paragraph>
<paragraph id="H6DF3C2F524F0452BAE0D89DDE9285291"><enum>(2)</enum><text display-inline="yes-display-inline">the head of the Financial Accounting Standards Board;</text> </paragraph>
<paragraph id="H56C7D8B577CD40968BB1FC2087942B72"><enum>(3)</enum><text display-inline="yes-display-inline">the Chairman of the Public Company Accounting Oversight Board;</text> </paragraph>
<paragraph id="HB13186B2DABB46DFB05C2DDFE8A3BA82"><enum>(4)</enum><text display-inline="yes-display-inline">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));</text> </paragraph>
<paragraph id="HE2269EA885BA48C9B571FEE77E12A757"><enum>(5)</enum><text display-inline="yes-display-inline">the Administrator of the National Credit Union Administration;</text> </paragraph>
<paragraph id="H8A6856C0A7D046A2A3D19A1C23EDDD0D"><enum>(6)</enum><text>the Secretary of the Treasury;</text> </paragraph>
<paragraph id="HE390502CFC1942A7B039C4061338A7AC"><enum>(7)</enum><text display-inline="yes-display-inline">a representative of a non-financial institution, appointed by the SEC;</text> </paragraph>
<paragraph id="H96B73505D27F43249A2651FEC6F5C454"><enum>(8)</enum><text>a representative of a financial institution, appointed by the SEC;</text> </paragraph>
<paragraph display-inline="no-display-inline" id="HD6E1D5EC8E5B4FB0A7245262397634B5"><enum>(9)</enum><text display-inline="yes-display-inline">a representative of auditors, appointed by the SEC; and</text> </paragraph>
<paragraph display-inline="no-display-inline" id="HDA1B84D4C35048F286BDCF26A30F4138"><enum>(10)</enum><text display-inline="yes-display-inline">a representative of investors, appointed by the SEC.</text> </paragraph></subsection>
<subsection id="H87CD77CDB4E941B3B4B0248B7535CF1E"><enum>(b)</enum><header>Meetings</header><text>The Forum shall meet no less often than quarterly.</text> </subsection>
<subsection id="HE7991EF4B4DE441A9AFBDC0266373ED7"><enum>(c)</enum><header>Duties</header><text display-inline="yes-display-inline">The Forum shall meet to discuss immediate and long-term issues critical to financial reporting.</text> </subsection>
<subsection id="H6CA342D119C84B289B758C88E4A01C15"><enum>(d)</enum><header>Reporting</header><text>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.</text> </subsection></section>
<section id="HAFCF576386934E02B360D7DDE2162B48"><enum>7418.</enum><header>Investment advisers subject to State authorities</header><text display-inline="no-display-inline">Section 203A(a) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–3a(a)) is amended—</text>
<paragraph id="H8AB3C26B97614277A5CB44146D0921C7"><enum>(1)</enum><text>by redesignating paragraph (2) as paragraph (3); and</text> </paragraph>
<paragraph id="H2D79DA40346142AAB5B5D6F4F90AFF29"><enum>(2)</enum><text>by inserting after paragraph (1) the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="HBC782D7F84584E88A090B0E08F39BD0C" style="OLC">
<paragraph id="H85DF46A34FE444B99E83B8AE70406252"><enum>(2)</enum><header>Treatment of certain mid-sized investment advisers</header><text display-inline="yes-display-inline">Notwithstanding paragraph (1), an investment adviser that is not exempt from registration under section 203 and—</text>
<subparagraph id="H30D0E422D8124FB49B96D3335C07AD36"><enum>(A)</enum><text display-inline="yes-display-inline">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</text> </subparagraph>
<subparagraph id="H9641D9B7E996487E90726CEFBE0CAD72"><enum>(B)</enum><text>has assets under management between—</text>
<clause id="HD040B83ECEAF4853898FFE62DD5BE56C"><enum>(i)</enum><text display-inline="yes-display-inline">the amount specified under subparagraph (A) of paragraph (1), as such amount may have been adjusted by the Commission pursuant to that subparagraph; and</text> </clause>
<clause id="H777C34B42E0E47FAB1356ABC478B8DCA"><enum>(ii)</enum><text display-inline="yes-display-inline">$100,000,000, or such higher amount as the Commission may, by rule, deem appropriate in accordance with the purposes of this title,</text> </clause><continuation-text continuation-text-level="subparagraph">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. </continuation-text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></section>
<section id="HAF28367A48B84F96AA4E2B45E84ADC58"><enum>7419.</enum><header>Custodial requirements</header>
<subsection id="H4C1F02E879C04C4EBC4E3209E09EF333"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="HF58EAD1729264C2490127FCCC92D5EC7"><enum>(1)</enum><text>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</text></paragraph>
<paragraph id="H3215A67F25C44829B1CF6596971CEAB2"><enum>(2)</enum><text>the qualified custodian does not directly or indirectly provide investment advice with respect to such funds or securities.</text></paragraph></subsection>
<subsection id="H7D06670AE6E24B52A0C4EA57F12BC081"><enum>(b)</enum><header>Exceptions</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="H3C28030A05AE417B9EDE94E7D964FE9B"><enum>(c)</enum><header>No limits on other actions</header><text display-inline="yes-display-inline">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. </text></subsection></section>
<section id="H9C4AAC3AA0EA4F7EAF4F2CBFE9DA81E9"><enum>7420.</enum><header>Ombudsman</header>
<subsection id="H8C32B75D4E764BA78D660D4787F3ECCF"><enum>(a)</enum><header>Appointment</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="H26C4035648BA43AC80FFAC99D40FBF01"><enum>(b)</enum><header>Duties</header><text>The Ombudsman appointed under subsection (a) shall—</text>
<paragraph id="H032CA50586B0425AB92F5B73D1BC28E8"><enum>(1)</enum><text>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;</text> </paragraph>
<paragraph id="H60616EF21E3143989B4DA6583636F354"><enum>(2)</enum><text>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</text> </paragraph>
<paragraph id="H391917036A934FDD97D35CD259691EC0"><enum>(3)</enum><text display-inline="yes-display-inline">assure that safeguards exist to maintain confidentiality of communications between such persons and the Ombudsman.</text> </paragraph></subsection>
<subsection id="HCB42214564AB4661A2FAF32BD4E3F56F"><enum>(c)</enum><header>Limitation</header><text>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.</text> </subsection>
<subsection id="H572DD3EF78F74AFBAB173E064B4F5419"><enum>(d)</enum><header>Report</header><text>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.</text> </subsection></section>
<section id="H9C0A7B52F48541A6A4AA814F5701327F" display-inline="no-display-inline" section-type="subsequent-section"><enum>7421.</enum><header>Notice to missing security holders</header><text display-inline="no-display-inline">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:</text>
<quoted-block style="OLC" id="HED42B6C768C549F1B73243182E046236" display-inline="no-display-inline">
<subsection id="H56B98CD3438B4244A8F21FC3AE15D7B9"><enum>(g)</enum><header>Due diligence for the delivery of dividends, interest, and other valuable property rights</header>
<paragraph id="H43A3796BAEBA4753BC8CB678DBB71529"><enum>(1)</enum><header>Revision of rules required</header><text>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:</text>
<subparagraph id="HC084FED2E1E94AD284A2D45AF4509063"><enum>(A)</enum><text>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.</text></subparagraph>
<subparagraph id="H8B4A55A7D9C043EC9779B208757AD12F"><enum>(B)</enum><text>An exclusion for paying agents from the notification requirements when the value of the not yet negotiated check is less than $25.</text></subparagraph>
<subparagraph id="H3DE0156D306047289FDA9605687C05EA"><enum>(C)</enum><text>A provision clarifying that the requirements described in subparagraph (A) shall have no effect on State escheatment laws.</text></subparagraph>
<subparagraph id="H2C1E5B465E6D451BA11241D4A36B502B"><enum>(D)</enum><text>For purposes of such revised regulations—</text>
<clause id="H2B56BA86A95D4ACD89AA836F31B3AF69"><enum>(i)</enum><text>a security holder shall be considered a <quote>missing security holder</quote> 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</text></clause>
<clause id="H65CD39BE5E2F499B92D6AB736914D816"><enum>(ii)</enum><text>the term <quote>paying agent</quote> 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.</text></clause></subparagraph></paragraph>
<paragraph id="H69876810A4FE451A98F927C060630ED5"><enum>(2)</enum><header>Rulemaking</header><text>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.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section id="H8ED08F5BB8EB4C61944D6AF5AA8A86C3"><enum>7422.</enum><header>Short sale reforms</header>
<subsection id="H9DB89203B5804AE6981AE6143E38E40F"><enum>(a)</enum><header>Short sale disclosure</header><text display-inline="yes-display-inline">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:</text>
<quoted-block style="OLC" id="HA28A527E11704ED98D2B21D17797DC9B" display-inline="no-display-inline">
<paragraph id="HB4144C68FF854DC2B607F3CCD9E739F2"><enum>(2)</enum>
<subparagraph id="H40973B5128574399BDA3D371B22D78A4" display-inline="yes-display-inline"><enum>(A)</enum><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="HA14515FDBEAB428FA8487D9850D1C4C7" indent="up1"><enum>(B)</enum><text>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.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HC39D5395185D4F92B6BCD94058C59C72"><enum>(b)</enum><header>Short selling enforcement</header><text>Section 9 of the Securities Exchange Act of 1934 (15 U.S.C. 78i) is amended—</text>
<paragraph id="H67BABB724F81478FB17CE2DB29282AD0"><enum>(1)</enum><text>by redesignating subsections (d), (e), (f), (g), (h), and (i) as subsections (e), (f), (g), (h), (i), and (j), respectively; and</text></paragraph>
<paragraph id="HFCBB2AEBA76146F6BE566D391EE1A533"><enum>(2)</enum><text>inserting after subsection (c), the following new subsection:</text>
<quoted-block style="OLC" id="H9EB07098F9ED46C58DA907FF0DFBAF7B" display-inline="no-display-inline">
<subsection id="H3CE47AE50F834130ACFD6DF96AFC71C8"><enum>(d)</enum><header>Transactions relating to short sales of securities</header><text display-inline="yes-display-inline">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.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="HA74DEA9625FA4CDD9BE2593F9523C748"><enum>(c)</enum><header>Investor Notification</header><text>Section 15 of the Securities Exchange Act of 1934 (15 U.S.C. 78o) is amended—</text>
<paragraph id="HC5F46B5A0720434489DF8F421020695C"><enum>(1)</enum><text>by redesignating subsections (e), (f), (g), (h), and (i) as subsections (f), (g), (h), (i), and (j), respectively; and</text></paragraph>
<paragraph id="H5604EDC0F0824AB398EFF77D86A3B0BA"><enum>(2)</enum><text>inserting after subsection (d) the following new subsection:</text>
<quoted-block style="OLC" id="HB581400519884300BBEAAD5CB95050E9" display-inline="no-display-inline">
<subsection id="HEA1C53C715F545948F2F25122133CD64"><enum>(e)</enum><header>Notices to customers regarding securities lending</header><text display-inline="yes-display-inline">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.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection></section>
<section id="H5740FFEFDACC4393A51AB08A58D41415"><enum>7423.</enum><header>Streamlining of SEC filing procedures</header>
<subsection id="H0AC01380169041699103DDC51DEC4A31"><enum>(a)</enum><header>Approval process</header><text display-inline="yes-display-inline">Section 19(b)(2) of the Securities Exchange Act of 1934 (15 U.S.C. 78s(b)(2)) is amended to read as follows:</text>
<quoted-block style="OLC" id="HBC739E3300C946849A8ECA01FEB733D4" display-inline="no-display-inline">
<paragraph id="HC5D74DD287A7493083B018AE09805B97"><enum>(2)</enum><header>Filing procedures</header>
<subparagraph id="H4838673C67F245CE90104F61F38698CB"><enum>(A)</enum><header>In general</header><text>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—</text>
<clause id="HF9551C4F9D96462F947752772C65C9A1"><enum>(i)</enum><text>by order approve such proposed rule change; or</text></clause>
<clause id="H7F85721579A64BB48BD62C6F8087685F"><enum>(ii)</enum><text>institute proceedings under subparagraph (B) to determine whether the proposed rule change should be disapproved.</text></clause></subparagraph>
<subparagraph id="H1AE0FCBA04BB49A6863E5F7298413D35"><enum>(B)</enum><header>Proceedings</header><text>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.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HCA275FE2BA454924AEBC4F38325D9F57"><enum>(b)</enum><header>Rules</header><text>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.</text></subsection></section></part>
<part id="HEB6CF0C701AB4558A10FC09F36C46C9B"><enum>5</enum><header>Securities Investor Protection Act amendments</header>
<section commented="no" id="H4518A347C06E460C8731C81170B0FAF4"><enum>7501.</enum><header>Increasing the minimum assessment paid by SIPC members</header><text display-inline="no-display-inline">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 <quote>$150 per annum</quote> and inserting the following: <quote>0.02 percent of the gross revenues from the securities business of such member of SIPC</quote>.</text> </section>
<section id="H272CA9D9633B43BAA950E6A08B23CF60"><enum>7502.</enum><header>Increasing the borrowing limit on treasury loans</header><text display-inline="no-display-inline">Section 4(h) of the Securities Investor Protection Act of 1970 (15 U.S.C. 78ddd(h)) is amended by striking <quote>of not to exceed $1,000,000,000</quote> and inserting <quote>the lesser of $2,500,000,000 or the target amount of the SIPC Fund specified in the bylaws of SIPC</quote>.</text> </section>
<section id="H215CAE3861A64C6D9CFE4797C534246C"><enum>7503.</enum><header>Increasing the cash limit of protection</header><text display-inline="no-display-inline">Section 9 of the Securities Investor Protection Act of 1970 (15 U.S.C. 78fff–3) is amended—</text>
<paragraph id="H3BE9F2B8CC3547AFA72000DBFA617399"><enum>(1)</enum><text>in subsection (a)(1), by striking <quote>$100,000 for each such customer</quote> and inserting <quote>the standard maximum cash advance amount for each such customer, as determined in accordance with subsection (d)</quote>; and</text> </paragraph>
<paragraph id="HD156DA1D90424F48B621A99FF2130B8D"><enum>(2)</enum><text>by adding the following new subsections:</text>
<quoted-block display-inline="no-display-inline" id="H29B99CAFBB404A4DACC366EC36E06A53" style="OLC">
<subsection id="HC149A887676043728495C42763CBEEBF"><enum>(d)</enum><header>Standard maximum cash advance amount defined</header><text display-inline="yes-display-inline">For purposes of this section, the term <quote>standard maximum cash advance amount</quote> means $250,000, as such amount may be adjusted after March 31, 2010, as provided under subsection (e).</text> </subsection>
<subsection id="HBF13838672D34FFF8F60FB3C6FF4B30B"><enum>(e)</enum><header>Inflation adjustment</header>
<paragraph id="H24D9B010A87748DF8347CFD6F59EB4E1"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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—</text>
<subparagraph id="HB276314C8E4047FF836D0B40F4A28078"><enum>(A)</enum><text>$250,000 multiplied by</text> </subparagraph>
<subparagraph id="H3C967853C6C2412D9BDC96064A16B533"><enum>(B)</enum><text>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.</text> </subparagraph><continuation-text continuation-text-level="paragraph">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.</continuation-text></paragraph>
<paragraph id="HF55E904093FF4345B39B5039297B641A"><enum>(2)</enum><header>Rounding</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H096B3EDC21B34108B5EC5422FC267ED3"><enum>(3)</enum><header>Publication and report to the Congress</header><text display-inline="yes-display-inline">Not later than April 5 of any calendar year in which a determination is required to be made under paragraph (1)—</text>
<subparagraph id="H709037E8F63A494591F3176F258F275C"><enum>(A)</enum><text>the Commission shall publish in the Federal Register the standard maximum cash advance amount; and</text> </subparagraph>
<subparagraph id="H5CD18AB89B654465B6AD8264F9A9F90E"><enum>(B)</enum><text display-inline="yes-display-inline">the Board of Directors of SIPC shall submit a report to the Congress stating the standard maximum cash advance amount.</text> </subparagraph></paragraph>
<paragraph id="H04EB8A6D8A4F4D5E99E8B91949AD042B"><enum>(4)</enum><header>Implementation period</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HFAB77A7DA3AE452EADD0C2E712DCB4E9"><enum>(5)</enum><header>Inflation adjustment considerations</header><text display-inline="yes-display-inline">In making any determination under paragraph (1) to increase the standard maximum cash advance amount, the Board of Directors of SIPC shall consider—</text>
<subparagraph id="HD7F8B42A96D24B0F9C1D16141AB7A6D0"><enum>(A)</enum><text>the overall state of the fund and the economic conditions affecting members of SIPC;</text> </subparagraph>
<subparagraph id="HE7FC2C550C9048E793DD57D2F6815A47"><enum>(B)</enum><text>the potential problems affecting members of SIPC; and</text> </subparagraph>
<subparagraph id="HF140A02B006342A3BCB8C2EA814DE35E"><enum>(C)</enum><text>such other factors as the Board of Directors of SIPC may determine appropriate.</text> </subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></section>
<section id="HD00518E2946D47A8ABDEB245FB5F78CE"><enum>7504.</enum><header>SIPC as trustee in SIPA liquidation proceedings</header><text display-inline="no-display-inline">Section 5(b)(3) of the Securities Investor Protection Act of 1970 (15 U.S.C. 78eee(b)(3)) is amended—</text>
<paragraph id="H7C1B0ACB9C3141ED9BC2B2258E2F85EA"><enum>(1)</enum><text>by striking <quote>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</quote>; and</text> </paragraph>
<paragraph id="H5CF04D35EDA549ABB9EBD363BC93C9FD"><enum>(2)</enum><text>by striking <quote>five hundred</quote> and inserting <quote>five thousand</quote>.</text> </paragraph></section>
<section id="H68C2F8A811CC4991A5EED305A5CBB944"><enum>7505.</enum><header>Insiders ineligible for SIPC advances</header><text display-inline="no-display-inline">Section 9(a)(4) of the Securities Investor Protection Act of 1970 (15 U.S.C. 78fff–3(a)(4)) is amended by inserting <quote>an insider,</quote> after <quote>or net profits of the debtor,</quote>.</text> </section>
<section id="H1B06C55473C94A59B12B861712E257A3"><enum>7506.</enum><header>Eligibility for direct payment procedure</header><text display-inline="no-display-inline">Section 10(a)(4) of the Securities Investor Protection Act of 1970 (15 U.S.C. 78fff–4(a)(4)) is amended by striking <quote>$250,000</quote> and inserting <quote>$850,000</quote>.</text> </section>
<section id="HE4FF1527D04C466C915D3467F31F8993"><enum>7507.</enum><header>Increasing the fine for prohibited acts under SIPA</header><text display-inline="no-display-inline">Section 14(c) of the Securities Investor Protection Act of 1970 (15 U.S.C. 78jjj(c)) is amended—</text>
<paragraph id="HE53DDB079AD64E6497F771FB890CD9A2"><enum>(1)</enum><text>in paragraph (1), by striking <quote>$50,000</quote> and inserting <quote>$250,000</quote>; and</text> </paragraph>
<paragraph id="H38EE0A731935413888727B2F7C53C096"><enum>(2)</enum><text>in paragraph (2), by striking <quote>$50,000</quote> and inserting <quote>$250,000</quote>.</text> </paragraph></section>
<section id="HEB0F9482A89E414397261D7E3B8B322F"><enum>7508.</enum><header>Penalty for misrepresentation of SIPC membership or protection</header><text display-inline="no-display-inline">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:</text>
<quoted-block display-inline="no-display-inline" id="HF82692D4E1594664B04DEEB899DAB040" style="OLC">
<subsection id="H9DEF43B3B8554372938AC41AB50E9246"><enum>(d)</enum><header>Misrepresentation of SIPC membership or protection</header>
<paragraph id="H30BA482E5729404EA390DFE23E0ED4E0"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HAA0BD247FE0D49D0B77FE1A43C2FA461"><enum>(2)</enum><header>Injunctions</header><text>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.</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </section>
<section id="HD6252A724A3248D6B52756402C6A0321"><enum>7509.</enum><header>Futures held in a portfolio margin securities account protection</header>
<subsection id="H7D9CE3940E7047C19B86AFA5F05E70BE"><enum>(a)</enum><header>SIPC Advances</header><text display-inline="yes-display-inline">Section 9(a)(1) of the Securities Investor Protection Act of 1970 (15 U.S.C. 78fff–3(a)(1)) is amended by inserting <quote>or options on futures contracts</quote> after <quote>claim for securities</quote>.</text> </subsection>
<subsection id="HF5C8E916ED6D49C0BDF07CB06CE1CD1B"><enum>(b)</enum><header>Definitions</header><text>Section 16 of such Act (15 U.S.C. 78lll) is amended—</text>
<paragraph id="H7580B8B563BA449299ECE04A70C51C80"><enum>(1)</enum><text>by amending paragraph (2) to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HE8DF11D2D6DC45C0880C9F65D9776E93" style="OLC">
<paragraph id="H28769F4DE4844F3D87C1E58A4A4B57DB"><enum>(2)</enum><header>Customer</header>
<subparagraph id="HABA348885FA94784B3DE0386056A9D9C"><enum>(A)</enum><header>In general</header><text>The term <term>customer</term> 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 <quote>customer</quote> includes any person who has a claim against the debtor arising out of sales or conversions of such securities.</text> </subparagraph>
<subparagraph id="H25FF81797CB54570B2EA7BBCED705BF7"><enum>(B)</enum><header>Included persons</header><text>The term <term>customer</term> includes—</text>
<clause id="H1EF6624DFAC34D6A82DAEB5280FF1BE9"><enum>(i)</enum><text>any person who has deposited cash with the debtor for the purpose of purchasing securities; and</text> </clause>
<clause id="H230CAA223B294ABBBFF01882C195DA32"><enum>(ii)</enum><text display-inline="yes-display-inline">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.</text> </clause></subparagraph>
<subparagraph id="H959ACCF765674F0E899464D5E206A69C"><enum>(C)</enum><header>Excluded persons</header><text>The term <term>customer</term> does not include—</text>
<clause id="HFC7DFC11E65C43A1B72D032E6523981D"><enum>(i)</enum><text>any person to the extent that the claim of such person arises out of transactions with a foreign subsidiary of a member of SIPC;</text> </clause>
<clause id="H4640CBBAB1C2494CBF7515AFAA1F52FC"><enum>(ii)</enum><text>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</text> </clause>
<clause id="H12D2D020E25147B6BFE588772DA466C7"><enum>(iii)</enum><text display-inline="yes-display-inline">any person to the extent such person has a claim relating to any open repurchase or open reverse repurchase agreement.</text> </clause><continuation-text continuation-text-level="subparagraph">For purposes of this paragraph, the term <quote>repurchase agreement</quote> 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.</continuation-text></subparagraph></paragraph><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph>
<paragraph id="HCD7F9B07539A4805A41C401F13BF12FF"><enum>(2)</enum><text>in paragraph (4), by inserting after the first sentence the following new sentence: <quote>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.</quote>;</text> </paragraph>
<paragraph id="H199B1A79F69446DEA5890F0006F47F77"><enum>(3)</enum><text>in paragraph (9), by inserting before <quote>Such term</quote> in the matter following subparagraph (L) the following: <quote>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.</quote>; and</text> </paragraph>
<paragraph id="HA06FE16F340B418B83A9608975BFD873"><enum>(4)</enum><text>in paragraph (11)—</text>
<subparagraph id="HC8B35F1561E6482CBFD91FEDF0E1F3EF"><enum>(A)</enum><text>by amending subparagraph (A) to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H6FB4FCC560FF47028460C2AD6F8F0275" style="OLC">
<subparagraph id="HBB199DC664DC430E8F521980EF0B81CE"><enum>(A)</enum><text display-inline="yes-display-inline">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—</text>
<clause id="H0545D8E4EEC7470E8061FA7EE6AAE637"><enum>(i)</enum><text>all securities positions of such customer (other than customer name securities reclaimed by such customer); and</text> </clause>
<clause id="H3FE387BEF67249D6A113D5A6211E5E6B"><enum>(ii)</enum><text>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</text> </clause></subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block> </subparagraph>
<subparagraph id="H16C0B204FAB846A8B474B6E9FFF754F5"><enum>(B)</enum><text>by inserting before <quote>In determining</quote> in the matter following subparagraph (C) the following: <quote>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.</quote>.</text> </subparagraph></paragraph></subsection></section>
<section id="HA57FBA91C7574267AF9333340358CF13"><enum>7510.</enum><header>Study and report on the feasibility of risk-based assessments for SIPC members</header>
<subsection id="H82A18410AE7D4CFEB624DCD7754CC5C2"><enum>(a)</enum><header>Study required</header><text display-inline="yes-display-inline">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 <quote>SIPC</quote>) 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.</text> </subsection>
<subsection id="HD86D2C9A93DD4B47843CC67984F38836"><enum>(b)</enum><header>Content</header><text>The Comptroller General in conducting this study shall—</text>
<paragraph id="H33F45EC2247248E2AF9241F24A0B549B"><enum>(1)</enum><text>identify and examine available approaches, including modeling, to measure broker and dealer operational risk;</text> </paragraph>
<paragraph id="HB094C935BFC641A285B800864431E34B"><enum>(2)</enum><text>analyze whether the available approaches to measure broker and dealer operational risk can be used in managing the aggregate risk to the SIPC Fund;</text> </paragraph>
<paragraph id="H8D45286ABEE644A4BE3AF0CAE7AB8C36"><enum>(3)</enum><text>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;</text> </paragraph>
<paragraph id="H65DA465B42F441E39CF90B1D8785436D"><enum>(4)</enum><text>examine the impact that risk-based assessments could have on large and small brokers and dealers; </text> </paragraph>
<paragraph id="H453AB78CC01842A1A6B2D9DC2507174D"><enum>(5)</enum><text>examine the impact that risk-based assessments could have on institutional and retail brokers and dealers; and</text></paragraph>
<paragraph id="HEC1519CAFF3F42AF8C047659CD16A9D0"><enum>(6)</enum><text display-inline="yes-display-inline">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. </text> </paragraph></subsection>
<subsection id="H0A06FD71BFAC482B8EFC33470A15F9EC"><enum>(c)</enum><header>Consultation</header><text>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.</text> </subsection>
<subsection id="H9F518DFED4124EFC8D368E663BBC4A4B"><enum>(d)</enum><header>Report required</header><text>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.</text> </subsection></section> </part>
<part id="HA60F6927322D4CD48F44900D1086D9FC"><enum>6</enum><header>Sarbanes-Oxley Act Amendments</header>
<section id="HEF4CA8FA55E346C0B6AEA02E28D9220B"><enum>7601.</enum><header>Public Company Accounting Oversight Board oversight of auditors of brokers and dealers</header>
<subsection id="H2E29BDBFC08444DD8ABE38514BF0024F"><enum>(a)</enum><header>Definitions</header>
<paragraph commented="no" display-inline="yes-display-inline" id="H5022F22E0EC4457A9E16D60831BCEBE8"><enum>(1)</enum><text>Title I of the Sarbanes-Oxley Act of 2002 is amended by adding at the end the following new section:</text>
<quoted-block display-inline="no-display-inline" id="H4323607399694DCC928C36C65B0D9D78" style="OLC">
<section id="HDC79D947FF6E41409E8C0236689CDAEC"><enum>110.</enum><header>Definitions</header><text display-inline="no-display-inline">For the purposes of this title, and notwithstanding section 2:</text>
<paragraph id="HD98115AF1E5445208456770D1294E12E"><enum>(1)</enum><header>Audit</header><text display-inline="yes-display-inline">The term <quote>audit</quote> 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.</text> </paragraph>
<paragraph id="H01644F86F0F84F51B4A9739632E180A1"><enum>(2)</enum><header>Audit report</header><text display-inline="yes-display-inline">The term <quote>audit report</quote> means a document, report, notice, or other record—</text>
<subparagraph id="HB85AA1F81FEE4907A6B5BCA9511362F2"><enum>(A)</enum><text>prepared following an audit performed for purposes of compliance by an issuer, broker, or dealer with the requirements of the securities laws; and</text> </subparagraph>
<subparagraph id="HDE8BD76BE07343429EF1044D02D08672"><enum>(B)</enum><text>in which a public accounting firm either—</text>
<clause id="HABF18B36E8EA4C0C94AF0AD055A8042E"><enum>(i)</enum><text>sets forth the opinion of that firm regarding a financial statement, report, notice, other document, procedures, or controls; or</text> </clause>
<clause id="H321182EA40D846E7B57260F6BBADC807"><enum>(ii)</enum><text>asserts that no such opinion can be expressed.</text> </clause></subparagraph></paragraph>
<paragraph display-inline="no-display-inline" id="H7475240C2AC341F08E1DEF047517B113"><enum>(3)</enum><header>Professional standards</header><text>The term <quote>professional standards</quote> means—</text>
<subparagraph id="H987FAB0D3E42457397F28CD6AC61627E"><enum>(A)</enum><text>accounting principles that are—</text>
<clause id="H1915DDB6A7F14EE78AB5635F8AE0FEA1"><enum>(i)</enum><text>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</text> </clause>
<clause id="H19F7F7A40B4A48CD8F58F0BF821FB48A"><enum>(ii)</enum><text>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</text> </clause></subparagraph>
<subparagraph id="H0E5A2BF97E524347A2FF1AF8624657D4"><enum>(B)</enum><text>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—</text>
<clause id="H7CEC06E2F91A4883AF5863F81B084121"><enum>(i)</enum><text>relate to the preparation or issuance of audit reports for issuers, brokers, or dealers; and</text> </clause>
<clause id="H44F940E175AF4F1C8A9A6C7A22441D2F"><enum>(ii)</enum><text>are established or adopted by the Board under section 103(a), or are promulgated as rules of the Commission.</text> </clause></subparagraph></paragraph>
<paragraph id="HC6DD42A74FF847CA842AB902843CDE2F"><enum>(4)</enum><header>Broker</header><text display-inline="yes-display-inline">The term <quote>broker</quote> 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.</text> </paragraph>
<paragraph id="H473396EA75FE48E580DF8CA87A597E73"><enum>(5)</enum><header>Dealer</header><text display-inline="yes-display-inline">The term <quote>dealer</quote> 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.</text> </paragraph>
<paragraph id="HFB74BEB25723458EA8E1D36A71BB10E4"><enum>(6)</enum><header>Self-regulatory organization</header><text display-inline="yes-display-inline">The term <quote>self-regulatory organization</quote> has the same meaning as in section 3(a)(26) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(26)).</text> </paragraph></section><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H8FC2F7175707475688BC12D4A0210320" indent="up1"><enum>(2)</enum><text>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:</text>
<quoted-block display-inline="no-display-inline" id="HBF87ED1A7AF34DB2BBBAAA8B5E08F843" style="OLC">
<toc regeneration="no-regeneration">
<toc-entry level="section">Sec. 110. Definitions.</toc-entry> </toc> <after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection id="HF18DAA7DBF3A43C09C3CEF1D85FB38F6"><enum>(b)</enum><header>Establishment and Administration of the Public Company Accounting Oversight Board</header><text>Section 101 of such Act is amended—</text>
<paragraph id="HC0CC1CFB665A42C6A14C2B785680DCD0"><enum>(1)</enum><text>by striking <quote>issuers</quote> each place it appears and inserting <quote>issuers, brokers, and dealers</quote>;</text> </paragraph>
<paragraph id="H3EB50E08F29E4602899F6475A3D8607D"><enum>(2)</enum><text>in subsection (a), by striking <quote>public companies</quote> and inserting <quote>companies</quote>; and</text> </paragraph>
<paragraph id="H08DC770943004FDC9D493932FC360973"><enum>(3)</enum><text>in subsection (a), by striking <quote>for companies the securities of which are sold to, and held by and for, public investors</quote>.</text> </paragraph></subsection>
<subsection id="HD2B86F13D87D4A10938EE6FF6CBAF931"><enum>(c)</enum><header>Registration with the Board</header><text display-inline="yes-display-inline">Section 102 of such Act is amended—</text>
<paragraph id="HF31C177F3B7440E18ED141EBBAF52075"><enum>(1)</enum><text>in subsection (a), by striking <quote>Beginning 180 days after the date of the determination of the Commission under section 101(d), it</quote> and inserting <quote>It</quote>;</text> </paragraph>
<paragraph id="HB1F8B27673994070A5930D1DAB45B6DC"><enum>(2)</enum><text>in subsections (a) and (b)(2)(G), by striking <quote>issuer</quote> each place it appears and inserting <quote>issuer, broker, or dealer</quote>; and</text> </paragraph>
<paragraph id="H57FC5065C1304ACC8ADBD232F6543340"><enum>(3)</enum><text>in subsection (b)(2)(A), by striking <quote>issuers</quote> and inserting <quote>issuers, brokers, and dealers</quote>.</text> </paragraph></subsection>
<subsection id="H9B50AF73F07A441F9D671475E5050662"><enum>(d)</enum><header>Auditing and independence</header><text>Section 103(a) of such Act is amended—</text>
<paragraph id="H0249857313AB4CD08FB07BC0985BBED7"><enum>(1)</enum><text>in paragraph (1), by striking <quote>and such ethics standards</quote> and inserting <quote>such ethics standards, and such independence standards</quote>;</text> </paragraph>
<paragraph id="H937582800FA049E59B51D50854ABBDA1"><enum>(2)</enum><text>in paragraph (2)(A)(iii), by striking <quote>describe in each audit report</quote> and inserting <quote>in each audit report for an issuer, describe</quote>; and</text> </paragraph>
<paragraph id="H3FE262F7494A4BE9BEA9C880526ADE32"><enum>(3)</enum><text>in paragraph (2)(B)(i), by striking <quote>issuers</quote> and inserting <quote>issuers, brokers, and dealers</quote>.</text> </paragraph></subsection>
<subsection id="H2FEAA6E6F66645EF800B52EFA0F3BC3D" display-inline="no-display-inline"><enum>(e)</enum><header>Inspections by registered accounting firms</header><text display-inline="yes-display-inline">Subsection (a) of Section 104 of such Act is amended—</text>
<paragraph id="H35E71EBA65A542F7B4889FE2FF9CF739"><enum>(1)</enum><text>by striking <quote>(a) <header-in-text level="subsection" style="OLC">In General</header-in-text>.—The Board shall</quote> and inserting the following: </text>
<quoted-block style="OLC" id="HF834E4C9D1974364B4D05A5E331A696B" display-inline="no-display-inline">
<subsection id="H8CADB1E938AF473A802D8668E4EDB919"><enum>(a)</enum><header>In general</header>
<paragraph id="HEAFB9C3C1ACF467AA21F8E2C9E2F9A7D"><enum>(1)</enum><text display-inline="yes-display-inline">The Board shall</text></paragraph></subsection><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph>
<paragraph id="HC757E6533F9444A0B2D18FE8FE156428"><enum>(2)</enum><text>by adding at the end of such subsection the following: </text>
<quoted-block style="OLC" id="H7D11CD223FDD433FB017977078F7F6BE" display-inline="no-display-inline">
<paragraph id="H5AD6E6E0DE594B60A5BAECC1E31D09F9"><enum>(2)</enum><header>Inspections of audit report for brokers and dealers</header><text display-inline="yes-display-inline"> </text>
<subparagraph id="HADE4344AD91E47CDBE006A2D1B5D83D2"><enum>(A)</enum><text>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. </text></subparagraph>
<subparagraph id="H5C9F7A6A47354A66824F93E658E577B2"><enum>(B)</enum><text>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. </text></subparagraph>
<subparagraph id="HACFB09AB07FC46E3B6C7659868C43B13"><enum>(C)</enum><text>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.</text></subparagraph>
<subparagraph id="H4A6BED62317149729B99D0191E04676A"><enum>(D)</enum><text>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. </text></subparagraph></paragraph>
<paragraph id="HF62C0B44E1C5408E89970D5E420E7EF8"><enum>(3)</enum><header>Conforming Amendment</header><text>Section 17 (e)(1)(A) of the Securities Exchange Act of 1934 (15 U.S.C. 78q(e)(1)(A)) is amended by striking <quote>registered public accounting firm</quote> and inserting <quote>independent public accounting firm or by a registered public accounting firm if registration is required under the Sarbanes-Oxley Act of 2002 as amended.</quote>.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="HBC6E8262E9F345F8BACF526FD55DF7A1"><enum>(f)</enum><header>Investigations and disciplinary proceedings</header><text>Section 105(c)(7)(B) of such Act is amended—</text>
<paragraph id="H71B85FF9DC6C4D18A7C3F5CDB363C5C3"><enum>(1)</enum><text>in the subparagraph heading, by inserting <quote><header-in-text level="subparagraph" style="OLC">, broker, or dealer</header-in-text></quote> after <quote><header-in-text level="subparagraph" style="OLC">issuer</header-in-text></quote>;</text> </paragraph>
<paragraph id="H2D939074CF4A495A9D6B717E039D736A"><enum>(2)</enum><text>by striking <quote>any issuer</quote> each place it appears and inserting <quote>any issuer, broker, or dealer</quote>; and</text> </paragraph>
<paragraph id="H96037D93977A498A94E7B12BCB7AE919"><enum>(3)</enum><text>by striking <quote>an issuer under this subsection</quote> and inserting <quote>a registered public accounting firm under this subsection</quote>.</text> </paragraph></subsection>
<subsection id="H1C6560EDAE7B448DA5D08E534003E8B3"><enum>(g)</enum><header>Foreign public accounting firms</header><text>Section 106 of such Act is amended—</text>
<paragraph id="H65B8FA0E3F734E748FEB059789273602"><enum>(1)</enum><text>in subsection (a)(1), by striking <quote>issuer</quote> and inserting <quote>issuer, broker, or dealer</quote>; and</text> </paragraph>
<paragraph id="H32CFEC18FB0E4F5BAA1A90AD9C14A2FE"><enum>(2)</enum><text>in subsection (a)(2), by striking <quote>issuers</quote> and inserting <quote>issuers, brokers, or dealers</quote>.</text> </paragraph></subsection>
<subsection id="HF57D688FA66744F9BD3AA70514D08EA8"><enum>(h)</enum><header>Funding</header><text display-inline="yes-display-inline">Section 109 of such Act is amended—</text>
<paragraph display-inline="no-display-inline" id="HD81723D7E07F4CEAA93D0C797DCA4BF4"><enum>(1)</enum><text>in subsection (c)(2), by striking <quote>subsection (i)</quote> and inserting <quote>subsection (j)</quote>;</text> </paragraph>
<paragraph id="H952298867A014AB39DB4060CA233D25F"><enum>(2)</enum><text>in subsection (d)(2), by striking <quote>allowing for differentiation among classes of issuers, as appropriate</quote> and inserting <quote>and among brokers and dealers in accordance with subsection (h), and allowing for differentiation among classes of issuers and brokers and dealers, as appropriate</quote>;</text> </paragraph>
<paragraph id="HE082FC0DC8264187A869CB59CBFB73CD"><enum>(3)</enum><text display-inline="yes-display-inline">in subsection (d), by inserting at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H49A2D71F35D4445AB7FD066B35802181" style="OLC">
<paragraph id="HA09535EC98EE4DE4896842B63EE5AA65"><enum>(3)</enum><header>Brokers and dealers</header><text display-inline="yes-display-inline">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.</text> </paragraph><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H74CC4B763587465FBFB45138A283EE1D"><enum>(4)</enum><text>by redesignating subsections (h), (i), and (j) as subsections (i), (j), and (k), respectively; and</text> </paragraph>
<paragraph id="H8B676BCBBEE44F459FDDA377F2460C1C"><enum>(5)</enum><text>by inserting after subsection (g) the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H545D634C1CAF4016AEEA52E1FDEDDA22" style="OLC">
<subsection id="HEFC4BDC3E65E4E1EBF51E08AB9A2F11B"><enum>(h)</enum><header>Allocation of accounting support fees among brokers and dealers</header>
<paragraph id="H65303210F8E546DBA326DAF7195DC921"><enum>(1)</enum><header>In general</header><text>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.</text> </paragraph>
<paragraph id="HFFA42ABB66B24AF289C83CA5D8A2E386"><enum>(2)</enum><header>Obligation to pay</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection id="H2E97CA87D92E419E8BE0A4D7163DCD5E"><enum>(i)</enum><header>Referral of investigations to a self-regulatory organization</header><text>Section 105(b)(4)(B) of the Sarbanes-Oxley Act of 2002 is amended—</text>
<paragraph id="H472531AA0F3749E39442A7FDE4F57205"><enum>(1)</enum><text>by redesignating clauses (ii) and (iii) as clauses (iii) and (iv), respectively; and</text> </paragraph>
<paragraph id="H098E54639F574DFCB9B8CE9190F9566C"><enum>(2)</enum><text>by inserting after clause (i) the following new clause:</text>
<quoted-block display-inline="no-display-inline" id="H008F026CF8BC42B18AD5FB3AF8529FD4" style="OLC">
<clause id="HA36649FD3F3C4EA29958727546212B2F"><enum>(ii)</enum><text display-inline="yes-display-inline">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;</text> </clause><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection id="H63A2C0C382B64B79A465556C66F1197E"><enum>(j)</enum><header>Use of documents related to an inspection or investigation</header><text>Section 105(b)(5)(B)(ii) of such Act is amended—</text>
<paragraph id="HD81F4BE578A64D59B005F54406CDDC13"><enum>(1)</enum><text>in subclause (III), by striking <quote>and</quote>;</text> </paragraph>
<paragraph id="H6E820A9E52774B25B30609306F7A137D"><enum>(2)</enum><text>in subclause (IV), by striking the comma and inserting <quote>; and</quote>; and</text> </paragraph>
<paragraph id="H5F0DBD47ECF744E191D5A32DD4D47C40"><enum>(3)</enum><text>by inserting after subclause (IV) the following new subclause:</text>
<quoted-block display-inline="no-display-inline" id="H1BB5C81A8142426C9ED9B6F60E3B2B21" style="OLC">
<subclause id="H6EF10DAB104E498CA53CC65B383C399D"><enum>(V)</enum><text display-inline="yes-display-inline">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,</text> </subclause><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection></section>
<section id="H184CBB11E4D94B7AA06D348C9A714DA3"><enum>7602.</enum><header>Foreign regulatory information sharing</header>
<subsection id="H86A825ED110F471A9B89CC04C2C716D8"><enum>(a)</enum><header>Definition</header><text display-inline="yes-display-inline">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:</text>
<quoted-block display-inline="no-display-inline" id="HFE86B9A5F7A748FAA0766BC96D7BD436" style="OLC">
<paragraph id="HEE57ADC66D7548AB9E2460E2FFC1F0B8"><enum>(17)</enum><header>Foreign auditor oversight authority</header><text display-inline="yes-display-inline">The term <term>foreign auditor oversight authority</term> 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.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H299337EA5B604231B3831AFAB006DF60"><enum>(b)</enum><header>Availability To Share information</header><text>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:</text>
<quoted-block display-inline="no-display-inline" id="HA3967ACEB32A4B57B87BB914BF90E2CE" style="OLC">
<subparagraph id="HBF17F306C97C433489B44678E5D1FB8A"><enum>(C)</enum><header>Availability to foreign oversight authorities</header><text display-inline="yes-display-inline">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.</text> </subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H6E53E6300D764768BCB1A457CD2E42F0"><enum>(c)</enum><header>Conforming amendment</header><text display-inline="yes-display-inline">Section 105(b)(5)(A) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7215(b)(5)(A)) is amended by striking <quote>subparagraph (B)</quote> and inserting <quote>subparagraphs (B) and (C)</quote>.</text> </subsection></section>
