    [Congressional Bills 111th Congress]
    [From the U.S. Government Publishing Office]
    [H.R. 4173 Enrolled Bill (ENR)]

            H.R.4173

                          One Hundred Eleventh Congress

                                     of the

                            United States of America

                              AT THE SECOND SESSION

              Begun and held at the City of Washington on Tuesday,
                 the fifth day of January, two thousand and ten

                                     An Act

      To promote the financial stability of the United States by improving
     accountability and transparency in the financial system, to end ``too
     big to fail'', to protect the American taxpayer by ending bailouts, to
      protect consumers from abusive financial services practices, and for
                                 other purposes.

        Be it enacted by the Senate and House of Representatives of the
    United States of America in Congress assembled,
    SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
        (a) Short Title.--This Act may be cited as the ``Dodd-Frank Wall
    Street Reform and Consumer Protection Act''.
        (b) Table of Contents.--The table of contents for this Act is as
    follows:

    Sec. 1. Short title; table of contents.
    Sec. 2. Definitions.
    Sec. 3. Severability.
    Sec. 4. Effective date.
    Sec. 5. Budgetary effects.
    Sec. 6. Antitrust savings clause.

                          TITLE I--FINANCIAL STABILITY

    Sec. 101. Short title.
    Sec. 102. Definitions.

                Subtitle A--Financial Stability Oversight Council

    Sec. 111. Financial Stability Oversight Council established.
    Sec. 112. Council authority.
    Sec. 113. Authority to require supervision and regulation of certain
              nonbank financial companies.
    Sec. 114. Registration of nonbank financial companies supervised by the
              Board of Governors.
    Sec. 115. Enhanced supervision and prudential standards for nonbank
              financial companies supervised by the Board of Governors and
              certain bank holding companies.
    Sec. 116. Reports.
    Sec. 117. Treatment of certain companies that cease to be bank holding
              companies.
    Sec. 118. Council funding.
    Sec. 119. Resolution of supervisory jurisdictional disputes among member
              agencies.
    Sec. 120. Additional standards applicable to activities or practices for
              financial stability purposes.
    Sec. 121. Mitigation of risks to financial stability.
    Sec. 122. GAO Audit of Council.
    Sec. 123. Study of the effects of size and complexity of financial
              institutions on capital market efficiency and economic growth.

                    Subtitle B--Office of Financial Research

    Sec. 151. Definitions.
    Sec. 152. Office of Financial Research established.
    Sec. 153. Purpose and duties of the Office.
    Sec. 154. Organizational structure; responsibilities of primary
              programmatic units.
    Sec. 155. Funding.
    Sec. 156. Transition oversight.

    Subtitle C--Additional Board of Governors Authority for Certain Nonbank
                 Financial Companies and Bank Holding Companies

    Sec. 161. Reports by and examinations of nonbank financial companies by
              the Board of Governors.
    Sec. 162. Enforcement.
    Sec. 163. Acquisitions.
    Sec. 164. Prohibition against management interlocks between certain
              financial companies.
    Sec. 165. Enhanced supervision and prudential standards for nonbank
              financial companies supervised by the Board of Governors and
              certain bank holding companies.
    Sec. 166. Early remediation requirements.
    Sec. 167. Affiliations.
    Sec. 168. Regulations.
    Sec. 169. Avoiding duplication.
    Sec. 170. Safe harbor.
    Sec. 171. Leverage and risk-based capital requirements.
    Sec. 172. Examination and enforcement actions for insurance and orderly
              liquidation purposes.
    Sec. 173. Access to United States financial market by foreign
              institutions.
    Sec. 174. Studies and reports on holding company capital requirements.
    Sec. 175. International policy coordination.
    Sec. 176. Rule of construction.

                     TITLE II--ORDERLY LIQUIDATION AUTHORITY

    Sec. 201. Definitions.
    Sec. 202. Judicial review.
    Sec. 203. Systemic risk determination.
    Sec. 204. Orderly liquidation of covered financial companies.
    Sec. 205. Orderly liquidation of covered brokers and dealers.
    Sec. 206. Mandatory terms and conditions for all orderly liquidation
              actions.
    Sec. 207. Directors not liable for acquiescing in appointment of
              receiver.
    Sec. 208. Dismissal and exclusion of other actions.
    Sec. 209. Rulemaking; non-conflicting law.
    Sec. 210. Powers and duties of the Corporation.
    Sec. 211. Miscellaneous provisions.
    Sec. 212. Prohibition of circumvention and prevention of conflicts of
              interest.
    Sec. 213. Ban on certain activities by senior executives and directors.
    Sec. 214. Prohibition on taxpayer funding.
    Sec. 215. Study on secured creditor haircuts.
    Sec. 216. Study on bankruptcy process for financial and nonbank
              financial institutions
    Sec. 217. Study on international coordination relating to bankruptcy
              process for nonbank financial institutions

     TITLE III--TRANSFER OF POWERS TO THE COMPTROLLER OF THE CURRENCY, THE
                     CORPORATION, AND THE BOARD OF GOVERNORS

    Sec. 300. Short title.
    Sec. 301. Purposes.
    Sec. 302. Definition.

                    Subtitle A--Transfer of Powers and Duties

    Sec. 311. Transfer date.
    Sec. 312. Powers and duties transferred.
    Sec. 313. Abolishment.
    Sec. 314. Amendments to the Revised Statutes.
    Sec. 315. Federal information policy.
    Sec. 316. Savings provisions.
    Sec. 317. References in Federal law to Federal banking agencies.
    Sec. 318. Funding.
    Sec. 319. Contracting and leasing authority.

                       Subtitle B--Transitional Provisions

    Sec. 321. Interim use of funds, personnel, and property of the Office of
              Thrift Supervision.
    Sec. 322. Transfer of employees.
    Sec. 323. Property transferred.
    Sec. 324. Funds transferred.
    Sec. 325. Disposition of affairs.
    Sec. 326. Continuation of services.
    Sec. 327. Implementation plan and reports.

                Subtitle C--Federal Deposit Insurance Corporation

    Sec. 331. Deposit insurance reforms.
    Sec. 332. Elimination of procyclical assessments.
    Sec. 333. Enhanced access to information for deposit insurance purposes.
    Sec. 334. Transition reserve ratio requirements to reflect new
              assessment base.
    Sec. 335. Permanent increase in deposit and share insurance.
    Sec. 336. Management of the Federal Deposit Insurance Corporation.

                            Subtitle D--Other Matters

    Sec. 341. Branching.
    Sec. 342. Office of Minority and Women Inclusion.
    Sec. 343. Insurance of transaction accounts.

                 Subtitle E--Technical and Conforming Amendments

    Sec. 351. Effective date.
    Sec. 352. Balanced Budget and Emergency Deficit Control Act of 1985.
    Sec. 353. Bank Enterprise Act of 1991.
    Sec. 354. Bank Holding Company Act of 1956.
    Sec. 355. Bank Holding Company Act Amendments of 1970.
    Sec. 356. Bank Protection Act of 1968.
    Sec. 357. Bank Service Company Act.
    Sec. 358. Community Reinvestment Act of 1977.
    Sec. 359. Crime Control Act of 1990.
    Sec. 360. Depository Institution Management Interlocks Act.
    Sec. 361. Emergency Homeowners' Relief Act.
    Sec. 362. Federal Credit Union Act.
    Sec. 363. Federal Deposit Insurance Act.
    Sec. 364. Federal Home Loan Bank Act.
    Sec. 365. Federal Housing Enterprises Financial Safety and Soundness Act
              of 1992.
    Sec. 366. Federal Reserve Act.
    Sec. 367. Financial Institutions Reform, Recovery, and Enforcement Act
              of 1989.
    Sec. 368. Flood Disaster Protection Act of 1973.
    Sec. 369. Home Owners' Loan Act.
    Sec. 370. Housing Act of 1948.
    Sec. 371. Housing and Community Development Act of 1992.
    Sec. 372. Housing and Urban-Rural Recovery Act of 1983.
    Sec. 373. National Housing Act.
    Sec. 374. Neighborhood Reinvestment Corporation Act.
    Sec. 375. Public Law 93-100.
    Sec. 376. Securities Exchange Act of 1934.
    Sec. 377. Title 18, United States Code.
    Sec. 378. Title 31, United States Code.

           TITLE IV--REGULATION OF ADVISERS TO HEDGE FUNDS AND OTHERS

    Sec. 401. Short title.
    Sec. 402. Definitions.
    Sec. 403. Elimination of private adviser exemption; limited exemption
              for foreign private advisers; limited intrastate exemption.
    Sec. 404. Collection of systemic risk data; reports; examinations;
              disclosures.
    Sec. 405. Disclosure provision amendment.
    Sec. 406. Clarification of rulemaking authority.
    Sec. 407. Exemption of venture capital fund advisers.
    Sec. 408. Exemption of and record keeping by private equity fund
              advisers.
    Sec. 409. Family offices.
    Sec. 410. State and Federal responsibilities; asset threshold for
              Federal registration of investment advisers.
    Sec. 411. Custody of client assets.
    Sec. 412. Adjusting the accredited investor standard.
    Sec. 413. GAO study and report on accredited investors.
    Sec. 414. GAO study on self-regulatory organization for private funds.
    Sec. 415. Commission study and report on short selling.
    Sec. 416. Transition period.

                               TITLE V--INSURANCE

                    Subtitle A--Office of National Insurance

    Sec. 501. Short title.
    Sec. 502. Federal Insurance Office.

                    Subtitle B--State-Based Insurance Reform

    Sec. 511. Short title.
    Sec. 512. Effective date.

                          PART I--Nonadmitted Insurance

    Sec. 521. Reporting, payment, and allocation of premium taxes.
    Sec. 522. Regulation of nonadmitted insurance by insured's home State.
    Sec. 523. Participation in national producer database.
    Sec. 524. Uniform standards for surplus lines eligibility.
    Sec. 525. Streamlined application for commercial purchasers.
    Sec. 526. GAO study of nonadmitted insurance market.
    Sec. 527. Definitions.

                              PART II--Reinsurance

    Sec. 531. Regulation of credit for reinsurance and reinsurance
              agreements.
    Sec. 532. Regulation of reinsurer solvency.
    Sec. 533. Definitions.

                         PART III--Rule of Construction

    Sec. 541. Rule of construction.
    Sec. 542. Severability.

      TITLE VI--IMPROVEMENTS TO REGULATION OF BANK AND SAVINGS ASSOCIATION
                  HOLDING COMPANIES AND DEPOSITORY INSTITUTIONS

    Sec. 601. Short title.
    Sec. 602. Definition.
    Sec. 603. Moratorium and study on treatment of credit card banks,
              industrial loan companies, and certain other companies under
              the Bank Holding Company Act of 1956.
    Sec. 604. Reports and examinations of holding companies; regulation of
              functionally regulated subsidiaries.
    Sec. 605. Assuring consistent oversight of permissible activities of
              depository institution subsidiaries of holding companies.
    Sec. 606. Requirements for financial holding companies to remain well
              capitalized and well managed.
    Sec. 607. Standards for interstate acquisitions.
    Sec. 608. Enhancing existing restrictions on bank transactions with
              affiliates.
    Sec. 609. Eliminating exceptions for transactions with financial
              subsidiaries.
    Sec. 610. Lending limits applicable to credit exposure on derivative
              transactions, repurchase agreements, reverse repurchase
              agreements, and securities lending and borrowing transactions.
    Sec. 611. Consistent treatment of derivative transactions in lending
              limits.
    Sec. 612. Restriction on conversions of troubled banks.
    Sec. 613. De novo branching into States.
    Sec. 614. Lending limits to insiders.
    Sec. 615. Limitations on purchases of assets from insiders.
    Sec. 616. Regulations regarding capital levels.
    Sec. 617. Elimination of elective investment bank holding company
              framework.
    Sec. 618. Securities holding companies.
    Sec. 619. Prohibitions on proprietary trading and certain relationships
              with hedge funds and private equity funds.
    Sec. 620. Study of bank investment activities.
    Sec. 621. Conflicts of interest.
    Sec. 622. Concentration limits on large financial firms.
    Sec. 623. Interstate merger transactions.
    Sec. 624. Qualified thrift lenders.
    Sec. 625. Treatment of dividends by certain mutual holding companies.
    Sec. 626. Intermediate holding companies.
    Sec. 627. Interest-bearing transaction accounts authorized.
    Sec. 628. Credit card bank small business lending.

             TITLE VII--WALL STREET TRANSPARENCY AND ACCOUNTABILITY

    Sec. 701. Short title.

            Subtitle A--Regulation of Over-the-Counter Swaps Markets

                          PART I--Regulatory Authority

    Sec. 711. Definitions.
    Sec. 712. Review of regulatory authority.
    Sec. 713. Portfolio margining conforming changes.
    Sec. 714. Abusive swaps.
    Sec. 715. Authority to prohibit participation in swap activities.
    Sec. 716. Prohibition against Federal Government bailouts of swaps
              entities.
    Sec. 717. New product approval CFTC--SEC process.
    Sec. 718. Determining status of novel derivative products.
    Sec. 719. Studies.
    Sec. 720. Memorandum.

                       PART II--Regulation of Swap Markets

    Sec. 721. Definitions.
    Sec. 722. Jurisdiction.
    Sec. 723. Clearing.
    Sec. 724. Swaps; segregation and bankruptcy treatment.
    Sec. 725. Derivatives clearing organizations.
    Sec. 726. Rulemaking on conflict of interest.
    Sec. 727. Public reporting of swap transaction data.
    Sec. 728. Swap data repositories.
    Sec. 729. Reporting and recordkeeping.
    Sec. 730. Large swap trader reporting.
    Sec. 731. Registration and regulation of swap dealers and major swap
              participants.
    Sec. 732. Conflicts of interest.
    Sec. 733. Swap execution facilities.
    Sec. 734. Derivatives transaction execution facilities and exempt boards
              of trade.
    Sec. 735. Designated contract markets.
    Sec. 736. Margin.
    Sec. 737. Position limits.
    Sec. 738. Foreign boards of trade.
    Sec. 739. Legal certainty for swaps.
    Sec. 740. Multilateral clearing organizations.
    Sec. 741. Enforcement.
    Sec. 742. Retail commodity transactions.
    Sec. 743. Other authority.
    Sec. 744. Restitution remedies.
    Sec. 745. Enhanced compliance by registered entities.
    Sec. 746. Insider trading.
    Sec. 747. Antidisruptive practices authority.
    Sec. 748. Commodity whistleblower incentives and protection.
    Sec. 749. Conforming amendments.
    Sec. 750. Study on oversight of carbon markets.
    Sec. 751. Energy and environmental markets advisory committee.
    Sec. 752. International harmonization.
    Sec. 753. Anti-manipulation authority.
    Sec. 754. Effective date.

              Subtitle B--Regulation of Security-Based Swap Markets

    Sec. 761. Definitions under the Securities Exchange Act of 1934.
    Sec. 762. Repeal of prohibition on regulation of security-based swap
              agreements.
    Sec. 763. Amendments to the Securities Exchange Act of 1934.
    Sec. 764. Registration and regulation of security-based swap dealers and
              major security-based swap participants.
    Sec. 765. Rulemaking on conflict of interest.
    Sec. 766. Reporting and recordkeeping.
    Sec. 767. State gaming and bucket shop laws.
    Sec. 768. Amendments to the Securities Act of 1933; treatment of
              security-based swaps.
    Sec. 769. Definitions under the Investment Company Act of 1940.
    Sec. 770. Definitions under the Investment Advisers Act of 1940.
    Sec. 771. Other authority.
    Sec. 772. Jurisdiction.
    Sec. 773. Civil penalties.
    Sec. 774. Effective date.

            TITLE VIII--PAYMENT, CLEARING, AND SETTLEMENT SUPERVISION

    Sec. 801. Short title.
    Sec. 802. Findings and purposes.
    Sec. 803. Definitions.
    Sec. 804. Designation of systemic importance.
    Sec. 805. Standards for systemically important financial market
              utilities and payment, clearing, or settlement activities.
    Sec. 806. Operations of designated financial market utilities.
    Sec. 807. Examination of and enforcement actions against designated
              financial market utilities.
    Sec. 808. Examination of and enforcement actions against financial
              institutions subject to standards for designated activities.
    Sec. 809. Requests for information, reports, or records.
    Sec. 810. Rulemaking.
    Sec. 811. Other authority.
    Sec. 812. Consultation.
    Sec. 813. Common framework for designated clearing entity risk
              management.
    Sec. 814. Effective date.

      TITLE IX--INVESTOR PROTECTIONS AND IMPROVEMENTS TO THE REGULATION OF
                                   SECURITIES

    Sec. 901. Short title.

                   Subtitle A--Increasing Investor Protection

    Sec. 911. Investor Advisory Committee established.
    Sec. 912. Clarification of authority of the Commission to engage in
              investor testing.
    Sec. 913. Study and rulemaking regarding obligations of brokers,
              dealers, and investment advisers.
    Sec. 914. Study on enhancing investment adviser examinations.
    Sec. 915. Office of the Investor Advocate.
    Sec. 916. Streamlining of filing procedures for self-regulatory
              organizations.
    Sec. 917. Study regarding financial literacy among investors.
    Sec. 918. Study regarding mutual fund advertising.
    Sec. 919. Clarification of Commission authority to require investor
              disclosures before purchase of investment products and
              services.
    Sec. 919A. Study on conflicts of interest.
    Sec. 919B. Study on improved investor access to information on
              investment advisers and broker-dealers.
    Sec. 919C. Study on financial planners and the use of financial
              designations.
    Sec. 919D. Ombudsman.

           Subtitle B--Increasing Regulatory Enforcement and Remedies

    Sec. 921. Authority to restrict mandatory pre-dispute arbitration.
    Sec. 922. Whistleblower protection.
    Sec. 923. Conforming amendments for whistleblower protection.
    Sec. 924. Implementation and transition provisions for whistleblower
              protection.
    Sec. 925. Collateral bars.
    Sec. 926. Disqualifying felons and other ``bad actors'' from Regulation
              D offerings.
    Sec. 927. Equal treatment of self-regulatory organization rules.
    Sec. 928. Clarification that section 205 of the Investment Advisers Act
              of 1940 does not apply to State-registered advisers.
    Sec. 929. Unlawful margin lending.
    Sec. 929A. Protection for employees of subsidiaries and affiliates of
              publicly traded companies.
    Sec. 929B. Fair Fund amendments.
    Sec. 929C. Increasing the borrowing limit on Treasury loans.
    Sec. 929D. Lost and stolen securities.
    Sec. 929E. Nationwide service of subpoenas.
    Sec. 929F. Formerly associated persons.
    Sec. 929G. Streamlined hiring authority for market specialists.
    Sec. 929H. SIPC Reforms.
    Sec. 929I. Protecting confidentiality of materials submitted to the
              Commission.
    Sec. 929J. Expansion of audit information to be produced and exchanged.
    Sec. 929K. Sharing privileged information with other authorities.
    Sec. 929L. Enhanced application of antifraud provisions.
    Sec. 929M. Aiding and abetting authority under the Securities Act and
              the Investment Company Act.
    Sec. 929N. Authority to impose penalties for aiding and abetting
              violations of the Investment Advisers Act.
    Sec. 929O. Aiding and abetting standard of knowledge satisfied by
              recklessness.
    Sec. 929P. Strengthening enforcement by the Commission.
    Sec. 929Q. Revision to recordkeeping rule.
    Sec. 929R. Beneficial ownership and short-swing profit reporting.
    Sec. 929S. Fingerprinting.
    Sec. 929T. Equal treatment of self-regulatory organization rules.
    Sec. 929U. Deadline for completing examinations, inspections and
              enforcement actions.
    Sec. 929V. Security Investor Protection Act amendments.
    Sec. 929W. Notice to missing security holders.
    Sec. 929X. Short sale reforms.
    Sec. 929Y. Study on extraterritorial private rights of action.
    Sec. 929Z. GAO study on securities litigation.

      Subtitle C--Improvements to the Regulation of Credit Rating Agencies

    Sec. 931. Findings.
    Sec. 932. Enhanced regulation, accountability, and transparency of
              nationally recognized statistical rating organizations.
    Sec. 933. State of mind in private actions.
    Sec. 934. Referring tips to law enforcement or regulatory authorities.
    Sec. 935. Consideration of information from sources other than the
              issuer in rating decisions.
    Sec. 936. Qualification standards for credit rating analysts.
    Sec. 937. Timing of regulations.
    Sec. 938. Universal ratings symbols.
    Sec. 939. Removal of statutory references to credit ratings.
    Sec. 939A. Review of reliance on ratings.
    Sec. 939B. Elimination of exemption from fair disclosure rule.
    Sec. 939C. Securities and Exchange Commission study on strengthening
              credit rating agency independence.
    Sec. 939D. Government Accountability Office study on alternative
              business models.
    Sec. 939E. Government Accountability Office study on the creation of an
              independent professional analyst organization.
    Sec. 939F. Study and rulemaking on assigned credit ratings.
    Sec. 939G. Effect of Rule 436(g).
    Sec. 939H. Sense of Congress.

       Subtitle D--Improvements to the Asset-Backed Securitization Process

    Sec. 941. Regulation of credit risk retention.
    Sec. 942. Disclosures and reporting for asset-backed securities.
    Sec. 943. Representations and warranties in asset-backed offerings.
    Sec. 944. Exempted transactions under the Securities Act of 1933.
    Sec. 945. Due diligence analysis and disclosure in asset-backed
              securities issues.
    Sec. 946. Study on the macroeconomic effects of risk retention
              requirements.

              Subtitle E--Accountability and Executive Compensation

    Sec. 951. Shareholder vote on executive compensation disclosures.
    Sec. 952. Compensation committee independence.
    Sec. 953. Executive compensation disclosures.
    Sec. 954. Recovery of erroneously awarded compensation.
    Sec. 955. Disclosure regarding employee and director hedging.
    Sec. 956. Enhanced compensation structure reporting.
    Sec. 957. Voting by brokers.

        Subtitle F--Improvements to the Management of the Securities and
                               Exchange Commission

    Sec. 961. Report and certification of internal supervisory controls.
    Sec. 962. Triennial report on personnel management.
    Sec. 963. Annual financial controls audit.
    Sec. 964. Report on oversight of national securities associations.
    Sec. 965. Compliance examiners.
    Sec. 966. Suggestion program for employees of the Commission.
    Sec. 967. Commission organizational study and reform.
    Sec. 968. Study on SEC revolving door.

                 Subtitle G--Strengthening Corporate Governance

    Sec. 971. Proxy access.
    Sec. 972. Disclosures regarding chairman and CEO structures.

                        Subtitle H--Municipal Securities

    Sec. 975. Regulation of municipal securities and changes to the board of
              the MSRB.
    Sec. 976. Government Accountability Office study of increased disclosure
              to investors.
    Sec. 977. Government Accountability Office study on the municipal
              securities markets.
    Sec. 978. Funding for Governmental Accounting Standards Board.
    Sec. 979. Commission Office of Municipal Securities.

        Subtitle I--Public Company Accounting Oversight Board, Portfolio
                          Margining, and Other Matters

    Sec. 981. Authority to share certain information with foreign
              authorities.
    Sec. 982. Oversight of brokers and dealers.
    Sec. 983. Portfolio margining.
    Sec. 984. Loan or borrowing of securities.
    Sec. 985. Technical corrections to Federal securities laws.
    Sec. 986. Conforming amendments relating to repeal of the Public Utility
              Holding Company Act of 1935.
    Sec. 987. Amendment to definition of material loss and nonmaterial
              losses to the Deposit Insurance Fund for purposes of Inspector
              General reviews.
    Sec. 988. Amendment to definition of material loss and nonmaterial
              losses to the National Credit Union Share Insurance Fund for
              purposes of Inspector General reviews.
    Sec. 989. Government Accountability Office study on proprietary trading.
    Sec. 989A. Senior investor protections.
    Sec. 989B. Designated Federal entity inspectors general independence.
    Sec. 989C. Strengthening Inspector General accountability.
    Sec. 989D. Removal of Inspectors General of designated Federal entities.
    Sec. 989E. Additional oversight of financial regulatory system.
    Sec. 989F. GAO study of person to person lending.
    Sec. 989G. Exemption for nonaccelerated filers.
    Sec. 989H. Corrective responses by heads of certain establishments to
              deficiencies identified by Inspectors General.
    Sec. 989I. GAO study regarding exemption for smaller issuers.
    Sec. 989J. Further promoting the adoption of the NAIC Model Regulations
              that enhance protection of seniors and other consumers.

          Subtitle J--Securities and Exchange Commission Match Funding

    Sec. 991. Securities and Exchange Commission match funding.

                TITLE X--BUREAU OF CONSUMER FINANCIAL PROTECTION

    Sec. 1001. Short title.
    Sec. 1002. Definitions.

               Subtitle A--Bureau of Consumer Financial Protection

    Sec. 1011. Establishment of the Bureau of Consumer Financial Protection.
    Sec. 1012. Executive and administrative powers.
    Sec. 1013. Administration.
    Sec. 1014. Consumer Advisory Board.
    Sec. 1015. Coordination.
    Sec. 1016. Appearances before and reports to Congress.
    Sec. 1017. Funding; penalties and fines.
    Sec. 1018. Effective date.

                    Subtitle B--General Powers of the Bureau

    Sec. 1021. Purpose, objectives, and functions.
    Sec. 1022. Rulemaking authority.
    Sec. 1023. Review of Bureau regulations.
    Sec. 1024. Supervision of nondepository covered persons.
    Sec. 1025. Supervision of very large banks, savings associations, and
              credit unions.
    Sec. 1026. Other banks, savings associations, and credit unions.
    Sec. 1027. Limitations on authorities of the Bureau; preservation of
              authorities.
    Sec. 1028. Authority to restrict mandatory pre-dispute arbitration.
    Sec. 1029. Exclusion for auto dealers.
    Sec. 1029A. Effective date.

                     Subtitle C--Specific Bureau Authorities

    Sec. 1031. Prohibiting unfair, deceptive, or abusive acts or practices.
    Sec. 1032. Disclosures.
    Sec. 1033. Consumer rights to access information.
    Sec. 1034. Response to consumer complaints and inquiries.
    Sec. 1035. Private education loan ombudsman.
    Sec. 1036. Prohibited acts.
    Sec. 1037. Effective date.

                      Subtitle D--Preservation of State Law

    Sec. 1041. Relation to State law.
    Sec. 1042. Preservation of enforcement powers of States.
    Sec. 1043. Preservation of existing contracts.
    Sec. 1044. State law preemption standards for national banks and
              subsidiaries clarified.
    Sec. 1045. Clarification of law applicable to nondepository institution
              subsidiaries.
    Sec. 1046. State law preemption standards for Federal savings
              associations and subsidiaries clarified.
    Sec. 1047. Visitorial standards for national banks and savings
              associations.
    Sec. 1048. Effective date.

                         Subtitle E--Enforcement Powers

    Sec. 1051. Definitions.
    Sec. 1052. Investigations and administrative discovery.
    Sec. 1053. Hearings and adjudication proceedings.
    Sec. 1054. Litigation authority.
    Sec. 1055. Relief available.
    Sec. 1056. Referrals for criminal proceedings.
    Sec. 1057. Employee protection.
    Sec. 1058. Effective date.

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

    Sec. 1061. Transfer of consumer financial protection functions.
    Sec. 1062. Designated transfer date.
    Sec. 1063. Savings provisions.
    Sec. 1064. Transfer of certain personnel.
    Sec. 1065. Incidental transfers.
    Sec. 1066. Interim authority of the Secretary.
    Sec. 1067. Transition oversight.

                       Subtitle G--Regulatory Improvements

    Sec. 1071. Small business data collection.
    Sec. 1072. Assistance for economically vulnerable individuals and
              families.
    Sec. 1073. Remittance transfers.
    Sec. 1074. Department of the Treasury study on ending the
              conservatorship of Fannie Mae, Freddie Mac, and reforming the
              housing finance system.
    Sec. 1075. Reasonable fees and rules for payment card transactions.
    Sec. 1076. Reverse mortgage study and regulations.
    Sec. 1077. Report on private education loans and private educational
              lenders.
    Sec. 1078. Study and report on credit scores.
    Sec. 1079. Review, report, and program with respect to exchange
              facilitators.
    Sec. 1079A. Financial fraud provisions.

                        Subtitle H--Conforming Amendments

    Sec. 1081. Amendments to the Inspector General Act.
    Sec. 1082. Amendments to the Privacy Act of 1974.
    Sec. 1083. Amendments to the Alternative Mortgage Transaction Parity Act
              of 1982.
    Sec. 1084. Amendments to the Electronic Fund Transfer Act.
    Sec. 1085. Amendments to the Equal Credit Opportunity Act.
    Sec. 1086. Amendments to the Expedited Funds Availability Act.
    Sec. 1087. Amendments to the Fair Credit Billing Act.
    Sec. 1088. Amendments to the Fair Credit Reporting Act and the Fair and
              Accurate Credit Transactions Act of 2003.
    Sec. 1089. Amendments to the Fair Debt Collection Practices Act.
    Sec. 1090. Amendments to the Federal Deposit Insurance Act.
    Sec. 1091. Amendment to Federal Financial Institutions Examination
              Council Act of 1978.
    Sec. 1092. Amendments to the Federal Trade Commission Act.
    Sec. 1093. Amendments to the Gramm-Leach-Bliley Act.
    Sec. 1094. Amendments to the Home Mortgage Disclosure Act of 1975.
    Sec. 1095. Amendments to the Homeowners Protection Act of 1998.
    Sec. 1096. Amendments to the Home Ownership and Equity Protection Act of
              1994.
    Sec. 1097. Amendments to the Omnibus Appropriations Act, 2009.
    Sec. 1098. Amendments to the Real Estate Settlement Procedures Act of
              1974.
    Sec. 1098A. Amendments to the Interstate Land Sales Full Disclosure Act.
    Sec. 1099. Amendments to the Right to Financial Privacy Act of 1978.
    Sec. 1100. Amendments to the Secure and Fair Enforcement for Mortgage
              Licensing Act of 2008.
    Sec. 1100A. Amendments to the Truth in Lending Act.
    Sec. 1100B. Amendments to the Truth in Savings Act.
    Sec. 1100C. Amendments to the Telemarketing and Consumer Fraud and Abuse
              Prevention Act.
    Sec. 1100D. Amendments to the Paperwork Reduction Act.
    Sec. 1100E. Adjustments for inflation in the Truth in Lending Act.
    Sec. 1100F. Use of consumer reports.
    Sec. 1100G. Small business fairness and regulatory transparency.
    Sec. 1100H. Effective date.

                   TITLE XI--FEDERAL RESERVE SYSTEM PROVISIONS

    Sec. 1101. Federal Reserve Act amendments on emergency lending
              authority.
    Sec. 1102. Reviews of special Federal reserve credit facilities.
    Sec. 1103. Public access to information.
    Sec. 1104. Liquidity event determination.
    Sec. 1105. Emergency financial stabilization.
    Sec. 1106. Additional related amendments.
    Sec. 1107. Federal Reserve Act amendments on Federal reserve bank
              governance.
    Sec. 1108. Federal Reserve Act amendments on supervision and regulation
              policy.
    Sec. 1109. GAO audit of the Federal Reserve facilities; publication of
              Board actions.

        TITLE XII--IMPROVING ACCESS TO MAINSTREAM FINANCIAL INSTITUTIONS

    Sec. 1201. Short title.
    Sec. 1202. Purpose.
    Sec. 1203. Definitions.
    Sec. 1204. Expanded access to mainstream financial institutions.
    Sec. 1205. Low-cost alternatives to payday loans.
    Sec. 1206. Grants to establish loan-loss reserve funds.
    Sec. 1207. Procedural provisions.
    Sec. 1208. Authorization of appropriations.
    Sec. 1209. Regulations.
    Sec. 1210. Evaluation and reports to Congress.

                           TITLE XIII--PAY IT BACK ACT

    Sec. 1301. Short title.
    Sec. 1302. Amendment to reduce TARP authorization.
    Sec. 1303. Report.
    Sec. 1304. Amendments to Housing and Economic Recovery Act of 2008.
    Sec. 1305. Federal Housing Finance Agency report.
    Sec. 1306. Repayment of unobligated ARRA funds.

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

    Sec. 1400. Short title; designation as enumerated consumer law.

           Subtitle A--Residential Mortgage Loan Origination Standards

    Sec. 1401. Definitions.
    Sec. 1402. Residential mortgage loan origination.
    Sec. 1403. Prohibition on steering incentives.
    Sec. 1404. Liability.
    Sec. 1405. Regulations.
    Sec. 1406. Study of shared appreciation mortgages.

                   Subtitle B--Minimum Standards For Mortgages

    Sec. 1411. Ability to repay.
    Sec. 1412. Safe harbor and rebuttable presumption.
    Sec. 1413. Defense to foreclosure.
    Sec. 1414. Additional standards and requirements.
    Sec. 1415. Rule of construction.
    Sec. 1416. Amendments to civil liability provisions.
    Sec. 1417. Lender rights in the context of borrower deception.
    Sec. 1418. Six-month notice required before reset of hybrid adjustable
              rate mortgages.
    Sec. 1419. Required disclosures.
    Sec. 1420. Disclosures required in monthly statements for residential
              mortgage loans.
    Sec. 1421. Report by the GAO.
    Sec. 1422. State attorney general enforcement authority.

                         Subtitle C--High-Cost Mortgages

    Sec. 1431. Definitions relating to high-cost mortgages.
    Sec. 1432. Amendments to existing requirements for certain mortgages.
    Sec. 1433. Additional requirements for certain mortgages.

                    Subtitle D--Office of Housing Counseling

    Sec. 1441. Short title.
    Sec. 1442. Establishment of Office of Housing Counseling.
    Sec. 1443. Counseling procedures.
    Sec. 1444. Grants for housing counseling assistance.
    Sec. 1445. Requirements to use HUD-certified counselors under HUD
              programs.
    Sec. 1446. Study of defaults and foreclosures.
    Sec. 1447. Default and foreclosure database.
    Sec. 1448. Definitions for counseling-related programs.
    Sec. 1449. Accountability and transparency for grant recipients.
    Sec. 1450. Updating and simplification of mortgage information booklet.
    Sec. 1451. Home inspection counseling.
    Sec. 1452. Warnings to homeowners of foreclosure rescue scams.

                         Subtitle E--Mortgage Servicing

    Sec. 1461. Escrow and impound accounts relating to certain consumer
              credit transactions.
    Sec. 1462. Disclosure notice required for consumers who waive escrow
              services.
    Sec. 1463. Real Estate Settlement Procedures Act of 1974 amendments.
    Sec. 1464. Truth in Lending Act amendments.
    Sec. 1465. Escrows included in repayment analysis.

                        Subtitle F--Appraisal Activities

    Sec. 1471. Property appraisal requirements.
    Sec. 1472. Appraisal independence requirements.
    Sec. 1473. Amendments relating to Appraisal Subcommittee of FFIEC,
              Appraiser Independence Monitoring, Approved Appraiser
              Education, Appraisal Management Companies, Appraiser Complaint
              Hotline, Automated Valuation Models, and Broker Price
              Opinions.
    Sec. 1474. Equal Credit Opportunity Act amendment.
    Sec. 1475. Real Estate Settlement Procedures Act of 1974 amendment
              relating to certain appraisal fees.
    Sec. 1476. GAO study on the effectiveness and impact of various
              appraisal methods, valuation models and distributions
              channels, and on the Home Valuation Code of conduct and the
              Appraisal Subcommittee.

                Subtitle G--Mortgage Resolution and Modification

    Sec. 1481. Multifamily mortgage resolution program.
    Sec. 1482. Home Affordable Modification Program guidelines.
    Sec. 1483. Public availability of information of Making Home Affordable
              Program.
    Sec. 1484. Protecting tenants at foreclosure extension and
              clarification.

                      Subtitle H--Miscellaneous Provisions

    Sec. 1491. 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.
    Sec. 1492. GAO study report on government efforts to combat mortgage
              foreclosure rescue scams and loan modification fraud.
    Sec. 1493. Reporting of mortgage data by State.
    Sec. 1494. Study of effect of drywall presence on foreclosures.
    Sec. 1495. Definition.
    Sec. 1496. Emergency mortgage relief.
    Sec. 1497. Additional assistance for Neighborhood Stabilization Program.
    Sec. 1498. Legal assistance for foreclosure-related issues.

                       TITLE XV--MISCELLANEOUS PROVISIONS

    Sec. 1501. Restrictions on use of United States funds for foreign
              governments; protection of American taxpayers.
    Sec. 1502. Conflict minerals.
    Sec. 1503. Reporting requirements regarding coal or other mine safety.
    Sec. 1504. Disclosure of payments by resource extraction issuers.
    Sec. 1505. Study by the Comptroller General.
    Sec. 1506. Study on core deposits and brokered deposits.

                        TITLE XVI--SECTION 1256 CONTRACTS

    Sec. 1601. Certain swaps, etc., not treated as section 1256 contracts.
    SEC. 2. DEFINITIONS.
        As used in this Act, the following definitions shall apply, except
    as the context otherwise requires or as otherwise specifically provided
    in this Act:
            (1) Affiliate.--The term ``affiliate'' has the same meaning as
        in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813).
            (2) Appropriate federal banking agency.--On and after the
        transfer date, the term ``appropriate Federal banking agency'' has
        the same meaning as in section 3(q) of the Federal Deposit
        Insurance Act (12 U.S.C. 1813(q)), as amended by title III.
            (3) Board of governors.--The term ``Board of Governors'' means
        the Board of Governors of the Federal Reserve System.
            (4) Bureau.--The term ``Bureau'' means the Bureau of Consumer
        Financial Protection established under title X.
            (5) Commission.--The term ``Commission'' means the Securities
        and Exchange Commission, except in the context of the Commodity
        Futures Trading Commission.
            (6) Commodity futures terms.--The terms ``futures commission
        merchant'', ``swap'', ``swap dealer'', ``swap execution facility'',
        ``derivatives clearing organization'', ``board of trade'',
        ``commodity trading advisor'', ``commodity pool'', and ``commodity
        pool operator'' have the same meanings as given the terms in
        section 1a of the Commodity Exchange Act (7 U.S.C. 1 et seq.).
            (7) Corporation.--The term ``Corporation'' means the Federal
        Deposit Insurance Corporation.
            (8) Council.--The term ``Council'' means the Financial
        Stability Oversight Council established under title I.
            (9) Credit union.--The term ``credit union'' means a Federal
        credit union, State credit union, or State-chartered credit union,
        as those terms are defined in section 101 of the Federal Credit
        Union Act (12 U.S.C. 1752).
            (10) Federal banking agency.--The term--
                (A) ``Federal banking agency'' means, individually, the
            Board of Governors, the Office of the Comptroller of the
            Currency, and the Corporation; and
                (B) ``Federal banking agencies'' means all of the agencies
            referred to in subparagraph (A), collectively.
            (11) Functionally regulated subsidiary.--The term
        ``functionally regulated subsidiary'' has the same meaning as in
        section 5(c)(5) of the Bank Holding Company Act of 1956 (12 U.S.C.
        1844(c)(5)).
            (12) Primary financial regulatory agency.--The term ``primary
        financial regulatory agency'' means--
                (A) the appropriate Federal banking agency, with respect to
            institutions described in section 3(q) of the Federal Deposit
            Insurance Act, except to the extent that an institution is or
            the activities of an institution are otherwise described in
            subparagraph (B), (C), (D), or (E);
                (B) the Securities and Exchange Commission, with respect
            to--
                    (i) any broker or dealer that is registered with the
                Commission under the Securities Exchange Act of 1934, with
                respect to the activities of the broker or dealer that
                require the broker or dealer to be registered under that
                Act;
                    (ii) any investment company that is registered with the
                Commission under the Investment Company Act of 1940, with
                respect to the activities of the investment company that
                require the investment company to be registered under that
                Act;
                    (iii) any investment adviser that is registered with
                the Commission under the Investment Advisers Act of 1940,
                with respect to the investment advisory activities of such
                company and activities that are incidental to such advisory
                activities;
                    (iv) any clearing agency registered with the Commission
                under the Securities Exchange Act of 1934, with respect to
                the activities of the clearing agency that require the
                agency to be registered under such Act;
                    (v) any nationally recognized statistical rating
                organization registered with the Commission under the
                Securities Exchange Act of 1934;
                    (vi) any transfer agent registered with the Commission
                under the Securities Exchange Act of 1934;
                    (vii) any exchange registered as a national securities
                exchange with the Commission under the Securities Exchange
                Act of 1934;
                    (viii) any national securities association registered
                with the Commission under the Securities Exchange Act of
                1934;
                    (ix) any securities information processor registered
                with the Commission under the Securities Exchange Act of
                1934;
                    (x) the Municipal Securities Rulemaking Board
                established under the Securities Exchange Act of 1934;
                    (xi) the Public Company Accounting Oversight Board
                established under the Sarbanes-Oxley Act of 2002 (15 U.S.C.
                7211 et seq.);
                    (xii) the Securities Investor Protection Corporation
                established under the Securities Investor Protection Act of
                1970 (15 U.S.C. 78aaa et seq.); and
                    (xiii) any security-based swap execution facility,
                security-based swap data repository, security-based swap
                dealer or major security-based swap participant registered
                with the Commission under the Securities Exchange Act of
                1934, with respect to the security-based swap activities of
                the person that require such person to be registered under
                such Act;
                (C) the Commodity Futures Trading Commission, with respect
            to--
                    (i) any futures commission merchant registered with the
                Commodity Futures Trading Commission under the Commodity
                Exchange Act (7 U.S.C. 1 et seq.), with respect to the
                activities of the futures commission merchant that require
                the futures commission merchant to be registered under that
                Act;
                    (ii) 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
                activities of the commodity pool operator that require the
                commodity pool operator to be registered under that Act, or
                a commodity pool, as defined in that Act;
                    (iii) any commodity trading advisor or introducing
                broker registered with the Commodity Futures Trading
                Commission under the Commodity Exchange Act (7 U.S.C. 1 et
                seq.), with respect to the activities of the commodity
                trading advisor or introducing broker that require the
                commodity trading adviser or introducing broker to be
                registered under that Act;
                    (iv) any derivatives clearing organization registered
                with the Commodity Futures Trading Commission under the
                Commodity Exchange Act (7 U.S.C. 1 et seq.), with respect
                to the activities of the derivatives clearing organization
                that require the derivatives clearing organization to be
                registered under that Act;
                    (v) any board of trade designated as a contract market
                by the Commodity Futures Trading Commission under the
                Commodity Exchange Act (7 U.S.C. 1 et seq.);
                    (vi) any futures association registered with the
                Commodity Futures Trading Commission under the Commodity
                Exchange Act (7 U.S.C. 1 et seq.);
                    (vii) any retail foreign exchange dealer registered
                with the Commodity Futures Trading Commission under the
                Commodity Exchange Act (7 U.S.C. 1 et seq.), with respect
                to the activities of the retail foreign exchange dealer
                that require the retail foreign exchange dealer to be
                registered under that Act;
                    (viii) any swap execution facility, swap data
                repository, swap dealer, or major swap participant
                registered with the Commodity Futures Trading Commission
                under the Commodity Exchange Act (7 U.S.C. 1 et seq.) with
                respect to the swap activities of the person that require
                such person to be registered under that Act; and
                    (ix) any registered entity under the Commodity Exchange
                Act (7 U.S.C. 1 et seq.), with respect to the activities of
                the registered entity that require the registered entity to
                be registered under that Act;
                (D) the State insurance authority of the State in which an
            insurance company is domiciled, with respect to the insurance
            activities and activities that are incidental to such insurance
            activities of an insurance company that is subject to
            supervision by the State insurance authority under State
            insurance law; and
                (E) the Federal Housing Finance Agency, with respect to
            Federal Home Loan Banks or the Federal Home Loan Bank System,
            and with respect to the Federal National Mortgage Association
            or the Federal Home Loan Mortgage Corporation.
            (13) Prudential standards.--The term ``prudential standards''
        means enhanced supervision and regulatory standards developed by
        the Board of Governors under section 165.
            (14) Secretary.--The term ``Secretary'' means the Secretary of
        the Treasury.
            (15) Securities terms.--The--
                (A) terms ``broker'', ``dealer'', ``issuer'', ``nationally
            recognized statistical rating organization'', ``security'', and
            ``securities laws'' have the same meanings as in section 3 of
            the Securities Exchange Act of 1934 (15 U.S.C. 78c);
                (B) term ``investment adviser'' has the same meaning as in
            section 202 of the Investment Advisers Act of 1940 (15 U.S.C.
            80b-2); and
                (C) term ``investment company'' has the same meaning as in
            section 3 of the Investment Company Act of 1940 (15 U.S.C. 80a-
            3).
            (16) State.--The term ``State'' means any State, commonwealth,
        territory, or possession of the United States, the District of
        Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the
        Northern Mariana Islands, American Samoa, Guam, or the United
        States Virgin Islands.
            (17) Transfer date.--The term ``transfer date'' means the date
        established under section 311.
            (18) Other incorporated definitions.--
                (A) Federal deposit insurance act.--The terms ``bank'',
            ``bank holding company'', ``control'', ``deposit'',
            ``depository institution'', ``Federal depository institution'',
            ``Federal savings association'', ``foreign bank'',
            ``including'', ``insured branch'', ``insured depository
            institution'', ``national member bank'', ``national nonmember
            bank'', ``savings association'', ``State bank'', ``State
            depository institution'', ``State member bank'', ``State
            nonmember bank'', ``State savings association'', and
            ``subsidiary'' have the same meanings as in section 3 of the
            Federal Deposit Insurance Act (12 U.S.C. 1813).
                (B) Holding companies.--The term--
                    (i) ``bank holding company'' has the same meaning as in
                section 2 of the Bank Holding Company Act of 1956 (12
                U.S.C. 1841);
                    (ii) ``financial holding company'' has the same meaning
                as in section 2(p) of the Bank Holding Company Act of 1956
                (12 U.S.C. 1841(p)); and
                    (iii) ``savings and loan holding company'' has the same
                meaning as in section 10 of the Home Owners' Loan Act (12
                U.S.C. 1467a(a)).
    SEC. 3. SEVERABILITY.
        If any provision of this Act, an amendment made by this Act, or the
    application of such provision or amendment to any person or
    circumstance is held to be unconstitutional, the remainder of this Act,
    the amendments made by this Act, and the application of the provisions
    of such to any person or circumstance shall not be affected thereby.
    SEC. 4. EFFECTIVE DATE.
        Except as otherwise specifically provided in this Act or the
    amendments made by this Act, this Act and such amendments shall take
    effect 1 day after the date of enactment of this Act.
    SEC. 5. BUDGETARY EFFECTS.
        The budgetary effects of this Act, for the purpose of complying
    with the Statutory Pay-As-You-Go-Act of 2010, shall be determined by
    reference to the latest statement titled ``Budgetary Effects of PAYGO
    Legislation'' for this Act, jointly submitted for printing in the
    Congressional Record by the Chairmen of the House and Senate Budget
    Committees, provided that such statement has been submitted prior to
    the vote on passage in the House acting first on this conference report
    or amendment between the Houses.
    SEC. 6. ANTITRUST SAVINGS CLAUSE.
        Nothing in this Act, or any amendment made by this Act, shall be
    construed to modify, impair, or supersede the operation of any of the
    antitrust laws, unless otherwise specified. For purposes of this
    section, the term ``antitrust laws'' has the same meaning as 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 applies to unfair methods of
    competition.

                          TITLE I--FINANCIAL STABILITY

        SEC. 101. SHORT TITLE.
        This title may be cited as the ``Financial Stability Act of 2010''.
        SEC. 102. DEFINITIONS.
        (a) In General.--For purposes of this title, unless the context
    otherwise requires, the following definitions shall apply:
            (1) Bank holding company.--The term ``bank holding company''
        has the same meaning as in section 2 of the Bank Holding Company
        Act of 1956 (12 U.S.C. 1841). A foreign bank or company that is
        treated as a bank holding company for purposes of the Bank Holding
        Company Act of 1956, pursuant to section 8(a) of the International
        Banking Act of 1978 (12 U.S.C. 3106(a)), shall be treated as a bank
        holding company for purposes of this title.
            (2) Chairperson.--The term ``Chairperson'' means the
        Chairperson of the Council.
            (3) Member agency.--The term ``member agency'' means an agency
        represented by a voting member of the Council.
            (4) Nonbank financial company definitions.--
                (A) Foreign nonbank financial company.--The term ``foreign
            nonbank financial company'' means a company (other than a
            company that is, or is treated in the United States as, a bank
            holding company) that is--
                    (i) incorporated or organized in a country other than
                the United States; and
                    (ii) predominantly engaged in, including through a
                branch in the United States, financial activities, as
                defined in paragraph (6).
                (B) U.S. nonbank financial company.--The term ``U.S.
            nonbank financial company'' means a company (other than a bank
            holding company, a Farm Credit System institution chartered and
            subject to the provisions of the Farm Credit Act of 1971 (12
            U.S.C. 2001 et seq.), or a national securities exchange (or
            parent thereof), clearing agency (or parent thereof, unless the
            parent is a bank holding company), security-based swap
            execution facility, or security-based swap data repository
            registered with the Commission, or a board of trade designated
            as a contract market (or parent thereof), or a derivatives
            clearing organization (or parent thereof, unless the parent is
            a bank holding company), swap execution facility or a swap data
            repository registered with the Commodity Futures Trading
            Commission), that is--
                    (i) incorporated or organized under the laws of the
                United States or any State; and
                    (ii) predominantly engaged in financial activities, as
                defined in paragraph (6).
                (C) Nonbank financial company.--The term ``nonbank
            financial company'' means a U.S. nonbank financial company and
            a foreign nonbank financial company.
                (D) Nonbank financial company supervised by the board of
            governors.--The term ``nonbank financial company supervised by
            the Board of Governors'' means a nonbank financial company that
            the Council has determined under section 113 shall be
            supervised by the Board of Governors.
            (5) Office of financial research.--The term ``Office of
        Financial Research'' means the office established under section
        152.
            (6) Predominantly engaged.--A company is ``predominantly
        engaged in financial activities'' if--
                (A) the annual gross revenues derived by the company and
            all of its subsidiaries from activities that are financial in
            nature (as defined in section 4(k) of the Bank Holding Company
            Act of 1956) and, if applicable, from the ownership or control
            of one or more insured depository institutions, represents 85
            percent or more of the consolidated annual gross revenues of
            the company; or
                (B) the consolidated assets of the company and all of its
            subsidiaries related to activities that are financial in nature
            (as defined in section 4(k) of the Bank Holding Company Act of
            1956) and, if applicable, related to the ownership or control
            of one or more insured depository institutions, represents 85
            percent or more of the consolidated assets of the company.
            (7) Significant institutions.--The terms ``significant nonbank
        financial company'' and ``significant bank holding company'' have
        the meanings given those terms by rule of the Board of Governors,
        but in no instance shall the term ``significant nonbank financial
        company'' include those entities that are excluded under paragraph
        (4)(B).
        (b) Definitional Criteria.--The Board of Governors shall establish,
    by regulation, the requirements for determining if a company is
    predominantly engaged in financial activities, as defined in subsection
    (a)(6).
        (c) Foreign Nonbank Financial Companies.--For purposes of the
    application of subtitles A and C (other than section 113(b)) with
    respect to a foreign nonbank financial company, references in this
    title to ``company'' or ``subsidiary'' include only the United States
    activities and subsidiaries of such foreign company, except as
    otherwise provided.

               Subtitle A--Financial Stability Oversight Council

        SEC. 111. FINANCIAL STABILITY OVERSIGHT COUNCIL ESTABLISHED.
        (a) Establishment.--Effective on the date of enactment of this Act,
    there is established the Financial Stability Oversight Council.
        (b) Membership.--The Council shall consist of the following
    members:
            (1) Voting members.--The voting members, who shall each have 1
        vote on the Council shall be--
                (A) the Secretary of the Treasury, who shall serve as
            Chairperson of the Council;
                (B) the Chairman of the Board of Governors;
                (C) the Comptroller of the Currency;
                (D) the Director of the Bureau;
                (E) the Chairman of the Commission;
                (F) the Chairperson of the Corporation;
                (G) the Chairperson of the Commodity Futures Trading
            Commission;
                (H) the Director of the Federal Housing Finance Agency;
                (I) the Chairman of the National Credit Union
            Administration Board; and
                (J) an independent member appointed by the President, by
            and with the advice and consent of the Senate, having insurance
            expertise.
            (2) Nonvoting members.--The nonvoting members, who shall serve
        in an advisory capacity as a nonvoting member of the Council, shall
        be--
                (A) the Director of the Office of Financial Research;
                (B) the Director of the Federal Insurance Office;
                (C) a State insurance commissioner, to be designated by a
            selection process determined by the State insurance
            commissioners;
                (D) a State banking supervisor, to be designated by a
            selection process determined by the State banking supervisors;
            and
                (E) a State securities commissioner (or an officer
            performing like functions), to be designated by a selection
            process determined by such State securities commissioners.
            (3) Nonvoting member participation.--The nonvoting members of
        the Council shall not be excluded from any of the proceedings,
        meetings, discussions, or deliberations of the Council, except that
        the Chairperson may, upon an affirmative vote of the member
        agencies, exclude the nonvoting members from any of the
        proceedings, meetings, discussions, or deliberations of the Council
        when necessary to safeguard and promote the free exchange of
        confidential supervisory information.
        (c) Terms; Vacancy.--
            (1) Terms.--The independent member of the Council shall serve
        for a term of 6 years, and each nonvoting member described in
        subparagraphs (C), (D), and (E) of subsection (b)(2) shall serve
        for a term of 2 years.
            (2) Vacancy.--Any vacancy on the Council shall be filled in the
        manner in which the original appointment was made.
            (3) Acting officials may serve.--In the event of a vacancy in
        the office of the head of a member agency or department, and
        pending the appointment of a successor, or during the absence or
        disability of the head of a member agency or department, the acting
        head of the member agency or department shall serve as a member of
        the Council in the place of that agency or department head.
        (d) Technical and Professional Advisory Committees.--The Council
    may appoint such special advisory, technical, or professional
    committees as may be useful in carrying out the functions of the
    Council, including an advisory committee consisting of State
    regulators, and the members of such committees may be members of the
    Council, or other persons, or both.
        (e) Meetings.--
            (1) Timing.--The Council shall meet at the call of the
        Chairperson or a majority of the members then serving, but not less
        frequently than quarterly.
            (2) Rules for conducting business.--The Council shall adopt
        such rules as may be necessary for the conduct of the business of
        the Council. Such rules shall be rules of agency organization,
        procedure, or practice for purposes of section 553 of title 5,
        United States Code.
        (f) Voting.--Unless otherwise specified, the Council shall make all
    decisions that it is authorized or required to make by a majority vote
    of the voting members then serving.
        (g) Nonapplicability of FACA.--The Federal Advisory Committee Act
    (5 U.S.C. App.) shall not apply to the Council, or to any special
    advisory, technical, or professional committee 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.
        (h) Assistance From Federal Agencies.--Any department or agency of
    the United States may provide to the Council and any special advisory,
    technical, or professional committee appointed by the Council, such
    services, funds, facilities, staff, and other support services as the
    Council may determine advisable.
        (i) Compensation of Members.--
            (1) Federal employee members.--All members of the Council who
        are officers or employees of the United States shall serve without
        compensation in addition to that received for their services as
        officers or employees of the United States.
            (2) Compensation for non-federal member.--Section 5314 of title
        5, United States Code, is amended by adding at the end the
        following:
            ``Independent Member of the Financial Stability Oversight
        Council (1).''.
        (j) Detail of Government Employees.--Any employee of the Federal
    Government may be detailed to the Council without reimbursement, and
    such detail shall be without interruption or loss of civil service
    status or privilege. An employee of the Federal Government detailed to
    the Council shall report to and be subject to oversight by the Council
    during the assignment to the Council, and shall be compensated by the
    department or agency from which the employee was detailed.
        SEC. 112. COUNCIL AUTHORITY.
        (a) Purposes and Duties of the Council.--
            (1) In general.--The purposes of the Council are--
                (A) to identify risks to the financial stability of the
            United States that could arise from the material financial
            distress or failure, or ongoing activities, of large,
            interconnected bank holding companies or nonbank financial
            companies, or that could arise outside the financial services
            marketplace;
                (B) to promote market discipline, by eliminating
            expectations on the part of shareholders, creditors, and
            counterparties of such companies that the Government will
            shield them from losses in the event of failure; and
                (C) to respond to emerging threats to the stability of the
            United States financial system.
            (2) Duties.--The Council shall, in accordance with this title--
                (A) collect information from member agencies, other Federal
            and State financial regulatory agencies, the Federal Insurance
            Office and, if necessary to assess risks to the United States
            financial system, direct the Office of Financial Research to
            collect information from bank holding companies and nonbank
            financial companies;
                (B) provide direction to, and request data and analyses
            from, the Office of Financial Research to support the work of
            the Council;
                (C) monitor the financial services marketplace in order to
            identify potential threats to the financial stability of the
            United States;
                (D) to monitor domestic and international financial
            regulatory proposals and developments, including insurance and
            accounting issues, and to advise Congress and make
            recommendations in such areas that will enhance the integrity,
            efficiency, competitiveness, and stability of the U.S.
            financial markets;
                (E) facilitate information sharing and coordination among
            the member agencies and other Federal and State agencies
            regarding domestic financial services policy development,
            rulemaking, examinations, reporting requirements, and
            enforcement actions;
                (F) recommend to the member agencies general supervisory
            priorities and principles reflecting the outcome of discussions
            among the member agencies;
                (G) identify gaps in regulation that could pose risks to
            the financial stability of the United States;
                (H) require supervision by the Board of Governors for
            nonbank financial companies that may pose risks to the
            financial stability of the United States in the event of their
            material financial distress or failure, or because of their
            activities pursuant to section 113;
                (I) make recommendations to the Board of Governors
            concerning the establishment of heightened prudential standards
            for risk-based capital, leverage, liquidity, contingent
            capital, resolution plans and credit exposure reports,
            concentration limits, enhanced public disclosures, and overall
            risk management for nonbank financial companies and large,
            interconnected bank holding companies supervised by the Board
            of Governors;
                (J) identify systemically important financial market
            utilities and payment, clearing, and settlement activities (as
            that term is defined in title VIII);
                (K) make recommendations to primary financial regulatory
            agencies to apply new or heightened standards and safeguards
            for financial activities or practices that could create or
            increase risks of significant liquidity, credit, or other
            problems spreading among bank holding companies, nonbank
            financial companies, and United States financial markets;
                (L) review and, as appropriate, may submit comments to the
            Commission and any standard-setting body with respect to an
            existing or proposed accounting principle, standard, or
            procedure;
                (M) provide a forum for--
                    (i) discussion and analysis of emerging market
                developments and financial regulatory issues; and
                    (ii) resolution of jurisdictional disputes among the
                members of the Council; and
                (N) annually report to and testify before Congress on--
                    (i) the activities of the Council;
                    (ii) significant financial market and regulatory
                developments, including insurance and accounting
                regulations and standards, along with an assessment of
                those developments on the stability of the financial
                system;
                    (iii) potential emerging threats to the financial
                stability of the United States;
                    (iv) all determinations made under section 113 or title
                VIII, and the basis for such determinations;
                    (v) all recommendations made under section 119 and the
                result of such recommendations; and
                    (vi) recommendations--

                        (I) to enhance the integrity, efficiency,
                    competitiveness, and stability of United States
                    financial markets;
                        (II) to promote market discipline; and
                        (III) to maintain investor confidence.

        (b) Statements by Voting Members of the Council.--At the time at
    which each report is submitted under subsection (a), each voting member
    of the Council shall--
            (1) if such member believes that the Council, the Government,
        and the private sector are taking all reasonable steps to ensure
        financial stability and to mitigate systemic risk that would
        negatively affect the economy, submit a signed statement to
        Congress stating such belief; or
            (2) if such member does not believe that all reasonable steps
        described under paragraph (1) are being taken, submit a signed
        statement to Congress stating what actions such member believes
        need to be taken in order to ensure that all reasonable steps
        described under paragraph (1) are taken.
        (c) Testimony by the Chairperson.--The Chairperson 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 an annual hearing, after the report is
    submitted under subsection (a)--
            (1) to discuss the efforts, activities, objectives, and plans
        of the Council; and
            (2) to discuss and answer questions concerning such report.
        (d) Authority To Obtain Information.--
            (1) In general.--The Council may receive, and may request the
        submission of, any data or information from the Office of Financial
        Research, member agencies, and the Federal Insurance Office, as
        necessary--
                (A) to monitor the financial services marketplace to
            identify potential risks to the financial stability of the
            United States; or
                (B) to otherwise carry out any of the provisions of this
            title.
            (2) Submissions by the office and member agencies.--
        Notwithstanding any other provision of law, the Office of Financial
        Research, any member agency, and the Federal Insurance Office, are
        authorized to submit information to the Council.
            (3) Financial data collection.--
                (A) In general.--The Council, acting through the Office of
            Financial Research, may require the submission of periodic and
            other reports from any nonbank financial company or bank
            holding company for the purpose of assessing the extent to
            which a financial activity or financial market in which the
            nonbank financial company or bank holding company participates,
            or the nonbank financial company or bank holding company
            itself, poses a threat to the financial stability of the United
            States.
                (B) Mitigation of report burden.--Before requiring the
            submission of reports from any nonbank financial company or
            bank holding company that is regulated by a member agency or
            any primary financial regulatory agency, the Council, acting
            through the Office of Financial Research, shall coordinate with
            such agencies and shall, whenever possible, rely on information
            available from the Office of Financial Research or such
            agencies.
                (C) Mitigation in case of foreign financial companies.--
            Before requiring the submission of reports from a company that
            is a foreign nonbank financial company or foreign-based bank
            holding company, the Council shall, acting through the Office
            of Financial Research, to the extent appropriate, consult with
            the appropriate foreign regulator of such company and, whenever
            possible, rely on information already being collected by such
            foreign regulator, with English translation.
            (4) Back-up examination by the board of governors.--If the
        Council is unable to determine whether the financial activities of
        a U.S. nonbank financial company pose a threat to the financial
        stability of the United States, based on information or reports
        obtained under paragraphs (1) and (3), discussions with management,
        and publicly available information, the Council may request the
        Board of Governors, and the Board of Governors is authorized, to
        conduct an examination of the U.S. nonbank financial company for
        the sole purpose of determining whether the nonbank financial
        company should be supervised by the Board of Governors for purposes
        of this title.
            (5) Confidentiality.--
                (A) In general.--The Council, the Office of Financial
            Research, and the other member agencies shall maintain the
            confidentiality of any data, information, and reports submitted
            under this title.
                (B) Retention of privilege.--The submission of any
            nonpublicly available data or information under this subsection
            and subtitle B 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.
                (C) Freedom of information act.--Section 552 of title 5,
            United States Code, including the exceptions thereunder, shall
            apply to any data or information submitted under this
            subsection and subtitle B.
        SEC. 113. AUTHORITY TO REQUIRE SUPERVISION AND REGULATION OF
          CERTAIN NONBANK FINANCIAL COMPANIES.
        (a) U.S. Nonbank Financial Companies Supervised by the Board of
    Governors.--
            (1) Determination.--The Council, on a nondelegable basis and by
        a vote of not fewer than \2/3\ of the voting members then serving,
        including an affirmative vote by the Chairperson, may determine
        that a U.S. nonbank financial company shall be supervised by the
        Board of Governors and shall be subject to prudential standards, in
        accordance with this title, if the Council determines that material
        financial distress at the U.S. nonbank financial company, or the
        nature, scope, size, scale, concentration, interconnectedness, or
        mix of the activities of the U.S. nonbank financial company, could
        pose a threat to the financial stability of the United States.
            (2) Considerations.--In making a determination under paragraph
        (1), the Council shall consider--
                (A) the extent of the leverage of the company;
                (B) the extent and nature of the off-balance-sheet
            exposures of the company;
                (C) the extent and nature of the transactions and
            relationships of the company with other significant nonbank
            financial companies and significant bank holding companies;
                (D) the importance of the company as a source of credit for
            households, businesses, and State and local governments and as
            a source of liquidity for the United States financial system;
                (E) the importance of the company as a source of credit for
            low-income, minority, or underserved communities, and the
            impact that the failure of such company would have on the
            availability of credit in such communities;
                (F) the extent to which assets are managed rather than
            owned by the company, and the extent to which ownership of
            assets under management is diffuse;
                (G) the nature, scope, size, scale, concentration,
            interconnectedness, and mix of the activities of the company;
                (H) the degree to which the company is already regulated by
            1 or more primary financial regulatory agencies;
                (I) the amount and nature of the financial assets of the
            company;
                (J) the amount and types of the liabilities of the company,
            including the degree of reliance on short-term funding; and
                (K) any other risk-related factors that the Council deems
            appropriate.
        (b) Foreign Nonbank Financial Companies Supervised by the Board of
    Governors.--
            (1) Determination.--The Council, on a nondelegable basis and by
        a vote of not fewer than \2/3\ of the voting members then serving,
        including an affirmative vote by the Chairperson, may determine
        that a foreign nonbank financial company shall be supervised by the
        Board of Governors and shall be subject to prudential standards, in
        accordance with this title, if the Council determines that material
        financial distress at the foreign nonbank financial company, or the
        nature, scope, size, scale, concentration, interconnectedness, or
        mix of the activities of the foreign nonbank financial company,
        could pose a threat to the financial stability of the United
        States.
            (2) Considerations.--In making a determination under paragraph
        (1), the Council shall consider--
                (A) the extent of the leverage of the company;
                (B) the extent and nature of the United States related off-
            balance-sheet exposures of the company;
                (C) the extent and nature of the transactions and
            relationships of the company with other significant nonbank
            financial companies and significant bank holding companies;
                (D) the importance of the company as a source of credit for
            United States households, businesses, and State and local
            governments and as a source of liquidity for the United States
            financial system;
                (E) the importance of the company as a source of credit for
            low-income, minority, or underserved communities in the United
            States, and the impact that the failure of such company would
            have on the availability of credit in such communities;
                (F) the extent to which assets are managed rather than
            owned by the company and the extent to which ownership of
            assets under management is diffuse;
                (G) the nature, scope, size, scale, concentration,
            interconnectedness, and mix of the activities of the company;
                (H) the extent to which the company is subject to
            prudential standards on a consolidated basis in its home
            country that are administered and enforced by a comparable
            foreign supervisory authority;
                (I) the amount and nature of the United States financial
            assets of the company;
                (J) the amount and nature of the liabilities of the company
            used to fund activities and operations in the United States,
            including the degree of reliance on short-term funding; and
                (K) any other risk-related factors that the Council deems
            appropriate.
        (c) Antievasion.--
            (1) Determinations.--In order to avoid evasion of this title,
        the Council, on its own initiative or at the request of the Board
        of Governors, may determine, on a nondelegable basis and by a vote
        of not fewer than \2/3\ of the voting members then serving,
        including an affirmative vote by the Chairperson, that--
                (A) material financial distress related to, or the nature,
            scope, size, scale, concentration, interconnectedness, or mix
            of, the financial activities conducted directly or indirectly
            by a company incorporated or organized under the laws of the
            United States or any State or the financial activities in the
            United States of a company incorporated or organized in a
            country other than the United States would pose a threat to the
            financial stability of the United States, based on
            consideration of the factors in subsection (a)(2) or (b)(2), as
            applicable;
                (B) the company is organized or operates in such a manner
            as to evade the application of this title; and
                (C) such financial activities of the company shall be
            supervised by the Board of Governors and subject to prudential
            standards in accordance with this title, consistent with
            paragraph (3).
            (2) Report.--Upon making a determination under paragraph (1),
        the Council shall submit a report to the appropriate committees of
        Congress detailing the reasons for making such determination.
            (3) Consolidated supervision of only financial activities;
        establishment of an intermediate holding company.--
                (A) Establishment of an intermediate holding company.--Upon
            a determination under paragraph (1), the company that is the
            subject of the determination may establish an intermediate
            holding company in which the financial activities of such
            company and its subsidiaries shall be conducted (other than the
            activities described in section 167(b)(2)) in compliance with
            any regulations or guidance provided by the Board of Governors.
            Such intermediate holding company shall be subject to the
            supervision of the Board of Governors and to prudential
            standards under this title as if the intermediate holding
            company were a nonbank financial company supervised by the
            Board of Governors.
                (B) Action of the board of governors.--To facilitate the
            supervision of the financial activities subject to the
            determination in paragraph (1), the Board of Governors may
            require a company to establish an intermediate holding company,
            as provided for in section 167, which would be subject to the
            supervision of the Board of Governors and to prudential
            standards under this title, as if the intermediate holding
            company were a nonbank financial company supervised by the
            Board of Governors.
            (4) Notice and opportunity for hearing and final determination;
        judicial review.--Subsections (d) through (h) shall apply to
        determinations made by the Council pursuant to paragraph (1) in the
        same manner as such subsections apply to nonbank financial
        companies.
            (5) Covered financial activities.--For purposes of this
        subsection, the term ``financial activities''--
                (A) means activities that are financial in nature (as
            defined in section 4(k) of the Bank Holding Company Act of
            1956);
                (B) includes the ownership or control of one or more
            insured depository institutions; and
                (C) does not include internal financial activities
            conducted for the company or any affiliate thereof, including
            internal treasury, investment, and employee benefit functions.
            (6) Only financial activities subject to prudential
        supervision.--Nonfinancial activities of the company shall not be
        subject to supervision by the Board of Governors and prudential
        standards of the Board. For purposes of this Act, the financial
        activities that are the subject of the determination in paragraph
        (1) shall be subject to the same requirements as a nonbank
        financial company supervised by the Board of Governors. Nothing in
        this paragraph shall prohibit or limit the authority of the Board
        of Governors to apply prudential standards under this title to the
        financial activities that are subject to the determination in
        paragraph (1).
        (d) Reevaluation and Rescission.--The Council shall--
            (1) not less frequently than annually, reevaluate each
        determination made under subsections (a) and (b) with respect to
        such nonbank financial company supervised by the Board of
        Governors; and
            (2) rescind any such determination, if the Council, by a vote
        of not fewer than \2/3\ of the voting members then serving,
        including an affirmative vote by the Chairperson, determines that
        the nonbank financial company no longer meets the standards under
        subsection (a) or (b), as applicable.
        (e) Notice and Opportunity for Hearing and Final Determination.--
            (1) In general.--The Council shall provide to a nonbank
        financial company written notice of a proposed determination of the
        Council, including an explanation of the basis of the proposed
        determination of the Council, that a nonbank financial company
        shall be supervised by the Board of Governors and shall be subject
        to prudential standards in accordance with this title.
            (2) Hearing.--Not later than 30 days after the date of receipt
        of any notice of a proposed determination under paragraph (1), the
        nonbank financial company may request, in writing, an opportunity
        for a written or oral hearing before the Council to contest the
        proposed determination. Upon receipt of a timely request, the
        Council shall fix a time (not later than 30 days after the date of
        receipt of the request) and place at which such company may appear,
        personally or through counsel, to submit written materials (or, at
        the sole discretion of the Council, oral testimony and oral
        argument).
            (3) Final determination.--Not later than 60 days after the date
        of a hearing under paragraph (2), the Council shall notify the
        nonbank financial company of the final determination of the
        Council, which shall contain a statement of the basis for the
        decision of the Council.
            (4) No hearing requested.--If a nonbank financial company does
        not make a timely request for a hearing, the Council shall notify
        the nonbank financial company, in writing, of the final
        determination of the Council under subsection (a) or (b), as
        applicable, not later than 10 days after the date by which the
        company may request a hearing under paragraph (2).
        (f) Emergency Exception.--
            (1) In general.--The Council may waive or modify the
        requirements of subsection (e) with respect to a nonbank financial
        company, if the Council determines, by a vote of not fewer than \2/
        3\ of the voting members then serving, including an affirmative
        vote by the Chairperson, that such waiver or modification is
        necessary or appropriate to prevent or mitigate threats posed by
        the nonbank financial company to the financial stability of the
        United States.
            (2) Notice.--The Council shall provide notice of a waiver or
        modification under this subsection to the nonbank financial company
        concerned as soon as practicable, but not later than 24 hours after
        the waiver or modification is granted.
            (3) International coordination.--In making a determination
        under paragraph (1), the Council shall consult with the appropriate
        home country supervisor, if any, of the foreign nonbank financial
        company that is being considered for such a determination.
            (4) Opportunity for hearing.--The Council shall allow a nonbank
        financial company to request, in writing, an opportunity for a
        written or oral hearing before the Council to contest a waiver or
        modification under this subsection, not later than 10 days after
        the date of receipt of notice of the waiver or modification by the
        company. Upon receipt of a timely request, the Council shall fix a
        time (not later than 15 days after the date of receipt of the
        request) and place at which the nonbank financial company may
        appear, personally or through counsel, to submit written materials
        (or, at the sole discretion of the Council, oral testimony and oral
        argument).
            (5) Notice of final determination.--Not later than 30 days
        after the date of any hearing under paragraph (4), the Council
        shall notify the subject nonbank financial company of the final
        determination of the Council under this subsection, which shall
        contain a statement of the basis for the decision of the Council.
        (g) Consultation.--The Council shall consult with the primary
    financial regulatory agency, if any, for each nonbank financial company
    or subsidiary of a nonbank financial company that is being considered
    for supervision by the Board of Governors under this section before the
    Council makes any final determination with respect to such nonbank
    financial company under subsection (a), (b), or (c).
        (h) Judicial Review.--If the Council makes a final determination
    under this section with respect to a nonbank financial company, such
    nonbank financial company may, not later than 30 days after the date of
    receipt of the notice of final determination under subsection (d)(2),
    (e)(3), or (f)(5), bring an action in the United States district court
    for the judicial district in which the home office of such nonbank
    financial company is located, or in the United States District Court
    for the District of Columbia, for an order requiring that the final
    determination be rescinded, and the court shall, upon review, dismiss
    such action or direct the final determination to be rescinded. Review
    of such an action shall be limited to whether the final determination
    made under this section was arbitrary and capricious.
        (i) International Coordination.--In exercising its duties under
    this title with respect to foreign nonbank financial companies,
    foreign-based bank holding companies, and cross-border activities and
    markets, the Council shall consult with appropriate foreign regulatory
    authorities, to the extent appropriate.
        SEC. 114. REGISTRATION OF NONBANK FINANCIAL COMPANIES SUPERVISED BY
          THE BOARD OF GOVERNORS.
        Not later than 180 days after the date of a final Council
    determination under section 113 that a nonbank financial company is to
    be supervised by the Board of Governors, such company shall register
    with the Board of Governors, on forms prescribed by the Board of
    Governors, which shall include such information as the Board of
    Governors, in consultation with the Council, may deem necessary or
    appropriate to carry out this title.
        SEC. 115. ENHANCED SUPERVISION AND PRUDENTIAL STANDARDS FOR NONBANK
          FINANCIAL COMPANIES SUPERVISED BY THE BOARD OF GOVERNORS AND
          CERTAIN BANK HOLDING COMPANIES.
        (a) In General.--
            (1) Purpose.--In order to prevent or mitigate risks to the
        financial stability of the United States that could arise from the
        material financial distress, failure, or ongoing activities of
        large, interconnected financial institutions, the Council may make
        recommendations to the Board of Governors concerning the
        establishment and refinement of prudential standards and reporting
        and disclosure requirements applicable to nonbank financial
        companies supervised by the Board of Governors and large,
        interconnected bank holding companies, that--
                (A) are more stringent than those applicable to other
            nonbank financial companies and bank holding companies that do
            not present similar risks to the financial stability of the
            United States; and
                (B) increase in stringency, based on the considerations
            identified in subsection (b)(3).
            (2) Recommended application of required standards.--In making
        recommendations under this section, the Council may--
                (A) differentiate among companies that are subject to
            heightened standards on an individual basis or by category,
            taking into consideration their capital structure, riskiness,
            complexity, financial activities (including the financial
            activities of their subsidiaries), size, and any other risk-
            related factors that the Council deems appropriate; or
                (B) recommend an asset threshold that is higher than
            $50,000,000,000 for the application of any standard described
            in subsections (c) through (g).
        (b) Development of Prudential Standards.--
            (1) In general.--The recommendations of the Council under
        subsection (a) may include--
                (A) risk-based capital requirements;
                (B) leverage limits;
                (C) liquidity requirements;
                (D) resolution plan and credit exposure report
            requirements;
                (E) concentration limits;
                (F) a contingent capital requirement;
                (G) enhanced public disclosures;
                (H) short-term debt limits; and
                (I) overall risk management requirements.
            (2) Prudential standards for foreign financial companies.--In
        making recommendations concerning the standards set forth in
        paragraph (1) that would apply to foreign nonbank financial
        companies supervised by the Board of Governors or foreign-based
        bank holding companies, the Council shall--
                (A) give due regard to the principle of national treatment
            and equality of competitive opportunity; and
                (B) take into account the extent to which the foreign
            nonbank financial company or foreign-based bank holding company
            is subject on a consolidated basis to home country standards
            that are comparable to those applied to financial companies in
            the United States.
            (3) Considerations.--In making recommendations concerning
        prudential standards under paragraph (1), the Council shall--
                (A) take into account differences among nonbank financial
            companies supervised by the Board of Governors and bank holding
            companies described in subsection (a), based on--
                    (i) the factors described in subsections (a) and (b) of
                section 113;
                    (ii) whether the company owns an insured depository
                institution;
                    (iii) nonfinancial activities and affiliations of the
                company; and
                    (iv) any other factors that the Council determines
                appropriate;
                (B) to the extent possible, ensure that small changes in
            the factors listed in subsections (a) and (b) of section 113
            would not result in sharp, discontinuous changes in the
            prudential standards established under section 165; and
                (C) adapt its recommendations as appropriate in light of
            any predominant line of business of such company, including
            assets under management or other activities for which
            particular standards may not be appropriate.
        (c) Contingent Capital.--
            (1) Study required.--The Council shall conduct a study of the
        feasibility, benefits, costs, and structure of a contingent capital
        requirement for nonbank financial companies supervised by the Board
        of Governors and bank holding companies described in subsection
        (a), which study shall include--
                (A) an evaluation of the degree to which such requirement
            would enhance the safety and soundness of companies subject to
            the requirement, promote the financial stability of the United
            States, and reduce risks to United States taxpayers;
                (B) an evaluation of the characteristics and amounts of
            contingent capital that should be required;
                (C) an analysis of potential prudential standards that
            should be used to determine whether the contingent capital of a
            company would be converted to equity in times of financial
            stress;
                (D) an evaluation of the costs to companies, the effects on
            the structure and operation of credit and other financial
            markets, and other economic effects of requiring contingent
            capital;
                (E) an evaluation of the effects of such requirement on the
            international competitiveness of companies subject to the
            requirement and the prospects for international coordination in
            establishing such requirement; and
                (F) recommendations for implementing regulations.
            (2) Report.--The Council shall submit a report to Congress
        regarding the study required by paragraph (1) not later than 2
        years after the date of enactment of this Act.
            (3) Recommendations.--
                (A) In general.--Subsequent to submitting a report to
            Congress under paragraph (2), the Council may make
            recommendations to the Board of Governors to require any
            nonbank financial company supervised by the Board of Governors
            and any bank holding company described in subsection (a) to
            maintain a minimum amount of contingent capital that is
            convertible to equity in times of financial stress.
                (B) Factors to consider.--In making recommendations under
            this subsection, the Council shall consider--
                    (i) an appropriate transition period for implementation
                of a conversion under this subsection;
                    (ii) the factors described in subsection (b)(3);
                    (iii) capital requirements applicable to a nonbank
                financial company supervised by the Board of Governors or a
                bank holding company described in subsection (a), and
                subsidiaries thereof;
                    (iv) results of the study required by paragraph (1);
                and
                    (v) any other factor that the Council deems
                appropriate.
        (d) Resolution Plan and Credit Exposure Reports.--
            (1) Resolution plan.--The Council may make recommendations to
        the Board of Governors concerning the requirement that each nonbank
        financial company supervised by the Board of Governors and each
        bank holding company described in subsection (a) report
        periodically to the Council, the Board of Governors, and the
        Corporation, the plan of such company for rapid and orderly
        resolution in the event of material financial distress or failure.
            (2) Credit exposure report.--The Council may make
        recommendations to the Board of Governors concerning the
        advisability of requiring each nonbank financial company supervised
        by the Board of Governors and bank holding company described in
        subsection (a) to report periodically to the Council, the Board of
        Governors, and the Corporation on--
                (A) the nature and extent to which the company has credit
            exposure to other significant nonbank financial companies and
            significant bank holding companies; and
                (B) the nature and extent to which other such significant
            nonbank financial companies and significant bank holding
            companies have credit exposure to that company.
        (e) Concentration Limits.--In order to limit the risks that the
    failure of any individual company could pose to nonbank financial
    companies supervised by the Board of Governors or bank holding
    companies described in subsection (a), the Council may make
    recommendations to the Board of Governors to prescribe standards to
    limit such risks, as set forth in section 165.
        (f) Enhanced Public Disclosures.--The Council may make
    recommendations to the Board of Governors to require periodic public
    disclosures by bank holding companies described in subsection (a) and
    by nonbank financial companies supervised by the Board of Governors, in
    order to support market evaluation of the risk profile, capital
    adequacy, and risk management capabilities thereof.
        (g) Short-term Debt Limits.--The Council may make recommendations
    to the Board of Governors to require short-term debt limits to mitigate
    the risks that an over-accumulation of such debt could pose to bank
    holding companies described in subsection (a), nonbank financial
    companies supervised by the Board of Governors, or the financial
    system.
        SEC. 116. REPORTS.
        (a) In General.--Subject to subsection (b), the Council, acting
    through the Office of Financial Research, may require a bank holding
    company with total consolidated assets of $50,000,000,000 or greater or
    a nonbank financial company supervised by the Board of Governors, and
    any subsidiary thereof, to submit certified reports to keep the Council
    informed as to--
            (1) the financial condition of the company;
            (2) systems for monitoring and controlling financial,
        operating, and other risks;
            (3) transactions with any subsidiary that is a depository
        institution; and
            (4) the extent to which the activities and operations of the
        company and any subsidiary thereof, could, under adverse
        circumstances, have the potential to disrupt financial markets or
        affect the overall financial stability of the United States.
        (b) Use of Existing Reports.--
            (1) In general.--For purposes of compliance with subsection
        (a), the Council, acting through the Office of Financial Research,
        shall, to the fullest extent possible, use--
                (A) reports that a bank holding company, nonbank financial
            company supervised by the Board of Governors, or any
            functionally regulated subsidiary of such company has been
            required to provide to other Federal or State regulatory
            agencies or to a relevant foreign supervisory authority;
                (B) information that is otherwise required to be reported
            publicly; and
                (C) externally audited financial statements.
            (2) Availability.--Each bank holding company described in
        subsection (a) and nonbank financial company supervised by the
        Board of Governors, and any subsidiary thereof, shall provide to
        the Council, at the request of the Council, copies of all reports
        referred to in paragraph (1).
            (3) Confidentiality.--The Council shall maintain the
        confidentiality of the reports obtained under subsection (a) and
        paragraph (1)(A) of this subsection.
        SEC. 117. TREATMENT OF CERTAIN COMPANIES THAT CEASE TO BE BANK
          HOLDING COMPANIES.
        (a) Applicability.--This section shall apply to--
            (1) any entity that--
                (A) was a bank holding company having total consolidated
            assets equal to or greater than $50,000,000,000 as of January
            1, 2010; and
                (B) received financial assistance under or participated in
            the Capital Purchase Program established under the Troubled
            Asset Relief Program authorized by the Emergency Economic
            Stabilization Act of 2008; and
            (2) any successor entity (as defined by the Board of Governors,
        in consultation with the Council) to an entity described in
        paragraph (1).
        (b) Treatment.--If an entity described in subsection (a) ceases to
    be a bank holding company at any time after January 1, 2010, then such
    entity shall be treated as a nonbank financial company supervised by
    the Board of Governors, as if the Council had made a determination
    under section 113 with respect to that entity.
        (c) Appeal.--
            (1) Request for hearing.--An entity may request, in writing, an
        opportunity for a written or oral hearing before the Council to
        appeal its treatment as a nonbank financial company supervised by
        the Board of Governors in accordance with this section. Upon
        receipt of the request, the Council shall fix a time (not later
        than 30 days after the date of receipt of the request) and place at
        which such entity may appear, personally or through counsel, to
        submit written materials (or, at the sole discretion of the
        Council, oral testimony and oral argument).
            (2) Decision.--
                (A) Proposed decision.--A Council decision to grant an
            appeal under this subsection shall be made by a vote of not
            fewer than \2/3\ of the voting members then serving, including
            an affirmative vote by the Chairperson. Not later than 60 days
            after the date of a hearing under paragraph (1), the Council
            shall submit a report to, and may testify before, the Committee
            on Banking, Housing, and Urban Affairs of the Senate and the
            Committee on Financial Services of the House of Representatives
            on the proposed decision of the Council regarding an appeal
            under paragraph (1), which report shall include a statement of
            the basis for the proposed decision of the Council.
                (B) Notice of final decision.--The Council shall notify the
            subject entity of the final decision of the Council regarding
            an appeal under paragraph (1), which notice shall contain a
            statement of the basis for the final decision of the Council,
            not later than 60 days after the later of--
                    (i) the date of the submission of the report under
                subparagraph (A); or
                    (ii) if, not later than 1 year after the date of
                submission of the report under subparagraph (A), the
                Committee on Banking, Housing, and Urban Affairs of the
                Senate or the Committee on Financial Services of the House
                of Representatives holds one or more hearings regarding
                such report, the date of the last such hearing.
                (C) Considerations.--In making a decision regarding an
            appeal under paragraph (1), the Council shall consider whether
            the company meets the standards under section 113(a) or 113(b),
            as applicable, and the definition of the term ``nonbank
            financial company'' under section 102. The decision of the
            Council shall be final, subject to the review under paragraph
            (3).
            (3) Review.--If the Council denies an appeal under this
        subsection, the Council shall, not less frequently than annually,
        review and reevaluate the decision.
        SEC. 118. COUNCIL FUNDING.
        Any expenses of the Council shall be treated as expenses of, and
    paid by, the Office of Financial Research.
        SEC. 119. RESOLUTION OF SUPERVISORY JURISDICTIONAL DISPUTES AMONG
          MEMBER AGENCIES.
        (a) Request for Council Recommendation.--The Council shall seek to
    resolve a dispute among 2 or more member agencies, if--
            (1) a member agency has a dispute with another member agency
        about the respective jurisdiction over a particular bank holding
        company, nonbank financial company, or financial activity or
        product (excluding matters for which another dispute mechanism
        specifically has been provided under title X);
            (2) the Council determines that the disputing agencies cannot,
        after a demonstrated good faith effort, resolve the dispute without
        the intervention of the Council; and
            (3) any of the member agencies involved in the dispute--
                (A) provides all other disputants prior notice of the
            intent to request dispute resolution by the Council; and
                (B) requests in writing, not earlier than 14 days after
            providing the notice described in subparagraph (A), that the
            Council seek to resolve the dispute.
        (b) Council Recommendation.--The Council shall seek to resolve each
    dispute described in subsection (a)--
            (1) within a reasonable time after receiving the dispute
        resolution request;
            (2) after consideration of relevant information provided by
        each agency party to the dispute; and
            (3) by agreeing with 1 of the disputants regarding the entirety
        of the matter, or by determining a compromise position.
        (c) Form of Recommendation.--Any Council recommendation under this
    section shall--
            (1) be in writing;
            (2) include an explanation of the reasons therefor; and
            (3) be approved by the affirmative vote of \2/3\ of the voting
        members of the Council then serving.
        (d) Nonbinding Effect.--Any recommendation made by the Council
    under subsection (c) shall not be binding on the Federal agencies that
    are parties to the dispute.
        SEC. 120. ADDITIONAL STANDARDS APPLICABLE TO ACTIVITIES OR
          PRACTICES FOR FINANCIAL STABILITY PURPOSES.
        (a) In General.--The Council may provide for more stringent
    regulation of a financial activity by issuing recommendations to the
    primary financial regulatory agencies to apply new or heightened
    standards and safeguards, including standards enumerated in section
    115, for a financial activity or practice conducted by bank holding
    companies or nonbank financial companies under their respective
    jurisdictions, 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 bank holding
    companies and nonbank financial companies, financial markets of the
    United States, or low-income, minority, or underserved communities.
        (b) Procedure for Recommendations to Regulators.--
            (1) Notice and opportunity for comment.--The Council shall
        consult with the primary financial regulatory agencies and provide
        notice to the public and opportunity for comment for any proposed
        recommendation that the primary financial regulatory agencies apply
        new or heightened standards and safeguards for a financial activity
        or practice.
            (2) Criteria.--The new or heightened standards and safeguards
        for a financial activity or practice recommended under paragraph
        (1)--
                (A) shall take costs to long-term economic growth into
            account; and
                (B) may include prescribing the conduct of the activity or
            practice in specific ways (such as by limiting its scope, or
            applying particular capital or risk management requirements to
            the conduct of the activity) or prohibiting the activity or
            practice.
        (c) Implementation of Recommended Standards.--
            (1) Role of primary financial regulatory agency.--
                (A) In general.--Each primary financial regulatory agency
            may impose, require reports regarding, examine for compliance
            with, and enforce standards in accordance with this section
            with respect to those entities for which it is the primary
            financial regulatory agency.
                (B) Rule of construction.--The authority under this
            paragraph is in addition to, and does not limit, any other
            authority of a primary financial regulatory agency. 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
            jurisdiction of the primary financial regulatory agency over
            the entity, as if the agency action were taken under those
            statutes.
            (2) Imposition of standards.--The primary financial regulatory
        agency shall impose the standards recommended by the Council in
        accordance with subsection (a), or similar standards that the
        Council deems acceptable, or shall explain in writing to the
        Council, not later than 90 days after the date on which the Council
        issues the recommendation, why the agency has determined not to
        follow the recommendation of the Council.
        (d) Report to Congress.--The Council shall report to Congress on--
            (1) any recommendations issued by the Council under this
        section;
            (2) the implementation of, or failure to implement, such
        recommendation on the part of a primary financial regulatory
        agency; and
            (3) in any case in which no primary financial regulatory agency
        exists for the nonbank financial company conducting financial
        activities or practices referred to in subsection (a),
        recommendations for legislation that would prevent such activities
        or practices from threatening the stability of the financial system
        of the United States.
        (e) Effect of Rescission of Identification.--
            (1) Notice.--The Council may recommend to the relevant primary
        financial regulatory agency that a financial activity or practice
        no longer requires any standards or safeguards implemented under
        this section.
            (2) Determination of primary financial regulatory agency to
        continue.--
                (A) In general.--Upon receipt of a recommendation under
            paragraph (1), a primary financial regulatory agency that has
            imposed standards under this section shall determine whether
            such standards should remain in effect.
                (B) Appeal process.--Each primary financial regulatory
            agency that has imposed standards under this section shall
            promulgate regulations to establish a procedure under which
            entities under its jurisdiction may appeal a determination by
            such agency under this paragraph that standards imposed under
            this section should remain in effect.
        SEC. 121. MITIGATION OF RISKS TO FINANCIAL STABILITY.
        (a) Mitigatory Actions.--If the Board of Governors determines that
    a bank holding company with total consolidated assets of
    $50,000,000,000 or more, or a nonbank financial company supervised by
    the Board of Governors, poses a grave threat to the financial stability
    of the United States, the Board of Governors, upon an affirmative vote
    of not fewer than \2/3\ of the voting members of the Council then
    serving, shall--
            (1) limit the ability of the company to merge with, acquire,
        consolidate with, or otherwise become affiliated with another
        company;
            (2) restrict the ability of the company to offer a financial
        product or products;
            (3) require the company to terminate one or more activities;
            (4) impose conditions on the manner in which the company
        conducts 1 or more activities; or
            (5) if the Board of Governors determines that the actions
        described in paragraphs (1) through (4) are inadequate to mitigate
        a threat to the financial stability of the United States in its
        recommendation, require the company to sell or otherwise transfer
        assets or off-balance-sheet items to unaffiliated entities.
        (b) Notice and Hearing.--
            (1) In general.--The Board of Governors, in consultation with
        the Council, shall provide to a company described in subsection (a)
        written notice that such company is being considered for mitigatory
        action pursuant to this section, including an explanation of the
        basis for, and description of, the proposed mitigatory action.
            (2) Hearing.--Not later than 30 days after the date of receipt
        of notice under paragraph (1), the company may request, in writing,
        an opportunity for a written or oral hearing before the Board of
        Governors to contest the proposed mitigatory action. Upon receipt
        of a timely request, the Board of Governors shall fix a time (not
        later than 30 days after the date of receipt of the request) and
        place at which such company may appear, personally or through
        counsel, to submit written materials (or, at the discretion of the
        Board of Governors, in consultation with the Council, oral
        testimony and oral argument).
            (3) Decision.--Not later than 60 days after the date of a
        hearing under paragraph (2), or not later than 60 days after the
        provision of a notice under paragraph (1) if no hearing was held,
        the Board of Governors shall notify the company of the final
        decision of the Board of Governors, including the results of the
        vote of the Council, as described in subsection (a).
        (c) Factors for Consideration.--The Board of Governors and the
    Council shall take into consideration the factors set forth in
    subsection (a) or (b) of section 113, as applicable, in making any
    determination under subsection (a).
        (d) Application to Foreign Financial Companies.--The Board of
    Governors may prescribe regulations regarding the application of this
    section to foreign nonbank financial companies supervised by the Board
    of Governors and foreign-based bank holding companies--
            (1) giving due regard to the principle of national treatment
        and equality of competitive opportunity; and
            (2) taking into account the extent to which the foreign nonbank
        financial company or foreign-based bank holding company is subject
        on a consolidated basis to home country standards that are
        comparable to those applied to financial companies in the United
        States.
        SEC. 122. GAO AUDIT OF COUNCIL.
        (a) Authority To Audit.--The Comptroller General of the United
    States may audit the activities of--
            (1) the Council; and
            (2) any person or entity acting on behalf of or under the
        authority of the Council, to the extent that such activities relate
        to work for the Council by such person or entity.
        (b) Access to Information.--
            (1) In general.--Notwithstanding any other provision of law,
        the Comptroller General shall, upon request and at such reasonable
        time and in such reasonable form as the Comptroller General may
        request, have access to--
                (A) any records or other information under the control of
            or used by the Council;
                (B) any records or other information under the control of a
            person or entity acting on behalf of or under the authority of
            the Council, to the extent that such records or other
            information is relevant to an audit under subsection (a); and
                (C) the officers, directors, employees, financial advisors,
            staff, working groups, and agents and representatives of the
            Council (as related to the activities on behalf of the Council
            of such agent or representative), at such reasonable times as
            the Comptroller General may request.
            (2) Copies.--The Comptroller General may make and retain copies
        of such books, accounts, and other records, access to which is
        granted under this section, as the Comptroller General considers
        appropriate.
        SEC. 123. STUDY OF THE EFFECTS OF SIZE AND COMPLEXITY OF FINANCIAL
          INSTITUTIONS ON CAPITAL MARKET EFFICIENCY AND ECONOMIC GROWTH.
        (a) Study Required.--
            (1) In general.--The Chairperson 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 benefits and costs on the efficiency of capital
        markets, on the financial sector, and on national economic growth,
        of--
                (A) explicit or implicit limits on the maximum size of
            banks, bank holding companies, and other large financial
            institutions;
                (B) limits on the organizational complexity and
            diversification of large financial institutions;
                (C) requirements for operational separation between
            business units of large financial institutions in order to
            expedite resolution in case of failure;
                (D) limits on risk transfer between business units of large
            financial institutions;
                (E) requirements to carry contingent capital or similar
            mechanisms;
                (F) limits on commingling of commercial and financial
            activities by large financial institutions;
                (G) segregation requirements between traditional financial
            activities and trading or other high-risk operations in large
            financial institutions; and
                (H) other limitations on the activities or structure of
            large financial institutions that may be useful to limit
            systemic risk.
            (2) Recommendations.--The study required by this section shall
        include recommendations for the optimal structure of any limits
        considered in subparagraphs (A) through (E), in order to maximize
        their effectiveness and minimize their economic impact.
        (b) Report.--Not later than the end of the 180-day period beginning
    on the date of enactment of this title, and not later than every 5
    years thereafter, the Chairperson shall issue a report to the Congress
    containing any findings and determinations made in carrying out the
    study required under subsection (a).

                    Subtitle B--Office of Financial Research

        SEC. 151. DEFINITIONS.
        For purposes of this subtitle--
            (1) the terms ``Office'' and ``Director'' mean the Office of
        Financial Research established under this subtitle and the Director
        thereof, respectively;
            (2) the term ``financial company'' has the same meaning as in
        title II, and includes an insured depository institution and an
        insurance company;
            (3) the term ``Data Center'' means the data center established
        under section 154;
            (4) the term ``Research and Analysis Center'' means the
        research and analysis center established under section 154;
            (5) the term ``financial transaction data'' means the structure
        and legal description of a financial contract, with sufficient
        detail to describe the rights and obligations between
        counterparties and make possible an independent valuation;
            (6) the term ``position data''--
                (A) means data on financial assets or liabilities held on
            the balance sheet of a financial company, where positions are
            created or changed by the execution of a financial transaction;
            and
                (B) includes information that identifies counterparties,
            the valuation by the financial company of the position, and
            information that makes possible an independent valuation of the
            position;
            (7) the term ``financial contract'' means a legally binding
        agreement between 2 or more counterparties, describing rights and
        obligations relating to the future delivery of items of intrinsic
        or extrinsic value among the counterparties; and
            (8) the term ``financial instrument'' means a financial
        contract in which the terms and conditions are publicly available,
        and the roles of one or more of the counterparties are assignable
        without the consent of any of the other counterparties (including
        common stock of a publicly traded company, government bonds, or
        exchange traded futures and options contracts).
        SEC. 152. OFFICE OF FINANCIAL RESEARCH ESTABLISHED.
        (a) Establishment.--There is established within the Department of
    the Treasury the Office of Financial Research.
        (b) Director.--
            (1) In general.--The Office shall be headed by a Director, who
        shall be appointed by the President, by and with the advice and
        consent of the Senate.
            (2) Term of service.--The Director shall serve for a term of 6
        years, except that, in the event that a successor is not nominated
        and confirmed by the end of the term of service of a Director, the
        Director may continue to serve until such time as the next Director
        is appointed and confirmed.
            (3) Executive level.--The Director shall be compensated at
        Level III of the Executive Schedule.
            (4) Prohibition on dual service.--The individual serving in the
        position of Director may not, during such service, also serve as
        the head of any financial regulatory agency.
            (5) Responsibilities, duties, and authority.--The Director
        shall have sole discretion in the manner in which the Director
        fulfills the responsibilities and duties and exercises the
        authorities described in this subtitle.
        (c) Budget.--The Director, in consultation with the Chairperson,
    shall establish the annual budget of the Office.
        (d) Office Personnel.--
            (1) In general.--The Director, in consultation with the
        Chairperson, may fix the number of, and appoint and direct, all
        employees of the Office.
            (2) Compensation.--The Director, in consultation with the
        Chairperson, shall fix, adjust, and administer the pay for all
        employees of the Office, without regard to chapter 51 or subchapter
        III of chapter 53 of title 5, United States Code, relating to
        classification of positions and General Schedule pay rates.
            (3) Comparability.--Section 1206(a) of the Financial
        Institutions Reform, Recovery, and Enforcement Act of 1989 (12
        U.S.C. 1833b(a)) is amended--
                (A) by striking ``Finance Board,'' and inserting ``Finance
            Board, the Office of Financial Research, and the Bureau of
            Consumer Financial Protection''; and
                (B) by striking ``and the Office of Thrift Supervision,''.
            (4) Senior executives.--Section 3132(a)(1)(D) of title 5,
        United States Code, is amended by striking ``and the National
        Credit Union Administration;'' and inserting ``the National Credit
        Union Administration, the Bureau of Consumer Financial Protection,
        and the Office of Financial Research;''.
        (e) Assistance From Federal Agencies.--Any department or agency of
    the United States may provide to the Office and any special advisory,
    technical, or professional committees appointed by the Office, such
    services, funds, facilities, staff, and other support services as the
    Office may determine advisable. Any Federal Government employee may be
    detailed to the Office without reimbursement, and such detail shall be
    without interruption or loss of civil service status or privilege.
        (f) Procurement of Temporary and Intermittent Services.--The
    Director may procure temporary and intermittent services under section
    3109(b) of title 5, United States Code, at rates for individuals which
    do not exceed the daily equivalent of the annual rate of basic pay
    prescribed for Level V of the Executive Schedule under section 5316 of
    such title.
        (g) Post-employment Prohibitions.--The Secretary, with the
    concurrence of the Director of the Office of Government Ethics, shall
    issue regulations prohibiting the Director and any employee of the
    Office who has had access to the transaction or position data
    maintained by the Data Center or other business confidential
    information about financial entities required to report to the Office
    from being employed by or providing advice or consulting services to a
    financial company, for a period of 1 year after last having had access
    in the course of official duties to such transaction or position data
    or business confidential information, regardless of whether that entity
    is required to report to the Office. For employees whose access to
    business confidential information was limited, the regulations may
    provide, on a case-by-case basis, for a shorter period of post-
    employment prohibition, provided that the shorter period does not
    compromise business confidential information.
        (h) Technical and Professional Advisory Committees.--The Office, in
    consultation with the Chairperson, may appoint such special advisory,
    technical, or professional committees as may be useful in carrying out
    the functions of the Office, and the members of such committees may be
    staff of the Office, or other persons, or both.
        (i) Fellowship Program.--The Office, in consultation with the
    Chairperson, may establish and maintain an academic and professional
    fellowship program, under which qualified academics and professionals
    shall be invited to spend not longer than 2 years at the Office, to
    perform research and to provide advanced training for Office personnel.
        (j) Executive Schedule Compensation.--Section 5314 of title 5,
    United States Code, is amended by adding at the end the following new
    item:
            ``Director of the Office of Financial Research.''.
        SEC. 153. PURPOSE AND DUTIES OF THE OFFICE.
        (a) Purpose and Duties.--The purpose of the Office is to support
    the Council in fulfilling the purposes and duties of the Council, as
    set forth in subtitle A, and to support member agencies, by--
            (1) collecting data on behalf of the Council, and providing
        such data to the Council and member agencies;
            (2) standardizing the types and formats of data reported and
        collected;
            (3) performing applied research and essential long-term
        research;
            (4) developing tools for risk measurement and monitoring;
            (5) performing other related services;
            (6) making the results of the activities of the Office
        available to financial regulatory agencies; and
            (7) assisting such member agencies in determining the types and
        formats of data authorized by this Act to be collected by such
        member agencies.
        (b) Administrative Authority.--The Office may--
            (1) share data and information, including software developed by
        the Office, with the Council, member agencies, and the Bureau of
        Economic Analysis, which shared data, information, and software--
                (A) shall be maintained with at least the same level of
            security as is used by the Office; and
                (B) may not be shared with any individual or entity without
            the permission of the Council;
            (2) sponsor and conduct research projects; and
            (3) assist, on a reimbursable basis, with financial analyses
        undertaken at the request of other Federal agencies that are not
        member agencies.
        (c) Rulemaking Authority.--
            (1) Scope.--The Office, in consultation with the Chairperson,
        shall issue rules, regulations, and orders only to the extent
        necessary to carry out the purposes and duties described in
        paragraphs (1), (2), and (7) of subsection (a).
            (2) Standardization.--Member agencies, in consultation with the
        Office, shall implement regulations promulgated by the Office under
        paragraph (1) to standardize the types and formats of data reported
        and collected on behalf of the Council, as described in subsection
        (a)(2). If a member agency fails to implement such regulations
        prior to the expiration of the 3-year period following the date of
        publication of final regulations, the Office, in consultation with
        the Chairperson, may implement such regulations with respect to the
        financial entities under the jurisdiction of the member agency.
        This paragraph shall not supersede or interfere with the
        independent authority of a member agency under other law to collect
        data, in such format and manner as the member agency requires.
        (d) Testimony.--
            (1) In general.--The Director of the Office shall report to and
        testify before the Committee on Banking, Housing, and Urban Affairs
        of the Senate and the Committee on Financial Services of the House
        of Representatives annually on the activities of the Office,
        including the work of the Data Center and the Research and Analysis
        Center, and the assessment of the Office of significant financial
        market developments and potential emerging threats to the financial
        stability of the United States.
            (2) No prior review.--No officer or agency of the United States
        shall have any authority to require the Director to submit the
        testimony required under paragraph (1) or other congressional
        testimony to any officer or agency of the United States for
        approval, comment, or review prior to the submission of such
        testimony. Any such testimony to Congress shall include a statement
        that the views expressed therein are those of the Director and do
        not necessarily represent the views of the President.
        (e) Additional Reports.--The Director may provide additional
    reports to Congress concerning the financial stability of the United
    States. The Director shall notify the Council of any such additional
    reports provided to Congress.
        (f) Subpoena.--
            (1) In general.--The Director may require from a financial
        company, by subpoena, the production of the data requested under
        subsection (a)(1) and section 154(b)(1), but only upon a written
        finding by the Director that--
                (A) such data is required to carry out the functions
            described under this subtitle; and
                (B) the Office has coordinated with the relevant primary
            financial regulatory agency, as required under section
            154(b)(1)(B)(ii).
            (2) Format.--Subpoenas under paragraph (1) shall bear the
        signature of the Director, and shall be served by any person or
        class of persons designated by the Director for that purpose.
            (3) Enforcement.--In the case of contumacy or failure to obey a
        subpoena, the subpoena shall be enforceable by order of any
        appropriate district court of the United States. Any failure to
        obey the order of the court may be punished by the court as a
        contempt of court.
        SEC. 154. ORGANIZATIONAL STRUCTURE; RESPONSIBILITIES OF PRIMARY
          PROGRAMMATIC UNITS.
        (a) In General.--There are established within the Office, to carry
    out the programmatic responsibilities of the Office--
            (1) the Data Center; and
            (2) the Research and Analysis Center.
        (b) Data Center.--
            (1) General duties.--
                (A) Data collection.--The Data Center, on behalf of the
            Council, shall collect, validate, and maintain all data
            necessary to carry out the duties of the Data Center, as
            described in this subtitle. The data assembled shall be
            obtained from member agencies, commercial data providers,
            publicly available data sources, and financial entities under
            subparagraph (B).
                (B) Authority.--
                    (i) In general.--The Office may, as determined by the
                Council or by the Director in consultation with the
                Council, require the submission of periodic and other
                reports from any financial company for the purpose of
                assessing the extent to which a financial activity or
                financial market in which the financial company
                participates, or the financial company itself, poses a
                threat to the financial stability of the United States.
                    (ii) Mitigation of report burden.--Before requiring the
                submission of a report from any financial company that is
                regulated by a member agency, any primary financial
                regulatory agency, a foreign supervisory authority, or the
                Office shall coordinate with such agencies or authority,
                and shall, whenever possible, rely on information available
                from such agencies or authority.
                    (iii) Collection of financial transaction and position
                data.--The Office shall collect, on a schedule determined
                by the Director, in consultation with the Council,
                financial transaction data and position data from financial
                companies.
                (C) Rulemaking.--The Office shall promulgate regulations
            pursuant to subsections (a)(1), (a)(2), (a)(7), and (c)(1) of
            section 153 regarding the type and scope of the data to be
            collected by the Data Center under this paragraph.
            (2) Responsibilities.--
                (A) Publication.--The Data Center shall prepare and
            publish, in a manner that is easily accessible to the public--
                    (i) a financial company reference database;
                    (ii) a financial instrument reference database; and
                    (iii) formats and standards for Office data, including
                standards for reporting financial transaction and position
                data to the Office.
                (B) Confidentiality.--The Data Center shall not publish any
            confidential data under subparagraph (A).
            (3) Information security.--The Director shall ensure that data
        collected and maintained by the Data Center are kept secure and
        protected against unauthorized disclosure.
            (4) Catalog of financial entities and instruments.--The Data
        Center shall maintain a catalog of the financial entities and
        instruments reported to the Office.
            (5) Availability to the council and member agencies.--The Data
        Center shall make data collected and maintained by the Data Center
        available to the Council and member agencies, as necessary to
        support their regulatory responsibilities.
            (6) Other authority.--The Office shall, after consultation with
        the member agencies, provide certain data to financial industry
        participants and to the general public to increase market
        transparency and facilitate research on the financial system, to
        the extent that intellectual property rights are not violated,
        business confidential information is properly protected, and the
        sharing of such information poses no significant threats to the
        financial system of the United States.
        (c) Research and Analysis Center.--
            (1) General duties.--The Research and Analysis Center, on
        behalf of the Council, shall develop and maintain independent
        analytical capabilities and computing resources--
                (A) to develop and maintain metrics and reporting systems
            for risks to the financial stability of the United States;
                (B) to monitor, investigate, and report on changes in
            systemwide risk levels and patterns to the Council and
            Congress;
                (C) to conduct, coordinate, and sponsor research to support
            and improve regulation of financial entities and markets;
                (D) to evaluate and report on stress tests or other
            stability-related evaluations of financial entities overseen by
            the member agencies;
                (E) to maintain expertise in such areas as may be necessary
            to support specific requests for advice and assistance from
            financial regulators;
                (F) to investigate disruptions and failures in the
            financial markets, report findings, and make recommendations to
            the Council based on those findings;
                (G) to conduct studies and provide advice on the impact of
            policies related to systemic risk; and
                (H) to promote best practices for financial risk
            management.
        (d) Reporting Responsibilities.--
            (1) Required reports.--Not later than 2 years after the date of
        enactment of this Act, and not later than 120 days after the end of
        each fiscal year thereafter, the Office shall prepare and submit a
        report to Congress.
            (2) Content.--Each report required by this subsection shall
        assess the state of the United States financial system, including--
                (A) an analysis of any threats to the financial stability
            of the United States;
                (B) the status of the efforts of the Office in meeting the
            mission of the Office; and
                (C) key findings from the research and analysis of the
            financial system by the Office.
        SEC. 155. FUNDING.
        (a) Financial Research Fund.--
            (1) Fund established.--There is established in the Treasury of
        the United States a separate fund to be known as the ``Financial
        Research Fund''.
            (2) Fund receipts.--All amounts provided to the Office under
        subsection (c), and all assessments that the Office receives under
        subsection (d) shall be deposited into the Financial Research Fund.
            (3) Investments authorized.--
                (A) Amounts in fund may be invested.--The Director may
            request the Secretary to invest the portion of the Financial
            Research Fund that is not, in the judgment of the Director,
            required to meet the needs of the Office.
                (B) Eligible investments.--Investments 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 Financial
            Research Fund, as determined by the Director.
            (4) Interest and proceeds credited.--The interest on, and the
        proceeds from the sale or redemption of, any obligations held in
        the Financial Research Fund shall be credited to and form a part of
        the Financial Research Fund.
        (b) Use of Funds.--
            (1) In general.--Funds obtained by, transferred to, or credited
        to the Financial Research Fund shall be immediately available to
        the Office, and shall remain available until expended, to pay the
        expenses of the Office in carrying out the duties and
        responsibilities of the Office.
            (2) Fees, assessments, and other funds not government funds.--
        Funds obtained by, transferred to, or credited to the Financial
        Research Fund shall not be construed to be Government funds or
        appropriated moneys.
            (3) Amounts not subject to apportionment.--Notwithstanding any
        other provision of law, amounts in the Financial Research Fund
        shall not be subject to apportionment for purposes of chapter 15 of
        title 31, United States Code, or under any other authority, or for
        any other purpose.
        (c) Interim Funding.--During the 2-year period following the date
    of enactment of this Act, the Board of Governors shall provide to the
    Office an amount sufficient to cover the expenses of the Office.
        (d) Permanent Self-funding.--Beginning 2 years after the date of
    enactment of this Act, the Secretary shall establish, by regulation,
    and with the approval of the Council, an assessment schedule, including
    the assessment base and rates, applicable to bank holding companies
    with total consolidated assets of $50,000,000,000 or greater and
    nonbank financial companies supervised by the Board of Governors, that
    takes into account differences among such companies, based on the
    considerations for establishing the prudential standards under section
    115, to collect assessments equal to the total expenses of the Office.
        SEC. 156. TRANSITION OVERSIGHT.
        (a) Purpose.--The purpose of this section is to ensure that the
    Office--
            (1) has an orderly and organized startup;
            (2) attracts and retains a qualified workforce; and
            (3) establishes comprehensive employee training and benefits
        programs.
        (b) Reporting Requirement.--
            (1) In general.--The Office shall submit an annual report to
        the Committee on Banking, Housing, and Urban Affairs of the Senate
        and the Committee on Financial Services of the House of
        Representatives that includes the plans described in paragraph (2).
            (2) Plans.--The plans described in this paragraph are as
        follows:
                (A) Training and workforce development plan.--The Office
            shall submit a training and workforce development plan that
            includes, to the extent practicable--
                    (i) identification of skill and technical expertise
                needs and actions taken to meet those requirements;
                    (ii) steps taken to foster innovation and creativity;
                    (iii) leadership development and succession planning;
                and
                    (iv) effective use of technology by employees.
                (B) Workplace flexibility plan.--The Office shall submit a
            workforce flexibility plan that includes, to the extent
            practicable--
                    (i) telework;
                    (ii) flexible work schedules;
                    (iii) phased retirement;
                    (iv) reemployed annuitants;
                    (v) part-time work;
                    (vi) job sharing;
                    (vii) parental leave benefits and childcare assistance;
                    (viii) domestic partner benefits;
                    (ix) other workplace flexibilities; or
                    (x) any combination of the items described in clauses
                (i) through (ix).
                (C) Recruitment and retention plan.--The Office shall
            submit a recruitment and retention plan that includes, to the
            extent practicable, provisions relating to--
                    (i) the steps necessary to target highly qualified
                applicant pools with diverse backgrounds;
                    (ii) streamlined employment application processes;
                    (iii) the provision of timely notification of the
                status of employment applications to applicants; and
                    (iv) the collection of information to measure
                indicators of hiring effectiveness.
        (c) Expiration.--The reporting requirement under subsection (b)
    shall terminate 5 years after the date of enactment of this Act.
        (d) Rule of Construction.--Nothing in this section may be construed
    to affect--
            (1) a collective bargaining agreement, as that term is defined
        in section 7103(a)(8) of title 5, United States Code, that is in
        effect on the date of enactment of this Act; or
            (2) the rights of employees under chapter 71 of title 5, United
        States Code.

    Subtitle C--Additional Board of Governors Authority for Certain Nonbank
                 Financial Companies and Bank Holding Companies

        SEC. 161. REPORTS BY AND EXAMINATIONS OF NONBANK FINANCIAL
          COMPANIES BY THE BOARD OF GOVERNORS.
        (a) Reports.--
            (1) In general.--The Board of Governors may require each
        nonbank financial company supervised by the Board of Governors, and
        any subsidiary thereof, to submit reports under oath, to keep the
        Board of Governors informed as to--
                (A) the financial condition of the company or subsidiary,
            systems of the company or subsidiary for monitoring and
            controlling financial, operating, and other risks, and the
            extent to which the activities and operations of the company or
            subsidiary pose a threat to the financial stability of the
            United States; and
                (B) compliance by the company or subsidiary with the
            requirements of this title.
            (2) Use of existing reports and information.--In carrying out
        subsection (a), the Board of Governors shall, to the fullest extent
        possible, use--
                (A) reports and supervisory information that a nonbank
            financial company or subsidiary thereof has been required to
            provide to other Federal or State regulatory agencies;
                (B) information otherwise obtainable from Federal or State
            regulatory agencies;
                (C) information that is otherwise required to be reported
            publicly; and
                (D) externally audited financial statements of such company
            or subsidiary.
            (3) Availability.--Upon the request of the Board of Governors,
        a nonbank financial company supervised by the Board of Governors,
        or a subsidiary thereof, shall promptly provide to the Board of
        Governors any information described in paragraph (2).
        (b) Examinations.--
            (1) In general.--Subject to paragraph (2), the Board of
        Governors may examine any nonbank financial company supervised by
        the Board of Governors and any subsidiary of such company, to
        inform the Board of Governors of--
                (A) the nature of the operations and financial condition of
            the company and such subsidiary;
                (B) the financial, operational, and other risks of the
            company or such subsidiary that may pose a threat to the safety
            and soundness of such company or subsidiary or to the financial
            stability of the United States;
                (C) the systems for monitoring and controlling such risks;
            and
                (D) compliance by the company or such subsidiary with the
            requirements of this title.
            (2) Use of examination reports and information.--For purposes
        of this subsection, the Board of Governors shall, to the fullest
        extent possible, rely on reports of examination of any subsidiary
        depository institution or functionally regulated subsidiary made by
        the primary financial regulatory agency for that subsidiary, and on
        information described in subsection (a)(2).
        (c) Coordination With Primary Financial Regulatory Agency.--The
    Board of Governors shall--
            (1) provide reasonable notice to, and consult with, the primary
        financial regulatory agency for any subsidiary before requiring a
        report or commencing an examination of such subsidiary under this
        section; and
            (2) avoid duplication of examination activities, reporting
        requirements, and requests for information, to the fullest extent
        possible.
        SEC. 162. ENFORCEMENT.
        (a) In General.--Except as provided in subsection (b), a nonbank
    financial company supervised by the Board of Governors and any
    subsidiaries of such company (other than any depository institution
    subsidiary) shall be subject to the provisions of subsections (b)
    through (n) of section 8 of the Federal Deposit Insurance Act (12
    U.S.C. 1818), in the same manner and to the same extent as if the
    company were a bank holding company, as provided in section 8(b)(3) of
    the Federal Deposit Insurance Act (12 U.S.C. 1818(b)(3)).
        (b) Enforcement Authority for Functionally Regulated
    Subsidiaries.--
            (1) Referral.--If the Board of Governors determines that a
        condition, practice, or activity of a depository institution
        subsidiary or functionally regulated subsidiary of a nonbank
        financial company supervised by the Board of Governors does not
        comply with the regulations or orders prescribed by the Board of
        Governors under this Act, or otherwise poses a threat to the
        financial stability of the United States, the Board of Governors
        may recommend, in writing, to the primary financial regulatory
        agency for the subsidiary that such agency initiate a supervisory
        action or enforcement proceeding. The recommendation shall be
        accompanied by a written explanation of the concerns giving rise to
        the recommendation.
            (2) Back-up authority of the board of governors.--If, during
        the 60-day period beginning on the date on which the primary
        financial regulatory agency receives a recommendation under
        paragraph (1), the primary financial regulatory agency does not
        take supervisory or enforcement action against a subsidiary that is
        acceptable to the Board of Governors, the Board of Governors (upon
        a vote of its members) may take the recommended supervisory or
        enforcement action, as if the subsidiary were a bank holding
        company subject to supervision by the Board of Governors.
        SEC. 163. ACQUISITIONS.
        (a) Acquisitions of Banks; Treatment as a Bank Holding Company.--
    For purposes of section 3 of the Bank Holding Company Act of 1956 (12
    U.S.C. 1842), a nonbank financial company supervised by the Board of
    Governors shall be deemed to be, and shall be treated as, a bank
    holding company.
        (b) Acquisition of Nonbank Companies.--
            (1) Prior notice for large acquisitions.--Notwithstanding
        section 4(k)(6)(B) of the Bank Holding Company Act of 1956 (12
        U.S.C. 1843(k)(6)(B)), a bank holding company with total
        consolidated assets equal to or greater than $50,000,000,000 or a
        nonbank financial company supervised by the Board of Governors
        shall not acquire direct or indirect ownership or control of any
        voting shares of any company (other than an insured depository
        institution) that is engaged in activities described in section
        4(k) of the Bank Holding Company Act of 1956 having total
        consolidated assets of $10,000,000,000 or more, without providing
        written notice to the Board of Governors in advance of the
        transaction.
            (2) Exemptions.--The prior notice requirement in paragraph (1)
        shall not apply with regard to the acquisition of shares that would
        qualify for the exemptions in section 4(c) or section 4(k)(4)(E) of
        the Bank Holding Company Act of 1956 (12 U.S.C. 1843(c) and
        (k)(4)(E)).
            (3) Notice procedures.--The notice procedures set forth in
        section 4(j)(1) of the Bank Holding Company Act of 1956 (12 U.S.C.
        1843(j)(1)), without regard to section 4(j)(3) of that Act, shall
        apply to an acquisition of any company (other than an insured
        depository institution) by a bank holding company with total
        consolidated assets equal to or greater than $50,000,000,000 or a
        nonbank financial company supervised by the Board of Governors, as
        described in paragraph (1), including any such company engaged in
        activities described in section 4(k) of that Act.
            (4) Standards for review.--In addition to the standards
        provided in section 4(j)(2) of the Bank Holding Company Act of 1956
        (12 U.S.C. 1843(j)(2)), the Board of Governors shall consider the
        extent to which the proposed acquisition would result in greater or
        more concentrated risks to global or United States financial
        stability or the United States economy.
            (5) Hart-Scott-Rodino filing requirement.--Solely for purposes
        of section 7A(c)(8) of the Clayton Act (15 U.S.C. 18a(c)(8)), the
        transactions subject to the requirements of paragraph (1) shall be
        treated as if Board of Governors approval is not required.
        SEC. 164. PROHIBITION AGAINST MANAGEMENT INTERLOCKS BETWEEN CERTAIN
          FINANCIAL COMPANIES.
        A nonbank financial company supervised by the Board of Governors
    shall be treated as a bank holding company for purposes of the
    Depository Institutions Management Interlocks Act (12 U.S.C. 3201 et
    seq.), except that the Board of Governors shall not exercise the
    authority provided in section 7 of that Act (12 U.S.C. 3207) to permit
    service by a management official of a nonbank financial company
    supervised by the Board of Governors as a management official of any
    bank holding company with total consolidated assets equal to or greater
    than $50,000,000,000, or other nonaffiliated nonbank financial company
    supervised by the Board of Governors (other than to provide a temporary
    exemption for interlocks resulting from a merger, acquisition, or
    consolidation).
        SEC. 165. ENHANCED SUPERVISION AND PRUDENTIAL STANDARDS FOR NONBANK
          FINANCIAL COMPANIES SUPERVISED BY THE BOARD OF GOVERNORS AND
          CERTAIN BANK HOLDING COMPANIES.
        (a) In General.--
            (1) Purpose.--In order to prevent or mitigate risks to the
        financial stability of the United States that could arise from the
        material financial distress or failure, or ongoing activities, of
        large, interconnected financial institutions, the Board of
        Governors shall, on its own or pursuant to recommendations by the
        Council under section 115, establish prudential standards for
        nonbank financial companies supervised by the Board of Governors
        and bank holding companies with total consolidated assets equal to
        or greater than $50,000,000,000 that--
                (A) are more stringent than the standards and requirements
            applicable to nonbank financial companies and bank holding
            companies that do not present similar risks to the financial
            stability of the United States; and
                (B) increase in stringency, based on the considerations
            identified in subsection (b)(3).
            (2) Tailored application.--
                (A) In general.--In prescribing more stringent prudential
            standards under this section, the Board of Governors may, on
            its own or pursuant to a recommendation by the Council in
            accordance with section 115, differentiate among companies on
            an individual basis or by category, taking into consideration
            their capital structure, riskiness, complexity, financial
            activities (including the financial activities of their
            subsidiaries), size, and any other risk-related factors that
            the Board of Governors deems appropriate.
                (B) Adjustment of threshold for application of certain
            standards.--The Board of Governors may, pursuant to a
            recommendation by the Council in accordance with section 115,
            establish an asset threshold above $50,000,000,000 for the
            application of any standard established under subsections (c)
            through (g).
        (b) Development of Prudential Standards.--
            (1) In general.--
                (A) Required standards.--The Board of Governors shall
            establish prudential standards for nonbank financial companies
            supervised by the Board of Governors and bank holding companies
            described in subsection (a), that shall include--
                    (i) risk-based capital requirements and leverage
                limits, unless the Board of Governors, in consultation with
                the Council, determines that such requirements are not
                appropriate for a company subject to more stringent
                prudential standards because of the activities of such
                company (such as investment company activities or assets
                under management) or structure, in which case, the Board of
                Governors shall apply other standards that result in
                similarly stringent risk controls;
                    (ii) liquidity requirements;
                    (iii) overall risk management requirements;
                    (iv) resolution plan and credit exposure report
                requirements; and
                    (v) concentration limits.
                (B) Additional standards authorized.--The Board of
            Governors may establish additional prudential standards for
            nonbank financial companies supervised by the Board of
            Governors and bank holding companies described in subsection
            (a), that include--
                    (i) a contingent capital requirement;
                    (ii) enhanced public disclosures;
                    (iii) short-term debt limits; and
                    (iv) such other prudential standards as the Board or
                Governors, on its own or pursuant to a recommendation made
                by the Council in accordance with section 115, determines
                are appropriate.
            (2) Standards for foreign financial companies.--In applying the
        standards set forth in paragraph (1) to any foreign nonbank
        financial company supervised by the Board of Governors or foreign-
        based bank holding company, the Board of Governors shall--
                (A) give due regard to the principle of national treatment
            and equality of competitive opportunity; and
                (B) take into account the extent to which the foreign
            financial company is subject on a consolidated basis to home
            country standards that are comparable to those applied to
            financial companies in the United States.
            (3) Considerations.--In prescribing prudential standards under
        paragraph (1), the Board of Governors shall--
                (A) take into account differences among nonbank financial
            companies supervised by the Board of Governors and bank holding
            companies described in subsection (a), based on--
                    (i) the factors described in subsections (a) and (b) of
                section 113;
                    (ii) whether the company owns an insured depository
                institution;
                    (iii) nonfinancial activities and affiliations of the
                company; and
                    (iv) any other risk-related factors that the Board of
                Governors determines appropriate;
                (B) to the extent possible, ensure that small changes in
            the factors listed in subsections (a) and (b) of section 113
            would not result in sharp, discontinuous changes in the
            prudential standards established under paragraph (1) of this
            subsection;
                (C) take into account any recommendations of the Council
            under section 115; and
                (D) adapt the required standards as appropriate in light of
            any predominant line of business of such company, including
            assets under management or other activities for which
            particular standards may not be appropriate.
            (4) Consultation.--Before imposing prudential standards or any
        other requirements pursuant to this section, including notices of
        deficiencies in resolution plans and more stringent requirements or
        divestiture orders resulting from such notices, that are likely to
        have a significant impact on a functionally regulated subsidiary or
        depository institution subsidiary of a nonbank financial company
        supervised by the Board of Governors or a bank holding company
        described in subsection (a), the Board of Governors shall consult
        with each Council member that primarily supervises any such
        subsidiary with respect to any such standard or requirement.
            (5) Report.--The Board of Governors shall submit an annual
        report to Congress regarding the implementation of the prudential
        standards required pursuant to paragraph (1), including the use of
        such standards to mitigate risks to the financial stability of the
        United States.
        (c) Contingent Capital.--
            (1) In general.--Subsequent to submission by the Council of a
        report to Congress under section 115(c), the Board of Governors may
        issue regulations that require each nonbank financial company
        supervised by the Board of Governors and bank holding companies
        described in subsection (a) to maintain a minimum amount of
        contingent capital that is convertible to equity in times of
        financial stress.
            (2) Factors to consider.--In issuing regulations under this
        subsection, the Board of Governors shall consider--
                (A) the results of the study undertaken by the Council, and
            any recommendations of the Council, under section 115(c);
                (B) an appropriate transition period for implementation of
            contingent capital under this subsection;
                (C) the factors described in subsection (b)(3)(A);
                (D) capital requirements applicable to the nonbank
            financial company supervised by the Board of Governors or a
            bank holding company described in subsection (a), and
            subsidiaries thereof; and
                (E) any other factor that the Board of Governors deems
            appropriate.
        (d) Resolution Plan and Credit Exposure Reports.--
            (1) Resolution plan.--The Board of Governors shall require each
        nonbank financial company supervised by the Board of Governors and
        bank holding companies described in subsection (a) to report
        periodically to the Board of Governors, the Council, and the
        Corporation the plan of such company for rapid and orderly
        resolution in the event of material financial distress or failure,
        which shall include--
                (A) information regarding the manner and extent to which
            any insured depository institution affiliated with the company
            is adequately protected from risks arising from the activities
            of any nonbank subsidiaries of the company;
                (B) full descriptions of the ownership structure, assets,
            liabilities, and contractual obligations of the company;
                (C) identification of the cross-guarantees tied to
            different securities, identification of major counterparties,
            and a process for determining to whom the collateral of the
            company is pledged; and
                (D) any other information that the Board of Governors and
            the Corporation jointly require by rule or order.
            (2) Credit exposure report.--The Board of Governors shall
        require each nonbank financial company supervised by the Board of
        Governors and bank holding companies described in subsection (a) to
        report periodically to the Board of Governors, the Council, and the
        Corporation on--
                (A) the nature and extent to which the company has credit
            exposure to other significant nonbank financial companies and
            significant bank holding companies; and
                (B) the nature and extent to which other significant
            nonbank financial companies and significant bank holding
            companies have credit exposure to that company.
            (3) Review.--The Board of Governors and the Corporation shall
        review the information provided in accordance with this subsection
        by each nonbank financial company supervised by the Board of
        Governors and bank holding company described in subsection (a).
            (4) Notice of deficiencies.--If the Board of Governors and the
        Corporation jointly determine, based on their review under
        paragraph (3), that the resolution plan of a nonbank financial
        company supervised by the Board of Governors or a bank holding
        company described in subsection (a) is not credible or would not
        facilitate an orderly resolution of the company under title 11,
        United States Code--
                (A) the Board of Governors and the Corporation shall notify
            the company of the deficiencies in the resolution plan; and
                (B) the company shall resubmit the resolution plan within a
            timeframe determined by the Board of Governors and the
            Corporation, with revisions demonstrating that the plan is
            credible and would result in an orderly resolution under title
            11, United States Code, including any proposed changes in
            business operations and corporate structure to facilitate
            implementation of the plan.
            (5) Failure to resubmit credible plan.--
                (A) In general.--If a nonbank financial company supervised
            by the Board of Governors or a bank holding company described
            in subsection (a) fails to timely resubmit the resolution plan
            as required under paragraph (4), with such revisions as are
            required under subparagraph (B), the Board of Governors and the
            Corporation may jointly impose more stringent capital,
            leverage, or liquidity requirements, or restrictions on the
            growth, activities, or operations of the company, or any
            subsidiary thereof, until such time as the company resubmits a
            plan that remedies the deficiencies.
                (B) Divestiture.--The Board of Governors and the
            Corporation, in consultation with the Council, may jointly
            direct a nonbank financial company supervised by the Board of
            Governors or a bank holding company described in subsection
            (a), by order, to divest certain assets or operations
            identified by the Board of Governors and the Corporation, to
            facilitate an orderly resolution of such company under title
            11, United States Code, in the event of the failure of such
            company, in any case in which--
                    (i) the Board of Governors and the Corporation have
                jointly imposed more stringent requirements on the company
                pursuant to subparagraph (A); and
                    (ii) the company has failed, within the 2-year period
                beginning on the date of the imposition of such
                requirements under subparagraph (A), to resubmit the
                resolution plan with such revisions as were required under
                paragraph (4)(B).
            (6) No limiting effect.--A resolution plan submitted in
        accordance with this subsection shall not be binding on a
        bankruptcy court, a receiver appointed under title II, or any other
        authority that is authorized or required to resolve the nonbank
        financial company supervised by the Board, any bank holding
        company, or any subsidiary or affiliate of the foregoing.
            (7) No private right of action.--No private right of action may
        be based on any resolution plan submitted in accordance with this
        subsection.
            (8) Rules.--Not later than 18 months after the date of
        enactment of this Act, the Board of Governors and the Corporation
        shall jointly issue final rules implementing this subsection.
        (e) Concentration Limits.--
            (1) Standards.--In order to limit the risks that the failure of
        any individual company could pose to a nonbank financial company
        supervised by the Board of Governors or a bank holding company
        described in subsection (a), the Board of Governors, by regulation,
        shall prescribe standards that limit such risks.
            (2) Limitation on credit exposure.--The regulations prescribed
        by the Board of Governors under paragraph (1) shall prohibit each
        nonbank financial company supervised by the Board of Governors and
        bank holding company described in subsection (a) from having credit
        exposure to any unaffiliated company that exceeds 25 percent of the
        capital stock and surplus (or such lower amount as the Board of
        Governors may determine by regulation to be necessary to mitigate
        risks to the financial stability of the United States) of the
        company.
            (3) Credit exposure.--For purposes of paragraph (2), ``credit
        exposure'' to a company means--
                (A) all extensions of credit to the company, including
            loans, deposits, and lines of credit;
                (B) all repurchase agreements and reverse repurchase
            agreements with the company, and all securities borrowing and
            lending transactions with the company, to the extent that such
            transactions create credit exposure for the nonbank financial
            company supervised by the Board of Governors or a bank holding
            company described in subsection (a);
                (C) all guarantees, acceptances, or letters of credit
            (including endorsement or standby letters of credit) issued on
            behalf of the company;
                (D) all purchases of or investment in securities issued by
            the company;
                (E) counterparty credit exposure to the company in
            connection with a derivative transaction between the nonbank
            financial company supervised by the Board of Governors or a
            bank holding company described in subsection (a) and the
            company; and
                (F) any other similar transactions that the Board of
            Governors, by regulation, determines to be a credit exposure
            for purposes of this section.
            (4) Attribution rule.--For purposes of this subsection, any
        transaction by a nonbank financial company supervised by the Board
        of Governors or a bank holding company described in subsection (a)
        with any person is a transaction with a company, to the extent that
        the proceeds of the transaction are used for the benefit of, or
        transferred to, that company.
            (5) Rulemaking.--The Board of Governors may issue such
        regulations and orders, including definitions consistent with this
        section, as may be necessary to administer and carry out this
        subsection.
            (6) Exemptions.--This subsection shall not apply to any Federal
        home loan bank. The Board of Governors may, by regulation or order,
        exempt transactions, in whole or in part, from the definition of
        the term ``credit exposure'' for purposes of this subsection, if
        the Board of Governors finds that the exemption is in the public
        interest and is consistent with the purpose of this subsection.
            (7) Transition period.--
                (A) In general.--This subsection and any regulations and
            orders of the Board of Governors under this subsection shall
            not be effective until 3 years after the date of enactment of
            this Act.
                (B) Extension authorized.--The Board of Governors may
            extend the period specified in subparagraph (A) for not longer
            than an additional 2 years.
        (f) Enhanced Public Disclosures.--The Board of Governors may
    prescribe, by regulation, periodic public disclosures by nonbank
    financial companies supervised by the Board of Governors and bank
    holding companies described in subsection (a) in order to support
    market evaluation of the risk profile, capital adequacy, and risk
    management capabilities thereof.
        (g) Short-term Debt Limits.--
            (1) In general.--In order to mitigate the risks that an over-
        accumulation of short-term debt could pose to financial companies
        and to the stability of the United States financial system, the
        Board of Governors may, by regulation, prescribe a limit on the
        amount of short-term debt, including off-balance sheet exposures,
        that may be accumulated by any bank holding company described in
        subsection (a) and any nonbank financial company supervised by the
        Board of Governors.
            (2) Basis of limit.--Any limit prescribed under paragraph (1)
        shall be based on the short-term debt of the company described in
        paragraph (1) as a percentage of capital stock and surplus of the
        company or on such other measure as the Board of Governors
        considers appropriate.
            (3) Short-term debt defined.--For purposes of this subsection,
        the term ``short-term debt'' means such liabilities with short-
        dated maturity that the Board of Governors identifies, by
        regulation, except that such term does not include insured
        deposits.
            (4) Rulemaking authority.--In addition to prescribing
        regulations under paragraphs (1) and (3), the Board of Governors
        may prescribe such regulations, including definitions consistent
        with this subsection, and issue such orders, as may be necessary to
        carry out this subsection.
            (5) Authority to issue exemptions and adjustments.--
        Notwithstanding the Bank Holding Company Act of 1956 (12 U.S.C.
        1841 et seq.), the Board of Governors may, if it determines such
        action is necessary to ensure appropriate heightened prudential
        supervision, with respect to a company described in paragraph (1)
        that does not control an insured depository institution, issue to
        such company an exemption from or adjustment to the limit
        prescribed under paragraph (1).
        (h) Risk Committee.--
            (1) Nonbank financial companies supervised by the board of
        governors.--The Board of Governors shall require each nonbank
        financial company supervised by the Board of Governors that is a
        publicly traded company to establish a risk committee, as set forth
        in paragraph (3), not later than 1 year after the date of receipt
        of a notice of final determination under section 113(e)(3) with
        respect to such nonbank financial company supervised by the Board
        of Governors.
            (2) Certain bank holding companies.--
                (A) Mandatory regulations.--The Board of Governors shall
            issue regulations requiring each bank holding company that is a
            publicly traded company and that has total consolidated assets
            of not less than $10,000,000,000 to establish a risk committee,
            as set forth in paragraph (3).
                (B) Permissive regulations.--The Board of Governors may
            require each bank holding company that is a publicly traded
            company and that has total consolidated assets of less than
            $10,000,000,000 to establish a risk committee, as set forth in
            paragraph (3), as determined necessary or appropriate by the
            Board of Governors to promote sound risk management practices.
            (3) Risk committee.--A risk committee required by this
        subsection shall--
                (A) be responsible for the oversight of the enterprise-wide
            risk management practices of the nonbank financial company
            supervised by the Board of Governors or bank holding company
            described in subsection (a), as applicable;
                (B) include such number of independent directors as the
            Board of Governors may determine appropriate, based on the
            nature of operations, size of assets, and other appropriate
            criteria related to the nonbank financial company supervised by
            the Board of Governors or a bank holding company described in
            subsection (a), as applicable; and
                (C) include at least 1 risk management expert having
            experience in identifying, assessing, and managing risk
            exposures of large, complex firms.
            (4) Rulemaking.--The Board of Governors shall issue final rules
        to carry out this subsection, not later than 1 year after the
        transfer date, to take effect not later than 15 months after the
        transfer date.
        (i) Stress Tests.--
            (1) By the board of governors.--
                (A) Annual tests required.--The Board of Governors, in
            coordination with the appropriate primary financial regulatory
            agencies and the Federal Insurance Office, shall conduct annual
            analyses in which nonbank financial companies supervised by the
            Board of Governors and bank holding companies described in
            subsection (a) are subject to evaluation of whether such
            companies have the capital, on a total consolidated basis,
            necessary to absorb losses as a result of adverse economic
            conditions.
                (B) Test parameters and consequences.--The Board of
            Governors--
                    (i) shall provide for at least 3 different sets of
                conditions under which the evaluation required by this
                subsection shall be conducted, including baseline, adverse,
                and severely adverse;
                    (ii) may require the tests described in subparagraph
                (A) at bank holding companies and nonbank financial
                companies, in addition to those for which annual tests are
                required under subparagraph (A);
                    (iii) may develop and apply such other analytic
                techniques as are necessary to identify, measure, and
                monitor risks to the financial stability of the United
                States;
                    (iv) shall require the companies described in
                subparagraph (A) to update their resolution plans required
                under subsection (d)(1), as the Board of Governors
                determines appropriate, based on the results of the
                analyses; and
                    (v) shall publish a summary of the results of the tests
                required under subparagraph (A) or clause (ii) of this
                subparagraph.
            (2) By the company.--
                (A) Requirement.--A nonbank financial company supervised by
            the Board of Governors and a bank holding company described in
            subsection (a) shall conduct semiannual stress tests. All other
            financial companies that have total consolidated assets of more
            than $10,000,000,000 and are regulated by a primary Federal
            financial regulatory agency shall conduct annual stress tests.
            The tests required under this subparagraph shall be conducted
            in accordance with the regulations prescribed under
            subparagraph (C).
                (B) Report.--A company required to conduct stress tests
            under subparagraph (A) shall submit a report to the Board of
            Governors and to its primary financial regulatory agency at
            such time, in such form, and containing such information as the
            primary financial regulatory agency shall require.
                (C) Regulations.--Each Federal primary financial regulatory
            agency, in coordination with the Board of Governors and the
            Federal Insurance Office, shall issue consistent and comparable
            regulations to implement this paragraph that shall--
                    (i) define the term ``stress test'' for purposes of
                this paragraph;
                    (ii) establish methodologies for the conduct of stress
                tests required by this paragraph that shall provide for at
                least 3 different sets of conditions, including baseline,
                adverse, and severely adverse;
                    (iii) establish the form and content of the report
                required by subparagraph (B); and
                    (iv) require companies subject to this paragraph to
                publish a summary of the results of the required stress
                tests.
        (j) Leverage Limitation.--
            (1) Requirement.--The Board of Governors shall require a bank
        holding company with total consolidated assets equal to or greater
        than $50,000,000,000 or a nonbank financial company supervised by
        the Board of Governors to maintain a debt to equity ratio of no
        more than 15 to 1, upon a determination by the Council that such
        company poses a grave threat to the financial stability of the
        United States and that the imposition of such requirement is
        necessary to mitigate the risk that such company poses to the
        financial stability of the United States. Nothing in this paragraph
        shall apply to a Federal home loan bank.
            (2) Considerations.--In making a determination under this
        subsection, the Council shall consider the factors described in
        subsections (a) and (b) of section 113 and any other risk-related
        factors that the Council deems appropriate.
            (3) Regulations.--The Board of Governors shall promulgate
        regulations to establish procedures and timelines for complying
        with the requirements of this subsection.
        (k) Inclusion of Off-balance-sheet Activities in Computing Capital
    Requirements.--
            (1) In general.--In the case of any bank holding company
        described in subsection (a) or nonbank financial company supervised
        by the Board of Governors, the computation of capital for purposes
        of meeting capital requirements shall take into account any off-
        balance-sheet activities of the company.
            (2) Exemptions.--If the Board of Governors determines that an
        exemption from the requirement under paragraph (1) is appropriate,
        the Board of Governors may exempt a company, or any transaction or
        transactions engaged in by such company, from the requirements of
        paragraph (1).
            (3) Off-balance-sheet activities defined.--For purposes of this
        subsection, the term ``off-balance-sheet activities'' means an
        existing liability of a company 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
        that they may create a liability:
                (A) Direct credit substitutes in which a bank substitutes
            its own credit for a third party, including standby letters of
            credit.
                (B) Irrevocable letters of credit that guarantee repayment
            of commercial paper or tax-exempt securities.
                (C) Risk participations in bankers' acceptances.
                (D) Sale and repurchase agreements.
                (E) Asset sales with recourse against the seller.
                (F) Interest rate swaps.
                (G) Credit swaps.
                (H) Commodities contracts.
                (I) Forward contracts.
                (J) Securities contracts.
                (K) Such other activities or transactions as the Board of
            Governors may, by rule, define.
        SEC. 166. EARLY REMEDIATION REQUIREMENTS.
        (a) In General.--The Board of Governors, in consultation with the
    Council and the Corporation, shall prescribe regulations establishing
    requirements to provide for the early remediation of financial distress
    of a nonbank financial company supervised by the Board of Governors or
    a bank holding company described in section 165(a), except that nothing
    in this subsection authorizes the provision of financial assistance
    from the Federal Government.
        (b) Purpose of the Early Remediation Requirements.--The purpose of
    the early remediation requirements under subsection (a) shall be to
    establish a series of specific remedial actions to be taken by a
    nonbank financial company supervised by the Board of Governors or a
    bank holding company described in section 165(a) that is experiencing
    increasing financial distress, in order to minimize the probability
    that the company will become insolvent and the potential harm of such
    insolvency to the financial stability of the United States.
        (c) Remediation Requirements.--The regulations prescribed by the
    Board of Governors under subsection (a) shall--
            (1) define measures of the financial condition of the company,
        including regulatory capital, liquidity measures, and other
        forward-looking indicators; and
            (2) establish requirements that increase in stringency as the
        financial condition of the company declines, including--
                (A) requirements in the initial stages of financial
            decline, including limits on capital distributions,
            acquisitions, and asset growth; and
                (B) requirements at later stages of financial decline,
            including a capital restoration plan and capital-raising
            requirements, limits on transactions with affiliates,
            management changes, and asset sales.
        SEC. 167. AFFILIATIONS.
        (a) Affiliations.--Nothing in this subtitle shall be construed to
    require a nonbank financial company supervised by the Board of
    Governors, or a company that controls a nonbank financial company
    supervised by the Board of Governors, to conform the activities thereof
    to the requirements of section 4 of the Bank Holding Company Act of
    1956 (12 U.S.C. 1843).
        (b) Requirement.--
            (1) In general.--
                (A) Board authority.--If a nonbank financial company
            supervised by the Board of Governors conducts activities other
            than those that are determined to be financial in nature or
            incidental thereto under section 4(k) of the Bank Holding
            Company Act of 1956, the Board of Governors may require such
            company to establish and conduct all or a portion of such
            activities that are determined to be financial in nature or
            incidental thereto in or through an intermediate holding
            company established pursuant to regulation of the Board of
            Governors, not later than 90 days (or such longer period as the
            Board of Governors may deem appropriate) after the date on
            which the nonbank financial company supervised by the Board of
            Governors is notified of the determination of the Board of
            Governors under this section.
                (B) Necessary actions.--Notwithstanding subparagraph (A),
            the Board of Governors shall require a nonbank financial
            company supervised by the Board of Governors to establish an
            intermediate holding company if the Board of Governors makes a
            determination that the establishment of such intermediate
            holding company is necessary to--
                    (i) appropriately supervise activities that are
                determined to be financial in nature or incidental thereto;
                or
                    (ii) to ensure that supervision by the Board of
                Governors does not extend to the commercial activities of
                such nonbank financial company.
            (2) Internal financial activities.--For purposes of this
        subsection, activities that are determined to be financial in
        nature or incidental thereto under section 4(k) of the Bank Holding
        Company Act of 1956, as described in paragraph (1), shall not
        include internal financial activities, including internal treasury,
        investment, and employee benefit functions. With respect to any
        internal financial activity engaged in for the company or an
        affiliate and a non-affiliate of such company during the year prior
        to the date of enactment of this Act, such company (or an affiliate
        that is not an intermediate holding company or subsidiary of an
        intermediate holding company) may continue to engage in such
        activity, as long as not less than 2/3 of the assets or 2/3 of the
        revenues generated from the activity are from or attributable to
        such company or an affiliate, subject to review by the Board of
        Governors, to determine whether engaging in such activity presents
        undue risk to such company or to the financial stability of the
        United States.
            (3) Source of strength.--A company that directly or indirectly
        controls an intermediate holding company established under this
        section shall serve as a source of strength to its subsidiary
        intermediate holding company.
            (4) Parent company reports.--The Board of Governors may, from
        time to time, require reports under oath from a company that
        controls an intermediate holding company, and from the appropriate
        officers or directors of such company, solely for purposes of
        ensuring compliance with the provisions of this section, including
        assessing the ability of the company to serve as a source of
        strength to its subsidiary intermediate holding company pursuant to
        paragraph (3) and enforcing such compliance.
            (5) Limited parent company enforcement.--
                (A) In general.--In addition to any other authority of the
            Board of Governors, the Board of Governors may enforce
            compliance with the provisions of this subsection that are
            applicable to any company described in paragraph (1) that
            controls an intermediate holding company under section 8 of the
            Federal Deposit Insurance Act, and such company shall be
            subject to such section (solely for such purposes) in the same
            manner and to the same extent as if such company were a bank
            holding company.
                (B) Application of other act.--Any violation of this
            subsection by any company that controls an intermediate holding
            company may also be treated as a violation of the Federal
            Deposit Insurance Act for purposes of subparagraph (A).
                (C) No effect on other authority.--No provision of this
            paragraph shall be construed as limiting any authority of the
            Board of Governors or any other Federal agency under any other
            provision of law.
        (c) Regulations.--The Board of Governors--
            (1) shall promulgate regulations to establish the criteria for
        determining whether to require a nonbank financial company
        supervised by the Board of Governors to establish an intermediate
        holding company under subsection (b); and
            (2) may promulgate regulations to establish any restrictions or
        limitations on transactions between an intermediate holding company
        or a nonbank financial company supervised by the Board of Governors
        and its affiliates, as necessary to prevent unsafe and unsound
        practices in connection with transactions between such company, or
        any subsidiary thereof, and its parent company or affiliates that
        are not subsidiaries of such company, except that such regulations
        shall not restrict or limit any transaction in connection with the
        bona fide acquisition or lease by an unaffiliated person of assets,
        goods, or services.
        SEC. 168. REGULATIONS.
        The Board of Governors shall have authority to issue regulations to
    implement subtitles A and C and the amendments made thereunder. Except
    as otherwise specified in subtitle A or C, not later than 18 months
    after the effective date of this Act, the Board of Governors shall
    issue final regulations to implement subtitles A and C, and the
    amendments made thereunder.
        SEC. 169. AVOIDING DUPLICATION.
        The Board of Governors shall take any action that the Board of
    Governors deems appropriate to avoid imposing requirements under this
    subtitle that are duplicative of requirements applicable to bank
    holding companies and nonbank financial companies under other
    provisions of law.
        SEC. 170. SAFE HARBOR.
        (a) Regulations.--The Board of Governors shall promulgate
    regulations on behalf of, and in consultation with, the Council setting
    forth the criteria for exempting certain types or classes of U.S.
    nonbank financial companies or foreign nonbank financial companies from
    supervision by the Board of Governors.
        (b) Considerations.--In developing the criteria under subsection
    (a), the Board of Governors shall take into account the factors for
    consideration described in subsections (a) and (b) of section 113 in
    determining whether a U.S. nonbank financial company or foreign nonbank
    financial company shall be supervised by the Board of Governors.
        (c) Rule of Construction.--Nothing in this section shall be
    construed to require supervision by the Board of Governors of a U.S.
    nonbank financial company or foreign nonbank financial company, if such
    company does not meet the criteria for exemption established under
    subsection (a).
        (d) Revisions.--
            (1) In general.--The Board of Governors shall, in consultation
        with the Council, review the regulations promulgated under
        subsection (a), not less frequently than every 5 years, and based
        upon the review, the Board of Governors may revise such regulations
        on behalf of, and in consultation with, the Council to update as
        necessary the criteria set forth in such regulations.
            (2) Transition period.--No revisions under paragraph (1) shall
        take effect before the end of the 2-year period after the date of
        publication of such revisions in final form.
        (e) Report.--The Chairman of the Board of Governors and the
    Chairperson of the Council shall submit a joint report to the Committee
    on Banking, Housing, and Urban Affairs of the Senate and the Committee
    on Financial Services of the House of Representatives not later than 30
    days after the date of the issuance in final form of regulations under
    subsection (a), or any subsequent revision to such regulations under
    subsection (d), as applicable. Such report shall include, at a minimum,
    the rationale for exemption and empirical evidence to support the
    criteria for exemption.
        SEC. 171. LEVERAGE AND RISK-BASED CAPITAL REQUIREMENTS.
        (a) Definitions.--For purposes of this section, the following
    definitions shall apply:
            (1) Generally applicable leverage capital requirements.--The
        term ``generally applicable leverage capital requirements'' means--
                (A) the minimum ratios of tier 1 capital to average total
            assets, as established by the appropriate Federal banking
            agencies to apply to insured depository institutions under the
            prompt corrective action regulations implementing section 38 of
            the Federal Deposit Insurance Act, regardless of total
            consolidated asset size or foreign financial exposure; and
                (B) includes the regulatory capital components in the
            numerator of that capital requirement, average total assets in
            the denominator of that capital requirement, and the required
            ratio of the numerator to the denominator.
            (2) Generally applicable risk-based capital requirements.--The
        term ``generally applicable risk-based capital requirements''
        means--
                (A) the risk-based capital requirements, as established by
            the appropriate Federal banking agencies to apply to insured
            depository institutions under the prompt corrective action
            regulations implementing section 38 of the Federal Deposit
            Insurance Act, regardless of total consolidated asset size or
            foreign financial exposure; and
                (B) includes the regulatory capital components in the
            numerator of those capital requirements, the risk-weighted
            assets in the denominator of those capital requirements, and
            the required ratio of the numerator to the denominator.
            (3) Definition of depository institution holding company.--The
        term ``depository institution holding company'' means a bank
        holding company or a savings and loan holding company (as those
        terms are defined in section 3 of the Federal Deposit Insurance
        Act) that is organized in the United States, including any bank or
        savings and loan holding company that is owned or controlled by a
        foreign organization, but does not include the foreign
        organization.
        (b) Minimum Capital Requirements.--
            (1) Minimum leverage capital requirements.--The appropriate
        Federal banking agencies shall establish minimum leverage capital
        requirements on a consolidated basis for insured depository
        institutions, depository institution holding companies, and nonbank
        financial companies supervised by the Board of Governors. The
        minimum leverage capital requirements established under this
        paragraph shall not be less than the generally applicable leverage
        capital requirements, which shall serve as a floor for any capital
        requirements that the agency may require, nor quantitatively lower
        than the generally applicable leverage capital requirements that
        were in effect for insured depository institutions as of the date
        of enactment of this Act.
            (2) Minimum risk-based capital requirements.--The appropriate
        Federal banking agencies shall establish minimum risk-based capital
        requirements on a consolidated basis for insured depository
        institutions, depository institution holding companies, and nonbank
        financial companies supervised by the Board of Governors. The
        minimum risk-based capital requirements established under this
        paragraph shall not be less than the generally applicable risk-
        based capital requirements, which shall serve as a floor for any
        capital requirements that the agency may require, nor
        quantitatively lower than the generally applicable risk-based
        capital requirements that were in effect for insured depository
        institutions as of the date of enactment of this Act.
            (3) Investments in financial subsidiaries.--For purposes of
        this section, investments in financial subsidiaries that insured
        depository institutions are required to deduct from regulatory
        capital under section 5136A of the Revised Statutes of the United
        States or section 46(a)(2) of the Federal Deposit Insurance Act
        need not be deducted from regulatory capital by depository
        institution holding companies or nonbank financial companies
        supervised by the Board of Governors, unless such capital deduction
        is required by the Board of Governors or the primary financial
        regulatory agency in the case of nonbank financial companies
        supervised by the Board of Governors.
            (4) Effective dates and phase-in periods.--
                (A) Debt or equity instruments on or after may 19, 2010.--
            For debt or equity instruments issued on or after May 19, 2010,
            by depository institution holding companies or by nonbank
            financial companies supervised by the Board of Governors, this
            section shall be deemed to have become effective as of May 19,
            2010.
                (B) Debt or equity instruments issued before may 19,
            2010.--For debt or equity instruments issued before May 19,
            2010, by depository institution holding companies or by nonbank
            financial companies supervised by the Board of Governors, any
            regulatory capital deductions required under this section shall
            be phased in incrementally over a period of 3 years, with the
            phase-in period to begin on January 1, 2013, except as set
            forth in subparagraph (C).
                (C) Debt or equity instruments of smaller institutions.--
            For debt or equity instruments issued before May 19, 2010, by
            depository institution holding companies with total
            consolidated assets of less than $15,000,000,000 as of December
            31, 2009, and by organizations that were mutual holding
            companies on May 19, 2010, the capital deductions that would be
            required for other institutions under this section are not
            required as a result of this section.
                (D) Depository institution holding companies not previously
            supervised by the board of governors.--For any depository
            institution holding company that was not supervised by the
            Board of Governors as of May 19, 2010, the requirements of this
            section, except as set forth in subparagraphs (A) and (B),
            shall be effective 5 years after the date of enactment of this
            Act
                (E) Certain bank holding company subsidiaries of foreign
            banking organizations.--For bank holding company subsidiaries
            of foreign banking organizations that have relied on
            Supervision and Regulation Letter SR-01-1 issued by the Board
            of Governors (as in effect on May 19, 2010), the requirements
            of this section, except as set forth in subparagraph (A), shall
            be effective 5 years after the date of enactment of this Act.
            (5) Exceptions.--This section shall not apply to--
                (A) debt or equity instruments issued to the United States
            or any agency or instrumentality thereof pursuant to the
            Emergency Economic Stabilization Act of 2008, and prior to
            October 4, 2010;
                (B) any Federal home loan bank; or
                (C) any small bank holding company that is subject to the
            Small Bank Holding Company Policy Statement of the Board of
            Governors, as in effect on May 19, 2010.
            (6) Study and report on small institution access to capital.--
                (A) Study required.--The Comptroller General of the United
            States, after consultation with the Federal banking agencies,
            shall conduct a study of access to capital by smaller insured
            depository institutions.
                (B) Scope.--For purposes of this study required by
            subparagraph (A), the term ``smaller insured depository
            institution'' means an insured depository institution with
            total consolidated assets of $5,000,000,000 or less.
                (C) Report to congress.--Not later than 18 months after the
            date of enactment of this Act, the Comptroller General of the
            United States shall submit 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
            summarizing the results of the study conducted under
            subparagraph (A), together with any recommendations for
            legislative or regulatory action that would enhance the access
            to capital of smaller insured depository institutions, in a
            manner that is consistent with safe and sound banking
            operations.
            (7) Capital requirements to address activities that pose risks
        to the financial system.--
                (A) In general.--Subject to the recommendations of the
            Council, in accordance with section 120, the Federal banking
            agencies shall develop capital requirements applicable to
            insured depository institutions, depository institution holding
            companies, and nonbank financial companies supervised by the
            Board of Governors that address the risks that the activities
            of such institutions pose, not only to the institution engaging
            in the activity, but to other public and private stakeholders
            in the event of adverse performance, disruption, or failure of
            the institution or the activity.
                (B) Content.--Such rules shall address, at a minimum, the
            risks arising from--
                    (i) significant volumes of activity in derivatives,
                securitized products purchased and sold, financial
                guarantees purchased and sold, securities borrowing and
                lending, and repurchase agreements and reverse repurchase
                agreements;
                    (ii) concentrations in assets for which the values
                presented in financial reports are based on models rather
                than historical cost or prices deriving from deep and
                liquid 2-way markets; and
                    (iii) concentrations in market share for any activity
                that would substantially disrupt financial markets if the
                institution is forced to unexpectedly cease the activity.
        SEC. 172. EXAMINATION AND ENFORCEMENT ACTIONS FOR INSURANCE AND
          ORDERLY LIQUIDATION PURPOSES.
        (a) Examinations for Insurance and Resolution Purposes.--Section
    10(b)(3) of the Federal Deposit Insurance Act (12 U.S.C. 1820(b)(3)) is
    amended--
            (1) by striking ``In addition'' and inserting the following:
                ``(A) In general.--In addition''; and
            (2) by striking ``whenever the board of directors determines''
        and all that follows through the period and inserting the
        following: ``or nonbank financial company supervised by the Board
        of Governors or a bank holding company described in section 165(a)
        of the Financial Stability Act of 2010, whenever the Board of
        Directors determines that a special examination of any such
        depository institution is necessary to determine the condition of
        such depository institution for insurance purposes, or of such
        nonbank financial company supervised by the Board of Governors or
        bank holding company described in section 165(a) of the Financial
        Stability Act of 2010, for the purpose of implementing its
        authority to provide for orderly liquidation of any such company
        under title II of that Act, provided that such authority may not be
        used with respect to any such company that is in a generally sound
        condition.
                ``(B) Limitation.--Before conducting a special examination
            of a nonbank financial company supervised by the Board of
            Governors or a bank holding company described in section 165(a)
            of the Financial Stability Act of 2010, the Corporation shall
            review any available and acceptable resolution plan that the
            company has submitted in accordance with section 165(d) of that
            Act, consistent with the nonbinding effect of such plan, and
            available reports of examination, and shall coordinate to the
            maximum extent practicable with the Board of Governors, in
            order to minimize duplicative or conflicting examinations.''.
        (b) Enforcement Authority.--Section 8(t) of the Federal Deposit
    Insurance Act (12 U.S.C. 1818(t)) is amended--
            (1) in paragraph (1), by inserting ``, any depository
        institution holding company,'' before ``or any institution-
        affiliated party'';
            (2) in paragraph (2)--
                (A) by striking ``or'' at the end of subparagraph (B);
                (B) at the end of subparagraph (C), by striking the period
            and inserting ``or''; and
                (C) by inserting at the end the following new subparagraph:
                ``(D) the conduct or threatened conduct (including any acts
            or omissions) of the depository institution holding company
            poses a risk to the Deposit Insurance Fund, provided that such
            authority may not be used with respect to a depository
            institution holding company that is in generally sound
            condition and whose conduct does not pose a foreseeable and
            material risk of loss to the Deposit Insurance Fund;''; and
            (3) by adding at the end the following:
            ``(6) Powers and duties with respect to depository institution
        holding companies.--For purposes of exercising the backup authority
        provided in this subsection--
                ``(A) the Corporation shall have the same powers with
            respect to a depository institution holding company and its
            affiliates as the appropriate Federal banking agency has with
            respect to the holding company and its affiliates; and
                ``(B) the holding company and its affiliates shall have the
            same duties and obligations with respect to the Corporation as
            the holding company and its affiliates have with respect to the
            appropriate Federal banking agency.''.
        (c) Rule of Construction.--Nothing in this Act shall be construed
    to limit or curtail the Corporation's current authority to examine or
    bring enforcement actions with respect to any insured depository
    institution or institution-affiliated party.
        SEC. 173. ACCESS TO UNITED STATES FINANCIAL MARKET BY FOREIGN
          INSTITUTIONS.
        (a) Establishment of Foreign Bank Offices in the United States.--
    Section 7(d)(3) of the International Banking Act of 1978 (12 U.S.C.
    3105(d)(3)) is amended--
            (1) in subparagraph (C), by striking ``and'' at the end;
            (2) in subparagraph (D), by striking the period at the end of
        and inserting ``; and''; and
            (3) by adding at the end the following new subparagraph:
                ``(E) for a foreign bank that presents a risk to the
            stability of United States financial system, 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 risk.''.
        (b) Termination of Foreign Bank Offices in the United States.--
    Section 7(e)(1) of the International Banking Act of 1978 (12 U.S.C.
    3105(e)(1)) is amended--
            (1) in subparagraph (A), by striking ``or'' at the end;
            (2) in subparagraph (B), by striking the period at the end of
        and inserting ``; or''; and
            (3) by inserting after subparagraph (B), the following new
        subparagraph:
                ``(C) for a foreign bank that presents a risk to the
            stability of the United States financial system, 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 risk.''.
        (c) Registration or Succession to a United States Broker or Dealer
    and Termination of Such Registration.--Section 15 of the Securities
    Exchange Act of 1934 (15 U.S.C. 78o) is amended by adding at the end
    the following new subsections:
        ``(k) Registration or Succession to a United States Broker or
    Dealer.--In determining whether to permit a foreign person or an
    affiliate of a foreign person to register as a United States broker or
    dealer, or succeed to the registration of a United States broker or
    dealer, the Commission may consider whether, for a foreign person, or
    an affiliate of a foreign person that presents a risk to the stability
    of the United States financial system, the home country of the foreign
    person has adopted, or made demonstrable progress toward adopting, an
    appropriate system of financial regulation to mitigate such risk.
        ``(l) Termination of a United States Broker or Dealer.--For a
    foreign person or an affiliate of a foreign person that presents such a
    risk to the stability of the United States financial system, the
    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 risk.''.
        SEC. 174. STUDIES AND REPORTS ON HOLDING COMPANY CAPITAL
          REQUIREMENTS.
        (a) Study of Hybrid Capital Instruments.--The Comptroller General
    of the United States, in consultation with the Board of Governors, the
    Comptroller of the Currency, and the Corporation, shall conduct a study
    of the use of hybrid capital instruments as a component of Tier 1
    capital for banking institutions and bank holding companies. The study
    shall consider--
            (1) the current use of hybrid capital instruments, such as
        trust preferred shares, as a component of Tier 1 capital;
            (2) the differences between the components of capital permitted
        for insured depository institutions and those permitted for
        companies that control insured depository institutions;
            (3) the benefits and risks of allowing such instruments to be
        used to comply with Tier 1 capital requirements;
            (4) the economic impact of prohibiting the use of such capital
        instruments for Tier 1;
            (5) a review of the consequences of disqualifying trust
        preferred instruments, and whether it could lead to the failure or
        undercapitalization of existing banking organizations;
            (6) the international competitive implications prohibiting
        hybrid capital instruments for Tier 1;
            (7) the impact on the cost and availability of credit in the
        United States from such a prohibition;
            (8) the availability of capital for financial institutions with
        less than $10,000,000,000 in total assets; and
            (9) any other relevant factors relating to the safety and
        soundness of our financial system and potential economic impact of
        such a prohibition.
        (b) Study of Foreign Bank Intermediate Holding Company Capital
    Requirements.--The Comptroller General of the United States, in
    consultation with the Secretary, the Board of Governors, the
    Comptroller of the Currency, and the Corporation, shall conduct a study
    of capital requirements applicable to United States intermediate
    holding companies of foreign banks that are bank holding companies or
    savings and loan holding companies. The study shall consider--
            (1) current Board of Governors policy regarding the treatment
        of intermediate holding companies;
            (2) the principle of national treatment and equality of
        competitive opportunity for foreign banks operating in the United
        States;
            (3) the extent to which foreign banks are subject on a
        consolidated basis to home country capital standards comparable to
        United States capital standards;
            (4) potential effects on United States banking organizations
        operating abroad of changes to United States policy regarding
        intermediate holding companies;
            (5) the impact on the cost and availability of credit in the
        United States from a change in United States policy regarding
        intermediate holding companies; and
            (6) any other relevant factors relating to the safety and
        soundness of our financial system and potential economic impact of
        such a prohibition.
        (c) Report.--Not later than 18 months after the date of enactment
    of this Act, the Comptroller General of the United States shall submit
    reports to the Committee on Banking, Housing, and Urban Affairs of the
    Senate and the Committee on Financial Services of the House of
    Representatives summarizing the results of the studies required under
    subsection (a). The reports shall include specific recommendations for
    legislative or regulatory action regarding the treatment of hybrid
    capital instruments, including trust preferred shares, and shall
    explain the basis for such recommendations.
        SEC. 175. INTERNATIONAL POLICY COORDINATION.
        (a) By the President.--The President, or a designee of the
    President, may coordinate through all available international policy
    channels, similar policies as those found in United States law relating
    to limiting the scope, nature, size, scale, concentration, and
    interconnectedness of financial companies, in order to protect
    financial stability and the global economy.
        (b) By the Council.--The Chairperson 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.
        (c) By the Board of Governors and the Secretary.--The Board of
    Governors and the Secretary shall consult with their foreign
    counterparts and through appropriate multilateral organizations to
    encourage comprehensive and robust prudential supervision and
    regulation for all highly leveraged and interconnected financial
    companies.
        SEC. 176. RULE OF CONSTRUCTION.
        No regulation or standard imposed under this title may be construed
    in a manner that would lessen the stringency of the requirements of any
    applicable primary financial regulatory agency or any other Federal or
    State agency that are otherwise applicable. This title, and the rules
    and regulations or orders prescribed pursuant to this title, do not
    divest any such agency of any authority derived from any other
    applicable law.