<section id="HB6827BC52F7C4EA5AA0BD28EAE493ACD"><enum>7603.</enum><header>Expansion of audit information to be produced and exchanged with foreign counterparts</header><text display-inline="no-display-inline">Section 106 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7216) is amended—</text>
<paragraph id="HEE7B2FBFF3AA4BEDA6E2FB48887D5374"><enum>(1)</enum><text>by amending subsection (b) to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HD530C70F403147AD83C55761F9A47CF5" style="OLC">
<subsection id="H94D92178726A40869E881074CACF3F47"><enum>(b)</enum><header>Production of documents</header>
<paragraph id="H0FFDE8D9154D4480AC854DFA21CDA65A"><enum>(1)</enum><header>Production by foreign firms</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H2DD0C3D4E9544ACEA9B5BCC194ABA1FF"><enum>(2)</enum><header>Other production</header><text display-inline="yes-display-inline">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—</text>
<subparagraph id="H1395CD8E17C747F8AF063D22F92CA1D3"><enum>(A)</enum><text>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</text> </subparagraph>
<subparagraph id="H0E5FEAC2E32343C4A7F0F1DF7E899387"><enum>(B)</enum><text>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.</text> </subparagraph></paragraph></subsection><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H6A84DB0BB4A24911BC6D82A39FC4C81F"><enum>(2)</enum><text display-inline="yes-display-inline">by redesignating subsection (d) as subsection (g); and</text> </paragraph>
<paragraph id="H55EFF12EFE3749FA8B17A96D26B3F1D8"><enum>(3)</enum><text>by inserting after subsection (c) the following new subsections:</text>
<quoted-block display-inline="no-display-inline" id="H8FBD86A93F584742BEC93D8CD5FE1624" style="OLC">
<subsection id="H169C1CFB31B04E3FABD75FC340E5A2DD"><enum>(d)</enum><header>Service of requests or process</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="HD6D0D896AE1246B5A36749D16B1CBC14"><enum>(e)</enum><header>Sanctions</header><text>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.</text> </subsection>
<subsection id="H46B499EDA063416CBAFB4FD0C0046B05"><enum>(f)</enum><header>Other means of satisfying production obligations</header><text display-inline="yes-display-inline">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.</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></section>
<section id="H93557098E1054807A3B34B216107B906"><enum>7604.</enum><header>Conforming amendment related to registration</header><text display-inline="no-display-inline">Section 102(b)(3)(A) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7212(b)(3)(A)) is amended by striking <quote>by the Board</quote> and inserting <quote>by the Commission or the Board</quote>.</text> </section>
<section id="H2E78C379B0CA4A0DB16B17E1EF98124E"><enum>7605.</enum><header>Fair fund amendments</header><text display-inline="no-display-inline">Section 308 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7246(a)) is amended—</text>
<paragraph id="H68C0BDA4B34F45FB8B62A2736A6A5ED4"><enum>(1)</enum><text>by amending subsection (a) to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HCC5919A18BD04118B93EE610CC23BD15" style="OLC">
<subsection id="H4AEE4C2A3CC54F26B4D4E5DAD2DA56FD"><enum>(a)</enum><header>Civil penalties to be used for the relief of victims</header><text display-inline="yes-display-inline">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.</text> </subsection><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph>
<paragraph id="HFB7E8B606CC64940A3DD01DAE69A1EFB"><enum>(2)</enum><text>in subsection (b), by—</text>
<subparagraph id="H421D9B6B8FAC412A98604AF0264217E4"><enum>(A)</enum><text>striking <quote>for a disgorgement fund described in subsection (a)</quote> and inserting <quote>for a disgorgement fund or other fund described in subsection (a)</quote>; and</text> </subparagraph>
<subparagraph id="HDE73B86443BF477FA9C2E702F8172F2A"><enum>(B)</enum><text>striking <quote>in the disgorgement fund</quote> and inserting <quote>in such fund</quote>; and</text> </subparagraph></paragraph>
<paragraph id="H8DDD70A3DE5846F2A9A53965290F4292"><enum>(3)</enum><text>by striking subsection (e).</text> </paragraph></section>
<section id="HD700AFCE8AB94B988D16B0DCCACB0C17"><enum>7606.</enum><header>Exemption for nonaccelerated filers</header>
<subsection id="H9754367E452546C79BF2DB832BB4CBEE"><enum>(a)</enum><header>Exemption</header><text display-inline="yes-display-inline">Section 404 of the Sarbanes-Oxley Act of 2002 is amended by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="H7E9F6A1B99F04F9980FAF93F3B1E05F2" style="OLC">
<subsection id="H0BDE923F7CA8450D99972EBC8971F198"><enum>(c)</enum><header>Exemption for smaller issuers</header><text display-inline="yes-display-inline">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).</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H75C3D00EF8CD45E1B672D8A59120E2D5"><enum>(b)</enum><header>Study</header><text display-inline="yes-display-inline">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.</text> </subsection></section>
<section id="HA3765333226D44EE82BCF556D1D06929"><enum>7607.</enum><header>Whistleblower protection against retaliation by a subsidiary of an issuer</header><text display-inline="no-display-inline">Section 1514A(a) of title 18, United States Code, is amended by inserting <quote>including any subsidiary or affiliate whose financial information is included in the consolidated financial statements of such company,</quote> after <quote>(15 U.S.C. 78o(d)),</quote>.</text> </section>
<section id="H32DFF7CED9674051B7EBFC05C3816334"><enum>7608.</enum><header>Congressional access to information</header><text display-inline="no-display-inline">Section 101 of the Sarbanes-Oxley Act of 2002 is amended by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="HC03B01397A0D4E7E8AAAB18941985B4A" style="OLC">
<subsection id="H4B432A7C70404424AAFE557D65B045B4"><enum>(i)</enum><header>Congressional access to information</header><text display-inline="yes-display-inline">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).</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </section>
<section id="H713CDBC4C05D4B0FB4C31C2FBE85E278"><enum>7609.</enum><header>Creation of ombudsman for the PCAOB</header>
<subsection id="H491D875637E3449E81172D4CB1B2727B"><enum>(a)</enum><header>Ombudsman</header><text display-inline="yes-display-inline">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:</text>
<quoted-block display-inline="no-display-inline" id="H83F02D1668E74144BA595A222FADD768" style="OLC">
<section id="HD8651B6A0DAE47D89852142D6F8DEA4C"><enum>111.</enum><header>Ombudsman</header>
<subsection id="H747F6D078AD44E4987F1B80D83A604D5"><enum>(a)</enum><header>Establishment Required</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="HC3E17502E23343C7B756E3EBB3839893"><enum>(b)</enum><header>Duties of Ombudsman</header><text>The ombudsman appointed in accordance with subsection (a) for the Board shall—</text>
<paragraph id="H26B90E169697428AB0593156E02C01EA"><enum>(1)</enum><text>act as a liaison between the Board and—</text>
<subparagraph id="HF23C8ADAC3904C0E866BB84DFE2A73F2"><enum>(A)</enum><text>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</text> </subparagraph>
<subparagraph id="H7E0DE8814C404DACBF3A95347438F404"><enum>(B)</enum><text>any affected registered public accounting firm or issuer with respect to—</text>
<clause id="H85581DCF32DE474DBFA296DED06BECDB"><enum>(i)</enum><text>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</text> </clause>
<clause id="H623EB0087CCC4AAE83D2ED7F1E45ECFB"><enum>(ii)</enum><text>issues caused by the relationships of registered public accounting firms and issuers generally; </text> </clause></subparagraph></paragraph>
<paragraph id="H82D15A05B70A402DBB21CA8C4DFFF17A"><enum>(2)</enum><text>assure that safeguards exist to encourage complainants to come forward and to preserve confidentiality; and</text> </paragraph>
<paragraph id="H55C029EFF7404F20B00FD53F9511F181"><enum>(3)</enum><text>carry out such activities, and any other activities assigned by the Board, in accordance with guidelines prescribed by the Board.</text> </paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H180C46DFA74B4BE5850B107582D3FE7B"><enum>(b)</enum><header>Conforming amendment</header><text>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:</text>
<quoted-block display-inline="no-display-inline" id="HD2CDED0C1FE44D6493106F9981AB29DE" style="OLC">
<toc regeneration="no-regeneration">
<toc-entry level="section">Sec. 111. Ombudsman.</toc-entry> </toc> <after-quoted-block>.</after-quoted-block></quoted-block> </subsection></section>
<section id="H5E04C2E67E3F453D8E68E6B7E6728AA9"><enum>7610.</enum><header>Auditing Oversight Board</header><text display-inline="no-display-inline">The Sarbanes-Oxley Act of 2002 is amended—</text>
<paragraph id="H8E5D4BCB3B164F6FA59C59B93FFC559F"><enum>(1)</enum><text>in section 2(a)(5), by striking <quote>Public Company Accounting Oversight Board</quote> and inserting <quote>Auditing Oversight Board</quote>;</text> </paragraph>
<paragraph id="H88EF1431FF3349C5BB929CD4FFB25EBA"><enum>(2)</enum><text display-inline="yes-display-inline">in section 101(a), by striking <quote>Public Company Accounting Oversight Board</quote> and inserting <quote>Auditing Oversight Board</quote>; and</text> </paragraph>
<paragraph id="HB1B66AB04651476C9D16566AAF19F0BD"><enum>(3)</enum><text display-inline="yes-display-inline">in the heading of title I, by striking <quote><header-in-text level="title" style="OLC">Public Company Accounting Oversight Board</header-in-text></quote> and inserting <quote><header-in-text level="title" style="OLC">Auditing Oversight Board</header-in-text></quote>.</text> </paragraph></section></part>
<part id="H8FD89CD500A34E538ED1EB0270935FD2"><enum>7</enum><header>Senior Investment Protection</header>
<section id="HEE4F8BADAC6E4BF3A390A8854BBA4D8F"><enum>7701.</enum><header>Findings</header><text display-inline="no-display-inline">Congress finds that—</text>
<paragraph id="HD1EAE964A6F14C178584A59B9A81289C"><enum>(1)</enum><text>many seniors are targeted by salespersons and advisers using misleading certifications and professional designations;</text> </paragraph>
<paragraph id="H33110970D3884A5C8523AC9413A94FFF"><enum>(2)</enum><text>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;</text> </paragraph>
<paragraph id="H4E9461A2924646E693D152778167FFA5"><enum>(3)</enum><text>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;</text> </paragraph>
<paragraph id="HDE5847099B5B4B2B9E9AC2F3303E6BAE"><enum>(4)</enum><text>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</text> </paragraph>
<paragraph id="H7EDC9A06198543A7A3A8A15F68D4FC30"><enum>(5)</enum><text>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.</text> </paragraph></section>
<section id="H91559D7FD19640F4B1D3A5AF0A280140"><enum>7702.</enum><header>Definitions</header><text display-inline="no-display-inline">For purposes of this part:</text>
<paragraph id="HBBD8563A3C9F4CE6A898FCD64163D6EA"><enum>(1)</enum><header>Misleading designation</header><text>The term <term>misleading designation</term>—</text>
<subparagraph id="HA0DDF50E52B94377991EB4576FA862D3"><enum>(A)</enum><text>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</text> </subparagraph>
<subparagraph id="HCEC48C804E824B8D8DB13EF6132058E9"><enum>(B)</enum><text>does not include any legitimate certification, professional designation, license, or other credential, if—</text>
<clause id="H424649B7FCF54892A4AD18A33327D3B7"><enum>(i)</enum><text>it has been offered by an academic institution having regional accreditation; or</text> </clause>
<clause id="H21DBD213761640C382F01E401767A9A4"><enum>(ii)</enum><text display-inline="yes-display-inline">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 <quote>NASAA</quote>) 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.</text> </clause></subparagraph></paragraph>
<paragraph id="H62BF0BF8E352493C8BFF2207937FE356"><enum>(2)</enum><header>Financial product</header><text>The term <term>financial product</term> means securities, insurance products (including insurance products which pay a return, whether fixed or variable), and bank and loan products.</text> </paragraph>
<paragraph id="H14571463EE3548B18199C5DD60F6BEB2"><enum>(3)</enum><header>Misleading or fraudulent marketing</header><text>The term <term>misleading or fraudulent marketing</term> means the use of a misleading designation when selling to or advising a senior about the sale of a financial product.</text> </paragraph>
<paragraph id="HDDC7F07E7EDC42129D69DCCF464AC23E"><enum>(4)</enum><header>Senior</header><text>The term <term>senior</term> means any individual who has attained the age of 62 years or more.</text> </paragraph>
<paragraph id="H771DD44011474A8B9DBDE65C43904750"><enum>(5)</enum><header>State</header><text>The term <term>State</term> means each of the 50 States, the District of Columbia, and the unincorporated territories of Puerto Rico and the U.S. Virgin Islands.</text> </paragraph></section>
<section id="H8B0375829DC44226ACBA139802DF6F08"><enum>7703.</enum><header>Grants to States for enhanced protection of seniors from being misled by false designations</header>
<subsection id="HA19660CEDECA4AF8A61300C01DEDD36F"><enum>(a)</enum><header>Grant program</header><text>The Securities and Exchange Commission (in this part referred to as the <term>Commission</term>)—</text>
<paragraph id="HC6318F6DBD914EFCB129B58BBCD58331"><enum>(1)</enum><text>shall establish a program in accordance with this part to provide grants to States—</text>
<subparagraph id="HB266F6B7359B415F83810A9F151F5E50"><enum>(A)</enum><text>to investigate and prosecute misleading and fraudulent marketing practices; or</text> </subparagraph>
<subparagraph id="H89F24EE53EB447EB8CDB9140AE52E442"><enum>(B)</enum><text>to develop educational materials and training aimed at reducing misleading and fraudulent marketing of financial products toward seniors; and</text> </subparagraph></paragraph>
<paragraph id="H7FB9E2EC36A6431D9CACC79AB9321C63"><enum>(2)</enum><text>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.</text> </paragraph></subsection>
<subsection id="H8A53C6BDFD9B47139AD9B004A575E18C"><enum>(b)</enum><header>Use of grant amounts</header><text>A grant under this part may be used (including through subgrants) by the State or the appropriate State agency designated by the State—</text>
<paragraph id="HFE1FDAB5E11A4893A5EE3BA6BB713BDE"><enum>(1)</enum><text>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;</text> </paragraph>
<paragraph id="H7A891B94E8E842EC8D5E21C963B385B5"><enum>(2)</enum><text>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;</text> </paragraph>
<paragraph id="HA2E0E04993D94BF08D02717FA9A3CDA6"><enum>(3)</enum><text>to fund technology, equipment, and training for prosecutors to increase the successful prosecution of those targeting seniors with the use of misleading designations;</text> </paragraph>
<paragraph id="H5C0B00D3BAF3428CBC5E709524BAAB9A"><enum>(4)</enum><text>to provide educational materials and training to regulators on the appropriateness of the use of designations by salespersons and advisers of financial products;</text> </paragraph>
<paragraph id="H23E470F889324C3BBBDD591B5B6B55C8"><enum>(5)</enum><text>to provide educational materials and training to seniors to increase their awareness and understanding of designations; and</text> </paragraph>
<paragraph id="H95FB061973F64DEFBCF2B9E1D6285A3C"><enum>(6)</enum><text>to develop comprehensive plans to combat misleading or fraudulent marketing of financial products to seniors.</text> </paragraph></subsection>
<subsection id="H1754E774018A40689D9259B7DBAF6D23"><enum>(c)</enum><header>Grant requirements</header>
<paragraph id="H03987910C69249B8AC910CADE43DD875"><enum>(1)</enum><header>Maximum</header><text>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—</text>
<subparagraph id="HC3EC4BFB99B7432692E77BAB815BD467"><enum>(A)</enum><text>paragraphs (2) and (3), but not each of paragraphs (4) and (5); or</text> </subparagraph>
<subparagraph id="H2E733B692FDC477EA5F5367C16A8DEB3"><enum>(B)</enum><text>paragraphs (4) and (5), but not each of paragraphs (2) and (3).</text> </subparagraph></paragraph>
<paragraph id="HE255C35D641244828FD313773E7A6D8F"><enum>(2)</enum><header>Standard designation rules for securities</header><text>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.</text> </paragraph>
<paragraph id="H9BE83B50C0C64B7C86922090E3945D2B"><enum>(3)</enum><header>Suitability rules for securities</header><text>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).</text></paragraph>
<paragraph id="H7F383CC8E327488394DCEFBF6D02574A" display-inline="no-display-inline"><enum>(4)</enum><header>Application of fiduciary duty for personalized investment advice about securities</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H165370F2AECF42779381D01FD43B373C"><enum>(5)</enum><header>Standard designation rules for insurance products</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HC870BBAD3EF84D129E797FB2E9708D1C"><enum>(6)</enum><header>Suitability and supervision rules for annuity products</header><text display-inline="yes-display-inline">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.</text></paragraph> </subsection></section>
<section id="H6C5DBD151F5749DEA9B01CC63012C987"><enum>7704.</enum><header>Applications</header><text display-inline="no-display-inline">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—</text>
<paragraph id="HA7AE41D44BBE444AB1F590426A19C74E"><enum>(1)</enum><text>identify the scope of the problem;</text> </paragraph>
<paragraph id="H25E440B523014381BA87CD091E82ADAE"><enum>(2)</enum><text>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—</text>
<subparagraph id="H28DDCEF792BD4BA4AA733D88AB9A86F1"><enum>(A)</enum><text display-inline="yes-display-inline">by proactively identifying seniors who are victims of misleading and fraudulent marketing in the offer and sale of financial products;</text> </subparagraph>
<subparagraph id="H0A4E54C3AB1443B98641AD6A1D7D5271"><enum>(B)</enum><text>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</text> </subparagraph>
<subparagraph id="H439A667ED4C6441A9F1425E97DEFE9E3"><enum>(C)</enum><text>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</text> </subparagraph></paragraph>
<paragraph id="H4FBDA571F89A485EB3314386FF1530CF"><enum>(3)</enum><text>describe how the proposed program is to be integrated with other existing State efforts.</text> </paragraph></section>
<section id="H4391158D7FBA450CA73745B2847582BD"><enum>7705.</enum><header>Length of participation</header><text display-inline="no-display-inline">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.</text> </section>
<section id="H0F51ED9A4AD349798E2F6C43E2C154EE"><enum>7706.</enum><header>Authorization of appropriations</header><text display-inline="no-display-inline">There are authorized to be appropriated to carry out this part, $16,000,000 for each of the fiscal years 2011 through 2015.</text> </section></part>
<part id="HB58FAE7D6E0F4460BB2C269F05463A30"><enum>8</enum><header>Registration of Municipal Financial Advisors</header>
<section id="H9B0254BA9F4C45378DFD3EC1B3DFBD0B"><enum>7801.</enum><header>Municipal financial adviser registration requirement</header>
<subsection id="H08B57BE015804804820DD2250EFCF296"><enum>(a)</enum><header>In general</header><text>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:</text>
<quoted-block id="HEA239540E765476494C9661F1ACD871E" style="OLC">
<section id="HDF5549BFCE4B46C99FAE6FB4C9DE9A11"><enum>15G.</enum><header>Municipal financial adviser registration requirement</header>
<subsection id="HD7329E16B00C4ADD9EF880DB28F69B34"><enum>(a)</enum>
<paragraph commented="no" display-inline="yes-display-inline" id="HD0F78A91E892421EA8C1D8570C1B02AA"><enum>(1)</enum>
<subparagraph commented="no" display-inline="yes-display-inline" id="HCE81AE0EA1CC44749E1C5E98967927AD"><enum>(A)</enum><text display-inline="yes-display-inline">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).</text> </subparagraph>
<subparagraph id="HF38EF27044964FBAA053BE203323D5F2" indent="up2"><enum>(B)</enum><text display-inline="yes-display-inline">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.</text> </subparagraph></paragraph>
<paragraph id="H7697B517C8394CC38D990D95789BB304" indent="up1"><enum>(2)</enum><text>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.</text> </paragraph></subsection>
<subsection id="H4469D19AD9D847FBBEABC9408D6BC6DD"><enum>(b)</enum>
<paragraph commented="no" display-inline="yes-display-inline" id="HA2557D8A948041B8A689D9F80D37A6EC" changed="added" indent="paragraph"><enum>(1)</enum><text>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—</text>
<subparagraph id="H48D4B3F5C5A041D58602A0BD57D17221" indent="up2"><enum>(A)</enum><text>by order grant registration; or</text> </subparagraph>
<subparagraph id="H484AFF2044864D6B99756E84A2523EAF" indent="up2"><enum>(B)</enum><text>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.</text> </subparagraph><continuation-text continuation-text-level="subparagraph" indent="subparagraph" changed="added">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).</continuation-text></paragraph>
<paragraph id="H730964DA5C844929A758B24DA9A90D19" indent="up1"><enum>(2)</enum><text>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.</text> </paragraph>
<paragraph id="HB8FB8810E4BA41FEB83FAE824C7A144B" indent="up1"><enum>(3)</enum><text>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.</text> </paragraph>
<paragraph id="HD5C0867BE3DE4295A3A84377E1EBE9AC" indent="up1"><enum>(4)</enum><text>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—</text>
<subparagraph id="HAF999BE0B87442BFAC62A7D7E7AD2E72"><enum>(A)</enum><text>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;</text> </subparagraph>
<subparagraph id="H08560CA3AC34431CB152FB409DFC0D27"><enum>(B)</enum><text>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—</text>
<clause id="H7F15EDE2DF094BABA84E4BE5934B9BC2"><enum>(i)</enum><text>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;</text> </clause>
<clause id="HB0046805C91B4109A644FEC0C13A32FE"><enum>(ii)</enum><text>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;</text> </clause>
<clause id="H601940711E164F9096930B19E70986DD"><enum>(iii)</enum><text>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</text> </clause>
<clause id="HCBA46BC00EC441D99E2BE3DF1316D722"><enum>(iv)</enum><text display-inline="yes-display-inline">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;</text> </clause></subparagraph>
<subparagraph id="H8B1845212D7A4149B5DE10158E3DDF6C"><enum>(C)</enum><text>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;</text> </subparagraph>
<subparagraph id="H4C3F4C5E01A34A218EAC901214239F63"><enum>(D)</enum><text display-inline="yes-display-inline">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;</text> </subparagraph>
<subparagraph id="HBA499C83AF334982B497ED1BE7FD5646"><enum>(E)</enum><text display-inline="yes-display-inline">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—</text>
<clause id="H44C8E8EC0D15474F939398F210A4106F"><enum>(i)</enum><text>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</text> </clause>
<clause id="H2255499520424759A869AB817F2A0DFF"><enum>(ii)</enum><text>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;</text> </clause></subparagraph>
<subparagraph id="H6B844E550BE9407CBE5B138691A67097"><enum>(F)</enum><text>is subject to any order of the Commission barring or suspending the right of the person to be associated with a municipal financial adviser;</text> </subparagraph>
<subparagraph id="H2B39BB5E47654F62B47DD74289DA84F6"><enum>(G)</enum><text>has been found by a foreign financial regulatory authority to have—</text>
<clause id="HA258B4613EEB4FD7AD2BCF17E475F2A0"><enum>(i)</enum><text>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;</text> </clause>
<clause id="H5560CD587FD34074AD27D01F2C32FD50"><enum>(ii)</enum><text>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</text> </clause>
<clause id="H42B538C758184DDB9F0DB8EE2C84743D"><enum>(iii)</enum><text>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</text> </clause></subparagraph>
<subparagraph id="H9DA05200A2364637B7C658096D319657"><enum>(H)</enum><text>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—</text>
<clause id="H03236AD885C5435BBF39ED02B7BC74A3"><enum>(i)</enum><text>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</text> </clause>
<clause id="H28B16CB6089C4E1AACD232073A15B784"><enum>(ii)</enum><text>constitutes a final order based on violations of any laws or regulations that prohibit fraudulent, manipulative, or deceptive conduct.</text> </clause></subparagraph></paragraph>
<paragraph id="H4E7D691040B046DB805D1BD08BE3735D" indent="up1"><enum>(5)</enum><text>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.</text> </paragraph>
<paragraph id="H13DF85E8294A4950977B3874B9390F24" indent="up1"><enum>(6)</enum>
<subparagraph commented="no" display-inline="yes-display-inline" id="H0C7A028C3AAB44D8B878CF53F274470F"><enum>(A)</enum><text display-inline="yes-display-inline">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—</text>
<clause id="H3323FBA8D17F48DF94BDED18578ACA64" indent="up1"><enum>(i)</enum><text display-inline="yes-display-inline">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;</text> </clause>
<clause id="H25C777E30EA2438F9983BD9C2B2293E5" indent="up1"><enum>(ii)</enum><text>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</text> </clause>
<clause id="H7B590F074AFB43C8B52BA132BB63FEBC" indent="up1"><enum>(iii)</enum><text>is enjoined from any action, conduct, or practice specified in subparagraph (C) of such paragraph (4).</text> </clause></subparagraph>
<subparagraph id="H7FEA8F10038D4A1C8C8C0EDB722B7CC0" indent="up1"><enum>(B)</enum><text>It shall be unlawful—</text>
<clause id="H997E76457290432A808FE161055C2BA1"><enum>(i)</enum><text>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</text> </clause>
<clause id="H4C3825E5EAD34035B33787A34B163DF1"><enum>(ii)</enum><text>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.</text> </clause></subparagraph></paragraph>
<paragraph id="H58840404C2A1443A93B6C0BB1AA9F60F" indent="up1"><enum>(7)</enum><text>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—</text>
<subparagraph id="HFDB9B13A2BCC433393644597770322B6"><enum>(A)</enum><text>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;</text> </subparagraph>
<subparagraph id="H3659A0417B5844F58ED7D3736A2AF096"><enum>(B)</enum><text>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</text> </subparagraph>
<subparagraph id="HC77360DEF1C04B53A6F861634FA7A7BB"><enum>(C)</enum><text>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.</text> </subparagraph><continuation-text continuation-text-level="paragraph">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.</continuation-text></paragraph></subsection>
<subsection id="H5D8539601FC54E88B2D4BB0D788C3D12"><enum>(c)</enum>
<paragraph commented="no" display-inline="yes-display-inline" id="H2DDD6FB6624F44ECB1095C8A019A606D"><enum>(1)</enum>
<subparagraph commented="no" display-inline="yes-display-inline" id="HAEC6465A813C4B3A95764A928D336E98"><enum>(A)</enum><text>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.</text> </subparagraph>
<subparagraph id="HC526C3C3CC1E4657BEBF04383AF385E8" indent="up2"><enum>(B)</enum><text>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.</text> </subparagraph></paragraph>
<paragraph id="H5D060CF32AE245B2ABACBA0B77391650" indent="up1"><enum>(2)</enum><text>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.</text> </paragraph></subsection>
<subsection id="H0845ABAE62E94C0DB1BAB07C9BD0BEB3"><enum>(d)</enum><text>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.</text> </subsection>
<subsection id="HC45FD7EB8BC44F31BFED958673DA3F56"><enum>(e)</enum><text>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.</text> </subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H9E288C84B6DC4405BE4ACF44F710B092"><enum>(b)</enum><header>Definition</header><text>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:</text>
<quoted-block id="H0FFCA1086701449AA21E9D95D5FA5C23" style="OLC">
<paragraph id="H67CEB20A2D0043A8832939AD7CA258C6"><enum>(78)</enum><header>Municipal financial adviser</header>
<subparagraph id="H9FA4B30E800C489895E36E50CEE2CFBC"><enum>(A)</enum><text>The term <quote>municipal financial adviser</quote> means a person who, for compensation, engages in the business of—</text>
<clause id="HDC75DC18F7204AF6B4A9651C5820F7A0"><enum>(i)</enum><text>providing advice to a municipal securities issuer with respect to—</text>
<subclause id="HA10A29120C734F86BA0B774578B8F4E7"><enum>(I)</enum><text>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;</text> </subclause>
<subclause id="H001C66C2A3D74DA7B4E2465DC2D21FF3"><enum>(II)</enum><text>the investment of proceeds from securities issued by such municipal securities issuer;</text> </subclause>
<subclause id="H30D898C891C844F1B152891808F36605"><enum>(III)</enum><text>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</text> </subclause>
<subclause id="H034D01BE86804305977096C8796D3A93"><enum>(IV)</enum><text display-inline="yes-display-inline">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;</text> </subclause></clause>
<clause id="HF818551AF2D9484EBAE418C8009D208A"><enum>(ii)</enum><text>assisting a municipal securities issuer in selecting or negotiating guaranteed investment contracts or other investment products; or</text> </clause>
<clause id="H5B93BC35D2574573970A3752143F38B6"><enum>(iii)</enum><text>assisting any municipal securities issuer in the primary offering of securities not involving a public offering.</text> </clause></subparagraph>
<subparagraph id="H73705D3B5249415C902D5433F66761DB"><enum>(B)</enum><text>Such term does not include—</text>
<clause id="H721E010C14DD40A19A229F6DFF70F0F4"><enum>(i)</enum><text>an attorney, if the attorney is offering advice or providing services that are of a traditional legal nature;</text> </clause>
<clause id="H7CD80AED3493431580BA1C7237E244A0"><enum>(ii)</enum><text>a nationally recognized statistical rating organization to the extent it is involved in the process of developing credit ratings;</text> </clause>
<clause id="H057798941DFD4F3084E392E6180CFCDE"><enum>(iii)</enum><text>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)); </text> </clause>
<clause id="HB9E6EA905D734B988F3A4B49EFD2B6C0"><enum>(iv)</enum><text>a State or any political subdivision thereof; or</text></clause>
<clause id="HD33F785C634B424BB71D23C0E8312C90"><enum>(v)</enum><text display-inline="yes-display-inline">the independent accountant that audits the financial statements of the municipal securities issuer. </text> </clause></subparagraph></paragraph>
<paragraph id="H9337E7B556F545CEB546B4731D5C00C2"><enum>(79)</enum><header>Municipal securities issuer</header><text>The term <quote>municipal securities issuer</quote> means—</text>
<subparagraph id="H0E2AFD4BA14048569CBB37BAD536A770"><enum>(A)</enum><text>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</text> </subparagraph>
<subparagraph id="H3643CCD7EA3E42C9B2F93BC048174F78"><enum>(B)</enum><text>any person who receives the proceeds generated from the issuance of municipal securities.</text> </subparagraph></paragraph>
<paragraph id="H6DB7A1CB504F44FABAC14A0DA5561A92"><enum>(80)</enum><header>Person associated with a municipal financial adviser; associated person of a municipal financial adviser</header><text>The term <quote>person associated with a municipal financial adviser</quote> or <quote>associated person of a municipal financial adviser</quote> 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).</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection></section>
<section commented="no" id="HBB3E18EEAEEB4AE4AB564AA19486CDD4"><enum>7802.</enum><header>Conforming amendments</header>
<subsection id="HF495B487FD2D445EAF92A7A6A6B04584"><enum>(a)</enum><header>Securities Exchange Act of 1934 </header><text>The Securities Exchange Act of 1934 is amended—</text>
<paragraph id="H01E046A6CAC244219F10369279D20DFA"><enum>(1)</enum><text>in section 15(b)(4)(B)(ii) (15 U.S.C. 78o(b)(4)(B)(ii)), by inserting <quote>municipal finance adviser,</quote> after <quote>nationally recognized statistical rating organization,</quote>;</text> </paragraph>
<paragraph id="HB70B8CECD01743D4982569D9E31BE005"><enum>(2)</enum><text>in section 15(b)(4)(C) (15 U.S.C. 78o(b)(4)(C)), by inserting <quote>municipal finance adviser,</quote> after <quote>nationally recognized statistical rating organization,</quote>; and</text> </paragraph>
<paragraph id="HC41F8E9975F04C40ADC3DEEBBA5A8309"><enum>(3)</enum><text>in section 17(a)(1) (15 U.S.C. 78q(a)(1)), by inserting <quote>registered municipal financial adviser,</quote> after <quote>nationally recognized statistical rating organization,</quote>.</text> </paragraph></subsection>
<subsection commented="no" id="H7F52EF59D73E481791ECC353CEED9D79"><enum>(b)</enum><header>Investment Company Act of 1940</header><text display-inline="yes-display-inline">The Investment Company Act of 1940 is amended—</text>
<paragraph commented="no" id="H28C5E955BEA54EE0B82A7730BC4E320C"><enum>(1)</enum><text>in section 2(a) (15 U.S.C. 80a–2(a)), by inserting at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="HD45B1E6351F64971BBC3F8C3D5E43512" style="OLC">
<paragraph commented="no" id="HAFCCC5245BA749F49BAB7DA5734E5252"><enum>(54)</enum><text display-inline="yes-display-inline">The term <quote>municipal finance adviser</quote> has the same meaning as in section 3 of the Securities Exchange Act of 1934.</text> </paragraph><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph>
<paragraph commented="no" id="HAF8CB481DDB44A339EC9B7E5BCD51F75"><enum>(2)</enum><text>in section 9(a)(1) (15 U.S.C. 80a–9(a)(1)), by inserting <quote>municipal finance adviser,</quote> after <quote>credit rating agency,</quote>; and</text> </paragraph>
<paragraph commented="no" id="HB628AA45AD374BD6B784426D98E88AD9"><enum>(3)</enum><text>in section 9(a)(2) (15 U.S.C. 80a–9(a)(2)), by inserting <quote>municipal finance adviser,</quote> after <quote>credit rating agency,</quote>.</text> </paragraph></subsection>
<subsection commented="no" id="HF29C093AAB514D47B6BEC3A7998F8D31"><enum>(c)</enum><header>Investment Advisers Act of 1940</header><text display-inline="yes-display-inline">The Investment Advisers Act of 1940 is amended—</text>
<paragraph id="H3E9F336393DF4837B43178B2B4B7EDB1"><enum>(1)</enum><text>in section 202(a) (15 U.S.C. 80b–2(a)), by inserting at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H2854E6FB475F40338A2C0D6716DEE217" style="OLC">
<paragraph commented="no" id="H74AD676CFB334522A25EAB92C4340E7D"><enum>(31)</enum><text display-inline="yes-display-inline">The term <quote>municipal finance adviser</quote> has the same meaning as in section 3 of the Securities Exchange Act of 1934.</text> </paragraph><after-quoted-block>; </after-quoted-block></quoted-block> </paragraph>
<paragraph commented="no" id="H8A882CDF37A6478B9D4C194C0EFD54E9"><enum>(2)</enum><text>in section 203(e)(2)(B) (15 U.S.C. 80b–3(e)(2)(B)), by inserting <quote>municipal finance adviser,</quote> after <quote>credit rating agency,</quote>; and</text> </paragraph>
<paragraph commented="no" id="HD04545057C2A40468AFAFFB82C0D0A91"><enum>(3)</enum><text>in section 203(e)(4) (15 U.S.C. 80b–3(e)(4)) is amended by inserting <quote>municipal finance adviser,</quote> after <quote>credit rating agency,</quote>.</text> </paragraph></subsection></section>
<section id="H2662E5F80E674724A3A3848D81757338"><enum>7803.</enum><header>Effective dates</header>
<subsection id="H88A839242B04403599F1B0CD2E550D0D"><enum>(a)</enum><header>In general</header><text>The amendments made by this part shall take effect 30 days after the date of the enactment of this subtitle.</text> </subsection>
<subsection id="H5A73901FC1E34D7D853D68E5D5F9331E"><enum>(b)</enum><header>Effective date and requirements for regulations</header><text>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.</text> </subsection>
<subsection id="HB0DC8272DCB142B497CED7905B3E563E"><enum>(c)</enum><header>Registration date</header><text>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.</text> </subsection></section></part></subtitle>
<enum>VI</enum><header>Federal Insurance Office</header>
<section commented="no" id="HD1965BE40DA0499D8BC0BCAEF9D0EACA" section-type="subsequent-section"><enum>8001.</enum><header>Short title</header><text display-inline="no-display-inline">This title may be cited as the <quote><short-title>Federal Insurance Office Act of 2009</short-title></quote>.</text> </section>
<section id="HA1D11D923445426FA6CA7717E7C615B0"><enum>8002.</enum><header>Federal Insurance Office established</header>
<subsection id="HA5ACD3AA0FDD44B28CDAB0D5E0431E1D"><enum>(a)</enum><header>Establishment of Office</header><text>Subchapter I of chapter 3 of title 31, United States Code, is amended—</text>
<paragraph id="HC89037F3F3E449A383A84A8FC3AE76C1"><enum>(1)</enum><text>by transferring and inserting section 312 after section 313;</text> </paragraph>
<paragraph id="H30DEBC90493A455499AB033B3DB357F6"><enum>(2)</enum><text>by redesignating sections 313 and 312 (as so transferred) as sections 312 and 315, respectively; and</text> </paragraph>
<paragraph id="HE2CCF27EEF7B4830A43D002D44009CB5"><enum>(3)</enum><text>by inserting after section 312 (as so redesignated) the following new sections:</text>
<quoted-block id="HF7D4973D71594EEAA053B8216A8ACC19" style="OLC">
<section id="H0C46AEEEFE104B8487CE4F4031C169F5"><enum>313.</enum><header>Federal Insurance Office</header>
<subsection id="HACF7DD0D566F4F4DBB80E79234AFF96F"><enum>(a)</enum><header>Establishment of Office</header><text>There is established the Federal Insurance Office as an office in the Department of the Treasury.</text> </subsection>
<subsection id="H1E1D8303274B428A9079C90872BF50C8"><enum>(b)</enum><header>Leadership</header><text>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.</text> </subsection>
<subsection id="H1874420FAD404B50A1E3E71A9215C1FC"><enum>(c)</enum><header>Functions</header>
<paragraph id="H7A9BC094C6C34F5A9849416BEE975FE4"><enum>(1)</enum><header>Authority pursuant to direction of Secretary</header><text>The Office shall have the authority, pursuant to the direction of the Secretary, as follows:</text>
<subparagraph id="H89B8D5D619BF45D0A9EA5EC3D72ACFDF"><enum>(A)</enum><text display-inline="yes-display-inline">To monitor the insurance industry to gain expertise.</text> </subparagraph>
<subparagraph id="H5B3922E284A747A2A60AC2E5D5BD95BC"><enum>(B)</enum><text>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.</text> </subparagraph>
<subparagraph id="H70DF580F26614C4C896B3332153A9CA7" display-inline="no-display-inline"><enum>(C)</enum><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph commented="no" id="HC808FD80762B425A94E2FFD67EF76CA9"><enum>(D)</enum><text display-inline="yes-display-inline">To recommend to the Financial Services Oversight Council that it designate an insurer, including its affiliates, as an entity subject to stricter standards.</text> </subparagraph>
<subparagraph id="HB35A0D3B9A6D4BD585D1020070F17A54"><enum>(E)</enum><text>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).</text> </subparagraph>
<subparagraph id="HF32A9E4D2E1945A0B2B88E3D9B3FE616"><enum>(F)</enum><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="H4AE3D194DB1F4EE79F284240FEF65FED"><enum>(G)</enum><text>To determine, in accordance with subsection (f), whether State insurance measures are preempted by covered agreements.</text> </subparagraph>
<subparagraph id="HDE6D8C1444FD4CD6AAC1E8DFB645CDAF"><enum>(H)</enum><text>To consult with the States regarding insurance matters of national importance and prudential insurance matters of international importance.</text> </subparagraph>
<subparagraph id="H181E5DE154D64A319F566B62C3A90A64"><enum>(I)</enum><text>To perform such other related duties and authorities as may be assigned to it by the Secretary.</text> </subparagraph></paragraph>
<paragraph id="H22BC2F6B73DD4CCAB5E46211E1BCCC11"><enum>(2)</enum><header>Advisory functions</header><text>The Office shall advise the Secretary on major domestic and prudential international insurance policy issues.</text> </paragraph>
<paragraph id="H3517F20245164D688B1762DA753799CE"><enum>(3)</enum><header>Advisory capacity on council</header><text display-inline="yes-display-inline">The Director shall serve in an advisory capacity on the Financial Services Oversight Council established under the Financial Stability Improvement Act of 2009.</text></paragraph></subsection>
<subsection id="H600C6BD1B7144EE0900393A0357DDA52"><enum>(d)</enum><header>Scope</header><text display-inline="yes-display-inline">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).</text> </subsection>
<subsection id="HEC5836E7F2EA49E1A3AE5208A43F1D9E"><enum>(e)</enum><header>Gathering of information</header>
<paragraph id="HE1953C78415F4D289AA10413954D3F7E"><enum>(1)</enum><header>General</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HFB9C01A4926F47D09D193FF8A5486729"><enum>(2)</enum><header>Collection of information from insurers and affiliates</header><text display-inline="yes-display-inline">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 <quote>insurer</quote> means any entity that writes insurance or reinsures risks and issues contracts or policies in one or more States.</text> </paragraph>
<paragraph id="HB49B28086ED14353A9B04D5A6A4E6856"><enum>(3)</enum><header>Exception for small insurers</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H6262F66A28BC45B6AB1BB7B264206767"><enum>(4)</enum><header>Advance coordination</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="HC7AA3FA59F1F47F99010691B2049D3BE"><enum>(5)</enum><header>Confidentiality</header>
<subparagraph id="H23AA2FEC2F21402CA6E2F557CDABBE8B"><enum>(A)</enum><text>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.</text> </subparagraph>
<subparagraph id="HE239231E293F4A49ACB6A27BA33C35FB"><enum>(B)</enum><text>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.</text> </subparagraph>
<subparagraph id="H152483A4A55C474A9625477978BF005B"><enum>(C)</enum><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="HB050C89218FD4F36BFF2CBBB7DDD729A"><enum>(D)</enum><text display-inline="yes-display-inline">Section 552 of title 5, United States Code, shall apply to any data or information submitted by an insurer or affiliate of an insurer.</text> </subparagraph></paragraph></subsection>
<subsection id="H979112985B4A43F199C958C84A864245"><enum>(f)</enum><header>Preemption of State insurance measures</header>
<paragraph id="H552DEC38146E46E08729239364C18A08"><enum>(1)</enum><header>Standard</header><text>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—</text>
<subparagraph id="H478CE11D82264F5C8861961A63612AB5"><enum>(A)</enum><text>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</text> </subparagraph>
<subparagraph id="H63240C11BEF04B8989FE395A640204EB"><enum>(B)</enum><text>is inconsistent with a covered agreement that is entered into on a date after the date of the enactment of this Act.</text> </subparagraph></paragraph>
<paragraph id="H63B30FC98D0E4D298FD0AFAA71351F1A"><enum>(2)</enum><header>Determination</header>
<subparagraph id="H99FA3B5A41754C32B5F871DFBCBFF1DC"><enum>(A)</enum><header>Notice of potential inconsistency</header><text>Before making any determination of inconsistency, the Director shall—</text>