                    TITLE II--ORDERLY LIQUIDATION AUTHORITY

        SEC. 201. DEFINITIONS.
        (a) In General.--In this title, the following definitions shall
    apply:
            (1) Administrative expenses of the receiver.--The term
        ``administrative expenses of the receiver'' includes--
                (A) the actual, necessary costs and expenses incurred by
            the Corporation as receiver for a covered financial company in
            liquidating a covered financial company; and
                (B) any obligations that the Corporation as receiver for a
            covered financial company determines are necessary and
            appropriate to facilitate the smooth and orderly liquidation of
            the covered financial company.
            (2) Bankruptcy code.--The term ``Bankruptcy Code'' means title
        11, United States Code.
            (3) Bridge financial company.--The term ``bridge financial
        company'' means a new financial company organized by the
        Corporation in accordance with section 210(h) for the purpose of
        resolving a covered financial company.
            (4) Claim.--The term ``claim'' means any right to payment,
        whether or not such right is reduced to judgment, liquidated,
        unliquidated, fixed, contingent, matured, unmatured, disputed,
        undisputed, legal, equitable, secured, or unsecured.
            (5) Company.--The term ``company'' has the same meaning as in
        section 2(b) of the Bank Holding Company Act of 1956 (12 U.S.C.
        1841(b)), except that such term includes any company described in
        paragraph (11), the majority of the securities of which are owned
        by the United States or any State.
            (6) Court.--The term ``Court'' means the United States District
        Court for the District of Columbia, unless the context otherwise
        requires.
            (7) Covered broker or dealer.--The term ``covered broker or
        dealer'' means a covered financial company that is a broker or
        dealer that--
                (A) is registered with the Commission under section 15(b)
            of the Securities Exchange Act of 1934 (15 U.S.C. 78o(b)); and
                (B) is a member of SIPC.
            (8) Covered financial company.--The term ``covered financial
        company''--
                (A) means a financial company for which a determination has
            been made under section 203(b); and
                (B) does not include an insured depository institution.
            (9) Covered subsidiary.--The term ``covered subsidiary'' means
        a subsidiary of a covered financial company, other than--
                (A) an insured depository institution;
                (B) an insurance company; or
                (C) a covered broker or dealer.
            (10) Definitions relating to covered brokers and dealers.--The
        terms ``customer'', ``customer name securities'', ``customer
        property'', and ``net equity'' in the context of a covered broker
        or dealer, have the same meanings as in section 16 of the
        Securities Investor Protection Act of 1970 (15 U.S.C. 78lll).
            (11) Financial company.--The term ``financial company'' means
        any company that--
                (A) is incorporated or organized under any provision of
            Federal law or the laws of any State;
                (B) is--
                    (i) a bank holding company, as defined in section 2(a)
                of the Bank Holding Company Act of 1956 (12 U.S.C.
                1841(a));
                    (ii) a nonbank financial company supervised by the
                Board of Governors;
                    (iii) any company that is predominantly engaged in
                activities that the Board of Governors has determined 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)) other than a company described in clause
                (i) or (ii); or
                    (iv) any subsidiary of any company described in any of
                clauses (i) through (iii) that is predominantly engaged in
                activities that the Board of Governors has determined 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)) (other than a subsidiary that is an insured
                depository institution or an insurance company); and
                (C) 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.), a governmental entity, or
            a regulated entity, as defined under section 1303(20) of the
            Federal Housing Enterprises Financial Safety and Soundness Act
            of 1992 (12 U.S.C. 4502(20)).
            (12) Fund.--The term ``Fund'' means the Orderly Liquidation
        Fund established under section 210(n).
            (13) Insurance company.--The term ``insurance company'' means
        any entity that is--
                (A) engaged in the business of insurance;
                (B) subject to regulation by a State insurance regulator;
            and
                (C) covered by a State law that is designed to specifically
            deal with the rehabilitation, liquidation, or insolvency of an
            insurance company.
            (14) Nonbank financial company.--The term ``nonbank financial
        company'' has the same meaning as in section 102(a)(4)(C).
            (15) Nonbank financial company supervised by the board of
        governors.--The term ``nonbank financial company supervised by the
        Board of Governors'' has the same meaning as in section
        102(a)(4)(D).
            (16) SIPC.--The term ``SIPC'' means the Securities Investor
        Protection Corporation.
        (b) Definitional Criteria.--For purpose of the definition of the
    term ``financial company'' under subsection (a)(11), no company shall
    be deemed to be predominantly engaged in activities that the Board of
    Governors has determined 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)), if the consolidated revenues of such company from
    such activities constitute less than 85 percent of the total
    consolidated revenues of such company, as the Corporation, in
    consultation with the Secretary, shall establish by regulation. In
    determining whether a company is a financial company under this title,
    the consolidated revenues derived from the ownership or control of a
    depository institution shall be included.
        SEC. 202. JUDICIAL REVIEW.
        (a) Commencement of Orderly Liquidation.--
            (1) Petition to district court.--
                (A) District court review.--
                    (i) Petition to district court.--Subsequent to a
                determination by the Secretary under section 203 that a
                financial company satisfies the criteria in section 203(b),
                the Secretary shall notify the Corporation and the covered
                financial company. If the board of directors (or body
                performing similar functions) of the covered financial
                company acquiesces or consents to the appointment of the
                Corporation as receiver, the Secretary shall appoint the
                Corporation as receiver. If the board of directors (or body
                performing similar functions) of the covered financial
                company does not acquiesce or consent to the appointment of
                the Corporation as receiver, the Secretary shall petition
                the United States District Court for the District of
                Columbia for an order authorizing the Secretary to appoint
                the Corporation as receiver.
                    (ii) Form and content of order.--The Secretary shall
                present all relevant findings and the recommendation made
                pursuant to section 203(a) to the Court. The petition shall
                be filed under seal.
                    (iii) Determination.--On a strictly confidential basis,
                and without any prior public disclosure, the Court, after
                notice to the covered financial company and a hearing in
                which the covered financial company may oppose the
                petition, shall determine whether the determination of the
                Secretary that the covered financial company is in default
                or in danger of default and satisfies the definition of a
                financial company under section 201(a)(11) is arbitrary and
                capricious.
                    (iv) Issuance of order.--If the Court determines that
                the determination of the Secretary that the covered
                financial company is in default or in danger of default and
                satisfies the definition of a financial company under
                section 201(a)(11)--

                        (I) is not arbitrary and capricious, the Court
                    shall issue an order immediately authorizing the
                    Secretary to appoint the Corporation as receiver of the
                    covered financial company; or
                        (II) is arbitrary and capricious, the Court shall
                    immediately provide to the Secretary a written
                    statement of each reason supporting its determination,
                    and afford the Secretary an immediate opportunity to
                    amend and refile the petition under clause (i).

                    (v) Petition granted by operation of law.--If the Court
                does not make a determination within 24 hours of receipt of
                the petition--

                        (I) the petition shall be granted by operation of
                    law;
                        (II) the Secretary shall appoint the Corporation as
                    receiver; and
                        (III) liquidation under this title shall
                    automatically and without further notice or action be
                    commenced and the Corporation may immediately take all
                    actions authorized under this title.

                (B) Effect of determination.--The determination of the
            Court under subparagraph (A) shall be final, and shall be
            subject to appeal only in accordance with paragraph (2). The
            decision shall not be subject to any stay or injunction pending
            appeal. Upon conclusion of its proceedings under subparagraph
            (A), the Court shall provide immediately for the record a
            written statement of each reason supporting the decision of the
            Court, and shall provide copies thereof to the Secretary and
            the covered financial company.
                (C) Criminal penalties.--A person who recklessly discloses
            a determination of the Secretary under section 203(b) or a
            petition of the Secretary under subparagraph (A), or the
            pendency of court proceedings as provided for under
            subparagraph (A), shall be fined not more than $250,000, or
            imprisoned for not more than 5 years, or both.
            (2) Appeal of decisions of the district court.--
                (A) Appeal to court of appeals.--
                    (i) In general.--Subject to clause (ii), the United
                States Court of Appeals for the District of Columbia
                Circuit shall have jurisdiction of an appeal of a final
                decision of the Court filed by the Secretary or a covered
                financial company, through its board of directors,
                notwithstanding section 210(a)(1)(A)(i), not later than 30
                days after the date on which the decision of the Court is
                rendered or deemed rendered under this subsection.
                    (ii) Condition of jurisdiction.--The Court of Appeals
                shall have jurisdiction of an appeal by a covered financial
                company only if the covered financial company did not
                acquiesce or consent to the appointment of a receiver by
                the Secretary under paragraph (1)(A).
                    (iii) Expedition.--The Court of Appeals shall consider
                any appeal under this subparagraph on an expedited basis.
                    (iv) Scope of review.--For an appeal taken under this
                subparagraph, review shall be limited to whether the
                determination of the Secretary that a covered financial
                company is in default or in danger of default and satisfies
                the definition of a financial company under section
                201(a)(11) is arbitrary and capricious.
                (B) Appeal to the supreme court.--
                    (i) In general.--A petition for a writ of certiorari to
                review a decision of the Court of Appeals under
                subparagraph (A) may be filed by the Secretary or the
                covered financial company, through its board of directors,
                notwithstanding section 210(a)(1)(A)(i), with the Supreme
                Court of the United States, not later than 30 days after
                the date of the final decision of the Court of Appeals, and
                the Supreme Court shall have discretionary jurisdiction to
                review such decision.
                    (ii) Written statement.--In the event of a petition
                under clause (i), the Court of Appeals shall immediately
                provide for the record a written statement of each reason
                for its decision.
                    (iii) Expedition.--The Supreme Court shall consider any
                petition under this subparagraph on an expedited basis.
                    (iv) Scope of review.--Review by the Supreme Court
                under this subparagraph shall be limited to whether the
                determination of the Secretary that the covered financial
                company is in default or in danger of default and satisfies
                the definition of a financial company under section
                201(a)(11) is arbitrary and capricious.
        (b) Establishment and Transmittal of Rules and Procedures.--
            (1) In general.--Not later than 6 months after the date of
        enactment of this Act, the Court shall establish such rules and
        procedures as may be necessary to ensure the orderly conduct of
        proceedings, including rules and procedures to ensure that the 24-
        hour deadline is met and that the Secretary shall have an ongoing
        opportunity to amend and refile petitions under subsection (a)(1).
            (2) Publication of rules.--The rules and procedures established
        under paragraph (1), and any modifications of such rules and
        procedures, shall be recorded and shall be transmitted to--
                (A) the Committee on the Judiciary of the Senate;
                (B) the Committee on Banking, Housing, and Urban Affairs of
            the Senate;
                (C) the Committee on the Judiciary of the House of
            Representatives; and
                (D) the Committee on Financial Services of the House of
            Representatives.
        (c) Provisions Applicable to Financial Companies.--
            (1) Bankruptcy code.--Except as provided in this subsection,
        the provisions of the Bankruptcy Code and rules issued thereunder
        or otherwise applicable insolvency law, and not the provisions of
        this title, shall apply to financial companies that are not covered
        financial companies for which the Corporation has been appointed as
        receiver.
            (2) This title.--The provisions of this title shall exclusively
        apply to and govern all matters relating to covered financial
        companies for which the Corporation is appointed as receiver, and
        no provisions of the Bankruptcy Code or the rules issued thereunder
        shall apply in such cases, except as expressly provided in this
        title.
        (d) Time Limit on Receivership Authority.--
            (1) Baseline period.--Any appointment of the Corporation as
        receiver under this section shall terminate at the end of the 3-
        year period beginning on the date on which such appointment is
        made.
            (2) Extension of time limit.--The time limit established in
        paragraph (1) may be extended by the Corporation for up to 1
        additional year, if the Chairperson of the Corporation determines
        and certifies in writing to the Committee on Banking, Housing, and
        Urban Affairs of the Senate and the Committee on Financial Services
        of the House of Representatives that continuation of the
        receivership is necessary--
                (A) to--
                    (i) maximize the net present value return from the sale
                or other disposition of the assets of the covered financial
                company; or
                    (ii) minimize the amount of loss realized upon the sale
                or other disposition of the assets of the covered financial
                company; and
                (B) to protect the stability of the financial system of the
            United States.
            (3) Second extension of time limit.--
                (A) In general.--The time limit under this subsection, as
            extended under paragraph (2), may be extended for up to 1
            additional year, if the Chairperson of the Corporation, with
            the concurrence of the Secretary, submits the certifications
            described in paragraph (2).
                (B) Additional report required.--Not later than 30 days
            after the date of commencement of the extension under
            subparagraph (A), the Corporation shall submit a report to the
            Committee on Banking, Housing, and Urban Affairs of the Senate
            and the Committee on Financial Services of the House of
            Representatives describing the need for the extension and the
            specific plan of the Corporation to conclude the receivership
            before the end of the second extension.
            (4) Ongoing litigation.--The time limit under this subsection,
        as extended under paragraph (3), may be further extended solely for
        the purpose of completing ongoing litigation in which the
        Corporation as receiver is a party, provided that the appointment
        of the Corporation as receiver shall terminate not later than 90
        days after the date of completion of such litigation, if--
                (A) the Council determines that the Corporation used its
            best efforts to conclude the receivership in accordance with
            its plan before the end of the time limit described in
            paragraph (3);
                (B) the Council determines that the completion of longer-
            term responsibilities in the form of ongoing litigation
            justifies the need for an extension; and
                (C) the Corporation submits a report approved by the
            Council not later than 30 days after the date of the
            determinations by the Council under subparagraphs (A) and (B)
            to the Committee on Banking, Housing, and Urban Affairs of the
            Senate and the Committee on Financial Services of the House of
            Representatives, describing--
                    (i) the ongoing litigation justifying the need for an
                extension; and
                    (ii) the specific plan of the Corporation to complete
                the litigation and conclude the receivership.
            (5) Regulations.--The Corporation may issue regulations
        governing the termination of receiverships under this title.
            (6) No liability.--The Corporation and the Deposit Insurance
        Fund shall not be liable for unresolved claims arising from the
        receivership after the termination of the receivership.
        (e) Study of Bankruptcy and Orderly Liquidation Process for
    Financial Companies.--
            (1) Study.--
                (A) In general.--The Administrative Office of the United
            States Courts and the Comptroller General of the United States
            shall each monitor the activities of the Court, and each such
            Office shall conduct separate studies regarding the bankruptcy
            and orderly liquidation process for financial companies under
            the Bankruptcy Code.
                (B) Issues to be studied.--In conducting the study under
            subparagraph (A), the Administrative Office of the United
            States Courts and the Comptroller General of the United States
            each shall evaluate--
                    (i) the effectiveness of chapter 7 or chapter 11 of the
                Bankruptcy Code in facilitating the orderly liquidation or
                reorganization of financial companies;
                    (ii) ways to maximize the efficiency and effectiveness
                of the Court; and
                    (iii) ways to make the orderly liquidation process
                under the Bankruptcy Code for financial companies more
                effective.
            (2) Reports.--Not later than 1 year after the date of enactment
        of this Act, in each successive year until the third year, and
        every fifth year after that date of enactment, the Administrative
        Office of the United States Courts and the Comptroller General of
        the United States shall submit 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 separate
        reports summarizing the results of the studies conducted under
        paragraph (1).
        (f) Study of International Coordination Relating to Bankruptcy
    Process for Financial Companies.--
            (1) Study.--
                (A) In general.--The Comptroller General of the United
            States shall conduct a study regarding international
            coordination relating to the orderly liquidation of financial
            companies under the Bankruptcy Code.
                (B) Issues to be studied.--In conducting the study under
            subparagraph (A), the Comptroller General of the United States
            shall evaluate, with respect to the bankruptcy process for
            financial companies--
                    (i) the extent to which international coordination
                currently exists;
                    (ii) current mechanisms and structures for facilitating
                international cooperation;
                    (iii) barriers to effective international coordination;
                and
                    (iv) ways to increase and make more effective
                international coordination.
            (2) Report.--Not later than 1 year after the date of enactment
        of this Act, the Comptroller General of the United States shall
        submit 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 and the Secretary a report summarizing the
        results of the study conducted under paragraph (1).
        (g) Study of Prompt Corrective Action Implementation by the
    Appropriate Federal Agencies.--
            (1) Study.--The Comptroller General of the United States shall
        conduct a study regarding the implementation of prompt corrective
        action by the appropriate Federal banking agencies.
            (2) Issues to be studied.--In conducting the study under
        paragraph (1), the Comptroller General shall evaluate--
                (A) the effectiveness of implementation of prompt
            corrective action by the appropriate Federal banking agencies
            and the resolution of insured depository institutions by the
            Corporation; and
                (B) ways to make prompt corrective action a more effective
            tool to resolve the insured depository institutions at the
            least possible long-term cost to the Deposit Insurance Fund.
            (3) Report to council.--Not later than 1 year after the date of
        enactment of this Act, the Comptroller General shall submit a
        report to the Council on the results of the study conducted under
        this subsection.
            (4) Council report of action.--Not later than 6 months after
        the date of receipt of the report from the Comptroller General
        under paragraph (3), the Council shall submit a report to the
        Committee on Banking, Housing, and Urban Affairs of the Senate and
        the Committee on Financial Services of the House of Representatives
        on actions taken in response to the report, including any
        recommendations made to the Federal primary financial regulatory
        agencies under section 120.
        SEC. 203. SYSTEMIC RISK DETERMINATION.
        (a) Written Recommendation and Determination.--
            (1) Vote required.--
                (A) In general.--On their own initiative, or at the request
            of the Secretary, the Corporation and the Board of Governors
            shall consider whether to make a written recommendation
            described in paragraph (2) with respect to whether the
            Secretary should appoint the Corporation as receiver for a
            financial company. Such recommendation shall be made upon a
            vote of not fewer than \2/3\ of the members of the Board of
            Governors then serving and \2/3\ of the members of the board of
            directors of the Corporation then serving.
                (B) Cases involving brokers or dealers.--In the case of a
            broker or dealer, or in which the largest United States
            subsidiary (as measured by total assets as of the end of the
            previous calendar quarter) of a financial company is a broker
            or dealer, the Commission and the Board of Governors, at the
            request of the Secretary, or on their own initiative, shall
            consider whether to make the written recommendation described
            in paragraph (2) with respect to the financial company. Subject
            to the requirements in paragraph (2), such recommendation shall
            be made upon a vote of not fewer than \2/3\ of the members of
            the Board of Governors then serving and \2/3\ of the members of
            the Commission then serving, and in consultation with the
            Corporation.
                (C) Cases involving insurance companies.--In the case of an
            insurance company, or in which the largest United States
            subsidiary (as measured by total assets as of the end of the
            previous calendar quarter) of a financial company is an
            insurance company, the Director of the Federal Insurance Office
            and the Board of Governors, at the request of the Secretary or
            on their own initiative, shall consider whether to make the
            written recommendation described in paragraph (2) with respect
            to the financial company. Subject to the requirements in
            paragraph (2), such recommendation shall be made upon a vote of
            not fewer than \2/3\ of the Board of Governors then serving and
            the affirmative approval of the Director of the Federal
            Insurance Office, and in consultation with the Corporation.
            (2) Recommendation required.--Any written recommendation
        pursuant to paragraph (1) shall contain--
                (A) an evaluation of whether the financial company is in
            default or in danger of default;
                (B) a description of the effect that the default of the
            financial company would have on financial stability in the
            United States;
                (C) 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;
                (D) a recommendation regarding the nature and the extent of
            actions to be taken under this title regarding the financial
            company;
                (E) an evaluation of the likelihood of a private sector
            alternative to prevent the default of the financial company;
                (F) an evaluation of why a case under the Bankruptcy Code
            is not appropriate for the financial company;
                (G) an evaluation of the effects on creditors,
            counterparties, and shareholders of the financial company and
            other market participants; and
                (H) an evaluation of whether the company satisfies the
            definition of a financial company under section 201.
        (b) Determination by the Secretary.--Notwithstanding any other
    provision of Federal or State law, the Secretary shall take action in
    accordance with section 202(a)(1)(A), if, upon the written
    recommendation under subsection (a), the Secretary (in consultation
    with the President) determines that--
            (1) the financial company is in default or in danger of
        default;
            (2) the failure of the financial company and its resolution
        under otherwise applicable Federal or State law would have serious
        adverse effects on financial stability in the United States;
            (3) no viable private sector alternative is available to
        prevent the default of the financial company;
            (4) any effect on the claims or interests of creditors,
        counterparties, and shareholders of the financial company and other
        market participants as a result of actions to be taken under this
        title is appropriate, given the impact that any action taken under
        this title would have on financial stability in the United States;
            (5) any action under section 204 would avoid or mitigate such
        adverse effects, taking into consideration the effectiveness of the
        action in mitigating potential adverse effects on the financial
        system, the cost to the general fund of the Treasury, and the
        potential to increase excessive risk taking on the part of
        creditors, counterparties, and shareholders in the financial
        company;
            (6) a Federal regulatory agency has ordered the financial
        company to convert all of its convertible debt instruments that are
        subject to the regulatory order; and
            (7) the company satisfies the definition of a financial company
        under section 201.
        (c) Documentation and Review.--
            (1) In general.--The Secretary shall--
                (A) document any determination under subsection (b);
                (B) retain the documentation for review under paragraph
            (2); and
                (C) notify the covered financial company and the
            Corporation of such determination.
            (2) Report to congress.--Not later than 24 hours after the date
        of appointment of the Corporation as receiver for a covered
        financial company, the Secretary shall provide written notice of
        the recommendations and determinations reached in accordance with
        subsections (a) and (b) to the Majority Leader and the Minority
        Leader of the Senate and the Speaker and the Minority Leader of the
        House of Representatives, the Committee on Banking, Housing, and
        Urban Affairs of the Senate, and the Committee on Financial
        Services of the House of Representatives, which shall consist of a
        summary of the basis for the determination, including, to the
        extent available at the time of the determination--
                (A) the size and financial condition of the covered
            financial company;
                (B) the sources of capital and credit support that were
            available to the covered financial company;
                (C) the operations of the covered financial company that
            could have had a significant impact on financial stability,
            markets, or both;
                (D) identification of the banks and financial companies
            which may be able to provide the services offered by the
            covered financial company;
                (E) any potential international ramifications of resolution
            of the covered financial company under other applicable
            insolvency law;
                (F) an estimate of the potential effect of the resolution
            of the covered financial company under other applicable
            insolvency law on the financial stability of the United States;
                (G) the potential effect of the appointment of a receiver
            by the Secretary on consumers;
                (H) the potential effect of the appointment of a receiver
            by the Secretary on the financial system, financial markets,
            and banks and other financial companies; and
                (I) whether resolution of the covered financial company
            under other applicable insolvency law would cause banks or
            other financial companies to experience severe liquidity
            distress.
            (3) Reports to congress and the public.--
                (A) In general.--Not later than 60 days after the date of
            appointment of the Corporation as receiver for a covered
            financial company, the Corporation shall file a report with the
            Committee on Banking, Housing, and Urban Affairs of the Senate
            and the Committee on Financial Services of the House of
            Representatives--
                    (i) setting forth information on the financial
                condition of the covered financial company as of the date
                of the appointment, including a description of its assets
                and liabilities;
                    (ii) describing the plan of, and actions taken by, the
                Corporation to wind down the covered financial company;
                    (iii) explaining each instance in which the Corporation
                waived any applicable requirements of part 366 of title 12,
                Code of Federal Regulations (or any successor thereto) 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;
                    (iv) describing the reasons for the provision of any
                funding to the receivership out of the Fund;
                    (v) setting forth the expected costs of the orderly
                liquidation of the covered financial company;
                    (vi) setting forth the identity of any claimant that is
                treated in a manner different from other similarly situated
                claimants under subsection (b)(4), (d)(4), or (h)(5)(E),
                the amount of any additional payment to such claimant under
                subsection (d)(4), and the reason for any such action; and
                    (vii) which report the Corporation shall publish on an
                online website maintained by the Corporation, subject to
                maintaining appropriate confidentiality.
                (B) Amendments.--The Corporation shall, on a timely basis,
            not less frequently than quarterly, amend or revise and
            resubmit the reports prepared under this paragraph, as
            necessary.
                (C) Congressional testimony.--The Corporation and the
            primary financial regulatory agency, if any, of the financial
            company for which the Corporation was appointed receiver under
            this title shall appear before Congress, if requested, not
            later than 30 days after the date on which the Corporation
            first files the reports required under subparagraph (A).
            (4) Default or in danger of default.--For purposes of this
        title, a financial company shall be considered to be in default or
        in danger of default if, as determined in accordance with
        subsection (b)--
                (A) a case has been, or likely will promptly be, commenced
            with respect to the financial company under the Bankruptcy
            Code;
                (B) 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;
                (C) the assets of the financial company are, or are likely
            to be, less than its obligations to creditors and others; or
                (D) 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.
            (5) GAO review.--The Comptroller General of the United States
        shall review and report to Congress on any determination under
        subsection (b), that results in the appointment of the Corporation
        as receiver, including--
                (A) the basis for the determination;
                (B) the purpose for which any action was taken pursuant
            thereto;
                (C) the likely effect of the determination and such action
            on the incentives and conduct of financial companies and their
            creditors, counterparties, and shareholders; and
                (D) the likely disruptive effect of the determination and
            such action on the reasonable expectations of creditors,
            counterparties, and shareholders, taking into account the
            impact any action under this title would have on financial
            stability in the United States, including whether the rights of
            such parties will be disrupted.
        (d) Corporation Policies and Procedures.--As soon as is practicable
    after the date of enactment of this Act, the Corporation shall
    establish policies and procedures that are acceptable to the Secretary
    governing the use of funds available to the Corporation to carry out
    this title, including the terms and conditions for the provision and
    use of funds under sections 204(d), 210(h)(2)(G)(iv), and 210(h)(9).
        (e) Treatment of Insurance Companies and Insurance Company
    Subsidiaries.--
            (1) In general.--Notwithstanding subsection (b), if an
        insurance company is a covered financial company or a subsidiary or
        affiliate of a covered financial company, the liquidation or
        rehabilitation of such insurance company, and any subsidiary or
        affiliate of such company that is not excepted under paragraph (2),
        shall be conducted as provided under applicable State law.
            (2) Exception for subsidiaries and affiliates.--The requirement
        of paragraph (1) shall not apply with respect to any subsidiary or
        affiliate of an insurance company that is not itself an insurance
        company.
            (3) Backup authority.--Notwithstanding paragraph (1), with
        respect to a covered financial company described in paragraph (1),
        if, after the end of the 60-day period beginning on the date on
        which a determination is made under section 202(a) 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 orderly liquidation under the laws and
        requirements of the State, 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 orderly liquidation under the laws and
        requirements of the State.
        SEC. 204. ORDERLY LIQUIDATION OF COVERED FINANCIAL COMPANIES.
        (a) Purpose of Orderly Liquidation Authority.--It is the purpose of
    this title to provide the necessary authority to liquidate failing
    financial companies that pose a significant risk to the financial
    stability of the United States in a manner that mitigates such risk and
    minimizes moral hazard. The authority provided in this title shall be
    exercised in the manner that best fulfills such purpose, so that--
            (1) creditors and shareholders will bear the losses of the
        financial company;
            (2) management responsible for the condition of the financial
        company will not be retained; and
            (3) the Corporation and other appropriate agencies will take
        all steps necessary and appropriate to assure that all parties,
        including management, directors, and third parties, having
        responsibility for the condition of the financial company bear
        losses consistent with their responsibility, including actions for
        damages, restitution, and recoupment of compensation and other
        gains not compatible with such responsibility.
        (b) Corporation as Receiver.--Upon the appointment of the
    Corporation under section 202, the Corporation shall act as the
    receiver for the covered financial company, with all of the rights and
    obligations set forth in this title.
        (c) Consultation.--The Corporation, as receiver--
            (1) shall consult with the primary financial regulatory agency
        or agencies of the covered financial company and its covered
        subsidiaries for purposes of ensuring an orderly liquidation of the
        covered financial company;
            (2) may consult with, or under subsection (a)(1)(B)(v) or
        (a)(1)(L) of section 210, acquire the services of, any outside
        experts, as appropriate to inform and aid the Corporation in the
        orderly liquidation process;
            (3) shall consult with the primary financial regulatory agency
        or agencies of any subsidiaries of the covered financial company
        that are not covered subsidiaries, and coordinate with such
        regulators regarding the treatment of such solvent subsidiaries and
        the separate resolution of any such insolvent subsidiaries under
        other governmental authority, as appropriate; and
            (4) shall consult with the Commission and the Securities
        Investor Protection Corporation in the case of any covered
        financial company for which the Corporation has been appointed as
        receiver that 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)) and is a member of the Securities Investor
        Protection Corporation, for the purpose of determining whether to
        transfer to a bridge financial company organized by the Corporation
        as receiver, without consent of any customer, customer accounts of
        the covered financial company.
        (d) Funding for Orderly Liquidation.--Upon its appointment as
    receiver for a covered financial company, and thereafter as the
    Corporation may, in its discretion, determine to be necessary or
    appropriate, the Corporation may make available to the receivership,
    subject to the conditions set forth in section 206 and subject to the
    plan described in section 210(n)(9), funds for the orderly liquidation
    of the covered financial company. All funds provided by the Corporation
    under this subsection shall have a priority of claims under
    subparagraph (A) or (B) of section 210(b)(1), as applicable, including
    funds used for--
            (1) making loans to, or purchasing any debt obligation of, the
        covered financial company or any covered subsidiary;
            (2) purchasing or guaranteeing against loss the assets of the
        covered financial company or any covered subsidiary, directly or
        through an entity established by the Corporation for such purpose;
            (3) assuming or guaranteeing the obligations of the covered
        financial company or any covered subsidiary to 1 or more third
        parties;
            (4) taking a lien on any or all assets of the covered financial
        company or any covered subsidiary, including a first priority lien
        on all unencumbered assets of the covered financial company or any
        covered subsidiary to secure repayment of any transactions
        conducted under this subsection;
            (5) selling or transferring all, or any part, of such acquired
        assets, liabilities, or obligations of the covered financial
        company or any covered subsidiary; and
            (6) making payments pursuant to subsections (b)(4), (d)(4), and
        (h)(5)(E) of section 210.
        SEC. 205. ORDERLY LIQUIDATION OF COVERED BROKERS AND DEALERS.
        (a) Appointment of SIPC as Trustee.--
            (1) Appointment.--Upon the appointment of the Corporation as
        receiver for any covered broker or dealer, the Corporation shall
        appoint, without any need for court approval, the Securities
        Investor Protection Corporation to act as trustee for the
        liquidation under the Securities Investor Protection Act of 1970
        (15 U.S.C. 78aaa et seq.) of the covered broker or dealer.
            (2) Actions by sipc.--
                (A) Filing.--Upon appointment of SIPC under paragraph (1),
            SIPC shall promptly file with any Federal district court of
            competent jurisdiction specified in section 21 or 27 of the
            Securities Exchange Act of 1934 (15 U.S.C. 78u, 78aa), an
            application for a protective decree under the Securities
            Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.) as to
            the covered broker or dealer. The Federal district court shall
            accept and approve the filing, including outside of normal
            business hours, and shall immediately issue the protective
            decree as to the covered broker or dealer.
                (B) Administration by sipc.--Following entry of the
            protective decree, and except as otherwise provided in this
            section, the determination of claims and the liquidation of
            assets retained in the receivership of the covered broker or
            dealer and not transferred to the bridge financial company
            shall be administered under the Securities Investor Protection
            Act of 1970 (15 U.S.C. 78aaa et seq.) by SIPC, as trustee for
            the covered broker or dealer.
                (C) Definition of filing date.--For purposes of the
            liquidation proceeding, the term ``filing date'' means the date
            on which the Corporation is appointed as receiver of the
            covered broker or dealer.
                (D) Determination of claims.--As trustee for the covered
            broker or dealer, SIPC shall determine and satisfy, consistent
            with this title and with the Securities Investor Protection Act
            of 1970 (15 U.S.C. 78aaa et seq.), all claims against the
            covered broker or dealer arising on or before the filing date.
        (b) Powers and Duties of SIPC.--
            (1) In general.--Except as provided in this section, upon its
        appointment as trustee for the liquidation of a covered broker or
        dealer, SIPC shall have all of the powers and duties provided by
        the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et
        seq.), including, without limitation, all rights of action against
        third parties, and shall conduct such liquidation in accordance
        with the terms of the Securities Investor Protection Act of 1970
        (15 U.S.C. 78aaa et seq.), except that SIPC shall have no powers or
        duties with respect to assets and liabilities transferred by the
        Corporation from the covered broker or dealer to any bridge
        financial company established in accordance with this title.
            (2) Limitation of powers.--The exercise by SIPC of powers and
        functions as trustee under subsection (a) shall not impair or
        impede the exercise of the powers and duties of the Corporation
        with regard to--
                (A) any action, except as otherwise provided in this
            title--
                    (i) to make funds available under section 204(d);
                    (ii) to organize, establish, operate, or terminate any
                bridge financial company;
                    (iii) to transfer assets and liabilities;
                    (iv) to enforce or repudiate contracts; or
                    (v) to take any other action relating to such bridge
                financial company under section 210; or
                (B) determining claims under subsection (e).
            (3) Protective decree.--SIPC and the Corporation, in
        consultation with the Commission, shall jointly determine the terms
        of the protective decree to be filed by SIPC with any court of
        competent jurisdiction under section 21 or 27 of the Securities
        Exchange Act of 1934 (15 U.S.C. 78u, 78aa), as required by
        subsection (a).
            (4) Qualified financial contracts.--Notwithstanding any
        provision of the Securities Investor Protection Act of 1970 (15
        U.S.C. 78aaa et seq.) to the contrary (including section 5(b)(2)(C)
        of that Act (15 U.S.C. 78eee(b)(2)(C))), the rights and obligations
        of any party to a qualified financial contract (as that term is
        defined in section 210(c)(8)) to which a covered broker or dealer
        for which the Corporation has been appointed receiver is a party
        shall be governed exclusively by section 210, including the
        limitations and restrictions contained in section 210(c)(10)(B).
        (c) Limitation on Court Action.--Except as otherwise provided in
    this title, no court may take any action, including any action pursuant
    to the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et
    seq.) or the Bankruptcy Code, to restrain or affect the exercise of
    powers or functions of the Corporation as receiver for a covered broker
    or dealer and any claims against the Corporation as such receiver shall
    be determined in accordance with subsection (e) and such claims shall
    be limited to money damages.
        (d) Actions by Corporation as Receiver.--
            (1) In general.--Notwithstanding any other provision of this
        title, no action taken by the Corporation as receiver with respect
        to a covered broker or dealer shall--
                (A) adversely affect the rights of a customer to customer
            property or customer name securities;
                (B) diminish the amount or timely payment of net equity
            claims of customers; or
                (C) otherwise impair the recoveries provided to a customer
            under the Securities Investor Protection Act of 1970 (15 U.S.C.
            78aaa et seq.).
            (2) Net proceeds.--The net proceeds from any transfer, sale, or
        disposition of assets of the covered broker or dealer, or proceeds
        thereof by the Corporation as receiver for the covered broker or
        dealer shall be for the benefit of the estate of the covered broker
        or dealer, as provided in this title.
        (e) Claims Against the Corporation as Receiver.--Any claim against
    the Corporation as receiver for a covered broker or dealer for assets
    transferred to a bridge financial company established with respect to
    such covered broker or dealer--
            (1) shall be determined in accordance with section 210(a)(2);
        and
            (2) may be reviewed by the appropriate district or territorial
        court of the United States in accordance with section 210(a)(5).
        (f) Satisfaction of Customer Claims.--
            (1) Obligations to customers.--Notwithstanding any other
        provision of this title, all obligations of a covered broker or
        dealer or of any bridge financial company established with respect
        to such covered broker or dealer to a customer relating to, or net
        equity claims based upon, customer property or customer name
        securities shall be promptly discharged by SIPC, the Corporation,
        or the bridge financial company, as applicable, by the delivery of
        securities or the making of payments to or for the account of such
        customer, in a manner and in an amount at least as beneficial to
        the customer as would have been the case had the actual proceeds
        realized from the liquidation of the covered broker or dealer under
        this title been distributed in a proceeding under the Securities
        Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.) without
        the appointment of the Corporation as receiver and without any
        transfer of assets or liabilities to a bridge financial company,
        and with a filing date as of the date on which the Corporation is
        appointed as receiver.
            (2) Satisfaction of claims by sipc.--SIPC, as trustee for a
        covered broker or dealer, shall satisfy customer claims in the
        manner and amount provided under the Securities Investor Protection
        Act of 1970 (15 U.S.C. 78aaa et seq.), as if the appointment of the
        Corporation as receiver had not occurred, and with a filing date as
        of the date on which the Corporation is appointed as receiver. The
        Corporation shall satisfy customer claims, to the extent that a
        customer would have received more securities or cash with respect
        to the allocation of customer property had the covered financial
        company been subject to a proceeding under the Securities Investor
        Protection Act (15 U.S.C. 78aaa et seq.) without the appointment of
        the Corporation as receiver, and with a filing date as of the date
        on which the Corporation is appointed as receiver.
        (g) Priorities.--
            (1) Customer property.--As trustee for a covered broker or
        dealer, SIPC shall allocate customer property and deliver customer
        name securities in accordance with section 8(c) of the Securities
        Investor Protection Act of 1970 (15 U.S.C. 78fff-2(c)).
            (2) Other claims.--All claims other than those described in
        paragraph (1) (including any unpaid claim by a customer for the
        allowed net equity claim of such customer from customer property)
        shall be paid in accordance with the priorities in section 210(b).
        (h) Rulemaking.--The Commission and the Corporation, after
    consultation with SIPC, shall jointly issue rules to implement this
    section.
        SEC. 206. MANDATORY TERMS AND CONDITIONS FOR ALL ORDERLY
          LIQUIDATION ACTIONS.
        In taking action under this title, the Corporation shall--
            (1) determine that such action is necessary for purposes of the
        financial stability of the United States, and not for the purpose
        of preserving the covered financial company;
            (2) ensure that the shareholders of a covered financial company
        do not receive payment until after all other claims and the Fund
        are fully paid;
            (3) ensure that unsecured creditors bear losses in accordance
        with the priority of claim provisions in section 210;
            (4) ensure 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 at which the Corporation is
        appointed receiver);
            (5) ensure 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; and
            (6) not take an equity interest in or become a shareholder of
        any covered financial company or any covered subsidiary.
        SEC. 207. DIRECTORS NOT LIABLE FOR ACQUIESCING IN APPOINTMENT OF
          RECEIVER.
        The members of the board of directors (or body performing similar
    functions) of a covered financial company shall not be liable to the
    shareholders or creditors thereof for acquiescing in or consenting in
    good faith to the appointment of the Corporation as receiver for the
    covered financial company under section 203.
        SEC. 208. DISMISSAL AND EXCLUSION OF OTHER ACTIONS.
        (a) In General.--Effective as of the date of the appointment of the
    Corporation as receiver for the covered financial company under section
    202 or the appointment of SIPC as trustee for a covered broker or
    dealer under section 205, as applicable, any case or proceeding
    commenced with respect to the covered financial company under the
    Bankruptcy Code or the Securities Investor Protection Act of 1970 (15
    U.S.C. 78aaa et seq.) shall be dismissed, upon notice to the bankruptcy
    court (with respect to a case commenced under the Bankruptcy Code), and
    upon notice to SIPC (with respect to a covered broker or dealer) and no
    such case or proceeding may be commenced with respect to a covered
    financial company at any time while the orderly liquidation is pending.
        (b) Revesting of Assets.--Effective as of the date of appointment
    of the Corporation as receiver, the assets of a covered financial
    company shall, to the extent they have vested in any entity other than
    the covered financial company as a result of any case or proceeding
    commenced with respect to the covered financial company under the
    Bankruptcy Code, the Securities Investor Protection Act of 1970 (15
    U.S.C. 78aaa et seq.), or any similar provision of State liquidation or
    insolvency law applicable to the covered financial company, revest in
    the covered financial company.
        (c) Limitation.--Notwithstanding subsections (a) and (b), any order
    entered or other relief granted by a bankruptcy court prior to the date
    of appointment of the Corporation as receiver shall continue with the
    same validity as if an orderly liquidation had not been commenced.
        SEC. 209. RULEMAKING; NON-CONFLICTING LAW.
        The Corporation shall, in consultation with the Council, prescribe
    such rules or regulations as the Corporation considers necessary or
    appropriate to implement this title, including rules and regulations
    with respect to the rights, interests, and priorities of creditors,
    counterparties, security entitlement holders, or other persons with
    respect to any covered financial company or any assets or other
    property of or held by such covered financial company, and address the
    potential for conflicts of interest between or among individual
    receiverships established under this title or under the Federal Deposit
    Insurance Act. To the extent possible, the Corporation shall seek to
    harmonize applicable rules and regulations promulgated under this
    section with the insolvency laws that would otherwise apply to a
    covered financial company.
        SEC. 210. POWERS AND DUTIES OF THE CORPORATION.
        (a) Powers and Authorities.--
            (1) General powers.--
                (A) Successor to covered financial company.--The
            Corporation shall, upon appointment as receiver for a covered
            financial company under this title, succeed to--
                    (i) all rights, titles, powers, and privileges of the
                covered financial company and its assets, and of any
                stockholder, member, officer, or director of such company;
                and
                    (ii) title to the books, records, and assets of any
                previous receiver or other legal custodian of such covered
                financial company.
                (B) Operation of the covered financial company during the
            period of orderly liquidation.--The Corporation, as receiver
            for a covered financial company, may--
                    (i) take over the assets of and operate the covered
                financial company with all of the powers of the members or
                shareholders, the directors, and the officers of the
                covered financial company, and conduct all business of the
                covered financial company;
                    (ii) collect all obligations and money owed to the
                covered financial company;
                    (iii) perform all functions of the covered financial
                company, in the name of the covered financial company;
                    (iv) manage the assets and property of the covered
                financial company, consistent with maximization of the
                value of the assets in the context of the orderly
                liquidation; and
                    (v) provide by contract for assistance in fulfilling
                any function, activity, action, or duty of the Corporation
                as receiver.
                (C) Functions of covered financial company officers,
            directors, and shareholders.--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
            title.
                (D) Additional powers as receiver.--The Corporation shall,
            as receiver for a covered financial company, and subject to all
            legally enforceable and perfected security interests and all
            legally enforceable security entitlements in respect of assets
            held by the covered financial company, liquidate, and wind-up
            the affairs of a covered financial company, including taking
            steps to realize upon the assets of the covered financial
            company, in such manner as the Corporation deems appropriate,
            including through the sale of assets, the transfer of assets to
            a bridge financial company established under subsection (h), or
            the exercise of any other rights or privileges granted to the
            receiver under this section.
                (E) Additional powers with respect to failing subsidiaries
            of a covered financial company.--
                    (i) In general.--In any case in which a receiver is
                appointed for a covered financial company under section
                202, the Corporation may appoint itself as receiver of any
                covered subsidiary of the covered financial company that is
                organized under Federal law or the laws of any State, if
                the Corporation and the Secretary jointly determine that--

                        (I) the covered subsidiary is in default or in
                    danger of default;
                        (II) such action would avoid or mitigate serious
                    adverse effects on the financial stability or economic
                    conditions of the United States; and
                        (III) such action would facilitate the orderly
                    liquidation of the covered financial company.

                    (ii) Treatment as covered financial company.--If the
                Corporation is appointed as receiver of a covered
                subsidiary of a covered financial company under clause (i),
                the covered subsidiary shall thereafter be considered a
                covered financial company under this title, and the
                Corporation shall thereafter have all the powers and rights
                with respect to that covered subsidiary as it has with
                respect to a covered financial company under this title.
                (F) Organization of bridge companies.--The Corporation, as
            receiver for a covered financial company, may organize a bridge
            financial company under subsection (h).
                (G) Merger; transfer of assets and liabilities.--
                    (i) In general.--Subject to clauses (ii) and (iii), the
                Corporation, as receiver for a covered financial company,
                may--

                        (I) merge the covered financial company with
                    another company; or
                        (II) transfer any asset or liability of the covered
                    financial company (including any assets and liabilities
                    held by the covered financial company for security
                    entitlement holders, any customer property, or any
                    assets and liabilities associated with any trust or
                    custody business) without obtaining any approval,
                    assignment, or consent with respect to such transfer.

                    (ii) Federal agency approval; antitrust review.--With
                respect to a transaction described in clause (i)(I) that
                requires approval by a Federal agency--

                        (I) the transaction may not be consummated before
                    the 5th calendar day after the date of approval by the
                    Federal agency responsible for such approval;
                        (II) 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 United States of the
                    proposed transaction, and the Attorney General shall
                    provide the required report not later than 10 days
                    after the date of the request; and
                        (III) 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 7A, or
                    is extended pursuant to subsection (e)(2) of such
                    section 7A.

                    (iii) Setoff.--Subject to the other provisions of this
                title, any transferee of assets from a receiver, including
                a bridge financial company, shall be subject to such claims
                or rights as would prevail over the rights of such
                transferee in such assets under applicable noninsolvency
                law.
                (H) Payment of valid obligations.--The Corporation, as
            receiver for a covered financial company, shall, to the extent
            that 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.
                (I) Applicable noninsolvency law.--Except as may otherwise
            be provided in this title, the applicable noninsolvency law
            shall be determined by the noninsolvency choice of law rules
            otherwise applicable to the claims, rights, titles, persons, or
            entities at issue.
                (J) Subpoena authority.--
                    (i) In general.--The Corporation, as receiver for a
                covered financial company, may, for purposes of carrying
                out any power, authority, or duty with respect to the
                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 Corporation were
                the appropriate Federal banking agency for the covered
                financial company, and the covered financial company were
                an insured depository institution.
                    (ii) Rule of construction.--This subparagraph may not
                be construed as limiting any rights that the Corporation,
                in any capacity, might otherwise have to exercise any
                powers described in clause (i) or under any other provision
                of law.
                (K) Incidental powers.--The Corporation, as receiver for a
            covered financial company, may exercise all powers and
            authorities specifically granted to receivers under this title,
            and such incidental powers as shall be necessary to carry out
            such powers under this title.
                (L) Utilization of private sector.--In carrying out its
            responsibilities in the management and disposition of assets
            from the covered financial company, the Corporation, as
            receiver for a covered financial company, 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
            that utilization of such services is practicable, efficient,
            and cost effective.
                (M) Shareholders and creditors of covered financial
            company.--Notwithstanding any other provision of law, the
            Corporation, as receiver for a covered financial company, shall
            succeed by operation of law to the rights, titles, powers, and
            privileges described in subparagraph (A), and 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 under this
            section.
                (N) Coordination with foreign financial authorities.--The
            Corporation, as receiver for a covered financial company, shall
            coordinate, to the maximum extent possible, with the
            appropriate foreign financial authorities regarding the orderly
            liquidation of any covered financial company that has assets or
            operations in a country other than the United States.
                (O) Restriction on transfers.--
                    (i) Selection of accounts for transfer.--If the
                Corporation establishes one or more bridge financial
                companies with respect to a covered broker or dealer, the
                Corporation shall transfer to one of such bridge financial
                companies, all customer accounts of the covered broker or
                dealer, and all associated customer name securities and
                customer property, unless the Corporation, after consulting
                with the Commission and SIPC, determines that--

                        (I) the customer accounts, customer name
                    securities, and customer property are likely to be
                    promptly transferred to another broker or dealer that
                    is registered with the Commission under section 15(b)
                    of the Securities Exchange Act of 1934 (15 U.S.C.
                    73o(b)) and is a member of SIPC; or
                        (II) the transfer of the accounts to a bridge
                    financial company would materially interfere with the
                    ability of the Corporation to avoid or mitigate serious
                    adverse effects on financial stability or economic
                    conditions in the United States.

                    (ii) Transfer of property.--SIPC, as trustee for the
                liquidation of the covered broker or dealer, and the
                Commission shall provide any and all reasonable assistance
                necessary to complete such transfers by the Corporation.
                    (iii) Customer consent and court approval not
                required.--Neither customer consent nor court approval
                shall be required to transfer any customer accounts or
                associated customer name securities or customer property to
                a bridge financial company in accordance with this section.
                    (iv) Notification of sipc and sharing of information.--
                The Corporation shall identify to SIPC the customer
                accounts and associated customer name securities and
                customer property transferred to the bridge financial
                company. The Corporation and SIPC shall cooperate in the
                sharing of any information necessary for each entity to
                discharge its obligations under this title and under the
                Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa
                et seq.) including by providing access to the books and
                records of the covered financial company and any bridge
                financial company established in accordance with this
                title.
            (2) Determination of claims.--
                (A) In general.--The Corporation, as receiver for a covered
            financial company, shall report on claims, as set forth in
            section 203(c)(3). Subject to paragraph (4) of this subsection,
            the Corporation, as receiver for a covered financial company,
            shall determine claims in accordance with the requirements of
            this subsection and regulations prescribed under section 209.
                (B) Notice requirements.--The Corporation, as receiver for
            a covered financial company, in any case involving the
            liquidation or winding up of the affairs of a covered financial
            company, shall--
                    (i) promptly publish a notice to the creditors of the
                covered financial company to present their claims, together
                with proof, to the receiver by a date specified in the
                notice, which shall be not earlier than 90 days after the
                date of publication of such notice; and
                    (ii) republish such notice 1 month and 2 months,
                respectively, after the date of publication under clause
                (i).
                (C) Mailing required.--The Corporation as receiver shall
            mail a notice similar to the notice published under clause (i)
            or (ii) of subparagraph (B), at the time of such publication,
            to any creditor shown on the books and records of the covered
            financial company--
                    (i) at the last address of the creditor appearing in
                such books;
                    (ii) in any claim filed by the claimant; or
                    (iii) upon discovery of the name and address of a
                claimant not appearing on the books and records of the
                covered financial company, not later than 30 days after the
                date of the discovery of such name and address.
            (3) Procedures for resolution of claims.--
                (A) Decision period.--
                    (i) In general.--Prior to the 180th day after the date
                on which a claim against a covered financial company is
                filed with the Corporation as receiver, or such later date
                as may be agreed as provided in clause (ii), the
                Corporation shall notify the claimant whether it allows or
                disallows the claim, in accordance with subparagraphs (B),
                (C), and (D).
                    (ii) Extension of time.--By written agreement executed
                not later than 180 days after the date on which a claim
                against a covered financial company is filed with the
                Corporation, the period described in clause (i) may be
                extended by written agreement between the claimant and the
                Corporation. Failure to notify the claimant of any
                disallowance within the time period set forth in clause
                (i), as it may be extended by agreement under this clause,
                shall be deemed to be a disallowance of such claim, and the
                claimant may file or continue an action in court, as
                provided in paragraph (4).
                    (iii) Mailing of notice sufficient.--The requirements
                of clause (i) shall be deemed to be satisfied if the notice
                of any decision with respect to any claim is mailed to the
                last address of the claimant which appears--

                        (I) on the books, records, or both of the covered
                    financial company;
                        (II) in the claim filed by the claimant; or
                        (III) in documents submitted in proof of the claim.

                    (iv) Contents of notice of disallowance.--If the
                Corporation as receiver disallows any claim filed under
                clause (i), the notice to the claimant shall contain--

                        (I) a statement of each reason for the
                    disallowance; and
                        (II) the procedures required to file or continue an
                    action in court, as provided in paragraph (4).

                (B) Allowance of proven claim.--The receiver shall allow
            any claim received by the receiver on or before the date
            specified in the notice under paragraph (2)(B)(i), which is
            proved to the satisfaction of the receiver.
                (C) Disallowance of claims filed after end of filing
            period.--
                    (i) In general.--Except as provided in clause (ii),
                claims filed after the date specified in the notice
                published under paragraph (2)(B)(i) shall be disallowed,
                and such disallowance shall be final.
                    (ii) Certain exceptions.--Clause (i) shall not apply
                with respect to any claim filed by a claimant after the
                date specified in the notice published under paragraph
                (2)(B)(i), and such claim may be considered by the receiver
                under subparagraph (B), if--

                        (I) the claimant did not receive notice of the
                    appointment of the receiver in time to file such claim
                    before such date; and
                        (II) such claim is filed in time to permit payment
                    of such claim.

                (D) Authority to disallow claims.--
                    (i) In general.--The Corporation may disallow any
                portion of any claim by a creditor or claim of a security,
                preference, setoff, or priority which is not proved to the
                satisfaction of the Corporation.
                    (ii) Payments to undersecured creditors.--In the case
                of a claim against a covered financial company that is
                secured by any property or other asset of such covered
                financial company, the receiver--

                        (I) may treat the portion of such claim which
                    exceeds an amount equal to the fair market value of
                    such property or other asset as an unsecured claim; and
                        (II) may not make any payment with respect to such
                    unsecured portion of the claim, other than in
                    connection with the disposition of all claims of
                    unsecured creditors of the covered financial company.

                    (iii) Exceptions.--No provision of this paragraph shall
                apply with respect to--

                        (I) any extension of credit from any Federal
                    reserve bank, or the Corporation, to any covered
                    financial company; or
                        (II) subject to clause (ii), any legally
                    enforceable and perfected security interest in the
                    assets of the covered financial company securing any
                    such extension of credit.

                (E) Legal effect of filing.--
                    (i) Statute of limitations tolled.--For purposes of any
                applicable statute of limitations, the filing of a claim
                with the receiver shall constitute a commencement of an
                action.
                    (ii) No prejudice to other actions.--Subject to
                paragraph (8), 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 date of appointment
                of the receiver for the covered financial company.
            (4) Judicial determination of claims.--
                (A) In general.--Subject to subparagraph (B), a claimant
            may file suit on a claim (or continue an action commenced
            before the date of appointment of the Corporation as receiver)
            in the district or territorial court of the United States for
            the district within which the principal place of business of
            the covered financial company is located (and such court shall
            have jurisdiction to hear such claim).
                (B) Timing.--A claim under subparagraph (A) may be filed
            before the end of the 60-day period beginning on the earlier
            of--
                    (i) the end of the period described in paragraph
                (3)(A)(i) (or, if extended by agreement of the Corporation
                and the claimant, the period described in paragraph
                (3)(A)(ii)) with respect to any claim against a covered
                financial company for which the Corporation is receiver; or
                    (ii) the date of any notice of disallowance of such
                claim pursuant to paragraph (3)(A)(i).
                (C) Statute of limitations.--If any claimant fails to file
            suit on such claim (or to continue an action on such claim
            commenced before the date of appointment of the Corporation as
            receiver) prior to the end of the 60-day period described in
            subparagraph (B), 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.
            (5) Expedited determination of claims.--
                (A) Procedure required.--The Corporation shall establish a
            procedure for expedited relief outside of the claims process
            established under paragraph (3), for any claimant that
            alleges--
                    (i) having a legally valid and enforceable or perfected
                security interest in property of a covered financial
                company or control of any legally valid and enforceable
                security entitlement in respect of any asset held by the
                covered financial company for which the Corporation has
                been appointed receiver; and
                    (ii) that irreparable injury will occur if the claims
                procedure established under paragraph (3) is followed.
                (B) Determination period.--Prior to the end of the 90-day
            period beginning on the date on which a claim is filed in
            accordance with the procedures established pursuant to
            subparagraph (A), the Corporation shall--
                    (i) determine--

                        (I) whether to allow or disallow such claim, or any
                    portion thereof; or
                        (II) whether such claim should be determined
                    pursuant to the procedures established pursuant to
                    paragraph (3);

                    (ii) notify the claimant of the determination; and
                    (iii) if the claim is disallowed, provide a statement
                of each reason for the disallowance and the procedure for
                obtaining a judicial determination.
                (C) Period for filing or renewing suit.--Any claimant who
            files a request for expedited relief shall be permitted to file
            suit (or continue a suit filed before the date of appointment
            of the Corporation as receiver seeking a determination of the
            rights of the claimant with respect to such security interest
            (or such security entitlement) after the earlier of--
                    (i) the end of the 90-day period beginning on the date
                of the filing of a request for expedited relief; or
                    (ii) the date on which the Corporation denies the claim
                or a portion thereof.
                (D) Statute of limitations.--If an action described in
            subparagraph (C) is not filed, or the motion to renew a
            previously filed suit is not made, before the end of the 30-day
            period beginning on the date on which such action or motion may
            be filed in accordance with subparagraph (C), the claim shall
            be deemed to be disallowed as of the end of such period (other
            than any portion of such claim which was allowed by the
            receiver), such disallowance shall be final, and the claimant
            shall have no further rights or remedies with respect to such
            claim.
                (E) Legal effect of filing.--
                    (i) Statute of limitations tolled.--For purposes of any
                applicable statute of limitations, the filing of a claim
                with the receiver shall constitute a commencement of an
                action.
                    (ii) No prejudice to other actions.--Subject to
                paragraph (8), 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.
            (6) Agreements against interest of the receiver.--No agreement
        that tends to diminish or defeat the interest of the Corporation as
        receiver in any asset acquired by the receiver under this section
        shall be valid against the receiver, unless such agreement--
                (A) is in writing;
                (B) was executed by an authorized officer or representative
            of the covered financial company, or confirmed in the ordinary
            course of business by the covered financial company; and
                (C) has been, since the time of its execution, an official
            record of the company or the party claiming under the agreement
            provides documentation, acceptable to the receiver, of such
            agreement and its authorized execution or confirmation by the
            covered financial company.
            (7) Payment of claims.--
                (A) In general.--Subject to subparagraph (B), the
            Corporation as receiver may, in its discretion and to the
            extent that funds are available, pay creditor claims, in such
            manner and amounts as are authorized under this section, which
            are--
                    (i) allowed by the receiver;
                    (ii) approved by the receiver pursuant to a final
                determination pursuant to paragraph (3) or (5), as
                applicable; or
                    (iii) determined by the final judgment of a court of
                competent jurisdiction.
                (B) Limitation.--A creditor shall, in no event, receive
            less than the amount that the creditor is entitled to receive
            under paragraphs (2) and (3) of subsection (d), as applicable.
                (C) Payment of dividends on claims.--The Corporation as
            receiver may, in its 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 as receiver, by reason of any such payment or for
            failure to pay dividends to a claimant whose claim is not
            proved at the time of any such payment.
                (D) Rulemaking by the corporation.--The Corporation may
            prescribe such rules, including definitions of terms, as the
            Corporation deems appropriate to establish an interest rate for
            or to make payments of post-insolvency interest to creditors
            holding proven claims against the receivership estate of a
            covered financial company, except that no such interest shall
            be paid until the Corporation as receiver has satisfied the
            principal amount of all creditor claims.
            (8) Suspension of legal actions.--
                (A) In general.--After the appointment of the Corporation
            as receiver for a covered financial company, the Corporation
            may request a stay in any judicial action or proceeding in
            which such covered financial company is or becomes a party, for
            a period of not to exceed 90 days.
                (B) Grant of stay by all courts required.--Upon receipt of
            a request by the Corporation pursuant to subparagraph (A), the
            court shall grant such stay as to all parties.
            (9) Additional rights and duties.--
                (A) Prior final adjudication.--The Corporation shall abide
            by any final, non-appealable judgment of any court of competent
            jurisdiction that was rendered before the appointment of the
            Corporation as receiver.
                (B) Rights and remedies of receiver.--In the event of any
            appealable judgment, the Corporation as receiver shall--
                    (i) have all the rights and remedies available to the
                covered financial company (before the date of appointment
                of the Corporation as receiver under section 202) and the
                Corporation, including removal to Federal court and all
                appellate rights; and
                    (ii) not be required to post any bond in order to
                pursue such remedies.
                (C) No attachment or execution.--No attachment or execution
            may be issued by any court upon assets in the possession of the
            Corporation as receiver for a covered financial company.
                (D) Limitation on judicial review.--Except as otherwise
            provided in this title, no court shall have jurisdiction over--
                    (i) any claim or action for payment from, or any action
                seeking a determination of rights with respect to, the
                assets of any covered financial company for which the
                Corporation has been appointed receiver, including any
                assets which the Corporation may acquire from itself as
                such receiver; or
                    (ii) any claim relating to any act or omission of such
                covered financial company or the Corporation as receiver.
                (E) Disposition of assets.--In exercising any right, power,
            privilege, or authority as receiver in connection with any
            covered financial company for which the Corporation is acting
            as receiver under this section, the Corporation shall, to the
            greatest extent practicable, conduct its operations in a manner
            that--
                    (i) maximizes the net present value return from the
                sale or disposition of such assets;
                    (ii) minimizes the amount of any loss realized in the
                resolution of cases;
                    (iii) mitigates the potential for serious adverse
                effects to the financial system;
                    (iv) ensures timely and adequate competition and fair
                and consistent treatment of offerors; and
                    (v) prohibits discrimination on the basis of race, sex,
                or ethnic group in the solicitation and consideration of
                offers.
            (10) Statute of limitations for actions brought by receiver.--
                (A) In general.--Notwithstanding any provision of any
            contract, the applicable statute of limitations with regard to
            any action brought by the Corporation as receiver for a covered
            financial company shall be--
                    (i) in the case of any contract claim, the longer of--

                        (I) the 6-year period beginning on the date on
                    which the claim accrues; or
                        (II) the period applicable under State law; and

                    (ii) in the case of any tort claim, the longer of--

                        (I) the 3-year period beginning on the date on
                    which the claim accrues; or
                        (II) the period applicable under State law.

                (B) Date on which a claim accrues.--For purposes of
            subparagraph (A), the date on which the statute of limitations
            begins to run on any claim described in subparagraph (A) shall
            be the later of--
                    (i) the date of the appointment of the Corporation as
                receiver under this title; or
                    (ii) the date on which the cause of action accrues.
                (C) Revival of expired state causes of action.--
                    (i) In general.--In the case of any tort claim
                described in clause (ii) for which the applicable statute
                of limitations under State law has expired not more than 5
                years before the date of appointment of the Corporation as
                receiver for a covered financial company, the Corporation
                may bring an action as receiver on such claim without
                regard to the expiration of the statute of limitations.
                    (ii) Claims described.--A tort claim referred to in
                clause (i) is a claim arising from fraud, intentional
                misconduct resulting in unjust enrichment, or intentional
                misconduct resulting in substantial loss to the covered
                financial company.
            (11) Avoidable transfers.--
                (A) Fraudulent transfers.--The Corporation, as receiver for
            any covered financial company, may avoid a transfer of any
            interest of the covered financial company in property, or any
            obligation incurred by the covered financial company, that was
            made or incurred at or within 2 years before the date on which
            the Corporation was appointed receiver, if--
                    (i) the covered financial company voluntarily or
                involuntarily--

                        (I) made such transfer or incurred such obligation
                    with actual intent to hinder, delay, or defraud any
                    entity to which the covered financial company was or
                    became, on or after the date on which such transfer was
                    made or such obligation was incurred, indebted; or
                        (II) received less than a reasonably equivalent
                    value in exchange for such transferor obligation; and

                    (ii) the covered financial company voluntarily or
                involuntarily--

                        (I) was insolvent on the date that such transfer
                    was made or such obligation was incurred, or became
                    insolvent as a result of such transfer or obligation;
                        (II) was engaged in business or a transaction, or
                    was about to engage in business or a transaction, for
                    which any property remaining with the covered financial
                    company was an unreasonably small capital;
                        (III) intended to incur, or believed that the
                    covered financial company would incur, debts that would
                    be beyond the ability of the covered financial company
                    to pay as such debts matured; or
                        (IV) made such transfer to or for the benefit of an
                    insider, or incurred such obligation to or for the
                    benefit of an insider, under an employment contract and
                    not in the ordinary course of business.

                (B) Preferential transfers.--The Corporation as receiver
            for any covered financial company may avoid a transfer of an
            interest of the covered financial company in property--
                    (i) to or for the benefit of a creditor;
                    (ii) for or on account of an antecedent debt that was
                owed by the covered financial company before the transfer
                was made;
                    (iii) that was made while the covered financial company
                was insolvent;
                    (iv) that was made--

                        (I) 90 days or less before the date on which the
                    Corporation was appointed receiver; or
                        (II) more than 90 days, but less than 1 year before
                    the date on which the Corporation was appointed
                    receiver, if such creditor at the time of the transfer
                    was an insider; and

                    (v) that enables the creditor to receive more than the
                creditor would receive if--

                        (I) the covered financial company had been
                    liquidated under chapter 7 of the Bankruptcy Code;
                        (II) the transfer had not been made; and
                        (III) the creditor received payment of such debt to
                    the extent provided by the provisions of chapter 7 of
                    the Bankruptcy Code.

                (C) Post-receivership transactions.--The Corporation as
            receiver for any covered financial company may avoid a transfer
            of property of the receivership that occurred after the
            Corporation was appointed receiver that was not authorized
            under this title by the Corporation as receiver.
                (D) Right of recovery.--To the extent that a transfer is
            avoided under subparagraph (A), (B), or (C), the Corporation
            may recover, for the benefit of the covered financial company,
            the property transferred or, if a court so orders, the value of
            such property (at the time of such transfer) from--
                    (i) the initial transferee of such transfer or the
                person for whose benefit such transfer was made; or
                    (ii) any immediate or mediate transferee of any such
                initial transferee.
                (E) Rights of transferee or obligee.--The Corporation may
            not recover under subparagraph (D)(ii) from--
                    (i) any transferee that takes for value, including in
                satisfaction of or to secure a present or antecedent debt,
                in good faith, and without knowledge of the voidability of
                the transfer avoided; or
                    (ii) any immediate or mediate good faith transferee of
                such transferee.
                (F) Defenses.--Subject to the other provisions of this
            title--
                    (i) a transferee or obligee from which the Corporation
                seeks to recover a transfer or to avoid an obligation under
                subparagraph (A), (B), (C), or (D) shall have the same
                defenses available to a transferee or obligee from which a
                trustee seeks to recover a transfer or avoid an obligation
                under sections 547, 548, and 549 of the Bankruptcy Code;
                and
                    (ii) the authority of the Corporation to recover a
                transfer or avoid an obligation shall be subject to
                subsections (b) and (c) of section 546, section 547(c), and
                section 548(c) of the Bankruptcy Code.
                (G) Rights under this section.--The rights of the
            Corporation as receiver under this section shall be superior to
            any rights of a trustee or any other party (other than a
            Federal agency) under the Bankruptcy Code.
                (H) Rules of construction; definitions.--For purposes of--
                    (i) subparagraphs (A) and (B)--

                        (I) the term ``insider'' has the same meaning as in
                    section 101(31) of the Bankruptcy Code;
                        (II) a transfer is made when such transfer is so
                    perfected that a bona fide purchaser from the covered
                    financial company against whom applicable law permits
                    such transfer to be perfected cannot acquire an
                    interest in the property transferred that is superior
                    to the interest in such property of the transferee, but
                    if such transfer is not so perfected before the date on
                    which the Corporation is appointed as receiver for the
                    covered financial company, such transfer is made
                    immediately before the date of such appointment; and
                        (III) the term ``value'' means property, or
                    satisfaction or securing of a present or antecedent
                    debt of the covered financial company, but does not
                    include an unperformed promise to furnish support to
                    the covered financial company; and

                    (ii) subparagraph (B)--

                        (I) the covered financial company is presumed to
                    have been insolvent on and during the 90-day period
                    immediately preceding the date of appointment of the
                    Corporation as receiver; and
                        (II) the term ``insolvent'' has the same meaning as
                    in section 101(32) of the Bankruptcy Code.

            (12) Setoff.--
                (A) Generally.--Except as otherwise provided in this title,
            any right of a creditor to offset a mutual debt owed by the
            creditor to any covered financial company that arose before the
            Corporation was appointed as receiver for the covered financial
            company against a claim of such creditor may be asserted if
            enforceable under applicable noninsolvency law, except to the
            extent that--
                    (i) the claim of the creditor against the covered
                financial company is disallowed;
                    (ii) the claim was transferred, by an entity other than
                the covered financial company, to the creditor--

                        (I) after the Corporation was appointed as receiver
                    of the covered financial company; or
                        (II)(aa) after the 90-day period preceding the date
                    on which the Corporation was appointed as receiver for
                    the covered financial company; and
                        (bb) while the covered financial company was
                    insolvent (except for a setoff in connection with a
                    qualified financial contract); or

                    (iii) the debt owed to the covered financial company
                was incurred by the covered financial company--

                        (I) after the 90-day period preceding the date on
                    which the Corporation was appointed as receiver for the
                    covered financial company;
                        (II) while the covered financial company was
                    insolvent; and
                        (III) for the purpose of obtaining a right of
                    setoff against the covered financial company (except
                    for a setoff in connection with a qualified financial
                    contract).

                (B) Insufficiency.--
                    (i) In general.--Except with respect to a setoff in
                connection with a qualified financial contract, if a
                creditor offsets a mutual debt owed to the covered
                financial company against a claim of the covered financial
                company on or within the 90-day period preceding the date
                on which the Corporation is appointed as receiver for the
                covered financial company, the Corporation may recover from
                the creditor the amount so offset, to the extent that any
                insufficiency on the date of such setoff is less than the
                insufficiency on the later of--

                        (I) the date that is 90 days before the date on
                    which the Corporation is appointed as receiver for the
                    covered financial company; or
                        (II) the first day on which there is an
                    insufficiency during the 90-day period preceding the
                    date on which the Corporation is appointed as receiver
                    for the covered financial company.

                    (ii) Definition of insufficiency.--In this
                subparagraph, the term ``insufficiency'' means the amount,
                if any, by which a claim against the covered financial
                company exceeds a mutual debt owed to the covered financial
                company by the holder of such claim.
                (C) Insolvency.--The term ``insolvent'' has the same
            meaning as in section 101(32) of the Bankruptcy Code.
                (D) Presumption of insolvency.--For purposes of this
            paragraph, the covered financial company is presumed to have
            been insolvent on and during the 90-day period preceding the
            date of appointment of the Corporation as receiver.
                (E) Limitation.--Nothing in this paragraph (12) shall be
            the basis for any right of setoff where no such right exists
            under applicable noninsolvency law.
                (F) Priority claim.--Except as otherwise provided in this
            title, the Corporation as receiver for the covered financial
            company may sell or transfer any assets free and clear of the
            setoff rights of any party, except that such party shall be
            entitled to a claim, subordinate to the claims payable under
            subparagraphs (A), (B), (C), and (D) of subsection (b)(1), but
            senior to all other unsecured liabilities defined in subsection
            (b)(1)(E), in an amount equal to the value of such setoff
            rights.
            (13) Attachment of assets and other injunctive relief.--Subject
        to paragraph (14), any court of competent jurisdiction may, at the
        request of the Corporation as receiver for a covered financial
        company, issue an order in accordance with Rule 65 of the Federal
        Rules of Civil Procedure, including an order placing the assets of
        any person designated by the Corporation under the control of the
        court and appointing a trustee to hold such assets.
            (14) Standards.--
                (A) Showing.--Rule 65 of the Federal Rules of Civil
            Procedure shall apply with respect to any proceeding under
            paragraph (13), without regard to the requirement that the
            applicant show that the injury, loss, or damage is irreparable
            and immediate.
                (B) State proceeding.--If, in the case of any proceeding in
            a State court, the court determines that rules of civil
            procedure available under the laws of the State provide
            substantially similar protections of the right of the parties
            to due process as provided under Rule 65 (as modified with
            respect to such proceeding by subparagraph (A)), the relief
            sought by the Corporation pursuant to paragraph (14) may be
            requested under the laws of such State.
            (15) Treatment of claims arising from breach of contracts
        executed by the corporation as receiver.--Notwithstanding any other
        provision of this title, any final and non-appealable judgment for
        monetary damages entered against the Corporation as receiver for a
        covered financial company for the breach of an agreement executed
        or approved by the Corporation after the date of its appointment
        shall be paid as an administrative expense of the receiver. Nothing
        in this paragraph shall be construed to limit the power of a
        receiver to exercise any rights under contract or law, including to
        terminate, breach, cancel, or otherwise discontinue such agreement.
            (16) Accounting and recordkeeping requirements.--
                (A) In general.--The Corporation as receiver for a covered
            financial company shall, consistent with the accounting and
            reporting practices and procedures established by the
            Corporation, maintain a full accounting of each receivership or
            other disposition of any covered financial company.
                (B) Annual accounting or report.--With respect to each
            receivership to which the Corporation is appointed, the
            Corporation shall make an annual accounting or report, as
            appropriate, available to the Secretary and the Comptroller
            General of the United States.
                (C) Availability of reports.--Any report prepared pursuant
            to subparagraph (B) and section 203(c)(3) shall be made
            available to the public by the Corporation.
                (D) Recordkeeping requirement.--
                    (i) In general.--The Corporation shall prescribe such
                regulations and establish such retention schedules as are
                necessary to maintain the documents and records of the
                Corporation generated in exercising the authorities of this
                title and the records of a covered financial company for
                which the Corporation is appointed receiver, with due
                regard for--

                        (I) the avoidance of duplicative record retention;
                    and
                        (II) the expected evidentiary needs of the
                    Corporation as receiver for a covered financial company
                    and the public regarding the records of covered
                    financial companies.

                    (ii) Retention of records.--Unless otherwise required
                by applicable Federal law or court order, the Corporation
                may not, at any time, destroy any records that are subject
                to clause (i).
                    (iii) Records defined.--As used in this subparagraph,
                the terms ``records'' and ``records of a covered financial
                company'' mean any document, book, paper, map, photograph,
                microfiche, microfilm, computer or electronically-created
                record generated or maintained by the covered financial
                company in the course of and necessary to its transaction
                of business.
        (b) Priority of Expenses and Unsecured Claims.--
            (1) In general.--Unsecured claims against a covered financial
        company, or the Corporation as receiver for such covered financial
        company under this section, that are proven to the satisfaction of
        the receiver shall have priority in the following order:
                (A) Administrative expenses of the receiver.
                (B) Any amounts owed to the United States, unless the
            United States agrees or consents otherwise.
                (C) Wages, salaries, or commissions, including vacation,
            severance, and sick leave pay earned by an individual (other
            than an individual described in subparagraph (G)), but only to
            the extent of $11,725 for each individual (as indexed for
            inflation, by regulation of the Corporation) earned not later
            than 180 days before the date of appointment of the Corporation
            as receiver.
                (D) Contributions owed to employee benefit plans arising
            from services rendered not later than 180 days before the date
            of appointment of the Corporation as receiver, to the extent of
            the number of employees covered by each such plan, multiplied
            by $11,725 (as indexed for inflation, by regulation of the
            Corporation), less the aggregate amount paid to such employees
            under subparagraph (C), plus the aggregate amount paid by the
            receivership on behalf of such employees to any other employee
            benefit plan.
                (E) Any other general or senior liability of the covered
            financial company (which is not a liability described under
            subparagraph (F), (G), or (H)).
                (F) Any obligation subordinated to general creditors (which
            is not an obligation described under subparagraph (G) or (H)).
                (G) Any wages, salaries, or commissions, including
            vacation, severance, and sick leave pay earned, owed to senior
            executives and directors of the covered financial company.
                (H) Any obligation to shareholders, members, general
            partners, limited partners, or other persons, with interests in
            the equity of the covered financial company arising as a result
            of their status as shareholders, members, general partners,
            limited partners, or other persons with interests in the equity
            of the covered financial company.
            (2) Post-receivership financing priority.--In the event that
        the Corporation, as receiver for a covered financial company, is
        unable to obtain unsecured credit for the covered financial company
        from commercial sources, the Corporation as receiver may obtain
        credit or incur debt on the part of the covered financial company,
        which shall have priority over any or all administrative expenses
        of the receiver under paragraph (1)(A).
            (3) Claims of the united states.--Unsecured claims of the
        United States shall, at a minimum, have a higher priority than
        liabilities of the covered financial company that count as
        regulatory capital.
            (4) Creditors similarly situated.--All claimants of a covered
        financial company that are similarly situated under paragraph (1)
        shall be treated in a similar manner, except that the Corporation
        may take any action (including making payments, subject to
        subsection (o)(1)(D)(i)) that does not comply with this subsection,
        if--
                (A) the Corporation determines that such action is
            necessary--
                    (i) to maximize the value of the assets of the covered
                financial company;
                    (ii) to initiate and continue operations essential to
                implementation of the receivership or any bridge financial
                company;
                    (iii) to maximize the present value return from the
                sale or other disposition of the assets of the covered
                financial company; or
                    (iv) to minimize the amount of any loss realized upon
                the sale or other disposition of the assets of the covered
                financial company; and
                (B) all claimants that are similarly situated under
            paragraph (1) receive not less than the amount provided in
            paragraphs (2) and (3) of subsection (d).
            (5) Secured claims unaffected.--This section shall not affect
        secured claims or security entitlements in respect of assets or
        property held by the covered financial company, except to the
        extent that the security is insufficient to satisfy the claim, and
        then only with regard to the difference between the claim and the
        amount realized from the security.
            (6) Priority of expenses and unsecured claims in the orderly
        liquidation of sipc member.--Where the Corporation is appointed as
        receiver for a covered broker or dealer, unsecured claims against
        such covered broker or dealer, or the Corporation as receiver for
        such covered broker or dealer under this section, that are proven
        to the satisfaction of the receiver under section 205(e), shall
        have the priority prescribed in paragraph (1), except that--
                (A) SIPC shall be entitled to recover administrative
            expenses incurred in performing its responsibilities under
            section 205 on an equal basis with the Corporation, in
            accordance with paragraph (1)(A);
                (B) the Corporation shall be entitled to recover any
            amounts paid to customers or to SIPC pursuant to section
            205(f), in accordance with paragraph (1)(B);
                (C) SIPC shall be entitled to recover any amounts paid out
            of the SIPC Fund to meet its obligations under section 205 and
            under the Securities Investor Protection Act of 1970 (15 U.S.C.
            78aaa et seq.), which claim shall be subordinate to the claims
            payable under subparagraphs (A) and (B) of paragraph (1), but
            senior to all other claims; and
                (D) the Corporation may, after paying any proven claims to
            customers under section 205 and the Securities Investor
            Protection Act of 1970 (15 U.S.C. 78aaa et seq.), and as
            provided above, pay dividends on other proven claims, in its
            discretion, and to the extent that funds are available, in
            accordance with the priorities set forth in paragraph (1).
        (c) Provisions Relating to Contracts Entered Into Before
    Appointment of Receiver.--
            (1) Authority to repudiate contracts.--In addition to any other
        rights that a receiver may have, the Corporation as receiver for
        any covered financial company may disaffirm or repudiate any
        contract or lease--
                (A) to which the covered financial company is a party;
                (B) the performance of which the Corporation as receiver,
            in the discretion of the Corporation, determines to be
            burdensome; and
                (C) the disaffirmance or repudiation of which the
            Corporation as receiver determines, in the discretion of the
            Corporation, will promote the orderly administration of the
            affairs of the covered financial company.
            (2) Timing of repudiation.--The Corporation, as receiver for
        any covered financial company, shall determine whether or not to
        exercise the rights of repudiation under this section within a
        reasonable period of time.
            (3) Claims for damages for repudiation.--
                (A) In general.--Except as provided in paragraphs (4), (5),
            and (6) and in subparagraphs (C), (D), and (E) of this
            paragraph, the liability of the Corporation as receiver for a
            covered financial company for the disaffirmance or repudiation
            of any contract pursuant to paragraph (1) shall be--
                    (i) limited to actual direct compensatory damages; and
                    (ii) determined as of--

                        (I) the date of the appointment of the Corporation
                    as receiver; or
                        (II) in the case of any contract or agreement
                    referred to in paragraph (8), the date of the
                    disaffirmance or repudiation of such contract or
                    agreement.

                (B) No liability for other damages.--For purposes of
            subparagraph (A), the term ``actual direct compensatory
            damages'' does not include--
                    (i) punitive or exemplary damages;
                    (ii) damages for lost profits or opportunity; or
                    (iii) damages for pain and suffering.
                (C) Measure of damages for repudiation of qualified
            financial contracts.--In the case of any qualified financial
            contract or agreement to which paragraph (8) applies,
            compensatory damages shall be--
                    (i) deemed to include normal and reasonable costs of
                cover or other reasonable measures of damages utilized in
                the industries for such contract and agreement claims; and
                    (ii) paid in accordance with this paragraph and
                subsection (d), except as otherwise specifically provided
                in this subsection.
                (D) Measure of damages for repudiation or disaffirmance of
            debt obligation.--In the case of any debt for borrowed money or
            evidenced by a security, actual direct compensatory damages
            shall be no less than the amount lent plus accrued interest
            plus any accreted original issue discount as of the date the
            Corporation was appointed receiver of the covered financial
            company and, to the extent that an allowed secured claim is
            secured by property the value of which is greater than the
            amount of such claim and any accrued interest through the date
            of repudiation or disaffirmance, such accrued interest pursuant
            to paragraph (1).
                (E) Measure of damages for repudiation or disaffirmance of
            contingent obligation.--In the case of any contingent
            obligation of a covered financial company consisting of any
            obligation under a guarantee, letter of credit, loan
            commitment, or similar credit obligation, the Corporation may,
            by rule or regulation, prescribe that actual direct
            compensatory damages shall be no less than the estimated value
            of the claim as of the date the Corporation was appointed
            receiver of the covered financial company, as such value is
            measured based on the likelihood that such contingent claim
            would become fixed and the probable magnitude thereof.
            (4) Leases under which the covered financial company is the
        lessee.--
                (A) In general.--If the Corporation as receiver disaffirms
            or repudiates a lease under which the covered financial company
            is the lessee, the receiver shall not be liable for any damages
            (other than damages determined pursuant to subparagraph (B))
            for the disaffirmance or repudiation of such lease.
                (B) Payments of rent.--Notwithstanding subparagraph (A),
            the lessor under a lease to which subparagraph (A) would
            otherwise apply shall--
                    (i) be entitled to the contractual rent accruing before
                the later of the date on which--

                        (I) the notice of disaffirmance or repudiation is
                    mailed; or
                        (II) the disaffirmance or repudiation becomes
                    effective, unless the lessor is in default or breach of
                    the terms of the lease;

                    (ii) have no claim for damages under any acceleration
                clause or other penalty provision in the lease; and
                    (iii) have a claim for any unpaid rent, subject to all
                appropriate offsets and defenses, due as of the date of the
                appointment which shall be paid in accordance with this
                paragraph and subsection (d).
            (5) Leases under which the covered financial company is the
        lessor.--
                (A) In general.--If the Corporation as receiver for a
            covered financial company repudiates an unexpired written lease
            of real property of the covered financial company under which
            the covered financial company is the lessor and the lessee is
            not, as of the date of such repudiation, in default, the lessee
            under such lease may either--
                    (i) treat the lease as terminated by such repudiation;
                or
                    (ii) remain in possession of the leasehold interest for
                the balance of the term of the lease, unless the lessee
                defaults under the terms of the lease after the date of
                such repudiation.
                (B) Provisions applicable to lessee remaining in
            possession.--If any lessee under a lease described in
            subparagraph (A) remains in possession of a leasehold interest
            pursuant to clause (ii) of subparagraph (A)--
                    (i) the lessee--

                        (I) shall continue to pay the contractual rent
                    pursuant to the terms of the lease after the date of
                    the repudiation of such lease; and
                        (II) may offset against any rent payment which
                    accrues after the date of the repudiation of the lease,
                    any damages which accrue after such date due to the
                    nonperformance of any obligation of the covered
                    financial company under the lease after such date; and

                    (ii) the Corporation as receiver shall not be liable to
                the lessee for any damages arising after such date as a
                result of the repudiation, other than the amount of any
                offset allowed under clause (i)(II).
            (6) Contracts for the sale of real property.--
                (A) In general.--If the receiver repudiates any contract
            (which meets the requirements of subsection (a)(6)) for the
            sale of real property, and the purchaser of such real property
            under such contract is in possession and is not, as of the date
            of such repudiation, in default, such purchaser may either--
                    (i) treat the contract as terminated by such
                repudiation; or
                    (ii) remain in possession of such real property.
                (B) Provisions applicable to purchaser remaining in
            possession.--If any purchaser of real property under any
            contract described in subparagraph (A) remains in possession of
            such property pursuant to clause (ii) of subparagraph (A)--
                    (i) the purchaser--

                        (I) shall continue to make all payments due under
                    the contract after the date of the repudiation of the
                    contract; and
                        (II) may offset against any such payments any
                    damages which accrue after such date due to the
                    nonperformance (after such date) of any obligation of
                    the covered financial company under the contract; and

                    (ii) the Corporation as receiver shall--

                        (I) not be liable to the purchaser for any damages
                    arising after such date as a result of the repudiation,
                    other than the amount of any offset allowed under
                    clause (i)(II);
                        (II) deliver title to the purchaser in accordance
                    with the provisions of the contract; and
                        (III) have no obligation under the contract other
                    than the performance required under subclause (II).

                (C) Assignment and sale allowed.--
                    (i) In general.--No provision of this paragraph shall
                be construed as limiting the right of the Corporation as
                receiver to assign the contract described in subparagraph
                (A) and sell the property, subject to the contract and the
                provisions of this paragraph.
                    (ii) No liability after assignment and sale.--If an
                assignment and sale described in clause (i) is consummated,
                the Corporation as receiver shall have no further liability
                under the contract described in subparagraph (A) or with
                respect to the real property which was the subject of such
                contract.
            (7) Provisions applicable to service contracts.--
                (A) Services performed before appointment.--In the case of
            any contract for services between any person and any covered
            financial company for which the Corporation has been appointed
            receiver, any claim of such person for services performed
            before the date of appointment shall be--
                    (i) a claim to be paid in accordance with subsections
                (a), (b), and (d); and
                    (ii) deemed to have arisen as of the date on which the
                receiver was appointed.
                (B) Services performed after appointment and prior to
            repudiation.--If, in the case of any contract for services
            described in subparagraph (A), the Corporation as receiver
            accepts performance by the other person before making any
            determination to exercise the right of repudiation of such
            contract under this section--
                    (i) the other party shall be paid under the terms of
                the contract for the services performed; and
                    (ii) the amount of such payment shall be treated as an
                administrative expense of the receivership.
                (C) Acceptance of performance no bar to subsequent
            repudiation.--The acceptance by the Corporation as receiver for
            services referred to in subparagraph (B) in connection with a
            contract described in subparagraph (B) shall not affect the
            right of the Corporation as receiver to repudiate such contract
            under this section at any time after such performance.
            (8) Certain qualified financial contracts.--
                (A) Rights of parties to contracts.--Subject to subsection
            (a)(8) and paragraphs (9) and (10) of this subsection, and
            notwithstanding any other provision of this section, any other
            provision of Federal law, or the law of any State, no person
            shall be stayed or prohibited from exercising--
                    (i) any right that such person has to cause the
                termination, liquidation, or acceleration of any qualified
                financial contract with a covered financial company which
                arises upon the date of appointment of the Corporation as
                receiver for such covered financial company or at any time
                after such appointment;
                    (ii) any right under any security agreement or
                arrangement or other credit enhancement related to one or
                more qualified financial contracts described in clause (i);
                or
                    (iii) any right to offset or net out any termination
                value, payment amount, or other transfer obligation arising
                under or in connection with 1 or more contracts or
                agreements described in clause (i), including any master
                agreement for such contracts or agreements.
                (B) Applicability of other provisions.--Subsection (a)(8)
            shall apply in the case of any judicial action or proceeding
            brought against the Corporation as receiver referred to in
            subparagraph (A), or the subject covered financial company, by
            any party to a contract or agreement described in subparagraph
            (A)(i) with such covered financial company.
                (C) Certain transfers not avoidable.--
                    (i) In general.--Notwithstanding subsection (a)(11),
                (a)(12), or (c)(12), 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
                the Corporation or as receiver for a covered financial
                company, may not avoid any transfer of money or other
                property in connection with any qualified financial
                contract with a covered financial company.
                    (ii) Exception for certain transfers.--Clause (i) shall
                not apply to any transfer of money or other property in
                connection with any qualified financial contract with a
                covered financial company if the transferee had actual
                intent to hinder, delay, or defraud such company, the
                creditors of such company, or the Corporation as receiver
                appointed for such company.
                (D) Certain contracts and agreements defined.--For purposes
            of this subsection, the following definitions shall apply:
                    (i) Qualified financial contract.--The term ``qualified
                financial contract'' means any securities contract,
                commodity contract, forward contract, repurchase agreement,
                swap agreement, and any similar agreement that the
                Corporation determines by regulation, resolution, or order
                to be a qualified financial contract for purposes of this
                paragraph.
                    (ii) Securities contract.--The term ``securities
                contract''--

                        (I) means a contract for the purchase, sale, or
                    loan of a security, a certificate of deposit, a
                    mortgage loan, any interest in a mortgage loan, a group
                    or index of securities, certificates of deposit, or
                    mortgage loans or interests therein (including any
                    interest therein or based on the value thereof), or any
                    option on any of the foregoing, including any option to
                    purchase or sell any such security, certificate of
                    deposit, mortgage loan, interest, group or index, or
                    option, and including any repurchase or reverse
                    repurchase transaction on any such security,
                    certificate of deposit, mortgage loan, interest, group
                    or index, or option (whether or not such repurchase or
                    reverse repurchase transaction is a ``repurchase
                    agreement'', as defined in clause (v));
                        (II) does not include any purchase, sale, or
                    repurchase obligation under a participation in a
                    commercial mortgage loan unless the Corporation
                    determines by regulation, resolution, or order to
                    include any such agreement within the meaning of such
                    term;
                        (III) means any option entered into on a national
                    securities exchange relating to foreign currencies;
                        (IV) means the guarantee (including by novation) by
                    or to any securities clearing agency of any settlement
                    of cash, securities, certificates of deposit, mortgage
                    loans or interests therein, group or index of
                    securities, certificates of deposit or mortgage loans
                    or interests therein (including any interest therein or
                    based on the value thereof) or an option on any of the
                    foregoing, including any option to purchase or sell any
                    such security, certificate of deposit, mortgage loan,
                    interest, group or index, or option (whether or not
                    such settlement is in connection with any agreement or
                    transaction referred to in subclauses (I) through (XII)
                    (other than subclause (II)));
                        (V) means any margin loan;
                        (VI) means any extension of credit for the
                    clearance or settlement of securities transactions;
                        (VII) means any loan transaction coupled with a
                    securities collar transaction, any prepaid securities
                    forward transaction, or any total return swap
                    transaction coupled with a securities sale transaction;
                        (VIII) means any other agreement or transaction
                    that is similar to any agreement or transaction
                    referred to in this clause;
                        (IX) means any combination of the agreements or
                    transactions referred to in this clause;
                        (X) means any option to enter into any agreement or
                    transaction referred to in this clause;
                        (XI) means a master agreement that provides for an
                    agreement or transaction referred to in any of
                    subclauses (I) through (X), other than subclause (II),
                    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 any of subclauses (I)
                    through (X), other than subclause (II); and
                        (XII) means any security agreement or arrangement
                    or other credit enhancement related to any agreement or
                    transaction referred to in this clause, including any
                    guarantee or reimbursement obligation in connection
                    with any agreement or transaction referred to in this
                    clause.

                    (iii) Commodity contract.--The term ``commodity
                contract'' means--

                        (I) with respect to a futures commission merchant,
                    a contract for the purchase or sale of a commodity for
                    future delivery on, or subject to the rules of, a
                    contract market or board of trade;
                        (II) with respect to a foreign futures commission
                    merchant, a foreign future;
                        (III) with respect to a leverage transaction
                    merchant, a leverage transaction;
                        (IV) with respect to a clearing organization, a
                    contract for the purchase or sale of a commodity for
                    future delivery on, or subject to the rules of, a
                    contract market or board of trade that is cleared by
                    such clearing organization, or commodity option traded
                    on, or subject to the rules of, a contract market or
                    board of trade that is cleared by such clearing
                    organization;
                        (V) with respect to a commodity options dealer, a
                    commodity option;
                        (VI) any other agreement or transaction that is
                    similar to any agreement or transaction referred to in
                    this clause;
                        (VII) any combination of the agreements or
                    transactions referred to in this clause;
                        (VIII) any option to enter into any agreement or
                    transaction referred to in this clause;
                        (IX) a master agreement that provides for an
                    agreement or transaction referred to in any of
                    subclauses (I) through (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 any of subclauses (I) through
                    (VIII); or
                        (X) any security agreement or arrangement or other
                    credit enhancement related to any agreement or
                    transaction referred to in this clause, including any
                    guarantee or reimbursement obligation in connection
                    with any agreement or transaction referred to in this
                    clause.

                    (iv) Forward contract.--The term ``forward contract''
                means--

                        (I) a contract (other than a commodity contract)
                    for the purchase, sale, or transfer of a commodity or
                    any similar good, article, service, right, or interest
                    which is presently or in the future becomes the subject
                    of dealing in the forward contract trade, or product or
                    byproduct thereof, with a maturity date that is more
                    than 2 days after the date on which the contract is
                    entered into, including a repurchase or reverse
                    repurchase transaction (whether or not such repurchase
                    or reverse repurchase transaction is a ``repurchase
                    agreement'', as defined in clause (v)), consignment,
                    lease, swap, hedge transaction, deposit, loan, option,
                    allocated transaction, unallocated transaction, or any
                    other similar agreement;
                        (II) any combination of agreements or transactions
                    referred to in subclauses (I) and (III);
                        (III) any option to enter into any agreement or
                    transaction referred to in subclause (I) or (II);
                        (IV) a master agreement that provides for an
                    agreement or transaction referred to in subclause (I),
                    (II), or (III), together with all supplements to any
                    such master agreement, without regard to whether the
                    master agreement provides for an agreement or
                    transaction that is not a forward contract under this
                    clause, except that the master agreement shall be
                    considered to be a forward contract under this clause
                    only with respect to each agreement or transaction
                    under the master agreement that is referred to in
                    subclause (I), (II), or (III); or
                        (V) any security agreement or arrangement or other
                    credit enhancement related to any agreement or
                    transaction referred to in subclause (I), (II), (III),
                    or (IV), including any guarantee or reimbursement
                    obligation in connection with any agreement or
                    transaction referred to in any such subclause.

                    (v) Repurchase agreement.--The term ``repurchase
                agreement'' (which definition also applies to a reverse
                repurchase agreement)--

                        (I) means an agreement, including related terms,
                    which provides for the transfer of one or more
                    certificates of deposit, mortgage related securities
                    (as such term is defined in section 3 of 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, means 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 Board of Governors), or securities that
                    are direct obligations of, or that are fully guaranteed
                    by, the United States or any agency of the United
                    States against the transfer of funds by the transferee
                    of such certificates of deposit, eligible bankers'
                    acceptances, securities, mortgage loans, or interests
                    with a simultaneous agreement by such transferee to
                    transfer to the transferor thereof certificates of
                    deposit, eligible bankers' acceptances, securities,
                    mortgage loans, or interests as described above, at a
                    date certain not later than 1 year after such transfers
                    or on demand, against the transfer of funds, or any
                    other similar agreement;
                        (II) does not include any repurchase obligation
                    under a participation in a commercial mortgage loan,
                    unless the Corporation determines, by regulation,
                    resolution, or order to include any such participation
                    within the meaning of such term;
                        (III) means any combination of agreements or
                    transactions referred to in subclauses (I) and (IV);
                        (IV) means any option to enter into any agreement
                    or transaction referred to in subclause (I) or (III);
                        (V) means a master agreement that provides for an
                    agreement or transaction referred to in subclause (I),
                    (III), or (IV), together with all supplements to any
                    such master agreement, without regard to whether the
                    master agreement provides for an agreement or
                    transaction that is not a repurchase agreement under
                    this clause, except that the master agreement shall be
                    considered to be a repurchase agreement under this
                    subclause only with respect to each agreement or
                    transaction under the master agreement that is referred
                    to in subclause (I), (III), or (IV); and
                        (VI) means any security agreement or arrangement or
                    other credit enhancement related to any agreement or
                    transaction referred to in subclause (I), (III), (IV),
                    or (V), including any guarantee or reimbursement
                    obligation in connection with any agreement or
                    transaction referred to in any such subclause.

                    (vi) Swap agreement.--The term ``swap agreement''
                means--

                        (I) any agreement, including the terms and
                    conditions incorporated by reference in any such
                    agreement, which is an interest rate swap, option,
                    future, or forward agreement, including a rate floor,
                    rate cap, rate collar, cross-currency rate swap, and
                    basis swap; a spot, same day-tomorrow, tomorrow-next,
                    forward, or other foreign exchange, precious metals, or
                    other commodity agreement; a currency swap, option,
                    future, or forward agreement; an equity index or equity
                    swap, option, future, or forward agreement; a debt
                    index or debt swap, option, future, or forward
                    agreement; a total return, credit spread or credit
                    swap, option, future, or forward agreement; a commodity
                    index or commodity swap, option, future, or forward
                    agreement; weather swap, option, future, or forward
                    agreement; an emissions swap, option, future, or
                    forward agreement; or an inflation swap, option,
                    future, or forward agreement;
                        (II) any agreement or transaction that is similar
                    to any other agreement or transaction referred to in
                    this clause and that is of a type that has been, is
                    presently, or in the future becomes, the subject of
                    recurrent dealings in the swap or other derivatives
                    markets (including terms and conditions incorporated by
                    reference in such agreement) and that is a forward,
                    swap, future, option, or spot transaction on one or
                    more rates, currencies, commodities, equity securities
                    or other equity instruments, debt securities or other
                    debt instruments, quantitative measures associated with
                    an occurrence, extent of an occurrence, or contingency
                    associated with a financial, commercial, or economic
                    consequence, or economic or financial indices or
                    measures of economic or financial risk or value;
                        (III) any combination of agreements or transactions
                    referred to in this clause;
                        (IV) any option to enter into any agreement or
                    transaction referred to in this clause;
                        (V) a master agreement that provides for an
                    agreement or transaction referred to in subclause (I),
                    (II), (III), or (IV), together with all supplements to
                    any such master agreement, without regard to whether
                    the master agreement contains an agreement or
                    transaction that is not a swap agreement under this
                    clause, except that the master agreement shall be
                    considered to be a swap agreement under this clause
                    only with respect to each agreement or transaction
                    under the master agreement that is referred to in
                    subclause (I), (II), (III), or (IV); and
                        (VI) any security agreement or arrangement or other
                    credit enhancement related to any agreement or
                    transaction referred to in any of subclauses (I)
                    through (V), including any guarantee or reimbursement
                    obligation in connection with any agreement or
                    transaction referred to in any such clause.

                    (vii) Definitions relating to default.--When used in
                this paragraph and paragraphs (9) and (10)--

                        (I) the term ``default'' means, with respect to a
                    covered financial company, any adjudication or other
                    official decision by any court of competent
                    jurisdiction, or other public authority pursuant to
                    which the Corporation has been appointed receiver; and
                        (II) the term ``in danger of default'' means a
                    covered financial company with respect to which the
                    Corporation or appropriate State authority has
                    determined that--

                            (aa) in the opinion of the Corporation or such
                        authority--
                                (AA) the covered financial company is not
                            likely to be able to pay its obligations in the
                            normal course of business; and
                                (BB) there is no reasonable prospect that
                            the covered financial company will be able to
                            pay such obligations without Federal
                            assistance; or
                            (bb) in the opinion of the Corporation or such
                        authority--
                                (AA) the covered financial company has
                            incurred or is likely to incur losses that will
                            deplete all or substantially all of its
                            capital; and
                                (BB) there is no reasonable prospect that
                            the capital will be replenished without Federal
                            assistance.
                    (viii) Treatment of master agreement as one
                agreement.--Any master agreement for any contract or
                agreement described in any of clauses (i) through (vi) (or
                any master agreement for such master agreement or
                agreements), together with all supplements to such master
                agreement, shall be treated as a single agreement and a
                single qualified financial contact. If a master agreement
                contains provisions relating to agreements or transactions
                that are not themselves qualified financial contracts, the
                master agreement shall be deemed to be a qualified
                financial contract only with respect to those transactions
                that are themselves qualified financial contracts.
                    (ix) Transfer.--The term ``transfer'' means every mode,
                direct or indirect, absolute or conditional, voluntary or
                involuntary, of disposing of or parting with property or
                with an interest in property, including retention of title
                as a security interest and foreclosure of the equity of
                redemption of the covered financial company.
                    (x) Person.--The term ``person'' includes any
                governmental entity in addition to any entity included in
                the definition of such term in section 1, title 1, United
                States Code.
                (E) Clarification.--No provision of law shall be construed
            as limiting the right or power of the Corporation, or
            authorizing any court or agency to limit or delay, in any
            manner, the right or power of the Corporation to transfer any
            qualified financial contract or to disaffirm or repudiate any
            such contract in accordance with this subsection.
                (F) Walkaway clauses not effective.--
                    (i) In general.--Notwithstanding the provisions of
                subparagraph (A) of this paragraph and sections 403 and 404
                of the Federal Deposit Insurance Corporation Improvement
                Act of 1991, no walkaway clause shall be enforceable in a
                qualified financial contract of a covered financial company
                in default.
                    (ii) Limited suspension of certain obligations.--In the
                case of a qualified financial contract referred to in
                clause (i), any payment or delivery obligations otherwise
                due from a party pursuant to the qualified financial
                contract shall be suspended from the time at which the
                Corporation is appointed as receiver until the earlier of--

                        (I) the time at which such party receives notice
                    that such contract has been transferred pursuant to
                    paragraph (10)(A); or
                        (II) 5:00 p.m. (eastern time) on the business day
                    following the date of the appointment of the
                    Corporation as receiver.

                    (iii) Walkaway clause defined.--For purposes of this
                subparagraph, the term ``walkaway clause'' means any
                provision in a qualified financial contract that suspends,
                conditions, or extinguishes a payment obligation of a
                party, in whole or in part, or does not create a payment
                obligation of a party that would otherwise exist, solely
                because of the status of such party 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 the
                Corporation as receiver for such covered financial company,
                and not as a result of the exercise by a party of any right
                to offset, setoff, or net obligations that exist under the
                contract, any other contract between those parties, or
                applicable law.
                (G) Certain obligations to clearing organizations.--In the
            event that the Corporation has been appointed as receiver for a
            covered financial company which is a party to any qualified
            financial contract cleared by or subject to the rules of a
            clearing organization (as defined in paragraph (9)(D)), the
            receiver shall use its best efforts to meet all margin,
            collateral, and settlement obligations of the covered financial
            company that arise under qualified financial contracts (other
            than any margin, collateral, or settlement obligation that is
            not enforceable against the receiver under paragraph (8)(F)(i)
            or paragraph (10)(B)), as required by the rules of the clearing
            organization when due. Notwithstanding any other provision of
            this title, if the receiver fails to satisfy any such margin,
            collateral, or settlement obligations under the rules of the
            clearing organization, the clearing organization shall have the
            immediate right to exercise, and shall not be stayed from
            exercising, all of its rights and remedies under its rules and
            applicable law with respect to any qualified financial contract
            of the covered financial company, including, without
            limitation, the right to liquidate all positions and collateral
            of such covered financial company under the company's qualified
            financial contracts, and suspend or cease to act for such
            covered financial company, all in accordance with the rules of
            the clearing organization.
                (H) Recordkeeping.--
                    (i) Joint rulemaking.--The Federal primary financial
                regulatory agencies shall jointly prescribe regulations
                requiring that financial companies maintain such records
                with respect to qualified financial contracts (including
                market valuations) that the Federal primary financial
                regulatory agencies determine to be necessary or
                appropriate in order to assist the Corporation as receiver
                for a covered financial company in being able to exercise
                its rights and fulfill its obligations under this paragraph
                or paragraph (9) or (10).
                    (ii) Time frame.--The Federal primary financial
                regulatory agencies shall prescribe joint final or interim
                final regulations not later than 24 months after the date
                of enactment of this Act.
                    (iii) Back-up rulemaking authority.--If the Federal
                primary financial regulatory agencies do not prescribe
                joint final or interim final regulations within the time
                frame in clause (ii), the Chairperson of the Council shall
                prescribe, in consultation with the Corporation, the
                regulations required by clause (i).
                    (iv) Categorization and tiering.--The joint regulations
                prescribed under clause (i) shall, as appropriate,
                differentiate among financial companies by taking into
                consideration their size, risk, complexity, leverage,
                frequency and dollar amount of qualified financial
                contracts, interconnectedness to the financial system, and
                any other factors deemed appropriate.
            (9) Transfer of qualified financial contracts.--
                (A) In general.--In making any transfer of assets or
            liabilities of a covered financial company in default, which
            includes any qualified financial contract, the Corporation as
            receiver for such covered financial company shall either--
                    (i) transfer to one financial institution, other than a
                financial institution for which a conservator, receiver,
                trustee in bankruptcy, or other legal custodian has been
                appointed or which is otherwise the subject of a bankruptcy
                or insolvency proceeding--

                        (I) all qualified financial contracts between any
                    person or any affiliate of such person and the covered
                    financial company in default;
                        (II) all claims of such person or any affiliate of
                    such person against such covered financial company
                    under any such contract (other than any claim which,
                    under the terms of any such contract, is subordinated
                    to the claims of general unsecured creditors of such
                    company);
                        (III) all claims of such covered financial company
                    against such person or any affiliate of such person
                    under any such contract; and
                        (IV) all property securing or any other credit
                    enhancement for any contract described in subclause (I)
                    or any claim described in subclause (II) or (III) under
                    any such contract; or

                    (ii) transfer none of the qualified financial
                contracts, claims, property or other credit enhancement
                referred to in clause (i) (with respect to such person and
                any affiliate of such person).
                (B) Transfer to foreign bank, financial institution, or
            branch or agency thereof.--In transferring any qualified
            financial contracts and related claims and property under
            subparagraph (A)(i), the Corporation as receiver for the
            covered financial company shall not make such transfer to a
            foreign bank, financial institution organized under the laws of
            a foreign country, or a branch or agency of a foreign bank or
            financial institution unless, under the law applicable to such
            bank, financial institution, branch or agency, to the qualified
            financial contracts, and to any netting contract, any security
            agreement or arrangement or other credit enhancement related to
            one or more qualified financial contracts, the contractual
            rights of the parties to such qualified financial contracts,
            netting contracts, security agreements or arrangements, or
            other credit enhancements are enforceable substantially to the
            same extent as permitted under this section.
                (C) Transfer of contracts subject to the rules of a
            clearing organization.--In the event that the Corporation as
            receiver for a financial institution transfers any qualified
            financial contract and related claims, property, or credit
            enhancement pursuant to subparagraph (A)(i) and such contract
            is cleared by or subject to the rules of a clearing
            organization, the clearing organization shall not be required
            to accept the transferee as a member by virtue of the transfer.
                (D) Definitions.--For purposes of this paragraph--
                    (i) the term ``financial institution'' means a broker
                or dealer, a depository institution, a futures commission
                merchant, a bridge financial company, or any other
                institution determined by the Corporation, by regulation,
                to be a financial institution; and
                    (ii) the term ``clearing organization'' has the same
                meaning as in section 402 of the Federal Deposit Insurance
                Corporation Improvement Act of 1991.
            (10) Notification of transfer.--
                (A) In general.--
                    (i) Notice.--The Corporation shall provide notice in
                accordance with clause (ii), if--

                        (I) the Corporation as receiver for a covered
                    financial company in default or in danger of default
                    transfers any assets or liabilities of the covered
                    financial company; and
                        (II) the transfer includes any qualified financial
                    contract.

                    (ii) Timing.--The Corporation as receiver for a covered
                financial company shall notify any person who is a party to
                any contract described in clause (i) of such transfer not
                later than 5:00 p.m. (eastern time) on the business day
                following the date of the appointment of the Corporation as
                receiver.
                (B) Certain rights not enforceable.--
                    (i) Receivership.--A person who is a party to a
                qualified financial contract with a covered financial
                company may not exercise any right that such person has to
                terminate, liquidate, or net such contract under paragraph
                (8)(A) solely by reason of or incidental to the appointment
                under this section of the Corporation as receiver for the
                covered financial company (or the insolvency or financial
                condition of the covered financial company for which the
                Corporation has been appointed as receiver)--

                        (I) until 5:00 p.m. (eastern time) on the business
                    day following the date of the appointment; or
                        (II) after the person has received notice that the
                    contract has been transferred pursuant to paragraph
                    (9)(A).

                    (ii) Notice.--For purposes of this paragraph, the
                Corporation as 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 Corporation has taken steps reasonably
                calculated to provide notice to such person by the time
                specified in subparagraph (A).
                (C) Treatment of bridge financial company.--For purposes of
            paragraph (9), a bridge financial company shall not be
            considered to be a financial institution for which a
            conservator, receiver, trustee in bankruptcy, or other legal
            custodian has been appointed, or which is otherwise the subject
            of a bankruptcy or insolvency proceeding.
                (D) Business day defined.--For purposes of this paragraph,
            the term ``business day'' means any day other than any
            Saturday, Sunday, or any day on which either the New York Stock
            Exchange or the Federal Reserve Bank of New York is closed.
            (11) Disaffirmance or repudiation of qualified financial
        contracts.--In exercising the rights of disaffirmance or
        repudiation of the Corporation as receiver with respect to any
        qualified financial contract to which a covered financial company
        is a party, the Corporation shall either--
                (A) disaffirm or repudiate all qualified financial
            contracts between--
                    (i) any person or any affiliate of such person; and
                    (ii) the covered financial company in default; or
                (B) disaffirm or repudiate none of the qualified financial
            contracts referred to in subparagraph (A) (with respect to such
            person or any affiliate of such person).
            (12) Certain security and customer interests not avoidable.--No
        provision of this subsection shall be construed as permitting the
        avoidance of any--
                (A) legally enforceable or perfected security interest in
            any of the assets of any covered financial company, except in
            accordance with subsection (a)(11); or
                (B) legally enforceable interest in customer property,
            security entitlements in respect of assets or property held by
            the covered financial company for any security entitlement
            holder.
            (13) Authority to enforce contracts.--
                (A) In general.--The Corporation, as receiver for a covered
            financial company, may enforce any contract, other than a
            liability insurance contract of a director or officer, 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,
            the appointment of or the exercise of rights or powers by the
            Corporation as receiver, the filing of the petition pursuant to
            section 202(a)(1), or the issuance of the recommendations or
            determination, or any actions or events occurring in connection
            therewith or as a result thereof, pursuant to section 203.
                (B) Certain rights not affected.--No provision of this
            paragraph may be construed as impairing or affecting any right
            of the Corporation as receiver to enforce or recover under a
            liability insurance contract of a director or officer or
            financial institution bond under other applicable law.
                (C) Consent requirement and ipso facto clauses.--
                    (i) In general.--Except as otherwise provided by this
                section, no person may exercise any right or power to
                terminate, accelerate, or declare a default under any
                contract to which the covered financial company is a party
                (and no provision in any such contract providing for such
                default, termination, or acceleration shall be
                enforceable), 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 Corporation as receiver
                for the covered financial company during the 90 day period
                beginning from the appointment of the Corporation as
                receiver.
                    (ii) Exceptions.--No provision of this subparagraph
                shall apply to a director or officer liability insurance
                contract or a financial institution bond, to the rights of
                parties to certain qualified financial contracts pursuant
                to paragraph (8), or to the rights of parties to netting
                contracts pursuant to subtitle A of title IV of the Federal
                Deposit Insurance Corporation Improvement Act of 1991 (12
                U.S.C. 4401 et seq.), or shall be construed as permitting
                the Corporation as receiver to fail to comply with
                otherwise enforceable provisions of such contract.
                (D) Contracts to extend credit.--Notwithstanding any other
            provision in this title, if the Corporation as receiver
            enforces any contract to extend credit to the covered financial
            company or bridge financial company, any valid and enforceable
            obligation to repay such debt shall be paid by the Corporation
            as receiver, as an administrative expense of the receivership.
            (14) Exception for federal reserve banks and corporation
        security interest.--No provision of this subsection shall apply
        with respect to--
                (A) any extension of credit from any Federal reserve bank
            or the Corporation to any covered financial company; or
                (B) any security interest in the assets of the covered
            financial company securing any such extension of credit.
            (15) Savings clause.--The meanings of terms used in this
        subsection are applicable for purposes of this subsection only, and
        shall not be construed or applied so as to challenge or affect the
        characterization, definition, or treatment of any similar terms
        under any other statute, regulation, or rule, including the Gramm-
        Leach-Bliley Act, the Legal Certainty for Bank Products Act of
        2000, the securities laws (as that term is defined in section
        3(a)(47) of the Securities Exchange Act of 1934), and the Commodity
        Exchange Act.
            (16) Enforcement of contracts guaranteed by the covered
        financial company.--
                (A) In general.--The Corporation, as receiver for a covered
            financial company or as receiver for a subsidiary of a covered
            financial company (including an insured depository institution)
            shall have the power to enforce contracts of subsidiaries or
            affiliates of the covered financial company, the obligations
            under which are guaranteed or otherwise supported by or linked
            to the covered financial company, notwithstanding any
            contractual right to cause the termination, liquidation, or
            acceleration of such contracts based solely on the insolvency,
            financial condition, or receivership of the covered financial
            company, if--
                    (i) such guaranty or other support and all related
                assets and liabilities are transferred to and assumed by a
                bridge financial company or a third party (other than a
                third party 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) within the same period of time as
                the Corporation is entitled to transfer the qualified
                financial contracts of such covered financial company; or
                    (ii) the Corporation, as receiver, otherwise provides
                adequate protection with respect to such obligations.
                (B) Rule of construction.--For purposes of this paragraph,
            a bridge financial company shall not be considered to be a
            third party for which a conservator, receiver, trustee in
            bankruptcy, or other legal custodian has been appointed, or
            which is otherwise the subject of a bankruptcy or insolvency
            proceeding.
        (d) Valuation of Claims in Default.--
            (1) In general.--Notwithstanding any other provision of Federal
        law or the law of any State, and regardless of the method utilized
        by the Corporation for a covered financial company, including
        transactions authorized under subsection (h), this subsection shall
        govern the rights of the creditors of any such covered financial
        company.
            (2) Maximum liability.--The maximum liability of the
        Corporation, acting as receiver for a covered financial company or
        in any other capacity, to any person having a claim against the
        Corporation as receiver or the covered financial company for which
        the Corporation is appointed shall equal the amount that such
        claimant would have received if--
                (A) the Corporation had not been appointed receiver with
            respect to the covered financial company; and
                (B) the covered financial company had been liquidated under
            chapter 7 of the Bankruptcy Code, or any similar provision of
            State insolvency law applicable to the covered financial
            company.
            (3) Special provision for orderly liquidation by sipc.--The
        maximum liability of the Corporation, acting as receiver or in its
        corporate capacity for any covered broker or dealer to any customer
        of such covered broker or dealer, with respect to customer property
        of such customer, shall be--
                (A) equal to the amount that such customer would have
            received with respect to such customer property in a case
            initiated by SIPC under the Securities Investor Protection Act
            of 1970 (15 U.S.C. 78aaa et seq.); and
                (B) determined as of the close of business on the date on
            which the Corporation is appointed as receiver.
            (4) Additional payments authorized.--
                (A) In general.--Subject to subsection (o)(1)(D)(i), the
            Corporation, with the approval of the Secretary, may make
            additional payments or credit additional amounts to or with
            respect to or for the account of any claimant or category of
            claimants of the covered financial company, if the Corporation
            determines that such payments or credits are necessary or
            appropriate to minimize losses to the Corporation as receiver
            from the orderly liquidation of the covered financial company
            under this section.
                (B) Limitations.--
                    (i) Prohibition.--The Corporation shall not make any
                payments or credit amounts to any claimant or category of
                claimants that would result in any claimant receiving more
                than the face value amount of any claim that is proven to
                the satisfaction of the Corporation.
                    (ii) No obligation.--Notwithstanding any other
                provision of Federal or State law, or the Constitution of
                any State, the Corporation shall not be obligated, as a
                result of having made any payment under subparagraph (A) or
                credited any amount described in subparagraph (A) to or
                with respect to, or for the account, of any claimant or
                category of claimants, to make payments to any other
                claimant or category of claimants.
                (C) Manner of payment.--The Corporation may make payments
            or credit amounts under subparagraph (A) directly to the
            claimants or may make such payments or credit such amounts to a
            company other than a covered financial company or a bridge
            financial company established with respect thereto in order to
            induce such other company to accept liability for such claims.
        (e) Limitation on Court Action.--Except as provided in this title,
    no court may take any action to restrain or affect the exercise of
    powers or functions of the receiver hereunder, and any remedy against
    the Corporation or receiver shall be limited to money damages
    determined in accordance with this title.
        (f) Liability of Directors and Officers.--
            (1) In general.--A director or officer of a covered financial
        company may be held personally liable for monetary damages in any
        civil action described in paragraph (2) by, on behalf of, or at the
        request or direction of the Corporation, which action is prosecuted
        wholly or partially for the benefit of the Corporation--
                (A) acting as receiver for such covered financial company;
                (B) acting based upon a suit, claim, or cause of action
            purchased from, assigned by, or otherwise conveyed by the
            Corporation as receiver; or
                (C) acting based upon a suit, claim, or cause of action
            purchased from, assigned by, or otherwise conveyed in whole or
            in part by a covered financial company or its affiliate in
            connection with assistance provided under this title.
            (2) Actions covered.--Paragraph (1) shall apply with respect to
        actions for gross negligence, including any similar conduct or
        conduct that demonstrates a greater disregard of a duty of care
        (than gross negligence) including intentional tortious conduct, as
        such terms are defined and determined under applicable State law.
            (3) Savings clause.--Nothing in this subsection shall impair or
        affect any right of the Corporation under other applicable law.
        (g) Damages.--In any proceeding related to any claim against a
    director, officer, employee, agent, attorney, accountant, or appraiser
    of a covered financial company, 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 assets of the covered financial company shall include
    principal losses and appropriate interest.
        (h) Bridge Financial Companies.--
            (1) Organization.--
                (A) Purpose.--The Corporation, as receiver for one or more
            covered financial companies or in anticipation of being
            appointed receiver for one or more covered financial companies,
            may organize one or more bridge financial companies in
            accordance with this subsection.
                (B) Authorities.--Upon the creation of a bridge financial
            company under subparagraph (A) with respect to a covered
            financial company, such bridge financial company may--
                    (i) assume such liabilities (including liabilities
                associated with any trust or custody business, but
                excluding any liabilities that count as regulatory capital)
                of such covered financial company as the Corporation may,
                in its discretion, determine to be appropriate;
                    (ii) purchase such assets (including assets associated
                with any trust or custody business) of such covered
                financial company as the Corporation may, in its
                discretion, determine to be appropriate; and
                    (iii) perform any other temporary function which the
                Corporation may, in its discretion, prescribe in accordance
                with this section.
            (2) Charter and establishment.--
                (A) Establishment.--Except as provided in subparagraph (H),
            where the covered financial company is a covered broker or
            dealer, the Corporation, as receiver for a covered financial
            company, may grant a Federal charter to and approve articles of
            association for one or more bridge financial company or
            companies, with respect to such covered financial company which
            shall, by operation of law and immediately upon issuance of its
            charter and approval of its articles of association, be
            established and operate in accordance with, and subject to,
            such charter, articles, and this section.
                (B) Management.--Upon its establishment, a bridge financial
            company shall be under the management of a board of directors
            appointed by the Corporation.
                (C) Articles of association.--The articles of association
            and organization certificate of a bridge financial company
            shall have such terms as the Corporation may provide, and shall
            be executed by such representatives as the Corporation may
            designate.
                (D) Terms of charter; rights and privileges.--Subject to
            and in accordance with the provisions of this subsection, the
            Corporation shall--
                    (i) establish the terms of the charter of a bridge
                financial company and the rights, powers, authorities, and
                privileges of a bridge financial company granted by the
                charter or as an incident thereto; and
                    (ii) provide for, and establish the terms and
                conditions governing, the management (including the bylaws
                and the number of directors of the board of directors) and
                operations of the bridge financial company.
                (E) Transfer of rights and privileges of covered financial
            company.--
                    (i) In general.--Notwithstanding any other provision of
                Federal or State law, the Corporation may provide for a
                bridge financial company to succeed to and assume any
                rights, powers, authorities, or privileges of the covered
                financial company with respect to which the bridge
                financial company was established and, upon such
                determination by the Corporation, the bridge financial
                company shall immediately and by operation of law succeed
                to and assume such rights, powers, authorities, and
                privileges.
                    (ii) Effective without approval.--Any succession to or
                assumption by a bridge financial company of rights, powers,
                authorities, or privileges of a covered financial company
                under clause (i) or otherwise shall be effective without
                any further approval under Federal or State law,
                assignment, or consent with respect thereto.
                (F) Corporate governance and election and designation of
            body of law.--To the extent permitted by the Corporation and
            consistent with this section and any rules, regulations, or
            directives issued by the Corporation under this section, a
            bridge financial company may elect to follow the corporate
            governance practices and procedures that are applicable to a
            corporation incorporated under the general corporation law of
            the State of Delaware, or the State of incorporation or
            organization of the covered financial company with respect to
            which the bridge financial company was established, as such law
            may be amended from time to time.
                (G) Capital.--
                    (i) Capital not required.--Notwithstanding any other
                provision of Federal or State law, a bridge financial
                company may, if permitted by the Corporation, operate
                without any capital or surplus, or with such capital or
                surplus as the Corporation may in its discretion determine
                to be appropriate.
                    (ii) No contribution by the corporation required.--The
                Corporation is not required to pay capital into a bridge
                financial company or to issue any capital stock on behalf
                of a bridge financial company established under this
                subsection.
                    (iii) Authority.--If the Corporation determines that
                such action is advisable, the Corporation may cause capital
                stock or other securities of a bridge financial company
                established with respect to a covered financial company to
                be issued and offered for sale in such amounts and on such
                terms and conditions as the Corporation may, in its
                discretion, determine.
                    (iv) Operating funds in lieu of capital and
                implementation plan.--Upon the organization of a bridge
                financial company, and thereafter as the Corporation may,
                in its discretion, determine to be necessary or advisable,
                the Corporation may make available to the bridge financial
                company, subject to the plan described in subsection
                (n)(9), funds for the operation of the bridge financial
                company in lieu of capital.
                (H) Bridge brokers or dealers.--
                    (i) In general.--The Corporation, as receiver for a
                covered broker or dealer, may approve articles of
                association for one or more bridge financial companies with
                respect to such covered broker or dealer, which bridge
                financial company or companies shall, by operation of law
                and immediately upon approval of its articles of
                association--

                        (I) be established and deemed registered with the
                    Commission under the Securities Exchange Act of 1934
                    and a member of SIPC;
                        (II) operate in accordance with such articles and
                    this section; and
                        (III) succeed to any and all registrations and
                    memberships of the covered financial company with or in
                    any self-regulatory organizations.

                    (ii) Other requirements.--Except as provided in clause
                (i), and notwithstanding any other provision of this
                section, the bridge financial company shall be subject to
                the Federal securities laws and all requirements with
                respect to being a member of a self-regulatory
                organization, unless exempted from any such requirements by
                the Commission, as is necessary or appropriate in the
                public interest or for the protection of investors.
                    (iii) Treatment of customers.--Except as otherwise
                provided by this title, any customer of the covered broker
                or dealer whose account is transferred to a bridge
                financial company shall have all the rights, privileges,
                and protections under section 205(f) and under the
                Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa
                et seq.), that such customer would have had if the account
                were not transferred from the covered financial company
                under this subparagraph.
                    (iv) Operation of bridge brokers or dealers.--
                Notwithstanding any other provision of this title, the
                Corporation shall not operate any bridge financial company
                created by the Corporation under this title with respect to
                a covered broker or dealer in such a manner as to adversely
                affect the ability of customers to promptly access their
                customer property in accordance with applicable law.
            (3) Interests in and assets and obligations of covered
        financial company.--Notwithstanding paragraph (1) or (2) or any
        other provision of law--
                (A) a bridge financial company shall assume, acquire, or
            succeed to the assets or liabilities of a covered financial
            company (including the assets or liabilities associated with
            any trust or custody business) only to the extent that such
            assets or liabilities are transferred by the Corporation to the
            bridge financial company in accordance with, and subject to the
            restrictions set forth in, paragraph (1)(B); and
                (B) a bridge financial company shall not assume, acquire,
            or succeed to any obligation that a covered financial company
            for which the Corporation has been appointed receiver may have
            to any shareholder, member, general partner, limited partner,
            or other person with an interest in the equity of the covered
            financial company that arises as a result of the status of that
            person having an equity claim in the covered financial company.
            (4) Bridge financial company treated as being in default for
        certain purposes.--A bridge financial company shall be treated as a
        covered financial company in default at such times and for such
        purposes as the Corporation may, in its discretion, determine.
            (5) Transfer of assets and liabilities.--
                (A) Authority of corporation.--The Corporation, as receiver
            for a covered financial company, 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) Subsequent transfers.--At any time after the
            establishment of a bridge financial company with respect to a
            covered financial company, the Corporation, as receiver, may
            transfer any assets and liabilities of such covered financial
            company as the Corporation may, in its discretion, determine to
            be appropriate in accordance with and subject to the
            restrictions of paragraph (1).
                (C) Treatment of trust or custody business.--For purposes
            of this paragraph, the trust or custody business, including
            fiduciary appointments, held by any covered financial company
            is included among its assets and liabilities.
                (D) Effective without approval.--The transfer of any assets
            or liabilities, including those associated with any trust or
            custody business of a covered financial company, to a bridge
            financial company shall be effective without any further
            approval under Federal or State law, assignment, or consent
            with respect thereto.
                (E) Equitable treatment of similarly situated creditors.--
            The Corporation shall treat all creditors of a covered
            financial company that are similarly situated under subsection
            (b)(1), in a similar manner in exercising the authority of the
            Corporation under this subsection to transfer any assets or
            liabilities of the covered financial company to one or more
            bridge financial companies established with respect to such
            covered financial company, except that the Corporation may take
            any action (including making payments, subject to subsection
            (o)(1)(D)(i)) that does not comply with this subparagraph, if--
                    (i) the Corporation determines that such action is
                necessary--

                        (I) to maximize the value of the assets of the
                    covered financial company;
                        (II) to maximize the present value return from the
                    sale or other disposition of the assets of the covered
                    financial company; or
                        (III) to minimize the amount of any loss realized
                    upon the sale or other disposition of the assets of the
                    covered financial company; and

                    (ii) all creditors that are similarly situated under
                subsection (b)(1) receive not less than the amount provided
                under paragraphs (2) and (3) of subsection (d).
                (F) Limitation on transfer of liabilities.--Notwithstanding
            any other provision of law, the aggregate amount of liabilities
            of a covered financial company that are transferred to, or
            assumed by, a bridge financial company from a covered financial
            company may not exceed the aggregate amount of the assets of
            the covered financial company that are transferred to, or
            purchased by, the bridge financial company from the covered
            financial company.
            (6) Stay of judicial action.--Any judicial action to which a
        bridge financial company becomes a party by virtue of its
        acquisition of any assets or assumption of any liabilities of a
        covered financial company shall be stayed from further proceedings
        for a period of not longer than 45 days (or such longer period as
        may be agreed to upon the consent of all parties) at the request of
        the bridge financial company.
            (7) Agreements against interest of the bridge financial
        company.--No agreement that tends to diminish or defeat the
        interest of the bridge financial company in any asset of a covered
        financial company acquired by the bridge financial company shall be
        valid against the bridge financial company, unless such agreement--
                (A) is in writing;
                (B) was executed by an authorized officer or representative
            of the covered financial company or confirmed in the ordinary
            course of business by the covered financial company; and
                (C) has been on the official record of the company, since
            the time of its execution, or with which, the party claiming
            under the agreement provides documentation of such agreement
            and its authorized execution or confirmation by the covered
            financial company that is acceptable to the receiver.
            (8) No federal status.--
                (A) Agency status.--A bridge financial company is not an
            agency, establishment, or instrumentality of the United States.
                (B) Employee status.--Representatives for purposes of
            paragraph (1)(B), directors, officers, employees, or agents of
            a bridge financial company are not, solely by virtue of service
            in any such capacity, officers or employees of the United
            States. Any employee of the Corporation or of any Federal
            instrumentality who serves at the request of the Corporation as
            a representative for purposes of paragraph (1)(B), director,
            officer, employee, or agent of a bridge financial company shall
            not--
                    (i) solely by virtue of service in any such capacity
                lose any existing status as an officer or employee of the
                United States for purposes of title 5, United States Code,
                or any other provision of law; or
                    (ii) receive any salary or benefits for service in any
                such capacity with respect to a bridge financial company in
                addition to such salary or benefits as are obtained through
                employment with the Corporation or such Federal
                instrumentality.
            (9) Funding authorized.--The Corporation may, subject to the
        plan described in subsection (n)(9), provide funding to facilitate
        any transaction described in subparagraph (A), (B), (C), or (D) of
        paragraph (13) with respect to any bridge financial company, or
        facilitate the acquisition by a bridge financial company of any
        assets, or the assumption of any liabilities, of a covered
        financial company for which the Corporation has been appointed
        receiver.
            (10) Exempt tax status.--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 the United States, by any territory,
        dependency, or possession thereof, or by any State, county,
        municipality, or local taxing authority.
            (11) Federal agency approval; antitrust review.--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 a notification is required under section 7A of the
        Clayton Act with respect to such transaction, 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
        section 7A(b)(2) of the Clayton Act, or extended under section
        7A(e)(2) of that Act.
            (12) Duration of bridge financial company.--Subject to
        paragraphs (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 on which it was granted a charter. The Corporation may, in
        its discretion, extend the status of the bridge financial company
        as such for no more than 3 additional 1-year periods.
            (13) Termination of bridge financial company status.--The
        status of any bridge financial company as such shall terminate upon
        the earliest of--
                (A) the date of the merger or consolidation of the bridge
            financial company with a company that is not a bridge financial
            company;
                (B) at the election of the Corporation, the sale of a
            majority of the capital stock of the bridge financial company
            to a company other than the Corporation and other than another
            bridge financial company;
                (C) the sale of 80 percent, or more, of the capital stock
            of the bridge financial company to a person other than the
            Corporation and other than another bridge financial company;
                (D) at the election of the Corporation, either the
            assumption of all or substantially all of the liabilities of
            the bridge financial company by a company that is not a bridge
            financial company, or the acquisition of all or substantially
            all of the assets of the bridge financial company by a company
            that is not a bridge financial company, or other entity as
            permitted under applicable law; and
                (E) the expiration of the period provided in paragraph
            (12), or the earlier dissolution of the bridge financial
            company, as provided in paragraph (15).
            (14) Effect of termination events.--
                (A) Merger or consolidation.--A merger or consolidation,
            described in paragraph (13)(A) shall be conducted in accordance
            with, and shall have the effect provided in, the provisions of
            applicable law. For the purpose of effecting such a merger or
            consolidation, the bridge financial company shall be treated as
            a corporation organized under the laws of the State of Delaware
            (unless the law of another State has been selected by the
            bridge financial company in accordance with paragraph (2)(F)),
            and the Corporation shall be treated as the sole shareholder
            thereof, notwithstanding any other provision of State or
            Federal law.
                (B) Charter conversion.--Following the sale of a majority
            of the capital stock of the bridge financial company, as
            provided in paragraph (13)(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 Federal or State 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
            Federal or State law, such State-chartered corporation shall be
            deemed to succeed by operation of law to such rights, titles,
            powers, and interests of the bridge financial company as the
            Corporation may provide, with the same effect as if the bridge
            financial company had merged with the State-chartered
            corporation under provisions of the corporate laws of such
            State.
                (C) Sale of stock.--Following the sale of 80 percent or
            more of the capital stock of a bridge financial company, as
            provided in paragraph (13)(C), the company shall have all of
            the rights, powers, and privileges under its constituent
            documents and applicable Federal or State 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 Federal or State law, the State-chartered
            corporation shall be deemed to succeed by operation of law to
            such rights, titles, powers and interests of the bridge
            financial company as the Corporation may provide, with the same
            effect as if the bridge financial company had merged with the
            State-chartered corporation under provisions of the corporate
            laws of such State.
                (D) Assumption of liabilities and sale of assets.--
            Following the assumption of all or substantially all of the
            liabilities of the bridge financial company, or the sale of all
            or substantially all of the assets of the bridge financial
            company, as provided in paragraph (13)(D), at the election of
            the Corporation, the bridge financial company may retain its
            status as such for the period provided in paragraph (12) or may
            be dissolved at the election of the Corporation.
                (E) Amendments to charter.--Following the consummation of a
            transaction described in subparagraph (A), (B), (C), or (D) of
            paragraph (13), the charter of the resulting company shall be
            amended to reflect the termination of bridge financial company
            status, if appropriate.
            (15) Dissolution of bridge financial company.--
                (A) In general.--Notwithstanding any other provision of
            Federal or State law, if the status of a bridge financial
            company as such has not previously been terminated by the
            occurrence of an event specified in subparagraph (A), (B), (C),
            or (D) of paragraph (13)--
                    (i) the Corporation may, in its discretion, dissolve
                the bridge financial company in accordance with this
                paragraph at any time; and
                    (ii) the Corporation shall promptly commence
                dissolution proceedings in accordance with this paragraph
                upon the expiration of the 2-year period following the date
                on which the bridge financial company was chartered, or any
                extension thereof, as provided in paragraph (12).
                (B) Procedures.--The Corporation shall remain the receiver
            for a bridge financial company for the purpose of dissolving
            the bridge financial company. The Corporation as receiver for a
            bridge financial company 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
            under this title. 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 the Corporation as receiver for a covered financial
            company under this title 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.
            (16) Authority to obtain credit.--
                (A) In general.--A bridge financial company may obtain
            unsecured credit and issue unsecured debt.
                (B) Inability to obtain credit.--If a bridge financial
            company is unable to obtain unsecured credit or issue unsecured
            debt, the Corporation may authorize the obtaining of credit or
            the issuance of debt by the bridge financial company--
                    (i) with priority over any or all of the obligations of
                the bridge financial company;
                    (ii) secured by a lien on property of the bridge
                financial company that is not otherwise subject to a lien;
                or
                    (iii) secured by a junior lien on property of the
                bridge financial company that is subject to a lien.
                (C) Limitations.--
                    (i) In general.--The Corporation, after notice and a
                hearing, may authorize the obtaining of credit or the
                issuance of debt by a bridge financial company that is
                secured by a senior or equal lien on property of the bridge
                financial company that is subject to a lien, only if--

                        (I) the bridge financial company is unable to
                    otherwise obtain such credit or issue such debt; and
                        (II) there is adequate protection of the interest
                    of the holder of the lien on the property with respect
                    to which such senior or equal lien is proposed to be
                    granted.

                    (ii) Hearing.--The hearing required pursuant to this
                subparagraph shall be before a court of the United States,
                which shall have jurisdiction to conduct such hearing and
                to authorize a bridge financial company to obtain secured
                credit under clause (i).
                (D) Burden of proof.--In any hearing under this paragraph,
            the Corporation has the burden of proof on the issue of
            adequate protection.
                (E) Qualified financial contracts.--No credit or debt
            obtained or issued by a bridge financial company may contain
            terms that impair the rights of a counterparty to a qualified
            financial contract upon a default by the bridge financial
            company, other than the priority of such counterparty's
            unsecured claim (after the exercise of rights) relative to the
            priority of the bridge financial company's obligations in
            respect of such credit or debt, unless such counterparty
            consents in writing to any such impairment.
            (17) Effect on debts and liens.--The reversal or modification
        on appeal of an authorization under this subsection to obtain
        credit or issue debt, or of a grant under this section of a
        priority or a lien, does not affect the validity of any debt so
        issued, or any priority or lien so granted, to an entity that
        extended such credit in good faith, whether or not such entity knew
        of the pendency of the appeal, unless such authorization and the
        issuance of such debt, or the granting of such priority or lien,
        were stayed pending appeal.
        (i) Sharing Records.--If the Corporation has been appointed as
    receiver for a covered financial company, other Federal regulators
    shall make all records relating to the covered financial company
    available to the Corporation, which may be used by the Corporation in
    any manner that the Corporation determines to be appropriate.
        (j) Expedited Procedures for Certain Claims.--
            (1) Time for filing notice of appeal.--The notice of appeal of
        any order, whether interlocutory or final, entered in any case
        brought by the Corporation against a director, officer, employee,
        agent, attorney, accountant, or appraiser of the covered financial
        company, or any other person employed by or providing services to a
        covered financial company, shall be filed not later than 30 days
        after the date of entry of the order. The hearing of the appeal
        shall be held not later than 120 days after the date of the notice
        of appeal. The appeal shall be decided not later than 180 days
        after the date of the notice of appeal.
            (2) Scheduling.--The court shall expedite the consideration of
        any case brought by the Corporation against a director, officer,
        employee, agent, attorney, accountant, or appraiser of a covered
        financial company or any other person employed by or providing
        services to a covered financial company. As far as practicable, the
        court shall give such case priority on its docket.
            (3) Judicial discretion.--The court may modify the schedule and
        limitations stated in paragraphs (1) and (2) in a particular case,
        based on a specific finding that the ends of justice that would be
        served by making such a modification would outweigh the best
        interest of the public in having the case resolved expeditiously.
        (k) Foreign Investigations.--The Corporation, as receiver for any
    covered financial company, and for purposes of carrying out any power,
    authority, or duty with respect to a covered financial company--
            (1) may request the assistance of any foreign financial
        authority and provide assistance to any foreign financial authority
        in accordance with section 8(v) of the Federal Deposit Insurance
        Act, as if the covered financial company were an insured depository
        institution, the Corporation were the appropriate Federal banking
        agency for the company, and any foreign financial authority were
        the foreign banking authority; and
            (2) may maintain an office to coordinate foreign investigations
        or investigations on behalf of foreign financial authorities.
        (l) Prohibition on Entering Secrecy Agreements and Protective
    Orders.--The Corporation may not enter into any agreement or approve
    any protective order which prohibits the Corporation from disclosing
    the terms of any settlement of an administrative or other action for
    damages or restitution brought by the Corporation in its capacity as
    receiver for a covered financial company.
        (m) Liquidation of Certain Covered Financial Companies or Bridge
    Financial Companies.--
            (1) In general.--Except as specifically provided in this
        section, and notwithstanding any other provision of law, 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--
                (A) in the case of any covered financial company or bridge
            financial company that is a stockbroker, but is not a member of
            the Securities Investor Protection Corporation, apply the
            provisions of subchapter III of chapter 7 of the Bankruptcy
            Code, in respect of the distribution to any customer of all
            customer name security and customer property and member
            property, as if such covered financial company or bridge
            financial company were a debtor for purposes of such
            subchapter; or
                (B) in the case of any covered financial company or bridge
            financial company that is a commodity broker, apply the
            provisions of subchapter IV of chapter 7 the Bankruptcy Code,
            in respect of the distribution to any customer of all customer
            property and member property, as if such covered financial
            company or bridge financial company were a debtor for purposes
            of such subchapter.
            (2) Definitions.--For purposes of this subsection--
                (A) the terms ``customer'', ``customer name security'', and
            ``customer property and member property'' have the same
            meanings as in sections 741 and 761 of title 11, United States
            Code; and
                (B) the terms ``commodity broker'' and ``stockbroker'' have
            the same meanings as in section 101 of the Bankruptcy Code.
        (n) Orderly Liquidation Fund.--
            (1) Establishment.--There is established in the Treasury of the
        United States a separate fund to be known as the ``Orderly
        Liquidation Fund'', which shall be available to the Corporation to
        carry out the authorities contained in this title, for the cost of
        actions authorized by this title, including the orderly liquidation
        of covered financial companies, payment of administrative expenses,
        the payment of principal and interest by the Corporation on
        obligations issued under paragraph (5), and the exercise of the
        authorities of the Corporation under this title.
            (2) Proceeds.--Amounts received by the Corporation, including
        assessments received under subsection (o), proceeds of obligations
        issued under paragraph (5), interest and other earnings from
        investments, and repayments to the Corporation by covered financial
        companies, shall be deposited into the Fund.
            (3) Management.--The Corporation shall manage the Fund in
        accordance with this subsection and the policies and procedures
        established under section 203(d).
            (4) Investments.--At the request of the Corporation, the
        Secretary may invest such portion of amounts held in the Fund that
        are not, in the judgment of the Corporation, required to meet the
        current needs of the Corporation, in obligations of the United
        States having suitable maturities, as determined by the
        Corporation. The interest on and the proceeds from the sale or
        redemption of such obligations shall be credited to the Fund.
            (5) Authority to issue obligations.--
                (A) Corporation authorized to issue obligations.--Upon
            appointment by the Secretary of the Corporation as receiver for
            a covered financial company, the Corporation is authorized to
            issue obligations to the Secretary.
                (B) Secretary authorized to purchase obligations.--The
            Secretary may, under such terms and conditions as the Secretary
            may require, purchase or agree to purchase any obligations
            issued under subparagraph (A), and for such purpose, the
            Secretary is authorized to use as a public debt transaction the
            proceeds of the sale of any securities issued under chapter 31
            of title 31, United States Code, and the purposes for which
            securities may be issued under chapter 31 of title 31, United
            States Code, are extended to include such purchases.
                (C) Interest rate.--Each purchase of obligations by the
            Secretary under this paragraph shall be upon such terms and
            conditions as to yield a return at a rate determined by the
            Secretary, taking into consideration the current average yield
            on outstanding marketable obligations of the United States of
            comparable maturity, plus an interest rate surcharge to be
            determined by the Secretary, which shall be greater than the
            difference between--
                    (i) the current average rate on an index of corporate
                obligations of comparable maturity; and
                    (ii) the current average rate on outstanding marketable
                obligations of the United States of comparable maturity.
                (D) Secretary authorized to sell obligations.--The
            Secretary may sell, upon such terms and conditions as the
            Secretary shall determine, any of the obligations acquired
            under this paragraph.
                (E) Public debt transactions.--All purchases and sales by
            the Secretary of such obligations under this paragraph shall be
            treated as public debt transactions of the United States, and
            the proceeds from the sale of any obligations acquired by the
            Secretary under this paragraph shall be deposited into the
            Treasury of the United States as miscellaneous receipts.
            (6) Maximum obligation limitation.--The Corporation may not, in
        connection with the orderly liquidation of a covered financial
        company, issue or incur any obligation, if, after issuing or
        incurring the obligation, the aggregate amount of such obligations
        outstanding under this subsection for each covered financial
        company would exceed--
                (A) an amount that is equal to 10 percent of the total
            consolidated assets of the covered financial company, based on
            the most recent financial statement available, during the 30-
            day period immediately following the date of appointment of the
            Corporation as receiver (or a shorter time period if the
            Corporation has calculated the amount described under
            subparagraph (B)); and
                (B) the amount that is equal to 90 percent of the fair
            value of the total consolidated assets of each covered
            financial company that are available for repayment, after the
            time period described in subparagraph (A).
            (7) Rulemaking.--The Corporation and the Secretary shall
        jointly, in consultation with the Council, prescribe regulations
        governing the calculation of the maximum obligation limitation
        defined in this paragraph.
            (8) Rule of construction.--
                (A) In general.--Nothing in this section shall be construed
            to affect the authority of the Corporation under subsection (a)
            or (b) of section 14 or section 15(c)(5) of the Federal Deposit
            Insurance Act (12 U.S.C. 1824, 1825(c)(5)), the management of
            the Deposit Insurance Fund by the Corporation, or the
            resolution of insured depository institutions, provided that--
                    (i) the authorities of the Corporation contained in
                this title shall not be used to assist the Deposit
                Insurance Fund or to assist any financial company under
                applicable law other than this Act;
                    (ii) the authorities of the Corporation relating to the
                Deposit Insurance Fund, or any other responsibilities of
                the Corporation under applicable law other than this title,
                shall not be used to assist a covered financial company
                pursuant to this title; and
                    (iii) the Deposit Insurance Fund may not be used in any
                manner to otherwise circumvent the purposes of this title.
                (B) Valuation.--For purposes of determining the amount of
            obligations under this subsection--
                    (i) the Corporation shall include as an obligation any
                contingent liability of the Corporation pursuant to this
                title; and
                    (ii) the Corporation shall value any contingent
                liability at its expected cost to the Corporation.
            (9) Orderly liquidation and repayment plans.--
                (A) Orderly liquidation plan.--Amounts in the Fund shall be
            available to the Corporation with regard to a covered financial
            company for which the Corporation is appointed receiver after
            the Corporation has developed an orderly liquidation plan that
            is acceptable to the Secretary with regard to such covered
            financial company, including the provision and use of funds,
            including taking any actions specified under section 204(d) and
            subsection (h)(2)(G)(iv) and (h)(9) of this section, and
            payments to third parties. The orderly liquidation plan shall
            take into account actions to avoid or mitigate potential
            adverse effects on low income, minority, or underserved
            communities affected by the failure of the covered financial
            company, and shall provide for coordination with the primary
            financial regulatory agencies, as appropriate, to ensure that
            such actions are taken. The Corporation may, at any time, amend
            any orderly liquidation plan approved by the Secretary with the
            concurrence of the Secretary.
                (B) Mandatory repayment plan.--
                    (i) In general.--No amount authorized under paragraph
                (6)(B) may be provided by the Secretary to the Corporation
                under paragraph (5), unless an agreement is in effect
                between the Secretary and the Corporation that--

                        (I) provides a specific plan and schedule to
                    achieve the repayment of the outstanding amount of any
                    borrowing under paragraph (5); and
                        (II) demonstrates that income to the Corporation
                    from the liquidated assets of the covered financial
                    company and assessments under subsection (o) will be
                    sufficient to amortize the outstanding balance within
                    the period established in the repayment schedule and
                    pay the interest accruing on such balance within the
                    time provided in subsection (o)(1)(B).

                    (ii) Consultation with and report to congress.--The
                Secretary and the Corporation shall--

                        (I) consult with the Committee on Banking, Housing,
                    and Urban Affairs of the Senate and the Committee on
                    Financial Services of the House of Representatives on
                    the terms of any repayment schedule agreement; and
                        (II) submit a copy of the repayment schedule
                    agreement to the Committees described in subclause (I)
                    before the end of the 30-day period beginning on the
                    date on which any amount is provided by the Secretary
                    to the Corporation under paragraph (5).

            (10) Implementation expenses.--
                (A) In general.--Reasonable implementation expenses of the
            Corporation incurred after the date of enactment of this Act
            shall be treated as expenses of the Council.
                (B) Requests for reimbursement.--The Corporation shall
            periodically submit a request for reimbursement for
            implementation expenses to the Chairperson of the Council, who
            shall arrange for prompt reimbursement to the Corporation of
            reasonable implementation expenses.
                (C) Definition.--As used in this paragraph, the term
            ``implementation expenses''--
                    (i) means costs incurred by the Corporation beginning
                on the date of enactment of this Act, as part of its
                efforts to implement this title that do not relate to a
                particular covered financial company; and
                    (ii) includes the costs incurred in connection with the
                development of policies, procedures, rules, and regulations
                and other planning activities of the Corporation consistent
                with carrying out this title.
        (o) Assessments.--
            (1) Risk-based assessments.--
                (A) Eligible financial companies defined.--For purposes of
            this subsection, the term ``eligible financial company'' means
            any bank holding company with total consolidated assets equal
            to or greater than $50,000,000,000 and any nonbank financial
            company supervised by the Board of Governors.
                (B) Assessments.--The Corporation shall charge one or more
            risk-based assessments in accordance with the provisions of
            subparagraph (D), if such assessments are necessary to pay in
            full the obligations issued by the Corporation to the Secretary
            under this title within 60 months of the date of issuance of
            such obligations.
                (C) Extensions authorized.--The Corporation may, with the
            approval of the Secretary, extend the time period under
            subparagraph (B), if the Corporation determines that an
            extension is necessary to avoid a serious adverse effect on the
            financial system of the United States.
                (D) Application of assessments.--To meet the requirements
            of subparagraph (B), the Corporation shall--
                    (i) impose assessments, as soon as practicable, on any
                claimant that received additional payments or amounts from
                the Corporation pursuant to subsection (b)(4), (d)(4), or
                (h)(5)(E), except for payments or amounts necessary to
                initiate and continue operations essential to
                implementation of the receivership or any bridge financial
                company, to recover on a cumulative basis, the entire
                difference between--

                        (I) the aggregate value the claimant received from
                    the Corporation on a claim pursuant to this title
                    (including pursuant to subsection (b)(4), (d)(4), and
                    (h)(5)(E)), as of the date on which such value was
                    received; and
                        (II) the value the claimant was entitled to receive
                    from the Corporation on such claim solely from the
                    proceeds of the liquidation of the covered financial
                    company under this title; and

                    (ii) if the amounts to be recovered on a cumulative
                basis under clause (i) are insufficient to meet the
                requirements of subparagraph (B), after taking into account
                the considerations set forth in paragraph (4), impose
                assessments on--

                        (I) eligible financial companies; and
                        (II) financial companies with total consolidated
                    assets equal to or greater than $50,000,000,000 that
                    are not eligible financial companies.

                (E) Provision of financing.--Payments or amounts necessary
            to initiate and continue operations essential to implementation
            of the receivership or any bridge financial company described
            in subparagraph (D)(i) shall not include the provision of
            financing, as defined by rule of the Corporation, to third
            parties.
            (2) Graduated assessment rate.--The Corporation shall impose
        assessments on a graduated basis, with financial companies having
        greater assets and risk being assessed at a higher rate.
            (3) Notification and payment.--The Corporation shall notify
        each financial company of that company's assessment under this
        subsection. Any financial company subject to assessment under this
        subsection shall pay such assessment in accordance with the
        regulations prescribed pursuant to paragraph (6).
            (4) Risk-based assessment considerations.--In imposing
        assessments under paragraph (1)(D)(ii), the Corporation shall use a
        risk matrix. The Council shall make a recommendation to the
        Corporation on the risk matrix to be used in imposing such
        assessments, and the Corporation shall take into account any such
        recommendation in the establishment of the risk matrix to be used
        to impose such assessments. In recommending or establishing such
        risk matrix, the Council and the Corporation, respectively, shall
        take into account--
                (A) economic conditions generally affecting financial
            companies so as to allow assessments to increase during more
            favorable economic conditions and to decrease during less
            favorable economic conditions;
                (B) any assessments imposed on a financial company or an
            affiliate of a financial company that--
                    (i) is an insured depository institution, assessed
                pursuant to section 7 or 13(c)(4)(G) of the Federal Deposit
                Insurance Act;
                    (ii) is a member of the Securities Investor Protection
                Corporation, assessed pursuant to section 4 of the
                Securities Investor Protection Act of 1970 (15 U.S.C.
                78ddd);
                    (iii) is an insured credit union, assessed pursuant to
                section 202(c)(1)(A)(i) of the Federal Credit Union Act (12
                U.S.C. 1782(c)(1)(A)(i)); or
                    (iv) is an insurance company, assessed pursuant to
                applicable State law to cover (or reimburse payments made
                to cover) the costs of the rehabilitation, liquidation, or
                other State insolvency proceeding with respect to 1 or more
                insurance companies;
                (C) 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 orderly
            liquidation of a financial company under this title,
            including--
                    (i) the amount, different categories, and
                concentrations of assets of the financial company and its
                affiliates, including both on-balance sheet and off-balance
                sheet assets;
                    (ii) the activities of the financial company and its
                affiliates;
                    (iii) the relevant market share of the financial
                company and its affiliates;
                    (iv) the extent to which the financial company is
                leveraged;
                    (v) the potential exposure to sudden calls on liquidity
                precipitated by economic distress;
                    (vi) the amount, maturity, volatility, and stability of
                the company's financial obligations to, and relationship
                with, other financial companies;
                    (vii) the amount, maturity, volatility, and stability
                of the liabilities of the company, including the degree of
                reliance on short-term funding, taking into consideration
                existing systems for measuring a company's risk-based
                capital;
                    (viii) the stability and variety of the company's
                sources of funding;
                    (ix) the company's importance as a source of credit for
                households, businesses, and State and local governments and
                as a source of liquidity for the financial system;
                    (x) the extent to which assets are simply managed and
                not owned by the financial company and the extent to which
                ownership of assets under management is diffuse; and
                    (xi) the amount, different categories, and
                concentrations of liabilities, both insured and uninsured,
                contingent and noncontingent, including both on-balance
                sheet and off-balance sheet liabilities, of the financial
                company and its affiliates;
                (D) any risks presented by the financial company during the
            10-year period immediately prior to the appointment of the
            Corporation as receiver for the covered financial company that
            contributed to the failure of the covered financial company;
            and
                (E) such other risk-related factors as the Corporation, or
            the Council, as applicable, may determine to be appropriate.
            (5) Collection of information.--The Corporation may impose on
        covered financial companies such collection of information
        requirements as the Corporation deems necessary to carry out this
        subsection after the appointment of the Corporation as receiver
        under this title.
            (6) Rulemaking.--
                (A) In general.--The Corporation shall prescribe
            regulations to carry out this subsection. The Corporation shall
            consult with the Secretary in the development and finalization
            of such regulations.
                (B) Equitable treatment.--The regulations prescribed under
            subparagraph (A) shall take into account the differences in
            risks posed to the financial stability of the United States by
            financial companies, the differences in the liability
            structures of financial companies, and the different bases for
            other assessments that such financial companies may be required
            to pay, to ensure that assessed financial companies are treated
            equitably and that assessments under this subsection reflect
            such differences.
        (p) Unenforceability of Certain Agreements.--
            (1) In general.--No provision described in paragraph (2) shall
        be enforceable against or impose any liability on any person, as
        such enforcement or liability shall be contrary to public policy.
            (2) Prohibited provisions.--A provision described in this
        paragraph is any term contained in any existing or future
        standstill, confidentiality, or other agreement that, directly or
        indirectly--
                (A) affects, restricts, or limits the ability of any person
            to offer to acquire or acquire;
                (B) prohibits any person from offering to acquire or
            acquiring; or
                (C) prohibits any person from using any previously
            disclosed information in connection with any such offer to
            acquire or acquisition of,
        all or part of any covered financial company, including any
        liabilities, assets, or interest therein, in connection with any
        transaction in which the Corporation exercises its authority under
        this title.
        (q) Other Exemptions.--
            (1) In general.--When acting as a receiver under this title--
                (A) the Corporation, including its franchise, its capital,
            reserves and surplus, and its income, shall be exempt from all
            taxation imposed by any State, county, municipality, or local
            taxing authority, except that any real property of the
            Corporation shall be subject to State, territorial, county,
            municipal, or local taxation to the same extent according to
            its value as other real property is taxed, except that,
            notwithstanding the failure of any person to challenge an
            assessment under State law of the value of such property, such
            value, and the tax thereon, shall be determined as of the
            period for which such tax is imposed;
                (B) no property of the Corporation shall be subject to
            levy, attachment, garnishment, foreclosure, or sale without the
            consent of the Corporation, nor shall any involuntary lien
            attach to the property of the Corporation; and
                (C) the Corporation shall not be liable for any amounts in
            the nature of penalties or fines, including those arising from
            the failure of any person to pay any real property, personal
            property, probate, or recording tax or any recording or filing
            fees when due; and
                (D) the Corporation shall be exempt from all prosecution by
            the United States or any State, county, municipality, or local
            authority for any criminal offense arising under Federal,
            State, county, municipal, or local law, which was allegedly
            committed by the covered financial company, or persons acting
            on behalf of the covered financial company, prior to the
            appointment of the Corporation as receiver.
            (2) Limitation.--Paragraph (1) shall not apply with respect to
        any tax imposed (or other amount arising) under the Internal
        Revenue Code of 1986.
        (r) Certain Sales of Assets Prohibited.--
            (1) Persons who engaged in improper conduct with, or caused
        losses to, covered financial companies.--The Corporation shall
        prescribe regulations which, at a minimum, shall prohibit the sale
        of assets of a covered financial company by the Corporation to--
                (A) any person who--
                    (i) has defaulted, or was a member of a partnership or
                an officer or director of a corporation that has defaulted,
                on 1 or more obligations, the aggregate amount of which
                exceeds $1,000,000, to such covered financial company;
                    (ii) has been found to have engaged in fraudulent
                activity in connection with any obligation referred to in
                clause (i); and
                    (iii) proposes to purchase any such asset in whole or
                in part through the use of the proceeds of a loan or
                advance of credit from the Corporation or from any covered
                financial company;
                (B) any person who participated, as an officer or director
            of such covered financial company or of any affiliate of such
            company, in a material way in any transaction that resulted in
            a substantial loss to such covered financial company; or
                (C) any person who has demonstrated a pattern or practice
            of defalcation regarding obligations to such covered financial
            company.
            (2) Convicted debtors.--Except as provided in paragraph (3), a
        person may not purchase any asset of such institution from the
        receiver, if that person--
                (A) has been convicted of an offense under section 215,
            656, 657, 1005, 1006, 1007, 1008, 1014, 1032, 1341, 1343, or
            1344 of title 18, United States Code, or of conspiring to
            commit such an offense, affecting any covered financial
            company; and
                (B) is in default on any loan or other extension of credit
            from such covered financial company which, if not paid, will
            cause substantial loss to the Fund or the Corporation.
            (3) Settlement of claims.--Paragraphs (1) and (2) shall not
        apply to the sale or transfer by the Corporation of any asset of
        any covered financial company to any person, if the sale or
        transfer of the asset resolves or settles, or is part of the
        resolution or settlement, of 1 or more claims that have been, or
        could have been, asserted by the Corporation against the person.
            (4) Definition of default.--For purposes of this subsection,
        the term ``default'' means a failure to comply with the terms of a
        loan or other obligation to such an extent that the property
        securing the obligation is foreclosed upon.
        (s) Recoupment of Compensation From Senior Executives and
    Directors.--
            (1) In general.--The Corporation, as receiver of a covered
        financial company, may recover from any current or former senior
        executive or director substantially responsible for the failed
        condition of the covered financial company any compensation
        received during the 2-year period preceding the date on which the
        Corporation was appointed as the receiver of the covered financial
        company, except that, in the case of fraud, no time limit shall
        apply.
            (2) Cost considerations.--In seeking to recover any such
        compensation, the Corporation shall weigh the financial and
        deterrent benefits of such recovery against the cost of executing
        the recovery.
            (3) Rulemaking.--The Corporation shall promulgate regulations
        to implement the requirements of this subsection, including
        defining the term ``compensation'' to mean any financial
        remuneration, including salary, bonuses, incentives, benefits,
        severance, deferred compensation, or golden parachute benefits, and
        any profits realized from the sale of the securities of the covered
        financial company.
        SEC. 211. MISCELLANEOUS PROVISIONS.
        (a) Clarification of Prohibition Regarding Concealment of Assets
    From Receiver or Liquidating Agent.--Section 1032(1) of title 18,
    United States Code, is amended by inserting ``the Federal Deposit
    Insurance Corporation acting as receiver for a covered financial
    company, in accordance with title II of the Dodd-Frank Wall Street
    Reform and Consumer Protection Act,'' before ``or the National
    Credit''.
        (b) Conforming Amendment.--Section 1032 of title 18, United States
    Code, is amended in the section heading, by striking ``of financial
    institution''.
        (c) Federal Deposit Insurance Corporation Improvement Act of
    1991.--Section 403(a) of the Federal Deposit Insurance Corporation
    Improvement Act of 1991 (12 U.S.C. 4403(a)) is amended by inserting
    ``section 210(c) of the Dodd-Frank Wall Street Reform and Consumer
    Protection Act, section 1367 of the Federal Housing Enterprises
    Financial Safety and Soundness Act of 1992 (12 U.S.C. 4617(d)),'' after
    ``section 11(e) of the Federal Deposit Insurance Act,''.
        (d) FDIC Inspector General Reviews.--
            (1) Scope.--The Inspector General of the Corporation shall
        conduct, supervise, and coordinate audits and investigations of the
        liquidation of any covered financial company by the Corporation as
        receiver under this title, including collecting and summarizing--
                (A) a description of actions taken by the Corporation as
            receiver;
                (B) a description of any material sales, transfers,
            mergers, obligations, purchases, and other material
            transactions entered into by the Corporation;
                (C) an evaluation of the adequacy of the policies and
            procedures of the Corporation under section 203(d) and orderly
            liquidation plan under section 210(n)(14);
                (D) an evaluation of the utilization by the Corporation of
            the private sector in carrying out its functions, including the
            adequacy of any conflict-of-interest reviews; and
                (E) an evaluation of the overall performance of the
            Corporation in liquidating the covered financial company,
            including administrative costs, timeliness of liquidation
            process, and impact on the financial system.
            (2) Frequency.--Not later than 6 months after the date of
        appointment of the Corporation as receiver under this title and
        every 6 months thereafter, the Inspector General of the Corporation
        shall conduct the audit and investigation described in paragraph
        (1).
            (3) Reports and testimony.--The Inspector General of the
        Corporation shall include in the semiannual reports required by
        section 5(a) of the Inspector General Act of 1978 (5 U.S.C. App.),
        a summary of the findings and evaluations under paragraph (1), and
        shall appear before the appropriate committees of Congress, if
        requested, to present each such report.
            (4) Funding.--
                (A) Initial funding.--The expenses of the Inspector General
            of the Corporation in carrying out this subsection shall be
            considered administrative expenses of the receivership.
                (B) Additional funding.--If the maximum amount available to
            the Corporation as receiver under this title is insufficient to
            enable the Inspector General of the Corporation to carry out
            the duties under this subsection, the Corporation shall pay
            such additional amounts from assessments imposed under section
            210.
            (5) Termination of responsibilities.--The duties and
        responsibilities of the Inspector General of the Corporation under
        this subsection shall terminate 1 year after the date of
        termination of the receivership under this title.
        (e) Treasury Inspector General Reviews.--
            (1) Scope.--The Inspector General of the Department of the
        Treasury shall conduct, supervise, and coordinate audits and
        investigations of actions taken by the Secretary related to the
        liquidation of any covered financial company under this title,
        including collecting and summarizing--
                (A) a description of actions taken by the Secretary under
            this title;
                (B) an analysis of the approval by the Secretary of the
            policies and procedures of the Corporation under section 203
            and acceptance of the orderly liquidation plan of the
            Corporation under section 210; and
                (C) an assessment of the terms and conditions underlying
            the purchase by the Secretary of obligations of the Corporation
            under section 210.
            (2) Frequency.--Not later than 6 months after the date of
        appointment of the Corporation as receiver under this title and
        every 6 months thereafter, the Inspector General of the Department
        of the Treasury shall conduct the audit and investigation described
        in paragraph (1).
            (3) Reports and testimony.--The Inspector General of the
        Department of the Treasury shall include in the semiannual reports
        required by section 5(a) of the Inspector General Act of 1978 (5
        U.S.C. App.), a summary of the findings and assessments under
        paragraph (1), and shall appear before the appropriate committees
        of Congress, if requested, to present each such report.
            (4) Termination of responsibilities.--The duties and
        responsibilities of the Inspector General of the Department of the
        Treasury under this subsection shall terminate 1 year after the
        date on which the obligations purchased by the Secretary from the
        Corporation under section 210 are fully redeemed.
        (f) Primary Financial Regulatory Agency Inspector General
    Reviews.--
            (1) Scope.--Upon the appointment of the Corporation as receiver
        for a covered financial company supervised by a Federal primary
        financial regulatory agency or the Board of Governors under section
        165, the Inspector General of the agency or the Board of Governors
        shall make a written report reviewing the supervision by the agency
        or the Board of Governors of the covered financial company, which
        shall--
                (A) evaluate the effectiveness of the agency or the Board
            of Governors in carrying out its supervisory responsibilities
            with respect to the covered financial company;
                (B) identify any acts or omissions on the part of agency or
            Board of Governors officials that contributed to the covered
            financial company being in default or in danger of default;
                (C) identify any actions that could have been taken by the
            agency or the Board of Governors that would have prevented the
            company from being in default or in danger of default; and
                (D) recommend appropriate administrative or legislative
            action.
            (2) Reports and testimony.--Not later than 1 year after the
        date of appointment of the Corporation as receiver under this
        title, the Inspector General of the Federal primary financial
        regulatory agency or the Board of Governors shall provide the
        report required by paragraph (1) to such agency or the Board of
        Governors, and along with such agency or the Board of Governors, as
        applicable, shall appear before the appropriate committees of
        Congress, if requested, to present the report required by paragraph
        (1). Not later than 90 days after the date of receipt of the report
        required by paragraph (1), such agency or the Board of Governors,
        as applicable, shall provide a written report to Congress
        describing any actions taken in response to the recommendations in
        the report, and if no such actions were taken, describing the
        reasons why no actions were taken.
        SEC. 212. PROHIBITION OF CIRCUMVENTION AND PREVENTION OF CONFLICTS
          OF INTEREST.
        (a) No Other Funding.--Funds for the orderly liquidation of any
    covered financial company under this title shall only be provided as
    specified under this title.
        (b) Limit on Governmental Actions.--No governmental entity may take
    any action to circumvent the purposes of this title.
        (c) Conflict of Interest.--In the event that the Corporation is
    appointed receiver for more than 1 covered financial company or is
    appointed receiver for a covered financial company and receiver for any
    insured depository institution that is an affiliate of such covered
    financial company, the Corporation shall take appropriate action, as
    necessary to avoid any conflicts of interest that may arise in
    connection with multiple receiverships.
        SEC. 213. BAN ON CERTAIN ACTIVITIES BY SENIOR EXECUTIVES AND
          DIRECTORS.
        (a) Prohibition Authority.--The Board of Governors or, if the
    covered financial company was not supervised by the Board of Governors,
    the Corporation, may exercise the authority provided by this section.
        (b) Authority To Issue Order.--The appropriate agency described in
    subsection (a) may take any action authorized by subsection (c), if the
    agency determines that--
            (1) a senior executive or a director of the covered financial
        company, prior to the appointment of the Corporation as receiver,
        has, directly or indirectly--
                (A) violated--
                    (i) any law or regulation;
                    (ii) any cease-and-desist order which has become final;
                    (iii) any condition imposed in writing by a Federal
                agency in connection with any action on any application,
                notice, or request by such company or senior executive; or
                    (iv) any written agreement between such company and
                such agency;
                (B) engaged or participated in any unsafe or unsound
            practice in connection with any financial company; or
                (C) committed or engaged in any act, omission, or practice
            which constitutes a breach of the fiduciary duty of such senior
            executive or director;
            (2) by reason of the violation, practice, or breach described
        in any subparagraph of paragraph (1), such senior executive or
        director has received financial gain or other benefit by reason of
        such violation, practice, or breach and such violation, practice,
        or breach contributed to the failure of the company; and
            (3) such violation, practice, or breach--
                (A) involves personal dishonesty on the part of such senior
            executive or director; or
                (B) demonstrates willful or continuing disregard by such
            senior executive or director for the safety or soundness of
            such company.
        (c) Authorized Actions.--
            (1) In general.--The appropriate agency for a financial
        company, as described in subsection (a), may serve upon a senior
        executive or director described in subsection (b) a written notice
        of the intention of the agency to prohibit any further
        participation by such person, in any manner, in the conduct of the
        affairs of any financial company for a period of time determined by
        the appropriate agency to be commensurate with such violation,
        practice, or breach, provided such period shall be not less than 2
        years.
            (2) Procedures.--The due process requirements and other
        procedures under section 8(e) of the Federal Deposit Insurance Act
        (12 U.S.C. 1818(e)) shall apply to actions under this section as if
        the covered financial company were an insured depository
        institution and the senior executive or director were an
        institution-affiliated party, as those terms are defined in that
        Act.
        (d) Regulations.--The Corporation and the Board of Governors, in
    consultation with the Council, shall jointly prescribe rules or
    regulations to administer and carry out this section, including rules,
    regulations, or guidelines to further define the term senior executive
    for the purposes of this section.
        SEC. 214. PROHIBITION ON TAXPAYER FUNDING.
        (a) Liquidation Required.--All financial companies put into
    receivership under this title shall be liquidated. No taxpayer funds
    shall be used to prevent the liquidation of any financial company under
    this title.
        (b) Recovery of Funds.--All funds expended in the liquidation of a
    financial company under this title shall be recovered from the
    disposition of assets of such financial company, or shall be the
    responsibility of the financial sector, through assessments.
        (c) No Losses to Taxpayers.--Taxpayers shall bear no losses from
    the exercise of any authority under this title.
        SEC. 215. STUDY ON SECURED CREDITOR HAIRCUTS.
        (a) Study Required.--The Council shall conduct a study evaluating
    the importance of maximizing United States taxpayer protections and
    promoting market discipline with respect to the treatment of fully
    secured creditors in the utilization of the orderly liquidation
    authority authorized by this Act. In carrying out such study, the
    Council shall--
            (1) not be prejudicial to current or past laws or regulations
        with respect to secured creditor treatment in a resolution process;
            (2) study the similarities and differences between the
        resolution mechanisms authorized by the Bankruptcy Code, the
        Federal Deposit Insurance Corporation Improvement Act of 1991, and
        the orderly liquidation authority authorized by this Act;
            (3) determine how various secured creditors are treated in such
        resolution mechanisms and examine how a haircut (of various
        degrees) on secured creditors could improve market discipline and
        protect taxpayers;
            (4) compare the benefits and dynamics of prudent lending
        practices by depository institutions in secured loans for consumers
        and small businesses to the lending practices of secured creditors
        to large, interconnected financial firms;
            (5) consider whether credit differs according to different
        types of collateral and different terms and timing of the extension
        of credit; amd
            (6) include an examination of stakeholders who were unsecured
        or under-collateralized and seek collateral when a firm is failing,
        and the impact that such behavior has on financial stability and an
        orderly resolution that protects taxpayers if the firm fails.
        (b) Report.--Not later than the end of the 1-year period beginning
    on the date of enactment of this Act, the Council shall issue a report
    to the Congress containing all findings and conclusions made by the
    Council in carrying out the study required under subsection (a).
        SEC. 216. STUDY ON BANKRUPTCY PROCESS FOR FINANCIAL AND NONBANK
          FINANCIAL INSTITUTIONS.
        (a) Study.--
            (1) In general.--Upon enactment of this Act, the Board of
        Governors, in consultation with the Administrative Office of the
        United States Courts, shall conduct a study regarding the
        resolution of financial companies under the Bankruptcy Code, under
        chapter 7 or 11 thereof .
            (2) Issues to be studied.--Issues to be studied under this
        section include--
                (A) the effectiveness of chapter 7 and chapter 11 of the
            Bankruptcy Code in facilitating the orderly resolution or
            reorganization of systemic financial companies;
                (B) whether a special financial resolution court or panel
            of special masters or judges should be established to oversee
            cases involving financial companies to provide for the
            resolution of such companies under the Bankruptcy Code, in a
            manner that minimizes adverse impacts on financial markets
            without creating moral hazard;
                (C) whether amendments to the Bankruptcy Code should be
            adopted to enhance the ability of the Code to resolve financial
            companies in a manner that minimizes adverse impacts on
            financial markets without creating moral hazard;
                (D) whether amendments should be made to the Bankruptcy
            Code, the Federal Deposit Insurance Act, and other insolvency
            laws to address the manner in which qualified financial
            contracts of financial companies are treated; and
                (E) the implications, challenges, and benefits to creating
            a new chapter or subchapter of the Bankruptcy Code to deal with
            financial companies.
        (b) Reports to Congress.--Not later than 1 year after the date of
    enactment of this Act, and in each successive year until the fifth year
    after the date of enactment of this Act, the Administrative Office of
    the United States courts shall submit to the Committees on Banking,
    Housing, and Urban Affairs and the Judiciary of the Senate and the
    Committees on Financial Services and the Judiciary of the House of
    Representatives a report summarizing the results of the study conducted
    under subsection (a).
        SEC. 217. STUDY ON INTERNATIONAL COORDINATION RELATING TO
          BANKRUPTCY PROCESS FOR NONBANK FINANCIAL INSTITUTIONS.
        (a) Study.--
            (1) In general.--The Board of Governors, in consultation with
        the Administrative Office of the United States Courts, shall
        conduct a study regarding international coordination relating to
        the resolution of systemic financial companies under the United
        States Bankruptcy Code and applicable foreign law.
            (2) Issues to be studied.--With respect to the bankruptcy
        process for financial companies, issues to be studied under this
        section include--
                (A) the extent to which international coordination
            currently exists;
                (B) current mechanisms and structures for facilitating
            international cooperation;
                (C) barriers to effective international coordination; and
                (D) ways to increase and make more effective international
            coordination of the resolution of financial companies, so as to
            minimize the impact on the financial system without creating
            moral hazard.
        (b) Report to Congress.--Not later than 1 year after the date of
    enactment of this Act, the Administrative office of the United States
    Courts shall submit to the Committees on Banking, Housing, and Urban
    Affairs and the Judiciary of the Senate and the Committees on Financial
    Services and the Judiciary of the House of Representatives a report
    summarizing the results of the study conducted under subsection (a).