<clause id="HC518010FE322431C9651B850FF355FA2"><enum>(i)</enum><text display-inline="yes-display-inline">notify and consult with the appropriate State regarding any potential inconsistency or preemption;</text> </clause>
<clause id="H1890C9361B2C4D95ABF13C90FF8CF998"><enum>(ii)</enum><text display-inline="yes-display-inline">notify and consult with the United States Trade Representative regarding any potential inconsistency or preemption;</text> </clause>
<clause id="HBDFA88B16E584D2FAACB91195735906B"><enum>(iii)</enum><text>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;</text> </clause>
<clause id="H78171F63794B4266B62C44BCC0530420"><enum>(iv)</enum><text>provide interested parties a reasonable opportunity to submit written comments to the Office;</text> </clause>
<clause id="H18F84EA24CAA4E1A80E9CD2D757BDDAE"><enum>(v)</enum><text display-inline="yes-display-inline">consider the effect of preemption on—</text>
<subclause id="H29FC43C79A754953A1754C315AC81ECA"><enum>(I)</enum><text>the protection of policyholders and policy claimants;</text> </subclause>
<subclause id="HB0EC6A87691045A4A92C47C316656055"><enum>(II)</enum><text>the maintenance of the safety, soundness, integrity, and financial responsibility of any entity involved in the business of insurance or insurance operations;</text> </subclause>
<subclause id="H2FD7DDEF28DE43D6B54D6DAC37A4000F"><enum>(III)</enum><text>ensuring the integrity and stability of the United States financial system; and</text> </subclause>
<subclause id="H052362AE0F384B259662688455A5B522"><enum>(IV)</enum><text>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</text> </subclause></clause>
<clause id="HDBA6BF7B63F1493CB6C79C1F9F0C8AE7"><enum>(vi)</enum><text>consider any comments received.</text> </clause><continuation-text continuation-text-level="subparagraph">The Director shall provide the notifications required under clauses (i), (ii), and (iii) contemporaneously.</continuation-text></subparagraph>
<subparagraph id="H6CD4A58146BA4F65862E3F463F40D678"><enum>(B)</enum><header>Scope of review</header><text display-inline="yes-display-inline">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.</text> </subparagraph>
<subparagraph id="H9845525D532048388FE9C00499FC5A60"><enum>(C)</enum><header>Notice of determination of inconsistency</header><text>Upon making any determination of inconsistency, the Director shall—</text>
<clause id="HF23D4155F18B4F76A5D34D87DB16466D"><enum>(i)</enum><text>notify the appropriate State of the determination and the extent of the inconsistency;</text> </clause>
<clause id="HA5403FDF04884332BE69E71AD01E6120"><enum>(ii)</enum><text display-inline="yes-display-inline">establish a reasonable period of time, which shall not be shorter than 90 days, before the determination shall become effective; and</text> </clause>
<clause id="H9768E04A839D497CBB6B22F7787C8AFB"><enum>(iii)</enum><text>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.</text> </clause></subparagraph></paragraph>
<paragraph id="H33D648C6FF9B4A65A5DD017BF1D2816D"><enum>(3)</enum><header>Notice of effectiveness</header><text>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—</text>
<subparagraph id="HDD4F0A4DC33F4234BD0FD407184134B4"><enum>(A)</enum><text>cause to be published notice in the Federal Register that the preemption has become effective, as well as the effective date; and</text> </subparagraph>
<subparagraph id="H6449676D37E7453C8BBDEF71F2CE7A34"><enum>(B)</enum><text>notify the appropriate State.</text> </subparagraph></paragraph>
<paragraph id="H5376AE9F42C14AA8900727C091392B0D"><enum>(4)</enum><header>Limitation</header><text>No State may enforce a State insurance measure to the extent that it has been preempted under this subsection.</text> </paragraph></subsection>
<subsection id="H2347F20C0BF94CDAA93A27D01BAADB9D"><enum>(g)</enum><header>Applicability of Administrative Procedure Act</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="H0C4868364D714592BF5C7A49057CCFC0"><enum>(h)</enum><header>Regulations, policies, and procedures</header><text>The Secretary may issue orders, regulations, policies and procedures to implement this section.</text> </subsection>
<subsection id="H90ED5755A625416A87BA569173DFFA19"><enum>(i)</enum><header>Consultation</header><text>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.</text> </subsection>
<subsection id="H3E7AE34BEB064C6E900A4D88F24A9BC2"><enum>(j)</enum><header>Savings provisions</header><text>Nothing in this section shall—</text>
<paragraph id="H0E8DECEFF3A74D0A8BBBB8E61E6EFF25"><enum>(1)</enum><text>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;</text> </paragraph>
<paragraph display-inline="no-display-inline" id="H5BC3274755234C72BA8543FA08B60F0F"><enum>(2)</enum><text display-inline="yes-display-inline">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;</text> </paragraph>
<paragraph commented="no" id="H9883E66F8C8F4F94B266D02BE7EB292B"><enum>(3)</enum><text>be construed to alter, amend, or limit the responsibility of the Consumer Financial Protection Agency;</text> </paragraph>
<paragraph display-inline="no-display-inline" id="H8FACCD92EBBB48689AE6CE8A16D87210"><enum>(4)</enum><text display-inline="yes-display-inline">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</text> </paragraph>
<paragraph id="H6FABA42FB95D449AB57F09523CAC87E2"><enum>(5)</enum><text>affect the preemption of any State insurance measure otherwise inconsistent with and preempted by Federal law.</text> </paragraph></subsection>
<subsection id="H77EBDD8CCE144097997EF765C3755F30"><enum>(k)</enum><header>Retention of existing State regulatory authority</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection display-inline="no-display-inline" id="HA26ED3FE3E544621A3AADA8A3224A1B7"><enum>(l)</enum><header>Retention of authority of Federal financial regulatory agencies</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="H8782424590684CDE851DCFF4A6F88D63"><enum>(m)</enum><header>Retention of authority of United States Trade Representative</header><text display-inline="yes-display-inline">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.</text> </subsection>
<subsection id="H797D925E224F4D1FA379EDD5CEBBD96F"><enum>(n)</enum><header>Reports to Congress</header>
<paragraph id="H6852C70F27064DCDA40915F5556C3818"><enum>(1)</enum><header>Annual report</header><text display-inline="yes-display-inline">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).</text> </paragraph>
<paragraph id="H6007051270C24EFB8896FB45EDAD6B0C"><enum>(2)</enum><header>Other reports</header><text display-inline="yes-display-inline">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.</text> </paragraph></subsection>
<subsection id="H3261D5B630974C86884AD28BD245B81B"><enum>(o)</enum><header>Use of existing resources</header><text>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.</text> </subsection>
<subsection id="H124AB97323D1420C8BD9DAE03C6897D6"><enum>(p)</enum><header>Definitions</header><text>For purposes of this section and section 314, the following definitions shall apply:</text>
<paragraph id="H80B860EDAA564784971D02DA77EAB37B"><enum>(1)</enum><header>Affiliate</header><text>The term <quote>affiliate</quote> means, with respect to an insurer, any person that controls, is controlled by, or is under common control with the insurer.</text> </paragraph>
<paragraph display-inline="no-display-inline" id="HB6ADECA1535341F19A2A35822865799E"><enum>(2)</enum><header>Covered agreement</header><text display-inline="yes-display-inline">The term <quote>covered agreement</quote> means a written bilateral or multilateral recognition agreement that—</text>
<subparagraph id="HBCFD3E4DBA1446B88054F0210FEE24FC"><enum>(A)</enum><text>is entered into between the United States and one or more foreign governments, authorities, or regulatory entities; and</text> </subparagraph>
<subparagraph id="HCF47D6CC9B844F098DE73B85EE6AAC3F"><enum>(B)</enum><text>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.</text> </subparagraph></paragraph>
<paragraph id="H386676AE56184F098F384C4CA114E3EB"><enum>(3)</enum><header>Determination of inconsistency</header><text>The term <quote>determination of inconsistency</quote> means a determination that a State insurance measure is preempted under subsection (f).</text> </paragraph>
<paragraph commented="no" display-inline="no-display-inline" id="HD59AB0CA7F9D4A69A2100B35E0083F17"><enum>(4)</enum><header>Federal financial regulatory agency</header><text display-inline="yes-display-inline">The term <quote>Federal financial regulatory agency</quote> 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.</text> </paragraph>
<paragraph id="H0250D4D792D1423EB92B12D2B58D29EF"><enum>(5)</enum><header>Insurer</header><text>The term <quote>insurer</quote> means any person engaged in the business of insurance, including reinsurance.</text> </paragraph>
<paragraph id="HFF4A20E067DC4006B1320C1E5EBEC0BF"><enum>(6)</enum><header>Non-united states insurer</header><text>The term <quote>non-United States insurer</quote> 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.</text> </paragraph>
<paragraph id="HAB98F7A3D630456286288FCFFDA22F20"><enum>(7)</enum><header>Office</header><text>The term <quote>Office</quote> means the Federal Insurance Office established by this section.</text> </paragraph>
<paragraph id="HFD0CE6799CA1462991FD557BD9221C07"><enum>(8)</enum><header>Secretary</header><text>The term <quote>Secretary</quote> means the Secretary of the Treasury.</text> </paragraph>
<paragraph id="HFB43615CB6084127958AFD4DB6F1F429"><enum>(9)</enum><header>State</header><text>The term <quote>State</quote> 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.</text> </paragraph>
<paragraph id="H495E194679454E1684CDC96D6F653431"><enum>(10)</enum><header>State insurance measure</header><text>The term <quote>State insurance measure</quote> means any State law, regulation, administrative ruling, bulletin, guideline, or practice relating to or affecting prudential measures applicable to insurance or reinsurance.</text> </paragraph>
<paragraph id="HB6DEACF09D6A4761B80938781430CB8D"><enum>(11)</enum><header>State insurance regulator</header><text>The term <quote>State insurance regulator</quote> means any State regulatory authority responsible for the supervision of insurers.</text> </paragraph>
<paragraph id="H540E394723214EE886ACC2863A3BA331"><enum>(12)</enum><header>United states insurer</header><text>The term <quote>United States insurer</quote> means—</text>
<subparagraph id="H3BCA63CB251A4266BE96F72191834C56"><enum>(A)</enum><text>an insurer that is organized under the laws of a State; or</text> </subparagraph>
<subparagraph id="HDAC3E9C26AC94AE9B3C35BE4A773F03D"><enum>(B)</enum><text>a United States branch of a non-United States insurer.</text> </subparagraph></paragraph></subsection>
<subsection id="HD7B545FB1E144391A2A2553BD6C80F2D"><enum>(q)</enum><header>Authorization of appropriations</header><text>There are authorized to be appropriated for the Office such sums as may be necessary for each fiscal year.</text> </subsection></section>
<section display-inline="no-display-inline" id="H12BCE20DD6C7481789F2E018067A941B" section-type="subsequent-section"><enum>314.</enum><header>Covered agreements</header>
<subsection id="H1A47538621FD4725BEE5E4CFE6ECD570"><enum>(a)</enum><header>Authority</header><text display-inline="yes-display-inline">The Secretary and the United States Trade Representative are authorized, jointly, to negotiate and enter into covered agreements on behalf of the United States.</text> </subsection>
<subsection display-inline="no-display-inline" id="H92C34FD0687E44ED940958962DC62858"><enum>(b)</enum><header>Requirements for consultation with Congress</header>
<paragraph id="HE592E516C1FC46E8A3778F21F86F400A"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text> </paragraph>
<paragraph id="H24263BFBC7E24239B8B0714FFFC1ADEA"><enum>(2)</enum><header>Scope</header><text>The consultation described in paragraph (1) shall include consultation with respect to—</text>
<subparagraph id="HF85FB715230F427E8006D56CCACE975A"><enum>(A)</enum><text>the nature of the agreement;</text> </subparagraph>
<subparagraph id="H771561F4595744098CFC89644B9EEFE1"><enum>(B)</enum><text>how and to what extent the agreement will achieve the applicable purposes, policies, priorities, and objectives of section 313 and this section; and</text> </subparagraph>
<subparagraph id="HB68B805830404440A203E8ECDE32D233"><enum>(C)</enum><text>the implementation of the agreement, including the general effect of the agreement on existing State laws.</text> </subparagraph></paragraph></subsection>
<subsection id="HFF43617185B8417E9654DD1BAE64AF86"><enum>(c)</enum><header>Submission and layover provisions</header><text display-inline="yes-display-inline">A covered agreement under subsection (a) may enter into force with respect to the United States only if—</text>
<paragraph id="H4A4664FFE4814578919640199526E828"><enum>(1)</enum><text display-inline="yes-display-inline">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</text> </paragraph>
<paragraph id="HADD4780ADB734233A090CDB336FA7DDA"><enum>(2)</enum><text>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.</text> </paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection id="HE6878F07E8624CF08EEF9A4BD524962C"><enum>(b)</enum><header>Duties of Secretary</header><text>Section 321(a) of title 31, United States Code, is amended—</text>
<paragraph id="HABF174FA3B2641B8B9361B6C2A960A52"><enum>(1)</enum><text>in paragraph (7), by striking <quote>and</quote> at the end;</text> </paragraph>
<paragraph id="HD29E526C5BCE491F863492EB681A087E"><enum>(2)</enum><text>in paragraph (8)(C), by striking the period at the end and inserting <quote>; and</quote>; and</text> </paragraph>
<paragraph id="H37C0DDFF0A5B43758698C6939E7ADFEA"><enum>(3)</enum><text>by adding at the end the following new paragraph:</text>
<quoted-block id="H52B7C214714F42F9AE84CF3CA1FE7503" style="OLC">
<paragraph id="HBB3C6877AFBC4A789326D36A86572CAB"><enum>(9)</enum><text>advise the President on major domestic and international prudential policy issues in connection with all lines of insurance except health insurance.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection display-inline="no-display-inline" id="H58A944C32C32495C9AE3581B1B796DC7"><enum>(c)</enum><header>Clerical amendment</header><text display-inline="yes-display-inline">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:</text>
<quoted-block display-inline="no-display-inline" id="H114623A3016C4670880CB5DDDF4A6338" style="USC">
<toc regeneration="no-regeneration">
<toc-entry level="section">Sec. 312. Terrorism and Financial Intelligence.</toc-entry>
<toc-entry level="section">Sec. 313. Federal Insurance Office.</toc-entry>
<toc-entry level="section">Sec. 314. Covered agreements.</toc-entry>
<toc-entry level="section">Sec. 315. Continuing in office.</toc-entry> </toc> <after-quoted-block>.</after-quoted-block></quoted-block> </subsection></section>
<section id="H5521A01770C2493C9E43F58A20F09597"><enum>8003.</enum><header>Report on global reinsurance market</header><text display-inline="no-display-inline">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.</text> </section>
<section id="H2B1E3B0B719140F2A2B78DF55E1D1F23"><enum>8004.</enum><header>Study on modernization and improvement of insurance regulation in the United States</header>
<subsection id="H1BD57887D32442FAAFB23B25599F1CE3"><enum>(a)</enum><header>Study</header><text display-inline="yes-display-inline">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:</text>
<paragraph id="H6C23A0F85FB44364B5F8A636711AD581"><enum>(1)</enum><text>Effective systemic risk regulation with respect to insurance.</text> </paragraph>
<paragraph id="H0F6FE1F3F5444446BE9E18F49882C799"><enum>(2)</enum><text>Strong capital standards and an appropriate match between capital allocation and liabilities for all risk.</text> </paragraph>
<paragraph id="H81737F9D5EC8484E861C3C4608CD1E09"><enum>(3)</enum><text>Meaningful and consistent consumer protection for insurance products and practices.</text> </paragraph>
<paragraph id="H53C5AC8B74BC437284DAD5DEBE8BA117"><enum>(4)</enum><text>Increased national uniformity through either a Federal charter or effective action by the States.</text> </paragraph>
<paragraph id="HB5E786F26B534684B4A8435A5B05AA86"><enum>(5)</enum><text>Improved regulation of insurance companies and affiliates on a consolidated basis, including affiliates outside of the traditional insurance business.</text> </paragraph>
<paragraph id="HB7F5B626DDE643459FE23F04289D3A0F"><enum>(6)</enum><text display-inline="yes-display-inline">International coordination.</text></paragraph>
<paragraph id="H045C32CCF11A41669D551E8CFCBB2215"><enum>(7)</enum><text>Geographic disparities in access to and cost of insurance products.</text> </paragraph></subsection>
<subsection id="H208AE9F2EB964F1F8F8B91E1C9177CA7"><enum>(b)</enum><header>Report</header><text>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—</text>
<paragraph id="H97F3165C5C6546A3AD2937F2B75CAEBD"><enum>(1)</enum><text>the results of the study conducted under subsection (a); and</text> </paragraph>
<paragraph id="HB15F44EE8CE545E3AC93149A35542225"><enum>(2)</enum><text display-inline="yes-display-inline">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.</text> </paragraph></subsection>
<subsection id="HFB9509C93A7D4D41A1172574C1F09D54"><enum>(c)</enum><header>Consultation</header><text>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.</text> </subsection></section>
<section id="H089B20E6EA434AFFB94303537BC2F4B0" display-inline="no-display-inline" section-type="subsequent-section"><enum>8005.</enum><header>Sense of Congress regarding simplified mortgage contract summaries</header><text display-inline="no-display-inline">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.</text></section>
<enum>VII</enum><header>Mortgage Reform and Anti-Predatory Lending Act</header>
<section id="H61B1DC8EC17D4F95881E9D9E9C83D68A" section-type="subsequent-section"><enum>9000.</enum><header>Short title; designation as enumerated consumer law</header>
<subsection id="H14F974D323234C8E9F94BCB11DE1441C"><enum>(a)</enum><header>Short title</header><text display-inline="yes-display-inline">This title may be cited as the <quote><short-title>Mortgage Reform and Anti-Predatory Lending Act</short-title></quote>.</text></subsection>
<subsection id="HE956B5C33EA54B01B4BF00065778564A"><enum>(b)</enum><header>Designation as enumerated consumer law under the purview of the Consumer Financial Protection Agency</header><text>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.</text></subsection></section>
<subtitle id="H5BC0C3F032E243D2955CD4261D3111D9"><enum>A</enum><header>Residential Mortgage Loan Origination Standards</header>
<section id="HB0F720D24825430C95C2F908ADFD32A4" section-type="subsequent-section"><enum>9001.</enum><header>Definitions</header><text display-inline="no-display-inline">Section 103 of the Truth in Lending Act (15 U.S.C. 1602) is amended by adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="HB9C545715E7341ADBD8978C24E09116F" style="USC">
<subsection id="HE7A34029BB694A07AC092FBDE7582B16"><enum>(cc)</enum><header>Definitions relating to mortgage origination and residential mortgage loans</header>
<paragraph id="H51597DB45154459FB1F8623031B959CB"><enum>(1)</enum><header>Commission</header><text>Unless otherwise specified, the term <term>Commission</term> means the Federal Trade Commission.</text></paragraph>
<paragraph display-inline="no-display-inline" id="H8B6AD20661B64C8890556D5486E30F85"><enum>(2)</enum><header>Federal banking agencies</header><text display-inline="yes-display-inline">The term <term>Federal banking agencies</term> 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 <quote>Federal banking agencies</quote> 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.</text></paragraph>
<paragraph commented="no" id="HCF7C655F4A284276A14DF6A085B82BD0"><enum>(3)</enum><header>Mortgage originator</header><text>The term <term>mortgage originator</term>—</text>
<subparagraph commented="no" id="H1B0DD421AA264CBDA3A238E42332A022"><enum>(A)</enum><text display-inline="yes-display-inline">means any person who, for direct or indirect compensation or gain, or in the expectation of direct or indirect compensation or gain—</text>
<clause commented="no" id="H144079E8562742398097A6C2CAEC94B7"><enum>(i)</enum><text>takes a residential mortgage loan application;</text></clause>
<clause commented="no" id="H99A0FD8B9DFB4AA0A21C4B6D19B0EFD1"><enum>(ii)</enum><text>assists a consumer in obtaining or applying to obtain a residential mortgage loan; or</text></clause>
<clause commented="no" id="H7513F1B4273F47B2BA3D9FCE926CDDF3"><enum>(iii)</enum><text display-inline="yes-display-inline">offers or negotiates terms of a residential mortgage loan;</text></clause></subparagraph>
<subparagraph commented="no" id="HE24966E6151743A9A317474A949BD6B2"><enum>(B)</enum><text display-inline="yes-display-inline">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);</text></subparagraph>
<subparagraph commented="no" id="H2904F7CA75194A3E926053679204121C"><enum>(C)</enum><text display-inline="yes-display-inline">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);</text></subparagraph>
<subparagraph id="H84AF2FCD3B8C40489DB66DE5139DDE3E"><enum>(D)</enum><text display-inline="yes-display-inline">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; </text></subparagraph>
<subparagraph id="H6982739F001D45C78E449F339DCB4E5E"><enum>(E)</enum><text display-inline="yes-display-inline">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—</text>
<clause id="H432195CD2B6949939ABB4E979DF972DA"><enum>(i)</enum><text>is fully amortizing;</text></clause>
<clause id="HCE8A563632B24DB792B05C2C5A0ABA96"><enum>(ii)</enum><text>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;</text></clause>
<clause id="H08EF3C61316D4A86A2356524FAF470F8"><enum>(iii)</enum><text>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</text></clause>
<clause id="H0D1EB19D9DF84DC8ACFF90A07C002507"><enum>(iv)</enum><text>meets any other criteria the Federal banking agencies may prescribe; and</text></clause></subparagraph>
<subparagraph id="HD6EC924B02254BF8B897D166F0F59C63" display-inline="no-display-inline"><enum>(F)</enum><text display-inline="yes-display-inline">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.</text></subparagraph></paragraph>
<paragraph commented="no" id="H129DEBBBD1A1487F87F595786824D8A5"><enum>(4)</enum><header>Nationwide Mortgage Licensing System and Registry</header><text display-inline="yes-display-inline">The term <term>Nationwide Mortgage Licensing System and Registry</term> has the same meaning as in the Secure and Fair Enforcement for Mortgage Licensing Act of 2008.</text></paragraph>
<paragraph commented="no" id="HC9DF4E2BAB104F7E89E639848A5110D4"><enum>(5)</enum><header>Other definitions relating to mortgage originator</header><text display-inline="yes-display-inline">For purposes of this subsection, a person <term>assists a consumer in obtaining or applying to obtain a residential mortgage loan</term> 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.</text></paragraph>
<paragraph commented="no" display-inline="no-display-inline" id="H802EAC50DCFF415197CE0282CB7E7EC3"><enum>(6)</enum><header>Residential mortgage loan</header><text display-inline="yes-display-inline">The term <term>residential mortgage loan</term> 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.</text></paragraph>
<paragraph id="H329E28B07AA445239C7E2A73EB3374D5"><enum>(7)</enum><header>Secretary</header><text>The term <term>Secretary</term>, when used in connection with any transaction or person involved with a residential mortgage loan, means the Secretary of Housing and Urban Development.</text></paragraph>
<paragraph id="HDF3C55C918E94B8D9ADECA65F6995B8D"><enum>(8)</enum><header>Securitization vehicle</header><text display-inline="yes-display-inline">The term <term>securitization vehicle</term> means a trust, corporation, partnership, limited liability entity, special purpose entity, or other structure that—</text>
<subparagraph id="HEA0649E16C244E46A2454810C48B55B5"><enum>(A)</enum><text>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</text></subparagraph>
<subparagraph id="HEB6F2BE1ED2C418389A6F99E874E3E29"><enum>(B)</enum><text>holds such loans.</text></subparagraph></paragraph>
<paragraph commented="no" id="HE04E39E021DA4A1183C14A6A30A1B03E"><enum>(9)</enum><header>Securitizer</header><text display-inline="yes-display-inline">The term <term>securitizer</term> 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.</text></paragraph>
<paragraph id="HEB66C79EB1684579BADAEBCF692486FB"><enum>(10)</enum><header>Servicer</header><text display-inline="yes-display-inline">The term <term>servicer</term> has the same meaning as in section 6(i)(2) of the Real Estate Settlement Procedures Act of 1974.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section id="HD790967C178B4954ABE42F25752BF321" section-type="subsequent-section"><enum>9002.</enum><header>Residential mortgage loan origination</header>
<subsection id="H9BC7A2BC165143F590861C7E87E0C182"><enum>(a)</enum><header>In general</header><text>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:</text>
<quoted-block display-inline="no-display-inline" id="H9A4A7A5F4F6A465FA1FBB79B31F01067" style="USC">
<section id="H4F98FF02FADD4BB1899665C96A7C708D"><enum>129B.</enum><header>Residential mortgage loan origination</header>
<subsection id="H6709EB2E91E147D6A0B40F754E320E78"><enum>(a)</enum><header>Finding and purpose</header>
<paragraph id="H3955AEA4A22F4174AD4A2444FBD348FD"><enum>(1)</enum><header>Finding</header><text>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.</text></paragraph>
<paragraph id="H5EFE5AF5255442E9A182ADB8D078C88F"><enum>(2)</enum><header>Purpose</header><text>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.</text></paragraph></subsection>
<subsection id="H70E5F61485534CFCB2D8AB77917B8D88"><enum>(b)</enum><header>Duty of care</header>
<paragraph id="H6694E8D096E2445FB13813774BAC05A3"><enum>(1)</enum><header>Standard</header><text display-inline="yes-display-inline">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—</text>
<subparagraph id="HECB61755316F40CEA4B2A54097C21106"><enum>(A)</enum><text display-inline="yes-display-inline">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;</text></subparagraph>
<subparagraph id="HEFCB64DEC3BA4FB0AC51FA97C6EE41FF"><enum>(B)</enum><text display-inline="yes-display-inline">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;</text></subparagraph>
<subparagraph id="H7EFAA07B360E489085AB49251EE8CB0A"><enum>(C)</enum><text display-inline="yes-display-inline">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—</text>
<clause id="H4710F7ABEB484D26AF9B24C066E13FE4"><enum>(i)</enum><text display-inline="yes-display-inline">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);</text></clause>
<clause id="HFBBD92593F4746F78BF978E04FEBE1E1"><enum>(ii)</enum><text>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</text></clause>
<clause id="H08A4A72F84D84D5198DD5537B53029BE"><enum>(iii)</enum><text>any relevant conflicts of interest between the originator and the consumer;</text></clause></subparagraph>
<subparagraph id="H06B8FAAD20874426BA02C23E5368C9C4"><enum>(D)</enum><text display-inline="yes-display-inline">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</text></subparagraph>
<subparagraph commented="no" id="H0517ADC2468C4F30BD6AE66955E86561"><enum>(E)</enum><text display-inline="yes-display-inline">include on all loan documents any unique identifier of the mortgage originator provided by the Nationwide Mortgage Licensing System and Registry.</text></subparagraph></paragraph>
<paragraph display-inline="no-display-inline" id="H5AC05C6979B24B9B8691675307A0B67B"><enum>(2)</enum><header>Clarification of extent of duty to present range of products and appropriate products</header>
<subparagraph id="HC34B7A067C874830AF2EC089506D63FF"><enum>(A)</enum><header>No duty to offer products for which originator is not authorized to take an application</header><text>Paragraph (1)(B) shall not be construed as requiring—</text>
<clause id="H3FE36BB674074498B3F3E28B8FD20872"><enum>(i)</enum><text>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</text></clause>
<clause id="H4710068D02AD46F68892D4E710F30948"><enum>(ii)</enum><text>a creditor to offer products that the creditor does not offer to the general public.</text></clause></subparagraph>
<subparagraph id="H93934652545F403D845D690A2C618810"><enum>(B)</enum><header>Appropriate loan product</header><text display-inline="yes-display-inline">For purposes of paragraph (1)(B), a residential mortgage loan shall be presumed to be appropriate for a consumer if—</text>
<clause id="H8953BECCC41A4A0B82BB05597047779E"><enum>(i)</enum><text display-inline="yes-display-inline">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</text></clause>
<clause id="H02ACE210116A4D2192D538D99983DC67"><enum>(ii)</enum><text display-inline="yes-display-inline">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).</text></clause></subparagraph></paragraph>
<paragraph id="H34955E6CAD5C45A18002827F8A259FA3"><enum>(3)</enum><header>Rules of construction</header><text display-inline="yes-display-inline">No provision of this subsection shall be construed as—</text>
<subparagraph id="H91B37752AA674F8588A0CFEF686A50B1"><enum>(A)</enum><text>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</text></subparagraph>
<subparagraph id="HE7354350142E462FA19B8A9EDB129965"><enum>(B)</enum><text>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.</text></subparagraph></paragraph>
<paragraph id="HD09CDFE02E4B4FCE81FD531F41988E85"><enum>(4)</enum><header>Regulations</header>
<subparagraph id="H37973E9B0C56489C85E6B61E6C01C92C"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">The Federal banking agencies, in consultation with the Secretary, and the Commission, shall jointly prescribe regulations to—</text>
<clause id="H6778822F59AD468AA44D9D55E9096900"><enum>(i)</enum><text>further define the duty established under paragraph (1);</text></clause>
<clause id="H4E72FCB762DE45F888F3EA71C313F48B"><enum>(ii)</enum><text>implement the requirements of this subsection;</text></clause>
<clause id="HEF0166BBFED04A698E01D52DF2BC15CF"><enum>(iii)</enum><text>establish the time period within which any disclosure required under paragraph (1) shall be made to the consumer; and</text></clause>
<clause id="H0858EA3BAB014A2C85A277127F00BC0C"><enum>(iv)</enum><text>establish such other requirements for any mortgage originator as such regulatory agencies may determine to be appropriate to meet the purposes of this subsection.</text></clause></subparagraph>
<subparagraph id="HB8E3011A153A43169971B48E8C97EDB8"><enum>(B)</enum><header>Complementary and nonduplicative disclosures</header><text display-inline="yes-display-inline">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—</text>
<clause id="HADFC749DDEF64BD1BF78DF392985EACA"><enum>(i)</enum><text>are practicable; and</text></clause>
<clause id="HDBAE87A84FEC40C99F20769666DDBC14"><enum>(ii)</enum><text>do not reduce the value of any such disclosure to recipients of such disclosures.</text></clause></subparagraph></paragraph>
<paragraph display-inline="no-display-inline" id="H464ECBCA37B0402C93358B168D3F3C51"><enum>(5)</enum><header>Compliance procedures required</header><text display-inline="yes-display-inline">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.</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H9CB049F61AAD42BBA44290AE5EC90DB3"><enum>(b)</enum><header>Clerical amendment</header><text>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:</text>
<quoted-block display-inline="no-display-inline" id="H4C1B62D230834782AC90A312A30FFD95" style="USC">
<toc regeneration="no-regeneration">
<toc-entry level="section">129A. Fiduciary duty of servicers of pooled residential mortgages.</toc-entry>
<toc-entry level="section">129B. Residential mortgage loan origination.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section>
<section id="H57D7DDAFEEDF471E9678EB1EE9371ADA"><enum>9003.</enum><header>Prohibition on steering incentives</header><text display-inline="no-display-inline">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:</text>
<quoted-block display-inline="no-display-inline" id="HAEB4CEB1913346B5B7F116FCB35D57E9" style="USC">
<subsection id="H74F2E1875489462EBF4C9F7F675BE64D"><enum>(c)</enum><header>Prohibition on steering incentives</header>
<paragraph commented="no" id="H0D3AE1350AA2440497181A89DAE834AA"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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).</text></paragraph>
<paragraph id="HA652B48CC3E841F79218684D32B0DD03" display-inline="no-display-inline"><enum>(2)</enum><header>Restructuring of financing origination fee</header>
<subparagraph id="HB78315519A684BB0B0A8AD129BBE4ABF"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="HB831B821198A49B2840FC593C097A71A"><enum>(B)</enum><header>Exception</header><text>Notwithstanding paragraph subparagraph (A), a mortgage originator may arrange for a consumer to finance through rate an origination fee or cost if—</text>
<clause id="HEA1A3A73DD654F23959FD18506EA5F7F"><enum>(i)</enum><text>the mortgage originator does not receive any other compensation from the consumer except the compensation that is financed through rate; and</text></clause>
<clause id="H7D6B2413D43F4F17BCABA9E50D67260C"><enum>(ii)</enum><text>the mortgage is a qualified mortgage.</text></clause></subparagraph></paragraph>
<paragraph commented="no" id="H1A831ED80E9A46E29581308BA57E580F"><enum>(3)</enum><header>Regulations</header><text display-inline="yes-display-inline">The Federal banking agencies, in consultation with the Secretary and the Commission, shall jointly prescribe regulations to prohibit—</text>
<subparagraph commented="no" id="H8E3846BF5453459998FA4E2C3E92F53F"><enum>(A)</enum><text>mortgage originators from steering any consumer to a residential mortgage loan that—</text>
<clause commented="no" id="H77BB02BA66BE415DA9B1E5BA7CCC2793"><enum>(i)</enum><text display-inline="yes-display-inline">the consumer lacks a reasonable ability to repay (in accordance with regulations prescribed under section 129C(a));</text></clause>
<clause commented="no" id="H5AEBDDEA8D2841B1A676011A8148D3BC"><enum>(ii)</enum><text display-inline="yes-display-inline">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</text></clause>
<clause commented="no" id="HAA54DCEBC31C40589AB60A36832FDECC"><enum>(iii)</enum><text>has predatory characteristics or effects (such as equity stripping, excessive fees, or abusive terms);</text></clause></subparagraph>
<subparagraph commented="no" id="HAE6339FADAD04927A5A3C4ACB1307AB0"><enum>(B)</enum><text display-inline="yes-display-inline">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;</text></subparagraph>
<subparagraph commented="no" id="HF54C170F5D70438295914F531ACF04FC"><enum>(C)</enum><text display-inline="yes-display-inline">abusive or unfair lending practices that promote disparities among consumers of equal credit worthiness but of different race, ethnicity, gender, or age; </text></subparagraph>
<subparagraph id="HB89A7E6CAB4F4F4C90A060C2D7E9EFA3"><enum>(D)</enum><text display-inline="yes-display-inline">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</text></subparagraph>
<subparagraph id="H47DF5EBE52E74C5D9C041C012834D118"><enum>(E)</enum><text display-inline="yes-display-inline">mortgage originators from—</text>
<clause id="HE8120C0E5B384F62828E10A6AF64858B"><enum>(i)</enum><text display-inline="yes-display-inline">mischaracterizing the credit history of a consumer or the residential mortgage loans available to a consumer;</text></clause>
<clause id="H3FC40CC736FA4505AFA2058981415429"><enum>(ii)</enum><text display-inline="yes-display-inline">mischaracterizing or suborning the mischaracterization of the appraised value of the property securing the extension of credit; or</text></clause>
<clause id="HDA44C94DBFEB472CA08BA87B70F7F1FB"><enum>(iii)</enum><text display-inline="yes-display-inline">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.</text></clause></subparagraph></paragraph>
<paragraph commented="no" id="HE437D082EDBC4084822BEE37D71BCCD5"><enum>(4)</enum><header>Rules of construction</header><text>No provision of this subsection shall be construed as—</text>
<subparagraph id="H3EE0AD780EDB4309A4F5A8812C21BDF9"><enum>(A)</enum><text display-inline="yes-display-inline">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);</text></subparagraph>
<subparagraph commented="no" id="H2E0D8FCBDF0F4869A5C6F00FF39F0A43"><enum>(B)</enum><text display-inline="yes-display-inline">affecting the mechanism for providing the total amount of direct and indirect compensation permitted to a mortgage originator;</text></subparagraph>
<subparagraph commented="no" display-inline="no-display-inline" id="HB9E1C76D12414EAFBAFE5AB531538B0D"><enum>(C)</enum><text display-inline="yes-display-inline">limiting or affecting the amount of compensation received by a creditor upon the sale of a consummated loan to a subsequent purchaser;</text></subparagraph>
<subparagraph commented="no" id="H0FB97A171AEF4DF3B2C2145273AE7DA1"><enum>(D)</enum><text display-inline="yes-display-inline">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</text></subparagraph>
<subparagraph commented="no" id="HAC09C77925094E6B98E7B4BC6C18F494"><enum>(E)</enum><text>prohibiting incentive payments to a mortgage originator based on the number of residential mortgage loans originated within a specified period of time.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section id="H19C60B5BFEC046519D72E88752DB95EB"><enum>9004.</enum><header>Liability</header><text display-inline="no-display-inline">Section 129B of the Truth in Lending Act is amended by inserting after subsection (c) (as added by section 103) the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H19F60A1E830E4EBF89BBC20CB3244549" style="OLC">
<subsection id="HF77FEBA8597A433AA76211F39A40DF13"><enum>(d)</enum><header>Liability for violations</header>
<paragraph id="HAE8B1C74D71A4DB8ACFDCEC81272EAEF"><enum>(1)</enum><header>In general</header><text>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 <term>mortgage originator</term> for <term>creditor</term> each place such term appears in each such subsection.</text></paragraph>
<paragraph id="HE27DD048AF284CFCB487A1EDF08D2A0F"><enum>(2)</enum><header>Maximum</header><text display-inline="yes-display-inline">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.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section id="HC7E8E137EBFF4A58A0FBE6545C1C979C"><enum>9005.</enum><header>Regulations</header>
<subsection id="H42B60E0B3F3E4B528E0CC94718B88B1C"><enum>(a)</enum><header>Discretionary regulatory authority</header><text display-inline="yes-display-inline">Section 129B of the Truth in Lending Act is amended by inserting after subsection (d) (as added by section 104) the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H9431AD49D43F43FFB35F930D37C214A2" style="OLC">
<subsection id="H52440F4C38204A399314425F0D854334"><enum>(e)</enum><header>Discretionary regulatory authority</header>
<paragraph id="HF32BF4E9E29044F8A31391C292420429"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H8777C5D6993F42938C18516BD6793EE9"><enum>(2)</enum><header>Application</header><text>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.</text></paragraph></subsection>
<subsection id="H839804F6E34B4F81AD173D981046B1E6"><enum>(f)</enum><text>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.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H12C50157060041F88B3414EF8F886534"><enum>(b)</enum><header>Effective date</header><text display-inline="yes-display-inline">The regulations required or authorized to be prescribed under this subtitle or the amendments made by this subtitle—</text>
<paragraph id="H91C5562AE9EF4FA09E811F0C44412FF9"><enum>(1)</enum><text>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</text></paragraph>
<paragraph id="H9AAA68306551475AB994BE1A3B614B60"><enum>(2)</enum><text>shall take effect not later than 18 months after the date of the enactment of this Act.</text></paragraph></subsection>
<subsection display-inline="no-display-inline" id="H1D4AE9F48AA8448D90169EDAB96EFC0D"><enum>(c)</enum><header>Technical and conforming amendments</header><text>Section 129(l)(2) of the Truth in Lending Act (15 U.S.C. 1639(l)(2)) is amended by inserting <quote>referred to in section 103(aa)</quote> after <quote>loans</quote> each place such term appears.</text></subsection></section>
<section id="HCFCF0594EA9F4E45970AC4C621D2DDD6"><enum>9006.</enum><header>Study of shared appreciation mortgages</header>
<subsection id="H1A415AA798624E5198A25014ED58E9DA"><enum>(a)</enum><header>Study</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="H8644B63D1E574842BEAAB9DEFA3CD5B2"><enum>(b)</enum><header>Report</header><text>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).</text></subsection></section></subtitle>
<subtitle id="HEC8181C414F24C249BF368D8E549B18A"><enum>B</enum><header>Minimum Standards For Mortgages</header>
<section id="H206BBC20A89645D3821A588777CD87DA"><enum>9101.</enum><header>Ability to repay</header>
<subsection id="HA8002DFD7E144921B7904AF4FB1A4F6D"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">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:</text>
<quoted-block display-inline="no-display-inline" id="H56C224BECDDF4896AA42080CCE204474" style="USC">
<section id="H7228B13CA64F4A78830A614EDFD967A8"><enum>129C.</enum><header>Minimum standards for residential mortgage loans</header>
<subsection id="HC8BC446B5821440F92E328ECA8D13913"><enum>(a)</enum><header>Ability To repay</header>
<paragraph id="HDF47403B0E794CE68C6EA0E0DB2E12BF"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H6EE1C2F787454F609327006DD128BCFA"><enum>(2)</enum><header>Multiple loans</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H80B3A56F6F8A412EB24DCCFC1FA6E26E"><enum>(3)</enum><header>Basis for determination</header><text>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.</text></paragraph>
<paragraph id="HD7898D8A8F9144CBB80E4B21DFBC7096" display-inline="no-display-inline"><enum>(4)</enum><header>Income verification</header><text display-inline="yes-display-inline">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—</text>
<subparagraph id="H54D2B81B5F75461FB45E984A6CAEE3DE"><enum>(A)</enum><text display-inline="yes-display-inline">Internal Revenue Service transcripts of tax returns provided by a third party; or</text></subparagraph>
<subparagraph id="H2DCDA20D245E4C06A7EE5F9AC3899A36"><enum>(B)</enum><text>such other similar method that quickly and effectively verifies income documentation by a third party as the Federal banking agencies may jointly prescribe.</text></subparagraph></paragraph>
<paragraph id="HDB989C7123EB4C61B9F924CDBD3988AB"><enum>(5)</enum><header>Nonstandard loans</header>
<subparagraph id="H5DB09B2CC99F4AF6ABA3E182A885B27E"><enum>(A)</enum><header>Variable rate loans that defer repayment of any principal or interest</header><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="H641A32A4EDB94908A3024A6C2121C906"><enum>(B)</enum><header>Interest-only loans</header><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="HAC97B4E4C55C48978B4D3C47FDC954C5"><enum>(C)</enum><header>Calculation for negative amortization</header><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="H302E059983A740FE843CD4A1EEBFCD19"><enum>(D)</enum><header>Calculation process</header><text display-inline="yes-display-inline">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—</text>
<clause id="H8B0DD7EB297E4D35A2358A029629BCF5"><enum>(i)</enum><text>the loan proceeds are fully disbursed on the date of the consummation of the loan;</text></clause>
<clause display-inline="no-display-inline" id="HE9384D6427AE4C6B92F973204A50E728"><enum>(ii)</enum><text display-inline="yes-display-inline">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</text></clause>
<clause id="H2547A12FEB744EE7A22D9A59EF5D6422"><enum>(iii)</enum><text>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.</text></clause></subparagraph>
<subparagraph id="HA645975E71444FD6B2E7607ABC7DD7A8" display-inline="no-display-inline"><enum>(E)</enum><header>Refinance of hybrid loans with current lender</header><text display-inline="yes-display-inline">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—</text>
<clause id="H976B829779EF4DB9AAD04761F7F13AAD"><enum>(i)</enum><text>consider the mortgagor’s good standing on the existing mortgage;</text></clause>
<clause id="HD2DAD5241578487FAF3622D215512B84"><enum>(ii)</enum><text>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</text></clause>
<clause id="H72796B051E6D42E0A4F73A56CCE7BDF9"><enum>(iii)</enum><text>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.</text></clause></subparagraph></paragraph>
<paragraph commented="no" id="H9C18CA14369C48C0BAD56BB833C6CEAD"><enum>(6)</enum><header>Fully-indexed rate defined</header><text display-inline="yes-display-inline">For purposes of this subsection, the term <term>fully indexed rate</term> 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.</text></paragraph>
<paragraph id="H3F693D10844F4CBEA78A0A9C02AD2BB2"><enum>(7)</enum><header>Reverse mortgages</header><text>This subsection shall not apply with respect to any reverse mortgage</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H6AD5DEEA8CC94F669721BF262ADCB18A"><enum>(b)</enum><header>Clerical amendment</header><text>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:</text>
<quoted-block display-inline="no-display-inline" id="H24981BEE830C4068A2348B06EA6F306C" style="USC">
<toc regeneration="no-regeneration">
<toc-entry level="section">129C. Minimum standards for residential mortgage loans.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section>
<section id="H744CCB9FAAE84A35B51003333A4EE68E"><enum>9102.</enum><header>Net tangible benefit for refinancing of residential mortgage loans</header><text display-inline="no-display-inline">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:</text>
<quoted-block display-inline="no-display-inline" id="HD1978440B42C4823960BDEFF55D5A0C8" style="OLC">
<subsection id="H2286287E0E594BA6B32187C639425AC2"><enum>(b)</enum><header>Net tangible benefit for refinancing of residential mortgage loans</header>
<paragraph id="H174EADC68F7F445FA47A70A829DB222F"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="HF9EAF0CDD72340BF83E7A54C19884FFE"><enum>(2)</enum><header>Certain loans providing no net tangible benefit</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph commented="no" id="HAA091376A59B470186EFD935F2B12E1F"><enum>(3)</enum><header>Net tangible benefit</header><text display-inline="yes-display-inline">The Federal banking agencies shall jointly prescribe regulations defining the term <term>net tangible benefit</term> for purposes of this subsection.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section display-inline="no-display-inline" id="HCAED6164DE564F77B9D1B8DEAA40123C"><enum>9103.</enum><header>Safe harbor and rebuttable presumption</header><text display-inline="no-display-inline">Section 129C of the Truth in Lending Act is amended by inserting after subsection (b) (as added by section 9102) the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H4D6BEA987F364963BE28C6C4BE1DC481" style="OLC">
<subsection id="HE611FD8DBEB149AB9FE54D4EF6A08E4D"><enum>(c)</enum><header>Presumption of ability To repay and net tangible benefit</header>
<paragraph id="H03B178468D544C0D9B5E2B8D1F30950A"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H6479D79786504A0DA3767D7A570F0955"><enum>(2)</enum><header>Definitions</header><text>For purposes of this subsection, the following definitions shall apply:</text>
<subparagraph id="H8E559DA67EE14B0FBC431ED36230DB3D"><enum>(A)</enum><header>Qualified mortgage</header><text display-inline="yes-display-inline">The term <term>qualified mortgage</term> means any residential mortgage loan—</text>
<clause id="HEAF130E406C3465A8BC2A250677BC3DA"><enum>(i)</enum><text display-inline="yes-display-inline">that does not allow a consumer to defer repayment of principal or interest, or is not otherwise deemed a <quote>non-traditional mortgage</quote> under guidance, advisories, or regulations prescribed by the Federal Banking Agencies;</text></clause>
<clause id="H212D5B3165ED4D558D86E890BC32A481"><enum>(ii)</enum><text>that does not provide for a repayment schedule that results in negative amortization at any time;</text></clause>
<clause id="H7A82F251EF084B439C8E16705AFFC8D5"><enum>(iii)</enum><text>for which the terms are fully amortizing and which does not result in a balloon payment, where a <quote>balloon payment</quote> is a scheduled payment that is more than twice as large as the average of earlier scheduled payments;</text></clause>
<clause id="H6C75C129C8824661A916497DEE172678"><enum>(iv)</enum><text>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—</text>
<subclause id="HC2949D129FB946C280D7C4D56FE5281C"><enum>(I)</enum><text display-inline="yes-display-inline">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)); </text></subclause>
<subclause id="H5E8F8A4CE695412D922B5E64551E518F"><enum>(II)</enum><text display-inline="yes-display-inline">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</text></subclause>
<subclause id="H5F4C9741C91745C5B30922C4140E94AE"><enum>(III)</enum><text display-inline="yes-display-inline">by 3.5 or more percentage points, in the case of a subordinate lien residential mortgage loan;</text></subclause></clause>
<clause id="HC34C5F2A68EF4A178CE7D727BBB80A7C"><enum>(v)</enum><text>for which the income and financial resources relied upon to qualify the obligors on the loan are verified and documented;</text></clause>
<clause id="H80E3189D32B14762B122A35A1BDAA752"><enum>(vi)</enum><text>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;</text></clause>
<clause id="H72B5C6704590428681B7A650A415579F"><enum>(vii)</enum><text>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;</text></clause>
<clause id="H8B0C2C85C8514FEEB7ECBA6A72A7A7E2"><enum>(viii)</enum><text>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;</text></clause>
<clause id="H8D8579E1AAD443DE9B35C3090877B4B5"><enum>(ix)</enum><text>for which the total points and fees payable in connection with the loan do not exceed 2 percent of the total loan amount, where <term>points and fees</term> 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</text></clause>
<clause id="H1FC2FEE9477049A293107C4EF3F1FB2F"><enum>(x)</enum><text>for which the term of the loan does not exceed 30 years, except as such term may be extended under paragraph (4).</text></clause></subparagraph>
<subparagraph id="H656CEFDA70C7484BAEBADB619547D4F2"><enum>(B)</enum><header>Average prime offer rate</header><text display-inline="yes-display-inline">The term <term>average prime offer rate</term> 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.</text></subparagraph>
<subparagraph id="H7DE370F207824CBDAB81F2573179A0F3"><enum>(C)</enum><header>Reverse mortgages</header><text display-inline="yes-display-inline">For purposes of this subsection, the term <quote>qualified mortgage</quote> includes any reverse mortgage that is insured by the Federal Housing Administration or complies with the condition established in subparagraph (A)(iv).</text></subparagraph></paragraph>
<paragraph id="H27CAB85F5CC2424BA7850CE1EA444F8F"><enum>(3)</enum><header>Publication of average prime offer rate and APR thresholds</header><text>The Board—</text>
<subparagraph id="HD6970A2B8B824D548E89D67D7ECF6638"><enum>(A)</enum><text display-inline="yes-display-inline">shall publish, and update at least weekly, average prime offer rates; </text></subparagraph>
<subparagraph id="HA6D1115E86D049B1AD607E7BEE018BB3"><enum>(B)</enum><text display-inline="yes-display-inline">may publish multiple rates based on varying types of mortgage transactions; and</text></subparagraph>
<subparagraph id="HFE4B61C9755643EC80BF774ED8DBD4E2"><enum>(C)</enum><text display-inline="yes-display-inline">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.</text></subparagraph></paragraph>
<paragraph id="H96FDFFC365004166844BA44A77C3AC2F"><enum>(4)</enum><header>Regulations</header>
<subparagraph id="HBE97F29975D5457591B8A1593C73E22B"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">The Federal banking agencies shall jointly prescribe regulations to carry out the purposes of this subsection.</text></subparagraph>
<subparagraph id="HEF052811BCF34C66951036AD890CFA43"><enum>(B)</enum><header>Revision of safe harbor criteria</header>
<clause id="H46D0A4E3A7E546A388C963E6BD13F03B"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text></clause>
<clause id="H01FC79A94AFE49B0A7DCCEE4E71C7EE2"><enum>(ii)</enum><header>Loan definition</header><text display-inline="yes-display-inline">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—</text>
<subclause id="H7F2E27B1D2984746AF4A00452FD556BF"><enum>(I)</enum><text>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.);</text></subclause>
<subclause id="HBF25E96D7C2C4AD0BF61F57E24A22418"><enum>(II)</enum><text>The Secretary of Veterans Affairs, with regard to a loan made or guaranteed by the Secretary of Veterans Affairs;</text></subclause>
<subclause id="HD1775D1E18294F3EA0F9FE70488843ED"><enum>(III)</enum><text>The Secretary of Agriculture, with regard loans guaranteed by the Secretary of Agriculture pursuant to 42 U.S.C. 1472(h);</text></subclause>
<subclause id="HDA4A612FCBA742B7B8892C37A185391A"><enum>(IV)</enum><text>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</text></subclause>
<subclause id="HBB37C056AEFA4287B1A67A4EF7E3B3FB"><enum>(V)</enum><text>The Rural Housing Service, with regard to loans insured by the Rural Housing Service.</text></subclause></clause></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section display-inline="no-display-inline" id="HC9A82D3A3CD54E3688700B9E34FD026D"><enum>9104.</enum><header>Liability</header><text display-inline="no-display-inline">Section 129C of the Truth in Lending Act is amended by inserting after subsection (c) (as added by section 9103) the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="HFDC184D9EA424750BB6E000EAA8F26AC" style="OLC">
<subsection commented="no" id="HD35E29D043CA484A9F50CD47B2268357"><enum>(d)</enum><header>Liability for violations</header>
<paragraph id="H6C3BEC88ED0E4BFBA52685C939A922DD"><enum>(1)</enum><header>In general</header>
<subparagraph id="H4F14B06A0262439BB380552B9CFF9B4F"><enum>(A)</enum><header>Rescission</header><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="HC07D9C79EDF149A49A799FB79E2512F9"><enum>(B)</enum><header>Cure</header><text display-inline="yes-display-inline">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.</text></subparagraph></paragraph>
<paragraph commented="no" id="H66D92F6ECF174A248EEEADE62F4DCA77"><enum>(2)</enum><header>Limited assignee and securitizer liability</header><text display-inline="yes-display-inline">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:</text>
<subparagraph commented="no" id="HFCFC89E0DE36488C8282638B00BFD44A"><enum>(A)</enum><text display-inline="yes-display-inline">Rescission of the loan.</text></subparagraph>
<subparagraph commented="no" id="H565D6187FE7B4F78AF4649CE3F78A93D"><enum>(B)</enum><text display-inline="yes-display-inline">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.</text></subparagraph></paragraph>
<paragraph commented="no" id="H2265F35763484D85A4705D1BA0C7B76C"><enum>(3)</enum><header>Assignee and securitizer exemption</header><text display-inline="yes-display-inline">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).</text></paragraph>
<paragraph id="HE462D24FCBFC4198A65DF14519C9A747"><enum>(4)</enum><header>Absent parties</header>
<subparagraph id="H4BEF97F8ADFB48AF9635E4D2FF6350E9"><enum>(A)</enum><header>Absent creditor</header><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="HED6210D254F04D9B903E770D546CCD82"><enum>(B)</enum><header>Absent creditor and assignee</header><text>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.</text></subparagraph></paragraph>
<paragraph id="HA22ADF35575B4324B02057C19FE05CB1"><enum>(5)</enum><header>Cure defined</header><text display-inline="yes-display-inline">For purposes of this subsection, the term <term>cure</term> 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.</text></paragraph>
<paragraph id="H446C59EA03B84A0798896F1E4B9BC7F8"><enum>(6)</enum><header>Disagreement over cure</header><text display-inline="yes-display-inline">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—</text>
<subparagraph id="HA8577CDF50014D7EAF18878F36ABF6DA"><enum>(A)</enum><text>the creditor, assignee, or securitizer may provide the cure; and</text></subparagraph>
<subparagraph id="HE54BD4BA4D3F4FD497A5D540CE6D8155"><enum>(B)</enum><text>the consumer may challenge the adequacy of the cure during the 6-month period beginning when the cure is provided.</text></subparagraph><continuation-text continuation-text-level="paragraph">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).</continuation-text></paragraph>
<paragraph id="H4FE5FA3A954E499FBFEE1F2150FAADC3"><enum>(7)</enum><header>Inability to provide or obtain rescission</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H9BBDF965025A4D8087211234DCF5C724"><enum>(8)</enum><header>No class actions against assignee or securitizer under paragraph <enum-in-header>(2)</enum-in-header></header><text>Only individual actions may be brought against an assignee or securitizer of a residential mortgage loan for a violation of subsection (a) or (b).</text></paragraph>
<paragraph commented="no" id="H47545474A7974BEEB8F3EBB8E8517AB5"><enum>(9)</enum><header>Statute of limitations</header><text display-inline="yes-display-inline">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—</text>
<subparagraph id="H66B4980014394D2DB8AE5D9ADE1EA4EF"><enum>(A)</enum><text>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</text></subparagraph>
<subparagraph commented="no" id="HC906B82364084A71A1179C96AE137C5B"><enum>(B)</enum><text display-inline="yes-display-inline">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—</text>
<clause display-inline="no-display-inline" id="HF3BC5DBC67834573AF30AA8C58ADE310"><enum>(i)</enum><text>the end of the 1-year period beginning on the date of such reset, adjustment, or conversion; or</text></clause>
<clause id="HD9FB40AA337A4D5F8F3C2F974A3C34DD"><enum>(ii)</enum><text display-inline="yes-display-inline">the end of the 6-year period beginning on the date the loan is consummated.</text></clause></subparagraph></paragraph>
<paragraph commented="no" id="HB2DE3AE2CD5742D898A12F0E3E576C85"><enum>(10)</enum><header>Trustees, pools, and investors in pools excluded</header><text display-inline="yes-display-inline">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 <term>assignee</term> and <term>securitizer</term>, 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.</text></paragraph></subsection>
<subsection display-inline="no-display-inline" id="HB56CF16E6B9F4436A229C6195C2EB4EB"><enum>(e)</enum><header>Obligation of securitizers, and preservation of borrower remedies</header>
<paragraph id="H670C12D4A93E4A3C97B31E1B34F83FCB"><enum>(1)</enum><header>Obligation to retain access</header><text>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—</text>
<subparagraph id="H2919D3FC68EE46FC888382F875D775CA"><enum>(A)</enum><text>to identify and obtain access to any such loan;</text></subparagraph>
<subparagraph id="H33546FCAFF7A49BCA573198B0D48E4B6"><enum>(B)</enum><text>to acquire any such loan in the event of a violation of subsection (a) or (b) of this section; and</text></subparagraph>
<subparagraph id="H13442D8DE82041148009A531A03DB76F"><enum>(C)</enum><text>to provide to the consumer any and all remedies provided for under this title for any violation of this title.</text></subparagraph></paragraph>
<paragraph id="H9EC5D5ADD87341D097D60A3DBEB0878C"><enum>(2)</enum><header>Additional damages</header><text>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.</text></paragraph>
<paragraph id="H589C5A10D42B4A3F91A8A6EC4C124311"><enum>(3)</enum><header>Contact information notice</header><text>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—</text>
<subparagraph id="H07F7A8C387D847C592460BDBCD1E4601"><enum>(A)</enum><text>upon request of the consumer;</text></subparagraph>
<subparagraph id="H77ECCFBC643848B59BA7330455E49FAD"><enum>(B)</enum><text>whenever there is a change in ownership of a residential mortgage loan; or</text></subparagraph>
<subparagraph id="H1DF48212C4D1498CA51D815F1E8BB236"><enum>(C)</enum><text>on a regular basis, not less than annually.</text></subparagraph></paragraph></subsection>
<subsection id="HD51C8739FB8F4788A5C137271418875C"><enum>(f)</enum><header>Rules To establish process</header><text>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.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section display-inline="no-display-inline" id="HA21FE085BBE240238C67A04345DF1042" section-type="subsequent-section"><enum>9105.</enum><header>Defense to foreclosure</header><text display-inline="no-display-inline">Section 129C of the Truth in Lending Act is amended by inserting after subsection (f) (as added by section 9104) the following new subsections:</text>
<quoted-block display-inline="no-display-inline" id="H151460AC31D9489C80C2E9D2BE403DED" style="OLC">
<subsection id="HB2FA257C793B4301A006CFA0CE45DA99"><enum>(g)</enum><header>Defense to foreclosure</header><text display-inline="yes-display-inline">Notwithstanding any other provision of law—</text>
<paragraph id="H02D2CC60F23842BD95373CEE51556EDA"><enum>(1)</enum><text>when the holder of a residential mortgage loan or anyone acting for such holder initiates a judicial or nonjudicial foreclosure—</text>
<subparagraph id="HDA82B3E7C630482E88115DC53E29289B"><enum>(A)</enum><text display-inline="yes-display-inline">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</text></subparagraph>
<subparagraph id="H972CB29A701543C79C5542A0079CB120"><enum>(B)</enum><text display-inline="yes-display-inline">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</text></subparagraph></paragraph>
<paragraph id="HFEEA9430CCC648F7A8D776D00533EDB1"><enum>(2)</enum><text display-inline="yes-display-inline">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.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section id="H4CD810E306364693969116AB00E217D1"><enum>9106.</enum><header>Additional standards and requirements</header>
<subsection id="HE70BB76FFE5F4F5BB98B97BAA7D5D133"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Section 129C of the Truth in Lending Act is amended by inserting after subsection (g) (as added by section 9105) the following new subsections:</text>
<quoted-block display-inline="no-display-inline" id="H4F73FA0E68364CDC8DB1CFCFF1E178AB" style="OLC">
<subsection id="H72377B48BBAF41A29D642BEB390BD356"><enum>(h)</enum><header>Prohibition on certain prepayment penalties</header>
<paragraph id="H5C3C6A29E99846259BE77227C1B12269"><enum>(1)</enum><header>Prohibited on certain loans</header><text display-inline="yes-display-inline">A residential mortgage loan that is not a <term>qualified mortgage</term> 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 <term>qualified mortgage</term> may not include a residential mortgage loan that has an adjustable rate.</text></paragraph>
<paragraph id="HCBB5EAA6569B4FF1BF10ADDDCCF4FEB0"><enum>(2)</enum><header>Phased-out penalties on qualified mortgages</header><text>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:</text>
<subparagraph id="H302D479037214207AC855D3B420FF99D"><enum>(A)</enum><text>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.</text></subparagraph>
<subparagraph id="HF36DA4E631834F1787A5EE76AB13E50F"><enum>(B)</enum><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="H301FDDE769D044CDB893234760536DB9"><enum>(C)</enum><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="H8F45063B9C5A4B33BA13BC760F7C8C8C"><enum>(D)</enum><text display-inline="yes-display-inline">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.</text></subparagraph></paragraph>
<paragraph id="H012B850F6BE84CC4AA3192C8A0584ED3"><enum>(3)</enum><header>Option for no prepayment penalty required</header><text>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.</text></paragraph></subsection>
<subsection id="HF8DB297A66BB4270BDF98D18772335D2"><enum>(i)</enum><header>Single premium credit insurance prohibited</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="H87AF91FA99784BB4AB40A88E717F3F94"><enum>(1)</enum><text>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</text></paragraph>
<paragraph id="H1D0E7D178A7C484C84B2D28BDA06C345"><enum>(2)</enum><text display-inline="yes-display-inline">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.</text></paragraph></subsection>
<subsection display-inline="no-display-inline" id="H3C6D6AFD0AB9450E8945CB242CB66EBD"><enum>(j)</enum><header>Arbitration</header>
<paragraph id="HD3F6F1037B0246039C6ED2E77A5CD4C8"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="HEB6EAA7969FF4E8F9CBB6C3AE7A5A98B"><enum>(2)</enum><header>Post-controversy agreements</header><text>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.</text></paragraph>
<paragraph id="HEC60FC1BF4A24A829B5B59ECF6445070"><enum>(3)</enum><header>No waiver of statutory cause of action</header><text display-inline="yes-display-inline">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.</text></paragraph></subsection>
<subsection id="HE19DFBFC96A64CFF9FCEC42ABC22D6FF"><enum>(k)</enum><header>Mortgages with negative amortization</header><text>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—</text>
<paragraph id="H3449247CDC9F4F93963C01F22CD85514"><enum>(1)</enum><text>the creditor provides the consumer with a statement that—</text>
<subparagraph id="H1190BD2154514241A8A48EBA96A61EEE"><enum>(A)</enum><text>the pending transaction will or may, as the case may be, result in negative amortization;</text></subparagraph>
<subparagraph id="HC91D5E3B1CBB496D92A30730543FD3C0"><enum>(B)</enum><text>describes negative amortization in such manner as the Federal banking agencies shall prescribe;</text></subparagraph>
<subparagraph id="H48BAE981943742F887B90C5C9F3C7E77"><enum>(C)</enum><text display-inline="yes-display-inline">negative amortization increases the outstanding principal balance of the account; and</text></subparagraph>
<subparagraph id="H0624EFE0946144C89862D7E2F5CDDCAF"><enum>(D)</enum><text display-inline="yes-display-inline">negative amortization reduces the consumer’s equity in the dwelling or real property; and</text></subparagraph></paragraph>
<paragraph display-inline="no-display-inline" id="HA22B10F1039A47048DF0A8B85865FA19"><enum>(2)</enum><text display-inline="yes-display-inline">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.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H0C43A2EB67BC46C1AD2AF5D9889D042C"><enum>(b)</enum><header>Conforming amendment relating to enforcement</header><text>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:</text>
<quoted-block display-inline="no-display-inline" id="HCA24E4F906C0485D85AECBE31A920B47" style="OLC">
<paragraph id="H586602FB57114D0894880E0FAD500F02"><enum>(7)</enum><text display-inline="yes-display-inline">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.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H5140A9CE66624A0BB57C63ABBE99D3E6"><enum>(c)</enum><header>Protection against loss of anti-deficiency protection</header><text>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):</text>
<quoted-block style="OLC" display-inline="no-display-inline" id="H01D44015A68E44EEA8C5CA0D5F5C268C">
<subsection id="H08D2E5EE635E49098E199AF80DE4669C"><enum>(l)</enum><header>Protection against loss of anti-deficiency protection</header>
<paragraph id="HA9F64E61CBD7457AA4D234FFA9123910"><enum>(1)</enum><header>Definition</header><text display-inline="yes-display-inline">For purposes of this subsection, the term <quote>anti-deficiency law</quote> 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.</text></paragraph>
<paragraph id="H758DA46A05B146BBABBDF9C4B4B45D86"><enum>(2)</enum><header>Notice at time of consummation</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="HCB53FA7C7B62496A84A2F1341D4391E8"><enum>(3)</enum><header>Notice before refinancing that would cause loss of protection</header><text>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.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H4D80A97F27754B458A4573F7F99A0E1E"><enum>(d)</enum><header>Policy regarding acceptance of partial payment</header><text display-inline="yes-display-inline">Section 129C of the Truth in Lending Act is amended by inserting after subsection (l) (as added by subsection (c)) the following new subsection:</text>
<quoted-block style="OLC" display-inline="no-display-inline" id="H4C74C1F5C39F4119A1BC317F52BDC377">
<subsection id="H6AB3811F0EA341EEB4943626ED2C39A4"><enum>(m)</enum><header>Policy regarding acceptance of partial payment</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="HEF7EFCDA283748FCB44781E11896919A"><enum>(1)</enum><text>the creditor’s policy regarding the acceptance of partial payments; and</text></paragraph>
<paragraph id="H46928F87F4474C6DA799A092230653A8"><enum>(2)</enum><text>if partial payments are accepted, how such payments will be applied to such mortgage and if such payments will be placed in escrow.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section>
<section display-inline="no-display-inline" id="H3CDB4AFBE7E448A18CD97FD0772E3D92" section-type="subsequent-section"><enum>9107.</enum><header>Rule of construction</header><text display-inline="no-display-inline">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.</text></section>
<section display-inline="no-display-inline" id="HD030AC73F6FF41F0A295F73968610D8A"><enum>9108.</enum><header>Effect on State laws</header>
<subsection id="H92CA052DEA184B3AB6CEB57489954271"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="H677F51AEA9674C28BCDA3E60AC1987D4"><enum>(b)</enum><header>Rules of construction</header><text>No provision of this section shall be construed as limiting—</text>
<paragraph id="H279CD068628642DF9D4E49A07411F3AE"><enum>(1)</enum><text>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;</text></paragraph>
<paragraph id="H8730872F15E845DC9F2D68DBCF2F3B91"><enum>(2)</enum><text>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;</text></paragraph>
<paragraph id="H7A08E872852E47108A7C241174D97618"><enum>(3)</enum>
<subparagraph commented="no" display-inline="yes-display-inline" id="H1A39E4F3CEAC46CC955A1D69B98339F7"><enum>(A)</enum><text display-inline="yes-display-inline">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</text></subparagraph>
<subparagraph id="HE554F6C0633747DDB528ABB1C542119A" indent="up1"><enum>(B)</enum><text display-inline="yes-display-inline">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); </text></subparagraph></paragraph>
<paragraph id="HAAA2043F66D342FD923298D23CDB3009"><enum>(4)</enum><text display-inline="yes-display-inline">the availability of any equitable remedies, including injunctive relief, under State law; or</text></paragraph>
<paragraph id="HA827F2FCC0C8457A864453620046843D"><enum>(5)</enum><text display-inline="yes-display-inline">notwithstanding paragraph (2), the availability of any remedies under State law against any assignee, securitizer or securitization vehicle that—</text>
<subparagraph id="H4F7C284E74F246848E2DC5CB22A3875A"><enum>(A)</enum><text>are in addition to those remedies provided for in section 129C; and </text></subparagraph>
<subparagraph id="H9E954063FB7244D8963C875FA562409D"><enum>(B)</enum><text>were in effect on the date of enactment of this Act.</text></subparagraph></paragraph></subsection></section>
<section display-inline="no-display-inline" id="HEA2B621A48524CE9BF7620B2526773A8" section-type="subsequent-section"><enum>9109.</enum><header>Regulations</header><text display-inline="no-display-inline">Regulations required or authorized to be prescribed under this subtitle or the amendments made by this subtitle—</text>
<paragraph id="H8190851DDDCF4415BDEBFD07F204864A"><enum>(1)</enum><text>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</text></paragraph>
<paragraph id="H1BDFA26EC8214F0FB697DD7DE0C1E96C"><enum>(2)</enum><text display-inline="yes-display-inline">shall take effect not later than 18 months after the date of the enactment of this Act.</text></paragraph></section>
<section commented="no" id="H25C2E11BE8AA49C6A3F2067DAC30825F"><enum>9110.</enum><header>Amendments to civil liability provisions</header>
<subsection commented="no" id="HA63DB1923D014BD59D52F1D9FF45676A"><enum>(a)</enum><header>Increase in amount of civil money penalties for certain violations</header><text>Section 130(a)(2) of the Truth in Lending Act (15 U.S.C. 1640(a)(2)) is amended—</text>
<paragraph id="HC5966CBA97D743F4ADD0AEB297A89AB6"><enum>(1)</enum><text>by striking <quote>$100</quote> and inserting <quote>$200</quote>;</text></paragraph>
<paragraph id="H90BBA745916B4FC9BEB3A153396AE223"><enum>(2)</enum><text>by striking <quote>$1,000</quote> and inserting <quote>$2,000</quote>; and</text></paragraph>
<paragraph id="H163E7259DF2949E69561333B07E34BCC"><enum>(3)</enum><text>by striking <quote>$500,000</quote> and inserting <quote>$1,000,000</quote>.</text></paragraph></subsection>
<subsection commented="no" id="H937625EDDE214E04BC0DE14ED8CC4886"><enum>(b)</enum><header>Statute of limitations extended for section 129 violations</header><text>Section 130(e) of the Truth in Lending Act (15 U.S.C. 1640(e)) is amended—</text>
<paragraph commented="no" id="HCB678B24EF864206A07FD0DF52FAA31E"><enum>(1)</enum><text>in the first sentence, by striking <quote>Any action</quote> and inserting <quote>Except as provided in the subsequent sentence, any action</quote>; and</text></paragraph>
<paragraph commented="no" id="HAE734C0D97994C73AF2D6F76B5242539"><enum>(2)</enum><text>by inserting after the first sentence the following new sentence: <quote>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.</quote>.</text></paragraph></subsection></section>
<section id="H4BAC08AC1CD84EB78F816233ED4731F8"><enum>9111.</enum><header>Lender rights in the context of borrower deception</header><text display-inline="no-display-inline">Section 130 of the Truth in Lending Act is amended by adding at the end the following new subsection:</text>
<quoted-block id="H08A5BA1690C540358D751432FBB9F519" style="OLC">
<subsection id="HDBDCA24CA224476789BCCA58D2FB7CB7"><enum>(k)</enum><header>Exemption from liability and rescission in case of borrower fraud or deception</header><text display-inline="yes-display-inline">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.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section id="H94C53AA3AC8A4A3C94269A22D09D4112"><enum>9112.</enum><header>Six-month notice required before reset of hybrid adjustable rate mortgages</header>
<subsection id="H2A9EDD92F3D14C0584DBCBFBC1A5A480"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">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:</text>
<quoted-block display-inline="no-display-inline" id="HFACBBCC4AFB0414ABE0AE3061A345630" style="USC">
<section id="HBCB905E49E204BABBD6BBF58727848E8"><enum>128A.</enum><header>Reset of hybrid adjustable rate mortgages</header>
<subsection id="H182A72BE18BD4D5286EFAAB6BFC4E89A"><enum>(a)</enum><header>Hybrid adjustable rate mortgages defined</header><text display-inline="yes-display-inline">For purposes of this section, the term <term>hybrid adjustable rate mortgage</term> 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.</text></subsection>
<subsection id="HA8AA5FF541154C17850088A400861E5A"><enum>(b)</enum><header>Notice of Reset and alternatives</header><text display-inline="yes-display-inline">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:</text>
<paragraph id="H61F6D54A6D4E4A96BA393E97CAB3D39F"><enum>(1)</enum><text display-inline="yes-display-inline">Any index or formula used in making adjustments to or resetting the interest rate and a source of information about the index or formula.</text></paragraph>
<paragraph id="H57DAF267B15441829674791A2ACA0012"><enum>(2)</enum><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="HC22CDD173AB642AA8DF0B263E481BCDA"><enum>(3)</enum><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H6D061C23D6C34F39965B23BB18370390"><enum>(4)</enum><text display-inline="yes-display-inline">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—</text>
<subparagraph id="HFB3445E3BCCF4175839D95A631771F43"><enum>(A)</enum><text>refinancing;</text></subparagraph>
<subparagraph id="HA1DCD6DFFCC8495985FC3ABC381BE2E2"><enum>(B)</enum><text>renegotiation of loan terms;</text></subparagraph>
<subparagraph id="HC13F9E041C3C4260A59B32D7CF50849C"><enum>(C)</enum><text>payment forbearances; and</text></subparagraph>
<subparagraph id="H36DB8824E6AB43BCB9D0C5512602B902"><enum>(D)</enum><text>pre-foreclosure sales.</text></subparagraph></paragraph>
<paragraph id="H02E4EE025386458EAAEFBFD2936C9B2B"><enum>(5)</enum><text display-inline="yes-display-inline">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).</text></paragraph>
<paragraph id="H420BE263591641F6BBAD32AA77831E98"><enum>(6)</enum><text display-inline="yes-display-inline">The address, telephone number, and Internet address for the State housing finance authority (as so defined) for the State in which the consumer resides.</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HC0AD647570DB426C834465CA4D9D32B9"><enum>(b)</enum><header>Clerical amendment</header><text>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:</text>
<quoted-block display-inline="no-display-inline" id="H2B6169290FED4013BEB1185617A1F64E" style="OLC">
<toc regeneration="no-regeneration">
<toc-entry level="section">128A. Reset of hybrid adjustable rate mortgages.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section>
<section id="H5EB4B8684DDC4D6FBF388B72D6D083F8" commented="no" section-type="subsequent-section" display-inline="no-display-inline"><enum>9113.</enum><header>Required disclosures</header><text display-inline="no-display-inline">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:</text>
<quoted-block style="OLC" display-inline="no-display-inline" id="HA9EF8D6EFA024E56BB27D14EE9E4F928">
<paragraph id="HD7F75D9D27CC46B3AE4273477F7EBCE7"><enum>(16)</enum><text display-inline="yes-display-inline">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—</text>
<subparagraph id="H08EEE8C0BABB4F38BD77B49B9DAEEB13"><enum>(A)</enum><text>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</text></subparagraph>
<subparagraph id="HAFB72A3516954F719663C11B7ADC137C"><enum>(B)</enum><text>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.</text></subparagraph></paragraph>
<paragraph id="HD8A42EDEA2FC45E088E5CB9BE8561936"><enum>(17)</enum><text>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.</text></paragraph>
<paragraph id="H3E4A86763850417D88E7C0036884DEC1"><enum>(18)</enum><text>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.</text></paragraph>
<paragraph id="HE315D96E843640948FCEEF6F0F84B844"><enum>(19)</enum><text>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.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section id="HB80D94626B1E422DBCB8514823F51437"><enum>9114.</enum><header>Disclosures required in monthly statements for residential mortgage loans</header><text display-inline="no-display-inline">Section 128 of the Truth in Lending Act (15 U.S.C. 1638) is amended by adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H64637865D73D429AAF44DA50E92A0F59" style="OLC">
<subsection id="H4912A0F5C2204C36AE05700EF2B1EADA"><enum>(f)</enum><header>Periodic statements for residential mortgage loans</header>
<paragraph id="H125E98B4E8164C00BE199F594615AF04"><enum>(1)</enum><header>In general</header><text>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:</text>
<subparagraph id="H6036E160585A43008A58F11D13692D94"><enum>(A)</enum><text display-inline="yes-display-inline">The amount of the principal obligation under the mortgage.</text></subparagraph>
<subparagraph id="H51349C2C3A164DCEAB41ADFF84D93CCD"><enum>(B)</enum><text>The current interest rate in effect for the loan.</text></subparagraph>
<subparagraph id="HFE0BA42B1A964EB3BB14DC243B2CFBD9"><enum>(C)</enum><text>The date on which the interest rate may next reset or adjust.</text></subparagraph>
<subparagraph id="HD1353A3936194D5F9B649A738D455997"><enum>(D)</enum><text>The amount of any prepayment fee to be charged, if any.</text></subparagraph>
<subparagraph id="H29EB404E649C4F4A845FABE0F25BDF91"><enum>(E)</enum><text>A description of any late payment fees.</text></subparagraph>
<subparagraph id="HA9DA812D9DB24CDF832F443EC8DF9453"><enum>(F)</enum><text>A telephone number and electronic mail address that may be used by the obligor to obtain information regarding the mortgage.</text></subparagraph>
<subparagraph id="H6ABC2E594F4446BB8990FC749B5116C9" display-inline="no-display-inline"><enum>(G)</enum><text display-inline="yes-display-inline">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).</text></subparagraph>
<subparagraph id="H3B83B3F1E58C48169062D1DDFB4DBD9D"><enum>(H)</enum><text>Such other information as the Board may prescribe in regulations.</text></subparagraph></paragraph>
<paragraph id="H67890C4818D04DF2BE6F5D639F43DDEE"><enum>(2)</enum><header>Development and use of standard form</header><text display-inline="yes-display-inline">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.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section id="H7232F494637B4234A87EFFF560685952"><enum>9115.</enum><header>Legal assistance for foreclosure-related issues</header>
<subsection id="H5E6EDD81F94148C483FAE6643D323381"><enum>(a)</enum><header>Establishment</header><text display-inline="yes-display-inline">The Secretary of Housing and Urban Development (hereafter in this section referred to as the <term>Secretary</term> 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.</text></subsection>
<subsection id="H6D9B339FC9BA49EA9B9352B5E8A6882B"><enum>(b)</enum><header>Competitive allocation</header><text display-inline="yes-display-inline">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 <term>State and local legal organizations</term> are those State and local organizations whose primary business or mission is to provide legal assistance.</text></subsection>
<subsection id="HB1DB60CA4D1D4C829BB07D89EA4FC925"><enum>(c)</enum><header>Priority to certain areas</header><text>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.</text></subsection>
<subsection id="H5D71DD27B3D849488A5E414ECBC5072F"><enum>(d)</enum><header>Legal assistance</header>
<paragraph id="HB3415C6283F4469D8E9792E11A7A1072"><enum>(1)</enum><header>In general</header><text>Any State or local legal organization that receives financial assistance pursuant to this section may use such amounts only to assist—</text>
<subparagraph id="HA9E4901EC5F04561A29F8D739B3ED3F4"><enum>(A)</enum><text>homeowners of owner-occupied homes with mortgages in default, in danger of default, or subject to or at risk of foreclosure; and</text></subparagraph>
<subparagraph id="H9E61781B2C9A488488C414F432F6752F"><enum>(B)</enum><text>tenants at risk of or subject to eviction as a result of foreclosure of the property in which such tenant resides.</text></subparagraph></paragraph>
<paragraph id="H2F2A446940C6428187D0F8913F865CA2"><enum>(2)</enum><header>Commence use within 90 days</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="HCC7A45F25AA642A3A57B3773856F95A1"><enum>(3)</enum><header>Prohibition on class actions</header><text>No funds provided to a State or local legal organization under this section may be used to support any class action litigation.</text></paragraph>
<paragraph id="HE414102D64824DB9927C81619CC7E740"><enum>(4)</enum><header>Limitation on legal assistance</header><text>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.</text></paragraph>
<paragraph id="H27524674CBCB43C48ACC19DA1AA63D9A"><enum>(5)</enum><header>Effective date</header><text display-inline="yes-display-inline">Notwithstanding section 9116, this subsection shall take effect on the date of the enactment of this Act.</text></paragraph></subsection>
<subsection id="HC1F65FDB969D42ADA78C5158F1FDEE38" display-inline="no-display-inline"><enum>(e)</enum><header>Limitation on distribution of assistance</header>
<paragraph id="H95185798D73A4D1D93F861AAB8BA42F4"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">None of the amounts made available under this section shall be distributed to—</text>
<subparagraph id="HE5DA6B77921C4193B956D6F714974311"><enum>(A)</enum><text>any organization which has been convicted for a violation under Federal law relating to an election for Federal office; or</text></subparagraph>
<subparagraph id="H45E97D133F7C421D9B3284F49B4D7788"><enum>(B)</enum><text>any organization which employs applicable individuals.</text></subparagraph></paragraph>
<paragraph id="HF6663971B5F44D98A226A29649D3A80A"><enum>(2)</enum><header>Definition of applicable individuals</header><text>In this subsection, the term <quote>applicable individual</quote> means an individual who—</text>
<subparagraph id="H181CAA534B9E498BBB68D809998EC868"><enum>(A)</enum><text>is—</text>
<clause id="H7DB8A6F3F3E84635B5BA624B82F3CBFD"><enum>(i)</enum><text>employed by the organization in a permanent or temporary capacity;</text></clause>
<clause id="H34763B04536D405CB2F21321E4EF39C2"><enum>(ii)</enum><text>contracted or retained by the organization; or</text></clause>
<clause id="H96E57E0F552B4FBB815F1A09DA0FAD7F"><enum>(iii)</enum><text>acting on behalf of, or with the express or apparent authority of, the organization; and</text></clause></subparagraph>
<subparagraph id="H00175DC4EEBB48D98C81242B1B79EB75"><enum>(B)</enum><text>has been convicted for a violation under Federal law relating to an election for Federal office. </text></subparagraph></paragraph></subsection>
<subsection id="HB632F27041D9419BA679CB0332E8437D"><enum>(f)</enum><header>Authorization of appropriations</header><text display-inline="yes-display-inline">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.</text></subsection></section>
<section id="HBD95517AE7DF4B24A42301E744AB1EF4"><enum>9116.</enum><header>Effective date</header><text display-inline="no-display-inline">The amendments made by this subtitle shall apply to transactions consummated on or after the effective date of the regulations specified in section 9109.</text></section>
<section id="HD10A906F819F42448981DD26CDC8D329"><enum>9117.</enum><header>Report by the GAO</header>
<subsection id="H7A120717CCAF4DF0AEE5D5AA85CE6C7E"><enum>(a)</enum><header>Report required</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="HDCAC038A06444F8C8A2579425E9A9D4B"><enum>(1)</enum><text display-inline="yes-display-inline">on the mortgage market for mortgages that are not within the safe harbor provided in the amendments made by this subtitle;</text></paragraph>
<paragraph id="H5D3FF3AB65654B11994E86E8935C5DFD"><enum>(2)</enum><text>on the ability of prospective homebuyers to obtain financing;</text></paragraph>
<paragraph id="H2B04E47757754286BC94F08C31F8AD9B"><enum>(3)</enum><text>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;</text></paragraph>