     TITLE III--TRANSFER OF POWERS TO THE COMPTROLLER OF THE CURRENCY, THE
                    CORPORATION, AND THE BOARD OF GOVERNORS

        SEC. 300. SHORT TITLE.
        This title may be cited as the ``Enhancing Financial Institution
    Safety and Soundness Act of 2010''.
        SEC. 301. PURPOSES.
        The purposes of this title are--
            (1) to provide for the safe and sound operation of the banking
        system of the United States;
            (2) to preserve and protect the dual system of Federal and
        State-chartered depository institutions;
            (3) to ensure the fair and appropriate supervision of each
        depository institution, regardless of the size or type of charter
        of the depository institution; and
            (4) to streamline and rationalize the supervision of depository
        institutions and the holding companies of depository institutions.
        SEC. 302. DEFINITION.
        In this title, the term ``transferred employee'' means, as the
    context requires, an employee transferred to the Office of the
    Comptroller of the Currency or the Corporation under section 322.

                   Subtitle A--Transfer of Powers and Duties

        SEC. 311. TRANSFER DATE.
        (a) Transfer Date.--Except as provided in subsection (b), the term
    ``transfer date'' means the date that is 1 year after the date of
    enactment of this Act.
        (b) Extension Permitted.--
            (1) Notice required.--The Secretary, in consultation with the
        Comptroller of the Currency, the Director of the Office of Thrift
        Supervision, the Chairman of the Board of Governors, and the
        Chairperson of the Corporation, may extend the period under
        subsection (a) and designate a transfer date that is not later than
        18 months after the date of enactment of this Act, if the Secretary
        transmits to the Committee on Banking, Housing, and Urban Affairs
        of the Senate and the Committee on Financial Services of the House
        of Representatives--
                (A) a written determination that commencement of the
            orderly process to implement this title is not feasible by the
            date that is 1 year after the date of enactment of this Act;
                (B) an explanation of why an extension is necessary to
            commence the process of orderly implementation of this title;
                (C) the transfer date designated under this subsection; and
                (D) a description of the steps that will be taken to
            initiate the process of an orderly and timely implementation of
            this title within the extended time period.
            (2) Publication of notice.--Not later than 270 days after the
        date of enactment of this Act, the Secretary shall publish in the
        Federal Register notice of any transfer date designated under
        paragraph (1).
        SEC. 312. POWERS AND DUTIES TRANSFERRED.
        (a) Effective Date.--This section, and the amendments made by this
    section, shall take effect on the transfer date.
        (b) Functions of the Office of Thrift Supervision.--
            (1) Savings and loan holding company functions transferred.--
                (A) Transfer of functions.--There are transferred to the
            Board of Governors all functions of the Office of Thrift
            Supervision and the Director of the Office of Thrift
            Supervision (including the authority to issue orders) relating
            to--
                    (i) the supervision of--

                        (I) any savings and loan holding company; and
                        (II) any subsidiary (other than a depository
                    institution) of a savings and loan holding company; and

                    (ii) all rulemaking authority of the Office of Thrift
                Supervision and the Director of the Office of Thrift
                Supervision relating to savings and loan holding companies.
                (B) Powers, authorities, rights, and duties.--The Board of
            Governors shall succeed to all powers, authorities, rights, and
            duties that were vested in the Office of Thrift Supervision and
            the Director of the Office of Thrift Supervision on the day
            before the transfer date relating to the functions and
            authority transferred under subparagraph (A).
            (2) All other functions transferred.--
                (A) Board of governors.--All rulemaking authority of the
            Office of Thrift Supervision and the Director of the Office of
            Thrift Supervision under section 11 of the Home Owners' Loan
            Act (12 U.S.C. 1468) relating to transactions with affiliates
            and extensions of credit to executive officers, directors, and
            principal shareholders and under section 5(q) of such Act
            relating to tying arrangements is transferred to the Board of
            Governors.
                (B) Comptroller of the currency.--Except as provided in
            paragraph (1) and subparagraph (A)--
                    (i) there are transferred to the Office of the
                Comptroller of the Currency and the Comptroller of the
                Currency--

                        (I) all functions of the Office of Thrift
                    Supervision and the Director of the Office of Thrift
                    Supervision, respectively, relating to Federal savings
                    associations; and
                        (II) all rulemaking authority of the Office of
                    Thrift Supervision and the Director of the Office of
                    Thrift Supervision, respectively, relating to savings
                    associations; and

                    (ii) the Office of the Comptroller of the Currency and
                the Comptroller of the Currency shall succeed to all
                powers, authorities, rights, and duties that were vested in
                the Office of Thrift Supervision and the Director of the
                Office of Thrift Supervision, respectively, on the day
                before the transfer date relating to the functions and
                authority transferred under clause (i).
                (C) Corporation.--Except as provided in paragraph (1) and
            subparagraphs (A) and (B)--
                    (i) all functions of the Office of Thrift Supervision
                and the Director of the Office of Thrift Supervision
                relating to State savings associations are transferred to
                the Corporation; and
                    (ii) the Corporation shall succeed to all powers,
                authorities, rights, and duties that were vested in the
                Office of Thrift Supervision and the Director of the Office
                of Thrift Supervision on the day before the transfer date
                relating to the functions transferred under clause (i).
        (c) Conforming Amendments.--Section 3 of the Federal Deposit
    Insurance Act (12 U.S.C. 1813) is amended--
            (1) in subsection (q), by striking paragraphs (1) through (4)
        and inserting the following:
            ``(1) the Office of the Comptroller of the Currency, in the
        case of--
                ``(A) any national banking association;
                ``(B) any Federal branch or agency of a foreign bank; and
                ``(C) any Federal savings association;
            ``(2) the Federal Deposit Insurance Corporation, in the case
        of--
                ``(A) any State nonmember insured bank;
                ``(B) any foreign bank having an insured branch; and
                ``(C) any State savings association;
            ``(3) the Board of Governors of the Federal Reserve System, in
        the case of--
                ``(A) any State member bank;
                ``(B) any branch or agency of a foreign bank with respect
            to any provision of the Federal Reserve Act which is made
            applicable under the International Banking Act of 1978;
                ``(C) any foreign bank which does not operate an insured
            branch;
                ``(D) any agency or commercial lending company other than a
            Federal agency;
                ``(E) supervisory or regulatory proceedings arising from
            the authority given to the Board of Governors under section
            7(c)(1) of the International Banking Act of 1978, including
            such proceedings under the Financial Institutions Supervisory
            Act of 1966;
                ``(F) any bank holding company and any subsidiary (other
            than a depository institution) of a bank holding company; and
                ``(G) any savings and loan holding company and any
            subsidiary (other than a depository institution) of a savings
            and loan holding company.''; and
            (2) in paragraphs (1) and (3) of subsection (u), by striking
        ``(other than a bank holding company'' and inserting ``(other than
        a bank holding company or savings and loan holding company''.
        (d) Consumer Protection.--Nothing in this section may be construed
    to limit or otherwise affect the transfer of powers under title X.
        SEC. 313. ABOLISHMENT.
        Effective 90 days after the transfer date, the Office of Thrift
    Supervision and the position of Director of the Office of Thrift
    Supervision are abolished.
        SEC. 314. AMENDMENTS TO THE REVISED STATUTES.
        (a) Amendment to Section 324.--Section 324 of the Revised Statutes
    of the United States (12 U.S.C. 1) is amended to read as follows:
        ``SEC. 324. COMPTROLLER OF THE CURRENCY.
        ``(a) Office of the Comptroller of the Currency Established.--There
    is established in the Department of the Treasury a bureau to be known
    as the `Office of the Comptroller of the Currency' which is charged
    with assuring the safety and soundness of, and compliance with laws and
    regulations, fair access to financial services, and fair treatment of
    customers by, the institutions and other persons subject to its
    jurisdiction.
        ``(b) Comptroller of the Currency.--
            ``(1) In general.--The chief officer of the Office of the
        Comptroller of the Currency shall be known as the Comptroller of
        the Currency. The Comptroller of the Currency shall perform the
        duties of the Comptroller of the Currency under the general
        direction of the Secretary of the Treasury. 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.
            ``(2) Additional authority.--The Comptroller of the Currency
        shall have the same authority with respect to functions transferred
        to the Comptroller of the Currency under the Enhancing Financial
        Institution Safety and Soundness Act of 2010 as was vested in the
        Director of the Office of Thrift Supervision on the transfer date,
        as defined in section 311 of that Act.''.
        (b) Supervision of Federal Savings Associations.--Chapter 9 of
    title VII of the Revised Statutes of the United States (12 U.S.C. 1 et
    seq.) is amended by inserting after section 327A (12 U.S.C. 4a) the
    following:
    ``SEC. 327B. DEPUTY COMPTROLLER FOR THE SUPERVISION AND EXAMINATION OF
    FEDERAL SAVINGS ASSOCIATIONS.
        ``The Comptroller of the Currency shall designate a Deputy
    Comptroller, who shall be responsible for the supervision and
    examination of Federal savings associations.''.
        (c) Amendment to Section 329.--Section 329 of the Revised Statutes
    of the United States (12 U.S.C. 11) is amended by inserting before the
    period at the end the following: ``or any Federal savings
    association''.
        (d) Effective Date.--This section, and the amendments made by this
    section, shall take effect on the transfer date.
        SEC. 315. FEDERAL INFORMATION POLICY.
        Section 3502(5) of title 44, United States Code, is amended by
    inserting ``Office of the Comptroller of the Currency,'' after ``the
    Securities and Exchange Commission,''.
        SEC. 316. SAVINGS PROVISIONS.
        (a) Office of Thrift Supervision.--
            (1) Existing rights, duties, and obligations not affected.--
        Sections 312(b) and 313 shall not affect the validity of any right,
        duty, or obligation of the United States, the Director of the
        Office of Thrift Supervision, the Office of Thrift Supervision, or
        any other person, that existed on the day before the transfer date.
            (2) Continuation of suits.--This title shall not abate any
        action or proceeding commenced by or against the Director of the
        Office of Thrift Supervision or the Office of Thrift Supervision
        before the transfer date, except that--
                (A) for any action or proceeding arising out of a function
            of the Office of Thrift Supervision or the Director of the
            Office of Thrift Supervision transferred to the Board of
            Governors by this title, the Board of Governors shall be
            substituted for the Office of Thrift Supervision or the
            Director of the Office of Thrift Supervision as a party to the
            action or proceeding on and after the transfer date;
                (B) for any action or proceeding arising out of a function
            of the Office of Thrift Supervision or the Director of the
            Office of Thrift Supervision transferred to the Office of the
            Comptroller of the Currency or the Comptroller of the Currency
            by this title, the Office of the Comptroller of the Currency or
            the Comptroller of the Currency shall be substituted for the
            Office of Thrift Supervision or the Director of the Office of
            Thrift Supervision, as the case may be, as a party to the
            action or proceeding on and after the transfer date; and
                (C) for any action or proceeding arising out of a function
            of the Office of Thrift Supervision or the Director of the
            Office of Thrift Supervision transferred to the Corporation by
            this title, the Corporation shall be substituted for the Office
            of Thrift Supervision or the Director of the Office of Thrift
            Supervision as a party to the action or proceeding on and after
            the transfer date.
        (b) Continuation of Existing OTS Orders, Resolutions,
    Determinations, Agreements, Regulations, etc.--All orders, resolutions,
    determinations, agreements, and regulations, interpretative rules,
    other interpretations, guidelines, procedures, and other advisory
    materials, that have been issued, made, prescribed, or allowed to
    become effective by the Office of Thrift Supervision or the Director of
    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 such orders,
    resolutions, determinations, agreements, and regulations,
    interpretative rules, other interpretations, guidelines, procedures,
    and other advisory materials, and shall be enforceable by or against--
            (1) the Board of Governors, in the case of a function of the
        Office of Thrift Supervision or the Director of the Office of
        Thrift Supervision transferred to the Board of Governors, until
        modified, terminated, set aside, or superseded in accordance with
        applicable law by the Board of Governors, by any court of competent
        jurisdiction, or by operation of law;
            (2) the Office of the Comptroller of the Currency or the
        Comptroller of the Currency, in the case of a function of the
        Office of Thrift Supervision or the Director of the Office of
        Thrift Supervision transferred to the Office of the Comptroller of
        the Currency or the Comptroller of the Currency, respectively,
        until modified, terminated, set aside, or superseded in accordance
        with applicable law by the Office of the Comptroller of the
        Currency or the Comptroller of the Currency, by any court of
        competent jurisdiction, or by operation of law; and
            (3) the Corporation, in the case of a function of the Office of
        Thrift Supervision or the Director of the Office of Thrift
        Supervision transferred to the Corporation, until modified,
        terminated, set aside, or superseded in accordance with applicable
        law by the Corporation, by any court of competent jurisdiction, or
        by operation of law.
        (c) Identification of Regulations Continued.--
            (1) By the board of governors.--Not later than the transfer
        date, the Board of Governors shall--
                (A) identify the regulations continued under subsection (b)
            that will be enforced by the Board of Governors; and
                (B) publish a list of the regulations identified under
            subparagraph (A) in the Federal Register.
            (2) By office of the comptroller of the currency.--Not later
        than the transfer date, the Office of the Comptroller of the
        Currency shall--
                (A) after consultation with the Corporation, identify the
            regulations continued under subsection (b) that will be
            enforced by the Office of the Comptroller of the Currency; and
                (B) publish a list of the regulations identified under
            subparagraph (A) in the Federal Register.
            (3) By the corporation.--Not later than the transfer date, the
        Corporation shall--
                (A) after consultation with the Office of the Comptroller
            of the Currency, identify the regulations continued under
            subsection (b) that will be enforced by the Corporation; and
                (B) publish a list of the regulations identified under
            subparagraph (A) in the Federal Register.
        (d) Status of Regulations Proposed or Not Yet Effective.--
            (1) Proposed regulations.--Any proposed regulation of the
        Office of Thrift Supervision, which the Office of Thrift
        Supervision in performing functions transferred by this title, has
        proposed before the transfer date but has not published as a final
        regulation before such date, shall be deemed to be a proposed
        regulation of the Office of the Comptroller of the Currency or the
        Board of Governors, as appropriate, according to the terms of the
        proposed regulation.
            (2) Regulations not yet effective.--Any interim or final
        regulation of the Office of Thrift Supervision, which the Office of
        Thrift Supervision, 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
        Board of Governors, as appropriate, according to the terms of the
        interim or final regulation, unless modified, terminated, set
        aside, or superseded in accordance with applicable law by the
        Office of the Comptroller of the Currency or the Board of
        Governors, as appropriate, by any court of competent jurisdiction,
        or by operation of law.
        SEC. 317. REFERENCES IN FEDERAL LAW TO FEDERAL BANKING AGENCIES.
        On and after the transfer date, any reference in Federal law to the
    Director of the Office of Thrift Supervision or the Office of Thrift
    Supervision, in connection with any function of the Director of the
    Office of Thrift Supervision or the Office of Thrift Supervision
    transferred under section 312(b) or any other provision of this
    subtitle, shall be deemed to be a reference to the Comptroller of the
    Currency, the Office of the Comptroller of the Currency, the
    Chairperson of the Corporation, the Corporation, the Chairman of the
    Board of Governors, or the Board of Governors, as appropriate and
    consistent with the amendments made in subtitle E.
        SEC. 318. FUNDING.
        (a) Compensation of Examiners.--Section 5240 of the Revised
    Statutes of the United States (12 U.S.C. 481 et seq.) is amended--
            (1) in the second undesignated paragraph (12 U.S.C. 481), in
        the fourth sentence, by striking ``without regard to the provisions
        of other laws applicable to officers or employees of the United
        States'' and inserting the following: ``set and adjusted subject 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''; and
            (2) in the third undesignated paragraph (12 U.S.C. 482), in the
        first sentence, by striking ``shall fix'' and inserting ``shall,
        subject to chapter 71 of title 5, United States Code, fix''.
        (b) Funding of Office of the Comptroller of the Currency.--Chapter
    4 of title LXII of the Revised Statutes is amended by inserting after
    section 5240 (12 U.S.C. 481, 482) the following:
        ``Sec. 5240A.  The Comptroller of the Currency may collect an
    assessment, fee, or other charge from any entity described in section
    3(q)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)(1)), as
    the Comptroller determines is necessary or appropriate to carry out the
    responsibilities of the Office of the Comptroller of the Currency. In
    establishing the amount of an assessment, fee, or charge collected from
    an entity under this section, the Comptroller of the Currency may take
    into account the nature and scope of the activities of the entity, the
    amount and type of assets that the entity holds, the financial and
    managerial condition of the entity, and any other factor, as the
    Comptroller of the Currency determines is appropriate. Funds derived
    from any assessment, fee, or charge collected or payment made pursuant
    to this section may be deposited by the Comptroller of the Currency in
    accordance with the provisions of section 5234. Such funds shall not be
    construed to be Government funds or appropriated monies, and shall not
    be subject to apportionment for purposes of chapter 15 of title 31,
    United States Code, or any other provision of law. The authority of the
    Comptroller of the Currency under this section shall be in addition to
    the authority under section 5240.
        ``The Comptroller of the Currency shall have sole authority to
    determine the manner in which the obligations of the Office of the
    Comptroller of the Currency shall be incurred and its disbursements and
    expenses allowed and paid, in accordance with this section, except as
    provided in chapter 71 of title 5, United States Code (with respect to
    compensation).''.
        (c) Funding of Board of Governors.--Section 11 of the Federal
    Reserve Act (12 U.S.C. 248) is amended by adding at the end the
    following:
        ``(s) Assessments, Fees, and Other Charges for Certain Companies.--
            ``(1) In general.--The Board shall collect a total amount of
        assessments, fees, or other charges from the companies described in
        paragraph (2) that is equal to the total expenses the Board
        estimates are necessary or appropriate to carry out the supervisory
        and regulatory responsibilities of the Board with respect to such
        companies.
            ``(2) Companies.--The companies described in this paragraph
        are--
                ``(A) all bank holding companies having total consolidated
            assets of $50,000,000,000 or more;
                ``(B) all savings and loan holding companies having total
            consolidated assets of $50,000,000,000 or more; and
                ``(C) all nonbank financial companies supervised by the
            Board under section 113 of the Dodd-Frank Wall Street Reform
            and Consumer Protection Act.''.
        (d) Corporation Examination Fees.--Section 10(e) of the Federal
    Deposit Insurance Act (12 U.S.C. 1820(e)) is amended by striking
    paragraph (1) and inserting the following:
            ``(1) Regular and special examinations of depository
        institutions.--The cost of conducting any regular examination or
        special examination of any depository institution under subsection
        (b)(2), (b)(3), or (d) or of any entity described in section
        3(q)(2) may be assessed by the Corporation against the institution
        or entity to meet the expenses of the Corporation in carrying out
        such examinations.''.
        (e) Effective Date.--This section, and the amendments made by this
    section, shall take effect on the transfer date.
        SEC. 319. CONTRACTING AND LEASING AUTHORITY.
        Notwithstanding the Federal Property and Administrative Services
    Act of 1949 (41 U.S.C. 251 et seq.) or any other provision of law
    (except the full and open competition requirements of the Competition
    in Contracting Act), the Office of the Comptroller of the Currency
    may--
            (1) enter into and perform contracts, execute instruments, and
        acquire real property (or property interest) as the Comptroller
        deems necessary to carry out the duties and responsibilities of the
        Office of the Comptroller of the Currency; and
            (2) hold, maintain, sell, lease, or otherwise dispose of the
        property (or property interest) acquired under paragraph (1).

                      Subtitle B--Transitional Provisions

        SEC. 321. INTERIM USE OF FUNDS, PERSONNEL, AND PROPERTY OF THE
          OFFICE OF THRIFT SUPERVISION.
        (a) In General.--Before the transfer date, the Office of the
    Comptroller of the Currency, the Corporation, and the Board of
    Governors shall--
            (1) consult and cooperate with the Office of Thrift Supervision
        to facilitate the orderly transfer of functions to the Office of
        the Comptroller of the Currency, the Corporation, and the Board of
        Governors in accordance with this title;
            (2) determine jointly, from time to time--
                (A) the amount of funds necessary to pay any expenses
            associated with the transfer of functions (including expenses
            for personnel, property, and administrative services) during
            the period beginning on the date of enactment of this Act and
            ending on the transfer date;
                (B) which personnel are appropriate to facilitate the
            orderly transfer of functions by this title; and
                (C) what property and administrative services are necessary
            to support the Office of the Comptroller of the Currency, the
            Corporation, and the Board of Governors during the period
            beginning on the date of enactment of this Act and ending on
            the transfer date; and
            (3) take such actions as may be necessary to provide for the
        orderly implementation of this title.
        (b) Agency Consultation.--When requested jointly by the Office of
    the Comptroller of the Currency, the Corporation, and the Board of
    Governors to do so before the transfer date, the Office of Thrift
    Supervision shall--
            (1) pay to the Office of the Comptroller of the Currency, the
        Corporation, or the Board of Governors, as applicable, 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 as the Office of the
        Comptroller of the Currency, the Corporation, and the Board of
        Governors jointly determine to be necessary under subsection (a);
            (2) detail to the Office of the Comptroller of the Currency,
        the Corporation, or the Board of Governors, as applicable, such
        personnel as the Office of the Comptroller of the Currency, the
        Corporation, and the Board of Governors jointly determine to be
        appropriate under subsection (a); and
            (3) make available to the Office of the Comptroller of the
        Currency, the Corporation, or the Board of Governors, as
        applicable, such property and provide to the Office of the
        Comptroller of the Currency, the Corporation, or the Board of
        Governors, as applicable, such administrative services as the
        Office of the Comptroller of the Currency, the Corporation, and the
        Board of Governors jointly determine to be necessary under
        subsection (a).
        (c) Notice Required.--The Office of the Comptroller of the
    Currency, the Corporation, and the Board of Governors shall jointly
    give the Office of Thrift Supervision reasonable prior notice of any
    request that the Office of the Comptroller of the Currency, the
    Corporation, and the Board of Governors jointly intend to make under
    subsection (b).
        SEC. 322. TRANSFER OF EMPLOYEES.
        (a) In General.--
            (1) Office of thrift supervision employees.--
                (A) In general.--Except as provided in section 1064, all
            employees of the Office of Thrift Supervision shall be
            transferred to the Office of the Comptroller of the Currency or
            the Corporation for employment in accordance with this section.
                (B) Allocating employees for transfer to receiving
            agencies.--The Director of the Office of Thrift Supervision,
            the Comptroller of the Currency, and the Chairperson of the
            Corporation shall--
                    (i) jointly determine the number of employees of the
                Office of Thrift Supervision necessary to perform or
                support the functions that are transferred to the Office of
                the Comptroller of the Currency or the Corporation by this
                title; and
                    (ii) consistent with the determination under clause
                (i), jointly identify employees of the Office of Thrift
                Supervision for transfer to the Office of the Comptroller
                of the Currency or the Corporation.
            (2) Employees transferred; service periods credited.--For
        purposes of this section, periods of service with a Federal home
        loan bank, a joint office of Federal home loan banks, or a Federal
        reserve bank shall be credited as periods of service with a Federal
        agency.
            (3) Appointment authority for excepted service transferred.--
                (A) In general.--Except as provided in subparagraph (B),
            any appointment authority of the Office of Thrift Supervision
            under Federal law that relates to the functions transferred
            under section 312, including the regulations of the Office of
            Personnel Management, for filling the positions of employees in
            the excepted service shall be transferred to the Comptroller of
            the Currency or the Chairperson of the Corporation, as
            appropriate.
                (B) Declining transfers allowed.--The Comptroller of the
            Currency or the Chairperson of the Corporation may decline to
            accept a transfer of authority under subparagraph (A) (and the
            employees appointed under that authority) 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.
            (4) Additional appointment authority.--Notwithstanding any
        other provision of law, the Office of the Comptroller of the
        Currency and the Corporation may appoint transferred employees to
        positions in the Office of the Comptroller of the Currency or the
        Corporation, respectively.
        (b) Timing of Transfers and Position Assignments.--Each employee to
    be transferred under subsection (a)(1) shall--
            (1) be transferred not later than 90 days after the transfer
        date; and
            (2) receive notice of the position assignment of the employee
        not later than 120 days after the effective date of the transfer of
        the employee.
        (c) Transfer of Functions.--
            (1) In general.--Notwithstanding any other provision of law,
        the transfer of employees under this subtitle shall be deemed a
        transfer of functions for the purpose of section 3503 of title 5,
        United States Code.
            (2) Priority.--If any provision of this subtitle conflicts with
        any protection provided to a transferred employee under section
        3503 of title 5, United States Code, the provisions of this
        subtitle shall control.
        (d) Employee Status and Eligibility.--The transfer of functions and
    employees under this subtitle, and the abolishment of the Office of
    Thrift Supervision under section 313, shall not affect the status of
    the transferred employees as employees of an agency of the United
    States under any provision of law.
        (e) Equal Status and Tenure Positions.--
            (1) Status and tenure.--Each transferred employee from the
        Office of Thrift Supervision shall be placed in a position at the
        Office of the Comptroller of the Currency or the Corporation with
        the same status and tenure as the transferred employee held on the
        day before the date on which the employee was transferred.
            (2) Functions.--To the extent practicable, each transferred
        employee shall be placed in a position at the Office of the
        Comptroller of the Currency or the Corporation, as applicable,
        responsible for the same functions and duties as the transferred
        employee had on the day before the date on which the employee was
        transferred, in accordance with the expertise and preferences of
        the transferred employee.
        (f) No Additional Certification Requirements.--An examiner who is a
    transferred employee shall not be subject to any additional
    certification requirements before being placed in a comparable position
    at the Office of the Comptroller of the Currency or the Corporation, if
    the examiner carries out examinations of the same type of institutions
    as an employee of the Office of the Comptroller of the Currency or the
    Corporation as the employee was responsible for carrying out before the
    date on which the employee was transferred.
        (g) Personnel Actions Limited.--
            (1) Protection.--
                (A) In general.--Except as provided in paragraph (2), each
            affected employee shall not, during the 30-month period
            beginning on the transfer date, be involuntarily separated, or
            involuntarily reassigned outside his or her locality pay area.
                (B) Affected employees.--For purposes of this paragraph,
            the term ``affected employee'' means--
                    (i) an employee transferred from the Office of Thrift
                Supervision holding a permanent position on the day before
                the transfer date; and
                    (ii) an employee of the Office of the Comptroller of
                the Currency or the Corporation holding a permanent
                position on the day before the transfer date.
            (2) Exceptions.--Paragraph (1) does not limit the right of the
        Office of the Comptroller of the Currency or the Corporation to--
                (A) separate an employee for cause or for unacceptable
            performance;
                (B) terminate an appointment to a position excepted from
            the competitive service because of its confidential policy-
            making, policy-determining, or policy-advocating character; or
                (C) reassign an employee outside such employee's locality
            pay area when the Office of the Comptroller of the Currency or
            the Corporation determines that the reassignment is necessary
            for the efficient operation of the agency.
        (h) Pay.--
            (1) 30-month protection.--Except as provided in paragraph (2),
        during the 30-month period beginning on the date on which the
        employee was transferred under this subtitle, a transferred
        employee shall be paid at a rate that is not less than the basic
        rate of pay, including any geographic differential, that the
        transferred employee received during the pay period immediately
        preceding the date on which the employee was transferred.
        Notwithstanding the preceding sentence, if the employee was
        receiving a higher rate of basic pay on a temporary basis (because
        of a temporary assignment, temporary promotion, or other temporary
        action) immediately before the transfer, the Agency may reduce the
        rate of basic pay on the date the rate would have been reduced but
        for the transfer, and the protected rate for the remainder of the
        30-month period will be the reduced rate that would have applied
        but for the transfer.
            (2) Exceptions.--The Comptroller of the Currency or the
        Corporation may reduce the rate of basic pay of a transferred
        employee--
                (A) for cause, including for unacceptable performance; or
                (B) with the consent of the transferred employee.
            (3) Protection only while employed.--This subsection shall
        apply to a transferred employee only during the period that the
        transferred employee remains employed by Office of the Comptroller
        of the Currency or the Corporation.
            (4) Pay increases permitted.--Nothing in this subsection shall
        limit the authority of the Comptroller of the Currency or the
        Chairperson of the Corporation to increase the pay of a transferred
        employee.
        (i) Benefits.--
            (1) Retirement benefits for transferred employees.--
                (A) In general.--
                    (i) Continuation of existing retirement plan.--Each
                transferred employee shall remain enrolled in the
                retirement plan of the transferred employee, for as long as
                the transferred employee is employed by the Office of the
                Comptroller of the Currency or the Corporation.
                    (ii) Employer's contribution.--The Comptroller of the
                Currency or the Chairperson of the Corporation, as
                appropriate, shall pay any employer contributions to the
                existing retirement plan of each transferred employee, as
                required under each such existing retirement plan.
                (B) Definition.--In this paragraph, the term ``existing
            retirement plan'' means, with respect to a transferred
            employee, the retirement plan (including the Financial
            Institutions Retirement Fund), and any associated thrift
            savings plan, of the agency from which the employee was
            transferred in which the employee was enrolled on the day
            before the date on which the employee was transferred.
            (2) Benefits other than retirement benefits.--
                (A) During first year.--
                    (i) Existing plans continue.--During the 1-year period
                following the transfer date, each transferred employee may
                retain membership in any employee benefit program (other
                than a retirement benefit program) of the agency from which
                the employee was transferred under this title, including
                any dental, vision, long term care, or life insurance
                program to which the employee belonged on the day before
                the transfer date.
                    (ii) Employer's contribution.--The Office of the
                Comptroller of the Currency or the Corporation, as
                appropriate, shall pay any employer cost required to extend
                coverage in the benefit program to the transferred employee
                as required under that program or negotiated agreements.
                (B) Dental, vision, or life insurance after first year.--
            If, after the 1-year period beginning on the transfer date, the
            Office of the Comptroller of the Currency or the Corporation
            determines that the Office of the Comptroller of the Currency
            or the Corporation, as the case may be, will not continue to
            participate in any dental, vision, or life insurance program of
            an agency from which an employee was transferred, a transferred
            employee who is a member of the program may, before the
            decision takes effect and without regard to any regularly
            scheduled open season, elect to enroll in--
                    (i) the enhanced dental benefits program established
                under chapter 89A of title 5, United States Code;
                    (ii) the enhanced vision benefits established under
                chapter 89B of title 5, United States Code; and
                    (iii) the Federal Employees' Group Life Insurance
                Program established under chapter 87 of title 5, United
                States Code, without regard to any requirement of
                insurability.
                (C) Long term care insurance after 1st year.--If, after the
            1-year period beginning on the transfer date, the Office of the
            Comptroller of the Currency or the Corporation determines that
            the Office of the Comptroller of the Currency or the
            Corporation, as appropriate, will not continue to participate
            in any long term care insurance program of an agency from which
            an employee transferred, a transferred employee who is a member
            of such a program may, before the decision takes effect, elect
            to apply for coverage under the Federal Long Term Care
            Insurance Program established under chapter 90 of title 5,
            United States Code, under the underwriting requirements
            applicable to a new active workforce member, as described in
            part 875 of title 5, Code of Federal Regulations (or any
            successor thereto).
                (D) Contribution of transferred employee.--
                    (i) In general.--Subject to clause (ii), a transferred
                employee who is enrolled in a plan under the Federal
                Employees Health Benefits Program shall pay any employee
                contribution required under the plan.
                    (ii) Cost differential.--The Office of the Comptroller
                of the Currency or the Corporation, as applicable, shall
                pay any difference in cost between the employee
                contribution required under the plan provided to
                transferred employees by the agency from which the employee
                transferred on the date of enactment of this Act and the
                plan provided by the Office of the Comptroller of the
                Currency or the Corporation, as the case may be, under this
                section.
                    (iii) Funds transfer.--The Office of the Comptroller of
                the Currency or the Corporation, as the case may be, shall
                transfer to the 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
                Comptroller of the Currency or the Chairperson of the
                Corporation, as the case may be, and the Office of
                Management and Budget, to be necessary to reimburse the
                Fund for the cost to the Fund of providing any benefits
                under this subparagraph that are not otherwise paid for by
                a transferred employee under clause (i).
                (E) Special provisions to ensure continuation of life
            insurance benefits.--
                    (i) In general.--An annuitant, as defined in section
                8901 of title 5, United States Code, who is enrolled in a
                life insurance plan administered by an agency from which
                employees are transferred under this title on the day
                before the transfer date shall be eligible for coverage by
                a life insurance plan under sections 8706(b), 8714a, 8714b,
                or 8714c of title 5, United States Code, or by a life
                insurance plan established by the Office of the Comptroller
                of the Currency or the Corporation, as applicable, without
                regard to any regularly scheduled open season or any
                requirement of insurability.
                    (ii) Contribution of transferred employee.--

                        (I) In general.--Subject to subclause (II), a
                    transferred employee enrolled in a life insurance plan
                    under this subparagraph shall pay any employee
                    contribution required by the plan.
                        (II) Cost differential.--The Office of the
                    Comptroller of the Currency or the Corporation, as the
                    case may be, shall pay any difference in cost between
                    the benefits provided by the agency from which the
                    employee transferred on the date of enactment of this
                    Act and the benefits provided under this section.
                        (III) Funds transfer.--The Office of the
                    Comptroller of the Currency or the Corporation, as the
                    case may be, shall transfer to the Federal Employees'
                    Group 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 Comptroller of
                    the Currency or the Chairperson of the Corporation, as
                    the case may be, and the Office of Management and
                    Budget, to be necessary to reimburse the Federal
                    Employees' Group Life Insurance Fund for the cost to
                    the Federal Employees' Group Life Insurance Fund of
                    providing benefits under this subparagraph not
                    otherwise paid for by a transferred employee under
                    subclause (I).
                        (IV) Credit for time enrolled in other plans.--For
                    any transferred employee, enrollment in a life
                    insurance plan administered by the agency from which
                    the employee transferred, immediately before enrollment
                    in a life insurance plan under chapter 87 of title 5,
                    United States Code, shall be considered as enrollment
                    in a life insurance plan under that chapter for
                    purposes of section 8706(b)(1)(A) of title 5, United
                    States Code.

        (j) Incorporation Into Agency Pay System.--Not later than 30 months
    after the transfer date, the Comptroller of the Currency and the
    Chairperson of the Corporation shall place each transferred employee
    into the established pay system and structure of the appropriate
    employing agency.
        (k) Equitable Treatment.--In administering the provisions of this
    section, the Comptroller of the Currency and the Chairperson of the
    Corporation--
            (1) may not take any action that would unfairly disadvantage a
        transferred employee relative to any other employee of the Office
        of the Comptroller of the Currency or the Corporation on the basis
        of prior employment by the Office of Thrift Supervision;
            (2) may take such action as is appropriate in an individual
        case to ensure that a transferred employee receives equitable
        treatment, with respect to the 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 of the transferred
        employee;
            (3) shall, jointly with the Director of the Office of Thrift
        Supervision, develop and adopt procedures and safeguards designed
        to ensure that the requirements of this subsection are met; and
            (4) shall conduct a study detailing the position assignments of
        all employees transferred pursuant to subsection (a), describing
        the procedures and safeguards adopted pursuant to paragraph (3),
        and demonstrating that the requirements of this subsection have
        been met; and shall, not later than 365 days after the transfer
        date, submit a copy of such study to Congress.
        (l) Reorganization.--
            (1) In general.--If the Comptroller of the Currency or the
        Chairperson of the Corporation determines, during the 2-year period
        beginning 1 year after the transfer date, that a reorganization of
        the staff of the Office of the Comptroller of the Currency or the
        Corporation, respectively, is required, the reorganization shall be
        deemed a ``major reorganization'' for purposes of affording
        affected employees retirement under section 8336(d)(2) or
        8414(b)(1)(B) of title 5, United States Code.
            (2) Service credit.--For purposes of this subsection, periods
        of service with a Federal home loan bank or a joint office of
        Federal home loan banks shall be credited as periods of service
        with a Federal agency.
        SEC. 323. PROPERTY TRANSFERRED.
        (a) Property Defined.--For purposes of this section, the term
    ``property'' includes all real property (including leaseholds) and all
    personal property, including computers, furniture, fixtures, equipment,
    books, accounts, records, reports, files, memoranda, paper, reports of
    examination, work papers, and correspondence related to such reports,
    and any other information or materials.
        (b) Property of the Office of Thrift Supervision.--
            (1) In general.--No later than 90 days after the transfer date,
        all property of the Office of Thrift Supervision (other than
        property described under paragraph (b)(2)) that the Comptroller of
        the Currency and the Chairperson of the Corporation jointly
        determine is used, on the day before the transfer date, to perform
        or support the functions of the Office of Thrift Supervision
        transferred to the Office of the Comptroller of the Currency or the
        Corporation under this title, shall be transferred to the Office of
        the Comptroller of the Currency or the Corporation in a manner
        consistent with the transfer of employees under this subtitle.
            (2) Personal property.--All books, accounts, records, reports,
        files, memoranda, papers, documents, reports of examination, work
        papers, and correspondence of the Office of Thrift Supervision that
        the Comptroller of the Currency, the Chairperson of the
        Corporation, and the Chairman of the Board of Governors jointly
        determine is used, on the day before the transfer date, to perform
        or support the functions of the Office of Thrift Supervision
        transferred to the Board of Governors under this title shall be
        transferred to the Board of Governors in a manner consistent with
        the purposes of this title.
        (c) Contracts Related to Property Transferred.--Each contract,
    agreement, lease, license, permit, and similar arrangement 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, as appropriate,
    together with the property to which it relates.
        (d) Preservation of Property.--Property identified for transfer
    under this section shall not be altered, destroyed, or deleted before
    transfer under this section.
        SEC. 324. FUNDS TRANSFERRED.
        The funds that, on the day before the transfer date, the Director
    of the Office of Thrift Supervision (in consultation with the
    Comptroller of the Currency, the Chairperson of the Corporation, and
    the Chairman of the Board of Governors) determines are not necessary to
    dispose of the affairs of the Office of Thrift Supervision under
    section 325 and are available to the Office of Thrift Supervision to
    pay the expenses of the Office of Thrift Supervision--
            (1) relating to the functions of the Office of Thrift
        Supervision transferred under section 312(b)(2)(B), shall be
        transferred to the Office of the Comptroller of the Currency on the
        transfer date;
            (2) relating to the functions of the Office of Thrift
        Supervision transferred under section 312(b)(2)(C), shall be
        transferred to the Corporation on the transfer date; and
            (3) relating to the functions of the Office of Thrift
        Supervision transferred under section 312(b)(1)(A), shall be
        transferred to the Board of Governors on the transfer date.
        SEC. 325. DISPOSITION OF AFFAIRS.
        (a) Authority of Director.--During the 90-day period beginning on
    the transfer date, the Director of the Office of Thrift Supervision--
            (1) shall, solely for the purpose of winding up the affairs of
        the Office of Thrift Supervision relating to any function
        transferred to the Office of the Comptroller of the Currency, the
        Corporation, or the Board of Governors under this title--
                (A) manage the employees of the Office of Thrift
            Supervision who have not yet been transferred and provide for
            the payment of the compensation and benefits of the employees
            that accrue before the date on which the employees are
            transferred under this title; and
                (B) manage any property of the Office of Thrift
            Supervision, until the date on which the property is
            transferred under section 323; and
            (2) may take any other action necessary to wind up the affairs
        of the Office of Thrift Supervision.
        (b) Status of Director.--
            (1) In general.--Notwithstanding the transfer of functions
        under this subtitle, during the 90-day period beginning on the
        transfer date, the Director of the Office of Thrift Supervision
        shall retain and may exercise any authority vested in the Director
        of the Office of Thrift Supervision on the day before the transfer
        date, only to the extent necessary--
                (A) to wind up the Office of Thrift Supervision; and
                (B) to carry out the transfer under this subtitle during
            such 90-day period.
            (2) Other provisions.--For purposes of paragraph (1), the
        Director of the Office of Thrift Supervision shall, during the 90-
        day period beginning on the transfer date, continue to be--
                (A) treated as an officer of the United States; and
                (B) entitled to receive compensation at the same annual
            rate of basic pay that the Director of the Office of Thrift
            Supervision received on the day before the transfer date.
        SEC. 326. CONTINUATION OF SERVICES.
        Any agency, department, or other instrumentality of the United
    States, and any successor to any such agency, department, or
    instrumentality, that was, before the transfer date, providing support
    services to the Office of Thrift Supervision in connection with
    functions transferred to the Office of the Comptroller of the Currency,
    the Corporation or the Board of Governors under this title, shall--
            (1) continue to provide such services, subject to reimbursement
        by the Office of the Comptroller of the Currency, the Corporation,
        or the Board of Governors, until the transfer of functions under
        this title is complete; and
            (2) consult with the Comptroller of the Currency, the
        Chairperson of the Corporation, or the Chairman of the Board of
        Governors, as appropriate, to coordinate and facilitate a prompt
        and orderly transition.
        SEC. 327. IMPLEMENTATION PLAN AND REPORTS.
        (a) Plan Submission.--Within 180 days of the enactment of the Dodd-
    Frank Wall Street Reform and Consumer Protection Act, the Board of
    Governors, the Corporation, the Office of the Comptroller of the
    Currency, and the Office of Thrift Supervision, shall jointly submit a
    plan to the Committee on Banking, Housing, and Urban Affairs of the
    Senate, the Committee on Financial Services of the House of
    Representatives, and the Inspectors General of the Department of the
    Treasury, the Corporation, and the Board of Governors detailing the
    steps the Board of Governors, the Corporation, the Office of the
    Comptroller of the Currency, and the Office of Thrift Supervision will
    take to implement the provisions of sections 301 through 326, and the
    provisions of the amendments made by such sections.
        (b) Inspectors General Review of the Plan.--Within 60 days of
    receiving the plan required under subsection (a), the Inspectors
    General of the Department of the Treasury, the Corporation, and the
    Board of Governors shall jointly provide a written report to the Board
    of Governors, the Corporation, the Office of the Comptroller of the
    Currency, and the Office of Thrift Supervision and shall submit a copy
    to the Committee on Banking, Housing, and Urban Affairs of the Senate
    and the Committee on Financial Services of the House of Representatives
    detailing whether the plan conforms with the provisions of sections 301
    through 326, and the provisions of the amendments made by such
    sections, including--
            (1) whether the plan sufficiently takes into consideration the
        orderly transfer of personnel;
            (2) whether the plan describes procedures and safeguards to
        ensure that the Office of Thrift Supervision employees are not
        unfairly disadvantaged relative to employees of the Office of the
        Comptroller of the Currency and the Corporation;
            (3) whether the plan sufficiently takes into consideration the
        orderly transfer of authority and responsibilities;
            (4) whether the plan sufficiently takes into consideration the
        effective transfer of funds;
            (5) whether the plan sufficiently takes in consideration the
        orderly transfer of property; and
            (6) any additional recommendations for an orderly and effective
        process.
        (c) Implementation Reports.--Not later than 6 months after the date
    on which the Committee on Banking, Housing, and Urban Affairs of the
    Senate and the Committee on Financial Services of the House of
    Representatives 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,
    the Corporation, and the Board of Governors shall jointly provide a
    written report on the status of the implementation of the plan to the
    Board of Governors, the Corporation, the Office of the Comptroller of
    the Currency, and the Office of Thrift Supervision and shall submit a
    copy to the Committee on Banking, Housing, and Urban Affairs of the
    Senate and the Committee on Financial Services of the House of
    Representatives.

               Subtitle C--Federal Deposit Insurance Corporation

        SEC. 331. DEPOSIT INSURANCE REFORMS.
        (a) Size Distinctions.--Section 7(b)(2) of the Federal Deposit
    Insurance Act (12 U.S.C. 1817(b)(2)) is amended--
            (1) by striking subparagraph (D); and
            (2) by redesignating subparagraph (C) as subparagraph (D).
        (b) Assessment Base.--The Corporation shall amend the regulations
    issued by the Corporation under section 7(b)(2) of the Federal Deposit
    Insurance Act (12 U.S.C. 1817(b)(2)) to define the term ``assessment
    base'' with respect to an insured depository institution for purposes
    of that section 7(b)(2), as an amount equal to--
            (1) the average consolidated total assets of the insured
        depository institution during the assessment period; minus
            (2) the sum of--
                (A) the average tangible equity of the insured depository
            institution during the assessment period; and
                (B) in the case of an insured depository institution that
            is a custodial bank (as defined by the Corporation, based on
            factors including the percentage of total revenues generated by
            custodial businesses and the level of assets under custody) or
            a banker's bank (as that term is used in section 5136 of the
            Revised Statutes (12 U.S.C. 24)), an amount that the
            Corporation determines is necessary to establish assessments
            consistent with the definition under section 7(b)(1) of the
            Federal Deposit Insurance Act (12 U.S.C. 1817(b)(1)) for a
            custodial bank or a banker's bank.
        SEC. 332. ELIMINATION OF PROCYCLICAL ASSESSMENTS.
        Section 7(e) of the Federal Deposit Insurance Act is amended--
            (1) in paragraph (2)--
                (A) by amending subparagraph (B) to read as follows:
                ``(B) Limitation.--The Board of Directors may, in its sole
            discretion, suspend or limit the declaration of payment of
            dividends under subparagraph (A).'';
                (B) by amending subparagraph (C) to read as follows:
                ``(C) Notice and opportunity for comment.--The Corporation
            shall prescribe, by regulation, after notice and opportunity
            for comment, the method for the declaration, calculation,
            distribution, and payment of dividends under this paragraph'';
            and
                (C) by striking subparagraphs (D) through (G); and
            (2) in paragraph (4)(A) by striking ``paragraphs (2)(D) and''
        and inserting ``paragraphs (2) and''.
        SEC. 333. ENHANCED ACCESS TO INFORMATION FOR DEPOSIT INSURANCE
          PURPOSES.
        (a) Section 7(a)(2)(B) of the Federal Deposit Insurance Act is
    amended by striking ``agreement'' and inserting ``consultation''.
        (b) Section 7(b)(1)(E) of the Federal Deposit Insurance Act is
    amended--
            (1) in clause (i), by striking ``such as'' and inserting
        ``including''; and
            (2) in clause (iii), by striking ``Corporation'' and inserting
        ``Corporation, except as provided in section 7(a)(2)(B)''.
        SEC. 334. TRANSITION RESERVE RATIO REQUIREMENTS TO REFLECT NEW
          ASSESSMENT BASE.
        (a) Section 7(b)(3)(B) of the Federal Deposit Insurance Act is
    amended to read as follows:
                ``(B) Minimum reserve ratio.--The reserve ratio designated
            by the Board of Directors for any year may not be less than
            1.35 percent of estimated insured deposits, or the comparable
            percentage of the assessment base set forth in paragraph
            (2)(C).''.
        (b) Section 3(y)(3) of the Federal Deposit Insurance Act is amended
    by inserting ``, or such comparable percentage of the assessment base
    set forth in section 7(b)(2)(C)'' before the period.
        (c) For a period of not less than 5 years after the date of the
    enactment of this title, the Federal Deposit Insurance Corporation
    shall make available to the public the reserve ratio and the designated
    reserve ratio using both estimated insured deposits and the assessment
    base under section 7(b)(2)(C) of the Federal Deposit Insurance Act.
        (d) Reserve Ratio.--Notwithstanding the timing requirements of
    section 7(b)(3)(E)(ii) of the Federal Deposit Insurance Act, the
    Corporation shall take such steps as may be necessary for the reserve
    ratio of the Deposit Insurance Fund to reach 1.35 percent of estimated
    insured deposits by September 30, 2020.
        (e) Offset.--In setting the assessments necessary to meet the
    requirements of subsection (d), the Corporation shall offset the effect
    of subsection (d) on insured depository institutions with total
    consolidated assets of less than $10,000,000,000.
        SEC. 335. PERMANENT INCREASE IN DEPOSIT AND SHARE INSURANCE.
        (a) Permanent Increase in Deposit Insurance.--Section 11(a)(1)(E)
    of the Federal Deposit Insurance Act (12 U.S.C. 1821(a)(1)(E)) is
    amended--
            (1) by striking ``$100,000'' and inserting ``$250,000''; and
            (2) by adding at the end the following new sentences:
        ``Notwithstanding any other provision of law, the increase in the
        standard maximum deposit insurance amount to $250,000 shall apply
        to depositors in any institution for which the Corporation was
        appointed as receiver or conservator on or after January 1, 2008,
        and before October 3, 2008. The Corporation shall take such actions
        as are necessary to carry out the requirements of this section with
        respect to such depositors, without regard to any time limitations
        under this Act. In implementing this and the preceding 2 sentences,
        any payment on a deposit claim made by the Corporation as receiver
        or conservator to a depositor above the standard maximum deposit
        insurance amount in effect at the time of the appointment of the
        Corporation as receiver or conservator shall be deemed to be part
        of the net amount due to the depositor under subparagraph (B).''
        (b) Permanent Increase in Share Insurance.--Section 207(k)(5) of
    the Federal Credit Union Act (12 U.S.C. 1787(k)(5)) is amended by
    striking ``$100,000'' and inserting ``$250,000''.
        SEC. 336. MANAGEMENT OF THE FEDERAL DEPOSIT INSURANCE CORPORATION.
        (a) In General.--Section 2 of the Federal Deposit Insurance Act (12
    U.S.C. 1812) is amended--
            (1) in subsection (a)(1)(B), by striking ``Director of the
        Office of Thrift Supervision'' and inserting ``Director of the
        Consumer Financial Protection Bureau'';
            (2) by amending subsection (d)(2) to read as follows:
            ``(2) Acting officials may serve.--In the event of a vacancy in
        the office of the Comptroller of the Currency or the office of
        Director of the Consumer Financial Protection Bureau and pending
        the appointment of a successor, or during the absence or disability
        of the Comptroller of the Currency or the Director of the Consumer
        Financial Protection Bureau, the acting Comptroller of the Currency
        or the acting Director of the Consumer Financial Protection Bureau,
        as the case may be, shall be a member of the Board of Directors in
        the place of the Comptroller or Director.''; and
            (3) in subsection (f)(2), by striking ``Office of Thrift
        Supervision'' and inserting ``Consumer Financial Protection
        Bureau''.
        (b) Effective Date.--This section, and the amendments made by this
    section, shall take effect on the transfer date.

                           Subtitle D--Other Matters

        SEC. 341. BRANCHING.
        Notwithstanding the Federal Deposit Insurance Act (12 U.S.C. 1811
    et seq.), the Bank Holding Company Act of 1956 (12 U.S.C. 1841 et
    seq.), or any other provision of Federal or State law, a savings
    association that becomes a bank may--
            (1) continue to operate any branch or agency that the savings
        association operated immediately before the savings association
        became a bank; and
            (2) establish, acquire, and operate additional branches and
        agencies at any location within any State in which the savings
        association operated a branch immediately before the savings
        association became a bank, if the law of the State in which 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.
        SEC. 342. OFFICE OF MINORITY AND WOMEN INCLUSION.
        (a) Office of Minority and Women Inclusion.--
            (1) Establishment.--
                (A) In general.--Except as provided in subparagraph (B),
            not later than 6 months after the date of enactment of this
            Act, each agency shall establish an Office of Minority and
            Women Inclusion that shall be responsible for all matters of
            the agency relating to diversity in management, employment, and
            business activities.
                (B) Bureau.--The Bureau shall establish an Office of
            Minority and Women Inclusion not later than 6 months after the
            designated transfer date established under section 1062.
            (2) Transfer of responsibilities.--Each agency that, on the day
        before the date of enactment of this Act, assigned the
        responsibilities described in paragraph (1) (or comparable
        responsibilities) to another office of the agency shall ensure that
        such responsibilities are transferred to the Office.
            (3) Duties with respect to civil rights laws.--The
        responsibilities described in paragraph (1) do not include
        enforcement of statutes, regulations, or executive orders
        pertaining to civil rights, except each Director shall coordinate
        with the agency administrator, or the designee of the agency
        administrator, regarding the design and implementation of any
        remedies resulting from violations of such statutes, regulations,
        or executive orders.
        (b) Director.--
            (1) In general.--The Director of each Office shall be appointed
        by, and shall report to, the agency administrator. The position of
        Director shall be a career reserved position in the Senior
        Executive Service, as that position is defined in section 3132 of
        title 5, United States Code, or an equivalent designation.
            (2) Duties.--Each Director shall develop standards for--
                (A) equal employment opportunity and the racial, ethnic,
            and gender diversity of the workforce and senior management of
            the agency;
                (B) increased participation of minority-owned and women-
            owned businesses in the programs and contracts of the agency,
            including standards for coordinating technical assistance to
            such businesses; and
                (C) assessing the diversity policies and practices of
            entities regulated by the agency.
            (3) Other duties.--Each Director shall advise the agency
        administrator on the impact of the policies and regulations of the
        agency on minority-owned and women-owned businesses.
            (4) Rule of construction.--Nothing in paragraph (2)(C) may be
        construed to mandate any requirement on or otherwise affect the
        lending policies and practices of any regulated entity, or to
        require any specific action based on the findings of the
        assessment.
        (c) Inclusion in All Levels of Business Activities.--
            (1) In general.--The Director of each Office shall develop and
        implement standards and procedures to ensure, to the maximum extent
        possible, the fair inclusion and utilization of minorities, women,
        and minority-owned and women-owned businesses in all business and
        activities of the agency at all levels, including in procurement,
        insurance, and all types of contracts.
            (2) Contracts.--The procedures established by each agency for
        review and evaluation of contract proposals and for hiring service
        providers shall include, to the extent consistent with applicable
        law, a component that gives consideration to the diversity of the
        applicant. Such procedure shall include a written statement, in a
        form and with such content as the Director shall prescribe, that a
        contractor shall ensure, to the maximum extent possible, the fair
        inclusion of women and minorities in the workforce of the
        contractor and, as applicable, subcontractors.
            (3) Termination.--
                (A) Determination.--The standards and procedures developed
            and implemented under this subsection shall include a procedure
            for the Director to make a determination whether an agency
            contractor, and, as applicable, a subcontractor has failed to
            make a good faith effort to include minorities and women in
            their workforce.
                (B) Effect of determination.--
                    (i) Recommendation to agency administrator.--Upon a
                determination described in subparagraph (A), the Director
                shall make a recommendation to the agency administrator
                that the contract be terminated.
                    (ii) Action by agency administrator.--Upon receipt of a
                recommendation under clause (i), the agency administrator
                may--

                        (I) terminate the contract;
                        (II) make a referral to the Office of Federal
                    Contract Compliance Programs of the Department of
                    Labor; or
                        (III) take other appropriate action.

        (d) Applicability.--This section shall apply to all contracts of an
    agency for services of any kind, including the services of financial
    institutions, investment banking firms, mortgage banking firms, asset
    management firms, brokers, dealers, financial services entities,
    underwriters, accountants, investment consultants, and providers of
    legal services. The contracts referred to in this subsection include
    all contracts for all business and activities of an agency, at all
    levels, including contracts for the issuance or guarantee of any debt,
    equity, or security, the sale of assets, the management of the assets
    of the agency, the making of equity investments by the agency, and the
    implementation by the agency of programs to address economic recovery.
        (e) Reports.--Each Office shall submit to Congress an annual report
    regarding the actions taken by the agency and the Office pursuant to
    this section, which shall include--
            (1) a statement of the total amounts paid by the agency to
        contractors since the previous report;
            (2) the percentage of the amounts described in paragraph (1)
        that were paid to contractors described in subsection (c)(1);
            (3) the successes achieved and challenges faced by the agency
        in operating minority and women outreach programs;
            (4) the challenges the agency may face in hiring qualified
        minority and women employees and contracting with qualified
        minority-owned and women-owned businesses; and
            (5) any other information, findings, conclusions, and
        recommendations for legislative or agency action, as the Director
        determines appropriate.
        (f) Diversity in Agency Workforce.--Each agency shall take
    affirmative steps to seek diversity in the workforce of the agency at
    all levels of the agency in a manner consistent with applicable law.
    Such steps shall include--
            (1) recruiting at historically black colleges and universities,
        Hispanic-serving institutions, women's colleges, and colleges that
        typically serve majority minority populations;
            (2) sponsoring and recruiting at job fairs in urban
        communities;
            (3) placing employment advertisements in newspapers and
        magazines oriented toward minorities and women;
            (4) 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;
            (5) 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
            (6) any other mass media communications that the Office
        determines necessary.
        (g) Definitions.--For purposes of this section, the following
    definitions shall apply:
            (1) Agency.--The term ``agency'' means--
                (A) the Departmental Offices of the Department of the
            Treasury;
                (B) the Corporation;
                (C) the Federal Housing Finance Agency;
                (D) each of the Federal reserve banks;
                (E) the Board;
                (F) the National Credit Union Administration;
                (G) the Office of the Comptroller of the Currency;
                (H) the Commission; and
                (I) the Bureau.
            (2) Agency administrator.--The term ``agency administrator''
        means the head of an agency.
            (3) Minority.--The term ``minority'' has the same meaning as in
        section 1204(c) of the Financial Institutions Reform, Recovery, and
        Enforcement Act of 1989 (12 U.S.C. 1811 note).
            (4) Minority-owned business.--The term ``minority-owned
        business'' has the same meaning as in section 21A(r)(4)(A) of the
        Federal Home Loan Bank Act (12 U.S.C. 1441a(r)(4)(A)), as in effect
        on the day before the transfer date.
            (5) Office.--The term ``Office'' means the Office of Minority
        and Women Inclusion established by an agency under subsection (a).
            (6) Women-owned business.--The term ``women-owned business''
        has the meaning given the term ``women's business'' in section
        21A(r)(4)(B) of the Federal Home Loan Bank Act (12 U.S.C.
        1441a(r)(4)(B)), as in effect on the day before the transfer date.
        SEC. 343. INSURANCE OF TRANSACTION ACCOUNTS.
        (a) Banks and Savings Associations.--
            (1) Amendments.--Section 11(a)(1) of the Federal Deposit
        Insurance Act (12 U.S.C. 1821(a)(1)) is amended--
                (A) in subparagraph (B)--
                    (i) by striking ``The net amount'' and inserting the
                following:
                    ``(i) In general.--Subject to clause (ii), the net
                amount''; and
                    (ii) by adding at the end the following new clauses:
                    ``(ii) Insurance for noninterest-bearing transaction
                accounts.--Notwithstanding clause (i), the Corporation
                shall fully insure the net amount that any depositor at an
                insured depository institution maintains in a noninterest-
                bearing transaction account. Such amount shall not be taken
                into account when computing the net amount due to such
                depositor under clause (i).
                    ``(iii) Noninterest-bearing transaction account
                defined.--For purposes of this subparagraph, the term
                `noninterest-bearing transaction account' means a deposit
                or account maintained at an insured depository
                institution--

                        ``(I) with respect to which interest is neither
                    accrued nor paid;
                        ``(II) on which the depositor or account holder is
                    permitted to make withdrawals by negotiable or
                    transferable instrument, payment orders of withdrawal,
                    telephone or other electronic media transfers, or other
                    similar items for the purpose of making payments or
                    transfers to third parties or others; and
                        ``(III) on which the insured depository institution
                    does not reserve the right to require advance notice of
                    an intended withdrawal.''; and

                (B) in subparagraph (C), by striking ``subparagraph (B)''
            and inserting ``subparagraph (B)(i)''.
            (2) Effective date.--The amendments made by paragraph (1) shall
        take effect on December 31, 2010.
            (3) Prospective repeal.--Effective January 1, 2013, section
        11(a)(1) of the Federal Deposit Insurance Act (12 U.S.C.
        1821(a)(1)), as amended by paragraph (1), is amended--
                (A) in subparagraph (B)--
                    (i) by striking ``deposit.--'' and all that follows
                through ``clause (ii), the net amount'' and insert
                ``deposit.--The net amount''; and
                    (ii) by striking clauses (ii) and (iii); and
                (B) in subparagraph (C), by striking ``subparagraph
            (B)(i)'' and inserting ``subparagraph (B)''.
        (b) Credit Unions.--
            (1) Amendments.--Section 207(k)(1) of the Federal Credit Union
        Act (12 U.S.C. 1787(k)(1)) is amended--
                (A) in subparagraph (A)--
                    (i) by striking ``Subject to the provisions of
                paragraph (2), the net amount'' and inserting the
                following:
                    ``(i) Net amount of insurance payable.--Subject to
                clause (ii) and the provisions of paragraph (2), the net
                amount''; and
                    (ii) by adding at the end the following new clauses:
                    ``(ii) Insurance for noninterest-bearing transaction
                accounts.--Notwithstanding clause (i), the Board shall
                fully insure the net amount that any member or depositor at
                an insured credit union maintains in a noninterest-bearing
                transaction account. Such amount shall not be taken into
                account when computing the net amount due to such member or
                depositor under clause (i).
                    ``(iii) Noninterest-bearing transaction account
                defined.--For purposes of this subparagraph, the term
                `noninterest-bearing transaction account' means an account
                or deposit maintained at an insured credit union--

                        ``(I) with respect to which interest is neither
                    accrued nor paid;
                        ``(II) on which the account holder or depositor is
                    permitted to make withdrawals by negotiable or
                    transferable instrument, payment orders of withdrawal,
                    telephone or other electronic media transfers, or other
                    similar items for the purpose of making payments or
                    transfers to third parties or others; and
                        ``(III) on which the insured credit union does not
                    reserve the right to require advance notice of an
                    intended withdrawal.''; and

                (B) in subparagraph (B), by striking ``subparagraph (A)''
            and inserting ``subparagraph (A)(i)''.
            (2) Effective date.--The amendments made by paragraph (1) shall
        take effect upon the date of the enactment of this Act
            (3) Prospective repeal.--Effective January 1, 2013, section
        207(k)(1) of the Federal Credit Union Act (12 U.S.C. 1787(k)(1)),
        as amended by paragraph (1), is amended--
                (A) in subparagraph (A)--
                    (i) by striking ``(i) net amount of insurance
                payable.--'' and all that follows through ``paragraph (2),
                the net amount'' and inserting ``Subject to the provisions
                of paragraph (2), the net amount''; and
                    (ii) by striking clauses (ii) and (iii); and
                (B) in subparagraph (B), by striking ``subparagraph
            (A)(i)'' and inserting ``subparagraph (A)''.

                Subtitle E--Technical and Conforming Amendments

        SEC. 351. EFFECTIVE DATE.
        Except as provided in section 364(a), the amendments made by this
    subtitle shall take effect on the transfer date.
        SEC. 352. BALANCED BUDGET AND EMERGENCY DEFICIT CONTROL ACT OF
          1985.
        Section 256(h) of the Balanced Budget and Emergency Deficit Control
    Act of 1985 (2 U.S.C. 906(h)) is amended--
            (1) in paragraph (4), by striking subparagraphs (C) and (G);
        and
            (2) by redesignating subparagraphs (D), (E), (F), and (H) as
        subparagraphs (C), (D), (E), and (F), respectively.
        SEC. 353. BANK ENTERPRISE ACT OF 1991.
        Section 232(a) of the Bank Enterprise Act of 1991 (12 U.S.C.
    1834(a)) is amended--
            (1) in the subsection heading, by striking ``by Federal Reserve
        Board'';
            (2) in paragraph (1)--
                (A) by striking ``The Board of Governors of the Federal
            Reserve System,'' and inserting ``The Comptroller of the
            Currency''; and
                (B) by striking ``section 7(b)(2)(H)'' and inserting
            ``section 7(b)(2)(E)'';
            (3) in paragraph (2)(A), by striking ``Board'' and inserting
        ``Comptroller''; and
            (4) in paragraph (3)--
                (A) by redesignating subparagraphs (A) through (C) as
            subparagraphs (B) through (D), respectively; and
                (B) by inserting before subparagraph (B) the following:
                ``(A) Comptroller.--The term `Comptroller' means the
            Comptroller of the Currency.''.
        SEC. 354. BANK HOLDING COMPANY ACT OF 1956.
        The Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) is
    amended--
            (1) in section 2(j)(3) (12 U.S.C. 1841(j)(3)), strike
        ``Director of the Office of Thrift Supervision'' and inserting
        ``appropriate Federal banking agency'';
            (2) in section 4 (12 U.S.C. 1843)--
                (A) in subsection (i)--
                    (i) in paragraph (4)--

                        (I) in subparagraph (A)--

                            (aa) in the subparagraph heading, by striking
                        ``to director''; and
                            (bb) by striking ``Board'' and all that follows
                        through the end of the subparagraph and inserting
                        ``Board shall solicit comments and recommendations
                        from--
                    ``(i) the Comptroller of the Currency, with respect to
                the acquisition of a Federal savings association; and
                    ``(ii) the Federal Deposit Insurance Corporation, with
                respect to the acquisition of a State savings
                association.''.

                        (II) in subparagraph (B), by striking ``Director''
                    each place that term appears and inserting
                    ``Comptroller of the Currency or the Federal Deposit
                    Insurance Corporation, as applicable,'';

                    (ii) in paragraph (5)--

                        (I) in subparagraph (B), by striking ``Director
                    with'' and inserting ``Comptroller of the Currency or
                    the Federal Deposit Insurance Corporation, as
                    applicable, with''; and
                        (II) by striking ``Director'' each place that term
                    appears and inserting ``Comptroller of the Currency or
                    the Federal Deposit Insurance Corporation'';

                    (iii) in paragraph (6), by striking ``Director'' and
                inserting ``Comptroller of the Currency or the Federal
                Deposit Insurance Corporation, as applicable,''; and
                    (iv) by striking paragraph (7); and
            (3) in section 5(f) (12 U.S.C. 1844(f))--
                (A) by striking ``subpena'' each place that term appears
            and inserting ``subpoena'';
                (B) by striking ``subpenas'' each place that term appears
            and inserting ``subpoenas''; and
                (C) by striking ``subpenaed'' and inserting ``subpoenaed''.
        SEC. 355. BANK HOLDING COMPANY ACT AMENDMENTS OF 1970.
        Section 106(b)(1) of the Bank Holding Company Act Amendments of
    1970 (12 U.S.C. 1972(1)) is amended in the undesignated matter
    following subparagraph (E) by inserting ``issue such regulations as are
    necessary to carry out this section, and, in consultation with the
    Comptroller of the Currency and the Federal Deposit Insurance Company,
    may'' after ``The Board may''.
        SEC. 356. BANK PROTECTION ACT OF 1968.
        The Bank Protection Act of 1968 (12 U.S.C. 1881 et seq.) is
    amended--
            (1) in section 2 (12 U.S.C. 1881), by striking ``the term'' and
        all that follows through the end of the section and inserting ``the
        term `Federal supervisory agency' means the appropriate Federal
        banking agency, as defined in section 3(q) of the Federal Deposit
        Insurance Act (12 U.S.C. 1813(q)).'';
            (2) in section 3 (12 U.S.C. 1882), by striking ``and loan''
        each place that term appears; and
            (3) in section 5 (12 U.S.C. 1884), by striking ``and loan''.
        SEC. 357. BANK SERVICE COMPANY ACT.
        The Bank Service Company Act (12 U.S.C. 1861 et seq.) is amended--
            (1) in section 1(b)(4) (12 U.S.C. 1861(b)(4))--
                (A) by inserting after ``an insured bank,'' the following:
            ``a savings association,'';
                (B) by striking ``Director of the Office of Thrift
            Supervision'' and inserting ``appropriate Federal banking
            agency''; and
                (C) by striking ``, the Federal Savings and Loan Insurance
            Corporation,'';
            (2) in section 1(b)(5), by striking ``term `insured depository
        institution' has the same meaning as in section 3(c)'' and
        inserting ``terms `depository institution' and `savings
        association' have the same meanings as in section 3''; and
            (3) in section 7(c)(2) (12 U.S.C. 1867(c)(2)), by inserting
        ``each'' after ``notify''.
        SEC. 358. COMMUNITY REINVESTMENT ACT OF 1977.
        The Community Reinvestment Act of 1977 (12 U.S.C. 2901 et seq.) is
    amended--
            (1) in section 803 (12 U.S.C. 2902)--
                (A) in paragraph (1)--
                    (i) in subparagraph (A), by inserting ``and Federal
                savings associations (the deposits of which are insured by
                the Federal Deposit Insurance Corporation)'' after
                ``banks'';
                    (ii) in subparagraph (B), by striking ``and bank
                holding companies'' and inserting ``, bank holding
                companies, and savings and loan holding companies''; and
                    (iii) in subparagraph (C), by striking ``; and'' and
                inserting ``, and State savings associations (the deposits
                of which are insured by the Federal Deposit Insurance
                Corporation).''; and
                (B) by striking paragraph (2) (relating to the Office of
            Thrift Supervision), as added by section 744(q) of the
            Financial Institutions Reform, Recovery, and Enforcement Act of
            1989 (Public Law 101-73; 103 Stat. 440); and
            (2) in section 806 (12 U.S.C. 2905), by inserting ``, except
        that the Comptroller of the Currency shall prescribe regulations
        applicable to savings associations and the Board of Governors shall
        prescribe regulations applicable to insured State member banks,
        bank holding companies and savings and loan holding companies,''
        after ``supervisory agency''.
        SEC. 359. CRIME CONTROL ACT OF 1990.
        The Crime Control Act of 1990 is amended--
            (1) in section 2539(c)(2) (28 U.S.C. 509 note)--
                (A) by striking subparagraphs (C) and (D); and
                (B) by redesignating subparagraphs (E) through (H) as
            subparagraphs (C) through (G), respectively; and
            (2) in section 2554(b)(2) (Public Law 101-647; 104 Stat.
        4890)--
                (A) in subparagraph (A), by striking ``, the Director of
            the Office of Thrift Supervision,'' and inserting ``the
            Comptroller of the Currency''; and
                (B) in subparagraph (B), by striking ``, the Director'' and
            all that follows through ``Trust Corporation'' and inserting
            ``or the Federal Deposit Insurance Corporation''.
        SEC. 360. DEPOSITORY INSTITUTION MANAGEMENT INTERLOCKS ACT.
        The Depository Institution Management Interlocks Act (12 U.S.C.
    3201 et seq.) is amended--
            (1) in section 207 (12 U.S.C. 3206)--
                (A) in paragraph (1), by inserting before the comma at the
            end the following: ``and Federal savings associations (the
            deposits of which are insured by the Federal Deposit Insurance
            Corporation)'';
                (B) in paragraph (2), by striking ``, and bank holding
            companies'' and inserting ``, bank holding companies, and
            savings and loan holding companies'';
                (C) in paragraph (3), by striking ``Corporation,'' and
            inserting ``Corporation and State savings associations (the
            deposits of which are insured by the Federal Deposit Insurance
            Corporation),'';
                (D) by striking paragraph (4);
                (E) by redesignating paragraphs (5) and (6) as paragraphs
            (4) and (5), respectively; and
                (F) in paragraph (5), as so redesignated, by striking
            ``through (5)'' and inserting ``through (4)'';
            (2) in section 209 (12 U.S.C. 3207)--
                (A) in paragraph (1), by inserting before the comma at the
            end the following: ``and Federal savings associations (the
            deposits of which are insured by the Federal Deposit Insurance
            Corporation)'';
                (B) in paragraph (2), by striking ``, and bank holding
            companies'' and inserting ``, bank holding companies, and
            savings and loan holding companies'';
                (C) in paragraph (3), by striking ``Corporation,'' and
            inserting ``Corporation and State savings associations (the
            deposits of which are insured by the Federal Deposit Insurance
            Corporation),'';
                (D) by striking paragraph (4); and
                (E) by redesignating paragraph (5) as paragraph (4); and
            (3) in section 210(a) (12 U.S.C. 3208(a))--
                (A) by striking ``his'' and inserting ``the''; and
                (B) by inserting ``of the Attorney General'' after
            ``enforcement functions''.
        SEC. 361. EMERGENCY HOMEOWNERS' RELIEF ACT.
        Section 110 of the Emergency Homeowners' Relief Act (12 U.S.C.
    2709) is amended in the second sentence, by striking ``Home Loan Bank
    Board, the Federal Savings and Loan Insurance Corporation'' and
    inserting ``Housing Finance Agency''.
        SEC. 362. FEDERAL CREDIT UNION ACT.
        The Federal Credit Union Act (12 U.S.C. 1751 et seq.) is amended--
            (1) in section 107(8) (12 U.S.C. 1757(8)), by striking ``or the
        Federal Savings and Loan Insurance Corporation'';
            (2) in section 205 (12 U.S.C. 1785)--
                (A) in subsection (b)(2)(G)(i), by striking ``the Office of
            Thrift Supervision and''; and
                (B) in subsection (i)(1), by striking ``or the Federal
            Savings and Loan Insurance Corporation''; and
            (3) in section 206(g)(7) (12 U.S.C. 1786(g)(7))--
                (A) in subparagraph (A)--
                    (i) in clause (ii), by striking ``(b)(8)'' and
                inserting ``(b)(9)'';
                    (ii) in clause (v)--

                        (I) by striking ``depository'' and inserting
                    ``financial''; and
                        (II) by adding ``and'' at the end;

                    (iii) in clause (vi)--

                        (I) by striking ``Board'' and inserting ``Agency'';
                    and
                        (II) by striking ``; and'' and inserting a period;
                    and

                    (iv) by striking clause (vii); and
                (B) in subparagraph (D)--
                    (i) in clause (iii), by adding ``and'' at the end;
                    (ii) in clause (iv)--

                        (I) by striking ``Board'' and inserting ``Agency'';
                    and
                        (II) by striking ``and'' at the end; and

                    (iii) by striking clause (v).
        SEC. 363. FEDERAL DEPOSIT INSURANCE ACT.
        The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) is
    amended--
            (1) in section 3 (12 U.S.C. 1813)--
                (A) in subsection (b)(1)(C), by striking ``Director of the
            Office of Thrift Supervision'' and inserting ``Comptroller of
            the Currency'';
                (B) in subsection (l)(5), in the matter preceding
            subparagraph (A), by striking ``Director of the Office of
            Thrift Supervision,''; and
                (C) in subsection (z), by striking ``the Director of the
            Office of Thrift Supervision,'';
            (2) in section 7 (12 U.S.C. 1817)--
                (A) in subsection (a)--
                    (i) in paragraph (2)--

                        (I) in subparagraph (A)--

                            (aa) in the first sentence, by striking ``the
                        Director of the Office of Thrift Supervision,'';
                            (bb) in the second sentence--
                                (AA) by striking ``the Director of the
                            Office of Thrift Supervision,'' and inserting
                            ``to''; and
                                (BB) by inserting ``to'' before ``any
                            Federal home''; and
                            (cc) by striking ``Finance Board'' each place
                        that term appears and inserting ``Finance Agency'';
                        and

                        (II) in subparagraph (B), by striking ``the
                    Comptroller of the Currency, the Board of Governors of
                    the Federal Reserve System, and the Director of the
                    Office of Thrift Supervision,'' and inserting ``the
                    Comptroller of the Currency and the Board of Governors
                    of the Federal Reserve System,'';

                    (ii) in paragraph (3), in the first sentence, by
                striking ``Comptroller of the Currency, the Chairman of the
                Board of Governors of the Federal Reserve System, and the
                Director of the Office of Thrift Supervision.'' and
                inserting ``Comptroller of the Currency, and the Chairman
                of the Board of Governors of the Federal Reserve System.'';
                    (iii) in paragraph (6), by striking ``section
                232(a)(3)(C)'' and inserting ``section 232(a)(3)(D)''; and
                    (iv) in paragraph (7), by striking ``, the Director of
                the Office of Thrift Supervision,''; and
                (B) in subsection (n)--
                    (i) in the heading, by striking ``Director of the
                Office of Thrift Supervision'' and inserting ``Comptroller
                of the Currency'';
                    (ii) in the first sentence--

                        (I) by striking ``the Director of the Office of
                    Thrift Supervision'' and inserting ``the Comptroller of
                    the Currency''; and
                        (II) by inserting ``Federal'' before ``savings
                    associations'';

                    (iii) in the third sentence, by striking ``, the
                Financing Corporation, and the Resolution Funding
                Corporation''; and
                    (iv) by striking ``the Director'' each place that term
                appears and inserting ``the Comptroller'';
            (3) in section 8 (12 U.S.C. 1818)--
                (A) in subsection (a)(8)(B)(ii), in the last sentence, by
            striking ``Director of the Office of Thrift Supervision'' each
            place that term appears and inserting ``Comptroller of the
            Currency'';
                (B) in subsection (b)(3)--
                    (i) by inserting ``any savings and loan holding company
                and any subsidiary (other than a depository institution) of
                a savings and loan holding company (as such terms are
                defined in section 10 of Home Owners' Loan Act)), any
                noninsured State member bank'' after ``Bank Holding Company
                Act of 1956,''; and
                    (ii) by inserting ``or against a savings and loan
                holding company or any subsidiary thereof (other than a
                depository institution or a subsidiary of such depository
                institution)'' before the period at the end;
                (C) by striking paragraph (9) of subsection (b) and
            inserting the following new paragraph:
            ``(9) [Repealed]''.
                (D) in subsection (e)(7)--
                    (i) in subparagraph (A)--

                        (I) in clause (v), by inserting ``and'' after the
                    semicolon;
                        (II) in clause (vi)--

                            (aa) by striking ``Board'' and inserting
                        ``Agency''; and
                            (bb) by striking ``; and'' and inserting a
                        period; and

                        (III) by striking clause (vii); and

                    (ii) in subparagraph (D)--

                        (I) in clause (iii), by inserting ``and'' after the
                    semicolon;
                        (II) in clause (iv)--

                            (aa) by striking ``Board'' and inserting
                        ``Agency''; and
                            (bb) by striking ``; and'' and inserting a
                        period; and

                        (III) by striking clause (v);

                (E) in subsection (j)--
                    (i) in paragraph (2), by striking ``, or as a savings
                association under subsection (b)(9) of this section'';
                    (ii) in paragraph (3), by inserting ``or'' after the
                semicolon;
                    (iii) in paragraph (4), by striking ``; or'' and
                inserting a comma; and
                    (iv) by striking paragraph (5);
                (F) in subsection (o), by striking ``Director of the Office
            of Thrift Supervision'' and inserting ``Comptroller of the
            Currency''; and
                (G) in subsection (w)(3)(A), by striking ``and the Office
            of Thrift Supervision'';
            (4) in section 10 (12 U.S.C. 1820)--
                (A) in subsection (d)(5), by striking ``or the Resolution
            Trust Corporation'' each place that term appears; and
                (B) in subsection (k)(5)(B)--
                    (i) in clause (ii), by inserting ``and'' after the
                semicolon;
                    (ii) in clause (iii), by striking ``; and'' and
                inserting a period; and
                    (iii) by striking clause (iv);
            (5) in section 11 (12 U.S.C. 1821)--
                (A) in subsection (c)--
                    (i) in paragraph (2)(A)(ii), by striking ``(other than
                section 21A of the Federal Home Loan Bank Act)'';
                    (ii) in paragraph (4), by striking ``Except as
                otherwise provided in section 21A of the Federal Home Loan
                Bank Act and notwithstanding'' and inserting
                ``Notwithstanding'';
                    (iii) in paragraph (6)--

                        (I) in the heading, by striking ``Director of the
                    office of thrift supervision'' and inserting
                    ``Comptroller of the currency'';
                        (II) in subparagraph (A)--

                            (aa) by striking ``or the Resolution Trust
                        Corporation''; and
                            (bb) by striking ``Director of the Office of
                        Thrift Supervision'' and inserting ``Comptroller of
                        the Currency''; and

                        (III) by amending subparagraph (B) to read as
                    follows:

                ``(B) Receiver.--The Corporation may, at the discretion of
            the Comptroller of the Currency, be appointed receiver and the
            Corporation may accept any such appointment.'';
                    (iv) in paragraph (12)(A), by striking ``or the
                Resolution Trust Corporation'';
                (B) in subsection (d)--
                    (i) in paragraph (17)(A), by striking ``or the Director
                of the Office of Thrift Supervision''; and
                    (ii) in paragraph (18)(B), by striking ``or the
                Director of the Office of Thrift Supervision'';
                (C) in subsection (m)--
                    (i) in paragraph (9), by striking ``or the Director of
                the Office of Thrift Supervision, as appropriate'';
                    (ii) in paragraph (16), by striking ``or the Director
                of the Office of Thrift Supervision, as appropriate'' each
                place that term appears; and
                    (iii) in paragraph (18), by striking ``or the Director
                of the Office of Thrift Supervision, as appropriate'' each
                place that term appears;
                (D) in subsection (n)--
                    (i) in paragraph (1)(A)--

                        (I) by striking ``, or the Director of the Office
                    of Thrift Supervision, with respect to'' and inserting
                    ``or''; and
                        (II) by striking ``applicable,,'' and inserting
                    ``applicable,'';

                    (ii) in paragraph (2)(A), by striking ``or the Director
                of the Office of Thrift Supervision'';
                    (iii) in paragraph (4)(D), by striking ``and the
                Director of the Office of Thrift Supervision, as
                appropriate,'';
                    (iv) in paragraph (4)(G), by striking ``and the
                Director of the Office of Thrift Supervision, as
                appropriate,''; and
                    (v) in paragraph (12)(B)--

                        (I) by inserting ``as'' after ``shall appoint the
                    Corporation'';
                        (II) by striking ``or the Director of the Office of
                    Thrift Supervision, as appropriate,'' each place such
                    term appears;

                (E) in subsection (p)--
                    (i) in paragraph (2)(B), by striking ``the Corporation,
                the FSLIC Resolution Fund, or the Resolution Trust
                Corporation,'' and inserting ``or the Corporation,''; and
                    (ii) in paragraph (3)(B), by striking ``, the FSLIC
                Resolution Fund, the Resolution Trust Corporation,''; and
                (F) in subsection (r), by striking ``and the Resolution
            Trust Corporation'';
            (6) in section 13(k)(1)(A)(iv) (12 U.S.C. 1823(k)(1)(A)(iv)),
        by striking ``Director of the Office of Thrift Supervision'' and
        inserting ``Comptroller of the Currency'';
            (7) in section 18 (12 U.S.C. 1828)--
                (A) in subsection (c)(2)--
                    (i) in subparagraph (A), by inserting ``or a Federal
                savings association'' before the semicolon;
                    (ii) in subparagraph (B), by adding ``and'' at the end;
                    (iii) in subparagraph (C), by striking ``(except'' and
                all that follows through ``; and'' and inserting ``or a
                State savings association.''; and
                    (iv) by striking subparagraph (D);
                (B) in subsection (g)(1), by striking ``the Director of the
            Office of Thrift Supervision''and inserting ``the Comptroller
            of the Currency'';
                (C) in subsection (i)(2)(C), by striking ``Director of the
            Office of Thrift Supervision'' and inserting ``Corporation'';
            and
                (D) in subsection (m)--
                    (i) in paragraph (1)--

                        (I) in subparagraph (A), by striking ``and the
                    Director of the Office of Thrift Supervision'' and
                    inserting ``or the Comptroller of the Currency, as
                    appropriate,''; and
                        (II) in subparagraph (B), by striking ``and orders
                    of the Director of the Office of Thrift Supervision''
                    and inserting ``of the Comptroller of the Currency and
                    orders of the Corporation and the Comptroller of the
                    Currency'';

                    (ii) in paragraph (2)--

                        (I) in subparagraph (A), by striking ``Director of
                    the Office of Thrift Supervision'' and inserting
                    ``Comptroller of the Currency, as appropriate,''; and
                        (II) in subparagraph (B)--

                            (aa) in the matter before clause (i), by
                        striking ``Director of the Office of Thrift
                        Supervision'' and inserting ``Corporation or the
                        Comptroller of the Currency, as appropriate,''; and
                            (bb) in the matter following clause (ii)--
                                (AA) in the first sentence, by striking
                            ``Director of the Office of Thrift
                            Supervision'' and inserting ``Office of the
                            Comptroller of the Currency, as appropriate,'';
                            and
                                (BB) by striking the second sentence and
                            inserting the following: ``The Corporation or
                            the Comptroller of the Currency, as
                            appropriate, may take any other corrective
                            measures with respect to the subsidiary,
                            including the authority to require the
                            subsidiary to terminate the activities or
                            operations posing such risks, as the
                            Corporation or the Comptroller of the Currency,
                            respectively, may deem appropriate.''; and
                    (iii) in paragraph (3)--

                        (I) in subparagraph (A), in the second sentence--

                            (aa) by inserting ``, in the case of a Federal
                        savings association,'' before ``consult with''; and
                            (bb) by striking ``Director of the Office of
                        Thrift Supervision'' and inserting ``Comptroller of
                        the Currency''; and

                        (II) in subparagraph (B)--

                            (aa) in the subparagraph heading, by striking
                        ``Director'' and inserting ``Comptroller of the
                        currency'';
                            (bb) by striking ``Office of Thrift
                        Supervision'' and inserting ``Comptroller of the
                        Currency'';
                            (cc) by inserting a comma after ``soundness'';
                        and
                            (dd) by inserting ``as to Federal savings
                        associations'' after ``compliance'';
            (8) in section 19(e) (12 U.S.C. 1829(e))--
                (A) in paragraph (1), by striking ``Director of the Office
            of Thrift Supervision'' and inserting ``Board of Governors of
            the Federal Reserve System''; and
                (B) in paragraph (2), by striking ``Director of the Office
            of Thrift Supervision'' and inserting ``Board of Governors of
            the Federal Reserve System'';
            (9) in section 28 (12 U.S.C. 1831e)--
                (A) in subsection (e)--
                    (i) in paragraph (2)--

                        (I) in subparagraph (A)(ii), by striking ``Director
                    of the Office of Thrift Supervision'' and inserting
                    ``Comptroller of the Currency or the Corporation, as
                    appropriate'';
                        (II) in subparagraph (C), by striking ``Director of
                    the Office of Thrift Supervision'' and inserting
                    ``Comptroller of the Currency or the Corporation, as
                    appropriate,''; and
                        (III) in subparagraph (F), by striking ``Director
                    of the Office of Thrift Supervision'' and inserting
                    ``Comptroller of the Currency or the Corporation, as
                    appropriate''; and

                    (ii) in paragraph (3)--

                        (I) in subparagraph (A), by striking ``Director of
                    the Office of Thrift Supervision'' and inserting
                    ``Comptroller of the Currency or the Corporation, as
                    appropriate''; and
                        (II) in subparagraph (B), by striking ``Director of
                    the Office of Thrift Supervision'' and inserting
                    ``Comptroller of the Currency or the Corporation, as
                    appropriate,''; and

                (B) in subsection (h)(2), by striking ``Director of the
            Office of Thrift Supervision'' and inserting ``Comptroller of
            the Currency, of the Corporation,''; and
            (10) in section 33(e) (12 U.S.C. 1831j(e)), by striking
        ``Federal Housing Finance Board, the Comptroller of the Currency,
        and the Director of the Office of Thrift Supervision'' and
        inserting ``Federal Housing Finance Agency and the Comptroller of
        the Currency''.
        SEC. 364. FEDERAL HOME LOAN BANK ACT.
        (a) Repeal of Section 18(c).--Effective 90 days after the transfer
    date, section 18(c) of the Federal Home Loan Bank Act (12 U.S.C.
    1438(c)) is repealed.
        (b) Repeal of Section 21A.--Section 21A of the Federal Home Loan
    Bank Act (12 U.S.C. 1441a) is repealed.
        SEC. 365. FEDERAL HOUSING ENTERPRISES FINANCIAL SAFETY AND
          SOUNDNESS ACT OF 1992.
        The Federal Housing Enterprises Financial Safety and Soundness Act
    of 1992 (12 U.S.C. 4501 et seq.) is amended--
            (1) in section 1315(b) (12 U.S.C. 4515(b)), by striking ``the
        Federal Deposit Insurance Corporation, and the Office of Thrift
        Supervision.'' and inserting ``and the Federal Deposit Insurance
        Corporation.''; and
            (2) in section 1317(c) (12 U.S.C. 4517(c)), by striking ``the
        Federal Deposit Insurance Corporation, or the Director of the
        Office of Thrift Supervision'' and inserting ``or the Federal
        Deposit Insurance Corporation''.
        SEC. 366. FEDERAL RESERVE ACT.
        The Federal Reserve Act (12 U.S.C. 221 et seq.) is amended--
            (1) in section 11(a)(2) (12 U.S.C. 248(a)(2))--
                (A) by inserting ``State savings associations that are
            insured depository institutions (as defined in section 3 of the
            Federal Deposit Insurance Act),'' after ``case of insured'';
                (B) by striking ``Director of the Office of Thrift
            Supervision'' and inserting ``Comptroller of the Currency'';
                (C) by inserting ``Federal'' before ``savings association
            which''; and
                (D) by striking ``savings and loan association'' and
            inserting ``savings association''; and
            (2) in section 19(b) (12 U.S.C. 461(b))--
                (A) in paragraph (1)(F), by striking ``Director of the
            Office of Thrift Supervision'' and inserting ``Comptroller of
            the Currency''; and
                (B) in paragraph (4)(B), by striking ``Director of the
            Office of Thrift Supervision'' and inserting ``Comptroller of
            the Currency''.
        SEC. 367. FINANCIAL INSTITUTIONS REFORM, RECOVERY, AND ENFORCEMENT
          ACT OF 1989.
        The Financial Institutions Reform, Recovery, and Enforcement Act of
    1989 is amended--
            (1) in section 203 (12 U.S.C. 1812 note), by striking
        subsection (b);
            (2) in section 302(1) (12 U.S.C. 1467a note), by striking
        ``Director of the Office of Thrift Supervision'' and inserting
        ``Comptroller of the Currency'';
            (3) in section 305(12 U.S.C. 1464 note), by striking subsection
        (b);
            (4) in section 308 (12 U.S.C. 1463 note)--
                (A) in subsection (a), by striking ``Director of the Office
            of Thrift Supervision'' and inserting ``Chairman of the Board
            of Governors of the Federal Reserve System, the Comptroller of
            the Currency, the Chairman of the National Credit Union
            Administration,''; and
                (B) by adding at the end the following new subsection:
        ``(c) Reports.--The Secretary of the Treasury, the Chairman of the
    Board of Governors of the Federal Reserve System, the Comptroller of
    the Currency, the Chairman of the National Credit Union Administration,
    and the Chairperson of Board of Directors of the Federal Deposit
    Insurance Corporation shall each submit an annual report to the
    Congress containing a description of actions taken to carry out this
    section.'';
            (5) in section 402 (12 U.S.C. 1437 note)--
                (A) in subsection (a), by striking ``Director of the Office
            of Thrift Supervision'' and inserting ``Comptroller of the
            Currency'';
                (B) by striking subsection (b);
                (C) in subsection (e)--
                    (i) in paragraph (1), by striking ``Office of Thrift
                Supervision'' and inserting ``Comptroller of the
                Currency''; and
                    (ii) in each of paragraphs (2), (3), and (4), by
                striking ``Director of the Office of Thrift Supervision''
                each place that term appears and inserting ``Comptroller of
                the Currency''; and
                (D) by striking ``Federal Housing Finance Board'' each
            place that term appears and inserting ``Federal Housing Finance
            Agency'';
            (6) in section 1103(a) (12 U.S.C. 3332(a)), by striking ``and
        the Resolution Trust Corporation'';
            (7) in section 1205(b) (12 U.S.C. 1818 note)--
                (A) in paragraph (1)--
                    (i) by striking subparagraph (B); and
                    (ii) by redesignating subparagraphs (C) through (F) as
                subparagraphs (B) through (E), respectively; and
                (B) in paragraph (2), by striking ``paragraph (1)(F)'' and
            inserting ``paragraph (1)(E)'';
            (8) in section 1206 (12 U.S.C. 1833b)--
                (A) by striking ``Board, the Oversight Board of the
            Resolution Trust Corporation'' and inserting ``Agency, and'';
            and
                (B) by striking ``, and the Office of Thrift Supervision'';
            (9) in section 1216 (12 U.S.C. 1833e)--
                (A) in subsection (a)--
                    (i) in paragraph (3), by adding ``and'' at the end;
                    (ii) in paragraph (4), by striking the semicolon at the
                end and inserting a period;
                    (iii) by striking paragraphs (2), (5), and (6); and
                    (iv) by redesignating paragraphs (3) and (4), as
                paragraphs (2) and (3), respectively;
                (B) in subsection (c)--
                    (i) by striking ``the Director of the Office of Thrift
                Supervision,'' and inserting ``and''; and
                    (ii) by striking ``the Thrift Depositor Protection
                Oversight Board of the Resolution Trust Corporation, and
                the Resolution Trust Corporation''; and
                (C) in subsection (d)--
                    (i) by striking paragraphs (3), (5), and (6); and
                    (ii) by redesignating paragraphs (4), (7), and (8) as
                paragraphs (3), (4), and (5), respectively.
        SEC. 368. FLOOD DISASTER PROTECTION ACT OF 1973.
        Section 3(a)(5) of the Flood Disaster Protection Act of 1973 (42
    U.S.C. 4003(a)(5)) is amended by striking ``, the Office of Thrift
    Supervision''.
        SEC. 369. HOME OWNERS' LOAN ACT.
        The Home Owners' Loan Act (12 U.S.C. 1461 et seq.) is amended--
            (1) in section 1 (12 U.S.C. 1461), by striking the table of
        contents;
            (2) in section 2 (12 U.S.C. 1462), as amended by this Act--
                (A) by striking paragraphs (1) and (3);
                (B) by redesignating paragraph (2) as paragraph (1);
                (C) by redesignating paragraphs (4) through (9) as
            paragraphs (2) through (7), respectively; and
                (D) by adding at the end the following:
            ``(8) Board.--The term `Board', other than in the context of
        the Board of Directors of the Corporation, means the Board of
        Governors of the Federal Reserve System.
            ``(9) Comptroller.--The term `Comptroller' means the
        Comptroller of the Currency.'';
            (3) in section 3 (12 U.S.C. 1462a)--
                (A) by striking the section heading and inserting the
            following:
    ``SEC. 3. ADMINISTRATIVE PROVISIONS.'';
                (B) by striking subsections (a), (b), (c), (d), (g), (h),
            (i), and (j);
                (C) by redesignating subsections (e) and (f) as subsections
            (a) and (b), respectively;
                (D) in subsection (a), as so redesignated--
                    (i) in the heading by striking ``of the Director''; and
                    (ii) in the matter preceding paragraph (1), by striking
                ``The Director'' and inserting ``In accordance with
                subtitle A of title III of the Dodd-Frank Wall Street
                Reform and Consumer Protection Act, the appropriate Federal
                banking agency''; and
                (E) in subsection (b), as so redesignated, by striking
            ``Director'' and inserting ``appropriate Federal banking
            agency'';
            (4) in section 4 (12 U.S.C. 1463)--
                (A) in subsection (a)--
                    (i) in the subsection heading, by striking ``Federal'';
                    (ii) by striking paragraphs (1) and (2) and inserting
                the following:
            ``(1) Examination and safe and sound operation.--
                ``(A) Federal savings associations.--The Comptroller shall
            provide for the examination and safe and sound operation of
            Federal savings associations.
                ``(B) State savings associations.--The Corporation shall
            provide for the examination and safe and sound operation of
            State savings associations.
            ``(2) Regulations for savings associations.--The Comptroller
        may prescribe regulations with respect to savings associations, as
        the Comptroller determines to be appropriate to carry out the
        purposes of this Act.''; and
                    (iii) in paragraph (3), by striking ``Director'' each
                place that term appears and inserting ``Comptroller and the
                Corporation'';
                (B) in subsection (b)--
                    (i) in paragraph (2)--

                        (I) in subparagraph (A), by adding ``and'' at the
                    end;
                        (II) in subparagraph (B), by striking ``; and'' and
                    inserting a period; and
                        (III) by striking subparagraph (C); and

                    (ii) by striking ``Director'' each place that term
                appears and inserting ``Comptroller'';
                (C) in subsection (c)--
                    (i) by striking ``All regulations and policies of the
                Director'' and inserting ``The regulations of the
                Comptroller and the policies of the Comptroller and the
                Corporation''; and
                    (ii) by striking ``of the Currency'';
                (D) in subsection (e)(5), by striking ``Director'' and
            inserting ``Comptroller'';
                (E) in subsection (f), by striking ``Director'' each place
            that term appears and inserting ``appropriate Federal banking
            agency''; and
                (F) in subsection (h), by striking ``Director'' each place
            that term appears and inserting ``appropriate Federal banking
            agency'';
            (5) in section 5 (12 U.S.C. 1464)--
                (A) in subsection (a), by striking ``Director'', each place
            such term appears and inserting ``Comptroller of the
            Currency'';
                (B) in subsection (b), by striking ``Director'', each place
            such term appears and inserting ``Comptroller of the
            Currency'';
                (C) in subsection (c)--
                    (i) in paragraph (5)--

                        (I) in subparagraph (A), by striking ``Director''
                    and inserting ``appropriate Federal banking agency'';
                    and
                        (II) in subparagraph (B)--

                            (aa) by striking ``The Director'' and inserting
                        ``The appropriate Federal banking agency''; and
                            (bb) by striking ``the Director'' and inserting
                        ``the appropriate Federal banking agency'';
                (D) in subsection (d)--
                    (i) in paragraph (1)--

                        (I) in subparagraph (A)--

                            (aa) in the first sentence, by striking
                        ``Director'' and inserting ``appropriate Federal
                        banking agency'';
                            (bb) in the second sentence--
                                (AA) by striking ``Director's own name and
                            through the Director's own attorneys'' and
                            inserting ``name of the appropriate Federal
                            banking agency and through the attorneys of the
                            appropriate Federal banking agency''; and
                                (BB) by striking ``Director'' each place
                            that term appears and inserting ``appropriate
                            Federal banking agency''; and
                            (cc) in the third sentence, by striking
                        ``Director'' each place that term appears and
                        inserting ``Comptroller'';

                        (II) in subparagraph (B)--

                            (aa) in clauses (i) through (iv), by striking
                        ``Director'' each place that term appears and
                        inserting ``appropriate Federal banking agency'';

                        (III) in clause (v)--

                            (aa) in the matter preceding subclause (I), by
                        striking ``Director'' and inserting ``appropriate
                        Federal banking agency'';
                            (bb) in subclause (II), by striking
                        ``subpenas'' and inserting ``subpoenas''; and
                            (cc) in the matter following subclause (II), by
                        striking ``subpena'' and inserting ``subpoena'';

                        (IV) in clause (vi)--

                            (aa) in the first sentence, by striking
                        ``Director'' and inserting ``appropriate Federal
                        banking agency''; and
                            (bb) in the second sentence, by striking
                        ``Director'' and inserting ``Comptroller'';

                        (V) in clause (vii)--

                            (aa) in the first sentence, by striking
                        ``subpena'' and inserting ``subpoena'';
                            (bb) in the second sentence, by striking
                        ``subpenaed'' and inserting ``subpoenaed''; and
                            (cc) in the third sentence, by striking
                        ``Director'' and inserting ``appropriate Federal
                        banking agency'';
                    (ii) in paragraph (2)--

                        (I) in subparagraph (A)--

                            (aa) by striking ``Director of the Office of
                        Thrift Supervision'' and inserting ``appropriate
                        Federal banking agency'';
                            (bb) by striking ``any insured savings
                        association'' and inserting ``an insured savings
                        association''; and
                            (cc) by striking ``Director determines, in the
                        Director's discretion'' and inserting ``appropriate
                        Federal banking agency determines, in the
                        discretion of the appropriate Federal banking
                        agency'';

                        (II) in subparagraph (B), by striking ``Director''
                    each place that term appears and inserting
                    ``appropriate Federal banking agency'';
                        (III) in subparagraphs (C) and (D), by striking
                    ``Director'' and inserting ``appropriate Federal
                    banking agency'';
                        (IV) in subparagraph (E)--

                            (aa) in clause (ii)--
                                (AA) in the clause heading, by striking
                            ``or rtc''; and
                                (BB) by striking ``or the Resolution Trust
                            Corporation, as appropriate,'' each place that
                            term appears; and
                            (bb) by striking ``Director'' each place that
                        term appears and inserting ``appropriate Federal
                        banking agency''; and
                    (iii) in paragraph (3)--

                        (I) in subparagraph (A), by striking ``Director''
                    each place that term appears and inserting
                    ``Comptroller''; and
                        (II) in subparagraph (B)--

                            (aa) in the subparagraph heading, by striking
                        ``or rtc'';
                            (bb) by striking ``Corporation or the
                        Resolution Trust''; and
                            (cc) by striking ``Director'' and inserting
                        ``Comptroller'';
                    (iv) in paragraph (4), by striking ``Director'' and
                inserting ``appropriate Federal banking agency'';
                    (v) in paragraph (6)--

                        (I) in subparagraph (A), by striking ``Director''
                    and inserting ``Comptroller''; and
                        (II) in subparagraphs (B) and (C), by striking
                    ``Director'' each place that term appears and inserting
                    ``appropriate Federal banking agency'';

                    (vi) in paragraph (7)--

                        (I) in subparagraphs (A), (B), and (D), by striking
                    ``Director'' each place that term appears and inserting
                    ``appropriate Federal banking agency'';
                        (II) in subparagraph (C), by striking ``Director''
                    and inserting ``Federal Deposit Insurance Corporation
                    or the Comptroller, as appropriate,''; and
                        (III) by striking subparagraph (E) and inserting
                    the following:

                ``(E) Administration by the comptroller and the
            corporation.--The Comptroller may issue such regulations, and
            the appropriate Federal banking agency may issue such orders,
            including those issued pursuant to section 8 of the Federal
            Deposit Insurance Act, as may be necessary to administer and
            carry out this paragraph and to prevent evasion of this
            paragraph.'';
                (E) in subsection (e)(2), strike ``Director'' and insert
            ``Comptroller'';
                (F) in subsection (i)--
                    (i) by striking ``Director'', each place such term
                appears, and inserting ``Comptroller'';
                    (ii) in paragraph (2), in the heading, by striking
                ``director'' and inserting ``Comptroller'';
                    (iii) in paragraph (5)(A), by striking ``of the
                Currency''; and
                    (iv) except as provided in clauses (i) through (iii),
                by striking ``Director'' each place such term appears and
                inserting ``Comptroller'';
                (G) in subsection (o)--
                    (i) in paragraph (1), by striking ``Director'' and
                inserting ``Comptroller''; and
                    (ii) in paragraph (2)(B), by striking ``Director's
                determination'' and inserting ``determination of the
                Comptroller'';
                (H) in subsections (m), (n), (o), and (p), by striking
            ``Director'', each place such term appears, and inserting
            ``Comptroller'';
                (I) in subsection (q)--
                    (i) in paragraph (6), by striking ``of Governors of the
                Federal Reserve System'';
                    (ii) by striking ``Director'' each place that term
                appears and inserting ``Board''; and
                    (iii) by inserting ``in consultation with the
                Comptroller and the Corporation,'' before ``considers'';
                (J) in subsection (r)(3), by striking ``Director'' and
            inserting ``Comptroller of the Currency'';
                (K) in subsection (s)--
                    (i) in paragraph (1), strike ``Director'' and insert
                ``Comptroller of the Currency'';
                    (ii) in paragraph (2), strike ``Director'' and insert
                ``Comptroller of the Currency'';
                    (iii) in paragraph (3), by striking ``Director's
                discretion, the Director'' and inserting ``discretion of
                the appropriate Federal banking agency, the appropriate
                Federal banking agency,'';
                    (iv) in paragraph (4), by striking ``Director'' each
                place that term appears and inserting ``appropriate Federal
                banking agency''; and
                    (v) in paragraph (5)--

                        (I) by striking ``Director'', each place such term
                    appears, and inserting ``appropriate Federal banking
                    agency''; and
                        (II) by striking ``Director's approval'' and
                    inserting ``approval of the appropriate Federal banking
                    agency'';

                (L) in subsection (t)--
                    (i) in paragraph (1), by striking subparagraph (D);
                    (ii) by striking paragraph (3) and inserting the
                following:
            ``(3) [Repealed].'';
                    (iii) in paragraph (5)--

                        (I) in subparagraph (B), by striking ``Corporation,
                    in its sole discretion'' and inserting ``appropriate
                    Federal banking agency, in the sole discretion of the
                    appropriate Federal banking agency''; and
                        (II) by striking subparagraph (D);

                    (iv) in paragraph (6)--

                        (I) by striking subparagraph (A) and inserting the
                    following:

                ``(A) [Reserved].'';

                        (II) in subparagraph (B), by striking ``Director''
                    each place that term appears and inserting
                    ``appropriate Federal banking agency'';
                        (III) in subparagraph (C)--

                            (aa) in clause (i), by striking ``Director's
                        prior approval'' and inserting ``prior approval of
                        the appropriate Federal banking agency'';
                            (bb) in clause (ii), by striking ``Director's
                        discretion'' and inserting ``discretion of the
                        appropriate Federal banking agency''; and
                            (cc) by striking ``Director'' each place that
                        term appears and inserting ``appropriate Federal
                        banking agency'';

                        (IV) in subparagraph (E), by striking ``Director
                    shall'' and inserting ``appropriate Federal banking
                    agency may''; and
                        (V) in subparagraph (F), by striking ``Director''
                    and all that follows through the end of the
                    subparagraph and inserting ``appropriate Federal
                    banking agency under this Act or any other provision of
                    law.'';

                    (v) in paragraph (7), by striking ``Director'' each
                place that term appears and inserting ``appropriate Federal
                banking agency'';
                    (vi) by striking paragraph (8) and inserting the
                following:
            ``(8) [Repealed].'';
                    (vii) in paragraph (9)--

                        (I) in subparagraph (A), by striking ``Director''
                    and inserting ``Comptroller'';
                        (II) in subparagraph (C), by striking ``of the
                    Currency''; and
                        (III) by striking subparagraph (B) and
                    redesignating subparagraphs (C) and (D) as
                    subparagraphs (B) and (C), respectively; and

                    (viii) except as provided in clauses (i) through (vii),
                by striking ``Director'' each place that term appears and
                inserting ``appropriate Federal banking agency'';
                (M) in subsection (u), by striking ``Director'' each place
            that term appears and inserting ``appropriate Federal banking
            agency'';
                (N) in subsection (v)--
                    (i) in paragraph (2), by striking ``Director's
                determinations'' and inserting ``determinations of the
                appropriate Federal banking agency''; and
                    (ii) by striking ``Director'' each place that term
                appears and inserting ``appropriate Federal banking
                agency'';
                (O) in subsection (w)(1)--
                    (i) in subparagraph (A)(II), by striking ``Director's
                intention'' and inserting ``intention of the Comptroller'';
                and
                    (ii) in subparagraph (B), by striking ``Director's
                intention'' and inserting ``intention of the Comptroller'';
                and
                (P) except as provided in subparagraphs (A) through (J), by
            striking ``Director'' each place that term appears and
            inserting ``Comptroller'';
            (6) in section 8 (12 U.S.C. 1466a), by striking ``Director''
        each place that term appears and inserting ``Comptroller'';
            (7) in section 9 (12 U.S.C. 1467)--
                (A) in subsection (a), by striking ``assessed by the
            Director'' and all that follows through the end of the
            subsection and inserting the following: ``assessed by--
            ``(1) the Comptroller, against each such Federal savings
        association, as the Comptroller deems necessary or appropriate; and
            ``(2) the Corporation, against each such State savings
        association, as the Corporation deems necessary or appropriate.'';
                (B) in subsection (b), by striking ``Director'', each place
            such term appears, and inserting ``Comptroller or Corporation,
            as appropriate'';
                (C) in subsection (e)--
                    (i) by striking ``Only the Director'' and inserting
                ``The Comptroller''; and
                    (ii) by striking ``Director's designee'' and inserting
                ``designee of the Comptroller'';
                (D) by striking subsection (f) and inserting the following:
        ``(f) [Reserved].'';
                (E) in subsection (g)--
                    (i) in paragraph (1), by striking ``Director'' and
                inserting ``appropriate Federal banking agency''; and
                    (ii) in paragraph (2), by striking ``Director, or the
                Corporation, as the case may be,'' and inserting
                ``appropriate Federal banking agency for the savings
                association'';
                (F) in subsection (i), by striking ``Director'' each place
            that term appears and inserting ``appropriate Federal banking
            agency'';
                (G) in subsection (j), by striking ``Director's sole
            discretion'' and inserting ``sole discretion of the appropriate
            Federal banking agency'';
                (H) in subsection (k), by striking ``Director may assess
            against institutions for which the Director is the appropriate
            Federal banking agency, as defined in section 3 of the Federal
            Deposit Insurance Act,'' and inserting ``appropriate Federal
            banking agency may assess against an institution''; and
                (I) except as provided in subparagraphs (A) through (G), by
            striking ``Director'' each place that term appears and
            inserting ``appropriate Federal banking agency'';
            (8) in section 10 (12 U.S.C. 1467a)--
                (A) in subsection (a)(1), by striking ``Director'' each
            place that term appears and inserting ``appropriate Federal
            banking agency'';
                (B) in subsection (b)--
                    (i) in paragraph (2), by striking ``and the regional
                office of the Director of the district in which its
                principal office is located,''; and
                    (ii) in paragraph (6), by striking ``Director's own
                motion or application'' and inserting ``motion or
                application of the Board'';
                (C) in subsection (c)--
                    (i) in paragraph (2)(F), by striking ``of Governors of
                the Federal Reserve System'';
                    (ii) in paragraph (4)(B), in the subparagraph heading,
                by striking ``by director'';
                    (iii) in paragraph (6)(D), in the subparagraph heading,
                by striking ``by director''; and
                    (iv) in paragraph (9)(E), by inserting ``(in
                consultation with the appropriate Federal banking agency)''
                after ``including a determination'';
                (D) in subsection (g)(5)(B), by striking ``the Director's
            discretion'' and inserting ``the discretion of the Board'';
                (E) in subsection (l), by striking ``Director'' each place
            that term appears and inserting ``appropriate Federal banking
            agency'';
                (F) in subsection (m), by striking ``Director'' and
            inserting ``appropriate Federal banking agency'';
                (G) in subsection (p)--
                    (i) in paragraph (1)--

                        (I) by striking ``Director determines'' the 1st
                    place such term appears and inserting ``Board or the
                    appropriate Federal banking agency for the savings
                    association determines'';
                        (II) by striking ``Director may'' and inserting
                    ``Board may''; and
                        (III) by striking ``Director determines'' the 2nd
                    place such term appears and inserting ``Board, in
                    consultation with the appropriate Federal banking
                    agency for the savings association determines''; and

                    (ii) in paragraph (2), by striking ``Director'', each
                place such term appears, and inserting ``Board'';
                (H) in subsection (q), by striking ``Director'', each place
            such term appears, and inserting ``Board'';
                (I) in subsection (r), by striking ``Director'', each place
            such term appears, and inserting ``Board or appropriate Federal
            banking agency'';
                (J) in subsection (s)--
                    (i) in paragraph (2)--

                        (I) in subparagraph (B)(ii), by striking
                    ``Director's judgment'' and inserting ``judgment of the
                    appropriate Federal banking agency for the savings
                    association''; and
                        (II) by striking ``Director'' each place that term
                    appears and inserting ``appropriate Federal banking
                    agency for the savings association''; and

                    (ii) in paragraph (4), by striking ``Director'' and
                inserting ``Comptroller''; and
                (K) except as provided in subparagraphs (A) through (J), by
            striking ``Director'' each place that term appears and
            inserting ``Board'';
            (9) in section 11 (12 U.S.C. 1468), by striking ``Director''
        each place that term appears and inserting ``appropriate Federal
        banking agency'';
            (10) in section 12 (12 U.S.C. 1468a), by striking ``the
        Director'' and inserting ``a Federal banking agency''; and
            (11) in section 13 (12 U.S.C. 1468a) is amended by striking
        ``Director'' and inserting ``a Federal banking agency''.
        SEC. 370. HOUSING ACT OF 1948.
        Section 502(c) of the Housing Act of 1948 (12 U.S.C. 1701c(c)) is
    amended--
            (1) in the matter preceding paragraph (1), by striking ``and
        the Director of the Office of Thrift Supervision'' and inserting
        ``, the Comptroller of the Currency, and the Federal Deposit
        Insurance Corporation''; and
            (2) in paragraph (3), by striking ``Board'' and inserting
        ``Agency''.
        SEC. 371. HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1992.
        Section 543 of the Housing and Community Development Act of 1992
    (Public Law 102-550; 106 Stat. 3798) is amended--
            (1) in subsection (c)(1)--
                (A) by striking subparagraphs (D) through (F); and
                (B) by redesignating subparagraphs (G) and (H) as
            subparagraphs (D) and (E), respectively; and
            (2) in subsection (f)--
                (A) in paragraph (2), by striking ``the Office of Thrift
            Supervision,'' each place that term appears; and
                (B) in paragraph (3)--
                    (i) in the matter preceding subparagraph (A), by
                striking ``the Office of Thrift Supervision,''; and
                    (ii) in subparagraph (D), by striking ``Office of
                Thrift Supervision,''.
        SEC. 372. HOUSING AND URBAN-RURAL RECOVERY ACT OF 1983.
        Section 469 of the Housing and Urban-Rural Recovery Act of 1983 (12
    U.S.C. 1701p-1) is amended in the first sentence, by striking ``Federal
    Home Loan Bank Board'' and inserting ``Federal Housing Finance
    Agency''.
        SEC. 373. NATIONAL HOUSING ACT.
        Section 202(f) of the National Housing Act (12 U.S.C. 1708(f)) is
    amended--
            (1) by striking paragraph (5) and inserting the following:
            ``(5) if the mortgagee is a national bank, a subsidiary or
        affiliate of such bank, a Federal savings association or a
        subsidiary or affiliate of a savings association, the Comptroller
        of the Currency;'';
            (2) in paragraph (6), by adding ``and'' at the end;
            (3) in paragraph (7)--
                (A) by inserting ``or State savings association'' after
            ``State bank''; and
                (B) by striking ``; and'' and inserting a period; and
            (4) by striking paragraph (8).
        SEC. 374. NEIGHBORHOOD REINVESTMENT CORPORATION ACT.
        Section 606(c)(3) of the Neighborhood Reinvestment Corporation Act
    (42 U.S.C. 8105(c)(3)) is amended by striking ``Federal Home Loan Bank
    Board'' and inserting ``Federal Housing Finance Agency''.
        SEC. 375. PUBLIC LAW 93-100.
        Section 5(d) of Public Law 93-100 (12 U.S.C. 1470(a)) is amended--
            (1) in paragraph (1), by striking ``Federal Savings and Loan
        Insurance Corporation with respect to insured institutions, the
        Board of Governors of the Federal Reserve System with respect to
        State member insured banks, and the Federal Deposit Insurance
        Corporation with respect to State nonmember insured banks'' and
        inserting ``appropriate Federal banking agency, with respect to the
        institutions subject to the jurisdiction of each such agency,'';
        and
            (2) in paragraph (2), by striking ``supervisory'' and inserting
        ``banking''.
        SEC. 376. SECURITIES EXCHANGE ACT OF 1934.
        The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is
    amended--
            (1) in section 3(a)(34) (15 U.S.C. 78c(a)(34))--
                (A) in subparagraph (A)--
                    (i) in clause (i), by striking ``or a subsidiary or a
                department or division of any such bank'' and inserting ``a
                subsidiary or a department or division of any such bank, a
                Federal savings association (as defined in section 3(b)(2)
                of the Federal Deposit Insurance Act (12 U.S.C.
                1813(b)(2))), the deposits of which are insured by the
                Federal Deposit Insurance Corporation, or a subsidiary or
                department or division of any such Federal savings
                association'';
                    (ii) in clause (ii), by striking ``or a subsidiary or a
                department or division of such subsidiary'' and inserting
                ``a subsidiary or a department or division of such
                subsidiary, or a savings and loan holding company'';
                    (iii) in clause (iii), by striking ``or a subsidiary or
                department or division thereof;'' and inserting ``a
                subsidiary or department or division of any such bank, a
                State savings association (as defined in section 3(b)(3) of
                the Federal Deposit Insurance Act (12 U.S.C. 1813(b)(3))),
                the deposits of which are insured by the Federal Deposit
                Insurance Corporation, or a subsidiary or a department or
                division of any such State savings association; and'';
                    (iv) by striking clause (iv); and
                    (v) by redesignating clause (v) as clause (iv);
                (B) in subparagraph (B)--
                    (i) in clause (i), by striking ``or a subsidiary of any
                such bank'' and inserting ``a subsidiary of any such bank,
                a Federal savings association (as defined in section
                3(b)(2) of the Federal Deposit Insurance Act (12 U.S.C.
                1813(b)(2))), the deposits of which are insured by the
                Federal Deposit Insurance Corporation, or a subsidiary of
                any such Federal savings association'';
                    (ii) in clause (ii), by striking ``or a subsidiary of a
                bank holding company which is a bank other than a bank
                specified in clause (i), (iii), or (iv) of this
                subparagraph'' and inserting ``a subsidiary of a bank
                holding company that is a bank other than a bank specified
                in clause (i) or (iii) of this subparagraph, or a savings
                and loan holding company'';
                    (iii) in clause (iii), by striking ``or a subsidiary
                thereof;'' and inserting ``a subsidiary of any such bank, a
                State savings association (as defined in section 3(b)(3) of
                the Federal Deposit Insurance Act (12 U.S.C. 1813(b)(3))),
                the deposits of which are insured by the Federal Deposit
                Insurance Corporation, or a subsidiary of any such State
                savings association; and'';
                    (iv) by striking clause (iv); and
                    (v) by redesignating clause (v) as clause (iv);
                (C) in subparagraph (C)--
                    (i) in clause (i), by striking ``bank'' and inserting
                ``bank or a Federal savings association (as defined in
                section 3(b)(2) of the Federal Deposit Insurance Act (12
                U.S.C. 1813(b)(2))), the deposits of which are insured by
                the Federal Deposit Insurance Corporation'';
                    (ii) in clause (ii), by striking ``or a subsidiary of a
                bank holding company which is a bank other than a bank
                specified in clause (i), (iii), or (iv) of this
                subparagraph'' and inserting ``a subsidiary of a bank
                holding company that is a bank other than a bank specified
                in clause (i) or (iii) of this subparagraph, or a savings
                and loan holding company'';
                    (iii) in clause (iii), by striking ``System)'' and
                inserting, ``System) or a State savings association (as
                defined in section 3(b)(3) of the Federal Deposit Insurance
                Act (12 U.S.C. 1813(b)(3))), the deposits of which are
                insured by the Federal Deposit Insurance Corporation;
                and'';
                    (iv) by striking clause (iv); and
                    (v) by redesignating clause (v) as clause (iv);
                (D) in subparagraph (D)--
                    (i) in clause (i), by inserting after ``bank'' the
                following: ``or a Federal savings association (as defined
                in section 3(b)(2) of the Federal Deposit Insurance Act (12
                U.S.C. 1813(b)(2))), the deposits of which are insured by
                the Federal Deposit Insurance Corporation'';
                    (ii) in clause (ii), by adding ``and'' at the end;
                    (iii) by striking clause (iii);
                    (iv) by redesignating clause (iv) as clause (iii); and
                    (v) in clause (iii), as so redesignated, by inserting
                after ``bank'' the following: ``or a State savings
                association (as defined in section 3(b)(3) of the Federal
                Deposit Insurance Act (12 U.S.C. 1813(b)(3))), the deposits
                of which are insured by the Federal Deposit Insurance
                Corporation'';
                (E) in subparagraph (F)--
                    (i) in clause (i), by inserting after ``bank'' the
                following: ``or a Federal savings association (as defined
                in section 3(b)(2) of the Federal Deposit Insurance Act (12
                U.S.C. 1813(b)(2))), the deposits of which are insured by
                the Federal Deposit Insurance Corporation'';
                    (ii) by striking clause (ii);
                    (iii) by redesignating clauses (iii), (iv), and (v) as
                clauses (ii), (iii), and (iv), respectively; and
                    (iv) in clause (iii), as so redesignated, by inserting
                before the semicolon the following: ``or a State savings
                association (as defined in section 3(b)(3) of the Federal
                Deposit Insurance Act (12 U.S.C. 1813(b)(3))), the deposits
                of which are insured by the Federal Deposit Insurance
                Corporation'';
                (F) in subparagraph (G)--
                    (i) in clause (i), by inserting after ``national bank''
                the following: ``, a Federal savings association (as
                defined in section 3(b)(2) of the Federal Deposit Insurance
                Act), the deposits of which are insured by the Federal
                Deposit Insurance Corporation,'';
                    (ii) in clause (iii)--

                        (I) by inserting after ``bank)'' the following: ``,
                    a State savings association (as defined in section
                    3(b)(3) of the Federal Deposit Insurance Act), the
                    deposits of which are insured by the Federal Deposit
                    Insurance Corporation,''; and
                        (II) by adding ``and'' at the end;

                    (iii) by striking clause (iv); and
                    (iv) by redesignating clause (v) as clause (iv); and
                (G) in the undesignated matter following subparagraph (H),
            by striking ``, and the term `District of Columbia savings and
            loan association' means any association subject to examination
            and supervision by the Office of Thrift Supervision under
            section 8 of the Home Owners' Loan Act of 1933'';
            (2) in section 12(i) (15 U.S.C. 78l(i))--
                (A) in paragraph (1), by inserting after ``national banks''
            the following: ``and Federal savings associations, the accounts
            of which are insured by the Federal Deposit Insurance
            Corporation'';
                (B) by striking ``(3)'' and all that follows through
            ``vested in the Office of Thrift Supervision'' and inserting
            ``and (3) with respect to all other insured banks and State
            savings associations, the accounts of which are insured by the
            Federal Deposit Insurance Corporation, are vested in the
            Federal Deposit Insurance Corporation''; and
                (C) in the second sentence, by striking ``the Federal
            Deposit Insurance Corporation, and the Office of Thrift
            Supervision'' and inserting ``and the Federal Deposit Insurance
            Corporation'';
            (3) in section 15C(g)(1) (15 U.S.C. 78o-5(g)(1)), by striking
        ``the Director of the Office of Thrift Supervision, the Federal
        Savings and Loan Insurance Corporation,''; and
            (4) in section 23(b)(1) (15 U.S.C. 78w(b)(1)), by striking ``,
        other than the Office of Thrift Supervision,''.
        SEC. 377. TITLE 18, UNITED STATES CODE.
        Title 18, United States Code, is amended--
            (1) in section 212(c)(2)--
                (A) by striking subparagraph (C); and
                (B) by redesignating subparagraphs (D) through (H) as
            subparagraphs (C) through (G), respectively;
            (2) in section 657, by striking ``Office of Thrift Supervision,
        the Resolution Trust Corporation,'';
            (3) in section 981(a)(1)(D)--
                (A) by striking ``Resolution Trust Corporation,''; and
                (B) by striking ``or the Office of Thrift Supervision'';
            (4) in section 982(a)(3)--
                (A) by striking ``Resolution Trust Corporation,''; and
                (B) by striking ``or the Office of Thrift Supervision'';
            (5) in section 1006--
                (A) by striking ``Office of Thrift Supervision,''; and
                (B) by striking ``the Resolution Trust Corporation,'';
            (6) in section 1014--
                (A) by striking ``the Office of Thrift Supervision''; and
                (B) by striking ``the Resolution Trust Corporation,''; and
            (7) in section 1032(1)--
                (A) by striking ``the Resolution Trust Corporation,''; and
                (B) by striking ``or the Director of the Office of Thrift
            Supervision''.
        SEC. 378. TITLE 31, UNITED STATES CODE.
        Title 31, United States Code, is amended--
            (1) in section 321--
                (A) in subsection (c)--
                    (i) in paragraph (1), by adding ``and'' at the end;
                    (ii) in paragraph (2), by striking ``; and'' and
                inserting a period; and
                    (iii) by striking paragraph (3); and
                (B) by striking subsection (e); and
            (2) in section 714(a), by striking ``the Office of the
        Comptroller of the Currency, and the Office of Thrift
        Supervision.'' and inserting ``and the Office of the Comptroller of
        the Currency.''.

           TITLE IV--REGULATION OF ADVISERS TO HEDGE FUNDS AND OTHERS

        SEC. 401. SHORT TITLE.
        This title may be cited as the ``Private Fund Investment Advisers
    Registration Act of 2010''.
        SEC. 402. DEFINITIONS.
        (a) Investment Advisers Act of 1940 Definitions.--Section 202(a) of
    the Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)) is amended by
    adding at the end the following:
            ``(29) The term `private fund' means an issuer that would be an
        investment company, as defined in section 3 of the Investment
        Company Act of 1940 (15 U.S.C. 80a-3), but for section 3(c)(1) or
        3(c)(7) of that Act.
            ``(30) The term `foreign private adviser' means any investment
        adviser who--
                ``(A) has no place of business in the United States;
                ``(B) has, in total, fewer than 15 clients and investors in
            the United States in private funds advised by the investment
            adviser;
                ``(C) has aggregate assets under management attributable to
            clients in the United States 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 accordance with the purposes of this
            title; and
                ``(D) neither--
                    ``(i) holds itself out generally to the public in the
                United States as an investment adviser; nor
                    ``(ii) acts as--

                        ``(I) an investment adviser to any investment
                    company registered under the Investment Company Act of
                    1940; or
                        ``(II) a company that 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 its election.''.

        (b) Other Definitions.--As used in this title, the terms
    ``investment adviser'' and ``private fund'' have the same meanings as
    in section 202 of the Investment Advisers Act of 1940, as amended by
    this title.
        SEC. 403. ELIMINATION OF PRIVATE ADVISER EXEMPTION; LIMITED
          EXEMPTION FOR FOREIGN PRIVATE ADVISERS; LIMITED INTRASTATE
          EXEMPTION.
        Section 203(b) of the Investment Advisers Act of 1940 (15 U.S.C.
    80b-3(b)) is amended--
            (1) in paragraph (1), by inserting ``, other than an investment
        adviser who acts as an investment adviser to any private fund,''
        before ``all of whose'';
            (2) by striking paragraph (3) and inserting the following:
            ``(3) any investment adviser that is a foreign private
        adviser;''; and
            (3) in paragraph (5), by striking ``or'' at the end;
            (4) in paragraph (6)--
                (A) by striking ``any investment adviser'' and inserting
            ``(A) any investment adviser'';
                (B) by redesignating subparagraphs (A) and (B) as clauses
            (i) and (ii), respectively; and
                (C) in clause (ii) (as so redesignated), by striking the
            period at the end and inserting ``; or''; and
                (D) by adding at the end the following:
        ``(B) any investment adviser that is registered with the Commodity
    Futures Trading Commission as a commodity trading advisor and advises a
    private fund, provided that, if after the date of enactment of the
    Private Fund Investment Advisers Registration Act of 2010, the business
    of the advisor should become predominately the provision of securities-
    related advice, then such adviser shall register with the
    Commission.''.
            (5) by adding at the end the following:
            ``(7) any investment adviser, other than any entity that has
        elected to be regulated or is regulated as a business development
        company pursuant to section 54 of the Investment Company Act of
        1940 (15 U.S.C. 80a-54), who solely advises--
                ``(A) small business investment companies that are
            licensees under the Small Business Investment Act of 1958;
                ``(B) entities that have received from the Small Business
            Administration notice to proceed to qualify for a license as a
            small business investment company under the Small Business
            Investment Act of 1958, which notice or license has not been
            revoked; or
                ``(C) applicants that are affiliated with 1 or more
            licensed small business investment companies described in
            subparagraph (A) and that have applied for another license
            under the Small Business Investment Act of 1958, which
            application remains pending.''.
        SEC. 404. COLLECTION OF SYSTEMIC RISK DATA; REPORTS; EXAMINATIONS;
          DISCLOSURES.
        Section 204 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-
    4) is amended--
            (1) by redesignating subsections (b) and (c) as subsections (c)
        and (d), respectively; and
            (2) by inserting after subsection (a) the following:
        ``(b) Records and Reports of Private Funds.--
            ``(1) In general.--The Commission may require any investment
        adviser registered under this title--
                ``(A) to maintain such records of, and file with the
            Commission such reports regarding, private funds advised by the
            investment adviser, as necessary and appropriate in the public
            interest and for the protection of investors, or for the
            assessment of systemic risk by the Financial Stability
            Oversight Council (in this subsection referred to as the
            `Council'); and
                ``(B) to provide or make available to the Council those
            reports or records or the information contained therein.
            ``(2) Treatment of records.--The records and reports of any
        private fund to which an investment adviser registered under this
        title provides investment advice shall be deemed to be the records
        and reports of the investment adviser.
            ``(3) Required information.--The records and reports required
        to be maintained by an investment adviser and subject to inspection
        by the Commission under this subsection shall include, for each
        private fund advised by the investment adviser, a description of--
                ``(A) the amount of assets under management and use of
            leverage, including off-balance-sheet leverage;
                ``(B) counterparty credit risk exposure;
                ``(C) trading and investment positions;
                ``(D) valuation policies and practices of the fund;
                ``(E) types of assets held;
                ``(F) side arrangements or side letters, whereby certain
            investors in a fund obtain more favorable rights or
            entitlements than other investors;
                ``(G) trading practices; and
                ``(H) such other information as the Commission, in
            consultation with the Council, determines is necessary and
            appropriate in the public interest and for the protection of
            investors or for the assessment of systemic risk, which may
            include the establishment of different reporting requirements
            for different classes of fund advisers, based on the type or
            size of private fund being advised.
            ``(4) Maintenance of records.--An investment adviser registered
        under this title shall maintain such records of private funds
        advised by the investment adviser for such period or periods as the
        Commission, by rule, may prescribe as necessary and appropriate in
        the public interest and for the protection of investors, or for the
        assessment of systemic risk.
            ``(5) Filing of records.--The Commission shall issue rules
        requiring each investment adviser to a private fund to file reports
        containing such information as the Commission deems necessary and
        appropriate in the public interest and for the protection of
        investors or for the assessment of systemic risk.
            ``(6) Examination of records.--
                ``(A) Periodic and special examinations.--The Commission--
                    ``(i) shall conduct periodic inspections of the records
                of private funds maintained by an investment adviser
                registered under this title in accordance with a schedule
                established by the Commission; and
                    ``(ii) may conduct at any time and from time to time
                such additional, special, and other examinations as the
                Commission may prescribe as necessary and appropriate in
                the public interest and for the protection of investors, or
                for the assessment of systemic risk.
                ``(B) Availability of records.--An investment adviser
            registered under this title shall make available to the
            Commission 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.
            ``(7) Information sharing.--
                ``(A) In general.--The Commission shall make available to
            the 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 Council may
            consider necessary for the purpose of assessing the systemic
            risk posed by a private fund.
                ``(B) Confidentiality.--The Council shall maintain the
            confidentiality of information received under this paragraph in
            all such reports, documents, records, and information, in a
            manner consistent with the level of confidentiality established
            for the Commission pursuant to paragraph (8). The Council shall
            be exempt from section 552 of title 5, United States Code, with
            respect to any information in any report, document, record, or
            information made available, to the Council under this
            subsection.''.
            ``(8) Commission confidentiality of reports.--Notwithstanding
        any other provision of law, the Commission may not be compelled to
        disclose any report or information contained therein required to be
        filed with the Commission under this subsection, except that
        nothing in this subsection authorizes the Commission--
                ``(A) to withhold information from Congress, upon an
            agreement of confidentiality; or
                ``(B) prevent the Commission from complying with--
                    ``(i) 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
                    ``(ii) an order of a court of the United States in an
                action brought by the United States or the Commission.
            ``(9) Other recipients confidentiality.--Any department,
        agency, or self-regulatory organization that receives reports or
        information from the Commission under this subsection shall
        maintain the confidentiality of such reports, documents, records,
        and information in a manner consistent with the level of
        confidentiality established for the Commission under paragraph (8).
            ``(10) Public information exception.--
                ``(A) In general.--The Commission, the Council, and any
            other department, agency, or self-regulatory organization that
            receives information, reports, documents, records, or
            information from the Commission under this subsection, shall be
            exempt from the provisions of section 552 of title 5, United
            States Code, with respect to any such report, document, record,
            or information. Any proprietary information of an investment
            adviser ascertained by the Commission from any report required
            to be filed with the Commission pursuant to this subsection
            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.
                ``(B) Proprietary information.--For purposes of this
            paragraph, proprietary information includes sensitive, non-
            public information regarding--
                    ``(i) the investment or trading strategies of the
                investment adviser;
                    ``(ii) analytical or research methodologies;
                    ``(iii) trading data;
                    ``(iv) computer hardware or software containing
                intellectual property; and
                    ``(v) any additional information that the Commission
                determines to be proprietary.
            ``(11) Annual report to congress.--The Commission shall report
        annually to Congress on how the Commission has used the data
        collected pursuant to this subsection to monitor the markets for
        the protection of investors and the integrity of the markets.''.
        SEC. 405. DISCLOSURE PROVISION AMENDMENT.
        Section 210(c) of the Investment Advisers Act of 1940 (15 U.S.C.
    80b-10(c)) is amended by inserting before the period at the end the
    following: ``or for purposes of assessment of potential systemic
    risk''.
        SEC. 406. CLARIFICATION OF RULEMAKING AUTHORITY.
        Section 211 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-
    11) is amended--
            (1) in subsection (a), by inserting before the period at the
        end of the first sentence the following: ``, including rules and
        regulations defining technical, trade, and other terms used in this
        title, except that the Commission may not define the term `client'
        for purposes of paragraphs (1) and (2) of section 206 to include an
        investor in a private fund managed by an investment adviser, if
        such private fund has entered into an advisory contract with such
        adviser''; and
            (2) by adding at the end the following:
        ``(e) Disclosure Rules on Private Funds.--The Commission and the
    Commodity Futures Trading Commission shall, after consultation with the
    Council but not later than 12 months after the date of enactment of the
    Private Fund Investment Advisers Registration Act of 2010, jointly
    promulgate rules to establish the form and content of the reports
    required to be filed with the Commission under subsection 204(b) and
    with the Commodity Futures Trading Commission by investment advisers
    that are registered both under this title and the Commodity Exchange
    Act (7 U.S.C. 1a et seq.).''.
        SEC. 407. EXEMPTION OF AND REPORTING BY VENTURE CAPITAL FUND
          ADVISERS.
        Section 203 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-
    3) is amended by adding at the end the following:
        ``(l) Exemption of Venture Capital Fund Advisers.--No investment
    adviser that acts as an investment adviser solely to 1 or more venture
    capital funds shall be subject to the registration requirements of this
    title with respect to the provision of investment advice relating to a
    venture capital fund. Not later than 1 year after the date of enactment
    of this subsection, the Commission shall issue final rules to define
    the term `venture capital fund' for purposes of this subsection. The
    Commission shall require such advisers to maintain such records and
    provide to the Commission such annual or other reports as the
    Commission determines necessary or appropriate in the public interest
    or for the protection of investors.''.
        SEC. 408. EXEMPTION OF AND REPORTING BY CERTAIN PRIVATE FUND
          ADVISERS.
        Section 203 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-
    3) is amended by adding at the end the following:
        ``(m) Exemption of and Reporting by Certain Private Fund
    Advisers.--
            ``(1) In general.--The Commission shall provide an exemption
        from the registration requirements under this section to any
        investment adviser of private funds, if each of such investment
        adviser acts solely as an adviser to private funds and has assets
        under management in the United States of less than $150,000,000.
            ``(2) Reporting.--The Commission shall require investment
        advisers exempted by reason of this subsection to maintain such
        records and provide to the Commission such annual or other reports
        as the Commission determines necessary or appropriate in the public
        interest or for the protection of investors.
        ``(n) Registration and Examination of Mid-sized Private Fund
    Advisers.--In prescribing regulations to carry out the requirements of
    this section with respect to investment advisers acting as investment
    advisers to mid-sized private funds, the Commission shall take into
    account the size, governance, and investment strategy of such funds to
    determine whether they pose systemic risk, and shall provide for
    registration and examination procedures with respect to the investment
    advisers of such funds which reflect the level of systemic risk posed
    by such funds.''.
        SEC. 409. FAMILY OFFICES.
        (a) In General.--Section 202(a)(11) of the Investment Advisers Act
    of 1940 (15 U.S.C. 80b-2(a)(11)) is amended by striking ``or (G)'' and
    inserting the following: ``; (G) any family office, as defined by rule,
    regulation, or order of the Commission, in accordance with the purposes
    of this title; or (H)''.
        (b) Rulemaking.--The rules, regulations, or orders issued by the
    Commission pursuant to section 202(a)(11)(G) of the Investment Advisers
    Act of 1940, as added by this section, regarding the definition of the
    term ``family office'' shall provide for an exemption that--
            (1) is consistent with the previous exemptive policy of the
        Commission, as reflected in exemptive orders for family offices in
        effect on the date of enactment of this Act, and the grandfathering
        provisions in paragraph (3);
            (2) recognizes the range of organizational, management, and
        employment structures and arrangements employed by family offices;
        and
            (3) does not exclude any person who was not registered or
        required to be registered under the Investment Advisers Act of 1940
        on January 1, 2010 from the definition of the term ``family
        office'', solely because such person provides investment advice to,
        and was engaged before January 1, 2010 in providing investment
        advice to--
                (A) natural persons who, at the time of their applicable
            investment, are officers, directors, or employees of the family
            office who--
                    (i) have invested with the family office before January
                1, 2010; and
                    (ii) are accredited investors, as defined in Regulation
                D of the Commission (or any successor thereto) under the
                Securities Act of 1933, or, as the Commission may prescribe
                by rule, the successors-in-interest thereto;
                (B) any company owned exclusively and controlled by members
            of the family of the family office, or as the Commission may
            prescribe by rule;
                (C) any investment adviser registered under the Investment
            Adviser Act of 1940 that provides investment advice to the
            family office and who identifies investment opportunities to
            the family office, and invests in such transactions on
            substantially the same terms as the family office invests, but
            does not invest in other funds advised by the family office,
            and whose assets as to which the family office directly or
            indirectly provides investment advice represent, in the
            aggregate, not more than 5 percent of the value of the total
            assets as to which the family office provides investment
            advice.
        (c) Antifraud Authority.--A family office that would not be a
    family office, but for subsection (b)(3), shall be deemed to be an
    investment adviser for the purposes of paragraphs (1), (2) and (4) of
    section 206 of the Investment Advisers Act of 1940.
        SEC. 410. STATE AND FEDERAL RESPONSIBILITIES; ASSET THRESHOLD FOR
          FEDERAL REGISTRATION OF INVESTMENT ADVISERS.
        Section 203A(a) of the of the Investment Advisers Act of 1940 (15
    U.S.C. 80b-3a(a)) is amended--
            (1) by redesignating paragraph (2) as paragraph (3); and
            (2) by inserting after paragraph (1) the following:
            ``(2) Treatment of mid-sized investment advisers.--
                ``(A) In general.--No investment adviser described in
            subparagraph (B) shall register under section 203, unless the
            investment adviser is an adviser to an 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,
            and has not withdrawn the election, except that, if by effect
            of this paragraph an investment adviser would be required to
            register with 15 or more States, then the adviser may register
            under section 203.
                ``(B) Covered persons.--An investment adviser described in
            this subparagraph is an investment adviser that--
                    ``(i) is required to be registered as an investment
                adviser with the securities commissioner (or any agency or
                office performing like functions) of the State in which it
                maintains its principal office and place of business and,
                if registered, would be subject to examination as an
                investment adviser by any such commissioner, agency, or
                office; and
                    ``(ii) has assets under management between--

                        ``(I) the amount specified under subparagraph (A)
                    of paragraph (1), as such amount may have been adjusted
                    by the Commission pursuant to that subparagraph; and
                        ``(II) $100,000,000, or such higher amount as the
                    Commission may, by rule, deem appropriate in accordance
                    with the purposes of this title.''.

        SEC. 411. CUSTODY OF CLIENT ASSETS.
        The Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.) is
    amended by adding at the end the following new section:
        ``SEC. 223. CUSTODY OF CLIENT ACCOUNTS.
        ``An investment adviser registered under this title shall take such
    steps to safeguard client assets over which such adviser has custody,
    including, without limitation, verification of such assets by an
    independent public accountant, as the Commission may, by rule,
    prescribe.''.
        SEC. 412. COMPTROLLER GENERAL STUDY ON CUSTODY RULE COSTS.
        The Comptroller General of the United States shall--
            (1) conduct a study of--
                (A) the compliance costs associated with the current
            Securities and Exchange Commission rules 204-2 (17 C.F.R. Parts
            275.204-2) and rule 206(4)-2 (17 C.F.R. 275.206(4)-2) under the
            Investment Advisers Act of 1940 regarding custody of funds or
            securities of clients by investment advisers; and
                (B) the additional costs if subsection (b)(6) of rule
            206(4)-2 (17 C.F.R. 275.206(4)-2(b)(6)) relating to operational
            independence were eliminated; and
            (2) submit a report to the Committee on Banking, Housing, and
        Urban Affairs of the Senate and the Committee on Financial Services
        of the House of Representatives on the results of such study, not
        later than 3 years after the date of enactment of this Act.
        SEC. 413. ADJUSTING THE ACCREDITED INVESTOR STANDARD.
        (a) In General.--The Commission shall adjust any net worth standard
    for an accredited investor, as set forth in the rules of the Commission
    under the Securities Act of 1933, so that the individual net worth of
    any natural person, or joint net worth with the spouse of that person,
    at the time of purchase, is more than $1,000,000 (as such amount is
    adjusted periodically by rule of the Commission), excluding the value
    of the primary residence of such natural person, except that during the
    4-year period that begins on the date of enactment of this Act, any net
    worth standard shall be $1,000,000, excluding the value of the primary
    residence of such natural person.
        (b) Review and Adjustment.--
            (1) Initial review and adjustment.--
                (A) Initial review.--The Commission may undertake a review
            of the definition of the term ``accredited investor'', as such
            term applies to natural persons, to determine whether the
            requirements of the definition, excluding the requirement
            relating to the net worth standard described in subsection (a),
            should be adjusted or modified for the protection of investors,
            in the public interest, and in light of the economy.
                (B) Adjustment or modification.--Upon completion of a
            review under subparagraph (A), the Commission may, by notice
            and comment rulemaking, make such adjustments to the definition
            of the term ``accredited investor'', excluding adjusting or
            modifying the requirement relating to the net worth standard
            described in subsection (a), as such term applies to natural
            persons, as the Commission may deem appropriate for the
            protection of investors, in the public interest, and in light
            of the economy.
            (2) Subsequent reviews and adjustment.--
                (A) Subsequent reviews.--Not earlier than 4 years after the
            date of enactment of this Act, and not less frequently than
            once every 4 years thereafter, the Commission shall undertake a
            review of the definition, in its entirety, of the term
            ``accredited investor'', as defined in section 230.215 of title
            17, Code of Federal Regulations, or any successor thereto, as
            such term applies to natural persons, to determine whether the
            requirements of the definition should be adjusted or modified
            for the protection of investors, in the public interest, and in
            light of the economy.
                (B) Adjustment or modification.--Upon completion of a
            review under subparagraph (A), the Commission may, by notice
            and comment rulemaking, make such adjustments to the definition
            of the term ``accredited investor'', as defined in section
            230.215 of title 17, Code of Federal Regulations, or any
            successor thereto, as such term applies to natural persons, as
            the Commission may deem appropriate for the protection of
            investors, in the public interest, and in light of the economy.
        SEC. 414. RULE OF CONSTRUCTION RELATING TO THE COMMODITIES EXCHANGE
          ACT.
        The Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.) is
    further amended by adding at the end the following new section:
        ``SEC. 224. RULE OF CONSTRUCTION RELATING TO THE COMMODITIES
          EXCHANGE ACT.
        ``Nothing in this title shall relieve any person of any obligation
    or duty, or affect the availability of any right or remedy available to
    the Commodity Futures Trading Commission or any private party, arising
    under the Commodity Exchange Act (7 U.S.C. 1 et seq.) governing
    commodity pools, commodity pool operators, or commodity trading
    advisors.''.
        SEC. 415. GAO STUDY AND REPORT ON ACCREDITED INVESTORS.
        The Comptroller General of the United States shall conduct a study
    on the appropriate criteria for determining the financial thresholds or
    other criteria needed to qualify for accredited investor status and
    eligibility to invest in private funds, and shall submit a report to
    the Committee on Banking, Housing, and Urban Affairs of the Senate and
    the Committee on Financial Services of the House of Representatives on
    the results of such study not later than 3 years after the date of
    enactment of this Act.
        SEC. 416. GAO STUDY ON SELF-REGULATORY ORGANIZATION FOR PRIVATE
          FUNDS.
        The Comptroller General of the United States shall--
            (1) conduct a study of the feasibility of forming a self-
        regulatory organization to oversee private funds; and
            (2) submit a report to the Committee on Banking, Housing, and
        Urban Affairs of the Senate and the Committee on Financial Services
        of the House of Representatives on the results of such study, not
        later than 1 year after the date of enactment of this Act.
        SEC. 417. COMMISSION STUDY AND REPORT ON SHORT SELLING.
        (a) Studies.--The Division of Risk, Strategy, and Financial
    Innovation of the Commission shall conduct--
            (1) a study, taking into account current scholarship, on the
        state of short selling on national securities exchanges and in the
        over-the-counter markets, with particular attention to the impact
        of recent rule changes and the incidence of--
                (A) the failure to deliver shares sold short; or
                (B) delivery of shares on the fourth day following the
            short sale transaction; and
            (2) a study of--
                (A) the feasibility, benefits, and costs of requiring
            reporting publicly, in real time short sale positions of
            publicly listed securities, or, in the alternative, reporting
            such short positions in real time only to the Commission and
            the Financial Industry Regulatory Authority; and
                (B) the feasibility, benefits, and costs of conducting a
            voluntary pilot program in which public companies will agree to
            have all trades of their shares marked ``short'', ``market
            maker short'', ``buy'', ``buy-to-cover'', or ``long'', and
            reported in real time through the Consolidated Tape.
        (b) Reports.--The Commission shall submit a report to the Committee
    on Banking, Housing, and Urban Affairs of the Senate and the Committee
    on Financial Services of the House of Representatives--
            (1) on the results of the study required under subsection
        (a)(1), including recommendations for market improvements, not
        later than 2 years after the date of enactment of this Act; and
            (2) on the results of the study required under subsection
        (a)(2), not later than 1 year after the date of enactment of this
        Act.
        SEC. 418. QUALIFIED CLIENT STANDARD.
        Section 205(e) of the Investment Advisers Act of 1940 (15 U.S.C.
    80b-5(e)) is amended by adding at the end the following: ``With respect
    to any factor used in any rule or regulation by the Commission in
    making a determination under this subsection, if the Commission uses a
    dollar amount test in connection with such factor, such as a net asset
    threshold, the Commission shall, by order, not later than 1 year after
    the date of enactment of the Private Fund Investment Advisers
    Registration Act of 2010, 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.''.
        SEC. 419. TRANSITION PERIOD.
        Except as otherwise provided in this title, this title and the
    amendments made by this title shall become effective 1 year after the
    date of enactment of this Act, except that any investment adviser may,
    at the discretion of the investment adviser, register with the
    Commission under the Investment Advisers Act of 1940 during that 1-year
    period, subject to the rules of the Commission.