<paragraph id="H8496AE045E31403A871E621C5647795D"><enum>(4)</enum><text>on minorities’ ability to access affordable credit compared with other prospective borrowers;</text></paragraph>
<paragraph id="HEDE6B908FB3340DFAC06F79DD27268DC"><enum>(5)</enum><text>on home sales and construction;</text></paragraph>
<paragraph id="HCE097D237C4D45D493DE96022EAE22AB"><enum>(6)</enum><text>of extending the rescission right, if any, on adjustable rate loans and its impact on litigation;</text></paragraph>
<paragraph id="H660088E0A6504AFBBF2BCB5A5C29347F"><enum>(7)</enum><text>of State foreclosure laws and, if any, an investor’s ability to transfer a property after foreclosure;</text></paragraph>
<paragraph id="H0BD0EB07D803424DB6A739DD69C634B6"><enum>(8)</enum><text>of expanding the existing provisions of the Home Ownership and Equity Protection Act of 1994;</text></paragraph>
<paragraph id="H405959FE1F1648E8B04F983A13A355C0"><enum>(9)</enum><text>of prohibiting prepayment penalties on high-cost mortgages; and</text></paragraph>
<paragraph id="H7FADCA98857745AC894F780A21A35D4F"><enum>(10)</enum><text display-inline="yes-display-inline">of establishing counseling services under the Department of Housing and Urban Development and offered through the Office of Housing Counseling.</text></paragraph></subsection>
<subsection id="H4B3508C86E3548BB9303FEDBAAC6FBC1"><enum>(b)</enum><header>Report</header><text>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).</text></subsection>
<subsection id="H84286EC8AEF64CC3AC70D81EB973A289"><enum>(c)</enum><header>Examination related to certain credit risk retention provisions</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="HC0D21C89C1CC44E8B1DFA56ABC6B9AEE"><enum>(d)</enum><header>Analysis of credit risk retention provisions</header><text display-inline="yes-display-inline">The report required by subsection (b) shall also include—</text>
<paragraph id="H045AD7B1C9A54AE0B0BF28D90E0463A2"><enum>(1)</enum><text>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</text></paragraph>
<paragraph id="HF49DC7437F5B48ADA979336989E35C12"><enum>(2)</enum><text>recommendations to the Congress on adjustments that should be made, or additional measures that should be undertaken.</text></paragraph></subsection></section>
<section commented="no" display-inline="no-display-inline" id="HE6243D1760F443BF80096BCD591733A9" section-type="subsequent-section"><enum>9118.</enum><header>State Attorney General enforcement authority</header><text display-inline="no-display-inline">Section 130(e) of the Truth in Lending Act (15 U.S.C. 1640(e)) is amended by striking <quote>section 129 may also</quote> and inserting <quote>section 129, 129B, or 129C of this Act may also</quote>.</text></section></subtitle>
<subtitle id="H631420F37D8F46AF972BB08A7FB35596"><enum>C</enum><header>High-Cost Mortgages</header>
<section id="HB44D601A438C4971A7647780C65ABC56"><enum>9201.</enum><header>Definitions relating to high-cost mortgages</header>
<subsection id="HEE90AB5CA2F04C72BA6A8028A1A6814D"><enum>(a)</enum><header>High-cost mortgage defined</header><text>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:</text>
<quoted-block id="H1BC118C0203741E8B0A13CDF5C324B73">
<subsection id="H1AC744C0779B4F0DA8B1B0D43D7C5337"><enum>(aa)</enum><header>High-cost mortgage</header>
<paragraph id="HF22EADC227B44A779B88E3D63AA1ED78"><enum>(1)</enum><header>Definition</header>
<subparagraph id="HA8CB395BBD8B4A79A6517E4669EC97D6"><enum>(A)</enum><header>In general</header><text>The term <term>high-cost mortgage</term>, 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—</text>
<clause id="H0DFE05B6C4D64B33A49AE94CD73FCD8D"><enum>(i)</enum><text>in the case of a credit transaction secured—</text>
<subclause id="HFC99CEEF90394E41BEA22DFE0BF71D41"><enum>(I)</enum><text display-inline="yes-display-inline">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</text></subclause>
<subclause id="H32D7BA364751400EA22CEDC4C1D136B0"><enum>(II)</enum><text display-inline="yes-display-inline">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;</text></subclause></clause>
<clause id="H59F79F1E1530400B816CA60082A680B3"><enum>(ii)</enum><text>the total points and fees payable in connection with the transaction exceed—</text>
<subclause id="HFFB561F2DEDA448EA72749717EE0BCD4"><enum>(I)</enum><text display-inline="yes-display-inline">in the case of a transaction for $20,000 or more, 5 percent of the total transaction amount; or</text></subclause>
<subclause id="H9C6F23C05298457AB8C72033D99957A1"><enum>(II)</enum><text>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</text></subclause></clause>
<clause id="HEA68AB3A63D74DFA8F748D7CF289E0C4"><enum>(iii)</enum><text display-inline="yes-display-inline">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.</text></clause></subparagraph>
<subparagraph id="HDD075AE9F0E546C8ACA964466DCAA67C"><enum>(B)</enum><header>Introductory rates taken into account</header><text>For purposes of subparagraph (A)(i), the annual percentage rate of interest shall be determined based on the following interest rate:</text>
<clause id="H0D93DA1979944F4F9C5E001C09F0B701"><enum>(i)</enum><text>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.</text></clause>
<clause id="H225B3646594D4CBF922DD1D7F539557D"><enum>(ii)</enum><text display-inline="yes-display-inline">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.</text></clause>
<clause id="H6DF4AB05CD8C4B9B989473865E382DA3"><enum>(iii)</enum><text display-inline="yes-display-inline">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.</text></clause></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H52A6BC6943D14316A60B9758E0904A57"><enum>(b)</enum><header>Adjustment of percentage points</header><text>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:</text>
<quoted-block id="H126433012AF94BFE996B4DF1ECAEC097">
<subparagraph id="H14AC01AA879448A2A5D5F4326A924178"><enum>(B)</enum><text>An increase or decrease under subparagraph (A)—</text>
<clause id="H31EDFC6CF81C48C4B0B6FC71D342C739"><enum>(i)</enum><text>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</text></clause>
<clause id="H11CCD816139F4BFD8E1E37BDEA16A2EC"><enum>(ii)</enum><text>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.</text></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HEA6454D557FF47BCB486BFF38FD0C236"><enum>(c)</enum><header>Points and fees defined</header>
<paragraph id="HF2A804A92927451C8205C02BAA7F1B3E"><enum>(1)</enum><header>In general</header><text>Section 103(aa)(4) of the Truth in Lending Act (15 U.S.C. 1602(aa)(4)) is amended—</text>
<subparagraph id="H6A792E8340CE4CCB9BD655868CD40501"><enum>(A)</enum><text>by striking subparagraph (B) and inserting the following:</text>
<quoted-block id="H7AC31C930F9743898AE4ED999D5D597A">
<subparagraph id="HFD17845A8498415A87D8D69379AEBBBB"><enum>(B)</enum><text display-inline="yes-display-inline">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;</text></subparagraph><after-quoted-block>;</after-quoted-block></quoted-block></subparagraph>
<subparagraph id="HED0DDB1B2F82406D902099797E716B03"><enum>(B)</enum><text display-inline="yes-display-inline">in subparagraph (C)(ii), by inserting <quote>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</quote> before the semicolon at the end;</text></subparagraph>
<subparagraph id="H7B5DE7CA3FC7457CA1A772C5AE978E97"><enum>(C)</enum><text>in subparagraph (C)(iii), by striking <quote>; and</quote> and inserting <quote>, except as provided for in clause (ii);</quote>;</text></subparagraph>
<subparagraph id="H45BC71143E834668BD18A750F3C80F60"><enum>(D)</enum><text>by redesignating subparagraph (D) as subparagraph (G); and</text></subparagraph>
<subparagraph id="H113B9540162946A5A7CF0AD67001DF55"><enum>(E)</enum><text>by inserting after subparagraph (C) the following new subparagraphs:</text>
<quoted-block id="HAE68A1AD701E43DC9C2C3AA42FFB8752">
<subparagraph id="H566F98048783496BB2FD10A57EFC06F5"><enum>(D)</enum><text>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;</text></subparagraph>
<subparagraph id="H0F6D2FF971A94F7EA12D9B259C843A78"><enum>(E)</enum><text>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;</text></subparagraph>
<subparagraph id="H6D8C8E940EF14D2FBA5349EBB7E5A3DF"><enum>(F)</enum><text>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</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph>
<paragraph id="H24D8EA05A02C4C67B10843103AC90A8E"><enum>(2)</enum><header>Calculation of points and fees for open-end consumer credit plans</header><text>Section 103(aa) of the Truth in Lending Act (15 U.S.C. 1602(aa)) is amended—</text>
<subparagraph id="H3AE5877C049A4518A7A57B72E9A1C3BC"><enum>(A)</enum><text>by redesignating paragraph (5) as paragraph (6); and</text></subparagraph>
<subparagraph id="HFD7B4143ECDE4177B8DA93AFE80F9CE4"><enum>(B)</enum><text>by inserting after paragraph (4) the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="HC764908ABB6448A9A022889DC00E202C" style="OLC">
<paragraph id="HA1E85AF6B518402CA749999A5DB6A510"><enum>(5)</enum><header>Calculation of points and fees for open-end consumer credit plans</header><text display-inline="yes-display-inline">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.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph></subsection>
<subsection id="HE6F0ECAE820D45A0AA858ED14837B396"><enum>(d)</enum><header>Bona fide discount loan discount points</header><text>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:</text>
<quoted-block id="HEBAC9E64F6C94845AA0EE76911FEE208">
<subsection id="H730E33B902E44C14A4C3C56430A9FC1D"><enum>(dd)</enum><header>Bona fide discount points and prepayment penalties</header><text display-inline="yes-display-inline">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:</text>
<paragraph id="H881E37486A7C4429BD759EB2C40910F6"><enum>(1)</enum><text display-inline="yes-display-inline">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—</text>
<subparagraph id="H753CE23B911749CB93A9072795B4A3BC"><enum>(A)</enum><text>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</text></subparagraph>
<subparagraph id="H251CC255158C4BEDBF0EDFED38199ACB"><enum>(B)</enum><text>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.).</text></subparagraph></paragraph>
<paragraph id="H0298B025904741D2B6B226E93F710E3E"><enum>(2)</enum><text display-inline="yes-display-inline">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—</text>
<subparagraph id="H4A78CCEA2BAF4B1694BA5D7FB3EB89FA"><enum>(A)</enum><text>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</text></subparagraph>
<subparagraph id="H2BD352DF7ACB4F9F8A9AC0006C3745B0"><enum>(B)</enum><text>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.).</text></subparagraph></paragraph>
<paragraph id="H00DFF19A0F414FE3849E9F053E46E903"><enum>(3)</enum><text>For purposes of paragraph (1), the term <term>bona fide discount points</term> 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.</text></paragraph>
<paragraph id="HDFD270ECED884F9B9B9596F857091A1E"><enum>(4)</enum><text display-inline="yes-display-inline">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.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section>
<section display-inline="no-display-inline" id="H8EBE4EECB6EF426E9F3D66C5ECD42513" section-type="subsequent-section"><enum>9202.</enum><header>Amendments to existing requirements for certain mortgages</header>
<subsection display-inline="no-display-inline" id="HE13F608AE4FE4A1199F2525ABE6E693F"><enum>(a)</enum><header>Prepayment penalty provisions</header><text display-inline="yes-display-inline">Section 129(c)(2) of the Truth in Lending Act (15 U.S.C. 1639(c)(2)) is hereby repealed.</text></subsection>
<subsection id="H449A7055BE6143D985E283CA0C9F1CF9"><enum>(b)</enum><header>No balloon payments</header><text>Section 129(e) of the Truth in Lending Act (15 U.S.C. 1639(e)) is amended to read as follows:</text>
<quoted-block id="HDB233D1C8A2F471E872C4383A0F531D4">
<subsection id="H68957B1134A64F3B972C64BB347361D5"><enum>(e)</enum><header>No balloon payments</header><text display-inline="yes-display-inline">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.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section>
<section commented="no" id="H31170502D93B4804BCC1ED8D8418CD4B"><enum>9203.</enum><header>Additional requirements for certain mortgages</header>
<subsection commented="no" id="H9F491DD65D0B43FD937002DB9A1214E0"><enum>(a)</enum><header>Additional Requirements for Certain Mortgages</header><text>Section 129 of the Truth in Lending Act (15 U.S.C. 1639) is amended—</text>
<paragraph commented="no" id="H6ED9E25930654AFDA6C554130A7F5CC3"><enum>(1)</enum><text>by redesignating subsections (j), (k) and (l) as subsections (n), (o) and (p) respectively; and</text></paragraph>
<paragraph commented="no" id="HD5D9C6E3E2DA45A78BEFEC64B3E2C922"><enum>(2)</enum><text>by inserting after subsection (i) the following new subsections:</text>
<quoted-block id="H6A545DF8CF7A4609B9AD1436839CA0EE">
<subsection commented="no" id="H31412A05BC684B67924BF82E85263121"><enum>(j)</enum><header>Recommended Default</header><text>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.</text></subsection>
<subsection commented="no" id="H66FEDBC980314DE881A09B259070AC27"><enum>(k)</enum><header>Late fees</header>
<paragraph commented="no" id="H7C998AC49FFF49B796357B88D8752719"><enum>(1)</enum><header>In general</header><text>No creditor may impose a late payment charge or fee in connection with a high-cost mortgage—</text>
<subparagraph commented="no" id="H5F7489D6D71A40FEB1F842EAA80D2281"><enum>(A)</enum><text>in an amount in excess of 4 percent of the amount of the payment past due;</text></subparagraph>
<subparagraph commented="no" id="H367A2AC835A64C738B57D68A4969B807"><enum>(B)</enum><text>unless the loan documents specifically authorize the charge or fee;</text></subparagraph>
<subparagraph commented="no" id="HA2B703DE6DDA4BA29CB85921B5DF0392"><enum>(C)</enum><text>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</text></subparagraph>
<subparagraph commented="no" id="HF2E579509E0A4FA3ADC1CC88951270AD"><enum>(D)</enum><text>more than once with respect to a single late payment.</text></subparagraph></paragraph>
<paragraph commented="no" id="H938EEDCDA5084D4FA4EB163A28449ABC"><enum>(2)</enum><header>Coordination with subsequent late fees</header><text>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.</text></paragraph>
<paragraph commented="no" id="H1DC3D1F9C9CB4D6F9DAA1187CB9E7FEE"><enum>(3)</enum><header>Failure to make installment payment</header><text>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.</text></paragraph></subsection>
<subsection id="H3D613EAD07A04B6DB6D3D44C3F2FD65B" display-inline="no-display-inline"><enum>(l)</enum><header>Acceleration of Debt</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection commented="no" id="H11046C427ECC44CC99B854B14070D8AD"><enum>(m)</enum><header>Restriction on financing points and fees</header><text>No creditor may directly or indirectly finance, in connection with any high-cost mortgage, any of the following:</text>
<paragraph commented="no" id="H9E90A5F08C5D47448481B78D7C17C30F"><enum>(1)</enum><text>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.</text></paragraph>
<paragraph commented="no" id="HC54142D607744815AF5C8AEEB87FC759"><enum>(2)</enum><text>Any points or fees.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection commented="no" id="H5F2338A71AA7411A887E29B3B51C0E35"><enum>(b)</enum><header>Prohibitions on evasions</header><text>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:</text>
<quoted-block id="HC5D7C1846B5A43C7BE0A030D04C60B7D">
<subsection commented="no" id="H22288A87D465408BA68CE478B85276F0"><enum>(q)</enum><header>Prohibitions on evasions, structuring of transactions, and reciprocal arrangements</header><text>A creditor may not take any action in connection with a high-cost mortgage—</text>
<paragraph commented="no" id="H5947B1588D80422BAD35810FB5CAE77D"><enum>(1)</enum><text>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</text></paragraph>
<paragraph commented="no" id="HB71E48FDE9304225A829E60F73675780"><enum>(2)</enum><text>to divide any loan transaction into separate parts for the purpose and with the intent of evading provisions of this title.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection commented="no" id="H049C7962531245B9ACA7FD94F59855B3"><enum>(c)</enum><header>Modification or Deferral Fees</header><text>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:</text>
<quoted-block id="H14A79E0F432F4A0FA265FAC6380E64E0">
<subsection commented="no" id="HE3FD3EEB3A8541A08E39FB769E8E5E72"><enum>(r)</enum><header>Modification and deferral fees prohibited</header>
<paragraph id="H48440CE63461450EB52A48CAE4DB7D16"><enum>(1)</enum><header>Creditors</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="HC986F5A32F594B428F91B51D519AD2CF"><enum>(2)</enum><header>Third parties</header><text display-inline="yes-display-inline">A third-party may not charge a consumer any fee to—</text>
<subparagraph id="HE1493EE5118F46D19EA5160E4CF0C890"><enum>(A)</enum><text>modify, renew, extend, or amend a high-cost mortgage, or defer any payment due under the terms of such mortgage;</text></subparagraph>
<subparagraph id="H3AC67282B66B4396B345EE45A999F979"><enum>(B)</enum><text>negotiate with a creditor on behalf of a consumer, the modification, renewal, extension, or amendment of a high-cost mortgage; or</text></subparagraph>
<subparagraph id="HA033C63A07264DF9B58AC5D76C478EE0"><enum>(C)</enum><text>negotiate with a creditor on behalf of a consumer, the deferral of any payment due under the terms of such mortgage, </text></subparagraph><continuation-text continuation-text-level="paragraph">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.</continuation-text></paragraph>
<paragraph id="H18CD3E24F5464CA58112724BC99B25F9"><enum>(3)</enum><header>Enforcement</header><text>Section 130 shall be applied for purposes of paragraph (2) by—</text>
<subparagraph id="HC4A7FE0AFC824C3384C4947EB29897AB"><enum>(A)</enum><text>substituting <quote>third party</quote> for <quote>creditor</quote>each place such term appears; and</text></subparagraph>
<subparagraph id="HE51410A841F74DA0AF0A2D03022941EF"><enum>(B)</enum><text>substituting <quote>any fee charged by a third party</quote> for <quote>finance charge</quote> each place such term appears.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection commented="no" id="H70231F19C304442FAF7AD7703F4EE5A2"><enum>(d)</enum><header>Payoff statement</header><text>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:</text>
<quoted-block id="HACCA5482613241CEB5E2819061E411C0">
<subsection commented="no" id="H57ED24EA4CF741AD942C780ECD2803CD"><enum>(s)</enum><header>Payoff statement</header>
<paragraph commented="no" id="H317F507835F7474CAB861EBF12A7D5FC"><enum>(1)</enum><header>Fees</header>
<subparagraph commented="no" id="HAB567E02C0934471B0FD75395221829E"><enum>(A)</enum><header>In general</header><text>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.</text></subparagraph>
<subparagraph commented="no" id="H094301F1748242A79535F39B03E31E63"><enum>(B)</enum><header>Transaction fee</header><text>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.</text></subparagraph>
<subparagraph commented="no" id="H191DB461372C40368F87EC7849FF06BB"><enum>(C)</enum><header>Fee disclosure</header><text>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).</text></subparagraph>
<subparagraph commented="no" id="H81ADA26CA99A4AFCB3D5A4CE49C51658"><enum>(D)</enum><header>Multiple requests</header><text>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.</text></subparagraph></paragraph>
<paragraph commented="no" id="HFD7FB9AD56F048B983A147663D5A0896"><enum>(2)</enum><header>Prompt delivery</header><text>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.</text></paragraph>
<paragraph id="H5BEFC66442394A22B8E30B6129F1C036"><enum>(3)</enum><header>Services considered assignee</header><text display-inline="yes-display-inline">For the purposes of this subsection, a servicer shall be considered an assignee under the Truth in Lending Act.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection commented="no" id="HDAB7C60F6DCA431E94F0C121294DC9C7"><enum>(e)</enum><header>Pre-Loan Counseling Required</header><text>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:</text>
<quoted-block display-inline="no-display-inline" id="H2671614F720B4C7E933FC6246463E521" style="OLC">
<subsection commented="no" id="HC733EFC6104342C7BFB7AE8EC57D01DB"><enum>(t)</enum><header>Pre-Loan Counseling</header>
<paragraph commented="no" id="HCE601795837A4045BBD8A01D850176EC"><enum>(1)</enum><header>In general</header><text>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.</text></paragraph>
<paragraph commented="no" id="HB08CA58EE50549E0A0D35B67AFAB05A6"><enum>(2)</enum><header>Disclosures required prior to counseling</header><text>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.</text></paragraph>
<paragraph commented="no" id="HF826BE9C5EE3441CADE2A4CCDF00DB2D"><enum>(3)</enum><header>Regulations</header><text>The Board may prescribe such regulations as the Board determines to be appropriate to carry out the requirements of paragraph (1).</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HBF547166934A4F9E83CEBCCDC2F3A65B"><enum>(f)</enum><header>Flipping prohibited</header><text display-inline="yes-display-inline">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:</text>
<quoted-block display-inline="no-display-inline" id="H6149A26A141B4BC0B37BD2F0B64E35B7" style="OLC">
<subsection id="H97E9A95638AF401596A7283136A5651E"><enum>(u)</enum><header>Flipping</header>
<paragraph id="H5917CF8111C74455BD2CEDA4D8258DC2"><enum>(1)</enum><header>In general</header><text>No creditor may knowingly or intentionally engage in the unfair act or practice of flipping in connection with a high-cost mortgage.</text></paragraph>
<paragraph id="H285FE456094140C1A989F89F2C56835C"><enum>(2)</enum><header>Flipping defined</header><text display-inline="yes-display-inline">For purposes of this subsection, the term <term>flipping</term> 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.</text></paragraph></subsection>
<subsection display-inline="no-display-inline" id="HF60566BCE73041698405ABA9FFDB0838"><enum>(v)</enum><header>Corrections and unintentional violations</header><text display-inline="yes-display-inline">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—</text>
<paragraph commented="no" id="HE460A98AC46546F296EC4B8171CF61E7"><enum>(1)</enum><text>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—</text>
<subparagraph commented="no" id="H0DF569572DC643DDB380EEB8D1DDE4E0"><enum>(A)</enum><text>make the loan satisfy the requirements of this chapter; or</text></subparagraph>
<subparagraph commented="no" id="H068EF5CB09F94A64B9B21379BF111D01"><enum>(B)</enum><text>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</text></subparagraph></paragraph>
<paragraph commented="no" id="H3D9F0CCB928542CDA686EDB8A784FA31"><enum>(2)</enum><text>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—</text>
<subparagraph commented="no" id="H3F377289CDD94D41B85819020D54D86D"><enum>(A)</enum><text>make the loan satisfy the requirements of this chapter; or</text></subparagraph>
<subparagraph commented="no" id="HE081631B4786484392F7245F99E0FCF7"><enum>(B)</enum><text>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.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section>
<section id="HD4743D7158E94CA8A0270DFB1D3CDD68"><enum>9204.</enum><header>Regulations</header>
<subsection id="H04A33CFC2B7443918AE2FD142490B8F8"><enum>(a)</enum><header>In General</header><text>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.</text></subsection>
<subsection id="HDDA8ECC5B3E54ADFB15528CB9C25E866"><enum>(b)</enum><header>Consumer Mortgage Education</header>
<paragraph id="H19032A52637F4214AD07903C635A3F8E"><enum>(1)</enum><header>Regulations</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="HE5756A28CCAA4AFA83A398352FD74564"><enum>(2)</enum><header>Coordination with state law</header><text>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.</text></paragraph></subsection></section>
<section id="HF44211927FCA4297AC782803C00040F4"><enum>9205.</enum><header>Effective date</header><text display-inline="no-display-inline">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.</text></section></subtitle>
<subtitle id="H474A139045424DE5B7484198501E65BF"><enum>D</enum><header>Office of Housing Counseling</header>
<section id="HD5F97E7AEFD04682BE99DBC5514B4C48"><enum>9301.</enum><header>Short title</header><text display-inline="no-display-inline">This subtitle may be cited as the <quote><short-title>Expand and Preserve Home Ownership Through Counseling Act</short-title></quote>.</text></section>
<section id="HCD08E3E5A24F4194B9197887CC701736"><enum>9302.</enum><header>Establishment of Office of Housing Counseling</header><text display-inline="no-display-inline">Section 4 of the Department of <act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> (42 U.S.C. 3533) is amended by adding at the end the following new subsection:</text>
<quoted-block act-name="Housing" id="H17949C08C4C8423989FEAE9CFC64F80C">
<subsection id="HC142C4F4E186417DA232EBFC24206509"><enum>(g)</enum><header>Office of Housing Counseling</header>
<paragraph id="H8F1749656B5B4CBDA2249CFD4ED59AE5"><enum>(1)</enum><header>Establishment</header><text>There is established, in the Department, the Office of Housing Counseling.</text></paragraph>
<paragraph id="HE190758EEF1945C8AEC43E75CC036BF2"><enum>(2)</enum><header>Director</header><text>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.</text></paragraph>
<paragraph id="HA59D0EED17764FD2B77A9FCEB6E613DE"><enum>(3)</enum><header>Functions</header>
<subparagraph id="H9B6E4A75A5854FC299614F4A4690F890"><enum>(A)</enum><header>In general</header><text>The Director shall have primary responsibility within the Department for all activities and matters relating to homeownership counseling and rental housing counseling, including—</text>
<clause id="H0231725C4B2F494C862520DE6B7B7509"><enum>(i)</enum><text>research, grant administration, public outreach, and policy development relating to such counseling; and</text></clause>
<clause id="H635A5F2C0942452C9B3935827F18DF0E"><enum>(ii)</enum><text>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.</text></clause></subparagraph>
<subparagraph id="H089E5402F2F74069AED224528081D0AD"><enum>(B)</enum><header>Specific functions</header><text display-inline="yes-display-inline">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—</text>
<clause id="H066B9353789C42AB846CD2C8679030AE"><enum>(i)</enum><text>the counseling procedures under section 106(g)(1) of the <act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> of 1968 (12 U.S.C. 1701x(h)(1));</text></clause>
<clause id="H09A4134789F843D097F889E209447B59"><enum>(ii)</enum><text>carrying out all other functions of the Secretary under section 106(g) of the <act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> of 1968, including the establishment, operation, and publication of the availability of the toll-free telephone number under paragraph (2) of such section;</text></clause>
<clause commented="no" display-inline="no-display-inline" id="H2FA4D252D2094F0489F8D47CA2F94586"><enum>(iii)</enum><text display-inline="yes-display-inline">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);</text></clause>
<clause id="HAE9A81B0918544EEBEC4C51367355434"><enum>(iv)</enum><text>carrying out the certification program under section 106(e) of the <act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> of 1968 (12 U.S.C. 1701x(e));</text></clause>
<clause id="HFBA3E1CCF84F4B45879C78FECDBE7BE1"><enum>(v)</enum><text>carrying out the assistance program under section 106(a)(4) of the <act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> of 1968, including criteria for selection of applications to receive assistance;</text></clause>
<clause id="H4EF6686CA48E4F2DBE61FC15AF74571F"><enum>(vi)</enum><text>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;</text></clause>
<clause id="H18C25BCFB45E43DEB635E20B857EB940"><enum>(vii)</enum><text>providing for operation of the advisory committee established under paragraph (4) of this subsection;</text></clause>
<clause id="HF3BF7D7A0EF14E1A9350545666EFF296"><enum>(viii)</enum><text>collaborating with community-based organizations with expertise in the field of housing counseling; and</text></clause>
<clause id="HA380D85C96E1410DA719A002433DA7A1"><enum>(ix)</enum><text display-inline="yes-display-inline">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.</text></clause></subparagraph></paragraph>
<paragraph id="H3E6BAEE83E6C495692B0D8607037B3C7"><enum>(4)</enum><header>Advisory Committee</header>
<subparagraph id="H0A5CFBBE8E9A4E388AA57E1B182C0534"><enum>(A)</enum><header>In general</header><text>The Secretary shall appoint an advisory committee to provide advice regarding the carrying out of the functions of the Director.</text></subparagraph>
<subparagraph id="H410C474E0C684B1D9F58D41FAB343628"><enum>(B)</enum><header>Members</header><text>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.</text></subparagraph>
<subparagraph id="HEE360BD4632A4E06AA2362130F1BFF5B"><enum>(C)</enum><header>Terms</header><text>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.</text></subparagraph>
<subparagraph id="H934516146A7542B184C770B50032F226"><enum>(D)</enum><header>Terms of initial appointees</header><text>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.</text></subparagraph>
<subparagraph id="H64D549CA31D244F9B0F01592269C239B"><enum>(E)</enum><header>Prohibition of pay; travel expenses</header><text>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.</text></subparagraph>
<subparagraph id="H3BDA57F14C204B33B9CB26AC2F6929E8"><enum>(F)</enum><header>Advisory role only</header><text>The advisory committee shall have no role in reviewing or awarding housing counseling grants.</text></subparagraph></paragraph>
<paragraph id="H32AAE61AE392415E8F03250D9EBA19FF"><enum>(5)</enum><header>Scope of homeownership counseling</header><text>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.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section id="HAA7616D245B1474C9957F595A931851D"><enum>9303.</enum><header>Counseling procedures</header>
<subsection id="H95ED8278A7FC43208283A8097F634136"><enum>(a)</enum><header>In general</header><text>Section 106 of the <act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> of 1968 (12 U.S.C. 1701x) is amended by adding at the end the following new subsection:</text>
<quoted-block act-name="Housing" id="HD1AE5B6614584996B95F1E68DF5F341B">
<subsection id="H7CBA0D85977E41D88F3037B2A56C19DB"><enum>(g)</enum><header>Procedures and activities</header>
<paragraph id="H7ADA81C4526441A599FBA12FB501F6A0"><enum>(1)</enum><header>Counseling procedures</header>
<subparagraph id="H748AC2E17A934206B3FF6D51FDC2891D"><enum>(A)</enum><header>In general</header><text>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.</text></subparagraph>
<subparagraph id="HBEB0582A33A54010BED70D313C68C054"><enum>(B)</enum><header>Homeownership counseling</header><text>For purposes of this subsection and as used in the provisions referred to in this subparagraph, the term <term>homeownership counseling</term> 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—</text>
<clause id="H6B91D81A88F64942A36646AEC662A2A3"><enum>(i)</enum><text>section 105(a)(20) of the <act-name parsable-cite="HCDA">Housing and Community Development Act of 1974</act-name> (42 U.S.C. 5305(a)(20));</text></clause>
<clause id="H1BF5A3E324B847D1AD0C5A84AEE75DB6"><enum>(ii)</enum><text>in the <act-name parsable-cite="USHA">United States Housing Act of 1937</act-name>—</text>
<subclause id="HB1F28D21CE934BE38FB908A1EBEF7504"><enum>(I)</enum><text>section 9(e) (42 U.S.C. 1437g(e));</text></subclause>
<subclause id="HD7195A2738214556B967A991590DE685"><enum>(II)</enum><text>section 8(y)(1)(D) (42 U.S.C. 1437f(y)(1)(D));</text></subclause>
<subclause id="HCD63E544180A48CF9506A75D7CB67116"><enum>(III)</enum><text>section 18(a)(4)(D) (42 U.S.C. 1437p(a)(4)(D));</text></subclause>
<subclause id="H7D1E3C1C5C5043D288AD84F9E4D94110"><enum>(IV)</enum><text>section 23(c)(4) (42 U.S.C. 1437u(c)(4));</text></subclause>
<subclause id="H30B842C915994E6FB1010E03E2ADBD26"><enum>(V)</enum><text>section 32(e)(4) (42 U.S.C. 1437z–4(e)(4));</text></subclause>
<subclause id="H4926FF074014479DA1FA7E20D3BFDCB7"><enum>(VI)</enum><text>section 33(d)(2)(B) (42 U.S.C. 1437z–5(d)(2)(B));</text></subclause>
<subclause id="H804C62A2CF1943A68488407933092341"><enum>(VII)</enum><text>sections 302(b)(6) and 303(b)(7) (42 U.S.C. 1437aaa–1(b)(6), 1437aaa–2(b)(7)); and</text></subclause>
<subclause id="H99EA7F42C0D94E3998A13FF8B2959A0A"><enum>(VIII)</enum><text>section 304(c)(4) (42 U.S.C. 1437aaa–3(c)(4));</text></subclause></clause>
<clause id="H3D27F1797503470BA46B45BC17DC7184"><enum>(iii)</enum><text>section 302(a)(4) of the American Homeownership and Economic Opportunity Act of 2000 (42 U.S.C. 1437f note);</text></clause>
<clause id="H94E1AE7E2E7C4CA5A1C4331AEE140D92"><enum>(iv)</enum><text>sections 233(b)(2) and 258(b) of the <act-name parsable-cite="CGNHA">Cranston-Gonzalez National Affordable Housing Act</act-name> (42 U.S.C. 12773(b)(2), 12808(b));</text></clause>
<clause id="HB43827748F884A79B65DF59C489A8D64"><enum>(v)</enum><text>this section and section 101(e) of the <act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> of 1968 (12 U.S.C. 1701x, 1701w(e));</text></clause>
<clause id="H6681C5442B7A4C22B2CE4F864C3A6798"><enum>(vi)</enum><text>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));</text></clause>
<clause id="H0D47226207144117856C60062D04717D"><enum>(vii)</enum><text>sections 422(b)(6), 423(b)(7), 424(c)(4), 442(b)(6), and 443(b)(6) of the <act-name parsable-cite="CGNHA">Cranston-Gonzalez National Affordable Housing Act</act-name> (42 U.S.C. 12872(b)(6), 12873(b)(7), 12874(c)(4), 12892(b)(6), and 12893(b)(6));</text></clause>
<clause id="H00FBF2F7B2474688968D8CF23A1ADCDE"><enum>(viii)</enum><text>section 491(b)(1)(F)(iii) of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11408(b)(1)(F)(iii));</text></clause>
<clause id="HB0DDD87B22524542B936C916E5BD3F5F"><enum>(ix)</enum><text>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));</text></clause>
<clause id="H3F176B7AC52D499693ACD74D038469DE"><enum>(x)</enum><text>in the <act-name parsable-cite="NHA">National Housing Act</act-name>—</text>
<subclause id="H9C9671AEFAEF4A71845362B363F55451"><enum>(I)</enum><text>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);</text></subclause>
<subclause id="H0AFB5F6610F147D9871E6B546BA9EC01"><enum>(II)</enum><text>subsections (a) and (c)(3) of section 237 (12 U.S.C. 1715z–2); and</text></subclause>
<subclause id="HCD0D2C0A59124482BA03222292C30EC5"><enum>(III)</enum><text>subsections (d)(2)(B) and (m)(1) of section 255 (12 U.S.C. 1715z–20);</text></subclause></clause>
<clause id="HC1A591C15B7B4D1EBDAF1D141C00A67C"><enum>(xi)</enum><text>section 502(h)(4)(B) of the <act-name parsable-cite="HA49">Housing Act of 1949</act-name> (42 U.S.C. 1472(h)(4)(B)); </text></clause>
<clause id="HDF0C2E1D29124F1C892AD8678C3C71DA"><enum>(xii)</enum><text>section 508 of the <act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> of 1970 (12 U.S.C. 1701z–7); and</text></clause>
<clause id="H873EF07ED8D2408CB9BB7197F1AE52FA"><enum>(xiii)</enum><text display-inline="yes-display-inline">section 106 of the Energy Policy Act of 1992 (42 U.S.C. 12712 note).</text></clause></subparagraph>
<subparagraph id="H453B66DF291745F78FBDB8D0CAE0AF9F"><enum>(C)</enum><header>Rental housing counseling</header><text>For purposes of this subsection, the term <term>rental housing counseling</term> 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—</text>
<clause id="HBD9A02FB4F504FD29B11B16747C30014"><enum>(i)</enum><text>section 105(a)(20) of the <act-name parsable-cite="HCDA">Housing and Community Development Act of 1974</act-name> (42 U.S.C. 5305(a)(20));</text></clause>
<clause id="H130FAF37CADD409A882DAC8596A7A5A4"><enum>(ii)</enum><text>in the <act-name parsable-cite="USHA">United States Housing Act of 1937</act-name>—</text>
<subclause id="HADE16B25B4FA492E83DE0E34C688E334"><enum>(I)</enum><text>section 9(e) (42 U.S.C. 1437g(e));</text></subclause>
<subclause id="H531C503F5BC5473BB3E7C109E6475A98"><enum>(II)</enum><text>section 18(a)(4)(D) (42 U.S.C. 1437p(a)(4)(D));</text></subclause>
<subclause id="H5592752189D6414FAAA6D84A312066EF"><enum>(III)</enum><text>section 23(c)(4) (42 U.S.C. 1437u(c)(4));</text></subclause>
<subclause id="HA3E01D7F03174A2C8A18B3D00AF3405B"><enum>(IV)</enum><text>section 32(e)(4) (42 U.S.C. 1437z–4(e)(4));</text></subclause>
<subclause id="H3F9D287391E9418A87C2EA3302F68719"><enum>(V)</enum><text>section 33(d)(2)(B) (42 U.S.C. 1437z–5(d)(2)(B)); and</text></subclause>
<subclause id="HD6756386A7CE4CD596074CD5BF9F496B"><enum>(VI)</enum><text>section 302(b)(6) (42 U.S.C. 1437aaa–1(b)(6));</text></subclause></clause>
<clause id="HA7C2F3843D844EE0A4DFB27902765931"><enum>(iii)</enum><text>section 233(b)(2) of the <act-name parsable-cite="CGNHA">Cranston-Gonzalez National Affordable Housing Act</act-name> (42 U.S.C. 12773(b)(2));</text></clause>
<clause id="H6883AF6F6E31480B9EED695BC2BAFB25"><enum>(iv)</enum><text>section 106 of the <act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> of 1968 (12 U.S.C. 1701x);</text></clause>
<clause id="HD483A4E2857B45A7B085F0D4AC6824D1"><enum>(v)</enum><text>section 422(b)(6) of the <act-name parsable-cite="CGNHA">Cranston-Gonzalez National Affordable Housing Act</act-name> (42 U.S.C. 12872(b)(6));</text></clause>
<clause id="HA12D6A3F77164622A990740B78484D4A"><enum>(vi)</enum><text>section 491(b)(1)(F)(iii) of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11408(b)(1)(F)(iii));</text></clause>
<clause id="HCAA1E4DB4199447D894891212246552F"><enum>(vii)</enum><text>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</text></clause>
<clause id="H3CD98E5AFA034B46BE4589E5E3DDB5B4"><enum>(viii)</enum><text>the rental assistance program under section 8 of the <act-name parsable-cite="USHA">United States Housing Act of 1937</act-name> (42 U.S.C. 1437f).</text></clause></subparagraph></paragraph>
<paragraph id="HA7DF036E33434617915E979243C4F079"><enum>(2)</enum><header>Standards for materials</header><text display-inline="yes-display-inline">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).</text></paragraph>
<paragraph id="H5F615759CF24409FBFCD889ABD132090"><enum>(3)</enum><header>Mortgage software systems</header>
<subparagraph id="H4567EAB06DB04C19ABE7960207DE7B0A"><enum>(A)</enum><header>Certification</header><text>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—</text>
<clause id="HE69F2D3B1F8C46C58BD9986DA8AF2C3A"><enum>(i)</enum><text>the consumer’s financial situation and the cost of maintaining a home, including insurance, taxes, and utilities;</text></clause>
<clause id="H9D86C2BC38B4468ABC4CD2EB948900B9"><enum>(ii)</enum><text>the amount of time the consumer expects to remain in the home or expected time to maturity of the loan; and</text></clause>
<clause id="HAD5354D3DE004137A713C5AAA8AB595C"><enum>(iii)</enum><text>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.</text></clause><continuation-text continuation-text-level="subparagraph">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.</continuation-text></subparagraph>
<subparagraph id="HA31C74BA01674339BD06D4D0269CFD90"><enum>(B)</enum><header>Use and initial availability</header><text>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).</text></subparagraph>
<subparagraph id="HA1A2A228D2E6425B8CB287A851358436"><enum>(C)</enum><header>Availability</header><text>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.</text></subparagraph>
<subparagraph id="H905ECA1AB4AE43F1A2F4973A27FA9926"><enum>(D)</enum><header>Budget compliance</header><text display-inline="yes-display-inline">This paragraph shall be effective only to the extent that amounts to carry out this paragraph are made available in advance in appropriations Acts.</text></subparagraph></paragraph>
<paragraph id="HA3EED9E0B5ED4E7D8848B8181DECD20C"><enum>(4)</enum><header>National public service multimedia campaigns to promote housing counseling</header>
<subparagraph id="HA3469E3199634A1ABB32BF56BCFE6178"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="H62696776F3E841329AEAFEA8F88AA58E"><enum>(B)</enum><header>Contact information</header><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="H9ED232D59D1A4D7C804547DBAB83F885"><enum>(C)</enum><header>Authorization of appropriations</header><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="H1F19377093F648BE95DB4C78195373CA"><enum>(D)</enum><header>Foreclosure rescue education programs</header>
<clause id="H2142C71C36F349DC903261547978E4C3"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">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—</text>
<subclause id="HEFA7A122B54848FE8482D9C40FD6071A"><enum>(I)</enum><text>tips on avoiding foreclosure rescue scams;</text></subclause>
<subclause id="H6D96E672D70D431DB614EC0A10C1407E"><enum>(II)</enum><text>tips on avoiding predatory lending mortgage agreements;</text></subclause>
<subclause id="H857D1D18B8B54CB0878C1BE6DF861912"><enum>(III)</enum><text>tips on avoiding for-profit foreclosure counseling services; and</text></subclause>
<subclause id="HAECC721F53D74306B8A09E8CE457D9BB"><enum>(IV)</enum><text>local counseling resources that are approved by the Department of Housing and Urban Development.</text></subclause></clause>
<clause id="H4073FEEE9303417FAE755042DB9795F1"><enum>(ii)</enum><header>Program emphasis</header><text>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.</text></clause>
<clause id="HB7F75C8FC6CB431A86475F9BE8C958E3"><enum>(iii)</enum><header>Terms defined</header><text display-inline="yes-display-inline">For purposes of this subparagraph:</text>
<subclause id="HB247AE7D82DB40B3BBDAF007A275AF11"><enum>(I)</enum><header>High density of foreclosures</header><text display-inline="yes-display-inline">An area has a <term>high density of foreclosures</term> 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.</text></subclause>
<subclause id="HC26A31FF13244E278DE278872C265ED3"><enum>(II)</enum><header>High percentage of retirement communities</header><text display-inline="yes-display-inline">An area has a <term>high percentage of retirement communities</term> 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.</text></subclause>
<subclause id="HC86FE530D34B42EE9B51F3C5F69DE32A"><enum>(III)</enum><header>High percentage of low-income minority communities</header><text>An area has a <term>high percentage of low-income minority communities</term> 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.</text></subclause></clause></subparagraph></paragraph>
<paragraph id="HDF5247B5FDFA414BB0271154D72E9F14"><enum>(5)</enum><header>Education programs</header><text display-inline="yes-display-inline">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.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HD8037A77572F4745A44D1F2E26C28537"><enum>(b)</enum><header>Conforming amendments to grant program for homeownership counseling organizations</header><text>Section 106(c)(5)(A)(ii) of the <act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> of 1968 (12 U.S.C. 1701x(c)(5)(A)(ii)) is amended—</text>
<paragraph id="H21389B7F41274B728E8B83B795EB7156"><enum>(1)</enum><text>in subclause (III), by striking <quote>and</quote> at the end;</text></paragraph>