                               TITLE V--INSURANCE
                      Subtitle A--Federal Insurance Office

        SEC. 501. SHORT TITLE.
        This subtitle may be cited as the ``Federal Insurance Office Act of
    2010''.
        SEC. 502. FEDERAL INSURANCE OFFICE.
        (a) Establishment of Office.--Subchapter I of chapter 3 of subtitle
    I of title 31, United States Code, is amended--
            (1) by redesignating section 312 as section 315;
            (2) by redesignating section 313 as section 312; and
            (3) by inserting after section 312 (as so redesignated) the
        following new sections:
        ``SEC. 313. FEDERAL INSURANCE OFFICE.
        ``(a) Establishment.--There is established within the Department of
    the Treasury the Federal Insurance Office.
        ``(b) Leadership.--The Office shall be headed by a Director, who
    shall be appointed by the Secretary of the Treasury. The position of
    Director shall be a career reserved position in the Senior Executive
    Service, as that position is defined under section 3132 of title 5,
    United States Code.
        ``(c) Functions.--
            ``(1) Authority pursuant to direction of secretary.--The
        Office, pursuant to the direction of the Secretary, shall have the
        authority--
                ``(A) to monitor all aspects of the insurance industry,
            including identifying 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;
                ``(B) to monitor the extent to which traditionally
            underserved communities and consumers, 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)), and low- and moderate-income persons have access to
            affordable insurance products regarding all lines of insurance,
            except health insurance;
                ``(C) to recommend to the Financial Stability Oversight
            Council that it designate an insurer, including the affiliates
            of such insurer, as an entity subject to regulation as a
            nonbank financial company supervised by the Board of Governors
            pursuant to title I of the Dodd-Frank Wall Street Reform and
            Consumer Protection Act;
                ``(D) 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);
                ``(E) 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 a successor entity) and assisting the Secretary
            in negotiating covered agreements (as such term is defined in
            subsection (r));
                ``(F) to determine, in accordance with subsection (f),
            whether State insurance measures are preempted by covered
            agreements;
                ``(G) to consult with the States (including State insurance
            regulators) regarding insurance matters of national importance
            and prudential insurance matters of international importance;
            and
                ``(H) to perform such other related duties and authorities
            as may be assigned to the Office by the Secretary.
            ``(2) Advisory functions.--The Office shall advise the
        Secretary on major domestic and prudential international insurance
        policy issues.
            ``(3) Advisory capacity on council.--The Director shall serve
        in an advisory capacity on the Financial Stability Oversight
        Council established under the Financial Stability Act of 2010.
        ``(d) Scope.--The authority of the Office shall extend to all lines
    of insurance except--
            ``(1) health insurance, as determined by the Secretary in
        coordination with the Secretary of Health and Human Services based
        on section 2791 of the Public Health Service Act (42 U.S.C. 300gg-
        91);
            ``(2) long-term care insurance, except long-term care insurance
        that is included with life or annuity insurance components, as
        determined by the Secretary in coordination with the Secretary of
        Health and Human Services, and in the case of long-term care
        insurance that is included with such components, the Secretary
        shall coordinate with the Secretary of Health and Human Services in
        performing the functions of the Office; and
            ``(3) crop insurance, as established by the Federal Crop
        Insurance Act (7 U.S.C. 1501 et seq.).
        ``(e) Gathering of Information.--
            ``(1) In general.--In carrying out the functions required under
        subsection (c), the Office may--
                ``(A) receive and collect data and information on and from
            the insurance industry and insurers;
                ``(B) enter into information-sharing agreements;
                ``(C) analyze and disseminate data and information; and
                ``(D) issue reports regarding all lines of insurance except
            health insurance.
            ``(2) Collection of information from insurers and affiliates.--
                ``(A) In general.--Except as provided in paragraph (3), the
            Office may require an insurer, or any affiliate of an insurer,
            to submit such data or information as the Office may reasonably
            require in carrying out the functions described under
            subsection (c).
                ``(B) Rule of construction.--Notwithstanding any other
            provision of this section, for purposes of subparagraph (A),
            the term `insurer' means any entity that writes insurance or
            reinsures risks and issues contracts or policies in 1 or more
            States.
            ``(3) Exception for small insurers.--Paragraph (2) shall not
        apply with respect to any insurer or affiliate thereof that meets a
        minimum size threshold that the Office may establish, whether by
        order or rule.
            ``(4) Advance coordination.--Before collecting any data or
        information under paragraph (2) from an insurer, or affiliate of an
        insurer, the Office shall coordinate with each relevant Federal
        agency and State insurance regulator (or other relevant Federal or
        State regulatory agency, if any, in the case of an affiliate of an
        insurer) and any publicly available sources to determine if the
        information to be collected is available from, and 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, and may be obtained in a timely
        manner, from such an agency, regulator, regulatory agency, or
        source, the Director shall obtain the data or information from such
        agency, regulator, regulatory agency, or source. If the Director
        determines that such data or information is not so available, the
        Director may collect such data or information from an insurer (or
        affiliate) only if the Director complies with the requirements of
        subchapter I of chapter 35 of title 44, United States Code
        (relating to Federal information policy; commonly known as the
        Paperwork Reduction Act), in collecting such data or information.
        Notwithstanding any other provision of law, each such relevant
        Federal agency and State insurance regulator or other Federal or
        State regulatory agency is authorized to provide to the Office such
        data or information.
            ``(5) Confidentiality.--
                ``(A) Retention of privilege.--The submission of any
            nonpublicly available data and information to the Office under
            this subsection shall not constitute a waiver of, or otherwise
            affect, any privilege arising under Federal or State law
            (including the rules of any Federal or State court) to which
            the data or information is otherwise subject.
                ``(B) Continued application of prior confidentiality
            agreements.--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
            nonpublicly available data or information and the source of
            such data or information to the Office, regarding the privacy
            or confidentiality of any data or information in the possession
            of the source to the Office, shall continue to apply to such
            data or information after the data or information has been
            provided pursuant to this subsection to the Office.
                ``(C) Information-sharing agreement.--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--
                    ``(i) shall comply with applicable Federal law; and
                    ``(ii) shall not constitute a waiver of, or otherwise
                affect, any privilege under Federal or State law (including
                the rules of any Federal or State court) to which the data
                or information is otherwise subject.
                ``(D) Agency disclosure requirements.--Section 552 of title
            5, United States Code, shall apply to any data or information
            submitted to the Office by an insurer or an affiliate of an
            insurer.
            ``(6) Subpoenas and enforcement.--The Director shall have the
        power to require by subpoena the production of the data or
        information requested under paragraph (2), but only upon a written
        finding by the Director that such data or information is required
        to carry out the functions described under subsection (c) and that
        the Office has coordinated with such regulator or agency as
        required under paragraph (4). Subpoenas shall bear the signature of
        the Director and shall be served by any person or class of persons
        designated by the Director for that purpose. In the case of
        contumacy or failure to obey a subpoena, the subpoena shall be
        enforceable by order of any appropriate district court of the
        United States. Any failure to obey the order of the court may be
        punished by the court as a contempt of court.
        ``(f) Preemption of State Insurance Measures.--
            ``(1) Standard.--A State insurance measure shall be preempted
        pursuant to this section or section 314 if, and only to the extent
        that the Director determines, in accordance with this subsection,
        that the measure--
                ``(A) 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, or otherwise admitted in that State; and
                ``(B) is inconsistent with a covered agreement.
            ``(2) Determination.--
                ``(A) Notice of potential inconsistency.--Before making any
            determination under paragraph (1), the Director shall--
                    ``(i) notify and consult with the appropriate State
                regarding any potential inconsistency or preemption;
                    ``(ii) notify and consult with the United States Trade
                Representative regarding any potential inconsistency or
                preemption;
                    ``(iii) cause to be published in the Federal Register
                notice of the issue regarding the potential inconsistency
                or preemption, including a description of each State
                insurance measure at issue and any applicable covered
                agreement;
                    ``(iv) provide interested parties a reasonable
                opportunity to submit written comments to the Office; and
                    ``(v) consider any comments received.
                ``(B) Scope of review.--For purposes of this subsection,
            any determination of the Director regarding State insurance
            measures, and any preemption under paragraph (1) as a result of
            such determination, shall be limited to the subject matter
            contained within the covered agreement involved and shall
            achieve 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.
                ``(C) Notice of determination of inconsistency.--Upon
            making any determination under paragraph (1), the Director
            shall--
                    ``(i) notify the appropriate State of the determination
                and the extent of the inconsistency;
                    ``(ii) establish a reasonable period of time, which
                shall not be less than 30 days, before the determination
                shall become effective; and
                    ``(iii) notify 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.
            ``(3) Notice of effectiveness.--Upon the conclusion of the
        period referred to in paragraph (2)(C)(ii), if the basis for such
        determination still exists, the determination shall become
        effective and the Director shall--
                ``(A) cause to be published a notice in the Federal
            Register that the preemption has become effective, as well as
            the effective date; and
                ``(B) notify the appropriate State.
            ``(4) Limitation.--No State may enforce a State insurance
        measure to the extent that such measure has been preempted under
        this subsection.
        ``(g) Applicability of Administrative Procedures Act.--
    Determinations of inconsistency made pursuant to subsection (f)(2)
    shall be subject to the applicable provisions of subchapter II of
    chapter 5 of title 5, United States Code (relating to administrative
    procedure), and chapter 7 of such title (relating to judicial review),
    except that in any action for judicial review of a determination of
    inconsistency, the court shall determine the matter de novo.
        ``(h) Regulations, Policies, and Procedures.--The Secretary may
    issue orders, regulations, policies, and procedures to implement this
    section.
        ``(i) Consultation.--The Director shall consult with State
    insurance regulators, individually or collectively, to the extent the
    Director determines appropriate, in carrying out the functions of the
    Office.
        ``(j) Savings Provisions.--Nothing in this section shall--
            ``(1) preempt--
                ``(A) any State insurance measure that governs any
            insurer's rates, premiums, underwriting, or sales practices;
                ``(B) any State coverage requirements for insurance;
                ``(C) the application of the antitrust laws of any State to
            the business of insurance; or
                ``(D) any State insurance measure governing the capital or
            solvency of an insurer, except to the extent that such State
            insurance measure results in less favorable treatment of a non-
            United State insurer than a United States insurer;
            ``(2) be construed to alter, amend, or limit any provision of
        the Consumer Financial Protection Agency Act of 2010; or
            ``(3) affect the preemption of any State insurance measure
        otherwise inconsistent with and preempted by Federal law.
        ``(k) Retention of Existing State Regulatory Authority.--Nothing in
    this section or section 314 shall be construed to establish or provide
    the Office or the Department of the Treasury with general supervisory
    or regulatory authority over the business of insurance.
        ``(l) Retention of Authority of Federal Financial Regulatory
    Agencies.--Nothing in this section or section 314 shall be construed to
    limit the authority of any Federal financial regulatory agency,
    including the authority to develop and coordinate policy, negotiate,
    and enter into agreements with foreign governments, authorities,
    regulators, and multinational regulatory committees and to preempt
    State measures to affect uniformity with international regulatory
    agreements.
        ``(m) Retention of Authority of United States Trade
    Representative.--Nothing in this section or section 314 shall be
    construed to affect the authority of the Office of the United States
    Trade Representative pursuant to section 141 of the Trade Act of 1974
    (19 U.S.C. 2171) or any other provision of law, including authority
    over the development and coordination of United States international
    trade policy and the administration of the United States trade
    agreements program.
        ``(n) Annual Reports to Congress.--
            ``(1) Section 313(f) reports.--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 any actions taken by the
        Office pursuant to subsection (f) (regarding preemption of
        inconsistent State insurance measures).
            ``(2) Insurance industry.--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 Committee on Financial
        Services of the House of Representatives and the Committee on
        Banking, Housing, and Urban Affairs of the Senate on the insurance
        industry and any other information as deemed relevant by the
        Director or requested by such Committees.
        ``(o) Reports on U.S. and Global Reinsurance Market.--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--
            ``(1) a report received not later than September 30, 2012,
        describing the breadth and scope of the global reinsurance market
        and the critical role such market plays in supporting insurance in
        the United States; and
            ``(2) a report received not later than January 1, 2013, and
        updated not later than January 1, 2015, describing the impact of
        part II of the Nonadmitted and Reinsurance Reform Act of 2010 on
        the ability of State regulators to access reinsurance information
        for regulated companies in their jurisdictions.
        ``(p) Study and Report on Regulation of Insurance.--
            ``(1) In general.--Not later than 18 months after the date of
        enactment of this section, the Director shall conduct a study and
        submit a report to Congress on how to modernize and improve the
        system of insurance regulation in the United States.
            ``(2) Considerations.--The study and report required under
        paragraph (1) shall be based on and guided by the following
        considerations:
                ``(A) Systemic risk regulation with respect to insurance.
                ``(B) Capital standards and the relationship between
            capital allocation and liabilities, including standards
            relating to liquidity and duration risk.
                ``(C) Consumer protection for insurance products and
            practices, including gaps in State regulation.
                ``(D) The degree of national uniformity of State insurance
            regulation.
                ``(E) The regulation of insurance companies and affiliates
            on a consolidated basis.
                ``(F) International coordination of insurance regulation.
            ``(3) Additional factors.--The study and report required under
        paragraph (1) shall also examine the following factors:
                ``(A) The costs and benefits of potential Federal
            regulation of insurance across various lines of insurance
            (except health insurance).
                ``(B) The feasibility of regulating only certain lines of
            insurance at the Federal level, while leaving other lines of
            insurance to be regulated at the State level.
                ``(C) The ability of any potential Federal regulation or
            Federal regulators to eliminate or minimize regulatory
            arbitrage.
                ``(D) The impact that developments in the regulation of
            insurance in foreign jurisdictions might have on the potential
            Federal regulation of insurance.
                ``(E) The ability of any potential Federal regulation or
            Federal regulator to provide robust consumer protection for
            policyholders.
                ``(F) The potential consequences of subjecting insurance
            companies to a Federal resolution authority, including the
            effects of any Federal resolution authority--
                    ``(i) on the operation of State insurance guaranty fund
                systems, including the loss of guaranty fund coverage if an
                insurance company is subject to a Federal resolution
                authority;
                    ``(ii) on policyholder protection, including the loss
                of the priority status of policyholder claims over other
                unsecured general creditor claims;
                    ``(iii) in the case of life insurance companies, on the
                loss of the special status of separate account assets and
                separate account liabilities; and
                    ``(iv) on the international competitiveness of
                insurance companies.
                ``(G) Such other factors as the Director determines
            necessary or appropriate, consistent with the principles set
            forth in paragraph (2).
            ``(4) Required recommendations.--The study and report required
        under paragraph (1) shall also contain any legislative,
        administrative, or regulatory recommendations, as the Director
        determines appropriate, to carry out or effectuate the findings set
        forth in such report.
            ``(5) Consultation.--With respect to the study and report
        required under paragraph (1), the Director shall consult with the
        State insurance regulators, consumer organizations, representatives
        of the insurance industry and policyholders, and other
        organizations and experts, as appropriate.
        ``(q) Use of Existing Resources.--To carry out this section, the
    Office may employ personnel, facilities, and any other resource of the
    Department of the Treasury available to the Secretary and the Secretary
    shall dedicate specific personnel to the Office.
        ``(r) Definitions.--In this section and section 314, the following
    definitions shall apply:
            ``(1) Affiliate.--The term `affiliate' means, with respect to
        an insurer, any person who controls, is controlled by, or is under
        common control with the insurer.
            ``(2) Covered agreement.--The term `covered agreement' means a
        written bilateral or multilateral agreement regarding prudential
        measures with respect to the business of insurance or reinsurance
        that--
                ``(A) is entered into between the United States and one or
            more foreign governments, authorities, or regulatory entities;
            and
                ``(B) relates to the recognition of prudential measures
            with respect to the business of insurance or reinsurance that
            achieves a level of protection for insurance or reinsurance
            consumers that is substantially equivalent to the level of
            protection achieved under State insurance or reinsurance
            regulation.
            ``(3) Insurer.--The term `insurer' means any person engaged in
        the business of insurance, including reinsurance.
            ``(4) Federal financial regulatory agency.--The term `Federal
        financial regulatory agency' means the Department of the Treasury,
        the Board of Governors of the Federal Reserve System, the Office of
        the Comptroller of the Currency, the Office of Thrift Supervision,
        the Securities and Exchange Commission, the Commodity Futures
        Trading Commission, the Federal Deposit Insurance Corporation, the
        Federal Housing Finance Agency, or the National Credit Union
        Administration.
            ``(5) Non-united states insurer.--The term `non-United States
        insurer' means an insurer that is organized under the laws of a
        jurisdiction other than a State, but does not include any United
        States branch of such an insurer.
            ``(6) Office.--The term `Office' means the Federal Insurance
        Office established by this section.
            ``(7) State insurance measure.--The term `State insurance
        measure' means any State law, regulation, administrative ruling,
        bulletin, guideline, or practice relating to or affecting
        prudential measures applicable to insurance or reinsurance.
            ``(8) State insurance regulator.--The term `State insurance
        regulator' means any State regulatory authority responsible for the
        supervision of insurers.
            ``(9) Substantially equivalent to the level of protection
        achieved.--The term `substantially equivalent to the level of
        protection achieved' means the prudential measures of a foreign
        government, authority, or regulatory entity achieve a similar
        outcome in consumer protection as the outcome achieved under State
        insurance or reinsurance regulation.
            ``(10) United states insurer.--The term `United States insurer'
        means--
                ``(A) an insurer that is organized under the laws of a
            State; or
                ``(B) a United States branch of a non-United States
            insurer.
        ``(s) Authorization of Appropriations.--There are authorized to be
    appropriated for the Office for each fiscal year such sums as may be
    necessary.
        ``SEC. 314. COVERED AGREEMENTS.
        ``(a) Authority.--The Secretary and the United States Trade
    Representative are authorized, jointly, to negotiate and enter into
    covered agreements on behalf of the United States.
        ``(b) Requirements for Consultation With Congress.--
            ``(1) In general.--Before initiating negotiations to enter into
        a covered agreement under subsection (a), during such negotiations,
        and before entering into any such agreement, the Secretary and the
        United States Trade Representative shall jointly consult with the
        Committee on Financial Services and the Committee on Ways and Means
        of the House of Representatives and the Committee on Banking,
        Housing, and Urban Affairs and the Committee on Finance of the
        Senate.
            ``(2) Scope.--The consultation described in paragraph (1) shall
        include consultation with respect to--
                ``(A) the nature of the agreement;
                ``(B) how and to what extent the agreement will achieve the
            applicable purposes, policies, priorities, and objectives of
            section 313 and this section; and
                ``(C) the implementation of the agreement, including the
            general effect of the agreement on existing State laws.
        ``(c) Submission and Layover Provisions.--A covered agreement under
    subsection (a) may enter into force with respect to the United States
    only if--
            ``(1) the Secretary and the United States Trade Representative
        jointly submit to the congressional committees specified in
        subsection (b)(1), on a day on which both Houses of Congress are in
        session, a copy of the final legal text of the agreement; and
            ``(2) a period of 90 calendar days beginning on the date on
        which the copy of the final legal text of the agreement is
        submitted to the congressional committees under paragraph (1) has
        expired.''.
        (b) Duties of Secretary.--Section 321(a) of title 31, United States
    Code, is amended--
            (1) in paragraph (7), by striking ``; and'' and inserting a
        semicolon;
            (2) in paragraph (8)(C), by striking the period at the end and
        inserting ``; and''; and
            (3) by adding at the end the following new paragraph:
            ``(9) advise the President on major domestic and international
        prudential policy issues in connection with all lines of insurance
        except health insurance.''.
        (c) Clerical Amendment.--The table of sections for subchapter I of
    chapter 3 of title 31, United States Code, is amended by striking the
    item relating to section 312 and inserting the following new items:

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

                    Subtitle B--State-Based Insurance Reform

        SEC. 511. SHORT TITLE.
        This subtitle may be cited as the ``Nonadmitted and Reinsurance
    Reform Act of 2010''.
        SEC. 512. EFFECTIVE DATE.
        Except as otherwise specifically provided in this subtitle, this
    subtitle shall take effect upon the expiration of the 12-month period
    beginning on the date of the enactment of this subtitle.

                         PART I--NONADMITTED INSURANCE

        SEC. 521. REPORTING, PAYMENT, AND ALLOCATION OF PREMIUM TAXES.
        (a) Home State's Exclusive Authority.--No State other than the home
    State of an insured may require any premium tax payment for nonadmitted
    insurance.
        (b) Allocation of Nonadmitted Premium Taxes.--
            (1) In general.--The States may enter into a compact or
        otherwise establish procedures to allocate among the States the
        premium taxes paid to an insured's home State described in
        subsection (a).
            (2) Effective date.--Except as expressly otherwise provided in
        such compact or other procedures, any such compact or other
        procedures--
                (A) if adopted on or before the expiration of the 330-day
            period that begins on the date of the enactment of this
            subtitle, shall apply to any premium taxes that, on or after
            such date of enactment, are required to be paid to any State
            that is subject to such compact or procedures; and
                (B) if adopted after the expiration of such 330-day period,
            shall apply to any premium taxes that, on or after January 1 of
            the first calendar year that begins after the expiration of
            such 330-day period, are required to be paid to any State that
            is subject to such compact or procedures.
            (3) Report.--Upon the expiration of the 330-day period referred
        to in paragraph (2), the NAIC may submit a report to the Committee
        on Financial Services and the Committee on the Judiciary of the
        House of Representatives and the Committee on Banking, Housing, and
        Urban Affairs of the Senate identifying and describing any compact
        or other procedures for allocation among the States of premium
        taxes that have been adopted during such period by any States.
            (4) Nationwide system.--The Congress intends that each State
        adopt nationwide uniform requirements, forms, and procedures, such
        as an interstate compact, that provide for the reporting, payment,
        collection, and allocation of premium taxes for nonadmitted
        insurance consistent with this section.
        (c) Allocation Based on Tax Allocation Report.--To facilitate the
    payment of premium taxes among the States, an insured's home State may
    require surplus lines brokers and insureds who have independently
    procured insurance to annually file tax allocation reports with the
    insured's home State detailing the portion of the nonadmitted insurance
    policy premium or premiums attributable to properties, risks, or
    exposures located in each State. The filing of a nonadmitted insurance
    tax allocation report and the payment of tax may be made by a person
    authorized by the insured to act as its agent.
        SEC. 522. REGULATION OF NONADMITTED INSURANCE BY INSURED'S HOME
          STATE.
        (a) Home State Authority.--Except as otherwise provided in this
    section, the placement of nonadmitted insurance shall be subject to the
    statutory and regulatory requirements solely of the insured's home
    State.
        (b) Broker Licensing.--No State other than an insured's home State
    may require a surplus lines broker to be licensed in order to sell,
    solicit, or negotiate nonadmitted insurance with respect to such
    insured.
        (c) Enforcement Provision.--With respect to section 521 and
    subsections (a) and (b) of this section, any law, regulation,
    provision, or action of any State that applies or purports to apply to
    nonadmitted insurance sold to, solicited by, or negotiated with an
    insured whose home State is another State shall be preempted with
    respect to such application.
        (d) Workers' Compensation Exception.--This section may not be
    construed to preempt any State law, rule, or regulation that restricts
    the placement of workers' compensation insurance or excess insurance
    for self-funded workers' compensation plans with a nonadmitted insurer.
        SEC. 523. PARTICIPATION IN NATIONAL PRODUCER DATABASE.
        After the expiration of the 2-year period beginning on the date of
    the enactment of this subtitle, a State may not collect any fees
    relating to licensing of an individual or entity as a surplus lines
    broker in the State unless the State has in effect at such time laws or
    regulations that provide for participation by the State in the national
    insurance producer database of the NAIC, or any other equivalent
    uniform national database, for the licensure of surplus lines brokers
    and the renewal of such licenses.
        SEC. 524. UNIFORM STANDARDS FOR SURPLUS LINES ELIGIBILITY.
        A State may not--
            (1) impose eligibility requirements on, or otherwise establish
        eligibility criteria for, nonadmitted insurers domiciled in a
        United States jurisdiction, except in conformance with such
        requirements and criteria in sections 5A(2) and 5C(2)(a) of the
        Non-Admitted Insurance Model Act, unless the State has adopted
        nationwide uniform requirements, forms, and procedures developed in
        accordance with section 521(b) of this subtitle that include
        alternative nationwide uniform eligibility requirements; or
            (2) prohibit a surplus lines broker from placing nonadmitted
        insurance with, or procuring nonadmitted insurance from, a
        nonadmitted insurer domiciled outside the United States that is
        listed on the Quarterly Listing of Alien Insurers maintained by the
        International Insurers Department of the NAIC.
        SEC. 525. STREAMLINED APPLICATION FOR COMMERCIAL PURCHASERS.
        A surplus lines broker seeking to procure or place nonadmitted
    insurance in a State for an exempt commercial purchaser shall not be
    required to satisfy any State requirement to make a due diligence
    search to determine whether the full amount or type of insurance sought
    by such exempt commercial purchaser can be obtained from admitted
    insurers if--
            (1) the broker procuring or placing the surplus lines insurance
        has disclosed to the exempt commercial purchaser that such
        insurance may or may not be available from the admitted market that
        may provide greater protection with more regulatory oversight; and
            (2) the exempt commercial purchaser has subsequently requested
        in writing the broker to procure or place such insurance from a
        nonadmitted insurer.
        SEC. 526. GAO STUDY OF NONADMITTED INSURANCE MARKET.
        (a) In General.--The Comptroller General of the United States shall
    conduct a study of the nonadmitted insurance market to determine the
    effect of the enactment of this part on the size and market share of
    the nonadmitted insurance market for providing coverage typically
    provided by the admitted insurance market.
        (b) Contents.--The study shall determine and analyze--
            (1) the change in the size and market share of the nonadmitted
        insurance market and in the number of insurance companies and
        insurance holding companies providing such business in the 18-month
        period that begins upon the effective date of this subtitle;
            (2) the extent to which insurance coverage typically provided
        by the admitted insurance market has shifted to the nonadmitted
        insurance market;
            (3) the consequences of any change in the size and market share
        of the nonadmitted insurance market, including differences in the
        price and availability of coverage available in both the admitted
        and nonadmitted insurance markets;
            (4) the extent to which insurance companies and insurance
        holding companies that provide both admitted and nonadmitted
        insurance have experienced shifts in the volume of business between
        admitted and nonadmitted insurance; and
            (5) the extent to which there has been a change in the number
        of individuals who have nonadmitted insurance policies, the type of
        coverage provided under such policies, and whether such coverage is
        available in the admitted insurance market.
        (c) Consultation With NAIC.--In conducting the study under this
    section, the Comptroller General shall consult with the NAIC.
        (d) Report.--The Comptroller General shall complete the study under
    this section and submit a report to the Committee on Banking, Housing,
    and Urban Affairs of the Senate and the Committee on Financial Services
    of the House of Representatives regarding the findings of the study not
    later than 30 months after the effective date of this subtitle.
        SEC. 527. DEFINITIONS.
        For purposes of this part, the following definitions shall apply:
            (1) Admitted insurer.--The term ``admitted insurer'' means,
        with respect to a State, an insurer licensed to engage in the
        business of insurance in such State.
            (2) Affiliate.--The term ``affiliate'' means, with respect to
        an insured, any entity that controls, is controlled by, or is under
        common control with the insured.
            (3) Affiliated group.--The term ``affiliated group'' means any
        group of entities that are all affiliated.
            (4) Control.--An entity has ``control'' over another entity
        if--
                (A) the entity directly or indirectly or acting through 1
            or more other persons owns, controls, or has the power to vote
            25 percent or more of any class of voting securities of the
            other entity; or
                (B) the entity controls in any manner the election of a
            majority of the directors or trustees of the other entity.
            (5) Exempt commercial purchaser.--The term ``exempt commercial
        purchaser'' means any person purchasing commercial insurance that,
        at the time of placement, meets the following requirements:
                (A) The person employs or retains a qualified risk manager
            to negotiate insurance coverage.
                (B) The person has paid aggregate nationwide commercial
            property and casualty insurance premiums in excess of $100,000
            in the immediately preceding 12 months.
                (C)(i) The person meets at least 1 of the following
            criteria:
                    (I) The person possesses a net worth in excess of
                $20,000,000, as such amount is adjusted pursuant to clause
                (ii).
                    (II) The person generates annual revenues in excess of
                $50,000,000, as such amount is adjusted pursuant to clause
                (ii).
                    (III) The person employs more than 500 full-time or
                full-time equivalent employees per individual insured or is
                a member of an affiliated group employing more than 1,000
                employees in the aggregate.
                    (IV) The person is a not-for-profit organization or
                public entity generating annual budgeted expenditures of at
                least $30,000,000, as such amount is adjusted pursuant to
                clause (ii).
                    (V) The person is a municipality with a population in
                excess of 50,000 persons.
                (ii) Effective on the fifth January 1 occurring after the
            date of the enactment of this subtitle and each fifth January 1
            occurring thereafter, the amounts in subclauses (I), (II), and
            (IV) of clause (i) shall be adjusted to reflect the percentage
            change for such 5-year period in the Consumer Price Index for
            All Urban Consumers published by the Bureau of Labor Statistics
            of the Department of Labor.
            (6) Home state.--
                (A) In general.--Except as provided in subparagraph (B),
            the term ``home State'' means, with respect to an insured--
                    (i) the State in which an insured maintains its
                principal place of business or, in the case of an
                individual, the individual's principal residence; or
                    (ii) if 100 percent of the insured risk is located out
                of the State referred to in clause (i), the State to which
                the greatest percentage of the insured's taxable premium
                for that insurance contract is allocated.
                (B) Affiliated groups.--If more than 1 insured from an
            affiliated group are named insureds on a single nonadmitted
            insurance contract, the term ``home State'' means the home
            State, as determined pursuant to subparagraph (A), of the
            member of the affiliated group that has the largest percentage
            of premium attributed to it under such insurance contract.
            (7) Independently procured insurance.--The term ``independently
        procured insurance'' means insurance procured directly by an
        insured from a nonadmitted insurer.
            (8) NAIC.--The term ``NAIC'' means the National Association of
        Insurance Commissioners or any successor entity.
            (9) Nonadmitted insurance.--The term ``nonadmitted insurance''
        means any property and casualty insurance permitted to be placed
        directly or through a surplus lines broker with a nonadmitted
        insurer eligible to accept such insurance.
            (10) Non-admitted insurance model act.--The term ``Non-Admitted
        Insurance Model Act'' means the provisions of the Non-Admitted
        Insurance Model Act, as adopted by the NAIC on August 3, 1994, and
        amended on September 30, 1996, December 6, 1997, October 2, 1999,
        and June 8, 2002.
            (11) Nonadmitted insurer.--The term ``nonadmitted insurer''--
                (A) means, with respect to a State, an insurer not licensed
            to engage in the business of insurance in such State; but
                (B) does not include a risk retention group, as that term
            is defined in section 2(a)(4) of the Liability Risk Retention
            Act of 1986 (15 U.S.C. 3901(a)(4)).
            (12) Premium tax.--The term ``premium tax'' means, with respect
        to surplus lines or independently procured insurance coverage, any
        tax, fee, assessment, or other charge imposed by a government
        entity directly or indirectly based on any payment made as
        consideration for an insurance contract for such insurance,
        including premium deposits, assessments, registration fees, and any
        other compensation given in consideration for a contract of
        insurance.
            (13) Qualified risk manager.--The term ``qualified risk
        manager'' means, with respect to a policyholder of commercial
        insurance, a person who meets all of the following requirements:
                (A) The person is an employee of, or third-party consultant
            retained by, the commercial policyholder.
                (B) The person provides skilled services in loss
            prevention, loss reduction, or risk and insurance coverage
            analysis, and purchase of insurance.
                (C) The person--
                    (i)(I) has a bachelor's degree or higher from an
                accredited college or university in risk management,
                business administration, finance, economics, or any other
                field determined by a State insurance commissioner or other
                State regulatory official or entity to demonstrate minimum
                competence in risk management; and
                    (II)(aa) has 3 years of experience in risk financing,
                claims administration, loss prevention, risk and insurance
                analysis, or purchasing commercial lines of insurance; or
                    (bb) has--

                        (AA) a designation as a Chartered Property and
                    Casualty Underwriter (in this subparagraph referred to
                    as ``CPCU'') issued by the American Institute for CPCU/
                    Insurance Institute of America;
                        (BB) a designation as an Associate in Risk
                    Management (ARM) issued by the American Institute for
                    CPCU/Insurance Institute of America;
                        (CC) a designation as Certified Risk Manager (CRM)
                    issued by the National Alliance for Insurance Education
                    & Research;
                        (DD) a designation as a RIMS Fellow (RF) issued by
                    the Global Risk Management Institute; or
                        (EE) any other designation, certification, or
                    license determined by a State insurance commissioner or
                    other State insurance regulatory official or entity to
                    demonstrate minimum competency in risk management;

                    (ii)(I) has at least 7 years of experience in risk
                financing, claims administration, loss prevention, risk and
                insurance coverage analysis, or purchasing commercial lines
                of insurance; and
                    (II) has any 1 of the designations specified in
                subitems (AA) through (EE) of clause (i)(II)(bb);
                    (iii) has at least 10 years of experience in risk
                financing, claims administration, loss prevention, risk and
                insurance coverage analysis, or purchasing commercial lines
                of insurance; or
                    (iv) has a graduate degree from an accredited college
                or university in risk management, business administration,
                finance, economics, or any other field determined by a
                State insurance commissioner or other State regulatory
                official or entity to demonstrate minimum competence in
                risk management.
            (14) Reinsurance.--The term ``reinsurance'' means the
        assumption by an insurer of all or part of a risk undertaken
        originally by another insurer.
            (15) Surplus lines broker.--The term ``surplus lines broker''
        means an individual, firm, or corporation which is licensed in a
        State to sell, solicit, or negotiate insurance on properties,
        risks, or exposures located or to be performed in a State with
        nonadmitted insurers.
            (16) State.--The term ``State'' includes any State of the
        United States, the District of Columbia, the Commonwealth of Puerto
        Rico, Guam, the Northern Mariana Islands, the Virgin Islands, and
        American Samoa.

                              PART II--REINSURANCE

        SEC. 531. REGULATION OF CREDIT FOR REINSURANCE AND REINSURANCE
          AGREEMENTS.
        (a) Credit for Reinsurance.--If the State of domicile of a ceding
    insurer is an NAIC-accredited State, or has financial solvency
    requirements substantially similar to the requirements necessary for
    NAIC accreditation, and recognizes credit for reinsurance for the
    insurer's ceded risk, then no other State may deny such credit for
    reinsurance.
        (b) Additional Preemption of Extraterritorial Application of State
    Law.--In addition to the application of subsection (a), all laws,
    regulations, provisions, or other actions of a State that is not the
    domiciliary State of the ceding insurer, except those with respect to
    taxes and assessments on insurance companies or insurance income, are
    preempted to the extent that they--
            (1) restrict or eliminate the rights of the ceding insurer or
        the assuming insurer to resolve disputes pursuant to contractual
        arbitration to the extent such contractual provision is not
        inconsistent with the provisions of title 9, United States Code;
            (2) require that a certain State's law shall govern the
        reinsurance contract, disputes arising from the reinsurance
        contract, or requirements of the reinsurance contract;
            (3) attempt to enforce a reinsurance contract on terms
        different than those set forth in the reinsurance contract, to the
        extent that the terms are not inconsistent with this part; or
            (4) otherwise apply the laws of the State to reinsurance
        agreements of ceding insurers not domiciled in that State.
        SEC. 532. REGULATION OF REINSURER SOLVENCY.
        (a) Domiciliary State Regulation.--If the State of domicile of a
    reinsurer is an NAIC-accredited State or has financial solvency
    requirements substantially similar to the requirements necessary for
    NAIC accreditation, such State shall be solely responsible for
    regulating the financial solvency of the reinsurer.
        (b) Nondomiciliary States.--
            (1) Limitation on financial information requirements.--If the
        State of domicile of a reinsurer is an NAIC-accredited State or has
        financial solvency requirements substantially similar to the
        requirements necessary for NAIC accreditation, no other State may
        require the reinsurer to provide any additional financial
        information other than the information the reinsurer is required to
        file with its domiciliary State.
            (2) Receipt of information.--No provision of this section shall
        be construed as preventing or prohibiting a State that is not the
        State of domicile of a reinsurer from receiving a copy of any
        financial statement filed with its domiciliary State.
        SEC. 533. DEFINITIONS.
        For purposes of this part, the following definitions shall apply:
            (1) Ceding insurer.--The term ``ceding insurer'' means an
        insurer that purchases reinsurance.
            (2) Domiciliary state.--The terms ``State of domicile'' and
        ``domiciliary State'' mean, with respect to an insurer or
        reinsurer, the State in which the insurer or reinsurer is
        incorporated or entered through, and licensed.
            (3) NAIC.--The term ``NAIC'' means the National Association of
        Insurance Commissioners or any successor entity.
            (4) Reinsurance.--The term ``reinsurance'' means the assumption
        by an insurer of all or part of a risk undertaken originally by
        another insurer.
            (5) Reinsurer.--
                (A) In general.--The term ``reinsurer'' means an insurer to
            the extent that the insurer--
                    (i) is principally engaged in the business of
                reinsurance;
                    (ii) does not conduct significant amounts of direct
                insurance as a percentage of its net premiums; and
                    (iii) is not engaged in an ongoing basis in the
                business of soliciting direct insurance.
                (B) Determination.--A determination of whether an insurer
            is a reinsurer shall be made under the laws of the State of
            domicile in accordance with this paragraph.
            (6) State.--The term ``State'' includes any State of the United
        States, the District of Columbia, the Commonwealth of Puerto Rico,
        Guam, the Northern Mariana Islands, the Virgin Islands, and
        American Samoa.

                         PART III--RULE OF CONSTRUCTION

        SEC. 541. RULE OF CONSTRUCTION.
        Nothing in this subtitle or the amendments made by this subtitle
    shall be construed to modify, impair, or supersede the application of
    the antitrust laws. Any implied or actual conflict between this
    subtitle and any amendments to this subtitle and the antitrust laws
    shall be resolved in favor of the operation of the antitrust laws.
        SEC. 542. SEVERABILITY.
        If any section or subsection of this subtitle, or any application
    of such provision to any person or circumstance, is held to be
    unconstitutional, the remainder of this subtitle, and the application
    of the provision to any other person or circumstance, shall not be
    affected.

     TITLE VI--IMPROVEMENTS TO REGULATION OF BANK AND SAVINGS ASSOCIATION
                 HOLDING COMPANIES AND DEPOSITORY INSTITUTIONS

        SEC. 601. SHORT TITLE.
        This title may be cited as the ``Bank and Savings Association
    Holding Company and Depository Institution Regulatory Improvements Act
    of 2010''.
        SEC. 602. DEFINITION.
        For purposes of this title, a company is a ``commercial firm'' if
    the annual gross revenues derived by the company and all of its
    affiliates from activities that are financial in nature (as defined in
    section 4(k) of the Bank Holding Company Act of 1956 (12 U.S.C.
    1843(k))) and, if applicable, from the ownership or control of one or
    more insured depository institutions, represent less than 15 percent of
    the consolidated annual gross revenues of the company.
        SEC. 603. MORATORIUM AND STUDY ON TREATMENT OF CREDIT CARD BANKS,
          INDUSTRIAL LOAN COMPANIES, AND CERTAIN OTHER COMPANIES UNDER THE
          BANK HOLDING COMPANY ACT OF 1956.
        (a) Moratorium.--
            (1) Definitions.--In this subsection--
                (A) the term ``credit card bank'' means an institution
            described in section 2(c)(2)(F) of the Bank Holding Company Act
            of 1956 (12 U.S.C. 1841(c)(2)(F));
                (B) the term ``industrial bank'' means an institution
            described in section 2(c)(2)(H) of the Bank Holding Company Act
            of 1956 (12 U.S.C. 1841(c)(2)(H)); and
                (C) the term ``trust bank'' means an institution described
            in section 2(c)(2)(D) of the Bank Holding Company Act of 1956
            (12 U.S.C. 1841(c)(2)(D)).
            (2) Moratorium on provision of deposit insurance.--The
        Corporation may not approve an application for deposit insurance
        under section 5 of the Federal Deposit Insurance Act (12 U.S.C.
        1815) that is received after November 23, 2009, for an industrial
        bank, a credit card bank, or a trust bank that is directly or
        indirectly owned or controlled by a commercial firm.
            (3) Change in control.--
                (A) In general.--Except as provided in subparagraph (B),
            the appropriate Federal banking agency shall disapprove a
            change in control, as provided in section 7(j) of the Federal
            Deposit Insurance Act (12 U.S.C. 1817(j)), of an industrial
            bank, a credit card bank, or a trust bank if the change in
            control would result in direct or indirect control of the
            industrial bank, credit card bank, or trust bank by a
            commercial firm.
                (B) Exceptions.--Subparagraph (A) shall not apply to a
            change in control of an industrial bank, credit card bank, or
            trust bank--
                    (i) that--

                        (I) is in danger of default, as determined by the
                    appropriate Federal banking agency;
                        (II) results from the merger or whole acquisition
                    of a commercial firm that directly or indirectly
                    controls the industrial bank, credit card bank, or
                    trust bank in a bona fide merger with or acquisition by
                    another commercial firm, as determined by the
                    appropriate Federal banking agency; or
                        (III) results from an acquisition of voting shares
                    of a publicly traded company that controls an
                    industrial bank, credit card bank, or trust bank, if,
                    after the acquisition, the acquiring shareholder (or
                    group of shareholders acting in concert) holds less
                    than 25 percent of any class of the voting shares of
                    the company; and

                    (ii) that has obtained all regulatory approvals
                otherwise required for such change of control under any
                applicable Federal or State law, including section 7(j) of
                the Federal Deposit Insurance Act (12 U.S.C. 1817(j)).
            (4) Sunset.--This subsection shall cease to have effect 3 years
        after the date of enactment of this Act.
        (b) Government Accountability Office Study of Exceptions Under the
    Bank Holding Company Act of 1956.--
            (1) Study required.--The Comptroller General of the United
        States shall carry out a study to determine whether it is
        necessary, in order to strengthen the safety and soundness of
        institutions or the stability of the financial system, to eliminate
        the exceptions under section 2 of the Bank Holding Company Act of
        1956 (12 U.S.C. 1841) for institutions described in--
                (A) section 2(a)(5)(E) of the Bank Holding Company Act of
            1956 (12 U.S.C. 1841(a)(5)(E));
                (B) section 2(a)(5)(F) of the Bank Holding Company Act of
            1956 (12 U.S.C. 1841(a)(5)(F));
                (C) section 2(c)(2)(D) of the Bank Holding Company Act of
            1956 (12 U.S.C. 1841(c)(2)(D));
                (D) section 2(c)(2)(F) of the Bank Holding Company Act of
            1956 (12 U.S.C. 1841(c)(2)(F));
                (E) section 2(c)(2)(H) of the Bank Holding Company Act of
            1956 (12 U.S.C. 1841(c)(2)(H)); and
                (F) section 2(c)(2)(B) of the Bank Holding Company Act of
            1956 (12 U.S.C. 1841(c)(2)(B)).
            (2) Content of study.--
                (A) In general.--The study required under paragraph (1),
            with respect to the institutions referenced in each of
            subparagraphs (A) through (E) of paragraph (1), shall, to the
            extent feasible be based on information provided to the
            Comptroller General by the appropriate Federal or State
            regulator, and shall--
                    (i) identify the types and number of institutions
                excepted from section 2 of the Bank Holding Company Act of
                1956 (12 U.S.C. 1841) under each of the subparagraphs
                described in subparagraphs (A) through (E) of paragraph
                (1);
                    (ii) generally describe the size and geographic
                locations of the institutions described in clause (i);
                    (iii) determine the extent to which the institutions
                described in clause (i) are held by holding companies that
                are commercial firms;
                    (iv) determine whether the institutions described in
                clause (i) have any affiliates that are commercial firms;
                    (v) identify the Federal banking agency responsible for
                the supervision of the institutions described in clause (i)
                on and after the transfer date;
                    (vi) determine the adequacy of the Federal bank
                regulatory framework applicable to each category of
                institution described in clause (i), including any
                restrictions (including limitations on affiliate
                transactions or cross-marketing) that apply to transactions
                between an institution, the holding company of the
                institution, and any other affiliate of the institution;
                and
                    (vii) evaluate the potential consequences of subjecting
                the institutions described in clause (i) to the
                requirements of the Bank Holding Company Act of 1956,
                including with respect to the availability and allocation
                of credit, the stability of the financial system and the
                economy, the safe and sound operation of each category of
                institution, and the impact on the types of activities in
                which such institutions, and the holding companies of such
                institutions, may engage.
                (B) Savings associations.--With respect to institutions
            described in paragraph (1)(F), the study required under
            paragraph (1) shall--
                    (i) determine the adequacy of the Federal bank
                regulatory framework applicable to such institutions,
                including any restrictions (including limitations on
                affiliate transactions or cross-marketing) that apply to
                transactions between an institution, the holding company of
                the institution, and any other affiliate of the
                institution; and
                    (ii) evaluate the potential consequences of subjecting
                the institutions described in paragraph (1)(F) to the
                requirements of the Bank Holding Company Act of 1956,
                including with respect to the availability and allocation
                of credit, the stability of the financial system and the
                economy, the safe and sound operation of such institutions,
                and the impact on the types of activities in which such
                institutions, and the holding companies of such
                institutions, may engage.
            (3) Report.--Not later than 18 months after the date of
        enactment of this Act, the Comptroller General shall submit 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 the study required under paragraph (1).
        SEC. 604. REPORTS AND EXAMINATIONS OF HOLDING COMPANIES; REGULATION
          OF FUNCTIONALLY REGULATED SUBSIDIARIES.
        (a) Reports by Bank Holding Companies.--Sections 5(c)(1) of the
    Bank Holding Company Act of 1956 (12 U.S.C. 1844(c)(1)) is amended--
            (1) by striking subclause (A)(ii) and inserting the following:
                    ``(ii) compliance by the bank holding company or
                subsidiary with--

                        ``(I) this Act;
                        ``(II) Federal laws that the Board has specific
                    jurisdiction to enforce against the company or
                    subsidiary; and
                        ``(III) other than in the case of an insured
                    depository institution or functionally regulated
                    subsidiary, any other applicable provision of Federal
                    law.'';

            (2) by striking subparagraph (B) and inserting the following:
                ``(B) Use of existing reports and other supervisory
            information.--The Board shall, to the fullest extent possible,
            use--
                    ``(i) reports and other supervisory information that
                the bank holding company or any subsidiary thereof has been
                required to provide to other Federal or State regulatory
                agencies;
                    ``(ii) externally audited financial statements of the
                bank holding company or subsidiary;
                    ``(iii) information otherwise available from Federal or
                State regulatory agencies; and
                    ``(iv) information that is otherwise required to be
                reported publicly.''; and
            (3) by adding at the end the following:
                ``(C) Availability.--Upon the request of the Board, the
            bank holding company or a subsidiary of the bank holding
            company shall promptly provide to the Board any information
            described in clauses (i) through (iii) of subparagraph (B).''.
        (b) Examinations of Bank Holding Companies.--Section 5(c)(2) of the
    Bank Holding Company Act of 1956 (12 U.S.C. 1844(c)(2)) is amended to
    read as follows:
            ``(2) Examinations.--
                ``(A) In general.--Subject to subtitle B of the Consumer
            Financial Protection Act of 2010, the Board may make
            examinations of a bank holding company and each subsidiary of a
            bank holding company in order to--
                    ``(i) inform the Board of--

                        ``(I) the nature of the operations and financial
                    condition of the bank holding company and the
                    subsidiary;
                        ``(II) the financial, operational, and other risks
                    within the bank holding company system that may pose a
                    threat to--

                            ``(aa) the safety and soundness of the bank
                        holding company or of any depository institution
                        subsidiary of the bank holding company; or
                            ``(bb) the stability of the financial system of
                        the United States; and

                        ``(III) the systems of the bank holding company for
                    monitoring and controlling the risks described in
                    subclause (II); and

                    ``(ii) monitor the compliance of the bank holding
                company and the subsidiary with--

                        ``(I) this Act;
                        ``(II) Federal laws that the Board has specific
                    jurisdiction to enforce against the company or
                    subsidiary; and
                        ``(III) other than in the case of an insured
                    depository institution or functionally regulated
                    subsidiary, any other applicable provisions of Federal
                    law.

                ``(B) Use of reports to reduce examinations.--For purposes
            of this paragraph, the Board shall, to the fullest extent
            possible, rely on--
                    ``(i) examination reports made by other Federal or
                State regulatory agencies relating to a bank holding
                company and any subsidiary of a bank holding company; and
                    ``(ii) the reports and other information required under
                paragraph (1).
                ``(C) Coordination with other regulators.--The Board
            shall--
                    ``(i) provide reasonable notice to, and consult with,
                the appropriate Federal banking agency, the Securities and
                Exchange Commission, the Commodity Futures Trading
                Commission, or State regulatory agency, as appropriate, for
                a subsidiary that is a depository institution or a
                functionally regulated subsidiary of a bank holding company
                before commencing an examination of the subsidiary under
                this section; and
                    ``(ii) to the fullest extent possible, avoid
                duplication of examination activities, reporting
                requirements, and requests for information.''.
        (c) Authority To Regulate Functionally Regulated Subsidiaries of
    Bank Holding Companies.--The Bank Holding Company Act of 1956 (12
    U.S.C. 1841 et seq.) is amended--
            (1) in section 5(c)(5)(B) (12 U.S.C. 1844(c)(5)(B)), by
        striking clause (v) and inserting the following:
                    ``(v) an entity that is subject to regulation by, or
                registration with, the Commodity Futures Trading
                Commission, with respect to activities conducted as a
                futures commission merchant, commodity trading adviser,
                commodity pool, commodity pool operator, swap execution
                facility, swap data repository, swap dealer, major swap
                participant, and activities that are incidental to such
                commodities and swaps activities.''; and
            (2) by striking section 10A (12 U.S.C. 1848a).
        (d) Acquisitions of Banks.--Section 3(c) of the Bank Holding
    Company Act of 1956 (12 U.S.C. 1842(c)) is amended by adding at the end
    the following:
            ``(7) Financial stability.--In every case, the Board shall take
        into consideration the extent to which a proposed acquisition,
        merger, or consolidation would result in greater or more
        concentrated risks to the stability of the United States banking or
        financial system.''.
        (e) Acquisitions of Nonbanks.--
            (1) Notice procedures.--Section 4(j)(2)(A) of the Bank Holding
        Company Act of 1956 (12 U.S.C. 1843(j)(2)(A)) is amended by
        striking ``or unsound banking practices'' and inserting ``unsound
        banking practices, or risk to the stability of the United States
        banking or financial system''.
            (2) Activities that are financial in nature.--Section
        4(k)(6)(B) of the Bank Holding Company Act of 1956 (12 U.S.C.
        1843(k)(6)(B)) is amended to read as follows:
                ``(B) Approval not required for certain financial
            activities.--
                    ``(i) In general.--Except as provided in subsection (j)
                with regard to the acquisition of a savings association and
                clause (ii), 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.
                    ``(ii) Exception.--A financial holding company may not
                acquire a company, without the prior approval of the Board,
                in a transaction in which the total consolidated assets to
                be acquired by the financial holding company exceed
                $10,000,000,000.
                    ``(iii) Hart-Scott-Rodino filing requirement.--Solely
                for purposes of section 7A(c)(8) of the Clayton Act (15
                U.S.C. 18a(c)(8)), the transactions subject to the
                requirements of this paragraph shall be treated as if the
                approval of the Board is not required.''.
        (f) Bank Merger Act Transactions.--Section 18(c)(5) of the Federal
    Deposit Insurance Act (12 U.S.C. 1828(c)(5)) is amended, in the matter
    immediately following subparagraph (B), by striking ``and the
    convenience and needs of the community to be served'' and inserting
    ``the convenience and needs of the community to be served, and the risk
    to the stability of the United States banking or financial system''.
        (g) Reports by Savings and Loan Holding Companies.--Section
    10(b)(2) of the Home Owners' Loan Act (12 U.S.C. 1467a(b)(2) is
    amended--
            (1) by striking ``Each savings'' and inserting the following:
                ``(A) In general.--Each savings''; and
            (2) by adding at the end the following:
                ``(B) Use of existing reports and other supervisory
            information.--The Board shall, to the fullest extent possible,
            use--
                    ``(i) reports and other supervisory information that
                the savings and loan holding company or any subsidiary
                thereof has been required to provide to other Federal or
                State regulatory agencies;
                    ``(ii) externally audited financial statements of the
                savings and loan holding company or subsidiary;
                    ``(iii) information that is otherwise available from
                Federal or State regulatory agencies; and
                    ``(iv) information that is otherwise required to be
                reported publicly.
                ``(C) Availability.--Upon the request of the Board, a
            savings and loan holding company or a subsidiary of a savings
            and loan holding company shall promptly provide to the Board
            any information described in clauses (i) through (iii) of
            subparagraph (B).''.
        (h) Examination of Savings and Loan Holding Companies.--
            (1) Definitions.--Section 2 of the Home Owners' Loan Act (12
        U.S.C. 1462) is amended by adding at the end the following:
            ``(10) Appropriate federal banking agency.--The term
        `appropriate Federal banking agency' has the same meaning as in
        section 3(q) of the Federal Deposit Insurance Act (12 U.S.C.
        1813(q)).
            ``(11) Functionally regulated subsidiary.--The term
        `functionally regulated subsidiary' has the same meaning as in
        section 5(c)(5) of the Bank Holding Company Act of 1956 (12 U.S.C.
        1844(c)(5)).''.
            (2) Examination.--Section 10(b) of the Home Owners' Loan Act
        (12 U.S.C. 1467a(b)) is amended by striking paragraph (4) and
        inserting the following:
            ``(4) Examinations.--
                ``(A) In general.--Subject to subtitle B of the Consumer
            Financial Protection Act of 2010, the Board may make
            examinations of a savings and loan holding company and each
            subsidiary of a savings and loan holding company system, in
            order to--
                    ``(i) inform the Board of--

                        ``(I) the nature of the operations and financial
                    condition of the savings and loan holding company and
                    the subsidiary;
                        ``(II) the financial, operational, and other risks
                    within the savings and loan holding company system that
                    may pose a threat to--

                            ``(aa) the safety and soundness of the savings
                        and loan holding company or of any depository
                        institution subsidiary of the savings and loan
                        holding company; or
                            ``(bb) the stability of the financial system of
                        the United States; and

                        ``(III) the systems of the savings and loan holding
                    company for monitoring and controlling the risks
                    described in subclause (II); and

                    ``(ii) monitor the compliance of the savings and loan
                holding company and the subsidiary with--

                        ``(I) this Act;
                        ``(II) Federal laws that the Board has specific
                    jurisdiction to enforce against the company or
                    subsidiary; and
                        ``(III) other than in the case of an insured
                    depository institution or functionally regulated
                    subsidiary, any other applicable provisions of Federal
                    law.

                ``(B) Use of reports to reduce examinations.--For purposes
            of this subsection, the Board shall, to the fullest extent
            possible, rely on--
                    ``(i) the examination reports made by other Federal or
                State regulatory agencies relating to a savings and loan
                holding company and any subsidiary; and
                    ``(ii) the reports and other information required under
                paragraph (2).
                ``(C) Coordination with other regulators.--The Board
            shall--
                    ``(i) provide reasonable notice to, and consult with,
                the appropriate Federal banking agency, the Securities and
                Exchange Commission, the Commodity Futures Trading
                Commission, or State regulatory agency, as appropriate, for
                a subsidiary that is a depository institution or a
                functionally regulated subsidiary of a savings and loan
                holding company before commencing an examination of the
                subsidiary under this section; and
                    ``(ii) to the fullest extent possible, avoid
                duplication of examination activities, reporting
                requirements, and requests for information.''.
        (i) Definition of the Term ``Savings and Loan Holding Company''.--
    Section 10(a)(1)(D)(ii) of the Home Owners' Loan Act (12 U.S.C.
    1467a(a)(1)(D)(ii)) is amended to read as follows:
                    ``(ii) Exclusion.--The term `savings and loan holding
                company' does not include--

                        ``(I) a bank holding company that is registered
                    under, and subject to, the Bank Holding Company Act of
                    1956 (12 U.S.C. 1841 et seq.), or to any company
                    directly or indirectly controlled by such company
                    (other than a savings association);
                        ``(II) a company that controls a savings
                    association that functions solely in a trust or
                    fiduciary capacity as described in section 2(c)(2)(D)
                    of the Bank Holding Company Act of 1956 (12 U.S.C.
                    1841(c)(2)(D)); or
                        ``(III) a company described in subsection (c)(9)(C)
                    solely by virtue of such company's control of an
                    intermediate holding company established pursuant to
                    section 10A.''.

        (j) Effective Date.--The amendments made by this section shall take
    effect on the transfer date.
        SEC. 605. ASSURING CONSISTENT OVERSIGHT OF PERMISSIBLE ACTIVITIES
          OF DEPOSITORY INSTITUTION SUBSIDIARIES OF HOLDING COMPANIES.
        (a) In General.--The Federal Deposit Insurance Act (12 U.S.C. 1811
    et seq.) is amended by inserting after section 25 the following new
    section:
      ``SEC. 26. ASSURING CONSISTENT OVERSIGHT OF SUBSIDIARIES OF HOLDING
          COMPANIES.
        ``(a) Definitions.--For purposes of this section:
            ``(1) Board.--The term `Board' means the Board of Governors of
        the Federal Reserve System.
            ``(2) Functionally regulated subsidiary.--The term
        `functionally regulated subsidiary' has the same meaning as in
        section 5(c)(5) of the Bank Holding Company Act.
            ``(3) Lead insured depository institution.--The term `lead
        insured depository institution' has the same meaning as in section
        2(o)(8) of the Bank Holding Company Act.
        ``(b) Examination Requirements.--Subject to subtitle B of the
    Consumer Financial Protection Act of 2010, the Board shall examine the
    activities of a nondepository institution subsidiary (other than a
    functionally regulated subsidiary or a subsidiary of a depository
    institution) of a depository institution holding company that are
    permissible for the insured depository institution subsidiaries of the
    depository institution holding company in the same manner, subject to
    the same standards, and with the same frequency as would be required if
    such activities were conducted in the lead insured depository
    institution of the depository institution holding company.
        ``(c) State Coordination.--
            ``(1) Consultation and coordination.--If a nondepository
        institution subsidiary is supervised by a State bank supervisor or
        other State regulatory authority, the Board, in conducting the
        examinations required in subsection (b), shall consult and
        coordinate with such State regulator.
            ``(2) Alternating examinations permitted.--The examinations
        required under subsection (b) may be conducted in joint or
        alternating manner with a State regulator, if the Board determines
        that an examination of a nondepository institution subsidiary
        conducted by the State carries out the purposes of this section.
        ``(d) Appropriate Federal Banking Agency Backup Examination
    Authority.--
            ``(1) In general.--In the event that the Board does not conduct
        examinations required under subsection (b) in the same manner,
        subject to the same standards, and with the same frequency as would
        be required if such activities were conducted by the lead insured
        depository institution subsidiary of the depository institution
        holding company, the appropriate Federal banking agency for the
        lead insured depository institution may recommend in writing (which
        shall include a written explanation of the concerns giving rise to
        the recommendation) that the Board perform the examination required
        under subsection (b).
            ``(2) Examination by an appropriate federal banking agency.--If
        the Board does not, before the end of the 60-day period beginning
        on the date on which the Board receives a recommendation under
        paragraph (1), begin an examination as required under subsection
        (b) or provide a written explanation or plan to the appropriate
        Federal banking agency making such recommendation responding to the
        concerns raised by the appropriate Federal banking agency for the
        lead insured depository institution, the appropriate Federal
        banking agency for the lead insured depository institution may,
        subject to the Consumer Financial Protection Act of 2010, examine
        the activities that are permissible for a depository institution
        subsidiary conducted by such nondepository institution subsidiary
        (other than a functionally regulated subsidiary or a subsidiary of
        a depository institution) of the depository institution holding
        company as if the nondepository institution subsidiary were an
        insured depository institution for which the appropriate Federal
        banking agency of the lead insured depository institution was the
        appropriate Federal banking agency, to determine whether the
        activities--
                ``(A) pose a material threat to the safety and soundness of
            any insured depository institution subsidiary of the depository
            institution holding company;
                ``(B) are conducted in accordance with applicable Federal
            law; and
                ``(C) are subject to appropriate systems for monitoring and
            controlling the financial, operating, and other material risks
            of the activities that may pose a material threat to the safety
            and soundness of the insured depository institution
            subsidiaries of the holding company.
            ``(3) Agency coordination with the board.--An appropriate
        Federal banking agency that conducts an examination pursuant to
        paragraph (2) shall coordinate examination of the activities of
        nondepository institution subsidiaries described in subsection (b)
        with the Board in a manner that--
                ``(A) avoids duplication;
                ``(B) shares information relevant to the supervision of the
            depository institution holding company;
                ``(C) achieves the objectives of subsection (b); and
                ``(D) ensures that the depository institution holding
            company and the subsidiaries of the depository institution
            holding company are not subject to conflicting supervisory
            demands by such agency and the Board.
            ``(4) Fee permitted for examination costs.--An appropriate
        Federal banking agency that conducts an examination or enforcement
        action pursuant to this section may collect an assessment, fee, or
        such other charge from the subsidiary as the appropriate Federal
        banking agency determines necessary or appropriate to carry out the
        responsibilities of the appropriate Federal banking agency in
        connection with such examination.
        ``(e) Referrals for Enforcement by Appropriate Federal Banking
    Agency.--
            ``(1) Recommendation of enforcement action.--The appropriate
        Federal banking agency for the lead insured depository institution,
        based upon its examination of a nondepository institution
        subsidiary conducted pursuant to subsection (d), or other relevant
        information, may submit to the Board, in writing, a recommendation
        that the Board take enforcement action against such nondepository
        institution subsidiary, together with an explanation of the
        concerns giving rise to the recommendation, if the appropriate
        Federal banking agency determines (by a vote of its members, if
        applicable) that the activities of the nondepository institution
        subsidiary pose a material threat to the safety and soundness of
        any insured depository institution subsidiary of the depository
        institution holding company.
            ``(2) Back-up authority of the appropriate federal banking
        agency.--If, within the 60-day period beginning on the date on
        which the Board receives a recommendation under paragraph (1), the
        Board does not take enforcement action against the nondepository
        institution subsidiary or provide a plan for supervisory or
        enforcement action that is acceptable to the appropriate Federal
        banking agency that made the recommendation pursuant to paragraph
        (1), such agency may take the recommended enforcement action
        against the nondepository institution subsidiary, in the same
        manner as if the nondepository institution subsidiary were an
        insured depository institution for which the agency was the
        appropriate Federal banking agency.
        ``(f) Coordination Among Appropriate Federal Banking Agencies.--
    Each Federal banking agency, prior to or when exercising authority
    under subsection (d) or (e) shall--
            ``(1) provide reasonable notice to, and consult with, the
        appropriate Federal banking agency or State bank supervisor (or
        other State regulatory agency) of the nondepository institution
        subsidiary of a depository institution holding company that is
        described in subsection (d) before commencing any examination of
        the subsidiary;
            ``(2) to the fullest extent possible--
                ``(A) rely on the examinations, inspections, and reports of
            the appropriate Federal banking agency or the State bank
            supervisor (or other State regulatory agency) of the
            subsidiary;
                ``(B) avoid duplication of examination activities,
            reporting requirements, and requests for information; and
                ``(C) ensure that the depository institution holding
            company and the subsidiaries of the depository institution
            holding company are not subject to conflicting supervisory
            demands by the appropriate Federal banking agencies.
        ``(g) Rule of Construction.--No provision of this section shall be
    construed as limiting any authority of the Board, the Corporation, or
    the Comptroller of the Currency under any other provision of law.''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    take effect on the transfer date.
        SEC. 606. REQUIREMENTS FOR FINANCIAL HOLDING COMPANIES TO REMAIN
          WELL CAPITALIZED AND WELL MANAGED.
        (a) Amendment.--Section 4(l)(1) of the Bank Holding Company Act of
    1956 (12 U.S.C. 1843(l)(1)) is amended--
            (1) in subparagraph (B), by striking ``and'' at the end;
            (2) by redesignating subparagraph (C) as subparagraph (D);
            (3) by inserting after subparagraph (B) the following:
                ``(C) the bank holding company is well capitalized and well
            managed; and''; and
            (4) in subparagraph (D)(ii), as so redesignated, by striking
        ``subparagraphs (A) and (B)'' and inserting ``subparagraphs (A),
        (B), and (C)''.
        (b) Home Owners' Loan Act Amendment.--Section 10(c)(2) of the Home
    Owners' Loan Act (12 U.S.C. 1467a(c)(2)) is amended by adding at the
    end the following new subparagraph:
                ``(H) Any activity that is permissible for a financial
            holding company (as such term is defined under section 2(p) of
            the Bank Holding Company Act of 1956 (12 U.S.C. 1841(p)) to
            conduct under section 4(k) of the Bank Holding Company Act of
            1956 if--
                    ``(i) the savings and loan holding company meets all of
                the criteria to qualify as a financial holding company, and
                complies with all of the requirements applicable to a
                financial holding company, under sections 4(l) and 4(m) of
                the Bank Holding Company Act and section 804(c) of the
                Community Reinvestment Act of 1977 (12 U.S.C. 2903(c)) as
                if the savings and loan holding company was a bank holding
                company; and
                    ``(ii) the savings and loan holding company conducts
                the activity in accordance with the same terms, conditions,
                and requirements that apply to the conduct of such activity
                by a bank holding company under the Bank Holding Company
                Act of 1956 and the Board's regulations and interpretations
                under such Act.''.
        (c) Effective Date.--The amendments made by this section shall take
    effect on the transfer date.
        SEC. 607. STANDARDS FOR INTERSTATE ACQUISITIONS.
        (a) Acquisition of Banks.--Section 3(d)(1)(A) of the Bank Holding
    Company Act of 1956 (12 U.S.C. 1842(d)(1)(A)) is amended by striking
    ``adequately capitalized and adequately managed'' and inserting ``well
    capitalized and well managed''.
        (b) Interstate Bank Mergers.--Section 44(b)(4)(B) of the Federal
    Deposit Insurance Act (12 U.S.C. 1831u(b)(4)(B)) is amended by striking
    ``will continue to be adequately capitalized and adequately managed''
    and inserting ``will be well capitalized and well managed''.
        (c) Effective Date.--The amendments made by this section shall take
    effect on the transfer date.
        SEC. 608. ENHANCING EXISTING RESTRICTIONS ON BANK TRANSACTIONS WITH
          AFFILIATES.
        (a) Affiliate Transactions.--Section 23A of the Federal Reserve Act
    (12 U.S.C. 371c) is amended--
            (1) in subsection (b)--
                (A) in paragraph (1), by striking subparagraph (D) and
            inserting the following:
                ``(D) any investment fund with respect to which a member
            bank or affiliate thereof is an investment adviser; and''; and
                (B) in paragraph (7)--
                    (i) in subparagraph (A), by inserting before the
                semicolon at the end the following: ``, including a
                purchase of assets subject to an agreement to repurchase'';
                    (ii) in subparagraph (C), by striking ``, including
                assets subject to an agreement to repurchase,'';
                    (iii) in subparagraph (D)--

                        (I) by inserting ``or other debt obligations''
                    after ``acceptance of securities''; and
                        (II) by striking ``or'' at the end; and

                    (iv) by adding at the end the following:
                ``(F) a transaction with an affiliate that involves the
            borrowing or lending of securities, to the extent that the
            transaction causes a member bank or a subsidiary to have credit
            exposure to the affiliate; or
                ``(G) a derivative transaction, as defined in paragraph (3)
            of section 5200(b) of the Revised Statutes of the United States
            (12 U.S.C. 84(b)), with an affiliate, to the extent that the
            transaction causes a member bank or a subsidiary to have credit
            exposure to the affiliate;'';
            (2) in subsection (c)--
                (A) in paragraph (1)--
                    (i) in the matter preceding subparagraph (A), by
                striking ``subsidiary'' and all that follows through ``time
                of the transaction'' and inserting ``subsidiary, and any
                credit exposure of a member bank or a subsidiary to an
                affiliate resulting from a securities borrowing or lending
                transaction, or a derivative transaction, shall be secured
                at all times''; and
                    (ii) in each of subparagraphs (A) through (D), by
                striking ``or letter of credit'' and inserting ``letter of
                credit, or credit exposure'';
                (B) by striking paragraph (2);
                (C) by redesignating paragraphs (3) through (5) as
            paragraphs (2) through (4), respectively;
                (D) in paragraph (2), as so redesignated, by inserting
            before the period at the end ``, or credit exposure to an
            affiliate resulting from a securities borrowing or lending
            transaction, or derivative transaction''; and
                (E) in paragraph (3), as so redesignated--
                    (i) by inserting ``or other debt obligations'' after
                ``securities''; and
                    (ii) by striking ``or guarantee'' and all that follows
                through ``behalf of,'' and inserting ``guarantee,
                acceptance, or letter of credit issued on behalf of, or
                credit exposure from a securities borrowing or lending
                transaction, or derivative transaction to,'';
            (3) in subsection (d)(4), in the matter preceding subparagraph
        (A), by striking ``or issuing'' and all that follows through
        ``behalf of,'' and inserting ``issuing a guarantee, acceptance, or
        letter of credit on behalf of, or having credit exposure resulting
        from a securities borrowing or lending transaction, or derivative
        transaction to,''; and
            (4) in subsection (f)--
                (A) in paragraph (2)--
                    (i) by striking ``or order'';
                    (ii) by striking ``if it finds'' and all that follows
                through the end of the paragraph and inserting the
                following: ``if--
                    ``(i) the Board finds the exemption to be in the public
                interest and consistent with the purposes of this section,
                and notifies the Federal Deposit Insurance Corporation of
                such finding; and
                    ``(ii) before the end of the 60-day period beginning on
                the date on which the Federal Deposit Insurance Corporation
                receives notice of the finding under clause (i), the
                Federal Deposit Insurance Corporation does not object, in
                writing, to the finding, based on a determination that the
                exemption presents an unacceptable risk to the Deposit
                Insurance Fund.'';
                    (iii) by striking the Board and inserting the
                following:
                ``(A) In general.--The Board''; and
                    (iv) by adding at the end the following:
                ``(B) Additional exemptions.--
                    ``(i) National banks.--The Comptroller of the Currency
                may, by order, exempt a transaction of a national bank from
                the requirements of this section if--

                        ``(I) the Board and the Office of the Comptroller
                    of the Currency jointly find the exemption to be in the
                    public interest and consistent with the purposes of
                    this section and notify the Federal Deposit Insurance
                    Corporation of such finding; and
                        ``(II) before the end of the 60-day period
                    beginning on the date on which the Federal Deposit
                    Insurance Corporation receives notice of the finding
                    under subclause (I), the Federal Deposit Insurance
                    Corporation does not object, in writing, to the
                    finding, based on a determination that the exemption
                    presents an unacceptable risk to the Deposit Insurance
                    Fund.

                    ``(ii) State banks.--The Federal Deposit Insurance
                Corporation may, by order, exempt a transaction of a State
                nonmember bank, and the Board may, by order, exempt a
                transaction of a State member bank, from the requirements
                of this section if--

                        ``(I) the Board and the Federal Deposit Insurance
                    Corporation jointly find that the exemption is in the
                    public interest and consistent with the purposes of
                    this section; and
                        ``(II) the Federal Deposit Insurance Corporation
                    finds that the exemption does not present an
                    unacceptable risk to the Deposit Insurance Fund.''; and

                (B) by adding at the end the following:
            ``(4) Amounts of covered transactions.--The Board may issue
        such regulations or interpretations as the Board determines are
        necessary or appropriate with respect to the manner in which a
        netting agreement may be taken into account in determining the
        amount of a covered transaction between a member bank or a
        subsidiary and an affiliate, including the extent to which netting
        agreements between a member bank or a subsidiary and an affiliate
        may be taken into account in determining whether a covered
        transaction is fully secured for purposes of subsection (d)(4). An
        interpretation under this paragraph with respect to a specific
        member bank, subsidiary, or affiliate shall be issued jointly with
        the appropriate Federal banking agency for such member bank,
        subsidiary, or affiliate.''.
        (b) Transactions With Affiliates.--Section 23B(e) of the Federal
    Reserve Act (12 U.S.C. 371c-1(e)) is amended--
            (1) by striking the undesignated matter following subparagraph
        (B);
            (2) by redesignating subparagraphs (A) and (B) as clauses (i)
        and (ii), respectively, and adjusting the clause margins
        accordingly;
            (3) by redesignating paragraphs (1) and (2) as subparagraphs
        (A) and (B), respectively, and adjusting the subparagraph margins
        accordingly;
            (4) by striking ``The Board'' and inserting the following:
            ``(1) In general.--The Board'';
            (5) in paragraph (1)(B), as so redesignated--
                (A) in the matter preceding clause (i), by inserting before
            ``regulations'' the following: ``subject to paragraph (2), if
            the Board finds that an exemption or exclusion is in the public
            interest and is consistent with the purposes of this section,
            and notifies the Federal Deposit Insurance Corporation of such
            finding,''; and
                (B) in clause (ii), by striking the comma at the end and
            inserting a period; and
            (6) by adding at the end the following:
            ``(2) Exception.--The Board may grant an exemption or exclusion
        under this subsection only if, during the 60-day period beginning
        on the date of receipt of notice of the finding from the Board
        under paragraph (1)(B), the Federal Deposit Insurance Corporation
        does not object, in writing, to such exemption or exclusion, based
        on a determination that the exemption presents an unacceptable risk
        to the Deposit Insurance Fund.''.
        (c) Home Owners' Loan Act.--Section 11 of the Home Owners' Loan Act
    (12 U.S.C. 1468) is amended by adding at the end the following:
        ``(d) Exemptions.--
            ``(1) Federal savings associations.--The Comptroller of the
        Currency may, by order, exempt a transaction of a Federal savings
        association from the requirements of this section if--
                ``(A) the Board and the Office of the Comptroller of the
            Currency jointly find the exemption to be in the public
            interest and consistent with the purposes of this section and
            notify the Federal Deposit Insurance Corporation of such
            finding; and
                ``(B) before the end of the 60-day period beginning on the
            date on which the Federal Deposit Insurance Corporation
            receives notice of the finding under subparagraph (A), the
            Federal Deposit Insurance Corporation does not object, in
            writing, to the finding, based on a determination that the
            exemption presents an unacceptable risk to the Deposit
            Insurance Fund.
            ``(2) State savings association.--The Federal Deposit Insurance
        Corporation may, by order, exempt a transaction of a State savings
        association from the requirements of this section if the Board and
        the Federal Deposit Insurance Corporation jointly find that--
                ``(A) the exemption is in the public interest and
            consistent with the purposes of this section; and
                ``(B) the exemption does not present an unacceptable risk
            to the Deposit Insurance Fund.''.
        (d) Effective Date.--The amendments made by this section shall take
    effect 1 year after the transfer date.
        SEC. 609. ELIMINATING EXCEPTIONS FOR TRANSACTIONS WITH FINANCIAL
          SUBSIDIARIES.
        (a) Amendment.--Section 23A(e) of the Federal Reserve Act (12
    U.S.C. 371c(e)) is amended--
            (1) by striking paragraph (3); and
            (2) by redesignating paragraph (4) as paragraph (3).
        (b) Prospective Application of Amendment.--The amendments made by
    this section shall apply with respect to any covered transaction
    between a bank and a subsidiary of the bank, as those terms are defined
    in section 23A of the Federal Reserve Act (12 U.S.C. 371c), that is
    entered into on or after the date of enactment of this Act.
        (c) Effective Date.--The amendments made by this section shall take
    effect 1 year after the transfer date.
        SEC. 610. LENDING LIMITS APPLICABLE TO CREDIT EXPOSURE ON
          DERIVATIVE TRANSACTIONS, REPURCHASE AGREEMENTS, REVERSE
          REPURCHASE AGREEMENTS, AND SECURITIES LENDING AND BORROWING
          TRANSACTIONS.
        (a) National Banks.--Section 5200(b) of the Revised Statutes of the
    United States (12 U.S.C. 84(b)) is amended--
            (1) in paragraph (1), by striking ``shall include'' and all
        that follows through the end of the paragraph and inserting the
        following: ``shall include--
                ``(A) all direct or indirect advances of funds to a person
            made on the basis of any obligation of that person to repay the
            funds or repayable from specific property pledged by or on
            behalf of the person;
                ``(B) to the extent specified by the Comptroller of the
            Currency, any liability of a national banking association to
            advance funds to or on behalf of a person pursuant to a
            contractual commitment; and
                ``(C) any credit exposure to a person arising from a
            derivative transaction, repurchase agreement, reverse
            repurchase agreement, securities lending transaction, or
            securities borrowing transaction between the national banking
            association and the person;'';
            (2) in paragraph (2), by striking the period at the end and
        inserting ``; and''; and
            (3) by adding at the end the following:
            ``(3) the term `derivative transaction' includes 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.''.
        (b) Savings Associations.--Section 5(u)(3) of the Home Owners' Loan
    Act (12 U.S.C. 1464(u)(3)) is amended by striking ``Director'' each
    place that term appears and inserting ``Comptroller of the Currency''.
        (c) Effective Date.--The amendments made by this section shall take
    effect 1 year after the transfer date.
        SEC. 611. CONSISTENT TREATMENT OF DERIVATIVE TRANSACTIONS IN
          LENDING LIMITS.
        (a) Amendment.--Section 18 of the Federal Deposit Insurance Act (12
    U.S.C. 1828) is amended by adding at the end the following:
        ``(y) State Lending Limit Treatment of Derivatives Transactions.--
    An insured State bank may engage in a derivative transaction, as
    defined in section 5200(b)(3) of the Revised Statutes of the United
    States (12 U.S.C. 84(b)(3)), only if the law with respect to lending
    limits of the State in which the insured State bank is chartered takes
    into consideration credit exposure to derivative transactions.''.
        (b) Effective Date.--The amendment made by this section shall take
    effect 18 months after the transfer date.
        SEC. 612. RESTRICTION ON CONVERSIONS OF TROUBLED BANKS.
        (a) Conversion of a National Banking Association.--The Act entitled
    ``An Act to provide for the conversion of national banking associations
    into and their merger or consolidation with State banks, and for other
    purposes.'' (12 U.S.C. 214 et seq.) is amended by adding at the end the
    following:
      ``SEC. 10. PROHIBITION ON CONVERSION.
        ``A national banking association may not convert to a State bank or
    State savings association during any period in which the national
    banking association is subject to a cease and desist order (or other
    formal enforcement order) issued by, or a memorandum of understanding
    entered into with, the Comptroller of the Currency with respect to a
    significant supervisory matter.''.
        (b) Conversion of a State Bank or Savings Association.--Section
    5154 of the Revised Statutes of the United States (12 U.S.C. 35) is
    amended by adding at the end the following: ``The Comptroller of the
    Currency may not approve the conversion of a State bank or State
    savings association to a national banking association or Federal
    savings association during any period in which the State bank or State
    savings association is subject to a cease and desist order (or other
    formal enforcement order) issued by, or a memorandum of understanding
    entered into with, a State bank supervisor or the appropriate Federal
    banking agency with respect to a significant supervisory matter or a
    final enforcement action by a State Attorney General.''.
        (c) Conversion of a Federal Savings Association.--Section 5(i) of
    the Home Owners' Loan Act (12 U.S.C. 1464(i)) is amended by adding at
    the end the following:
            ``(6) Limitation on certain conversions by federal savings
        associations.--A Federal savings association may not convert to a
        State bank or State savings association during any period in which
        the Federal savings association is subject to a cease and desist
        order (or other formal enforcement order) issued by, or a
        memorandum of understanding entered into with, the Office of Thrift
        Supervision or the Comptroller of the Currency with respect to a
        significant supervisory matter.''.
        (d) Exception.--The prohibition on the approval of conversions
    under the amendments made by subsections (a), (b), and (c) shall not
    apply, if--
            (1) the Federal banking agency that would be the appropriate
        Federal banking agency after the proposed conversion gives the
        appropriate Federal banking agency or State bank supervisor that
        issued the cease and desist order (or other formal enforcement
        order) or memorandum of understanding, as appropriate, written
        notice of the proposed conversion including a plan to address the
        significant supervisory matter in a manner that is consistent with
        the safe and sound operation of the institution;
            (2) within 30 days of receipt of the written notice required
        under paragraph (1), the appropriate Federal banking agency or
        State bank supervisor that issued the cease and desist order (or
        other formal enforcement order) or memorandum of understanding, as
        appropriate, does not object to the conversion or the plan to
        address the significant supervisory matter;
            (3) after conversion of the insured depository institution, the
        appropriate Federal banking agency after the conversion implements
        such plan; and
            (4) in the case of a final enforcement action by a State
        Attorney General, approval of the conversion is conditioned on
        compliance by the insured depository institution with the terms of
        such final enforcement action.
        (e) Notification of Pending Enforcement Actions.--
            (1) Copy of conversion application.--At the time an insured
        depository institution files a conversion application, the insured
        depository institution shall transmit a copy of the conversion
        application to--
                (A) the appropriate Federal banking agency for the insured
            depository institution; and
                (B) the Federal banking agency that would be the
            appropriate Federal banking agency of the insured depository
            institution after the proposed conversion.
            (2) Notification and access to information.--Upon receipt of a
        copy of the application described in paragraph (1), the appropriate
        Federal banking agency for the insured depository institution
        proposing the conversion shall--
                (A) notify the Federal banking agency that would be the
            appropriate Federal banking agency for the institution after
            the proposed conversion in writing of any ongoing supervisory
            or investigative proceedings that the appropriate Federal
            banking agency for the institution proposing to convert
            believes is likely to result, in the near term and absent the
            proposed conversion, in a cease and desist order (or other
            formal enforcement order) or memorandum of understanding with
            respect to a significant supervisory matter; and
                (B) provide the Federal banking agency that would be the
            appropriate Federal banking agency for the institution after
            the proposed conversion access to all investigative and
            supervisory information relating to the proceedings described
            in subparagraph (A).
        SEC. 613. DE NOVO BRANCHING INTO STATES.
        (a) National Banks.--Section 5155(g)(1)(A) of the Revised Statutes
    of the United States (12 U.S.C. 36(g)(1)(A)) is amended to read as
    follows:
                ``(A) the law of the State in which 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;
            and''.
        (b) State Insured Banks.--Section 18(d)(4)(A)(i) of the Federal
    Deposit Insurance Act (12 U.S.C. 1828(d)(4)(A)(i)) is amended to read
    as follows:
                    ``(i) the law of the State in which 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; and''.
        SEC. 614. LENDING LIMITS TO INSIDERS.
        (a) Extensions of Credit.--Section 22(h)(9)(D)(i) of the Federal
    Reserve Act (12 U.S.C. 375b(9)(D)(i)) is amended--
            (1) by striking the period at the end and inserting ``; or'';
            (2) by striking ``a person'' and inserting ``the person'';
            (3) by striking ``extends credit by making'' and inserting the
        following: ``extends credit to a person by--

                        ``(I) making''; and

            (4) by adding at the end the following:

                        ``(II) having credit exposure to the person arising
                    from a derivative transaction (as defined in section
                    5200(b) of the Revised Statutes of the United States
                    (12 U.S.C. 84(b))), repurchase agreement, reverse
                    repurchase agreement, securities lending transaction,
                    or securities borrowing transaction between the member
                    bank and the person.''.

        (b) Effective Date.--The amendments made by this section shall take
    effect 1 year after the transfer date.
        SEC. 615. LIMITATIONS ON PURCHASES OF ASSETS FROM INSIDERS.
        (a) Amendment to the Federal Deposit Insurance Act.--Section 18 of
    the Federal Deposit Insurance Act (12 U.S.C. 1828) is amended by adding
    at the end the following:
        ``(z) General Prohibition on Sale of Assets.--
            ``(1) In general.--An insured depository institution may not
        purchase an asset from, or sell an asset to, an executive officer,
        director, or principal shareholder of the insured depository
        institution, or any related interest of such person (as such terms
        are defined in section 22(h) of Federal Reserve Act), unless--
                ``(A) the transaction is on market terms; and
                ``(B) if the transaction represents more than 10 percent of
            the capital stock and surplus of the insured depository
            institution, the transaction has been approved in advance by a
            majority of the members of the board of directors of the
            insured depository institution who do not have an interest in
            the transaction.
            ``(2) Rulemaking.--The Board of Governors of the Federal
        Reserve System may issue such rules as may be necessary to define
        terms and to carry out the purposes this subsection. Before
        proposing or adopting a rule under this paragraph, the Board of
        Governors of the Federal Reserve System shall consult with the
        Comptroller of the Currency and the Corporation as to the terms of
        the rule.''.
        (b) Amendments to the Federal Reserve Act.--Section 22(d) of the
    Federal Reserve Act (12 U.S.C. 375) is amended to read as follows:
        ``(d) [Reserved]''.
        (c) Effective Date.--The amendments made by this section shall take
    effect on the transfer date.
        SEC. 616. REGULATIONS REGARDING CAPITAL LEVELS.
        (a) Capital Levels of Bank Holding Companies.--Section 5(b) of the
    Bank Holding Company Act of 1956 (12 U.S.C. 1844(b)) is amended--
            (1) by inserting after ``orders'' the following: ``, including
        regulations and orders relating to the capital requirements for
        bank holding companies,''; and
            (2) by adding at the end the following: ``In establishing
        capital regulations pursuant to this subsection, the Board shall
        seek to make such requirements countercyclical, so that the amount
        of capital required to be maintained by a company increases in
        times of economic expansion and decreases in times of economic
        contraction, consistent with the safety and soundness of the
        company.''.
        (b) Capital Levels of Savings and Loan Holding Companies.--Section
    10(g)(1) of the Home Owners' Loan Act (12 U.S.C. 1467a(g)(1)) is
    amended--
            (1) by inserting after ``orders'' the following: ``, including
        regulations and orders relating to capital requirements for savings
        and loan holding companies,''; and
            (2) by inserting at the end the following: ``In establishing
        capital regulations pursuant to this subsection, the appropriate
        Federal banking agency shall seek to make such requirements
        countercyclical so that the amount of capital required to be
        maintained by a company increases in times of economic expansion
        and decreases in times of economic contraction, consistent with the
        safety and soundness of the company.''.
        (c) Capital Levels of Insured Depository Institutions.--Section
    908(a)(1) of the International Lending Supervision Act of 1983 (12
    U.S.C. 3907(a)(1)) is amended by adding at the end the following:
    ``Each appropriate Federal banking agency shall seek to make the
    capital standards required under this section or other provisions of
    Federal law for insured depository institutions countercyclical so that
    the amount of capital required to be maintained by an insured
    depository institution increases in times of economic expansion and
    decreases in times of economic contraction, consistent with the safety
    and soundness of the insured depository institution.''
        (d) Source of Strength.--The Federal Deposit Insurance Act (12
    U.S.C. 1811 et seq.) is amended by inserting after section 38 (12
    U.S.C. 1831o) the following:
        ``SEC. 38A. SOURCE OF STRENGTH.
        ``(a) Holding Companies.--The appropriate Federal banking agency
    for a bank holding company or savings and loan holding company shall
    require the bank holding company or savings and loan holding company to
    serve as a source of financial strength for any subsidiary of the bank
    holding company or savings and loan holding company that is a
    depository institution.
        ``(b) Other Companies.--If an insured depository institution is not
    the subsidiary of a bank holding company or savings and loan holding
    company, the appropriate Federal banking agency for the insured
    depository institution shall require any company that directly or
    indirectly controls the insured depository institution to serve as a
    source of financial strength for such institution.
        ``(c) Reports.--The appropriate Federal banking agency for an
    insured depository institution described in subsection (b) may, from
    time to time, require the company, or a company that directly or
    indirectly controls the insured depository institution, to submit a
    report, under oath, for the purposes of--
            ``(1) assessing the ability of such company to comply with the
        requirement under subsection (b); and
            ``(2) enforcing the compliance of such company with the
        requirement under subsection (b).
        ``(d) Rules.--Not later than 1 year after the transfer date, as
    defined in section 311 of the Enhancing Financial Institution Safety
    and Soundness Act of 2010, the appropriate Federal banking agencies
    shall jointly issue final rules to carry out this section.
        ``(e) Definition.--In this section, the term `source of financial
    strength' means the ability of a company that directly or indirectly
    owns or controls an insured depository institution to provide financial
    assistance to such insured depository institution in the event of the
    financial distress of the insured depository institution.''.
        (e) Effective Date.--The amendments made by this section shall take
    effect on the transfer date.
        SEC. 617. ELIMINATION OF ELECTIVE INVESTMENT BANK HOLDING COMPANY
          FRAMEWORK.
        (a) Amendment.--Section 17 of the Securities Exchange Act of 1934
    (15 U.S.C. 78q) is amended--
            (1) by striking subsection (i); and
            (2) by redesignating subsections (j) and (k) as subsections (i)
        and (j), respectively.
        (b) Effective Date.--The amendments made by this section shall take
    effect on the transfer date.
        SEC. 618. SECURITIES HOLDING COMPANIES.
        (a) Definitions.--In this section--
            (1) the term ``associated person of a securities holding
        company'' means a person directly or indirectly controlling,
        controlled by, or under common control with, a securities holding
        company;
            (2) the term ``foreign bank'' has the same meaning as in
        section 1(b)(7) of the International Banking Act of 1978 (12 U.S.C.
        3101(7));
            (3) the term ``insured bank'' has the same meaning as in
        section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813);
            (4) the term ``securities holding company''--
                (A) means--
                    (i) a person (other than a natural person) that owns or
                controls 1 or more brokers or dealers registered with the
                Commission; and
                    (ii) the associated persons of a person described in
                clause (i); and
                (B) does not include a person that is--
                    (i) a nonbank financial company supervised by the Board
                under title I;
                    (ii) an insured bank (other than an institution
                described in subparagraphs (D), (F), or (H) of section
                2(c)(2) of the Bank Holding Company Act of 1956 (12 U.S.C.
                1841(c)(2)) or a savings association;
                    (iii) an affiliate of an insured bank (other than an
                institution described in subparagraphs (D), (F), or (H) of
                section 2(c)(2) of the Bank Holding Company Act of 1956 (12
                U.S.C. 1841(c)(2)) or an affiliate of a savings
                association;
                    (iv) a foreign bank, foreign company, or company that
                is described in section 8(a) of the International Banking
                Act of 1978 (12 U.S.C. 3106(a));
                    (v) 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
                    (vi) subject to comprehensive consolidated supervision
                by a foreign regulator;
            (5) the term ``supervised securities holding company'' means a
        securities holding company that is supervised by the Board of
        Governors under this section; and
            (6) the terms ``affiliate'', ``bank'', ``bank holding
        company'', ``company'', ``control'', ``savings association'', and
        ``subsidiary'' have the same meanings as in section 2 of the Bank
        Holding Company Act of 1956.
        (b) Supervision of a Securities Holding Company Not Having a Bank
    or Savings Association Affiliate.--
            (1) In general.--A securities holding company that is required
        by a foreign regulator or provision of foreign law to be subject to
        comprehensive consolidated supervision may register with the Board
        of Governors under paragraph (2) to become a supervised securities
        holding company. Any securities holding company filing such a
        registration shall be supervised in accordance with this section,
        and shall comply with the rules and orders prescribed by the Board
        of Governors applicable to supervised securities holding companies.
            (2) Registration as a supervised securities holding company.--
                (A) Registration.--A securities holding company that elects
            to be subject to comprehensive consolidated supervision shall
            register by filing with the Board of Governors such information
            and documents as the Board of Governors, by regulation, may
            prescribe as necessary or appropriate in furtherance of the
            purposes of this section.
                (B) Effective date.--A securities holding company that
            registers under subparagraph (A) shall be deemed to be a
            supervised securities holding company, effective on the date
            that is 45 days after the date of receipt of the registration
            information and documents under subparagraph (A) by the Board
            of Governors, or within such shorter period as the Board of
            Governors, by rule or order, may determine.
        (c) Supervision of Securities Holding Companies.--
            (1) Recordkeeping and reporting.--
                (A) Recordkeeping and reporting required.--Each supervised
            securities holding company and each affiliate of a supervised
            securities holding company shall make and keep for periods
            determined by the Board of Governors such records, furnish
            copies of such records, and make such reports, as the Board of
            Governors determines to be necessary or appropriate to carry
            out this section, to prevent evasions thereof, and to monitor
            compliance by the supervised securities holding company or
            affiliate with applicable provisions of law.
                (B) Form and contents.--
                    (i) In general.--Any record or report required to be
                made, furnished, or kept under this paragraph shall--

                        (I) be prepared in such form and according to such
                    specifications (including certification by a registered
                    public accounting firm), as the Board of Governors may
                    require; and
                        (II) be provided promptly to the Board of Governors
                    at any time, upon request by the Board of Governors.

                    (ii) Contents.--Records and reports required to be
                made, furnished, or kept under this paragraph may include--

                        (I) a balance sheet or income statement of the
                    supervised securities holding company or an affiliate
                    of a supervised securities holding company;
                        (II) an assessment of the consolidated capital and
                    liquidity of the supervised securities holding company;
                        (III) a report by an independent auditor attesting
                    to the compliance of the supervised securities holding
                    company with the internal risk management and internal
                    control objectives of the supervised securities holding
                    company; and
                        (IV) a report concerning the extent to which the
                    supervised securities holding company or affiliate has
                    complied with the provisions of this section and any
                    regulations prescribed and orders issued under this
                    section.

            (2) Use of existing reports.--
                (A) In general.--The Board of Governors shall, to the
            fullest extent possible, accept reports in fulfillment of the
            requirements of this paragraph that a supervised securities
            holding company or an affiliate of a supervised securities
            holding company has been required to provide to another
            regulatory agency or a self-regulatory organization.
                (B) Availability.--A supervised securities holding company
            or an affiliate of a supervised securities holding company
            shall promptly provide to the Board of Governors, at the
            request of the Board of Governors, any report described in
            subparagraph (A), as permitted by law.
            (3) Examination authority.--
                (A) Focus of examination authority.--The Board of Governors
            may make examinations of any supervised securities holding
            company and any affiliate of a supervised securities holding
            company to carry out this subsection, to prevent evasions
            thereof, and to monitor compliance by the supervised securities
            holding company or affiliate with applicable provisions of law.
                (B) Deference to other examinations.--For purposes of this
            subparagraph, the Board of Governors 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 or any
            institution described in subparagraph (D), (F), or (H) of
            section 2(c)(2) of the Bank Holding Company Act of 1956 (12
            U.S.C. 1841(c)(2)).
        (d) Capital and Risk Management.--
            (1) In general.--The Board of Governors shall, by regulation or
        order, prescribe capital adequacy and other risk management
        standards for supervised securities holding companies that are
        appropriate to protect the safety and soundness of the supervised
        securities holding companies and address the risks posed to
        financial stability by supervised securities holding companies.
            (2) Differentiation.--In imposing standards under this
        subsection, the Board of Governors may differentiate among
        supervised securities holding companies on an individual basis, or
        by category, taking into consideration the requirements under
        paragraph (3).
            (3) Content.--Any standards imposed on a supervised securities
        holding company under this subsection shall take into account--
                (A) the differences among types of business activities
            carried out by the supervised securities holding company;
                (B) the amount and nature of the financial assets of the
            supervised securities holding company;
                (C) the amount and nature of the liabilities of the
            supervised securities holding company, including the degree of
            reliance on short-term funding;
                (D) the extent and nature of the off-balance sheet
            exposures of the supervised securities holding company;
                (E) the extent and nature of the transactions and
            relationships of the supervised securities holding company with
            other financial companies;
                (F) the importance of the supervised securities holding
            company as a source of credit for households, businesses, and
            State and local governments, and as a source of liquidity for
            the financial system; and
                (G) the nature, scope, and mix of the activities of the
            supervised securities holding company.
            (4) Notice.--A capital requirement imposed under this
        subsection may not take effect earlier than 180 days after the date
        on which a supervised securities holding company is provided notice
        of the capital requirement.
        (e) Other Provisions of Law Applicable to Supervised Securities
    Holding Companies.--
            (1) Federal deposit insurance act.--Subsections (b), (c)
        through (s), and (u) of section 8 of the Federal Deposit Insurance
        Act (12 U.S.C. 1818) shall apply to any supervised securities
        holding company, and to any subsidiary (other than a bank or an
        institution described in subparagraph (D), (F), or (H) of section
        2(c)(2) of the Bank Holding Company Act of 1956 (12 U.S.C.
        1841(c)(2))) of a supervised securities holding company, in the
        same manner as such subsections apply to a bank holding company for
        which the Board of Governors is the appropriate Federal banking
        agency. For purposes of applying such subsections to a supervised
        securities holding company or a subsidiary (other than a bank or an
        institution described in subparagraph (D), (F), or (H) of section
        2(c)(2) of the Bank Holding Company Act of 1956 (12 U.S.C.
        1841(c)(2))) of a supervised securities holding company, the Board
        of Governors shall be deemed the appropriate Federal banking agency
        for the supervised securities holding company or subsidiary.
            (2) Bank holding company act of 1956.--Except as the Board of
        Governors 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 a bank holding
        company is subject to such provisions, except that a supervised
        securities holding company may not, by reason of this paragraph, be
        deemed to be a bank holding company for purposes of section 4 of
        the Bank Holding Company Act of 1956 (12 U.S.C. 1843).
        SEC. 619. PROHIBITIONS ON PROPRIETARY TRADING AND CERTAIN
          RELATIONSHIPS WITH HEDGE FUNDS AND PRIVATE EQUITY FUNDS.
        The Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) is
    amended by adding at the end the following:
      ``SEC. 13. PROHIBITIONS ON PROPRIETARY TRADING AND CERTAIN
          RELATIONSHIPS WITH HEDGE FUNDS AND PRIVATE EQUITY FUNDS.
        ``(a) In General.--
            ``(1) Prohibition.--Unless otherwise provided in this section,
        a banking entity shall not--
                ``(A) engage in proprietary trading; or
                ``(B) acquire or retain any equity, partnership, or other
            ownership interest in or sponsor a hedge fund or a private
            equity fund.
            ``(2) Nonbank financial companies supervised by the board.--Any
        nonbank financial company supervised by the Board that engages in
        proprietary trading or takes or retains any equity, partnership, or
        other ownership interest in or sponsors a hedge fund or a private
        equity fund shall be subject, by rule, as provided in subsection
        (b)(2), to additional capital requirements for and additional
        quantitative limits with regards to such proprietary trading and
        taking or retaining any equity, partnership, or other ownership
        interest in or sponsorship of a hedge fund or a private equity
        fund, except that permitted activities as described in subsection
        (d) shall not be subject to the additional capital and additional
        quantitative limits except as provided in subsection (d)(3), as if
        the nonbank financial company supervised by the Board were a
        banking entity.
        ``(b) Study and Rulemaking.--
            ``(1) Study.--Not later than 6 months after the date of
        enactment of this section, the Financial Stability Oversight
        Council shall study and make recommendations on implementing the
        provisions of this section so as to--
                ``(A) promote and enhance the safety and soundness of
            banking entities;
                ``(B) protect taxpayers and consumers and enhance financial
            stability by minimizing the risk that insured depository
            institutions and the affiliates of insured depository
            institutions will engage in unsafe and unsound activities;
                ``(C) limit the inappropriate transfer of Federal subsidies
            from institutions that benefit from deposit insurance and
            liquidity facilities of the Federal Government to unregulated
            entities;
                ``(D) reduce conflicts of interest between the self-
            interest of banking entities and nonbank financial companies
            supervised by the Board, and the interests of the customers of
            such entities and companies;
                ``(E) limit activities that have caused undue risk or loss
            in banking entities and nonbank financial companies supervised
            by the Board, or that might reasonably be expected to create
            undue risk or loss in such banking entities and nonbank
            financial companies supervised by the Board;
                ``(F) appropriately accommodate the business of insurance
            within an insurance company, subject to regulation in
            accordance with the relevant insurance company investment laws,
            while protecting the safety and soundness of any banking entity
            with which such insurance company is affiliated and of the
            United States financial system; and
                ``(G) appropriately time the divestiture of illiquid assets
            that are affected by the implementation of the prohibitions
            under subsection (a).
            ``(2) Rulemaking.--
                ``(A) In general.--Unless otherwise provided in this
            section, not later than 9 months after the completion of the
            study under paragraph (1), the appropriate Federal banking
            agencies, the Securities and Exchange Commission, and the
            Commodity Futures Trading Commission, shall consider the
            findings of the study under paragraph (1) and adopt rules to
            carry out this section, as provided in subparagraph (B).
                ``(B) Coordinated rulemaking.--
                    ``(i) Regulatory authority.--The regulations issued
                under this paragraph shall be issued by--

                        ``(I) the appropriate Federal banking agencies,
                    jointly, with respect to insured depository
                    institutions;
                        ``(II) the Board, with respect to any company that
                    controls an insured depository institution, or that is
                    treated as a bank holding company for purposes of
                    section 8 of the International Banking Act, any nonbank
                    financial company supervised by the Board, and any
                    subsidiary of any of the foregoing (other than a
                    subsidiary for which an agency described in subclause
                    (I), (III), or (IV) is the primary financial regulatory
                    agency);
                        ``(III) the Commodity Futures Trading Commission,
                    with respect to any entity for which the Commodity
                    Futures Trading Commission is the primary financial
                    regulatory agency, as defined in section 2 of the Dodd-
                    Frank Wall Street Reform and Consumer Protection Act;
                    and
                        ``(IV) the Securities and Exchange Commission, with
                    respect to any entity for which the Securities and
                    Exchange Commission is the primary financial regulatory
                    agency, as defined in section 2 of the Dodd-Frank Wall
                    Street Reform and Consumer Protection Act.

                    ``(ii) Coordination, consistency, and comparability.--
                In developing and issuing regulations pursuant to this
                section, the appropriate Federal banking agencies, the
                Securities and Exchange Commission, and the Commodity
                Futures Trading Commission shall consult and coordinate
                with each other, as appropriate, for the purposes of
                assuring, to the extent possible, that such regulations are
                comparable and provide for consistent application and
                implementation of the applicable provisions of this section
                to avoid providing advantages or imposing disadvantages to
                the companies affected by this subsection and to protect
                the safety and soundness of banking entities and nonbank
                financial companies supervised by the Board.
                    ``(iii) Council role.--The Chairperson of the Financial
                Stability Oversight Council shall be responsible for
                coordination of the regulations issued under this section.
        ``(c) Effective Date.--
            ``(1) In general.--Except as provided in paragraphs (2) and
        (3), this section shall take effect on the earlier of--
                ``(A) 12 months after the date of the issuance of final
            rules under subsection (b); or
                ``(B) 2 years after the date of enactment of this section.
            ``(2) Conformance period for divestiture.--A banking entity or
        nonbank financial company supervised by the Board shall bring its
        activities and investments into compliance with the requirements of
        this section not later than 2 years after the date on which the
        requirements become effective pursuant to this section or 2 years
        after the date on which the entity or company becomes a nonbank
        financial company supervised by the Board. The Board may, by rule
        or order, extend this two-year period for not more than one year at
        a time, if, in the judgment of the Board, such an extension is
        consistent with the purposes of this section and would not be
        detrimental to the public interest. The extensions made by the
        Board under the preceding sentence may not exceed an aggregate of 3
        years.
            ``(3) Extended transition for illiquid funds.--
                ``(A) Application.--The Board may, upon the application of
            a banking entity, extend the period during which the banking
            entity, to the extent necessary to fulfill a contractual
            obligation that was in effect on May 1, 2010, may take or
            retain its equity, partnership, or other ownership interest in,
            or otherwise provide additional capital to, an illiquid fund.
                ``(B) Time limit on approval.--The Board may grant 1
            extension under subparagraph (A), which may not exceed 5 years.
            ``(4) Divestiture required.--Except as otherwise provided in
        subsection (d)(1)(G), a banking entity may not engage in any
        activity prohibited under subsection (a)(1)(B) after the earlier
        of--
                ``(A) the date on which the contractual obligation to
            invest in the illiquid fund terminates; and
                ``(B) the date on which any extensions granted by the Board
            under paragraph (3) expire.
            ``(5) Additional capital during transition period.--
        Notwithstanding paragraph (2), on the date on which the rules are
        issued under subsection (b)(2), the appropriate Federal banking
        agencies, the Securities and Exchange Commission, and the Commodity
        Futures Trading Commission shall issue rules, as provided in
        subsection (b)(2), to impose additional capital requirements, and
        any other restrictions, as appropriate, on any equity, partnership,
        or ownership interest in or sponsorship of a hedge fund or private
        equity fund by a banking entity.
            ``(6) Special rulemaking.--Not later than 6 months after the
        date of enactment of this section, the Board shall issues rules to
        implement paragraphs (2) and (3).
        ``(d) Permitted Activities.--
            ``(1) In general.--Notwithstanding the restrictions under
        subsection (a), to the extent permitted by any other provision of
        Federal or State law, and subject to the limitations under
        paragraph (2) and any restrictions or limitations that the
        appropriate Federal banking agencies, the Securities and Exchange
        Commission, and the Commodity Futures Trading Commission, may
        determine, the following activities (in this section referred to as
        `permitted activities') are permitted:
                ``(A) The purchase, sale, acquisition, or disposition of
            obligations of the United States or any agency thereof,
            obligations, participations, or other instruments of or issued
            by the Government National Mortgage Association, the Federal
            National Mortgage Association, the Federal Home Loan Mortgage
            Corporation, a Federal Home Loan Bank, the Federal Agricultural
            Mortgage Corporation, or a Farm Credit System institution
            chartered under and subject to the provisions of the Farm
            Credit Act of 1971 (12 U.S.C. 2001 et seq.), and obligations of
            any State or of any political subdivision thereof.
                ``(B) The purchase, sale, acquisition, or disposition of
            securities and other instruments described in subsection (h)(4)
            in connection with underwriting or market-making-related
            activities, to the extent that any such activities permitted by
            this subparagraph are designed not to exceed the reasonably
            expected near term demands of clients, customers, or
            counterparties.
                ``(C) Risk-mitigating hedging activities in connection with
            and related to individual or aggregated positions, contracts,
            or other holdings of a banking entity that are designed to
            reduce the specific risks to the banking entity in connection
            with and related to such positions, contracts, or other
            holdings.
                ``(D) The purchase, sale, acquisition, or disposition of
            securities and other instruments described in subsection (h)(4)
            on behalf of customers.
                ``(E) Investments in one or more small business investment
            companies, as defined in section 102 of the Small Business
            Investment Act of 1958 (15 U.S.C. 662), investments designed
            primarily to promote the public welfare, of the type permitted
            under paragraph (11) of section 5136 of the Revised Statutes of
            the United States (12 U.S.C. 24), or investments that are
            qualified rehabilitation expenditures with respect to a
            qualified rehabilitated building or certified historic
            structure, as such terms are defined in section 47 of the
            Internal Revenue Code of 1986 or a similar State historic tax
            credit program.
                ``(F) The purchase, sale, acquisition, or disposition of
            securities and other instruments described in subsection (h)(4)
            by a regulated insurance company directly engaged in the
            business of insurance for the general account of the company
            and by any affiliate of such regulated insurance company,
            provided that such activities by any affiliate are solely for
            the general account of the regulated insurance company, if--
                    ``(i) the purchase, sale, acquisition, or disposition
                is conducted in compliance with, and subject to, the
                insurance company investment laws, regulations, and written
                guidance of the State or jurisdiction in which each such
                insurance company is domiciled; and
                    ``(ii) the appropriate Federal banking agencies, after
                consultation with the Financial Stability Oversight Council
                and the relevant insurance commissioners of the States and
                territories of the United States, have not jointly
                determined, after notice and comment, that a particular
                law, regulation, or written guidance described in clause
                (i) is insufficient to protect the safety and soundness of
                the banking entity, or of the financial stability of the
                United States.
                ``(G) Organizing and offering a private equity or hedge
            fund, including serving as a general partner, managing member,
            or trustee of the fund and in any manner selecting or
            controlling (or having employees, officers, directors, or
            agents who constitute) a majority of the directors, trustees,
            or management of the fund, including any necessary expenses for
            the foregoing, only if--
                    ``(i) the banking entity provides bona fide trust,
                fiduciary, or investment advisory services;
                    ``(ii) the fund is organized and offered only in
                connection with the provision of bona fide trust,
                fiduciary, or investment advisory services and only to
                persons that are customers of such services of the banking
                entity;
                    ``(iii) the banking entity does not acquire or retain
                an equity interest, partnership interest, or other
                ownership interest in the funds except for a de minimis
                investment subject to and in compliance with paragraph (4);
                    ``(iv) the banking entity complies with the
                restrictions under paragraphs (1) and (2) of subparagraph
                (f);
                    ``(v) the banking entity does not, directly or
                indirectly, guarantee, assume, or otherwise insure the
                obligations or performance of the hedge fund or private
                equity fund or of any hedge fund or private equity fund in
                which such hedge fund or private equity fund invests;
                    ``(vi) the banking entity does not share with the hedge
                fund or private equity fund, for corporate, marketing,
                promotional, or other purposes, the same name or a
                variation of the same name;
                    ``(vii) no director or employee of the banking entity
                takes or retains an equity interest, partnership interest,
                or other ownership interest in the hedge fund or private
                equity fund, except for any director or employee of the
                banking entity who is directly engaged in providing
                investment advisory or other services to the hedge fund or
                private equity fund; and
                    ``(viii) the banking entity discloses to prospective
                and actual investors in the fund, in writing, that any
                losses in such hedge fund or private equity fund are borne
                solely by investors in the fund and not by the banking
                entity, and otherwise complies with any additional rules of
                the appropriate Federal banking agencies, the Securities
                and Exchange Commission, or the Commodity Futures Trading
                Commission, as provided in subsection (b)(2), designed to
                ensure that losses in such hedge fund or private equity
                fund are borne solely by investors in the fund and not by
                the banking entity.
                ``(H) Proprietary trading conducted by a banking entity
            pursuant to paragraph (9) or (13) of section 4(c), provided
            that the trading occurs solely outside of the United States and
            that the banking entity is not directly or indirectly
            controlled by a banking entity that is organized under the laws
            of the United States or of one or more States.
                ``(I) The acquisition or retention of any equity,
            partnership, or other ownership interest in, or the sponsorship
            of, a hedge fund or a private equity fund by a banking entity
            pursuant to paragraph (9) or (13) of section 4(c) solely
            outside of the United States, provided that no ownership
            interest in such hedge fund or private equity fund is offered
            for sale or sold to a resident of the United States and that
            the banking entity is not directly or indirectly controlled by
            a banking entity that is organized under the laws of the United
            States or of one or more States.
                ``(J) Such other activity as the appropriate Federal
            banking agencies, the Securities and Exchange Commission, and
            the Commodity Futures Trading Commission determine, by rule, as
            provided in subsection (b)(2), would promote and protect the
            safety and soundness of the banking entity and the financial
            stability of the United States.
            ``(2) Limitation on permitted activities.--
                ``(A) In general.--No transaction, class of transactions,
            or activity may be deemed a permitted activity under paragraph
            (1) if the transaction, class of transactions, or activity--
                    ``(i) would involve or result in a material conflict of
                interest (as such term shall be defined by rule as provided
                in subsection (b)(2)) between the banking entity and its
                clients, customers, or counterparties;
                    ``(ii) would result, directly or indirectly, in a
                material exposure by the banking entity to high-risk assets
                or high-risk trading strategies (as such terms shall be
                defined by rule as provided in subsection (b)(2));
                    ``(iii) would pose a threat to the safety and soundness
                of such banking entity; or
                    ``(iv) would pose a threat to the financial stability
                of the United States.
                ``(B) Rulemaking.--The appropriate Federal banking
            agencies, the Securities and Exchange Commission, and the
            Commodity Futures Trading Commission shall issue regulations to
            implement subparagraph (A), as part of the regulations issued
            under subsection (b)(2).
            ``(3) Capital and quantitative limitations.--The appropriate
        Federal banking agencies, the Securities and Exchange Commission,
        and the Commodity Futures Trading Commission shall, as provided in
        subsection (b)(2), adopt rules imposing additional capital
        requirements and quantitative limitations, including
        diversification requirements, regarding the activities permitted
        under this section if the appropriate Federal banking agencies, the
        Securities and Exchange Commission, and the Commodity Futures
        Trading Commission determine that additional capital and
        quantitative limitations are appropriate to protect the safety and
        soundness of banking entities engaged in such activities.
            ``(4) De minimis investment.--
                ``(A) In general.--A banking entity may make and retain an
            investment in a hedge fund or private equity fund that the
            banking entity organizes and offers, subject to the limitations
            and restrictions in subparagraph (B) for the purposes of--
                    ``(i) establishing the fund and providing the fund with
                sufficient initial equity for investment to permit the fund
                to attract unaffiliated investors; or
                    ``(ii) making a de minimis investment.
                ``(B) Limitations and restrictions on investments.--
                    ``(i) Requirement to seek other investors.--A banking
                entity shall actively seek unaffiliated investors to reduce
                or dilute the investment of the banking entity to the
                amount permitted under clause (ii).
                    ``(ii) Limitations on size of investments.--
                Notwithstanding any other provision of law, investments by
                a banking entity in a hedge fund or private equity fund
                shall--

                        ``(I) not later than 1 year after the date of
                    establishment of the fund, be reduced through
                    redemption, sale, or dilution to an amount that is not
                    more than 3 percent of the total ownership interests of
                    the fund;
                        ``(II) be immaterial to the banking entity, as
                    defined, by rule, pursuant to subsection (b)(2), but in
                    no case may the aggregate of all of the interests of
                    the banking entity in all such funds exceed 3 percent
                    of the Tier 1 capital of the banking entity.

                    ``(iii) Capital.--For purposes of determining
                compliance with applicable capital standards under
                paragraph (3), the aggregate amount of the outstanding
                investments by a banking entity under this paragraph,
                including retained earnings, shall be deducted from the
                assets and tangible equity of the banking entity, and the
                amount of the deduction shall increase commensurate with
                the leverage of the hedge fund or private equity fund.
                ``(C) Extension.--Upon an application by a banking entity,
            the Board may extend the period of time to meet the
            requirements under subparagraph (B)(ii)(I) for 2 additional
            years, if the Board finds that an extension would be consistent
            with safety and soundness and in the public interest.
        ``(e) Anti-evasion.--
            ``(1) Rulemaking.--The appropriate Federal banking agencies,
        the Securities and Exchange Commission, and the Commodity Futures
        Trading Commission shall issue regulations, as part of the
        rulemaking provided for in subsection (b)(2), regarding internal
        controls and recordkeeping, in order to insure compliance with this
        section.
            ``(2) Termination of activities or investment.--Notwithstanding
        any other provision of law, whenever an appropriate Federal banking
        agency, the Securities and Exchange Commission, or the Commodity
        Futures Trading Commission, as appropriate, has reasonable cause to
        believe that a banking entity or nonbank financial company
        supervised by the Board under the respective agency's jurisdiction
        has made an investment or engaged in an activity in a manner that
        functions as an evasion of the requirements of this section
        (including through an abuse of any permitted activity) or otherwise
        violates the restrictions under this section, the appropriate
        Federal banking agency, the Securities and Exchange Commission, or
        the Commodity Futures Trading Commission, as appropriate, shall
        order, after due notice and opportunity for hearing, the banking
        entity or nonbank financial company supervised by the Board to
        terminate the activity and, as relevant, dispose of the investment.
        Nothing in this paragraph shall be construed to limit the inherent
        authority of any Federal agency or State regulatory authority to
        further restrict any investments or activities under otherwise
        applicable provisions of law.
        ``(f) Limitations on Relationships With Hedge Funds and Private
    Equity Funds.--
            ``(1) In general.--No banking entity that serves, directly or
        indirectly, as the investment manager, investment adviser, or
        sponsor to a hedge fund or private equity fund, or that organizes
        and offers a hedge fund or private equity fund pursuant to
        paragraph (d)(1)(G), and no affiliate of such entity, may enter
        into a transaction with the fund, or with any other hedge fund or
        private equity fund that is controlled by such fund, that would be
        a covered transaction, as defined in section 23A of the Federal
        Reserve Act (12 U.S.C. 371c), with the hedge fund or private equity
        fund, as if such banking entity and the affiliate thereof were a
        member bank and the hedge fund or private equity fund were an
        affiliate thereof.
            ``(2) Treatment as member bank.--A banking entity that serves,
        directly or indirectly, as the investment manager, investment
        adviser, or sponsor to a hedge fund or private equity fund, or that
        organizes and offers a hedge fund or private equity fund pursuant
        to paragraph (d)(1)(G), shall be subject to section 23B of the
        Federal Reserve Act (12 U.S.C. 371c-1), as if such banking entity
        were a member bank and such hedge fund or private equity fund were
        an affiliate thereof.
            ``(3) Permitted services.--
                ``(A) In general.--Notwithstanding paragraph (1), the Board
            may permit a banking entity to enter into any prime brokerage
            transaction with any hedge fund or private equity fund in which
            a hedge fund or private equity fund managed, sponsored, or
            advised by such banking entity has taken an equity,
            partnership, or other ownership interest, if--
                    ``(i) the banking entity is in compliance with each of
                the limitations set forth in subsection (d)(1)(G) with
                regard to a hedge fund or private equity fund organized and
                offered by such banking entity;
                    ``(ii) the chief executive officer (or equivalent
                officer) of the banking entity certifies in writing
                annually (with a duty to update the certification if the
                information in the certification materially changes) that
                the conditions specified in subsection (d)(1)(g)(v) are
                satisfied; and
                    ``(iii) the Board has determined that such transaction
                is consistent with the safe and sound operation and
                condition of the banking entity.
                ``(B) Treatment of prime brokerage transactions.--For
            purposes of subparagraph (A), a prime brokerage transaction
            described in subparagraph (A) shall be subject to section 23B
            of the Federal Reserve Act (12 U.S.C. 371c-1) as if the
            counterparty were an affiliate of the banking entity.
            ``(4) Application to nonbank financial companies supervised by
        the board.--The appropriate Federal banking agencies, the
        Securities and Exchange Commission, and the Commodity Futures
        Trading Commission shall adopt rules, as provided in subsection
        (b)(2), imposing additional capital charges or other restrictions
        for nonbank financial companies supervised by the Board to address
        the risks to and conflicts of interest of banking entities
        described in paragraphs (1), (2), and (3) of this subsection.
        ``(g) Rules of Construction.--
            ``(1) Limitation on contrary authority.--Except as provided in
        this section, notwithstanding any other provision of law, the
        prohibitions and restrictions under this section shall apply to
        activities of a banking entity or nonbank financial company
        supervised by the Board, even if such activities are authorized for
        a banking entity or nonbank financial company supervised by the
        Board.
            ``(2) Sale or securitization of loans.--Nothing in this section
        shall be construed to limit or restrict the ability of a banking
        entity or nonbank financial company supervised by the Board to sell
        or securitize loans in a manner otherwise permitted by law.
            ``(3) Authority of federal agencies and state regulatory
        authorities.--Nothing in this section shall be construed to limit
        the inherent authority of any Federal agency or State regulatory
        authority under otherwise applicable provisions of law.
        ``(h) Definitions.--In this section, the following definitions
    shall apply:
            ``(1) Banking entity.--The term `banking entity' means any
        insured depository institution (as defined in section 3 of the
        Federal Deposit Insurance Act (12 U.S.C. 1813)), any company that
        controls an insured depository institution, or that is treated as a
        bank holding company for purposes of section 8 of the International
        Banking Act of 1978, and any affiliate or subsidiary of any such
        entity. For purposes of this paragraph, the term `insured
        depository institution' does not include an institution that
        functions solely in a trust or fiduciary capacity, if--
                ``(A) all or substantially all of the deposits of such
            institution are in trust funds and are received in a bona fide
            fiduciary capacity;
                ``(B) no deposits of such institution which are insured by
            the Federal Deposit Insurance Corporation are offered or
            marketed by or through an affiliate of such institution;
                ``(C) such institution does not accept demand deposits or
            deposits that the depositor may withdraw by check or similar
            means for payment to third parties or others or make commercial
            loans; and
                ``(D) such institution does not--
                    ``(i) obtain payment or payment related services from
                any Federal Reserve bank, including any service referred to
                in section 11A of the Federal Reserve Act (12 U.S.C. 248a);
                or
                    ``(ii) exercise discount or borrowing privileges
                pursuant to section 19(b)(7) of the Federal Reserve Act (12
                U.S.C. 461(b)(7)).
            ``(2) Hedge fund; private equity fund.--The terms `hedge fund'
        and `private equity fund' mean an issuer that would be an
        investment company, as defined in the Investment Company Act of
        1940 (15 U.S.C. 80a-1 et seq.), but for section 3(c)(1) or 3(c)(7)
        of that Act, or such similar funds as the appropriate Federal
        banking agencies, the Securities and Exchange Commission, and the
        Commodity Futures Trading Commission may, by rule, as provided in
        subsection (b)(2), determine.
            ``(3) Nonbank financial company supervised by the board.--The
        term `nonbank financial company supervised by the Board' means a
        nonbank financial company supervised by the Board of Governors, as
        defined in section 102 of the Financial Stability Act of 2010.
            ``(4) Proprietary trading.--The term `proprietary trading',
        when used with respect to a banking entity or nonbank financial
        company supervised by the Board, means engaging as a principal for
        the trading account of the banking entity or nonbank financial
        company supervised by the Board in any transaction to purchase or
        sell, or otherwise acquire or dispose of, any security, any
        derivative, any contract of sale of a commodity for future
        delivery, any option on any such security, derivative, or contract,
        or any other security or financial instrument that the appropriate
        Federal banking agencies, the Securities and Exchange Commission,
        and the Commodity Futures Trading Commission may, by rule as
        provided in subsection (b)(2), determine.
            ``(5) Sponsor.--The term to `sponsor' a fund means--
                ``(A) to serve as a general partner, managing member, or
            trustee of a fund;
                ``(B) in any manner to select or to control (or to have
            employees, officers, or directors, or agents who constitute) a
            majority of the directors, trustees, or management of a fund;
            or
                ``(C) to share with a fund, for corporate, marketing,
            promotional, or other purposes, the same name or a variation of
            the same name.
            ``(6) Trading account.--The term `trading account' means any
        account used for acquiring or taking positions in the securities
        and instruments described in paragraph (4) principally for the
        purpose of selling in the near term (or otherwise with the intent
        to resell in order to profit from short-term price movements), and
        any such other accounts as the appropriate Federal banking
        agencies, the Securities and Exchange Commission, and the Commodity
        Futures Trading Commission may, by rule as provided in subsection
        (b)(2), determine.
            ``(7) Illiquid fund.--
                ``(A) In general.--The term `illiquid fund' means a hedge
            fund or private equity fund that--
                    ``(i) as of May 1, 2010, was principally invested in,
                or was invested and contractually committed to principally
                invest in, illiquid assets, such as portfolio companies,
                real estate investments, and venture capital investments;
                and
                    ``(ii) makes all investments pursuant to, and
                consistent with, an investment strategy to principally
                invest in illiquid assets. In issuing rules regarding this
                subparagraph, the Board shall take into consideration the
                terms of investment for the hedge fund or private equity
                fund, including contractual obligations, the ability of the
                fund to divest of assets held by the fund, and any other
                factors that the Board determines are appropriate.
                ``(B) Hedge fund.--For the purposes of this paragraph, the
            term `hedge fund' means any fund identified under subsection
            (h)(2), and does not include a private equity fund, as such
            term is used in section 203(m) of the Investment Advisers Act
            of 1940 (15 U.S.C. 80b-3(m)).''.
        SEC. 620. STUDY OF BANK INVESTMENT ACTIVITIES.
        (a) Study.--
            (1) In general.--Not later than 18 months after the date of
        enactment of this Act, the appropriate Federal banking agencies
        shall jointly review and prepare a report on the activities that a
        banking entity, as such term is defined in the Bank Holding Company
        Act of 1956 (12 U.S.C. 1841 et. seq.), may engage in under Federal
        and State law, including activities authorized by statute and by
        order, interpretation and guidance.
            (2) Content.--In carrying out the study under paragraph (1),
        the appropriate Federal banking agencies shall review and
        consider--
                (A) the type of activities or investments;
                (B) any financial, operational, managerial, or reputation
            risks associated with or presented as a result of the banking
            entity engaged in the activity or making the investment; and
                (C) risk mitigation activities undertaken by the banking
            entity with regard to the risks.
        (b) Report and Recommendations to the Council and to Congress.--The
    appropriate Federal banking agencies shall submit to the Council, the
    Committee on Financial Services of the House of Representatives, and
    the Committee on Banking, Housing, and Urban Affairs of the Senate the
    study conducted pursuant to subsection (a) no later than 2 months after
    its completion. In addition to the information described in subsection
    (a), the report shall include recommendations regarding--
            (1) whether each activity or investment has or could have a
        negative effect on the safety and soundness of the banking entity
        or the United States financial system;
            (2) the appropriateness of the conduct of each activity or type
        of investment by banking entities; and
            (3) additional restrictions as may be necessary to address
        risks to safety and soundness arising from the activities or types
        of investments described in subsection (a).
        SEC. 621. CONFLICTS OF INTEREST.
        (a) In General.--The Securities Act of 1933 (15 U.S.C. 77a et seq.)
    is amended by inserting after section 27A the following:
        ``SEC. 27B. CONFLICTS OF INTEREST RELATING TO CERTAIN
          SECURITIZATIONS.
        ``(a) In General.--An underwriter, placement agent, initial
    purchaser, or sponsor, or any affiliate or subsidiary of any such
    entity, of an asset-backed security (as such term is defined in section
    3 of the Securities and Exchange Act of 1934 (15 U.S.C. 78c), which for
    the purposes of this section shall include a synthetic asset-backed
    security), shall not, at any time for a period ending on the date that
    is one year after the date of the first closing of the sale of the
    asset-backed security, engage in any transaction that would involve or
    result in any material conflict of interest with respect to any
    investor in a transaction arising out of such activity.
        ``(b) Rulemaking.--Not later than 270 days after the date of
    enactment of this section, the Commission shall issue rules for the
    purpose of implementing subsection (a).
        ``(c) Exception.--The prohibitions of subsection (a) shall not
    apply to--
            ``(1) risk-mitigating hedging activities in connection with
        positions or holdings arising out of the underwriting, placement,
        initial purchase, or sponsorship of an asset-backed security,
        provided that such activities are designed to reduce the specific
        risks to the underwriter, placement agent, initial purchaser, or
        sponsor associated with positions or holdings arising out of such
        underwriting, placement, initial purchase, or sponsorship; or
            ``(2) purchases or sales of asset-backed securities made
        pursuant to and consistent with--
                ``(A) commitments of the underwriter, placement agent,
            initial purchaser, or sponsor, or any affiliate or subsidiary
            of any such entity, to provide liquidity for the asset-backed
            security, or
                ``(B) bona fide market-making in the asset backed security.
        ``(d) Rule of Construction.--This subsection shall not otherwise
    limit the application of section 15G of the Securities Exchange Act of
    1934.''.
        (b) Effective Date.--Section 27B of the Securities Act of 1933, as
    added by this section, shall take effect on the effective date of final
    rules issued by the Commission under subsection (b) of such section
    27B, except that subsections (b) and (d) of such section 27B shall take
    effect on the date of enactment of this Act.
        SEC. 622. CONCENTRATION LIMITS ON LARGE FINANCIAL FIRMS.
        The Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) is
    amended by adding at the end the following:
      ``SEC. 14. CONCENTRATION LIMITS ON LARGE FINANCIAL FIRMS.
        ``(a) Definitions.--In this section--
            ``(1) the term `Council' means the Financial Stability
        Oversight Council;
            ``(2) the term `financial company' means--
                ``(A) an insured depository institution;
                ``(B) a bank holding company;
                ``(C) a savings and loan holding company;
                ``(D) a company that controls an insured depository
            institution;
                ``(E) a nonbank financial company supervised by the Board
            under title I of the Dodd-Frank Wall Street Reform and Consumer
            Protection Act; and
                ``(F) a foreign bank or company that is treated as a bank
            holding company for purposes of this Act; and
            ``(3) the term `liabilities' means--
                ``(A) with respect to a United States financial company--
                    ``(i) the total risk-weighted assets of the financial
                company, as determined under the risk-based capital rules
                applicable to bank holding companies, as adjusted to
                reflect exposures that are deducted from regulatory
                capital; less
                    ``(ii) the total regulatory capital of the financial
                company under the risk-based capital rules applicable to
                bank holding companies;
                ``(B) with respect to a foreign-based financial company--
                    ``(i) the total risk-weighted assets of the United
                States operations of the financial company, as determined
                under the applicable risk-based capital rules, as adjusted
                to reflect exposures that are deducted from regulatory
                capital; less
                    ``(ii) the total regulatory capital of the United
                States operations of the financial company, as determined
                under the applicable risk-based capital rules; and
                ``(C) with respect to an insurance company or other nonbank
            financial company supervised by the Board, such assets of the
            company as the Board shall specify by rule, in order to provide
            for consistent and equitable treatment of such companies.
        ``(b) Concentration Limit.--Subject to the recommendations by the
    Council under subsection (e), a financial company may not merge or
    consolidate with, acquire all or substantially all of the assets of, or
    otherwise acquire control of, another company, if the total
    consolidated liabilities of the acquiring financial company upon
    consummation of the transaction would exceed 10 percent of the
    aggregate consolidated liabilities of all financial companies at the
    end of the calendar year preceding the transaction.
        ``(c) Exception to Concentration Limit.--With the prior written
    consent of the Board, the concentration limit under subsection (b)
    shall not apply to an acquisition--
            ``(1) of a bank in default or in danger of default;
            ``(2) with respect to which assistance is provided by the
        Federal Deposit Insurance Corporation under section 13(c) of the
        Federal Deposit Insurance Act (12 U.S.C. 1823(c)); or
            ``(3) that would result only in a de minimis increase in the
        liabilities of the financial company.
        ``(d) Rulemaking and Guidance.--The Board shall issue regulations
    implementing this section in accordance with the recommendations of the
    Council under subsection (e), including the definition of terms, as
    necessary. The Board may issue interpretations or guidance regarding
    the application of this section to an individual financial company or
    to financial companies in general.
        ``(e) Council Study and Rulemaking.--
            ``(1) Study and recommendations.--Not later than 6 months after
        the date of enactment of this section, the Council shall--
                ``(A) complete a study of the extent to which the
            concentration limit under this section would affect financial
            stability, moral hazard in the financial system, the efficiency
            and competitiveness of United States financial firms and
            financial markets, and the cost and availability of credit and
            other financial services to households and businesses in the
            United States; and
                ``(B) make recommendations regarding any modifications to
            the concentration limit that the Council determines would more
            effectively implement this section.
            ``(2) Rulemaking.--Not later than 9 months after the date of
        completion of the study under paragraph (1), and notwithstanding
        subsections (b) and (d), the Board shall issue final regulations
        implementing this section, which shall reflect any recommendations
        by the Council under paragraph (1)(B).''.
        SEC. 623. INTERSTATE MERGER TRANSACTIONS.
        (a) Interstate Merger Transactions.--Section 18(c) of the Federal
    Deposit Insurance Act (12 U.S.C. 1828(c)) is amended by adding at the
    end the following:
        ``(13)(A) Except as provided in subparagraph (B), 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.
        ``(B) Subparagraph (A) shall not apply to an interstate merger
    transaction that involves 1 or more insured depository institutions in
    default or in danger of default, or with respect to which the
    Corporation provides assistance under section 13.
        ``(C) In this paragraph--
            ``(i) the term `interstate merger transaction' means a merger
        transaction involving 2 or more insured depository institutions
        that have different home States and that are not affiliates; and
            ``(ii) the term `home State' means--
                ``(I) with respect to a national bank, the State in which
            the main office of the bank is located;
                ``(II) with respect to a State bank or State savings
            association, the State by which the State bank or State savings
            association is chartered; and
                ``(III) with respect to a Federal savings association, the
            State in which the home office (as defined by the regulations
            of the Director of the Office of Thrift Supervision, or, on and
            after the transfer date, the Comptroller of the Currency) of
            the Federal savings association is located.''.
        (b) Acquisitions by Bank Holding Companies.--
            (1) In general.--Section 4 of the Bank Holding Company Act of
        1956 (12 U.S.C. 1843) is amended--
                (A) in subsection (i), by adding at the end the following:
            ``(8) Interstate acquisitions.--
                ``(A) In general.--The Board may not approve an application
            by a bank holding company to acquire an insured depository
            institution under subsection (c)(8) or any other provision of
            this Act if--
                    ``(i) the home State of such insured depository
                institution is a State other than the home State of the
                bank holding company; and
                    ``(ii) the applicant (including all insured depository
                institutions which are affiliates of the applicant)
                controls, or 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.
                ``(B) Exception.--Subparagraph (A) shall not apply to an
            acquisition that involves an insured depository institution in
            default or in danger of default, or with respect to which the
            Federal Deposit Insurance Corporation provides assistance under
            section 13 of the Federal Deposit Insurance Act (12 U.S.C.
            1823).''; and
                (B) in subsection (k)(6)(B), by striking ``savings
            association'' and inserting ``insured depository institution''.
            (2) Definitions.--Section 2(o)(4) of the Bank Holding Company
        Act of 1956 (12 U.S.C. 1841(o)(4)) is amended--
                (A) in subparagraph (B), by striking ``and'' at the end;
                (B) in subparagraph (C)(ii), by striking the period at the
            end and inserting a semicolon; and
                (C) by adding at the end the following:
                ``(D) with respect to a State savings association, the
            State by which the savings association is chartered; and
                ``(E) with respect to a Federal savings association, the
            State in which the home office (as defined by the regulations
            of the Director of the Office of Thrift Supervision, or, on and
            after the transfer date, the Comptroller of the Currency) of
            the Federal savings association is located.''.
        (c) Acquisitions by Savings and Loan Holding Companies.--Section
    10(e)(2) of the Home Owners' Loan Act (12 U.S.C. 1467a(e)(2)) is
    amended--
            (1) in paragraph (2)--
                (A) in subparagraph (C), by striking ``or'' at the end;
                (B) in subparagraph (D), by striking the period at the end
            and inserting ``, or''; and
                (C) by adding at the end the following:
                ``(E) in the case of an application by a savings and loan
            holding company to acquire an insured depository institution,
            if--
                    ``(i) the home State of the insured depository
                institution is a State other than the home State of the
                savings and loan holding company;
                    ``(ii) the applicant (including all insured depository
                institutions which are affiliates of the applicant)
                controls, or 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; and
                    ``(iii) the acquisition does not involve an insured
                depository institution in default or in danger of default,
                or with respect to which the Federal Deposit Insurance
                Corporation provides assistance under section 13 of the
                Federal Deposit Insurance Act (12 U.S.C. 1823).''; and
            (2) by adding at the end the following:
            ``(7) Definitions.--For purposes of paragraph (2)(E)--
                ``(A) the terms `default', `in danger of default', and
            `insured depository institution' have the same meanings as in
            section 3 of the Federal Deposit Insurance Act (12 U.S.C.
            1813); and
                ``(B) the term `home State' means--
                    ``(i) with respect to a national bank, the State in
                which the main office of the bank is located;
                    ``(ii) with respect to a State bank or State savings
                association, the State by which the savings association is
                chartered;
                    ``(iii) with respect to a Federal savings association,
                the State in which the home office (as defined by the
                regulations of the Director of the Office of Thrift
                Supervision, or, on and after the transfer date, the
                Comptroller of the Currency) of the Federal savings
                association is located; and
                    ``(iv) with respect to a savings and loan holding
                company, the State in which the amount of total deposits of
                all insured depository institution subsidiaries of such
                company was the greatest on the date on which the company
                became a savings and loan holding company.''.
        SEC. 624. QUALIFIED THRIFT LENDERS.
        Section 10(m)(3) of the Home Owners' Loan Act (12 U.S.C.
    1467a(m)(3)) is amended--
            (1) by striking subparagraph (A) and inserting the following:
                ``(A) In general.--A savings association that fails to
            become or remain a qualified thrift lender shall immediately be
            subject to the restrictions under subparagraph (B).''; and
            (2) in subparagraph (B)(i), by striking subclause (III) and
        inserting the following:

                        ``(III) Dividends.--The savings association may not
                    pay dividends, except for dividends that--

                            ``(aa) would be permissible for a national
                        bank;
                            ``(bb) are necessary to meet obligations of a
                        company that controls such savings association; and
                            ``(cc) are specifically approved by the
                        Comptroller of the Currency and the Board after a
                        written request submitted to the Comptroller of the
                        Currency and the Board by the savings association
                        not later than 30 days before the date of the
                        proposed payment.

                        ``(IV) Regulatory authority.--A savings association
                    that fails to become or remain a qualified thrift
                    lender shall be deemed to have violated section 5 of
                    the Home Owners' Loan Act (12 U.S.C. 1464) and subject
                    to actions authorized by section 5(d) of the Home
                    Owners' Loan Act (12 U.S.C. 1464(d)).''.

        SEC. 625. TREATMENT OF DIVIDENDS BY CERTAIN MUTUAL HOLDING
          COMPANIES.
        (a) In General.--Section 10(o) of the Home Owners' Loan Act (12
    U.S.C. 1467a(o) is amended by adding at the end the following:
            ``(11) Dividends.--
                ``(A) Declaration of dividends.--
                    ``(i) Advance notice required.--Each subsidiary of a
                mutual holding company that is a savings association shall
                give the appropriate Federal banking agency and the Board
                notice not later than 30 days before the date of a proposed
                declaration by the board of directors of the savings
                association of any dividend on the guaranty, permanent, or
                other nonwithdrawable stock of the savings association.
                    ``(ii) Invalid dividends.--Any dividend described in
                clause (i) that is declared without giving notice to the
                appropriate Federal banking agency and the Board under
                clause (i), or that is declared during the 30-day period
                preceding the date of a proposed declaration for which
                notice is given to the appropriate Federal banking agency
                and the Board under clause (i), shall be invalid and shall
                confer no rights or benefits upon the holder of any such
                stock.
                ``(B) Waiver of dividends.--A mutual holding company may
            waive the right to receive any dividend declared by a
            subsidiary of the mutual holding company, if--
                    ``(i) 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
                    ``(ii) the mutual holding company gives written notice
                to the Board of the intent of the mutual holding company to
                waive the right to receive dividends, not later than 30
                days before the date of the proposed date of payment of the
                dividend, and the Board does not object to the waiver.
                ``(C) Resolution included in waiver notice.--A notice of a
            waiver under subparagraph (B) shall include a copy of the
            resolution of the board of directors of the mutual holding
            company, in such form and substance as the Board may determine,
            together with any supporting materials relied upon by the board
            of directors of the mutual holding company, concluding that the
            proposed dividend waiver is consistent with the fiduciary
            duties of the board of directors to the mutual members of the
            mutual holding company.
                ``(D) Standards for waiver of dividend.--The Board may not
            object to a waiver of dividends under subparagraph (B) if--
                    ``(i) the waiver would not be detrimental to the safe
                and sound operation of the savings association;
                    ``(ii) 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
                fiduciary duties of the board of directors to the mutual
                members of the mutual holding company; and
                    ``(iii) the mutual holding company has, prior to
                December 1, 2009--

                        ``(I) reorganized into a mutual holding company
                    under subsection (o);
                        ``(II) issued minority stock either from its mid-
                    tier stock holding company or its subsidiary stock
                    savings association; and
                        ``(III) waived dividends it had a right to receive
                    from the subsidiary stock savings association.

                ``(E) Valuation.--
                    ``(i) In general.--The appropriate Federal banking
                agency shall consider waived dividends in determining an
                appropriate exchange ratio in the event of a full
                conversion to stock form.
                    ``(ii) Exception.--In the case of a savings association
                that has reorganized into a mutual holding company, has
                issued minority stock from a mid-tier stock holding company
                or a subsidiary stock savings association of the mutual
                holding company, and has waived dividends it had a right to
                receive from a subsidiary savings association before
                December 1, 2009, the appropriate Federal banking agency
                shall not consider waived dividends in determining an
                appropriate exchange ratio in the event of a full
                conversion to stock form.''.
        (b) Effective Date.--The amendment made by subsection (a) shall
    take effect on the transfer date.
        SEC. 626. INTERMEDIATE HOLDING COMPANIES.
        The Home Owners' Loan Act (12 U.S.C. 1461 et seq.) is amended by
    inserting after section 10 (12 U.S.C. 1467a) the following new section:
        ``SEC. 10A. INTERMEDIATE HOLDING COMPANIES.
        ``(a) Definition.--For purposes of this section:
            ``(1) Financial activities.--The term `financial activities'
        means activities described in clauses (i) and (ii) of section
        10(c)(9)(A).
            ``(2) Grandfathered unitary savings and loan holding company.--
        The term `grandfathered unitary savings and loan holding company'
        means a company described in section 10(c)(9)(C).
            ``(3) Internal financial activities.--The term `internal
        financial activities' includes--
                ``(A) internal financial activities conducted by a
            grandfathered savings and loan holding company or any
            affiliate; and
                ``(B) internal treasury, investment, and employee benefit
            functions.
        ``(b) Requirement.--
            ``(1) In general.--
                ``(A) Activities other than financial activities.--If a
            grandfathered unitary savings and loan holding company conducts
            activities other than financial activities, the Board may
            require such company to establish and conduct all or a portion
            of such financial activities in or through an intermediate
            holding company, which shall be a savings and loan holding
            company, established pursuant to regulations of the Board, not
            later than 90 days (or such longer period as the Board may deem
            appropriate) after the transfer date.
                ``(B) Other activities.--Notwithstanding subparagraph (A),
            the Board shall require a grandfathered unitary savings and
            loan holding company to establish an intermediate holding
            company if the Board makes a determination that the
            establishment of such intermediate holding company is
            necessary--
                    ``(i) to appropriately supervise activities that are
                determined to be financial activities; or
                    ``(ii) to ensure that supervision by the Board does not
                extend to the activities of such company that are not
                financial activities.
            ``(2) Internal financial activities.--
                ``(A) Treatment of internal financial activities.--For
            purposes of this subsection, the internal financial activities
            of a grandfathered unitary savings and loan holding company
            shall not be required to be placed in an intermediate holding
            company.
                ``(B) Grandfathered activities.--A grandfathered unitary
            savings and loan holding company may continue to engage in an
            internal financial activity, subject to review by the Board to
            determine whether engaging in such activity presents undue risk
            to the grandfathered unitary savings and loan holding company
            or to the financial stability of the United States, if--
                    ``(i) the grandfathered unitary savings and loan
                holding company engaged in the activity during the year
                before the date of enactment of this section; and
                    ``(ii) at least \2/3\ of the assets or \2/3\ of the
                revenues generated from the activity are from or
                attributable to the grandfathered unitary savings and loan
                holding company.
            ``(3) Source of strength.--A grandfathered unitary savings and
        loan holding company that directly or indirectly controls an
        intermediate holding company established under this section shall
        serve as a source of strength to its subsidiary intermediate
        holding company.
            ``(4) Parent company reports.--The Board, may from time to
        time, examine and require reports under oath from a grandfathered
        unitary savings and loan holding company that controls an
        intermediate holding company, and from the appropriate officers or
        directors of such company, solely for purposes of ensuring
        compliance with the provisions of this section, including assessing
        the ability of the company to serve as a source of strength to its
        subsidiary intermediate holding company as required under paragraph
        (3) and enforcing compliance with such requirement.
            ``(5) Limited parent company enforcement.--
                ``(A) In general.--In addition to any other authority of
            the Board, the Board may enforce compliance with the provisions
            of this subsection that are applicable to any company described
            in paragraph (1)(A) that controls an intermediate holding
            company under section 8 of the Federal Deposit Insurance Act,
            and a company described in paragraph (1)(A) shall be subject to
            such section (solely for purposes of this subparagraph) in the
            same manner and to the same extent as if the company described
            in paragraph (1)(A) were a savings and loan holding company.
                ``(B) Application of other act.--Any violation of this
            subsection by a grandfathered unitary savings and loan holding
            company that controls an intermediate holding company may also
            be treated as a violation of the Federal Deposit Insurance Act
            for purposes of subparagraph (A).
                ``(C) No effect on other authority.--No provision of this
            paragraph shall be construed as limiting any authority of the
            Board or any other Federal agency under any other provision of
            law.
        ``(c) Regulations.--The Board--
            ``(1) shall promulgate regulations to establish the criteria
        for determining whether to require a grandfathered unitary savings
        and loan holding company to establish an intermediate holding
        company under subsection (b); and
            ``(2) may promulgate regulations to establish any restrictions
        or limitations on transactions between an intermediate holding
        company or a parent of such company and its affiliates, as
        necessary to prevent unsafe and unsound practices in connection
        with transactions between the intermediate holding company, or any
        subsidiary thereof, and its parent company or affiliates that are
        not subsidiaries of the intermediate holding company, except that
        such regulations shall not restrict or limit any transaction in
        connection with the bona fide acquisition or lease by an
        unaffiliated person of assets, goods, or services.
        ``(d) Rules of Construction.--
            ``(1) Activities.--Nothing in this section shall be construed
        to require a grandfathered unitary savings and loan holding company
        to conform its activities to permissible activities.
            ``(2) Permissible corporate reorganization.--The formation of
        an intermediate holding company as required in subsection (b) shall
        be presumed to be a permissible corporate reorganization as
        described in section 10(c)(9)(D).''.
        SEC. 627. INTEREST-BEARING TRANSACTION ACCOUNTS AUTHORIZED.
        (a) Repeal of Prohibition on Payment of Interest on Demand
    Deposits.--
            (1) Federal reserve act.--Section 19(i) of the Federal Reserve
        Act (12 U.S.C. 371a) is amended to read as follows:
        ``(i) [Repealed]''.
            (2) Home owners' loan act.--The first sentence of section
        5(b)(1)(B) of the Home Owners' Loan Act (12 U.S.C. 1464(b)(1)(B))
        is amended by striking ``savings association may not--'' and all
        that follows through ``(ii) permit any'' and inserting ``savings
        association may not permit any''.
            (3) Federal deposit insurance act.--Section 18(g) of the
        Federal Deposit Insurance Act (12 U.S.C. 1828(g)) is amended to
        read as follows:
        ``(g) [Repealed]''.
        (b) Effective Date.--The amendments made by subsection (a) shall
    take effect 1 year after the date of the enactment of this Act.
        SEC. 628. CREDIT CARD BANK SMALL BUSINESS LENDING.
        Section 2(c)(2)(F)(v) of the Bank Holding Company Act of 1956 (12
    U.S.C. 1841(c)(2)(F)(v)) is amended by inserting before the period the
    following: ``, other than credit card loans that 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''.

             TITLE VII--WALL STREET TRANSPARENCY AND ACCOUNTABILITY

        SEC. 701. SHORT TITLE.
        This title may be cited as the ``Wall Street Transparency and
    Accountability Act of 2010''.

            Subtitle A--Regulation of Over-the-Counter Swaps Markets

                          PART I--REGULATORY AUTHORITY

        SEC. 711. DEFINITIONS.
        In this subtitle, the terms ``prudential regulator'', ``swap'',
    ``swap dealer'', ``major swap participant'', ``swap data repository'',
    ``associated person of a swap dealer or major swap participant'',
    ``eligible contract participant'', ``swap execution facility'',
    ``security-based swap'', ``security-based swap dealer'', ``major
    security-based swap participant'', and ``associated person of a
    security-based swap dealer or major security-based swap participant''
    have the meanings given the terms in section 1a of the Commodity
    Exchange Act (7 U.S.C. 1a), including any modification of the meanings
    under section 721(b) of this Act.
        SEC. 712. REVIEW OF REGULATORY AUTHORITY.
        (a) Consultation.--
            (1) Commodity futures trading commission.--Before commencing
        any rulemaking or issuing an order regarding swaps, swap dealers,
        major swap participants, swap data repositories, derivative
        clearing organizations with regard to swaps, persons associated
        with a swap dealer or major swap participant, eligible contract
        participants, or swap execution facilities pursuant to this
        subtitle, the Commodity Futures Trading Commission shall consult
        and coordinate to the extent possible with the Securities and
        Exchange Commission and the prudential regulators for the purposes
        of assuring regulatory consistency and comparability, to the extent
        possible.
            (2) Securities and exchange commission.--Before commencing any
        rulemaking or issuing an order regarding security-based swaps,
        security-based swap dealers, major security-based swap
        participants, security-based swap data repositories, clearing
        agencies with regard to security-based swaps, persons associated
        with a security-based swap dealer or major security-based swap
        participant, eligible contract participants with regard to
        security-based swaps, or security-based swap execution facilities
        pursuant to subtitle B, the Securities and Exchange Commission
        shall consult and coordinate to the extent possible with the
        Commodity Futures Trading Commission and the prudential regulators
        for the purposes of assuring regulatory consistency and
        comparability, to the extent possible.
            (3) Procedures and deadline.--Such regulations shall be
        prescribed in accordance with applicable requirements of title 5,
        United States Code, and shall be issued in final form not later
        than 360 days after the date of enactment of this Act.
            (4) Applicability.--The requirements of paragraphs (1) and (2)
        shall not apply to an order issued--
                (A) in connection with or arising from a violation or
            potential violation of any provision of the Commodity Exchange
            Act (7 U.S.C. 1 et seq.);
                (B) in connection with or arising from a violation or
            potential violation of any provision of the securities laws; or
                (C) in any proceeding that is conducted on the record in
            accordance with sections 556 and 557 of title 5, United States
            Code.
            (5) Effect.--Nothing in this subsection authorizes any
        consultation or procedure for consultation that is not consistent
        with the requirements of subchapter II of chapter 5, and chapter 7,
        of title 5, United States Code (commonly known as the
        ``Administrative Procedure Act'').
            (6) Rules; orders.--In developing and promulgating rules or
        orders pursuant to this subsection, each Commission shall consider
        the views of the prudential regulators.
            (7) Treatment of similar products and entities.--
                (A) In general.--In adopting rules and orders under this
            subsection, the Commodity Futures Trading Commission and the
            Securities and Exchange Commission shall treat functionally or
            economically similar products or entities described in
            paragraphs (1) and (2) in a similar manner.
                (B) Effect.--Nothing in this subtitle requires the
            Commodity Futures Trading Commission or the Securities and
            Exchange Commission to adopt joint rules or orders that treat
            functionally or economically similar products or entities
            described in paragraphs (1) and (2) in an identical manner.
            (8) Mixed swaps.--The Commodity Futures Trading Commission and
        the Securities and Exchange Commission, after consultation with the
        Board of Governors, shall jointly prescribe such regulations
        regarding mixed swaps, as described in section 1a(47)(D) of the
        Commodity Exchange Act (7 U.S.C. 1a(47)(D)) and in section
        3(a)(68)(D) of the Securities Exchange Act of 1934 (15 U.S.C.
        78c(a)(68)(D)), as may be necessary to carry out the purposes of
        this title.
        (b) Limitation.--
            (1) Commodity futures trading commission.--Nothing in this
        title, unless specifically provided, confers jurisdiction on the
        Commodity Futures Trading Commission to issue a rule, regulation,
        or order providing for oversight or regulation of--
                (A) security-based swaps; or
                (B) with regard to its activities or functions concerning
            security-based swaps--
                    (i) security-based swap dealers;
                    (ii) major security-based swap participants;
                    (iii) security-based swap data repositories;
                    (iv) associated persons of a security-based swap dealer
                or major security-based swap participant;
                    (v) eligible contract participants with respect to
                security-based swaps; or
                    (vi) swap execution facilities with respect to
                security-based swaps.
            (2) Securities and exchange commission.--Nothing in this title,
        unless specifically provided, confers jurisdiction on the
        Securities and Exchange Commission or State securities regulators
        to issue a rule, regulation, or order providing for oversight or
        regulation of--
                (A) swaps; or
                (B) with regard to its activities or functions concerning
            swaps--
                    (i) swap dealers;
                    (ii) major swap participants;
                    (iii) swap data repositories;
                    (iv) persons associated with a swap dealer or major
                swap participant;
                    (v) eligible contract participants with respect to
                swaps; or
                    (vi) swap execution facilities with respect to swaps.
            (3) Prohibition on certain futures associations and national
        securities associations.--
                (A) Futures associations.--Notwithstanding any other
            provision of law (including regulations), unless otherwise
            authorized by this title, no futures association registered
            under section 17 of the Commodity Exchange Act (7 U.S.C. 21)
            may issue a rule, regulation, or order for the oversight or
            regulation of, or otherwise assert jurisdiction over, for any
            purpose, any security-based swap, except that this subparagraph
            shall not limit the authority of a registered futures
            association to examine for compliance with, and enforce, its
            rules on capital adequacy.
                (B) National securities associations.--Notwithstanding any
            other provision of law (including regulations), unless
            otherwise authorized by this title, no national securities
            association registered under section 15A of the Securities
            Exchange Act of 1934 (15 U.S.C. 78o-3) may issue a rule,
            regulation, or order for the oversight or regulation of, or
            otherwise assert jurisdiction over, for any purpose, any swap,
            except that this subparagraph shall not limit the authority of
            a national securities association to examine for compliance
            with, and enforce, its rules on capital adequacy.
        (c) Objection to Commission Regulation.--
            (1) Filing of petition for review.--
                (A) In general.--If either Commission referred to in this
            section determines that a final rule, regulation, or order of
            the other Commission conflicts with subsection (a)(7) or (b),
            then the complaining Commission may obtain review of the final
            rule, regulation, or order 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.
                (B) Expedited proceeding.--A proceeding described in
            subparagraph (A) shall be expedited by the United States Court
            of Appeals for the District of Columbia Circuit.
            (2) Transmittal of petition and record.--
                (A) In general.--A copy of a petition described in
            paragraph (1) shall be transmitted not later than 1 business
            day after the date of filing by the complaining Commission to
            the Secretary of the responding Commission.
                (B) Duty of responding commission.--On receipt of the copy
            of a petition described in paragraph (1), the responding
            Commission shall file with the United States Court of Appeals
            for the District of Columbia Circuit--
                    (i) a copy of the rule, regulation, or order under
                review (including any documents referred to therein); and
                    (ii) any other materials prescribed by the United
                States Court of Appeals for the District of Columbia
                Circuit.
            (3) Standard of review.--The United States Court of Appeals for
        the District of Columbia Circuit shall--
                (A) give deference to the views of neither Commission; and
                (B) 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)(7) or
            (b), as applicable.
            (4) Judicial stay.--The filing of a petition by the complaining
        Commission pursuant to paragraph (1) shall operate as a stay of the
        rule, regulation, or order until the date on which the
        determination of the United States Court of Appeals for the
        District of Columbia Circuit is final (including any appeal of the
        determination).
        (d) Joint Rulemaking.--
            (1) In general.--Notwithstanding any other provision of this
        title and subsections (b) and (c), the Commodity Futures Trading
        Commission and the Securities and Exchange Commission, in
        consultation with the Board of Governors, shall further define the
        terms ``swap'', ``security-based swap'', ``swap dealer'',
        ``security-based swap dealer'', ``major swap participant'', ``major
        security-based swap participant'', ``eligible contract
        participant'', and ``security-based swap agreement'' in section
        1a(47)(A)(v) of the Commodity Exchange Act (7 U.S.C. 1a(47)(A)(v))
        and section 3(a)(78) of the Securities Exchange Act of 1934 (15
        U.S.C. 78c(a)(78)).
            (2) Authority of the commissions.--
                (A) In general.--Notwithstanding any other provision of
            this title, the Commodity Futures Trading Commission and the
            Securities and Exchange Commission, in consultation with the
            Board of Governors, shall jointly adopt such other rules
            regarding such definitions as the Commodity Futures Trading
            Commission and the Securities and Exchange Commission determine
            are necessary and appropriate, in the public interest, and for
            the protection of investors.
                (B) Trade repository recordkeeping.--Notwithstanding any
            other provision of this title, the Commodity Futures Trading
            Commission and the Securities and Exchange Commission, in
            consultation with the Board of Governors, shall engage in joint
            rulemaking to jointly adopt a rule or rules governing the books
            and records that are required to be kept and maintained
            regarding security-based swap agreements by persons that are
            registered as swap data repositories under the Commodity
            Exchange Act, including uniform rules that specify the data
            elements that shall be collected and maintained by each
            repository.
                (C) Books and records.--Notwithstanding any other provision
            of this title, the Commodity Futures Trading Commission and the
            Securities and Exchange Commission, in consultation with the
            Board of Governors, shall engage in joint rulemaking to jointly
            adopt a rule or rules governing books and records regarding
            security-based swap agreements, including daily trading
            records, for swap dealers, major swap participants, security-
            based swap dealers, and security-based swap participants.
                (D) Comparable rules.--Rules and regulations prescribed
            jointly under this title by the Commodity Futures Trading
            Commission and the Securities and Exchange Commission shall be
            comparable to the maximum extent possible, taking into
            consideration differences in instruments and in the applicable
            statutory requirements.
                (E) Tracking uncleared transactions.--Any rules prescribed
            under subparagraph (A) shall require the maintenance of records
            of all activities relating to security-based swap agreement
            transactions defined under subparagraph (A) that are not
            cleared.
                (F) Sharing of information.--The Commodity Futures Trading
            Commission shall make available to the Securities and Exchange
            Commission information relating to security-based swap
            agreement transactions defined in subparagraph (A) that are not
            cleared.
            (3) Financial stability oversight council.--In the event that
        the Commodity Futures Trading Commission and the Securities and
        Exchange Commission fail to jointly prescribe rules pursuant to
        paragraph (1) or (2) in a timely manner, at the request of either
        Commission, the Financial Stability Oversight Council shall resolve
        the dispute--
                (A) within a reasonable time after receiving the request;
                (B) after consideration of relevant information provided by
            each Commission; and
                (C) by agreeing with 1 of the Commissions regarding the
            entirety of the matter or by determining a compromise position.
            (4) Joint interpretation.--Any interpretation of, or guidance
        by either Commission regarding, a provision of this title, shall be
        effective only if issued jointly by the Commodity Futures Trading
        Commission and the Securities and Exchange Commission, after
        consultation with the Board of Governors, if this title requires
        the Commodity Futures Trading Commission and the Securities and
        Exchange Commission to issue joint regulations to implement the
        provision.
        (e) Global Rulemaking Timeframe.--Unless otherwise provided in this
    title, or an amendment made by this title, the Commodity Futures
    Trading Commission or the Securities and Exchange Commission, or both,
    shall individually, and not jointly, promulgate rules and regulations
    required of each Commission under this title or an amendment made by
    this title not later than 360 days after the date of enactment of this
    Act.
        (f) Rules and Registration Before Final Effective Dates.--Beginning
    on the date of enactment of this Act and notwithstanding the effective
    date of any provision of this Act, the Commodity Futures Trading
    Commission and the Securities and Exchange Commission may, in order to
    prepare for the effective dates of the provisions of this Act--
            (1) promulgate rules, regulations, or orders permitted or
        required by this Act;
            (2) conduct studies and prepare reports and recommendations
        required by this Act;
            (3) register persons under the provisions of this Act; and
            (4) exempt persons, agreements, contracts, or transactions from
        provisions of this Act, under the terms contained in this Act,
    provided, however, that no action by the Commodity Futures Trading
    Commission or the Securities and Exchange Commission described in
    paragraphs (1) through (4) shall become effective prior to the
    effective date applicable to such action under the provisions of this
    Act.
        SEC. 713. PORTFOLIO MARGINING CONFORMING CHANGES.
        (a) Securities Exchange Act of 1934.--Section 15(c)(3) of the
    Securities Exchange Act of 1934 (15 U.S.C. 78o(c)(3)) is amended by
    adding at the end the following:
                ``(C) Notwithstanding any provision of sections
            2(a)(1)(C)(i) or 4d(a)(2) of the Commodity Exchange Act and the
            rules and regulations thereunder, and pursuant to an exemption
            granted by the Commission under section 36 of this title or
            pursuant to a rule or regulation, cash and securities may be
            held by a broker or dealer registered pursuant to subsection
            (b)(1) and also registered as a futures commission merchant
            pursuant to section 4f(a)(1) of the Commodity Exchange Act, in
            a portfolio margining account carried as a futures account
            subject to section 4d of the Commodity Exchange Act and the
            rules and regulations thereunder, pursuant to a portfolio
            margining program approved by the Commodity Futures Trading
            Commission, and subject to subchapter IV of chapter 7 of title
            11 of the United States Code and the rules and regulations
            thereunder. The Commission shall consult with the Commodity
            Futures Trading Commission to adopt rules to ensure that such
            transactions and accounts are subject to comparable
            requirements to the extent practicable for similar products.''.
        (b) Commodity Exchange Act.--Section 4d of the Commodity Exchange
    Act (7 U.S.C. 6d) is amended by adding at the end the following:
        ``(h) Notwithstanding subsection (a)(2) or the rules and
    regulations thereunder, and pursuant to an exemption granted by the
    Commission under section 4(c) of this Act or pursuant to a rule or
    regulation, a futures commission merchant that is registered pursuant
    to section 4f(a)(1) of this Act and also registered as a broker or
    dealer pursuant to section 15(b)(1) of the Securities Exchange Act of
    1934 may, pursuant to a portfolio margining program approved by the
    Securities and Exchange Commission pursuant to section 19(b) of the
    Securities Exchange Act of 1934, hold in a portfolio margining account
    carried as a securities account subject to section 15(c)(3) of the
    Securities Exchange Act of 1934 and the rules and regulations
    thereunder, a contract for the purchase or sale of a commodity for
    future delivery or an option on such a contract, and any money,
    securities or other property received from a customer to margin,
    guarantee or secure such a contract, or accruing to a customer as the
    result of such a contract. The Commission shall consult with the
    Securities and Exchange Commission to adopt rules to ensure that such
    transactions and accounts are subject to comparable requirements to the
    extent practical for similar products.''.
        (c) Duty of Commodity Futures Trading Commission.--Section 20 of
    the Commodity Exchange Act (7 U.S.C. 24) is amended by adding at the
    end the following:
        ``(c) The Commission shall exercise its authority to ensure that
    securities held in a portfolio margining account carried as a futures
    account are customer property and the owners of those accounts are
    customers for the purposes of subchapter IV of chapter 7 of title 11 of
    the United States Code.''.
        SEC. 714. ABUSIVE SWAPS.
        The Commodity Futures Trading Commission or the Securities and
    Exchange Commission, or both, individually may, by rule or order--
            (1) collect information as may be necessary concerning the
        markets for any types of--
                (A) swap (as defined in section 1a of the Commodity
            Exchange Act (7 U.S.C. 1a)); or
                (B) security-based swap (as defined in section 1a of the
            Commodity Exchange Act (7 U.S.C. 1a)); and
            (2) issue a report with respect to any types of swaps or
        security-based swaps that the Commodity Futures Trading Commission
        or the Securities and Exchange Commission determines to be
        detrimental to--
                (A) the stability of a financial market; or
                (B) participants in a financial market.
        SEC. 715. AUTHORITY TO PROHIBIT PARTICIPATION IN SWAP ACTIVITIES.
        Except as provided in section 4 of the Commodity Exchange Act (7
    U.S.C. 6), 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 the foreign country from participating in the
    United States in any swap or security-based swap activities.
        SEC. 716. PROHIBITION AGAINST FEDERAL GOVERNMENT BAILOUTS OF SWAPS
          ENTITIES.
        (a) Prohibition on Federal Assistance.--Notwithstanding any other
    provision of law (including regulations), no Federal assistance may be
    provided to any swaps entity with respect to any swap, security-based
    swap, or other activity of the swaps entity.
        (b) Definitions.--In this section:
            (1) Federal assistance.--The term ``Federal assistance'' means
        the use of any advances from any Federal Reserve credit facility or
        discount window that is not part of a program or facility with
        broad-based eligibility under section 13(3)(A) of the Federal
        Reserve Act, Federal Deposit Insurance Corporation insurance or
        guarantees for the purpose of--
                (A) making any loan to, or purchasing any stock, equity
            interest, or debt obligation of, any swaps entity;
                (B) purchasing the assets of any swaps entity;
                (C) guaranteeing any loan or debt issuance of any swaps
            entity; or
                (D) entering into any assistance arrangement (including tax
            breaks), loss sharing, or profit sharing with any swaps entity.
            (2) Swaps entity.--
                (A) In general.--The term ``swaps entity'' means any swap
            dealer, security-based swap dealer, major swap participant,
            major security-based swap participant, that is registered
            under--
                    (i) the Commodity Exchange Act (7 U.S.C. 1 et seq.); or
                    (ii) the Securities Exchange Act of 1934 (15 U.S.C. 78a
                et seq.).
                (B) Exclusion.--The term ``swaps entity'' does not include
            any major swap participant or major security-based swap
            participant that is an insured depository institution.
        (c) Affiliates of Insured Depository Institutions.--The prohibition
    on Federal assistance contained in subsection (a) does not apply to and
    shall not prevent an insured depository institution from having or
    establishing an affiliate which is a swaps entity, as long as such
    insured depository institution is part of a bank holding company, or
    savings and loan holding company, that is supervised by the Federal
    Reserve and such swaps entity affiliate complies with sections 23A and
    23B of the Federal Reserve Act and such other requirements as the
    Commodity Futures Trading Commission or the Securities Exchange
    Commission, as appropriate, and the Board of Governors of the Federal
    Reserve System, may determine to be necessary and appropriate.
        (d) Only Bona Fide Hedging and Traditional Bank Activities
    Permitted.--The prohibition in subsection (a) shall apply to any
    insured depository institution unless the insured depository
    institution limits its swap or security-based swap activities to:
            (1) Hedging and other similar risk mitigating activities
        directly related to the insured depository institution's
        activities.
            (2) Acting as a swaps entity for swaps or security-based swaps
        involving rates or reference assets that are permissible for
        investment by a national bank under the paragraph designated as
        ``Seventh.'' of section 5136 of the Revised Statutes of the United
        States ( 12 U.S.C. 24), other than as described in paragraph (3).
            (3) Limitation on credit default swaps.--Acting as a swaps
        entity for credit default swaps, including swaps or security-based
        swaps referencing the credit risk of asset-backed securities as
        defined in section 3(a)(77) of the Securities Exchange Act of 1934
        (15 U.S.C. 78c(a)(77)) (as amended by this Act) shall not be
        considered a bank permissible activity for purposes of subsection
        (d)(2) unless such swaps or security-based swaps are cleared by a
        derivatives clearing organization (as such term is defined in
        section la of the Commodity Exchange Act (7 U.S.C. la)) or a
        clearing agency (as such term is defined in section 3 of the
        Securities Exchange Act (15 U.S.C. 78c)) that is registered, or
        exempt from registration, as a derivatives clearing organization
        under the Commodity Exchange Act or as a clearing agency under the
        Securities Exchange Act, respectively.
        (e) Existing Swaps and Security-based Swaps.--The prohibition in
    subsection (a) shall only apply to swaps or security-based swaps
    entered into by an insured depository institution after the end of the
    transition period described in subsection (f).
        (f) Transition Period.--To the extent an insured depository
    institution qualifies as a ``swaps entity'' and would be subject to the
    Federal assistance prohibition in subsection (a), the appropriate
    Federal banking agency, after consulting with and considering the views
    of the Commodity Futures Trading Commission or the Securities Exchange
    Commission, as appropriate, shall permit the insured depository
    institution up to 24 months to divest the swaps entity or cease the
    activities that require registration as a swaps entity. In establishing
    the appropriate transition period to effect such divestiture or
    cessation of activities, which may include making the swaps entity an
    affiliate of the insured depository institution, the appropriate
    Federal banking agency shall take into account and make written
    findings regarding the potential impact of such divestiture or
    cessation of activities on the insured depository institution's (1)
    mortgage lending, (2) small business lending, (3) job creation, and (4)
    capital formation versus the potential negative impact on insured
    depositors and the Deposit Insurance Fund of the Federal Deposit
    Insurance Corporation. The appropriate Federal banking agency may
    consider such other factors as may be appropriate. The appropriate
    Federal banking agency may place such conditions on the insured
    depository institution's divestiture or ceasing of activities of the
    swaps entity as it deems necessary and appropriate. The transition
    period under this subsection may be extended by the appropriate Federal
    banking agency, after consultation with the Commodity Futures Trading
    Commission and the Securities and Exchange Commission, for a period of
    up to 1 additional year.
        (g) Excluded Entities.--For purposes of this section, the term
    ``swaps entity'' shall not include any insured depository institution
    under the Federal Deposit Insurance Act or a covered financial company
    under title II which is in a conservatorship, receivership, or a bridge
    bank operated by the Federal Deposit Insurance Corporation.
        (h) Effective Date.--The prohibition in subsection (a) shall be
    effective 2 years following the date on which this Act is effective.
        (i) Liquidation Required.--
            (1) In general.--
                (A) FDIC insured institutions.--All swaps entities that are
            FDIC insured institutions that are put into receivership or
            declared insolvent as a result of swap or security-based swap
            activity of the swaps entities shall be subject to the
            termination or transfer of that swap or security-based swap
            activity in accordance with applicable law prescribing the
            treatment of those contracts. No taxpayer funds shall be used
            to prevent the receivership of any swap entity resulting from
            swap or security-based swap activity of the swaps entity.
                (B) Institutions that pose a systemic risk and are subject
            to heightened prudential supervision as regulated under section
            113.--All swaps entities that are institutions that pose a
            systemic risk and are subject to heightened prudential
            supervision as regulated under section 113, that are put into
            receivership or declared insolvent as a result of swap or
            security-based swap activity of the swaps entities shall be
            subject to the termination or transfer of that swap or
            security-based swap activity in accordance with applicable law
            prescribing the treatment of those contracts. No taxpayer funds
            shall be used to prevent the receivership of any swap entity
            resulting from swap or security-based swap activity of the
            swaps entity.
                (C) Non-FDIC insured, non-systemically significant
            institutions not subject to heightened prudential supervision
            as regulated under section 113.--No taxpayer resources shall be
            used for the orderly liquidation of any swaps entities that are
            non-FDIC insured, non-systemically significant institutions not
            subject to heightened prudential supervision as regulated under
            section 113.
            (2) Recovery of funds.--All funds expended on the termination
        or transfer of the swap or security-based swap activity of the
        swaps entity shall be recovered in accordance with applicable law
        from the disposition of assets of such swap entity or through
        assessments, including on the financial sector as provided under
        applicable law.
            (3) No losses to taxpayers.--Taxpayers shall bear no losses
        from the exercise of any authority under this title.
        (j) Prohibition on Unregulated Combination of Swaps Entities and
    Banking.--At no time following adoption of the rules in subsection (k)
    may a bank or bank holding company be permitted to be or become a swap
    entity unless it conducts its swap or security-based swap activity in
    compliance with such minimum standards set by its prudential regulator
    as are reasonably calculated to permit the swaps entity to conduct its
    swap or security-based swap activities in a safe and sound manner and
    mitigate systemic risk.
        (k) Rules.--In prescribing rules, the prudential regulator for a
    swaps entity shall consider the following factors:
            (1) The expertise and managerial strength of the swaps entity,
        including systems for effective oversight.
            (2) The financial strength of the swaps entity.
            (3) Systems for identifying, measuring and controlling risks
        arising from the swaps entity's operations.
            (4) Systems for identifying, measuring and controlling the
        swaps entity's participation in existing markets.
            (5) Systems for controlling the swaps entity's participation or
        entry into in new markets and products.
        (l) Authority of the Financial Stability Oversight Council.--The
    Financial Stability Oversight Council may determine that, when other
    provisions established by this Act are insufficient to effectively
    mitigate systemic risk and protect taxpayers, that swaps entities may
    no longer access Federal assistance with respect to any swap, security-
    based swap, or other activity of the swaps entity. Any such
    determination by the Financial Stability Oversight Council of a
    prohibition of federal assistance shall be made on an institution-by-
    institution basis, and shall require the vote of not fewer than two-
    thirds of the members of the Financial Stability Oversight Council,
    which must include the vote by the Chairman of the Council, the
    Chairman of the Board of Governors of the Federal Reserve System, and
    the Chairperson of the Federal Deposit Insurance Corporation. Notice
    and hearing requirements for such determinations shall be consistent
    with the standards provided in title I.
        (m) Ban on Proprietary Trading in Derivatives.--An insured
    depository institution shall comply with the prohibition on proprietary
    trading in derivatives as required by section 619 of the Dodd-Frank
    Wall Street Reform and Consumer Protection Act.
        SEC. 717. NEW PRODUCT APPROVAL CFTC--SEC PROCESS.
        (a) Amendments to the Commodity Exchange Act.--Section 2(a)(1)(C)
    of the Commodity Exchange Act (7 U.S.C. 2(a)(1)(C)) is amended--
            (1) in clause (i) by striking ``This'' and inserting ``(I)
        Except as provided in subclause (II), this''; and
            (2) by adding at the end of clause (i) the following:

                        ``(II) This Act shall apply to and the Commission
                    shall have jurisdiction with respect to accounts,
                    agreements, and transactions involving, and may permit
                    the listing for trading pursuant to section 5c(c) of, a
                    put, call, or other option on 1 or more securities (as
                    defined in section 2(a)(1) of the Securities Act of
                    1933 or section 3(a)(10) of the Securities Exchange Act
                    of 1934 on the date of enactment of the Futures Trading
                    Act of 1982), including any group or index of such
                    securities, or any interest therein or based on the
                    value thereof, that is exempted by the Securities and
                    Exchange Commission pursuant to section 36(a)(1) of the
                    Securities Exchange Act of 1934 with the condition that
                    the Commission exercise concurrent jurisdiction over
                    such put, call, or other option; provided, however,
                    that nothing in this paragraph shall be construed to
                    affect the jurisdiction and authority of the Securities
                    and Exchange Commission over such put, call, or other
                    option.''.

        (b) Amendments to the Securities Exchange Act of 1934.--The
    Securities Exchange Act of 1934 is amended by adding the following
    section after section 3A (15 U.S.C. 78c-1):
      ``SEC. 3B. SECURITIES-RELATED DERIVATIVES.
        ``(a) Any agreement, contract, or transaction (or class thereof)
    that is exempted by the Commodity Futures Trading Commission pursuant
    to section 4(c)(1) of the Commodity Exchange Act (7 U.S.C. 6(c)(1))
    with the condition that the Commission exercise concurrent jurisdiction
    over such agreement, contract, or transaction (or class thereof) shall
    be deemed a security for purposes of the securities laws.
        ``(b) With respect to any agreement, contract, or transaction (or
    class thereof) that is exempted by the Commodity Futures Trading
    Commission pursuant to section 4(c)(1) of the Commodity Exchange Act (7
    U.S.C. 6(c)(1)) with the condition that the Commission exercise
    concurrent jurisdiction over such agreement, contract, or transaction
    (or class thereof), references in the securities laws to the `purchase'
    or `sale' of a security shall be deemed to 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 such agreement, contract, or transaction,
    as the context may require.''.
        (c) Amendment to Securities Exchange Act of 1934.--Section 19(b) of
    the Securities Exchange Act of 1934 (15 U.S.C. 78s(b)) is amended by
    adding at the end the following:
            ``(10) Notwithstanding paragraph (2), the time period within
        which the Commission is required by order to approve a proposed
        rule change or institute proceedings to determine whether the
        proposed rule change should be disapproved is stayed pending a
        determination by the Commission upon the request of the Commodity
        Futures Trading Commission or its Chairman that the Commission
        issue a determination as to whether a product that is the subject
        of such proposed rule change is a security pursuant to section 718
        of the Wall Street Transparency and Accountability Act of 2010.''.
        (d) Amendment to Commodity Exchange Act.--Section 5c(c)(1) of the
    Commodity Exchange Act (7 U.S.C. 7a-2(c)(1)) is amended--
            (1) by striking ``Subject to paragraph (2)'' and inserting the
        following:
                ``(A) Election.--Subject to paragraph (2)''; and
            (2) by adding at the end the following:
                ``(B) Certification.--The certification of a product
            pursuant to this paragraph shall be stayed pending a
            determination by the Commission upon the request of the
            Securities and Exchange Commission or its Chairman that the
            Commission issue a determination as to whether the product that
            is the subject of such certification is a contract of sale of a
            commodity for future delivery, an option on such a contract, or
            an option on a commodity pursuant to section 718 of the Wall
            Street Transparency and Accountability Act of 2010.''.
        SEC. 718. DETERMINING STATUS OF NOVEL DERIVATIVE PRODUCTS.
        (a) Process for Determining the Status of a Novel Derivative
    Product.--
            (1) Notice.--
                (A) In general.--Any person filing a proposal to list or
            trade a novel derivative product that may have elements of both
            securities and contracts of sale of a commodity for future
            delivery (or options on such contracts or options on
            commodities) may concurrently provide notice and furnish a copy
            of such filing with the Securities and Exchange Commission and
            the Commodity Futures Trading Commission. Any such notice shall
            state that notice has been made with both Commissions.
                (B) Notification.--If no concurrent notice is made pursuant
            to subparagraph (A), within 5 business days after determining
            that a proposal that seeks to list or trade a novel derivative
            product may have elements of both securities and contracts of
            sale of a commodity for future delivery (or options on such
            contracts or options on commodities), the Securities and
            Exchange Commission or the Commodity Futures Trading
            Commission, as applicable, shall notify the other Commission
            and provide a copy of such filing to the other Commission.
            (2) Request for determination.--
                (A) In general.--No later than 21 days after receipt of a
            notice under paragraph (1), or upon its own initiative if no
            such notice is received, the Commodity Futures Trading
            Commission may request that the Securities and Exchange
            Commission issue a determination as to whether a product is a
            security, as defined in section 3(a)(10) of the Securities
            Exchange Act of 1934 (15 U.S.C. 78c(a)(10)).
                (B) Request.--No later than 21 days after receipt of a
            notice under paragraph (1), or upon its own initiative if no
            such notice is received, the Securities and Exchange Commission
            may request that the Commodity Futures Trading Commission issue
            a determination as to whether a product is a contract of sale
            of a commodity for future delivery, an option on such a
            contract, or an option on a commodity subject to the Commodity
            Futures Trading Commission's exclusive jurisdiction under
            section 2(a)(1)(A) of the Commodity Exchange Act (7 U.S.C.
            2(a)(1)(A)).
                (C) Requirement relating to request.--A request under
            subparagraph (A) or (B) shall be made by submitting such
            request, in writing, to the Securities and Exchange Commission
            or the Commodity Futures Trading Commission, as applicable.
                (D) Effect.--Nothing in this paragraph shall be construed
            to prevent--
                    (i) the Commodity Futures Trading Commission from
                requesting that the Securities and Exchange Commission
                grant an exemption pursuant to section 36(a)(1) of the
                Securities Exchange Act of 1934 (15 U.S.C. 78mm(a)(1)) with
                respect to a product that is the subject of a filing under
                paragraph (1); or
                    (ii) the Securities and Exchange Commission from
                requesting that the Commodity Futures Trading Commission
                grant an exemption pursuant to section 4(c)(1) of the
                Commodity Exchange Act (7 U.S.C. 6(c)(1)) with respect to a
                product that is the subject of a filing under paragraph
                (1),
            Provided, however, that nothing in this subparagraph shall be
            construed to require the Commodity Futures Trading Commission
            or the Securities and Exchange Commission to issue an exemption
            requested pursuant to this subparagraph; provided further, That
            an order granting or denying an exemption described in this
            subparagraph and issued under paragraph (3)(B) shall not be
            subject to judicial review pursuant to subsection (b).
                (E) Withdrawal of request.--A request under subparagraph
            (A) or (B) may be withdrawn by the Commission making the
            request at any time prior to a determination being made
            pursuant to paragraph (3) for any reason by providing written
            notice to the head of the other Commission.
            (3) Determination.--Notwithstanding any other provision of law,
        no later than 120 days after the date of receipt of a request--
                (A) under subparagraph (A) or (B) of paragraph (2), unless
            such request has been withdrawn pursuant to paragraph (2)(E),
            the Securities and Exchange Commission or the Commodity Futures
            Trading Commission, as applicable, shall, by order, issue the
            determination requested in subparagraph (A) or (B) of paragraph
            (2), as applicable, and the reasons therefor; or
                (B) under paragraph (2)(D), unless such request has been
            withdrawn, the Securities and Exchange Commission or the
            Commodity Futures Trading Commission, as applicable, shall
            grant an exemption or provide reasons for not granting such
            exemption, provided that any decision by the Securities and
            Exchange Commission not to grant such exemption shall not be
            reviewable under section 25 of the Securities Exchange Act of
            1934 (15 U.S.C. 78y).
        (b) Judicial Resolution.--
            (1) In general.--The Commodity Futures Trading Commission or
        the Securities and Exchange Commission may petition the United
        States Court of Appeals for the District of Columbia Circuit for
        review of a final order of the other Commission issued pursuant to
        subsection (a)(3)(A), with respect to a novel derivative product
        that may have elements of both securities and contracts of sale of
        a commodity for future delivery (or options on such contracts or
        options on commodities) that it believes affects its statutory
        jurisdiction within 60 days after the date of entry of such order,
        a written petition requesting a review of the order. Any such
        proceeding shall be expedited by the Court of Appeals.
            (2) Transmittal of petition and record.--A copy of a petition
        described in paragraph (1) shall be transmitted not later than 1
        business day after filing by the complaining Commission to the
        responding Commission. On receipt of the petition, the responding
        Commission shall file with the court a copy of the order under
        review and any documents referred to therein, and any other
        materials prescribed by the court.
            (3) Standard of review.--The court, in considering a petition
        filed pursuant to paragraph (1), shall give no deference to, or
        presumption in favor of, the views of either Commission.
            (4) Judicial stay.--The filing of a petition by the complaining
        Commission pursuant to paragraph (1) shall operate as a stay of the
        order, until the date on which the determination of the court is
        final (including any appeal of the determination).
        SEC. 719. STUDIES.
        (a) Study on Effects of Position Limits on Trading on Exchanges in
    the United States.--
            (1) Study.--The Commodity Futures Trading Commission, in
        consultation with each entity that is a designated contract market
        under the Commodity Exchange Act, shall conduct a study of the
        effects (if any) of the position limits imposed pursuant to the
        other provisions of this title on excessive speculation and on the
        movement of transactions from exchanges in the United States to
        trading venues outside the United States.
            (2) Report to the congress.--Within 12 months after the
        imposition of position limits pursuant to the other provisions of
        this title, the Commodity Futures Trading Commission, in
        consultation with each entity that is a designated contract market
        under the Commodity Exchange Act, shall submit to the Congress a
        report on the matters described in paragraph (1).
            (3) Required hearing.--Within 30 legislative days after the
        submission to the Congress of the report described in paragraph
        (2), the Committee on Agriculture of the House of Representatives
        shall hold a hearing examining the findings of the report.
            (4) Biennial reporting.--In addition to the study required in
        paragraph (1), the Chairman of the Commodity Futures Trading
        Commission shall prepare and submit to the Congress biennial
        reports on the growth or decline of the derivatives markets in the
        United States and abroad, which shall include assessments of the
        causes of any such growth or decline, the effectiveness of
        regulatory regimes in managing systemic risk, a comparison of the
        costs of compliance at the time of the report for market
        participants subject to regulation by the United States with the
        costs of compliance in December 2008 for the market participants,
        and the quality of the available data. In preparing the report, the
        Chairman shall solicit the views of, consult with, and address the
        concerns raised by, market participants, regulators, legislators,
        and other interested parties.
        (b) Study on Feasibility of Requiring Use of Standardized
    Algorithmic Descriptions for Financial Derivatives.--
            (1) In general.--The Securities and Exchange Commission and the
        Commodity Futures Trading Commission shall conduct a joint study of
        the feasibility of requiring the derivatives industry to adopt
        standardized computer-readable algorithmic descriptions which may
        be used to describe complex and standardized financial derivatives.
            (2) Goals.--The algorithmic descriptions defined in the study
        shall be designed to facilitate computerized analysis of individual
        derivative contracts and to calculate net exposures to complex
        derivatives. The algorithmic descriptions shall be optimized for
        simultaneous use by--
                (A) commercial users and traders of derivatives;
                (B) derivative clearing houses, exchanges and electronic
            trading platforms;
                (C) trade repositories and regulator investigations of
            market activities; and
                (D) systemic risk regulators.
        The study will also examine the extent to which the algorithmic
        description, together with standardized and extensible legal
        definitions, may serve as the binding legal definition of
        derivative contracts. The study will examine the logistics of
        possible implementations of standardized algorithmic descriptions
        for derivatives contracts. The study shall be limited to electronic
        formats for exchange of derivative contract descriptions and will
        not contemplate disclosure of proprietary valuation models.
            (3) International coordination.--In conducting the study, the
        Securities and Exchange Commission and the Commodity Futures
        Trading Commission shall coordinate the study with international
        financial institutions and regulators as appropriate and practical.
            (4) Report.--Within 8 months after the date of the enactment of
        this Act, the Securities and Exchange Commission and the Commodity
        Futures Trading Commission shall jointly submit to the Committees
        on Agriculture and on Financial Services of the House of
        Representatives and the Committees on Agriculture, Nutrition, and
        Forestry and on Banking, Housing, and Urban Affairs of the Senate a
        written report which contains the results of the study required by
        paragraphs (1) through (3).
        (c) International Swap Regulation.--
            (1) In general.--The Commodity Futures Trading Commission and
        the Securities and Exchange Commission shall jointly conduct a
        study--
                (A) relating to--
                    (i) swap regulation in the United States, Asia, and
                Europe; and
                    (ii) clearing house and clearing agency regulation in
                the United States, Asia, and Europe; and
                (B) that identifies areas of regulation that are similar in
            the United States, Asia and Europe and other areas of
            regulation that could be harmonized
            (2) Report.--Not later than 18 months after the date of
        enactment of this Act, the Commodity Futures Trading Commission and
        the Securities and Exchange Commission shall submit to the
        Committee on Agriculture, Nutrition, and Forestry and the Committee
        on Banking, Housing, and Urban Affairs of the Senate and the
        Committee on Agriculture and the Committee on Financial Services of
        the House of Representatives a report that includes a description
        of the results of the study under subsection (a), including--
                (A) identification of the major exchanges and their
            regulator in each geographic area for the trading of swaps and
            security-based swaps including a listing of the major contracts
            and their trading volumes and notional values as well as
            identification of the major swap dealers participating in such
            markets;
                (B) identification of the major clearing houses and
            clearing agencies and their regulator in each geographic area
            for the clearing of swaps and security-based swaps, including a
            listing of the major contracts and the clearing volumes and
            notional values as well as identification of the major clearing
            members of such clearing houses and clearing agencies in such
            markets;
                (C) a description of the comparative methods of clearing
            swaps in the United States, Asia, and Europe; and
                (D) a description of the various systems used for
            establishing margin on individual swaps, security-based swaps,
            and swap portfolios.
        (d) Stable Value Contracts.--
            (1) Determination.--
                (A) Status.--Not later than 15 months after the date of the
            enactment of this Act, the Securities and Exchange Commission
            and the Commodity Futures Trading Commission shall, jointly,
            conduct a study to determine whether stable value contracts
            fall within the definition of a swap. In making the
            determination required under this subparagraph, the Commissions
            jointly shall consult with the Department of Labor, the
            Department of the Treasury, and the State entities that
            regulate the issuers of stable value contracts.
                (B) Regulations.--If the Commissions determine that stable
            value contracts fall within the definition of a swap, the
            Commissions jointly shall determine if an exemption for stable
            value contracts from the definition of swap is appropriate and
            in the public interest. The Commissions shall issue regulations
            implementing the determinations required under this paragraph.
            Until the effective date of such regulations, and
            notwithstanding any other provision of this title, the
            requirements of this title shall not apply to stable value
            contracts.
                (C) Legal certainty.--Stable value contracts in effect
            prior to the effective date of the regulations described in
            subparagraph (B) shall not be considered swaps.
            (2) Definition.--For purposes of this subsection, the term
        ``stable value contract'' means any contract, agreement, or
        transaction that provides a crediting interest rate and guaranty or
        financial assurance of liquidity at contract or book value prior to
        maturity offered by a bank, insurance company, or other State or
        federally regulated financial institution for the benefit of any
        individual or commingled fund available as an investment in an
        employee benefit plan (as defined in section 3(3) of the Employee
        Retirement Income Security Act of 1974, including plans described
        in section 3(32) of such Act) subject to participant direction, an
        eligible deferred compensation plan (as defined in section 457(b)
        of the Internal Revenue Code of 1986) that is maintained by an
        eligible employer described in section 457(e)(1)(A) of such Code,
        an arrangement described in section 403(b) of such Code, or a
        qualified tuition program (as defined in section 529 of such Code).
        SEC. 720. MEMORANDUM.
        (a)(1) The Commodity Futures Trading Commission and the Federal
    Energy Regulatory Commission shall, not later than 180 days after the
    date of the enactment of this Act, negotiate a memorandum of
    understanding to establish procedures for--
            (A) applying their respective authorities in a manner so as to
        ensure effective and efficient regulation in the public interest;
            (B) resolving conflicts concerning overlapping jurisdiction
        between the 2 agencies; and
            (C) avoiding, to the extent possible, conflicting or
        duplicative regulation.
        (2) Such memorandum and any subsequent amendments to the memorandum
    shall be promptly submitted to the appropriate committees of Congress.
        (b) The Commodity Futures Trading Commission and the Federal Energy
    Regulatory Commission shall, not later than 180 days after the date of
    the enactment of this section, negotiate a memorandum of understanding
    to share information that may be requested where either Commission is
    conducting an investigation into potential manipulation, fraud, or
    market power abuse in markets subject to such Commission's regulation
    or oversight. Shared information shall remain subject to the same
    restrictions on disclosure applicable to the Commission initially
    holding the information.

                      PART II--REGULATION OF SWAP MARKETS

        SEC. 721. DEFINITIONS.
        (a) In General.--Section 1a of the Commodity Exchange Act (7 U.S.C.
    1a) is amended--
            (1) by redesignating paragraphs (2), (3) and (4), (5) through
        (17), (18) through (23), (24) through (28), (29), (30), (31)
        through (33), and (34) as paragraphs (6), (8) and (9), (11) through
        (23), (26) through (31), (34) through (38), (40), (41), (44)
        through (46), and (51), respectively;
            (2) by inserting after paragraph (1) the following:
            ``(2) Appropriate federal banking agency.--The term
        `appropriate Federal banking agency'--
                ``(A) has the meaning given the term in section 3 of the
            Federal Deposit Insurance Act (12 U.S.C. 1813);
                ``(B) means the Board in the case of a noninsured State
            bank; and
                ``(C) is the Farm Credit Administration for farm credit
            system institutions.
            ``(3) Associated person of a security-based swap dealer or
        major security-based swap participant.--The term `associated person
        of a security-based swap dealer or major security-based swap
        participant' has the meaning given the term in section 3(a) of the
        Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).
            ``(4) Associated person of a swap dealer or major swap
        participant.--
                ``(A) In general.--The term `associated person of a swap
            dealer or major swap participant' means a person who is
            associated with a swap dealer or major swap participant as a
            partner, officer, employee, or agent (or any person occupying a
            similar status or performing similar functions), in any
            capacity that involves--
                    ``(i) the solicitation or acceptance of swaps; or
                    ``(ii) the supervision of any person or persons so
                engaged.
                ``(B) Exclusion.--Other than for purposes of section
            4s(b)(6), the term `associated person of a swap dealer or major
            swap participant' does not include any person associated with a
            swap dealer or major swap participant the functions of which
            are solely clerical or ministerial.
            ``(5) Board.--The term `Board' means the Board of Governors of
        the Federal Reserve System.'';
            (3) by inserting after paragraph (6) (as redesignated by
        paragraph (1)) the following:
            ``(7) Cleared swap.--The term `cleared swap' means any swap
        that is, directly or indirectly, submitted to and cleared by a
        derivatives clearing organization registered with the
        Commission.'';
            (4) in paragraph (9) (as redesignated by paragraph (1)), by
        striking ``except onions'' and all that follows through the period
        at the end and inserting the following: ``except onions (as
        provided by the first section of Public Law 85-839 (7 U.S.C. 13-1))
        and motion picture box office receipts (or any index, measure,
        value, or data related to such receipts), and all services, rights,
        and interests (except motion picture box office receipts, or any
        index, measure, value or data related to such receipts) in which
        contracts for future delivery are presently or in the future dealt
        in.'';
            (5) by inserting after paragraph (9) (as redesignated by
        paragraph (1)) the following:
            ``(10) Commodity pool.--
                ``(A) In general.--The term `commodity pool' means any
            investment trust, syndicate, or similar form of enterprise
            operated for the purpose of trading in commodity interests,
            including any--
                    ``(i) commodity for future delivery, security futures
                product, or swap;
                    ``(ii) agreement, contract, or transaction described in
                section 2(c)(2)(C)(i) or section 2(c)(2)(D)(i);
                    ``(iii) commodity option authorized under section 4c;
                or
                    ``(iv) leverage transaction authorized under section
                19.
                ``(B) Further definition.--The Commission, by rule or
            regulation, may include within, or exclude from, the term
            `commodity pool' any investment trust, syndicate, or similar
            form of enterprise if the Commission determines that the rule
            or regulation will effectuate the purposes of this Act.'';
            (6) by striking paragraph (11) (as redesignated by paragraph
        (1)) and inserting the following:
            ``(11) Commodity pool operator.--
                ``(A) In general.--The term `commodity pool operator' means
            any person--
                    ``(i) engaged in a business that is of the nature of a
                commodity pool, investment trust, syndicate, or similar
                form of enterprise, and who, in connection therewith,
                solicits, accepts, or receives from others, funds,
                securities, or property, either directly or through capital
                contributions, the sale of stock or other forms of
                securities, or otherwise, for the purpose of trading in
                commodity interests, including any--

                        ``(I) commodity for future delivery, security
                    futures product, or swap;
                        ``(II) agreement, contract, or transaction
                    described in section 2(c)(2)(C)(i) or section
                    2(c)(2)(D)(i);
                        ``(III) commodity option authorized under section
                    4c; or
                        ``(IV) leverage transaction authorized under
                    section 19; or

                    ``(ii) who is registered with the Commission as a
                commodity pool operator.
                ``(B) Further definition.--The Commission, by rule or
            regulation, may include within, or exclude from, the term
            `commodity pool operator' any person engaged in a business that
            is of the nature of a commodity pool, investment trust,
            syndicate, or similar form of enterprise if the Commission
            determines that the rule or regulation will effectuate the
            purposes of this Act.'';
            (7) in paragraph (12) (as redesignated by paragraph (1)), in
        subparagraph (A)--
                (A) in clause (i)--
                    (i) in subclause (I), by striking ``made or to be made
                on or subject to the rules of a contract market or
                derivatives transaction execution facility'' and inserting
                ``, security futures product, or swap'';
                    (ii) by redesignating subclauses (II) and (III) as
                subclauses (III) and (IV);
                    (iii) by inserting after subclause (I) the following:

                        ``(II) any agreement, contract, or transaction
                    described in section 2(c)(2)(C)(i) or section
                    2(c)(2)(D)(i)''; and

                    (iv) in subclause (IV) (as so redesignated), by
                striking ``or'';
                (B) in clause (ii), by striking the period at the end and
            inserting a semicolon; and
                (C) by adding at the end the following:
                    ``(iii) is registered with the Commission as a
                commodity trading advisor; or
                    ``(iv) the Commission, by rule or regulation, may
                include if the Commission determines that the rule or
                regulation will effectuate the purposes of this Act.'';
            (8) in paragraph (17) (as redesignated by paragraph (1)), in
        subparagraph (A), in the matter preceding clause (i), by striking
        ``paragraph (12)(A)'' and inserting ``paragraph (18)(A)'';
            (9) in paragraph (18) (as redesignated by paragraph (1))--
                (A) in subparagraph (A)--
                    (i) in the matter following clause (vii)(III)--

                        (I) by striking ``section 1a (11)(A)'' and
                    inserting ``paragraph (17)(A)''; and
                        (II) by striking ``$25,000,000'' and inserting
                    ``$50,000,000''; and

                    (ii) in clause (xi), in the matter preceding subclause
                (I), by striking ``total assets in an amount'' and
                inserting ``amounts invested on a discretionary basis, the
                aggregate of which is'';
            (10) by striking paragraph (22) (as redesignated by paragraph
        (1)) and inserting the following:
            ``(22) Floor broker.--
                ``(A) In general.--The term `floor broker' means any
            person--
                    ``(i) who, in or surrounding any pit, ring, post, or
                other place provided by a contract market for the meeting
                of persons similarly engaged, shall purchase or sell for
                any other person--

                        ``(I) any commodity for future delivery, security
                    futures product, or swap; or
                        ``(II) any commodity option authorized under
                    section 4c; or

                    ``(ii) who is registered with the Commission as a floor
                broker.
                ``(B) Further definition.--The Commission, by rule or
            regulation, may include within, or exclude from, the term
            `floor broker' any person in or surrounding any pit, ring,
            post, or other place provided by a contract market for the
            meeting of persons similarly engaged who trades for any other
            person if the Commission determines that the rule or regulation
            will effectuate the purposes of this Act.'';
            (11) by striking paragraph (23) (as redesignated by paragraph
        (1)) and inserting the following:
            ``(23) Floor trader.--
                ``(A) In general.--The term `floor trader' means any
            person--
                    ``(i) who, in or surrounding any pit, ring, post, or
                other place provided by a contract market for the meeting
                of persons similarly engaged, purchases, or sells solely
                for such person's own account--

                        ``(I) any commodity for future delivery, security
                    futures product, or swap; or
                        ``(II) any commodity option authorized under
                    section 4c; or

                    ``(ii) who is registered with the Commission as a floor
                trader.
                ``(B) Further definition.--The Commission, by rule or
            regulation, may include within, or exclude from, the term
            `floor trader' any person in or surrounding any pit, ring,
            post, or other place provided by a contract market for the
            meeting of persons similarly engaged who trades solely for such
            person's own account if the Commission determines that the rule
            or regulation will effectuate the purposes of this Act.'';
            (12) by inserting after paragraph (23) (as redesignated by
        paragraph (1)) the following:
            ``(24) Foreign exchange forward.--The term `foreign exchange
        forward' means a transaction that solely involves the exchange of 2
        different currencies on a specific future date at a fixed rate
        agreed upon on the inception of the contract covering the exchange.
            ``(25) Foreign exchange swap.--The term `foreign exchange swap'
        means a transaction that solely involves--
                ``(A) an exchange of 2 different currencies on a specific
            date at a fixed rate that is agreed upon on the inception of
            the contract covering the exchange; and
                ``(B) a reverse exchange of the 2 currencies described in
            subparagraph (A) at a later date and at a fixed rate that is
            agreed upon on the inception of the contract covering the
            exchange.'';
            (13) by striking paragraph (28) (as redesignated by paragraph
        (1)) and inserting the following:
            ``(28) Futures commission merchant.--
                ``(A) In general.--The term `futures commission merchant'
            means an individual, association, partnership, corporation, or
            trust--
                    ``(i) that--

                        ``(I) is--

                            ``(aa) engaged in soliciting or in accepting
                        orders for--
                                ``(AA) the purchase or sale of a commodity
                            for future delivery;
                                ``(BB) a security futures product;
                                ``(CC) a swap;
                                ``(DD) any agreement, contract, or
                            transaction described in section 2(c)(2)(C)(i)
                            or section 2(c)(2)(D)(i);
                                ``(EE) any commodity option authorized
                            under section 4c; or
                                ``(FF) any leverage transaction authorized
                            under section 19; or
                            ``(bb) acting as a counterparty in any
                        agreement, contract, or transaction described in
                        section 2(c)(2)(C)(i) or section 2(c)(2)(D)(i); and

                        ``(II) in or in connection with the activities
                    described in items (aa) or (bb) of subclause (I),
                    accepts any money, securities, or property (or extends
                    credit in lieu thereof) to margin, guarantee, or secure
                    any trades or contracts that result or may result
                    therefrom; or

                    ``(ii) that is registered with the Commission as a
                futures commission merchant.
                ``(B) Further definition.--The Commission, by rule or
            regulation, may include within, or exclude from, the term
            `futures commission merchant' any person who engages in
            soliciting or accepting orders for, or acting as a counterparty
            in, any agreement, contract, or transaction subject to this
            Act, and who accepts any money, securities, or property (or
            extends credit in lieu thereof) to margin, guarantee, or secure
            any trades or contracts that result or may result therefrom, if
            the Commission determines that the rule or regulation will
            effectuate the purposes of this Act.'';
            (14) in paragraph (30) (as redesignated by paragraph (1)), in
        subparagraph (B), by striking ``state'' and inserting ``State'';
            (15) by striking paragraph (31) (as redesignated by paragraph
        (1)) and inserting the following:
            ``(31) Introducing broker.--
                ``(A) In general.--The term `introducing broker' means any
            person (except an individual who elects to be and is registered
            as an associated person of a futures commission merchant)--
                    ``(i) who--

                        ``(I) is engaged in soliciting or in accepting
                    orders for--

                            ``(aa) the purchase or sale of any commodity
                        for future delivery, security futures product, or
                        swap;
                            ``(bb) any agreement, contract, or transaction
                        described in section 2(c)(2)(C)(i) or section
                        2(c)(2)(D)(i);
                            ``(cc) any commodity option authorized under
                        section 4c; or
                            ``(dd) any leverage transaction authorized
                        under section 19; and

                        ``(II) does not accept any money, securities, or
                    property (or extend credit in lieu thereof) to margin,
                    guarantee, or secure any trades or contracts that
                    result or may result therefrom; or

                    ``(ii) who is registered with the Commission as an
                introducing broker.
                ``(B) Further definition.--The Commission, by rule or
            regulation, may include within, or exclude from, the term
            `introducing broker' any person who engages in soliciting or
            accepting orders for any agreement, contract, or transaction
            subject to this Act, and who does not accept any money,
            securities, or property (or extend credit in lieu thereof) to
            margin, guarantee, or secure any trades or contracts that
            result or may result therefrom, if the Commission determines
            that the rule or regulation will effectuate the purposes of
            this Act.'';
            (16) by inserting after paragraph (31) (as redesignated by
        paragraph (1)) the following:
            ``(32) Major security-based swap participant.--The term `major
        security-based swap participant' has the meaning given the term in
        section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C.
        78c(a)).
            ``(33) Major swap participant.--
                ``(A) In general.--The term `major swap participant' means
            any person who is not a swap dealer, and--
                    ``(i) maintains a substantial position in swaps for any
                of the major swap categories as determined by the
                Commission, excluding--

                        ``(I) positions held for hedging or mitigating
                    commercial risk; and
                        ``(II) positions maintained by any employee benefit
                    plan (or any contract held by such a plan) as defined
                    in paragraphs (3) and (32) of section 3 of the Employee
                    Retirement Income Security Act of 1974 (29 U.S.C. 1002)
                    for the primary purpose of hedging or mitigating any
                    risk directly associated with the operation of the
                    plan;

                    ``(ii) whose outstanding swaps create substantial
                counterparty exposure that could have serious adverse
                effects on the financial stability of the United States
                banking system or financial markets; or
                    ``(iii)(I) is a financial entity that is highly
                leveraged relative to the amount of capital it holds and
                that is not subject to capital requirements established by
                an appropriate Federal banking agency; and
                    ``(II) maintains a substantial position in outstanding
                swaps in any major swap category as determined by the
                Commission.
                ``(B) Definition of substantial position.--For purposes of
            subparagraph (A), the Commission shall define by rule or
            regulation the term `substantial position' at the threshold
            that the Commission determines to be prudent for the effective
            monitoring, management, and oversight of entities that are
            systemically important or can significantly impact the
            financial system of the United States. In setting the
            definition under this subparagraph, the Commission shall
            consider the person's relative position in uncleared as opposed
            to cleared swaps and may take into consideration the value and
            quality of collateral held against counterparty exposures.
                ``(C) Scope of designation.--For purposes of subparagraph
            (A), a person may be designated as a major swap participant for
            1 or more categories of swaps without being classified as a
            major swap participant for all classes of swaps.
                ``(D) Exclusions.--The definition under this paragraph
            shall not include an entity whose primary business is providing
            financing, and uses derivatives for the purpose of hedging
            underlying commercial risks related to interest rate and
            foreign currency exposures, 90 percent or more of which arise
            from financing that facilitates the purchase or lease of
            products, 90 percent or more of which are manufactured by the
            parent company or another subsidiary of the parent company.'';
            (17) by inserting after paragraph (38) (as redesignated by
        paragraph (1)) the following:
            ``(39) Prudential regulator.--The term `prudential regulator'
        means--
                ``(A) the Board in the case of a swap dealer, major swap
            participant, security-based swap dealer, or major security-
            based swap participant that is--
                    ``(i) a State-chartered bank that is a member of the
                Federal Reserve System;
                    ``(ii) a State-chartered branch or agency of a foreign
                bank;
                    ``(iii) any foreign bank which does not operate an
                insured branch;
                    ``(iv) any organization operating under section 25A of
                the Federal Reserve Act or having an agreement with the
                Board under section 225 of the Federal Reserve Act;
                    ``(v) any bank holding company (as defined in section 2
                of the Bank Holding Company Act of 1965 (12 U.S.C. 1841)),
                any foreign bank (as defined in section 1(b)(7) of the
                International Banking Act of 1978 (12 U.S.C. 3101(b)(7))
                that is treated as a bank holding company under section
                8(a) of the International Banking Act of 1978 (12 U.S.C.
                3106(a)), and any subsidiary of such a company or foreign
                bank (other than a subsidiary that is described in
                subparagraph (A) or (B) or that is required to be
                registered with the Commission as a swap dealer or major
                swap participant under this Act or with the Securities and
                Exchange Commission as a security-based swap dealer or
                major security-based swap participant);
                    ``(vi) after the transfer date (as defined in section
                311 of the Dodd-Frank Wall Street Reform and Consumer
                Protection Act), any savings and loan holding company (as
                defined in section 10 of the Home Owners' Loan Act (12
                U.S.C. 1467a)) and any subsidiary of such company (other
                than a subsidiary that is described in subparagraph (A) or
                (B) or that is required to be registered as a swap dealer
                or major swap participant with the Commission under this
                Act or with the Securities and Exchange Commission as a
                security-based swap dealer or major security-based swap
                participant); or
                    ``(vii) any organization operating under section 25A of
                the Federal Reserve Act (12U.S.C. 611 et seq.) or having an
                agreement with the Board under section 25 of the Federal
                Reserve Act (12 U.S.C. 601 et seq.);
                ``(B) the Office of the Comptroller of the Currency in the
            case of a swap dealer, major swap participant, security-based
            swap dealer, or major security-based swap participant that is--
                    ``(i) a national bank;
                    ``(ii) a federally chartered branch or agency of a
                foreign bank; or
                    ``(iii) any Federal savings association;
                ``(C) the Federal Deposit Insurance Corporation in the case
            of a swap dealer, major swap participant, security-based swap
            dealer, or major security-based swap participant that is--
                    ``(i) a State-chartered bank that is not a member of
                the Federal Reserve System; or
                    ``(ii) any State savings association;
                ``(D) the Farm Credit Administration, in the case of a swap
            dealer, major swap participant, security-based swap dealer, or
            major security-based swap participant that is an institution
            chartered under the Farm Credit Act of 1971 (12 U.S.C. 2001 et
            seq.); and
                ``(E) the Federal Housing Finance Agency in the case of a
            swap dealer, major swap participant, security-based swap
            dealer, or major security-based swap participant that is a
            regulated entity (as such term is defined in section 1303 of
            the Federal Housing Enterprises Financial Safety and Soundness
            Act of 1992).'';
            (18) in paragraph (40) (as redesignated by paragraph (1))--
                (A) by striking subparagraph (B);
                (B) by redesignating subparagraphs (C), (D), and (E) as
            subparagraphs (B), (C), and (F), respectively;
                (C) in subparagraph (C) (as so redesignated), by striking
            ``and''; and
                (D) by inserting after subparagraph (C) (as so
            redesignated) the following:
                ``(D) a swap execution facility registered under section
            5h;
                ``(E) a swap data repository registered under section 21;
            and'';
            (19) by inserting after paragraph (41) (as redesignated by
        paragraph (1)) the following:
            ``(42) Security-based swap.--The term `security-based swap' has
        the meaning given the term in section 3(a) of the Securities
        Exchange Act of 1934 (15 U.S.C. 78c(a)).
            ``(43) Security-based swap dealer.--The term `security-based
        swap dealer' has the meaning given the term in section 3(a) of the
        Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).'';
            (20) in paragraph (46) (as redesignated by paragraph (1)), by
        striking ``subject to section 2(h)(7)'' and inserting ``subject to
        section 2(h)(5)'';
            (21) by inserting after paragraph (46) (as redesignated by
        paragraph (1)) the following:
            ``(47) Swap.--
                ``(A) In general.--Except as provided in subparagraph (B),
            the term `swap' means any agreement, contract, or transaction--
                    ``(i) that is a put, call, cap, floor, collar, or
                similar option of any kind that is for the purchase or
                sale, or based on the value, of 1 or more interest or other
                rates, currencies, commodities, securities, instruments of
                indebtedness, indices, quantitative measures, or other
                financial or economic interests or property of any kind;
                    ``(ii) that provides for any purchase, sale, payment,
                or delivery (other than a dividend on an equity security)
                that is dependent on the occurrence, nonoccurrence, or the
                extent of the occurrence of an event or contingency
                associated with a potential financial, economic, or
                commercial consequence;
                    ``(iii) that 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,
                including any agreement, contract, or transaction commonly
                known as--

                        ``(I) an interest rate swap;
                        ``(II) a rate floor;
                        ``(III) a rate cap;
                        ``(IV) a rate collar;
                        ``(V) a cross-currency rate swap;
                        ``(VI) a basis swap;
                        ``(VII) a currency swap;
                        ``(VIII) a foreign exchange swap;
                        ``(IX) a total return swap;
                        ``(X) an equity index swap;
                        ``(XI) an equity swap;
                        ``(XII) a debt index swap;
                        ``(XIII) a debt swap;
                        ``(XIV) a credit spread;
                        ``(XV) a credit default swap;
                        ``(XVI) a credit swap;
                        ``(XVII) a weather swap;
                        ``(XVIII) an energy swap;
                        ``(XIX) a metal swap;
                        ``(XX) an agricultural swap;
                        ``(XXI) an emissions swap; and
                        ``(XXII) a commodity swap;

                    ``(iv) that is an agreement, contract, or transaction
                that is, or in the future becomes, commonly known to the
                trade as a swap;
                    ``(v) including any security-based swap agreement which
                meets the definition of `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; or
                    ``(vi) that is any combination or permutation of, or
                option on, any agreement, contract, or transaction
                described in any of clauses (i) through (v).
                ``(B) Exclusions.--The term `swap' does not include--
                    ``(i) any contract of sale of a commodity for future
                delivery (or option on such a contract), leverage contract
                authorized under section 19, security futures product, or
                agreement, contract, or transaction described in section
                2(c)(2)(C)(i) or section 2(c)(2)(D)(i);
                    ``(ii) any sale of a nonfinancial commodity or security
                for deferred shipment or delivery, so long as the
                transaction is intended to be physically settled;
                    ``(iii) any put, call, straddle, option, or privilege
                on any security, certificate of deposit, or group or index
                of securities, including any interest therein or based on
                the value thereof, that is subject to--

                        ``(I) the Securities Act of 1933 (15 U.S.C. 77a et
                    seq.); and
                        ``(II) the Securities Exchange Act of 1934 (15
                    U.S.C. 78a et seq.);

                    ``(iv) any put, call, straddle, option, or privilege
                relating to a foreign currency entered into on a national
                securities exchange registered pursuant to section 6(a) of
                the Securities Exchange Act of 1934 (15 U.S.C. 78f(a));
                    ``(v) any agreement, contract, or transaction providing
                for the purchase or sale of 1 or more securities on a fixed
                basis that is subject to--

                        ``(I) the Securities Act of 1933 (15 U.S.C. 77a et
                    seq.); and
                        ``(II) the Securities Exchange Act of 1934 (15
                    U.S.C. 78a et seq.);

                    ``(vi) any agreement, contract, or transaction
                providing for the purchase or sale of 1 or more securities
                on a contingent basis that is subject to the Securities Act
                of 1933 (15 U.S.C. 77a et seq.) and the Securities Exchange
                Act of 1934 (15 U.S.C. 78a et seq.), unless the agreement,
                contract, or transaction predicates the purchase or sale on
                the occurrence of a bona fide contingency that might
                reasonably be expected to affect or be affected by the
                creditworthiness of a party other than a party to the
                agreement, contract, or transaction;
                    ``(vii) any note, bond, or evidence of indebtedness
                that is a security, as defined in section 2(a)(1) of the
                Securities Act of 1933 (15 U.S.C. 77b(a)(1));
                    ``(viii) any agreement, contract, or transaction that
                is--

                        ``(I) based on a security; and
                        ``(II) entered into directly or through an
                    underwriter (as defined in section 2(a)(11) of the
                    Securities Act of 1933 (15 U.S.C. 77b(a)(11)) by the
                    issuer of such security for the purposes of raising
                    capital, unless the agreement, contract, or transaction
                    is entered into to manage a risk associated with
                    capital raising;

                    ``(ix) any agreement, contract, or transaction a
                counterparty of which is a Federal Reserve bank, the
                Federal Government, or a Federal agency that is expressly
                backed by the full faith and credit of the United States;
                and
                    ``(x) any security-based swap, other than a security-
                based swap as described in subparagraph (D).
                ``(C) Rule of construction regarding master agreements.--
                    ``(i) In general.--Except as provided in clause (ii),
                the term `swap' includes a master agreement that provides
                for an agreement, contract, or transaction that is a swap
                under subparagraph (A), together with each supplement to
                any master agreement, without regard to whether the master
                agreement contains an agreement, contract, or transaction
                that is not a swap pursuant to subparagraph (A).
                    ``(ii) Exception.--For purposes of clause (i), the
                master agreement shall be considered to be a swap only with
                respect to each agreement, contract, or transaction covered
                by the master agreement that is a swap pursuant to
                subparagraph (A).
                ``(D) Mixed swap.--The term `security-based swap' includes
            any agreement, contract, or transaction that is as described in
            section 3(a)(68)(A) of the Securities Exchange Act of 1934 (15
            U.S.C. 78c(a)(68)(A)) and also is based on the value of 1 or
            more interest or other rates, currencies, commodities,
            instruments of indebtedness, indices, quantitative measures,
            other financial or economic interest or property of any kind
            (other than a single security or a narrow-based security
            index), or the occurrence, non-occurrence, or the extent of the
            occurrence of an event or contingency associated with a
            potential financial, economic, or commercial consequence (other
            than an event described in subparagraph (A)(iii)).
                ``(E) Treatment of foreign exchange swaps and forwards.--
                    ``(i) In general.--Foreign exchange swaps and foreign
                exchange forwards shall be considered swaps under this
                paragraph unless the Secretary makes a written
                determination under section 1b that either foreign exchange
                swaps or foreign exchange forwards or both--

                        ``(I) should be not be regulated as swaps under
                    this Act; and
                        ``(II) are not structured to evade the Dodd-Frank
                    Wall Street Reform and Consumer Protection Act in
                    violation of any rule promulgated by the Commission
                    pursuant to section 721(c) of that Act.

                    ``(ii) Congressional notice; effectiveness.--The
                Secretary shall submit any written determination under
                clause (i) to the appropriate committees of Congress,
                including the Committee on Agriculture, Nutrition, and
                Forestry of the Senate and the Committee on Agriculture of
                the House of Representatives. Any such written
                determination by the Secretary shall not be effective until
                it is submitted to the appropriate committees of Congress.
                    ``(iii) Reporting.--Notwithstanding a written
                determination by the Secretary under clause (i), all
                foreign exchange swaps and foreign exchange forwards shall
                be reported to either a swap data repository, or, if there
                is no swap data repository that would accept such swaps or
                forwards, to the Commission pursuant to section 4r within
                such time period as the Commission may by rule or
                regulation prescribe.
                    ``(iv) Business standards.--Notwithstanding a written
                determination by the Secretary pursuant to clause (i), any
                party to a foreign exchange swap or forward that is a swap
                dealer or major swap participant shall conform to the
                business conduct standards contained in section 4s(h).
                    ``(v) Secretary.--For purposes of this subparagraph,
                the term `Secretary' means the Secretary of the Treasury.
                ``(F) Exception for certain foreign exchange swaps and
            forwards.--
                    ``(i) Registered entities.--Any foreign exchange swap
                and any foreign exchange forward that is listed and traded
                on or subject to the rules of a designated contract market
                or a swap execution facility, or that is cleared by a
                derivatives clearing organization, shall not be exempt from
                any provision of this Act or amendments made by the Wall
                Street Transparency and Accountability Act of 2010
                prohibiting fraud or manipulation.
                    ``(ii) Retail transactions.--Nothing in subparagraph
                (E) shall affect, or be construed to affect, the
                applicability of this Act or the jurisdiction of the
                Commission with respect to agreements, contracts, or
                transactions in foreign currency pursuant to section
                2(c)(2).
            ``(48) Swap data repository.--The term `swap data repository'
        means any person that collects and maintains information or records
        with respect to transactions or positions in, or the terms and
        conditions of, swaps entered into by third parties for the purpose
        of providing a centralized recordkeeping facility for swaps.
            ``(49) Swap dealer.--
                ``(A) In general.--The term `swap dealer' means any person
            who--
                    ``(i) holds itself out as a dealer in swaps;
                    ``(ii) makes a market in swaps;
                    ``(iii) regularly enters into swaps with counterparties
                as an ordinary course of business for its own account; or
                    ``(iv) engages in any activity causing the person to be
                commonly known in the trade as a dealer or market maker in
                swaps,
            provided however, in no event shall an insured depository
            institution be considered to be a swap dealer to the extent it
            offers to enter into a swap with a customer in connection with
            originating a loan with that customer.
                ``(B) Inclusion.--A person may be designated as a swap
            dealer for a single type or single class or category of swap or
            activities and considered not to be a swap dealer for other
            types, classes, or categories of swaps or activities.
                ``(C) Exception.--The term `swap dealer' does not include a
            person that enters into swaps for such person's own account,
            either individually or in a fiduciary capacity, but not as a
            part of a regular business.
                ``(D) De minimis exception.--The Commission shall exempt
            from designation as a swap dealer an entity that engages in a
            de minimis quantity of swap dealing in connection with
            transactions with or on behalf of its customers. The Commission
            shall promulgate regulations to establish factors with respect
            to the making of this determination to exempt.
            ``(50) Swap execution facility.--The term `swap execution
        facility' means a trading system or platform in which multiple
        participants have the ability to execute or trade swaps by
        accepting bids and offers made by multiple participants in the
        facility or system, through any means of interstate commerce,
        including any trading facility, that--
                ``(A) facilitates the execution of swaps between persons;
            and
                ``(B) is not a designated contract market.''.
            (22) in paragraph (51) (as redesignated by paragraph (1)), in
        subparagraph (A)(i), by striking ``partipants'' and inserting
        ``participants''.
        (b) Authority To Define Terms.--The Commodity Futures Trading
    Commission may adopt a rule to define--
            (1) the term ``commercial risk''; and
            (2) any other term included in an amendment to the Commodity
        Exchange Act (7 U.S.C. 1 et seq.) made by this subtitle.
        (c) Modification of Definitions.--To include transactions and
    entities that have been structured to evade this subtitle (or an
    amendment made by this subtitle), the Commodity Futures Trading
    Commission shall adopt a rule to further define the terms ``swap'',
    ``swap dealer'', ``major swap participant'', and ``eligible contract
    participant''.
        (d) Exemptions.--Section 4(c)(1) of the Commodity Exchange Act (7
    U.S.C. 6(c)(1)) is amended by striking ``except that'' and all that
    follows through the period at the end and inserting the following:
    ``except that--
            ``(A) unless the Commission is expressly authorized by any
        provision described in this subparagraph to grant exemptions, with
        respect to amendments made by subtitle A of the Wall Street
        Transparency and Accountability Act of 2010--
                ``(i) with respect to--
                    ``(I) paragraphs (2), (3), (4), (5), and (7), paragraph
                (18)(A)(vii)(III), paragraphs (23), (24), (31), (32), (38),
                (39), (41), (42), (46), (47), (48), and (49) of section 1a,
                and sections 2(a)(13), 2(c)(1)(D), 4a(a), 4a(b), 4d(c),
                4d(d), 4r, 4s, 5b(a), 5b(b), 5(d), 5(g), 5(h), 5b(c),
                5b(i), 8e, and 21; and
                    ``(II) section 206(e) of the Gramm-Leach-Bliley Act
                (Public Law 106-102; 15 U.S.C. 78c note); and
                ``(ii) in sections 721(c) and 742 of the Dodd-Frank Wall
            Street Reform and Consumer Protection Act; and
            ``(B) the Commission and the Securities and Exchange Commission
        may by rule, regulation, or order jointly exclude any agreement,
        contract, or transaction from section 2(a)(1)(D)) if the
        Commissions determine that the exemption would be consistent with
        the public interest.''.
        (e) Conforming Amendments.--
            (1) Section 2(c)(2)(B)(i)(II) of the Commodity Exchange Act (7
        U.S.C. 2(c)(2)(B)(i)(II)) is amended--
                (A) in item (cc)--
                    (i) in subitem (AA), by striking ``section 1a(20)'' and
                inserting ``section 1a''; and
                    (ii) in subitem (BB), by striking ``section 1a(20)''
                and inserting ``section 1a''; and
                (B) in item (dd), by striking ``section 1a(12)(A)(ii)'' and
            inserting ``section 1a(18)(A)(ii)''.
            (2) Section 4m(3) of the Commodity Exchange Act (7 U.S.C.
        6m(3)) is amended by striking ``section 1a(6)'' and inserting
        ``section 1a''.
            (3) Section 4q(a)(1) of the Commodity Exchange Act (7 U.S.C.
        6o-1(a)(1)) is amended by striking ``section 1a(4)'' and inserting
        ``section 1a(9)''.
            (4) Section 5(e)(1) of the Commodity Exchange Act (7 U.S.C.
        7(e)(1)) is amended by striking ``section 1a(4)'' and inserting
        ``section 1a(9)''.
            (5) Section 5a(b)(2)(F) of the Commodity Exchange Act (7 U.S.C.
        7a(b)(2)(F)) is amended by striking ``section 1a(4)'' and inserting
        ``section 1a(9)''.
            (6) Section 5b(a) of the Commodity Exchange Act (7 U.S.C. 7a-
        1(a)) is amended, in the matter preceding paragraph (1), by
        striking ``section 1a(9)'' and inserting ``section 1a''.
            (7) Section 5c(c)(2)(B) of the Commodity Exchange Act (7 U.S.C.
        7a-2(c)(2)(B)) is amended by striking ``section 1a(4)'' and
        inserting ``section 1a(9)''.
            (8) Section 6(g)(5)(B)(i) of the Securities Exchange Act of
        1934 (15 U.S.C. 78f(g)(5)(B)(i)) is amended--
                (A) in subclause (I), by striking ``section 1a(12)(B)(ii)''
            and inserting ``section 1a(18)(B)(ii)''; and
                (B) in subclause (II), by striking ``section 1a(12)'' and
            inserting ``section 1a(18)''.
            (9) Section 402 of the Legal Certainty for Bank Products Act of
        2000 (7 U.S.C. 27 et seq.) is amended--
                (A) in subsection (a)(7), by striking ``section 1a(20)''
            and inserting ``section 1a'';
                (B) in subsection (b)(2), by striking ``section 1a(12)''
            and inserting ``section 1a''; and
                (C) in subsection (c), by striking ``section 1a(4)'' and
            inserting ``section 1a''.
            (10) The first section of Public Law 85-839 (7 U.S.C. 13-1) is
        amended in subsection (a), in the first sentence, by inserting
        ``motion picture box office receipts (or any index, measure, value,
        or data related to such receipts) or'' after ``sale of''.
        (f) Effective Date.--Notwithstanding any other provision of this
    Act, the amendments made by subsection (a)(4) shall take effect on June
    1, 2010.
        SEC. 722. JURISDICTION.
        (a) Exclusive Jurisdiction.--Section 2(a)(1) of the Commodity
    Exchange Act (7 U.S.C. 2(a)(1)) is amended--
            (1) in subparagraph (A), in the first sentence--
                (A) by inserting ``the Wall Street Transparency and
            Accountability Act of 2010 (including an amendment made by that
            Act) and'' after ``otherwise provided in'';
                (B) by striking ``(C) and (D)'' and inserting ``(C), (D),
            and (I)'';
                (C) by striking ``(c) through (i) of this section'' and
            inserting ``(c) and (f)'';
                (D) by striking ``contracts of sale'' and inserting ``swaps
            or contracts of sale''; and
                (E) by striking ``or derivatives transaction execution
            facility registered pursuant to section 5 or 5a'' and inserting
            ``pursuant to section 5 or a swap execution facility pursuant
            to section 5h''; and
            (2) by adding at the end the following:
                ``(G)(i) Nothing in this paragraph shall limit the
            jurisdiction conferred on the Securities and Exchange
            Commission by the Wall Street Transparency and Accountability
            Act of 2010 with regard to security-based swap agreements as
            defined pursuant to section 3(a)(78) of the Securities Exchange
            Act of 1934, and security-based swaps.
                ``(ii) In addition to the authority of the Securities and
            Exchange Commission described in clause (i), nothing in this
            subparagraph shall limit or affect any statutory authority of
            the Commission with respect to an agreement, contract, or
            transaction described in clause (i).
                ``(H) Notwithstanding any other provision of law, the Wall
            Street Transparency and Accountability Act of 2010 shall not
            apply to, and the Commodity Futures Trading Commission shall
            have no jurisdiction under such Act (or any amendments to the
            Commodity Exchange Act made by such Act) with respect to, any
            security other than a security-based swap.''.
        (b) Regulation of Swaps Under Federal and State Law.--Section 12 of
    the Commodity Exchange Act (7 U.S.C. 16) is amended by adding at the
    end the following:
        ``(h) Regulation of Swaps as Insurance Under State Law.--A swap--
            ``(1) shall not be considered to be insurance; and
            ``(2) may not be regulated as an insurance contract under the
        law of any State.''.
        (c) Agreements, Contracts, and Transactions Traded on an Organized
    Exchange.--Section 2(c)(2)(A) of the Commodity Exchange Act (7 U.S.C.
    2(c)(2)(A)) is amended--
            (1) in clause (i), by striking ``or'' at the end;
            (2) by redesignating clause (ii) as clause (iii); and
            (3) by inserting after clause (i) the following:
                    ``(ii) a swap; or''.
        (d) Applicability.--Section 2 of the Commodity Exchange Act (7
    U.S.C. 2) (as amended by section 723(a)(3)) is amended by adding at the
    end the following:
        ``(i) Applicability.--The provisions of this Act relating to swaps
    that were enacted by the Wall Street Transparency and Accountability
    Act of 2010 (including any rule prescribed or regulation promulgated
    under that Act), shall not apply to activities outside the United
    States unless those activities--
            ``(1) have a direct and significant connection with activities
        in, or effect on, commerce of the United States; or
            ``(2) contravene such rules or regulations as the Commission
        may prescribe or promulgate as are necessary or appropriate to
        prevent the evasion of any provision of this Act that was enacted
        by the Wall Street Transparency and Accountability Act of 2010.''.
        (e) Federal Energy Regulatory Commission.--Section 2(a)(1) of the
    Commodity Exchange Act (7 U.S.C. 2(a)(1)) is amended by adding at the
    end the following:
                ``(I)(i) Nothing in this Act shall limit or affect any
            statutory authority of the Federal Energy Regulatory Commission
            or a State regulatory authority (as defined in section 3(21) of
            the Federal Power Act (16 U.S.C. 796(21)) with respect to an
            agreement, contract, or transaction that is entered into
            pursuant to a tariff or rate schedule approved by the Federal
            Energy Regulatory Commission or a State regulatory authority
            and is--
                    ``(I) not executed, traded, or cleared on a registered
                entity or trading facility; or
                    ``(II) executed, traded, or cleared on a registered
                entity or trading facility owned or operated by a regional
                transmission organization or independent system operator.
                ``(ii) In addition to the authority of the Federal Energy
            Regulatory Commission or a State regulatory authority described
            in clause (i), nothing in this subparagraph shall limit or
            affect--
                    ``(I) any statutory authority of the Commission with
                respect to an agreement, contract, or transaction described
                in clause (i); or
                    ``(II) the jurisdiction of the Commission under
                subparagraph (A) with respect to an agreement, contract, or
                transaction that is executed, traded, or cleared on a
                registered entity or trading facility that is not owned or
                operated by a regional transmission organization or
                independent system operator (as defined by sections 3(27)
                and (28) of the Federal Power Act (16 U.S.C. 796(27),
                796(28)).''.
        (f) Public Interest Waiver.--Section 4(c) of the Commodity Exchange
    Act (7 U.S.C. 6(c)) (as amended by section 721(d)) is amended by adding
    at the end the following:
            ``(6) If the Commission determines that the exemption would be
        consistent with the public interest and the purposes of this Act,
        the Commission shall, in accordance with paragraphs (1) and (2),
        exempt from the requirements of this Act an agreement, contract, or
        transaction that is entered into--
                ``(A) pursuant to a tariff or rate schedule approved or
            permitted to take effect by the Federal Energy Regulatory
            Commission;
                ``(B) pursuant to a tariff or rate schedule establishing
            rates or charges for, or protocols governing, the sale of
            electric energy approved or permitted to take effect by the
            regulatory authority of the State or municipality having
            jurisdiction to regulate rates and charges for the sale of
            electric energy within the State or municipality; or
                ``(C) between entities described in section 201(f) of the
            Federal Power Act (16 U.S.C. 824(f)).''.
        (g) Authority of FERC.--Nothing in the Wall Street Transparency and
    Accountability Act of 2010 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 Wall Street
    Transparency and Accountability Act of 2010.
        (h) Determination.--The Commodity Exchange Act is amended by
    inserting after section 1a (7 U.S.C. 1a) the following:
      ``SEC. 1b. REQUIREMENTS OF SECRETARY OF THE TREASURY REGARDING
          EXEMPTION OF FOREIGN EXCHANGE SWAPS AND FOREIGN EXCHANGE FORWARDS
          FROM DEFINITION OF THE TERM `SWAP'.
        ``(a) Required Considerations.--In determining whether to exempt
    foreign exchange swaps and foreign exchange forwards from the
    definition of the term `swap', the Secretary of the Treasury (referred
    to in this section as the `Secretary') shall consider--
            ``(1) whether the required trading and clearing of foreign
        exchange swaps and foreign exchange forwards would create systemic
        risk, lower transparency, or threaten the financial stability of
        the United States;
            ``(2) whether foreign exchange swaps and foreign exchange
        forwards are already subject to a regulatory scheme that is
        materially comparable to that established by this Act for other
        classes of swaps;
            ``(3) the extent to which bank regulators of participants in
        the foreign exchange market provide adequate supervision, including
        capital and margin requirements;
            ``(4) the extent of adequate payment and settlement systems;
        and
            ``(5) the use of a potential exemption of foreign exchange
        swaps and foreign exchange forwards to evade otherwise applicable
        regulatory requirements.
        ``(b) Determination.--If the Secretary makes a determination to
    exempt foreign exchange swaps and foreign exchange forwards from the
    definition of the term `swap', the Secretary shall submit to the
    appropriate committees of Congress a determination that contains--
            ``(1) an explanation regarding why foreign exchange swaps and
        foreign exchange forwards are qualitatively different from other
        classes of swaps in a way that would make the foreign exchange
        swaps and foreign exchange forwards ill-suited for regulation as
        swaps; and
            ``(2) an identification of the objective differences of foreign
        exchange swaps and foreign exchange forwards with respect to
        standard swaps that warrant an exempted status.
        ``(c) Effect of Determination.--A determination by the Secretary
    under subsection (b) shall not exempt any foreign exchange swaps and
    foreign exchange forwards traded on a designated contract market or
    swap execution facility from any applicable antifraud and
    antimanipulation provision under this title.''.
        SEC. 723. CLEARING.
        (a) Clearing Requirement.--
            (1) In general.--Section 2 of the Commodity Exchange Act (7
        U.S.C. 2) is amended--
                (A) by striking subsections (d), (e), (g), and (h); and
                (B) by redesignating subsection (i) as subsection (g).
            (2) Swaps; limitation on participation.--Section 2 of the
        Commodity Exchange Act (7 U.S.C. 2) (as amended by paragraph (1))
        is amended by inserting after subsection (c) the following:
        ``(d) Swaps.--Nothing in this Act (other than subparagraphs (A),
    (B), (C), (D), (G), and (H) of subsection (a)(1), subsections (f) and
    (g), sections 1a, 2(a)(13), 2(c)(2)(A)(ii), 2(e), 2(h), 4(c), 4a, 4b,
    and 4b-1, subsections (a), (b), and (g) of section 4c, sections 4d, 4e,
    4f, 4g, 4h, 4i, 4j, 4k, 4l, 4m, 4n, 4o, 4p, 4r, 4s, 4t, 5, 5b, 5c, 5e,
    and 5h, subsections (c) and (d) of section 6, sections 6c, 6d, 8, 8a,
    and 9, subsections (e)(2), (f), and (h) of section 12, subsections (a)
    and (b) of section 13, sections 17, 20, 21, and 22(a)(4), and any other
    provision of this Act that is applicable to registered entities or
    Commission registrants) governs or applies to a swap.
        ``(e) Limitation on Participation.--It shall be unlawful for any
    person, other than an eligible contract participant, to enter into a
    swap unless the swap is entered into on, or subject to the rules of, a
    board of trade designated as a contract market under section 5.''.
            (3) Mandatory clearing of swaps.--Section 2 of the Commodity
        Exchange Act (7 U.S.C. 2) is amended by inserting after subsection
        (g) (as redesignated by paragraph (1)(B)) the following:
        ``(h) Clearing Requirement.--
            ``(1) In general.--
                ``(A) Standard for clearing.--It shall be unlawful for any
            person to engage in a swap unless that person submits such swap
            for clearing to a derivatives clearing organization that is
            registered under this Act or a derivatives clearing
            organization that is exempt from registration under this Act if
            the swap is required to be cleared.
                ``(B) Open access.--The rules of a derivatives clearing
            organization described in subparagraph (A) shall--
                    ``(i) prescribe that all swaps (but not contracts of
                sale of a commodity for future delivery or options on such
                contracts) submitted to the derivatives clearing
                organization with the same terms and conditions are
                economically equivalent within the derivatives clearing
                organization and may be offset with each other within the
                derivatives clearing organization; and
                    ``(ii) provide for non-discriminatory clearing of a
                swap (but not a contract of sale of a commodity for future
                delivery or option on such contract) executed bilaterally
                or on or through the rules of an unaffiliated designated
                contract market or swap execution facility.
            ``(2) Commission review.--
                ``(A) Commission-initiated review.--
                    ``(i) The Commission on an ongoing basis shall review
                each swap, or any group, category, type, or class of swaps
                to make a determination as to whether the swap or group,
                category, type, or class of swaps should be required to be
                cleared.
                    ``(ii) The Commission shall provide at least a 30-day
                public comment period regarding any determination made
                under clause (i).
                ``(B) Swap submissions.--
                    ``(i) A derivatives clearing organization shall submit
                to the Commission each swap, or any group, category, type,
                or class of swaps that it plans to accept for clearing, and
                provide notice to its members (in a manner to be determined
                by the Commission) of the submission.
                    ``(ii) Any swap or group, category, type, or class of
                swaps listed for clearing by a derivative clearing
                organization as of the date of enactment of this subsection
                shall be considered submitted to the Commission.
                    ``(iii) The Commission shall--

                        ``(I) make available to the public submissions
                    received under clauses (i) and (ii);
                        ``(II) review each submission made under clauses
                    (i) and (ii), and determine whether the swap, or group,
                    category, type, or class of swaps described in the
                    submission is required to be cleared; and
                        ``(III) provide at least a 30-day public comment
                    period regarding its determination as to whether the
                    clearing requirement under paragraph (1)(A) shall apply
                    to the submission.

                ``(C) Deadline.--The Commission shall make its
            determination under subparagraph (B)(iii) not later than 90
            days after receiving a submission made under subparagraphs
            (B)(i) and (B)(ii), unless the submitting derivatives clearing
            organization agrees to an extension for the time limitation
            established under this subparagraph.
                ``(D) Determination.--
                    ``(i) In reviewing a submission made under subparagraph
                (B), the Commission shall review whether the submission is
                consistent with section 5b(c)(2).
                    ``(ii) In reviewing a swap, group of swaps, or class of
                swaps pursuant to subparagraph (A) or a submission made
                under subparagraph (B), the Commission shall take into
                account the following factors:

                        ``(I) The existence of significant outstanding
                    notional exposures, trading liquidity, and adequate
                    pricing data.
                        ``(II) The availability of rule framework,
                    capacity, operational expertise and resources, and
                    credit support infrastructure to clear the contract on
                    terms that are consistent with the material terms and
                    trading conventions on which the contract is then
                    traded.
                        ``(III) The effect on the mitigation of systemic
                    risk, taking into account the size of the market for
                    such contract and the resources of the derivatives
                    clearing organization available to clear the contract.
                        ``(IV) The effect on competition, including
                    appropriate fees and charges applied to clearing.
                        ``(V) The existence of reasonable legal certainty
                    in the event of the insolvency of the relevant
                    derivatives clearing organization or 1 or more of its
                    clearing members with regard to the treatment of
                    customer and swap counterparty positions, funds, and
                    property.

                    ``(iii) In making a determination under subparagraph
                (A) or (B)(iii) that the clearing requirement shall apply,
                the Commission may require such terms and conditions to the
                requirement as the Commission determines to be appropriate.
                ``(E) Rules.--Not later than 1 year after the date of the
            enactment of this subsection, 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. Nothing in this subparagraph limits the Commission
            from making a determination under subparagraph (B)(iii) for
            swaps described in subparagraph (B)(ii).
            ``(3) Stay of clearing requirement.--
                ``(A) In general.--After making a determination pursuant to
            paragraph (2)(B), the Commission, on application of a
            counterparty to a swap or on its own initiative, may stay the
            clearing requirement of paragraph (1) until the Commission
            completes a review of the terms of the swap (or the group,
            category, type, or class of swaps) and the clearing
            arrangement.
                ``(B) Deadline.--The Commission shall complete a review
            undertaken pursuant to subparagraph (A) not later than 90 days
            after issuance of the stay, unless the derivatives clearing
            organization that clears the swap, or group, category, type, or
            class of swaps agrees to an extension of the time limitation
            established under this subparagraph.
                ``(C) Determination.--Upon completion of the review
            undertaken pursuant to subparagraph (A), the Commission may--
                    ``(i) determine, unconditionally or subject to such
                terms and conditions as the Commission determines to be
                appropriate, that the swap, or group, category, type, or
                class of swaps must be cleared pursuant to this subsection
                if it finds that such clearing is consistent with paragraph
                (2)(D); or
                    ``(ii) determine that the clearing requirement of
                paragraph (1) shall not apply to the swap, or group,
                category, type, or class of swaps.
                ``(D) Rules.--Not later than 1 year after the date of the
            enactment of the Wall Street Transparency and Accountability
            Act of 2010, the Commission shall adopt rules for reviewing,
            pursuant to this paragraph, a derivatives clearing
            organization's clearing of a swap, or a group, category, type,
            or class of swaps, that it has accepted for clearing.
            ``(4) Prevention of evasion.--
                ``(A) In general.--The Commission shall prescribe rules
            under this subsection (and issue interpretations of rules
            prescribed under this subsection) as determined by the
            Commission to be necessary to prevent evasions of the mandatory
            clearing requirements under this Act.
                ``(B) Duty of commission to investigate and take certain
            actions.--To the extent the Commission finds that a particular
            swap, group, category, type, or class of swaps would otherwise
            be subject to mandatory clearing but no derivatives clearing
            organization has listed the swap, group, category, type, or
            class of swaps for clearing, the Commission shall--
                    ``(i) investigate the relevant facts and circumstances;
                    ``(ii) within 30 days issue a public report containing
                the results of the investigation; and
                    ``(iii) take such actions as the Commission determines
                to be necessary and in the public interest, which may
                include requiring the retaining of adequate margin or
                capital by parties to the swap, group, category, type, or
                class of swaps.
                ``(C) Effect on authority.--Nothing in this paragraph--
                    ``(i) authorizes the Commission to adopt rules
                requiring a derivatives clearing organization to list for
                clearing a swap, group, category, type, or class of swaps
                if the clearing of the swap, group, category, type, or
                class of swaps would threaten the financial integrity of
                the derivatives clearing organization; and
                    ``(ii) affects the authority of the Commission to
                enforce the open access provisions of paragraph (1)(B) with
                respect to a swap, group, category, type, or class of swaps
                that is listed for clearing by a derivatives clearing
                organization.
            ``(5) Reporting transition rules.--Rules adopted by the
        Commission under this section shall provide for the reporting of
        data, as follows:
                ``(A) Swaps entered into before the date of the enactment
            of this subsection shall be reported to a registered swap data
            repository or the Commission no later than 180 days after the
            effective date of this subsection.
                ``(B) Swaps entered into on or after such date of enactment
            shall be reported to a registered swap data repository or the
            Commission no later than the later of--
                    ``(i) 90 days after such effective date; or
                    ``(ii) such other time after entering into the swap as
                the Commission may prescribe by rule or regulation.
            ``(6) Clearing transition rules.--
                ``(A) Swaps entered into before the date of the enactment
            of this subsection are exempt from the clearing requirements of
            this subsection if reported pursuant to paragraph (5)(A).
                ``(B) Swaps entered into before application of the clearing
            requirement pursuant to this subsection are exempt from the
            clearing requirements of this subsection if reported pursuant
            to paragraph (5)(B).
            ``(7) Exceptions.--
                ``(A) In general.--The requirements of paragraph (1)(A)
            shall not apply to a swap if 1 of the counterparties to the
            swap--
                    ``(i) is not a financial entity;
                    ``(ii) is using swaps to hedge or mitigate commercial
                risk; and
                    ``(iii) notifies the Commission, in a manner set forth
                by the Commission, how it generally meets its financial
                obligations associated with entering into non-cleared
                swaps.
                ``(B) Option to clear.--The application of the clearing
            exception in subparagraph (A) is solely at the discretion of
            the counterparty to the swap that meets the conditions of
            clauses (i) through (iii) of subparagraph (A).
                ``(C) Financial entity definition.--
                    ``(i) In general.--For the purposes of this paragraph,
                the term `financial entity' means--

                        ``(I) a swap dealer;
                        ``(II) a security-based swap dealer;
                        ``(III) a major swap participant;
                        ``(IV) a major security-based swap participant;
                        ``(V) a commodity pool;
                        ``(VI) a private fund as defined in section 202(a)
                    of the Investment Advisers Act of 1940 (15 U.S.C. 80-b-
                    2(a));
                        ``(VII) an employee benefit plan as defined in
                    paragraphs (3) and (32) of section 3 of the Employee
                    Retirement Income Security Act of 1974 (29 U.S.C.
                    1002);
                        ``(VIII) a person predominantly engaged in
                    activities that are in the business of banking, or in
                    activities that are financial in nature, as defined in
                    section 4(k) of the Bank Holding Company Act of 1956.

                    ``(ii) Exclusion.--The Commission shall consider
                whether to exempt small banks, savings associations, farm
                credit system institutions, and credit unions, including--

                        ``(I) depository institutions with total assets of
                    $10,000,000,000 or less;
                        ``(II) farm credit system institutions with total
                    assets of $10,000,000,000 or less; or
                        ``(III) credit unions with total assets of
                    $10,000,000,000 or less.

                    ``(iii) Limitation.--Such definition shall not include
                an entity whose primary business is providing financing,
                and uses derivatives for the purpose of hedging underlying
                commercial risks related to interest rate and foreign
                currency exposures, 90 percent or more of which arise from
                financing that facilitates the purchase or lease of
                products, 90 percent or more of which are manufactured by
                the parent company or another subsidiary of the parent
                company.
                ``(D) Treatment of affiliates.--
                    ``(i) In general.--An affiliate of a person that
                qualifies for an exception under subparagraph (A)
                (including affiliate entities predominantly engaged in
                providing financing for the purchase of the merchandise or
                manufactured goods of the person) may qualify for the
                exception only if the affiliate, acting on behalf of the
                person and as an agent, uses the swap to hedge or mitigate
                the commercial risk of the person or other affiliate of the
                person that is not a financial entity.
                    ``(ii) Prohibition relating to certain affiliates.--The
                exception in clause (i) shall not apply if the affiliate
                is--

                        ``(I) a swap dealer;
                        ``(II) a security-based swap dealer;
                        ``(III) a major swap participant;
                        ``(IV) a major security-based swap participant;
                        ``(V) an issuer that would be an investment
                    company, as defined in section 3 of the Investment
                    Company Act of 1940 (15 U.S.C. 80a-3), but for
                    paragraph (1) or (7) of subsection (c) of that Act (15
                    U.S.C. 80a-3(c));
                        ``(VI) a commodity pool; or
                        ``(VII) a bank holding company with over
                    $50,000,000,000 in consolidated assets.

                    ``(iii) Transition rule for affiliates.--An affiliate,
                subsidiary, or a wholly owned entity of a person that
                qualifies for an exception under subparagraph (A) and is
                predominantly engaged in providing financing for the
                purchase or lease of merchandise or manufactured goods of
                the person shall be exempt from the margin requirement
                described in section 4s(e) and the clearing requirement
                described in paragraph (1) with regard to swaps entered
                into to mitigate the risk of the financing activities for
                not less than a 2-year period beginning on the date of
                enactment of this clause.
                ``(E) Election of counterparty.--
                    ``(i) Swaps required to be cleared.--With respect to
                any swap that is subject to the mandatory clearing
                requirement under this subsection and entered into by a
                swap dealer or a major swap participant with a counterparty
                that is not a swap dealer, major swap participant,
                security-based swap dealer, or major security-based swap
                participant, the counterparty shall have the sole right to
                select the derivatives clearing organization at which the
                swap will be cleared.
                    ``(ii) Swaps not required to be cleared.--With respect
                to any swap that is not subject to the mandatory clearing
                requirement under this subsection and entered into by a
                swap dealer or a major swap participant with a counterparty
                that is not a swap dealer, major swap participant,
                security-based swap dealer, or major security-based swap
                participant, the counterparty--

                        ``(I) may elect to require clearing of the swap;
                    and
                        ``(II) shall have the sole right to select the
                    derivatives clearing organization at which the swap
                    will be cleared.

                ``(F) Abuse of exception.--The Commission may prescribe
            such rules or issue interpretations of the rules as the
            Commission determines to be necessary to prevent abuse of the
            exceptions described in this paragraph. The Commission may also
            request information from those persons claiming the clearing
            exception as necessary to prevent abuse of the exceptions
            described in this paragraph.
            ``(8) Trade execution.--
                ``(A) In general.--With respect to transactions involving
            swaps subject to the clearing requirement of paragraph (1),
            counterparties shall--
                    ``(i) execute the transaction on a board of trade
                designated as a contract market under section 5; or
                    ``(ii) execute the transaction on a swap execution
                facility registered under 5h or a swap execution facility
                that is exempt from registration under section 5h(f) of
                this Act.
                ``(B) Exception.--The requirements of clauses (i) and (ii)
            of subparagraph (A) shall not apply if no board of trade or
            swap execution facility makes the swap available to trade or
            for swap transactions subject to the clearing exception under
            paragraph (7).''.
        (b) Commodity Exchange Act.--Section 2 of the Commodity Exchange
    Act (7 U.S.C. 2) is amended by adding at the end the following:
        ``(j)  Committee Approval by Board.--Exemptions from the
    requirements of subsection (h)(1) to clear a swap and subsection (h)(8)
    to execute a swap through a board of trade or swap execution facility
    shall be available to a counterparty that is an issuer of securities
    that are registered under section 12 of the Securities Exchange Act of
    1934 (15 U.S.C. 78l) or that is required to file reports pursuant to
    section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78o)
    only if an appropriate committee of the issuer's board or governing
    body has reviewed and approved its decision to enter into swaps that
    are subject to such exemptions.''.
        (c) Grandfather Provisions.--
            (1) Legal certainty for certain transactions in exempt
        commodities.--Not later than 60 days after the date of enactment of
        this Act, a person may submit to the Commodity Futures Trading
        Commission a petition to remain subject to section 2(h) of the
        Commodity Exchange Act (7 U.S.C. 2(h)) (as in effect on the day
        before the date of enactment of this Act).
            (2) Consideration; authority of commodity futures trading
        commission.--The Commodity Futures Trading Commission--
                (A) shall consider any petition submitted under
            subparagraph (A) in a prompt manner; and
                (B) may allow a person to continue operating subject to
            section 2(h) of the Commodity Exchange Act (7 U.S.C. 2(h)) (as
            in effect on the day before the date of enactment of this Act)
            for not longer than a 1-year period.
            (3) Agricultural swaps.--
                (A) In general.--Except as provided in subparagraph (B), no
            person shall offer to enter into, enter into, or confirm the
            execution of, any swap in an agricultural commodity (as defined
            by the Commodity Futures Trading Commission).
                (B) Exception.--Notwithstanding subparagraph (A), a person
            may offer to enter into, enter into, or confirm the execution
            of, any swap in an agricultural commodity pursuant to section
            4(c) of the Commodity Exchange Act (7 U.S.C. 6(c)) or any rule,
            regulation, or order issued thereunder (including any rule,
            regulation, or order in effect as of the date of enactment of
            this Act) by the Commodity Futures Trading Commission to allow
            swaps under such terms and conditions as the Commission shall
            prescribe.
            (4) Required reporting.--If the exception described in section
        2(h)(8)(B) of the Commodity Exchange Act applies, the
        counterparties shall comply with any recordkeeping and transaction
        reporting requirements that may be prescribed by the Commission
        with respect to swaps subject to section 2(h)(8)(B) of the
        Commodity Exchange Act.
        SEC. 724. SWAPS; SEGREGATION AND BANKRUPTCY TREATMENT.
        (a) Segregation Requirements for Cleared Swaps.--Section 4d of the
    Commodity Exchange Act (7 U.S.C. 6d) (as amended by section 732) is
    amended by adding at the end the following:
        ``(f) Swaps.--
            ``(1) Registration requirement.--It shall be unlawful for any
        person to accept any money, securities, or property (or to extend
        any credit in lieu of money, securities, or property) from, for, or
        on behalf of a swaps customer to margin, guarantee, or secure a
        swap cleared by or through a derivatives clearing organization
        (including money, securities, or property accruing to the customer
        as the result of such a swap), unless the person shall have
        registered under this Act with the Commission as a futures
        commission merchant, and the registration shall not have expired
        nor been suspended nor revoked.
            ``(2) Cleared swaps.--
                ``(A) Segregation required.--A futures commission merchant
            shall treat and deal with all money, securities, and property
            of any swaps customer received to margin, guarantee, or secure
            a swap cleared by or though a derivatives clearing organization
            (including money, securities, or property accruing to the swaps
            customer as the result of such a swap) as belonging to the
            swaps customer.
                ``(B) Commingling prohibited.--Money, securities, and
            property of a swaps customer described in subparagraph (A)
            shall be separately accounted for and shall not be commingled
            with the funds of the futures commission merchant or be used to
            margin, secure, or guarantee any trades or contracts of any
            swaps customer or person other than the person for whom the
            same are held.
            ``(3) Exceptions.--
                ``(A) Use of funds.--
                    ``(i) In general.--Notwithstanding paragraph (2),
                money, securities, and property of swap customers of a
                futures commission merchant described in paragraph (2) may,
                for convenience, be commingled and deposited in the same
                account or accounts with any bank or trust company or with
                a derivatives clearing organization.
                    ``(ii) Withdrawal.--Notwithstanding paragraph (2), such
                share of the money, securities, and property described in
                clause (i) as in the normal course of business shall be
                necessary to margin, guarantee, secure, transfer, adjust,
                or settle a cleared swap with a derivatives clearing
                organization, or with any member of the derivatives
                clearing organization, may be withdrawn and applied to such
                purposes, including the payment of commissions, brokerage,
                interest, taxes, storage, and other charges, lawfully
                accruing in connection with the cleared swap.
                ``(B) Commission action.--Notwithstanding paragraph (2), in
            accordance with such terms and conditions as the Commission may
            prescribe by rule, regulation, or order, any money, securities,
            or property of the swaps customers of a futures commission
            merchant described in paragraph (2) may be commingled and
            deposited in customer accounts with any other money,
            securities, or property received by the futures commission
            merchant and required by the Commission to be separately
            accounted for and treated and dealt with as belonging to the
            swaps customer of the futures commission merchant.
            ``(4) Permitted investments.--Money described in paragraph (2)
        may be invested in obligations of the United States, in general
        obligations of any State or of any political subdivision of a
        State, and in obligations fully guaranteed as to principal and
        interest by the United States, or in any other investment that the
        Commission may by rule or regulation prescribe, and such
        investments shall be made in accordance with such rules and
        regulations and subject to such conditions as the Commission may
        prescribe.
            ``(5) Commodity contract.--A swap cleared by or through a
        derivatives clearing organization shall be considered to be a
        commodity contract as such term is defined in section 761 of title
        11, United States Code, with regard to all money, securities, and
        property of any swaps customer received by a futures commission
        merchant or a derivatives clearing organization to margin,
        guarantee, or secure the swap (including money, securities, or
        property accruing to the customer as the result of the swap).
            ``(6) Prohibition.--It shall be unlawful for any person,
        including any derivatives clearing organization and any depository
        institution, that has received any money, securities, or property
        for deposit in a separate account or accounts as provided in
        paragraph (2) to hold, dispose of, or use any such money,
        securities, or property as belonging to the depositing futures
        commission merchant or any person other than the swaps customer of
        the futures commission merchant.''.
        (b) Bankruptcy Treatment of Cleared Swaps.--Section 761 of title
    11, United States Code, is amended--
            (1) in paragraph (4), by striking subparagraph (F) and
        inserting the following:
                ``(F)(i) any other contract, option, agreement, or
            transaction that is similar to a contract, option, agreement,
            or transaction referred to in this paragraph; and
                ``(ii) with respect to a futures commission merchant or a
            clearing organization, any other contract, option, agreement,
            or transaction, in each case, that is cleared by a clearing
            organization;''; and
            (2) in paragraph (9)(A)(i), by striking ``the commodity futures
        account'' and inserting ``a commodity contract account''.
        (c) Segregation Requirements for Uncleared Swaps.--Section 4s of
    the Commodity Exchange Act (as added by section 731) is amended by
    adding at the end the following:
        ``(l) Segregation Requirements.--
            ``(1) Segregation of assets held as collateral in uncleared
        swap transactions.--
                ``(A) Notification.--A swap dealer or major swap
            participant shall be required to notify the counterparty of the
            swap dealer or major swap participant at the beginning of a
            swap transaction that the counterparty has the right to require
            segregation of the funds or other property supplied to margin,
            guarantee, or secure the obligations of the counterparty.
                ``(B) Segregation and maintenance of funds.--At the request
            of a counterparty to a swap that provides funds or other
            property to a swap dealer or major swap participant to margin,
            guarantee, or secure the obligations of the counterparty, the
            swap dealer or major swap participant shall--
                    ``(i) segregate the funds or other property for the
                benefit of the counterparty; and
                    ``(ii) in accordance with such rules and regulations as
                the Commission may promulgate, maintain the funds or other
                property in a segregated account separate from the assets
                and other interests of the swap dealer or major swap
                participant.
            ``(2) Applicability.--The requirements described in paragraph
        (1) shall--
                ``(A) apply only to a swap between a counterparty and a
            swap dealer or major swap participant that is not submitted for
            clearing to a derivatives clearing organization; and
                ``(B)(i) not apply to variation margin payments; or
                ``(ii) not preclude any commercial arrangement regarding--
                    ``(I) the investment of segregated funds or other
                property that may only be invested in such investments as
                the Commission may permit by rule or regulation; and
                    ``(II) the related allocation of gains and losses
                resulting from any investment of the segregated funds or
                other property.
            ``(3) Use of independent third-party custodians.--The
        segregated account described in paragraph (1) shall be--
                ``(A) carried by an independent third-party custodian; and
                ``(B) designated as a segregated account for and on behalf
            of the counterparty.
            ``(4) Reporting requirement.--If the counterparty does not
        choose to require segregation of the funds or other property
        supplied to margin, guarantee, or secure the obligations of the
        counterparty, the swap dealer or major swap participant shall
        report to the counterparty of the swap dealer or major swap
        participant on a quarterly basis that the back office procedures of
        the swap dealer or major swap participant relating to margin and
        collateral requirements are in compliance with the agreement of the
        counterparties.''.
        SEC. 725. DERIVATIVES CLEARING ORGANIZATIONS.
        (a) Registration Requirement.--Section 5b of the Commodity Exchange
    Act (7 U.S.C. 7a-1) is amended by striking subsections (a) and (b) and
    inserting the following:
        ``(a) Registration Requirement.--
            ``(1) In general.--Except as provided in paragraph (2), it
        shall be unlawful for a derivatives clearing organization, 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 with respect to--
                ``(A) a contract of sale of a commodity for future delivery
            (or an option on the contract of sale) or option on a
            commodity, in each case, unless the contract or option is--
                    ``(i) excluded from this Act by subsection
                (a)(1)(C)(i), (c), or (f) of section 2; or
                    ``(ii) a security futures product cleared by a clearing
                agency registered with the Securities and Exchange
                Commission under the Securities Exchange Act of 1934 (15
                U.S.C. 78a et seq.); or
                ``(B) a swap.
            ``(2) Exception.--Paragraph (1) shall not apply to a
        derivatives clearing organization that is registered with the
        Commission.
        ``(b) Voluntary Registration.--A person that clears 1 or more
    agreements, contracts, or transactions that are not required to be
    cleared under this Act may register with the Commission as a
    derivatives clearing organization.''.
        (b) Registration for Depository Institutions and Clearing Agencies;
    Exemptions; Compliance Officer; Annual Reports.--Section 5b of the
    Commodity Exchange Act (7 U.S.C. 7a-1) is amended by adding at the end
    the following:
        ``(g) Existing Depository Institutions and Clearing Agencies.--
            ``(1) In general.--A depository institution or clearing agency
        registered with the Securities and Exchange Commission under the
        Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) that is
        required to be registered as a derivatives clearing organization
        under this section is deemed to be registered under this section to
        the extent that, before the date of enactment of this subsection--
                ``(A) the depository institution cleared swaps as a
            multilateral clearing organization; or
                ``(B) the clearing agency cleared swaps.
            ``(2) Conversion of depository institutions.--A depository
        institution to which this subsection applies may, by the vote of
        the shareholders owning not less than 51 percent of the voting
        interests of the depository institution, be converted into a State
        corporation, partnership, limited liability company, or similar
        legal form pursuant to a plan of conversion, if the conversion is
        not in contravention of applicable State law.
            ``(3) Sharing of information.--The Securities and Exchange
        Commission shall make available to the Commission, upon request,
        all information determined to be relevant by the Securities and
        Exchange Commission regarding a clearing agency deemed to be
        registered with the Commission under paragraph (1).
        ``(h) Exemptions.--The Commission may exempt, conditionally or
    unconditionally, a derivatives clearing organization from registration
    under this section for the clearing of swaps if the Commission
    determines that the derivatives clearing organization is subject to
    comparable, comprehensive supervision and regulation by the Securities
    and Exchange Commission or the appropriate government authorities in
    the home country of the organization. Such conditions may include, but
    are not limited to, requiring that the derivatives clearing
    organization be available for inspection by the Commission and make
    available all information requested by the Commission.
        ``(i) Designation of Chief Compliance Officer.--
            ``(1) In general.--Each derivatives clearing organization shall
        designate an individual to serve as a chief compliance officer.
            ``(2) Duties.--The chief compliance officer shall--
                ``(A) report directly to the board or to the senior officer
            of the derivatives clearing organization;
                ``(B) review the compliance of the derivatives clearing
            organization with respect to the core principles described in
            subsection (c)(2);
                ``(C) in consultation with the board of the derivatives
            clearing organization, a body performing a function similar to
            the board of the derivatives clearing organization, or the
            senior officer of the derivatives clearing organization,
            resolve any conflicts of interest that may arise;
                ``(D) be responsible for administering each policy and
            procedure that is required to be established pursuant to this
            section;
                ``(E) ensure compliance with this Act (including
            regulations) relating to agreements, contracts, or
            transactions, including each rule prescribed by the Commission
            under this section;
                ``(F) establish procedures for the remediation of
            noncompliance issues identified by the compliance officer
            through any--
                    ``(i) compliance office review;
                    ``(ii) look-back;
                    ``(iii) internal or external audit finding;
                    ``(iv) self-reported error; or
                    ``(v) validated complaint; and
                ``(G) establish and follow appropriate procedures for the
            handling, management response, remediation, retesting, and
            closing of noncompliance issues.
            ``(3) Annual reports.--
                ``(A) In general.--In accordance with rules prescribed by
            the Commission, the chief compliance officer shall annually
            prepare and sign a report that contains a description of--
                    ``(i) the compliance of the derivatives clearing
                organization of the compliance officer with respect to this
                Act (including regulations); and
                    ``(ii) each policy and procedure of the derivatives
                clearing organization of the compliance officer (including
                the code of ethics and conflict of interest policies of the
                derivatives clearing organization).
                ``(B) Requirements.--A compliance report under subparagraph
            (A) shall--
                    ``(i) accompany each appropriate financial report of
                the derivatives clearing organization that is required to
                be furnished to the Commission pursuant to this section;
                and
                    ``(ii) include a certification that, under penalty of
                law, the compliance report is accurate and complete.''.
        (c) Core Principles for Derivatives Clearing Organizations.--
    Section 5b(c) of the Commodity Exchange Act (7 U.S.C. 7a-1(c)) is
    amended by striking paragraph (2) and inserting the following:
            ``(2) Core principles for derivatives clearing organizations.--
                ``(A) Compliance.--
                    ``(i) In general.--To be registered and to maintain
                registration as a derivatives clearing organization, a
                derivatives clearing organization shall comply with each
                core principle described in this paragraph and any
                requirement that the Commission may impose by rule or
                regulation pursuant to section 8a(5).
                    ``(ii) Discretion of derivatives clearing
                organization.--Subject to any rule or regulation prescribed
                by the Commission, a derivatives clearing organization
                shall have reasonable discretion in establishing the manner
                by which the derivatives clearing organization complies
                with each core principle described in this paragraph.
                ``(B) Financial resources.--
                    ``(i) In general.--Each derivatives clearing
                organization shall have adequate financial, operational,
                and managerial resources, as determined by the Commission,
                to discharge each responsibility of the derivatives
                clearing organization.
                    ``(ii) Minimum amount of financial resources.--Each
                derivatives clearing organization shall possess financial
                resources that, at a minimum, exceed the total amount that
                would--

                        ``(I) enable the organization to meet its financial
                    obligations to its members and participants
                    notwithstanding a default by the member or participant
                    creating the largest financial exposure for that
                    organization in extreme but plausible market
                    conditions; and
                        ``(II) enable the derivatives clearing organization
                    to cover the operating costs of the derivatives
                    clearing organization for a period of 1 year (as
                    calculated on a rolling basis).

                ``(C) Participant and product eligibility.--
                    ``(i) In general.--Each derivatives clearing
                organization shall establish--

                        ``(I) appropriate admission and continuing
                    eligibility standards (including sufficient financial
                    resources and operational capacity to meet obligations
                    arising from participation in the derivatives clearing
                    organization) for members of, and participants in, the
                    derivatives clearing organization; and
                        ``(II) appropriate standards for determining the
                    eligibility of agreements, contracts, or transactions
                    submitted to the derivatives clearing organization for
                    clearing.

                    ``(ii) Required procedures.--Each derivatives clearing
                organization shall establish and implement procedures to
                verify, on an ongoing basis, the compliance of each
                participation and membership requirement of the derivatives
                clearing organization.
                    ``(iii) Requirements.--The participation and membership
                requirements of each derivatives clearing organization
                shall--

                        ``(I) be objective;
                        ``(II) be publicly disclosed; and
                        ``(III) permit fair and open access.

                ``(D) Risk management.--
                    ``(i) In general.--Each derivatives clearing
                organization shall ensure that the derivatives clearing
                organization possesses the ability to manage the risks
                associated with discharging the responsibilities of the
                derivatives clearing organization through the use of
                appropriate tools and procedures.
                    ``(ii) Measurement of credit exposure.--Each
                derivatives clearing organization shall--

                        ``(I) not less than once during each business day
                    of the derivatives clearing organization, measure the
                    credit exposures of the derivatives clearing
                    organization to each member and participant of the
                    derivatives clearing organization; and
                        ``(II) monitor each exposure described in subclause
                    (I) periodically during the business day of the
                    derivatives clearing organization.

                    ``(iii) Limitation of exposure to potential losses from
                defaults.--Each derivatives clearing organization, through
                margin requirements and other risk control mechanisms,
                shall limit the exposure of the derivatives clearing
                organization to potential losses from defaults by members
                and participants of the derivatives clearing organization
                to ensure that--

                        ``(I) the operations of the derivatives clearing
                    organization would not be disrupted; and
                        ``(II) nondefaulting members or participants would
                    not be exposed to losses that nondefaulting members or
                    participants cannot anticipate or control.

                    ``(iv) Margin requirements.--The margin required from
                each member and participant of a derivatives clearing
                organization shall be sufficient to cover potential
                exposures in normal market conditions.
                    ``(v) Requirements regarding models and parameters.--
                Each model and parameter used in setting margin
                requirements under clause (iv) shall be--

                        ``(I) risk-based; and
                        ``(II) reviewed on a regular basis.

                ``(E) Settlement procedures.--Each derivatives clearing
            organization shall--
                    ``(i) complete money settlements on a timely basis (but
                not less frequently than once each business day);
                    ``(ii) employ money settlement arrangements to
                eliminate or strictly limit the exposure of the derivatives
                clearing organization to settlement bank risks (including
                credit and liquidity risks from the use of banks to effect
                money settlements);
                    ``(iii) ensure that money settlements are final when
                effected;
                    ``(iv) maintain an accurate record of the flow of funds
                associated with each money settlement;
                    ``(v) possess the ability to comply with each term and
                condition of any permitted netting or offset arrangement
                with any other clearing organization;
                    ``(vi) regarding physical settlements, establish rules
                that clearly state each obligation of the derivatives
                clearing organization with respect to physical deliveries;
                and
                    ``(vii) ensure that each risk arising from an
                obligation described in clause (vi) is identified and
                managed.
                ``(F) Treatment of funds.--
                    ``(i) Required standards and procedures.--Each
                derivatives clearing organization shall establish standards
                and procedures that are designed to protect and ensure the
                safety of member and participant funds and assets.
                    ``(ii) Holding of funds and assets.--Each derivatives
                clearing organization shall hold member and participant
                funds and assets in a manner by which to minimize the risk
                of loss or of delay in the access by the derivatives
                clearing organization to the assets and funds.
                    ``(iii) Permissible investments.--Funds and assets
                invested by a derivatives clearing organization shall be
                held in instruments with minimal credit, market, and
                liquidity risks.
                ``(G) Default rules and procedures.--
                    ``(i) In general.--Each derivatives clearing
                organization shall have rules and procedures designed to
                allow for the efficient, fair, and safe management of
                events during which members or participants--

                        ``(I) become insolvent; or
                        ``(II) otherwise default on the obligations of the
                    members or participants to the derivatives clearing
                    organization.

                    ``(ii) Default procedures.--Each derivatives clearing
                organization shall--

                        ``(I) clearly state the default procedures of the
                    derivatives clearing organization;
                        ``(II) make publicly available the default rules of
                    the derivatives clearing organization; and
                        ``(III) ensure that the derivatives clearing
                    organization may take timely action--

                            ``(aa) to contain losses and liquidity
                        pressures; and
                            ``(bb) to continue meeting each obligation of
                        the derivatives clearing organization.
                ``(H) Rule enforcement.--Each derivatives clearing
            organization shall--
                    ``(i) maintain adequate arrangements and resources
                for--

                        ``(I) the effective monitoring and enforcement of
                    compliance with the rules of the derivatives clearing
                    organization; and
                        ``(II) the resolution of disputes;

                    ``(ii) have the authority and ability to discipline,
                limit, suspend, or terminate the activities of a member or
                participant due to a violation by the member or participant
                of any rule of the derivatives clearing organization; and
                    ``(iii) report to the Commission regarding rule
                enforcement activities and sanctions imposed against
                members and participants as provided in clause (ii).
                ``(I) System safeguards.--Each derivatives clearing
            organization shall--
                    ``(i) establish and maintain a program of risk analysis
                and oversight to identify and minimize sources of
                operational risk through the development of appropriate
                controls and procedures, and automated systems, that are
                reliable, secure, and have adequate scalable capacity;
                    ``(ii) establish and maintain emergency procedures,
                backup facilities, and a plan for disaster recovery that
                allows for--

                        ``(I) the timely recovery and resumption of
                    operations of the derivatives clearing organization;
                    and
                        ``(II) the fulfillment of each obligation and
                    responsibility of the derivatives clearing
                    organization; and

                    ``(iii) periodically conduct tests to verify that the
                backup resources of the derivatives clearing organization
                are sufficient to ensure daily processing, clearing, and
                settlement.
                ``(J) Reporting.--Each derivatives clearing organization
            shall provide to the Commission all information that the
            Commission determines to be necessary to conduct oversight of
            the derivatives clearing organization.
                ``(K) Recordkeeping.--Each derivatives clearing
            organization shall maintain records of all activities related
            to the business of the derivatives clearing organization as a
            derivatives clearing organization--
                    ``(i) in a form and manner that is acceptable to the
                Commission; and
                    ``(ii) for a period of not less than 5 years.
                ``(L) Public information.--
                    ``(i) In general.--Each derivatives clearing
                organization shall provide to market participants
                sufficient information to enable the market participants to
                identify and evaluate accurately the risks and costs
                associated with using the services of the derivatives
                clearing organization.
                    ``(ii) Availability of information.--Each derivatives
                clearing organization shall make information concerning the
                rules and operating and default procedures governing the
                clearing and settlement systems of the derivatives clearing
                organization available to market participants.
                    ``(iii) Public disclosure.--Each derivatives clearing
                organization shall disclose publicly and to the Commission
                information concerning--

                        ``(I) the terms and conditions of each contract,
                    agreement, and transaction cleared and settled by the
                    derivatives clearing organization;
                        ``(II) each clearing and other fee that the
                    derivatives clearing organization charges the members
                    and participants of the derivatives clearing
                    organization;
                        ``(III) the margin-setting methodology, and the
                    size and composition, of the financial resource package
                    of the derivatives clearing organization;
                        ``(IV) daily settlement prices, volume, and open
                    interest for each contract settled or cleared by the
                    derivatives clearing organization; and
                        ``(V) any other matter relevant to participation in
                    the settlement and clearing activities of the
                    derivatives clearing organization.

                ``(M) Information-sharing.--Each derivatives clearing
            organization shall--
                    ``(i) enter into, and abide by the terms of, each
                appropriate and applicable domestic and international
                information-sharing agreement; and
                    ``(ii) use relevant information obtained from each
                agreement described in clause (i) in carrying out the risk
                management program of the derivatives clearing
                organization.
                ``(N) Antitrust considerations.--Unless necessary or
            appropriate to achieve the purposes of this Act, a derivatives
            clearing organization shall not--
                    ``(i) adopt any rule or take any action that results in
                any unreasonable restraint of trade; or
                    ``(ii) impose any material anticompetitive burden.
                ``(O) Governance fitness standards.--
                    ``(i) Governance arrangements.--Each derivatives
                clearing organization shall establish governance
                arrangements that are transparent--

                        ``(I) to fulfill public interest requirements; and
                        ``(II) to permit the consideration of the views of
                    owners and participants.

                    ``(ii) Fitness standards.--Each derivatives clearing
                organization shall establish and enforce appropriate
                fitness standards for--

                        ``(I) directors;
                        ``(II) members of any disciplinary committee;
                        ``(III) members of the derivatives clearing
                    organization;
                        ``(IV) any other individual or entity with direct
                    access to the settlement or clearing activities of the
                    derivatives clearing organization; and
                        ``(V) any party affiliated with any individual or
                    entity described in this clause.

                ``(P) Conflicts of interest.--Each derivatives clearing
            organization shall--
                    ``(i) establish and enforce rules to minimize conflicts
                of interest in the decision-making process of the
                derivatives clearing organization; and
                    ``(ii) establish a process for resolving conflicts of
                interest described in clause (i).
                ``(Q) Composition of governing boards.--Each derivatives
            clearing organization shall ensure that the composition of the
            governing board or committee of the derivatives clearing
            organization includes market participants.
                ``(R) Legal risk.--Each derivatives clearing organization
            shall have a well-founded, transparent, and enforceable legal
            framework for each aspect of the activities of the derivatives
            clearing organization.''.
        (d) Conflicts of Interest.--The Commodity Futures Trading
    Commission shall adopt rules mitigating conflicts of interest in
    connection with the conduct of business by a swap dealer or a major
    swap participant with a derivatives clearing organization, board of
    trade, or a swap execution facility that clears or trades swaps in
    which the swap dealer or major swap participant has a material debt or
    material equity investment.
        (e) Reporting Requirements.--Section 5b of the Commodity Exchange
    Act (7 U.S.C. 7a-1) (as amended by subsection (b)) is amended by adding
    at the end the following:
        ``(k) Reporting Requirements.--
            ``(1) Duty of derivatives clearing organizations.--Each
        derivatives clearing organization that clears swaps shall provide
        to the Commission all information that is determined by the
        Commission to be necessary to perform each responsibility of the
        Commission under this Act.
            ``(2) Data collection and maintenance requirements.--The
        Commission shall adopt data collection and maintenance requirements
        for swaps cleared by derivatives clearing organizations that are
        comparable to the corresponding requirements for--
                ``(A) swaps data reported to swap data repositories; and
                ``(B) swaps traded on swap execution facilities.
            ``(3) Reports on security-based swap agreements to be shared
        with the securities and exchange commission.--
                ``(A) In general.--A derivatives clearing organization that
            clears security-based swap agreements (as defined in section
            1a(47)(A)(v)) shall, upon request, open to inspection and
            examination to the Securities and Exchange Commission all books
            and records relating to such security-based swap agreements,
            consistent with the confidentiality and disclosure requirements
            of section 8.
                ``(B) Jurisdiction.--Nothing in this paragraph shall affect
            the exclusive jurisdiction of the Commission to prescribe
            recordkeeping and reporting requirements for a derivatives
            clearing organization that is registered with the Commission.
            ``(4) Information sharing.--Subject to section 8, and upon
        request, the Commission shall share information collected under
        paragraph (2) with--
                ``(A) the Board;
                ``(B) the Securities and Exchange Commission;
                ``(C) each appropriate prudential regulator;
                ``(D) the Financial Stability Oversight Council;
                ``(E) the Department of Justice; and
                ``(F) any other person that the Commission determines to be
            appropriate, including--
                    ``(i) foreign financial supervisors (including foreign
                futures authorities);
                    ``(ii) foreign central banks; and
                    ``(iii) foreign ministries.
            ``(5) Confidentiality and indemnification agreement.--Before
        the Commission may share information with any entity described in
        paragraph (4)--
                ``(A) the Commission shall receive a written agreement from
            each entity stating that the entity shall abide by the
            confidentiality requirements described in section 8 relating to
            the information on swap transactions that is provided; and
                ``(B) each entity shall agree to indemnify the Commission
            for any expenses arising from litigation relating to the
            information provided under section 8.
            ``(6) Public information.--Each derivatives clearing
        organization that clears swaps shall provide to the Commission
        (including any designee of the Commission) information under
        paragraph (2) in such form and at such frequency as is required by
        the Commission to comply with the public reporting requirements
        contained in section 2(a)(13).''.
        (f) Public Disclosure.--Section 8(e) of the Commodity Exchange Act
    (7 U.S.C. 12(e)) is amended in the last sentence--
            (1) by inserting ``, central bank and ministries,'' after
        ``department'' each place it appears; and
            (2) by striking ``. is a party.'' and inserting ``, is a
        party.''.
        (g) Legal Certainty for Identified Banking Products.--
            (1) Repeals.--The Legal Certainty for Bank Products Act of 2000
        (7 U.S.C. 27 et seq.) is amended--
                (A) by striking sections 404 and 407 (7 U.S.C. 27b, 27e);
                (B) in section 402 (7 U.S.C. 27), by striking subsection
            (d); and
                (C) in section 408 (7 U.S.C. 27f)--
                    (i) in subsection (c)--

                        (I) by striking ``in the case'' and all that
                    follows through ``a hybrid'' and inserting ``in the
                    case of a hybrid'';
                        (II) by striking ``; or'' and inserting a period;
                    and
                        (III) by striking paragraph (2);

                    (ii) by striking subsection (b); and
                    (iii) by redesignating subsection (c) as subsection
                (b).
            (2) Legal certainty for bank products act of 2000.--Section 403
        of the Legal Certainty for Bank Products Act of 2000 (7 U.S.C. 27a)
        is amended to read as follows:
        ``SEC. 403. EXCLUSION OF IDENTIFIED BANKING PRODUCT.
        ``(a) Exclusion.--Except as provided in subsection (b) or (c)--
            ``(1) the Commodity Exchange Act (7 U.S.C. 1 et seq.) shall not
        apply to, and the Commodity Futures Trading Commission shall not
        exercise regulatory authority under the Commodity Exchange Act (7
        U.S.C. 1 et seq.) with respect to, an identified banking product;
        and
            ``(2) the definitions of `security-based swap' in section
        3(a)(68) of the Securities Exchange Act of 1934 and `security-based
        swap agreement' in section 1a(47)(A)(v) of the Commodity Exchange
        Act and section 3(a)(78) of the Securities Exchange Act of 1934 do
        not include any identified bank product.
        ``(b) Exception.--An appropriate Federal banking agency may except
    an identified banking product of a bank under its regulatory
    jurisdiction from the exclusion in subsection (a) if the agency
    determines, in consultation with the Commodity Futures Trading
    Commission and the Securities and Exchange Commission, that the
    product--
            ``(1) would meet the definition of a `swap' under section
        1a(47) of the Commodity Exchange Act (7 U.S.C. 1a) or a `security-
        based swap' under that section 3(a)(68) of the Securities Exchange
        Act of 1934; and
            ``(2) has become known to the trade as a swap or security-based
        swap, or otherwise has been structured as an identified banking
        product for the purpose of evading the provisions of the Commodity
        Exchange Act (7 U.S.C. 1 et seq.), the Securities Act of 1933 (15
        U.S.C. 77a et seq.), or the Securities Exchange Act of 1934 (15
        U.S.C. 78a et seq.).
        ``(c) Exception.--The exclusions in subsection (a) shall not apply
    to an identified bank product that--
            ``(1) is a product of a bank that is not under the regulatory
        jurisdiction of an appropriate Federal banking agency;
            ``(2) meets the definition of swap in section 1a(47) of the
        Commodity Exchange Act or security-based swap in section 3(a)(68)
        of the Securities Exchange Act of 1934; and
            ``(3) has become known to the trade as a swap or security-based
        swap, or otherwise has been structured as an identified banking
        product for the purpose of evading the provisions of the Commodity
        Exchange Act (7 U.S.C. 1 et seq.), the Securities Act of 1933 (15
        U.S.C. 77a et seq.), or the Securities Exchange Act of 1934 (15
        U.S.C. 78a et seq.).''.
        (h) Reducing Clearing Systemic Risk.--Section 5b(f)(1) of the
    Commodity Exchange Act (7 U.S.C. 7a-1(F)(i)) is amended by adding at
    the end the following: ``In order to minimize systemic risk, under no
    circumstances shall a derivatives clearing organization be compelled to
    accept the counterparty credit risk of another clearing
    organization.''.
        SEC. 726. RULEMAKING ON CONFLICT OF INTEREST.
        (a) In General.--In order to mitigate conflicts of interest, not
    later than 180 days after the date of enactment of the Wall Street
    Transparency and Accountability Act of 2010, the Commodity Futures
    Trading Commission shall adopt rules which may include numerical limits
    on the control of, or the voting rights with respect to, any
    derivatives clearing organization that clears swaps, or swap execution
    facility or board of trade designated as a contract market that posts
    swaps or makes swaps available for trading, by a bank holding company
    (as defined in section 2 of the Bank Holding Company Act of 1956 (12
    U.S.C. 1841)) with total consolidated assets of $50,000,000,000 or
    more, a nonbank financial company (as defined in section 102)
    supervised by the Board, an affiliate of such a bank holding company or
    nonbank financial company, a swap dealer, major swap participant, or
    associated person of a swap dealer or major swap participant.
        (b) Purposes.--The Commission shall adopt rules if it determines,
    after the review described in subsection (a), that such rules are
    necessary or appropriate to improve the governance of, or to mitigate
    systemic risk, promote competition, or mitigate conflicts of interest
    in connection with a swap dealer or major swap participant's conduct of
    business with, a derivatives clearing organization, contract market, or
    swap execution facility that clears or posts swaps or makes swaps
    available for trading and in which such swap dealer or major swap
    participant has a material debt or equity investment.
        (c) Considerations.--In adopting rules pursuant to this section,
    the Commodity Futures Trading Commission shall consider any conflicts
    of interest arising from the amount of equity owned by a single
    investor, the ability to vote, cause the vote of, or withhold votes
    entitled to be cast on any matters by the holders of the ownership
    interest, and the governance arrangements of any derivatives clearing
    organization that clears swaps, or swap execution facility or board of
    trade designated as a contract market that posts swaps or makes swaps
    available for trading.
        SEC. 727. PUBLIC REPORTING OF SWAP TRANSACTION DATA.
        Section 2(a) of the Commodity Exchange Act (7 U.S.C. 2(a)) is
    amended by adding at the end the following:
            ``(13) Public availability of swap transaction data.--
                ``(A) Definition of real-time public reporting.--In this
            paragraph, the term `real-time public reporting' means to
            report data relating to a swap transaction, including price and
            volume, as soon as technologically practicable after the time
            at which the swap transaction has been executed.
                ``(B) Purpose.--The purpose of this section is to authorize
            the Commission to make swap transaction and pricing data
            available to the public in such form and at such times as the
            Commission determines appropriate to enhance price discovery.
                ``(C) General rule.--The Commission is authorized and
            required to provide by rule for the public availability of swap
            transaction and pricing data as follows:
                    ``(i) With respect to those swaps that are subject to
                the mandatory clearing requirement described in subsection
                (h)(1) (including those swaps that are excepted from the
                requirement pursuant to subsection (h)(7)), the Commission
                shall require real-time public reporting for such
                transactions.
                    ``(ii) With respect to those swaps that are not subject
                to the mandatory clearing requirement described in
                subsection (h)(1), but are cleared at a registered
                derivatives clearing organization, the Commission shall
                require real-time public reporting for such transactions.
                    ``(iii) With respect to swaps that are not cleared at a
                registered derivatives clearing organization and which are
                reported to a swap data repository or the Commission under
                subsection (h)(6), the Commission shall require real-time
                public reporting for such transactions, in a manner that
                does not disclose the business transactions and market
                positions of any person.
                    ``(iv) With respect to swaps that are determined to be
                required to be cleared under subsection (h)(2) but are not
                cleared, the Commission shall require real-time public
                reporting for such transactions.
                ``(D) Registered entities and public reporting.--The
            Commission may require registered entities to publicly
            disseminate the swap transaction and pricing data required to
            be reported under this paragraph.
                ``(E) Rulemaking required.--With respect to the rule
            providing for the public availability of transaction and
            pricing data for swaps described in clauses (i) and (ii) of
            subparagraph (C), the rule promulgated by the Commission shall
            contain provisions--
                    ``(i) to ensure such information does not identify the
                participants;
                    ``(ii) to specify the criteria for determining what
                constitutes a large notional swap transaction (block trade)
                for particular markets and contracts;
                    ``(iii) to specify the appropriate time delay for
                reporting large notional swap transactions (block trades)
                to the public; and
                    ``(iv) that take into account whether the public
                disclosure will materially reduce market liquidity.
                ``(F) Timeliness of reporting.--Parties to a swap
            (including agents of the parties to a swap) shall be
            responsible for reporting swap transaction information to the
            appropriate registered entity in a timely manner as may be
            prescribed by the Commission.
                ``(G) Reporting of swaps to registered swap data
            repositories.--Each swap (whether cleared or uncleared) shall
            be reported to a registered swap data repository.
            ``(14) Semiannual and annual public reporting of aggregate swap
        data.--
                ``(A) In general.--In accordance with subparagraph (B), the
            Commission shall issue a written report on a semiannual and
            annual basis to make available to the public information
            relating to--
                    ``(i) the trading and clearing in the major swap
                categories; and
                    ``(ii) the market participants and developments in new
                products.
                ``(B) Use; consultation.--In preparing a report under
            subparagraph (A), the Commission shall--
                    ``(i) use information from swap data repositories and
                derivatives clearing organizations; and
                    ``(ii) consult with the Office of the Comptroller of
                the Currency, the Bank for International Settlements, and
                such other regulatory bodies as may be necessary.
                ``(C) Authority of the commission.--The Commission may, by
            rule, regulation, or order, delegate the public reporting
            responsibilities of the Commission under this paragraph in
            accordance with such terms and conditions as the Commission
            determines to be appropriate and in the public interest.''.
        SEC. 728. SWAP DATA REPOSITORIES.
        The Commodity Exchange Act is amended by inserting after section 20
    (7 U.S.C. 24) the following:
      ``SEC. 21. SWAP DATA REPOSITORIES.
        ``(a) Registration Requirement.--
            ``(1) Requirement; authority of derivatives clearing
        organization.--
                ``(A) In general.--It shall be unlawful for any person,
            unless registered with the Commission, directly or indirectly
            to make use of the mails or any means or instrumentality of
            interstate commerce to perform the functions of a swap data
            repository.
                ``(B) Registration of derivatives clearing organizations.--
            A derivatives clearing organization may register as a swap data
            repository.
            ``(2) Inspection and examination.--Each registered swap data
        repository shall be subject to inspection and examination by any
        representative of the Commission.
            ``(3) Compliance with core principles.--
                ``(A) In general.--To be registered, and maintain
            registration, as a swap data repository, the swap data
            repository shall comply with--
                    ``(i) the requirements and core principles described in
                this section; and
                    ``(ii) any requirement that the Commission may impose
                by rule or regulation pursuant to section 8a(5).
                ``(B) Reasonable discretion of swap data repository.--
            Unless otherwise determined by the Commission by rule or
            regulation, a swap data repository described in subparagraph
            (A) shall have reasonable discretion in establishing the manner
            in which the swap data repository complies with the core
            principles described in this section.
        ``(b) Standard Setting.--
            ``(1) Data identification.--
                ``(A) In general.--In accordance with subparagraph (B), the
            Commission shall prescribe standards that specify the data
            elements for each swap that shall be collected and maintained
            by each registered swap data repository.
                ``(B) Requirement.--In carrying out subparagraph (A), the
            Commission shall prescribe consistent data element standards
            applicable to registered entities and reporting counterparties.
            ``(2) Data collection and maintenance.--The Commission shall
        prescribe data collection and data maintenance standards for swap
        data repositories.
            ``(3) Comparability.--The standards prescribed by the
        Commission under this subsection shall be comparable to the data
        standards imposed by the Commission on derivatives clearing
        organizations in connection with their clearing of swaps.
        ``(c) Duties.--A swap data repository shall--
            ``(1) accept data prescribed by the Commission for each swap
        under subsection (b);
            ``(2) confirm with both counterparties to the swap the accuracy
        of the data that was submitted;
            ``(3) maintain the data described in paragraph (1) in such
        form, in such manner, and for such period as may be required by the
        Commission;
            ``(4)(A) provide direct electronic access to the Commission (or
        any designee of the Commission, including another registered
        entity); and
            ``(B) provide the information described in paragraph (1) in
        such form and at such frequency as the Commission may require to
        comply with the public reporting requirements contained in section
        2(a)(13);
            ``(5) at the direction of the Commission, establish automated
        systems for monitoring, screening, and analyzing swap data,
        including compliance and frequency of end user clearing exemption
        claims by individual and affiliated entities;
            ``(6) maintain the privacy of any and all swap transaction
        information that the swap data repository receives from a swap
        dealer, counterparty, or any other registered entity; and
            ``(7) on a confidential basis pursuant to section 8, upon
        request, and after notifying the Commission of the request, make
        available all data obtained by the swap data repository, including
        individual counterparty trade and position data, to--
                ``(A) each appropriate prudential regulator;
                ``(B) the Financial Stability Oversight Council;
                ``(C) the Securities and Exchange Commission;
                ``(D) the Department of Justice; and
                ``(E) any other person that the Commission determines to be
            appropriate, including--
                    ``(i) foreign financial supervisors (including foreign
                futures authorities);
                    ``(ii) foreign central banks; and
                    ``(iii) foreign ministries; and
            ``(8) 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.
        ``(d) Confidentiality and Indemnification Agreement.--Before the
    swap data repository may share information with any entity described in
    subsection (c)(7)--
            ``(1) the swap data repository shall receive a written
        agreement from each entity stating that the entity shall abide by
        the confidentiality requirements described in section 8 relating to
        the information on swap transactions that is provided; and
            ``(2) each entity shall agree to indemnify the swap data
        repository and the Commission for any expenses arising from
        litigation relating to the information provided under section 8.
        ``(e) Designation of Chief Compliance Officer.--
            ``(1) In general.--Each swap data repository shall designate an
        individual to serve as a chief compliance officer.
            ``(2) Duties.--The chief compliance officer shall--
                ``(A) report directly to the board or to the senior officer
            of the swap data repository;
                ``(B) review the compliance of the swap data repository
            with respect to the requirements and core principles described
            in this section;
                ``(C) in consultation with the board of the swap data
            repository, a body performing a function similar to the board
            of the swap data repository, or the senior officer of the swap
            data repository, resolve any conflicts of interest that may
            arise;
                ``(D) be responsible for administering each policy and
            procedure that is required to be established pursuant to this
            section;
                ``(E) ensure compliance with this Act (including
            regulations) relating to agreements, contracts, or
            transactions, including each rule prescribed by the Commission
            under this section;
                ``(F) establish procedures for the remediation of
            noncompliance issues identified by the chief compliance officer
            through any--
                    ``(i) compliance office review;
                    ``(ii) look-back;
                    ``(iii) internal or external audit finding;
                    ``(iv) self-reported error; or
                    ``(v) validated complaint; and
                ``(G) establish and follow appropriate procedures for the
            handling, management response, remediation, retesting, and
            closing of noncompliance issues.
            ``(3) Annual reports.--
                ``(A) In general.--In accordance with rules prescribed by
            the Commission, the chief compliance officer shall annually
            prepare and sign a report that contains a description of--
                    ``(i) the compliance of the swap data repository of the
                chief compliance officer with respect to this Act
                (including regulations); and
                    ``(ii) each policy and procedure of the swap data
                repository of the chief compliance officer (including the
                code of ethics and conflict of interest policies of the
                swap data repository).
                ``(B) Requirements.--A compliance report under subparagraph
            (A) shall--
                    ``(i) accompany each appropriate financial report of
                the swap data repository that is required to be furnished
                to the Commission pursuant to this section; and
                    ``(ii) include a certification that, under penalty of
                law, the compliance report is accurate and complete.
        ``(f) Core Principles Applicable To Swap Data Repositories.--
            ``(1) Antitrust considerations.--Unless necessary or
        appropriate to achieve the purposes of this Act, a swap data
        repository shall not--
                ``(A) adopt any rule or take any action that results in any
            unreasonable restraint of trade; or
                ``(B) impose any material anticompetitive burden on the
            trading, clearing, or reporting of transactions.
            ``(2) Governance arrangements.--Each swap data repository shall
        establish governance arrangements that are transparent--
                ``(A) to fulfill public interest requirements; and
                ``(B) to support the objectives of the Federal Government,
            owners, and participants.
            ``(3) Conflicts of interest.--Each swap data repository shall--
                ``(A) establish and enforce rules to minimize conflicts of
            interest in the decision-making process of the swap data
            repository; and
                ``(B) establish a process for resolving conflicts of
            interest described in subparagraph (A).
            ``(4) Additional duties developed by commission.--
                ``(A) In general.--The Commission may develop 1 or more
            additional duties applicable to swap data repositories.
                ``(B) Consideration of evolving standards.--In developing
            additional duties under subparagraph (A), the Commission may
            take into consideration any evolving standard of the United
            States or the international community.
                ``(C) Additional duties for commission designees.--The
            Commission shall establish additional duties for any registrant
            described in section 1a(48) in order to minimize conflicts of
            interest, protect data, ensure compliance, and guarantee the
            safety and security of the swap data repository.
        ``(g) Required Registration for Swap Data Repositories.--Any person
    that is required to be registered as a swap data repository under this
    section shall register with the Commission regardless of whether that
    person is also licensed as a bank or registered with the Securities and
    Exchange Commission as a swap data repository.
        ``(h) Rules.--The Commission shall adopt rules governing persons
    that are registered under this section.''.
        SEC. 729. REPORTING AND RECORDKEEPING.
        The Commodity Exchange Act is amended by inserting after section 4q
    (7 U.S.C. 6o-1) the following:
      ``SEC. 4r. REPORTING AND RECORDKEEPING FOR UNCLEARED SWAPS.
        ``(a) Required Reporting of Swaps Not Accepted by Any Derivatives
    Clearing Organization.--
            ``(1) In general.--Each swap that is not accepted for clearing
        by any derivatives clearing organization shall be reported to--
                ``(A) a swap data repository described in section 21; or
                ``(B) in the case in which there is no swap data repository
            that would accept the swap, to the Commission pursuant to this
            section within such time period as the Commission may by rule
            or regulation prescribe.
            ``(2) Transition rule for preenactment swaps.--
                ``(A) Swaps entered into before the date of enactment of
            the wall street transparency and accountability act of 2010.--
            Each swap entered into before the date of enactment of the Wall
            Street Transparency and Accountability Act of 2010, the terms
            of which have not expired as of the date of enactment of that
            Act, shall be reported to a registered swap data repository or
            the Commission by a date that is not later than--
                    ``(i) 30 days after issuance of the interim final rule;
                or
                    ``(ii) such other period as the Commission determines
                to be appropriate.
                ``(B) Commission rulemaking.--The Commission shall
            promulgate an interim final rule within 90 days of the date of
            enactment of this section providing for the reporting of each
            swap entered into before the date of enactment as referenced in
            subparagraph (A).
                ``(C) Effective date.--The reporting provisions described
            in this section shall be effective upon the enactment of this
            section.
            ``(3) Reporting obligations.--
                ``(A) Swaps in which only 1 counterparty is a swap dealer
            or major swap participant.--With respect to a swap in which
            only 1 counterparty is a swap dealer or major swap participant,
            the swap dealer or major swap participant shall report the swap
            as required under paragraphs (1) and (2).
                ``(B) Swaps in which 1 counterparty is a swap dealer and
            the other a major swap participant.--With respect to a swap in
            which 1 counterparty is a swap dealer and the other a major
            swap participant, the swap dealer shall report the swap as
            required under paragraphs (1) and (2).
                ``(C) Other swaps.--With respect to any other swap not
            described in subparagraph (A) or (B), the counterparties to the
            swap shall select a counterparty to report the swap as required
            under paragraphs (1) and (2).
        ``(b) Duties of Certain Individuals.--Any individual or entity that
    enters into a swap shall meet each requirement described in subsection
    (c) if the individual or entity did not--
            ``(1) clear the swap in accordance with section 2(h)(1); or
            ``(2) have the data regarding the swap accepted by a swap data
        repository in accordance with rules (including timeframes) adopted
        by the Commission under section 21.
        ``(c) Requirements.--An individual or entity described in
    subsection (b) shall--
            ``(1) upon written request from the Commission, provide reports
        regarding the swaps held by the individual or entity to the
        Commission in such form and in such manner as the Commission may
        request; and
            ``(2) maintain books and records pertaining to the swaps held
        by the individual or entity in such form, in such manner, and for
        such period as the Commission may require, which shall be open to
        inspection by--
                ``(A) any representative of the Commission;
                ``(B) an appropriate prudential regulator;
                ``(C) the Securities and Exchange Commission;
                ``(D) the Financial Stability Oversight Council; and
                ``(E) the Department of Justice.
        ``(d) Identical Data.--In prescribing rules under this section, the
    Commission shall require individuals and entities described in
    subsection (b) to submit to the Commission a report that contains data
    that is not less comprehensive than the data required to be collected
    by swap data repositories under section 21.''.
        SEC. 730. LARGE SWAP TRADER REPORTING.
        The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by
    adding after section 4s (as added by section 731) the following:
      ``SEC. 4t. LARGE SWAP TRADER REPORTING.
        ``(a) Prohibition.--
            ``(1) In general.--Except as provided in paragraph (2), it
        shall be unlawful for any person to enter into any swap that the
        Commission determines to perform a significant price discovery
        function with respect to registered entities if--
                ``(A) the person directly or indirectly enters into the
            swap during any 1 day in an amount equal to or in excess of
            such amount as shall be established periodically by the
            Commission; and
                ``(B) the person directly or indirectly has or obtains a
            position in the swap equal to or in excess of such amount as
            shall be established periodically by the Commission.
            ``(2) Exception.--Paragraph (1) shall not apply if--
                ``(A) 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
            subparagraphs (A) and (B) of paragraph (1) as the Commission
            may require by rule or regulation; and
                ``(B) 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 designated
            contract market or swap execution facility, and of cash or spot
            transactions in, inventories of, and purchase and sale
            commitments of, such a commodity.
        ``(b) Requirements.--
            ``(1) In general.--Books and records described in subsection
        (a)(2)(B) shall--
                ``(A) show such complete details concerning all
            transactions and positions as the Commission may prescribe by
            rule or regulation;
                ``(B) be open at all times to inspection and examination by
            any representative of the Commission; and
                ``(C) be open at all times to inspection and examination by
            the Securities and Exchange Commission, to the extent such
            books and records relate to transactions in swaps (as that term
            is defined in section 1a(47)(A)(v)), and consistent with the
            confidentiality and disclosure requirements of section 8.
            ``(2) Jurisdiction.--Nothing in paragraph (1) shall affect the
        exclusive jurisdiction of the Commission to prescribe recordkeeping
        and reporting requirements for large swap traders under this
        section.
        ``(c) Applicability.--For purposes of this section, the swaps,
    futures, and cash or spot transactions and positions of any person
    shall include the swaps, futures, and cash or spot transactions and
    positions of any persons directly or indirectly controlled by the
    person.
        ``(d) Significant Price Discovery Function.--In making a
    determination as to whether a swap performs or affects a significant
    price discovery function with respect to registered entities, the
    Commission shall consider the factors described in section 4a(a)(3).''.
        SEC. 731. REGISTRATION AND REGULATION OF SWAP DEALERS AND MAJOR
          SWAP PARTICIPANTS.
        The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by
    inserting after section 4r (as added by section 729) the following:
      ``SEC. 4s. REGISTRATION AND REGULATION OF SWAP DEALERS AND MAJOR SWAP
          PARTICIPANTS.
        ``(a) Registration.--
            ``(1) Swap dealers.--It shall be unlawful for any person to act
        as a swap dealer unless the person is registered as a swap dealer
        with the Commission.
            ``(2) Major swap participants.--It shall be unlawful for any
        person to act as a major swap participant unless the person is
        registered as a major swap participant with the Commission.
        ``(b) Requirements.--
            ``(1) In general.--A person shall register as a swap dealer or
        major swap participant by filing a registration application with
        the Commission.
            ``(2) Contents.--
                ``(A) In general.--The application shall be made in such
            form and manner as prescribed by the Commission, and shall
            contain such information, as the Commission considers necessary
            concerning the business in which the applicant is or will be
            engaged.
                ``(B) Continual reporting.--A person that is registered as
            a swap dealer or major swap participant shall continue to
            submit to the Commission reports that contain such information
            pertaining to the business of the person as the Commission may
            require.
            ``(3) Expiration.--Each registration under this section shall
        expire at such time as the Commission may prescribe by rule or
        regulation.
            ``(4) Rules.--Except as provided in subsections (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.
            ``(5) Transition.--Rules under this section shall provide for
        the registration of swap dealers and major swap participants not
        later than 1 year after the date of enactment of the Wall Street
        Transparency and Accountability Act of 2010.
            ``(6) Statutory disqualification.--Except to the extent
        otherwise specifically provided by rule, regulation, or order, it
        shall be unlawful for a swap dealer or a major swap participant to
        permit any person associated with a swap dealer or a major swap
        participant who is subject to a statutory disqualification to
        effect or be involved in effecting swaps on behalf of the swap
        dealer or major swap participant, if the swap dealer or major swap
        participant knew, or in the exercise of reasonable care should have
        known, of the statutory disqualification.
        ``(c) Dual Registration.--
            ``(1) Swap dealer.--Any person that is required to be
        registered as a swap dealer under this section shall register with
        the Commission regardless of whether the person also is a
        depository institution or is registered with the Securities and
        Exchange Commission as a security-based swap dealer.
            ``(2) Major swap participant.--Any person that is required to
        be registered as a major swap participant under this section shall
        register with the Commission regardless of whether the person also
        is a depository institution or is registered with the Securities
        and Exchange Commission as a major security-based swap participant.
        ``(d) Rulemakings.--
            ``(1) In general.--The Commission shall adopt rules for persons
        that are registered as swap dealers or major swap participants
        under this section.
            ``(2) Exception for prudential requirements.--
                ``(A) In general.--The Commission may not prescribe rules
            imposing prudential requirements on swap dealers or major swap
            participants for which there is a prudential regulator.
                ``(B) Applicability.--Subparagraph (A) does not limit the
            authority of the Commission to prescribe rules as directed
            under this section.
        ``(e) Capital and Margin Requirements.--
            ``(1) In general.--
                ``(A) Swap dealers and major swap participants that are
            banks.--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 regulator shall by rule
            or regulation prescribe under paragraph (2)(A).
                ``(B) Swap dealers and major swap participants that are not
            banks.--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 under paragraph (2)(B).
            ``(2) Rules.--
                ``(A) Swap dealers and major swap participants that are
            banks.--The prudential regulators, in consultation with the
            Commission and the Securities and Exchange Commission, shall
            jointly adopt rules 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 imposing--
                    ``(i) capital requirements; and
                    ``(ii) both initial and variation margin requirements
                on all swaps that are not cleared by a registered
                derivatives clearing organization.
                ``(B) Swap dealers and major swap participants that are not
            banks.--The Commission shall adopt rules for swap dealers and
            major swap participants, with respect to their activities as a
            swap dealer or major swap participant, for which there is not a
            prudential regulator imposing--
                    ``(i) capital requirements; and
                    ``(ii) both initial and variation margin requirements
                on all swaps that are not cleared by a registered
                derivatives clearing organization.
                ``(C) Capital.--In setting capital requirements for a
            person that is designated as a swap dealer or a major swap
            participant for a single type or single class or category of
            swap or activities, the prudential regulator and the Commission
            shall take into account the risks associated with other types
            of swaps or classes of swaps or categories of swaps engaged in
            and the other activities conducted by that person that are not
            otherwise subject to regulation applicable to that person by
            virtue of the status of the person as a swap dealer or a major
            swap participant.
            ``(3) Standards for capital and margin.--
                ``(A) In general.--To offset the greater risk to the swap
            dealer or major swap participant and the financial system
            arising from the use of swaps that are not cleared, the
            requirements imposed under paragraph (2) shall--
                    ``(i) help ensure the safety and soundness of the swap
                dealer or major swap participant; and
                    ``(ii) be appropriate for the risk associated with the
                non-cleared swaps held as a swap dealer or major swap
                participant.
                ``(B) Rule of construction.--
                    ``(i) In general.--Nothing in this section shall limit,
                or be construed to limit, the authority--

                        ``(I) of the Commission to set financial
                    responsibility rules for a futures commission merchant
                    or introducing broker registered pursuant to section
                    4f(a) (except for section 4f(a)(3)) in accordance with
                    section 4f(b); or
                        ``(II) of the Securities and Exchange Commission to
                    set financial responsibility rules for a broker or
                    dealer registered pursuant to section 15(b) of the
                    Securities Exchange Act of 1934 (15 U.S.C. 78o(b))
                    (except for section 15(b)(11) of that Act (15 U.S.C.
                    78o(b)(11)) in accordance with section 15(c)(3) of the
                    Securities Exchange Act of 1934 (15 U.S.C. 78o(c)(3)).

                    ``(ii) Futures commission merchants and other
                dealers.--A futures commission merchant, introducing
                broker, broker, or dealer shall maintain sufficient capital
                to comply with the stricter of any applicable capital
                requirements to which such futures commission merchant,
                introducing broker, broker, or dealer is subject to under
                this Act or the Securities Exchange Act of 1934 (15 U.S.C.
                78a et seq.).
                ``(C) Margin requirements.--In prescribing margin
            requirements under this subsection, the prudential regulator
            with respect to swap dealers and major swap participants for
            which it is the prudential regulator and the Commission with
            respect to swap dealers and major swap participants for which
            there is no prudential regulator shall permit the use of
            noncash collateral, as the regulator or the Commission
            determines to be consistent with--
                    ``(i) preserving the financial integrity of markets
                trading swaps; and
                    ``(ii) preserving the stability of the United States
                financial system.
                ``(D) Comparability of capital and margin requirements.--
                    ``(i) In general.--The prudential regulators, the
                Commission, and the Securities and Exchange Commission
                shall periodically (but not less frequently than annually)
                consult on minimum capital requirements and minimum initial
                and variation margin requirements.
                    ``(ii) Comparability.--The entities described in clause
                (i) shall, to the maximum extent practicable, establish and
                maintain comparable minimum capital requirements and
                minimum initial and variation margin requirements,
                including the use of non cash collateral, for--

                        ``(I) swap dealers; and
                        ``(II) major swap participants.

        ``(f) Reporting and Recordkeeping.--
            ``(1) In general.--Each registered swap dealer and major swap
        participant--
                ``(A) shall make such reports as are required by the
            Commission by rule or regulation regarding the transactions and
            positions and financial condition of the registered swap dealer
            or major swap participant;
                ``(B)(i) for which there is a prudential regulator, shall
            keep books and records of all activities related to the
            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; and
                ``(ii) for which there is no prudential regulator, shall
            keep books and records in such form and manner and for such
            period as may be prescribed by the Commission by rule or
            regulation;
                ``(C) shall keep books and records described in
            subparagraph (B) open to inspection and examination by any
            representative of the Commission; and
                ``(D) shall keep any such books and records relating to
            swaps defined in section 1a(47)(A)(v) open to inspection and
            examination by the Securities and Exchange Commission.
            ``(2) Rules.--The Commission shall adopt rules governing
        reporting and recordkeeping for swap dealers and major swap
        participants.
        ``(g) Daily Trading Records.--
            ``(1) In general.--Each registered swap dealer and major swap
        participant shall maintain daily trading records of the swaps of
        the registered swap dealer and major swap participant and all
        related records (including related cash or forward transactions)
        and recorded communications, including electronic mail, instant
        messages, and recordings of telephone calls, for such period as may
        be required by the Commission by rule or regulation.
            ``(2) Information requirements.--The daily trading records
        shall include such information as the Commission shall require by
        rule or regulation.
            ``(3) Counterparty records.--Each registered swap dealer and
        major swap participant shall maintain daily trading records for
        each counterparty in a manner and form that is identifiable with
        each swap transaction.
            ``(4) Audit trail.--Each registered swap dealer and major swap
        participant shall maintain a complete audit trail for conducting
        comprehensive and accurate trade reconstructions.
            ``(5) Rules.--The Commission shall adopt rules governing daily
        trading records for swap dealers and major swap participants.
        ``(h) Business Conduct Standards.--
            ``(1) In general.--Each registered swap dealer and major swap
        participant shall conform with such business conduct standards as
        prescribed in paragraph (3) and as may be prescribed by the
        Commission by rule or regulation that relate to--
                ``(A) fraud, manipulation, and other abusive practices
            involving swaps (including swaps that are offered but not
            entered into);
                ``(B) diligent supervision of the business of the
            registered swap dealer and major swap participant;
                ``(C) adherence to all applicable position limits; and
                ``(D) such other matters as the Commission determines to be
            appropriate.
            ``(2) Responsibilities with respect to special entities.--
                ``(A) Advising special entities.--A swap dealer or major
            swap participant that acts as an advisor to a special entity
            regarding a swap shall comply with the requirements of
            subparagraph (4) with respect to such Special Entity.
                ``(B) Entering of swaps with respect to special entities.--
            A swap dealer that enters into or offers to enter into swap
            with a Special Entity shall comply with the requirements of
            subparagraph (5) with respect to such Special Entity.
                ``(C) Special entity defined.--For purposes of this
            subsection, the term `special entity' means--
                    ``(i) a Federal agency;
                    ``(ii) a State, State agency, city, county,
                municipality, or other political subdivision of a State;
                    ``(iii) any employee benefit plan, as defined in
                section 3 of the Employee Retirement Income Security Act of
                1974 (29 U.S.C. 1002);
                    ``(iv) any governmental plan, as defined in section 3
                of the Employee Retirement Income Security Act of 1974 (29
                U.S.C. 1002); or
                    ``(v) any endowment, including an endowment that is an
                organization described in section 501(c)(3) of the Internal
                Revenue Code of 1986.
            ``(3) Business conduct requirements.--Business conduct
        requirements adopted by the Commission shall--
                ``(A) establish a duty for a swap dealer or major swap
            participant to verify that any counterparty meets the
            eligibility standards for an eligible contract participant;
                ``(B) require disclosure by the swap dealer or major swap
            participant to any counterparty to the transaction (other than
            a swap dealer, major swap participant, security-based swap
            dealer, or major security-based swap participant) of--
                    ``(i) information about the material risks and
                characteristics of the swap;
                    ``(ii) any material incentives or conflicts of interest
                that the swap dealer or major swap participant may have in
                connection with the swap; and
                    ``(iii)(I) for cleared swaps, upon the request of the
                counterparty, receipt of the daily mark of the transaction
                from the appropriate derivatives clearing organization; and
                    ``(II) for uncleared swaps, receipt of the daily mark
                of the transaction from the swap dealer or the major swap
                participant;
                ``(C) establish a duty for a swap dealer or major swap
            participant to communicate in a fair and balanced manner based
            on principles of fair dealing and good faith; and
                ``(D) establish such other standards and requirements as
            the Commission may determine are appropriate in the public
            interest, for the protection of investors, or otherwise in
            furtherance of the purposes of this Act.
            ``(4) Special requirements for swap dealers acting as
        advisors.--
                ``(A) In general.--It shall be unlawful for a swap dealer
            or major swap participant--
                    ``(i) to employ any device, scheme, or artifice to
                defraud any Special Entity or prospective customer who is a
                Special Entity;
                    ``(ii) to engage in any transaction, practice, or
                course of business that operates as a fraud or deceit on
                any Special Entity or prospective customer who is a Special
                Entity; or
                    ``(iii) to engage in any act, practice, or course of
                business that is fraudulent, deceptive or manipulative.
                ``(B) Duty.--Any swap dealer that acts as an advisor to a
            Special Entity shall have a duty to act in the best interests
            of the Special Entity.
                ``(C) Reasonable efforts.--Any swap dealer that acts as an
            advisor to a Special Entity shall make reasonable efforts to
            obtain such information as is necessary to make a reasonable
            determination that any swap recommended by the swap dealer is
            in the best interests of the Special Entity, including
            information relating to--
                    ``(i) the financial status of the Special Entity;
                    ``(ii) the tax status of the Special Entity;
                    ``(iii) the investment or financing objectives of the
                Special Entity; and
                    ``(iv) any other information that the Commission may
                prescribe by rule or regulation.
            ``(5) Special requirements for swap dealers as counterparties
        to special entities.--
                ``(A) Any swap dealer or major swap participant that offers
            to enter or enters into a swap with a Special Entity shall--
                    ``(i) comply with any duty established by the
                Commission for a swap dealer or major swap participant,
                with respect to a counterparty that is an eligible contract
                participant within the meaning of subclause (I) or (II) of
                clause (vii) of section 1a(18) of this Act, that requires
                the swap dealer or major swap participant to have a
                reasonable basis to believe that the counterparty that is a
                Special Entity has an independent representative that--

                        ``(I) has sufficient knowledge to evaluate the
                    transaction and risks;
                        ``(II) is not subject to a statutory
                    disqualification;
                        ``(III) is independent of the swap dealer or major
                    swap participant;
                        ``(IV) undertakes a duty to act in the best
                    interests of the counterparty it represents;
                        ``(V) makes appropriate disclosures;
                        ``(VI) will provide written representations to the
                    Special Entity regarding fair pricing and the
                    appropriateness of the transaction; and
                        ``(VII) in the case of employee benefit plans
                    subject to the Employee Retirement Income Security act
                    of 1974, is a fiduciary as defined in section 3 of that
                    Act (29 U.S.C. 1002); and

                    ``(ii) before the initiation of the transaction,
                disclose to the Special Entity in writing the capacity in
                which the swap dealer is acting; and
                ``(B) the Commission may establish such other standards and
            requirements as the Commission may determine are appropriate in
            the public interest, for the protection of investors, or
            otherwise in furtherance of the purposes of this Act.
            ``(6) Rules.--The Commission shall prescribe rules under this
        subsection governing business conduct standards for swap dealers
        and major swap participants.
            ``(7) Applicability.--This section shall not apply with respect
        to a transaction that is--
                ``(A) initiated by a Special Entity on an exchange or swap
            execution facility; and
                ``(B) one in which the swap dealer or major swap
            participant does not know the identity of the counterparty to
            the transaction.
        ``(i) Documentation Standards.--
            ``(1) In general.--Each registered swap dealer and major swap
        participant shall conform with such standards as may be prescribed
        by the Commission by rule or regulation that relate to timely and
        accurate confirmation, processing, netting, documentation, and
        valuation of all swaps.
            ``(2) Rules.--The Commission shall adopt rules governing
        documentation standards for swap dealers and major swap
        participants.
        ``(j) Duties.--Each registered swap dealer and major swap
    participant at all times shall comply with the following requirements:
            ``(1) Monitoring of trading.--The swap dealer or major swap
        participant shall monitor its trading in swaps to prevent
        violations of applicable position limits.
            ``(2) Risk management procedures.--The swap dealer or major
        swap participant shall establish robust and professional risk
        management systems adequate for managing the day-to-day business of
        the swap dealer or major swap participant.
            ``(3) Disclosure of general information.--The swap dealer or
        major swap participant shall disclose to the Commission and to the
        prudential regulator for the swap dealer or major swap participant,
        as applicable, information concerning--
                ``(A) terms and conditions of its swaps;
                ``(B) swap trading operations, mechanisms, and practices;
                ``(C) financial integrity protections relating to swaps;
            and
                ``(D) other information relevant to its trading in swaps.
            ``(4) Ability to obtain information.--The swap dealer or major
        swap participant shall--
                ``(A) establish and enforce internal systems and procedures
            to obtain any necessary information to perform any of the
            functions described in this section; and
                ``(B) provide the information to the Commission and to the
            prudential regulator for the swap dealer or major swap
            participant, as applicable, on request.
            ``(5) Conflicts of interest.--The swap dealer and major swap
        participant shall implement conflict-of-interest systems and
        procedures that--
                ``(A) establish structural and institutional safeguards to
            ensure that the activities of any person within the firm
            relating to research or analysis of the price or market for any
            commodity or swap or acting in a role of providing clearing
            activities or making determinations as to accepting clearing
            customers are separated by appropriate informational partitions
            within the firm from the review, pressure, or oversight of
            persons whose involvement in pricing, trading, or clearing
            activities might potentially bias their judgment or supervision
            and contravene the core principles of open access and the
            business conduct standards described in this Act; and
                ``(B) address such other issues as the Commission
            determines to be appropriate.
            ``(6) Antitrust considerations.--Unless necessary or
        appropriate to achieve the purposes of this Act, a swap dealer or
        major swap participant shall not--
                ``(A) adopt any process or take any action that results in
            any unreasonable restraint of trade; or
                ``(B) impose any material anticompetitive burden on trading
            or clearing.
            ``(7) Rules.--The Commission shall prescribe rules under this
        subsection governing duties of swap dealers and major swap
        participants.
        ``(k) Designation of Chief Compliance Officer.--
            ``(1) In general.--Each swap dealer and major swap participant
        shall designate an individual to serve as a chief compliance
        officer.
            ``(2) Duties.--The chief compliance officer shall--
                ``(A) report directly to the board or to the senior officer
            of the swap dealer or major swap participant;
                ``(B) review the compliance of the swap dealer or major
            swap participant with respect to the swap dealer and major swap
            participant requirements described in this section;
                ``(C) in consultation with the board of directors, a body
            performing a function similar to the board, or the senior
            officer of the organization, resolve any conflicts of interest
            that may arise;
                ``(D) be responsible for administering each policy and
            procedure that is required to be established pursuant to this
            section;
                ``(E) ensure compliance with this Act (including
            regulations) relating to swaps, including each rule prescribed
            by the Commission under this section;
                ``(F) establish procedures for the remediation of
            noncompliance issues identified by the chief compliance officer
            through any--
                    ``(i) compliance office review;
                    ``(ii) look-back;
                    ``(iii) internal or external audit finding;
                    ``(iv) self-reported error; or
                    ``(v) validated complaint; and
                ``(G) establish and follow appropriate procedures for the
            handling, management response, remediation, retesting, and
            closing of noncompliance issues.
            ``(3) Annual reports.--
                ``(A) In general.--In accordance with rules prescribed by
            the Commission, the chief compliance officer shall annually
            prepare and sign a report that contains a description of--
                    ``(i) the compliance of the swap dealer or major swap
                participant with respect to this Act (including
                regulations); and
                    ``(ii) each policy and procedure of the swap dealer or
                major swap participant of the chief compliance officer
                (including the code of ethics and conflict of interest
                policies).
                ``(B) Requirements.--A compliance report under subparagraph
            (A) shall--
                    ``(i) accompany each appropriate financial report of
                the swap dealer or major swap participant that is required
                to be furnished to the Commission pursuant to this section;
                and
                    ``(ii) include a certification that, under penalty of
                law, the compliance report is accurate and complete.''.
        SEC. 732. CONFLICTS OF INTEREST.
        Section 4d of the Commodity Exchange Act (7 U.S.C. 6d) is amended--
            (1) by redesignating subsection (c) as subsection (e); and
            (2) by inserting after subsection (b) the following:
        ``(c) Conflicts of Interest.--The Commission shall require that
    futures commission merchants and introducing brokers implement
    conflict-of-interest systems and procedures that--
            ``(1) establish structural and institutional safeguards to
        ensure 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 persons whose
        involvement in trading or clearing activities might potentially
        bias the judgment or supervision of the persons; and
            ``(2) address such other issues as the Commission determines to
        be appropriate.
        ``(d) Designation of Chief Compliance Officer.--Each futures
    commission merchant shall designate an individual to serve as its Chief
    Compliance Officer and perform such duties and responsibilities as
    shall be set forth in regulations to be adopted by the Commission or
    rules to be adopted by a futures association registered under section
    17.''.
        SEC. 733. SWAP EXECUTION FACILITIES.
        The Commodity Exchange Act is amended by inserting after section 5g
    (7 U.S.C. 7b-2) the following:
      ``SEC. 5h. SWAP EXECUTION FACILITIES.
        ``(a) Registration.--
            ``(1) In general.--No person may operate a facility for the
        trading or processing of swaps unless the facility is registered as
        a swap execution facility or as a designated contract market under
        this section.
            ``(2) Dual registration.--Any person that is registered as a
        swap execution facility under this section shall register with the
        Commission regardless of whether the person also is registered with
        the Securities and Exchange Commission as a swap execution
        facility.
        ``(b) Trading and Trade Processing.--
            ``(1) In general.--Except as specified in paragraph (2), a swap
        execution facility that is registered under subsection (a) may--
                ``(A) make available for trading any swap; and
                ``(B) facilitate trade processing of any swap.
            ``(2) Agricultural swaps.--A swap execution facility may not
        list for trading or confirm the execution of any swap in an
        agricultural commodity (as defined by the Commission) except
        pursuant to a rule or regulation of the Commission allowing the
        swap under such terms and conditions as the Commission shall
        prescribe.
        ``(c) Identification of Facility Used To Trade Swaps by Contract
    Markets.--A board of trade that operates a contract market shall, to
    the extent that the board of trade also operates a swap execution
    facility and uses the same electronic trade execution system for
    listing and executing trades of swaps on or through the contract market
    and the swap execution facility, identify whether the electronic
    trading of such swaps is taking place on or through the contract market
    or the swap execution facility.
        ``(d) Rule-writing.--
            ``(1) The Securities and Exchange Commission and Commodity
        Futures Trading Commission may promulgate rules defining the
        universe of swaps that can be executed on a swap execution
        facility. These rules shall take into account the price and
        nonprice requirements of the counterparties to a swap and the goal
        of this section as set forth in subsection (e).
            ``(2) For all swaps that are not required to be executed
        through a swap execution facility as defined in paragraph (1), such
        trades may be executed through any other available means of
        interstate commerce.
            ``(3) The Securities and Exchange Commission and Commodity
        Futures Trading Commission shall update these rules as necessary to
        account for technological and other innovation.
        ``(e) Rule of Construction.--The goal of this section is to promote
    the trading of swaps on swap execution facilities and to promote pre-
    trade price transparency in the swaps market.
        ``(f) Core Principles for Swap Execution Facilities.--
            ``(1) Compliance with core principles.--
                ``(A) In general.--To be registered, and maintain
            registration, as a swap execution facility, the swap execution
            facility shall comply with--
                    ``(i) the core principles described in this subsection;
                and
                    ``(ii) any requirement that the Commission may impose
                by rule or regulation pursuant to section 8a(5).
                ``(B) Reasonable discretion of swap execution facility.--
            Unless otherwise determined by the Commission by rule or
            regulation, a swap execution facility described in subparagraph
            (A) shall have reasonable discretion in establishing the manner
            in which the swap execution facility complies with the core
            principles described in this subsection.
            ``(2) Compliance with rules.--A swap execution facility shall--
                ``(A) establish and enforce compliance with any rule of the
            swap execution facility, including--
                    ``(i) the terms and conditions of the swaps traded or
                processed on or through the swap execution facility; and
                    ``(ii) any limitation on access to the swap execution
                facility;
                ``(B) establish and enforce trading, trade processing, and
            participation rules that will deter abuses and have the
            capacity to detect, investigate, and enforce those rules,
            including means--
                    ``(i) to provide market participants with impartial
                access to the market; and
                    ``(ii) to capture information that may be used in
                establishing whether rule violations have occurred;
                ``(C) establish rules governing the operation of the
            facility, including rules specifying trading procedures to be
            used in entering and executing orders traded or posted on the
            facility, including block trades; and
                ``(D) provide by its rules that when a swap dealer or major
            swap participant enters into or facilitates a swap that is
            subject to the mandatory clearing requirement of section 2(h),
            the swap dealer or major swap participant shall be responsible
            for compliance with the mandatory trading requirement under
            section 2(h)(8).
            ``(3) Swaps not readily susceptible to manipulation.--The swap
        execution facility shall permit trading only in swaps that are not
        readily susceptible to manipulation.
            ``(4) Monitoring of trading and trade processing.--The swap
        execution facility shall--
                ``(A) establish and enforce rules or terms and conditions
            defining, or specifications detailing--
                    ``(i) trading procedures to be used in entering and
                executing orders traded on or through the facilities of the
                swap execution facility; and
                    ``(ii) procedures for trade processing of swaps on or
                through the facilities of the swap execution facility; and
                ``(B) monitor trading in swaps to prevent manipulation,
            price distortion, and disruptions of the delivery or cash
            settlement process through surveillance, compliance, and
            disciplinary practices and procedures, including methods for
            conducting real-time monitoring of trading and comprehensive
            and accurate trade reconstructions.
            ``(5) Ability to obtain information.--The swap execution
        facility shall--
                ``(A) establish and enforce rules that will allow the
            facility to obtain any necessary information to perform any of
            the functions described in this section;
                ``(B) provide the information to the Commission on request;
            and
                ``(C) have the capacity to carry out such international
            information-sharing agreements as the Commission may require.
            ``(6) Position limits or accountability.--
                ``(A) In general.--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 the contracts of the facility,
            as is necessary and appropriate, position limitations or
            position accountability for speculators.
                ``(B) Position limits.--For any contract that is subject to
            a position limitation established by the Commission pursuant to
            section 4a(a), the swap execution facility shall--
                    ``(i) set its position limitation at a level no higher
                than the Commission limitation; and
                    ``(ii) monitor positions established on or through the
                swap execution facility for compliance with the limit set
                by the Commission and the limit, if any, set by the swap
                execution facility.
            ``(7) Financial integrity of transactions.--The swap execution
        facility shall establish and enforce rules and procedures for
        ensuring the financial integrity of swaps entered on or through the
        facilities of the swap execution facility, including the clearance
        and settlement of the swaps pursuant to section 2(h)(1).
            ``(8) Emergency authority.--The swap execution facility shall
        adopt rules to provide for the exercise of emergency authority, in
        consultation or cooperation with the Commission, as is necessary
        and appropriate, including the authority to liquidate or transfer
        open positions in any swap or to suspend or curtail trading in a
        swap.
            ``(9) Timely publication of trading information.--
                ``(A) In general.--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.
                ``(B) Capacity of swap execution facility.--The swap
            execution facility shall be required to have the capacity to
            electronically capture and transmit trade information with
            respect to transactions executed on the facility.
            ``(10) Recordkeeping and reporting.--
                ``(A) In general.--A swap execution facility shall--
                    ``(i) maintain records of all activities relating 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;
                    ``(ii) report to the Commission, in a form and manner
                acceptable to the Commission, such information as the
                Commission determines to be necessary or appropriate for
                the Commission to perform the duties of the Commission
                under this Act; and
                    ``(iii) shall keep any such records relating to swaps
                defined in section 1a(47)(A)(v) open to inspection and
                examination by the Securities and Exchange Commission.''
                ``(B) Requirements.--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 data
            repositories.
            ``(11) Antitrust considerations.--Unless necessary or
        appropriate to achieve the purposes of this Act, the swap execution
        facility shall not--
                ``(A) adopt any rules or taking any actions that result in
            any unreasonable restraint of trade; or
                ``(B) impose any material anticompetitive burden on trading
            or clearing.
            ``(12) Conflicts of interest.--The swap execution facility
        shall--
                ``(A) establish and enforce rules to minimize conflicts of
            interest in its decision-making process; and
                ``(B) establish a process for resolving the conflicts of
            interest.
            ``(13) Financial resources.--
                ``(A) In general.--The swap execution facility shall have
            adequate financial, operational, and managerial resources to
            discharge each responsibility of the swap execution facility.
                ``(B) Determination of resource adequacy.--The financial
            resources of a swap execution facility shall be considered to
            be adequate if the value of the financial resources exceeds the
            total amount that would enable the swap execution facility to
            cover the operating costs of the swap execution facility for a
            1-year period, as calculated on a rolling basis.
            ``(14) System safeguards.--The swap execution facility shall--
                ``(A) establish and maintain a program of risk analysis and
            oversight to identify and minimize sources of operational risk,
            through the development of appropriate controls and procedures,
            and automated systems, that--
                    ``(i) are reliable and secure; and
                    ``(ii) have adequate scalable capacity;
                ``(B) establish and maintain emergency procedures, backup
            facilities, and a plan for disaster recovery that allow for--
                    ``(i) the timely recovery and resumption of operations;
                and
                    ``(ii) the fulfillment of the responsibilities and
                obligations of the swap execution facility; and
                ``(C) periodically conduct tests to verify that the backup
            resources of the swap execution facility are sufficient to
            ensure continued--
                    ``(i) order processing and trade matching;
                    ``(ii) price reporting;
                    ``(iii) market surveillance and
                    ``(iv) maintenance of a comprehensive and accurate
                audit trail.
            ``(15) Designation of chief compliance officer.--
                ``(A) In general.--Each swap execution facility shall
            designate an individual to serve as a chief compliance officer.
                ``(B) Duties.--The chief compliance officer shall--
                    ``(i) report directly to the board or to the senior
                officer of the facility;
                    ``(ii) review compliance with the core principles in
                this subsection;
                    ``(iii) 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;
                    ``(iv) be responsible for establishing and
                administering the policies and procedures required to be
                established pursuant to this section;
                    ``(v) 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
                    ``(vi) establish procedures for the remediation of
                noncompliance issues found during compliance office
                reviews, look backs, internal or external audit findings,
                self-reported errors, or through validated complaints.
                ``(C) Requirements for procedures.--In establishing
            procedures under subparagraph (B)(vi), the chief compliance
            officer shall design the procedures to establish the handling,
            management response, remediation, retesting, and closing of
            noncompliance issues.
                ``(D) Annual reports.--
                    ``(i) In general.--In accordance with rules prescribed
                by the Commission, the chief compliance officer shall
                annually prepare and sign a report that contains a
                description of--

                        ``(I) the compliance of the swap execution facility
                    with this Act; and
                        ``(II) the policies and procedures, including the
                    code of ethics and conflict of interest policies, of
                    the swap execution facility.

                    ``(ii) Requirements.--The chief compliance officer
                shall--

                        ``(I) submit each report described in clause (i)
                    with the appropriate financial report of the swap
                    execution facility that is required to be submitted to
                    the Commission pursuant to this section; and
                        ``(II) include in the report a certification that,
                    under penalty of law, the report is accurate and
                    complete.