<paragraph id="H1B4296E961B142709A1D1DBD8BBF2220"><enum>(2)</enum><text>in subclause (IV) by striking the period at the end and inserting <quote>; and</quote>; and</text></paragraph>
<paragraph id="HE415DBCF892342FCA6770FC3DD01B3D9"><enum>(3)</enum><text>by inserting after subclause (IV) the following new subclause:</text>
<quoted-block id="H0F036DF1C9B94BB98E0A4F34EA1A1FE9">
<subclause id="H148405489123477BA4159843EAD70B90"><enum>(V)</enum><text>notify the housing or mortgage applicant of the availability of mortgage software systems provided pursuant to subsection (g)(3).</text></subclause><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection></section>
<section id="H3D6CA70ABC5249DC9B9C78E3B1AF8A29"><enum>9304.</enum><header>Grants for housing counseling assistance</header><text display-inline="no-display-inline">Section 106(a) of the <act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> of 1968 (12 U.S.C. 1701x(a)(3)) is amended by adding at the end the following new paragraph:</text>
<quoted-block act-name="Housing" id="H8650931CF6C94EAC95395B20657EA203">
<paragraph id="H65E5F3CECF1047AAAB12C15D4632D867" indent="up1"><enum>(4)</enum><header>Homeownership and rental counseling assistance</header>
<subparagraph id="HA4F9A60C18D941EEBE535E8870CE0FAA"><enum>(A)</enum><header>In general</header><text>The Secretary shall make financial assistance available under this paragraph to HUD-approved housing counseling agencies and State housing finance agencies.</text></subparagraph>
<subparagraph id="H743FDAC018E24EAEAAD1884374F6C41C"><enum>(B)</enum><header>Qualified entities</header><text>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).</text></subparagraph>
<subparagraph id="H429FCFB32D37473688A237736A43256F"><enum>(C)</enum><header>Distribution</header><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="H8EE0FB6DBA554021845900A717DDCD53" display-inline="no-display-inline"><enum>(D)</enum><header>Limitation on distribution of assistance</header>
<clause id="H6A1B4EEEEFE744AB85094FFC0A72E3C0"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">None of the amounts made available under this paragraph shall be distributed to—</text>
<subclause id="H2C9B72A631BA4201A5AA63EA3C82A3D8"><enum>(I)</enum><text>any organization which has been convicted for a violation under Federal law relating to an election for Federal office; or</text></subclause>
<subclause id="H41744237EC82468191B004699E51F9B3"><enum>(II)</enum><text>any organization which employs applicable individuals.</text></subclause></clause>
<clause id="H6941342C0C0441F8897FF293FE584894"><enum>(ii)</enum><header>Definition of applicable individuals</header><text display-inline="yes-display-inline">In this subparagraph, the term <quote>applicable individual</quote> means an individual who—</text>
<subclause id="H68E9038A212A4F288DBB5B9C114C610D"><enum>(I)</enum><text>is—</text>
<item id="H13D9F430D1A8407EA5EEFA7CEC220A5B"><enum>(aa)</enum><text>employed by the organization in a permanent or temporary capacity;</text></item>
<item id="H6F314FD90DA2459FB16279E141B312AC"><enum>(bb)</enum><text>contracted or retained by the organization; or</text></item>
<item id="H322FB71F6A774613B1EF1B70DFBCBA10"><enum>(cc)</enum><text>acting on behalf of, or with the express or apparent authority of, the organization; and</text></item></subclause>
<subclause id="H6AC0C17AC3D94F5F8E81E0FF35F3E98E" display-inline="no-display-inline"><enum>(II)</enum><text display-inline="yes-display-inline">has been convicted for a violation under Federal law relating to an election for Federal office.</text></subclause></clause></subparagraph>
<subparagraph display-inline="no-display-inline" id="H5170A510D05741BF854B736615680D23"><enum>(E)</enum><header>Grantmaking process</header><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="H4950DE3EE99A4D2A97A9B6BAC352275F"><enum>(F)</enum><header>Authorization of appropriations</header><text>There are authorized to be appropriated $45,000,000 for each of fiscal years 2009 through 2012 for—</text>
<clause id="HA32F7B3F0C3047689ECD1728D10EA0A7"><enum>(i)</enum><text>the operations of the Office of Housing Counseling of the Department of Housing and Urban Development;</text></clause>
<clause id="HD5E50DADF5E040D5B0B9BA202203E11C"><enum>(ii)</enum><text>the responsibilities of the Director of Housing Counseling under paragraphs (2) through (5) of subsection (g); and</text></clause>
<clause id="H476EFB47A1F0473996958718175F5D99"><enum>(iii)</enum><text>assistance pursuant to this paragraph for entities providing homeownership and rental counseling.</text></clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section id="H40FCD9C258C040E29A434959BB4E7827"><enum>9305.</enum><header>Requirements to use HUD-certified counselors under HUD programs</header><text display-inline="no-display-inline">Section 106(e) of the <act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> of 1968 (12 U.S.C. 1701x(e)) is amended—</text>
<paragraph id="HB97BAC5578EF4096959C935AACBBA792"><enum>(1)</enum><text>by striking paragraph (1) and inserting the following new paragraph:</text>
<quoted-block id="H1D3A77E2B55047098B24ECDE4CE887FF">
<paragraph id="HE4FA353DD47B42FDB2EF44C52190886C"><enum>(1)</enum><header>Requirement for assistance</header><text>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.</text></paragraph><after-quoted-block>;</after-quoted-block></quoted-block></paragraph>
<paragraph id="H4BB84F60735C4B3489079EBAF2BB8C2C"><enum>(2)</enum><text>in paragraph (2)—</text>
<subparagraph id="H5DA08BC9065846C990971B6C19442BBE"><enum>(A)</enum><text>by inserting <quote>and for certifying organizations</quote> before the period at the end of the first sentence; and</text></subparagraph>
<subparagraph id="H4A10834F0A374D8F8F44A0D71FCD8B91"><enum>(B)</enum><text>in the second sentence by striking <quote>for certification</quote> and inserting <quote>, for certification of an organization, that each individual through which the organization provides counseling shall demonstrate, and, for certification of an individual,</quote>;</text></subparagraph></paragraph>
<paragraph id="H604FBAEB53AB427FA788D63FCC1A4AAD"><enum>(3)</enum><text>in paragraph (3), by inserting <quote>organizations and</quote> before <quote>individuals</quote>;</text></paragraph>
<paragraph id="HE1F08A5F60D4410E9202680071682A56"><enum>(4)</enum><text>by redesignating paragraph (3) as paragraph (5); and</text></paragraph>
<paragraph id="H0FC01CBF21D04A388107A2CFA07020DF"><enum>(5)</enum><text>by inserting after paragraph (2) the following new paragraphs:</text>
<quoted-block id="H734CCBC000524E9D81E3386919768123">
<paragraph id="H33EFC9BB56A245F58EC98E163F5A0243"><enum>(3)</enum><header>Requirement under hud programs</header><text>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.</text></paragraph>
<paragraph id="H5732A3C2A71C48BEA96960ECA9BB32C4"><enum>(4)</enum><header>Outreach</header><text>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).</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></section>
<section commented="no" id="H5DB9CACDA55C4804B4F06DC49076E378"><enum>9306.</enum><header>Study of defaults and foreclosures</header><text display-inline="no-display-inline">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.</text></section>
<section id="HE9F4C30F48BF4D809E12D35F9E9481F2" display-inline="no-display-inline"><enum>9307.</enum><header>Default and foreclosure database</header>
<subsection id="H8C8ACDBDB513471D8F2330531B2239A6"><enum>(a)</enum><header>Establishment</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="HE3428803F7754C20BB0AE7C63022EDD3"><enum>(b)</enum><header>Census tract data</header><text>Information in the database shall be collected, aggregated, and made available on a census tract basis. </text></subsection>
<subsection id="HC3F19FCC14794185B4C22198322C6E16"><enum>(c)</enum><header>Requirements</header><text>Information collected and made available through the database shall include—</text>
<paragraph id="H15C3D967137040A98A003EF1CB490BC6"><enum>(1)</enum><text display-inline="yes-display-inline">the number and percentage of such mortgage loans that are delinquent by more than 30 days;</text></paragraph>
<paragraph id="H983583C6364B4A9FAB753A5B1C2AF0C7"><enum>(2)</enum><text>the number and percentage of such mortgage loans that are delinquent by more than 90 days;</text></paragraph>
<paragraph id="HC78ABF76AE914865972F6F30BD89B613"><enum>(3)</enum><text>the number and percentage of such properties that are real estate-owned;</text></paragraph>
<paragraph id="H39578EF9D6A7421E9D8A7733C93DDF0F"><enum>(4)</enum><text>number and percentage of such mortgage loans that are in the foreclosure process;</text></paragraph>
<paragraph id="H681D90351A8B48BA9BCAD9E799B52058"><enum>(5)</enum><text>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</text></paragraph>
<paragraph id="H9B68B29DC0AC4AFD8EB19D860069AD19"><enum>(6)</enum><text>such other information as the Secretary considers appropriate.</text></paragraph></subsection></section>
<section id="H81CE7319125142D883457BCEA9F7DCB8"><enum>9308.</enum><header>Definitions for counseling-related programs</header><text display-inline="no-display-inline">Section 106 of the <act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> 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:</text>
<quoted-block act-name="Housing" id="H904017E53CDC4465B223DF05CD993567">
<subsection id="HD77BEB93917D4D0296CA9EB9A93F0AF1"><enum>(h)</enum><header>Definitions</header><text>For purposes of this section:</text>
<paragraph id="HD11BEC585042409F90747E1156B31D4E"><enum>(1)</enum><header>Nonprofit organization</header><text>The term <term>nonprofit organization</term> has the meaning given such term in section 104(5) of the <act-name parsable-cite="CGNHA">Cranston-Gonzalez National Affordable Housing Act</act-name> (42 U.S.C. 12704(5)), except that subparagraph (D) of such section shall not apply for purposes of this section.</text></paragraph>
<paragraph id="H5C90A8366BA546FE8EF35B6650C413A0"><enum>(2)</enum><header>State</header><text>The term <term>State</term> 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.</text></paragraph>
<paragraph id="HCD8D8A306F1C44D2961A7970B0330FCC"><enum>(3)</enum><header>Unit of general local government</header><text>The term <term>unit of general local government</term> means any city, county, parish, town, township, borough, village, or other general purpose political subdivision of a State.</text></paragraph>
<paragraph id="H0FB7FE13BF614E298C8A1A91176C0AAE"><enum>(4)</enum><header>HUD-approved counseling agency</header><text display-inline="yes-display-inline">The term <term>HUD-approved counseling agency</term> means a private or public nonprofit organization that is—</text>
<subparagraph id="HB71C1621F1DA4E02A8A4F034F6DD9C2B"><enum>(A)</enum><text>exempt from taxation under section 501(c) of the Internal Revenue Code of 1986; and</text></subparagraph>
<subparagraph id="H70343B795BA840FE816D171EFEB3CCE6"><enum>(B)</enum><text>certified by the Secretary to provide housing counseling services.</text></subparagraph></paragraph>
<paragraph id="H42EDB8DFC5B14DDBA0FDDA385E358600"><enum>(5)</enum><header>State housing finance agency</header><text>The term <term>State housing finance agency</term> 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. </text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section id="H4C3D8B7EE36C47B48042948FE10607B6" display-inline="no-display-inline"><enum>9309.</enum><header>Accountability and transparency for grant recipients</header><text display-inline="no-display-inline">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:</text>
<quoted-block style="OLC" display-inline="no-display-inline" id="HF8E3A8FC3A584019844B7C8246A44940">
<subsection id="HF610546D14F946CEADE02CDF0A86D8D1"><enum>(i)</enum><header>Accountability for recipients of covered assistance</header>
<paragraph id="H9E3689FA167C4ACDBE51EC4EEFF4C524"><enum>(1)</enum><header>Tracking of funds</header><text display-inline="yes-display-inline">The Secretary shall—</text>
<subparagraph id="HB5DB70EB9CAC45B68B12A80D02553B5F"><enum>(A)</enum><text display-inline="yes-display-inline">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</text></subparagraph>
<subparagraph id="HAF1A696E9F804DD0933CF4D28E3BF04B"><enum>(B)</enum><text display-inline="yes-display-inline">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—</text>
<clause id="HFEACBE6C2A614B67A6D6D4821B1B66E1"><enum>(i)</enum><text display-inline="yes-display-inline">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</text></clause>
<clause id="HF42E4C2E123A40489A14EF2418694753"><enum>(ii)</enum><text>any other requirements that the Secretary determines are necessary to ensure appropriate administration and compliance.</text></clause></subparagraph></paragraph>
<paragraph id="H2CBCA70DB69E419080CBA5C26246365F"><enum>(2)</enum><header>Misuse of funds</header><text display-inline="yes-display-inline">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—</text>
<subparagraph id="H3A9A71DD2C3B4131B91D596A38E6D143"><enum>(A)</enum><text>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</text></subparagraph>
<subparagraph id="HAB3631726E2E449FBA6C8F3F6CCE361D"><enum>(B)</enum><text display-inline="yes-display-inline">such organization or entity shall be ineligible, at any time after such determination, to apply for or receive any further covered assistance.</text></subparagraph><continuation-text continuation-text-level="paragraph">The remedies under this paragraph are in addition to any other remedies that may be available under law.</continuation-text></paragraph>
<paragraph id="HECF89FD6ECC04B3A919E4393F8AD07B6"><enum>(3)</enum><header>Covered assistance</header><text display-inline="yes-display-inline">For purposes of this subsection, the term <quote>covered assistance</quote> means any grant or other financial assistance provided under—</text>
<subparagraph id="H706345ADA1BD48CF9510C3B325104823"><enum>(A)</enum><text display-inline="yes-display-inline">this section; or</text></subparagraph>
<subparagraph id="H0209581574234B13AA8951F237861914"><enum>(B)</enum><text>section 9115 of the Mortgage Reform and Anti-Predatory Lending Act.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section id="H4D3A8482CF92438E95D015540F0476C2"><enum>9310.</enum><header>Updating and simplification of mortgage information booklet</header><text display-inline="no-display-inline">Section 5 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2604) is amended—</text>
<paragraph id="H0952631672C14663A2EF5F7890F5C5CE"><enum>(1)</enum><text>in the section heading, by striking <quote><header-in-text level="section" style="traditional">special</header-in-text></quote> and inserting <quote><header-in-text level="section" style="traditional">home buying</header-in-text></quote>;</text></paragraph>
<paragraph id="H193474BD8DA348499246AB516C70243C"><enum>(2)</enum><text>by striking subsections (a) and (b) and inserting the following new subsections:</text>
<quoted-block id="H70B5FEDD97DF4CCD84E773202C04848D">
<subsection id="H2EBD7428645749AB80D48B2C1C6B8255"><enum>(a)</enum><header>Preparation and distribution</header><text>The Director of the Consumer Financial Protection Agency (hereafter in this section referred to as the <quote>Director</quote>) 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 <act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> of 1968 (12 U.S.C. 1701x(e)) for use in complying with the requirement under subsection (c) of this section.</text></subsection>
<subsection id="H831CF5B255014EE5930B90E494D352B0"><enum>(b)</enum><header>Contents</header><text>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:</text>
<paragraph id="HC334984731C54161A7832386FBE1384C"><enum>(1)</enum><text>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—</text>
<subparagraph id="HFC1E77E9DD314FE1A4F7D5661174DE4B"><enum>(A)</enum><text>balloon payments;</text></subparagraph>
<subparagraph id="H31CE8F1E8343499E956B777250C469E3"><enum>(B)</enum><text>prepayment penalties; </text></subparagraph>
<subparagraph id="HCBA653EC6AA84A4C918B6FCB44E09BCD" display-inline="no-display-inline"><enum>(C)</enum><text display-inline="yes-display-inline">the advantages of prepayment; and</text></subparagraph>
<subparagraph id="H80F7B5617AA34FE98FC9E3705F31E4CA"><enum>(D)</enum><text>the trade-off between closing costs and the interest rate over the life of the loan.</text></subparagraph></paragraph>
<paragraph id="HE69CCB32C6B5431EB16C290933AC4CB8"><enum>(2)</enum><text>An explanation and sample of the uniform settlement statement required by section 4.</text></paragraph>
<paragraph id="HC603A8002DBE42A5B1436126B6DD550F"><enum>(3)</enum><text>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.</text></paragraph>
<paragraph id="H6882A8293F674CDE94A9BD1E04105D15"><enum>(4)</enum><text>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.</text></paragraph>
<paragraph id="H2F0F430B579648019D64436DF05C9C7F"><enum>(5)</enum><text>An explanation of the right of rescission as to certain transactions provided by sections 125 and 129 of the Truth in Lending Act.</text></paragraph>
<paragraph id="H62BBF72D0538490399019C24925C9EF8"><enum>(6)</enum><text>A brief explanation of the nature of a variable rate mortgage and a reference to the booklet entitled <quote>Consumer Handbook on Adjustable Rate Mortgages</quote>, published by the Director, or to any suitable substitute of such booklet that the Director may subsequently adopt pursuant to such section.</text></paragraph>
<paragraph id="H5AB6292C8C9E4BB892037E07DC88041B"><enum>(7)</enum><text>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.</text></paragraph>
<paragraph id="HD0216ED90E5E4D76922DE096BF947618"><enum>(8)</enum><text>Information about homeownership counseling services made available pursuant to section 106(a)(4) of the <act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> 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.</text></paragraph>
<paragraph id="HDD6948831AD349BA91D9F13419BE55D9"><enum>(9)</enum><text>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.</text></paragraph>
<paragraph id="HB480782269A948D5A48ED0A167AEC23F"><enum>(10)</enum><text>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.</text></paragraph>
<paragraph id="H11B65CEF6AD748D38DE49AE52B67447A"><enum>(11)</enum><text>An explanation of a consumer’s responsibilities, liabilities, and obligations in a mortgage transaction.</text></paragraph>
<paragraph id="H5DCAFE5AE3424C729D3FD4B24A688D7D"><enum>(12)</enum><text>An explanation of the nature and purpose of real estate appraisals, including the difference between an appraisal and a home inspection.</text></paragraph>
<paragraph id="H9680C401B4DF4A05AB7EA64041E8F7A2"><enum>(13)</enum><text>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.</text></paragraph><continuation-text continuation-text-level="subsection">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.</continuation-text></subsection><after-quoted-block>;</after-quoted-block></quoted-block></paragraph>
<paragraph id="HB79787C7E9DE45A5BB42A48682FF6EC9"><enum>(3)</enum><text>in subsection (c), by inserting at the end the following new sentence: <quote>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 <act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> of 1968 (12 U.S.C. 1701x(e)) and located in the area of the lender.</quote>; and</text></paragraph>
<paragraph id="HA0362C583DA44FD88D12AF2C8EB2F79B"><enum>(4)</enum><text>in subsection (d), by inserting after the period at the end of the first sentence the following: <quote>The lender shall provide the HUD-issued booklet in the version that is most appropriate for the person receiving it.</quote>.</text></paragraph></section>
<section commented="no" display-inline="no-display-inline" id="H583B439DD9504FCB8207449F6E77D7BA" section-type="subsequent-section"><enum>9311.</enum><header>Home inspection counseling</header>
<subsection commented="no" id="H293806D663DA4FE08CBFCD94B69D50C1"><enum>(a)</enum><header>Public outreach</header>
<paragraph commented="no" id="H2BA9D30CB8F84CFAAFF75BE50CA7B0F1"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">The Secretary of Housing and Urban Development (in this section referred to as the <quote>Secretary</quote>) 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—</text>
<subparagraph commented="no" id="HF57152F965A64CE9A2359EAFA7D8D455"><enum>(A)</enum><text>publication of the HUD/FHA form HUD 92564–CN entitled <quote>For Your Protection: Get a Home Inspection</quote>, in both English and Spanish languages;</text></subparagraph>
<subparagraph commented="no" id="HB8829CF9890D419BA3220D9B4DF34B06"><enum>(B)</enum><text>publication of the HUD/FHA booklet entitled <quote>For Your Protection: Get a Home Inspection</quote>, in both English and Spanish languages;</text></subparagraph>
<subparagraph commented="no" id="H848B012D375240C9926529E815F80E7E"><enum>(C)</enum><text>development and publication of a HUD booklet entitled <quote>For Your Protection—Get a Home Inspection</quote> that does not reference FHA-insured homes, in both English and Spanish languages; and</text></subparagraph>
<subparagraph commented="no" id="H348458F6305F4CB481A5F9F9A0DE1773"><enum>(D)</enum><text>publication of the HUD document entitled <quote>Ten Important Questions To Ask Your Home Inspector</quote>, in both English and Spanish languages.</text></subparagraph></paragraph>
<paragraph commented="no" id="H8DB1312568364CC8A05DB6460DA5C3A6"><enum>(2)</enum><header>Availability</header><text>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.</text></paragraph>
<paragraph commented="no" id="H557613B6954D43E5961917A55F252521"><enum>(3)</enum><header>Updating</header><text>The Secretary may periodically update and revise such materials, as the Secretary determines to be appropriate.</text></paragraph></subsection>
<subsection commented="no" id="H830C6E227511414E99342436764E9D4E"><enum>(b)</enum><header>Requirement for FHA-approved lenders</header><text>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).</text></subsection>
<subsection commented="no" id="H0F6B3DF501A44CD4A919EA7AE09FB589"><enum>(c)</enum><header>Requirements for HUD-approved counseling agencies</header><text display-inline="yes-display-inline">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).</text></subsection>
<subsection commented="no" id="HF665B29346614542BB94DEA17CFE15DF"><enum>(d)</enum><header>Training</header><text>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—</text>
<paragraph commented="no" id="H2EC6B0591F7A466F983F450815B57FA9"><enum>(1)</enum><text>providing information on counseling potential homebuyers of the availability and importance of getting an independent home inspection;</text></paragraph>
<paragraph commented="no" id="HF8F59687A1224CD7B2B81E38FD6D86C1"><enum>(2)</enum><text>providing information about the home inspection process, including the reasons for specific inspections such as radon and lead-based paint testing;</text></paragraph>
<paragraph commented="no" id="H38EF08D3FABF4CEBA9069F5C0EC2F861"><enum>(3)</enum><text>providing information about advising potential homebuyers on how to locate and select a qualified home inspector; and</text></paragraph>
<paragraph commented="no" id="H406D620A129A427B87B4DDFFE51799A9"><enum>(4)</enum><text>review of home inspection public outreach materials of the Department.</text></paragraph></subsection></section>
<section id="H6AC78CF15A1349F2A5CFF6F39FF525A4"><enum>9312.</enum><header>Warnings to homeowners of foreclosure rescue scams</header>
<subsection id="H461435017C6D4A6E9663BA2595A32854"><enum>(a)</enum><header>Assistance to NRC</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="H9506E171A8154875A013E5A1B12469D2"><enum>(b)</enum><header>Notice</header><text>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—</text>
<paragraph id="H619BBFB651E04FC4B8BE341291DB55D5"><enum>(1)</enum><text>that the foreclosure process is complex and can be confusing;</text></paragraph>
<paragraph id="H93874FDFDCD94109A1BE3A083A8FACD6"><enum>(2)</enum><text>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;</text></paragraph>
<paragraph id="HE9A4B714207748C69F14977B989077BF"><enum>(3)</enum><text>that there are Federal Government and nonprofit agencies that may provide information about the foreclosure process, including the Department of Housing and Urban Development; </text></paragraph>
<paragraph id="H9D975427393448C4B3BD11A558F3B6EF"><enum>(4)</enum><text display-inline="yes-display-inline">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</text></paragraph>
<paragraph id="H55BE6125993D4481961C3F458107A9B2"><enum>(5)</enum><text>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.</text></paragraph></subsection></section></subtitle>
<subtitle id="HB5BCDCF8FB6949C3903825DAFA1B89DE"><enum>E</enum><header>Mortgage Servicing</header>
<section display-inline="no-display-inline" id="H22155D29BAEF49A8ACA943FF080993A4" section-type="subsequent-section"><enum>9401.</enum><header>Escrow and impound accounts relating to certain consumer credit transactions</header>
<subsection id="HA5DA0405AB294D4B8B46974F48836650"><enum>(a)</enum><header>In general</header><text>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:</text>
<quoted-block display-inline="no-display-inline" id="H09143560E33B4E639E9CC854724B846D" style="OLC">
<section id="HEB8786F452554155BDBFBD2A1F138BBA"><enum>129D.</enum><header>Escrow or impound accounts relating to certain consumer credit transactions</header>
<subsection id="H31087DB4D89A498FB57CC6FD67F30184"><enum>(a)</enum><header>In general</header><text>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.</text></subsection>
<subsection id="H9E8BBA76989A457EA2D0C70F201733BA"><enum>(b)</enum><header>When required</header><text>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—</text>
<paragraph id="HEA17D85C53BC431AA8380925DED8E92E"><enum>(1)</enum><text>any such impound, trust, or other type of escrow or impound account for such purposes is required by Federal or State law;</text></paragraph>
<paragraph id="H429C1B3F770E4CF1B477AD8E6C610EEF"><enum>(2)</enum><text>a loan is made, guaranteed, or insured by a State or Federal governmental lending or insuring agency;</text></paragraph>
<paragraph id="H3B6E3DEBDD714AB79771264F9F19C63A" display-inline="no-display-inline"><enum>(3)</enum><text display-inline="yes-display-inline">the transaction is secured by a first mortgage or lien on the consumer’s principal dwelling having an original principal obligation amount that—</text>
<subparagraph id="H89C86AD14DB74B5486970557CE0654ED"><enum>(A)</enum><text>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</text></subparagraph>
<subparagraph id="H14E64C7C23D04DF3BA3312389093B708"><enum>(B)</enum><text> 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</text></subparagraph></paragraph>
<paragraph id="HD0ABE257B45F4CCDB95CE2C25E308972"><enum>(4)</enum><text>so required pursuant to regulation.</text></paragraph></subsection>
<subsection id="HA716DF44662249BF972BDA0B169860EF"><enum>(c)</enum><header>Duration of mandatory escrow or impound account</header><text>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.</text></subsection>
<subsection display-inline="no-display-inline" id="HE6E1AAB0AAA147C2B450225A1C71DE9F"><enum>(d)</enum><header>Limited exemptions for loans secured by shares in a cooperative and for certain condominium units</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="HF50149F8AAC348B7B4F17455FB08652E"><enum>(e)</enum><header>Clarification on escrow accounts for loans not meeting statutory test</header><text>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—</text>
<paragraph id="HEF217764897743D58EBF09D9E4578681"><enum>(1)</enum><text>on terms mutually agreeable to the parties to the loan;</text></paragraph>
<paragraph id="HFA5D6A2C40224B40BE5B41ED6CE90C34"><enum>(2)</enum><text>at the discretion of the lender or servicer, as provided by the contract between the lender or servicer and the borrower; or</text></paragraph>
<paragraph id="HC84CABD19AFC4519A46266B8CF186F28"><enum>(3)</enum><text display-inline="yes-display-inline">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.</text></paragraph></subsection>
<subsection id="H270ADCA720EB4035B4E9286AF3C82EC6"><enum>(f)</enum><header>Administration of mandatory escrow or impound accounts</header>
<paragraph id="H2D88C0C3489746CEB97670CEF8E997F2"><enum>(1)</enum><header>In general</header><text>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.</text></paragraph>
<paragraph id="H932B21E1ECFE4C76B6296D9DC446E298"><enum>(2)</enum><header>Administration</header><text>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—</text>
<subparagraph id="H62E41A7773F743B786FC4539C93D2CAD"><enum>(A)</enum><text>the Real Estate Settlement Procedures Act of 1974 and regulations prescribed under such Act;</text></subparagraph>
<subparagraph id="HD9FC073FC5B2412D98CFFBCB39BE3B36"><enum>(B)</enum><text>the Flood Disaster Protection Act of 1973 and regulations prescribed under such Act; and</text></subparagraph>
<subparagraph id="HC451E6014D4B4AF788FEBC9CFB6848B9"><enum>(C)</enum><text>the law of the State, if applicable, where the real property securing the consumer credit transaction is located.</text></subparagraph></paragraph>
<paragraph id="H6384B975972746CA940D6557F1D0CAFC"><enum>(3)</enum><header>Applicability of payment of interest</header><text>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.</text></paragraph>
<paragraph id="H9D93589286C4421ABF5C4372E0E673BB"><enum>(4)</enum><header>Penalty coordination with RESPA</header><text display-inline="yes-display-inline">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.</text></paragraph></subsection>
<subsection id="H6D6C5FDF2E8B4B59B642C7CE4D041B43"><enum>(g)</enum><header>Disclosures relating to mandatory escrow or impound account</header><text>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:</text>
<paragraph id="H4FC4C67C01034AD6BC57F224C1508923"><enum>(1)</enum><text>The fact that an escrow or impound account will be established at consummation of the transaction.</text></paragraph>
<paragraph id="HF3FEF4F2E26F4DFBB4DE34FF5CEB87B2"><enum>(2)</enum><text>The amount required at closing to initially fund the escrow or impound account.</text></paragraph>
<paragraph id="H8FC3EF21C9EF48A18992BBB1254CB09B"><enum>(3)</enum><text>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.</text></paragraph>
<paragraph id="H46716D9406174C09B730AED72D464F57"><enum>(4)</enum><text>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.</text></paragraph>
<paragraph id="HA6B9B3A499F7489A8D47C8D0CDC44A9C"><enum>(5)</enum><text>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.</text></paragraph>
<paragraph id="HB337410E449542698C1C94F41BE94FE5"><enum>(6)</enum><text display-inline="yes-display-inline">Such other information as the Federal banking agencies jointly determine necessary for the protection of the consumer.</text></paragraph></subsection>
<subsection id="HF82094554ED54F2A899987F276F1FE64"><enum>(h)</enum><header>Definitions</header><text>For purposes of this section, the following definitions shall apply:</text>
<paragraph id="HEBFB5B34AA784916B22882D09B594BC1"><enum>(1)</enum><header>Flood insurance</header><text>The term <term>flood insurance</term> means flood insurance coverage provided under the national flood insurance program pursuant to the National Flood Insurance Act of 1968.</text></paragraph>
<paragraph id="HDF80C127B8074C9DAB961A6814AE24D8"><enum>(2)</enum><header>Hazard insurance</header><text>The term <term>hazard insurance</term> shall have the same meaning as provided for <term>hazard insurance</term>, <term>casualty insurance</term>, <term>homeowner’s insurance</term>, or other similar term under the law of the State where the real property securing the consumer credit transaction is located.</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HD2C5D7BAE0ED4F0BA523AA96B905832B"><enum>(b)</enum><header>Implementation</header>
<paragraph id="H3F022FA8A4AD4427B217CF234C8FC42E"><enum>(1)</enum><header>Regulations</header><text display-inline="yes-display-inline">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 <quote>Federal banking agencies</quote>) 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.</text></paragraph>
<paragraph id="H04088427D49046C9BEBC747BEB0B4328"><enum>(2)</enum><header>Effective date</header><text>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.</text></paragraph></subsection>
<subsection id="HAC94B48ED9B64AB0876588842C418837"><enum>(c)</enum><header>Clerical Amendment</header><text display-inline="yes-display-inline">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:</text>
<quoted-block display-inline="no-display-inline" id="H77D90817F99D4625900274BA5969FDAC" style="OLC">
<toc regeneration="no-regeneration">
<toc-entry level="section">129D. Escrow or impound accounts relating to certain consumer credit transactions.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section>
<section id="HBD531E60BDA84C399BCD5C00534573A4"><enum>9402.</enum><header>Disclosure notice required for consumers who waive escrow services</header>
<subsection id="H8E7C5C36CEB14DDC8048E90B64DA8E8F"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Section 129D of the Truth in Lending Act (as added by section 9401) is amended by adding at the end the following new subsection:</text>
<quoted-block id="H1CD2C9C64CAC4C3F942149A152174CF1" style="OLC">
<subsection id="H17F5AD5972234C519C7FD2B20769EC58"><enum>(i)</enum><header>Disclosure notice required for consumers who waive escrow services</header>
<paragraph id="H6D90C5B8F40A4A3BA5561DAAC8EC33B8"><enum>(1)</enum><header>In general</header><text>If—</text>
<subparagraph id="H82F6124F1E894803AAF8D9A26DB956A5"><enum>(A)</enum><text>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</text></subparagraph>
<subparagraph id="H0352E1DE757F48D48989887028DAED73"><enum>(B)</enum><text>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,</text></subparagraph><continuation-text continuation-text-level="paragraph">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.</continuation-text></paragraph>
<paragraph id="HA6DEBCB688FC4F28AC63C5A3C20377A6"><enum>(2)</enum><header>Disclosure requirements</header><text>Any disclosure provided to a consumer under paragraph (1) shall include the following:</text>
<subparagraph id="H4B91E7973CFC41DE88A3F804847B19DA"><enum>(A)</enum><text>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.</text></subparagraph>
<subparagraph id="HCA10BCF0C7304C4E80F1CE212307D6FE"><enum>(B)</enum><text>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.</text></subparagraph>
<subparagraph id="H8055DD2A96F24B7DA8137476A2350EDA"><enum>(C)</enum><text>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.</text></subparagraph>
<subparagraph id="H2D253B38493F4D66AA8A681000D10628"><enum>(D)</enum><text display-inline="yes-display-inline">Such other information as the Federal banking agencies jointly determine necessary for the protection of the consumer.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H0CCBD282B98246C980C5104037DBE3B1"><enum>(b)</enum><header>Implementation</header>
<paragraph id="H0F861CCB1B4C4A638791C26880EFC2B7"><enum>(1)</enum><header>Regulations</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H87E00D8A667A4DEFA60F4A7630C9599D"><enum>(2)</enum><header>Effective date</header><text>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.</text></paragraph></subsection></section>
<section id="HD5CE5E63215A47FF9FDB9D2A92C1344D"><enum>9403.</enum><header>Real Estate Settlement Procedures Act of 1974 amendments</header>
<subsection id="H22524F84753F489BACE890638E772C92"><enum>(a)</enum><header>Servicer prohibitions</header><text>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:</text>
<quoted-block id="H8B9F73B73197496EA8C6B1847C6BA136" style="OLC">
<subsection id="HEF9E2564911B402AB4965B796741B443"><enum>(k)</enum><header>Servicer prohibitions</header>
<paragraph id="H1D6EC172A0584ACEA30F91CB10AFAB6A"><enum>(1)</enum><header>In general</header><text>A servicer of a federally related mortgage shall not—</text>
<subparagraph id="H688B49663FDF423C9A92D5403EC61600"><enum>(A)</enum><text>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;</text></subparagraph>
<subparagraph id="HD760EF5EFBCC45498B4EB6A889F70850"><enum>(B)</enum><text>charge fees for responding to valid qualified written requests (as defined in regulations which the Secretary shall prescribe) under this section;</text></subparagraph>
<subparagraph id="H3C3F252917F740239893717B894A5A28"><enum>(C)</enum><text>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;</text></subparagraph>
<subparagraph id="HDA2E9B1DD11B4C27828A797B3B73245C"><enum>(D)</enum><text>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</text></subparagraph>
<subparagraph id="HEDB1EB16C070422B86196BA61BB1BB42"><enum>(E)</enum><text>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.</text></subparagraph></paragraph>
<paragraph id="H4F494FD363BA4550A58B1AB7B29215CA"><enum>(2)</enum><header>Force-placed insurance defined</header><text>For purposes of this subsection and subsections (l) and (m), the term <term>force-placed insurance</term> 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.</text></paragraph></subsection>
<subsection id="H1139DA07FB19435B998876AF311E98C2"><enum>(l)</enum><header>Requirements for force-placed insurance</header><text>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.</text>
<paragraph id="H9FFBB0F3CCB14F3E8C858E599DE9755F"><enum>(1)</enum><header>Written notices to borrower</header><text>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—</text>
<subparagraph id="HCB76F3F845554D0C87D6545399AC5924"><enum>(A)</enum><text display-inline="yes-display-inline">the servicer has sent, by first-class mail, a written notice to the borrower containing—</text>
<clause id="HDB78F546F7DD456895ABCE3E0A603488"><enum>(i)</enum><text>a reminder of the borrower’s obligation to maintain hazard insurance on the property securing the federally related mortgage;</text></clause>
<clause id="H26EB089BF88049C28DE971068BDADEAB"><enum>(ii)</enum><text>a statement that the servicer does not have evidence of insurance coverage of such property;</text></clause>
<clause id="HB45631B26F13402B95ABA6C84142AE7C"><enum>(iii)</enum><text>a clear and conspicuous statement of the procedures by which the borrower may demonstrate that the borrower already has insurance coverage; and</text></clause>
<clause commented="no" id="H966B9AC362244E84BBF5DE47A7B39630"><enum>(iv)</enum><text display-inline="yes-display-inline">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;</text></clause></subparagraph>
<subparagraph id="HC7F964506DEB460591015A672226510C"><enum>(B)</enum><text display-inline="yes-display-inline">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</text></subparagraph>
<subparagraph id="H3085F03586F14B9BA317FB03819F167A"><enum>(C)</enum><text>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.</text></subparagraph></paragraph>
<paragraph id="H8803062363F9492690D5CD55E5FC503E"><enum>(2)</enum><header>Sufficiency of demonstration</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H27FDC8B24AD5420BAF0B4A8433F2C01F"><enum>(3)</enum><header>Termination of force-placed insurance</header><text display-inline="yes-display-inline">Within 15 days of the receipt by a servicer of confirmation of a borrower’s existing insurance coverage, the servicer shall—</text>
<subparagraph commented="no" id="HA1C9A4AE61234808A3B12959ADA676DF"><enum>(A)</enum><text>terminate the force-placed insurance; and</text></subparagraph>
<subparagraph id="H79D8E1EAF09D4FFFA26AA59EC9BA7B4F"><enum>(B)</enum><text>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.</text></subparagraph></paragraph>
<paragraph id="H48EBF3D5A7954AE4B60FFA700E5EFF36"><enum>(4)</enum><header>Clarification with respect to Flood Disaster Protection Act</header><text display-inline="yes-display-inline">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.</text></paragraph></subsection>
<subsection id="HAD098AC774CB41F98832DDCEFFDA25EE"><enum>(m)</enum><header>Limitations on force-placed insurance charges</header><text>All charges for force-placed insurance premiums shall be bona fide and reasonable in amount.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H1F0A5E3EF51440BE99CF3A87F80ECC01"><enum>(b)</enum><header>Increase in penalty amounts</header><text>Section 6(f) of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2605(f)) is amended—</text>
<paragraph id="HF1F8AE5FF63A4B458E38CA1F467BC20C"><enum>(1)</enum><text>in paragraphs (1)(B) and (2)(B), by striking <quote>$1,000</quote> each place such term appears and inserting <quote>$2,000</quote>; and</text></paragraph>
<paragraph id="H18CEE200A7154F009CAFCF3D2E815FF8"><enum>(2)</enum><text>in paragraph (2)(B)(i), by striking <quote>$500,000</quote> and inserting <quote>$1,000,000</quote>.</text></paragraph></subsection>
<subsection id="HA61775D5219B47E3A6C21F643C6ED3E4"><enum>(c)</enum><header>Decrease in response times</header><text>Section 6(e) of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2605(e)) is amended—</text>
<paragraph id="H3906BA13E54E496BB55C155195C4374C"><enum>(1)</enum><text>in paragraph (1)(A), by striking <quote>20 days</quote> and inserting <quote>5 days</quote>;</text></paragraph>
<paragraph id="H4D46B03476D544C195E957FDF2D2ED4B"><enum>(2)</enum><text>in paragraph (2), by striking <quote>60 days</quote> and inserting <quote>30 days</quote>; and</text></paragraph>
<paragraph id="H838AC56E6B0F4262B6E1BA40CF750BFC"><enum>(3)</enum><text>by adding at the end the following new paragraph:</text>
<quoted-block id="H8D2A6CC19BA4461D8D91048F15DD258C" style="OLC">
<paragraph id="HCF34B2F7FB30475F84197C4AD5349B15"><enum>(4)</enum><header>Limited extension of response time</header><text>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.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="HCFDDC4F84D7342D2B654C10ECC4DBD55"><enum>(d)</enum><header>Prompt refund of escrow accounts upon payoff</header><text>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: <quote>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.</quote>.</text></subsection></section>
<section id="HBB755DFB4C2F4807949FE26163D09682"><enum>9404.</enum><header>Truth in Lending Act amendments</header>
<subsection id="HF67D7FA53A904C1EA9C5DCF73C19696A"><enum>(a)</enum><header>Requirements for prompt crediting of home loan payments</header><text display-inline="yes-display-inline">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):</text>
<quoted-block display-inline="no-display-inline" id="H8136280086A64E81903D2C85EEBED2F0" style="OLC">
<section id="H00F6E9DC940148E6BC4FF4B8CC71D3C3"><enum>129F.</enum><header>Requirements for prompt crediting of home loan payments</header>
<subsection id="HF60944CF9A45472380880D5A1453625B"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">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).</text></subsection>
<subsection id="HF76A29E1A7BE4F2F808015B9F294A0B6"><enum>(b)</enum><header>Exception</header><text>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.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HAF15E1A1314E424AA06D7FCE64F8A3F7"><enum>(b)</enum><header>Requests for payoff amounts</header><text display-inline="yes-display-inline">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):</text>
<quoted-block display-inline="no-display-inline" id="H750794E003034ECCAAEA1500647F132D" style="OLC">
<section id="H90EFDBAC13F14AC9837FA94BDD40974D"><enum>129G.</enum><header>Requests for payoff amounts of home loan</header><text display-inline="no-display-inline">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.</text></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section>