        ``(g) Exemptions.--The Commission may exempt, conditionally or
    unconditionally, a swap execution facility from registration under this
    section if the Commission finds that the facility is subject to
    comparable, comprehensive supervision and regulation on a consolidated
    basis by the Securities and Exchange Commission, a prudential
    regulator, or the appropriate governmental authorities in the home
    country of the facility.
        ``(h) Rules.--The Commission shall prescribe rules governing the
    regulation of alternative swap execution facilities under this
    section.''.
        SEC. 734. DERIVATIVES TRANSACTION EXECUTION FACILITIES AND EXEMPT
          BOARDS OF TRADE.
        (a) In General.--Sections 5a and 5d of the Commodity Exchange Act
    (7 U.S.C. 7a, 7a-3) are repealed.
        (b) Conforming Amendments.--
            (1) Section 2 of the Commodity Exchange Act (7 U.S.C. 2) is
        amended--
                (A) in subsection (a)(1)(A), in the first sentence, by
            striking ``or 5a''; and
                (B) in paragraph (2) of subsection (g) (as redesignated by
            section 723(a)(1)(B)), by striking ``section 5a of this Act''
            and all that follows through ``5d of this Act'' and inserting
            ``section 5b of this Act''.
            (2) Section 6(g)(1)(A) of the Securities Exchange Act of 1934
        (15 U.S.C. 78f(g)(1)(A)) is amended--
                (A) by striking ``that--'' and all that follows through
            ``(i) has been designated'' and inserting ``that has been
            designated'';
                (B) by striking ``; or'' and inserting ``; and'' and
                (C) by striking clause (ii).
        (c) Ability to Petition Commission.--
            (1) In general.--Prior to the final effective dates in this
        title, a person may petition the Commodity Futures Trading
        Commission to remain subject to the provisions of section 5d of the
        Commodity Exchange Act, as such provisions existed prior to the
        effective date of this subtitle.
            (2) Consideration of petition.--The Commodity Futures Trading
        Commission shall consider any petition submitted under paragraph
        (1) in a prompt manner and may allow a person to continue operating
        subject to the provisions of section 5d of the Commodity Exchange
        Act for up to 1 year after the effective date of this subtitle.
        SEC. 735. DESIGNATED CONTRACT MARKETS.
        (a) Criteria for Designation.--Section 5 of the Commodity Exchange
    Act (7 U.S.C. 7) is amended by striking subsection (b).
        (b) Core Principles for Contract Markets.--Section 5 of the
    Commodity Exchange Act (7 U.S.C. 7) is amended by striking subsection
    (d) and inserting the following:
        ``(d) Core Principles for Contract Markets.--
            ``(1) Designation as contract market.--
                ``(A) In general.--To be designated, and maintain a
            designation, as a contract market, a board of trade shall
            comply with--
                    ``(i) any core principle described in this subsection;
                and
                    ``(ii) any requirement that the Commission may impose
                by rule or regulation pursuant to section 8a(5).
                ``(B) Reasonable discretion of contract market.--Unless
            otherwise determined by the Commission by rule or regulation, a
            board of trade described in subparagraph (A) shall have
            reasonable discretion in establishing the manner in which the
            board of trade complies with the core principles described in
            this subsection.
            ``(2) Compliance with rules.--
                ``(A) In general.--The board of trade shall establish,
            monitor, and enforce compliance with the rules of the contract
            market, including--
                    ``(i) access requirements;
                    ``(ii) the terms and conditions of any contracts to be
                traded on the contract market; and
                    ``(iii) rules prohibiting abusive trade practices on
                the contract market.
                ``(B) Capacity of contract market.--The board of trade
            shall have the capacity to detect, investigate, and apply
            appropriate sanctions to any person that violates any rule of
            the contract market.
                ``(C) Requirement of rules.--The rules of the contract
            market shall provide the board of trade with the ability and
            authority to obtain any necessary information to perform any
            function described in this subsection, including the capacity
            to carry out such international information-sharing agreements
            as the Commission may require.
            ``(3) Contracts not readily subject to manipulation.--The board
        of trade shall list on the contract market only contracts that are
        not readily susceptible to manipulation.
            ``(4) Prevention of market disruption.--The board of trade
        shall have the capacity and responsibility to prevent manipulation,
        price distortion, and disruptions of the delivery or cash-
        settlement process through market surveillance, compliance, and
        enforcement practices and procedures, including--
                ``(A) methods for conducting real-time monitoring of
            trading; and
                ``(B) comprehensive and accurate trade reconstructions.
            ``(5) Position limitations or accountability.--
                ``(A) In general.--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
            contract of the board of trade, as is necessary and
            appropriate, position limitations or position accountability
            for speculators.
                ``(B) Maximum allowable position limitation.--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 the position limitation of the board of trade at a
            level not higher than the position limitation established by
            the Commission.
            ``(6) Emergency authority.--The board of trade, in consultation
        or cooperation with the Commission, shall adopt rules to provide
        for the exercise of emergency authority, as is necessary and
        appropriate, including the authority--
                ``(A) to liquidate or transfer open positions in any
            contract;
                ``(B) to suspend or curtail trading in any contract; and
                ``(C) to require market participants in any contract to
            meet special margin requirements.
            ``(7) Availability of general information.--The board of trade
        shall make available to market authorities, market participants,
        and the public accurate information concerning--
                ``(A) the terms and conditions of the contracts of the
            contract market; and
                ``(B)(i) the rules, regulations, and mechanisms for
            executing transactions on or through the facilities of the
            contract market; and
                ``(ii) the rules and specifications describing the
            operation of the contract market's--
                    ``(I) electronic matching platform; or
                    ``(II) trade execution facility.
            ``(8) Daily publication of trading information.--The board of
        trade shall make public daily information on settlement prices,
        volume, open interest, and opening and closing ranges for actively
        traded contracts on the contract market.
            ``(9) Execution of transactions.--
                ``(A) In general.--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 centralized market of the board of
            trade.
                ``(B) Rules.--The rules of the board of trade may
            authorize, for bona fide business purposes--
                    ``(i) transfer trades or office trades;
                    ``(ii) an exchange of--

                        ``(I) futures in connection with a cash commodity
                    transaction;
                        ``(II) futures for cash commodities; or
                        ``(III) futures for swaps; or

                    ``(iii) a futures commission merchant, acting as
                principal or agent, to enter into or confirm the execution
                of a contract for the purchase or sale of a commodity for
                future delivery if the contract is reported, recorded, or
                cleared in accordance with the rules of the contract market
                or a derivatives clearing organization.
            ``(10) Trade information.--The board of trade shall maintain
        rules and procedures to provide for the recording and safe storage
        of all identifying trade information in a manner that enables the
        contract market to use the information--
                ``(A) to assist in the prevention of customer and market
            abuses; and
                ``(B) to provide evidence of any violations of the rules of
            the contract market.
            ``(11) Financial integrity of transactions.--The board of trade
        shall establish and enforce--
                ``(A) rules and procedures for ensuring the financial
            integrity of transactions entered into on or through the
            facilities of the contract market (including the clearance and
            settlement of the transactions with a derivatives clearing
            organization); and
                ``(B) rules to ensure--
                    ``(i) the financial integrity of any--

                        ``(I) futures commission merchant; and
                        ``(II) introducing broker; and

                    ``(ii) the protection of customer funds.
            ``(12) Protection of markets and market participants.--The
        board of trade shall establish and enforce rules--
                ``(A) to protect markets and market participants from
            abusive practices committed by any party, including abusive
            practices committed by a party acting as an agent for a
            participant; and
                ``(B) to promote fair and equitable trading on the contract
            market.
            ``(13) Disciplinary procedures.--The board of trade shall
        establish and enforce disciplinary procedures that authorize the
        board of trade to discipline, suspend, or expel members or market
        participants that violate the rules of the board of trade, or
        similar methods for performing the same functions, including
        delegation of the functions to third parties.
            ``(14) Dispute resolution.--The board of trade shall establish
        and enforce rules regarding, and provide facilities for alternative
        dispute resolution as appropriate for, market participants and any
        market intermediaries.
            ``(15) Governance fitness standards.--The board of trade shall
        establish and enforce appropriate fitness standards for directors,
        members of any disciplinary committee, members of the contract
        market, and any other person with direct access to the facility
        (including any party affiliated with any person described in this
        paragraph).
            ``(16) Conflicts of interest.--The board of trade shall
        establish and enforce rules--
                ``(A) to minimize conflicts of interest in the decision-
            making process of the contract market; and
                ``(B) to establish a process for resolving conflicts of
            interest described in subparagraph (A).
            ``(17) Composition of governing boards of contract markets.--
        The governance arrangements of the board of trade shall be designed
        to permit consideration of the views of market participants.
            ``(18) Recordkeeping.--The board of trade shall maintain
        records of all activities relating to the business of the contract
        market--
                ``(A) in a form and manner that is acceptable to the
            Commission; and
                ``(B) for a period of at least 5 years.
            ``(19) Antitrust considerations.--Unless necessary or
        appropriate to achieve the purposes of this Act, the board of trade
        shall not--
                ``(A) adopt any rule or taking any action that results in
            any unreasonable restraint of trade; or
                ``(B) impose any material anticompetitive burden on trading
            on the contract market.
            ``(20) System safeguards.--The board of trade shall--
                ``(A) establish and maintain a program of risk analysis and
            oversight to identify and minimize sources of operational risk,
            through the development of appropriate controls and procedures,
            and the development of automated systems, that are reliable,
            secure, and have adequate scalable capacity;
                ``(B) establish and maintain emergency procedures, backup
            facilities, and a plan for disaster recovery that allow for the
            timely recovery and resumption of operations and the
            fulfillment of the responsibilities and obligations of the
            board of trade; and
                ``(C) periodically conduct tests to verify that backup
            resources are sufficient to ensure continued order processing
            and trade matching, price reporting, market surveillance, and
            maintenance of a comprehensive and accurate audit trail.
            ``(21) Financial resources.--
                ``(A) In general.--The board of trade shall have adequate
            financial, operational, and managerial resources to discharge
            each responsibility of the board of trade.
                ``(B) Determination of adequacy.--The financial resources
            of the board of trade shall be considered to be adequate if the
            value of the financial resources exceeds the total amount that
            would enable the contract market to cover the operating costs
            of the contract market for a 1-year period, as calculated on a
            rolling basis.
            ``(22) Diversity of board of directors.--The board of trade, if
        a publicly traded company, shall endeavor to recruit individuals to
        serve on the board of directors and the other decision-making
        bodies (as determined by the Commission) of the board of trade from
        among, and to have the composition of the bodies reflect, a broad
        and culturally diverse pool of qualified candidates.
            ``(23) Securities and exchange commission.--The board of trade
        shall keep any such records relating to swaps defined in section
        1a(47)(A)(v) open to inspection and examination by the Securities
        and Exchange Commission.''.
        SEC. 736. MARGIN.
        Section 8a(7) of the Commodity Exchange Act (7 U.S.C. 12a(7)) is
    amended--
            (1) in subparagraph (C), by striking ``, excepting the setting
        of levels of margin'';
            (2) by redesignating subparagraphs (D) through (F) as
        subparagraphs (E) through (G), respectively; and
            (3) by inserting after subparagraph (C) the following:
                ``(D) margin requirements, provided that the rules,
            regulations, or orders shall--
                    ``(i) be limited to protecting the financial integrity
                of the derivatives clearing organization;
                    ``(ii) be designed for risk management purposes to
                protect the financial integrity of transactions; and
                    ``(iii) not set specific margin amounts;''.
        SEC. 737. POSITION LIMITS.
        (a) Aggregate Position Limits.--Section 4a(a) of the Commodity
    Exchange Act (7 U.S.C. 6a(a)) is amended--
            (1) by inserting after ``(a)'' the following:
            ``(1) In general.--'';
            (2) in the first sentence, by striking ``on electronic trading
        facilities with respect to a significant price discovery contract''
        and inserting ``swaps that perform or affect a significant price
        discovery function with respect to registered entities'';
            (3) in the second sentence--
                (A) by inserting ``, including any group or class of
            traders,'' after ``held by any person''; and
                (B) by striking ``on an electronic trading facility with
            respect to a significant price discovery contract,'' and
            inserting ``swaps traded on or subject to the rules of a
            designated contract market or a swap execution facility, or
            swaps not traded on or subject to the rules of a designated
            contract market or a swap execution facility that performs a
            significant price discovery function with respect to a
            registered entity,''; and
            (4) by adding at the end the following:
            ``(2) Establishment of limitations.--
                ``(A) In general.--In accordance with the standards set
            forth in paragraph (1) of this subsection and consistent with
            the good faith exception cited in subsection (b)(2), with
            respect to physical commodities other than excluded commodities
            as defined by the Commission, the Commission shall by rule,
            regulation, or order establish limits on the amount of
            positions, as appropriate, other than bona fide hedge
            positions, that may be held by any person with respect to
            contracts of sale for future delivery or with respect to
            options on the contracts or commodities traded on or subject to
            the rules of a designated contract market.
                ``(B) Timing.--
                    ``(i) Exempt commodities.--For exempt commodities, the
                limits required under subparagraph (A) shall be established
                within 180 days after the date of the enactment of this
                paragraph.
                    ``(ii) Agricultural commodities.--For agricultural
                commodities, the limits required under subparagraph (A)
                shall be established within 270 days after the date of the
                enactment of this paragraph.
                ``(C) Goal.--In establishing the limits required under
            subparagraph (A), the Commission shall strive to ensure that
            trading on foreign boards of trade in the same commodity will
            be subject to comparable limits and that any limits to be
            imposed by the Commission will not cause price discovery in the
            commodity to shift to trading on the foreign boards of trade.
            ``(3) Specific limitations.--In establishing the limits
        required in paragraph (2), the Commission, as appropriate, shall
        set limits--
                ``(A) on the number of positions that may be held by any
            person for the spot month, each other month, and the aggregate
            number of positions that may be held by any person for all
            months; and
                ``(B) to the maximum extent practicable, in its
            discretion--
                    ``(i) to diminish, eliminate, or prevent excessive
                speculation as described under this section;
                    ``(ii) to deter and prevent market manipulation,
                squeezes, and corners;
                    ``(iii) to ensure sufficient market liquidity for bona
                fide hedgers; and
                    ``(iv) to ensure that the price discovery function of
                the underlying market is not disrupted.
            ``(4) Significant price discovery function.--In making a
        determination whether a swap performs or affects a significant
        price discovery function with respect to regulated markets, the
        Commission shall consider, as appropriate:
                ``(A) Price linkage.--The extent to which the swap uses or
            otherwise relies on a daily or final settlement price, or other
            major price parameter, of another contract traded on a
            regulated market based upon the same underlying commodity, to
            value a position, transfer or convert a position, financially
            settle a position, or close out a position.
                ``(B) Arbitrage.--The extent to which the price for the
            swap is sufficiently related to the price of another contract
            traded on a regulated market based upon the same underlying
            commodity so as to permit market participants to effectively
            arbitrage between the markets by simultaneously maintaining
            positions or executing trades in the swaps on a frequent and
            recurring basis.
                ``(C) Material price reference.--The extent to which, on a
            frequent and recurring basis, bids, offers, or transactions in
            a contract traded on a regulated market are directly based on,
            or are determined by referencing, the price generated by the
            swap.
                ``(D) Material liquidity.--The extent to which the volume
            of swaps being traded in the commodity is sufficient to have a
            material effect on another contract traded on a regulated
            market.
                ``(E) Other material factors.--Such other material factors
            as the Commission specifies by rule or regulation as relevant
            to determine whether a swap serves a significant price
            discovery function with respect to a regulated market.
            ``(5) Economically equivalent contracts.--
                ``(A) Notwithstanding any other provision of this section,
            the Commission shall establish limits on the amount of
            positions, including aggregate position limits, as appropriate,
            other than bona fide hedge positions, that may be held by any
            person with respect to swaps that are economically equivalent
            to contracts of sale for future delivery or to options on the
            contracts or commodities traded on or subject to the rules of a
            designated contract market subject to paragraph (2).
                ``(B) In establishing limits pursuant to subparagraph (A),
            the Commission shall--
                    ``(i) develop the limits concurrently with limits
                established under paragraph (2), and the limits shall have
                similar requirements as under paragraph (3)(B); and
                    ``(ii) establish the limits simultaneously with limits
                established under paragraph (2).
            ``(6) Aggregate position limits.--The Commission shall, by rule
        or regulation, establish limits (including related hedge exemption
        provisions) on the aggregate number or amount of positions in
        contracts based upon the same underlying commodity (as defined by
        the Commission) that may be held by any person, including any group
        or class of traders, for each month across--
                ``(A) contracts listed by designated contract markets;
                ``(B) with respect to an agreement contract, or transaction
            that settles against any price (including the daily or final
            settlement price) of 1 or more contracts listed for trading on
            a registered entity, contracts traded on a foreign board of
            trade that provides members or other participants located in
            the United States with direct access to its electronic trading
            and order matching system; and
                ``(C) swap contracts that perform or affect a significant
            price discovery function with respect to regulated entities.
            ``(7) Exemptions.--The Commission, by rule, regulation, or
        order, may exempt, conditionally or unconditionally, any person or
        class of persons, any swap or class of swaps, any contract of sale
        of a commodity for future delivery or class of such contracts, any
        option or class of options, or any transaction or class of
        transactions from any requirement it may establish under this
        section with respect to position limits.''.
        (b) Conforming Amendments.--Section 4a(b) of the Commodity Exchange
    Act (7 U.S.C. 6a(b)) is amended--
            (1) in paragraph (1), by striking ``or derivatives transaction
        execution facility or facilities or electronic trading facility''
        and inserting ``or swap execution facility or facilities''; and
            (2) in paragraph (2), by striking ``or derivatives transaction
        execution facility or facilities or electronic trading facility''
        and inserting ``or swap execution facility''.
        (c) Bona Fide Hedging Transaction.--Section 4a(c) of the Commodity
    Exchange Act is amended--
            (1) by inserting ``(1)'' after ``(c)''; and
            (2) by adding at the end the following:
            ``(2) For the purposes of implementation of subsection (a)(2)
        for contracts of sale for future delivery or options on the
        contracts or commodities, the Commission shall define what
        constitutes a bona fide hedging transaction or position as a
        transaction or position that--
                ``(A)(i) represents a substitute for transactions made or
            to be made or positions taken or to be taken at a later time in
            a physical marketing channel;
                ``(ii) is economically appropriate to the reduction of
            risks in the conduct and management of a commercial enterprise;
            and
                ``(iii) arises from the potential change in the value of--
                    ``(I) assets that a person owns, produces,
                manufactures, processes, or merchandises or anticipates
                owning, producing, manufacturing, processing, or
                merchandising;
                    ``(II) liabilities that a person owns or anticipates
                incurring; or
                    ``(III) services that a person provides, purchases, or
                anticipates providing or purchasing; or
                ``(B) reduces risks attendant to a position resulting from
            a swap that--
                    ``(i) was executed opposite a counterparty for which
                the transaction would qualify as a bona fide hedging
                transaction pursuant to subparagraph (A); or
                    ``(ii) meets the requirements of subparagraph (A).''.
        (d) Effective Date.--This section and the amendments made by this
    section shall become effective on the date of the enactment of this
    section.
        SEC. 738. FOREIGN BOARDS OF TRADE.
        (a) In General.--Section 4(b) of the Commodity Exchange Act (7
    U.S.C. 6(b)) is amended--
            (1) in the first sentence, by striking ``The Commission'' and
        inserting the following:
            ``(2) Persons located in the united states.--
                ``(A) In general.--The Commission'';
            (2) in the second sentence, by striking ``Such rules and
        regulations'' and inserting the following:
                ``(B) Different requirements.--Rules and regulations
            described in subparagraph (A)'';
            (3) in the third sentence--
                (A) by striking ``No rule or regulation'' and inserting the
            following:
                ``(C) Prohibition.--Except as provided in paragraphs (1)
            and (2), no rule or regulation'';
                (B) by striking ``that (1) requires'' and inserting the
            following: ``that--
                    ``(i) requires''; and
                (C) by striking ``market, or (2) governs'' and inserting
            the following: ``market; or
                    ``(ii) governs''; and
            (4) by inserting before paragraph (2) (as designated by
        paragraph (1)) the following:
            ``(1) Foreign boards of trade.--
                ``(A) Registration.--The Commission may adopt rules and
            regulations requiring registration with the Commission for a
            foreign board of trade that provides the members of the foreign
            board of trade or other participants located in the United
            States with direct access to the electronic trading and order
            matching system of the foreign board of trade, including rules
            and regulations prescribing procedures and requirements
            applicable to the registration of such foreign boards of trade.
            For purposes of this paragraph, `direct access' refers to an
            explicit grant of authority by a foreign board of trade to an
            identified member or other participant located in the United
            States to enter trades directly into the trade matching system
            of the foreign board of trade. In adopting such rules and
            regulations, the commission shall consider--
                    ``(i) whether any such foreign board of trade is
                subject to comparable, comprehensive supervision and
                regulation by the appropriate governmental authorities in
                the foreign board of trade's home country; and
                    ``(ii) any previous commission findings that the
                foreign board of trade is subject to comparable
                comprehensive supervision and regulation by the appropriate
                government authorities in the foreign board of trade's home
                country.
                ``(B) Linked contracts.--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--
                    ``(i) 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
                    ``(ii) the foreign board of trade (or the foreign
                futures authority that oversees the foreign board of
                trade)--

                        ``(I) adopts position limits (including related
                    hedge exemption provisions) for the agreement,
                    contract, or transaction that are comparable to the
                    position limits (including related hedge exemption
                    provisions) adopted by the registered entity for the 1
                    or more contracts against which the agreement,
                    contract, or transaction traded on the foreign board of
                    trade settles;
                        ``(II) has the authority to require or direct
                    market participants to limit, reduce, or liquidate any
                    position the foreign board of trade (or the foreign
                    futures authority that oversees the foreign board of
                    trade) determines to be necessary to prevent or reduce
                    the threat of price manipulation, excessive speculation
                    as described in section 4a, price distortion, or
                    disruption of delivery or the cash settlement process;
                        ``(III) agrees to promptly notify the Commission,
                    with regard to the agreement, contract, or transaction
                    that settles against any price (including the daily or
                    final settlement price) of 1 or more contracts listed
                    for trading on a registered entity, of any change
                    regarding--

                            ``(aa) the information that the foreign board
                        of trade will make publicly available;
                            ``(bb) the position limits that the foreign
                        board of trade or foreign futures authority will
                        adopt and enforce;
                            ``(cc) 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
                            ``(dd) any other area of interest expressed by
                        the Commission to the foreign board of trade or
                        foreign futures authority;

                        ``(IV) provides information to the Commission
                    regarding large trader positions in the agreement,
                    contract, or transaction that is comparable to the
                    large trader position information collected by the
                    Commission for the 1 or more contracts against which
                    the agreement, contract, or transaction traded on the
                    foreign board of trade settles; and
                        ``(V) provides the Commission such information as
                    is 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 such 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.

                ``(C) Existing foreign boards of trade.--Subparagraphs (A)
            and (B) shall not be effective with respect to any foreign
            board of trade to which, prior to the date of enactment of this
            paragraph, the Commission granted direct access permission
            until the date that is 180 days after that date of
            enactment.''.
        (b) Liability of Registered Persons Trading on a Foreign Board of
    Trade.--Section 4 of the Commodity Exchange Act (7 U.S.C. 6) is
    amended--
            (1) in subsection (a), in the matter preceding paragraph (1),
        by inserting ``or by subsection (e)'' after ``Unless exempted by
        the Commission pursuant to subsection (c)''; and
            (2) by adding at the end the following:
        ``(e) Liability of Registered Persons Trading on a Foreign Board of
    Trade.--
            ``(1) In general.--A person registered with the Commission, or
        exempt from registration by the Commission, under this Act may not
        be found to have violated subsection (a) with respect to a
        transaction in, or in connection with, a contract of sale of a
        commodity for future delivery if the person--
                ``(A) has reason to believe that the transaction and the
            contract is made on or subject to the rules of a foreign board
            of trade that is--
                    ``(i) legally organized under the laws of a foreign
                country;
                    ``(ii) authorized to act as a board of trade by a
                foreign futures authority; and
                    ``(iii) subject to regulation by the foreign futures
                authority; and
                ``(B) has not been determined by the Commission to be
            operating in violation of subsection (a).
            ``(2) Rule of construction.--Nothing in this subsection shall
        be construed as implying or creating any presumption that a board
        of trade, exchange, or market is located outside the United States,
        or its territories or possessions, for purposes of subsection
        (a).''.
        (c) Contract Enforcement for Foreign Futures Contracts.--Section
    22(a) of the Commodity Exchange Act (7 U.S.C. 25(a)) (as amended by
    section 739) is amended by adding at the end the following:
        ``(6) Contract Enforcement for Foreign Futures Contracts.--A
    contract of sale of a commodity for future delivery traded or executed
    on or through the facilities of a board of trade, exchange, or market
    located outside the United States for purposes of section 4(a) shall
    not be void, voidable, or unenforceable, and a party to such a contract
    shall not be entitled to rescind or recover any payment made with
    respect to the contract, based on the failure of the foreign board of
    trade to comply with any provision of this Act.''.
        SEC. 739. LEGAL CERTAINTY FOR SWAPS.
        Section 22(a) of the Commodity Exchange Act (7 U.S.C. 25(a)) is
    amended by striking paragraph (4) and inserting the following:
        ``(4) Contract Enforcement Between Eligible Counterparties.--
            ``(A) In general.--No hybrid instrument sold to any investor
        shall be void, voidable, or unenforceable, and no party to a hybrid
        instrument shall be entitled to rescind, or recover any payment
        made with respect to, the 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.
            ``(B) Swaps.--No agreement, contract, or transaction between
        eligible contract participants or persons reasonably believed to be
        eligible contract participants shall be void, voidable, or
        unenforceable, and no party to such agreement, contract, or
        transaction shall be entitled to rescind, or recover any payment
        made with respect to, the 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--
                ``(i) to meet the definition of a swap under section 1a; or
                ``(ii) to be cleared in accordance with section 2(h)(1).
        ``(5) Legal Certainty for Long-term Swaps Entered Into Before the
    Date of Enactment of the Wall Street Transparency and Accountability
    Act of 2010.--
            ``(A) Effect on swaps.--Unless specifically reserved in the
        applicable swap, neither the enactment of the Wall Street
        Transparency and Accountability Act of 2010, nor any requirement
        under that Act or an amendment made by that Act, shall constitute a
        termination event, force majeure, illegality, increased costs,
        regulatory change, or similar event under a swap (including any
        related credit support arrangement) that would permit a party to
        terminate, renegotiate, modify, amend, or supplement 1 or more
        transactions under the swap.
            ``(B) Position limits.--Any position limit established under
        the Wall Street Transparency and Accountability Act of 2010 shall
        not apply to a position acquired in good faith prior to the
        effective date of any rule, regulation, or order under the Act that
        establishes the position limit; provided, however, that such
        positions shall be attributed to the trader if the trader's
        position is increased after the effective date of such position
        limit rule, regulation, or order.''.
        SEC. 740. MULTILATERAL CLEARING ORGANIZATIONS.
        Sections 408 and 409 of the Federal Deposit Insurance Corporation
    Improvement Act of 1991 (12 U.S.C. 4421, 4422) are repealed.
        SEC. 741. ENFORCEMENT.
        (a) Enforcement Authority.--The Commodity Exchange Act is amended
    by inserting after section 4b (7 U.S.C. 6b) the following:
    ``SEC. 4b-1. ENFORCEMENT AUTHORITY.
        ``(a) Commodity Futures Trading Commission.--Except as provided in
    subsections (b), (c), and (d), the Commission shall have exclusive
    authority to enforce the provisions of subtitle A of the Wall Street
    Transparency and Accountability Act of 2010 with respect to any person.
        ``(b) Prudential Regulators.--The prudential regulators shall have
    exclusive authority to enforce the provisions of section 4s(e) with
    respect to swap dealers or major swap participants for which they are
    the prudential regulator.
        ``(c) Referrals.--
            ``(1) Prudential regulators.--If the prudential regulator for a
        swap dealer or major swap participant has cause to believe that the
        swap dealer or major swap participant, or any affiliate or division
        of the swap dealer or major swap participant, may have engaged in
        conduct that constitutes a violation of the nonprudential
        requirements of this Act (including section 4s or rules adopted by
        the Commission under that section), the prudential regulator may
        promptly notify the Commission in a written report that includes--
                ``(A) a request that the Commission initiate an enforcement
            proceeding under this Act; and
                ``(B) an explanation of the facts and circumstances that
            led to the preparation of the written report.
            ``(2) Commission.--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 any prudential requirement of section 4s or rules adopted by the
        Commission under that section, the Commission may notify the
        prudential regulator of the conduct in a written report that
        includes--
                ``(A) a request that the prudential regulator initiate an
            enforcement proceeding under this Act or any other Federal law
            (including regulations); and
                ``(B) an explanation of the concerns of the Commission, and
            a description of the facts and circumstances, that led to the
            preparation of the written report.
        ``(d) Backstop Enforcement Authority.--
            ``(1) Initiation of enforcement proceeding by prudential
        regulator.--If the Commission does not initiate an enforcement
        proceeding before the end of the 90-day period beginning on the
        date on which the Commission receives a written report under
        subsection (c)(1), the prudential regulator may initiate an
        enforcement proceeding.
            ``(2) Initiation of enforcement proceeding by commission.--If
        the prudential regulator does not initiate an enforcement
        proceeding before the end of the 90-day period beginning on the
        date on which the prudential regulator receives a written report
        under subsection (c)(2), the Commission may initiate an enforcement
        proceeding.''.
        (b) Conforming Amendments.--
            (1) Section 4b of the Commodity Exchange Act (7 U.S.C. 6b) is
        amended--
                (A) in subsection (a)(2), by striking ``or other agreement,
            contract, or transaction subject to paragraphs (1) and (2) of
            section 5a(g),'' and inserting ``or swap,'';
                (B) in subsection (b), by striking ``or other agreement,
            contract or transaction subject to paragraphs (1) and (2) of
            section 5a(g),'' and inserting ``or swap,''; and
                (C) by adding at the end the following:
        ``(e) 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 registered entity, in or in
    connection with any order to make, or the making of, any contract of
    sale of any commodity for future delivery (or option on such a
    contract), or any swap, on a group or index of securities (or any
    interest therein or based on the value thereof)--
            ``(1) to employ any device, scheme, or artifice to defraud;
            ``(2) to make any untrue statement of a material fact or to
        omit to state a material fact necessary in order to make the
        statements made, in the light of the circumstances under which they
        were made, not misleading; or
            ``(3) to engage in any act, practice, or course of business
        which operates or would operate as a fraud or deceit upon any
        person.''.
            (2) Section 4c(a)(1) of the Commodity Exchange Act (7 U.S.C.
        6c(a)(1)) is amended by inserting ``or swap'' before ``if the
        transaction is used or may be used''.
            (3) Section 6(c) of the Commodity Exchange Act (7 U.S.C. 9) is
        amended in the first sentence by inserting ``or of any swap,''
        before ``or has willfully made''.
            (4) Section 6(d) of the Commodity Exchange Act (7 U.S.C. 13b)
        is amended in the first sentence, in the matter preceding the
        proviso, by inserting ``or of any swap,'' before ``or otherwise is
        violating''.
            (5) Section 6c(a) of the Commodity Exchange Act (7 U.S.C. 13a-
        1(a)) is amended in the matter preceding the proviso by inserting
        ``or any swap'' after ``commodity for future delivery''.
            (6) Section 9 of the Commodity Exchange Act (7 U.S.C. 13) is
        amended--
                (A) in subsection (a)--
                    (i) in paragraph (2), by inserting ``or of any swap,''
                before ``or to corner''; and
                    (ii) in paragraph (4), by inserting ``swap data
                repository,'' before ``or futures association'' and
                (B) in subsection (e)(1)--
                    (i) by inserting ``swap data repository,'' before ``or
                registered futures association''; and
                    (ii) by inserting ``, or swaps,'' before ``on the
                basis''.
            (7) Section 9(a) of the Commodity Exchange Act (7 U.S.C. 13(a))
        is amended by adding at the end the following:
            ``(6) Any person to abuse the end user clearing exemption under
        section 2(h)(4), as determined by the Commission.''.
            (8) Section 2(c)(2)(B) of the Commodity Exchange Act (7 U.S.C.
        2(c)(2)(B)) is amended--
                (A) by striking ``(dd),'' each place it appears;
                (B) in clause (iii), by inserting ``, and accounts or
            pooled investment vehicles described in clause (vi),'' before
            ``shall be subject to''; and
                (C) by adding at the end the following:
                    ``(vi) This Act applies to, and the Commission shall
                have jurisdiction over, an account or pooled investment
                vehicle that is offered for the purpose of trading, or that
                trades, any agreement, contract, or transaction in foreign
                currency described in clause (i).''.
            (9) Section 2(c)(2)(C) of the Commodity Exchange Act (7 U.S.C.
        2(c)(2)(C)) is amended--
                (A) by striking ``(dd),'' each place it appears;
                (B) in clause (ii)(I), by inserting ``, and accounts or
            pooled investment vehicles described in clause (vii),'' before
            ``shall be subject to''; and
                (C) by adding at the end the following:
                    ``(vii) This Act applies to, and the Commission shall
                have jurisdiction over, an account or pooled investment
                vehicle that is offered for the purpose of trading, or that
                trades, any agreement, contract, or transaction in foreign
                currency described in clause (i).''.
            (10) Section 1a(19)(A)(iv)(II) of the Commodity Exchange Act (7
        U.S.C. 1a(19)(A)(iv)(II)) (as redesignated by section 721(a)(1)) is
        amended by inserting before the semicolon at the end the following:
        ``provided, however, that for purposes of section 2(c)(2)(B)(vi)
        and section 2(c)(2)(C)(vii), the term `eligible contract
        participant' shall not include a commodity pool in which any
        participant is not otherwise an eligible contract participant''.
            (11) Section 6(e) of the Commodity Exchange Act (7 U.S.C. 9a)
        is amended by adding at the end the following:
            ``(4) Any designated clearing organization that knowingly or
        recklessly evades or participates in or facilitates an evasion of
        the requirements of section 2(h) shall be liable for a civil money
        penalty in twice the amount otherwise available for a violation of
        section 2(h).
            ``(5) Any swap dealer or major swap participant that knowingly
        or recklessly evades or participates in or facilitates an evasion
        of the requirements of section 2(h) shall be liable for a civil
        money penalty in twice the amount otherwise available for a
        violation of section 2(h).''.
        (c) Savings Clause.--Notwithstanding any other provision of this
    title, nothing in this subtitle shall be construed as divesting any
    appropriate Federal banking agency of any authority it may have to
    establish or enforce, with respect to a person for which such agency is
    the appropriate Federal banking agency, prudential or other standards
    pursuant to authority granted by Federal law other than this title.
        SEC. 742. RETAIL COMMODITY TRANSACTIONS.
        (a) In General.--Section 2(c) of the Commodity Exchange Act (7
    U.S.C. 2(c)) is amended--
            (1) in paragraph (1), by striking ``5a (to the extent provided
        in section 5a(g)), 5b, 5d, or 12(e)(2)(B))'' and inserting ``, 5b,
        or 12(e)(2)(B))''; and
            (2) in paragraph (2), by adding at the end the following:
                ``(D) Retail commodity transactions.--
                    ``(i) Applicability.--Except as provided in clause
                (ii), this subparagraph shall apply to any agreement,
                contract, or transaction in any commodity that is--

                        ``(I) entered into with, or offered to (even if not
                    entered into with), a person that is not an eligible
                    contract participant or eligible commercial entity; and
                        ``(II) entered into, or offered (even if not
                    entered into), on a leveraged or margined basis, or
                    financed by the offeror, the counterparty, or a person
                    acting in concert with the offeror or counterparty on a
                    similar basis.

                    ``(ii) Exceptions.--This subparagraph shall not apply
                to--

                        ``(I) an agreement, contract, or transaction
                    described in paragraph (1) or subparagraphs (A), (B),
                    or (C), including any agreement, contract, or
                    transaction specifically excluded from subparagraph
                    (A), (B), or (C);
                        ``(II) any security;
                        ``(III) a contract of sale that--

                            ``(aa) results in actual delivery within 28
                        days or such other longer period as the Commission
                        may determine by rule or regulation based upon the
                        typical commercial practice in cash or spot markets
                        for the commodity involved; or
                            ``(bb) creates an enforceable obligation to
                        deliver between a seller and a buyer that have the
                        ability to deliver and accept delivery,
                        respectively, in connection with the line of
                        business of the seller and buyer; or

                        ``(IV) an agreement, contract, or transaction that
                    is listed on a national securities exchange registered
                    under section 6(a) of the Securities Exchange Act of
                    1934 (15 U.S.C. 78f(a)); or
                        ``(V) an identified banking product, as defined in
                    section 402(b) of the Legal Certainty for Bank Products
                    Act of 2000 (7 U.S.C.27(b)).

                    ``(iii) Enforcement.--Sections 4(a), 4(b), and 4b apply
                to any agreement, contract, or transaction described in
                clause (i), as if the agreement, contract, or transaction
                was a contract of sale of a commodity for future delivery.
                    ``(iv) Eligible commercial entity.--For purposes of
                this subparagraph, an agricultural producer, packer, or
                handler shall be considered to be an eligible commercial
                entity for any agreement, contract, or transaction for a
                commodity in connection with the line of business of the
                agricultural producer, packer, or handler.''.
        (b) Gramm-Leach-Bliley Act.--Section 206(a) of the Gramm-Leach-
    Bliley Act (Public Law 106-102; 15 U.S.C. 78c note) is amended, in the
    matter preceding paragraph (1), by striking ``For purposes of'' and
    inserting ``Except as provided in subsection (e), for purposes of''.
        (c) Conforming Amendments Relating to Retail Foreign Exchange
    Transactions.--
            (1) Section 2(c)(2)(B)(i)(II) of the Commodity Exchange Act (7
        U.S.C. 2(c)(2)(B)(i)(II)) is amended--
                (A) in item (aa), by inserting ``United States'' before
            ``financial institution'';
                (B) by striking items (dd) and (ff);
                (C) by redesignating items (ee) and (gg) as items (dd) and
            (ff), respectively; and
                (D) in item (dd) (as so redesignated), by striking the
            semicolon and inserting ``; or''.
            (2) Section 2(c)(2) of the Commodity Exchange Act (7 U.S.C.
        2(c)(2)) (as amended by subsection (a)(2)) is amended by adding at
        the end the following:
                ``(E) Prohibition.--
                    ``(i) Definition of federal regulatory agency.--In this
                subparagraph, the term `Federal regulatory agency' means--

                        ``(I) the Commission;
                        ``(II) the Securities and Exchange Commission;
                        ``(III) an appropriate Federal banking agency;
                        ``(IV) the National Credit Union Association; and
                        ``(V) the Farm Credit Administration.

                    ``(ii) Prohibition.--

                        ``(I) In general.--Except as provided in subclause
                    (II), a person described in subparagraph (B)(i)(II) for
                    which there is a Federal regulatory agency shall not
                    offer to, or enter into with, a person that is not an
                    eligible contract participant, any agreement, contract,
                    or transaction in foreign currency described in
                    subparagraph (B)(i)(I) except pursuant to a rule or
                    regulation of a Federal regulatory agency allowing the
                    agreement, contract, or transaction under such terms
                    and conditions as the Federal regulatory agency shall
                    prescribe.
                        ``(II) Effective date.--With regard to persons
                    described in subparagraph (B)(i)(II) for which a
                    Federal regulatory agency has issued a proposed rule
                    concerning agreements, contracts, or transactions in
                    foreign currency described in subparagraph (B)(i)(I)
                    prior to the date of enactment of this subclause,
                    subclause (I) shall take effect 90 days after the date
                    of enactment of this subclause.

                    ``(iii) Requirements of rules and regulations.--

                        ``(I) In general.--The rules and regulations
                    described in clause (ii) shall prescribe appropriate
                    requirements with respect to--

                            ``(aa) disclosure;
                            ``(bb) recordkeeping;
                            ``(cc) capital and margin;
                            ``(dd) reporting;
                            ``(ee) business conduct;
                            ``(ff) documentation; and
                            ``(gg) such other standards or requirements as
                        the Federal regulatory agency shall determine to be
                        necessary.

                        ``(II) Treatment.--The rules or regulations
                    described in clause (ii) shall treat all agreements,
                    contracts, and transactions in foreign currency
                    described in subparagraph (B)(i)(I), and all
                    agreements, contracts, and transactions in foreign
                    currency that are functionally or economically similar
                    to agreements, contracts, or transactions described in
                    subparagraph (B)(i)(I), similarly.''.

        SEC. 743. OTHER AUTHORITY.
        Unless otherwise provided by the amendments made by this subtitle,
    the amendments made by this subtitle do not divest any appropriate
    Federal banking agency, the Commodity Futures Trading Commission, the
    Securities and Exchange Commission, or other Federal or State agency of
    any authority derived from any other applicable law.
        SEC. 744. RESTITUTION REMEDIES.
        Section 6c(d) of the Commodity Exchange Act (7 U.S.C. 13a-1(d)) is
    amended by adding at the end the following:
            ``(3) Equitable remedies.--In any action brought under this
        section, the Commission may seek, and the court may impose, on a
        proper showing, on any person found in the action to have committed
        any violation, equitable remedies including--
                ``(A) restitution to persons who have sustained losses
            proximately caused by such violation (in the amount of such
            losses); and
                ``(B) disgorgement of gains received in connection with
            such violation.''.
        SEC. 745. ENHANCED COMPLIANCE BY REGISTERED ENTITIES.
        (a) Effect of Interpretation.--Section 5c(a) of the Commodity
    Exchange Act (7 U.S.C. 7a-2(a)) is amended by striking paragraph (2)
    and inserting the following:
            ``(2) Effect of interpretation.--An interpretation issued under
        paragraph (1) may provide the exclusive means for complying with
        each section described in paragraph (1).''.
        (b) New Contracts, New Rules, and Rule Amendments.--Section 5c of
    the Commodity Exchange Act (7 U.S.C. 7a-2) is amended by striking
    subsection (c) and inserting the following:
        ``(c) New Contracts, New Rules, and Rule Amendments.--
            ``(1) In general.--A registered entity may elect to list for
        trading or accept for clearing any new contract, or other
        instrument, or may elect to approve and implement any new rule or
        rule amendment, by providing to the Commission (and the Secretary
        of the Treasury, in the case of a contract of sale of a government
        security for future delivery (or option on such a contract) or a
        rule or rule amendment specifically related to such a contract) a
        written certification that the new contract or instrument or
        clearing of the new contract or instrument, new rule, or rule
        amendment complies with this Act (including regulations under this
        Act).
            ``(2) Rule review.--The new rule or rule amendment described in
        paragraph (1) shall become effective, pursuant to the certification
        of the registered entity and notice of such certification to its
        members (in a manner to be determined by the Commission), on the
        date that is 10 business days after the date on which the
        Commission receives the certification (or such shorter period as
        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).
            ``(3) Stay of certification for rules.--
                ``(A) A notification by the Commission pursuant to
            paragraph (2) shall stay the certification of the new rule or
            rule amendment for up to an additional 90 days from the date of
            the notification.
                ``(B) A rule or rule amendment subject to a stay pursuant
            to subparagraph (A) shall become effective, pursuant to the
            certification of the registered entity, at the expiration of
            the period described in subparagraph (A) unless the
            Commission--
                    ``(i) withdraws the stay prior to that time; or
                    ``(ii) notifies the registered entity during such
                period that it objects to the proposed certification on the
                grounds that it is inconsistent with this Act (including
                regulations under this Act).
                ``(C) The Commission shall provide a not less than 30-day
            public comment period, within the 90-day period in which the
            stay is in effect as described in subparagraph (A), whenever
            the Commission reviews a rule or rule amendment pursuant to a
            notification by the Commission under this paragraph.
            ``(4) Prior approval.--
                ``(A) In general.--A registered entity may request that the
            Commission grant prior approval to any new contract or other
            instrument, new rule, or rule amendment.
                ``(B) Prior approval required.--Notwithstanding any other
            provision of this section, a designated contract market shall
            submit to the Commission for prior approval each rule amendment
            that materially changes the terms and conditions, as determined
            by the Commission, in any contract of sale for future delivery
            of a commodity specifically enumerated in section 1a(10) (or
            any option thereon) traded through its facilities if the rule
            amendment applies to contracts and delivery months which have
            already been listed for trading and have open interest.
                ``(C) Deadline.--If prior approval is requested under
            subparagraph (A), the Commission shall take final action on the
            request not later than 90 days after submission of the request,
            unless the person submitting the request agrees to an extension
            of the time limitation established under this subparagraph.
            ``(5) Approval.--
                ``(A) Rules.--The Commission shall approve a new rule, or
            rule amendment, of a registered entity unless the Commission
            finds that the new rule, or rule amendment, is inconsistent
            with this subtitle (including regulations).
                ``(B) Contracts and instruments.--The Commission shall
            approve a new contract or other instrument unless the
            Commission finds that the new contract or other instrument
            would violate this Act (including regulations).
                ``(C) Special rule for review and approval of event
            contracts and swaps contracts.--
                    ``(i) Event contracts.--In connection with the listing
                of agreements, contracts, transactions, or swaps in
                excluded commodities that are based upon the occurrence,
                extent of an occurrence, or contingency (other than a
                change in the price, rate, value, or levels of a commodity
                described in section 1a(2)(i)), by a designated contract
                market or swap execution facility, the Commission may
                determine that such agreements, contracts, or transactions
                are contrary to the public interest if the agreements,
                contracts, or transactions involve--

                        ``(I) activity that is unlawful under any Federal
                    or State law;
                        ``(II) terrorism;
                        ``(III) assassination;
                        ``(IV) war;
                        ``(V) gaming; or
                        ``(VI) other similar activity determined by the
                    Commission, by rule or regulation, to be contrary to
                    the public interest.

                    ``(ii) Prohibition.--No agreement, contract, or
                transaction determined by the Commission to be contrary to
                the public interest under clause (i) may be listed or made
                available for clearing or trading on or through a
                registered entity.
                    ``(iii) Swaps contracts.--

                        ``(I) In general.--In connection with the listing
                    of a swap for clearing by a derivatives clearing
                    organization, the Commission shall determine, upon
                    request or on its own motion, the initial eligibility,
                    or the continuing qualification, of a derivatives
                    clearing organization to clear such a swap under those
                    criteria, conditions, or rules that the Commission, in
                    its discretion, determines.
                        ``(II) Requirements.--Any such criteria,
                    conditions, or rules shall consider--

                            ``(aa) the financial integrity of the
                        derivatives clearing organization; and
                            ``(bb) any other factors which the Commission
                        determines may be appropriate.
                    ``(iv) Deadline.--The Commission shall take final
                action under clauses (i) and (ii) in not later than 90 days
                from the commencement of its review unless the party
                seeking to offer the contract or swap agrees to an
                extension of this time limitation.''.
        (c) Violation of Core Principles.--Section 5c of the Commodity
    Exchange Act (7 U.S.C. 7a-2) is amended by striking subsection (d).
        SEC. 746. INSIDER TRADING.
        Section 4c(a) of the Commodity Exchange Act (7 U.S.C. 6c(a)) is
    amended by adding at the end the following:
            ``(3) Contract of sale.--It shall be unlawful for any employee
        or agent of any department or agency of the Federal Government who,
        by virtue of the employment or position of the employee or agent,
        acquires information that may affect or tend to affect the price of
        any commodity in interstate commerce, or for future delivery, or
        any swap, and which information has not been disseminated by the
        department or agency of the Federal Government holding or creating
        the information in a manner which makes it generally available to
        the trading public, or disclosed in a criminal, civil, or
        administrative hearing, or in a congressional, administrative, or
        Government Accountability Office report, hearing, audit, or
        investigation, to use the information in his personal capacity and
        for personal gain to enter into, or offer to enter into--
                ``(A) a contract of sale of a commodity for future delivery
            (or option on such a contract);
                ``(B) an option (other than an option executed or traded on
            a national securities exchange registered pursuant to section
            6(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78f(a));
            or
                ``(C) a swap.
            ``(4) Nonpublic information.--
                ``(A) Imparting of nonpublic information.--It shall be
            unlawful for any employee or agent of any department or agency
            of the Federal Government who, by virtue of the employment or
            position of the employee or agent, acquires information that
            may affect or tend to affect the price of any commodity in
            interstate commerce, or for future delivery, or any swap, and
            which information has not been disseminated by the department
            or agency of the Federal Government holding or creating the
            information in a manner which makes it generally available to
            the trading public, or disclosed in a criminal, civil, or
            administrative hearing, or in a congressional, administrative,
            or Government Accountability Office report, hearing, audit, or
            investigation, to impart the information in his personal
            capacity and for personal gain with intent to assist another
            person, directly or indirectly, to use the information to enter
            into, or offer to enter into--
                    ``(i) a contract of sale of a commodity for future
                delivery (or option on such a contract);
                    ``(ii) an option (other than an option executed or
                traded on a national securities exchange registered
                pursuant to section 6(a) of the Securities Exchange Act of
                1934 (15 U.S.C. 78f(a)); or
                    ``(iii) a swap.
                ``(B) Knowing use.--It shall be unlawful for any person who
            receives information imparted by any employee or agent of any
            department or agency of the Federal Government as described in
            subparagraph (A) to knowingly use such information to enter
            into, or offer to enter into--
                    ``(i) a contract of sale of a commodity for future
                delivery (or option on such a contract);
                    ``(ii) an option (other than an option executed or
                traded on a national securities exchange registered
                pursuant to section 6(a) of the Securities Exchange Act of
                1934 (15 U.S.C. 78f(a)); or
                    ``(iii) a swap.
                ``(C) Theft of nonpublic information.--It shall be unlawful
            for any person to steal, convert, or misappropriate, by any
            means whatsoever, information held or created by any department
            or agency of the Federal Government that may affect or tend to
            affect the price of any commodity in interstate commerce, or
            for future delivery, or any swap, where such person knows, or
            acts in reckless disregard of the fact, that such information
            has not been disseminated by the department or agency of the
            Federal Government holding or creating the information in a
            manner which makes it generally available to the trading
            public, or disclosed in a criminal, civil, or administrative
            hearing, or in a congressional, administrative, or Government
            Accountability Office report, hearing, audit, or investigation,
            and to use such information, or to impart such information with
            the intent to assist another person, directly or indirectly, to
            use such information to enter into, or offer to enter into--
                    ``(i) a contract of sale of a commodity for future
                delivery (or option on such a contract);
                    ``(ii) an option (other than an option executed or
                traded on a national securities exchange registered
                pursuant to section 6(a) of the Securities Exchange Act of
                1934 (15 U.S.C. 78f(a)); or
                    ``(iii) a swap, provided, however, that nothing in this
                subparagraph shall preclude a person that has provided
                information concerning, or generated by, the person, its
                operations or activities, to any employee or agent of any
                department or agency of the Federal Government, voluntarily
                or as required by law, from using such information to enter
                into, or offer to enter into, a contract of sale, option,
                or swap described in clauses (i), (ii), or (iii).''.
        SEC. 747. ANTIDISRUPTIVE PRACTICES AUTHORITY.
        Section 4c(a) of the Commodity Exchange Act (7 U.S.C. 6c(a)) (as
    amended by section 746) is amended by adding at the end the following:
            ``(5) Disruptive practices.--It shall be unlawful for any
        person to engage in any trading, practice, or conduct on or subject
        to the rules of a registered entity that--
                ``(A) violates bids or offers;
                ``(B) demonstrates intentional or reckless disregard for
            the orderly execution of transactions during the closing
            period; or
                ``(C) is, is of the character of, or is commonly known to
            the trade as, `spoofing' (bidding or offering with the intent
            to cancel the bid or offer before execution).
            ``(6) Rulemaking authority.--The Commission may make and
        promulgate such rules and regulations as, in the judgment of the
        Commission, are reasonably necessary to prohibit the trading
        practices described in paragraph (5) and any other trading practice
        that is disruptive of fair and equitable trading.
            ``(7) Use of swaps to defraud.--It shall be unlawful for any
        person to enter into a swap knowing, or acting in reckless
        disregard of the fact, that its counterparty will use the swap as
        part of a device, scheme, or artifice to defraud any third
        party.''.
        SEC. 748. COMMODITY WHISTLEBLOWER INCENTIVES AND PROTECTION.
        The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by
    adding at the end the following:
      ``SEC. 23. COMMODITY WHISTLEBLOWER INCENTIVES AND PROTECTION.
        ``(a) Definitions.--In this section:
            ``(1) Covered judicial or administrative action.--The term
        `covered judicial or administrative action' means any judicial or
        administrative action brought by the Commission under this Act that
        results in monetary sanctions exceeding $1,000,000.
            ``(2) Fund.--The term `Fund' means the Commodity Futures
        Trading Commission Customer Protection Fund established under
        subsection (g).
            ``(3) Monetary sanctions.--The term `monetary sanctions', when
        used with respect to any judicial or administrative action means--
                ``(A) any monies, including penalties, disgorgement,
            restitution, and interest ordered to be paid; and
                ``(B) 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.
            ``(4) Original information.--The term `original information'
        means information that--
                ``(A) is derived from the independent knowledge or analysis
            of a whistleblower;
                ``(B) is not known to the Commission from any other source,
            unless the whistleblower is the original source of the
            information; and
                ``(C) is not exclusively derived from an allegation made in
            a judicial or administrative hearing, in a governmental report,
            hearing, audit, or investigation, or from the news media,
            unless the whistleblower is a source of the information.
            ``(5) Related action.--The term `related action', when used
        with respect to any judicial or administrative action brought by
        the Commission under this Act, means any judicial or administrative
        action brought by an entity described in subclauses (I) through
        (VI) of subsection (h)(2)(C) that is based upon the original
        information provided by a whistleblower pursuant to subsection (a)
        that led to the successful enforcement of the Commission action.
            ``(6) Successful resolution.--The term `successful resolution',
        when used with respect to any judicial or administrative action
        brought by the Commission under this Act, includes any settlement
        of such action.
            ``(7) Whistleblower.--The term `whistleblower' means any
        individual, or 2 or more individuals acting jointly, who provides
        information relating to a violation of this Act to the Commission,
        in a manner established by rule or regulation by the Commission.
        ``(b) Awards.--
            ``(1) In general.--In any covered judicial or administrative
        action, or related action, the Commission, under regulations
        prescribed by the Commission and subject to subsection (c), shall
        pay an award or awards to 1 or more whistleblowers who voluntarily
        provided original information to the Commission that led to the
        successful enforcement of the covered judicial or administrative
        action, or related action, in an aggregate amount equal to--
                ``(A) not less than 10 percent, in total, of what has been
            collected of the monetary sanctions imposed in the action or
            related actions; and
                ``(B) not more than 30 percent, in total, of what has been
            collected of the monetary sanctions imposed in the action or
            related actions.
            ``(2) Payment of awards.--Any amount paid under paragraph (1)
        shall be paid from the Fund.
        ``(c) Determination of Amount of Award; Denial of Award.--
            ``(1) Determination of amount of award.--
                ``(A) Discretion.--The determination of the amount of an
            award made under subsection (b) shall be in the discretion of
            the Commission.
                ``(B) Criteria.--In determining the amount of an award made
            under subsection (b), the Commission--
                    ``(i) shall take into consideration--

                        ``(I) the significance of the information provided
                    by the whistleblower to the success of the covered
                    judicial or administrative action;
                        ``(II) the degree of assistance provided by the
                    whistleblower and any legal representative of the
                    whistleblower in a covered judicial or administrative
                    action;
                        ``(III) the programmatic interest of the Commission
                    in deterring violations of the Act (including
                    regulations under the Act) by making awards to
                    whistleblowers who provide information that leads to
                    the successful enforcement of such laws; and
                        ``(IV) such additional relevant factors as the
                    Commission may establish by rule or regulation; and

                    ``(ii) shall not take into consideration the balance of
                the Fund.
            ``(2) Denial of award.--No award under subsection (b) shall be
        made--
                ``(A) to any whistleblower who is, or was at the time the
            whistleblower acquired the original information submitted to
            the Commission, a member, officer, or employee of--
                    ``(i) a appropriate regulatory agency;
                    ``(ii) the Department of Justice;
                    ``(iii) a registered entity;
                    ``(iv) a registered futures association;
                    ``(v) a self-regulatory organization as defined in
                section 3(a) of the Securities Exchange Act of 1934 (15
                U.S.C. 78c(a)); or
                    ``(vi) a law enforcement organization;
                ``(B) to any whistleblower who is convicted of a criminal
            violation related to the judicial or administrative action for
            which the whistleblower otherwise could receive an award under
            this section;
                ``(C) to any whistleblower who submits information to the
            Commission that is based on the facts underlying the covered
            action submitted previously by another whistleblower;
                ``(D) to any whistleblower who fails to submit information
            to the Commission in such form as the Commission may, by rule
            or regulation, require.
        ``(d) Representation.--
            ``(1) Permitted representation.--Any whistleblower who makes a
        claim for an award under subsection (b) may be represented by
        counsel.
            ``(2) Required representation.--
                ``(A) In general.--Any whistleblower who anonymously makes
            a claim for an award under subsection (b) shall be represented
            by counsel if the whistleblower submits the information upon
            which the claim is based.
                ``(B) Disclosure of identity.--Prior to the payment of an
            award, a whistleblower shall disclose the identity of the
            whistleblower and provide such other information as the
            Commission may require, directly or through counsel for the
            whistleblower.
        ``(e) No Contract Necessary.--No contract with the Commission is
    necessary for any whistleblower to receive an award under subsection
    (b), unless otherwise required by the Commission, by rule or
    regulation.
        ``(f) Appeals.--
            ``(1) In general.--Any determination made under this section,
        including whether, to whom, or in what amount to make awards, shall
        be in the discretion of the Commission.
            ``(2) Appeals.--Any determination described in paragraph (1)
        may be appealed to the appropriate court of appeals of the United
        States not more than 30 days after the determination is issued by
        the Commission.
            ``(3) Review.--The court shall review the determination made by
        the Commission in accordance with section 7064 of title 5, United
        States Code.
        ``(g) Commodity Futures Trading Commission Customer Protection
    Fund.--
            ``(1) Establishment.--There is established in the Treasury of
        the United States a revolving fund to be known as the `Commodity
        Futures Trading Commission Customer Protection Fund'.
            ``(2) Use of fund.--The Fund shall be available to the
        Commission, without further appropriation or fiscal year
        limitation, for--
                ``(A) the payment of awards to whistleblowers as provided
            in subsection (a); and
                ``(B) the funding of customer education initiatives
            designed to help customers protect themselves against fraud or
            other violations of this Act, or the rules and regulations
            thereunder.
            ``(3) Deposits and credits.--There shall be deposited into or
        credited to the Fund:
                ``(A) Monetary sanctions.--Any monetary sanctions collected
            by the Commission in any covered judicial or administrative
            action that is not otherwise distributed to victims of a
            violation of this Act or the rules and regulations thereunder
            underlying such action, unless the balance of the Fund at the
            time the monetary judgment is collected exceeds $100,000,000.
                ``(B) Additional amounts.--If the amounts deposited into or
            credited to the Fund under subparagraph (A) are not sufficient
            to satisfy an award made under subsection (b), there shall be
            deposited into or credited to the Fund an amount equal to the
            unsatisfied portion of the award from any monetary sanction
            collected by the Commission in any judicial or administrative
            action brought by the Commission under this Act that is based
            on information provided by a whistleblower.
                ``(C) Investment income.--All income from investments made
            under paragraph (4).
            ``(4) Investments.--
                ``(A) Amounts in fund may be invested.--The Commission may
            request the Secretary of the Treasury to invest the portion of
            the Fund that is not, in the Commission's judgment, required to
            meet the current needs of the Fund.
                ``(B) Eligible investments.--Investments shall be made by
            the Secretary of the Treasury in obligations of the United
            States or obligations that are guaranteed as to principal and
            interest by the United States, with maturities suitable to the
            needs of the Fund as determined by the Commission.
                ``(C) Interest and proceeds credited.--The interest on, and
            the proceeds from the sale or redemption of, any obligations
            held in the Fund shall be credited to, and form a part of, the
            Fund.
            ``(5) Reports to congress.--Not later than October 30 of each
        year, the Commission shall transmit to the Committee on
        Agriculture, Nutrition, and Forestry of the Senate, and the
        Committee on Agriculture of the House of Representatives a report
        on--
                ``(A) the Commission's whistleblower award program under
            this section, including a description of the number of awards
            granted and the types of cases in which awards were granted
            during the preceding fiscal year;
                ``(B) customer education initiatives described in paragraph
            (2)(B) that were funded by the Fund during the preceding fiscal
            year;
                ``(C) the balance of the Fund at the beginning of the
            preceding fiscal year;
                ``(D) the amounts deposited into or credited to the Fund
            during the preceding fiscal year;
                ``(E) the amount of earnings on investments of amounts in
            the Fund during the preceding fiscal year;
                ``(F) the amount paid from the Fund during the preceding
            fiscal year to whistleblowers pursuant to subsection (b);
                ``(G) the amount paid from the Fund during the preceding
            fiscal year for customer education initiatives described in
            paragraph (2)(B);
                ``(H) the balance of the Fund at the end of the preceding
            fiscal year; and
                ``(I) a complete set of audited financial statements,
            including a balance sheet, income statement, and cash flow
            analysis.
        ``(h) Protection of Whistleblowers.--
            ``(1) Prohibition against retaliation.--
                ``(A) In general.--No employer may discharge, demote,
            suspend, threaten, harass, directly or indirectly, or in any
            other manner discriminate against, a whistleblower in the terms
            and conditions of employment because of any lawful act done by
            the whistleblower--
                    ``(i) in providing information to the Commission in
                accordance with subsection (b); or
                    ``(ii) in assisting in any investigation or judicial or
                administrative action of the Commission based upon or
                related to such information.
                ``(B) Enforcement.--
                    ``(i) Cause of action.--An individual who alleges
                discharge or other discrimination in violation of
                subparagraph (A) may bring an action under this subsection
                in the appropriate district court of the United States for
                the relief provided in subparagraph (C), unless the
                individual who is alleging discharge or other
                discrimination in violation of subparagraph (A) is an
                employee of the Federal Government, in which case the
                individual shall only bring an action under section 1221 of
                title 5, United States Code.
                    ``(ii) Subpoenas.--A subpoena requiring the attendance
                of a witness at a trial or hearing conducted under this
                subsection may be served at any place in the United States.
                    ``(iii) Statute of limitations.--An action under this
                subsection may not be brought more than 2 years after the
                date on which the violation reported in subparagraph (A) is
                committed.
                ``(C) Relief.--Relief for an individual prevailing in an
            action brought under subparagraph (B) shall include--
                    ``(i) reinstatement with the same seniority status that
                the individual would have had, but for the discrimination;
                    ``(ii) the amount of back pay otherwise owed to the
                individual, with interest; and
                    ``(iii) 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.
            ``(2) Confidentiality.--
                ``(A) In general.--Except as provided in subparagraphs (B)
            and (C), 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 (C). For
            purposes of section 552 of title 5, United States Code, this
            paragraph shall be considered a statute described in subsection
            (b)(3)(B) of such section 552.
                ``(B) Effect.--Nothing in this paragraph is intended to
            limit the ability of the Attorney General to present such
            evidence to a grand jury or to share such evidence with
            potential witnesses or defendants in the course of an ongoing
            criminal investigation.
                ``(C) Availability to government agencies.--
                    ``(i) In general.--Without the loss of its status as
                confidential 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 or appropriate to accomplish the
                purposes of this Act and protect customers and in
                accordance with clause (ii), be made available to--

                        ``(I) the Department of Justice;
                        ``(II) an appropriate department or agency of the
                    Federal Government, acting within the scope of its
                    jurisdiction;
                        ``(III) a registered entity, registered futures
                    association, or self-regulatory organization as defined
                    in section 3(a) of the Securities Exchange Act of 1934
                    (15 U.S.C. 78c(a));
                        ``(IV) a State attorney general in connection with
                    any criminal investigation;
                        ``(V) an appropriate department or agency of any
                    State, acting within the scope of its jurisdiction; and
                        ``(VI) a foreign futures authority.

                    ``(ii) Maintenance of information.--Each of the
                entities, agencies, or persons described in clause (i)
                shall maintain information described in that clause as
                confidential, in accordance with the requirements in
                subparagraph (A).
                    ``(iii) Study on impact of foia exemption on commodity
                futures trading commission.--

                        ``(I) Study.--The Inspector General of the
                    Commission shall conduct a study--

                            ``(aa) on whether the exemption under section
                        552(b)(3) of title 5, United States Code (known as
                        the Freedom of Information Act) established in
                        paragraph (2)(A) aids whistleblowers in disclosing
                        information to the Commission;
                            ``(bb) on what impact the exemption has had on
                        the public's ability to access information about
                        the Commission's regulation of commodity futures
                        and option markets; and
                            ``(cc) to make any recommendations on whether
                        the Commission should continue to use the
                        exemption.

                        ``(II) Report.--Not later than 30 months after the
                    date of enactment of this clause, the Inspector General
                    shall--

                            ``(aa) submit a report on the findings of the
                        study required under this clause to the Committee
                        on Banking, Housing, and Urban Affairs of the
                        Senate and the Committee on Financial Services of
                        the House of Representatives; and
                            ``(bb) make the report available to the public
                        through publication of a report on the website of
                        the Commission.
            ``(3) Rights retained.--Nothing in this section shall be deemed
        to diminish the rights, privileges, or remedies of any
        whistleblower under any Federal or State law, or under any
        collective bargaining agreement.
        ``(i) Rulemaking Authority.--The Commission shall have the
    authority to issue such rules and regulations as may be necessary or
    appropriate to implement the provisions of this section consistent with
    the purposes of this section.
        ``(j) Implementing Rules.--The Commission shall issue final rules
    or regulations implementing the provisions of this section not later
    than 270 days after the date of enactment of the Wall Street
    Transparency and Accountability Act of 2010.
        ``(k) Original Information.--Information submitted to the
    Commission by a whistleblower in accordance with rules or regulations
    implementing this section shall not lose its status as original
    information solely because the whistleblower submitted such information
    prior to the effective date of such rules or regulations, provided such
    information was submitted after the date of enactment of the Wall
    Street Transparency and Accountability Act of 2010.
        ``(l) Awards.--A whistleblower may receive an award pursuant to
    this section regardless of whether any violation of a provision of this
    Act, 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 the Wall Street Transparency and
    Accountability Act of 2010.
        ``(m) Provision of False Information.--A whistleblower who
    knowingly and willfully makes any false, fictitious, or fraudulent
    statement or representation, or who 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 and shall be subject to prosecution under section 1001 of
    title 18, United States Code.
        ``(n) Nonenforceability of Certain Provisions Waiving Rights and
    Remedies or Requiring Arbitration of Disputes.--
            ``(1) Waiver of rights and remedies.--The rights and remedies
        provided for in this section may not be waived by any agreement,
        policy form, or condition of employment including by a predispute
        arbitration agreement.
            ``(2) Predispute arbitration agreements.--No predispute
        arbitration agreement shall be valid or enforceable, if the
        agreement requires arbitration of a dispute arising under this
        section.''.
        SEC. 749. CONFORMING AMENDMENTS.
        (a) Section 4d of the Commodity Exchange Act (7 U.S.C. 6d) (as
    amended by section 724) is amended--
            (1) in subsection (a)--
                (A) in the matter preceding paragraph (1)--
                    (i) by striking ``engage as'' and inserting ``be a'';
                and
                    (ii) by striking ``or introducing broker'' and all that
                follows through ``or derivatives transaction execution
                facility'';
                (B) in paragraph (1), by striking ``or introducing
            broker''; and
                (C) in paragraph (2), by striking ``if a futures commission
            merchant,''; and
            (2) by adding at the end the following:
        ``(g) It shall be unlawful for any person to be an introducing
    broker unless such person shall have registered under this Act with the
    Commission as an introducing broker and such registration shall not
    have expired nor been suspended nor revoked.''.
        (b) Section 4m(3) of the Commodity Exchange Act (7 U.S.C. 6m(3)) is
    amended--
            (1) by striking ``(3) Subsection (1) of this section'' and
        inserting the following:
        ``(3) Exception.--
            ``(A) In general.--Paragraph (1)''; and
            (2) by striking ``to any investment trust'' and all that
        follows through the period at the end and inserting the following:
        ``to any commodity pool that is engaged primarily in trading
        commodity interests.
            ``(B) Engaged primarily.--For purposes of subparagraph (A), a
        commodity trading advisor or a commodity pool shall be considered
        to be `engaged primarily' in the business of being a commodity
        trading advisor or commodity pool if it is or holds itself out to
        the public as being engaged primarily, or proposes to engage
        primarily, in the business of advising on commodity interests or
        investing, reinvesting, owning, holding, or trading in commodity
        interests, respectively.
            ``(C) Commodity interests.--For purposes of this paragraph,
        commodity interests shall include contracts of sale of a commodity
        for future delivery, options on such contracts, security futures,
        swaps, leverage contracts, foreign exchange, spot and forward
        contracts on physical commodities, and any monies held in an
        account used for trading commodity interests.''.
        (c) Section 5c of the Commodity Exchange Act (7 U.S.C. 7a-2) is
    amended--
            (1) in subsection (a)(1)--
                (A) by striking ``, 5a(d),''; and
                (B) by striking ``and section (2)(h)(7) with respect to
            significant price discovery contracts,''; and
            (2) in subsection (f)(1), by striking ``section 4d(c) of this
        Act'' and inserting ``section 4d(e)''.
        (d) Section 5e of the Commodity Exchange Act (7 U.S.C. 7b) is
    amended by striking ``or revocation of the right of an electronic
    trading facility to rely on the exemption set forth in section 2(h)(3)
    with respect to a significant price discovery contract,''.
        (e) Section 6(b) of the Commodity Exchange Act (7 U.S.C. 8(b)) is
    amended in the first sentence by striking ``, or to revoke the right of
    an electronic trading facility to rely on the exemption set forth in
    section 2(h)(3) with respect to a significant price discovery
    contract,''.
        (f) Section 12(e)(2)(B) of the Commodity Exchange Act (7 U.S.C.
    16(e)(2)(B)) is amended--
            (1) by striking ``section 2(c), 2(d), 2(f), or 2(g) of this
        Act'' and inserting ``section 2(c) or 2(f) of this Act''; and
            (2) by striking ``2(h) or''.
        (g) Section 17(r)(1) of the Commodity Exchange Act (7 U.S.C.
    21(r)(1)) is amended by striking ``section 4d(c) of this Act'' and
    inserting ``section 4d(e)''.
        (h) Section 22 of the Commodity Exchange Act is amended--
            (1) in subsection (a)(1)(B), by--
                (A) inserting ``or any swap'' after ``commodity)''; and
                (B) inserting ``or any swap'' after ``such contract'';
            (2) in subsection (a)(1)(C), by adding at the end the
        following:
                    ``(iv) a swap; or''; and
            (3) in subsection (b)(1)(A), by striking ``section 2(h)(7) or
        sections 5 through 5c'' and inserting ``section 5, 5b, 5c, 5h, or
        21''.
        (i) Section 408(2)(C) of the Federal Deposit Insurance Corporation
    Improvement Act of 1991 (12 U.S.C. 4421(2)(C)) is amended--
            (1) by striking ``section 2(c), 2(d), 2(f), or (2)(g) of such
        Act'' and inserting ``section 2(c), 2(f), or 2(i) of that Act'';
        and
            (2) by striking ``2(h) or''.
        SEC. 750. STUDY ON OVERSIGHT OF CARBON MARKETS.
        (a) Interagency Working Group.--There is established to carry out
    this section an interagency working group (referred to in this section
    as the ``interagency group'') composed of the following members or
    designees:
            (1) The Chairman of the Commodity Futures Trading Commission
        (referred to in this section as the ``Commission''), who shall
        serve as Chairman of the interagency group.
            (2) The Secretary of Agriculture.
            (3) The Secretary of the Treasury.
            (4) The Chairman of the Securities and Exchange Commission.
            (5) The Administrator of the Environmental Protection Agency.
            (6) The Chairman of the Federal Energy Regulatory Commission.
            (7) The Commissioner of the Federal Trade Commission.
            (8) The Administrator of the Energy Information Administration.
        (b) Administrative Support.--The Commission shall provide the
    interagency group such administrative support services as are necessary
    to enable the interagency group to carry out the functions of the
    interagency group under this section.
        (c) Consultation.--In carrying out this section, the interagency
    group shall consult with representatives of exchanges, clearinghouses,
    self-regulatory bodies, major carbon market participants, consumers,
    and the general public, as the interagency group determines to be
    appropriate.
        (d) Study.--The interagency group shall conduct a study on the
    oversight of existing and prospective carbon markets to ensure an
    efficient, secure, and transparent carbon market, including oversight
    of spot markets and derivative markets.
        (e) Report.--Not later than 180 days after the date of enactment of
    this Act, the interagency group shall submit to Congress a report on
    the results of the study conducted under subsection (b), including
    recommendations for the oversight of existing and prospective carbon
    markets to ensure an efficient, secure, and transparent carbon market,
    including oversight of spot markets and derivative markets.
        SEC. 751. ENERGY AND ENVIRONMENTAL MARKETS ADVISORY COMMITTEE.
        Section 2(a) of the Commodity Exchange Act (7 U.S.C. 2(a)) (as
    amended by section 727) is amended by adding at the end the following:
            ``(15) Energy and environmental markets advisory committee.--
                ``(A) Establishment.--
                    ``(i) In general.--An Energy and Environmental Markets
                Advisory Committee is hereby established.
                    ``(ii) Membership.--The Committee shall have 9 members.
                    ``(iii) Activities.--The Committee's objectives and
                scope of activities shall be--

                        ``(I) to conduct public meetings;
                        ``(II) to submit reports and recommendations to the
                    Commission (including dissenting or minority views, if
                    any); and
                        ``(III) otherwise to serve as a vehicle for
                    discussion and communication on matters of concern to
                    exchanges, firms, end users, and regulators regarding
                    energy and environmental markets and their regulation
                    by the Commission.

                ``(B) Requirements.--
                    ``(i) In general.--The Committee shall hold public
                meetings at such intervals as are necessary to carry out
                the functions of the Committee, but not less frequently
                than 2 times per year.
                    ``(ii) Members.--Members shall be appointed to 3-year
                terms, but may be removed for cause by vote of the
                Commission.
                ``(C) Appointment.--The Commission shall appoint members
            with a wide diversity of opinion and who represent a broad
            spectrum of interests, including hedgers and consumers.
                ``(D) Reimbursement.--Members shall be entitled to per diem
            and travel expense reimbursement by the Commission.
                ``(E) FACA.--The Committee shall not be subject to the
            Federal Advisory Committee Act (5 U.S.C. App.).''.
        SEC. 752. INTERNATIONAL HARMONIZATION.
        (a) In order to promote effective and consistent global regulation
    of swaps and security-based swaps, the Commodity Futures Trading
    Commission, the Securities and Exchange Commission, and the prudential
    regulators (as that term is defined in section 1a(39) 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 (including fees)
    of swaps, security-based swaps, swap entities, and security-based swap
    entities and may agree to such information-sharing arrangements as may
    be deemed to be necessary or appropriate in the public interest or for
    the protection of investors, swap counterparties, and security-based
    swap counterparties.
        (b) In order to promote effective and consistent global regulation
    of contracts of sale of a commodity for future delivery and options on
    such contracts, 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 options on
    such contracts, and may agree to such information-sharing arrangements
    as may be deemed necessary or appropriate in the public interest for
    the protection of users of contracts of sale of a commodity for future
    delivery.
        SEC. 753. ANTI-MANIPULATION AUTHORITY.
        (a) Prohibition Regarding Manipulation and False Information.--
    Subsection (c) of section 6 of the Commodity Exchange Act (7 U.S.C. 9,
    15) is amended to read as follows:
        ``(c) Prohibition Regarding Manipulation and False Information.--
            ``(1) Prohibition against manipulation.--It shall be unlawful
        for any person, directly or indirectly, to use or employ, or
        attempt to use or employ, in connection with any swap, or a
        contract of sale of any commodity in interstate commerce, or for
        future delivery on or subject to the rules of any registered
        entity, any manipulative or deceptive device or contrivance, in
        contravention of such rules and regulations as the Commission shall
        promulgate by not later than 1 year after the date of enactment of
        the Dodd-Frank Wall Street Reform and Consumer Protection Act,
        provided no rule or regulation promulgated by the Commission shall
        require any person to disclose to another person nonpublic
        information that may be material to the market price, rate, or
        level of the commodity transaction, except as necessary to make any
        statement made to the other person in or in connection with the
        transaction not misleading in any material respect.
                ``(A) Special provision for manipulation by false
            reporting.--Unlawful manipulation for purposes of this
            paragraph shall include, but not be limited to, delivering, or
            causing to be delivered for transmission through the mails or
            interstate commerce, by any means of communication whatsoever,
            a false or misleading or inaccurate report concerning crop or
            market information or conditions that affect or tend to affect
            the price of any commodity in interstate commerce, knowing, or
            acting in reckless disregard of the fact that such report is
            false, misleading or inaccurate.
                ``(B) Effect on other law.--Nothing in this paragraph shall
            affect, or be construed to affect, the applicability of section
            9(a)(2).
                ``(C) Good faith mistakes.--Mistakenly transmitting, in
            good faith, false or misleading or inaccurate information to a
            price reporting service would not be sufficient to violate
            subsection (c)(1)(A).
            ``(2) Prohibition regarding false information.--It shall be
        unlawful for any person to make any false or misleading statement
        of a material fact to the Commission, including in any registration
        application or any report filed with the Commission under this Act,
        or any other information relating to a swap, or a contract of sale
        of a commodity, in interstate commerce, or for future delivery on
        or subject to the rules of any registered entity, or to omit to
        state in any such statement any material fact that is necessary to
        make any statement of a material fact made not misleading in any
        material respect, if the person knew, or reasonably should have
        known, the statement to be false or misleading.
            ``(3) Other manipulation.--In addition to the prohibition in
        paragraph (1), it shall be unlawful for any person, directly or
        indirectly, to manipulate or attempt to manipulate the price of any
        swap, or of any commodity in interstate commerce, or for future
        delivery on or subject to the rules of any registered entity.
            ``(4) Enforcement.--
                ``(A) Authority of commission.--If the Commission has
            reason to believe that any person (other than a registered
            entity) is violating or has violated this subsection, or any
            other provision of this Act (including any rule, regulation, or
            order of the Commission promulgated in accordance with this
            subsection or any other provision of this Act), the Commission
            may serve upon the person a complaint.
                ``(B) Contents of complaint.--A complaint under
            subparagraph (A) shall--
                    ``(i) contain a description of the charges against the
                person that is the subject of the complaint; and
                    ``(ii) have attached or contain a notice of hearing
                that specifies the date and location of the hearing
                regarding the complaint.
                ``(C) Hearing.--A hearing described in subparagraph
            (B)(ii)--
                    ``(i) shall be held not later than 3 days after service
                of the complaint described in subparagraph (A);
                    ``(ii) shall require the person to show cause regarding
                why--

                        ``(I) an order should not be made--

                            ``(aa) to prohibit the person from trading on,
                        or subject to the rules of, any registered entity;
                        and
                            ``(bb) to direct all registered entities to
                        refuse all privileges to the person until further
                        notice of the Commission; and

                        ``(II) the registration of the person, if
                    registered with the Commission in any capacity, should
                    not be suspended or revoked; and

                    ``(iii) may be held before--

                        ``(I) the Commission; or
                        ``(II) an administrative law judge designated by
                    the Commission, under which the administrative law
                    judge shall ensure that all evidence is recorded in
                    written form and submitted to the Commission.

            ``(5) Subpoena.--For the purpose of securing effective
        enforcement of the provisions of this Act, for the purpose of any
        investigation or proceeding under this Act, and for the purpose of
        any action taken under section 12(f), any member of the Commission
        or any Administrative Law Judge or other officer designated by the
        Commission (except as provided in paragraph (7)) may administer
        oaths and affirmations, subpoena witnesses, compel their
        attendance, take evidence, and require the production of any books,
        papers, correspondence, memoranda, or other records that the
        Commission deems relevant or material to the inquiry.
            ``(6) Witnesses.--The attendance of witnesses and the
        production of any such records may be required from any place in
        the United States, any State, or any foreign country or
        jurisdiction at any designated place of hearing.
            ``(7) Service.--A subpoena issued under this section may be
        served upon any person who is not to be 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 of process in a foreign country, except that a subpoena to
        be served on a person who is not to be found within the territorial
        jurisdiction of any court of the United States may be issued only
        on the prior approval of the Commission.
            ``(8) Refusal to obey.--In case of contumacy by, or refusal to
        obey a subpoena issued to, any person, the Commission may invoke
        the aid of any court of the United States within the jurisdiction
        in which the investigation or proceeding is conducted, or where
        such person resides or transacts business, in requiring the
        attendance and testimony of witnesses and the production of books,
        papers, correspondence, memoranda, and other records. Such court
        may issue an order requiring such person to appear before the
        Commission or member or Administrative Law Judge or other officer
        designated by the Commission, there to produce records, if so
        ordered, or to give testimony touching the matter under
        investigation or in question.
            ``(9) Failure to obey.--Any failure to obey such order of the
        court may be punished by the court as a contempt thereof. All
        process in any such case may be served in the judicial district
        wherein such person is an inhabitant or transacts business or
        wherever such person may be found.
            ``(10) Evidence.--On the receipt of evidence under paragraph
        (4)(C)(iii), the Commission may--
                ``(A) prohibit the person that is the subject of the
            hearing from trading on, or subject to the rules of, any
            registered entity and require all registered entities to refuse
            the person all privileges on the registered entities for such
            period as the Commission may require in the order;
                ``(B) if the person is registered with the Commission in
            any capacity, suspend, for a period not to exceed 180 days, or
            revoke, the registration of the person;
                ``(C) assess such person--
                    ``(i) a civil penalty of not more than an amount equal
                to the greater of--

                        ``(I) $140,000; or
                        ``(II) triple the monetary gain to such person for
                    each such violation; or

                    ``(ii) in any case of manipulation or attempted
                manipulation in violation of this subsection or section
                9(a)(2), a civil penalty of not more than an amount equal
                to the greater of--

                        ``(I) $1,000,000; or
                        ``(II) triple the monetary gain to the person for
                    each such violation; and

                ``(D) require restitution to customers of damages
            proximately caused by violations of the person.
            ``(11) Orders.--
                ``(A) Notice.--The Commission shall provide to a person
            described in paragraph (10) and the appropriate governing board
            of the registered entity notice of the order described in
            paragraph (10) by--
                    ``(i) registered mail;
                    ``(ii) certified mail; or
                    ``(iii) personal delivery.
                ``(B) Review.--
                    ``(i) In general.--A person described in paragraph (10)
                may obtain a review of the order or such other equitable
                relief as determined to be appropriate by a court described
                in clause (ii).
                    ``(ii) Petition.--To obtain a review or other relief
                under clause (i), a person may, not later than 15 days
                after notice is given to the person under clause (i), file
                a written petition to set aside the order with the United
                States Court of Appeals--

                        ``(I) for the circuit in which the petitioner
                    carries out the business of the petitioner; or
                        ``(II) in the case of an order denying
                    registration, the circuit in which the principal place
                    of business of the petitioner is located, as listed on
                    the application for registration of the petitioner.

                ``(C) Procedure.--
                    ``(i) Duty of clerk of appropriate court.--The clerk of
                the appropriate court under subparagraph (B)(ii) shall
                transmit to the Commission a copy of a petition filed under
                subparagraph (B)(ii).
                    ``(ii) Duty of commission.--In accordance with section
                2112 of title 28, United States Code, the Commission shall
                file in the appropriate court described in subparagraph
                (B)(ii) the record theretofore made.
                    ``(iii) Jurisdiction of appropriate court.--Upon the
                filing of a petition under subparagraph (B)(ii), the
                appropriate court described in subparagraph (B)(ii) may
                affirm, set aside, or modify the order of the
                Commission.''.
        (b) Cease and Desist Orders, Fines.--Section 6(d) of the Commodity
    Exchange Act (7 U.S.C. 13b) is amended to read as follows:
        ``(d) If any person (other than a registered entity), is violating
    or has violated subsection (c) or any other provisions of this Act or
    of the rules, regulations, or orders of the Commission thereunder, the
    Commission may, upon notice and hearing, and subject to appeal as in
    other cases provided for in subsection (c), make and enter an order
    directing that such person shall cease and desist therefrom and, if
    such person thereafter and after the lapse of the period allowed for
    appeal of such order or after the affirmance of such order, shall
    knowingly fail or refuse to obey or comply with such order, such
    person, upon conviction thereof, shall be fined not more than the
    higher of $140,000 or triple the monetary gain to such person, or
    imprisoned for not more than 1 year, or both, except that if such
    knowing failure or refusal to obey or comply with such order involves
    any offense within subsection (a) or (b) of section 9, such person,
    upon conviction thereof, shall be subject to the penalties of said
    subsection (a) or (b):  Provided, That any such cease and desist order
    under this subsection against any respondent in any case of
    manipulation shall be issued only in conjunction with an order issued
    against such respondent under subsection (c).''.
        (c) Manipulations; Private Rights of Action.--Section 22(a)(1) of
    the Commodity Exchange Act (7 U.S.C. 25(a)(1)) is amended by striking
    subparagraph (D) and inserting the following:
            ``(D) who purchased or sold a contract referred to in
        subparagraph (B) hereof or swap if the violation constitutes--
                ``(i) the use or employment of, or an attempt to use or
            employ, in connection with a swap, or a contract of sale of a
            commodity, in interstate commerce, or for future delivery on or
            subject to the rules of any registered entity, any manipulative
            device or contrivance in contravention of such rules and
            regulations as the Commission shall promulgate by not later
            than 1 year after the date of enactment of the Dodd-Frank Wall
            Street Reform and Consumer Protection Act; or
                ``(ii) a manipulation of the price of any such contract or
            swap or the price of the commodity underlying such contract or
            swap.''.
        (d) Effective Date.--
            (1) The amendments made by this section shall take effect on
        the date on which the final rule promulgated by the Commodity
        Futures Trading Commission pursuant to this Act takes effect.
            (2) Paragraph (1) shall not preclude the Commission from
        undertaking prior to the effective date any rulemaking necessary to
        implement the amendments contained in this section.
        SEC. 754. EFFECTIVE DATE.
        Unless otherwise provided in this title, the provisions of this
    subtitle shall take effect on the later of 360 days after the date of
    the enactment of this subtitle or, to the extent a provision of this
    subtitle requires a rulemaking, not less than 60 days after publication
    of the final rule or regulation implementing such provision of this
    subtitle.

             Subtitle B--Regulation of Security-Based Swap Markets

        SEC. 761. DEFINITIONS UNDER THE SECURITIES EXCHANGE ACT OF 1934.
        (a) Definitions.--Section 3(a) of the Securities Exchange Act of
    1934 (15 U.S.C. 78c(a)) is amended--
            (1) in subparagraphs (A) and (B) of paragraph (5), by inserting
        ``(not including security-based swaps, other than security-based
        swaps with or for persons that are not eligible contract
        participants)'' after ``securities'' each place that term appears;
            (2) in paragraph (10), by inserting ``security-based swap,''
        after ``security future,'';
            (3) in paragraph (13), by adding at the end the following:
        ``For security-based swaps, such terms include the execution,
        termination (prior to its scheduled maturity date), assignment,
        exchange, or similar transfer or conveyance of, or extinguishing of
        rights or obligations under, a security-based swap, as the context
        may require.'';
            (4) in paragraph (14), by adding at the end the following:
        ``For security-based swaps, such terms include the execution,
        termination (prior to its scheduled maturity date), assignment,
        exchange, or similar transfer or conveyance of, or extinguishing of
        rights or obligations under, a security-based swap, as the context
        may require.'';
            (5) in paragraph (39)--
                (A) in subparagraph (B)(i)--
                    (i) in subclause (I), by striking ``or government
                securities dealer'' and inserting ``government securities
                dealer, security-based swap dealer, or major security-based
                swap participant''; and
                    (ii) in subclause (II), by inserting ``security-based
                swap dealer, major security-based swap participant,'' after
                ``government securities dealer,'';
                (B) in subparagraph (C), by striking ``or government
            securities dealer'' and inserting ``government securities
            dealer, security-based swap dealer, or major security-based
            swap participant''; and
                (C) in subparagraph (D), by inserting ``security-based swap
            dealer, major security-based swap participant,'' after
            ``government securities dealer,''; and
            (6) by adding at the end the following:
            ``(65) Eligible contract participant.--The term `eligible
        contract participant' has the same meaning as in section 1a of the
        Commodity Exchange Act (7 U.S.C. 1a).
            ``(66) Major swap participant.--The term `major swap
        participant' has the same meaning as in section 1a of the Commodity
        Exchange Act (7 U.S.C. 1a).
            ``(67) Major security-based swap participant.--
                ``(A) In general.--The term `major security-based swap
            participant' means any person--
                    ``(i) who is not a security-based swap dealer; and
                    ``(ii)(I) who maintains a substantial position in
                security-based swaps for any of the major security-based
                swap categories, as such categories are determined by the
                Commission, excluding both positions held for hedging or
                mitigating commercial risk and positions maintained by any
                employee benefit plan (or any contract held by such a plan)
                as defined in paragraphs (3) and (32) of section 3 of the
                Employee Retirement Income Security Act of 1974 (29 U.S.C.
                1002) for the primary purpose of hedging or mitigating any
                risk directly associated with the operation of the plan;
                    ``(II) whose outstanding security-based swaps create
                substantial counterparty exposure that could have serious
                adverse effects on the financial stability of the United
                States banking system or financial markets; or
                    ``(III) that is a financial entity that--

                        ``(aa) is highly leveraged relative to the amount
                    of capital such entity holds and that is not subject to
                    capital requirements established by an appropriate
                    Federal banking agency; and
                        ``(bb) maintains a substantial position in
                    outstanding security-based swaps in any major security-
                    based swap category, as such categories are determined
                    by the Commission.

                ``(B) Definition of substantial position.--For purposes of
            subparagraph (A), the Commission shall define, by rule or
            regulation, the term `substantial position' at the threshold
            that the Commission determines to be prudent for the effective
            monitoring, management, and oversight of entities that are
            systemically important or can significantly impact the
            financial system of the United States. In setting the
            definition under this subparagraph, the Commission shall
            consider the person's relative position in uncleared as opposed
            to cleared security-based swaps and may take into consideration
            the value and quality of collateral held against counterparty
            exposures.
                ``(C) Scope of designation.--For purposes of subparagraph
            (A), a person may be designated as a major security-based swap
            participant for 1 or more categories of security-based swaps
            without being classified as a major security-based swap
            participant for all classes of security-based swaps.
            ``(68) Security-based swap.--
                ``(A) In general.--Except as provided in subparagraph (B),
            the term `security-based swap' means any agreement, contract,
            or transaction that--
                    ``(i) is a swap, as that term is defined under section
                1a of the Commodity Exchange Act (without regard to
                paragraph (47)(B)(x) of such section); and
                    ``(ii) is based on--

                        ``(I) an index that is a narrow-based security
                    index, including any interest therein or on the value
                    thereof;
                        ``(II) a single security or loan, including any
                    interest therein or on the value thereof; or
                        ``(III) the occurrence, nonoccurrence, 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 directly
                    affects the financial statements, financial condition,
                    or financial obligations of the issuer.

                ``(B) Rule of construction regarding master agreements.--
            The term `security-based swap' shall be construed to include a
            master agreement that provides for an agreement, contract, or
            transaction that is a security-based swap pursuant to
            subparagraph (A), together with all supplements to any such
            master agreement, without regard to whether the master
            agreement contains an agreement, contract, or transaction that
            is not a security-based swap pursuant to subparagraph (A),
            except that the master agreement shall be considered to be a
            security-based swap only with respect to each agreement,
            contract, or transaction under the master agreement that is a
            security-based swap pursuant to subparagraph (A).
                ``(C) Exclusions.--The term `security-based swap' does not
            include any agreement, contract, or transaction that meets the
            definition of a security-based swap only because such
            agreement, contract, or transaction references, is based upon,
            or settles through the transfer, delivery, or receipt of an
            exempted security under paragraph (12), as in effect on the
            date of enactment of the Futures Trading Act of 1982 (other
            than any municipal security as defined in paragraph (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.
                ``(D) Mixed swap.--The term `security-based swap' includes
            any agreement, contract, or transaction that is as described in
            subparagraph (A) and also is based on the value of 1 or more
            interest or other rates, currencies, commodities, instruments
            of indebtedness, indices, quantitative measures, other
            financial or economic interest or property of any kind (other
            than a single security or a narrow-based security index), or
            the occurrence, non-occurrence, or the extent of the occurrence
            of an event or contingency associated with a potential
            financial, economic, or commercial consequence (other than an
            event described in subparagraph (A)(ii)(III)).
                ``(E) Rule of construction regarding use of the term
            index.--The term `index' means an index or group of securities,
            including any interest therein or based on the value thereof.
            ``(69) Swap.--The term `swap' has the same meaning as in
        section 1a of the Commodity Exchange Act (7 U.S.C. 1a).
            ``(70) Person associated with a security-based swap dealer or
        major security-based swap participant.--
                ``(A) In general.--The term `person associated with a
            security-based swap dealer or major security-based swap
            participant' or `associated person of a security-based swap
            dealer or major security-based swap participant' means--
                    ``(i) 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);
                    ``(ii) 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
                    ``(iii) any employee of such security-based swap dealer
                or major security-based swap participant.
                ``(B) Exclusion.--Other than for purposes of section
            15F(l)(2), the term `person associated with a security-based
            swap dealer or major security-based swap participant' or
            `associated person of a security-based swap dealer or major
            security-based swap participant' does not include any person
            associated with a security-based swap dealer or major security-
            based swap participant whose functions are solely clerical or
            ministerial.
            ``(71) Security-based swap dealer.--
                ``(A) In general.--The term `security-based swap dealer'
            means any person who--
                    ``(i) holds themself out as a dealer in security-based
                swaps;
                    ``(ii) makes a market in security-based swaps;
                    ``(iii) regularly enters into security-based swaps with
                counterparties as an ordinary course of business for its
                own account; or
                    ``(iv) engages in any activity causing it to be
                commonly known in the trade as a dealer or market maker in
                security-based swaps.
                ``(B) Designation by type or class.--A person may be
            designated as a security-based swap dealer for a single type or
            single class or category of security-based swap or activities
            and considered not to be a security-based swap dealer for other
            types, classes, or categories of security-based swaps or
            activities.
                ``(C) Exception.--The term `security-based swap dealer'
            does not include a person that enters into security-based swaps
            for such person's own account, either individually or in a
            fiduciary capacity, but not as a part of regular business.
                ``(D) De minimis exception.--The Commission shall exempt
            from designation as a security-based swap dealer an entity that
            engages in a de minimis quantity of security-based swap dealing
            in connection with transactions with or on behalf of its
            customers. The Commission shall promulgate regulations to
            establish factors with respect to the making of any
            determination to exempt.
            ``(72) Appropriate federal banking agency.--The term
        `appropriate Federal banking agency' has the same meaning as in
        section 3(q) of the Federal Deposit Insurance Act (12 U.S.C.
        1813(q)).
            ``(73) Board.--The term `Board' means the Board of Governors of
        the Federal Reserve System.
            ``(74) Prudential regulator.--The term `prudential regulator'
        has the same meaning as in section 1a of the Commodity Exchange Act
        (7 U.S.C. 1a).
            ``(75) Security-based swap data repository.--The term
        `security-based swap data repository' means any person that
        collects and 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 for the purpose
        of providing a centralized recordkeeping facility for security-
        based swaps.
            ``(76) Swap dealer.--The term `swap dealer' has the same
        meaning as in section 1a of the Commodity Exchange Act (7 U.S.C.
        1a).
            ``(77) Security-based swap execution facility.--The term
        `security-based swap execution facility' means a trading system or
        platform in which multiple participants have the ability to execute
        or trade security-based swaps by accepting bids and offers made by
        multiple participants in the facility or system, through any means
        of interstate commerce, including any trading facility, that--
                ``(A) facilitates the execution of security-based swaps
            between persons; and
                ``(B) is not a national securities exchange.
            ``(78) Security-based swap agreement.--
                ``(A) In general.--For purposes of sections 9, 10, 16, 20,
            and 21A of this Act, and section 17 of the Securities Act of
            1933 (15 U.S.C. 77q), the term `security-based swap agreement'
            means a swap agreement as defined in section 206A of the Gramm-
            Leach-Bliley Act (15 U.S.C. 78c note) of which a material term
            is based on the price, yield, value, or volatility of any
            security or any group or index of securities, or any interest
            therein.
                ``(B) Exclusions.--The term `security-based swap agreement'
            does not include any security-based swap.''.
        (b) Authority To Further Define Terms.--The Securities and Exchange
    Commission may, by rule, further define--
            (1) the term ``commercial risk'';
            (2) any other term included in an amendment to the Securities
        Exchange Act of 1934 (15 U.S.C. 78c(a)) made by this subtitle; and
            (3) the terms ``security-based swap'', ``security-based swap
        dealer'', ``major security-based swap participant'', and ``eligible
        contract participant'', with regard to security-based swaps (as
        such terms are defined in the amendments made by subsection (a))
        for the purpose of including transactions and entities that have
        been structured to evade this subtitle or the amendments made by
        this subtitle.
        SEC. 762. REPEAL OF PROHIBITION ON REGULATION OF SECURITY-BASED
          SWAP AGREEMENTS.
        (a) Repeal.--Sections 206B and 206C of the Gramm-Leach-Bliley Act
    (Public Law 106-102; 15 U.S.C. 78c note) are repealed.
        (b) Conforming Amendments to Gramm-Leach-Bliley.--Section 206A(a)
    of the Gramm-Leach-Bliley Act (15 U.S.C. 78c note) is amended in the
    material preceding paragraph (1), by striking ``Except as'' and all
    that follows through ``that--'' and inserting the following: ``Except
    as provided in subsection (b), as used in this section, the term `swap
    agreement' means any agreement, contract, or transaction that--''.
        (c) Conforming Amendments to the Securities Act of 1933.--
            (1) Section 2A of the Securities Act of 1933 (15 U.S.C. 77b-1)
        is amended--
                (A) by striking subsection (a) and reserving that
            subsection; and
                (B) by striking ``(as defined in section 206B of the Gramm-
            Leach-Bliley Act)'' each place that such term appears and
            inserting ``(as defined in section 3(a)(78) of the Securities
            Exchange Act of 1934)''.
            (2) Section 17 of the Securities Act of 1933 (15 U.S.C. 77q) is
        amended--
                (A) in subsection (a)--
                    (i) by inserting ``(including security-based swaps)''
                after ``securities''; and
                    (ii) by striking ``(as defined in section 206B of the
                Gramm-Leach-Bliley Act)'' and inserting ``(as defined in
                section 3(a)(78) of the Securities Exchange Act)''; and
                (B) in subsection (d), by striking ``206B of the Gramm-
            Leach-Bliley Act'' and inserting ``3(a)(78) of the Securities
            Exchange Act of 1934''.
        (d) Conforming Amendments to the Securities Exchange Act of 1934.--
    The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is
    amended--
            (1) in section 3A (15 U.S.C. 78c-1)--
                (A) by striking subsection (a) and reserving that
            subsection; and
                (B) by striking ``(as defined in section 206B of the Gramm-
            Leach-Bliley Act)'' each place that the term appears;
            (2) in section 9 (15 U.S.C. 78i)--
                (A) in subsection (a), by striking paragraphs (2) through
            (5) and inserting the following:
        ``(2) To effect, alone or with 1 or more other persons, a series of
    transactions in any security registered on a national securities
    exchange, any security not so registered, or in connection with any
    security-based swap or security-based swap agreement with respect to
    such security creating actual or apparent active trading in such
    security, or raising or depressing the price of such security, for the
    purpose of inducing the purchase or sale of such security by others.
        ``(3) If a dealer, broker, security-based swap dealer, major
    security-based swap participant, or other person selling or offering
    for sale or purchasing or offering to purchase the security, a
    security-based swap, or a security-based swap agreement with respect to
    such security, to induce the purchase or sale of any security
    registered on a national securities exchange, any security not so
    registered, any security-based swap, or any 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 1 or more persons conducted
    for the purpose of raising or depressing the price of such security.
        ``(4) If a dealer, broker, security-based swap dealer, major
    security-based swap participant, or other person selling or offering
    for sale or purchasing or offering to purchase the security, 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, any security not so registered, any security-based
    swap, or any security-based swap agreement with respect to such
    security, for the purpose of inducing the purchase or sale of such
    security, such security-based swap, or such 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 that person knew or had reasonable
    ground to believe was so false or misleading.
        ``(5) For a consideration, received directly or indirectly from a
    broker, dealer, 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, 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, any security not so registered, any security-based swap, or
    any 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 1 or more persons conducted for the
    purpose of raising or depressing the price of such security.''; and
                (B) in subsection (i), by striking ``(as defined in section
            206B of the Gramm-Leach-Bliley Act)'';
            (3) in section 10 (15 U.S.C. 78j)--
                (A) in subsection (b), by striking ``(as defined in section
            206B of the Gramm-Leach-Bliley Act),'' each place that term
            appears; and
                (B) in the matter following subsection (b), by striking
            ``(as defined in section 206B of the Gramm-Leach-Bliley Act),
            in each place that such terms appear'';
            (4) in section 15 (15 U.S.C. 78o)--
                (A) in subsection (c)(1)(A), by striking ``(as defined in
            section 206B of the Gramm-Leach-Bliley Act),'';
                (B) in subparagraphs (B) and (C) of subsection (c)(1), by
            striking ``(as defined in section 206B of the Gramm-Leach-
            Bliley Act)'' each place that term appears;
                (C) by redesignating subsection (i), as added by section
            303(f) of the Commodity Futures Modernization Act of 2000
            (Public Law 106-554; 114 Stat. 2763A-455)), as subsection (j);
            and
                (D) in subsection (j), as redesignated by subparagraph (C),
            by striking ``(as defined in section 206B of the Gramm-Leach-
            Bliley Act)'';
            (5) in section 16 (15 U.S.C. 78p)--
                (A) in subsection (a)(2)(C), by striking ``(as defined in
            section 206(b) of the Gramm-Leach-Bliley Act (15 U.S.C. 78c
            note))'';
                (B) in subsection (a)(3)(B), by inserting ``or security-
            based swaps'' after ``security-based swap agreement'';
                (C) in the first sentence of subsection (b), by striking
            ``(as defined in section 206B of the Gramm-Leach-Bliley Act)'';
                (D) in the third sentence of subsection (b), by striking
            ``(as defined in section 206B of the Gramm-Leach Bliley Act)''
            and inserting ``or a security-based swap''; and
                (E) in subsection (g), by striking ``(as defined in section
            206B of the Gramm-Leach-Bliley Act)'';
            (6) in section 20 (15 U.S.C. 78t),
                (A) in subsection (d), by striking ``(as defined in section
            206B of the Gramm-Leach-Bliley Act)''; and
                (B) in subsection (f), by striking ``(as defined in section
            206B of the Gramm-Leach-Bliley Act)''; and
            (7) in section 21A (15 U.S.C. 78u-1)--
                (A) in subsection (a)(1), by striking ``(as defined in
            section 206B of the Gramm-Leach-Bliley Act)''; and
                (B) in subsection (g), by striking ``(as defined in section
            206B of the Gramm-Leach-Bliley Act)''.
        SEC. 763. AMENDMENTS TO THE SECURITIES EXCHANGE ACT OF 1934.
        (a) Clearing for Security-based Swaps.--The Securities Exchange Act
    of 1934 (15 U.S.C. 78a et seq.) is amended by inserting after section
    3B (as added by section 717 of this Act):
      ``SEC. 3C. CLEARING FOR SECURITY-BASED SWAPS.
        ``(a) In General.--
            ``(1) Standard for clearing.--It shall be unlawful for any
        person to engage in a security-based swap unless that person
        submits such security-based swap for clearing to a clearing agency
        that is registered under this Act or a clearing agency that is
        exempt from registration under this Act if the security-based swap
        is required to be cleared.
            ``(2) Open access.--The rules of a clearing agency described in
        paragraph (1) shall--
                ``(A) prescribe that all security-based swaps submitted to
            the clearing agency with the same terms and conditions are
            economically equivalent within the clearing agency and may be
            offset with each other within the clearing agency; and
                ``(B) provide for non-discriminatory clearing of a
            security-based swap executed bilaterally or on or through the
            rules of an unaffiliated national securities exchange or
            security-based swap execution facility.
        ``(b) Commission Review.--
            ``(1) Commission-initiated review.--
                ``(A) The Commission on an ongoing basis shall review each
            security-based swap, or any group, category, type, or class of
            security-based swaps to make a determination that such
            security-based swap, or group, category, type, or class of
            security-based swaps should be required to be cleared.
                ``(B) The Commission shall provide at least a 30-day public
            comment period regarding any determination under subparagraph
            (A).
            ``(2) Swap submissions.--
                ``(A) A clearing agency shall submit to the Commission each
            security-based swap, or any group, category, type, or class of
            security-based swaps that it plans to accept for clearing and
            provide notice to its members (in a manner to be determined by
            the Commission) of such submission.
                ``(B) Any security-based swap or group, category, type, or
            class of security-based swaps listed for clearing by a clearing
            agency as of the date of enactment of this subsection shall be
            considered submitted to the Commission.
                ``(C) The Commission shall--
                    ``(i) make available to the public any submission
                received under subparagraphs (A) and (B);
                    ``(ii) review each submission made under subparagraphs
                (A) and (B), and determine whether the security-based swap,
                or group, category, type, or class of security-based swaps,
                described in the submission is required to be cleared; and
                    ``(iii) provide at least a 30-day public comment period
                regarding its determination whether the clearing
                requirement under subsection (a)(1) shall apply to the
                submission.
            ``(3) Deadline.--The Commission shall make its determination
        under paragraph (2)(C) not later than 90 days after receiving a
        submission made under paragraphs (2)(A) and (2)(B), unless the
        submitting clearing agency agrees to an extension for the time
        limitation established under this paragraph.
            ``(4) Determination.--
                ``(A) In reviewing a submission made under paragraph (2),
            the Commission shall review whether the submission is
            consistent with section 17A.
                ``(B) In reviewing a security-based swap, group of
            security-based swaps or class of security-based swaps pursuant
            to paragraph (1) or a submission made under paragraph (2), the
            Commission shall take into account the following factors:
                    ``(i) The existence of significant outstanding notional
                exposures, trading liquidity and adequate pricing data.
                    ``(ii) The availability of rule framework, capacity,
                operational expertise and resources, and credit support
                infrastructure to clear the contract on terms that are
                consistent with the material terms and trading conventions
                on which the contract is then traded.
                    ``(iii) The effect on the mitigation of systemic risk,
                taking into account the size of the market for such
                contract and the resources of the clearing agency available
                to clear the contract.
                    ``(iv) The effect on competition, including appropriate
                fees and charges applied to clearing.
                    ``(v) The existence of reasonable legal certainty in
                the event of the insolvency of the relevant clearing agency
                or 1 or more of its clearing members with regard to the
                treatment of customer and security-based swap counterparty
                positions, funds, and property.
                ``(C) In making a determination under subsection (b)(1) or
            paragraph (2)(C) that the clearing requirement shall apply, the
            Commission may require such terms and conditions to the
            requirement as the Commission determines to be appropriate.
            ``(5) Rules.--Not later than 1 year after the date of the
        enactment of this section, 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. Nothing in this paragraph limits the Commission from
        making a determination under paragraph (2)(C) for security-based
        swaps described in paragraph (2)(B).
        ``(c) Stay of Clearing Requirement.--
            ``(1) In general.--After making a determination pursuant to
        subsection (b)(2), the Commission, on application of a counterparty
        to a security-based swap or on its own initiative, may stay the
        clearing requirement of subsection (a)(1) until the Commission
        completes a review of the terms of the security-based swap (or the
        group, category, type, or class of security-based swaps) and the
        clearing arrangement.
            ``(2) Deadline.--The Commission shall complete a review
        undertaken pursuant to paragraph (1) not later than 90 days after
        issuance of the stay, unless the clearing agency that clears the
        security-based swap, or group, category, type, or class of
        security-based swaps, agrees to an extension of the time limitation
        established under this paragraph.
            ``(3) Determination.--Upon completion of the review undertaken
        pursuant to paragraph (1), the Commission may--
                ``(A) determine, unconditionally or subject to such terms
            and conditions as the Commission determines to be appropriate,
            that the security-based swap, or group, category, type, or
            class of security-based swaps, must be cleared pursuant to this
            subsection if it finds that such clearing is consistent with
            subsection (b)(4); or
                ``(B) determine that the clearing requirement of subsection
            (a)(1) shall not apply to the security-based swap, or group,
            category, type, or class of security-based swaps.
            ``(4) Rules.--Not later than 1 year after the date of the
        enactment of this section, the Commission shall adopt rules for
        reviewing, pursuant to this subsection, a clearing agency's
        clearing of a security-based swap, or a group, category, type, or
        class of security-based swaps, that it has accepted for clearing.
        ``(d) Prevention of Evasion.--
            ``(1) In general.--The Commission shall prescribe rules under
        this section (and issue interpretations of rules prescribed under
        this section), as determined by the Commission to be necessary to
        prevent evasions of the mandatory clearing requirements under this
        Act.
            ``(2) Duty of commission to investigate and take certain
        actions.--To the extent the Commission finds that a particular
        security-based swap or any group, category, type, or class of
        security-based swaps that would otherwise be subject to mandatory
        clearing but no clearing agency has listed the security-based swap
        or the group, category, type, or class of security-based swaps for
        clearing, the Commission shall--
                ``(A) investigate the relevant facts and circumstances;
                ``(B) within 30 days issue a public report containing the
            results of the investigation; and
                ``(C) take such actions as the Commission determines to be
            necessary and in the public interest, which may include
            requiring the retaining of adequate margin or capital by
            parties to the security-based swap or the group, category,
            type, or class of security-based swaps.
            ``(3) Effect on authority.--Nothing in this subsection--
                ``(A) authorizes the Commission to adopt rules requiring a
            clearing agency to list for clearing a security-based swap or
            any group, category, type, or class of security-based swaps if
            the clearing of the security-based swap or the group, category,
            type, or class of security-based swaps would threaten the
            financial integrity of the clearing agency; and
                ``(B) affects the authority of the Commission to enforce
            the open access provisions of subsection (a)(2) with respect to
            a security-based swap or the group, category, type, or class of
            security-based swaps that is listed for clearing by a clearing
            agency.
        ``(e) Reporting Transition Rules.--Rules adopted by the Commission
    under this section shall provide for the reporting of data, as follows:
            ``(1) Security-based swaps entered into before the date of the
        enactment of this section shall be reported to a registered
        security-based swap data repository or the Commission no later than
        180 days after the effective date of this section.
            ``(2) Security-based swaps entered into on or after such date
        of enactment shall be reported to a registered security-based swap
        data repository or the Commission no later than the later of--
                ``(A) 90 days after such effective date; or
                ``(B) such other time after entering into the security-
            based swap as the Commission may prescribe by rule or
            regulation.
        ``(f) Clearing Transition Rules.--
            ``(1) Security-based swaps entered into before the date of the
        enactment of this section are exempt from the clearing requirements
        of this subsection if reported pursuant to subsection (e)(1).
            ``(2) Security-based swaps entered into before application of
        the clearing requirement pursuant to this section are exempt from
        the clearing requirements of this section if reported pursuant to
        subsection (e)(2).
        ``(g) Exceptions.--
            ``(1) In general.--The requirements of subsection (a)(1) shall
        not apply to a security-based swap if 1 of the counterparties to
        the security-based swap--
                ``(A) is not a financial entity;
                ``(B) is using security-based swaps to hedge or mitigate
            commercial risk; and
                ``(C) notifies the Commission, in a manner set forth by the
            Commission, how it generally meets its financial obligations
            associated with entering into non-cleared security-based swaps.
            ``(2) Option to clear.--The application of the clearing
        exception in paragraph (1) is solely at the discretion of the
        counterparty to the security-based swap that meets the conditions
        of subparagraphs (A) through (C) of paragraph (1).
            ``(3) Financial entity definition.--
                ``(A) In general.--For the purposes of this subsection, the
            term `financial entity' means--
                    ``(i) a swap dealer;
                    ``(ii) a security-based swap dealer;
                    ``(iii) a major swap participant;
                    ``(iv) a major security-based swap participant;
                    ``(v) a commodity pool as defined in section 1a(10) of
                the Commodity Exchange Act;
                    ``(vi) a private fund as defined in section 202(a) of
                the Investment Advisers Act of 1940 (15 U.S.C. 80-b-2(a));
                    ``(vii) an employee benefit plan as defined in
                paragraphs (3) and (32) of section 3 of the Employee
                Retirement Income Security Act of 1974 (29 U.S.C. 1002);
                    ``(viii) a person predominantly engaged in activities
                that are in the business of banking or financial in nature,
                as defined in section 4(k) of the Bank Holding Company Act
                of 1956.
                ``(B) Exclusion.--The Commission shall consider whether to
            exempt small banks, savings associations, farm credit system
            institutions, and credit unions, including--
                    ``(i) depository institutions with total assets of
                $10,000,000,000 or less;
                    ``(ii) farm credit system institutions with total
                assets of $10,000,000,000 or less; or
                    ``(iii) credit unions with total assets of
                $10,000,000,000 or less.
            ``(4) Treatment of affiliates.--
                ``(A) In general.--An affiliate of a person that qualifies
            for an exception under this subsection (including affiliate
            entities predominantly engaged in providing financing for the
            purchase of the merchandise or manufactured goods of the
            person) may qualify for the exception only if the affiliate,
            acting on behalf of the person and as an agent, uses the
            security-based swap to hedge or mitigate the commercial risk of
            the person or other affiliate of the person that is not a
            financial entity.
                ``(B) Prohibition relating to certain affiliates.--The
            exception in subparagraph (A) shall not apply if the affiliate
            is--
                    ``(i) a swap dealer;
                    ``(ii) a security-based swap dealer;
                    ``(iii) a major swap participant;
                    ``(iv) a major security-based swap participant;
                    ``(v) an issuer that would be an investment company, as
                defined in section 3 of the Investment Company Act of 1940
                (15 U.S.C. 80a-3), but for paragraph (1) or (7) of
                subsection (c) of that Act (15 U.S.C. 80a-3(c));
                    ``(vi) a commodity pool; or
                    ``(vii) a bank holding company with over
                $50,000,000,000 in consolidated assets.
                ``(C) Transition rule for affiliates.--An affiliate,
            subsidiary, or a wholly owned entity of a person that qualifies
            for an exception under subparagraph (A) and is predominantly
            engaged in providing financing for the purchase or lease of
            merchandise or manufactured goods of the person shall be exempt
            from the margin requirement described in section 15F(e) and the
            clearing requirement described in subsection (a) with regard to
            security-based swaps entered into to mitigate the risk of the
            financing activities for not less than a 2-year period
            beginning on the date of enactment of this subparagraph.
            ``(5) Election of counterparty.--
                ``(A) Security-based swaps required to be cleared.--With
            respect to any security-based swap that is subject to the
            mandatory clearing requirement under subsection (a) and entered
            into by a security-based swap dealer or a major security-based
            swap participant with a counterparty that is not a swap dealer,
            major swap participant, security-based swap dealer, or major
            security-based swap participant, the counterparty shall have
            the sole right to select the clearing agency at which the
            security-based swap will be cleared.
                ``(B) Security-based swaps not required to be cleared.--
            With respect to any security-based swap that is not subject to
            the mandatory clearing requirement under subsection (a) and
            entered into by a security-based swap dealer or a major
            security-based swap participant with a counterparty that is not
            a swap dealer, major swap participant, security-based swap
            dealer, or major security-based swap participant, the
            counterparty--
                    ``(i) may elect to require clearing of the security-
                based swap; and
                    ``(ii) shall have the sole right to select the clearing
                agency at which the security-based swap will be cleared.
            ``(6) Abuse of exception.--The Commission may prescribe such
        rules or issue interpretations of the rules as the Commission
        determines to be necessary to prevent abuse of the exceptions
        described in this subsection. The Commission may also request
        information from those persons claiming the clearing exception as
        necessary to prevent abuse of the exceptions described in this
        subsection.
        ``(h) Trade Execution.--
            ``(1) In general.--With respect to transactions involving
        security-based swaps subject to the clearing requirement of
        subsection (a)(1), counterparties shall--
                ``(A) execute the transaction on an exchange; or
                ``(B) execute the transaction on a security-based swap
            execution facility registered under section 3D or a security-
            based swap execution facility that is exempt from registration
            under section 3D(e).
            ``(2) Exception.--The requirements of subparagraphs (A) and (B)
        of paragraph (1) shall not apply if no exchange or security-based
        swap execution facility makes the security-based swap available to
        trade or for security-based swap transactions subject to the
        clearing exception under subsection (g).
        ``(i) Board Approval.--Exemptions from the requirements of this
    section to clear a security-based swap or execute a security-based swap
    through a national securities exchange or security-based swap execution
    facility shall be available to a counterparty that is an issuer of
    securities that are registered under section 12 or that is required to
    file reports pursuant to section 15(d), only if an appropriate
    committee of the issuer's board or governing body has reviewed and
    approved the issuer's decision to enter into security-based swaps that
    are subject to such exemptions.
        ``(j) Designation of Chief Compliance Officer.--
            ``(1) In general.--Each registered clearing agency shall
        designate an individual to serve as a chief compliance officer.
            ``(2) Duties.--The chief compliance officer shall--
                ``(A) report directly to the board or to the senior officer
            of the clearing agency;
                ``(B) in consultation with its board, a body performing a
            function similar thereto, or the senior officer of the
            registered clearing agency, resolve any conflicts of interest
            that may arise;
                ``(C) be responsible for administering each policy and
            procedure that is required to be established pursuant to this
            section;
                ``(D) ensure compliance with this title (including
            regulations issued under this title) relating to agreements,
            contracts, or transactions, including each rule prescribed by
            the Commission under this section;
                ``(E) establish procedures for the remediation of
            noncompliance issues identified by the compliance officer
            through any--
                    ``(i) compliance office review;
                    ``(ii) look-back;
                    ``(iii) internal or external audit finding;
                    ``(iv) self-reported error; or
                    ``(v) validated complaint; and
                ``(F) establish and follow appropriate procedures for the
            handling, management response, remediation, retesting, and
            closing of noncompliance issues.
            ``(3) Annual reports.--
                ``(A) In general.--In accordance with rules prescribed by
            the Commission, the chief compliance officer shall annually
            prepare and sign a report that contains a description of--
                    ``(i) the compliance of the registered clearing agency
                or security-based swap execution facility of the compliance
                officer with respect to this title (including regulations
                under this title); and
                    ``(ii) each policy and procedure of the registered
                clearing agency of the compliance officer (including the
                code of ethics and conflict of interest policies of the
                registered clearing agency).
                ``(B) Requirements.--A compliance report under subparagraph
            (A) shall--
                    ``(i) accompany each appropriate financial report of
                the registered clearing agency that is required to be
                furnished to the Commission pursuant to this section; and
                    ``(ii) include a certification that, under penalty of
                law, the compliance report is accurate and complete.''.
        (b) Clearing Agency Requirements.--Section 17A of the Securities
    Exchange Act of 1934 (15 U.S.C. 78q-1) is amended by adding at the end
    the following:
        ``(g) Registration Requirement.--It shall be unlawful for a
    clearing agency, unless registered with the Commission, directly or
    indirectly to make use of the mails or any means or instrumentality of
    interstate commerce to perform the functions of a clearing agency with
    respect to a security-based swap.
        ``(h) Voluntary Registration.--A person that clears agreements,
    contracts, or transactions that are not required to be cleared under
    this title may register with the Commission as a clearing agency.
        ``(i) Standards for Clearing Agencies Clearing Security-based Swap
    Transactions.--To be registered and to maintain registration as a
    clearing agency that clears security-based 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.
        ``(j) Rules.--The Commission shall adopt rules governing persons
    that are registered as clearing agencies for security-based swaps under
    this title.
        ``(k) Exemptions.--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 determines
    that the clearing agency is subject to comparable, comprehensive
    supervision and regulation by the Commodity Futures Trading Commission
    or the appropriate government authorities in the home country of the
    agency. Such conditions may include, but are not limited to, requiring
    that the clearing agency be available for inspection by the Commission
    and make available all information requested by the Commission.
        ``(l) Existing Depository Institutions and Derivative Clearing
    Organizations.--
            ``(1) In general.--A depository institution or derivative
        clearing organization registered with the Commodity Futures Trading
        Commission under the Commodity Exchange Act that is required to be
        registered as a clearing agency under this section is deemed to be
        registered under this section solely for the purpose of clearing
        security-based swaps to the extent that, before the date of
        enactment of this subsection--
                ``(A) the depository institution cleared swaps as a
            multilateral clearing organization; or
                ``(B) the derivative clearing organization cleared swaps
            pursuant to an exemption from registration as a clearing
            agency.
            ``(2) Conversion of depository institutions.--A depository
        institution to which this subsection applies may, by the vote of
        the shareholders owning not less than 51 percent of the voting
        interests of the depository institution, be converted into a State
        corporation, partnership, limited liability company, or similar
        legal form pursuant to a plan of conversion, if the conversion is
        not in contravention of applicable State law.
            ``(3) Sharing of information.--The Commodity Futures Trading
        Commission shall make available to the Commission, upon request,
        all information determined to be relevant by the Commodity Futures
        Trading Commission regarding a derivatives clearing organization
        deemed to be registered with the Commission under paragraph (1).
        ``(m) Modification of Core Principles.--The Commission may conform
    the core principles established in this section to reflect evolving
    United States and international standards.''.
        (c) Security-based Swap Execution Facilities.--The Securities
    Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended by inserting
    after section 3C (as added by subsection (a) of this section) the
    following:
      ``SEC. 3D. SECURITY-BASED SWAP EXECUTION FACILITIES.
        ``(a) Registration.--
            ``(1) In general.--No person may operate a facility for the
        trading or processing of security-based swaps, unless the facility
        is registered as a security-based swap execution facility or as a
        national securities exchange under this section.
            ``(2) Dual registration.--Any person that is registered as a
        security-based swap execution facility under this section shall
        register with the Commission regardless of whether the person also
        is registered with the Commodity Futures Trading Commission as a
        swap execution facility.
        ``(b) Trading and Trade Processing.--A security-based swap
    execution facility that is registered under subsection (a) may--
            ``(1) make available for trading any security-based swap; and
            ``(2) facilitate trade processing of any security-based swap.
        ``(c) Identification of Facility Used To Trade Security-based Swaps
    by National Securities Exchanges.--A national securities exchange
    shall, to the extent that the exchange also operates a security-based
    swap execution facility and uses the same electronic trade execution
    system for listing and executing trades of security-based swaps on or
    through the exchange and the facility, identify whether electronic
    trading of such security-based swaps is taking place on or through the
    national securities exchange or the security-based swap execution
    facility.
        ``(d) Core Principles for Security-based Swap Execution
    Facilities.--
            ``(1) Compliance with core principles.--
                ``(A) In general.--To be registered, and maintain
            registration, as a security-based swap execution facility, the
            security-based swap execution facility shall comply with--
                    ``(i) the core principles described in this subsection;
                and
                    ``(ii) any requirement that the Commission may impose
                by rule or regulation.
                ``(B) Reasonable discretion of security-based swap
            execution facility.--Unless otherwise determined by the
            Commission, by rule or regulation, a security-based swap
            execution facility described in subparagraph (A) shall have
            reasonable discretion in establishing the manner in which it
            complies with the core principles described in this subsection.
            ``(2) Compliance with rules.--A security-based swap execution
        facility shall--
                ``(A) establish and enforce compliance with any rule
            established by such security-based swap execution facility,
            including--
                    ``(i) the terms and conditions of the security-based
                swaps traded or processed on or through the facility; and
                    ``(ii) any limitation on access to the facility;
                ``(B) establish and enforce trading, trade processing, and
            participation rules that will deter abuses and have the
            capacity to detect, investigate, and enforce those rules,
            including means--
                    ``(i) to provide market participants with impartial
                access to the market; and
                    ``(ii) to capture information that may be used in
                establishing whether rule violations have occurred; and
                ``(C) establish rules governing the operation of the
            facility, including rules specifying trading procedures to be
            used in entering and executing orders traded or posted on the
            facility, including block trades.
            ``(3) Security-based swaps not readily susceptible to
        manipulation.--The security-based swap execution facility shall
        permit trading only in security-based swaps that are not readily
        susceptible to manipulation.
            ``(4) Monitoring of trading and trade processing.--The
        security-based swap execution facility shall--
                ``(A) establish and enforce rules or terms and conditions
            defining, or specifications detailing--
                    ``(i) trading procedures to be used in entering and
                executing orders traded on or through the facilities of the
                security-based swap execution facility; and
                    ``(ii) procedures for trade processing of security-
                based swaps on or through the facilities of the security-
                based swap execution facility; and
                ``(B) monitor trading in security-based swaps to prevent
            manipulation, price distortion, and disruptions of the delivery
            or cash settlement process through surveillance, compliance,
            and disciplinary practices and procedures, including methods
            for conducting real-time monitoring of trading and
            comprehensive and accurate trade reconstructions.
            ``(5) Ability to obtain information.--The security-based swap
        execution facility shall--
                ``(A) establish and enforce rules that will allow the
            facility to obtain any necessary information to perform any of
            the functions described in this subsection;
                ``(B) provide the information to the Commission on request;
            and
                ``(C) have the capacity to carry out such international
            information-sharing agreements as the Commission may require.
            ``(6) Financial integrity of transactions.--The security-based
        swap execution facility shall establish and enforce rules and
        procedures for ensuring the financial integrity of security-based
        swaps entered on or through the facilities of the security-based
        swap execution facility, including the clearance and settlement of
        security-based swaps pursuant to section 3C(a)(1).
            ``(7) Emergency authority.--The security-based swap execution
        facility shall adopt rules to provide for the exercise of emergency
        authority, in consultation or cooperation with the Commission, as
        is necessary and appropriate, including the authority to liquidate
        or transfer open positions in any security-based swap or to suspend
        or curtail trading in a security-based swap.
            ``(8) Timely publication of trading information.--
                ``(A) In general.--The security-based swap execution
            facility shall make public timely information on price, trading
            volume, and other trading data on security-based swaps to the
            extent prescribed by the Commission.
                ``(B) Capacity of security-based swap execution facility.--
            The security-based swap execution facility shall be required to
            have the capacity to electronically capture and transmit and
            disseminate trade information with respect to transactions
            executed on or through the facility.
            ``(9) Recordkeeping and reporting.--
                ``(A) In general.--A security-based swap execution facility
            shall--
                    ``(i) maintain records of all activities relating 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
                    ``(ii) report to the Commission, in a form and manner
                acceptable to the Commission, such information as the
                Commission determines to be necessary or appropriate for
                the Commission to perform the duties of the Commission
                under this title.
                ``(B) Requirements.--The Commission shall adopt data
            collection and reporting requirements for security-based swap
            execution facilities that are comparable to corresponding
            requirements for clearing agencies and security-based swap data
            repositories.
            ``(10) Antitrust considerations.--Unless necessary or
        appropriate to achieve the purposes of this title, the security-
        based swap execution facility shall not--
                ``(A) adopt any rules or taking any actions that result in
            any unreasonable restraint of trade; or
                ``(B) impose any material anticompetitive burden on trading
            or clearing.
            ``(11) Conflicts of interest.--The security-based swap
        execution facility shall--
                ``(A) establish and enforce rules to minimize conflicts of
            interest in its decision-making process; and
                ``(B) establish a process for resolving the conflicts of
            interest.
            ``(12) Financial resources.--
                ``(A) In general.--The security-based swap execution
            facility shall have adequate financial, operational, and
            managerial resources to discharge each responsibility of the
            security-based swap execution facility, as determined by the
            Commission.
                ``(B) Determination of resource adequacy.--The financial
            resources of a security-based swap execution facility shall be
            considered to be adequate if the value of the financial
            resources--
                    ``(i) enables the organization to meet its financial
                obligations to its members and participants notwithstanding
                a default by the member or participant creating the largest
                financial exposure for that organization in extreme but
                plausible market conditions; and
                    ``(ii) exceeds the total amount that would enable the
                security-based swap execution facility to cover the
                operating costs of the security-based swap execution
                facility for a 1-year period, as calculated on a rolling
                basis.
            ``(13) System safeguards.--The security-based swap execution
        facility shall--
                ``(A) establish and maintain a program of risk analysis and
            oversight to identify and minimize sources of operational risk,
            through the development of appropriate controls and procedures,
            and automated systems, that--
                    ``(i) are reliable and secure; and
                    ``(ii) have adequate scalable capacity;
                ``(B) establish and maintain emergency procedures, backup
            facilities, and a plan for disaster recovery that allow for--
                    ``(i) the timely recovery and resumption of operations;
                and
                    ``(ii) the fulfillment of the responsibilities and
                obligations of the security-based swap execution facility;
                and
                ``(C) periodically conduct tests to verify that the backup
            resources of the security-based swap execution facility are
            sufficient to ensure continued--
                    ``(i) order processing and trade matching;
                    ``(ii) price reporting;
                    ``(iii) market surveillance; and
                    ``(iv) maintenance of a comprehensive and accurate
                audit trail.
            ``(14) Designation of chief compliance officer.--
                ``(A) In general.--Each security-based swap execution
            facility shall designate an individual to serve as a chief
            compliance officer.
                ``(B) Duties.--The chief compliance officer shall--
                    ``(i) report directly to the board or to the senior
                officer of the facility;
                    ``(ii) review compliance with the core principles in
                this subsection;
                    ``(iii) 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;
                    ``(iv) be responsible for establishing and
                administering the policies and procedures required to be
                established pursuant to this section;
                    ``(v) ensure compliance with this title and the rules
                and regulations issued under this title, including rules
                prescribed by the Commission pursuant to this section;
                    ``(vi) establish procedures for the remediation of
                noncompliance issues found during--

                        ``(I) compliance office reviews;
                        ``(II) look backs;
                        ``(III) internal or external audit findings;
                        ``(IV) self-reported errors; or
                        ``(V) through validated complaints; and

                    ``(vii) establish and follow appropriate procedures for
                the handling, management response, remediation, retesting,
                and closing of noncompliance issues.
                ``(C) Annual reports.--
                    ``(i) In general.--In accordance with rules prescribed
                by the Commission, the chief compliance officer shall
                annually prepare and sign a report that contains a
                description of--

                        ``(I) the compliance of the security-based swap
                    execution facility with this title; and
                        ``(II) the policies and procedures, including the
                    code of ethics and conflict of interest policies, of
                    the security-based security-based swap execution
                    facility.

                    ``(ii) Requirements.--The chief compliance officer
                shall--

                        ``(I) submit each report described in clause (i)
                    with the appropriate financial report of the security-
                    based swap execution facility that is required to be
                    submitted to the Commission pursuant to this section;
                    and
                        ``(II) include in the report a certification that,
                    under penalty of law, the report is accurate and
                    complete.

        ``(e) Exemptions.--The Commission may exempt, conditionally or
    unconditionally, a security-based 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 Commodity Futures Trading
    Commission.
        ``(f) Rules.--The Commission shall prescribe rules governing the
    regulation of security-based swap execution facilities under this
    section.''.
        (d) Segregation of Assets Held as Collateral in Security-based Swap
    Transactions.--The Securities Exchange Act of 1934 (15 U.S.C. 78a et
    seq.) is amended by inserting after section 3D (as added by subsection
    (b)) the following:
      ``SEC. 3E. SEGREGATION OF ASSETS HELD AS COLLATERAL IN SECURITY-BASED
          SWAP TRANSACTIONS.
        ``(a) Registration Requirement.--It shall be unlawful for any
    person to accept any money, securities, or property (or to extend any
    credit in lieu of money, securities, or property) from, for, or on
    behalf of a security-based swaps customer to margin, guarantee, or
    secure a security-based swap cleared by or through a clearing agency
    (including money, securities, or property accruing to the customer as
    the result of such a security-based swap), unless the person shall have
    registered under this title with the Commission as a broker, dealer, or
    security-based swap dealer, and the registration shall not have expired
    nor been suspended nor revoked.
        ``(b) Cleared Security-based Swaps.--
            ``(1) Segregation required.--A broker, dealer, or security-
        based swap dealer shall treat and deal with all money, securities,
        and property of any security-based swaps customer received to
        margin, guarantee, or secure a security-based swap cleared by or
        though a clearing agency (including money, securities, or property
        accruing to the security-based swaps customer as the result of such
        a security-based swap) as belonging to the security-based swaps
        customer.
            ``(2) Commingling prohibited.--Money, securities, and property
        of a security-based swaps customer described in paragraph (1) shall
        be separately accounted for and shall not be commingled with the
        funds of the broker, dealer, or security-based swap dealer or be
        used to margin, secure, or guarantee any trades or contracts of any
        security-based swaps customer or person other than the person for
        whom the same are held.
        ``(c) Exceptions.--
            ``(1) Use of funds.--
                ``(A) In general.--Notwithstanding subsection (b), money,
            securities, and property of a security-based swaps customer of
            a broker, dealer, or security-based swap dealer described in
            subsection (b) may, for convenience, be commingled and
            deposited in the same 1 or more accounts with any bank or trust
            company or with a clearing agency.
                ``(B) Withdrawal.--Notwithstanding subsection (b), such
            share of the money, securities, and property described in
            subparagraph (A) as in the normal course of business shall be
            necessary to margin, guarantee, secure, transfer, adjust, or
            settle a cleared security-based swap with a clearing agency, or
            with any member of the clearing agency, may be withdrawn and
            applied to such purposes, including the payment of commissions,
            brokerage, interest, taxes, storage, and other charges,
            lawfully accruing in connection with the cleared security-based
            swap.
            ``(2) Commission action.--Notwithstanding subsection (b), in
        accordance with such terms and conditions as the Commission may
        prescribe by rule, regulation, or order, any money, securities, or
        property of the security-based swaps customer of a broker, dealer,
        or security-based swap dealer described in subsection (b) may be
        commingled and deposited as provided in this section with any other
        money, securities, or property received by the broker, dealer, or
        security-based swap dealer and required by the Commission to be
        separately accounted for and treated and dealt with as belonging to
        the security-based swaps customer of the broker, dealer, or
        security-based swap dealer.
        ``(d) Permitted Investments.--Money described in subsection (b) may
    be invested in obligations of the United States, in general obligations
    of any State or of any political subdivision of a State, and in
    obligations fully guaranteed as to principal and interest by the United
    States, or in any other investment that the Commission may by rule or
    regulation prescribe, and such investments shall be made in accordance
    with such rules and regulations and subject to such conditions as the
    Commission may prescribe.
        ``(e) Prohibition.--It shall be unlawful for any person, including
    any clearing agency and any depository institution, that has received
    any money, securities, or property for deposit in a separate account or
    accounts as provided in subsection (b) to hold, dispose of, or use any
    such money, securities, or property as belonging to the depositing
    broker, dealer, or security-based swap dealer or any person other than
    the swaps customer of the broker, dealer, or security-based swap
    dealer.
        ``(f) Segregation Requirements for Uncleared Security-based
    Swaps.--
            ``(1) Segregation of assets held as collateral in uncleared
        security-based swap transactions.--
                ``(A) Notification.--A security-based swap dealer or major
            security-based swap participant shall be required to notify the
            counterparty of the security-based swap dealer or major
            security-based swap participant at the beginning of a security-
            based swap transaction that the counterparty has the right to
            require segregation of the funds of other property supplied to
            margin, guarantee, or secure the obligations of the
            counterparty.
                ``(B) Segregation and maintenance of funds.--At the request
            of a counterparty to a security-based swap that provides funds
            or other property to a security-based swap dealer or major
            security-based swap participant to margin, guarantee, or secure
            the obligations of the counterparty, the security-based swap
            dealer or major security-based swap participant shall--
                    ``(i) segregate the funds or other property for the
                benefit of the counterparty; and
                    ``(ii) in accordance with such rules and regulations as
                the Commission may promulgate, maintain the funds or other
                property in a segregated account separate from the assets
                and other interests of the security-based swap dealer or
                major security-based swap participant.
            ``(2) Applicability.--The requirements described in paragraph
        (1) shall--
                ``(A) apply only to a security-based swap between a
            counterparty and a security-based swap dealer or major
            security-based swap participant that is not submitted for
            clearing to a clearing agency; and
                ``(B)(i) not apply to variation margin payments; or
                ``(ii) not preclude any commercial arrangement regarding--
                    ``(I) the investment of segregated funds or other
                property that may only be invested in such investments as
                the Commission may permit by rule or regulation; and
                    ``(II) the related allocation of gains and losses
                resulting from any investment of the segregated funds or
                other property.
            ``(3) Use of independent third-party custodians.--The
        segregated account described in paragraph (1) shall be--
                ``(A) carried by an independent third-party custodian; and
                ``(B) designated as a segregated account for and on behalf
            of the counterparty.
            ``(4) Reporting requirement.--If the counterparty does not
        choose to require segregation of the funds or other property
        supplied to margin, guarantee, or secure the obligations of the
        counterparty, the security-based swap dealer or major security-
        based swap participant shall report to the counterparty of the
        security-based swap dealer or major security-based swap participant
        on a quarterly basis that the back office procedures of the
        security-based swap dealer or major security-based swap participant
        relating to margin and collateral requirements are in compliance
        with the agreement of the counterparties.
        ``(g) Bankruptcy.--A security-based swap, as defined in section
    3(a)(68) shall be considered to be a security as such term is used in
    section 101(53A)(B) and subchapter III of title 11, United States Code.
    An account that holds a security-based swap, other than a portfolio
    margining account referred to in section 15(c)(3)(C) shall be
    considered to be a securities account, as that term is defined in
    section 741 of title 11, United States Code. The definitions of the
    terms `purchase' and `sale' in section 3(a)(13) and (14) shall be
    applied to the terms `purchase' and `sale', as used in section 741 of
    title 11, United States Code. The term `customer', as defined in
    section 741 of title 11, United States Code, excludes any person, to
    the extent that such person has a claim based on any open repurchase
    agreement, open reverse repurchase agreement, stock borrowed agreement,
    non-cleared option, or non-cleared security-based swap except to the
    extent of any margin delivered to or by the customer with respect to
    which there is a customer protection requirement under section 15(c)(3)
    or a segregation requirement.''.
        (e) Trading in Security-based Swaps.--Section 6 of the Securities
    Exchange Act of 1934 (15 U.S.C. 78f) is amended by adding at the end
    the following:
        ``(l) Security-based Swaps.--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).''.
        (f) Additions of Security-based Swaps to Certain Enforcement
    Provisions.--Section 9(b) of the Securities Exchange Act of 1934 (15
    U.S.C. 78i(b)) is amended by striking paragraphs (1) through (3) and
    inserting the following:
            ``(1) any transaction in connection with any security whereby
        any party to such transaction acquires--
                ``(A) any put, call, straddle, or other option or privilege
            of buying the security from or selling the security to another
            without being bound to do so;
                ``(B) any security futures product on the security; or
                ``(C) any security-based swap involving the security or the
            issuer of the security;
            ``(2) any transaction in connection with any security with
        relation to which such person has, directly or indirectly, any
        interest in any--
                ``(A) such put, call, straddle, option, or privilege;
                ``(B) such security futures product; or
                ``(C) such security-based swap; or
            ``(3) any transaction in any security for the account of any
        person who such person 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.''.
        (g) Rulemaking Authority To Prevent Fraud, Manipulation and
    Deceptive Conduct in Security-based Swaps.--Section 9 of the Securities
    Exchange Act of 1934 (15 U.S.C. 78i) is amended by adding at the end
    the following:
        ``(j) 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 subsection, 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.''.
        (h) Position Limits and Position Accountability for Security-based
    Swaps.--The Securities Exchange Act of 1934 is amended by inserting
    after section 10A (15 U.S.C. 78j-1) the following:
        ``SEC. 10B. POSITION LIMITS AND POSITION ACCOUNTABILITY FOR
          SECURITY-BASED SWAPS AND LARGE TRADER REPORTING.
        ``(a) Position Limits.--As a means reasonably designed to prevent
    fraud and manipulation, the Commission shall, by rule or regulation, as
    necessary or appropriate in the public interest or for the protection
    of investors, establish limits (including related hedge exemption
    provisions) on the size of positions in any security-based swap that
    may be held by any person. In establishing such limits, the Commission
    may require any person to aggregate positions in--
            ``(1) any security-based swap and any security or loan or group
        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 paragraph (68) of
        section 3(a), and any other instrument relating to such security or
        loan or group or index of securities or loans; or
            ``(2) any security-based swap and--
                ``(A) any security or group or index of securities, the
            price, yield, value, or volatility of which, or of which any
            interest therein, is the basis for a material term of such
            security-based swap as described in paragraph (68) of section
            3(a); and
                ``(B) any other instrument relating to the same security or
            group or index of securities described under subparagraph (A).
        ``(b) Exemptions.--The Commission, by rule, regulation, or order,
    may conditionally or unconditionally exempt any person or class of
    persons, any security-based swap or class of security-based swaps, or
    any transaction or class of transactions from any requirement the
    Commission may establish under this section with respect to position
    limits.
        ``(c) SRO Rules.--
            ``(1) In general.--As a means reasonably designed to prevent
        fraud or manipulation, the Commission, by rule, regulation, or
        order, as necessary or appropriate in the public interest, for the
        protection of investors, or otherwise in furtherance of the
        purposes of this title, may direct a self-regulatory organization--
                ``(A) to adopt rules regarding the size of positions in any
            security-based swap that may be held by--
                    ``(i) any member of such self-regulatory organization;
                or
                    ``(ii) any person for whom a member of such self-
                regulatory organization effects transactions in such
                security-based swap; and
                ``(B) to adopt rules reasonably designed to ensure
            compliance with requirements prescribed by the Commission under
            this subsection.
            ``(2) Requirement to aggregate positions.--In establishing the
        limits under paragraph (1), the self-regulatory organization may
        require such member or person to aggregate positions in--
                ``(A) any security-based swap and any security or loan or
            group or narrow-based security 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
            narrow-based security index of securities or loans; or
                ``(B)(i) any security-based swap; and
                ``(ii) any security-based swap and any other instrument
            relating to the same security or group or narrow-based security
            index of securities.
        ``(d) Large Trader Reporting.--The Commission, by rule or
    regulation, may require any person that effects transactions for such
    person's own account or the account of others in any securities-based
    swap or uncleared security-based swap and any security or loan or group
    or narrow-based security 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 and any security or loan or group or narrow-based security index
    of securities or loans and any other instrument relating to such
    security or loan or group or narrow-based security index of securities
    or loans as set forth in paragraphs (1) and (2) of subsection (a) under
    this section.''.
        (i) Public Reporting and Repositories for Security-based Swaps.--
    Section 13 of the Securities Exchange Act of 1934 (15 U.S.C. 78m) is
    amended by adding at the end the following:
        ``(m) Public Availability of Security-based Swap Transaction
    Data.--
            ``(1) In general.--
                ``(A) Definition of real-time public reporting.--In this
            paragraph, the term `real-time public reporting' means to
            report data relating to a security-based swap transaction,
            including price and volume, as soon as technologically
            practicable after the time at which the security-based swap
            transaction has been executed.
                ``(B) Purpose.--The purpose of this subsection is to
            authorize the Commission to make security-based swap
            transaction and pricing data available to the public in such
            form and at such times as the Commission determines appropriate
            to enhance price discovery.
                ``(C) General rule.--The Commission is authorized to
            provide by rule for the public availability of security-based
            swap transaction, volume, and pricing data as follows:
                    ``(i) With respect to those security-based swaps that
                are subject to the mandatory clearing requirement described
                in section 3C(a)(1) (including those security-based swaps
                that are excepted from the requirement pursuant to section
                3C(g)), the Commission shall require real-time public
                reporting for such transactions.
                    ``(ii) With respect to those security-based swaps that
                are not subject to the mandatory clearing requirement
                described in section 3C(a)(1), but are cleared at a
                registered clearing agency, the Commission shall require
                real-time public reporting for such transactions.
                    ``(iii) With respect to security-based swaps that are
                not cleared at a registered clearing agency and which are
                reported to a security-based swap data repository or the
                Commission under section 3C(a)(6), the Commission shall
                require real-time public reporting for such transactions,
                in a manner that does not disclose the business
                transactions and market positions of any person.
                    ``(iv) With respect to security-based swaps that are
                determined to be required to be cleared under section 3C(b)
                but are not cleared, the Commission shall require real-time
                public reporting for such transactions.
                ``(D) Registered entities and public reporting.--The
            Commission may require registered entities to publicly
            disseminate the security-based swap transaction and pricing
            data required to be reported under this paragraph.
                ``(E) Rulemaking required.--With respect to the rule
            providing for the public availability of transaction and
            pricing data for security-based swaps described in clauses (i)
            and (ii) of subparagraph (C), the rule promulgated by the
            Commission shall contain provisions--
                    ``(i) to ensure such information does not identify the
                participants;
                    ``(ii) to specify the criteria for determining what
                constitutes a large notional security-based swap
                transaction (block trade) for particular markets and
                contracts;
                    ``(iii) to specify the appropriate time delay for
                reporting large notional security-based swap transactions
                (block trades) to the public; and
                    ``(iv) that take into account whether the public
                disclosure will materially reduce market liquidity.
                ``(F) Timeliness of reporting.--Parties to a security-based
            swap (including agents of the parties to a security-based swap)
            shall be responsible for reporting security-based swap
            transaction information to the appropriate registered entity in
            a timely manner as may be prescribed by the Commission.
                ``(G) Reporting of swaps to registered security-based swap
            data repositories.--Each security-based swap (whether cleared
            or uncleared) shall be reported to a registered security-based
            swap data repository.
                ``(H) Registration of clearing agencies.--A clearing agency
            may register as a security-based swap data repository.
            ``(2) Semiannual and annual public reporting of aggregate
        security-based swap data.--
                ``(A) In general.--In accordance with subparagraph (B), the
            Commission shall issue a written report on a semiannual and
            annual basis to make available to the public information
            relating to--
                    ``(i) the trading and clearing in the major security-
                based swap categories; and
                    ``(ii) the market participants and developments in new
                products.
                ``(B) Use; consultation.--In preparing a report under
            subparagraph (A), the Commission shall--
                    ``(i) use information from security-based swap data
                repositories and clearing agencies; and
                    ``(ii) consult with the Office of the Comptroller of
                the Currency, the Bank for International Settlements, and
                such other regulatory bodies as may be necessary.
                ``(C) Authority of commission.--The Commission may, by
            rule, regulation, or order, delegate the public reporting
            responsibilities of the Commission under this paragraph in
            accordance with such terms and conditions as the Commission
            determines to be appropriate and in the public interest.
        ``(n) Security-based Swap Data Repositories.--
            ``(1) Registration requirement.--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 security-based swap data repository.
            ``(2) Inspection and examination.--Each registered security-
        based swap data repository shall be subject to inspection and
        examination by any representative of the Commission.
            ``(3) Compliance with core principles.--
                ``(A) In general.--To be registered, and maintain
            registration, as a security-based swap data repository, the
            security-based swap data repository shall comply with--
                    ``(i) the requirements and core principles described in
                this subsection; and
                    ``(ii) any requirement that the Commission may impose
                by rule or regulation.
                ``(B) Reasonable discretion of security-based swap data
            repository.--Unless otherwise determined by the Commission, by
            rule or regulation, a security-based swap data repository
            described in subparagraph (A) shall have reasonable discretion
            in establishing the manner in which the security-based swap
            data repository complies with the core principles described in
            this subsection.
            ``(4) Standard setting.--
                ``(A) Data identification.--
                    ``(i) In general.--In accordance with clause (ii), the
                Commission shall prescribe standards that specify the data
                elements for each security-based swap that shall be
                collected and maintained by each registered security-based
                swap data repository.
                    ``(ii) Requirement.--In carrying out clause (i), the
                Commission shall prescribe consistent data element
                standards applicable to registered entities and reporting
                counterparties.
                ``(B) Data collection and maintenance.--The Commission
            shall prescribe data collection and data maintenance standards
            for security-based swap data repositories.
                ``(C) Comparability.--The standards prescribed by the
            Commission under this subsection shall be comparable to the
            data standards imposed by the Commission on clearing agencies
            in connection with their clearing of security-based swaps.
            ``(5) Duties.--A security-based swap data repository shall--
                ``(A) accept data prescribed by the Commission for each
            security-based swap under subsection (b);
                ``(B) confirm with both counterparties to the security-
            based swap the accuracy of the data that was submitted;
                ``(C) maintain the data described in subparagraph (A) in
            such form, in such manner, and for such period as may be
            required by the Commission;
                ``(D)(i) provide direct electronic access to the Commission
            (or any designee of the Commission, including another
            registered entity); and
                ``(ii) provide the information described in subparagraph
            (A) in such form and at such frequency as the Commission may
            require to comply with the public reporting requirements set
            forth in subsection (m);
                ``(E) at the direction of the Commission, establish
            automated systems for monitoring, screening, and analyzing
            security-based swap data;
                ``(F) maintain the privacy of any and all security-based
            swap transaction information that the security-based swap data
            repository receives from a security-based swap dealer,
            counterparty, or any other registered entity; and
                ``(G) on a confidential basis pursuant to section 24, upon
            request, and after notifying the Commission of the request,
            make available all data obtained by the security-based swap
            data repository, including individual counterparty trade and
            position data, to--
                    ``(i) each appropriate prudential regulator;
                    ``(ii) the Financial Stability Oversight Council;
                    ``(iii) the Commodity Futures Trading Commission;
                    ``(iv) the Department of Justice; and
                    ``(v) any other person that the Commission determines
                to be appropriate, including--

                        ``(I) foreign financial supervisors (including
                    foreign futures authorities);
                        ``(II) foreign central banks; and
                        ``(III) foreign ministries.

                ``(H) Confidentiality and indemnification agreement.--
            Before the security-based swap data repository may share
            information with any entity described in subparagraph (G)--
                    ``(i) the security-based swap data repository shall
                receive a written agreement from each entity stating that
                the entity shall abide by the confidentiality requirements
                described in section 24 relating to the information on
                security-based swap transactions that is provided; and
                    ``(ii) each entity shall agree to indemnify the
                security-based swap data repository and the Commission for
                any expenses arising from litigation relating to the
                information provided under section 24.
            ``(6) Designation of chief compliance officer.--
                ``(A) In general.--Each security-based swap data repository
            shall designate an individual to serve as a chief compliance
            officer.
                ``(B) Duties.--The chief compliance officer shall--
                    ``(i) report directly to the board or to the senior
                officer of the security-based swap data repository;
                    ``(ii) review the compliance of the security-based swap
                data repository with respect to the requirements and core
                principles described in this subsection;
                    ``(iii) in consultation with the board of the security-
                based swap data repository, a body performing a function
                similar to the board of the security-based swap data
                repository, or the senior officer of the security-based
                swap data repository, resolve any conflicts of interest
                that may arise;
                    ``(iv) be responsible for administering each policy and
                procedure that is required to be established pursuant to
                this section;
                    ``(v) ensure compliance with this title (including
                regulations) relating to agreements, contracts, or
                transactions, including each rule prescribed by the
                Commission under this section;
                    ``(vi) establish procedures for the remediation of
                noncompliance issues identified by the chief compliance
                officer through any--

                        ``(I) compliance office review;
                        ``(II) look-back;
                        ``(III) internal or external audit finding;
                        ``(IV) self-reported error; or
                        ``(V) validated complaint; and

                    ``(vii) establish and follow appropriate procedures for
                the handling, management response, remediation, retesting,
                and closing of noncompliance issues.
                ``(C) Annual reports.--
                    ``(i) In general.--In accordance with rules prescribed
                by the Commission, the chief compliance officer shall
                annually prepare and sign a report that contains a
                description of--

                        ``(I) the compliance of the security-based swap
                    data repository of the chief compliance officer with
                    respect to this title (including regulations); and
                        ``(II) each policy and procedure of the security-
                    based swap data repository of the chief compliance
                    officer (including the code of ethics and conflict of
                    interest policies of the security-based swap data
                    repository).

                    ``(ii) Requirements.--A compliance report under clause
                (i) shall--

                        ``(I) accompany each appropriate financial report
                    of the security-based swap data repository that is
                    required to be furnished to the Commission pursuant to
                    this section; and
                        ``(II) include a certification that, under penalty
                    of law, the compliance report is accurate and complete.

            ``(7) Core principles applicable to security-based swap data
        repositories.--
                ``(A) Antitrust considerations.--Unless necessary or
            appropriate to achieve the purposes of this title, the swap
            data repository shall not--
                    ``(i) adopt any rule or take any action that results in
                any unreasonable restraint of trade; or
                    ``(ii) impose any material anticompetitive burden on
                the trading, clearing, or reporting of transactions.
                ``(B) Governance arrangements.--Each security-based swap
            data repository shall establish governance arrangements that
            are transparent--
                    ``(i) to fulfill public interest requirements; and
                    ``(ii) to support the objectives of the Federal
                Government, owners, and participants.
                ``(C) Conflicts of interest.--Each security-based swap data
            repository shall--
                    ``(i) establish and enforce rules to minimize conflicts
                of interest in the decision-making process of the security-
                based swap data repository; and
                    ``(ii) establish a process for resolving any conflicts
                of interest described in clause (i).
                ``(D) Additional duties developed by commission.--
                    ``(i) In general.--The Commission may develop 1 or more
                additional duties applicable to security-based swap data
                repositories.
                    ``(ii) Consideration of evolving standards.--In
                developing additional duties under subparagraph (A), the
                Commission may take into consideration any evolving
                standard of the United States or the international
                community.
                    ``(iii) Additional duties for commission designees.--
                The Commission shall establish additional duties for any
                registrant described in section 13(m)(2)(C) in order to
                minimize conflicts of interest, protect data, ensure
                compliance, and guarantee the safety and security of the
                security-based swap data repository.
            ``(8) Required registration for security-based swap data
        repositories.--Any person that is required to be registered as a
        security-based swap data repository under this subsection shall
        register with the Commission, regardless of whether that person is
        also licensed under the Commodity Exchange Act as a swap data
        repository.
            ``(9) Rules.--The Commission shall adopt rules governing
        persons that are registered under this subsection.''.
        SEC. 764. REGISTRATION AND REGULATION OF SECURITY-BASED SWAP
          DEALERS AND MAJOR SECURITY-BASED SWAP PARTICIPANTS.
        (a) In General.--The Securities Exchange Act of 1934 (15 U.S.C. 78a
    et seq.) is amended by inserting after section 15E (15 U.S.C. 78o-7)
    the following:
        ``SEC. 15F. REGISTRATION AND REGULATION OF SECURITY-BASED SWAP
          DEALERS AND MAJOR SECURITY-BASED SWAP PARTICIPANTS.
        ``(a) Registration.--
            ``(1) Security-based swap dealers.--It shall be unlawful for
        any person to act as a security-based swap dealer unless the person
        is registered as a security-based swap dealer with the Commission.
            ``(2) Major security-based swap participants.--It shall be
        unlawful for any person to act as a major security-based swap
        participant unless the person is registered as a major security-
        based swap participant with the Commission.
        ``(b) Requirements.--
            ``(1) In general.--A person shall register as a security-based
        swap dealer or major security-based swap participant by filing a
        registration application with the Commission.
            ``(2) Contents.--
                ``(A) In general.--The application shall be made in such
            form and manner as prescribed by the Commission, and shall
            contain such information, as the Commission considers necessary
            concerning the business in which the applicant is or will be
            engaged.
                ``(B) Continual reporting.--A person that is registered as
            a security-based swap dealer or major security-based swap
            participant shall continue to submit to the Commission reports
            that contain such information pertaining to the business of the
            person as the Commission may require.
            ``(3) Expiration.--Each registration under this section shall
        expire at such time as the Commission may prescribe by rule or
        regulation.
            ``(4) Rules.--Except as provided in subsections (d) and (e),
        the Commission may prescribe rules applicable to security-based
        swap dealers and major security-based swap participants, including
        rules that limit the activities of non-bank security-based swap
        dealers and major security-based swap participants.
            ``(5) Transition.--Not later than 1 year after the date of
        enactment of the Wall Street Transparency and Accountability Act of
        2010, the Commission shall issue rules under this section to
        provide for the registration of security-based swap dealers and
        major security-based swap participants.
            ``(6) Statutory disqualification.--Except to the extent
        otherwise specifically provided by rule, regulation, or order of
        the Commission, it shall be unlawful for a security-based swap
        dealer or a major security-based swap participant to permit any
        person associated with a security-based swap dealer or a major
        security-based swap participant who is subject to a statutory
        disqualification to effect or be involved in effecting security-
        based swaps on behalf of the security-based swap dealer or major
        security-based swap participant, if the security-based swap dealer
        or major security-based swap participant knew, or in the exercise
        of reasonable care should have known, of the statutory
        disqualification.
        ``(c) Dual Registration.--
            ``(1) Security-based swap dealer.--Any person that is required
        to be registered as a security-based swap dealer under this section
        shall register with the Commission, regardless of whether the
        person also is registered with the Commodity Futures Trading
        Commission as a swap dealer.
            ``(2) Major security-based swap participant.--Any person that
        is required to be registered as a major security-based swap
        participant under this section shall register with the Commission,
        regardless of whether the person also is registered with the
        Commodity Futures Trading Commission as a major swap participant.
        ``(d) Rulemaking.--
            ``(1) In general.--The Commission shall adopt rules for persons
        that are registered as security-based swap dealers or major
        security-based swap participants under this section.
            ``(2) Exception for prudential requirements.--
                ``(A) In general.--The Commission may not prescribe rules
            imposing prudential requirements on security-based swap dealers
            or major security-based swap participants for which there is a
            prudential regulator.
                ``(B) Applicability.--Subparagraph (A) does not limit the
            authority of the Commission to prescribe rules as directed
            under this section.
        ``(e) Capital and Margin Requirements.--
            ``(1) In general.--
                ``(A) Security-based swap dealers and major security-based
            swap participants that are banks.--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 prudential regulator shall by rule
            or regulation prescribe under paragraph (2)(A).
                ``(B) Security-based swap dealers and major security-based
            swap participants that are not banks.--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 under paragraph (2)(B).
            ``(2) Rules.--
                ``(A) Security-based swap dealers and major security-based
            swap participants that are banks.--The prudential regulators,
            in consultation with the Commission and the Commodity Futures
            Trading Commission, shall adopt rules for security-based swap
            dealers and major security-based swap participants, with
            respect to their activities as a swap dealer or major swap
            participant, for which there is a prudential regulator
            imposing--
                    ``(i) capital requirements; and
                    ``(ii) both initial and variation margin requirements
                on all security-based swaps that are not cleared by a
                registered clearing agency.
                ``(B) Security-based swap dealers and major security-based
            swap participants that are not banks.--The Commission shall
            adopt rules for security-based swap dealers and major security-
            based swap participants, with respect to their activities as a
            swap dealer or major swap participant, for which there is not a
            prudential regulator imposing--
                    ``(i) capital requirements; and
                    ``(ii) both initial and variation margin requirements
                on all swaps that are not cleared by a registered clearing
                agency.
                ``(C) Capital.--In setting capital requirements for a
            person that is designated as a security-based swap dealer or a
            major security-based swap participant for a single type or
            single class or category of security-based swap or activities,
            the prudential regulator and the Commission shall take into
            account the risks associated with other types of security-based
            swaps or classes of security-based swaps or categories of
            security-based swaps engaged in and the other activities
            conducted by that person that are not otherwise subject to
            regulation applicable to that person by virtue of the status of
            the person.
            ``(3) Standards for capital and margin.--
                ``(A) In general.--To offset the greater risk to the
            security-based swap dealer or major security-based swap
            participant and the financial system arising from the use of
            security-based swaps that are not cleared, the requirements
            imposed under paragraph (2) shall --
                    ``(i) help ensure the safety and soundness of the
                security-based swap dealer or major security-based swap
                participant; and
                    ``(ii) be appropriate for the risk associated with the
                non-cleared security-based swaps held as a security-based
                swap dealer or major security-based swap participant.
                ``(B) Rule of construction.--
                    ``(i) In general.--Nothing in this section shall limit,
                or be construed to limit, the authority--

                        ``(I) of the Commission to set financial
                    responsibility rules for a broker or dealer registered
                    pursuant to section 15(b) (except for section 15(b)(11)
                    thereof) in accordance with section 15(c)(3); or
                        ``(II) of the Commodity Futures Trading Commission
                    to set financial responsibility rules for a futures
                    commission merchant or introducing broker registered
                    pursuant to section 4f(a) of the Commodity Exchange Act
                    (except for section 4f(a)(3) thereof) in accordance
                    with section 4f(b) of the Commodity Exchange Act.

                    ``(ii) Futures commission merchants and other
                dealers.--A futures commission merchant, introducing
                broker, broker, or dealer shall maintain sufficient capital
                to comply with the stricter of any applicable capital
                requirements to which such futures commission merchant,
                introducing broker, broker, or dealer is subject to under
                this title or the Commodity Exchange Act.
                ``(C) Margin requirements.--In prescribing margin
            requirements under this subsection, the prudential regulator
            with respect to security-based swap dealers and major security-
            based swap participants that are depository institutions, and
            the Commission with respect to security-based swap dealers and
            major security-based swap participants that are not depository
            institutions shall permit the use of noncash collateral, as the
            regulator or the Commission determines to be consistent with--
                    ``(i) preserving the financial integrity of markets
                trading security-based swaps; and
                    ``(ii) preserving the stability of the United States
                financial system.
                ``(D) Comparability of capital and margin requirements.--
                    ``(i) In general.--The prudential regulators, the
                Commission, and the Securities and Exchange Commission
                shall periodically (but not less frequently than annually)
                consult on minimum capital requirements and minimum initial
                and variation margin requirements.
                    ``(ii) Comparability.--The entities described in clause
                (i) shall, to the maximum extent practicable, establish and
                maintain comparable minimum capital requirements and
                minimum initial and variation margin requirements,
                including the use of noncash collateral, for--

                        ``(I) security-based swap dealers; and
                        ``(II) major security-based swap participants.

        ``(f) Reporting and Recordkeeping.--
            ``(1) In general.--Each registered security-based swap dealer
        and major security-based swap participant--
                ``(A) shall make such reports as are required by the
            Commission, by rule or regulation, regarding the transactions
            and positions and financial condition of the registered
            security-based swap dealer or major security-based swap
            participant;
                ``(B)(i) for which there is a prudential regulator, shall
            keep books and records of all activities related to the
            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; and
                ``(ii) for which there is no prudential regulator, shall
            keep books and records in such form and manner and for such
            period as may be prescribed by the Commission by rule or
            regulation; and
                ``(C) shall keep books and records described in
            subparagraph (B) open to inspection and examination by any
            representative of the Commission.
            ``(2) Rules.--The Commission shall adopt rules governing
        reporting and recordkeeping for security-based swap dealers and
        major security-based swap participants.
        ``(g) Daily Trading Records.--
            ``(1) In general.--Each registered security-based swap dealer
        and major security-based swap participant shall maintain daily
        trading records of the security-based swaps of the registered
        security-based swap dealer and major security-based swap
        participant and all related records (including related cash or
        forward transactions) and recorded communications, including
        electronic mail, instant messages, and recordings of telephone
        calls, for such period as may be required by the Commission by rule
        or regulation.
            ``(2) Information requirements.--The daily trading records
        shall include such information as the Commission shall require by
        rule or regulation.
            ``(3) Counterparty records.--Each registered security-based
        swap dealer and major security-based swap participant shall
        maintain daily trading records for each counterparty in a manner
        and form that is identifiable with each security-based swap
        transaction.
            ``(4) Audit trail.--Each registered security-based swap dealer
        and major security-based swap participant shall maintain a complete
        audit trail for conducting comprehensive and accurate trade
        reconstructions.
            ``(5) Rules.--The Commission shall adopt rules governing daily
        trading records for security-based swap dealers and major security-
        based swap participants.
        ``(h) Business Conduct Standards.--
            ``(1) In general.--Each registered security-based swap dealer
        and major security-based swap participant shall conform with such
        business conduct standards as prescribed in paragraph (3) and as
        may be prescribed by the Commission by rule or regulation that
        relate to--
                ``(A) fraud, manipulation, and other abusive practices
            involving security-based swaps (including security-based swaps
            that are offered but not entered into);
                ``(B) diligent supervision of the business of the
            registered security-based swap dealer and major security-based
            swap participant;
                ``(C) adherence to all applicable position limits; and
                ``(D) such other matters as the Commission determines to be
            appropriate.
            ``(2) Responsibilities with respect to special entities.--
                ``(A) Advising special entities.--A security-based swap
            dealer or major security-based swap participant that acts as an
            advisor to special entity regarding a security-based swap shall
            comply with the requirements of paragraph (4) with respect to
            such special entity.
                ``(B) Entering of security-based swaps with respect to
            special entities.--A security-based swap dealer that enters
            into or offers to enter into security-based swap with a special
            entity shall comply with the requirements of paragraph (5) with
            respect to such special entity.
                ``(C) Special entity defined.--For purposes of this
            subsection, the term `special entity' means--
                    ``(i) a Federal agency;
                    ``(ii) a State, State agency, city, county,
                municipality, or other political subdivision of a State or;
                    ``(iii) any employee benefit plan, as defined in
                section 3 of the Employee Retirement Income Security Act of
                1974 (29 U.S.C. 1002);
                    ``(iv) any governmental plan, as defined in section 3
                of the Employee Retirement Income Security Act of 1974 (29
                U.S.C. 1002); or
                    ``(v) any endowment, including an endowment that is an
                organization described in section 501(c)(3) of the Internal
                Revenue Code of 1986.
            ``(3) Business conduct requirements.--Business conduct
        requirements adopted by the Commission shall--
                ``(A) establish a duty for a security-based swap dealer or
            major security-based swap participant to verify that any
            counterparty meets the eligibility standards for an eligible
            contract participant;
                ``(B) require disclosure by the security-based swap dealer
            or major security-based swap participant to any counterparty to
            the transaction (other than a security-based swap dealer, major
            security-based swap participant, security-based swap dealer, or
            major security-based swap participant) of--
                    ``(i) information about the material risks and
                characteristics of the security-based swap;
                    ``(ii) any 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
                    ``(iii)(I) for cleared security-based swaps, upon the
                request of the counterparty, receipt of the daily mark of
                the transaction from the appropriate derivatives clearing
                organization; and
                    ``(II) for uncleared security-based swaps, receipt of
                the daily mark of the transaction from the security-based
                swap dealer or the major security-based swap participant;
                ``(C) establish a duty for a security-based swap dealer or
            major security-based swap participant to communicate in a fair
            and balanced manner based on principles of fair dealing and
            good faith; and
                ``(D) establish such other standards and requirements as
            the Commission may determine are appropriate in the public
            interest, for the protection of investors, or otherwise in
            furtherance of the purposes of this Act.
            ``(4) Special requirements for security-based swap dealers
        acting as advisors.--
                ``(A) In general.--It shall be unlawful for a security-
            based swap dealer or major security-based swap participant--
                    ``(i) to employ any device, scheme, or artifice to
                defraud any special entity or prospective customer who is a
                special entity;
                    ``(ii) to engage in any transaction, practice, or
                course of business that operates as a fraud or deceit on
                any special entity or prospective customer who is a special
                entity; or
                    ``(iii) to engage in any act, practice, or course of
                business that is fraudulent, deceptive, or manipulative.
                ``(B) Duty.--Any security-based swap dealer that acts as an
            advisor to a special entity shall have a duty to act in the
            best interests of the special entity.
                ``(C) Reasonable efforts.--Any security-based swap dealer
            that acts as an advisor to a special entity shall make
            reasonable efforts to obtain such information as is necessary
            to make a reasonable determination that any security-based swap
            recommended by the security-based swap dealer is in the best
            interests of the special entity, including information relating
            to--
                    ``(i) the financial status of the special entity;
                    ``(ii) the tax status of the special entity;
                    ``(iii) the investment or financing objectives of the
                special entity; and
                    ``(iv) any other information that the Commission may
                prescribe by rule or regulation.
            ``(5) Special requirements for security-based swap dealers as
        counterparties to special entities.--
                ``(A) In general.--Any security-based swap dealer or major
            security-based swap participant that offers to or enters into a
            security-based swap with a special entity shall--
                    ``(i) comply with any duty established by the
                Commission for a security-based swap dealer or major
                security-based swap participant, with respect to a
                counterparty that is an eligible contract participant
                within the meaning of subclause (I) or (II) of clause (vii)
                of section 1a(18) of the Commodity Exchange Act, that
                requires the security-based swap dealer or major security-
                based swap participant to have a reasonable basis to
                believe that the counterparty that is a special entity has
                an independent representative that--

                        ``(I) has sufficient knowledge to evaluate the
                    transaction and risks;
                        ``(II) is not subject to a statutory
                    disqualification;
                        ``(III) is independent of the security-based swap
                    dealer or major security-based swap participant;
                        ``(IV) undertakes a duty to act in the best
                    interests of the counterparty it represents;
                        ``(V) makes appropriate disclosures;
                        ``(VI) will provide written representations to the
                    special entity regarding fair pricing and the
                    appropriateness of the transaction; and
                        ``(VII) in the case of employee benefit plans
                    subject to the Employee Retirement Income Security act
                    of 1974, is a fiduciary as defined in section 3 of that
                    Act (29 U.S.C. 1002); and

                    ``(ii) before the initiation of the transaction,
                disclose to the special entity in writing the capacity in
                which the security-based swap dealer is acting.
                ``(B) Commission authority.--The Commission may establish
            such other standards and requirements under this paragraph as
            the Commission may determine are appropriate in the public
            interest, for the protection of investors, or otherwise in
            furtherance of the purposes of this Act.
            ``(6) Rules.--The Commission shall prescribe rules under this
        subsection governing business conduct standards for security-based
        swap dealers and major security-based swap participants.
            ``(7) Applicability.--This subsection shall not apply with
        respect to a transaction that is--
                ``(A) initiated by a special entity on an exchange or
            security-based swaps execution facility; and
                ``(B) the security-based swap dealer or major security-
            based swap participant does not know the identity of the
            counterparty to the transaction.''
        ``(i) Documentation Standards.--
            ``(1) In general.--Each registered security-based swap dealer
        and major security-based swap participant shall conform with such
        standards as may be prescribed by the Commission, by rule or
        regulation, that relate to timely and accurate confirmation,
        processing, netting, documentation, and valuation of all security-
        based swaps.
            ``(2) Rules.--The Commission shall adopt rules governing
        documentation standards for security-based swap dealers and major
        security-based swap participants.
        ``(j) Duties.--Each registered security-based swap dealer and major
    security-based swap participant shall, at all times, comply with the
    following requirements:
            ``(1) Monitoring of trading.--The security-based swap dealer or
        major security-based swap participant shall monitor its trading in
        security-based swaps to prevent violations of applicable position
        limits.
            ``(2) Risk management procedures.--The security-based swap
        dealer or major security-based swap participant shall establish
        robust and professional risk management systems adequate for
        managing the day-to-day business of the security-based swap dealer
        or major security-based swap participant.
            ``(3) Disclosure of general information.--The security-based
        swap dealer or major security-based swap participant shall disclose
        to the Commission and to the prudential regulator for the security-
        based swap dealer or major security-based swap participant, as
        applicable, information concerning--
                ``(A) terms and conditions of its security-based swaps;
                ``(B) security-based swap trading operations, mechanisms,
            and practices;
                ``(C) financial integrity protections relating to security-
            based swaps; and
                ``(D) other information relevant to its trading in
            security-based swaps.
            ``(4) Ability to obtain information.--The security-based swap
        dealer or major security-based swap participant shall--
                ``(A) establish and enforce internal systems and procedures
            to obtain any necessary information to perform any of the
            functions described in this section; and
                ``(B) provide the information to the Commission and to the
            prudential regulator for the security-based swap dealer or
            major security-based swap participant, as applicable, on
            request.
            ``(5) Conflicts of interest.--The security-based swap dealer
        and major security-based swap participant shall implement conflict-
        of-interest systems and procedures that--
                ``(A) establish structural and institutional safeguards to
            ensure that the activities of any person within the firm
            relating to research or analysis of the price or market for any
            security-based swap or acting in a role of providing clearing
            activities or making determinations as to accepting clearing
            customers are separated by appropriate informational partitions
            within the firm from the review, pressure, or oversight of
            persons whose involvement in pricing, trading, or clearing
            activities might potentially bias their judgment or supervision
            and contravene the core principles of open access and the
            business conduct standards described in this title; and
                ``(B) address such other issues as the Commission
            determines to be appropriate.
            ``(6) Antitrust considerations.--Unless necessary or
        appropriate to achieve the purposes of this title, the security-
        based swap dealer or major security-based swap participant shall
        not--
                ``(A) adopt any process or take any action that results in
            any unreasonable restraint of trade; or
                ``(B) impose any material anticompetitive burden on trading
            or clearing.
            ``(7) Rules.--The Commission shall prescribe rules under this
        subsection governing duties of security-based swap dealers and
        major security-based swap participants.
        ``(k) Designation of Chief Compliance Officer.--
            ``(1) In general.--Each security-based swap dealer and major
        security-based swap participant shall designate an individual to
        serve as a chief compliance officer.
            ``(2) Duties.--The chief compliance officer shall--
                ``(A) report directly to the board or to the senior officer
            of the security-based swap dealer or major security-based swap
            participant;
                ``(B) review the compliance of the security-based swap
            dealer or major security-based swap participant with respect to
            the security-based swap dealer and major security-based swap
            participant requirements described in this section;
                ``(C) in consultation with the board of directors, a body
            performing a function similar to the board, or the senior
            officer of the organization, resolve any conflicts of interest
            that may arise;
                ``(D) be responsible for administering each policy and
            procedure that is required to be established pursuant to this
            section;
                ``(E) ensure compliance with this title (including
            regulations) relating to security-based swaps, including each
            rule prescribed by the Commission under this section;
                ``(F) establish procedures for the remediation of
            noncompliance issues identified by the chief compliance officer
            through any--
                    ``(i) compliance office review;
                    ``(ii) look-back;
                    ``(iii) internal or external audit finding;
                    ``(iv) self-reported error; or
                    ``(v) validated complaint; and
                ``(G) establish and follow appropriate procedures for the
            handling, management response, remediation, retesting, and
            closing of noncompliance issues.
            ``(3) Annual reports.--
                ``(A) In general.--In accordance with rules prescribed by
            the Commission, the chief compliance officer shall annually
            prepare and sign a report that contains a description of--
                    ``(i) the compliance of the security-based swap dealer
                or major swap participant with respect to this title
                (including regulations); and
                    ``(ii) each policy and procedure of the security-based
                swap dealer or major security-based swap participant of the
                chief compliance officer (including the code of ethics and
                conflict of interest policies).
                ``(B) Requirements.--A compliance report under subparagraph
            (A) shall--
                    ``(i) accompany each appropriate financial report of
                the security-based swap dealer or major security-based swap
                participant that is required to be furnished to the
                Commission pursuant to this section; and
                    ``(ii) include a certification that, under penalty of
                law, the compliance report is accurate and complete.
        ``(l) Enforcement and Administrative Proceeding Authority.--
            ``(1) Primary enforcement authority.--
                ``(A) Securities and exchange commission.--Except as
            provided in subparagraph (B), (C), or (D), the Commission shall
            have primary authority to enforce subtitle B, and the
            amendments made by subtitle B of the Wall Street Transparency
            and Accountability Act of 2010, with respect to any person.
                ``(B) Prudential regulators.--The prudential regulators
            shall have exclusive authority to enforce the provisions of
            subsection (e) and other prudential requirements of this title
            (including risk management standards), with respect to
            security-based swap dealers or major security-based swap
            participants for which they are the prudential regulator.
                ``(C) Referral.--
                    ``(i) Violations of nonprudential requirements.--If the
                appropriate Federal banking agency for security-based swap
                dealers or major security-based swap participants that are
                depository institutions 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 this section
                or rules adopted by the Commission thereunder, the agency
                may recommend in writing to the Commission that the
                Commission initiate an enforcement proceeding as authorized
                under this title. The recommendation shall be accompanied
                by a written explanation of the concerns giving rise to the
                recommendation.
                    ``(ii) Violations of prudential requirements.--If the
                Commission has cause to believe that a securities-based
                swap dealer or major securities-based swap participant that
                has a prudential regulator may have engaged in conduct that
                constitute a violation of the prudential requirements of
                subsection (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 title. The recommendation shall be
                accompanied by a written explanation of the concerns giving
                rise to the recommendation.
                ``(D) Backstop enforcement authority.--
                    ``(i) Initiation of enforcement proceeding by
                prudential regulator.--If the Commission does not initiate
                an enforcement proceeding before the end of the 90-day
                period beginning on the date on which the Commission
                receives a written report under subsection (C)(i), the
                prudential regulator may initiate an enforcement
                proceeding.
                    ``(ii) Initiation of enforcement proceeding by
                commission.--If the prudential regulator does not initiate
                an enforcement proceeding before the end of the 90-day
                period beginning on the date on which the prudential
                regulator receives a written report under subsection
                (C)(ii), the Commission may initiate an enforcement
                proceeding.
            ``(2) Censure, denial, suspension; notice and hearing.--The
        Commission, by order, shall censure, place limitations on the
        activities, functions, or operations of, or revoke the registration
        of any security-based swap dealer or major security-based swap
        participant that has registered with the Commission pursuant to
        subsection (b) if the Commission finds, on the record after notice
        and opportunity for hearing, that such censure, placing of
        limitations, or revocation is in the public interest and that such
        security-based swap dealer or major security-based swap
        participant, or any person associated with such security-based swap
        dealer or major security-based swap participant effecting or
        involved in effecting transactions in security-based swaps on
        behalf of such security-based swap dealer or major security-based
        swap participant, whether prior or subsequent to becoming so
        associated--
                ``(A) has committed or omitted any act, or is subject to an
            order or finding, enumerated in subparagraph (A), (D), or (E)
            of paragraph (4) of section 15(b);
                ``(B) has been convicted of any offense specified in
            subparagraph (B) of such paragraph (4) within 10 years of the
            commencement of the proceedings under this subsection;
                ``(C) is enjoined from any action, conduct, or practice
            specified in subparagraph (C) of such paragraph (4);
                ``(D) is subject to an order or a final order specified in
            subparagraph (F) or (H), respectively, of such paragraph (4);
            or
                ``(E) has been found by a foreign financial regulatory
            authority to have committed or omitted any act, or violated any
            foreign statute or regulation, enumerated in subparagraph (G)
            of such paragraph (4).
            ``(3) Associated persons.--With respect to any person who is
        associated, who is seeking to become associated, or, at the time of
        the alleged misconduct, who was associated or was seeking to become
        associated with a security-based swap dealer or major security-
        based swap participant for the purpose of effecting or being
        involved in effecting security-based swaps on behalf of such
        security-based swap dealer or major security-based swap
        participant, the Commission, by order, shall censure, place
        limitations on the activities or functions of such person, or
        suspend for a period not exceeding 12 months, or bar such person
        from being associated with a security-based swap dealer or major
        security-based swap participant, if the Commission finds, on the
        record after notice and opportunity for a hearing, that such
        censure, placing of limitations, suspension, or bar is in the
        public interest and that such person--
                ``(A) has committed or omitted any act, or is subject to an
            order or finding, enumerated in subparagraph (A), (D), or (E)
            of paragraph (4) of section 15(b);
                ``(B) has been convicted of any offense specified in
            subparagraph (B) of such paragraph (4) within 10 years of the
            commencement of the proceedings under this subsection;
                ``(C) is enjoined from any action, conduct, or practice
            specified in subparagraph (C) of such paragraph (4);
                ``(D) is subject to an order or a final order specified in
            subparagraph (F) or (H), respectively, of such paragraph (4);
            or
                ``(E) has been found by a foreign financial regulatory
            authority to have committed or omitted any act, or violated any
            foreign statute or regulation, enumerated in subparagraph (G)
            of such paragraph (4).
            ``(4) Unlawful conduct.--It shall be unlawful--
                ``(A) for any person as to whom an order under paragraph
            (3) is in effect, without the consent of the Commission,
            willfully to become, or to be, associated with a security-based
            swap dealer or major security-based swap participant in
            contravention of such order; or
                ``(B) for any security-based swap dealer or major security-
            based swap participant to permit such a person, without the
            consent of the Commission, to become or remain a person
            associated with the security-based swap dealer or major
            security-based swap participant in contravention of such order,
            if such security-based swap dealer or major security-based swap
            participant knew, or in the exercise of reasonable care should
            have known, of such order.''.
        (b) Savings Clause.--Notwithstanding any other provision of this
    title, nothing in this subtitle shall be construed as divesting any
    appropriate Federal banking agency of any authority it may have to
    establish or enforce, with respect to a person for which such agency is
    the appropriate Federal banking agency, prudential or other standards
    pursuant to authority by Federal law other than this title.
        SEC. 765. RULEMAKING ON CONFLICT OF INTEREST.
        (a) In General.--In order to mitigate conflicts of interest, not
    later than 180 days after the date of enactment of the Wall Street
    Transparency and Accountability Act of 2010, the Securities and
    Exchange Commission shall adopt rules which may include numerical
    limits on the control of, or the voting rights with respect to, any
    clearing agency that clears security-based swaps, or on the control of
    any security-based swap execution facility or national securities
    exchange that posts or makes available for trading security-based
    swaps, by a bank holding company (as defined in section 2 of the Bank
    Holding Company Act of 1956 (12 U.S.C. 1841)) with total consolidated
    assets of $50,000,000,000 or more, a nonbank financial company (as
    defined in section 102) supervised by the Board of Governors of the
    Federal Reserve System, affiliate of such a bank holding company or
    nonbank financial company, a security-based swap dealer, major
    security-based swap participant, or person associated with a security-
    based swap dealer or major security-based swap participant.
        (b) Purposes.--The Securities and Exchange Commission shall adopt
    rules if the Commission determines, after the review described in
    subsection (a), that such rules are necessary or appropriate to improve
    the governance of, or to mitigate systemic risk, promote competition,
    or mitigate conflicts of interest in connection with a security-based
    swap dealer or major security-based swap participant's conduct of
    business with, a clearing agency, national securities exchange, or
    security-based swap execution facility that clears, posts, or makes
    available for trading security-based swaps and in which such security-
    based swap dealer or major security-based swap participant has a
    material debt or equity investment.
        (c) Considerations.--In adopting rules pursuant to this section,
    the Securities and Exchange Commission shall consider any conflicts of
    interest arising from the amount of equity owned by a single investor,
    the ability to vote, cause the vote of, or withhold votes entitled to
    be cast on any matters by the holders of the ownership interest, and
    the governance arrangements of any derivatives clearing organization
    that clears swaps, or swap execution facility or board of trade
    designated as a contract market that posts swaps or makes swaps
    available for trading.
        SEC. 766. REPORTING AND RECORDKEEPING.
        (a) In General.--The Securities Exchange Act of 1934 (15 U.S.C. 78a
    et seq.) is amended by inserting after section 13 the following:
        ``SEC. 13A. REPORTING AND RECORDKEEPING FOR CERTAIN SECURITY-BASED
          SWAPS.
        ``(a) Required Reporting of Security-based Swaps Not Accepted by
    Any Clearing Agency or Derivatives Clearing Organization.--
            ``(1) In general.--Each security-based swap that is not
        accepted for clearing by any clearing agency or derivatives
        clearing organization shall be reported to--
                ``(A) a security-based swap data repository described in
            section 13(n); or
                ``(B) in the case in which there is no security-based swap
            data repository that would accept the security-based swap, to
            the Commission pursuant to this section within such time period
            as the Commission may by rule or regulation prescribe.
            ``(2) Transition rule for preenactment security-based swaps.--
                ``(A) Security-based swaps entered into before the date of
            enactment of the wall street transparency and accountability
            act of 2010.--Each security-based swap entered into before the
            date of enactment of the Wall Street Transparency and
            Accountability Act of 2010, the terms of which have not expired
            as of the date of enactment of that Act, shall be reported to a
            registered security-based swap data repository or the
            Commission by a date that is not later than--
                    ``(i) 30 days after issuance of the interim final rule;
                or
                    ``(ii) such other period as the Commission determines
                to be appropriate.
                ``(B) Commission rulemaking.--The Commission shall
            promulgate an interim final rule within 90 days of the date of
            enactment of this section providing for the reporting of each
            security-based swap entered into before the date of enactment
            as referenced in subparagraph (A).
                ``(C) Effective date.--The reporting provisions described
            in this section shall be effective upon the date of the
            enactment of this section.
            ``(3) Reporting obligations.--
                ``(A) Security-based swaps in which only 1 counterparty is
            a security-based swap dealer or major security-based swap
            participant.--With respect to a security-based swap in which
            only 1 counterparty is a security-based swap dealer or major
            security-based swap participant, the security-based swap dealer
            or major security-based swap participant shall report the
            security-based swap as required under paragraphs (1) and (2).
                ``(B) Security-based swaps in which 1 counterparty is a
            security-based swap dealer and the other a major security-based
            swap participant.--With respect to a security-based swap in
            which 1 counterparty is a security-based swap dealer and the
            other a major security-based swap participant, the security-
            based swap dealer shall report the security-based swap as
            required under paragraphs (1) and (2).
                ``(C) Other security-based swaps.--With respect to any
            other security-based swap not described in subparagraph (A) or
            (B), the counterparties to the security-based swap shall select
            a counterparty to report the security-based swap as required
            under paragraphs (1) and (2).
        ``(b) Duties of Certain Individuals.--Any individual or entity that
    enters into a security-based swap shall meet each requirement described
    in subsection (c) if the individual or entity did not--
            ``(1) clear the security-based swap in accordance with section
        3C(a)(1); or
            ``(2) have the data regarding the security-based swap accepted
        by a security-based swap data repository in accordance with rules
        (including timeframes) adopted by the Commission under this title.
        ``(c) Requirements.--An individual or entity described in
    subsection (b) shall--
            ``(1) upon written request from the Commission, provide reports
        regarding the security-based swaps held by the individual or entity
        to the Commission in such form and in such manner as the Commission
        may request; and
            ``(2) maintain books and records pertaining to the security-
        based swaps held by the individual or entity in such form, in such
        manner, and for such period as the Commission may require, which
        shall be open to inspection by--
                ``(A) any representative of the Commission;
                ``(B) an appropriate prudential regulator;
                ``(C) the Commodity Futures Trading Commission;
                ``(D) the Financial Stability Oversight Council; and
                ``(E) the Department of Justice.
        ``(d) Identical Data.--In prescribing rules under this section, the
    Commission shall require individuals and entities described in
    subsection (b) to submit to the Commission a report that contains data
    that is not less comprehensive than the data required to be collected
    by security-based swap data repositories under this title.''.
        (b) Beneficial Ownership Reporting.--Section 13 of the Securities
    Exchange Act of 1934 (15 U.S.C. 78m) is amended--
            (1) in subsection (d)(1), by inserting ``or otherwise becomes
        or is deemed to become a beneficial owner of any of the foregoing
        upon the purchase or sale of a security-based swap that the
        Commission may define by rule, and'' after ``Alaska Native Claims
        Settlement Act,''; and
            (2) in subsection (g)(1), by inserting ``or otherwise becomes
        or is deemed to become a beneficial owner of any security of a
        class described in subsection (d)(1) upon the purchase or sale of a
        security-based swap that the Commission may define by rule'' after
        ``subsection (d)(1) of this section''.
        (c) Reports by Institutional Investment Managers.--Section 13(f)(1)
    of the Securities Exchange Act of 1934 (15 U.S.C. 78m(f)(1)) is amended
    by inserting ``or otherwise becomes or is deemed to become a beneficial
    owner of any security of a class described in subsection (d)(1) upon
    the purchase or sale of a security-based swap that the Commission may
    define by rule,'' after ``subsection (d)(1) of this section''.
        (d) Administrative Proceeding Authority.--Section 15(b)(4) of the
    Securities Exchange Act of 1934 (15 U.S.C. 78o(b)(4)) is amended--
            (1) in subparagraph (C), by inserting ``security-based swap
        dealer, major security-based swap participant,'' after ``government
        securities dealer,''; and
            (2) in subparagraph (F), by striking ``broker or dealer'' and
        inserting ``broker, dealer, security-based swap dealer, or a major
        security-based swap participant''.
        (e) Security-based Swap Beneficial Ownership.--Section 13 of the
    Securities Exchange Act of 1934 (15 U.S.C. 78m) is amended by adding at
    the end the following:
        ``(o) Beneficial Ownership.--For purposes of this section and
    section 16, a person shall be deemed to acquire beneficial ownership of
    an equity security based on the purchase or sale of a security-based
    swap, 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
    class of security-based swap, 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 class of security-based swap, be
    deemed the acquisition of beneficial ownership of the equity
    security.''.
        SEC. 767. STATE GAMING AND BUCKET SHOP LAWS.
        Section 28(a) of the Securities Exchange Act of 1934 (15 U.S.C.
    78bb(a)) is amended to read as follows:
        ``(a) Limitation on Judgments.--
            ``(1) In general.--No person permitted to maintain a suit for
        damages under the provisions of this title shall recover, through
        satisfaction of judgment in 1 or more actions, a total amount in
        excess of the actual damages to that person 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 under this title.
            ``(2) Rule of construction.--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.
            ``(3) State bucket shop laws.--No State law which prohibits or
        regulates the making or promoting of wagering or gaming contracts,
        or the operation of `bucket shops' or other similar or related
        activities, shall invalidate--
                ``(A) 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;
                ``(B) any security-based swap between eligible contract
            participants; or
                ``(C) any security-based swap effected on a national
            securities exchange registered pursuant to section 6(b).
            ``(4) Other state provisions.--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 paragraph may 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 any provision of State law.''.
        SEC. 768. AMENDMENTS TO THE SECURITIES ACT OF 1933; TREATMENT OF
          SECURITY-BASED SWAPS.
        (a) Definitions.--Section 2(a) of the Securities Act of 1933 (15
    U.S.C. 77b(a)) is amended--
            (1) in paragraph (1), by inserting ``security-based swap,''
        after ``security future,'';
            (2) in paragraph (3), by adding at the end the following: ``Any
        offer or sale of a security-based swap by or on behalf of the
        issuer of the securities upon which such security-based swap is
        based or is referenced, an affiliate of the issuer, or an
        underwriter, shall constitute a contract for sale of, sale of,
        offer for sale, or offer to sell such securities.''; and
            (3) by adding at the end the following:
            ``(17) The terms `swap' and `security-based swap' have the same
        meanings as in section 1a of the Commodity Exchange Act (7 U.S.C.
        1a).
            ``(18) The terms `purchase' or `sale' of a security-based swap
        shall be deemed to mean the execution, termination (prior to its
        scheduled maturity date), assignment, exchange, or similar transfer
        or conveyance of, or extinguishing of rights or obligations under,
        a security-based swap, as the context may require.''.
        (b) Registration of Security-based Swaps.--Section 5 of the
    Securities Act of 1933 (15 U.S.C. 77e) is amended by adding at the end
    the following:
        ``(d) Notwithstanding the provisions of section 3 or 4, unless a
    registration statement meeting the requirements of section 10(a) 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(18) of the Commodity Exchange Act (7 U.S.C.
    1a(18)).''.
        SEC. 769. DEFINITIONS UNDER THE INVESTMENT COMPANY ACT OF 1940.
        Section 2(a) of the Investment Company Act of 1940 (15 U.S.C. 80a-
    2) is amended by adding at the end the following:
            ``(54) The terms `commodity pool', `commodity pool operator',
        `commodity trading advisor', `major swap participant', `swap',
        `swap dealer', and `swap execution facility' have the same meanings
        as in section 1a of the Commodity Exchange Act (7 U.S.C. 1a).''.
        SEC. 770. DEFINITIONS UNDER THE INVESTMENT ADVISERS ACT OF 1940.
        Section 202(a) of the Investment Advisers Act of 1940 (15 U.S.C.
    80b-2) is amended by adding at the end the following:
            ``(29) The terms `commodity pool', `commodity pool operator',
        `commodity trading advisor', `major swap participant', `swap',
        `swap dealer', and `swap execution facility' have the same meanings
        as in section 1a of the Commodity Exchange Act (7 U.S.C. 1a).''.
        SEC. 771. OTHER AUTHORITY.
        Unless otherwise provided by its terms, this subtitle does not
    divest any appropriate Federal banking agency, the Securities and
    Exchange Commission, the Commodity Futures Trading Commission, or any
    other Federal or State agency, of any authority derived from any other
    provision of applicable law.
        SEC. 772. JURISDICTION.
        (a) In General.--Section 36 of the Securities Exchange Act of 1934
    (15 U.S.C. 78mm) is amended by adding at the end the following:
        ``(c) Derivatives.--Unless the Commission is expressly authorized
    by any provision described in this subsection to grant exemptions, the
    Commission shall not grant exemptions, with respect to amendments made
    by subtitle B of the Wall Street Transparency and Accountability Act of
    2010, with respect to paragraphs (65), (66), (68), (69), (70), (71),
    (72), (73), (74), (75), (76), and (79) of section 3(a), and sections
    10B(a), 10B(b), 10B(c), 13A, 15F, 17A(g), 17A(h), 17A(i), 17A(j),
    17A(k), and 17A(l); provided that the Commission shall have exemptive
    authority under this title with respect to security-based swaps as to
    the same matters that the Commodity Futures Trading Commission has
    under the Wall Street Transparency and Accountability Act of 2010 with
    respect to swaps, including under section 4(c) of the Commodity
    Exchange Act.''.
        (b) Rule of Construction.--Section 30 of the Securities Exchange
    Act of 1934 (15 U.S.C. 78dd) is amended by adding at the end the
    following:
        ``(c) Rule of Construction.--No provision of this title that was
    added by the Wall Street Transparency and Accountability Act of 2010,
    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 such person 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 title that was added by the Wall
    Street Transparency and Accountability Act of 2010. This subsection
    shall not be construed to limit the jurisdiction of the Commission
    under any provision of this title, as in effect prior to the date of
    enactment of the Wall Street Transparency and Accountability Act of
    2010.''.
        SEC. 773. CIVIL PENALTIES.
        Section 21B of the Securities Exchange Act of 1934 (15 U.S.C. 78p-
    2) is amended by adding at the end the following:
        ``(f) Security-based Swaps.--
            ``(1) Clearing agency.--Any clearing agency that knowingly or
        recklessly evades or participates in or facilitates an evasion of
        the requirements of section 3C shall be liable for a civil money
        penalty in twice the amount otherwise available for a violation of
        section 3C.
            ``(2) Security-based swap dealer or major security-based swap
        participant.--Any security-based swap dealer or major security-
        based swap participant that knowingly or recklessly evades or
        participates in or facilitates an evasion of the requirements of
        section 3C shall be liable for a civil money penalty in twice the
        amount otherwise available for a violation of section 3C.''.
        SEC. 774. EFFECTIVE DATE.
        Unless otherwise provided, the provisions of this subtitle shall
    take effect on the later of 360 days after the date of the enactment of
    this subtitle or, to the extent a provision of this subtitle requires a
    rulemaking, not less than 60 days after publication of the final rule
    or regulation implementing such provision of this subtitle.

           TITLE VIII--PAYMENT, CLEARING, AND SETTLEMENT SUPERVISION

        SEC. 801. SHORT TITLE.
        This title may be cited as the ``Payment, Clearing, and Settlement
    Supervision Act of 2010''.
        SEC. 802. FINDINGS AND PURPOSES.
        (a) Findings.--Congress finds the following:
            (1) The proper functioning of the financial markets is
        dependent upon safe and efficient arrangements for the clearing and
        settlement of payment, securities, and other financial
        transactions.
            (2) Financial market utilities that conduct or support
        multilateral payment, clearing, or settlement activities may reduce
        risks for their participants and the broader financial system, but
        such utilities may also concentrate and create new risks and thus
        must be well designed and operated in a safe and sound manner.
            (3) Payment, clearing, and settlement activities conducted by
        financial institutions also present important risks to the
        participating financial institutions and to the financial system.
            (4) Enhancements to the regulation and supervision of
        systemically important financial market utilities and the conduct
        of systemically important payment, clearing, and settlement
        activities by financial institutions are necessary--
                (A) to provide consistency;
                (B) to promote robust risk management and safety and
            soundness;
                (C) to reduce systemic risks; and
                (D) to support the stability of the broader financial
            system.
        (b) Purpose.--The purpose of this title is to mitigate systemic
    risk in the financial system and promote financial stability by--
            (1) authorizing the Board of Governors to promote uniform
        standards for the--
                (A) management of risks by systemically important financial
            market utilities; and
                (B) conduct of systemically important payment, clearing,
            and settlement activities by financial institutions;
            (2) providing the Board of Governors an enhanced role in the
        supervision of risk management standards for systemically important
        financial market utilities;
            (3) strengthening the liquidity of systemically important
        financial market utilities; and
            (4) providing the Board of Governors an enhanced role in the
        supervision of risk management standards for systemically important
        payment, clearing, and settlement activities by financial
        institutions.
        SEC. 803. DEFINITIONS.
        In this title, the following definitions shall apply:
            (1) Appropriate financial regulator.--The term ``appropriate
        financial regulator'' means--
                (A) the primary financial regulatory agency, as defined in
            section 2 of this Act;
                (B) 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.); and
                (C) the Board of Governors, with respect to organizations
            operating under section 25A of the Federal Reserve Act (12
            U.S.C. 611), and any other financial institution engaged in a
            designated activity.
            (2) Designated activity.--The term ``designated activity''
        means a payment, clearing, or settlement activity that the Council
        has designated as systemically important under section 804.
            (3) Designated clearing entity.--The term ``designated clearing
        entity'' means a designated financial market utility that is a
        derivatives clearing organization registered under section 5b of
        the Commodity Exchange Act (7 U.S.C. 7a-1) or a clearing agency
        registered with the Securities and Exchange Commission under
        section 17A of the Securities Exchange Act of 1934 (15 U.S.C. 78q-
        1).
            (4) Designated financial market utility.--The term ``designated
        financial market utility'' means a financial market utility that
        the Council has designated as systemically important under section
        804.
            (5) Financial institution.--
                (A) In general.--The term ``financial institution'' means--
                    (i) a depository institution, as defined in section 3
                of the Federal Deposit Insurance Act (12 U.S.C. 1813);
                    (ii) a branch or agency of a foreign bank, as defined
                in section 1(b) of the International Banking Act of 1978
                (12 U.S.C. 3101);
                    (iii) an organization operating under section 25 or 25A
                of the Federal Reserve Act (12 U.S.C. 601-604a and 611
                through 631);
                    (iv) a credit union, as defined in section 101 of the
                Federal Credit Union Act (12 U.S.C. 1752);
                    (v) a broker or dealer, as defined in section 3 of the
                Securities Exchange Act of 1934 (15 U.S.C. 78c);
                    (vi) an investment company, as defined in section 3 of
                the Investment Company Act of 1940 (15 U.S.C. 80a-3);
                    (vii) an insurance company, as defined in section 2 of
                the Investment Company Act of 1940 (15 U.S.C. 80a-2);
                    (viii) an investment adviser, as defined in section 202
                of the Investment Advisers Act of 1940 (15 U.S.C. 80b-2);
                    (ix) a futures commission merchant, commodity trading
                advisor, or commodity pool operator, as defined in section
                1a of the Commodity Exchange Act (7 U.S.C. 1a); and
                    (x) any company engaged in activities that are
                financial in nature or incidental to a financial activity,
                as described in section 4 of the Bank Holding Company Act
                of 1956 (12 U.S.C. 1843(k)).
                (B) Exclusions.--The term ``financial institution'' does
            not include designated contract markets, registered futures
            associations, swap data repositories, and swap execution
            facilities registered under the Commodity Exchange Act (7
            U.S.C. 1 et seq.), or national securities exchanges, national
            securities associations, alternative trading systems,
            securities information processors solely with respect to the
            activities of the entity as a securities information processor,
            security-based swap data repositories, and swap execution
            facilities registered under the Securities Exchange Act of 1934
            (15 U.S.C. 78a et seq.), or designated clearing entities,
            provided that the exclusions in this subparagraph apply only
            with respect to the activities that require the entity to be so
            registered.
            (6) Financial market utility.--
                (A) Inclusion.--The term ``financial market utility'' means
            any person that manages or operates a multilateral system for
            the purpose of transferring, clearing, or settling payments,
            securities, or other financial transactions among financial
            institutions or between financial institutions and the person.
                (B) Exclusions.--The term ``financial market utility'' does
            not include--
                    (i) designated contract markets, registered futures
                associations, swap data repositories, and swap execution
                facilities registered under the Commodity Exchange Act (7
                U.S.C. 1 et seq.), or national securities exchanges,
                national securities associations, alternative trading
                systems, security-based swap data repositories, and swap
                execution facilities registered under the Securities
                Exchange Act of 1934 (15 U.S.C. 78a et seq.), solely by
                reason of their providing facilities for comparison of data
                respecting the terms of settlement of securities or futures
                transactions effected on such exchange or by means of any
                electronic system operated or controlled by such entities,
                provided that the exclusions in this clause apply only with
                respect to the activities that require the entity to be so
                registered; and
                    (ii) any broker, dealer, transfer agent, or investment
                company, or any futures commission merchant, introducing
                broker, commodity trading advisor, or commodity pool
                operator, solely by reason of functions performed by such
                institution as part of brokerage, dealing, transfer agency,
                or investment company activities, or solely by reason of
                acting on behalf of a financial market utility or a
                participant therein in connection with the furnishing by
                the financial market utility of services to its
                participants or the use of services of the financial market
                utility by its participants, provided that services
                performed by such institution do not constitute critical
                risk management or processing functions of the financial
                market utility.
            (7) Payment, clearing, or settlement activity.--
                (A) In general.--The term ``payment, clearing, or
            settlement activity'' means an activity carried out by 1 or
            more financial institutions to facilitate the completion of
            financial transactions, but shall not include any offer or sale
            of a security under the Securities Act of 1933 (15 U.S.C. 77a
            et seq.), or any quotation, order entry, negotiation, or other
            pre-trade activity or execution activity.
                (B) Financial transaction.--For the purposes of
            subparagraph (A), the term ``financial transaction'' includes--
                    (i) funds transfers;
                    (ii) securities contracts;
                    (iii) contracts of sale of a commodity for future
                delivery;
                    (iv) forward contracts;
                    (v) repurchase agreements;
                    (vi) swaps;
                    (vii) security-based swaps;
                    (viii) swap agreements;
                    (ix) security-based swap agreements;
                    (x) foreign exchange contracts;
                    (xi) financial derivatives contracts; and
                    (xii) any similar transaction that the Council
                determines to be a financial transaction for purposes of
                this title.
                (C) Included activities.--When conducted with respect to a
            financial transaction, payment, clearing, and settlement
            activities may include--
                    (i) the calculation and communication of unsettled
                financial transactions between counterparties;
                    (ii) the netting of transactions;
                    (iii) provision and maintenance of trade, contract, or
                instrument information;
                    (iv) the management of risks and activities associated
                with continuing financial transactions;
                    (v) transmittal and storage of payment instructions;
                    (vi) the movement of funds;
                    (vii) the final settlement of financial transactions;
                and
                    (viii) other similar functions that the Council may
                determine.
                (D) Exclusion.--Payment, clearing, and settlement
            activities shall not include public reporting of swap
            transaction data under section 727 or 763(i) of the Wall Street
            Transparency and Accountability Act of 2010.
            (8) Supervisory agency.--
                (A) In general.--The term ``Supervisory Agency'' means the
            Federal agency that has primary jurisdiction over a designated
            financial market utility under Federal banking, securities, or
            commodity futures laws, as follows:
                    (i) The Securities and Exchange Commission, with
                respect to a designated financial market utility that is a
                clearing agency registered with the Securities and Exchange
                Commission.
                    (ii) The Commodity Futures Trading Commission, with
                respect to a designated financial market utility that is a
                derivatives clearing organization registered with the
                Commodity Futures Trading Commission.
                    (iii) The appropriate Federal banking agency, with
                respect to a designated financial market utility that is an
                institution described in section 3(q) of the Federal
                Deposit Insurance Act.
                    (iv) The Board of Governors, with respect to a
                designated financial market utility that is otherwise not
                subject to the jurisdiction of any agency listed in clauses
                (i), (ii), and (iii).
                (B) Multiple agency jurisdiction.--If a designated
            financial market utility is subject to the jurisdictional
            supervision of more than 1 agency listed in subparagraph (A),
            then such agencies should agree on 1 agency to act as the
            Supervisory Agency, and if such agencies cannot agree on which
            agency has primary jurisdiction, the Council shall decide which
            agency is the Supervisory Agency for purposes of this title.
            (9) Systemically important and systemic importance.--The terms
        ``systemically important'' and ``systemic importance'' mean a
        situation where the failure of or a disruption to the functioning
        of a financial market utility or the conduct of a payment,
        clearing, or settlement activity could create, or increase, the
        risk of significant liquidity or credit problems spreading among
        financial institutions or markets and thereby threaten the
        stability of the financial system of the United States.
        SEC. 804. DESIGNATION OF SYSTEMIC IMPORTANCE.
        (a) Designation.--
            (1) Financial stability oversight council.--The Council, on a
        nondelegable basis and by a vote of not fewer than \2/3\ of members
        then serving, including an affirmative vote by the Chairperson of
        the Council, shall designate those financial market utilities or
        payment, clearing, or settlement activities that the Council
        determines are, or are likely to become, systemically important.
            (2) Considerations.--In determining whether a financial market
        utility or payment, clearing, or settlement activity is, or is
        likely to become, systemically important, the Council shall take
        into consideration the following:
                (A) The aggregate monetary value of transactions processed
            by the financial market utility or carried out through the
            payment, clearing, or settlement activity.
                (B) The aggregate exposure of the financial market utility
            or a financial institution engaged in payment, clearing, or
            settlement activities to its counterparties.
                (C) The relationship, interdependencies, or other
            interactions of the financial market utility or payment,
            clearing, or settlement activity with other financial market
            utilities or payment, clearing, or settlement activities.
                (D) The effect that the failure of or a disruption to the
            financial market utility or payment, clearing, or settlement
            activity would have on critical markets, financial
            institutions, or the broader financial system.
                (E) Any other factors that the Council deems appropriate.
        (b) Rescission of Designation.--
            (1) In general.--The Council, on a nondelegable basis and by a
        vote of not fewer than \2/3\ of members then serving, including an
        affirmative vote by the Chairperson of the Council, shall rescind a
        designation of systemic importance for a designated financial
        market utility or designated activity if the Council determines
        that the utility or activity no longer meets the standards for
        systemic importance.
            (2) Effect of rescission.--Upon rescission, the financial
        market utility or financial institutions conducting the activity
        will no longer be subject to the provisions of this title or any
        rules or orders prescribed under this title.
        (c) Consultation and Notice and Opportunity for Hearing.--
            (1) Consultation.--Before making any determination under
        subsection (a) or (b), the Council shall consult with the relevant
        Supervisory Agency and the Board of Governors.
            (2) Advance notice and opportunity for hearing.--
                (A) In general.--Before making any determination under
            subsection (a) or (b), the Council shall provide the financial
            market utility or, in the case of a payment, clearing, or
            settlement activity, financial institutions with advance notice
            of the proposed determination of the Council.
                (B) Notice in federal register.--The Council shall provide
            such advance notice to financial institutions by publishing a
            notice in the Federal Register.
                (C) Requests for hearing.--Within 30 days from the date of
            any notice of the proposed determination of the Council, the
            financial market utility or, in the case of a payment,
            clearing, or settlement activity, a financial institution
            engaged in the designated activity may request, in writing, an
            opportunity for a written or oral hearing before the Council to
            demonstrate that the proposed designation or rescission of
            designation is not supported by substantial evidence.
                (D) Written submissions.--Upon receipt of a timely request,
            the Council shall fix a time, not more than 30 days after
            receipt of the request, unless extended at the request of the
            financial market utility or financial institution, and place at
            which the financial market utility or financial institution may
            appear, personally or through counsel, to submit written
            materials, or, at the sole discretion of the Council, oral
            testimony or oral argument.
            (3) Emergency exception.--
                (A) Waiver or modification by vote of the council.--The
            Council may waive or modify the requirements of paragraph (2)
            if the Council determines, by an affirmative vote of not fewer
            than \2/3\ of members then serving, including an affirmative
            vote by the Chairperson of the Council, that the waiver or
            modification is necessary to prevent or mitigate an immediate
            threat to the financial system posed by the financial market
            utility or the payment, clearing, or settlement activity.
                (B) Notice of waiver or modification.--The Council shall
            provide notice of the waiver or modification to the financial
            market utility concerned or, in the case of a payment,
            clearing, or settlement activity, to financial institutions, as
            soon as practicable, which shall be no later than 24 hours
            after the waiver or modification in the case of a financial
            market utility and 3 business days in the case of financial
            institutions. The Council shall provide the notice to financial
            institutions by posting a notice on the website of the Council
            and by publishing a notice in the Federal Register.
        (d) Notification of Final Determination.--
            (1) After hearing.--Within 60 days of any hearing under
        subsection (c)(2), the Council shall notify the financial market
        utility or financial institutions of the final determination of the
        Council in writing, which shall include findings of fact upon which
        the determination of the Council is based.
            (2) When no hearing requested.--If the Council does not receive
        a timely request for a hearing under subsection (c)(2), the Council
        shall notify the financial market utility or financial institutions
        of the final determination of the Council in writing not later than
        30 days after the expiration of the date by which a financial
        market utility or a financial institution could have requested a
        hearing. All notices to financial institutions under this
        subsection shall be published in the Federal Register.
        (e) Extension of Time Periods.--The Council may extend the time
    periods established in subsections (c) and (d) as the Council
    determines to be necessary or appropriate.
        SEC. 805. STANDARDS FOR SYSTEMICALLY IMPORTANT FINANCIAL MARKET
          UTILITIES AND PAYMENT, CLEARING, OR SETTLEMENT ACTIVITIES.
        (a) Authority to Prescribe Standards.--
            (1) Board of governors.--Except as provided in paragraph (2),
        the Board of Governors, by rule or order, and in consultation with
        the Council and the Supervisory Agencies, shall prescribe risk
        management standards, taking into consideration relevant
        international standards and existing prudential requirements,
        governing--
                (A) the operations related to the payment, clearing, and
            settlement activities of designated financial market utilities;
            and
                (B) the conduct of designated activities by financial
            institutions.
            (2) Special procedures for designated clearing entities and
        designated activities of certain financial institutions.--
                (A) CFTC and commission.--The Commodity Futures Trading
            Commission and the Commission may each prescribe regulations,
            in consultation with the Council and the Board of Governors,
            containing risk management standards, taking into consideration
            relevant international standards and existing prudential
            requirements, for those designated clearing entities and
            financial institutions engaged in designated activities for
            which each is the Supervisory Agency or the appropriate
            financial regulator, governing--
                    (i) the operations related to payment, clearing, and
                settlement activities of such designated clearing entities;
                and
                    (ii) the conduct of designated activities by such
                financial institutions.
                (B) Review and determination.--The Board of Governors may
            determine that existing prudential requirements of the
            Commodity Futures Trading Commission, the Commission, or both
            (including requirements prescribed pursuant to subparagraph
            (A)) with respect to designated clearing entities and financial
            institutions engaged in designated activities for which the
            Commission or the Commodity Futures Trading Commission is the
            Supervisory Agency or the appropriate financial regulator are
            insufficient to prevent or mitigate significant liquidity,
            credit, operational, or other risks to the financial markets or
            to the financial stability of the United States.
                (C) Written determination.--Any determination by the Board
            of Governors under subparagraph (B) shall be provided in
            writing to the Commodity Futures Trading Commission or the
            Commission, as applicable, and the Council, and shall explain
            why existing prudential requirements, considered as a whole,
            are insufficient to ensure that the operations and activities
            of the designated clearing entities or the activities of
            financial institutions described in subparagraph (B) will not
            pose significant liquidity, credit, operational, or other risks
            to the financial markets or to the financial stability of the
            United States. The Board of Governors' determination shall
            contain a detailed analysis supporting its findings and
            identify the specific prudential requirements that are
            insufficient.
                (D) CFTC and commission response.--The Commodity Futures
            Trading Commission or the Commission, as applicable, shall
            within 60 days either object to the Board of Governors'
            determination with a detailed analysis as to why existing
            prudential requirements are sufficient, or submit an
            explanation to the Council and the Board of Governors
            describing the actions to be taken in response to the Board of
            Governors' determination.
                (E) Authorization.--Upon an affirmative vote by not fewer
            than 2/3 of members then serving on the Council, the Council
            shall either find that the response submitted under
            subparagraph (D) is sufficient, or require the Commodity
            Futures Trading Commission, or the Commission, as applicable,
            to prescribe such risk management standards as the Council
            determines is necessary to address the specific prudential
            requirements that are determined to be insufficient.''
        (b) Objectives and Principles.--The objectives and principles for
    the risk management standards prescribed under subsection (a) shall be
    to--
            (1) promote robust risk management;
            (2) promote safety and soundness;
            (3) reduce systemic risks; and
            (4) support the stability of the broader financial system.
        (c) Scope.--The standards prescribed under subsection (a) may
    address areas such as--
            (1) risk management policies and procedures;
            (2) margin and collateral requirements;
            (3) participant or counterparty default policies and
        procedures;
            (4) the ability to complete timely clearing and settlement of
        financial transactions;
            (5) capital and financial resource requirements for designated
        financial market utilities; and
            (6) other areas that are necessary to achieve the objectives
        and principles in subsection (b).
        (d) Limitation on Scope.--Except as provided in subsections (e) and
    (f) of section 807, nothing in this title shall be construed to permit
    the Council or the Board of Governors to take any action or exercise
    any authority granted to the Commodity Futures Trading Commission under
    section 2(h) of the Commodity Exchange Act or the Securities and
    Exchange Commission under section 3C(a) of the Securities Exchange Act
    of 1934, including--
            (1) the approval of, disapproval of, or stay of the clearing
        requirement for any group, category, type, or class of swaps that a
        designated clearing entity may accept for clearing;
            (2) the determination that any group, category, type, or class
        of swaps shall be subject to the mandatory clearing requirement of
        section 2(h)(1) of the Commodity Exchange Act or section 3C(a)(1)
        of the Securities Exchange Act of 1934;
            (3) the determination that any person is exempt from the
        mandatory clearing requirement of section 2(h)(1) of the Commodity
        Exchange Act or section 3C(a)(1) of the Securities Exchange Act of
        1934; or
            (4) any authority granted to the Commodity Futures Trading
        Commission or the Securities and Exchange Commission with respect
        to transaction reporting or trade execution.
        (e) Threshold Level.--The standards prescribed under subsection (a)
    governing the conduct of designated activities by financial
    institutions shall, where appropriate, establish a threshold as to the
    level or significance of engagement in the activity at which a
    financial institution will become subject to the standards with respect
    to that activity.
        (f) Compliance Required.--Designated financial market utilities and
    financial institutions subject to the standards prescribed under
    subsection (a) for a designated activity shall conduct their operations
    in compliance with the applicable risk management standards.
        SEC. 806. OPERATIONS OF DESIGNATED FINANCIAL MARKET UTILITIES.
        (a) Federal Reserve Account and Services.--The Board of Governors
    may authorize a Federal Reserve Bank to establish and maintain an
    account for a designated financial market utility and provide the
    services listed in section 11A(b) of the Federal Reserve Act (12 U.S.C.
    248a(b)) and deposit accounts under the first undesignated paragraph of
    section 13 of the Federal Reserve Act (12 U.S.C. 342) to the designated
    financial market utility that the Federal Reserve Bank is authorized
    under the Federal Reserve Act to provide to a depository institution,
    subject to any applicable rules, orders, standards, or guidelines
    prescribed by the Board of Governors.
        (b) Advances.--The Board of Governors may authorize a Federal
    Reserve bank under section 10B of the Federal Reserve Act (12 U.S.C.
    347b) to provide to a designated financial market utility discount and
    borrowing privileges only in unusual or exigent circumstances, upon the
    affirmative vote of a majority of the Board of Governors then serving
    (or such other number in accordance with the provisions of section
    11(r)(2) of the Federal Reserve Act (12 U.S.C. 248(r)(2)) after
    consultation with the Secretary, and upon a showing by the designated
    financial market utility that it is unable to secure adequate credit
    accommodations from other banking institutions. All such discounts and
    borrowing privileges shall be subject to such other limitations,
    restrictions, and regulations as the Board of Governors may prescribe.
    Access to discount and borrowing privileges under section 10B of the
    Federal Reserve Act as authorized in this section does not require a
    designated financial market utility to be or become a bank or bank
    holding company.
        (c) Earnings on Federal Reserve Balances.--A Federal Reserve Bank
    may pay earnings on balances maintained by or on behalf of a designated
    financial market utility in the same manner and to the same extent as
    the Federal Reserve Bank may pay earnings to a depository institution
    under the Federal Reserve Act, subject to any applicable rules, orders,
    standards, or guidelines prescribed by the Board of Governors.
        (d) Reserve Requirements.--The Board of Governors may exempt a
    designated financial market utility from, or modify any, reserve
    requirements under section 19 of the Federal Reserve Act (12 U.S.C.
    461) applicable to a designated financial market utility.
        (e) Changes to Rules, Procedures, or Operations.--
            (1) Advance notice.--
                (A) Advance notice of proposed changes required.--A
            designated financial market utility shall provide notice 60
            days in advance notice to its Supervisory Agency of any
            proposed change to its rules, procedures, or operations that
            could, as defined in rules of each Supervisory Agency,
            materially affect, the nature or level of risks presented by
            the designated financial market utility.
                (B) Terms and standards prescribed by the supervisory
            agencies.--Each Supervisory Agency, in consultation with the
            Board of Governors, shall prescribe regulations that define and
            describe the standards for determining when notice is required
            to be provided under subparagraph (A).
                (C) Contents of notice.--The notice of a proposed change
            shall describe--
                    (i) the nature of the change and expected effects on
                risks to the designated financial market utility, its
                participants, or the market; and
                    (ii) how the designated financial market utility plans
                to manage any identified risks.
                (D) Additional information.--The Supervisory Agency may
            require a designated financial market utility to provide any
            information necessary to assess the effect the proposed change
            would have on the nature or level of risks associated with the
            designated financial market utility's payment, clearing, or
            settlement activities and the sufficiency of any proposed risk
            management techniques.
                (E) Notice of objection.--The Supervisory Agency shall
            notify the designated financial market utility of any objection
            regarding the proposed change within 60 days from the later
            of--
                    (i) the date that the notice of the proposed change is
                received; or
                    (ii) the date any further information requested for
                consideration of the notice is received.
                (F) Change not allowed if objection.--A designated
            financial market utility shall not implement a change to which
            the Supervisory Agency has an objection.
                (G) Change allowed if no objection within 60 days.--A
            designated financial market utility may implement a change if
            it has not received an objection to the proposed change within
            60 days of the later of--
                    (i) the date that the Supervisory Agency receives the
                notice of proposed change; or
                    (ii) the date the Supervisory Agency receives any
                further information it requests for consideration of the
                notice.
                (H) Review extension for novel or complex issues.--The
            Supervisory Agency may, during the 60-day review period, extend
            the review period for an additional 60 days for proposed
            changes that raise novel or complex issues, subject to the
            Supervisory Agency providing the designated financial market
            utility with prompt written notice of the extension. Any
            extension under this subparagraph will extend the time periods
            under subparagraphs (E) and (G).
                (I) Change allowed earlier if notified of no objection.--A
            designated financial market utility may implement a change in
            less than 60 days from the date of receipt of the notice of
            proposed change by the Supervisory Agency, or the date the
            Supervisory Agency receives any further information it
            requested, if the Supervisory Agency notifies the designated
            financial market utility in writing that it does not object to
            the proposed change and authorizes the designated financial
            market utility to implement the change on an earlier date,
            subject to any conditions imposed by the Supervisory Agency.
            (2) Emergency changes.--
                (A) In general.--A designated financial market utility may
            implement a change that would otherwise require advance notice
            under this subsection if it determines that--
                    (i) an emergency exists; and
                    (ii) immediate implementation of the change is
                necessary for the designated financial market utility to
                continue to provide its services in a safe and sound
                manner.
                (B) Notice required within 24 hours.--The designated
            financial market utility shall provide notice of any such
            emergency change to its Supervisory Agency, as soon as
            practicable, which shall be no later than 24 hours after
            implementation of the change.
                (C) Contents of emergency notice.--In addition to the
            information required for changes requiring advance notice, the
            notice of an emergency change shall describe--
                    (i) the nature of the emergency; and
                    (ii) the reason the change was necessary for the
                designated financial market utility to continue to provide
                its services in a safe and sound manner.
                (D) Modification or rescission of change may be required.--
            The Supervisory Agency may require modification or rescission
            of the change if it finds that the change is not consistent
            with the purposes of this Act or any applicable rules, orders,
            or standards prescribed under section 805(a).
            (3) Copying the board of governors.--The Supervisory Agency
        shall provide the Board of Governors concurrently with a complete
        copy of any notice, request, or other information it issues,
        submits, or receives under this subsection.
            (4) Consultation with board of governors.--Before taking any
        action on, or completing its review of, a change proposed by a
        designated financial market utility, the Supervisory Agency shall
        consult with the Board of Governors.
        SEC. 807. EXAMINATION OF AND ENFORCEMENT ACTIONS AGAINST DESIGNATED
          FINANCIAL MARKET UTILITIES.
        (a) Examination.--Notwithstanding any other provision of law and
    subject to subsection (d), the Supervisory Agency shall conduct
    examinations of a designated financial market utility at least once
    annually in order to determine the following:
            (1) The nature of the operations of, and the risks borne by,
        the designated financial market utility.
            (2) The financial and operational risks presented by the
        designated financial market utility to financial institutions,
        critical markets, or the broader financial system.
            (3) The resources and capabilities of the designated financial
        market utility to monitor and control such risks.
            (4) The safety and soundness of the designated financial market
        utility.
            (5) The designated financial market utility's compliance with--
                (A) this title; and
                (B) the rules and orders prescribed under this title.
        (b) Service Providers.--Whenever a service integral to the
    operation of a designated financial market utility is performed for the
    designated financial market utility by another entity, whether an
    affiliate or non-affiliate and whether on or off the premises of the
    designated financial market utility, the Supervisory Agency may examine
    whether the provision of that service is in compliance with applicable
    law, rules, orders, and standards to the same extent as if the
    designated financial market utility were performing the service on its
    own premises.
        (c) Enforcement.--For purposes of enforcing the provisions of this
    title, a designated financial market utility shall be subject to, and
    the appropriate Supervisory Agency shall have authority under the
    provisions of subsections (b) through (n) of section 8 of the Federal
    Deposit Insurance Act (12 U.S.C. 1818) in the same manner and to the
    same extent as if the designated financial market utility was an
    insured depository institution and the Supervisory Agency was the
    appropriate Federal banking agency for such insured depository
    institution.
        (d) Board of Governors Involvement in Examinations.--
            (1) Board of governors consultation on examination planning.--
        The Supervisory Agency shall consult annually with the Board of
        Governors regarding the scope and methodology of any examination
        conducted under subsections (a) and (b). The Supervisory Agency
        shall lead all examinations conducted under subsections (a) and (b)
            (2) Board of governors participation in examination.--The Board
        of Governors may, in its discretion, participate in any examination
        led by a Supervisory Agency and conducted under subsections (a) and
        (b).
        (e) Board of Governors Enforcement Recommendations.--
            (1) Recommendation.--The Board of Governors may, after
        consulting with the Council and the Supervisory Agency, at any time
        recommend to the Supervisory Agency that such agency take
        enforcement action against a designated financial market utility in
        order to prevent or mitigate significant liquidity, credit,
        operational, or other risks to the financial markets or to the
        financial stability of the United States. Any such recommendation
        for enforcement action shall provide a detailed analysis supporting
        the recommendation of the Board of Governors.
            (2) Consideration.--The Supervisory Agency shall consider the
        recommendation of the Board of Governors and submit a response to
        the Board of Governors within 60 days.
            (3) Binding arbitration.--If the Supervisory Agency rejects, in
        whole or in part, the recommendation of the Board of Governors, the
        Board of Governors may refer the recommendation to the Council for
        a binding decision on whether an enforcement action is warranted.
            (4) Enforcement action.--Upon an affirmative vote by a majority
        of the Council in favor of the Board of Governors' recommendation
        under paragraph (3), the Council may require the Supervisory Agency
        to--
                (A) exercise the enforcement authority referenced in
            subsection (c); and
                (B) take enforcement action against the designated
            financial market utility.
        (f) Emergency Enforcement Actions by the Board of Governors.--
            (1) Imminent risk of substantial harm.--The Board of Governors
        may, after consulting with the Supervisory Agency and upon an
        affirmative vote by a majority the Council, take enforcement action
        against a designated financial market utility if the Board of
        Governors has reasonable cause to conclude that--
                (A) either--
                    (i) an action engaged in, or contemplated by, a
                designated financial market utility (including any change
                proposed by the designated financial market utility to its
                rules, procedures, or operations that would otherwise be
                subject to section 806(e)) poses an imminent risk of
                substantial harm to financial institutions, critical
                markets, or the broader financial system of the United
                States; or
                    (ii) the condition of a designated financial market
                utility poses an imminent risk of substantial harm to
                financial institutions, critical markets, or the broader
                financial system; and
                (B) the imminent risk of substantial harm precludes the
            Board of Governors' use of the procedures in subsection (e).
            (2) Enforcement authority.--For purposes of taking enforcement
        action under paragraph (1), a designated financial market utility
        shall be subject to, and the Board of Governors shall have
        authority under the provisions of subsections (b) through (n) of
        section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818) in
        the same manner and to the same extent as if the designated
        financial market utility was an insured depository institution and
        the Board of Governors was the appropriate Federal banking agency
        for such insured depository institution.
        SEC. 808. EXAMINATION OF AND ENFORCEMENT ACTIONS AGAINST FINANCIAL
          INSTITUTIONS SUBJECT TO STANDARDS FOR DESIGNATED ACTIVITIES.
        (a) Examination.--The appropriate financial regulator is authorized
    to examine a financial institution subject to the standards prescribed
    under section 805(a) for a designated activity in order to determine
    the following:
            (1) The nature and scope of the designated activities engaged
        in by the financial institution.
            (2) The financial and operational risks the designated
        activities engaged in by the financial institution may pose to the
        safety and soundness of the financial institution.
            (3) The financial and operational risks the designated
        activities engaged in by the financial institution may pose to
        other financial institutions, critical markets, or the broader
        financial system.
            (4) The resources available to and the capabilities of the
        financial institution to monitor and control the risks described in
        paragraphs (2) and (3).
            (5) The financial institution's compliance with this title and
        the rules and orders prescribed under section 805(a).
        (b) Enforcement.--For purposes of enforcing the provisions of this
    title, and the rules and orders prescribed under this section, a
    financial institution subject to the standards prescribed under section
    805(a) for a designated activity shall be subject to, and the
    appropriate financial regulator shall have authority under the
    provisions of subsections (b) through (n) of section 8 of the Federal
    Deposit Insurance Act (12 U.S.C. 1818) in the same manner and to the
    same extent as if the financial institution was an insured depository
    institution and the appropriate financial regulator was the appropriate
    Federal banking agency for such insured depository institution.
        (c) Technical Assistance.--The Board of Governors shall consult
    with and provide such technical assistance as may be required by the
    appropriate financial regulators to ensure that the rules and orders
    prescribed under this title are interpreted and applied in as
    consistent and uniform a manner as practicable.
        (d) Delegation.--
            (1) Examination.--
                (A) Request to board of governors.--The appropriate
            financial regulator may request the Board of Governors to
            conduct or participate in an examination of a financial
            institution subject to the standards prescribed under section
            805(a) for a designated activity in order to assess the
            compliance of such financial institution with--
                    (i) this title; or
                    (ii) the rules or orders prescribed under this title.
                (B) Examination by board of governors.--Upon receipt of an
            appropriate written request, the Board of Governors will
            conduct the examination under such terms and conditions to
            which the Board of Governors and the appropriate financial
            regulator mutually agree.
            (2) Enforcement.--
                (A) Request to board of governors.--The appropriate
            financial regulator may request the Board of Governors to
            enforce this title or the rules or orders prescribed under this
            title against a financial institution that is subject to the
            standards prescribed under section 805(a) for a designated
            activity.
                (B) Enforcement by board of governors.--Upon receipt of an
            appropriate written request, the Board of Governors shall
            determine whether an enforcement action is warranted, and, if
            so, it shall enforce compliance with this title or the rules or
            orders prescribed under this title and, if so, the financial
            institution shall be subject to, and the Board of Governors
            shall have authority under the provisions of subsections (b)
            through (n) of section 8 of the Federal Deposit Insurance Act
            (12 U.S.C. 1818) in the same manner and to the same extent as
            if the financial institution was an insured depository
            institution and the Board of Governors was the appropriate
            Federal banking agency for such insured depository institution.
        (e) Back-up Authority of the Board of Governors.--
            (1) Examination and enforcement.--Notwithstanding any other
        provision of law, the Board of Governors may--
                (A) conduct an examination of the type described in
            subsection (a) of any financial institution that is subject to
            the standards prescribed under section 805(a) for a designated
            activity; and
                (B) enforce the provisions of this title or any rules or
            orders prescribed under this title against any financial
            institution that is subject to the standards prescribed under
            section 805(a) for a designated activity.
            (2) Limitations.--
                (A) Examination.--The Board of Governors may exercise the
            authority described in paragraph (1)(A) only if the Board of
            Governors has--
                    (i) reasonable cause to believe that a financial
                institution is not in compliance with this title or the
                rules or orders prescribed under this title with respect to
                a designated activity;
                    (ii) notified, in writing, the appropriate financial
                regulator and the Council of its belief under clause (i)
                with supporting documentation included;
                    (iii) requested the appropriate financial regulator to
                conduct a prompt examination of the financial institution;
                    (iv) either--

                        (I) not been afforded a reasonable opportunity to
                    participate in an examination of the financial
                    institution by the appropriate financial regulator
                    within 30 days after the date of the Board's
                    notification under clause (ii); or
                        (II) reasonable cause to believe that the financial
                    institution's noncompliance with this title or the
                    rules or orders prescribed under this title poses a
                    substantial risk to other financial institutions,
                    critical markets, or the broader financial system,
                    subject to the Board of Governors affording the
                    appropriate financial regulator a reasonable
                    opportunity to participate in the examination; and

                    (v) obtained the approval of the Council upon an
                affirmative vote by a majority of the Council.
                (B) Enforcement.--The Board of Governors may exercise the
            authority described in paragraph (1)(B) only if the Board of
            Governors has--
                    (i) reasonable cause to believe that a financial
                institution is not in compliance with this title or the
                rules or orders prescribed under this title with respect to
                a designated activity;
                    (ii) notified, in writing, the appropriate financial
                regulator and the Council of its belief under clause (i)
                with supporting documentation included and with a
                recommendation that the appropriate financial regulator
                take 1 or more specific enforcement actions against the
                financial institution;
                    (iii) either--

                        (I) not been notified, in writing, by the
                    appropriate financial regulator of the commencement of
                    an enforcement action recommended by the Board of
                    Governors against the financial institution within 60
                    days from the date of the notification under clause
                    (ii); or
                        (II) reasonable cause to believe that the financial
                    institution's noncompliance with this title or the
                    rules or orders prescribed under this title poses
                    significant liquidity, credit, operational, or other
                    risks to the financial markets or to the financial
                    stability of the United States, subject to the Board of
                    Governors notifying the appropriate financial regulator
                    of the Board's enforcement action; and

                    (iv) obtained the approval of the Council upon an
                affirmative vote by a majority of the Council.
            (3) Enforcement provisions.--For purposes of taking enforcement
        action under paragraph (1), the financial institution shall be
        subject to, and the Board of Governors shall have authority under
        the provisions of subsections (b) through (n) of section 8 of the
        Federal Deposit Insurance Act (12 U.S.C. 1818) in the same manner
        and to the same extent as if the financial institution was an
        insured depository institution and the Board of Governors was the
        appropriate Federal banking agency for such insured depository
        institution.
        SEC. 809. REQUESTS FOR INFORMATION, REPORTS, OR RECORDS.
        (a) Information To Assess Systemic Importance.--
            (1) Financial market utilities.--The Council is authorized to
        require any financial market utility to submit such information as
        the Council may require for the sole purpose of assessing whether
        that financial market utility is systemically important, but only
        if the Council has reasonable cause to believe that the financial
        market utility meets the standards for systemic importance set
        forth in section 804.
            (2) Financial institutions engaged in payment, clearing, or
        settlement activities.--The Council is authorized to require any
        financial institution to submit such information as the Council may
        require for the sole purpose of assessing whether any payment,
        clearing, or settlement activity engaged in or supported by a
        financial institution is systemically important, but only if the
        Council has reasonable cause to believe that the activity meets the
        standards for systemic importance set forth in section 804.
        (b) Reporting After Designation.--
            (1) Designated financial market utilities.--The Board of
        Governors and the Council may each require a designated financial
        market utility to submit reports or data to the Board of Governors
        and the Council in such frequency and form as deemed necessary by
        the Board of Governors or the Council in order to assess the safety
        and soundness of the utility and the systemic risk that the
        utility's operations pose to the financial system.
            (2) Financial institutions subject to standards for designated
        activities.--The Board of Governors and the Council may each
        require 1 or more financial institutions subject to the standards
        prescribed under section 805(a) for a designated activity to
        submit, in such frequency and form as deemed necessary by the Board
        of Governors or the Council, reports and data to the Board of
        Governors and the Council solely with respect to the conduct of the
        designated activity and solely to assess whether--
                (A) the rules, orders, or standards prescribed under
            section 805(a) with respect to the designated activity
            appropriately address the risks to the financial system
            presented by such activity; and
                (B) the financial institutions are in compliance with this
            title and the rules and orders prescribed under section 805(a)
            with respect to the designated activity.
            (3) Limitation.--The Board of Governors may, upon an
        affirmative vote by a majority of the Council, prescribe
        regulations under this section that impose a recordkeeping or
        reporting requirement on designated clearing entities or financial
        institutions engaged in designated activities that are subject to
        standards that have been prescribed under section 805(a)(2).
        (c) Coordination With Appropriate Federal Supervisory Agency.--
            (1) Advance coordination.--Before requesting any material
        information from, or imposing reporting or recordkeeping
        requirements on, any financial market utility or any financial
        institution engaged in a payment, clearing, or settlement activity,
        the Board of Governors or the Council shall coordinate with the
        Supervisory Agency for a financial market utility or the
        appropriate financial regulator for a financial institution to
        determine if the information is available from or may be obtained
        by the agency in the form, format, or detail required by the Board
        of Governors or the Council.
            (2) Supervisory reports.--Notwithstanding any other provision
        of law, the Supervisory Agency, the appropriate financial
        regulator, and the Board of Governors are authorized to disclose to
        each other and the Council copies of its examination reports or
        similar reports regarding any financial market utility or any
        financial institution engaged in payment, clearing, or settlement
        activities.
        (d) Timing of Response From Appropriate Federal Supervisory
    Agency.--If the information, report, records, or data requested by the
    Board of Governors or the Council under subsection (c)(1) are not
    provided in full by the Supervisory Agency or the appropriate financial
    regulator in less than 15 days after the date on which the material is
    requested, the Board of Governors or the Council may request the
    information or impose recordkeeping or reporting requirements directly
    on such persons as provided in subsections (a) and (b) with notice to
    the agency.
        (e) Sharing of Information.--
            (1) Material concerns.--Notwithstanding any other provision of
        law, the Board of Governors, the Council, the appropriate financial
        regulator, and any Supervisory Agency are authorized to--
                (A) promptly notify each other of material concerns about a
            designated financial market utility or any financial
            institution engaged in designated activities; and
                (B) share appropriate reports, information, or data
            relating to such concerns.
            (2) Other information.--Notwithstanding any other provision of
        law, the Board of Governors, the Council, the appropriate financial
        regulator, or any Supervisory Agency may, under such terms and
        conditions as it deems appropriate, provide confidential
        supervisory information and other information obtained under this
        title to each other, and to the Secretary, Federal Reserve Banks,
        State financial institution supervisory agencies, foreign financial
        supervisors, foreign central banks, and foreign finance ministries,
        subject to reasonable assurances of confidentiality, provided,
        however, that no person or entity receiving information pursuant to
        this section may disseminate such information to entities or
        persons other than those listed in this paragraph without complying
        with applicable law, including section 8 of the Commodity Exchange
        Act (7 U.S.C. 12).
        (f) Privilege Maintained.--The Board of Governors, the Council, the
    appropriate financial regulator, and any Supervisory Agency providing
    reports or data under this section shall not be deemed to have waived
    any privilege applicable to those reports or data, or any portion
    thereof, by providing the reports or data to the other party or by
    permitting the reports or data, or any copies thereof, to be used by
    the other party.
        (g) Disclosure Exemption.--Information obtained by the Board of
    Governors, the Supervisory Agencies, or the Council under this section
    and any materials prepared by the Board of Governors, the Supervisory
    Agencies, or the Council regarding their assessment of the systemic
    importance of financial market utilities or any payment, clearing, or
    settlement activities engaged in by financial institutions, and in
    connection with their supervision of designated financial market
    utilities and designated activities, shall be confidential supervisory
    information exempt from disclosure under section 552 of title 5, United
    States Code. For purposes of such section 552, this subsection shall be
    considered a statute described in subsection (b)(3) of such section
    552.
        SEC. 810. RULEMAKING.
        The Board of Governors, the Supervisory Agencies, and the Council
    are authorized to prescribe such rules and issue such orders as may be
    necessary to administer and carry out their respective authorities and
    duties granted under this title and prevent evasions thereof.
        SEC. 811. OTHER AUTHORITY.
        Unless otherwise provided by its terms, this title does not divest
    any appropriate financial regulator, any Supervisory Agency, or any
    other Federal or State agency, of any authority derived from any other
    applicable law, except that any standards prescribed by the Board of
    Governors under section 805 shall supersede any less stringent
    requirements established under other authority to the extent of any
    conflict.
        SEC. 812. CONSULTATION.
        (a) CFTC.--The Commodity Futures Trading Commission shall consult
    with the Board of Governors--
            (1) prior to exercising its authorities under sections
        2(h)(2)(C), 2(h)(3)(A), 2(h)(3)(C), 2(h)(4)(A), and 2(h)(4)(B) of
        the Commodity Exchange Act, as amended by the Wall Street
        Transparency and Accountability Act of 2010;
            (2) with respect to any rule or rule amendment of a derivatives
        clearing organization for which a stay of certification has been
        issued under section 745(b)(3) of the Wall Street Transparency and
        Accountability Act of 2010; and
            (3) prior to exercising its rulemaking authorities under
        section 728 of the Wall Street Transparency and Accountability Act
        of 2010.
        (b) SEC.--The Commission shall consult with the Board of
    Governors--
            (1) prior to exercising its authorities under sections
        3C(a)(2)(C), 3C(a)(3)(A), 3C(a)(3)(C), 3C(a)(4)(A), and 3C(a)(4)(B)
        of the Securities Exchange Act of 1934, as amended by the Wall
        Street Transparency and Accountability Act of 2010;
            (2) with respect to any proposed rule change of a clearing
        agency for which an extension of the time for review has been
        designated under section 19(b)(2) of the Securities Exchange Act of
        1934; and
            (3) prior to exercising its rulemaking authorities under
        section 13(n) of the Securities Exchange Act of 1934, as added by
        section 763(i) of the Wall Street Transparency and Accountability
        Act of 2010.
        SEC. 813. COMMON FRAMEWORK FOR DESIGNATED CLEARING ENTITY RISK
          MANAGEMENT.
        The Commodity Futures Trading Commission and the Commission shall
    coordinate with the Board of Governors to jointly develop risk
    management supervision programs for designated clearing entities. Not
    later than 1 year after the date of enactment of this Act, the
    Commodity Futures Trading Commission, the Commission, and the Board of
    Governors shall submit a joint report to the Committee on Banking,
    Housing, and Urban Affairs and the Committee on Agriculture, Nutrition,
    and Forestry of the Senate, and the Committee on Financial Services and
    the Committee on Agriculture of the House of Representatives
    recommendations for--
            (1) improving consistency in the designated clearing entity
        oversight programs of the Commission and the Commodity Futures
        Trading Commission;
            (2) promoting robust risk management by designated clearing
        entities;
            (3) promoting robust risk management oversight by regulators of
        designated clearing entities; and
            (4) improving regulators' ability to monitor the potential
        effects of designated clearing entity risk management on the
        stability of the financial system of the United States.
        SEC. 814. EFFECTIVE DATE.
        This title is effective as of the date of enactment of this Act.

     TITLE IX--INVESTOR PROTECTIONS AND IMPROVEMENTS TO THE REGULATION OF
                                   SECURITIES

        SEC. 901. SHORT TITLE.
        This title may be cited as the ``Investor Protection and Securities
    Reform Act of 2010''.

                   Subtitle A--Increasing Investor Protection

        SEC. 911. INVESTOR ADVISORY COMMITTEE ESTABLISHED.
        Title I of the Securities Exchange Act of 1934 (15 U.S.C. 78a et
    seq.) is amended by adding at the end the following:
      ``SEC. 39. INVESTOR ADVISORY COMMITTEE.
        ``(a) Establishment and Purpose.--
            ``(1) Establishment.--There is established within the
        Commission the Investor Advisory Committee (referred to in this
        section as the `Committee').
            ``(2) Purpose.--The Committee shall--
                ``(A) advise and consult with the Commission on--
                    ``(i) regulatory priorities of the Commission;
                    ``(ii) issues relating to the regulation of securities
                products, trading strategies, and fee structures, and the
                effectiveness of disclosure;
                    ``(iii) initiatives to protect investor interest; and
                    ``(iv) initiatives to promote investor confidence and
                the integrity of the securities marketplace; and
                ``(B) submit to the Commission such findings and
            recommendations as the Committee determines are appropriate,
            including recommendations for proposed legislative changes.
        ``(b) Membership.--
            ``(1) In general.--The members of the Committee shall be--
                ``(A) the Investor Advocate;
                ``(B) a representative of State securities commissions;
                ``(C) a representative of the interests of senior citizens;
            and
                ``(D) not fewer than 10, and not more than 20, members
            appointed by the Commission, from among individuals who--
                    ``(i) represent the interests of individual equity and
                debt investors, including investors in mutual funds;
                    ``(ii) represent the interests of institutional
                investors, including the interests of pension funds and
                registered investment companies;
                    ``(iii) are knowledgeable about investment issues and
                decisions; and
                    ``(iv) have reputations of integrity.
            ``(2) Term.--Each member of the Committee appointed under
        paragraph (1)(B) shall serve for a term of 4 years.
            ``(3) Members not commission employees.--Members appointed
        under paragraph (1)(B) shall not be deemed to be employees or
        agents of the Commission solely because of membership on the
        Committee.
        ``(c) Chairman; Vice Chairman; Secretary; Assistant Secretary.--
            ``(1) In general.--The members of the Committee shall elect,
        from among the members of the Committee--
                ``(A) a chairman, who may not be employed by an issuer;
                ``(B) a vice chairman, who may not be employed by an
            issuer;
                ``(C) a secretary; and
                ``(D) an assistant secretary.
            ``(2) Term.--Each member elected under paragraph (1) shall
        serve for a term of 3 years in the capacity for which the member
        was elected under paragraph (1).
        ``(d) Meetings.--
            ``(1) Frequency of meetings.--The Committee shall meet--
                ``(A) not less frequently than twice annually, at the call
            of the chairman of the Committee; and
                ``(B) from time to time, at the call of the Commission.
            ``(2) Notice.--The chairman of the Committee shall give the
        members of the Committee written notice of each meeting, not later
        than 2 weeks before the date of the meeting.
        ``(e) Compensation and Travel Expenses.--Each member of the
    Committee who is not a full-time employee of the United States shall--
            ``(1) be entitled to receive compensation at a rate not to
        exceed the daily equivalent of the annual rate of basic pay in
        effect for a position at level V of the Executive Schedule under
        section 5316 of title 5, United States Code, for each day during
        which the member is engaged in the actual performance of the duties
        of the Committee; and
            ``(2) while away from the home or regular place of business of
        the member in the performance of services for the Committee, be
        allowed travel expenses, including per diem in lieu of subsistence,
        in the same manner as persons employed intermittently in the
        Government service are allowed expenses under section 5703(b) of
        title 5, United States Code.
        ``(f) Staff.--The Commission shall make available to the Committee
    such staff as the chairman of the Committee determines are necessary to
    carry out this section.
        ``(g) Review by Commission.--The Commission shall--
            ``(1) review the findings and recommendations of the Committee;
        and
            ``(2) each time the Committee submits a finding or
        recommendation to the Commission, promptly issue a public
        statement--
                ``(A) assessing the finding or recommendation of the
            Committee; and
                ``(B) disclosing the action, if any, the Commission intends
            to take with respect to the finding or recommendation.
        ``(h) Committee Findings.--Nothing in this section shall require
    the Commission to agree to or act upon any finding or recommendation of
    the Committee.
        ``(i) Federal Advisory Committee Act.--The Federal Advisory
    Committee Act (5 U.S.C. App.) shall not apply with respect to the
    Committee and its activities.
        ``(j) Authorization of Appropriations.--There is authorized to be
    appropriated to the Commission such sums as are necessary to carry out
    this section.''.
        SEC. 912. CLARIFICATION OF AUTHORITY OF THE COMMISSION TO ENGAGE IN
          INVESTOR TESTING.
        Section 19 of the Securities Act of 1933 (15 U.S.C. 77s) is amended
    by adding at the end the following:
        ``(e) Evaluation of Rules or Programs.--For the purpose of
    evaluating any rule or program of the Commission issued or carried out
    under any provision of the securities laws, as defined in section 3 of
    the Securities Exchange Act of 1934 (15 U.S.C. 78c), and the purposes
    of considering, proposing, adopting, or engaging in any such rule or
    program or developing new rules or programs, the Commission may--
            ``(1) gather information from and communicate with investors or
        other members of the public;
            ``(2) engage in such temporary investor testing programs as the
        Commission determines are in the public interest or would protect
        investors; and
            ``(3) consult with academics and consultants, as necessary to
        carry out this subsection.
        ``(f) Rule of Construction.--For purposes of the Paperwork
    Reduction Act (44 U.S.C. 3501 et seq.), any action taken under
    subsection (e) shall not be construed to be a collection of
    information.''.
        SEC. 913. STUDY AND RULEMAKING REGARDING OBLIGATIONS OF BROKERS,
          DEALERS, AND INVESTMENT ADVISERS.
        (a) Definition.--For purposes of this section, the term ``retail
    customer'' means a natural person, or the legal representative of such
    natural person, who--
            (1) receives personalized investment advice about securities
        from a broker or dealer or investment adviser; and
            (2) uses such advice primarily for personal, family, or
        household purposes.
        (b) Study.--The Commission shall conduct a study to evaluate--
            (1) the effectiveness of existing legal or regulatory standards
        of care for brokers, dealers, investment advisers, persons
        associated with brokers or dealers, and persons associated with
        investment advisers for providing personalized investment advice
        and recommendations about securities to retail customers imposed by
        the Commission and a national securities association, and other
        Federal and State legal or regulatory standards; and
            (2) whether there are legal or regulatory gaps, shortcomings,
        or overlaps in legal or regulatory standards in the protection of
        retail customers relating to the standards of care for brokers,
        dealers, investment advisers, persons associated with brokers or
        dealers, and persons associated with investment advisers for
        providing personalized investment advice about securities to retail
        customers that should be addressed by rule or statute.
        (c) Considerations.--In conducting the study required under
    subsection (b), the Commission shall consider--
            (1) the effectiveness of existing legal or regulatory standards
        of care for brokers, dealers, investment advisers, persons
        associated with brokers or dealers, and persons associated with
        investment advisers for providing personalized investment advice
        and recommendations about securities to retail customers imposed by
        the Commission and a national securities association, and other
        Federal and State legal or regulatory standards;
            (2) whether there are legal or regulatory gaps, shortcomings,
        or overlaps in legal or regulatory standards in the protection of
        retail customers relating to the standards of care for brokers,
        dealers, investment advisers, persons associated with brokers or
        dealers, and persons associated with investment advisers for
        providing personalized investment advice about securities to retail
        customers that should be addressed by rule or statute;
            (3) whether retail customers understand that there are
        different standards of care applicable to brokers, dealers,
        investment advisers, persons associated with brokers or dealers,
        and persons associated with investment advisers in the provision of
        personalized investment advice about securities to retail
        customers;
            (4) whether the existence of different standards of care
        applicable to brokers, dealers, investment advisers, persons
        associated with brokers or dealers, and persons associated with
        investment advisers is a source of confusion for retail customers
        regarding the quality of personalized investment advice that retail
        customers receive;
            (5) the regulatory, examination, and enforcement resources
        devoted to, and activities of, the Commission, the States, and a
        national securities association to enforce the standards of care
        for brokers, dealers, investment advisers, persons associated with
        brokers or dealers, and persons associated with investment advisers
        when providing personalized investment advice and recommendations
        about securities to retail customers, including--
                (A) the effectiveness of the examinations of brokers,
            dealers, and investment advisers in determining compliance with
            regulations;
                (B) the frequency of the examinations; and
                (C) the length of time of the examinations;
            (6) the substantive differences in the regulation of brokers,
        dealers, and investment advisers, when providing personalized
        investment advice and recommendations about securities to retail
        customers;
            (7) the specific instances related to the provision of
        personalized investment advice about securities in which--
                (A) the regulation and oversight of investment advisers
            provide greater protection to retail customers than the
            regulation and oversight of brokers and dealers; and
                (B) the regulation and oversight of brokers and dealers
            provide greater protection to retail customers than the
            regulation and oversight of investment advisers;
            (8) the existing legal or regulatory standards of State
        securities regulators and other regulators intended to protect
        retail customers;
            (9) the potential impact on retail customers, including the
        potential impact on access of retail customers to the range of
        products and services offered by brokers and dealers, of imposing
        upon brokers, dealers, and persons associated with brokers or
        dealers--
                (A) the standard of care applied under the Investment
            Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.) for providing
            personalized investment advice about securities to retail
            customers of investment advisers, as interpreted by the
            Commission and the courts; and
                (B) other requirements of the Investment Advisers Act of
            1940 (15 U.S.C. 80b-1 et seq.);
            (10) the potential impact of eliminating the broker and dealer
        exclusion from the definition of ``investment adviser'' under
        section 202(a)(11)(C) of the Investment Advisers Act of 1940 (15
        U.S.C. 80b-2(a)(11)(C)), in terms of--
                (A) the impact and potential benefits and harm to retail
            customers that could result from such a change, including any
            potential impact on access to personalized investment advice
            and recommendations about securities to retail customers or the
            availability of such advice and recommendations;
                (B) the number of additional entities and individuals that
            would be required to register under, or become subject to, the
            Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.), and
            the additional requirements to which brokers, dealers, and
            persons associated with brokers and dealers would become
            subject, including--
                    (i) any potential additional associated person
                licensing, registration, and examination requirements; and
                    (ii) the additional costs, if any, to the additional
                entities and individuals; and
                (C) the impact on Commission and State resources to--
                    (i) conduct examinations of registered investment
                advisers and the representatives of registered investment
                advisers, including the impact on the examination cycle;
                and
                    (ii) enforce the standard of care and other applicable
                requirements imposed under the Investment Advisers Act of
                1940 (15 U.S.C. 80b-1 et seq.);
            (11) the varying level of services provided by brokers,
        dealers, investment advisers, persons associated with brokers or
        dealers, and persons associated with investment advisers to retail
        customers and the varying scope and terms of retail customer
        relationships of brokers, dealers, investment advisers, persons
        associated with brokers or dealers, and persons associated with
        investment advisers with such retail customers;
            (12) the potential impact upon retail customers that could
        result from potential changes in the regulatory requirements or
        legal standards of care affecting brokers, dealers, investment
        advisers, persons associated with brokers or dealers, and persons
        associated with investment advisers relating to their obligations
        to retail customers regarding the provision of investment advice,
        including any potential impact on--
                (A) protection from fraud;
                (B) access to personalized investment advice, and
            recommendations about securities to retail customers; or
                (C) the availability of such advice and recommendations;
            (13) the potential additional costs and expenses to--
                (A) retail customers regarding and the potential impact on
            the profitability of their investment decisions; and
                (B) brokers, dealers, and investment advisers resulting
            from potential changes in the regulatory requirements or legal
            standards affecting brokers, dealers, investment advisers,
            persons associated with brokers or dealers, and persons
            associated with investment advisers relating to their
            obligations, including duty of care, to retail customers; and
            (14) any other consideration that the Commission considers
        necessary and appropriate in determining whether to conduct a
        rulemaking under subsection (f).
        (d) Report.--
            (1) In general.--Not later than 6 months after the date of
        enactment of this Act, the Commission shall submit a report on the
        study required under subsection (b) to--
                (A) the Committee on Banking, Housing, and Urban Affairs of
            the Senate; and
                (B) the Committee on Financial Services of the House of
            Representatives.
            (2) Content requirements.--The report required under paragraph
        (1) shall describe the findings, conclusions, and recommendations
        of the Commission from the study required under subsection (b),
        including--
                (A) a description of the considerations, analysis, and
            public and industry input that the Commission considered, as
            required under subsection (b), to make such findings,
            conclusions, and policy recommendations; and
                (B) an analysis of whether any identified legal or
            regulatory gaps, shortcomings, or overlap in legal or
            regulatory standards in the protection of retail customers
            relating to the standards of care for brokers, dealers,
            investment advisers, persons associated with brokers or
            dealers, and persons associated with investment advisers for
            providing personalized investment advice about securities to
            retail customers.
        (e) Public Comment.--The Commission shall seek and consider public
    input, comments, and data in order to prepare the report required under
    subsection (d).
        (f) Rulemaking.--The Commission may commence a rulemaking, as
    necessary or appropriate in the public interest and for the protection
    of retail customers (and such other customers as the Commission may by
    rule provide), to address the legal or regulatory standards of care for
    brokers, dealers, investment advisers, persons associated with brokers
    or dealers, and persons associated with investment advisers for
    providing personalized investment advice about securities to such
    retail customers. The Commission shall consider the findings
    conclusions, and recommendations of the study required under subsection
    (b).
        (g) Authority to Establish a Fiduciary Duty for Brokers and
    Dealers.--
            (1) Securities exchange act of 1934.--Section 15 of the
        Securities Exchange Act of 1934 (15 U.S.C. 78o) is amended by
        adding at the end the following:
        ``(k) Standard of Conduct.--
            ``(1) In general.--Notwithstanding any other provision of this
        Act or the Investment Advisers Act of 1940, the Commission may
        promulgate rules to provide that, with respect to a broker or
        dealer, when providing personalized investment advice about
        securities to a retail customer (and such other customers as the
        Commission may by rule provide), the standard of conduct for such
        broker or dealer with respect to such customer shall be the same as
        the standard of conduct applicable to an investment adviser under
        section 211 of the Investment Advisers Act of 1940. The receipt of
        compensation based on commission or other standard compensation for
        the sale of securities shall not, in and of itself, be considered a
        violation of such standard applied to a broker or dealer. Nothing
        in this section shall require a broker or dealer or registered
        representative to have a continuing duty of care or loyalty to the
        customer after providing personalized investment advice about
        securities.
            ``(2) Disclosure of range of products offered.--Where a broker
        or dealer sells only proprietary or other limited range of
        products, as determined by the Commission, the Commission may 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).
        ``(l) Other Matters.--The Commission shall--
            ``(1) facilitate the provision of simple and clear disclosures
        to investors regarding the terms of their relationships with
        brokers, dealers, and investment advisers, including any material
        conflicts of interest; and
            ``(2) examine and, where appropriate, promulgate rules
        prohibiting or restricting certain sales practices, conflicts of
        interest, and compensation schemes for brokers, dealers, and
        investment advisers that the Commission deems contrary to the
        public interest and the protection of investors.''.
            (2) Investment advisers act of 1940.--Section 211 of the
        Investment Advisers Act of 1940, is further amended by adding at
        the end the following new subsections:
        ``(g) Standard of Conduct.--
            ``(1) In general.--The Commission may promulgate rules to
        provide that the standard of conduct for all brokers, dealers, and
        investment advisers, when providing personalized investment advice
        about securities to retail customers (and such other customers as
        the Commission may by rule provide), shall be to act in the best
        interest of the customer without regard to the financial or other
        interest of the broker, dealer, or investment adviser providing the
        advice. In accordance with such rules, any material conflicts of
        interest shall be disclosed and may be consented to by the
        customer. Such rules shall provide that such standard of conduct
        shall be no less stringent than the standard applicable to
        investment advisers under section 206(1) and (2) of this Act when
        providing personalized investment advice about securities, except
        the Commission shall not ascribe a meaning to the term `customer'
        that would include an investor in a private fund managed by an
        investment adviser, where such private fund has entered into an
        advisory contract with such adviser. The receipt of compensation
        based on commission or fees shall not, in and of itself, be
        considered a violation of such standard applied to a broker,
        dealer, or investment adviser.
            ``(2) Retail customer defined.--For purposes of this
        subsection, the term `retail customer' means a natural person, or
        the legal representative of such natural person, who--
                ``(A) receives personalized investment advice about
            securities from a broker, dealer, or investment adviser; and
                ``(B) uses such advice primarily for personal, family, or
            household purposes.
        ``(h) Other Matters.--The Commission shall--
            ``(1) facilitate the provision of simple and clear disclosures
        to investors regarding the terms of their relationships with
        brokers, dealers, and investment advisers, including any material
        conflicts of interest; and
            ``(2) examine and, where appropriate, promulgate rules
        prohibiting or restricting certain sales practices, conflicts of
        interest, and compensation schemes for brokers, dealers, and
        investment advisers that the Commission deems contrary to the
        public interest and the protection of investors.''.
        (h) Harmonization of Enforcement.--
            (1) Securities exchange act of 1934.--Section 15 of the
        Securities Exchange Act of 1934, as amended by subsection (g)(1),
        is further amended by adding at the end the following new
        subsection:
        ``(m) Harmonization of Enforcement.--The enforcement authority of
    the Commission with respect to violations of the standard of conduct
    applicable to a broker or dealer providing personalized investment
    advice about securities to a retail customer shall include--
            ``(1) the enforcement authority of the Commission with respect
        to such violations provided under this Act; and
            ``(2) the enforcement authority of the Commission with respect
        to violations of the standard of conduct applicable to an
        investment adviser under the Investment Advisers Act of 1940,
        including the authority to impose sanctions for such violations,
        and
    the Commission shall seek to prosecute and sanction violators of the
    standard of conduct applicable to a broker or dealer providing
    personalized investment advice about securities to a retail customer
    under this Act to same extent as the Commission prosecutes and
    sanctions violators of the standard of conduct applicable to an
    investment advisor under the Investment Advisers Act of 1940.''.
            (2) Investment advisers act of 1940.--Section 211 of the
        Investment Advisers Act of 1940, as amended by subsection (g)(2),
        is further amended by adding at the end the following new
        subsection:
        ``(i) Harmonization of Enforcement.--The enforcement authority of
    the Commission with respect to violations of the standard of conduct
    applicable to an investment adviser shall include--
            ``(1) the enforcement authority of the Commission with respect
        to such violations provided under this Act; and
            ``(2) the enforcement authority of the Commission with respect
        to violations of the standard of conduct applicable to a broker or
        dealer providing personalized investment advice about securities to
        a retail customer under the Securities Exchange Act of 1934,
        including the authority to impose sanctions for such violations,
        and
    the Commission shall seek to prosecute and sanction violators of the
    standard of conduct applicable to an investment adviser under this Act
    to same extent as the Commission prosecutes and sanctions violators of
    the standard of conduct applicable to a broker or dealer providing
    personalized investment advice about securities to a retail customer
    under the Securities Exchange Act of 1934.''.
        SEC. 914. STUDY ON ENHANCING INVESTMENT ADVISER EXAMINATIONS.
        (a) Study Required.--
            (1) In general.--The Commission shall review and analyze the
        need for enhanced examination and enforcement resources for
        investment advisers.
            (2) Areas of consideration.--The study required by this
        subsection shall examine--
                (A) the number and frequency of examinations of investment
            advisers by the Commission over the 5 years preceding the date
            of the enactment of this subtitle;
                (B) the extent to which having Congress authorize the
            Commission to designate one or more self-regulatory
            organizations to augment the Commission's efforts in overseeing
            investment advisers would improve the frequency of examinations
            of investment advisers; and
                (C) current and potential approaches to examining the
            investment advisory activities of dually registered broker-
            dealers and investment advisers or affiliated broker-dealers
            and investment advisers.
        (b) Report Required.--The Commission shall report its findings to
    the Committee on Financial Services of the House of Representatives and
    the Committee on Banking, Housing, and Urban Affairs of the Senate, not
    later than 180 days after the date of enactment of this subtitle, and
    shall use such findings to revise its rules and regulations, as
    necessary. The report shall include a discussion of regulatory or
    legislative steps that are recommended or that may be necessary to
    address concerns identified in the study.
        SEC. 915. OFFICE OF THE INVESTOR ADVOCATE.
        Section 4 of the Securities Exchange Act of 1934 (15 U.S.C. 78d) is
    amended by adding at the end the following:
        ``(g) Office of the Investor Advocate.--
            ``(1) Office established.--There is established within the
        Commission the Office of the Investor Advocate (in this subsection
        referred to as the `Office').
            ``(2) Investor advocate.--
                ``(A) In general.--The head of the Office shall be the
            Investor Advocate, who shall--
                    ``(i) report directly to the Chairman; and
                    ``(ii) be appointed by the Chairman, in consultation
                with the Commission, from among individuals having
                experience in advocating for the interests of investors in
                securities and investor protection issues, from the
                perspective of investors.
                ``(B) Compensation.--The annual rate of pay for the
            Investor Advocate shall be equal to the highest rate of annual
            pay for other senior executives who report to the Chairman of
            the Commission.
                ``(C) Limitation on service.--An individual who serves as
            the Investor Advocate may not be employed by the Commission--
                    ``(i) during the 2-year period ending on the date of
                appointment as Investor Advocate; or
                    ``(ii) during the 5-year period beginning on the date
                on which the person ceases to serve as the Investor
                Advocate.
            ``(3) Staff of office.--The Investor Advocate, after
        consultation with the Chairman of the Commission, may retain or
        employ independent counsel, research staff, and service staff, as
        the Investor Advocate deems necessary to carry out the functions,
        powers, and duties of the Office.
            ``(4) Functions of the investor advocate.--The Investor
        Advocate shall--
                ``(A) assist retail investors in resolving significant
            problems such investors may have with the Commission or with
            self-regulatory organizations;
                ``(B) identify areas in which investors would benefit from
            changes in the regulations of the Commission or the rules of
            self-regulatory organizations;
                ``(C) identify problems that investors have with financial
            service providers and investment products;
                ``(D) analyze the potential impact on investors of--
                    ``(i) proposed regulations of the Commission; and
                    ``(ii) proposed rules of self-regulatory organizations
                registered under this title; and
                ``(E) to the extent practicable, propose to the Commission
            changes in the regulations or orders of the Commission and to
            Congress any legislative, administrative, or personnel changes
            that may be appropriate to mitigate problems identified under
            this paragraph and to promote the interests of investors.
            ``(5) Access to documents.--The Commission shall ensure that
        the Investor Advocate has full access to the documents of the
        Commission and any self-regulatory organization, as necessary to
        carry out the functions of the Office.
            ``(6) Annual reports.--
                ``(A) Report on objectives.--
                    ``(i) In general.--Not later than June 30 of each year
                after 2010, the Investor Advocate shall submit 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 the objectives of the
                Investor Advocate for the following fiscal year.
                    ``(ii) Contents.--Each report required under clause (i)
                shall contain full and substantive analysis and
                explanation.
                ``(B) Report on activities.--
                    ``(i) In general.--Not later than December 31 of each
                year after 2010, the Investor Advocate shall submit 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 the activities of the
                Investor Advocate during the immediately preceding fiscal
                year.
                    ``(ii) Contents.--Each report required under clause (i)
                shall include--

                        ``(I) appropriate statistical information and full
                    and substantive analysis;
                        ``(II) information on steps that the Investor
                    Advocate has taken during the reporting period to
                    improve investor services and the responsiveness of the
                    Commission and self-regulatory organizations to
                    investor concerns;
                        ``(III) a summary of the most serious problems
                    encountered by investors during the reporting period;
                        ``(IV) an inventory of the items described in
                    subclause (III) that includes--

                            ``(aa) identification of any action taken by
                        the Commission or the self-regulatory organization
                        and the result of such action;
                            ``(bb) the length of time that each item has
                        remained on such inventory; and
                            ``(cc) for items on which no action has been
                        taken, the reasons for inaction, and an
                        identification of any official who is responsible
                        for such action;

                        ``(V) recommendations for such administrative and
                    legislative actions as may be appropriate to resolve
                    problems encountered by investors; and
                        ``(VI) any other information, as determined
                    appropriate by the Investor Advocate.

                    ``(iii) Independence.--Each report required under this
                paragraph shall be provided directly to the Committees
                listed in clause (i) without any prior review or comment
                from the Commission, any commissioner, any other officer or
                employee of the Commission, or the Office of Management and
                Budget.
                    ``(iv) Confidentiality.--No report required under
                clause (i) may contain confidential information.
            ``(7) Regulations.--The Commission shall, by regulation,
        establish procedures requiring a formal response to all
        recommendations submitted to the Commission by the Investor
        Advocate, not later than 3 months after the date of such
        submission.''.
        SEC. 916. STREAMLINING OF FILING PROCEDURES FOR SELF-REGULATORY
          ORGANIZATIONS.
        (a) Filing Procedures.--Section 19(b) of the Securities Exchange
    Act of 1934 (15 U.S.C. 78s(b)) is amended by striking paragraph (2)
    (including the undesignated matter immediately following subparagraph
    (B)) and inserting the following:
            ``(2) Approval process.--
                ``(A) Approval process established.--
                    ``(i) In general.--Except as provided in clause (ii),
                not later than 45 days after the date of publication of a
                proposed rule change under paragraph (1), the Commission
                shall--

                        ``(I) by order, approve or disapprove the proposed
                    rule change; or
                        ``(II) institute proceedings under subparagraph (B)
                    to determine whether the proposed rule change should be
                    disapproved.

                    ``(ii) Extension of time period.--The Commission may
                extend the period established under clause (i) by not more
                than an additional 45 days, if--

                        ``(I) the Commission determines that a longer
                    period is appropriate and publishes the reasons for
                    such determination; or
                        ``(II) the self-regulatory organization that filed
                    the proposed rule change consents to the longer period.

                ``(B) Proceedings.--
                    ``(i) Notice and hearing.--If the Commission does not
                approve or disapprove a proposed rule change under
                subparagraph (A), the Commission shall provide to the self-
                regulatory organization that filed the proposed rule
                change--

                        ``(I) notice of the grounds for disapproval under
                    consideration; and
                        ``(II) opportunity for hearing, to be concluded not
                    later than 180 days after the date of publication of
                    notice of the filing of the proposed rule change.

                    ``(ii) Order of approval or disapproval.--

                        ``(I) In general.--Except as provided in subclause
                    (II), not later than 180 days after the date of
                    publication under paragraph (1), the Commission shall
                    issue an order approving or disapproving the proposed
                    rule change.
                        ``(II) Extension of time period.--The Commission
                    may extend the period for issuance under clause (I) by
                    not more than 60 days, if--

                            ``(aa) the Commission determines that a longer
                        period is appropriate and publishes the reasons for
                        such determination; or
                            ``(bb) the self-regulatory organization that
                        filed the proposed rule change consents to the
                        longer period.
                ``(C) Standards for approval and disapproval.--
                    ``(i) Approval.--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 issued under this title that are applicable to
                such organization.
                    ``(ii) Disapproval.--The Commission shall disapprove a
                proposed rule change of a self-regulatory organization if
                it does not make a finding described in clause (i).
                    ``(iii) Time for approval.--The Commission may not
                approve a proposed rule change earlier than 30 days after
                the date of publication under paragraph (1), unless the
                Commission finds good cause for so doing and publishes the
                reason for the finding.
                ``(D) Result of failure to institute or conclude
            proceedings.--A proposed rule change shall be deemed to have
            been approved by the Commission, if--
                    ``(i) the Commission does not approve or disapprove the
                proposed rule change or begin proceedings under
                subparagraph (B) within the period described in
                subparagraph (A); or
                    ``(ii) the Commission does not issue an order approving
                or disapproving the proposed rule change under subparagraph
                (B) within the period described in subparagraph (B)(ii).
                ``(E) Publication date based on federal register
            publishing.--For purposes of this paragraph, if, after filing a
            proposed rule change with the Commission pursuant to paragraph
            (1), a self-regulatory organization publishes a notice of the
            filing of such proposed rule change, together with the
            substantive terms of such proposed rule change, on a publicly
            accessible website, the Commission shall thereafter send the
            notice to the Federal Register for publication thereof under
            paragraph (1) within 15 days of the date on which such website
            publication is made. If the Commission fails to send the notice
            for publication thereof within such 15 day period, then the
            date of publication shall be deemed to be the date on which
            such website publication was made.
                ``(F) Rulemaking.--
                    ``(i) In general.--Not later than 180 days after the
                date of enactment of the Investor Protection and Securities
                Reform Act of 2010, after consultation with other
                regulatory agencies, the Commission shall promulgate rules
                setting forth the procedural requirements of the
                proceedings required under this paragraph.
                    ``(ii) Notice and comment not required.--The rules
                promulgated by the Commission under clause (i) are not
                required to include republication of proposed rule changes
                or solicitation of public comment.''.
        (b) Clarification of Filing Date.--
            (1) Rule of construction.--Section 19(b) of the Securities
        Exchange Act of 1934 (15 U.S.C. 78s(b)) is amended by adding at the
        end the following:
            ``(10) Rule of construction relating to filing date of proposed
        rule changes.--
                ``(A) In general.--For purposes of this subsection, the
            date of filing of a proposed rule change shall be deemed to be
            the date on which the Commission receives the proposed rule
            change.
                ``(B) Exception.--A proposed rule change has not been
            received by the Commission for purposes of subparagraph (A) if,
            not later than 7 business days after the date of receipt by the
            Commission, the Commission notifies the self-regulatory
            organization that such proposed rule change does not comply
            with the rules of the Commission relating to the required form
            of a proposed rule change, except that if the Commission
            determines that the proposed rule change is unusually lengthy
            and is complex or raises novel regulatory issues, the
            Commission shall inform the self-regulatory organization of
            such determination not later than 7 business days after the
            date of receipt by the Commission and, for the purposes of
            subparagraph (A), a proposed rule change has not been received
            by the Commission, if, not later than 21 days after the date of
            receipt by the Commission, the Commission notifies the self-
            regulatory organization that such proposed rule change does not
            comply with the rules of the Commission relating to the
            required form of a proposed rule change.''.
            (2) Publication.--Section 19(b)(1) of the Securities Exchange
        Act of 1934 (15 U.S.C. 78s(b)(1)) is amended by striking ``upon''
        and inserting ``as soon as practicable after the date of''.
        (c) Effective Date of Proposed Rules.--Section 19(b)(3) of the
    Securities Exchange Act of 1934 (15 U.S.C. 78s(b)(3)) is amended--
            (1) in subparagraph (A)--
                (A) by striking ``may take effect'' and inserting ``shall
            take effect''; and
                (B) by inserting ``on any person, whether or not the person
            is a member of the self-regulatory organization'' after
            ``charge imposed by the self-regulatory organization''; and
            (2) in subparagraph (C)--
                (A) by amending the second sentence to read as follows:
            ``At any time within the 60-day period beginning on the date of
            filing of such a proposed rule change in accordance with the
            provisions of paragraph (1), the Commission summarily may
            temporarily suspend the change in the rules of the self-
            regulatory organization made thereby, if it appears to the
            Commission that such action is necessary or appropriate in the
            public interest, for the protection of investors, or otherwise
            in furtherance of the purposes of this title.'';
                (B) by inserting after the second sentence the following:
            ``If the Commission takes such action, the Commission shall
            institute proceedings under paragraph (2)(B) to determine
            whether the proposed rule should be approved or disapproved.'';
            and
                (C) in the third sentence, by striking ``the preceding
            sentence'' and inserting ``this subparagraph''.
        (d) Conforming Change.--Section 19(b)(4)(D) of the Securities
    Exchange Act of 1934 (15 U.S.C. 78s(b)(4)(D)) is amended to read as
    follows:
                ``(D)(i) The Commission shall order the temporary
            suspension of any change in the rules of a clearing agency made
            by a proposed rule change that has taken effect under paragraph
            (3), if the appropriate regulatory agency for the clearing
            agency notifies the Commission not later than 30 days after the
            date on which the proposed rule change was filed of--
                    ``(I) the determination by the appropriate regulatory
                agency that the rules of such clearing agency, as so
                changed, may be inconsistent with the safeguarding of
                securities or funds in the custody or control of such
                clearing agency or for which it is responsible; and
                    ``(II) the reasons for the determination described in
                subclause (I).
                ``(ii) If the Commission takes action under clause (i), the
            Commission shall institute proceedings under paragraph (2)(B)
            to determine if the proposed rule change should be approved or
            disapproved.''.
        SEC. 917. STUDY REGARDING FINANCIAL LITERACY AMONG INVESTORS.
        (a) In General.--The Commission shall conduct a study to identify--
            (1) the existing level of financial literacy among retail
        investors, including subgroups of investors identified by the
        Commission;
            (2) methods to improve the timing, content, and format of
        disclosures to investors with respect to financial intermediaries,
        investment products, and investment services;
            (3) the most useful and understandable relevant information
        that retail investors need to make informed financial decisions
        before engaging a financial intermediary or purchasing an
        investment product or service that is typically sold to retail
        investors, including shares of open-end companies, as that term is
        defined in section 5 of the Investment Company Act of 1940 (15
        U.S.C. 80a-5) that are registered under section 8 of that Act;
            (4) methods to increase the transparency of expenses and
        conflicts of interests in transactions involving investment
        services and products, including shares of open-end companies
        described in paragraph (3);
            (5) the most effective existing private and public efforts to
        educate investors; and
            (6) in consultation with the Financial Literacy and Education
        Commission, a strategy (including, to the extent practicable,
        measurable goals and objectives) to increase the financial literacy
        of investors in order to bring about a positive change in investor
        behavior.
        (b) Report.--Not later than 2 years after the date of enactment of
    this Act, the Commission shall submit a report on the study required
    under subsection (a) to--
            (1) the Committee on Banking, Housing, and Urban Affairs of the
        Senate; and
            (2) the Committee on Financial Services of the House of
        Representatives.
        SEC. 918. STUDY REGARDING MUTUAL FUND ADVERTISING.
        (a) In General.--The Comptroller General of the United States shall
    conduct a study on mutual fund advertising to identify--
            (1) existing and proposed regulatory requirements for open-end
        investment company advertisements;
            (2) current marketing practices for the sale of open-end
        investment company shares, including the use of past performance
        data, funds that have merged, and incubator funds;
            (3) the impact of such advertising on consumers; and
            (4) recommendations to improve investor protections in mutual
        fund advertising and additional information necessary to ensure
        that investors can make informed financial decisions when
        purchasing shares.
        (b) Report.--Not later than 18 months after the date of enactment
    of this Act, the Comptroller General of the United States shall submit
    a report on the results of the study conducted under subsection (a)
    to--
            (1) the Committee on Banking, Housing, and Urban Affairs of the
        United States Senate; and
            (2) the Committee on Financial Services of the House of
        Representatives.
        SEC. 919. CLARIFICATION OF COMMISSION AUTHORITY TO REQUIRE INVESTOR
          DISCLOSURES BEFORE PURCHASE OF INVESTMENT PRODUCTS AND SERVICES.
        Section 15 of the Securities Exchange Act of 1934 (15 U.S.C. 78o)
    is amended by adding at the end the following:
        ``(n) Disclosures to Retail Investors.--
            ``(1) In general.--Notwithstanding any other provision of the
        securities laws, the Commission may issue rules designating
        documents or information that shall be provided by a broker or
        dealer to a retail investor before the purchase of an investment
        product or service by the retail investor.
            ``(2) Considerations.--In developing any rules under paragraph
        (1), the Commission shall consider whether the rules will promote
        investor protection, efficiency, competition, and capital
        formation.
            ``(3) Form and contents of documents and information.--Any
        documents or information designated under a rule promulgated under
        paragraph (1) shall--
                ``(A) be in a summary format; and
                ``(B) contain clear and concise information about--
                    ``(i) investment objectives, strategies, costs, and
                risks; and
                    ``(ii) any compensation or other financial incentive
                received by a broker, dealer, or other intermediary in
                connection with the purchase of retail investment
                products.''.
    SEC. 919A. STUDY ON CONFLICTS OF INTEREST.
        (a) In General.--The Comptroller General of the United States shall
    conduct a study--
            (1) to identify and examine potential conflicts of interest
        that exist between the staffs of the investment banking and equity
        and fixed income securities analyst functions within the same firm;
        and
            (2) to make recommendations to Congress designed to protect
        investors in light of such conflicts.
        (b) Considerations.--In conducting the study under subsection (a),
    the Comptroller General shall--
            (1) consider--
                (A) the potential for investor harm resulting from
            conflicts, including consideration of the forms of misconduct
            engaged in by the several securities firms and individuals that
            entered into the Global Analyst Research Settlements in 2003
            (also known as the ``Global Settlement'');
                (B) the nature and benefits of the undertakings to which
            those firms agreed in enforcement proceedings, including
            firewalls between research and investment banking, separate
            reporting lines, dedicated legal and compliance staffs,
            allocation of budget, physical separation, compensation,
            employee performance evaluations, coverage decisions,
            limitations on soliciting investment banking business,
            disclosures, transparency, and other measures;
                (C) whether any such undertakings should be codified and
            applied permanently to securities firms, or whether the
            Commission should adopt rules applying any such undertakings to
            securities firms; and
                (D) whether to recommend regulatory or legislative measures
            designed to mitigate possible adverse consequences to investors
            arising from the conflicts of interest or to enhance investor
            protection or confidence in the integrity of the securities
            markets; and
            (2) consult with State attorneys general, State securities
        officials, the Commission, the Financial Industry Regulatory
        Authority (``FINRA''), NYSE Regulation, investor advocates,
        brokers, dealers, retail investors, institutional investors, and
        academics.
        (c) Report.--The Comptroller General shall submit a report on 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, not later than 18
    months after the date of enactment of this Act.
    SEC. 919B. STUDY ON IMPROVED INVESTOR ACCESS TO INFORMATION ON
    INVESTMENT ADVISERS AND BROKER-DEALERS.
        (a) Study.--
            (1) In general.--Not later than 6 months after the date of
        enactment of this Act, the Commission shall complete a study,
        including recommendations, of ways to improve the access of
        investors to registration information (including disciplinary
        actions, regulatory, judicial, and arbitration proceedings, and
        other information) about registered and previously registered
        investment advisers, associated persons of investment advisers,
        brokers and dealers and their associated persons on the existing
        Central Registration Depository and Investment Adviser Registration
        Depository systems, as well as identify additional information that
        should be made publicly available.
            (2) Contents.--The study required by subsection (a) shall
        include an analysis of the advantages and disadvantages of further
        centralizing access to the information contained in the 2 systems,
        including--
                (A) identification of those data pertinent to investors;
            and
                (B) the identification of the method and format for
            displaying and publishing such data to enhance accessibility by
            and utility to investors.
        (b) Implementation.--Not later than 18 months after the date of
    completion of the study required by subsection (a), the Commission
    shall implement any recommendations of the study.
    SEC. 919C. STUDY ON FINANCIAL PLANNERS AND THE USE OF FINANCIAL
    DESIGNATIONS.
        (a) In General.--The Comptroller General of the United States shall
    conduct a study to evaluate--
            (1) the effectiveness of State and Federal regulations to
        protect investors and other consumers from individuals who hold
        themselves out as financial planners through the use of misleading
        titles, designations, or marketing materials;
            (2) current State and Federal oversight structure and
        regulations for financial planners; and
            (3) legal or regulatory gaps in the regulation of financial
        planners and other individuals who provide or offer to provide
        financial planning services to consumers.
        (b) Considerations.--In conducting the study required under
    subsection (a), the Comptroller General shall consider--
            (1) the role of financial planners in providing advice
        regarding the management of financial resources, including
        investment planning, income tax planning, education planning,
        retirement planning, estate planning, and risk management;
            (2) whether current regulations at the State and Federal level
        provide adequate ethical and professional standards for financial
        planners;
            (3) the possible risk posed to investors and other consumers by
        individuals who hold themselves out as financial planners or as
        otherwise providing financial planning services in connection with
        the sale of financial products, including insurance and securities;
            (4) the possible risk posed to investors and other consumers by
        individuals who otherwise use titles, designations, or marketing
        materials in a misleading way in connection with the delivery of
        financial advice;
            (6) the ability of investors and other consumers to understand
        licensing requirements and standards of care that apply to
        individuals who hold themselves out as financial planners or as
        otherwise providing financial planning services;
            (7) the possible benefits to investors and other consumers of
        regulation and professional oversight of financial planners; and
            (8) any other consideration that the Comptroller General deems
        necessary or appropriate to effectively execute the study required
        under subsection (a).
        (c) Recommendations.--In providing recommendations for the
    appropriate regulation of financial planners and other individuals who
    provide or offer to provide financial planning services, in order to
    protect investors and other consumers of financial planning services,
    the Comptroller General shall consider--
            (1) the appropriate structure for regulation of financial
        planners and individuals providing financial planning services; and
            (2) the appropriate scope of the regulations needed to protect
        investors and other consumers, including but not limited to the
        need to establish competency standards, practice standards, ethical
        guidelines, disciplinary authority, and transparency to investors
        and other consumers.
        (d) Report.--
            (1) In general.--Not later than 180 days after the date of
        enactment of this Act, the Comptroller General shall submit a
        report on the study required under subsection (a) to--
                (A) the Committee on Banking, Housing, and Urban Affairs of
            the Senate;
                (B) the Special Committee on Aging of the Senate; and
                (C) the Committee on Financial Services of the House of
            Representatives.
            (2) Content requirements.--The report required under paragraph
        (1) shall describe the findings and determinations made by the
        Comptroller General in carrying out the study required under
        subsection (a), including a description of the considerations,
        analysis, and government, public, industry, nonprofit and consumer
        input that the Comptroller General considered to make such
        findings, conclusions, and legislative, regulatory, or other
        recommendations.
    SEC. 919D. OMBUDSMAN.
        Section 4(g) of the Securities Exchange Act of 1934, as added by
    section 914, is amended by adding at the end the following:
            ``(8) Ombudsman.--
                ``(A) Appointment.--Not later than 180 days after the date
            on which the first Investor Advocate is appointed under
            paragraph (2)(A)(i), the Investor Advocate shall appoint an
            Ombudsman, who shall report directly to the Investor Advocate.
                ``(B) Duties.--The Ombudsman appointed under subparagraph
            (A) shall--
                    ``(i) act as a liaison between the Commission and any
                retail investor in resolving problems that retail investors
                may have with the Commission or with self-regulatory
                organizations;
                    ``(ii) review and make recommendations regarding
                policies and procedures to encourage persons to present
                questions to the Investor Advocate regarding compliance
                with the securities laws; and
                    ``(iii) establish safeguards to maintain the
                confidentiality of communications between the persons
                described in clause (ii) and the Ombudsman.
                ``(C) Limitation.--In carrying out the duties of the
            Ombudsman under subparagraph (B), the Ombudsman shall utilize
            personnel of the Commission to the extent practicable. Nothing
            in this paragraph shall be construed as replacing, altering, or
            diminishing the activities of any ombudsman or similar office
            of any other agency.
                ``(D) Report.--The Ombudsman shall submit a semiannual
            report to the Investor Advocate that describes the activities
            and evaluates the effectiveness of the Ombudsman during the
            preceding year. The Investor Advocate shall include the reports
            required under this section in the reports required to be
            submitted by the Inspector Advocate under paragraph (6).''.

           Subtitle B--Increasing Regulatory Enforcement and Remedies

        SEC. 921. AUTHORITY TO RESTRICT MANDATORY PRE-DISPUTE ARBITRATION.
        (a) Amendment to Securities Exchange Act of 1934.--Section 15 of
    the Securities Exchange Act of 1934 (15 U.S.C. 78o), as amended by this
    title, is further amended by adding at the end the following new
    subsection:
        ``(o) Authority to Restrict Mandatory Pre-dispute Arbitration.--The
    Commission, by rule, may prohibit, or impose conditions or limitations
    on the use of, agreements that require customers or clients of any
    broker, dealer, or municipal securities dealer to arbitrate any future
    dispute between them arising under the Federal securities laws, the
    rules and regulations thereunder, or the rules of a self-regulatory
    organization if it finds that such prohibition, imposition of
    conditions, or limitations are in the public interest and for the
    protection of investors.''.
        (b) Amendment to Investment Advisers Act of 1940.--Section 205 of
    the Investment Advisers Act of 1940 (15 U.S.C. 80b-5) is amended by
    adding at the end the following new subsection:
        ``(f) Authority to Restrict Mandatory Pre-dispute Arbitration.--The
    Commission, by rule, may prohibit, or impose conditions or limitations
    on the use of, agreements that require customers or clients of any
    investment adviser to arbitrate any future dispute between them arising
    under the Federal securities laws, the rules and regulations
    thereunder, or the rules of a self-regulatory organization if it finds
    that such prohibition, imposition of conditions, or limitations are in
    the public interest and for the protection of investors.''.
        SEC. 922. WHISTLEBLOWER PROTECTION.
        (a) In General.--The Securities Exchange Act of 1934 (15 U.S.C. 78a
    et seq.) is amended by inserting after section 21E the following:
        ``SEC. 21F. SECURITIES WHISTLEBLOWER INCENTIVES AND PROTECTION.
        ``(a) Definitions.--In this section the following definitions shall
    apply:
            ``(1) Covered judicial or administrative action.--The term
        `covered judicial or administrative action' means any judicial or
        administrative action brought by the Commission under the
        securities laws that results in monetary sanctions exceeding
        $1,000,000.
            ``(2) Fund.--The term `Fund' means the Securities and Exchange
        Commission Investor Protection Fund.
            ``(3) Original information.--The term `original information'
        means information that--
                ``(A) is derived from the independent knowledge or analysis
            of a whistleblower;
                ``(B) is not known to the Commission from any other source,
            unless the whistleblower is the original source of the
            information; and
                ``(C) is not exclusively derived from an allegation made in
            a judicial or administrative hearing, in a governmental report,
            hearing, audit, or investigation, or from the news media,
            unless the whistleblower is a source of the information.
            ``(4) Monetary sanctions.--The term `monetary sanctions', when
        used with respect to any judicial or administrative action, means--
                ``(A) any monies, including penalties, disgorgement, and
            interest, ordered to be paid; and
                ``(B) 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.
            ``(5) Related action.--The term `related action', when used
        with respect to any judicial or administrative action brought by
        the Commission under the securities laws, means any judicial or
        administrative action brought by an entity described in subclauses
        (I) through (IV) of subsection (h)(2)(D)(i) that is based upon the
        original information provided by a whistleblower pursuant to
        subsection (a) that led to the successful enforcement of the
        Commission action.
            ``(6) Whistleblower.--The term `whistleblower' means any
        individual who provides, or 2 or more individuals acting jointly
        who provide, information relating to a violation of the securities
        laws to the Commission, in a manner established, by rule or
        regulation, by the Commission.
        ``(b) Awards.--
            ``(1) In general.--In any covered judicial or administrative
        action, or related action, the Commission, under regulations
        prescribed by the Commission and subject to subsection (c), shall
        pay an award or awards to 1 or more whistleblowers who voluntarily
        provided original information to the Commission that led to the
        successful enforcement of the covered judicial or administrative
        action, or related action, in an aggregate amount equal to--
                ``(A) not less than 10 percent, in total, of what has been
            collected of the monetary sanctions imposed in the action or
            related actions; and
                ``(B) not more than 30 percent, in total, of what has been
            collected of the monetary sanctions imposed in the action or
            related actions.
            ``(2) Payment of awards.--Any amount paid under paragraph (1)
        shall be paid from the Fund.
        ``(c) Determination of Amount of Award; Denial of Award.--
            ``(1) Determination of amount of award.--
                ``(A) Discretion.--The determination of the amount of an
            award made under subsection (b) shall be in the discretion of
            the Commission.
                ``(B) Criteria.--In determining the amount of an award made
            under subsection (b), the Commission--
                    ``(i) shall take into consideration--

                        ``(I) the significance of the information provided
                    by the whistleblower to the success of the covered
                    judicial or administrative action;
                        ``(II) the degree of assistance provided by the
                    whistleblower and any legal representative of the
                    whistleblower in a covered judicial or administrative
                    action;
                        ``(III) the programmatic interest of the Commission
                    in deterring violations of the securities laws by
                    making awards to whistleblowers who provide information
                    that lead to the successful enforcement of such laws;
                    and
                        ``(IV) such additional relevant factors as the
                    Commission may establish by rule or regulation; and

                    ``(ii) shall not take into consideration the balance of
                the Fund.
            ``(2) Denial of award.--No award under subsection (b) shall be
        made--
                ``(A) to any whistleblower who is, or was at the time the
            whistleblower acquired the original information submitted to
            the Commission, a member, officer, or employee of--
                    ``(i) an appropriate regulatory agency;
                    ``(ii) the Department of Justice;
                    ``(iii) a self-regulatory organization;
                    ``(iv) the Public Company Accounting Oversight Board;
                or
                    ``(v) a law enforcement organization;
                ``(B) to any whistleblower who is convicted of a criminal
            violation related to the judicial or administrative action for
            which the whistleblower otherwise could receive an award under
            this section;
                ``(C) to any whistleblower who gains the information
            through the performance of an audit of financial statements
            required under the securities laws and for whom such submission
            would be contrary to the requirements of section 10A of the
            Securities Exchange Act of 1934 (15 U.S.C. 78j-1); or
                ``(D) to any whistleblower who fails to submit information
            to the Commission in such form as the Commission may, by rule,
            require.
        ``(d) Representation.--
            ``(1) Permitted representation.--Any whistleblower who makes a
        claim for an award under subsection (b) may be represented by
        counsel.
            ``(2) Required representation.--
                ``(A) In general.--Any whistleblower who anonymously makes
            a claim for an award under subsection (b) shall be represented
            by counsel if the whistleblower anonymously submits the
            information upon which the claim is based.
                ``(B) Disclosure of identity.--Prior to the payment of an
            award, a whistleblower shall disclose the identity of the
            whistleblower and provide such other information as the
            Commission may require, directly or through counsel for the
            whistleblower.
        ``(e) No Contract Necessary.--No contract with the Commission is
    necessary for any whistleblower to receive an award under subsection
    (b), unless otherwise required by the Commission by rule or regulation.
        ``(f) Appeals.--Any determination made under this section,
    including whether, to whom, or in what amount to make awards, shall be
    in the discretion of the Commission. Any such determination, except the
    determination of the amount of an award if the award was made in
    accordance with subsection (b), may be appealed to the appropriate
    court of appeals of the United States not more than 30 days after the
    determination is issued by the Commission. The court shall review the
    determination made by the Commission in accordance with section 706 of
    title 5, United States Code.
        ``(g) Investor Protection Fund.--
            ``(1) Fund established.--There is established in the Treasury
        of the United States a fund to be known as the `Securities and
        Exchange Commission Investor Protection Fund'.
            ``(2) Use of fund.--The Fund shall be available to the
        Commission, without further appropriation or fiscal year
        limitation, for--
                ``(A) paying awards to whistleblowers as provided in
            subsection (b); and
                ``(B) funding the activities of the Inspector General of
            the Commission under section 4(i).
            ``(3) Deposits and credits.--
                ``(A)  In general.--There shall be deposited into or
            credited to the Fund an amount equal to--
                    ``(i) 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 under section 308 of the
                Sarbanes-Oxley Act of 2002 (15 U.S.C. 7246) 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 $300,000,000;
                    ``(ii) any monetary sanction added to a disgorgement
                fund or other fund under section 308 of the Sarbanes-Oxley
                Act of 2002 (15 U.S.C. 7246) that is not distributed to the
                victims for whom the Fund was established, unless the
                balance of the disgorgement fund at the time the
                determination is made not to distribute the monetary
                sanction to such victims exceeds $200,000,000; and
                    ``(iii) all income from investments made under
                paragraph (4).
                ``(B) Additional amounts.--If the amounts deposited into or
            credited to the Fund under subparagraph (A) are not sufficient
            to satisfy an award made under subsection (b), there shall be
            deposited into or credited to the Fund an amount equal to the
            unsatisfied portion of the award from any monetary sanction
            collected by the Commission in the covered judicial or
            administrative action on which the award is based.
            ``(4) Investments.--
                ``(A) Amounts in fund may be invested.--The Commission may
            request the Secretary of the Treasury to invest the portion of
            the Fund that is not, in the discretion of the Commission,
            required to meet the current needs of the Fund.
                ``(B) Eligible investments.--Investments shall be made by
            the Secretary of the Treasury in obligations of the United
            States or obligations that are guaranteed as to principal and
            interest by the United States, with maturities suitable to the
            needs of the Fund as determined by the Commission on the
            record.
                ``(C) Interest and proceeds credited.--The interest on, and
            the proceeds from the sale or redemption of, any obligations
            held in the Fund shall be credited to the Fund.
            ``(5) Reports to congress.--Not later than October 30 of each
        fiscal year beginning after the date of enactment of this
        subsection, the Commission shall submit to the Committee on
        Banking, Housing, and Urban Affairs of the Senate, and the
        Committee on Financial Services of the House of Representatives a
        report on--
                ``(A) the whistleblower award program, established under
            this section, including--
                    ``(i) a description of the number of awards granted;
                and
                    ``(ii) the types of cases in which awards were granted
                during the preceding fiscal year;
                ``(B) the balance of the Fund at the beginning of the
            preceding fiscal year;
                ``(C) the amounts deposited into or credited to the Fund
            during the preceding fiscal year;
                ``(D) the amount of earnings on investments made under
            paragraph (4) during the preceding fiscal year;
                ``(E) the amount paid from the Fund during the preceding
            fiscal year to whistleblowers pursuant to subsection (b);
                ``(F) the balance of the Fund at the end of the preceding
            fiscal year; and
                ``(G) a complete set of audited financial statements,
            including--
                    ``(i) a balance sheet;
                    ``(ii) income statement; and
                    ``(iii) cash flow analysis.
        ``(h) Protection of Whistleblowers.--
            ``(1) Prohibition against retaliation.--
                ``(A) In general.--No employer may discharge, demote,
            suspend, threaten, harass, directly or indirectly, or in any
            other manner discriminate against, a whistleblower in the terms
            and conditions of employment because of any lawful act done by
            the whistleblower--
                    ``(i) in providing information to the Commission in
                accordance with this section;
                    ``(ii) in initiating, testifying in, or assisting in
                any investigation or judicial or administrative action of
                the Commission based upon or related to such information;
                or
                    ``(iii) in making disclosures that are required or
                protected under the Sarbanes-Oxley Act of 2002 (15 U.S.C.
                7201 et seq.), the Securities Exchange Act of 1934 (15
                U.S.C. 78a et seq.), including section 10A(m) of such Act
                (15 U.S.C. 78f(m)), section 1513(e) of title 18, United
                States Code, and any other law, rule, or regulation subject
                to the jurisdiction of the Commission.
                ``(B) Enforcement.--
                    ``(i) Cause of action.--An individual who alleges
                discharge or other discrimination in violation of
                subparagraph (A) may bring an action under this subsection
                in the appropriate district court of the United States for
                the relief provided in subparagraph (C).
                    ``(ii) Subpoenas.--A subpoena requiring the attendance
                of a witness at a trial or hearing conducted under this
                section may be served at any place in the United States.
                    ``(iii) Statute of limitations.--

                        ``(I) In general.--An action under this subsection
                    may not be brought--

                            ``(aa) more than 6 years after the date on
                        which the violation of subparagraph (A) occurred;
                        or
                            ``(bb) 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).

                        ``(II) Required action within 10 years.--
                    Notwithstanding subclause (I), an action under this
                    subsection may not in any circumstance be brought more
                    than 10 years after the date on which the violation
                    occurs.

                ``(C) Relief.--Relief for an individual prevailing in an
            action brought under subparagraph (B) shall include--
                    ``(i) reinstatement with the same seniority status that
                the individual would have had, but for the discrimination;
                    ``(ii) 2 times the amount of back pay otherwise owed to
                the individual, with interest; and
                    ``(iii) compensation for litigation costs, expert
                witness fees, and reasonable attorneys' fees.
            ``(2) Confidentiality.--
                ``(A) In general.--Except as provided in subparagraphs (B)
            and (C), 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 (C). 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.
                ``(B) Exempted statute.--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.
                ``(C) Rule of construction.--Nothing in this section is
            intended to limit, or shall be construed to limit, the ability
            of the Attorney General to present such evidence to a grand
            jury or to share such evidence with potential witnesses or
            defendants in the course of an ongoing criminal investigation.
                ``(D) Availability to government agencies.--
                    ``(i) In general.--Without the loss of its status as
                confidential 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 to protect investors, be made available to--

                        ``(I) the Attorney General of the United States;
                        ``(II) an appropriate regulatory authority;
                        ``(III) a self-regulatory organization;
                        ``(IV) a State attorney general in connection with
                    any criminal investigation;
                        ``(V) any appropriate State regulatory authority;
                        ``(VI) the Public Company Accounting Oversight
                    Board;
                        ``(VII) a foreign securities authority; and
                        ``(VIII) a foreign law enforcement authority.

                    ``(ii) Confidentiality.--

                        ``(I) In general.--Each of the entities described
                    in subclauses (I) through (VI) of clause (i) shall
                    maintain such information as confidential in accordance
                    with the requirements established under subparagraph
                    (A).
                        ``(II) Foreign authorities.--Each of the entities
                    described in subclauses (VII) and (VIII) of clause (i)
                    shall maintain such information in accordance with such
                    assurances of confidentiality as the Commission
                    determines appropriate.

            ``(3) Rights retained.--Nothing in this section shall be deemed
        to diminish the rights, privileges, or remedies of any
        whistleblower under any Federal or State law, or under any
        collective bargaining agreement.
        ``(i) Provision of False Information.--A whistleblower shall not be
    entitled to an award under this section if the whistleblower--
            ``(1) knowingly and willfully makes any false, fictitious, or
        fraudulent statement or representation; or
            ``(2) uses any false writing or document knowing the writing or
        document contains any false, fictitious, or fraudulent statement or
        entry.
        ``(j) Rulemaking Authority.--The Commission shall have the
    authority to issue such rules and regulations as may be necessary or
    appropriate to implement the provisions of this section consistent with
    the purposes of this section.''.
        (b) Protection for Employees of Nationally Recognized Statistical
    Rating Organizations.--Section 1514A(a) of title 18, United States
    Code, is amended--
            (1) by inserting ``or nationally recognized statistical rating
        organization (as defined in section 3(a) of the Securities Exchange
        Act of 1934 (15 U.S.C. 78c),'' after ``78o(d)),''; and
            (2) by inserting ``or nationally recognized statistical rating
        organization'' after ``such company''.
        (c) Section 1514A of Title 18, United States Code.--
            (1) Statute of limitations; jury trial.--Section 1514A(b)(2) of
        title 18, United States Code, is amended--
                (A) in subparagraph (D)--
                    (i) by striking ``90'' and inserting ``180''; and
                    (ii) by striking the period at the end and inserting
                ``, or after the date on which the employee became aware of
                the violation.''; and
                (B) by adding at the end the following:
                ``(E) Jury trial.--A party to an action brought under
            paragraph (1)(B) shall be entitled to trial by jury.''.
            (2) Private securities litigation witnesses; nonenforceability;
        information.--Section 1514A of title 18, United States Code, is
        amended by adding at the end the following:
        ``(e) Nonenforceability of Certain Provisions Waiving Rights and
    Remedies or Requiring Arbitration of Disputes.--
            ``(1) Waiver of rights and remedies.--The rights and remedies
        provided for in this section may not be waived by any agreement,
        policy form, or condition of employment, including by a predispute
        arbitration agreement.
            ``(2) Predispute arbitration agreements.--No predispute
        arbitration agreement shall be valid or enforceable, if the
        agreement requires arbitration of a dispute arising under this
        section.''.
        (d) Study of Whistleblower Protection Program.--
            (1) Study.--The Inspector General of the Commission shall
        conduct a study of the whistleblower protections established under
        the amendments made by this section, including--
                (A) whether the final rules and regulation issued under the
            amendments made by this section have made the whistleblower
            protection program (referred to in this subsection as the
            ``program'') clearly defined and user-friendly;
                (B) whether the program is promoted on the website of the
            Commission and has been widely publicized;
                (C) whether the Commission is prompt in--
                    (i) responding to--

                        (I) information provided by whistleblowers; and
                        (II) applications for awards filed by
                    whistleblowers;

                    (ii) updating whistleblowers about the status of their
                applications; and
                    (iii) otherwise communicating with the interested
                parties;
                (D) whether the minimum and maximum reward levels are
            adequate to entice whistleblowers to come forward with
            information and whether the reward levels are so high as to
            encourage illegitimate whistleblower claims;
                (E) whether the appeals process has been unduly burdensome
            for the Commission;
                (F) whether the funding mechanism for the Investor
            Protection Fund is adequate;
                (G) whether, in the interest of protecting investors and
            identifying and preventing fraud, it would be useful for
            Congress to consider empowering whistleblowers or other
            individuals, who have already attempted to pursue the case
            through the Commission, to have a private right of action to
            bring suit based on the facts of the same case, on behalf of
            the Government and themselves, against persons who have
            committee securities fraud;
                (H)(i) whether the exemption under section 552(b)(3) of
            title 5 (known as the Freedom of Information Act) established
            in section 21F(h)(2)(A) of the Securities Exchange Act of 1934,
            as added by this Act, aids whistleblowers in disclosing
            information to the Commission;
                (ii) what impact the exemption described in clause (i) has
            had on the ability of the public to access information about
            the regulation and enforcement by the Commission of securities;
            and
                (iii) any recommendations on whether the exemption
            described in clause (i) should remain in effect; and
                (I) such other matters as the Inspector General deems
            appropriate.
            (2) Report.--Not later than 30 months after the date of
        enactment of this Act, the Inspector General shall--
                (A) submit a report on the findings of the study required
            under paragraph (1) to the Committee on Banking, Housing, and
            Urban Affairs of the Senate and the Committee on Financial
            Services of the House; and
                (B) make the report described in subparagraph (A) available
            to the public through publication of the report on the website
            of the Commission.
        SEC. 923. CONFORMING AMENDMENTS FOR WHISTLEBLOWER PROTECTION.
        (a) In General.--
            (1) Securities act of 1933.--Section 20(d)(3)(A) of the
        Securities Act of 1933 (15 U.S.C. 77t(d)(3)(A)) is amended by
        inserting ``and section 21F of the Securities Exchange Act of
        1934'' after ``the Sarbanes-Oxley Act of 2002''.
            (2) Investment company act of 1940.--Section 42(e)(3)(A) of the
        Investment Company Act of 1940 (15 U.S.C. 80a-41(e)(3)(A)) is
        amended by inserting ``and section 21F of the Securities Exchange
        Act of 1934'' after ``the Sarbanes-Oxley Act of 2002''.
            (3) Investment advisers act of 1940.--Section 209(e)(3)(A) of
        the Investment Advisers Act of 1940 (15 U.S.C. 80b-9(e)(3)(A)) is
        amended by inserting ``and section 21F of the Securities Exchange
        Act of 1934'' after ``the Sarbanes-Oxley Act of 2002''.
        (b) Securities Exchange Act.--
            (1) Section 21.--Section 21(d)(3)(C)(i) of the Securities
        Exchange Act of 1934 (15 U.S.C. 78u(d)(3)(C)(i)) is amended by
        inserting ``and section 21F of this title'' after ``the Sarbanes-
        Oxley Act of 2002''.
            (2) Section 21a.--Section 21A of the Securities Exchange Act of
        1934 (15 U.S.C. 78u-1) is amended--
                (A) in subsection (d)(1) by--
                    (i) striking ``(subject to subsection (e))''; and
                    (ii) inserting ``and section 21F of this title'' after
                ``the Sarbanes-Oxley Act of 2002'';
                (B) by striking subsection (e); and
                (C) by redesignating subsections (f) and (g) as subsections
            (e) and (f), respectively.
        SEC. 924. IMPLEMENTATION AND TRANSITION PROVISIONS FOR
          WHISTLEBLOWER PROTECTION.
        (a) Implementing Rules.--The Commission shall issue final
    regulations implementing the provisions of section 21F of the
    Securities Exchange Act of 1934, as added by this subtitle, not later
    than 270 days after the date of enactment of this Act.
        (b) Original Information.--Information provided to the Commission
    in writing by a whistleblower shall not lose the status of original
    information (as defined in section 21F(a)(3) of the Securities Exchange
    Act of 1934, as added by this subtitle) solely because the
    whistleblower provided the information prior to the effective date of
    the regulations, if the information is provided by the whistleblower
    after the date of enactment of this subtitle.
        (c) Awards.--A whistleblower may receive an award pursuant to
    section 21F of the Securities Exchange Act of 1934, as added by this
    subtitle, 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.
        (d) Administration and Enforcement.--The Securities and Exchange
    Commission shall establish a separate office within the Commission to
    administer and enforce the provisions of section 21F of the Securities
    Exchange Act of 1934 (as add by section 922(a)). Such office shall
    report annually to the Committee on Banking, Housing, and Urban Affairs
    of the Senate and the Committee on Financial Services of the House of
    Representatives on its activities, whistleblower complaints, and the
    response of the Commission to such complaints.
        SEC. 925. COLLATERAL BARS.
        (a) Securities Exchange Act of 1934.--
            (1) Section 15.--Section 15(b)(6)(A) of the Securities Exchange
        Act of 1934 (15 U.S.C. 78o(b)(6)(A)) is amended by striking ``12
        months, or bar such person from being associated with a broker or
        dealer,'' and inserting ``12 months, or bar any such person from
        being associated with a broker, dealer, investment adviser,
        municipal securities dealer, municipal advisor, transfer agent, or
        nationally recognized statistical rating organization,''.
            (2) Section 15b.--Section 15B(c)(4) of the Securities Exchange
        Act of 1934 (15 U.S.C. 78o-4(c)(4)) is amended by striking ``twelve
        months or bar any such person from being associated with a
        municipal securities dealer,'' and inserting ``12 months or bar any
        such person from being associated with a broker, dealer, investment
        adviser, municipal securities dealer, municipal advisor, transfer
        agent, or nationally recognized statistical rating organization,''.
            (3) Section 17a.--Section 17A(c)(4)(C) of the Securities
        Exchange Act of 1934 (15 U.S.C. 78q-1(c)(4)(C)) is amended by
        striking ``twelve months or bar any such person from being
        associated with the transfer agent,'' and inserting ``12 months or
        bar any such person from being associated with any transfer agent,
        broker, dealer, investment adviser, municipal securities dealer,
        municipal advisor, or nationally recognized statistical rating
        organization,''.
        (b) Investment Advisers Act of 1940.--Section 203(f) of the
    Investment Advisers Act of 1940 (15 U.S.C. 80b-3(f)) is amended by
    striking ``twelve months or bar any such person from being associated
    with an investment adviser,'' and inserting ``12 months or bar any such
    person from being associated with an investment adviser, broker,
    dealer, municipal securities dealer, municipal advisor, transfer agent,
    or nationally recognized statistical rating organization,''.
        SEC. 926. DISQUALIFYING FELONS AND OTHER ``BAD ACTORS'' FROM
          REGULATION D OFFERINGS.
        Not later than 1 year after the date of enactment of this Act, the
    Commission shall issue rules for the disqualification of offerings and
    sales of securities made under section 230.506 of title 17, Code of
    Federal Regulations, that--
            (1) are substantially similar to the provisions of section
        230.262 of title 17, Code of Federal Regulations, or any successor
        thereto; and
            (2) disqualify any offering or sale of securities by a person
        that--
                (A) is subject to a final order of a State securities
            commission (or an agency or officer of a State performing like
            functions), a State authority that supervises or examines
            banks, savings associations, or credit unions, a State
            insurance commission (or an agency or officer of a State
            performing like functions), an appropriate Federal banking
            agency, or the National Credit Union Administration, that--
                    (i) bars the person from--

                        (I) association with an entity regulated by such
                    commission, authority, agency, or officer;
                        (II) engaging in the business of securities,
                    insurance, or banking; or
                        (III) engaging in savings association or credit
                    union activities; or

                    (ii) constitutes a final order based on a violation of
                any law or regulation that prohibits fraudulent,
                manipulative, or deceptive conduct within the 10-year
                period ending on the date of the filing of the offer or
                sale; or
                (B) has been convicted of any felony or misdemeanor in
            connection with the purchase or sale of any security or
            involving the making of any false filing with the Commission.
        SEC. 927. EQUAL TREATMENT OF SELF-REGULATORY ORGANIZATION RULES.
        Section 29(a) of the Securities Exchange Act of 1934 (15 U.S.C.
    78cc(a)) is amended by striking ``an exchange required thereby'' and
    inserting ``a self-regulatory organization,''.
        SEC. 928. CLARIFICATION THAT SECTION 205 OF THE INVESTMENT ADVISERS
          ACT OF 1940 DOES NOT APPLY TO STATE-REGISTERED ADVISERS.
        Section 205(a) of the Investment Advisers Act of 1940 (15 U.S.C.
    80b-5(a)) is amended, in the matter preceding paragraph (1)--
            (1) by striking ``, unless exempt from registration pursuant to
        section 203(b),'' and inserting ``registered or required to be
        registered with the Commission'';
            (2) by striking ``make use of the mails or any means or
        instrumentality of interstate commerce, directly or indirectly,
        to''; and
            (3) by striking ``to'' after ``in any way''.
        SEC. 929. UNLAWFUL MARGIN LENDING.
        Section 7(c)(1)(A) of the Securities Exchange Act of 1934 (15
    U.S.C. 78g(c)(1)(A)) is amended by striking ``; and'' and inserting ``;
    or''.
    SEC. 929A. PROTECTION FOR EMPLOYEES OF SUBSIDIARIES AND AFFILIATES OF
    PUBLICLY TRADED COMPANIES.
        Section 1514A of title 18, United States Code, is amended by
    inserting ``including any subsidiary or affiliate whose financial
    information is included in the consolidated financial statements of
    such company'' after ``the Securities Exchange Act of 1934 (15 U.S.C.
    78o(d))''.
    SEC. 929B. FAIR FUND AMENDMENTS.
        Section 308 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7246(a))
    is amended--
            (1) by striking subsection (a) and inserting the following:
        ``(a) Civil Penalties to Be Used for the Relief of Victims.--If, in
    any judicial or administrative action brought by the Commission under
    the securities laws, the Commission obtains a civil penalty against any
    person for a violation of such laws, or such person agrees, in
    settlement of any such action, to such civil penalty, the amount of
    such civil penalty shall, on the motion or at the direction of the
    Commission, be added to and become part of a disgorgement fund or other
    fund established for the benefit of the victims of such violation.'';
            (2) in subsection (b)--
                (A) by striking ``for a disgorgement fund described in
            subsection (a)'' and inserting ``for a disgorgement fund or
            other fund described in subsection (a)''; and
                (B) by striking ``in the disgorgement fund'' and inserting
            ``in such fund''; and
            (3) by striking subsection (e).
    SEC. 929C. INCREASING THE BORROWING LIMIT ON TREASURY LOANS.
        Section 4(h) of the Securities Investor Protection Act of 1970 (15
    U.S.C. 78ddd(h)) is amended in the first sentence, by striking
    ``$1,000,000,000'' and inserting ``$2,500,000,000''.
    SEC. 929D. LOST AND STOLEN SECURITIES.
        Section 17(f)(1) of the Securities Exchange Act of 1934 (15 U.S.C.
    78q(f)(1)) is amended--
            (1) in subparagraph (A), by striking ``missing, lost,
        counterfeit, or stolen securities'' and inserting ``securities that
        are missing, lost, counterfeit, stolen, or cancelled''; and
            (2) in subparagraph (B), by striking ``or stolen'' and
        inserting ``stolen, cancelled, or reported in such other manner as
        the Commission, by rule, may prescribe''.
    SEC. 929E. NATIONWIDE SERVICE OF SUBPOENAS.
        (a) Securities Act of 1933.--Section 22(a) of the Securities Act of
    1933 (15 U.S.C. 77v(a)) is amended by inserting after the second
    sentence the following: ``In any action or proceeding instituted by the
    Commission under this title in a United States district court for any
    judicial district, a subpoena issued to compel the attendance of a
    witness or the production of documents or tangible things (or both) at
    a 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 shall not
    apply to a subpoena issued under the preceding sentence.''.
        (b) Securities Exchange Act of 1934.--Section 27 of the Securities
    Exchange Act of 1934 (15 U.S.C. 78aa) is amended by inserting after the
    third sentence the following: ``In any action or proceeding instituted
    by the Commission under this title in a United States district court
    for any judicial district, a subpoena issued to compel the attendance
    of a witness or the production of documents or tangible things (or
    both) at a 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 shall not apply to a subpoena issued under the preceding
    sentence.''.
        (c) Investment Company Act of 1940.--Section 44 of the Investment
    Company Act of 1940 (15 U.S.C. 80a-43) is amended by inserting after
    the fourth sentence the following: ``In any action or proceeding
    instituted by the Commission under this title in a United States
    district court for any judicial district, a subpoena issued to compel
    the attendance of a witness or the production of documents or tangible
    things (or both) at a 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 shall not apply to a subpoena issued under the
    preceding sentence.''.
        (d) Investment Advisers Act of 1940.--Section 214 of the Investment
    Advisers Act of 1940 (15 U.S.C. 80b-14) is amended by inserting after
    the third sentence the following: ``In any action or proceeding
    instituted by the Commission under this title in a United States
    district court for any judicial district, a subpoena issued to compel
    the attendance of a witness or the production of documents or tangible
    things (or both) at a 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 shall not apply to a subpoena issued under the
    preceding sentence.''.
    SEC. 929F. FORMERLY ASSOCIATED PERSONS.
        (a) Member or Employee of the Municipal Securities Rulemaking
    Board.--Section 15B(c)(8) of the Securities Exchange Act of 1934 (15
    U.S.C. 78o-4(c)(8)) is amended by striking ``any member or employee''
    and inserting ``any person who is, or at the time of the alleged
    violation or abuse was, a member or employee''.
        (b) Person Associated With a Government Securities Broker or
    Dealer.--Section 15C(c) of the Securities Exchange Act of 1934 (15
    U.S.C. 78o-5(c)) is amended--
            (1) in paragraph (1)(C), by striking ``any person associated,
        or seeking to become associated,'' and inserting ``any person who
        is, or at the time of the alleged misconduct was, associated or
        seeking to become associated''; and
            (2) in paragraph (2)--
                (A) in subparagraph (A), by inserting ``, seeking to become
            associated, or, at the time of the alleged misconduct,
            associated or seeking to become associated'' after ``any person
            associated''; and
                (B) in subparagraph (B), by inserting ``, seeking to become
            associated, or, at the time of the alleged misconduct,
            associated or seeking to become associated'' after ``any person
            associated''.
        (c) Person Associated With a Member of a National Securities
    Exchange or Registered Securities Association.--Section 21(a)(1) of the
    Securities Exchange Act of 1934 (15 U.S.C. 78u(a)(1)) is amended, in
    the first sentence, by inserting ``, or, as to any act or practice, or
    omission to act, while associated with a member, formerly associated''
    after ``member or a person associated''.
        (d) Participant of a Registered Clearing Agency.--Section 21(a)(1)
    of the Securities Exchange Act of 1934 (15 U.S.C. 78u(a)(1)) is
    amended, in the first sentence, by inserting ``or, as to any act or
    practice, or omission to act, while a participant, was a participant,''
    after ``in which such person is a participant,''.
        (e) Officer or Director of a Self-regulatory Organization.--Section
    19(h)(4) of the Securities Exchange Act of 1934 (15 U.S.C. 78s(h)(4))
    is amended--
            (1) by striking ``any officer or director'' and inserting ``any
        person who is, or at the time of the alleged misconduct was, an
        officer or director''; and
            (2) by striking ``such officer or director'' and inserting
        ``such person''.
        (f) Officer or Director of an Investment Company.--Section 36(a) of
    the Investment Company Act of 1940 (15 U.S.C. 80a-35(a)) is amended--
            (1) by striking ``a person serving or acting'' and inserting
        ``a person who is, or at the time of the alleged misconduct was,
        serving or acting''; and
            (2) by striking ``such person so serves or acts'' and inserting
        ``such person so serves or acts, or at the time of the alleged
        misconduct, so served or acted''.
        (g) Person Associated With a Public Accounting Firm.--
            (1) Sarbanes-oxley act of 2002 amendment.--Section 2(a)(9) of
        the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7201(9)) is amended by
        adding at the end the following:
                ``(C) Investigative and enforcement authority.--For
            purposes of sections 3(c), 101(c), 105, and 107(c) and the
            rules of the Board and Commission issued 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 that--
                    ``(i) the authority to conduct an investigation of such
                person under section 105(b) shall apply only with respect
                to any act or practice, or omission to act, by the person
                while such person was associated or seeking to become
                associated with a registered public accounting firm; and
                    ``(ii) the authority to commence a disciplinary
                proceeding under section 105(c)(1), or impose sanctions
                under section 105(c)(4), against such person shall apply
                only with respect to--

                        ``(I) conduct occurring while such person was
                    associated or seeking to become associated with a
                    registered public accounting firm; or
                        ``(II) non-cooperation, as described in section
                    105(b)(3), with respect to a demand in a Board
                    investigation for testimony, documents, or other
                    information relating to a period when such person was
                    associated or seeking to become associated with a
                    registered public accounting firm.''.

            (2) Securities exchange act of 1934 amendment.--Section
        21(a)(1) of the Securities Exchange Act of 1934 (15 U.S.C.
        78u(a)(1)) is amended by striking ``or a person associated with
        such a firm'' and inserting ``, a person associated with such a
        firm, or, as to any act, practice, or omission to act, while
        associated with such firm, a person formerly associated with such a
        firm''.
        (h) Supervisory Personnel of an Audit Firm.--Section 105(c)(6) of
    the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7215(c)(6)) is amended--
            (1) in subparagraph (A), by striking ``the supervisory
        personnel'' and inserting ``any person who is, or at the time of
        the alleged failure reasonably to supervise was, a supervisory
        person''; and
            (2) in subparagraph (B)--
                (A) by striking ``No associated person'' and inserting ``No
            current or former supervisory person''; and
                (B) by striking ``any other person'' and inserting ``any
            associated person''.
        (i) Member of the Public Company Accounting Oversight Board.--
    Section 107(d)(3) of the Sarbanes-Oxley Act of 2002 (15 U.S.C.
    7217(d)(3)) is amended by striking ``any member'' and inserting ``any
    person who is, or at the time of the alleged misconduct was, a
    member''.
    SEC. 929G. STREAMLINED HIRING AUTHORITY FOR MARKET SPECIALISTS.
        (a) Appointment Authority.--Section 3114 of title 5, United States
    Code, is amended by striking the section heading and all that follows
    through the end of subsection (a) and inserting the following:
    ``Sec. 3114. Appointment of candidates to certain positions in the
        competitive service by the Securities and Exchange Commission
        ``(a) Applicability.--This section applies with respect to any
    position of accountant, economist, and securities compliance examiner
    at the Commission that is in the competitive service, and any position
    at the Commission in the competitive service that requires specialized
    knowledge of financial and capital market formation or regulation,
    financial market structures or surveillance, or information
    technology.''.
        (b) Clerical Amendment.--The table of sections for chapter 31 of
    title 5, United States Code, is amended by striking the item relating
    to section 3114 and inserting the following:

    ``3114. Appointment of candidates to positions in the competitive
              service by the Securities and Exchange Commission.''.

        (c) Pay Authority.--The Commission may set the rate of pay for
    experts and consultants appointed under the authority of section 3109
    of title 5, United States Code, in the same manner in which it sets the
    rate of pay for employees of the Commission.
    SEC. 929H. SIPC REFORMS.
        (a) Increasing the Cash Limit of Protection.--Section 9 of the
    Securities Investor Protection Act of 1970 (15 U.S.C. 78fff-3) is
    amended--
            (1) in subsection (a)(1), by striking ``$100,000 for each such
        customer'' and inserting ``the standard maximum cash advance amount
        for each such customer, as determined in accordance with subsection
        (d)''; and
            (2) by adding the following new subsections:
        ``(d) Standard Maximum Cash Advance Amount Defined.--For purposes
    of this section, the term `standard maximum cash advance amount' means
    $250,000, as such amount may be adjusted after December 31, 2010, as
    provided under subsection (e).
        ``(e) Inflation Adjustment.--
            ``(1) In general.--Not later than January 1, 2011, and every 5
        years thereafter, and subject to the approval of the Commission as
        provided under section 3(e)(2), the Board of Directors of SIPC
        shall determine whether an inflation adjustment to the standard
        maximum cash advance amount is appropriate. If the Board of
        Directors of SIPC determines such an adjustment is appropriate,
        then the standard maximum cash advance amount shall be an amount
        equal to--
                ``(A) $250,000 multiplied by--
                ``(B) the ratio of the annual value of the Personal
            Consumption Expenditures Chain-Type Price Index (or any
            successor index thereto), published by the Department of
            Commerce, for the calendar year preceding the year in which
            such determination is made, to the published annual value of
            such index for the calendar year preceding the year in which
            this subsection was enacted.
        The index values used in calculations under this paragraph shall
        be, as of the date of the calculation, the values most recently
        published by the Department of Commerce.
            ``(2) Rounding.--If the standard maximum cash advance amount
        determined under paragraph (1) for any period is not a multiple of
        $10,000, the amount so determined shall be rounded down to the
        nearest $10,000.
            ``(3) Publication and report to the congress.--Not later than
        April 5 of any calendar year in which a determination is required
        to be made under paragraph (1)--
                ``(A) the Commission shall publish in the Federal Register
            the standard maximum cash advance amount; and
                ``(B) the Board of Directors of SIPC shall submit a report
            to the Congress stating the standard maximum cash advance
            amount.
            ``(4) Implementation period.--Any adjustment to the standard
        maximum cash advance amount shall take effect on January 1 of the
        year immediately succeeding the calendar year in which such
        adjustment is made.
            ``(5) Inflation adjustment considerations.--In making any
        determination under paragraph (1) to increase the standard maximum
        cash advance amount, the Board of Directors of SIPC shall
        consider--
                ``(A) the overall state of the fund and the economic
            conditions affecting members of SIPC;
                ``(B) the potential problems affecting members of SIPC; and
                ``(C) such other factors as the Board of Directors of SIPC
            may determine appropriate.''.
        (b) Liquidation of a Carrying Broker-dealer.--Section 5(a)(3) of
    the Securities Investor Protection Act of 1970 (15 U.S.C. 78eee(a)(3))
    is amended--
            (1) by striking the undesignated matter immediately following
        subparagraph (B);
            (2) in subparagraph (A), by striking ``any member of SIPC'' and
        inserting ``the member'';
            (3) in subparagraph (B), by striking the comma at the end and
        inserting a period;
            (4) by striking ``If SIPC'' and inserting the following:
                ``(A) In general.--SIPC may, upon notice to a member of
            SIPC, file an application for a protective decree with any
            court of competent jurisdiction specified in section 21(e) or
            27 of the Securities Exchange Act of 1934, except that no such
            application shall be filed with respect to a member, the only
            customers of which are persons whose claims could not be
            satisfied by SIPC advances pursuant to section 9, if SIPC'';
            and
            (5) by adding at the end the following:
                ``(B) Consent required.--No member of SIPC that has a
            customer may enter into an insolvency, receivership, or
            bankruptcy proceeding, under Federal or State law, without the
            specific consent of SIPC, except as provided in title II of the
            Dodd-Frank Wall Street Reform and Consumer Protection Act.''.
    SEC. 929I. PROTECTING CONFIDENTIALITY OF MATERIALS SUBMITTED TO THE
    COMMISSION.
        (a) Securities Exchange Act of 1934.--Section 24 of the Securities
    Exchange Act of 1934 (15 U.S.C. 78x) is amended--
            (1) in subsection (d), by striking ``subsection (e)'' and
        inserting ``subsection (f)'';
            (2) by redesignating subsection (e) as subsection (f); and
            (3) by inserting after subsection (d) the following:
        ``(e) Records Obtained From Registered Persons.--
            ``(1) In general.--Except as provided in subsection (f), the
        Commission shall not be compelled to disclose records or
        information obtained pursuant to section 17(b), or records or
        information based upon or derived from such records or information,
        if such records or information have been obtained by the Commission
        for use in furtherance of the purposes of this title, including
        surveillance, risk assessments, or other regulatory and oversight
        activities.
            ``(2) Treatment of information.--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 such section 552.
        Collection of information pursuant to section 17 shall be an
        administrative action involving an agency against specific
        individuals or agencies pursuant to section 3518(c)(1) of title 44,
        United States Code.''.
        (b) Investment Company Act of 1940.--Section 31 of the Investment
    Company Act of 1940 (15 U.S.C. 80a-30) is amended--
            (1) by striking subsection (c) and inserting the following:
        ``(c) Limitations on Disclosure by Commission.--Notwithstanding any
    other provision of law, the Commission shall not be compelled to
    disclose any records or information provided to the Commission under
    this section, or records or information based upon or derived from such
    records or information, if such records or information have been
    obtained by the Commission for use in furtherance of the purposes of
    this title, including surveillance, risk assessments, or other
    regulatory and oversight activities. Nothing in this subsection
    authorizes the Commission to withhold information from the Congress or
    prevent the Commission from complying with a request for information
    from any other Federal department or agency requesting the information
    for purposes within the scope of jurisdiction of that department or
    agency, 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 section shall be
    considered a statute described in subsection (b)(3)(B) of such section
    552. Collection of information pursuant to section 31 shall be an
    administrative action involving an agency against specific individuals
    or agencies pursuant to section 3518(c)(1) of title 44, United States
    Code.'';
            (2) by striking subsection (d); and
            (3) by redesignating subsections (e) and (f) as subsections (d)
        and (e), respectively.
        (c) Investment Advisers Act of 1940.--Section 210 of the Investment
    Advisers Act of 1940 (15 U.S.C. 80b-10) is amended by adding at the end
    the following:
        ``(d) Limitations on Disclosure by the Commission.--Notwithstanding
    any other provision of law, the Commission shall not be compelled to
    disclose any records or information provided to the Commission under
    section 204, or records or information based upon or derived from such
    records or information, if such records or information have been
    obtained by the Commission for use in furtherance of the purposes of
    this title, including surveillance, risk assessments, or other
    regulatory and oversight activities. Nothing in this subsection
    authorizes the Commission to withhold information from the Congress or
    prevent the Commission from complying with a request for information
    from any other Federal department or agency requesting the information
    for purposes within the scope of jurisdiction of that department or
    agency, 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 subsection shall be
    considered a statute described in subsection (b)(3)(B) of such section
    552. Collection of information pursuant to section 204 shall be an
    administrative action involving an agency against specific individuals
    or agencies pursuant to section 3518(c)(1) of title 44, United States
    Code.''.
    SEC. 929J. EXPANSION OF AUDIT INFORMATION TO BE PRODUCED AND EXCHANGED.
        Section 106 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7216) is
    amended--
            (1) by striking subsection (b) and inserting the following:
        ``(b) Production of Documents.--
            ``(1) Production by foreign firms.--If a foreign public
        accounting firm performs material services upon which a registered
        public accounting firm relies in the conduct of an audit or interim
        review, issues an audit report, performs audit work, or conducts
        interim reviews, the foreign public accounting firm shall--
                ``(A) produce the audit work papers of the foreign public
            accounting firm and all other documents of the firm related to
            any such audit work or interim review to the Commission or the
            Board, upon request of the Commission or the Board; and
                ``(B) be subject to the jurisdiction of the courts of the
            United States for purposes of enforcement of any request for
            such documents.
            ``(2) Other production.--Any registered public accounting firm
        that relies, in whole or in part, on the work of a foreign public
        accounting firm in issuing an audit report, performing audit work,
        or conducting an interim review, shall--
                ``(A) produce the audit work papers of the foreign public
            accounting firm and all other documents related to any such
            work in response to a request for production by the Commission
            or the Board; and
                ``(B) secure the agreement of any foreign public accounting
            firm to such production, as a condition of the reliance by the
            registered public accounting firm on the work of that foreign
            public accounting firm.'';
            (2) by redesignating subsection (d) as subsection (g); and
            (3) by inserting after subsection (c) the following:
        ``(d) Service of Requests or Process.--
            ``(1) In general.--Any foreign public accounting firm that
        performs work for a domestic registered public accounting firm
        shall furnish to the domestic registered public accounting firm a
        written irrevocable consent and power of attorney that designates
        the domestic registered public accounting firm as an agent upon
        whom may be served any request by the Commission or the Board under
        this section or upon whom may be served any process, pleadings, or
        other papers in any action brought to enforce this section.
            ``(2) Specific audit work.--Any foreign public accounting firm
        that performs material services upon which a registered public
        accounting firm relies in the conduct of an audit or interim
        review, issues an audit report, performs audit work, or, performs
        interim reviews, shall designate to the Commission or the Board an
        agent in the United States upon whom may be served any request by
        the Commission or the Board under this section or upon whom may be
        served any process, pleading, or other papers in any action brought
        to enforce this section.
        ``(e) Sanctions.--A willful refusal to comply, in whole in or in
    part, with any request by the Commission or the Board under this
    section, shall be deemed a violation of this Act.
        ``(f) Other Means of Satisfying Production Obligations.--
    Notwithstanding any other provisions of this section, the staff of the
    Commission or the Board may allow a foreign public accounting firm that
    is subject to this section to meet production obligations under this
    section through alternate means, such as through foreign counterparts
    of the Commission or the Board.''.
    SEC. 929K. SHARING PRIVILEGED INFORMATION WITH OTHER AUTHORITIES.
        Section 24 of the Securities Exchange Act of 1934 (15 U.S.C. 78x)
    is amended--
            (1) in subsection (d), as amended by subsection (d)(1)(A), by
        striking ``subsection (f)'' and inserting ``subsection (g)'';
            (2) in subsection (e), as added by subsection (d)(1)(C), by
        striking ``subsection (f)'' and inserting ``subsection (g)'';
            (3) by redesignating subsection (f) as subsection (g); and
            (4) by inserting after subsection (e) the following:
        ``(f) Sharing Privileged Information With Other Authorities.--
            ``(1) Privileged information provided by the commission.--The
        Commission shall not be deemed to have waived any privilege
        applicable to any information by transferring that information to
        or permitting that information to be used by--
                ``(A) any agency (as defined in section 6 of title 18,
            United States Code);
                ``(B) the Public Company Accounting Oversight Board;
                ``(C) any self-regulatory organization;
                ``(D) any foreign securities authority;
                ``(E) any foreign law enforcement authority; or
                ``(F) any State securities or law enforcement authority.
            ``(2) Nondisclosure of privileged information provided to the
        commission.--The Commission shall not be compelled to disclose
        privileged information obtained from any foreign securities
        authority, or foreign law enforcement authority, if the authority
        has in good faith determined and represented to the Commission that
        the information is privileged.
            ``(3) Nonwaiver of privileged information provided to the
        commission.--
                ``(A) In general.--Federal agencies, State securities and
            law enforcement authorities, self-regulatory organizations, and
            the Public Company Accounting Oversight Board shall not be
            deemed to have waived any privilege applicable to any
            information by transferring that information to or permitting
            that information to be used by the Commission.
                ``(B) Exception.--The provisions of subparagraph (A) shall
            not apply to a self-regulatory organization or the Public
            Company Accounting Oversight Board with respect to information
            used by the Commission in an action against such organization.
            ``(4) Definitions.--For purposes of this subsection--
                ``(A) the term `privilege' includes any work-product
            privilege, attorney-client privilege, governmental privilege,
            or other privilege recognized under Federal, State, or foreign
            law;
                ``(B) the term `foreign law enforcement authority' means
            any foreign authority that is empowered under foreign law to
            detect, investigate or prosecute potential violations of law;
            and
                ``(C) the term `State securities or law enforcement
            authority' means the authority of any State or territory that
            is empowered under State or territory law to detect,
            investigate, or prosecute potential violations of law.''.
    SEC. 929L. ENHANCED APPLICATION OF ANTIFRAUD PROVISIONS.
        The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is
    amended--
            (1) in section 9--
                (A) by striking ``registered on a national securities
            exchange'' each place that term appears and inserting ``other
            than a government security'';
                (B) in subsection (b), by striking ``by use of any facility
            of a national securities exchange,''; and
                (C) in subsection (c), by inserting after ``unlawful for
            any'' the following: ``broker, dealer, or'';
            (2) in section 10(a)(1), by striking ``registered on a national
        securities exchange'' and inserting ``other than a government
        security''; and
            (3) in section 15(c)(1)(A), by striking ``otherwise than on a
        national securities exchange of which it is a member''.
    SEC. 929M. AIDING AND ABETTING AUTHORITY UNDER THE SECURITIES ACT AND
    THE INVESTMENT COMPANY ACT.
        (a) Under the Securities Act of 1933.--Section 15 of the Securities
    Act of 1933 (15 U.S.C. 77o) is amended--
            (1) by striking ``Every person who'' and inserting ``(a)
        Controlling Persons.--Every person who''; and
            (2) by adding at the end the following:
        ``(b) Prosecution of Persons Who Aid and Abet Violations.--For
    purposes of any action brought by the Commission under subparagraph (b)
    or (d) of section 20, any person that knowingly or recklessly provides
    substantial assistance to another person in violation of a provision of
    this Act, or of any rule or regulation issued under this Act, shall be
    deemed to be in violation of such provision to the same extent as the
    person to whom such assistance is provided.''.
        (b) Under the Investment Company Act of 1940.--Section 48 of the
    Investment Company Act of 1940 (15 U.S.C. 80a-48) is amended by
    redesignating subsection (b) as subsection (c) and inserting after
    subsection (a) the following:
        ``(b) For purposes of any action brought by the Commission under
    subsection (d) or (e) of section 42, any person that knowingly or
    recklessly provides substantial assistance to another person in
    violation of a provision of this Act, or of any rule or regulation
    issued under this Act, shall be deemed to be in violation of such
    provision to the same extent as the person to whom such assistance is
    provided.''.
    SEC. 929N. AUTHORITY TO IMPOSE PENALTIES FOR AIDING AND ABETTING
    VIOLATIONS OF THE INVESTMENT ADVISERS ACT.
        Section 209 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-
    9) is amended by inserting at the end the following new subsection:
        ``(f) Aiding and Abetting.--For purposes of any action brought by
    the Commission under subsection (e), any person that knowingly or
    recklessly has aided, abetted, counseled, commanded, induced, or
    procured a violation of any provision of this Act, or of any rule,
    regulation, or order hereunder, shall be deemed to be in violation of
    such provision, rule, regulation, or order to the same extent as the
    person that committed such violation.''.
    SEC. 929O. AIDING AND ABETTING STANDARD OF KNOWLEDGE SATISFIED BY
    RECKLESSNESS.
        Section 20(e) of the Securities Exchange Act of 1934 (15 U.S.C.
    78t(e)) is amended by inserting ``or recklessly'' after ``knowingly''.
    SEC. 929P. STRENGTHENING ENFORCEMENT BY THE COMMISSION.
        (a) Authority to Impose Civil Penalties in Cease and Desist
    Proceedings.--
            (1) Under the securities act of 1933.--Section 8A of the
        Securities Act of 1933 (15 U.S.C. 77h-1) is amended by adding at
        the end the following new subsection:
        ``(g) Authority to Impose Money Penalties.--
            ``(1) Grounds.--In any cease-and-desist proceeding under
        subsection (a), the Commission may impose a civil penalty on a
        person if the Commission finds, on the record, after notice and
        opportunity for hearing, that--
                ``(A) such person--
                    ``(i) is violating or has violated any provision of
                this title, or any rule or regulation issued under this
                title; or
                    ``(ii) is or was a cause of the violation of any
                provision of this title, or any rule or regulation
                thereunder; and
                ``(B) such penalty is in the public interest.
            ``(2) Maximum amount of penalty.--
                ``(A) First tier.--The maximum amount of a penalty for each
            act or omission described in paragraph (1) shall be $7,500 for
            a natural person or $75,000 for any other person.
                ``(B) Second tier.--Notwithstanding subparagraph (A), the
            maximum amount of penalty for each such act or omission shall
            be $75,000 for a natural person or $375,000 for any other
            person, if the act or omission described in paragraph (1)
            involved fraud, deceit, manipulation, or deliberate or reckless
            disregard of a regulatory requirement.
                ``(C) Third tier.--Notwithstanding subparagraphs (A) and
            (B), the maximum amount of penalty for each such act or
            omission shall be $150,000 for a natural person or $725,000 for
            any other person, if--
                    ``(i) the act or omission described in paragraph (1)
                involved fraud, deceit, manipulation, or deliberate or
                reckless disregard of a regulatory requirement; and
                    ``(ii) such act or omission directly or indirectly
                resulted in--

                        ``(I) substantial losses or created a significant
                    risk of substantial losses to other persons; or
                        ``(II) substantial pecuniary gain to the person who
                    committed the act or omission.