<section id="HA544E14794F541849E6ADAD461B62E44"><enum>9405.</enum><header>Escrows included in repayment analysis</header><text display-inline="no-display-inline">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:</text>
<quoted-block style="OLC" id="HEB0CE73C62A04497BA9EECAF7AE94ACC" display-inline="no-display-inline">
<paragraph id="HBB0F1B99CCD54F4EB7461B79E63F9DA4"><enum>(4)</enum><header>Repayment analysis required to include escrow payments</header>
<subparagraph id="H751624046F204C62902CBCA5561E5BF4"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="HD127E334F6DD426FB6FB232F0BD7AC21"><enum>(B)</enum><header>Assessment value</header><text>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.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></section></subtitle>
<subtitle id="HF364F84B305A404BA6B40E204DC8E756"><enum>F</enum><header>Appraisal Activities</header>
<section id="HAFA5EB6B006C444997BEC6F5783C07F9" display-inline="no-display-inline"><enum>9501.</enum><header>Property appraisal requirements</header><text display-inline="no-display-inline">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:</text>
<quoted-block style="OLC" id="HF8611F8DFA76496897C9F052F799E320" display-inline="no-display-inline">
<section id="HF4FDAFF8C5804B179E628A0F7794720D"><enum>129H</enum><header>Property appraisal requirements</header>
<subsection id="H9D5AC785FC164A5B9F7296CF79CBA0AC" display-inline="no-display-inline"><enum>(a)</enum><header>In general</header><text>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.</text></subsection>
<subsection id="HDA6A46ED2D5444309642F9D2683B1D3B"><enum>(b)</enum><header>Appraisal requirements</header><text></text>
<paragraph id="H61DE08C1723D4DF1B628E7F6AA1488D2"><enum>(1)</enum><header>Physical property visit</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H76A723804E614D5281FA6D801848CA2A"><enum>(2)</enum><header>Second appraisal under certain circumstances</header><text></text>
<subparagraph id="H761A33A4DE03492A836CA3F6F7BCB7BE"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text></subparagraph>
<subparagraph id="HB977CAD9E5E6426BBD300EEB36069013"><enum>(B)</enum><header>No cost to applicant</header><text>The cost of any second appraisal required under subparagraph (A) may not be charged to the applicant.</text></subparagraph></paragraph>
<paragraph id="HEF56D74F952A4939803DFA0962D7DFFB"><enum>(3)</enum><header>Qualified appraiser defined</header><text>For purposes of this section, the term <quote>qualified appraiser</quote> means a person who—</text>
<subparagraph id="HAD7C68544ED84A5D86FCB0A8035D0842"><enum>(A)</enum><text>is, at a minimum, certified or licensed by the State in which the property to be appraised is located; and</text></subparagraph>
<subparagraph id="HC3AC9E0D1FFB4580ABBB04CF9F384FC8"><enum>(B)</enum><text>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.</text></subparagraph></paragraph></subsection>
<subsection id="HA503E199D3534CB09203E918252B9317"><enum>(c)</enum><header>Free copy of appraisal</header><text>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.</text></subsection>
<subsection id="H3F9FBB9AF6214C2AA10B9F4A7B31DA8E"><enum>(d)</enum><header>Consumer notification</header><text>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.</text></subsection>
<subsection id="H380E52DC6D1448318D0CC6C5497838DE"><enum>(e)</enum><header>Violations</header><text>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.</text></subsection>
<subsection id="H4E641DA11F4248FCB376465DC9A62700"><enum>(f)</enum><header>Subprime mortgage defined</header><text display-inline="yes-display-inline">For purposes of this section, the term <quote>subprime mortgage</quote> 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—</text>
<paragraph id="HAB41946A7F6441E8B99E9FB831E4A679"><enum>(1)</enum><text display-inline="yes-display-inline">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));</text></paragraph>
<paragraph id="H97B2A208808742A4AC409DDF7983AC0F"><enum>(2)</enum><text display-inline="yes-display-inline">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</text></paragraph>
<paragraph id="H0A740439AA9E4352BB0B8D05270A1584"><enum>(3)</enum><text>by 3.5 or more percentage points for a subordinate lien residential mortgage loan.</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section id="H035A0AFCEAF04393B69F7532DE2B7C02"><enum>9502.</enum><header>Unfair and deceptive practices and acts relating to certain consumer credit transactions</header>
<subsection id="HA02F64B248DD4676AA8C24867A630727"><enum>(a)</enum><header>In general</header><text>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:</text>
<quoted-block display-inline="no-display-inline" id="HC5AC485F9FB54B9C966DF69112798612" style="OLC">
<section id="H19509FE786C843F19C878E1983B821FF"><enum>129E.</enum><header>Unfair and deceptive practices and acts relating to certain consumer credit transactions</header>
<subsection id="H1EE501A158CD40528F877D298E2C7906"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="HA136B668ACA94D28A4593695B7B352CA"><enum>(b)</enum><header>Appraisal independence</header><text>For purposes of subsection (a), unfair and deceptive practices shall include—</text>
<paragraph id="H1C4F946AB599418D807E41DCADD786D2"><enum>(1)</enum><text>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;</text></paragraph>
<paragraph id="H43445A9626D84C0ABE0ED648BFDE748A"><enum>(2)</enum><text display-inline="yes-display-inline">mischaracterizing, or suborning any mischaracterization of, the appraised value of the property securing the extension of the credit;</text></paragraph>
<paragraph id="HA06BED0BAC9A4A0C8AB5F9FAF8B614F5"><enum>(3)</enum><text display-inline="yes-display-inline">seeking to influence an appraiser or otherwise to encourage a targeted value in order to facilitate the making or pricing of the transaction; and</text></paragraph>
<paragraph id="HD194097162AB46E6985EF6E82C5654E6"><enum>(4)</enum><text display-inline="yes-display-inline">withholding or threatening to withhold timely payment for an appraisal report or for appraisal services rendered.</text></paragraph></subsection>
<subsection id="HA8167AA945D143888EA8018B9EA34205"><enum>(c)</enum><header>Exceptions</header><text>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:</text>
<paragraph id="H8D294F51B6AD40F4BFBE035BAE977C2E"><enum>(1)</enum><text>Consider additional, appropriate property information, including the consideration of additional comparable properties to make or support an appraisal.</text></paragraph>
<paragraph id="H39D4B9334D9141F9A1968241F2E97B1C"><enum>(2)</enum><text>Provide further detail, substantiation, or explanation for the appraiser’s value conclusion.</text></paragraph>
<paragraph id="H604AE219D5644634BA0130C3D1F89391"><enum>(3)</enum><text>Correct errors in the appraisal report.</text></paragraph></subsection>
<subsection display-inline="no-display-inline" id="H4910714E55D04DB5A71833F25D7DC15F"><enum>(d)</enum><header>Prohibitions on conflicts of interest</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="HFAB1DA16497244088983F9163571857F"><enum>(e)</enum><header>Mandatory reporting</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="H3744A6DE7FD744469D715F1B9CA9BF96"><enum>(f)</enum><header>No extension of credit</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="HE85C3FDD1561470B8158F66A2E4EA148"><enum>(g)</enum><header>Rulemaking proceedings</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="H71E2AD4BA68D4DEB87BDAE5CAD4E995A"><enum>(1)</enum><text display-inline="yes-display-inline">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</text></paragraph>
<paragraph id="HF8E0F978A2E94286922E35BAEC520A92"><enum>(2)</enum><text display-inline="yes-display-inline">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).</text></paragraph></subsection>
<subsection id="H73962C6BEC714A169A883860ECDCFABF"><enum>(h)</enum><header>Penalties</header>
<paragraph id="H350D04F77079457497D0AA5B747CBD40"><enum>(1)</enum><header>First violation</header><text>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.</text></paragraph>
<paragraph id="HD13B7DA0D151488884C16C49C82DCA6E"><enum>(2)</enum><header>Subsequent violations</header><text>In the case of any person on whom a civil penalty has been imposed under paragraph (1), paragraph (1) shall be applied by substituting <quote>$20,000</quote> for <quote>$10,000</quote> with respect to all subsequent violations.</text></paragraph>
<paragraph id="HB2119A5B1EE141529F80DB1776FD88EB"><enum>(3)</enum><header>Assessment</header><text>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.</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H5FCED5290BA849729364C2AA5D48626D"><enum>(b)</enum><header>Clerical Amendment</header><text>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:</text>
<quoted-block display-inline="no-display-inline" id="H0A8D6F711E14401ABEFAE3D31A519947" style="OLC">
<toc regeneration="no-regeneration">
<toc-entry level="section">129E. Unfair and deceptive practices and acts relating to certain consumer credit transactions.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section>
<section display-inline="no-display-inline" id="H46F50FFC471241EDAC40A419FD154C27" section-type="subsequent-section"><enum>9503.</enum><header>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</header>
<subsection id="HF54D9F3869D64991821E2363614B2097"><enum>(a)</enum><header>Consumer protection mission</header>
<paragraph id="HD4B020EA17184084B0E1A5B693467270"><enum>(1)</enum><header>Purposes</header><text>Section 1101 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3331) is amended by inserting <quote>and to provide the Appraisal Subcommittee with a consumer protection mandate</quote> before the period at the end.</text></paragraph>
<paragraph id="H612BCEFDE78A42DEA281E71AF74071A5"><enum>(2)</enum><header>Functions of appraisal subcommittee</header><text>Section 1103(a) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3332(a)) is amended—</text>
<subparagraph id="H0F980376864842EE8E71026A125591D3"><enum>(A)</enum><text>by striking <quote>and</quote> at the end of paragraph (3); and</text></subparagraph>
<subparagraph id="H40A72BB0478E49B0A1B12A4A42A2C434"><enum>(B)</enum><text>by amending paragraph (4) to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H94D324ECC98D46299CB23DCACBFB41FC" style="OLC">
<paragraph id="HEB631317584F4856808AAD2F06D2C5FD"><enum>(4)</enum><text display-inline="yes-display-inline">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</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph>
<paragraph id="H9D58B5EEC9CD4A7295764D1B2BFF1E89"><enum>(3)</enum><header>Threshold levels</header><text>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: <quote>, 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</quote>.</text></paragraph></subsection>
<subsection display-inline="no-display-inline" id="H7D32D75D751E4D4AAADCBADA6EEF850C"><enum>(b)</enum><header>Annual report of Appraisal Subcommittee</header><text display-inline="yes-display-inline">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:</text>
<quoted-block display-inline="no-display-inline" id="HEF9C1B6B7B8147E08EEDA6FAD8EDFEC2" style="OLC">
<paragraph id="HD636A2E790C1430C919BAE734F2D4F1E"><enum>(5)</enum><text display-inline="yes-display-inline">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.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H939422055CB64E2191AEC55433496C44"><enum>(c)</enum><header>Open meetings</header><text>Section 1104(b) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3333(b)) is amended by inserting <quote>in public session after notice in the Federal Register</quote> after <quote>shall meet</quote>.</text></subsection>
<subsection id="H41EB2E374E2F49F89AC1B1DDE5B71DCF"><enum>(d)</enum><header>Regulations</header><text>Section 1106 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3335) is amended—</text>
<paragraph id="H2DF68B269A334841A4A0ACA98D9568D2"><enum>(1)</enum><text>by inserting <quote>prescribe regulations after notice and opportunity for comment,</quote> after <quote>hold hearings</quote>; and</text></paragraph>
<paragraph id="H8A240E8B2B424D75A49DD4C4A91FF75C"><enum>(2)</enum><text>at the end by inserting <quote>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.</quote>.</text></paragraph></subsection>
<subsection display-inline="no-display-inline" id="HD2299EBA01A141C2A9224FB96BE73D73"><enum>(e)</enum><header>Appraisals and appraisal reviews</header><text display-inline="yes-display-inline">Section 1113 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3342) is amended—</text>
<paragraph id="HEBAC6945F67148D9BA805D64CDC6D8A1"><enum>(1)</enum><text>by striking <quote>In determining</quote> and inserting <quote><header-in-text level="subsection" style="OLC"><enum-in-header>(a)</enum-in-header> In general</header-in-text>.—In determining</quote>;</text></paragraph>
<paragraph display-inline="no-display-inline" id="HFED761D734E343D6AC057D0D0DF4E648"><enum>(2)</enum><text display-inline="yes-display-inline">in subsection (a) (as designated by paragraph (1)), by inserting before the period the following: <quote>, 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</quote>; and</text></paragraph>
<paragraph id="HFCBFD1669E3D419EB1EAC5B6D0C3405E"><enum>(3)</enum><text>by adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H2D8F46572B164D928640B279F78A05DC" style="OLC">
<subsection id="H457C31CBD4F744CF942252E946A65868"><enum>(b)</enum><header>Appraisals and appraisal reviews</header><text display-inline="yes-display-inline">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.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection display-inline="no-display-inline" id="H558419D16EEA43E28138E5FA93C9AAF8"><enum>(f)</enum><header>Appraisal management services</header>
<paragraph id="H7E3D2C7F12AC49ACB3890AB502CA5143"><enum>(1)</enum><header>Supervision of third party providers of appraisal management services</header><text display-inline="yes-display-inline">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—</text>
<subparagraph id="H71DC9A7906D44C3E8BAF567BC5D69406"><enum>(A)</enum><text>by amending paragraph (1) to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H24E6282F14D6447A9CC96F4B2B38A15E" style="OLC">
<paragraph id="HD4A77848C1E544C0906FE40B505C7696"><enum>(1)</enum><text display-inline="yes-display-inline">monitor the requirements established by States—</text>
<subparagraph id="HABAD5B2184164C8D9DB4C5EC0294F750"><enum>(A)</enum><text>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</text></subparagraph>
<subparagraph id="H53CBD38A954F4DEE9D118733A7CA06D3"><enum>(B)</enum><text display-inline="yes-display-inline">for the registration and supervision of the operations and activities of an appraisal management company;</text></subparagraph></paragraph><after-quoted-block>; and</after-quoted-block></quoted-block></subparagraph>
<subparagraph id="HC4006C50A0DE444DBC517900E7A09695"><enum>(B)</enum><text>by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H018265590C904B418D941048CB1D19E9" style="OLC">
<paragraph id="HEDEAA2E15BAB45E591D7F75FC1D33584"><enum>(7)</enum><text display-inline="yes-display-inline">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.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph>
<paragraph id="H284350C1AC8846BCB4D0370A37326D74"><enum>(2)</enum><header>Appraisal management company minimum qualifications</header><text display-inline="yes-display-inline">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):</text>
<quoted-block display-inline="no-display-inline" id="HEEFA0E41706741FE8E65659986BA003E" style="OLC">
<section id="H38CA17A0D0F5451C81CD0C475D52C64D"><enum>1124.</enum><header>Appraisal management company minimum qualifications</header>
<subsection id="H69A2AA4EF0044A95B67CD252BFF24181"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="H92C854FEA66841C2849485052C2820DB"><enum>(1)</enum><text display-inline="yes-display-inline">register with and be subject to supervision by a State appraiser certifying and licensing agency in each State in which such company operates;</text></paragraph>
<paragraph id="H355392528686433A8954E7EF796BDC18"><enum>(2)</enum><text>verify that only licensed or certified appraisers are used for federally related transactions;</text></paragraph>
<paragraph id="HDC1EA06574D243C9BF024EDC36757E04"><enum>(3)</enum><text>require that appraisals coordinated by an appraisal management company comply with the Uniform Standards of Professional Appraisal Practice; and</text></paragraph>
<paragraph id="H5CD992C6192C47A09FD3EF1FCA05709D"><enum>(4)</enum><text>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.</text></paragraph></subsection>
<subsection id="H3CF4ED1736D2483684FE71748449A1E0"><enum>(b)</enum><header>Exception for federally regulated financial institutions</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="H2CA9A1DCC16C4D9798AF1E2914A130BA"><enum>(1)</enum><text>verify that only licensed or certified appraisers are used for federally related transactions;</text></paragraph>
<paragraph id="HE25A50494B1B4AA497135167FE4F7F32"><enum>(2)</enum><text>require that appraisals coordinated by an institution or subsidiary providing appraisal management services comply with the Uniform Standards of Professional Appraisal Practice; and</text></paragraph>
<paragraph id="H86C395CD4CD449D7983EA23CCD5B2E49"><enum>(3)</enum><text>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.</text></paragraph></subsection>
<subsection id="H648DB17C79154B3D9E28CD585787F305"><enum>(c)</enum><header>Registration limitations</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="H26A54B12E1AA49C3A0ECF9B9AB05B5A7"><enum>(d)</enum><header>Regulations</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="H787A7246CD98414DBA8DC8CBAE45FE92"><enum>(e)</enum><header>Effective date</header>
<paragraph id="HD070B88BA9294D9CBCAB2651F9CDC388"><enum>(1)</enum><header>In general</header><text>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.</text></paragraph>
<paragraph id="H94993ABC97134B6AAD30F7CB86516338"><enum>(2)</enum><header>Extension of effective date</header><text display-inline="yes-display-inline">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.</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="HFEC3B7631B084B90B709AA928B9763C6"><enum>(3)</enum><header>State appraiser certifying and licensing agency authority</header><text display-inline="yes-display-inline">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: <quote>The duties of such agency may additionally include the registration and supervision of appraisal management companies.</quote>.</text></paragraph>
<paragraph id="HFFBF975C4C154F319DA91048366E17E8"><enum>(4)</enum><header>Appraisal management company definition</header><text display-inline="yes-display-inline">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:</text>
<quoted-block display-inline="no-display-inline" id="H92D932C1500040BC800991263B1DDC78" style="OLC">
<paragraph id="H7AB820570EF84A6F8A28C4CED935DD7B"><enum>(11)</enum><header>Appraisal management company</header><text display-inline="yes-display-inline">The term <term>appraisal management company</term> 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—</text>
<subparagraph id="H5F573BDBA31341C2AEDA93C2BE86BCAD"><enum>(A)</enum><text>to recruit, select, and retain appraisers;</text></subparagraph>
<subparagraph id="H987C3FDFBF0B4101B3E3773AE87EBAB3"><enum>(B)</enum><text>to contract with licensed and certified appraisers to perform appraisal assignments;</text></subparagraph>
<subparagraph id="H0F447EBCAE8F4DB3972A3AAAE6B67BDC"><enum>(C)</enum><text>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</text></subparagraph>
<subparagraph id="H8A520F6E40254AC39A11D642ED473F3A"><enum>(D)</enum><text>to review and verify the work of appraisers.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H17D68C3D1C1F4E5294E6EEDF6E8335C3"><enum>(g)</enum><header>State agency reporting requirement</header><text>Section 1109(a) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3338(a)) is amended—</text>
<paragraph id="HD9EC966DF24540E6B78F52BD4A66FBB4"><enum>(1)</enum><text display-inline="yes-display-inline">by striking <quote>and</quote> after the semicolon in paragraph (1);</text></paragraph>
<paragraph id="H3B7C0883802F40008131D182FB929A91"><enum>(2)</enum><text display-inline="yes-display-inline">by redesignating paragraph (2) as paragraph (4); and</text></paragraph>
<paragraph id="HDFFA6E54806848B5BAB522E1519A3A41"><enum>(3)</enum><text display-inline="yes-display-inline">by inserting after paragraph (1) the following new paragraphs:</text>
<quoted-block id="H96C74D18030E41369174593C5C4C6661" style="OLC">
<paragraph id="H6B114923CF0B427EA929DE133F439C2C"><enum>(2)</enum><text>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;</text></paragraph>
<paragraph id="H0E15C9152FBA48A994BE1F23753AA3FD"><enum>(3)</enum><text display-inline="yes-display-inline">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</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection display-inline="no-display-inline" id="HAD2479769B354F68BE9B9162A8564FE4"><enum>(h)</enum><header>Registry fees modified</header>
<paragraph id="H316D68BF84E6481F81E0BA738CF73FB0"><enum>(1)</enum><header>In general</header><text>Section 1109(a) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3338(a)) is amended—</text>
<subparagraph id="H26512B2D041B4F818CF433245C70E6B3"><enum>(A)</enum><text>by amending paragraph (4) (as modified by section 9503(g)) to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H460683DAE22448709728DC0B91C5EF25" style="OLC">
<paragraph id="H39FE0B64CBBA4DC5B6F39657FA3E3D29"><enum>(4)</enum><text display-inline="yes-display-inline">collect—</text>
<subparagraph id="HC6A1E3F47CD047C2BF7C377ADCB25403"><enum>(A)</enum><text>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</text></subparagraph>
<subparagraph id="H02B93072D0AB49B5909C805FF39AB573"><enum>(B)</enum><text display-inline="yes-display-inline">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—</text>
<clause id="H26FEB38BEFED4CE7BDB2DA0330F78BCA"><enum>(i)</enum><text>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</text></clause>
<clause id="H6980B67343C64F58B63488C2B74A437F"><enum>(ii)</enum><text display-inline="yes-display-inline">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.</text></clause></subparagraph></paragraph><after-quoted-block>; and</after-quoted-block></quoted-block></subparagraph>
<subparagraph id="HE8486C8C3CC546E7802AE65D5D48FC2D"><enum>(B)</enum><text>by amending the matter following paragraph (4), as redesignated, to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H8B9B6894F7F5499CA66C98D4C6045F68" style="OLC">
<quoted-block-continuation-text quoted-block-continuation-text-level="subsection">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.</quoted-block-continuation-text><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph>
<paragraph id="H93F9633D6CCD4589819666B28A0EE9D8"><enum>(2)</enum><header>Incremental revenues</header><text display-inline="yes-display-inline">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 <quote>Appraisal Subcommittee Account</quote>.</text></paragraph></subsection>
<subsection id="HA4407C1F59C24F58B2C28B979CDF5A2B"><enum>(i)</enum><header>Grants and reports</header><text>Section 1109(b) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3348(b)) is amended—</text>
<paragraph id="HD85B8D08A0564780AD75D1CB2F024FE6"><enum>(1)</enum><text display-inline="yes-display-inline">by striking <quote>and</quote> after the semicolon in paragraph (3);</text></paragraph>
<paragraph id="H0989C1C3E6BB409BA89410E24B3CA07E"><enum>(2)</enum><text>by striking the period at the end of paragraph (4) and inserting a semicolon;</text></paragraph>
<paragraph id="H946799C66E8D4305B7B4D46A183DB883"><enum>(3)</enum><text>by adding at the end the following new paragraphs:</text>
<quoted-block id="H4C177E08B4AA4149B2E9C36E712FB84D" style="OLC">
<paragraph id="H4FF4CDB678CD404C8639DC00F36B1929"><enum>(5)</enum><text display-inline="yes-display-inline">to make grants to State appraiser certifying and licensing agencies to support the efforts of such agencies to comply with this title, including—</text>
<subparagraph id="HFC1496B9E19B4FAC80C79897E987A520"><enum>(A)</enum><text>the complaint process, complaint investigations, and appraiser enforcement activities of such agencies; and</text></subparagraph>
<subparagraph id="H6B950ADF5B3447AA93BC0E686D0EA838"><enum>(B)</enum><text>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</text></subparagraph></paragraph>
<paragraph id="HD03BB4D443594693910DD4D9592953F1"><enum>(6)</enum><text>to report to all State appraiser certifying and licensing agencies when a license or certification is surrendered, revoked, or suspended.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph><continuation-text continuation-text-level="subsection">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 <quote>Appraisal Subcommittee Account</quote> pursuant to subsection (h).</continuation-text></subsection>
<subsection id="H24B10E7F94264195ADA2CC3CDC9F79B6"><enum>(j)</enum><header>Criteria</header><text>Section 1116 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3345) is amended—</text>
<paragraph id="H55038D7F93D94440AC14200A7EBEAF8D"><enum>(1)</enum><text>in subsection (c), by inserting <quote>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</quote> before the period at the end; and</text></paragraph>
<paragraph id="HB753DAEFA9FD472FB3ED10A528DAD3E9"><enum>(2)</enum><text display-inline="yes-display-inline">by striking subsection (e) and inserting the following new subsection:</text>
<quoted-block id="HACD896DF007E4C1C8853021E7A3BC980" style="OLC">
<subsection id="H3811078D060B4DE991AB39D482EDDEE1"><enum>(e)</enum><header>Minimum qualification requirements</header><text>Any requirements established for individuals in the position of <quote>Trainee Appraiser</quote> and <quote>Supervisory Appraiser</quote> 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.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="HECC6F857CB074F7BB3602CC54155F059"><enum>(k)</enum><header>Monitoring of state appraiser certifying and licensing agencies</header><text>Section 1118 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3347) is amended—</text>
<paragraph id="HF8A105EFA3E546C089A30E7E7C00F2EF"><enum>(1)</enum><text display-inline="yes-display-inline">by amending subsection (a) to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HB681271F35104EEB9C99CC980C1E6F56" style="OLC">
<subsection id="HB806423D38DD4367871AADC249238199"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">The Appraisal Subcommittee shall monitor each State appraiser certifying and licensing agency for the purposes of determining whether such agency—</text>
<paragraph id="HD236E410F7EB4543AD8068D5B3E90333"><enum>(1)</enum><text>has policies, practices, funding, staffing, and procedures that are consistent with this title;</text></paragraph>
<paragraph id="H7BC20414B5F2450B8B74CA4F49502323"><enum>(2)</enum><text>processes complaints and completes investigations in a reasonable time period;</text></paragraph>
<paragraph id="H9E1A8A7E86944FA89229E35A03861EA5"><enum>(3)</enum><text>appropriately disciplines sanctioned appraisers and appraisal management companies;</text></paragraph>
<paragraph id="H6F20B4F8D4CE474F9B9359A94D08BBD4"><enum>(4)</enum><text>maintains an effective regulatory program; and</text></paragraph>
<paragraph id="H041AC3868336447F88333C5E825B5213"><enum>(5)</enum><text>reports complaints and disciplinary actions on a timely basis to the national registries on appraisers and appraisal management companies maintained by the Appraisal Subcommittee.</text></paragraph><continuation-text continuation-text-level="subsection">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.</continuation-text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="H37195094DA8445DAA5C6E0B5FAE85FCC"><enum>(2)</enum><text>in subsection (b)(2), by inserting after “authority” the following: “or sufficient funding”.</text></paragraph></subsection>
<subsection id="H2EF5A7329B6C41408698F2FD07DCE993"><enum>(l)</enum><header>Reciprocity</header><text>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:</text>
<quoted-block id="HCEAE326748624A4A9854EBD136B794AA" style="OLC">
<subsection id="H131BB68446E445F2B8968E6CF48EDF3A"><enum>(b)</enum><header>Reciprocity</header><text>A State appraiser certifying or licensing agency shall issue a reciprocal certification or license for an individual from another State when—</text>
<paragraph id="H9F2F9025E7904E91802D776EE16F54A3"><enum>(1)</enum><text>the appraiser licensing and certification program of such other State is in compliance with the provisions of this title; and</text></paragraph>
<paragraph id="HA48F8699E195468B83D55E9EF4B56922"><enum>(2)</enum><text>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.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H3EE8CFA62EB34DCE90EB2F9FBB66BB31"><enum>(m)</enum><header>Consideration of professional appraisal designations</header><text>Section 1122(d) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3351(d)) is amended by striking <quote>shall not exclude</quote> and all that follows through the end of the subsection and inserting the following: <quote>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.</quote>.</text></subsection>
<subsection id="H2FFCDB6BF16C4A448A964D2647F5F0CD"><enum>(n)</enum><header>Appraiser independence</header><text>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:</text>
<quoted-block id="H526D9B2C6B914D86B127754C44672F5B" style="OLC">
<subsection id="H82F984F117F84D66B0112C2BE62B729E"><enum>(g)</enum><header>Appraiser independence monitoring</header><text display-inline="yes-display-inline">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.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HABB2FF9CFDA84BCDA5856A43D2BEB580"><enum>(o)</enum><header>Appraiser education</header><text>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:</text>
<quoted-block id="HF49B3FC0ADDD4B7D99A791B7DFF31EC7" style="OLC">
<subsection id="H2AFC5CEB417D44E9B1A189F76309E577"><enum>(h)</enum><header>Approved education</header><text>The Appraisal Subcommittee shall encourage the States to accept courses approved by the Appraiser Qualification Board’s Course Approval Program.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection display-inline="no-display-inline" id="H42194297DFCD45EA85306F6F99E7F32C"><enum>(p)</enum><header>Appraisal complaint hotline</header><text display-inline="yes-display-inline">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:</text>
<quoted-block display-inline="no-display-inline" id="H41677EC7CC7E463782642091FD075EF7" style="OLC">
<subsection id="HD3804D0D27CD4564808D49F06597452A"><enum>(i)</enum><header>Appraisal complaint national hotline</header><text display-inline="yes-display-inline">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.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H378947862CCE42FAA965AB132F71DAD0"><enum>(q)</enum><header>Automated valuation models</header><text display-inline="yes-display-inline">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):</text>
<quoted-block display-inline="no-display-inline" id="H73E290A1399A46CFBF70721DE1E11D13" style="OLC">
<section id="H7C87D4332AB2476EAAD8F2B6C28C4456"><enum>1125.</enum><header>Automated valuation models used to value certain mortgages</header>
<subsection id="H133D215A270A419290ADA648C2998B33"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Automated valuation models shall adhere to quality control standards designed to—</text>
<paragraph id="H1996B8381A04476696D1AB285AF69A49"><enum>(1)</enum><text display-inline="yes-display-inline">ensure a high level of confidence in the estimates produced by automated valuation models;</text></paragraph>
<paragraph id="HA2B9823E119941CB965B7C108309D961"><enum>(2)</enum><text>protect against the manipulation of data;</text></paragraph>
<paragraph id="HF4AEFDDD0FA547EA878CC7ADCEB28D89"><enum>(3)</enum><text>seek to avoid conflicts of interest; and</text></paragraph>
<paragraph id="H01C76E93953748CEB4FC7B9B58842BF0"><enum>(4)</enum><text>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.</text></paragraph></subsection>
<subsection id="HFCEC1F28D7B84B8AA25A35446F910398"><enum>(b)</enum><header>Adoption of regulations</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="H0C4DA253A18543CFA2C36A57ED81F6C1"><enum>(c)</enum><header>Enforcement</header><text display-inline="yes-display-inline">Compliance with regulations issued under this subsection shall be enforced by—</text>
<paragraph id="H4FF14DA04506414F973256D7AB0A76A7"><enum>(1)</enum><text display-inline="yes-display-inline">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</text></paragraph>
<paragraph id="H893918B550614ADFBCD6379600708A10"><enum>(2)</enum><text>with respect to other persons, the Appraisal Subcommittee.</text></paragraph></subsection>
<subsection id="H71EAE4F2E3E549DAA1B1D46AC70D3CC5"><enum>(d)</enum><header>Automated valuation model defined</header><text display-inline="yes-display-inline">For purposes of this section, the term <quote>automated valuation model</quote> 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.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HA56EFD732F5F49E2A648312933AAFAFD"><enum>(r)</enum><header>Broker price opinions</header><text display-inline="yes-display-inline">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):</text>
<quoted-block display-inline="no-display-inline" id="H38401D2EECE14523952D630115BDA258" style="OLC">
<section id="HEA13387AE9FF4964A8CEDB931438EC68"><enum>1126.</enum><header>Broker price opinions</header>
<subsection id="H18859782BF3744DE9CFCE7CD6296606E"><enum>(a)</enum><header>General prohibition</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="H5892FA01B51A4204852A3BAAF3226EC4"><enum>(b)</enum><header>Broker price opinion defined</header><text>For purposes of this section, the term <quote>broker price opinion</quote> 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).</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H2410429B1B9C45B5B7978AD1132D4123"><enum>(s)</enum><header>Amendments to appraisal subcommittee</header><text>Section 1011 of the Federal Financial Institutions Examination Council Act of 1978 (12 U.S.C. 3310) is amended—</text>
<paragraph id="HBC6EA9F10F584A719EE19C09C00079FB"><enum>(1)</enum><text>in the first sentence, by adding before the period the following: <quote>and the Federal Housing Finance Agency</quote>; and</text></paragraph>
<paragraph id="H861C386F3FCC46EF978FB26C0FE5B9AC"><enum>(2)</enum><text>by inserting at the end the following: <quote>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.</quote>.</text></paragraph></subsection>
<subsection id="HA73FB354F42041DFA9557D332E39FF67"><enum>(t)</enum><header>Technical corrections</header>
<paragraph id="H85F58FBD28724051939CED3367B43A81"><enum>(1)</enum><text>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 <quote>council,</quote> and inserting <quote>Council,</quote>.</text></paragraph>
<paragraph id="HAF3D2E9E0A8842448AE46A26DA9351E9"><enum>(2)</enum><text>Section 1121(6) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3350(6)) is amended by striking <quote>Corporations,</quote> and inserting <quote>Corporation,</quote>.</text></paragraph>
<paragraph id="HEF8EF4D20C454CE282DE458012A08923"><enum>(3)</enum><text>Section 1121(8) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3350(8)) is amended by striking <quote>council</quote> and inserting <quote>Council</quote>.</text></paragraph>
<paragraph id="H66820552691F42ADB53677920E21CB10"><enum>(4)</enum><text>Section 1122 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3351) is amended—</text>
<subparagraph id="H77B935AB0415402BB6D35438817B2E7C"><enum>(A)</enum><text>in subsection (a)(1) by moving the left margin of subparagraphs (A), (B), and (C) 2 ems to the right; and</text></subparagraph>
<subparagraph id="H43529EF3325B49B6A84AF11D98EDAE40"><enum>(B)</enum><text>in subsection (c)—</text>
<clause id="H2F869DB33AC84A61B1EADEB4F1D85C23"><enum>(i)</enum><text>by striking <quote>Federal Financial Institutions Examination Council</quote> and inserting <quote>Financial Institutions Examination Council</quote>; and</text></clause>
<clause id="HEC0045671A42413A94402E48E2326E08"><enum>(ii)</enum><text>by striking <quote>the council’s functions</quote> and inserting <quote>the Council’s functions</quote>.</text></clause></subparagraph></paragraph></subsection></section>
<section id="H317C3B4FEF2F4C64B67464B1A9997638"><enum>9504.</enum><header>Study required on improvements in appraisal process and compliance programs</header>
<subsection id="HEC2FEA8DD672434CBABF1A0D182DA699"><enum>(a)</enum><header>Study</header><text>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.</text></subsection>
<subsection id="HFF30E36369AB4BA5803AA7FB8577E3AB"><enum>(b)</enum><header>Report</header><text>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.</text></subsection>
<subsection id="HB406A85AB29F4B10B778239FB2785917"><enum>(c)</enum><header>Additional study required</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="HE769E29133F84F6D9B4B5DDE5119671D"><enum>(1)</enum><text>quality and costs of appraisals;</text></paragraph>
<paragraph id="HE11254B3367446DDB3167B9B6A6077BB"><enum>(2)</enum><text>length of time for obtaining appraisals;</text></paragraph>
<paragraph id="HF7017CF63B8E43AA98C5A6EE1004D8E5"><enum>(3)</enum><text>impact on consumer protection, especially regarding maintaining appraisal independence, abating appraisal inflation, and mitigating acts of appraisal fraud;</text></paragraph>
<paragraph id="HDE347164C38C4369967213E113B608B7"><enum>(4)</enum><text>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</text></paragraph>
<paragraph id="HC6AD6765A761492DB0A141C90E05032A"><enum>(5)</enum><text>impact on mortgage brokers and other small business professionals in the financial services industry.</text></paragraph></subsection>
<subsection id="H36A2D5FC177C427EBA17588AAB2D005F" display-inline="no-display-inline"><enum>(d)</enum><header>Additional report</header><text>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.</text></subsection></section>
<section commented="no" id="HCC1C73DA019B44E3BDEBAE50C92262FE"><enum>9505.</enum><header>Equal Credit Opportunity Act amendment</header><text display-inline="no-display-inline">Subsection (e) of section 701 of the Equal Credit Opportunity Act (15 U.S.C. 1691) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H3DDB58C62C8643E2844332F7F503045C" style="OLC">
<subsection display-inline="no-display-inline" id="HFC6D171972A944EAA990C7ACD885E7C4"><enum>(e)</enum><header>Copies furnished to applicants</header>
<paragraph id="HA35661249680447483E91652CE5F3AB8"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="HBE03329D41F14A92AB647A1057922184"><enum>(2)</enum><header>Waiver</header><text display-inline="yes-display-inline">The applicant may waive the 3 day requirement provided for in paragraph (1), except where otherwise required in law.</text></paragraph>
<paragraph id="HDC97605721B542A885C898EF07D5435E"><enum>(3)</enum><header>Reimbursement</header><text>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.</text></paragraph>
<paragraph display-inline="no-display-inline" id="HA9D2660E2A6F4A5CBE6532861B40C423"><enum>(4)</enum><header>Free copy</header><text>Notwithstanding paragraph (3), the creditor shall provide a copy of each written appraisal or valuation at no additional cost to the applicant.</text></paragraph>
<paragraph id="HE3409460B56E42769DE639CFE6568B4F"><enum>(5)</enum><header>Notification to applicants</header><text>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.</text></paragraph>
<paragraph id="HA46D89426A78400488B61715E501D08C"><enum>(6)</enum><header>Regulations</header><text>The Board shall prescribe regulations to implement this subsection within 1 year of the date of the enactment of this subsection.</text></paragraph>
<paragraph id="H29E992B1551644AE8358E1CC9C58CCB1"><enum>(7)</enum><header>Valuation defined</header><text>For purposes of this subsection, the term <term>valuation</term> 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.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section id="H421C3452030E451298CF40EB4EAF4B15"><enum>9506.</enum><header>Real Estate Settlement Procedures Act of 1974 amendment relating to certain appraisal fees</header><text display-inline="no-display-inline">Section 4 of the Real Estate Settlement Procedures Act of 1974 is amended by adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H3CE2158D404149CF8095EB1097706068" style="OLC">
<subsection id="HAB86A28FE2074EF9A889408C0597B1F4"><enum>(c)</enum><text display-inline="yes-display-inline">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—</text>
<paragraph id="HDA38A4EB55304B0F883EB9075B573C43"><enum>(1)</enum><text display-inline="yes-display-inline">the fee paid directly to the appraiser by such company; and</text></paragraph>
<paragraph id="H1C611AF9E51149A7904304C2E81ED2BF"><enum>(2)</enum><text>the administration fee charged by such company.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section></subtitle>
<subtitle id="HA0242C652F7B468A932D63128078EFAE"><enum>G</enum><header>Sense of Congress regarding the importance of government sponsored enterprises reform</header>
<section display-inline="no-display-inline" id="HF2B4714EEF204D91BBFC1BC04818D8BA" section-type="subsequent-section"><enum>9601.</enum><header>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</header>
<subsection id="H9CF6053A195D4CE18392FA895A73B764"><enum>(a)</enum><header>Findings</header><text display-inline="yes-display-inline">The Congress finds as follows:</text>
<paragraph id="HA2F85304446A47578502F852292A88A6"><enum>(1)</enum><text>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.</text></paragraph>
<paragraph id="H096FA64D8D5A4FB0AC3EE022870980DE"><enum>(2)</enum><text>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.</text></paragraph>
<paragraph id="H238EF4C2FC1247F39FECC7CE725EB22A"><enum>(3)</enum><text>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 <quote>special affordable</quote> 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.</text></paragraph>
<paragraph id="H8D0B0CBF18F74059A33E79DD90194202"><enum>(4)</enum><text>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.</text></paragraph>
<paragraph id="HD9556734191C40659D462EC24A302565"><enum>(5)</enum><text>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.</text></paragraph>
<paragraph id="H95F3D21FD1894BAB9F2398D348AB7852"><enum>(6)</enum><text>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.</text></paragraph>
<paragraph id="H10CB2BA2F1F44E509DBA29FF7DED928C"><enum>(7)</enum><text>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.</text></paragraph>
<paragraph id="HCA3C924DD6F44DA995B8BD2091A2F644"><enum>(8)</enum><text>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.</text></paragraph>
<paragraph id="H91A004C95FCC4175A9D426B80D11CC0F"><enum>(9)</enum><text>The conservatorship for Fannie Mae and Freddie Mac has potentially exposed taxpayers to upwards of $5,300,000,000,000 worth of risk.</text></paragraph>
<paragraph id="H5EB46A55ADC74024AFF96D5389C0DF8E"><enum>(10)</enum><text>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.</text></paragraph></subsection>
<subsection id="HDC6E652E9EBE4D5D83113A0A23D46C1E"><enum>(b)</enum><header>Sense of the Congress</header><text>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.</text></subsection></section></subtitle>
<subtitle id="HA90AE24ACD2C4892940F420A3CB33914"><enum>H</enum><header>Reports and Data Collection</header>
<section id="H75EA9007A9F1497993769B07BCCA2FED"><enum>9701.</enum><header>GAO study report on government efforts to combat mortgage foreclosure rescue scams and loan modification fraud</header>
<subsection id="HB3CFD0FC4B3C4E41912CBB846FA48A2F"><enum>(a)</enum><header>Study</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="H7200B52C4B4D4691B0BFF1C879D2C050"><enum>(b)</enum><header>Report</header>
<paragraph id="H4993C71F52AA4576A1D26AA3723A833A"><enum>(1)</enum><header>In general</header><text>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).</text></paragraph>
<paragraph id="H6005D4986C5A4571873A893F15258263"><enum>(2)</enum><header>Specific topics</header><text display-inline="yes-display-inline">The report made under paragraph (1) shall include—</text>
<subparagraph id="H595AAD00C24F49889185B00192F83A94"><enum>(A)</enum><text>an evaluation of the effectiveness of the inter-agency task force current efforts to combat mortgage foreclosure rescue scams and loan modification fraud scams;</text></subparagraph>
<subparagraph id="H9DA7FE40CBDC4D378777D487A2F0E0F5"><enum>(B)</enum><text>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</text></subparagraph>
<subparagraph id="H186D3AA1547249EB9F388A9A8649010A"><enum>(C)</enum><text>the adequacy of financial resources that the Federal Government is allocating to—</text>
<clause id="HE52E9C57F82F47DF860FAEC054A63433"><enum>(i)</enum><text>crackdown on loan modification and foreclosure rescue scams; and</text></clause>
<clause id="H8A3304BC2BA14FDDA814528B6A618995"><enum>(ii)</enum><text>the education of homeowners about fraudulent scams relating to loan modification and foreclosure rescues.</text></clause></subparagraph></paragraph></subsection></section>
<section id="HFC05FA3F75444252B5F825EDF76381C6" display-inline="no-display-inline" section-type="subsequent-section"><enum>9702.</enum><header>Reporting of mortgage data by State</header>
<subsection id="H7D96B7DA4F9A45499C4BB43A6B9C598D"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Section 104(a) of the Helping Families Save Their Homes Act of 2009 (division A of Public Law 111–22) is amended—</text>
<paragraph id="HE4404EBFDD5B4A6392646C8B98AD007A"><enum>(1)</enum><text>in paragraph (2), by striking <quote>resulting</quote> and inserting <quote>in each State that result</quote>;</text></paragraph>
<paragraph id="HDDFC981F86CA4C7E8C5037EA2594255B"><enum>(2)</enum><text>in paragraph (3), by inserting <quote>each State for</quote> after <quote>modifications in</quote>; and</text></paragraph>
<paragraph id="HA3537A9892C0496686F47E8715A9D191"><enum>(3)</enum><text>in paragraph (4), by inserting <quote>in each State</quote> after <quote>total number of loans</quote>.</text></paragraph></subsection>
<subsection id="H22F7679191D546CAA3B322587230BB1C"><enum>(b)</enum><header>Conforming amendment</header><text display-inline="yes-display-inline">Section 104(b)(1)(A) of such Act is amended by adding at the end the following sentence: <quote>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.</quote>.</text></subsection></section></subtitle>
<subtitle id="H297247A3207D4CCA86AE6094D8E62195"><enum>I</enum><header>Multifamily mortgage resolution</header>
<section id="HAC871B991FF4454196B181EFB9337B1E"><enum>9801.</enum><header>Multifamily mortgage resolution program</header>
<subsection id="H4D50D6DD422C4A65BD2F43FA104B495B"><enum>(a)</enum><header>Establishment</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="HB389FDF292C84B27AFC6F7D1B38BFA51"><enum>(1)</enum><text>creating sustainable financing of such properties, that may take into consideration such factors as—</text>
<subparagraph id="H78060C6E91464FDBB991D6C12CD91DC3"><enum>(A)</enum><text>the rental income generated by such properties; and </text></subparagraph>
<subparagraph id="H0C154355DB7E4BED988112434343DAED"><enum>(B)</enum><text>the preservation of adequate operating reserves; </text></subparagraph></paragraph>
<paragraph id="HF9189D9704DB46DF84320F0D63F58422"><enum>(2)</enum><text>maintaining the level of Federal, State, and city subsidies in effect as of the date of the enactment of this Act; </text></paragraph>
<paragraph id="H09DBD69A17BD4184A7E56EE3CDCB73F7"><enum>(3)</enum><text>providing funds for rehabilitation; and</text></paragraph>
<paragraph id="H9DA50102F304410E9E91FF1EC4BB88FA"><enum>(4)</enum><text>facilitating the transfer of such properties, when appropriate and with the agreement of owners, to responsible new owners and ensuring affordability of such properties.</text></paragraph></subsection>
<subsection id="HACA9B241649242888A6DB2DB78C4D480"><enum>(b)</enum><header>Coordination</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="H1B8488E1EF0A4FCA8D87C78181D0E620"><enum>(c)</enum><header>Definition</header><text>For purposes of this section, the term <quote>multifamily properties</quote> means a residential structure that consists of 5 or more dwelling units.</text></subsection></section></subtitle>
<subtitle id="HB132157402D14AD383116A7AA8E8D642"><enum>J</enum><header>Study of effect of drywall presence on foreclosures</header>
<section id="HC86A0FE6E90F4210810F8299879875C1"><enum>9901.</enum><header>Study of effect of drywall presence on foreclosures</header>
<subsection id="HEC4FB379311144EBAA95424C979B2637"><enum>(a)</enum><header>Study</header><text display-inline="yes-display-inline">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—</text>
<paragraph id="HB40019353EE94CC0B60D94A79056672F"><enum>(1)</enum><text>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</text></paragraph>
<paragraph id="H941AF8852D194A08A423E35D716E839B"><enum>(2)</enum><text>the availability of property insurance for residential structures in which such drywall is present.</text></paragraph></subsection>
<subsection id="H3DDFA069970A4BAE9B99FC32CEA6F011"><enum>(b)</enum><header>Report</header><text display-inline="yes-display-inline">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.</text></subsection></section></subtitle>
<subtitle id="HBD71B08BF68943809D1697EE103BB6DE"><enum>K</enum><header>Home Affordable Modification Program</header>
<section id="H0D101686EF8B4F91969941B21371FCEB"><enum>9911.</enum><header>Home Affordable Modification Program guidelines</header>
<subsection id="HB62C004A42B64AB9B214DC40C80DB6A1"><enum>(a)</enum><header>Net present value input data</header><text display-inline="yes-display-inline">The Secretary of the Treasury (in this section referred to as the <quote>Secretary</quote>) 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.</text></subsection>
<subsection id="H45113A22705B4D6588163B0D1CFE27B0"><enum>(b)</enum><header>Web-based site for NPV calculator and application</header>
<paragraph id="HE45D147A7F6D43BB9641213E40A08F8F"><enum>(1)</enum><header>NPV calculator</header><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H72D3808E003641E68ECBBA5D01F0E330"><enum>(2)</enum><header>Disclosure</header><text> 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.</text></paragraph>
<paragraph id="H28EA2D0310F94D37A83B71F73F320EEE"><enum>(3)</enum><header>Application</header><text> 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.</text></paragraph></subsection>
<subsection id="H6EDA77B079FB44BEBCB0EB68CDC91A5C"><enum>(c)</enum><header>Public availability of NPV methodology, computer model, and variables</header><text>The Secretary shall make publicly available, including by posting on a World Wide Web site of the Secretary—</text>
<paragraph id="H3CA29559B5EE461A85860A66C355D0D6"><enum>(1)</enum><text display-inline="yes-display-inline">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</text></paragraph>
<paragraph id="HC9D1BFBAF27C44C1A59EB2411EA80723"><enum>(2)</enum><text>all variables used in such net present value analysis.</text></paragraph></subsection></section></subtitle>
<subtitle id="H60864F35DE354264B8CBAE18B9140D19"><enum>L</enum><header>Making Home Affordable Program</header>
<section id="H5F32D6F9B2EF456E93F9B1A831501593"><enum>9921.</enum><header>Public availability of information</header>
<subsection id="HE2F3F9917342456089035BBD0B9F2535"><enum>(a)</enum><header>Revisions to program guidelines</header><text display-inline="yes-display-inline">The Secretary of the Treasury (in this section referred to as the <quote>Secretary</quote>) 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). </text></subsection>
<subsection id="H8F3DA15706C3485A970882A2779F9A84"><enum>(b)</enum><header>Public availability</header><text display-inline="yes-display-inline">Data shall be made available according to the following guidelines:</text>
<paragraph id="H77C547694B4E43BBBB7D47BB200351A4"><enum>(1)</enum><text display-inline="yes-display-inline">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:</text>
<subparagraph id="H194CCFDFB2224D15B2884AD37FAEC2E2"><enum>(A)</enum><text>The number of requests for mortgage modifications under the Program that the servicer or lender has received.</text></subparagraph>
<subparagraph id="H63B0858837B446C5AFA82AD31686EEE3"><enum>(B)</enum><text>The number of requests for mortgage modifications under the Program that the servicer or lender has processed.</text></subparagraph>
<subparagraph id="H0BAF358C911D4B7B9A51C7AA27C666C9"><enum>(C)</enum><text>The number of requests for mortgage modifications under the Program that the servicer or lender has approved.</text></subparagraph>
<subparagraph id="HFDAA563CDC104337B0E7AF3FAA384BF1"><enum>(D)</enum><text>The number of requests for mortgage modifications under the Program that the servicer or lender has denied.</text></subparagraph></paragraph>
<paragraph id="H71360A556B3C472E9A8EFC65D90746F1"><enum>(2)</enum><text display-inline="yes-display-inline">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—</text>
<subparagraph id="H7BD36B86DC254173A0CF70559F12ADF2"><enum>(A)</enum><text>the procedures for disclosing such data to the public; and</text></subparagraph>
<subparagraph id="H5D79185BEE764E14A5886E31C93EC770"><enum>(B)</enum><text>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. </text></subparagraph></paragraph> </subsection> </section></subtitle>
<enum>VIII</enum><header>Foreclosure Avoidance and Affordable Housing</header>
<section id="H846ED3F973394C6E8DDEB118968FE03E"><enum>10001.</enum><header>Emergency mortgage relief</header>
<subsection id="H9A18C8398AF5403E8123183BC698D14B"><enum>(a)</enum><header>Use of TARP funds</header><text display-inline="yes-display-inline">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.</text></subsection>
<subsection id="HF9D4A14D525F4CC1AE48271CF4EA1F0F"><enum>(b)</enum><header>Reauthorization of emergency mortgage relief program</header><text>Title I of the Emergency Housing Act of 1975 is amended—</text>
<paragraph id="H70132B57DF58492CB96622D1DCEF9F75"><enum>(1)</enum><text>in section 103 (12 U.S.C. 2702)—</text>
<subparagraph id="HBDD82ADE40B749C194497EB7B940279A"><enum>(A)</enum><text>in paragraph (2)—</text>
<clause id="HC9C01A0C0F8D402787CF720A57E3C851"><enum>(i)</enum><text>by striking <quote>have indicated</quote> and all that follows through <quote>regulation of the holder</quote> and insert <quote>have certified</quote>;</text></clause>
<clause id="HC3B3515500034AEE81AA6206D6624555"><enum>(ii)</enum><text display-inline="yes-display-inline">by striking <quote>(such as the volume of delinquent loans in its portfolio)</quote>; and</text></clause>
<clause id="HE669A0AC1087427381E17328C95043E6"><enum>(iii)</enum><text>by striking <quote>, except that such statement</quote> and all that follows through <quote>purposes of this title</quote>; and</text></clause></subparagraph>
<subparagraph id="H2F094B8700D44678B465DDCC57BFE9E5"><enum>(B)</enum><text>in paragraph (4), by inserting <quote>or medical conditions</quote> after <quote>adverse economic conditions</quote>;</text></subparagraph></paragraph>
<paragraph id="H600E20C5B5654F9DB21FFE13782C3F68"><enum>(2)</enum><text>in section 104 (12 U.S.C. 2703)—</text>
<subparagraph id="H383C5DF9308C4EB193E0029AF0A6AB9F" commented="no"><enum>(A)</enum><text>in subsection (b), by striking <quote>, but such assistance</quote> and all that follows through the period at the end and inserting the following: <quote>. 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.</quote>;</text></subparagraph>
<subparagraph id="H191B5A5BDD5341A0ACE3DA8C49FBFFC3"><enum>(B)</enum><text>in subsection (d), by striking <quote>interest on a loan or advance</quote>and all that follows through the end of the subsection and inserting the following: <quote>(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.</quote>; and</text> </subparagraph>
<subparagraph id="H8B7AE16C548643AA8E30BEAEE155F5D1"><enum>(C)</enum><text>in subsection (e), by inserting after the period at the end of the first sentence the following: <quote>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.</quote>; </text></subparagraph></paragraph>
<paragraph id="H37A0094755C24DB8B42B6F1DE4885EF0"><enum>(3)</enum><text display-inline="yes-display-inline">in section 105 (12 U.S.C. 2704)—</text>
<subparagraph id="H34C4E70217DA4351BC3DB1DF7ABFEF9F"><enum>(A)</enum><text>by striking subsection (b);</text></subparagraph>
<subparagraph commented="no" id="H5189131A8E5345588C871F85DD390F51"><enum>(B)</enum><text>in subsection (e)—</text>
<clause id="H2CE0B090D70642E18229272BDAD7B086"><enum>(i)</enum><text>by inserting <quote>and emergency mortgage relief payments made under section 106</quote> after <quote>insured under this section</quote>; and</text></clause>
<clause id="H681CD1F89A8F4BB7A5D3AF4B6E3ECD05"><enum>(ii)</enum><text>by striking <quote>$1,500,000,000 at any one time</quote> and inserting <quote>$3,000,000,000</quote>;</text></clause></subparagraph>
<subparagraph id="H0D9D36A00ED440FA83DC5FA173857AC5"><enum>(C)</enum><text>by redesignating subsections (c), (d), and (e) as subsections (b), (c), and (d), respectively; and</text></subparagraph>
<subparagraph id="H71E9FAFC5EBC4723AABBE5BF6A5B1760"><enum>(D)</enum><text>by adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H730068499292463C84128CE1F7289FAA" style="OLC">
<subsection id="H0BA57DBAC01E4AB99C779447E50D9DB2"><enum>(e)</enum><text display-inline="yes-display-inline">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).</text></subsection><after-quoted-block>;</after-quoted-block></quoted-block></subparagraph></paragraph>
<paragraph commented="no" id="HE697F83BACB44F449184A0CCDA624EA0"><enum>(4)</enum><text>in section 107—</text>
<subparagraph id="HA389F48AE4DC4718A89FFE47CEF0C11D"><enum>(A)</enum><text>by striking <quote>(a)</quote>; and</text></subparagraph>
<subparagraph id="HE0891F3AFAB644F38B7C0F7F4D254632"><enum>(B)</enum><text>by striking subsection (b);</text></subparagraph></paragraph>
<paragraph id="HD3CE188FCD41418C8CA95CB3531DBD29"><enum>(5)</enum><text>in section 108 (12 U.S.C. 2707), by adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H1C92D6F9CC9344FA8A3D91AF0DA864A3" style="OLC">
<subsection id="H78C56A157C17463A9391A8FA454F2A17"><enum>(d)</enum><header>Coverage of existing programs</header><text display-inline="yes-display-inline">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.</text></subsection><after-quoted-block>;</after-quoted-block></quoted-block></paragraph>
<paragraph id="H18866DB6DCB24504B935B592EBAEE46F"><enum>(6)</enum><text>in section 109 (12 U.S.C. 2708)—</text>
<subparagraph id="H3A5F1327E1C344409B332D1A9BB0EDEB"><enum>(A)</enum><text>in the section heading, by striking <quote><header-in-text level="section" style="traditional">authorization and</header-in-text></quote>;</text></subparagraph>
<subparagraph id="H0F841E72F2AB4D9A83605CCA8B2E171B"><enum>(B)</enum><text>by striking subsection (a);</text></subparagraph>
<subparagraph id="H1A0D08984D3041D9AF0B0C2F2827CADE"><enum>(C)</enum><text>by striking <quote>(b)</quote>; and</text></subparagraph>
<subparagraph id="H0DB1100A1E79448F8424E22CD55ABCC3"><enum>(D)</enum><text>by striking <quote>1977</quote> and inserting <quote>2011</quote>;</text></subparagraph></paragraph>
<paragraph id="HBF58FA35DAA1422F92BB492EE4247AF7"><enum>(7)</enum><text display-inline="yes-display-inline">by striking sections 110, 111, and 113 (12 U.S.C. 2709, 2710, 2712); and</text></paragraph>
<paragraph id="HF94CDBDCAA6E42B694DEAD0822F53C32"><enum>(8)</enum><text>by redesignating section 112 (12 U.S.C. 2711) as section 110.</text></paragraph></subsection></section>
<section id="HFCD738EE11F14B8B9A614242625252E4"><enum>10002.</enum><header>Additional assistance for Neighborhood Stabilization Program</header><text display-inline="no-display-inline">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 <quote>Community Planning and Development—Community Development Fund</quote> 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:</text>
<paragraph id="H852076CAEEA54D5DA38AD9C2A7A0A9F9"><enum>(1)</enum><text>Notwithstanding the matter of such second undesignated paragraph that precedes the first proviso, amounts made available by this section shall remain available until expended.</text></paragraph>
<paragraph id="HF494ECD9CBBA4A15A65A23B6D2CF6968"><enum>(2)</enum><text>The 3rd, 4th, 5th, 6th, 7th, and 15th provisos of such second undesignated paragraph shall not apply to amounts made available by this section.</text></paragraph>
<paragraph id="H783930C32339456CBA10057BC88F9854"><enum>(3)</enum><text>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—</text>
<subparagraph id="HD26C29D6C4164EC18026DDCA43AAB667"><enum>(A)</enum><text>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;</text></subparagraph>
<subparagraph id="H42D1ACD535A04753986E1968779DBCA0"><enum>(B)</enum><text>the Secretary may not establish any minimum grant amount or size for grants to States; </text></subparagraph>
<subparagraph id="H3C79DBC2D23C47628F67FF6661309362"><enum>(C)</enum><text>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</text></subparagraph>
<subparagraph id="H75690EC0C2F24D51A7501571FB65AA83"><enum>(D)</enum><text display-inline="yes-display-inline">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. </text></subparagraph></paragraph>
<paragraph id="HA5D045D34F0B4E36857A5B0383992F37"><enum>(4)</enum><text>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.</text></paragraph>
<paragraph id="HC4F66D276B28485380ACF89989AB349A"><enum>(5)</enum><text>Section 2302 of the Housing and Economic Recovery Act of 2008 shall not apply to amounts made available by this section.</text></paragraph>
<paragraph id="H28873C4AEFC1463D875E8946E2B65433"><enum>(6)</enum><text>The fourth proviso from the end of such second undesignated paragraph shall be applied to amounts made available by this section by substituting <quote>2013</quote> for <quote>2012</quote>.</text></paragraph>
<paragraph id="H04A3F254748B4FBCB58C28388C9DFDBB"><enum>(7)</enum><text>Notwithstanding section 2301(a) of the Housing and Economic Recovery Act of 2008, the term <quote>State</quote> 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.</text></paragraph>
<paragraph id="H47519B3E4B9D4A5180664B25CFAA88F1"><enum>(8)</enum>
<subparagraph id="H00B3C44BE15947989EEE92D4EEFB875D" display-inline="yes-display-inline"><enum>(A)</enum><text>None of the amounts made available by this section shall be distributed to—</text>
<clause id="HFB48DDF5AF454687AF089417509A7860" indent="up1"><enum>(i)</enum><text>any organization which has been convicted for a violation under Federal law relating to an election for Federal office; or</text></clause>
<clause id="H04B59733BE814CA1902E1851F1612EDE" indent="up1"><enum>(ii)</enum><text>any organization which employs applicable individuals.</text></clause></subparagraph>
<subparagraph id="H36D75C4F77E2461B81AE1CBE83C2E91B" indent="up1"><enum>(B)</enum><text>In this paragraph, the term <quote>applicable individual</quote> means an individual who—</text>
<clause id="H3951C0A9C5A04F3282972DE01239D3BA"><enum>(i)</enum><text>is—</text>
<subclause id="H71F742FEE90649F9A912AD61741D58B2"><enum>(I)</enum><text>employed by the organization in a permanent or temporary capacity;</text></subclause>
<subclause id="HDD641AB6FB2445B3A3A4B2FD39FA1864"><enum>(II)</enum><text>contracted or retained by the organization; or</text></subclause>
<subclause id="H5342EDC86CC74C9DB98E446D70563526"><enum>(III)</enum><text>acting on behalf of, or with the express or apparent authority of, the organization; and</text></subclause></clause>
<clause id="H96655712C9B4491A80DB80438D56FD3D"><enum>(ii)</enum><text>has been convicted for a violation under Federal law relating to an election for Federal office.</text></clause></subparagraph></paragraph></section>
<enum>IX</enum><header>Nonadmitted and Reinsurance Reform Act</header>
<section id="H98BAD035C9634336B7B4858D17838CB1"><enum>10051.</enum><header>Short title</header><text display-inline="no-display-inline">This title may be cited as the <quote><short-title>Nonadmitted and Reinsurance Reform Act of 2009</short-title></quote>.</text> </section>
<section id="H1B2EEFD685034D1FB1482419014B9182"><enum>10052.</enum><header>Effective date</header><text display-inline="no-display-inline">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.</text></section>
<subtitle id="H033B7817AD9A479AA989EB1B1D8A574C"><enum>A</enum><header>Nonadmitted Insurance</header>
<section id="HBB43D1DC132F4CFD83A1E6567AD5ABBD"><enum>10101.</enum><header>Reporting, payment, and allocation of premium taxes</header>
<subsection id="H1CFD39935BFD49998308B4B4C33AEF2D"><enum>(a)</enum><header>Home State’s Exclusive Authority</header><text> No State other than the home State of an insured may require any premium tax payment for nonadmitted insurance.</text></subsection>
<subsection id="HFC152165A0034167B3678D489885DED9"><enum>(b)</enum><header>Allocation of Nonadmitted Premium Taxes</header>
<paragraph id="HA249C15AE34A418C96DFA3377ACB9C0F"><enum>(1)</enum><header>In general</header><text>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).</text></paragraph>
<paragraph id="H985051094C2A48039A8C0F969B40447E"><enum>(2)</enum><header>Effective date</header><text>Except as expressly otherwise provided in such compact or other procedures, any such compact or other procedures—</text>
<subparagraph id="HFA47913FB9AF427791DEB1563B568A0C"><enum>(A)</enum><text>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</text></subparagraph>
<subparagraph id="H4DECDEDF173D44B084EC9A8AA4D450E2"><enum>(B)</enum><text>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.</text></subparagraph></paragraph>
<paragraph id="HD156DE93737B45E0B235B609478A4773"><enum>(3)</enum><header>Report</header><text>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.</text></paragraph>
<paragraph id="H834EDECDE5E5431986B3B36F10A74106"><enum>(4)</enum><header>Nationwide system</header><text>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.</text></paragraph></subsection>
<subsection id="H443E255F028F49278821DD29EE486A6C"><enum>(c)</enum><header>Allocation Based on Tax Allocation Report</header><text> 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.</text></subsection></section>
<section id="H9BF3A0245F3A4B3785F573DDEF976500"><enum>10102.</enum><header>Regulation of nonadmitted insurance by insured’s home state</header>
<subsection id="H851D1ABAE14441F3B0D6A6EB8B845646"><enum>(a)</enum><header>Home State Authority</header><text>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.</text></subsection>
<subsection id="H0A447A47ADE4498BB77426F6AF8B792B"><enum>(b)</enum><header>Broker Licensing</header><text>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.</text></subsection>
<subsection id="H72B9123FBDF64A3BB05F9204BFAD5656"><enum>(c)</enum><header>Enforcement Provision</header><text>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.</text></subsection>
<subsection id="H87F3C0D8B8DF4C35868B89056572FE12"><enum>(d)</enum><header>Workers’ Compensation Exception</header><text>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.</text></subsection></section>
<section id="H006F7E4C18404355A71B99DCB1E54162"><enum>10103.</enum><header>Participation in national producer database</header><text display-inline="no-display-inline">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.</text></section>
<section id="H312A49A249954769B1D0C2D3EDF4C642"><enum>10104.</enum><header>Uniform standards for surplus lines eligibility</header><text display-inline="no-display-inline">A State may not—</text>
<paragraph id="HD99147EE9524449FB343EBBD5EC091CC"><enum>(1)</enum><text>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</text></paragraph>
<paragraph id="H5B026E69ED37469C92BA5E35C69ADA09"><enum>(2)</enum><text>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.</text></paragraph></section>
<section id="HF9096C3528B249088A0A60EACB728D51"><enum>10105.</enum><header>Streamlined application for commercial purchasers</header><text display-inline="no-display-inline">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—</text>
<paragraph id="H22575F6D35E4458C992A2513B104C1CA"><enum>(1)</enum><text>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</text></paragraph>
<paragraph id="H3880928F7D994156BB20DD66005E7ED4"><enum>(2)</enum><text>the exempt commercial purchaser has subsequently requested in writing the broker to procure or place such insurance from a nonadmitted insurer.</text></paragraph></section>
<section id="H0D6CD224E8C24F55920A87CB328CD68C"><enum>10106.</enum><header>GAO study of nonadmitted insurance market</header>
<subsection id="HC00093D7CC384E089B997655647EDF73"><enum>(a)</enum><header>In General</header><text>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.</text></subsection>
<subsection id="HDEF9F14E12F24B7C991C5D5E59172F4A"><enum>(b)</enum><header>Contents</header><text>The study shall determine and analyze—</text>
<paragraph id="H30A1340DDD1644B0A213C3CD2025DB19"><enum>(1)</enum><text>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;</text></paragraph>
<paragraph id="H0908C0F807714122B7780CA8FB246D9D"><enum>(2)</enum><text>the extent to which insurance coverage typically provided by the admitted insurance market has shifted to the nonadmitted insurance market;</text></paragraph>
<paragraph id="HF95BD6CC3D4742B395D1031E6E231563"><enum>(3)</enum><text>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;</text></paragraph>
<paragraph id="H87128E2C3A534F15A0F58D9AB610908B"><enum>(4)</enum><text>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</text></paragraph>
<paragraph id="HD26E9647E6F44E7E93F17957E9D30070"><enum>(5)</enum><text>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.</text></paragraph></subsection>
<subsection id="HFD203D3B965942EC8A16B227E81A811C"><enum>(c)</enum><header>Consultation With NAIC</header><text>In conducting the study under this section, the Comptroller General shall consult with the NAIC.</text></subsection>
<subsection id="HD3057D8C7C9B4363A3CA1B246FEC662C"><enum>(d)</enum><header>Report</header><text>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.</text></subsection></section>
<section id="HD21A3C608E4C4D5D96BC6C290BD593B9"><enum>10107.</enum><header>Definitions</header><text display-inline="no-display-inline">For purposes of this subtitle, the following definitions shall apply:</text>
<paragraph id="H131FF42FD5144156A52AE8547C9545D7"><enum>(1)</enum><header>Admitted insurer</header><text>The term <term>admitted insurer</term> means, with respect to a State, an insurer licensed to engage in the business of insurance in such State.</text></paragraph>
<paragraph id="H2BDFB4E1EF324327A03BBD89FF0232FE"><enum>(2)</enum><header>Affiliate</header><text>The term <term>affiliate</term> means, with respect to an insured, any entity that controls, is controlled by, or is under common control with the insured.</text></paragraph>
<paragraph id="H63DE878B09044C78B769E3BB412FB79F"><enum>(3)</enum><header>Affiliated group</header><text>The term <term>affiliated group</term> means any group of entities that are all affiliated.</text></paragraph>
<paragraph id="HA0B4A72F74CD4FFABB75EC0B8FDD6ECD"><enum>(4)</enum><header>Control</header><text>An entity has <quote>control</quote> over another entity if—</text>
<subparagraph id="HE7599F79745A41A4867D360D558DF5B1"><enum>(A)</enum><text>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</text></subparagraph>
<subparagraph id="H00ADA15429574F24AD686D7E585A02ED"><enum>(B)</enum><text>the entity controls in any manner the election of a majority of the directors or trustees of the other entity.</text></subparagraph></paragraph>
<paragraph id="H952027BAC7C34DA4B40948CB9EF96732"><enum>(5)</enum><header>Exempt commercial purchaser</header><text>The term <term>exempt commercial purchaser</term> means any person purchasing commercial insurance that, at the time of placement, meets the following requirements:</text>
<subparagraph id="H6B4FBD82C7E74E2EB7D4948D6F51B018"><enum>(A)</enum><text>The person employs or retains a qualified risk manager to negotiate insurance coverage.</text></subparagraph>
<subparagraph id="H2502227C60194A6BA18E8D77D4618078"><enum>(B)</enum><text>The person has paid aggregate nationwide commercial property and casualty insurance premiums in excess of $100,000 in the immediately preceding 12 months.</text></subparagraph>
<subparagraph id="HAB8ECC9D14F74CE2A7923F2DEBA7D8E4"><enum>(C)</enum>
<clause id="H3A4ACC4D8ED54C94B43C503FE3CC719F" display-inline="yes-display-inline"><enum>(i)</enum><text>The person meets at least one of the following criteria:</text>
<subclause id="H5DFF7D06260F4BE28194645BB15AFFE7"><enum>(I)</enum><text>The person possesses a net worth in excess of $20,000,000, as such amount is adjusted pursuant to clause (ii).</text></subclause>
<subclause id="HCCE43EECB84F4017AD5D616630AFEFD3"><enum>(II)</enum><text>The person generates annual revenues in excess of $50,000,000, as such amount is adjusted pursuant to clause (ii).</text></subclause>
<subclause id="H6197A2283505476DA644FF8D01474051"><enum>(III)</enum><text>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.</text></subclause>
<subclause id="H8ADCB45BCC3B4A7F8806C36B1DC86B3D"><enum>(IV)</enum><text>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).</text></subclause>
<subclause id="H9F6C6924B2CA47C1A9FA188D00C1D057"><enum>(V)</enum><text>The person is a municipality with a population in excess of 50,000 persons.</text></subclause></clause>
<clause id="H7F8DD931F8854063881B1B09F50F363D"><enum>(ii)</enum><text>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.</text></clause></subparagraph></paragraph>
<paragraph id="HF823F734BB8E44D58FDC27E02609F181"><enum>(6)</enum><header>Home state</header>
<subparagraph id="HA801591AD8CC44E4A3CD89D7C7BB5855"><enum>(A)</enum><header>In general</header><text>Except as provided in subparagraph (B), the term <term>home State</term> means, with respect to an insured—</text>
<clause id="HF71AB02322814B489E80011BD865C1C1"><enum>(i)</enum><text>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</text></clause>
<clause id="HA7849057633E4E14AA7A09A279780605"><enum>(ii)</enum><text>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.</text></clause></subparagraph>
<subparagraph id="H827A5E3F4B1F4E8991C3543116B73A71"><enum>(B)</enum><header>Affiliated groups</header><text>If more than one insured from an affiliated group are named insureds on a single nonadmitted insurance contract, the term <term>home State</term> 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.</text></subparagraph></paragraph>
<paragraph id="HD483D6119071415DAA045DE44D5D977C"><enum>(7)</enum><header>Independently procured insurance</header><text>The term <term>independently procured insurance</term> means insurance procured directly by an insured from a nonadmitted insurer.</text></paragraph>
<paragraph id="HC657F08EBE724F9895586CE4AFA24D18"><enum>(8)</enum><header>NAIC</header><text>The term <term>NAIC</term> means the National Association of Insurance Commissioners or any successor entity.</text></paragraph>
<paragraph id="H63FB70800EC34E778B90DA90FE00C6CE"><enum>(9)</enum><header>Nonadmitted insurance</header><text>The term <term>nonadmitted insurance</term> 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.</text></paragraph>
<paragraph id="H25966D9E57BB4B48AB07C3C63D170380"><enum>(10)</enum><header>Non-Admitted Insurance Model Act</header><text>The term <term>Non-Admitted Insurance Model Act</term> 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.</text></paragraph>
<paragraph id="H6714607C5AEF4368A81C2333F5419AD6"><enum>(11)</enum><header>Nonadmitted insurer</header><text>The term <term>nonadmitted insurer</term> means, with respect to a State, an insurer not licensed to engage in the business of insurance in such State.</text></paragraph>
<paragraph id="H24D90F837BA5470ABD133A36FBB2470E"><enum>(12)</enum><header>Qualified risk manager</header><text>The term <term>qualified risk manager</term> means, with respect to a policyholder of commercial insurance, a person who meets all of the following requirements:</text>
<subparagraph id="HAC4ECF98266440E2BC991BF66E46BA17"><enum>(A)</enum><text>The person is an employee of, or third party consultant retained by, the commercial policyholder.</text></subparagraph>
<subparagraph id="H07A23171878446CBABD8DF1EDBDBC3FF"><enum>(B)</enum><text>The person provides skilled services in loss prevention, loss reduction, or risk and insurance coverage analysis, and purchase of insurance.</text></subparagraph>
<subparagraph id="HE1FD113D4DA845C7AF92D72FD0C40EDB"><enum>(C)</enum><text>The person—</text>
<clause id="H59584FA127CA4549A2ADE93FBFDE0424"><enum>(i)</enum>
<subclause id="HCA1C92759D55471D87E5D79EE711D626" display-inline="yes-display-inline"><enum>(I)</enum><text>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</text></subclause>
<subclause id="H37195B39FC9C466E844AC4DB9B48AD94"><enum>(II)</enum>
<item id="H822FB09C83364788B49D2E36DD25FB65" display-inline="yes-display-inline"><enum>(aa)</enum><text>has three years of experience in risk financing, claims administration, loss prevention, risk and insurance analysis, or purchasing commercial lines of insurance; or</text></item>
<item id="H1937B6FB6FE64BF98C047055977F98C6"><enum>(bb)</enum><text>has one of the following designations:</text>
<subitem id="HA2FD766EF5654A6DA542DDE70EA92B9A"><enum>(AA)</enum><text>a designation as a Chartered Property and Casualty Underwriter (in this subparagraph referred to as <quote>CPCU</quote>) issued by the American Institute for CPCU/Insurance Institute of America;</text></subitem>
<subitem id="HE9F03AE3D3EF44BDA53DEC93F24C3CC2"><enum>(BB)</enum><text>a designation as an Associate in Risk Management (ARM) issued by the American Institute for CPCU/Insurance Institute of America;</text></subitem>
<subitem id="HF6C9689358D94D729BC0735F11F97ACE"><enum>(CC)</enum><text>a designation as Certified Risk Manager (CRM) issued by the National Alliance for Insurance Education & Research;</text></subitem>
<subitem id="H4B469810B34B4997B1CE57BF1D42C113"><enum>(DD)</enum><text>a designation as a RIMS Fellow (RF) issued by the Global Risk Management Institute; or</text></subitem>
<subitem id="H49A46E196F3D4A4687225DCF75420AAE"><enum>(EE)</enum><text>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;</text></subitem></item></subclause></clause>
<clause id="H523B0DCD04E64FACBEB7ECE0D1084CFF"><enum>(ii)</enum>
<subclause id="H4574569347FE4DF59BE10ACA6F27D7C9" display-inline="yes-display-inline"><enum>(I)</enum><text>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</text></subclause>
<subclause id="H45C261443FD04CCBBB451A42672B130A"><enum>(II)</enum><text>has any one of the designations specified in subitems (AA) through (EE) of clause (i)(II)(bb);</text></subclause></clause>
<clause id="H1BF18EE2D3A9473D90D58289DF09699E"><enum>(iii)</enum><text>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</text></clause>
<clause id="H97D7D7B90B054179B679CA302015DDBD"><enum>(iv)</enum><text>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.</text></clause></subparagraph></paragraph>
<paragraph id="HF18847580984450E8295FE3EC1727C2D"><enum>(13)</enum><header>Premium tax</header><text>The term <term>premium tax</term> 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.</text></paragraph>
<paragraph id="HC6D7C371491A44EBBE1A455137C0DC74"><enum>(14)</enum><header>Surplus lines broker</header><text>The term <term>surplus lines broker</term> 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.</text></paragraph>
<paragraph id="H4ABF63E4724A4EE28480E467D41108FA"><enum>(15)</enum><header>State</header><text>The term <term>State</term> 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.</text></paragraph></section></subtitle>
<subtitle id="H46C792EC50F44E09B7C504D61643598A"><enum>B</enum><header>Reinsurance</header>
<section id="H1AF7067B19324A89B7841B5584F01779"><enum>10201.</enum><header>Regulation of credit for reinsurance and reinsurance agreements</header>
<subsection id="H984EF7AF90C3478CBDCB59AF75089B43"><enum>(a)</enum><header>Credit for Reinsurance</header><text>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.</text></subsection>
<subsection id="HDCF4548605B04CCAB17FF152A5705663"><enum>(b)</enum><header>Additional Preemption of Extraterritorial Application of State Law</header><text>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—</text>
<paragraph id="H9835B40023524F80AD571388596762B4"><enum>(1)</enum><text>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;</text></paragraph>
<paragraph id="H104C8F4965F449C7ACD01AE3E93A29A7"><enum>(2)</enum><text>require that a certain State’s law shall govern the reinsurance contract, disputes arising from the reinsurance contract, or requirements of the reinsurance contract;</text></paragraph>
<paragraph id="H8F0A821EFC394500834BFEF5F25DE02A"><enum>(3)</enum><text>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</text></paragraph>
<paragraph id="HB494A693BAE14598957CF56020298EAE"><enum>(4)</enum><text>otherwise apply the laws of the State to reinsurance agreements of ceding insurers not domiciled in that State.</text></paragraph></subsection></section>
<section id="H15BB1C228B3A43368CF4E4F4D8B86061"><enum>10202.</enum><header>Regulation of reinsurer solvency</header>
<subsection id="HAD7C3DAE223E48E5BC84DFDF199B0858"><enum>(a)</enum><header>Domiciliary State Regulation</header><text>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.</text></subsection>
<subsection id="HE27AD77E04984F75BB71553F370FDF4B"><enum>(b)</enum><header>Nondomiciliary States</header>
<paragraph id="H71B71FA669D04E55949E8638F9478876"><enum>(1)</enum><header>Limitation on financial information requirements</header><text>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.</text></paragraph>
<paragraph id="H5FD3ED1D65AE4165B374D75D7ADC6CFF"><enum>(2)</enum><header>Receipt of information</header><text>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.</text></paragraph></subsection></section>
<section id="HB21295E234BF40458D1A19898CE92E98"><enum>10203.</enum><header>Definitions</header><text display-inline="no-display-inline">For purposes of this subtitle, the following definitions shall apply:</text>
<paragraph id="HA45106CC5A294C609A1E41A35933B19A"><enum>(1)</enum><header>Ceding insurer</header><text>The term <term>ceding insurer</term> means an insurer that purchases reinsurance.</text></paragraph>
<paragraph id="HA82E817D60EE4600B1761C8CFC2E6D5F"><enum>(2)</enum><header>Domiciliary state</header><text>The terms <term>State of domicile</term> and <term>domiciliary State</term> means, with respect to an insurer or reinsurer, the State in which the insurer or reinsurer is incorporated or entered through, and licensed.</text></paragraph>
<paragraph id="HF354A48A442F48BEB693FB344A8E6FAD"><enum>(3)</enum><header>Reinsurance</header><text>The term <term>reinsurance</term> means the assumption by an insurer of all or part of a risk undertaken originally by another insurer.</text></paragraph>
<paragraph id="H07280B00CED048A5AF6D6817885A8B47"><enum>(4)</enum><header>Reinsurer</header>
<subparagraph id="H25E5E4E67BCB404CBB69F2071E530D7B"><enum>(A)</enum><header>In general</header><text>The term <term>reinsurer</term> means an insurer to the extent that the insurer—</text>
<clause id="HF0D8728C3E3C4ACE8A90A91983096CC8"><enum>(i)</enum><text>is principally engaged in the business of reinsurance;</text></clause>
<clause id="HF547FA84A8A84533A8BC171518378A2C"><enum>(ii)</enum><text>does not conduct significant amounts of direct insurance as a percentage of its net premiums; and</text></clause>
<clause id="H4F65C748431645D8B298161442B082B8"><enum>(iii)</enum><text>is not engaged in an ongoing basis in the business of soliciting direct insurance.</text></clause></subparagraph>
<subparagraph id="H4440537E04134D30BCAAAB3541470B8A"><enum>(B)</enum><header>Determination</header><text>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.</text></subparagraph></paragraph>
<paragraph id="H2842E87B95274DECAF6CA3A85F9DBDFD"><enum>(5)</enum><header>State</header><text>The term <term>State</term> 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.</text></paragraph></section></subtitle>
<subtitle id="H043DF534DB704D5A94DC2287C0F5FCF0"><enum>C</enum><header>Rule of Construction</header>
<section id="H83B5649C45054F65912D503DB958B501"><enum>10301.</enum><header>Rule of construction</header><text display-inline="no-display-inline">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.</text></section>
<section id="H3B80E6A2A8B049438EF96F023429FC1A"><enum>10302.</enum><header>Severability</header><text display-inline="no-display-inline">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.</text></section></subtitle>
<enum>X</enum><header>Interest-bearing transaction accounts authorized</header>
<section display-inline="no-display-inline" id="H04CDBF3FB4A94804A1AE338A41891E51"><enum>11001.</enum><header>Interest-bearing transaction accounts authorized</header>
<subsection id="H2B610093CDAF49738B371A1C9B6600E2"><enum>(a)</enum><header>Repeal of prohibition on payment of interest on demand deposits</header>
<paragraph id="HFDE3CE80A8F94016B728284F1E14FE40"><enum>(1)</enum><header><act-name parsable-cite="FRA">Federal Reserve Act</act-name></header><text>Section 19(i) of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name> (12 U.S.C. 371a) is amended to read as follows:</text>
<quoted-block act-name="Federal" id="H289E42E83EB14D1DB7448783F6B937D0">
<subsection id="HFAF65755FA7E4629B364A92E8C74245E"><enum>(i)</enum><text>[Repealed]</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="HED61AB71D81345A9AF2DFB61C86A1878"><enum>(2)</enum><header>Home Owners’ Loan Act</header><text>The first sentence of section 5(b)(1)(B) of the <act-name parsable-cite="HOLA">Home Owners’ Loan Act</act-name> (12 U.S.C. 1464(b)(1)(B)) is amended by striking <quote>savings association may not—</quote> and all that follows through <quote>(ii) permit any</quote> and inserting <quote>savings association may not permit any</quote>.</text></paragraph>
<paragraph id="H878A7FC1DB4F4950B575633BFA719E8A"><enum>(3)</enum><header><act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name></header><text>Section 18(g) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> (12 U.S.C. 1828(g)) is amended to read as follows:</text>
<quoted-block act-name="Federal" id="H02B543CF77FC4BF897920E9A83C89681">
<subsection id="H3B55330F5DE84D2AA22A7F1597B26847"><enum>(g)</enum><text>[Repealed]</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="HE2046DAA6CFE4C288C5FAD34E152D2FA"><enum>(b)</enum><header>Effective date</header><text>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.</text></subsection></section>
Passed the House of Representatives December 11, 2009.Lorraine C. Miller,Clerk.