            ``(3) Evidence concerning ability to pay.--In any proceeding in
        which the Commission may impose a penalty under this section, a
        respondent may present evidence of the ability of the respondent 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 the ability of
        the respondent to continue in business and the collectability of a
        penalty, taking into account any other claims of the United States
        or third parties upon the assets of the respondent and the amount
        of the assets of the respondent.''.
            (2) Under the securities exchange act of 1934.--Section 21B(a)
        of the Securities Exchange Act of 1934 (15 U.S.C. 78u-2(a)) is
        amended--
                (A) by striking the matter following paragraph (4);
                (B) in the matter preceding paragraph (1), by inserting
            after ``opportunity for hearing,'' the following: ``that such
            penalty is in the public interest and'';
                (C) by redesignating paragraphs (1) through (4) as
            subparagraphs (A) through (D), respectively, and adjusting the
            margins accordingly;
                (D) by striking ``In any proceeding'' and inserting the
            following:
            ``(1) In general.--In any proceeding''; and
                (E) by adding at the end the following:
            ``(2) Cease-and-desist proceedings.--In any proceeding
        instituted under section 21C against any person, the Commission may
        impose a civil penalty, if the Commission finds, on the record
        after notice and opportunity for hearing, that such person--
                ``(A) is violating or has violated any provision of this
            title, or any rule or regulation issued under this title; or
                ``(B) is or was a cause of the violation of any provision
            of this title, or any rule or regulation issued under this
            title.''.
            (3) Under the investment company act of 1940.--Section 9(d)(1)
        of the Investment Company Act of 1940 (15 U.S.C. 80a-9(d)(1)) is
        amended--
                (A) by striking the matter following subparagraph (C);
                (B) in the matter preceding subparagraph (A), by inserting
            after ``opportunity for hearing,'' the following: ``that such
            penalty is in the public interest, and'';
                (C) by redesignating subparagraphs (A) through (C) as
            clauses (i) through (iii), respectively, and adjusting the
            margins accordingly;
                (D) by striking ``In any proceeding'' and inserting the
            following:
                ``(A) In general.--In any proceeding''; and
                (E) by adding at the end the following:
                ``(B) Cease-and-desist proceedings.--In any proceeding
            instituted pursuant to subsection (f) against any person, the
            Commission may impose a civil penalty if the Commission finds,
            on the record, after notice and opportunity for hearing, that
            such person--
                    ``(i) is violating or has violated any provision of
                this title, or any rule or regulation issued under this
                title; or
                    ``(ii) is or was a cause of the violation of any
                provision of this title, or any rule or regulation issued
                under this title.''.
            (4) Under the investment advisers act of 1940.--Section
        203(i)(1) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-
        3(i)(1)) is amended--
                (A) by striking the matter following subparagraph (D);
                (B) in the matter preceding subparagraph (A), by inserting
            after ``opportunity for hearing,'' the following: ``that such
            penalty is in the public interest and'';
                (C) by redesignating subparagraphs (A) through (D) as
            clauses (i) through (iv), respectively, and adjusting the
            margins accordingly;
                (D) by striking ``In any proceeding'' and inserting the
            following:
                ``(A) In general.--In any proceeding''; and
                (E) by adding at the end the following new subparagraph:
                ``(B) Cease-and-desist proceedings.--In any proceeding
            instituted pursuant to subsection (k) against any person, the
            Commission may impose a civil penalty if the Commission finds,
            on the record, after notice and opportunity for hearing, that
            such person--
                    ``(i) is violating or has violated any provision of
                this title, or any rule or regulation issued under this
                title; or
                    ``(ii) is or was a cause of the violation of any
                provision of this title, or any rule or regulation issued
                under this title.''.
        (b) Extraterritorial Jurisdiction of the Antifraud Provisions of
    the Federal Securities Laws.--
            (1) Under the securities act of 1933.--Section 22 of the
        Securities Act of 1933 (15 U.S.C. 77v(a)) is amended by adding at
        the end the following new subsection:
        ``(c) Extraterritorial Jurisdiction.--The district courts of the
    United States and the United States courts of any Territory shall have
    jurisdiction of an action or proceeding brought or instituted by the
    Commission or the United States alleging a violation of section 17(a)
    involving--
            ``(1) conduct within the United States that constitutes
        significant steps in furtherance of the violation, even if the
        securities transaction occurs outside the United States and
        involves only foreign investors; or
            ``(2) conduct occurring outside the United States that has a
        foreseeable substantial effect within the United States.''.
            (2) Under the securities exchange act of 1934.--Section 27 of
        the Securities Exchange Act of 1934 (15 U.S.C. 78aa) is amended--
                (A) by striking ``The district'' and inserting the
            following:
        ``(a) In General.--The district''; and
                (B) by adding at the end the following new subsection:
        ``(b) Extraterritorial Jurisdiction.--The district courts of the
    United States and the United States courts of any Territory shall have
    jurisdiction of an action or proceeding brought or instituted by the
    Commission or the United States alleging a violation of the antifraud
    provisions of this title involving--
            ``(1) conduct within the United States that constitutes
        significant steps in furtherance of the violation, even if the
        securities transaction occurs outside the United States and
        involves only foreign investors; or
            ``(2) conduct occurring outside the United States that has a
        foreseeable substantial effect within the United States.''.
            (3) Under the investment advisers act of 1940.--Section 214 of
        the Investment Advisers Act of 1940 (15 U.S.C. 80b-14) is amended--
                (A) by striking ``The district'' and inserting the
            following:
        ``(a) In General.--The district''; and
                (B) by adding at the end the following new subsection:
        ``(b) Extraterritorial Jurisdiction.--The district courts of the
    United States and the United States courts of any Territory shall have
    jurisdiction of an action or proceeding brought or instituted by the
    Commission or the United States alleging a violation of section 206
    involving--
            ``(1) conduct within the United States that constitutes
        significant steps in furtherance of the violation, even if the
        violation is committed by a foreign adviser and involves only
        foreign investors; or
            ``(2) conduct occurring outside the United States that has a
        foreseeable substantial effect within the United States.''.
        (c) Control Person Liability Under the Securities Exchange Act of
    1934.--Section 20(a) of the Securities Exchange Act of 1934 (15 U.S.C.
    78t(a)) is amended by inserting after ``controlled person is liable''
    the following: ``(including to the Commission in any action brought
    under paragraph (1) or (3) of section 21(d))''.
    SEC. 929Q. REVISION TO RECORDKEEPING RULE.
        (a) Investment Company Act of 1940 Amendments.--Section 31 of the
    Investment Company Act of 1940 (15 U.S.C. 80a-30) is amended--
            (1) in subsection (a)(1), by adding at the end the following:
        ``Each person having custody or use of the securities, deposits, or
        credits of a registered investment company shall maintain and
        preserve all records that relate to the custody or use by such
        person of the securities, deposits, or credits of the registered
        investment company for such period or periods as the Commission, by
        rule or regulation, may prescribe, as necessary or appropriate in
        the public interest or for the protection of investors.''; and
            (2) in subsection (b), by adding at the end the following:
            ``(4) Records of persons with custody or use.--
                ``(A) In general.--Records of persons having custody or use
            of the securities, deposits, or credits of a registered
            investment company that relate to such custody or use, are
            subject at any time, or from time to time, to such reasonable
            periodic, special, or other examinations and other information
            and document requests by representatives of the Commission, as
            the Commission deems necessary or appropriate in the public
            interest or for the protection of investors.
                ``(B) Certain persons subject to other regulation.--Any
            person that is 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 to the Commission a detailed listing, in writing, of
            the securities, deposits, or credits of the registered
            investment company within the custody or use of such person.''.
        (b) Investment Advisers Act of 1940 Amendment.--Section 204 of the
    Investment Advisers Act of 1940 (15 U.S.C. 80b-4) is amended by adding
    at the end the following new subsection:
        ``(d) Records of Persons With Custody or Use.--
            ``(1) In general.--Records of persons having custody or use of
        the securities, deposits, or credits of a client, that relate to
        such custody or use, are subject at any time, or from time to time,
        to such reasonable periodic, special, or other examinations and
        other information and document requests by representatives of the
        Commission, as the Commission deems necessary or appropriate in the
        public interest or for the protection of investors.
            ``(2) Certain persons subject to other regulation.--Any person
        that is 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 securities, deposits,
        or credits of the client within the custody or use of such
        person.''.
    SEC. 929R. BENEFICIAL OWNERSHIP AND SHORT-SWING PROFIT REPORTING.
        (a) Beneficial Ownership Reporting.--Section 13 of the Securities
    Exchange Act of 1934 (15 U.S.C. 78m) is amended--
            (1) in subsection (d)(1)--
                (A) by inserting after ``within ten days after such
            acquisition'' the following: ``or within such shorter time as
            the Commission may establish by rule''; and
                (B) by striking ``send to the issuer of the security at its
            principal executive office, by registered or certified mail,
            send to each exchange where the security is traded, and'';
            (2) in subsection (d)(2)--
                (A) by striking ``in the statements to the issuer and the
            exchange, and''; and
                (B) by striking ``shall be transmitted to the issuer and
            the exchange and'';
            (3) in subsection (g)(1), by striking ``shall send to the
        issuer of the security and''; and
            (4) in subsection (g)(2)--
                (A) by striking ``sent to the issuer and''; and
                (B) by striking ``shall be transmitted to the issuer and''.
        (b) Short-swing Profit Reporting.--Section 16(a) of the Securities
    Exchange Act of 1934 (15 U.S.C. 78p(a)) is amended--
            (1) in paragraph (1), by striking ``(and, if such security is
        registered on a national securities exchange, also with the
        exchange)''; and
            (2) in paragraph (2)(B), by inserting after ``officer'' the
        following: ``, or within such shorter time as the Commission may
        establish by rule''.
    SEC. 929S. FINGERPRINTING.
        Section 17(f)(2) of the Securities Exchange Act of 1934 (15 U.S.C.
    78q(f)(2)) is amended--
            (1) in the first sentence, by striking ``and registered
        clearing agency,'' and inserting ``registered clearing agency,
        registered securities information processor, national securities
        exchange, and national securities association''; and
            (2) in the second sentence, by striking ``or clearing agency,''
        and inserting ``clearing agency, securities information processor,
        national securities exchange, or national securities
        association,''.
    SEC. 929T. EQUAL TREATMENT OF SELF-REGULATORY ORGANIZATION RULES.
        Section 29(a) of the Securities Exchange Act of 1934 (15 U.S.C.
    78cc(a)) is amended by striking ``an exchange required thereby'' and
    inserting ``a self-regulatory organization,''.
    SEC. 929U. DEADLINE FOR COMPLETING EXAMINATIONS, INSPECTIONS AND
    ENFORCEMENT ACTIONS.
        The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is
    amended by inserting after section 4D the following new section:
      ``SEC. 4E. DEADLINE FOR COMPLETING ENFORCEMENT INVESTIGATIONS AND
          COMPLIANCE EXAMINATIONS AND INSPECTIONS.
        ``(a) Enforcement Investigations.--
            ``(1) In general.--Not later than 180 days after the date on
        which Commission staff provide a written Wells notification to any
        person, the Commission staff shall either file an action against
        such person or provide notice to the Director of the Division of
        Enforcement of its intent to not file an action.
            ``(2) Exceptions for certain complex actions.--Notwithstanding
        paragraph (1), if the Director of the Division of Enforcement of
        the Commission or the Director's designee determines that a
        particular enforcement investigation is sufficiently complex such
        that a determination regarding the filing of an action against a
        person cannot be completed within the deadline specified in
        paragraph (1), the Director of the Division of Enforcement of the
        Commission or the Director's designee may, after providing notice
        to the Chairman of the Commission, extend such deadline as needed
        for one additional 180-day period. If after the additional 180-day
        period the Director of the Division of Enforcement of the
        Commission or the Director's designee determines that a particular
        enforcement investigation is sufficiently complex such that a
        determination regarding the filing of an action against a person
        cannot be completed within the additional 180-day period, the
        Director of the Division of Enforcement of the Commission or the
        Director's designee may, after providing notice to and receiving
        approval of the Commission, extend such deadline as needed for one
        or more additional successive 180-day periods.
        ``(b) Compliance Examinations and Inspections.--
            ``(1) In general.--Not later than 180 days after the date on
        which Commission staff completes the on-site portion of its
        compliance examination or inspection or receives all records
        requested from the entity being examined or inspected, whichever is
        later, Commission staff shall provide the entity being examined or
        inspected with written notification indicating either that the
        examination or inspection has concluded, has concluded without
        findings, or that the staff requests the entity undertake
        corrective action.
            ``(2) Exception for certain complex actions.--Notwithstanding
        paragraph (1), if the head of any division or office within the
        Commission responsible for compliance examinations and inspections
        or his designee determines that a particular compliance examination
        or inspection is sufficiently complex such that a determination
        regarding concluding the examination or inspection, or regarding
        the staff requests the entity undertake corrective action, cannot
        be completed within the deadline specified in paragraph (1), the
        head of any division or office within the Commission responsible
        for compliance examinations and inspections or his designee may,
        after providing notice to the Chairman of the Commission, extend
        such deadline as needed for one additional 180-day period.''.
    SEC. 929V. SECURITY INVESTOR PROTECTION ACT AMENDMENTS.
        (a) Increasing the Minimum Assessment Paid by SIPC Members.--
    Section 4(d)(1)(C) of the Securities Investor Protection Act of 1970
    (15 U.S.C. 78ddd(d)(1)(C)) is amended by striking ``$150 per annum''
    and inserting the following: ``0.02 percent of the gross revenues from
    the securities business of such member of SIPC''.
        (b) Increasing the Fine for Prohibited Acts Under SIPA.--Section
    14(c) of the Securities Investor Protection Act of 1970 (15 U.S.C.
    78jjj(c)) is amended--
            (1) in paragraph (1), by striking ``$50,000'' and inserting
        ``$250,000''; and
            (2) in paragraph (2), by striking ``$50,000'' and inserting
        ``$250,000''.
        (c) Penalty for Misrepresentation of SIPC Membership or
    Protection.--Section 14 of the Securities Investor Protection Act of
    1970 (15 U.S.C. 78jjj) is amended by adding at the end the following
    new subsection:
        ``(d) Misrepresentation of SIPC Membership or Protection.--
            ``(1) In general.--Any person who falsely represents by any
        means (including, without limitation, through the Internet or any
        other medium of mass communication), with actual knowledge of the
        falsity of the representation and with an intent to deceive or
        cause injury to another, that such person, or another person, is a
        member of SIPC or that any person or account is protected or is
        eligible for protection under this Act or by SIPC, shall be liable
        for any damages caused thereby and shall be fined not more than
        $250,000 or imprisoned for not more than 5 years.
            ``(2) Injunctions.--Any court having jurisdiction of a civil
        action arising under this Act may grant temporary injunctions and
        final injunctions on such terms as the court deems reasonable to
        prevent or restrain any violation of paragraph (1). Any such
        injunction may be served anywhere in the United States on the
        person enjoined, shall be operative throughout the United States,
        and shall be enforceable, by proceedings in contempt or otherwise,
        by any United States court having jurisdiction over that person.
        The clerk of the court granting the injunction shall, when
        requested by any other court in which enforcement of the injunction
        is sought, transmit promptly to the other court a certified copy of
        all papers in the case on file in such clerk's office.''.
    SEC. 929W. NOTICE TO MISSING SECURITY HOLDERS.
        Section 17A of the Securities Exchange Act of 1934 (15 U.S.C. 78q-
    1) is amended by adding at the end the following new subsection:
        ``(g) Due Diligence for the Delivery of Dividends, Interest, and
    Other Valuable Property Rights.--
            ``(1) Revision of rules required.--The Commission shall revise
        its regulations in section 240.17Ad-17 of title 17, Code of Federal
        Regulations, as in effect on December 8, 1997, to extend the
        application of such section to brokers and dealers and to provide
        for the following:
                ``(A) A requirement that the paying agent provide a single
            written notification to each missing security holder that the
            missing security holder has been sent a check that has not yet
            been negotiated. The written notification may be sent along
            with a check or other mailing subsequently sent to the missing
            security holder but must be provided no later than 7 months
            after the sending of the not yet negotiated check.
                ``(B) An exclusion for paying agents from the notification
            requirements when the value of the not yet negotiated check is
            less than $25.
                ``(C) A provision clarifying that the requirements
            described in subparagraph (A) shall have no effect on State
            escheatment laws.
                ``(D) For purposes of such revised regulations--
                    ``(i) a security holder shall be considered a `missing
                security holder' if a check is sent to the security holder
                and the check is not negotiated before the earlier of the
                paying agent sending the next regularly scheduled check or
                the elapsing of 6 months after the sending of the not yet
                negotiated check; and
                    ``(ii) the term `paying agent' includes any issuer,
                transfer agent, broker, dealer, investment adviser,
                indenture trustee, custodian, or any other person that
                accepts payments from the issuer of a security and
                distributes the payments to the holders of the security.
            ``(2) Rulemaking.--The Commission shall adopt such rules,
        regulations, and orders necessary to implement this subsection no
        later than 1 year after the date of enactment of this subsection.
        In proposing such rules, the Commission shall seek to minimize
        disruptions to current systems used by or on behalf of paying
        agents to process payment to account holders and avoid requiring
        multiple paying agents to send written notification to a missing
        security holder regarding the same not yet negotiated check.''.
    SEC. 929X. SHORT SALE REFORMS.
        (a) Short Sale Disclosure.--Section 13(f) of the Securities
    Exchange Act of 1934 (15 U.S.C. 78m(f)) is amended by redesignating
    paragraphs (2), (3), (4), and (5) as paragraphs (3), (4), (5), and (6),
    respectively, and inserting after paragraph (1) the following:
            ``(2) The Commission shall prescribe rules providing for the
        public disclosure of the name of the issuer and the title, class,
        CUSIP number, aggregate amount of the number of short sales of each
        security, and any additional information determined by the
        Commission following the end of the reporting period. At a minimum,
        such public disclosure shall occur every month.''.
        (b) Short Selling Enforcement.--Section 9 of the Securities
    Exchange Act of 1934 (15 U.S.C. 78i) is amended--
            (1) by redesignating subsections (d), (e), (f), (g), (h), and
        (i) as subsections (e), (f), (g), (h), (i), and (j), respectively;
        and
            (2) inserting after subsection (c), the following new
        subsection:
        ``(d) Transactions Relating to Short Sales of Securities.--It shall
    be unlawful for any person, directly or indirectly, by the use of the
    mails or any means or instrumentality of interstate commerce, or of any
    facility of any national securities exchange, or for any member of a
    national securities exchange to effect, alone or with one or more other
    persons, a manipulative short sale of any security. The Commission
    shall issue such other rules as are necessary or appropriate to ensure
    that the appropriate enforcement options and remedies are available for
    violations of this subsection in the public interest or for the
    protection of investors.''.
        (c) Investor Notification.--Section 15 of the Securities Exchange
    Act of 1934 (15 U.S.C. 78o) is amended--
            (1) by redesignating subsections (e), (f), (g), (h), and (i) as
        subsections (f), (g), (h), (i), and (j), respectively; and
            (2) inserting after subsection (d) the following new
        subsection:
        ``(e) Notices to Customers Regarding Securities Lending.--Every
    registered broker or dealer shall provide notice to its customers that
    they may elect not to allow their fully paid securities to be used in
    connection with short sales. If a broker or dealer uses a customer's
    securities in connection with short sales, the broker or dealer shall
    provide notice to its customer that the broker or dealer may receive
    compensation in connection with lending the customer's securities. The
    Commission, by rule, as it deems necessary or appropriate in the public
    interest and for the protection of investors, may prescribe the form,
    content, time, and manner of delivery of any notice required under this
    paragraph.''.
    SEC. 929Y. STUDY ON EXTRATERRITORIAL PRIVATE RIGHTS OF ACTION.
        (a) In General.--The Securities and Exchange Commission of the
    United States shall solicit public comment and thereafter conduct a
    study to determine the extent to which private rights of action under
    the antifraud provisions of the Securities and Exchange Act of 1934 (15
    U.S.C. 78u-4) should be extended to cover--
            (1) conduct within the United States that constitutes a
        significant step in the furtherance of the violation, even if the
        securities transaction occurs outside the United States and
        involves only foreign investors; and
            (2) conduct occurring outside the United States that has a
        foreseeable substantial effect within the United States.
        (b) Contents.--The study shall consider and analyze, among other
    things--
            (1) the scope of such a private right of action, including
        whether it should extend to all private actors or whether it should
        be more limited to extend just to institutional investors or
        otherwise;
            (2) what implications such a private right of action would have
        on international comity;
            (3) the economic costs and benefits of extending a private
        right of action for transnational securities frauds; and
            (4) whether a narrower extraterritorial standard should be
        adopted.
        (c) Report.--A report of the study shall be submitted and
    recommendations made to the Committee on Banking, Housing, and Urban
    Affairs of the Senate and the Committee on Financial Services of the
    House not later than 18 months after the date of enactment of this Act.
    SEC. 929Z. GAO STUDY ON SECURITIES LITIGATION.
        (a) Study.--The Comptroller General of the United States shall
    conduct a study on the impact of authorizing a private right of action
    against any person who aids or abets another person in violation of the
    securities laws. To the extent feasible, this study shall include--
            (1) a review of the role of secondary actors in companies
        issuance of securities;
            (2) the courts interpretation of the scope of liability for
        secondary actors under Federal securities laws after January 14,
        2008; and
            (3) the types of lawsuits decided under the Private Securities
        Litigation Act of 1995.
        (b) Report.--Not later than 1 year after the date of enactment of
    this Act, the Comptroller General shall submit a report to Congress on
    the findings of the study required under subsection (a).

      Subtitle C--Improvements to the Regulation of Credit Rating Agencies

        SEC. 931. FINDINGS.
        Congress finds the following:
            (1) Because of the systemic importance of credit ratings and
        the reliance placed on credit ratings by individual and
        institutional investors and financial regulators, the activities
        and performances of credit rating agencies, including nationally
        recognized statistical rating organizations, are matters of
        national public interest, as credit rating agencies are central to
        capital formation, investor confidence, and the efficient
        performance of the United States economy.
            (2) Credit rating agencies, including nationally recognized
        statistical rating organizations, play a critical ``gatekeeper''
        role in the debt market that is functionally similar to that of
        securities analysts, who evaluate the quality of securities in the
        equity market, and auditors, who review the financial statements of
        firms. Such role justifies a similar level of public oversight and
        accountability.
            (3) Because credit rating agencies perform evaluative and
        analytical services on behalf of clients, much as other financial
        ``gatekeepers'' do, the activities of credit rating agencies are
        fundamentally commercial in character and should be subject to the
        same standards of liability and oversight as apply to auditors,
        securities analysts, and investment bankers.
            (4) In certain activities, particularly in advising arrangers
        of structured financial products on potential ratings of such
        products, credit rating agencies face conflicts of interest that
        need to be carefully monitored and that therefore should be
        addressed explicitly in legislation in order to give clearer
        authority to the Securities and Exchange Commission.
            (5) In the recent financial crisis, the ratings on structured
        financial products have proven to be inaccurate. This inaccuracy
        contributed significantly to the mismanagement of risks by
        financial institutions and investors, which in turn adversely
        impacted the health of the economy in the United States and around
        the world. Such inaccuracy necessitates increased accountability on
        the part of credit rating agencies.
        SEC. 932. ENHANCED REGULATION, ACCOUNTABILITY, AND TRANSPARENCY OF
          NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATIONS.
        (a) In General.--Section 15E of the Securities Exchange Act of 1934
    (15 U.S.C. 78o-7) is amended--
            (1) in subsection (b)--
                (A) in paragraph (1)(A), by striking ``furnished'' and
            inserting ``filed'' and by striking ``furnishing'' and
            inserting ``filing'';
                (B) in paragraph (1)(B), by striking ``furnishing'' and
            inserting ``filing''; and
                (C) in the first sentence of paragraph (2), by striking
            ``furnish to'' and inserting ``file with'';
            (2) in subsection (c)--
                (A) in paragraph (2)--
                    (i) in the second sentence, by inserting ``any other
                provision of this section, or'' after ``Notwithstanding'';
                and
                    (ii) by inserting after the period at the end the
                following: ``Nothing in this paragraph may be construed to
                afford a defense against any action or proceeding brought
                by the Commission to enforce the antifraud provisions of
                the securities laws.''; and
                (B) by adding at the end the following:
            ``(3) Internal controls over processes for determining credit
        ratings.--
                ``(A) In general.--Each nationally recognized statistical
            rating organization shall establish, maintain, enforce, and
            document an effective internal control structure governing the
            implementation of and adherence to policies, procedures, and
            methodologies for determining credit ratings, taking into
            consideration such factors as the Commission may prescribe, by
            rule.
                ``(B) Attestation requirement.--The Commission shall
            prescribe rules requiring each nationally recognized
            statistical rating organization to submit to the Commission an
            annual internal controls report, which shall contain--
                    ``(i) a description of the responsibility of the
                management of the nationally recognized statistical rating
                organization in establishing and maintaining an effective
                internal control structure under subparagraph (A);
                    ``(ii) an assessment of the effectiveness of the
                internal control structure of the nationally recognized
                statistical rating organization; and
                    ``(iii) the attestation of the chief executive officer,
                or equivalent individual, of the nationally recognized
                statistical rating organization.'';
            (3) in subsection (d)--
                (A) by inserting after ``or revoke the registration of any
            nationally recognized statistical rating organization'' the
            following: ``, or with respect to any person who is associated
            with, who is seeking to become associated with, 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,
            place limitations on the activities or functions of such
            person, suspend for a period not exceeding 1 year, or bar such
            person from being associated with a nationally recognized
            statistical rating organization,'';
                (B) by inserting ``bar'' after ``placing of limitations,
            suspension,'';
                (C) in paragraph (2), by striking ``furnished to'' and
            inserting ``filed with'';
                (D) in paragraph (2), by redesignating subparagraphs (A)
            and (B) as clauses (i) and (ii), respectively, and adjusting
            the clause margins accordingly;
                (E) by redesignating paragraphs (1) through (5) as
            subparagraphs (A) through (E), respectively, and adjusting the
            subparagraph margins accordingly;
                (F) in the matter preceding subparagraph (A), as so
            redesignated, by striking ``The Commission'' and inserting the
            following:
            ``(1) In general.--The Commission'';
                (G) in subparagraph (D), as so redesignated--
                    (i) by striking ``furnish'' and inserting ``file''; and
                    (ii) by striking ``or'' at the end.
                (H) in subparagraph (E), as so redesignated, by striking
            the period at the end and inserting a semicolon; and
                (I) by adding at the end the following:
                ``(F) has failed reasonably to supervise, with a view to
            preventing a violation of the securities laws, an individual
            who commits such a violation, if the individual is subject to
            the supervision of that person.
            ``(2) Suspension or revocation for particular class of
        securities.--
                ``(A) In general.--The Commission may temporarily suspend
            or permanently revoke the registration of a nationally
            recognized statistical rating organization with respect to a
            particular class or subclass of securities, if the Commission
            finds, on the record after notice and opportunity for hearing,
            that the nationally recognized statistical rating organization
            does not have adequate financial and managerial resources to
            consistently produce credit ratings with integrity.
                ``(B) Considerations.--In making any determination under
            subparagraph (A), the Commission shall consider--
                    ``(i) whether the nationally recognized statistical
                rating organization has failed over a sustained period of
                time, as determined by the Commission, to produce ratings
                that are accurate for that class or subclass of securities;
                and
                    ``(ii) such other factors as the Commission may
                determine.'';
            (4) in subsection (h), by adding at the end the following:
            ``(3) Separation of ratings from sales and marketing.--
                ``(A) Rules required.--The Commission shall issue rules to
            prevent the sales and marketing considerations of a nationally
            recognized statistical rating organization from influencing the
            production of ratings by the nationally recognized statistical
            rating organization.
                ``(B) Contents of rules.--The rules issued under
            subparagraph (A) shall provide for--
                    ``(i) exceptions for small nationally recognized
                statistical rating organizations with respect to which the
                Commission determines that the separation of the production
                of ratings and sales and marketing activities is not
                appropriate; and
                    ``(ii) suspension or revocation of the registration of
                a nationally recognized statistical rating organization, if
                the Commission finds, on the record, after notice and
                opportunity for a hearing, that--

                        ``(I) the nationally recognized statistical rating
                    organization has committed a violation of a rule issued
                    under this subsection; and
                        ``(II) the violation of a rule issued under this
                    subsection affected a rating.

            ``(4) Look-back requirement.--
                ``(A) Review by the nationally recognized statistical
            rating organization.--Each nationally recognized statistical
            rating organization shall establish, maintain, and enforce
            policies and procedures reasonably designed to ensure that, in
            any case in which an employee of a person subject to a credit
            rating of the nationally recognized statistical rating
            organization or the issuer, underwriter, or sponsor of a
            security or money market instrument subject to a credit rating
            of the nationally recognized statistical rating organization
            was employed by the nationally recognized statistical rating
            organization and participated in any capacity in determining
            credit ratings for the person or the securities or money market
            instruments during the 1-year period preceding the date an
            action was taken with respect to the credit rating, the
            nationally recognized statistical rating organization shall--
                    ``(i) conduct a review to determine whether any
                conflicts of interest of the employee influenced the credit
                rating; and
                    ``(ii) take action to revise the rating if appropriate,
                in accordance with such rules as the Commission shall
                prescribe.
                ``(B) Review by commission.--
                    ``(i) In general.--The Commission shall conduct
                periodic reviews of the policies described in subparagraph
                (A) and the implementation of the policies at each
                nationally recognized statistical rating organization to
                ensure they are reasonably designed and implemented to most
                effectively eliminate conflicts of interest.
                    ``(ii) Timing of reviews.--The Commission shall review
                the code of ethics and conflict of interest policy of each
                nationally recognized statistical rating organization--

                        ``(I) not less frequently than annually; and
                        ``(II) whenever such policies are materially
                    modified or amended.

            ``(5) Report to commission on certain employment transitions.--
                ``(A) Report required.--Each nationally recognized
            statistical rating organization shall report to the Commission
            any case such organization knows or can reasonably be expected
            to know where a person associated with such organization within
            the previous 5 years obtains employment with any obligor,
            issuer, underwriter, or sponsor of a security or money market
            instrument for which the organization issued a credit rating
            during the 12-month period prior to such employment, if such
            employee--
                    ``(i) was a senior officer of such organization;
                    ``(ii) participated in any capacity in determining
                credit ratings for such obligor, issuer, underwriter, or
                sponsor; or
                    ``(iii) supervised an employee described in clause
                (ii).
                ``(B) Public disclosure.--Upon receiving such a report, the
            Commission shall make such information publicly available.'';
            (5) in subsection (j)--
                (A) by striking ``Each'' and inserting the following:
            ``(1) In general.--Each''; and
                (B) by adding at the end the following:
            ``(2) Limitations.--
                ``(A) In general.--Except as provided in subparagraph (B),
            an individual designated under paragraph (1) may not, while
            serving in the designated capacity--
                    ``(i) perform credit ratings;
                    ``(ii) participate in the development of ratings
                methodologies or models;
                    ``(iii) perform marketing or sales functions; or
                    ``(iv) participate in establishing compensation levels,
                other than for employees working for that individual.
                ``(B) Exception.--The Commission may exempt a small
            nationally recognized statistical rating organization from the
            limitations under this paragraph, if the Commission finds that
            compliance with such limitations would impose an unreasonable
            burden on the nationally recognized statistical rating
            organization.
            ``(3) Other duties.--Each individual designated under paragraph
        (1) shall establish procedures for the receipt, retention, and
        treatment of--
                ``(A) complaints regarding credit ratings, models,
            methodologies, and compliance with the securities laws and the
            policies and procedures developed under this section; and
                ``(B) confidential, anonymous complaints by employees or
            users of credit ratings.
            ``(4) Compensation.--The compensation of each compliance
        officer appointed under paragraph (1) shall not be linked to the
        financial performance of the nationally recognized statistical
        rating organization and shall be arranged so as to ensure the
        independence of the officer's judgment.
            ``(5) Annual reports required.--
                ``(A) Annual reports required.--Each individual designated
            under paragraph (1) shall submit to the nationally recognized
            statistical rating organization an annual report on the
            compliance of the nationally recognized statistical rating
            organization with the securities laws and the policies and
            procedures of the nationally recognized statistical rating
            organization that includes--
                    ``(i) a description of any material changes to the code
                of ethics and conflict of interest policies of the
                nationally recognized statistical rating organization; and
                    ``(ii) a certification that the report is accurate and
                complete.
                ``(B) Submission of reports to the commission.--Each
            nationally recognized statistical rating organization shall
            file the reports required under subparagraph (A) together with
            the financial report that is required to be submitted to the
            Commission under this section.'';
            (6) in subsection (k), by striking ``furnish to'' and inserting
        ``file with'';
            (7) in subsection (l)(2)(A)(i), by striking ``furnished'' and
        inserting ``filed''; and
            (8) by striking subsection (p) and inserting the following:
        ``(p) Regulation of Nationally Recognized Statistical Rating
    Organizations.--
            ``(1) Establishment of office of credit ratings.--
                ``(A) Office established.--The Commission shall establish
            within the Commission an Office of Credit Ratings (referred to
            in this subsection as the `Office') to administer the rules of
            the Commission--
                    ``(i) with respect to the practices of nationally
                recognized statistical rating organizations in determining
                ratings, for the protection of users of credit ratings and
                in the public interest;
                    ``(ii) to promote accuracy in credit ratings issued by
                nationally recognized statistical rating organizations; and
                    ``(iii) to ensure that such ratings are not unduly
                influenced by conflicts of interest.
                ``(B) Director of the office.--The head of the Office shall
            be the Director, who shall report to the Chairman.
            ``(2) Staffing.--The Office established under this subsection
        shall be staffed sufficiently to carry out fully the requirements
        of this section. The staff shall include persons with knowledge of
        and expertise in corporate, municipal, and structured debt finance.
            ``(3) Commission examinations.--
                ``(A) Annual examinations required.--The Office shall
            conduct an examination of each nationally recognized
            statistical rating organization at least annually.
                ``(B) Conduct of examinations.--Each examination under
            subparagraph (A) shall include a review of--
                    ``(i) whether the nationally recognized statistical
                rating organization conducts business in accordance with
                the policies, procedures, and rating methodologies of the
                nationally recognized statistical rating organization;
                    ``(ii) the management of conflicts of interest by the
                nationally recognized statistical rating organization;
                    ``(iii) implementation of ethics policies by the
                nationally recognized statistical rating organization;
                    ``(iv) the internal supervisory controls of the
                nationally recognized statistical rating organization;
                    ``(v) the governance of the nationally recognized
                statistical rating organization;
                    ``(vi) the activities of the individual designated by
                the nationally recognized statistical rating organization
                under subsection (j)(1);
                    ``(vii) the processing of complaints by the nationally
                recognized statistical rating organization; and
                    ``(viii) the policies of the nationally recognized
                statistical rating organization governing the post-
                employment activities of former staff of the nationally
                recognized statistical rating organization.
                ``(C) Inspection reports.--The Commission shall make
            available to the public, in an easily understandable format, an
            annual report summarizing--
                    ``(i) the essential findings of all examinations
                conducted under subparagraph (A), as deemed appropriate by
                the Commission;
                    ``(ii) the responses by the nationally recognized
                statistical rating organizations to any material regulatory
                deficiencies identified by the Commission under clause (i);
                and
                    ``(iii) whether the nationally recognized statistical
                rating organizations have appropriately addressed the
                recommendations of the Commission contained in previous
                reports under this subparagraph.
            ``(4) Rulemaking authority.--The Commission shall--
                ``(A) establish, by rule, fines, and other penalties
            applicable to any nationally recognized statistical rating
            organization that violates the requirements of this section and
            the rules thereunder; and
                ``(B) issue such rules as may be necessary to carry out
            this section.
        ``(q) Transparency of Ratings Performance.--
            ``(1) Rulemaking required.--The Commission shall, by rule,
        require that each nationally recognized statistical rating
        organization publicly disclose information on the initial credit
        ratings determined by the nationally recognized statistical rating
        organization for each type of obligor, security, and money market
        instrument, and any subsequent changes to such credit ratings, for
        the purpose of allowing users of credit ratings to evaluate the
        accuracy of ratings and compare the performance of ratings by
        different nationally recognized statistical rating organizations.
            ``(2) Content.--The rules of the Commission under this
        subsection shall require, at a minimum, disclosures that--
                ``(A) are comparable among nationally recognized
            statistical rating organizations, to allow users of credit
            ratings to compare the performance of credit ratings across
            nationally recognized statistical rating organizations;
                ``(B) are clear and informative for investors having a wide
            range of sophistication who use or might use credit ratings;
                ``(C) include performance information over a range of years
            and for a variety of types of credit ratings, including for
            credit ratings withdrawn by the nationally recognized
            statistical rating organization;
                ``(D) are published and made freely available by the
            nationally recognized statistical rating organization, on an
            easily accessible portion of its website, and in writing, when
            requested;
                ``(E) are appropriate to the business model of a nationally
            recognized statistical rating organization; and
                ``(F) each nationally recognized statistical rating
            organization include an attestation with any credit rating it
            issues affirming that no part of the rating was influenced by
            any other business activities, that the rating was based solely
            on the merits of the instruments being rated, and that such
            rating was an independent evaluation of the risks and merits of
            the instrument.
        ``(r) Credit Ratings Methodologies.--The Commission shall prescribe
    rules, for the protection of investors and in the public interest, with
    respect to the procedures and methodologies, including qualitative and
    quantitative data and models, used by nationally recognized statistical
    rating organizations that require each nationally recognized
    statistical rating organization--
            ``(1) to ensure that credit ratings are determined using
        procedures and methodologies, including qualitative and
        quantitative data and models, that are--
                ``(A) approved by the board of the nationally recognized
            statistical rating organization, a body performing a function
            similar to that of a board; and
                ``(B) in accordance with the policies and procedures of the
            nationally recognized statistical rating organization for the
            development and modification of credit rating procedures and
            methodologies;
            ``(2) to ensure that when material changes to credit rating
        procedures and methodologies (including changes to qualitative and
        quantitative data and models) are made, that--
                ``(A) the changes are applied consistently to all credit
            ratings to which the changed procedures and methodologies
            apply;
                ``(B) to the extent that changes are made to credit rating
            surveillance procedures and methodologies, the changes are
            applied to then-current credit ratings by the nationally
            recognized statistical rating organization within a reasonable
            time period determined by the Commission, by rule; and
                ``(C) the nationally recognized statistical rating
            organization publicly discloses the reason for the change; and
            ``(3) to notify users of credit ratings--
                ``(A) of the version of a procedure or methodology,
            including the qualitative methodology or quantitative inputs,
            used with respect to a particular credit rating;
                ``(B) when a material change is made to a procedure or
            methodology, including to a qualitative model or quantitative
            inputs;
                ``(C) when a significant error is identified in a procedure
            or methodology, including a qualitative or quantitative model,
            that may result in credit rating actions; and
                ``(D) of the likelihood of a material change described in
            subparagraph (B) resulting in a change in current credit
            ratings.
        ``(s) Transparency of Credit Rating Methodologies and Information
    Reviewed.--
            ``(1) Form for disclosures.--The Commission shall require, by
        rule, each nationally recognized statistical rating organization to
        prescribe a form to accompany the publication of each credit rating
        that discloses--
                ``(A) information relating to--
                    ``(i) the assumptions underlying the credit rating
                procedures and methodologies;
                    ``(ii) the data that was relied on to determine the
                credit rating; and
                    ``(iii) if 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
                ``(B) information that can be used by investors and other
            users of credit ratings to better understand credit ratings in
            each class of credit rating issued by the nationally recognized
            statistical rating organization.
            ``(2) Format.--The form developed under paragraph (1) shall--
                ``(A) be easy to use and helpful for users of credit
            ratings to understand the information contained in the report;
                ``(B) require the nationally recognized statistical rating
            organization to provide the content described in paragraph
            (3)(B) in a manner that is directly comparable across types of
            securities; and
                ``(C) be made readily available to users of credit ratings,
            in electronic or paper form, as the Commission may, by rule,
            determine.
            ``(3) Content of form.--
                ``(A) Qualitative content.--Each nationally recognized
            statistical rating organization shall disclose on the form
            developed under paragraph (1)--
                    ``(i) the credit ratings produced by the nationally
                recognized statistical rating organization;
                    ``(ii) the main assumptions and principles used in
                constructing procedures and methodologies, including
                qualitative methodologies and quantitative inputs and
                assumptions about the correlation of defaults across
                underlying assets used in rating structured products;
                    ``(iii) the potential limitations of the credit
                ratings, and the types of risks excluded from the credit
                ratings that the nationally recognized statistical rating
                organization does not comment on, including liquidity,
                market, and other risks;
                    ``(iv) information on the uncertainty of the credit
                rating, including--

                        ``(I) information on the reliability, accuracy, and
                    quality of the data relied on in determining the credit
                    rating; and
                        ``(II) a statement relating to the extent to which
                    data essential to the determination of the credit
                    rating were reliable or limited, including--

                            ``(aa) any limits on the scope of historical
                        data; and
                            ``(bb) any limits in accessibility to certain
                        documents or other types of information that would
                        have better informed the credit rating;
                    ``(v) whether and to what extent third party due
                diligence services have been used by the nationally
                recognized statistical rating organization, a description
                of the information that such third party reviewed in
                conducting due diligence services, and a description of the
                findings or conclusions of such third party;
                    ``(vi) a description of the data about any obligor,
                issuer, security, or money market instrument that were
                relied upon for the purpose of determining the credit
                rating;
                    ``(vii) a statement containing an overall assessment of
                the quality of information available and considered in
                producing a rating for an obligor, security, or money
                market instrument, in relation to the quality of
                information available to the nationally recognized
                statistical rating organization in rating similar
                issuances;
                    ``(viii) information relating to conflicts of interest
                of the nationally recognized statistical rating
                organization; and
                    ``(ix) such additional information as the Commission
                may require.
                ``(B) Quantitative content.--Each nationally recognized
            statistical rating organization shall disclose on the form
            developed under this subsection--
                    ``(i) an explanation or measure of the potential
                volatility of the credit rating, including--

                        ``(I) any factors that might lead to a change in
                    the credit ratings; and
                        ``(II) the magnitude of the change that a user can
                    expect under different market conditions;

                    ``(ii) information on the content of the rating,
                including--

                        ``(I) the historical performance of the rating; and
                        ``(II) the expected probability of default and the
                    expected loss in the event of default;

                    ``(iii) information on the sensitivity of the rating to
                assumptions made by the nationally recognized statistical
                rating organization, including--

                        ``(I) 5 assumptions made in the ratings process
                    that, without accounting for any other factor, would
                    have the greatest impact on a rating if the assumptions
                    were proven false or inaccurate; and
                        ``(II) an analysis, using specific examples, of how
                    each of the 5 assumptions identified under subclause
                    (I) impacts a rating;

                    ``(iv) such additional information as may be required
                by the Commission.
            ``(4) Due diligence services for asset-backed securities.--
                ``(A) Findings.--The issuer or underwriter of any asset-
            backed security shall make publicly available the findings and
            conclusions of any third-party due diligence report obtained by
            the issuer or underwriter.
                ``(B) Certification required.--In any case in which third-
            party due diligence services are employed by a nationally
            recognized statistical rating organization, an issuer, or an
            underwriter, the person providing the due diligence services
            shall provide to any nationally recognized statistical rating
            organization that produces a rating to which such services
            relate, written certification, as provided in subparagraph (C).
                ``(C) Format and content.--The Commission shall establish
            the appropriate format and content for the written
            certifications required under subparagraph (B), to ensure that
            providers of due diligence services have conducted a thorough
            review of data, documentation, and other relevant information
            necessary for a nationally recognized statistical rating
            organization to provide an accurate rating.
                ``(D) Disclosure of certification.--The Commission shall
            adopt rules requiring a nationally recognized statistical
            rating organization, at the time at which the nationally
            recognized statistical rating organization produces a rating,
            to disclose the certification described in subparagraph (B) to
            the public in a manner that allows the public to determine the
            adequacy and level of due diligence services provided by a
            third party.
        ``(t) Corporate Governance, Organization, and Management of
    Conflicts of Interest.--
            ``(1) Board of directors.--Each nationally recognized
        statistical rating organization shall have a board of directors.
            ``(2) Independent directors.--
                ``(A) In general.--At least \1/2\ of the board of
            directors, but not fewer than 2 of the members thereof, shall
            be independent of the nationally recognized statistical rating
            agency. A portion of the independent directors shall include
            users of ratings from a nationally recognized statistical
            rating organization.
                ``(B) Independence determination.--In order to be
            considered independent for purposes of this subsection, a
            member of the board of directors of a nationally recognized
            statistical rating organization--
                    ``(i) may not, other than in his or her capacity as a
                member of the board of directors or any committee thereof--

                        ``(I) accept any consulting, advisory, or other
                    compensatory fee from the nationally recognized
                    statistical rating organization; or
                        ``(II) be a person associated with the nationally
                    recognized statistical rating organization or with any
                    affiliated company thereof; and

                    ``(ii) shall be disqualified from any deliberation
                involving a specific rating in which the independent board
                member has a financial interest in the outcome of the
                rating.
                ``(C) Compensation and term.--The compensation of the
            independent members of the board of directors of a nationally
            recognized statistical rating organization 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 to exceed 5 years, and shall not be renewable.
            ``(3) Duties of board of directors.--In addition to the overall
        responsibilities of the board of directors, the board shall
        oversee--
                ``(A) the establishment, maintenance, and enforcement of
            policies and procedures for determining credit ratings;
                ``(B) the establishment, maintenance, and enforcement of
            policies and procedures to address, manage, and disclose any
            conflicts of interest;
                ``(C) the effectiveness of the internal control system with
            respect to policies and procedures for determining credit
            ratings; and
                ``(D) the compensation and promotion policies and practices
            of the nationally recognized statistical rating organization.
            ``(4) Treatment of nrsro subsidiaries.--If a nationally
        recognized statistical rating organization is a subsidiary of a
        parent entity, the board of the directors of the parent entity may
        satisfy the requirements of this subsection by assigning to a
        committee of such board of directors the duties under paragraph
        (3), if--
                ``(A) at least \1/2\ of the members of the committee
            (including the chairperson of the committee) are independent,
            as defined in this section; and
                ``(B) at least 1 member of the committee is a user of
            ratings from a nationally recognized statistical rating
            organization.
            ``(5) Exception authority.--If the Commission finds that
        compliance with the provisions of this subsection present an
        unreasonable burden on a small nationally recognized statistical
        rating organization, the Commission may permit the nationally
        recognized statistical rating organization to delegate such
        responsibilities to a committee that includes at least one
        individual who is a user of ratings of a nationally recognized
        statistical rating organization.''.
        (b) Conforming Amendment.--Section 3(a)(62) of the Securities
    Exchange Act of 1934 (15 U.S.C. 78c(a)(62)) is amended by striking
    subparagraph (A) and redesignating subparagraphs (B) and (C) as
    subparagraphs (A) and (B), respectively.
        SEC. 933. STATE OF MIND IN PRIVATE ACTIONS.
        (a) Accountability.--Section 15E(m) of the Securities Exchange Act
    of 1934 (15 U.S.C. 78o-7(m)) is amended to read as follows:
        ``(m) Accountability.--
            ``(1) In general.--The enforcement and penalty provisions of
        this title shall apply to statements made by a credit rating agency
        in the same manner and to the same extent as such provisions apply
        to statements made by a registered public accounting firm or a
        securities analyst under the securities laws, and such statements
        shall not be deemed forward-looking statements for the purposes of
        section 21E.
            ``(2) Rulemaking.--The Commission shall issue such rules as may
        be necessary to carry out this subsection.''.
        (b) State of Mind.--Section 21D(b)(2) of the Securities Exchange
    Act of 1934 (15 U.S.C. 78u-4(b)(2)) is amended--
            (1) by striking ``In any'' and inserting the following:
                ``(A) In general.--Except as provided in subparagraph (B),
            in any''; and
            (2) by adding at the end the following:
                ``(B) Exception.--In the case of an action for money
            damages brought against a credit rating agency or a controlling
            person under this title, it shall be sufficient, for purposes
            of pleading any required state of mind in relation to such
            action, that the complaint state with particularity facts
            giving rise to a strong inference that the credit rating agency
            knowingly or recklessly failed--
                    ``(i) to conduct a reasonable investigation of the
                rated security with respect to the factual elements relied
                upon by its own methodology for evaluating credit risk; or
                    ``(ii) to obtain reasonable verification of such
                factual elements (which verification may be based on a
                sampling technique that does not amount to an audit) from
                other sources that the credit rating agency considered to
                be competent and that were independent of the issuer and
                underwriter.''.
        SEC. 934. REFERRING TIPS TO LAW ENFORCEMENT OR REGULATORY
          AUTHORITIES.
        Section 15E of the Securities Exchange Act of 1934 (15 U.S.C. 78o-
    7), as amended by this subtitle, is amended by adding at the end the
    following:
        ``(u) Duty To Report Tips Alleging Material Violations of Law.--
            ``(1) Duty to report.--Each nationally recognized statistical
        rating organization shall refer to the appropriate law enforcement
        or regulatory authorities any information that the nationally
        recognized statistical rating organization receives from a third
        party and finds credible that alleges that an issuer of securities
        rated by the nationally recognized statistical rating organization
        has committed or is committing a material violation of law that has
        not been adjudicated by a Federal or State court.
            ``(2) Rule of construction.--Nothing in paragraph (1) may be
        construed to require a nationally recognized statistical rating
        organization to verify the accuracy of the information described in
        paragraph (1).''.
        SEC. 935. CONSIDERATION OF INFORMATION FROM SOURCES OTHER THAN THE
          ISSUER IN RATING DECISIONS.
        Section 15E of the Securities Exchange Act of 1934 (15 U.S.C. 78o-
    7), as amended by this subtitle, is amended by adding at the end the
    following:
        ``(v) Information From Sources Other Than the Issuer.--In producing
    a credit rating, a nationally recognized statistical rating
    organization shall consider information about an issuer that the
    nationally recognized statistical rating organization has, or receives
    from a source other than the issuer or underwriter, that the nationally
    recognized statistical rating organization finds credible and
    potentially significant to a rating decision.''.
        SEC. 936. QUALIFICATION STANDARDS FOR CREDIT RATING ANALYSTS.
        Not later than 1 year after the date of enactment of this Act, the
    Commission shall issue rules that are reasonably designed to ensure
    that any person employed by a nationally recognized statistical rating
    organization to perform credit ratings--
            (1) meets standards of training, experience, and competence
        necessary to produce accurate ratings for the categories of issuers
        whose securities the person rates; and
            (2) is tested for knowledge of the credit rating process.
        SEC. 937. TIMING OF REGULATIONS.
        Unless otherwise specifically provided in this subtitle, the
    Commission shall issue final regulations, as required by this subtitle
    and the amendments made by this subtitle, not later than 1 year after
    the date of enactment of this Act.
        SEC. 938. UNIVERSAL RATINGS SYMBOLS.
        (a) Rulemaking.--The Commission shall require, by rule, each
    nationally recognized statistical rating organization to establish,
    maintain, and enforce written policies and procedures that--
            (1) assess the probability that an issuer of a security or
        money market instrument will default, fail to make timely payments,
        or otherwise not make payments to investors in accordance with the
        terms of the security or money market instrument;
            (2) clearly define and disclose the meaning of any symbol used
        by the nationally recognized statistical rating organization to
        denote a credit rating; and
            (3) apply any symbol described in paragraph (2) in a manner
        that is consistent for all types of securities and money market
        instruments for which the symbol is used.
        (b) Rule of Construction.--Nothing in this section shall prohibit a
    nationally recognized statistical rating organization from using
    distinct sets of symbols to denote credit ratings for different types
    of securities or money market instruments.
        SEC. 939. REMOVAL OF STATUTORY REFERENCES TO CREDIT RATINGS.
        (a) Federal Deposit Insurance Act.--The Federal Deposit Insurance
    Act (12 U.S.C. 1811 et seq.) is amended--
            (1) in section 7(b)(1)(E)(i), by striking ``credit rating
        entities, and other private economic'' and insert ``private
        economic, credit,'';
            (2) in section 28(d)--
                (A) in the subsection heading, by striking ``Not of
            Investment Grade'';
                (B) in paragraph (1), by striking ``not of investment
            grade'' and inserting ``that does not meet standards of credit-
            worthiness as established by the Corporation'';
                (C) in paragraph (2), by striking ``not of investment
            grade'';
                (D) by striking paragraph (3);
                (E) by redesignating paragraph (4) as paragraph (3); and
                (F) in paragraph (3), as so redesignated--
                    (i) by striking subparagraph (A);
                    (ii) by redesignating subparagraphs (B) and (C) as
                subparagraphs (A) and (B), respectively; and
                    (iii) in subparagraph (B), as so redesignated, by
                striking ``not of investment grade'' and inserting ``that
                does not meet standards of credit-worthiness as established
                by the Corporation''; and
            (3) in section 28(e)--
                (A) in the subsection heading, by striking ``Not of
            Investment Grade'';
                (B) in paragraph (1), by striking ``not of investment
            grade'' and inserting ``that does not meet standards of credit-
            worthiness as established by the Corporation''; and
                (C) in paragraphs (2) and (3), by striking ``not of
            investment grade'' each place that it appears and inserting
            ``that does not meet standards of credit-worthiness established
            by the Corporation''.
        (b) Federal Housing Enterprises Financial Safety and Soundness Act
    of 1992.--Section 1319 of the Federal Housing Enterprises Financial
    Safety and Soundness Act of 1992 (12 U.S.C. 4519) is amended by
    striking ``that is a nationally recognized statistical rating
    organization, as such term is defined in section 3(a) of the Securities
    Exchange Act of 1934,''.
        (c) Investment Company Act of 1940.--Section 6(a)(5)(A)(iv)(I)
    Investment Company Act of 1940 (15 U.S.C. 80a-6(a)(5)(A)(iv)(I)) is
    amended by striking ``is rated investment grade by not less than 1
    nationally recognized statistical rating organization'' and inserting
    ``meets such standards of credit-worthiness as the Commission shall
    adopt''.
        (d) Revised Statutes.--Section 5136A of title LXII of the Revised
    Statutes of the United States (12 U.S.C. 24a) is amended--
            (1) in subsection (a)(2)(E), by striking ``any applicable
        rating'' and inserting ``standards of credit-worthiness established
        by the Comptroller of the Currency'';
            (2) in the heading for subsection (a)(3) by striking ``Rating
        or Comparable Requirement'' and inserting ``Requirement'';
            (3) subsection (a)(3), by amending subparagraph (A) to read as
        follows:
                ``(A) In general.--A national bank meets the requirements
            of this paragraph if the bank is one of the 100 largest insured
            banks and has not fewer than 1 issue of outstanding debt that
            meets standards of credit-worthiness or other criteria as the
            Secretary of the Treasury and the Board of Governors of the
            Federal Reserve System may jointly establish.''.
            (4) in the heading for subsection (f), by striking ``Maintain
        Public Rating or'' and inserting ``Meet Standards of Credit-
        worthiness''; and
            (5) in subsection (f)(1), by striking ``any applicable rating''
        and inserting ``standards of credit-worthiness established by the
        Comptroller of the Currency''.
        (e) Securities Exchange Act of 1934.--Section 3(a) Securities
    Exchange Act of 1934 (15 U.S.C. 78a(3)(a)) is amended--
            (1) in paragraph (41), by striking ``is rated in one of the two
        highest rating categories by at least one nationally recognized
        statistical rating organization'' and inserting ``meets standards
        of credit-worthiness as established by the Commission''; and
            (2) in paragraph (53)(A), by striking ``is rated in 1 of the 4
        highest rating categories by at least 1 nationally recognized
        statistical rating organization'' and inserting ``meets standards
        of credit-worthiness as established by the Commission''.
        (f) World Bank Discussions.--Section 3(a)(6) of the amendment in
    the nature of a substitute to the text of H.R. 4645, as ordered
    reported from the Committee on Banking, Finance and Urban Affairs on
    September 22, 1988, as enacted into law by section 555 of Public Law
    100-461, (22 U.S.C. 286hh(a)(6)), is amended by striking ``credit
    rating'' and inserting ``credit-worthiness''.
        (g) Effective Date.--The amendments made by this section shall take
    effect 2 years after the date of enactment of this Act.
        (h) Study and Report.--
            (1) In general.--Commission shall undertake a study on the
        feasability and desirability of--
                (A) standardizing credit ratings terminology, so that all
            credit rating agencies issue credit ratings using identical
            terms;
                (B) standardizing the market stress conditions under which
            ratings are evaluated;
                (C) requiring a quantitative correspondence between credit
            ratings and a range of default probabilities and loss
            expectations under standardized conditions of economic stress;
            and
                (D) standardizing credit rating terminology across asset
            classes, so that named ratings correspond to a standard range
            of default probabilities and expected losses independent of
            asset class and issuing entity.
            (2) Report.--Not later than 1 year after the date of enactment
        of this Act, the Commission shall submit to Congress a report
        containing the findings of the study under paragraph (1) and the
        recommendations, if any, of the Commission with respect to the
        study.
    SEC. 939A. REVIEW OF RELIANCE ON RATINGS.
        (a) Agency Review.--Not later than 1 year after the date of the
    enactment of this subtitle, each Federal agency shall, to the extent
    applicable, review--
            (1) 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
            (2) any references to or requirements in such regulations
        regarding credit ratings.
        (b) Modifications Required.--Each such agency shall modify any such
    regulations identified by the review conducted under subsection (a) 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.
        (c) Report.--Upon conclusion of the review required under
    subsection (a), each Federal agency shall transmit a report to Congress
    containing a description of any modification of any regulation such
    agency made pursuant to subsection (b).
    SEC. 939B. ELIMINATION OF EXEMPTION FROM FAIR DISCLOSURE RULE.
        Not later than 90 days after the date of enactment of this
    subtitle, the Securities Exchange Commission shall revise Regulation FD
    (17 C.F.R. 243.100) to remove from such regulation the exemption for
    entities whose primary business is the issuance of credit ratings (17
    C.F.R. 243.100(b)(2)(iii)).
    SEC. 939C. SECURITIES AND EXCHANGE COMMISSION STUDY ON STRENGTHENING
    CREDIT RATING AGENCY INDEPENDENCE.
        (a) Study.--The Commission shall conduct a study of--
            (1) the independence of nationally recognized statistical
        rating organizations; and
            (2) how the independence of nationally recognized statistical
        rating organizations affects the ratings issued by the nationally
        recognized statistical rating organizations.
        (b) Subjects for Evaluation.--In conducting the study under
    subsection (a), the Commission shall evaluate--
            (1) the management of conflicts of interest raised by a
        nationally recognized statistical rating organization providing
        other services, including risk management advisory services,
        ancillary assistance, or consulting services;
            (2) the potential impact of rules prohibiting a nationally
        recognized statistical rating organization that provides a rating
        to an issuer from providing other services to the issuer; and
            (3) any other issue relating to nationally recognized
        statistical rating organizations, as the Chairman of the Commission
        determines is appropriate.
        (c) Report.--Not later than 3 years after the date of enactment of
    this Act, the Chairman of the Commission shall submit 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 the
    results of the study conducted under subsection (a), including
    recommendations, if any, for improving the integrity of ratings issued
    by nationally recognized statistical rating organizations.
    SEC. 939D. GOVERNMENT ACCOUNTABILITY OFFICE STUDY ON ALTERNATIVE
    BUSINESS MODELS.
        (a) Study.--The Comptroller General of the United States shall
    conduct a study on alternative means for compensating nationally
    recognized statistical rating organizations in order to create
    incentives for nationally recognized statistical rating organizations
    to provide more accurate credit ratings, including any statutory
    changes that would be required to facilitate the use of an alternative
    means of compensation.
        (b) Report.--Not later than 18 months after the date of enactment
    of this Act, the Comptroller General shall submit 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 the
    results of the study conducted under subsection (a), including
    recommendations, if any, for providing incentives to credit rating
    agencies to improve the credit rating process.
    SEC. 939E. GOVERNMENT ACCOUNTABILITY OFFICE STUDY ON THE CREATION OF AN
    INDEPENDENT PROFESSIONAL ANALYST ORGANIZATION.
        (a) Study.--The Comptroller General of the United States shall
    conduct a study on the feasibility and merits of creating an
    independent professional organization for rating analysts employed by
    nationally recognized statistical rating organizations that would be
    responsible for--
            (1) establishing independent standards for governing the
        profession of rating analysts;
            (2) establishing a code of ethical conduct; and
            (3) overseeing the profession of rating analysts.
        (b) Report.--Not later than 1 year after the date of publication of
    the rules issued by the Commission pursuant to section 936, the
    Comptroller General shall submit 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 the results of the study
    conducted under subsection (a).
    SEC. 939F. STUDY AND RULEMAKING ON ASSIGNED CREDIT RATINGS.
        (a) Definition.--In this section, the term ``structured finance
    product'' means an asset-backed security, as defined in section
    3(a)(77) of the Securities Exchange Act of 1934, as added by section
    941, and any structured product based on an asset-backed security, as
    determined by the Commission, by rule.
        (b) Study.--The Commission shall carry out a study of--
            (1) the credit rating process for structured finance products
        and the conflicts of interest associated with the issuer-pay and
        the subscriber-pay models;
            (2) the feasibility of establishing a system in which a public
        or private utility or a self-regulatory organization assigns
        nationally recognized statistical rating organizations to determine
        the credit ratings of structured finance products, including--
                (A) an assessment of potential mechanisms for determining
            fees for the nationally recognized statistical rating
            organizations;
                (B) appropriate methods for paying fees to the nationally
            recognized statistical rating organizations;
                (C) the extent to which the creation of such a system would
            be viewed as the creation of moral hazard by the Federal
            Government; and
                (D) any constitutional or other issues concerning the
            establishment of such a system;
            (3) the range of metrics that could be used to determine the
        accuracy of credit ratings; and
            (4) alternative means for compensating nationally recognized
        statistical rating organizations that would create incentives for
        accurate credit ratings.
        (c) Report and Recommendation.--Not later than 24 months after the
    date of enactment of this Act, the Commission shall submit 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 that contains--
            (1) the findings of the study required under subsection (b);
        and
            (2) any recommendations for regulatory or statutory changes
        that the Commission determines should be made to implement the
        findings of the study required under subsection (b).
        (d) Rulemaking.--
            (1) Rulemaking.--After submission of the report under
        subsection (c), the Commission shall, by rule, as the Commission
        determines is necessary or appropriate in the public interest or
        for the protection of investors, establish a system for the
        assignment of nationally recognized statistical rating
        organizations to determine the initial credit ratings of structured
        finance products, in a manner that prevents the issuer, sponsor, or
        underwriter of the structured finance product from selecting the
        nationally recognized statistical rating organization that will
        determine the initial credit ratings and monitor such credit
        ratings. In issuing any rule under this paragraph, the Commission
        shall give thorough consideration to the provisions of section
        15E(w) of the Securities Exchange Act of 1934, as that provision
        would have been added by section 939D of H.R. 4173 (111th
        Congress), as passed by the Senate on May 20, 2010, and shall
        implement the system described in such section 939D unless the
        Commission determines that an alternative system would better serve
        the public interest and the protection of investors.
            (2) Rule of construction.--Nothing in this subsection may be
        construed to limit or suspend any other rulemaking authority of the
        Commission.
    SEC. 939G. EFFECT OF RULE 436(G).
        Rule 436(g), promulgated by the Securities and Exchange Commission
    under the Securities Act of 1933, shall have no force or effect.
    SEC. 939H. SENSE OF CONGRESS.
        It is the sense of Congress that the Securities and Exchange
    Commission should exercise the rulemaking authority of the Commission
    under section 15E(h)(2)(B) of the Securities Exchange Act of 1934 (15
    U.S.C. 78o-7(h)(2)(B)) to prevent improper conflicts of interest
    arising from employees of nationally recognized statistical rating
    organizations providing services to issuers of securities that are
    unrelated to the issuance of credit ratings, including consulting,
    advisory, and other services.

      Subtitle D--Improvements to the Asset-Backed Securitization Process

        SEC. 941. REGULATION OF CREDIT RISK RETENTION.
        (a) Definition of Asset-backed Security.--Section 3(a) of the
    Securities Exchange Act of 1934 (15 U.S.C. 78c(a)) is amended by adding
    at the end the following:
            ``(77) Asset-backed security.--The term `asset-backed
        security'--
                ``(A) means a fixed-income or other security collateralized
            by any type of self-liquidating financial asset (including a
            loan, a lease, a mortgage, or a secured or unsecured
            receivable) that allows the holder of the security to receive
            payments that depend primarily on cash flow from the asset,
            including--
                    ``(i) a collateralized mortgage obligation;
                    ``(ii) a collateralized debt obligation;
                    ``(iii) a collateralized bond obligation;
                    ``(iv) a collateralized debt obligation of asset-backed
                securities;
                    ``(v) a collateralized debt obligation of
                collateralized debt obligations; and
                    ``(vi) a security that the Commission, by rule,
                determines to be an asset-backed security for purposes of
                this section; and
                ``(B) does not include a security issued by a finance
            subsidiary held by the parent company or a company controlled
            by the parent company, if none of the securities issued by the
            finance subsidiary are held by an entity that is not controlled
            by the parent company.''.
        (b) Credit Risk Retention.--The Securities Exchange Act of 1934 (15
    U.S.C. 78a et seq.) is amended by inserting after section 15F, as added
    by this Act, the following:
        ``SEC. 15G. CREDIT RISK RETENTION.
        ``(a) Definitions.--In this section--
            ``(1) the term `Federal banking agencies' means the Office of
        the Comptroller of the Currency, the Board of Governors of the
        Federal Reserve System, and the Federal Deposit Insurance
        Corporation;
            ``(2) the term `insured depository institution' has the same
        meaning as in section 3(c) of the Federal Deposit Insurance Act (12
        U.S.C. 1813(c));
            ``(3) the term `securitizer' means--
                ``(A) an issuer of an asset-backed security; or
                ``(B) a person who organizes and initiates an asset-backed
            securities transaction by selling or transferring assets,
            either directly or indirectly, including through an affiliate,
            to the issuer; and
            ``(4) the term `originator' means a person who--
                ``(A) through the extension of credit or otherwise, creates
            a financial asset that collateralizes an asset-backed security;
            and
                ``(B) sells an asset directly or indirectly to a
            securitizer.
        ``(b) Regulations Required.--
            ``(1) In general.--Not later than 270 days after the date of
        enactment of this section, the Federal banking agencies and the
        Commission shall jointly prescribe regulations to require any
        securitizer to retain an economic interest in a portion of the
        credit risk for any asset that the securitizer, through the
        issuance of an asset-backed security, transfers, sells, or conveys
        to a third party.
            ``(2) Residential mortgages.--Not later than 270 days after the
        date of the enactment of this section, the Federal banking
        agencies, the Commission, the Secretary of Housing and Urban
        Development, and the Federal Housing Finance Agency, shall jointly
        prescribe regulations to require any securitizer to retain an
        economic interest in a portion of the credit risk for any
        residential mortgage asset that the securitizer, through the
        issuance of an asset-backed security, transfers, sells, or conveys
        to a third party.
        ``(c) Standards for Regulations.--
            ``(1) Standards.--The regulations prescribed under subsection
        (b) shall--
                ``(A) prohibit a securitizer from directly or indirectly
            hedging or otherwise transferring the credit risk that the
            securitizer is required to retain with respect to an asset;
                ``(B) require a securitizer to retain--
                    ``(i) not less than 5 percent of the credit risk for
                any asset--

                        ``(I) that is not a qualified residential mortgage
                    that is transferred, sold, or conveyed through the
                    issuance of an asset-backed security by the
                    securitizer; or
                        ``(II) that is a qualified residential mortgage
                    that is transferred, sold, or conveyed through the
                    issuance of an asset-backed security by the
                    securitizer, if 1 or more of the assets that
                    collateralize the asset-backed security are not
                    qualified residential mortgages; or

                    ``(ii) less than 5 percent of the credit risk for an
                asset that is not a qualified residential mortgage that is
                transferred, sold, or conveyed through the issuance of an
                asset-backed security by the securitizer, if the originator
                of the asset meets the underwriting standards prescribed
                under paragraph (2)(B);
                ``(C) specify--
                    ``(i) the permissible forms of risk retention for
                purposes of this section;
                    ``(ii) the minimum duration of the risk retention
                required under this section; and
                    ``(iii) that a securitizer is not required to retain
                any part of the credit risk for an asset that is
                transferred, sold or conveyed through the issuance of an
                asset-backed security by the securitizer, if all of the
                assets that collateralize the asset-backed security are
                qualified residential mortgages;
                ``(D) apply, regardless of whether the securitizer is an
            insured depository institution;
                ``(E) with respect to a commercial mortgage, specify the
            permissible types, forms, and amounts of risk retention that
            would meet the requirements of subparagraph (B), which in the
            determination of the Federal banking agencies and the
            Commission may include--
                    ``(i) retention of a specified amount or percentage of
                the total credit risk of the asset;
                    ``(ii) retention of the first-loss position by a third-
                party purchaser that specifically negotiates for the
                purchase of such first loss position, holds adequate
                financial resources to back losses, provides due diligence
                on all individual assets in the pool before the issuance of
                the asset-backed securities, and meets the same standards
                for risk retention as the Federal banking agencies and the
                Commission require of the securitizer;
                    ``(iii) a determination by the Federal banking agencies
                and the Commission that the underwriting standards and
                controls for the asset are adequate; and
                    ``(iv) provision of adequate representations and
                warranties and related enforcement mechanisms; and
                ``(F) establish appropriate standards for retention of an
            economic interest with respect to collateralized debt
            obligations, securities collateralized by collateralized debt
            obligations, and similar instruments collateralized by other
            asset-backed securities; and
                ``(G) provide for--
                    ``(i) a total or partial exemption of any
                securitization, as may be appropriate in the public
                interest and for the protection of investors;
                    ``(ii) a total or partial exemption for the
                securitization of an asset issued or guaranteed by the
                United States, or an agency of the United States, as the
                Federal banking agencies and the Commission jointly
                determine appropriate in the public interest and for the
                protection of investors, except that, for purposes of this
                clause, the Federal National Mortgage Association and the
                Federal Home Loan Mortgage Corporation are not agencies of
                the United States;
                    ``(iii) a total or partial exemption for any asset-
                backed security that is a security issued or guaranteed by
                any State of the United States, or by any political
                subdivision of a State or territory, or by any public
                instrumentality of a State or territory that is exempt from
                the registration requirements of the Securities Act of 1933
                by reason of section 3(a)(2) of that Act (15 U.S.C.
                77c(a)(2)), or a security defined as a qualified
                scholarship funding bond in section 150(d)(2) of the
                Internal Revenue Code of 1986, as may be appropriate in the
                public interest and for the protection of investors; and
                    ``(iv) the allocation of risk retention obligations
                between a securitizer and an originator in the case of a
                securitizer that purchases assets from an originator, as
                the Federal banking agencies and the Commission jointly
                determine appropriate.
            ``(2) Asset classes.--
                ``(A) Asset classes.--The regulations prescribed under
            subsection (b) shall establish asset classes with separate
            rules for securitizers of different classes of assets,
            including residential mortgages, commercial mortgages,
            commercial loans, auto loans, and any other class of assets
            that the Federal banking agencies and the Commission deem
            appropriate.
                ``(B) Contents.--For each asset class established under
            subparagraph (A), the regulations prescribed under subsection
            (b) shall include underwriting standards established by the
            Federal banking agencies that specify the terms, conditions,
            and characteristics of a loan within the asset class that
            indicate a low credit risk with respect to the loan.
        ``(d) Originators.--In determining how to allocate risk retention
    obligations between a securitizer and an originator under subsection
    (c)(1)(E)(iv), the Federal banking agencies and the Commission shall--
            ``(1) reduce the percentage of risk retention obligations
        required of the securitizer by the percentage of risk retention
        obligations required of the originator; and
            ``(2) consider--
                ``(A) whether the assets sold to the securitizer have
            terms, conditions, and characteristics that reflect low credit
            risk;
                ``(B) whether the form or volume of transactions in
            securitization markets creates incentives for imprudent
            origination of the type of loan or asset to be sold to the
            securitizer; and
                ``(C) the potential impact of the risk retention
            obligations on the access of consumers and businesses to credit
            on reasonable terms, which may not include the transfer of
            credit risk to a third party.
        ``(e) Exemptions, Exceptions, and Adjustments.--
            ``(1) In general.--The Federal banking agencies and the
        Commission may jointly adopt or issue exemptions, exceptions, or
        adjustments to the rules issued under this section, including
        exemptions, exceptions, or adjustments for classes of institutions
        or assets relating to the risk retention requirement and the
        prohibition on hedging under subsection (c)(1).
            ``(2) Applicable standards.--Any exemption, exception, or
        adjustment adopted or issued by the Federal banking agencies and
        the Commission under this paragraph shall--
                ``(A) help ensure high quality underwriting standards for
            the securitizers and originators of assets that are securitized
            or available for securitization; and
                ``(B) encourage appropriate risk management practices by
            the securitizers and originators of assets, improve the access
            of consumers and businesses to credit on reasonable terms, or
            otherwise be in the public interest and for the protection of
            investors.
            ``(3) Certain institutions and programs exempt.--
                ``(A) Farm credit system institutions.--Notwithstanding any
            other provision of this section, the requirements of this
            section shall not apply to any loan or other financial asset
            made, insured, guaranteed, or purchased by any institution that
            is subject to the supervision of the Farm Credit
            Administration, including the Federal Agricultural Mortgage
            Corporation.
                ``(B) Other federal programs.--This section shall not apply
            to any residential, multifamily, or health care facility
            mortgage loan asset, or securitization based directly or
            indirectly on such an asset, which is insured or guaranteed by
            the United States or an agency of the United States. For
            purposes of this subsection, the Federal National Mortgage
            Association, the Federal Home Loan Mortgage Corporation, and
            the Federal home loan banks shall not be considered an agency
            of the United States.
            ``(4) Exemption for qualified residential mortgages.--
                ``(A) In general.--The Federal banking agencies, the
            Commission, the Secretary of Housing and Urban Development, and
            the Director of the Federal Housing Finance Agency shall
            jointly issue regulations to exempt qualified residential
            mortgages from the risk retention requirements of this
            subsection.
                ``(B) Qualified residential mortgage.--The Federal banking
            agencies, the Commission, the Secretary of Housing and Urban
            Development, and the Director of the Federal Housing Finance
            Agency shall jointly define the term `qualified residential
            mortgage' for purposes of this subsection, taking into
            consideration underwriting and product features that historical
            loan performance data indicate result in a lower risk of
            default, such as--
                    ``(i) documentation and verification of the financial
                resources relied upon to qualify the mortgagor;
                    ``(ii) standards with respect to--

                        ``(I) the residual income of the mortgagor after
                    all monthly obligations;
                        ``(II) the ratio of the housing payments of the
                    mortgagor to the monthly income of the mortgagor;
                        ``(III) the ratio of total monthly installment
                    payments of the mortgagor to the income of the
                    mortgagor;

                    ``(iii) mitigating the potential for payment shock on
                adjustable rate mortgages through product features and
                underwriting standards;
                    ``(iv) mortgage guarantee insurance or other types of
                insurance or credit enhancement obtained at the time of
                origination, to the extent such insurance or credit
                enhancement reduces the risk of default; and
                    ``(v) prohibiting or restricting the use of balloon
                payments, negative amortization, prepayment penalties,
                interest-only payments, and other features that have been
                demonstrated to exhibit a higher risk of borrower default.
                ``(C) Limitation on definition.--The Federal banking
            agencies, the Commission, the Secretary of Housing and Urban
            Development, and the Director of the Federal Housing Finance
            Agency in defining the term `qualified residential mortgage',
            as required by subparagraph (B), shall define that term to be
            no broader than the definition `qualified mortgage' as the term
            is defined under section 129C(c)(2) of the Truth in Lending
            Act, as amended by the Consumer Financial Protection Act of
            2010, and regulations adopted thereunder.
            ``(5) Condition for qualified residential mortgage exemption.--
        The regulations issued under paragraph (4) shall provide that an
        asset-backed security that is collateralized by tranches of other
        asset-backed securities shall not be exempt from the risk retention
        requirements of this subsection.
            ``(6) Certification.--The Commission shall require an issuer to
        certify, for each issuance of an asset-backed security
        collateralized exclusively by qualified residential mortgages, that
        the issuer has evaluated the effectiveness of the internal
        supervisory controls of the issuer with respect to the process for
        ensuring that all assets that collateralize the asset-backed
        security are qualified residential mortgages.
        ``(f) Enforcement.--The regulations issued under this section shall
    be enforced by--
            ``(1) the appropriate Federal banking agency, with respect to
        any securitizer that is an insured depository institution; and
            ``(2) the Commission, with respect to any securitizer that is
        not an insured depository institution.
        ``(g) Authority of Commission.--The authority of the Commission
    under this section shall be in addition to the authority of the
    Commission to otherwise enforce the securities laws.
        ``(h) Authority to Coordinate on Rulemaking.--The Chairperson of
    the Financial Stability Oversight Council shall coordinate all joint
    rulemaking required under this section.
        ``(i) Effective Date of Regulations.--The regulations issued under
    this section shall become effective--
            ``(1) with respect to securitizers and originators of asset-
        backed securities backed by residential mortgages, 1 year after the
        date on which final rules under this section are published in the
        Federal Register; and
            ``(2) with respect to securitizers and originators of all other
        classes of asset-backed securities, 2 years after the date on which
        final rules under this section are published in the Federal
        Register.''.
        (c) Study on Risk Retention.--
            (1) Study.--The Board of Governors of the Federal Reserve
        System, in coordination and consultation with the Comptroller of
        the Currency, the Director of the Office of Thrift Supervision, the
        Chairperson of the Federal Deposit Insurance Corporation, and the
        Securities and Exchange Commission shall conduct a study of the
        combined impact on each individual class of asset-backed security
        established under section 15G(c)(2) of the Securities Exchange Act
        of 1934, as added by subsection (b), of--
                (A) the new credit risk retention requirements contained in
            the amendment made by subsection (b), including the effect
            credit risk retention requirements have on increasing the
            market for Federally subsidized loans; and
                (B) the Financial Accounting Statements 166 and 167 issued
            by the Financial Accounting Standards Board.
            (2) Report.--Not later than 90 days after the date of enactment
        of this Act, the Board of Governors of the Federal Reserve System
        shall submit to Congress a report on the study conducted under
        paragraph (1). Such report shall include statutory and regulatory
        recommendations for eliminating any negative impacts on the
        continued viability of the asset-backed securitization markets and
        on the availability of credit for new lending identified by the
        study conducted under paragraph (1).
        SEC. 942. DISCLOSURES AND REPORTING FOR ASSET-BACKED SECURITIES.
        (a) Securities Exchange Act of 1934.--Section 15(d) of the
    Securities Exchange Act of 1934 (15 U.S.C. 78o(d)) is amended--
            (1) by striking ``(d) Each'' and inserting the following:
        ``(d) Supplementary and Periodic Information.--
            ``(1) In general.--Each'';
            (2) in the third sentence, by inserting after ``securities of
        each class'' the following: ``, other than any class of asset-
        backed securities,''; and
            (3) by adding at the end the following:
            ``(2) Asset-backed securities.--
                ``(A) Suspension of duty to file.--The Commission may, by
            rule or regulation, provide for the suspension or termination
            of the duty to file under this subsection for any class of
            asset-backed security, on such terms and conditions and for
            such period or periods as the Commission deems necessary or
            appropriate in the public interest or for the protection of
            investors.
                ``(B) Classification of issuers.--The Commission may, for
            purposes of this subsection, classify issuers and prescribe
            requirements appropriate for each class of issuers of asset-
            backed securities.''.
        (b) Securities Act of 1933.--Section 7 of the Securities Act of
    1933 (15 U.S.C. 77g) is amended by adding at the end the following:
        ``(c) Disclosure Requirements.--
            ``(1) In general.--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.
            ``(2) Content of regulations.--In adopting regulations under
        this subsection, the Commission shall--
                ``(A) 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; and
                ``(B) require issuers of asset-backed securities, at a
            minimum, to disclose asset-level or loan-level data, if such
            data are necessary for investors to independently perform due
            diligence, including--
                    ``(i) data having unique identifiers relating to loan
                brokers or originators;
                    ``(ii) the nature and extent of the compensation of the
                broker or originator of the assets backing the security;
                and
                    ``(iii) the amount of risk retention by the originator
                and the securitizer of such assets.''.
        SEC. 943. REPRESENTATIONS AND WARRANTIES IN ASSET-BACKED OFFERINGS.
        Not later than 180 days after the date of enactment of this Act,
    the Securities and Exchange Commission shall prescribe regulations on
    the use of representations and warranties in the market for asset-
    backed securities (as that term is defined in section 3(a)(77) of the
    Securities Exchange Act of 1934, as added by this subtitle) that--
            (1) require each national recognized statistical rating
        organization to include in any report accompanying a credit rating
        a description of--
                (A) the representations, warranties, and enforcement
            mechanisms available to investors; and
                (B) how they differ from the representations, warranties,
            and enforcement mechanisms in issuances of similar securities;
            and
            (2) require any securitizer (as that term is defined in section
        15G(a) of the Securities Exchange Act of 1934, as added by this
        subtitle) to disclose fulfilled and unfulfilled repurchase requests
        across all trusts aggregated by the securitizer, so that investors
        may identify asset originators with clear underwriting
        deficiencies.
        SEC. 944. EXEMPTED TRANSACTIONS UNDER THE SECURITIES ACT OF 1933.
        (a) Exemption Eliminated.--Section 4 of the Securities Act of 1933
    (15 U.S.C. 77d) is amended--
            (1) by striking paragraph (5); and
            (2) by striking ``(6) transactions'' and inserting the
        following:
            ``(5) transactions''.
        (b) Conforming Amendment.--Section 3(a)(4)(B)(vii)(I) of the
    Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(4)(B)(vii)(I)) is
    amended by striking ``4(6)'' and inserting ``4(5)''.
        SEC. 945. DUE DILIGENCE ANALYSIS AND DISCLOSURE IN ASSET-BACKED
          SECURITIES ISSUES.
        Section 7 of the Securities Act of 1933 (15 U.S.C. 77g), as amended
    by this subtitle, is amended by adding at the end the following:
        ``(d) Registration Statement for Asset-backed Securities.--Not
    later than 180 days after the date of enactment of this subsection, the
    Commission shall issue rules relating to the registration statement
    required to be filed by any issuer of an asset-backed security (as that
    term is defined in section 3(a)(77) of the Securities Exchange Act of
    1934) that require any issuer of an asset-backed security--
            ``(1) to perform a review of the assets underlying the asset-
        backed security; and
            ``(2) to disclose the nature of the review under paragraph
        (1).''.
        SEC. 946. STUDY ON THE MACROECONOMIC EFFECTS OF RISK RETENTION
          REQUIREMENTS.
        (a) Study Required.--The Chairman of the Financial Services
    Oversight Council shall carry out a study on the macroeconomic effects
    of the risk retention requirements under this subtitle, and the
    amendments made by this subtitle, with emphasis placed on potential
    beneficial effects with respect to stabilizing the real estate market.
    Such study shall include--
            (1) an analysis of the effects of risk retention on real estate
        asset price bubbles, including a retrospective estimate of what
        fraction of real estate losses may have been averted had such
        requirements been in force in recent years;
            (2) an analysis of the feasibility of minimizing real estate
        price bubbles by proactively adjusting the percentage of risk
        retention that must be borne by creditors and securitizers of real
        estate debt, as a function of regional or national market
        conditions;
            (3) a comparable analysis for proactively adjusting mortgage
        origination requirements;
            (4) an assessment of whether such proactive adjustments should
        be made by an independent regulator, or in a formulaic and
        transparent manner;
            (5) an assessment of whether such adjustments should take place
        independently or in concert with monetary policy; and
            (6) recommendations for implementation and enabling
        legislation.
        (b) Report.--Not later than the end of the 180-day period beginning
    on the date of the enactment of this title, the Chairman of the
    Financial Services Oversight Council shall issue a report to the
    Congress containing any findings and determinations made in carrying
    out the study required under subsection (a).

             Subtitle E--Accountability and Executive Compensation

        SEC. 951. SHAREHOLDER VOTE ON EXECUTIVE COMPENSATION DISCLOSURES.
        The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is
    amended by inserting after section 14 (15 U.S.C. 78n) the following:
        ``SEC. 14A. SHAREHOLDER APPROVAL OF EXECUTIVE COMPENSATION.
        ``(a) Separate Resolution Required.--
            ``(1) In general.--Not less frequently than once every 3 years,
        a proxy or consent or authorization for an annual or other meeting
        of the shareholders for which the proxy solicitation rules of the
        Commission require compensation disclosure shall include a separate
        resolution subject to shareholder vote to approve the compensation
        of executives, as disclosed pursuant to section 229.402 of title
        17, Code of Federal Regulations, or any successor thereto.
            ``(2) Frequency of vote.--Not less frequently than once every 6
        years, a proxy or consent or authorization for an annual or other
        meeting of the shareholders for which the proxy solicitation rules
        of the Commission require compensation disclosure shall include a
        separate resolution subject to shareholder vote to determine
        whether votes on the resolutions required under paragraph (1) will
        occur every 1, 2, or 3 years.
            ``(3) Effective date.--The proxy or consent or authorization
        for the first annual or other meeting of the shareholders occurring
        after the end of the 6-month period beginning on the date of
        enactment of this section shall include--
                ``(A) the resolution described in paragraph (1); and
                ``(B) a separate resolution subject to shareholder vote to
            determine whether votes on the resolutions required under
            paragraph (1) will occur every 1, 2, or 3 years.
        ``(b) Shareholder Approval of Golden Parachute Compensation.--
            ``(1) Disclosure.--In any proxy or consent solicitation
        material (the solicitation of which is subject to the rules of the
        Commission pursuant to subsection (a)) for a meeting of the
        shareholders occurring after the end of the 6-month period
        beginning on the date of enactment of this section, 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.
            ``(2) Shareholder approval.--Any proxy or consent or
        authorization relating to the proxy or consent solicitation
        material containing the disclosure required by paragraph (1) shall
        include a separate resolution subject to 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 subsection (a).
        ``(c) Rule of Construction.--The shareholder vote referred to in
    subsections (a) and (b) shall not be binding on the issuer or the board
    of directors of an issuer, and may not be construed--
            ``(1) as overruling a decision by such issuer or board of
        directors;
            ``(2) to create or imply any change to the fiduciary duties of
        such issuer or board of directors;
            ``(3) to create or imply any additional fiduciary duties for
        such issuer or board of directors; or
            ``(4) to restrict or limit the ability of shareholders to make
        proposals for inclusion in proxy materials related to executive
        compensation.
        ``(d) Disclosure of Votes.--Every institutional investment manager
    subject to section 13(f) shall report at least annually how it voted on
    any shareholder vote pursuant to subsections (a) and (b), unless such
    vote is otherwise required to be reported publicly by rule or
    regulation of the Commission.
        ``(e) Exemption.--The Commission may, by rule or order, exempt an
    issuer or class of issuers from the requirement under subsection (a) or
    (b). In determining whether to make an exemption under this subsection,
    the Commission shall take into account, among other considerations,
    whether the requirements under subsections (a) and (b)
    disproportionately burdens small issuers.''.
        SEC. 952. COMPENSATION COMMITTEE INDEPENDENCE.
        (a) In General.--The Securities Exchange Act of 1934 (15 U.S.C. 78
    et seq.) is amended by inserting after section 10B, as added by section
    753, the following:
        ``SEC. 10C. COMPENSATION COMMITTEES.
        ``(a) Independence of Compensation Committees.--
            ``(1) Listing standards.--The Commission shall, by rule, direct
        the national securities exchanges and national securities
        associations to prohibit the listing of any equity security of an
        issuer, other than an issuer that is a controlled company, limited
        partnership, company in bankruptcy proceedings, open-ended
        management investment company that is registered under the
        Investment Company Act of 1940, or a foreign private issuer that
        provides annual disclosures to shareholders of the reasons that the
        foreign private issuer does not have an independent compensation
        committee, that does not comply with the requirements of this
        subsection.
            ``(2) Independence of compensation committees.--The rules of
        the Commission under paragraph (1) shall require that each member
        of the compensation committee of the board of directors of an
        issuer be--
                ``(A) a member of the board of directors of the issuer; and
                ``(B) independent.
            ``(3) Independence.--The rules of the Commission under
        paragraph (1) shall require that, in determining the definition of
        the term `independence' for purposes of paragraph (2), the national
        securities exchanges and the national securities associations shall
        consider relevant factors, including--
                ``(A) the source of compensation of a member of the board
            of directors of an issuer, including any consulting, advisory,
            or other compensatory fee paid by the issuer to such member of
            the board of directors; and
                ``(B) whether a member of the board of directors of an
            issuer is affiliated with the issuer, a subsidiary of the
            issuer, or an affiliate of a subsidiary of the issuer.
            ``(4) Exemption authority.--The rules of the Commission under
        paragraph (1) shall permit a national securities exchange or a
        national securities association to exempt a particular relationship
        from the requirements of paragraph (2), with respect to the members
        of a compensation committee, as the national securities exchange or
        national securities association determines is appropriate, taking
        into consideration the size of an issuer and any other relevant
        factors.
        ``(b) Independence of Compensation Consultants and Other
    Compensation Committee Advisers.--
            ``(1) In general.--The compensation committee of an issuer may
        only select a compensation consultant, legal counsel, or other
        adviser to the compensation committee after taking into
        consideration the factors identified by the Commission under
        paragraph (2).
            ``(2) Rules.--The Commission shall identify factors that affect
        the independence of a compensation consultant, legal counsel, or
        other adviser to a compensation committee of an issuer. Such
        factors shall be competitively neutral among categories of
        consultants, legal counsel, or other advisers and preserve the
        ability of compensation committees to retain the services of
        members of any such category, and shall include--
                ``(A) the provision of other services to the issuer by the
            person that employs the compensation consultant, legal counsel,
            or other adviser;
                ``(B) the amount of fees received from the issuer by the
            person that employs the compensation consultant, legal counsel,
            or other adviser, as a percentage of the total revenue of the
            person that employs the compensation consultant, legal counsel,
            or other adviser;
                ``(C) the policies and procedures of the person that
            employs the compensation consultant, legal counsel, or other
            adviser that are designed to prevent conflicts of interest;
                ``(D) any business or personal relationship of the
            compensation consultant, legal counsel, or other adviser with a
            member of the compensation committee; and
                ``(E) any stock of the issuer owned by the compensation
            consultant, legal counsel, or other adviser.
        ``(c) Compensation Committee Authority Relating to Compensation
    Consultants.--
            ``(1) Authority to retain compensation consultant.--
                ``(A) In general.--The compensation committee of an issuer,
            in its capacity as a committee of the board of directors, may,
            in its sole discretion, retain or obtain the advice of a
            compensation consultant.
                ``(B) Direct responsibility of compensation committee.--The
            compensation committee of an issuer shall be directly
            responsible for the appointment, compensation, and oversight of
            the work of a compensation consultant.
                ``(C) Rule of construction.--This paragraph may not be
            construed--
                    ``(i) to require the compensation committee to
                implement or act consistently with the advice or
                recommendations of the compensation consultant; or
                    ``(ii) to affect the ability or obligation of a
                compensation committee to exercise its own judgment in
                fulfillment of the duties of the compensation committee.
            ``(2) Disclosure.--In any proxy or consent solicitation
        material for an annual meeting of the shareholders (or a special
        meeting in lieu of the annual meeting) occurring on or after the
        date that is 1 year after the date of enactment of this section,
        each issuer shall disclose in the proxy or consent material, in
        accordance with regulations of the Commission, whether--
                ``(A) the compensation committee of the issuer retained or
            obtained the advice of a compensation consultant; and
                ``(B) the work of the compensation consultant has raised
            any conflict of interest and, if so, the nature of the conflict
            and how the conflict is being addressed.
        ``(d) Authority To Engage Independent Legal Counsel and Other
    Advisers.--
            ``(1) In general.--The compensation committee of an issuer, in
        its capacity as a committee of the board of directors, may, in its
        sole discretion, retain and obtain the advice of independent legal
        counsel and other advisers.
            ``(2) Direct responsibility of compensation committee.--The
        compensation committee of an issuer shall be directly responsible
        for the appointment, compensation, and oversight of the work of
        independent legal counsel and other advisers.
            ``(3) Rule of construction.--This subsection may not be
        construed--
                ``(A) to require a compensation committee to implement or
            act consistently with the advice or recommendations of
            independent legal counsel or other advisers under this
            subsection; or
                ``(B) to affect the ability or obligation of a compensation
            committee to exercise its own judgment in fulfillment of the
            duties of the compensation committee.
        ``(e) Compensation of Compensation Consultants, Independent Legal
    Counsel, and Other Advisers.--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 reasonable
    compensation--
            ``(1) to a compensation consultant; and
            ``(2) to independent legal counsel or any other adviser to the
        compensation committee.
        ``(f) Commission Rules.--
            ``(1) In general.--Not later than 360 days after the date of
        enactment of this section, the Commission shall, by rule, direct
        the national securities exchanges and national securities
        associations to prohibit the listing of any security of an issuer
        that is not in compliance with the requirements of this section.
            ``(2) Opportunity to cure defects.--The rules of the Commission
        under paragraph (1) shall provide for appropriate procedures for an
        issuer to have a reasonable opportunity to cure any defects that
        would be the basis for the prohibition under paragraph (1), before
        the imposition of such prohibition.
            ``(3) Exemption authority.--
                ``(A) In general.--The rules of the Commission under
            paragraph (1) shall permit a national securities exchange or a
            national securities association to exempt a category of issuers
            from the requirements under this section, as the national
            securities exchange or the national securities association
            determines is appropriate.
                ``(B) Considerations.--In determining appropriate
            exemptions under subparagraph (A), the national securities
            exchange or the national securities association shall take into
            account the potential impact of the requirements of this
            section on smaller reporting issuers.
        ``(g) Controlled Company Exemption.--
            ``(1) In general.--This section shall not apply to any
        controlled company.
            ``(2) Definition.--For purposes of this section, the term
        `controlled company' means an issuer--
                ``(A) that is listed on a national securities exchange or
            by a national securities association; and
                ``(B) that holds an election for the board of directors of
            the issuer in which more than 50 percent of the voting power is
            held by an individual, a group, or another issuer.''.
        (b) Study and Report.--
            (1) Study.--The Securities and Exchange Commission shall
        conduct a study and review of the use of compensation consultants
        and the effects of such use.
            (2) Report.--Not later than 2 years after the date of the
        enactment of this Act, the Commission shall submit a report to
        Congress on the results of the study and review required by this
        subsection.
        SEC. 953. EXECUTIVE COMPENSATION DISCLOSURES.
        (a) Disclosure of Pay Versus Performance.--Section 14 of the
    Securities Exchange Act of 1934 (15 U.S.C. 78n), as amended by this
    title, is amended by adding at the end the following:
        ``(i) Disclosure of Pay Versus Performance.--The Commission shall,
    by rule, require each issuer to disclose in any proxy or consent
    solicitation material for an annual meeting of the shareholders of the
    issuer a clear description of any compensation required to be disclosed
    by the issuer under section 229.402 of title 17, Code of Federal
    Regulations (or any successor thereto), including information that
    shows the relationship between executive compensation actually paid and
    the financial performance of the issuer, taking into account any change
    in the value of the shares of stock and dividends of the issuer and any
    distributions. The disclosure under this subsection may include a
    graphic representation of the information required to be disclosed.''.
        (b) Additional Disclosure Requirements.--
            (1) In general.--The Commission shall amend section 229.402 of
        title 17, Code of Federal Regulations, to require each issuer to
        disclose in any filing of the issuer described in section 229.10(a)
        of title 17, Code of Federal Regulations (or any successor
        thereto)--
                (A) the median of the annual total compensation of all
            employees of the issuer, except the chief executive officer (or
            any equivalent position) of the issuer;
                (B) the annual total compensation of the chief executive
            officer (or any equivalent position) of the issuer; and
                (C) the ratio of the amount described in subparagraph (A)
            to the amount described in subparagraph (B).
            (2) Total compensation.--For purposes of this subsection, the
        total compensation of an employee of an issuer shall be determined
        in accordance with section 229.402(c)(2)(x) of title 17, Code of
        Federal Regulations, as in effect on the day before the date of
        enactment of this Act.
        SEC. 954. RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION.
        The Securities Exchange Act of 1934 is amended by inserting after
    section 10C, as added by section 952, the following:
        ``SEC. 10D. RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION POLICY.
        ``(a) Listing Standards.--The Commission shall, by rule, direct the
    national securities exchanges and national securities associations to
    prohibit the listing of any security of an issuer that does not comply
    with the requirements of this section.
        ``(b) Recovery of Funds.--The rules of the Commission under
    subsection (a) shall require each issuer to develop and implement a
    policy providing--
            ``(1) for disclosure of the policy of the issuer on incentive-
        based compensation that is based on financial information required
        to be reported under the securities laws; and
            ``(2) that, in the event that the issuer is required to prepare
        an accounting restatement due to the material noncompliance of the
        issuer with any financial reporting requirement under the
        securities laws, the issuer will recover from any current or former
        executive officer of the issuer who received incentive-based
        compensation (including stock options awarded as compensation)
        during the 3-year period preceding the date on which the issuer is
        required to prepare an accounting restatement, based on the
        erroneous data, in excess of what would have been paid to the
        executive officer under the accounting restatement.''.
        SEC. 955. DISCLOSURE REGARDING EMPLOYEE AND DIRECTOR HEDGING.
        Section 14 of the Securities Exchange Act of 1934 (15 U.S.C. 78n),
    as amended by this title, is amended by adding at the end the
    following:
        ``(j) Disclosure of Hedging by Employees and Directors.--The
    Commission shall, by rule, require each issuer to disclose in any proxy
    or consent solicitation material for an annual meeting of the
    shareholders of the issuer whether any employee or member of the board
    of directors of the issuer, or any designee of such employee or member,
    is permitted to purchase financial instruments (including prepaid
    variable forward contracts, equity swaps, collars, and exchange funds)
    that are designed to hedge or offset any decrease in the market value
    of equity securities--
            ``(1) granted to the employee or member of the board of
        directors by the issuer as part of the compensation of the employee
        or member of the board of directors; or
            ``(2) held, directly or indirectly, by the employee or member
        of the board of directors.''.
        SEC. 956. ENHANCED COMPENSATION STRUCTURE REPORTING.
        (a) Enhanced Disclosure and Reporting of Compensation
    Arrangements.--
            (1) In general.--Not later than 9 months after the date of
        enactment of this title, the appropriate Federal regulators jointly
        shall prescribe regulations or guidelines to require each covered
        financial institution to disclose to the appropriate Federal
        regulator the structures of all incentive-based compensation
        arrangements offered by such covered financial institutions
        sufficient to determine whether the compensation structure--
                (A) provides an executive officer, employee, director, or
            principal shareholder of the covered financial institution with
            excessive compensation, fees, or benefits; or
                (B) could lead to material financial loss to the covered
            financial institution.
            (2) Rules of construction.--Nothing in this section shall be
        construed as requiring the reporting of the actual compensation of
        particular individuals. Nothing in this section shall be construed
        to require a covered financial institution that does not have an
        incentive-based payment arrangement to make the disclosures
        required under this subsection.
        (b) Prohibition on Certain Compensation Arrangements.--Not later
    than 9 months after the date of enactment of this title, the
    appropriate Federal regulators shall jointly prescribe regulations or
    guidelines that prohibit any types of incentive-based payment
    arrangement, or any feature of any such arrangement, that the
    regulators determine encourages inappropriate risks by covered
    financial institutions--
            (1) by providing an executive officer, employee, director, or
        principal shareholder of the covered financial institution with
        excessive compensation, fees, or benefits; or
            (2) that could lead to material financial loss to the covered
        financial institution.
        (c) Standards.--The appropriate Federal regulators shall--
            (1) ensure that any standards for compensation established
        under subsections (a) or (b) are comparable to the standards
        established under section of the Federal Deposit Insurance Act (12
        U.S.C. 2 1831p-1) for insured depository institutions; and
            (2) in establishing such standards under such subsections, take
        into consideration the compensation standards described in section
        39(c) of the Federal Deposit Insurance Act (12 U.S.C. 1831p- 9
        1(c)).
        (d) Enforcement.--The provisions of this section and the
    regulations issued under 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 or such regulations shall be treated as a
    violation of subtitle A of title V of such Act.
        (e) Definitions.--As used in this section--
            (1) the term ``appropriate Federal regulator'' means the Board
        of Governors of the Federal Reserve System, the Office of the
        Comptroller of the Currency, the Board of Directors of the Federal
        Deposit Insurance Corporation, the Director of the Office of Thrift
        Supervision, the National Credit Union Administration Board, the
        Securities and Exchange Commission, the Federal Housing Finance
        Agency; and
            (2) the term ``covered financial institution'' means--
                (A) a depository institution or depository institution
            holding company, as such terms are defined in section 3 of the
            Federal Deposit Insurance Act (12 U.S.C. 1813);
                (B) a broker-dealer registered under section 15 of the
            Securities Exchange Act of 1934 (15 U.S.C. 78o);
                (C) a credit union, as described in section 19(b)(1)(A)(iv)
            of the Federal Reserve Act;
                (D) an investment advisor, as such term is defined in
            section 202(a)(11) of the Investment Advisers Act of 1940 (15
            U.S.C. 80b-2(a)(11));
                (E) the Federal National Mortgage Association;
                (F) the Federal Home Loan Mortgage Corporation; and
                (G) any other financial institution that the appropriate
            Federal regulators, jointly, by rule, determine should be
            treated as a covered financial institution for purposes of this
            section.
        (f) Exemption for Certain Financial Institutions.--The requirements
    of this section shall not apply to covered financial institutions with
    assets of less than $1,000,000,000.
        SEC. 957. VOTING BY BROKERS.
        Section 6(b) of the Securities Exchange Act of 1934 (15 U.S.C.
    78f(b)) is amended--
            (1) in paragraph (9)--
                (A) in subparagraph (A), by redesignating clauses (i)
            through (v) as subclauses (I) through (V), respectively, and
            adjusting the margins accordingly;
                (B) by redesignating subparagraphs (A) through (D) as
            clauses (i) through (iv), respectively, and adjusting the
            margins accordingly;
                (C) by inserting ``(A)'' after ``(9)''; and
                (D) in the matter immediately following clause (iv), as so
            redesignated, by striking ``As used'' and inserting the
            following:
            ``(B) As used''.
            (2) by adding at the end the following:
            ``(10)(A) The rules of the exchange prohibit any member that is
        not the beneficial owner of a security registered under section 12
        from granting a proxy to vote the security in connection with a
        shareholder vote described in subparagraph (B), unless the
        beneficial owner of the security has instructed the member to vote
        the proxy in accordance with the voting instructions of the
        beneficial owner.
            ``(B) A shareholder vote described in this subparagraph is a
        shareholder vote with respect to the election of a member of the
        board of directors of an issuer, executive compensation, or any
        other significant matter, as determined by the Commission, by rule,
        and does not include a vote with respect to the uncontested
        election of a member of the board of directors of any investment
        company registered under the Investment Company Act of 1940 (15
        U.S.C. 80b-1 et seq.).
            ``(C) Nothing in this paragraph shall be construed to prohibit
        a national securities exchange from prohibiting a member that is
        not the beneficial owner of a security registered under section 12
        from granting a proxy to vote the security in connection with a
        shareholder vote not described in subparagraph (A).''.

       Subtitle F--Improvements to the Management of the Securities and
                              Exchange Commission

        SEC. 961. REPORT AND CERTIFICATION OF INTERNAL SUPERVISORY
          CONTROLS.
        (a) Annual Reports and Certification.--Not later than 90 days after
    the end of each fiscal year, the Commission shall submit a report to
    the Committee on Banking, Housing, and Urban Affairs of the Senate and
    the Committee on Financial Services of the House of Representatives on
    the conduct by the Commission of examinations of registered entities,
    enforcement investigations, and review of corporate financial
    securities filings.
        (b) Contents of Reports.--Each report under subsection (a) shall
    contain--
            (1) an assessment, as of the end of the most recent fiscal
        year, of the effectiveness of--
                (A) the internal supervisory controls of the Commission;
            and
                (B) the procedures of the Commission applicable to the
            staff of the Commission who perform examinations of registered
            entities, enforcement investigations, and reviews of corporate
            financial securities filings;
            (2) a certification that the Commission has adequate internal
        supervisory controls to carry out the duties of the Commission
        described in paragraph (1)(B); and
            (3) a summary by the Comptroller General of the United States
        of the review carried out under subsection (d).
        (c) Certification.--
            (1) Signature.--The certification under subsection (b)(2) shall
        be signed by the Director of the Division of Enforcement, the
        Director of the Division of Corporation Finance, and the Director
        of the Office of Compliance Inspections and Examinations (or the
        head of any successor division or office).
            (2) Content of certification.--Each individual described in
        paragraph (1) shall certify that the individual--
                (A) is directly responsible for establishing and
            maintaining the internal supervisory controls of the Division
            or Office of which the individual is the head;
                (B) is knowledgeable about the internal supervisory
            controls of the Division or Office of which the individual is
            the head;
                (C) has evaluated the effectiveness of the internal
            supervisory controls during the 90-day period ending on the
            final day of the fiscal year to which the report relates; and
                (D) has disclosed to the Commission any significant
            deficiencies in the design or operation of internal supervisory
            controls that could adversely affect the ability of the
            Division or Office to consistently conduct inspections, or
            investigations, or reviews of filings with professional
            competence and integrity.
        (d) New Director or Acting Director.--Notwithstanding subsection
    (a), if the Director of the Division of Enforcement, the Director of
    the Division of Corporate Finance, or the Director of the Office of
    Compliance Inspections and Examinations has served as Director of the
    Division or Office for less than 90 days on the date on which a report
    is required to be submitted under subsection (a), the Commission may
    submit the report on the date on which the Director has served as
    Director for 90 days. If there is no Director of the Division of
    Enforcement, the Division of Corporate Finance, or the Office of
    Compliance Inspections and Examinations, on the date on which a report
    is required to be submitted under subsection (a), the Acting Director
    of the Division or Office may make the certification required under
    subsection (c).
        (e) Review by the Comptroller General.--
            (1) Report.--The Comptroller General of the United States shall
        submit 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 that contains a review of the adequacy and
        effectiveness of the internal supervisory control structure and
        procedures described in subsection (b)(1), not less frequently than
        once every 3 years, at a time to coincide with the publication of
        the reports of the Commission under this section.
            (2) Authority to hire experts.--The Comptroller General of the
        United States may hire independent consultants with specialized
        expertise in any area relevant to the duties of the Comptroller
        General described in this section, in order to assist the
        Comptroller General in carrying out such duties.
        SEC. 962. TRIENNIAL REPORT ON PERSONNEL MANAGEMENT.
        (a) Triennial Report Required.--Once every 3 years, the Comptroller
    General of the United States shall submit a report to the Committee on
    Banking, Housing, and Urban Affairs of the Senate and the Committee on
    Financial Services of the House of Representatives on the quality of
    personnel management by the Commission.
        (b) Contents of Report.--Each report under subsection (a) shall
    include--
            (1) an evaluation of--
                (A) the effectiveness of supervisors in using the skills,
            talents, and motivation of the employees of the Commission to
            achieve the goals of the Commission;
                (B) the criteria for promoting employees of the Commission
            to supervisory positions;
                (C) the fairness of the application of the promotion
            criteria to the decisions of the Commission;
                (D) the competence of the professional staff of the
            Commission;
                (E) the efficiency of communication between the units of
            the Commission regarding the work of the Commission (including
            communication between divisions and between subunits of a
            division) and the efforts by the Commission to promote such
            communication;
                (F) the turnover within subunits of the Commission,
            including the consideration of supervisors whose subordinates
            have an unusually high rate of turnover;
                (G) whether there are excessive numbers of low-level, mid-
            level, or senior-level managers;
                (H) any initiatives of the Commission that increase the
            competence of the staff of the Commission;
                (I) the actions taken by the Commission regarding employees
            of the Commission who have failed to perform their duties and
            circumstances under which the Commission has issued to
            employees a notice of termination; and
                (J) such other factors relating to the management of the
            Commission as the Comptroller General determines are
            appropriate;
            (2) an evaluation of any improvements made with respect to the
        areas described in paragraph (1) since the date of submission of
        the previous report; and
            (3) recommendations for how the Commission can use the human
        resources of the Commission more effectively and efficiently to
        carry out the mission of the Commission.
        (c) Consultation.--In preparing the report under subsection (a),
    the Comptroller General shall consult with current employees of the
    Commission, retired employees and other former employees of the
    Commission, the Inspector General of the Commission, persons that have
    business before the Commission, any union representing the employees of
    the Commission, private management consultants, academics, and any
    other source that the Comptroller General deems appropriate.
        (d) Report by Commission.--Not later than 90 days after the date on
    which the Comptroller General submits each report under subsection (a),
    the Commission shall submit 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 describing the actions taken by
    the Commission in response to the recommendations contained in the
    report under subsection (a).
        (e) Reimbursements for Cost of Reports.--
            (1) Reimbursements required.--The Commission shall reimburse
        the Government Accountability Office for the full cost of making
        the reports under this section, as billed therefor by the
        Comptroller General.
            (2) Crediting and use of reimbursements.--Such reimbursements
        shall--
                (A) be credited to the appropriation account ``Salaries and
            Expenses, Government Accountability Office'' current when the
            payment is received; and
                (B) remain available until expended.
        (f) Authority to Hire Experts.--The Comptroller General of the
    United States may hire independent consultants with specialized
    expertise in any area relevant to the duties of the Comptroller General
    described in this section, in order to assist the Comptroller General
    in carrying out such duties.
        SEC. 963. ANNUAL FINANCIAL CONTROLS AUDIT.
        (a) Reports of Commission.--
            (1) Annual reports required.--Not later than 6 months after the
        end of each fiscal year, the Commission shall publish and submit to
        Congress a report that--
                (A) describes the responsibility of the management of the
            Commission for establishing and maintaining an adequate
            internal control structure and procedures for financial
            reporting; and
                (B) contains an assessment of the effectiveness of the
            internal control structure and procedures for financial
            reporting of the Commission during that fiscal year.
            (2) Attestation.--The reports required under paragraph (1)
        shall be attested to by the Chairman and chief financial officer of
        the Commission.
        (b) Report by Comptroller General.--
            (1) Report required.--Not later than 6 months after the end of
        the first fiscal year after the date of enactment of this Act, the
        Comptroller General of the United States shall submit a report to
        Congress that assesses--
                (A) the effectiveness of the internal control structure and
            procedures of the Commission for financial reporting; and
                (B) the assessment of the Commission under subsection
            (a)(1)(B).
            (2) Attestation.--The Comptroller General shall attest to, and
        report on, the assessment made by the Commission under subsection
        (a).
        (c) Reimbursements for Cost of Reports.--
            (1) Reimbursements required.--The Commission shall reimburse
        the Government Accountability Office for the full cost of making
        the reports under subsection (b), as billed therefor by the
        Comptroller General.
            (2) Crediting and use of reimbursements.--Such reimbursements
        shall--
                (A) be credited to the appropriation account ``Salaries and
            Expenses, Government Accountability Office'' current when the
            payment is received; and
                (B) remain available until expended.
        SEC. 964. REPORT ON OVERSIGHT OF NATIONAL SECURITIES ASSOCIATIONS.
        (a) Report Required.--Not later than 2 years after the date of
    enactment of this Act, and every 3 years thereafter, the Comptroller
    General of the United States shall submit 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 that includes an
    evaluation of the oversight by the Commission of national securities
    associations registered under section 15A of the Securities Exchange
    Act of 1934 (15 U.S.C. 78o-3) with respect to--
            (1) the governance of such national securities associations,
        including the identification and management of conflicts of
        interest by such national securities associations, together with an
        analysis of the impact of any conflicts of interest on the
        regulatory enforcement or rulemaking by such national securities
        associations;
            (2) the examinations carried out by the national securities
        associations, including the expertise of the examiners;
            (3) the executive compensation practices of such national
        securities associations;
            (4) the arbitration services provided by the national
        securities associations;
            (5) the review performed by national securities associations of
        advertising by the members of the national securities associations;
            (6) the cooperation with and assistance to State securities
        administrators by the national securities associations to promote
        investor protection;
            (7) how the funding of national securities associations is used
        to support the mission of the national securities associations,
        including--
                (A) the methods of funding;
                (B) the sufficiency of funds;
                (C) how funds are invested by the national securities
            association pending use; and
                (D) the impact of the methods, sufficiency, and investment
            of funds on regulatory enforcement by the national securities
            associations;
            (8) the policies regarding the employment of former employees
        of national securities associations by regulated entities;
            (9) the ongoing effectiveness of the rules of the national
        securities associations in achieving the goals of the rules;
            (10) the transparency of governance and activities of the
        national securities associations; and
            (11) any other issue that has an impact, as determined by the
        Comptroller General, on the effectiveness of such national
        securities associations in performing their mission and in dealing
        fairly with investors and members;
        (b) Reimbursements for Cost of Reports.--
            (1) Reimbursements required.--The Commission shall reimburse
        the Government Accountability Office for the full cost of making
        the reports under subsection (a), as billed therefor by the
        Comptroller General.
            (2) Crediting and use of reimbursements.--Such reimbursements
        shall--
                (A) be credited to the appropriation account ``Salaries and
            Expenses, Government Accountability Office'' current when the
            payment is received; and
                (B) remain available until expended.
        SEC. 965. COMPLIANCE EXAMINERS.
        Section 4 of the Securities Exchange Act of 1934 (15 U.S.C. 78d) is
    amended by adding at the end the following:
        ``(h) Examiners.--
            ``(1) Division of trading and markets.--The Division of Trading
        and Markets of the Commission, or any successor organizational
        unit, shall have a staff of examiners who shall--
                ``(A) perform compliance inspections and examinations of
            entities under the jurisdiction of that Division; and
                ``(B) report to the Director of that Division.
            ``(2) Division of investment management.--The Division of
        Investment Management of the Commission, or any successor
        organizational unit, shall have a staff of examiners who shall--
                ``(A) perform compliance inspections and examinations of
            entities under the jurisdiction of that Division; and
                ``(B) report to the Director of that Division.''.
        SEC. 966. SUGGESTION PROGRAM FOR EMPLOYEES OF THE COMMISSION.
        The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is
    amended by inserting after section 4C (15 U.S.C. 78d-3) the following:
      ``SEC. 4D. ADDITIONAL DUTIES OF INSPECTOR GENERAL.
        ``(a) Suggestion Submissions by Commission Employees.--
            ``(1) Hotline established.--The Inspector General of the
        Commission shall establish and maintain a telephone hotline or
        other electronic means for the receipt of--
                ``(A) suggestions by employees of the Commission for
            improvements in the work efficiency, effectiveness, and
            productivity, and the use of the resources, of the Commission;
            and
                ``(B) allegations by employees of the Commission of waste,
            abuse, misconduct, or mismanagement within the Commission.
            ``(2) Confidentiality.--The Inspector General shall maintain as
        confidential--
                ``(A) the identity of any individual who provides
            information by the means established under paragraph (1),
            unless the individual requests otherwise, in writing; and
                ``(B) at the request of any such individual, any specific
            information provided by the individual.
        ``(b) Consideration of Reports.--The Inspector General shall
    consider any suggestions or allegations received by the means
    established under subsection (a)(1), and shall recommend appropriate
    action in relation to such suggestions or allegations.
        ``(c) Recognition.--The Inspector General may recognize any
    employee who makes a suggestion under subsection (a)(1) (or by other
    means) that would or does--
            ``(1) increase the work efficiency, effectiveness, or
        productivity of the Commission; or
            ``(2) reduce waste, abuse, misconduct, or mismanagement within
        the Commission.
        ``(d) Report.--The Inspector General of the Commission shall submit
    to Congress an annual report containing a description of--
            ``(1) the nature, number, and potential benefits of any
        suggestions received under subsection (a);
            ``(2) the nature, number, and seriousness of any allegations
        received under subsection (a);
            ``(3) any recommendations made or actions taken by the
        Inspector General in response to substantiated allegations received
        under subsection (a); and
            ``(4) any action the Commission has taken in response to
        suggestions or allegations received under subsection (a).
        ``(e) Funding.--The activities of the Inspector General under this
    subsection shall be funded by the Securities and Exchange Commission
    Investor Protection Fund established under section 21F.''.
        SEC. 967. COMMISSION ORGANIZATIONAL STUDY AND REFORM.
        (a) Study Required.--
            (1) In general.--Not later than the end of the 90-day period
        beginning on the date of the enactment of this subtitle, the
        Securities and Exchange Commission (hereinafter in this section
        referred to as the ``SEC'') shall hire an independent consultant of
        high caliber and with expertise in organizational restructuring and
        the operations of capital markets to examine the internal
        operations, structure, funding, and the need for comprehensive
        reform of the SEC, as well as the SEC's relationship with and the
        reliance on self-regulatory organizations and other entities
        relevant to the regulation of securities and the protection of
        securities investors that are under the SEC's oversight.
            (2) Specific areas for study.--The study required under
        paragraph (1) shall, at a minimum, include the study of--
                (A) the possible elimination of unnecessary or redundant
            units at the SEC;
                (B) improving communications between SEC offices and
            divisions;
                (C) the need to put in place a clear chain-of-command
            structure, particularly for enforcement examinations and
            compliance inspections;
                (D) the effect of high-frequency trading and other
            technological advances on the market and what the SEC requires
            to monitor the effect of such trading and advances on the
            market;
                (E) the SEC's hiring authorities, workplace policies, and
            personal practices, including--
                    (i) whether there is a need to further streamline
                hiring authorities for those who are not lawyers,
                accountants, compliance examiners, or economists;
                    (ii) whether there is a need for further pay reforms;
                    (iii) the diversity of skill sets of SEC employees and
                whether the present skill set diversity efficiently and
                effectively fosters the SEC's mission of investor
                protection; and
                    (iv) the application of civil service laws by the SEC;
                (F) whether the SEC's oversight and reliance on self-
            regulatory organizations promotes efficient and effective
            governance for the securities markets; and
                (G) whether adjusting the SEC's reliance on self-regulatory
            organizations is necessary to promote more efficient and
            effective governance for the securities markets.
        (b) Consultant Report.--Not later than the end of the 150-day
    period after being retained, the independent consultant hired pursuant
    to subsection (a)(1) shall issue a report to the SEC and the Congress
    containing--
            (1) a detailed description of any findings and conclusions made
        while carrying out the study required under subsection (a)(1); and
            (2) recommendations for legislative, regulatory, or
        administrative action that the consultant determines appropriate to
        enable the SEC and other entities on which the consultant reports
        to perform their statutorily or otherwise mandated missions.
        (c) SEC Report.--Not later than the end of the 6-month period
    beginning on the date the consultant issues the report under subsection
    (b), and every 6-months thereafter during the 2-year period following
    the date on which the consultant issues such report, the SEC shall
    issue a report to the Committee on Financial Services of the House of
    Representatives and the Committee on Banking, Housing, and Urban
    Affairs of the Senate describing the SEC's implementation of the
    regulatory and administrative recommendations contained in the
    consultant's report.
        SEC. 968. STUDY ON SEC REVOLVING DOOR.
        (a) Government Accountability Office Study.--The Comptroller
    General of the United States shall conduct a study that will--
            (1) review the number of employees who leave the Securities and
        Exchange Commission to work for financial institutions regulated by
        such Commission;
            (2) determine how many employees who leave the Securities and
        Exchange Commission worked on cases that involved financial
        institutions regulated by such Commission;
            (3) review the length of time employees work for the Securities
        and Exchange Commission before leaving to be employed by financial
        institutions regulated by such Commission;
            (4) review existing internal controls and make recommendations
        on strengthening such controls to ensure that employees of the
        Securities and Exchange Commission who are later employed by
        financial institutions did not assist such institutions in
        violating any rules or regulations of the Commission during the
        course of their employment with such Commission;
            (5) determine if greater post-employment restrictions are
        necessary to prevent employees of the Securities and Exchange
        Commission from being employed by financial institutions after
        employment with such Commission;
            (6) determine if the volume of employees of the Securities and
        Exchange Commission who are later employed by financial
        institutions has led to inefficiencies in enforcement;
            (7) determine if employees of the Securities and Exchange
        Commission who are later employed by financial institutions
        assisted such institutions in circumventing Federal rules and
        regulations while employed by such Commission;
            (8) review any information that may address the volume of
        employees of the Securities and Exchange Commission who are later
        employed by financial institutions, and make recommendations to
        Congress; and
            (9) review other additional issues as may be raised during the
        course of the study conducted under this subsection.
        (b) Report.--Not later than 1 year after the date of the enactment
    of this subtitle, the Comptroller General of the United States shall
    submit to the Committee on Financial Services of the House of
    Representatives and the Committee on Banking, Housing, and Urban
    Affairs of the Senate a report on the results of the study required by
    subsection (a).

                 Subtitle G--Strengthening Corporate Governance

        SEC. 971. PROXY ACCESS.
        (a) Proxy Access.--Section 14(a) of the Securities Exchange Act of
    1934 (15 U.S.C. 78n(a)) is amended--
            (1) by inserting ``(1)'' after ``(a)''; and
            (2) by adding at the end the following:
        ``(2) The rules and regulations prescribed by the Commission under
    paragraph (1) may include--
            ``(A) a requirement that a solicitation of proxy, consent, or
        authorization by (or on behalf of) an issuer include a nominee
        submitted by a shareholder to serve on the board of directors of
        the issuer; and
            ``(B) a requirement that an issuer follow a certain procedure
        in relation to a solicitation described in subparagraph (A).''.
        (b) Regulations.--The Commission may issue rules permitting the use
    by a shareholder of proxy solicitation materials supplied by an issuer
    of securities for the purpose of nominating individuals to membership
    on the board of directors of the issuer, under such terms and
    conditions as the Commission determines are in the interests of
    shareholders and for the protection of investors.
        (c) Exemptions.--The Commission may, by rule or order, exempt an
    issuer or class of issuers from the requirement made by this section or
    an amendment made by this section. In determining whether to make an
    exemption under this subsection, the Commission shall take into
    account, among other considerations, whether the requirement in the
    amendment made by subsection (a) disproportionately burdens small
    issuers.
        SEC. 972. DISCLOSURES REGARDING CHAIRMAN AND CEO STRUCTURES.
        The Securities Exchange Act of 1934 (15 U.S. C. 78a et seq.) is
    amended by inserting after section 14A, as added by this title, the
    following:
        ``SEC. 14B. CORPORATE GOVERNANCE.
        ``Not later than 180 days after the date of enactment of this
    subsection, the Commission shall issue rules that require an issuer to
    disclose in the annual proxy sent to investors the reasons why the
    issuer has chosen--
            ``(1) the same person to serve as chairman of the board of
        directors and chief executive officer (or in equivalent positions);
        or
            ``(2) different individuals to serve as chairman of the board
        of directors and chief executive officer (or in equivalent
        positions of the issuer).''.

                        Subtitle H--Municipal Securities

        SEC. 975. REGULATION OF MUNICIPAL SECURITIES AND CHANGES TO THE
          BOARD OF THE MSRB.
        (a) Registration of Municipal Securities Dealers and Municipal
    Advisors.--Section 15B(a) of the Securities Exchange Act of 1934 (15
    U.S.C. 78o-4(a)) is amended--
            (1) in paragraph (1)--
                (A) by inserting ``(A)'' after ``(1)''; and
                (B) by adding at the end the following:
                ``(B) It shall be unlawful for a municipal advisor to
            provide advice to or on behalf of a municipal entity or
            obligated person with respect to municipal financial products
            or the issuance of municipal securities, or to undertake a
            solicitation of a municipal entity or obligated person, unless
            the municipal advisor is registered in accordance with this
            subsection.'';
            (2) in paragraph (2), by inserting ``or municipal advisor''
        after ``municipal securities dealer'' each place that term appears;
            (3) in paragraph (3), by inserting ``or municipal advisor''
        after ``municipal securities dealer'' each place that term appears;
            (4) in paragraph (4), by striking ``dealer, or municipal
        securities dealer or class of brokers, dealers, or municipal
        securities dealers'' and inserting ``dealer, municipal securities
        dealer, or municipal advisor, or class of brokers, dealers,
        municipal securities dealers, or municipal advisors''; and
            (5) by adding at the end the following:
            ``(5) No municipal advisor shall make use of the mails or any
        means or instrumentality of interstate commerce to provide advice
        to or on behalf of a municipal entity or obligated person with
        respect to municipal financial products, the issuance of municipal
        securities, or to undertake a solicitation of a municipal entity or
        obligated person, in connection with which such municipal advisor
        engages in any fraudulent, deceptive, or manipulative act or
        practice.''.
        (b) Municipal Securities Rulemaking Board.--Section 15B(b) of the
    Securities Exchange Act of 1934 (15 U.S.C. 78o-4(b)) is amended--
            (1) in paragraph (1)--
                (A) in the first sentence, by striking ``Not later than''
            and all that follows through ``appointed by the Commission''
            and inserting ``The Municipal Securities Rulemaking Board shall
            be composed of 15 members, or such other number of members as
            specified by rules of the Board pursuant to paragraph
            (2)(B),'';
                (B) by striking the second sentence and inserting the
            following: ``The members of the Board shall serve as members
            for a term of 3 years or for such other terms as specified by
            rules of the Board pursuant to paragraph (2)(B), and shall
            consist of (A) 8 individuals who are independent of any
            municipal securities broker, municipal securities dealer, or
            municipal advisor, at least 1 of whom shall be representative
            of institutional or retail investors in municipal securities,
            at least 1 of whom shall be representative of municipal
            entities, and at least 1 of whom shall be a member of the
            public with knowledge of or experience in the municipal
            industry (which members are hereinafter referred to as `public
            representatives'); and (B) 7 individuals who are associated
            with a broker, dealer, municipal securities dealer, or
            municipal advisor, including at least 1 individual who is
            associated with and representative of brokers, dealers, or
            municipal securities dealers that are not banks or subsidiaries
            or departments or divisions of banks (which members are
            hereinafter referred to as `broker-dealer representatives'), at
            least 1 individual who is associated with and representative of
            municipal securities dealers which are banks or subsidiaries or
            departments or divisions of banks (which members are
            hereinafter referred to as `bank representatives'), and at
            least 1 individual who is associated with a municipal advisor
            (which members are hereinafter referred to as `advisor
            representatives' and, together with the broker-dealer
            representatives and the bank representatives, are referred to
            as `regulated representatives'). Each member of the board shall
            be knowledgeable of matters related to the municipal securities
            markets.''; and
                (C) in the third sentence, by striking ``initial'';
            (2) in paragraph (2)--
                (A) in the matter preceding subparagraph (A)--
                    (i) by inserting before the period at the end of the
                first sentence the following: ``and advice provided to or
                on behalf of municipal entities or obligated persons by
                brokers, dealers, municipal securities dealers, and
                municipal advisors with respect to municipal financial
                products, the issuance of municipal securities, and
                solicitations of municipal entities or obligated persons
                undertaken by brokers, dealers, municipal securities
                dealers, and municipal advisors''; and
                    (ii) by striking the second sentence;
                (B) in subparagraph (A)--
                    (i) in the matter preceding clause (i)--

                        (I) by inserting ``, and no broker, dealer,
                    municipal securities dealer, or municipal advisor shall
                    provide advice to or on behalf of a municipal entity or
                    obligated person with respect to municipal financial
                    products or the issuance of municipal securities,''
                    after ``sale of, any municipal security''; and
                        (II) by inserting ``and municipal entities or
                    obligated persons'' after ``protection of investors'';

                    (ii) in clause (i), by striking ``municipal securities
                brokers and municipal securities dealers'' each place that
                term appears and inserting ``municipal securities brokers,
                municipal securities dealers, and municipal advisors'';
                    (iii) in clause (ii), by adding ``and'' at the end;
                    (iv) in clause (iii), by striking ``; and'' and
                inserting a period; and
                    (v) by striking clause (iv);
                (C) by amending subparagraph (B) to read as follows:
            ``(B) establish fair procedures for the nomination and election
        of members of the Board and assure fair representation in such
        nominations and elections of public representatives, broker dealer
        representatives, bank representatives, and advisor representatives.
        Such rules--
                ``(i) shall provide that the number of public
            representatives of the Board shall at all times exceed the
            total number of regulated representatives and that the
            membership shall at all times be as evenly divided in number as
            possible between public representatives and regulated
            representatives;
                ``(ii) shall specify the length or lengths of terms members
            shall serve;
                ``(iii) may increase the number of members which shall
            constitute the whole Board, provided that such number is an odd
            number; and
                ``(iv) shall establish requirements regarding the
            independence of public representatives.''.
                (D) in subparagraph (C)--
                    (i) by inserting ``and municipal financial products''
                after ``municipal securities'' the first two times that
                term appears;
                    (ii) by inserting ``, municipal entities, obligated
                persons,'' before ``and the public interest'';
                    (iii) by striking ``between'' and inserting ``among'';
                    (iv) by striking ``issuers, municipal securities
                brokers, or municipal securities dealers, to fix'' and
                inserting ``municipal entities, obligated persons,
                municipal securities brokers, municipal securities dealers,
                or municipal advisors, to fix''; and
                    (v) by striking ``brokers or municipal securities
                dealers, to regulate'' and inserting ``brokers, municipal
                securities dealers, or municipal advisors, to regulate'';
                (E) in subparagraph (D)--
                    (i) by inserting ``and advice concerning municipal
                financial products'' after ``transactions in municipal
                securities'';
                    (ii) by striking ``That no'' and inserting ``that no'';
                    (iii) by inserting ``municipal advisor,'' before ``or
                person associated''; and
                    (iv) by striking ``a municipal securities broker or
                municipal securities dealer may be compelled'' and
                inserting ``a municipal securities broker, municipal
                securities dealer, or municipal advisor may be compelled'';
                (F) in subparagraph (E)--
                    (i) by striking ``municipal securities brokers and
                municipal securities dealers'' and inserting ``municipal
                securities brokers, municipal securities dealers, and
                municipal advisors''; and
                    (ii) by striking ``municipal securities broker or
                municipal securities dealer'' and inserting ``municipal
                securities broker, municipal securities dealer, or
                municipal advisor'';
                (G) in subparagraph (G), by striking ``municipal securities
            brokers and municipal securities dealers'' and inserting
            ``municipal securities brokers, municipal securities dealers,
            and municipal advisors'';
                (H) in subparagraph (J)--
                    (i) by striking ``municipal securities broker and each
                municipal securities dealer'' and inserting ``municipal
                securities broker, municipal securities dealer, and
                municipal advisor''; and
                    (ii) by striking the period at the end of the second
                sentence and inserting ``, which may include charges for
                failure to submit to the Board, or to any information
                system operated by the Board, within the prescribed
                timeframes, any items of information or documents required
                to be submitted under any rule issued by the Board.'';
                (I) in subparagraph (K)--
                    (i) by inserting ``broker, dealer, or'' before
                ``municipal securities dealer'' each place that term
                appears; and
                    (ii) by striking ``municipal securities investment
                portfolio'' and inserting ``related account of a broker,
                dealer, or municipal securities dealer''; and
                (J) by adding at the end the following:
                ``(L) with respect to municipal advisors--
                    ``(i) prescribe means reasonably designed to prevent
                acts, practices, and courses of business as are not
                consistent with a municipal advisor's fiduciary duty to its
                clients;
                    ``(ii) provide continuing education requirements for
                municipal advisors;
                    ``(iii) provide professional standards; and
                    ``(iv) not impose a regulatory burden on small
                municipal advisors that is not necessary or appropriate in
                the public interest and for the protection of investors,
                municipal entities, and obligated persons, provided that
                there is robust protection of investors against fraud.'';
            (3) by redesignating paragraph (3) as paragraph (7); and
            (4) by inserting after paragraph (2) the following:
            ``(3) The Board, in conjunction with or on behalf of any
        Federal financial regulator or self-regulatory organization, may--
                ``(A) establish information systems; and
                ``(B) assess such reasonable fees and charges for the
            submission of information to, or the receipt of information
            from, such systems from any persons which systems may be
            developed for the purposes of serving as a repository of
            information from municipal market participants or otherwise in
            furtherance of the purposes of the Board, a Federal financial
            regulator, or a self-regulatory organization, except that the
            Board--
                    ``(i) may not charge a fee to municipal entities or
                obligated persons to submit documents or other information
                to the Board or charge a fee to any person to obtain,
                directly from the Internet site of the Board, documents or
                information submitted by municipal entities, obligated
                persons, brokers, dealers, municipal securities dealers, or
                municipal advisors, including documents submitted under the
                rules of the Board or the Commission; and
                    ``(ii) shall not be prohibited from charging
                commercially reasonable fees for automated subscription-
                based feeds or similar services, or for charging for other
                data or document-based services customized upon request of
                any person, made available to commercial enterprises,
                municipal securities market professionals, or the general
                public, whether delivered through the Internet or any other
                means, that contain all or part of the documents or
                information, subject to approval of the fees by the
                Commission under section 19(b).
            ``(4) The Board may provide guidance and assistance in the
        enforcement of, and examination for, compliance with the rules of
        the Board to the Commission, a registered securities association
        under section 15A, or any other appropriate regulatory agency, as
        applicable.
            ``(5) The Board, the Commission, and a registered securities
        association under section 15A, or the designees of the Board, the
        Commission, or such association, shall meet not less frequently
        than 2 times a year--
                ``(A) to describe the work of the Board, the Commission,
            and the registered securities association involving the
            regulation of municipal securities; and
                ``(B) to share information about--
                    ``(i) the interpretation of the Board, the Commission,
                and the registered securities association of Board rules;
                and
                    ``(ii) examination and enforcement of compliance with
                Board rules.''.
        (c) Discipline of Brokers, Dealers, Municipal Securities Dealers
    and Municipal Advisors; Fiduciary Duty of Municipal Advisors.--Section
    15B(c) of the Securities Exchange Act of 1934 (15 U.S.C. 78o-4(c)) is
    amended--
            (1) in paragraph (1), by inserting ``, and no broker, dealer,
        municipal securities dealer, or municipal advisor shall make use of
        the mails or any means or instrumentality of interstate commerce to
        provide advice to or on behalf of a municipal entity or obligated
        person with respect to municipal financial products, the issuance
        of municipal securities, or to undertake a solicitation of a
        municipal entity or obligated person,'' after ``any municipal
        security'';
            (2) by adding at the end of paragraph (1) the following: ``A
        municipal advisor and any person associated with such municipal
        advisor shall be deemed to have a fiduciary duty to any municipal
        entity for whom such municipal advisor acts as a municipal advisor,
        and no municipal advisor may engage in any act, practice, or course
        of business which is not consistent with a municipal advisor's
        fiduciary duty or that is in contravention of any rule of the
        Board.''.
            (3) in paragraph (2), by inserting ``or municipal advisor''
        after ``municipal securities dealer'' each place that term appears;
            (4) in paragraph (3)--
                (A) by inserting ``or municipal entities or obligated
            person'' after ``protection of investors'' each place that term
            appears; and
                (B) by inserting ``or municipal advisor'' after ``municipal
            securities dealer'' each place that term appears;
            (5) in paragraph (4), by inserting ``or municipal advisor''
        after ``municipal securities dealer or obligated person'' each
        place that term appears;
            (6) in paragraph (6)(B), by inserting ``or municipal entities
        or obligated person'' after ``protection of investors'';
            (7) in paragraph (7)--
                (A) in subparagraph (A)--
                    (i) in clause (i), by striking ``; and'' and inserting
                a semicolon;
                    (ii) in clause (ii), by striking the period and
                inserting ``; and''; and
                    (iii) by adding at the end the following:
                    ``(iii) the Commission, or its designee, in the case of
                municipal advisors.''.
                (B) in subparagraph (B), by inserting ``or municipal
            entities or obligated person'' after ``protection of
            investors''; and
            (8) by adding at the end the following:
            ``(9)(A) Fines collected by the Commission for violations of
        the rules of the Board shall be equally divided between the
        Commission and the Board.
            ``(B) Fines collected by a registered securities association
        under section 15A(7) with respect to violations of the rules of the
        Board shall be accounted for by such registered securities
        association separately from other fines collected under section
        15A(7) and shall be allocated between such registered securities
        association and the Board, and such allocation shall require the
        registered securities association to pay to the Board \1/3\ of all
        fines collected by the registered securities association reasonably
        allocable to violations of the rules of the Board, or such other
        portion of such fines as may be directed by the Commission upon
        agreement between the registered securities association and the
        Board.''.
        (d) Issuance of Municipal Securities.--Section 15B(d)(2) of the
    Securities Exchange Act of 1934 (15 U.S.C. 78o-4(d)) is amended--
            (1) by striking ``through a municipal securities broker or
        municipal securities dealer or otherwise'' and inserting ``through
        a municipal securities broker, municipal securities dealer,
        municipal advisor, or otherwise''; and
            (2) by inserting ``or municipal advisors'' before ``to
        furnish''.
        (e) Definitions.--Section 15B of the Securities Exchange Act of
    1934 (15 U.S.C. 78o-4) is amended by adding at the end the following:
        ``(e) Definitions.--For purposes of this section--
            ``(1) the term `Board' means the Municipal Securities
        Rulemaking Board established under subsection (b)(1);
            ``(2) the term `guaranteed investment contract' includes any
        investment that has specified withdrawal or reinvestment provisions
        and a specifically negotiated or bid interest rate, and also
        includes any agreement to supply investments on 2 or more future
        dates, such as a forward supply contract;
            ``(3) the term `investment strategies' includes plans or
        programs for the investment of the proceeds of municipal securities
        that are not municipal derivatives, guaranteed investment
        contracts, and the recommendation of and brokerage of municipal
        escrow investments;
            ``(4) the term `municipal advisor'--
                ``(A) means a person (who is not a municipal entity or an
            employee of a municipal entity) that--
                    ``(i) provides advice to or on behalf of a municipal
                entity or obligated person with respect to municipal
                financial products or the issuance of municipal securities,
                including advice with respect to the structure, timing,
                terms, and other similar matters concerning such financial
                products or issues; or
                    ``(ii) undertakes a solicitation of a municipal entity;
                ``(B) includes financial advisors, guaranteed investment
            contract brokers, third-party marketers, placement agents,
            solicitors, finders, and swap advisors, if such persons are
            described in any of clauses (i) through (iii) of subparagraph
            (A); and
                ``(C) does not include a broker, dealer, or municipal
            securities dealer serving as an underwriter (as defined in
            section 2(a)(11) of the Securities Act of 1933) (15 U.S.C.
            77b(a)(11)), any investment adviser registered under the
            Investment Advisers Act of 1940, or persons associated with
            such investment advisers who are providing investment advice,
            any commodity trading advisor registered under the Commodity
            Exchange Act or persons associated with a commodity trading
            advisor who are providing advice related to swaps, attorneys
            offering legal advice or providing services that are of a
            traditional legal nature, or engineers providing engineering
            advice;
            ``(5) the term `municipal financial product' means municipal
        derivatives, guaranteed investment contracts, and investment
        strategies;
            ``(6) the term `rules of the Board' means the rules proposed
        and adopted by the Board under subsection (b)(2);
            ``(7) the term `person associated with a municipal advisor' or
        `associated person of an advisor' means--
                ``(A) any partner, officer, director, or branch manager of
            such municipal advisor (or any person occupying a similar
            status or performing similar functions);
                ``(B) any other employee of such municipal advisor who is
            engaged in the management, direction, supervision, or
            performance of any activities relating to the provision of
            advice to or on behalf of a municipal entity or obligated
            person with respect to municipal financial products or the
            issuance of municipal securities; and
                ``(C) any person directly or indirectly controlling,
            controlled by, or under common control with such municipal
            advisor;
            ``(8) the term `municipal entity' means any State, political
        subdivision of a State, or municipal corporate instrumentality of a
        State, including--
                ``(A) any agency, authority, or instrumentality of the
            State, political subdivision, or municipal corporate
            instrumentality;
                ``(B) any plan, program, or pool of assets sponsored or
            established by the State, political subdivision, or municipal
            corporate instrumentality or any agency, authority, or
            instrumentality thereof; and
                ``(C) any other issuer of municipal securities;
            ``(9) the term `solicitation of a municipal entity or obligated
        person' means a direct or indirect communication with a municipal
        entity or obligated person made by a person, for direct or indirect
        compensation, on behalf of a broker, dealer, municipal securities
        dealer, municipal advisor, or investment adviser (as defined in
        section 202 of the Investment Advisers Act of 1940) that does not
        control, is not controlled by, or is not under common control with
        the person undertaking such solicitation for the purpose of
        obtaining or retaining an engagement by a municipal entity or
        obligated person of a broker, dealer, municipal securities dealer,
        or municipal advisor for or in connection with municipal financial
        products, the issuance of municipal securities, or of an investment
        adviser to provide investment advisory services to or on behalf of
        a municipal entity; and
            ``(10) the term `obligated person' means any person, including
        an issuer of municipal securities, who is either generally or
        through an enterprise, fund, or account of such person, committed
        by contract or other arrangement to support the payment of all or
        part of the obligations on the municipal securities to be sold in
        an offering of municipal securities.''.
        (f) Registered Securities Association.--Section 15A(b) of the
    Securities Exchange Act of 1934 (15 U.S.C. 78o-3(b)) is amended by
    adding at the end the following:
            ``(15) The rules of the association provide that the
        association shall--
                ``(A) request guidance from the Municipal Securities
            Rulemaking Board in interpretation of the rules of the
            Municipal Securities Rulemaking Board; and
                ``(B) provide information to the Municipal Securities
            Rulemaking Board about the enforcement actions and examinations
            of the association under section 15B(b)(2)(E), so that the
            Municipal Securities Rulemaking Board may--
                    ``(i) assist in such enforcement actions and
                examinations; and
                    ``(ii) evaluate the ongoing effectiveness of the rules
                of the Board.''.
        (g) Registration and Regulation of Brokers and Dealers.--Section 15
    of the Securities Exchange Act of 1934 is amended--
            (1) in subsection (b)(4), by inserting ``municipal advisor,''
        after ``municipal securities dealer'' each place that term appears;
        and
            (2) in subsection (c), by inserting ``broker, dealer, or''
        before ``municipal securities dealer'' each place that term
        appears.
        (h) Accounts and Records, Reports, Examinations of Exchanges,
    Members, and Others.--Section 17(a)(1) of the Securities Exchange Act
    of 1934 is amended by inserting ``municipal advisor,'' after
    ``municipal securities dealer''.
        (i) Effective Date.--This section, and the amendments made by this
    section, shall take effect on October 1, 2010.
        SEC. 976. GOVERNMENT ACCOUNTABILITY OFFICE STUDY OF INCREASED
          DISCLOSURE TO INVESTORS.
        (a) Study.--The Comptroller General of the United States shall
    conduct a study and review of the disclosure required to be made by
    issuers of municipal securities.
        (b) Subjects for Evaluation.--In conducting the study under
    subsection (a), the Comptroller General of the United States shall--
            (1) broadly describe--
                (A) the size of the municipal securities markets and the
            issuers and investors; and
                (B) the disclosures provided by issuers to investors;
            (2) compare the amount, frequency, and quality of disclosures
        that issuers of municipal securities are required by law to provide
        for the benefit of municipal securities holders, including the
        amount of and frequency of disclosures actually provided by issuers
        of municipal securities, with the amount of and frequency of
        disclosures that issuers of corporate securities provide for the
        benefit of corporate securities holders, taking into account the
        differences between issuers of municipal securities and issuers of
        corporate securities;
            (3) evaluate the costs and benefits to various types of issuers
        of municipal securities of requiring issuers of municipal bonds to
        provide additional financial disclosures for the benefit of
        investors;
            (4) evaluate the potential benefit to investors from additional
        financial disclosures by issuers of municipal bonds; and
            (5) make recommendations relating to disclosure requirements
        for municipal issuers, including the advisability of the repeal or
        retention of section 15B(d) of the Securities Exchange Act of 1934
        (15 U.S.C. 78o-4(d)) (commonly known as the ``Tower Amendment'').
        (c) Report.--Not later than 24 months after the date of enactment
    of this Act, the Comptroller General of the United States shall submit
    a report to Congress on the results of the study conducted under
    subsection (a), including recommendations for how to improve disclosure
    by issuers of municipal securities.
        SEC. 977. GOVERNMENT ACCOUNTABILITY OFFICE STUDY ON THE MUNICIPAL
          SECURITIES MARKETS.
        (a) Study.--The Comptroller General of the United States shall
    conduct a study of the municipal securities markets.
        (b) Report.--Not later than 18 months after the date of enactment
    of this Act, the Comptroller General of the United States shall submit
    a report to the Committee on Banking, Housing, and Urban Affairs of the
    Senate, and the Committee on Financial Services of the House of
    Representatives, with copies to the Special Committee on Aging of the
    Senate and the Commission, on the results of the study conducted under
    subsection (a), including--
            (1) an analysis of the mechanisms for trading, quality of trade
        executions, market transparency, trade reporting, price discovery,
        settlement clearing, and credit enhancements;
            (2) the needs of the markets and investors and the impact of
        recent innovations;
            (3) recommendations for how to improve the transparency,
        efficiency, fairness, and liquidity of trading in the municipal
        securities markets, including with reference to items listed in
        paragraph (1); and
            (4) potential uses of derivatives in the municipal securities
        markets.
        (c) Responses.--Not later than 180 days after receipt of the report
    required under subsection (b), the Commission shall submit a response
    to the Committee on Banking, Housing, and Urban Affairs of the Senate,
    and the Committee on Financial Services of the House of
    Representatives, with a copy to the Special Committee on Aging of the
    Senate, stating the actions the Commission has taken in response to the
    recommendations contained in such report.
        SEC. 978. FUNDING FOR GOVERNMENTAL ACCOUNTING STANDARDS BOARD.
        (a) Amendment to the Securities Act of 1933.--Section 19 of the
    Securities Act of 1933 (15 U.S.C. 77s), as amended by section 912, is
    further amended by adding at the end the following:
        ``(g) Funding for the GASB.--
            ``(1) In general.--The Commission may, subject to the
        limitations imposed by section 15B of the Securities Exchange Act
        of 1934 (15 U.S.C. 78o-4), require a national securities
        association registered under the Securities Exchange Act of 1934 to
        establish--
                ``(A) a reasonable annual accounting support fee to
            adequately fund the annual budget of the Governmental
            Accounting Standards Board (referred to in this subsection as
            the `GASB'); and
                ``(B) rules and procedures, in consultation with the
            principal organizations representing State governors,
            legislators, local elected officials, and State and local
            finance officers, to provide for the equitable allocation,
            assessment, and collection of the accounting support fee
            established under subparagraph (A) from the members of the
            association, and the remittance of all such accounting support
            fees to the Financial Accounting Foundation.
            ``(2) Annual budget.--For purposes of this subsection, the
        annual budget of the GASB is the annual budget reviewed and
        approved according to the internal procedures of the Financial
        Accounting Foundation.
            ``(3) Use of funds.--Any fees or funds collected under this
        subsection shall be used to support the efforts of the GASB to
        establish standards of financial accounting and reporting
        recognized as generally accepted accounting principles applicable
        to State and local governments of the United States.
            ``(4) Limitation on fee.--The annual accounting support fees
        collected under this subsection for a fiscal year shall not exceed
        the recoverable annual budgeted expenses of the GASB (which may
        include operating expenses, capital, and accrued items).
            ``(5) Rules of construction.--
                ``(A) Fees not public monies.--Accounting support fees
            collected under this subsection and other receipts of the GASB
            shall not be considered public monies of the United States.
                ``(B) Limitation on authority of the commission.--Nothing
            in this subsection shall be construed to--
                    ``(i) provide the Commission or any national securities
                association direct or indirect oversight of the budget or
                technical agenda of the GASB; or
                    ``(ii) affect the setting of generally accepted
                accounting principles by the GASB.
                ``(C) Noninterference with states.--Nothing in this
            subsection shall be construed to impair or limit the authority
            of a State or local government to establish accounting and
            financial reporting standards.''.
        (b) Study of Funding for Governmental Accounting Standards Board.--
            (1) Study.--The Comptroller General of the United States shall
        conduct a study that evaluates--
                (A) the role and importance of the Governmental Accounting
            Standards Board in the municipal securities markets; and
                (B) the manner and the level at which the Governmental
            Accounting Standards Board has been funded.
            (2) Consultation.--In conducting the study required under
        paragraph (1), the Comptroller General shall consult with the
        principal organizations representing State governors, legislators,
        local elected officials, and State and local finance officers.
            (3) Report.--Not later than 180 days after the date of
        enactment of this Act, the Comptroller General shall submit 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 the study required under paragraph (1).
        SEC. 979. COMMISSION OFFICE OF MUNICIPAL SECURITIES.
        (a) In General.--There shall be in the Commission an Office of
    Municipal Securities, which shall--
            (1) administer the rules of the Commission with respect to the
        practices of municipal securities brokers and dealers, municipal
        securities advisors, municipal securities investors, and municipal
        securities issuers; and
            (2) coordinate with the Municipal Securities Rulemaking Board
        for rulemaking and enforcement actions as required by law.
        (b) Director of the Office.--The head of the Office of Municipal
    Securities shall be the Director, who shall report to the Chairman.
        (c) Staffing.--
            (1) In general.--The Office of Municipal Securities shall be
        staffed sufficiently to carry out the requirements of this section.
            (2) Requirement.--The staff of the Office of Municipal
        Securities shall include individuals with knowledge of and
        expertise in municipal finance.

       Subtitle I--Public Company Accounting Oversight Board, Portfolio
                          Margining, and Other Matters

        SEC. 981. AUTHORITY TO SHARE CERTAIN INFORMATION WITH FOREIGN
          AUTHORITIES.
        (a) Definition.--Section 2(a) of the Sarbanes-Oxley Act of 2002 (15
    U.S.C. 7201(a)) is amended by adding at the end the following:
            ``(17) Foreign auditor oversight authority.--The term `foreign
        auditor oversight authority' means any governmental body or other
        entity empowered by a foreign government to conduct inspections of
        public accounting firms or otherwise to administer or enforce laws
        related to the regulation of public accounting firms.''.
        (b) Availability to Share Information.--Section 105(b)(5) of the
    Sarbanes-Oxley Act of 2002 (15 U.S.C. 7215(b)(5)) is amended by adding
    at the end the following:
                ``(C) Availability to foreign oversight authorities.--
            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 that
            a foreign government has empowered a foreign auditor oversight
            authority to inspect or otherwise enforce laws with respect to,
            may, at the discretion of the Board, be made available to the
            foreign auditor oversight authority, if--
                    ``(i) the Board finds that it is necessary to
                accomplish the purposes of this Act or to protect
                investors;
                    ``(ii) the foreign auditor oversight authority
                provides--

                        ``(I) such assurances of confidentiality as the
                    Board may request;
                        ``(II) a description of the applicable information
                    systems and controls of the foreign auditor oversight
                    authority; and
                        ``(III) a description of the laws and regulations
                    of the foreign government of the foreign auditor
                    oversight authority that are relevant to information
                    access; and

                    ``(iii) the Board determines that it is appropriate to
                share such information.''.
        (c) Conforming Amendment.--Section 105(b)(5)(A) of the Sarbanes-
    Oxley Act of 2002 (15 U.S.C. 7215(b)(5)(A)) is amended by striking
    ``subparagraph (B)'' and inserting ``subparagraphs (B) and (C)''.
        SEC. 982. OVERSIGHT OF BROKERS AND DEALERS.
        (a) Definitions.--
            (1) Definitions amended.--Title I of the Sarbanes-Oxley Act of
        2002 (15 U.S.C. 7201 et seq.) is amended by adding at the end the
        following new section:
        ``SEC. 110. DEFINITIONS.
        ``For the purposes of this title, the following definitions shall
    apply:
            ``(1) Audit.--The term `audit' means an examination of the
        financial statements, reports, documents, procedures, 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, for the purpose of expressing an opinion on the
        financial statements or providing an audit report.
            ``(2) Audit report.--The term `audit report' means a document,
        report, notice, or other record--
                ``(A) prepared following an audit performed for purposes of
            compliance by an issuer, broker, or dealer with the
            requirements of the securities laws; and
                ``(B) in which a public accounting firm either--
                    ``(i) sets forth the opinion of that firm regarding a
                financial statement, report, notice, or other document,
                procedures, or controls; or
                    ``(ii) asserts that no such opinion can be expressed.
            ``(3) Broker.--The term `broker' means a broker (as such term
        is defined in section 3(a)(4) of the Securities Exchange Act of
        1934 (15 U.S.C. 78c(a)(4))) that is required to file a balance
        sheet, income statement, or other financial statement under section
        17(e)(1)(A) of such Act (15 U.S.C. 78q(e)(1)(A)), where such
        balance sheet, income statement, or financial statement is required
        to be certified by a registered public accounting firm.
            ``(4) Dealer.--The term `dealer' means a dealer (as such term
        is defined in section 3(a)(5) of the Securities Exchange Act of
        1934 (15 U.S.C. 78c(a)(5))) that is required to file a balance
        sheet, income statement, or other financial statement under section
        17(e)(1)(A) of such Act (15 U.S.C. 78q(e)(1)(A)), where such
        balance sheet, income statement, or financial statement is required
        to be certified by a registered public accounting firm.
            ``(5) Professional standards.--The term `professional
        standards' means--
                ``(A) accounting principles that are--
                    ``(i) established by the standard setting body
                described in section 19(b) of the Securities Act of 1933,
                as amended by this Act, or prescribed by the Commission
                under section 19(a) of that Act (15 U.S.C. 17a(s)) or
                section 13(b) of the Securities Exchange Act of 1934 (15
                U.S.C. 78a(m)); and
                    ``(ii) relevant to audit reports for particular
                issuers, brokers, or dealers, or dealt with in the quality
                control system of a particular registered public accounting
                firm; and
                ``(B) auditing standards, standards for attestation
            engagements, quality control policies and procedures, ethical
            and competency standards, and independence standards (including
            rules implementing title II) that the Board or the Commission
            determines--
                    ``(i) relate to the preparation or issuance of audit
                reports for issuers, brokers, or dealers; and
                    ``(ii) are established or adopted by the Board under
                section 103(a), or are promulgated as rules of the
                Commission.
            ``(6) Self-regulatory organization.--The term `self-regulatory
        organization' has the same meaning as in section 3(a) of the
        Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).''.
            (2) Conforming amendment.--Section 2(a) of the Sarbanes-Oxley
        Act of 2002 (15 U.S.C. 7201(a)) is amended in the matter preceding
        paragraph (1), by striking ``In this'' and inserting ``Except as
        otherwise specifically provided in this Act, in this''.
        (b) Establishment and Administration of the Public Company
    Accounting Oversight Board.--Section 101 of the Sarbanes-Oxley Act of
    2002 (15 U.S.C. 7211) is amended--
            (1) by striking ``issuers'' each place that term appears and
        inserting ``issuers, brokers, and dealers''; and
            (2) in subsection (a)--
                (A) by striking ``public companies'' and inserting
            ``companies''; and
                (B) by striking ``for companies the securities of which are
            sold to, and held by and for, public investors''.
        (c) Registration With the Board.--Section 102 of the Sarbanes-Oxley
    Act of 2002 (15 U.S.C. 7212) is amended--
            (1) in subsection (a)--
                (A) by striking ``Beginning 180'' and all that follows
            through ``101(d), it'' and inserting ``It''; and
                (B) by striking ``issuer'' and inserting ``issuer, broker,
            or dealer'';
            (2) in subsection (b)--
                (A) in paragraph (2)(A), by striking ``issuers'' and
            inserting ``issuers, brokers, and dealers''; and
                (B) by striking ``issuer'' each place that term appears and
            inserting ``issuer, broker, or dealer''.
        (d) Auditing and Independence.--Section 103(a) of the Sarbanes-
    Oxley Act of 2002 (15 U.S.C. 7213(a)) is amended--
            (1) in paragraph (1), by striking ``and such ethics standards''
        and inserting ``such ethics standards, and such independence
        standards'';
            (2) in paragraph (2)(A)(iii), by striking ``describe in each
        audit report'' and inserting ``in each audit report for an issuer,
        describe''; and
            (3) in paragraph (2)(B)(i), by striking ``issuers'' and
        inserting ``issuers, brokers, and dealers''.
        (e) Inspections of Registered Public Accounting Firms.--
            (1) Amendments.--Section 104(a) of the Sarbanes-Oxley Act of
        2002 (15 U.S.C. 7214(a)) is amended--
                (A) by striking ``The Board shall'' and inserting the
            following:
            ``(1) Inspections generally.--The Board shall''; and
                (B) by adding at the end the following:
            ``(2) Inspections of audit reports for brokers and dealers.--
                ``(A) The Board may, by rule, conduct and require a program
            of inspection in accordance with paragraph (1), on a basis to
            be determined by the Board, of registered public accounting
            firms that provide one or more audit reports for a broker or
            dealer. The Board, in establishing such a program, may allow
            for differentiation among classes of brokers and dealers, as
            appropriate.
                ``(B) If the Board determines to establish a program of
            inspection pursuant to subparagraph (A), the Board shall
            consider in establishing any inspection schedules whether
            differing schedules would be appropriate with respect to
            registered public accounting firms that issue audit reports
            only for one or more brokers or dealers that do not receive,
            handle, or hold customer securities or cash or are not a member
            of the Securities Investor Protection Corporation.
                ``(C) Any rules of the Board pursuant to this paragraph
            shall be subject to prior approval by the Commission pursuant
            to section 107(b) before the rules become effective, including
            an opportunity for public notice and comment.
                ``(D) Notwithstanding anything to the contrary in section
            102 of this Act, a public accounting firm shall not be required
            to register with the Board if the public accounting firm is
            exempt from the inspection program which may be established by
            the Board under subparagraph (A).''.
            (2) Conforming amendment.--Section 17(e)(1)(A) of the
        Securities Exchange Act of 1934 (15 U.S.C. 78q(e)(1)(A)) is amended
        by striking ``registered public accounting firm'' and inserting
        ``independent public accounting firm, or by a registered public
        accounting firm if the firm is required to be registered under the
        Sarbanes-Oxley Act of 2002,''.
        (f) Investigations and Disciplinary Proceedings.--Section
    105(c)(7)(B) of the Sarbanes-Oxley Act of 2002 (15 U.S.C.
    7215(c)(7)(B)) is amended--
            (1) in the subparagraph heading, by inserting ``, broker, or
        dealer'' after ``issuer'';
            (2) by striking ``any issuer'' each place that term appears and
        inserting ``any issuer, broker, or dealer''; and
            (3) by striking ``an issuer under this subsection'' and
        inserting ``a registered public accounting firm under this
        subsection''.
        (g) Foreign Public Accounting Firms.--Section 106(a) of the
    Sarbanes-Oxley Act of 2002 (15 U.S.C. 7216(a)) is amended--
            (1) in paragraph (1), by striking ``issuer'' and inserting
        ``issuer, broker, or dealer''; and
            (2) in paragraph (2), by striking ``issuers'' and inserting
        ``issuers, brokers, or dealers''.
        (h) Funding.--Section 109 of the Sarbanes-Oxley Act of 2002 (15
    U.S.C. 7219) is amended--
            (1) in subsection (c)(2), by striking ``subsection (i)'' and
        inserting ``subsection (j)'';
            (2) in subsection (d)--
                (A) in paragraph (2), by striking ``allowing for
            differentiation among classes of issuers, as appropriate'' and
            inserting ``and among brokers and dealers, in accordance with
            subsection (h), and allowing for differentiation among classes
            of issuers, brokers and dealers, as appropriate''; and
                (B) by adding at the end the following:
            ``(3) Brokers and dealers.--The Board shall begin the
        allocation, assessment, and collection of fees under paragraph (2)
        with respect to brokers and dealers with the payment of support
        fees to fund the first full fiscal year beginning after the date of
        enactment of the Investor Protection and Securities Reform Act of
        2010.'';
            (3) by redesignating subsections (h), (i), and (j) as
        subsections (i), (j), and (k), respectively; and
            (4) by inserting after subsection (g) the following:
        ``(h) Allocation of Accounting Support Fees Among Brokers and
    Dealers.--
            ``(1) Obligation to pay.--Each broker or dealer shall pay to
        the Board the annual accounting support fee allocated to such
        broker or dealer under this section.
            ``(2) Allocation.--Any amount due from a broker or dealer (or
        from a particular class of brokers and dealers) under this section
        shall be allocated among brokers and dealers and payable by the
        broker or dealer (or the brokers and dealers in the particular
        class, as applicable).
            ``(3) Proportionality.--The amount due from a broker or dealer
        shall be in proportion to the net capital of the broker or dealer
        (before or after any adjustments), compared to the total net
        capital of all brokers and dealers (before or after any
        adjustments), in accordance with rules issued by the Board.''.
        (i) Referral of Investigations to a Self-regulatory Organization.--
    Section 105(b)(4)(B) of the Sarbanes-Oxley Act of 2002 (15 U.S.C.
    7215(b)(4)(B)) is amended--
            (1) by redesignating clauses (ii) and (iii) as clauses (iii)
        and (iv), respectively; and
            (2) by inserting after clause (i) the following:
                    ``(ii) to a self-regulatory organization, in the case
                of an investigation that concerns an audit report for a
                broker or dealer that is under the jurisdiction of such
                self-regulatory organization;''.
        (j) Use of Documents Related to an Inspection or Investigation.--
    Section 105(b)(5)(B)(ii) of the Sarbanes-Oxley Act of 2002 (15 U.S.C.
    7215(b)(5)(B)(ii)) is amended--
            (1) in subclause (III), by striking ``and'' at the end;
            (2) in subclause (IV), by striking the comma and inserting ``;
        and''; and
            (3) by inserting after subclause (IV) the following:

                        ``(V) a self-regulatory organization, with respect
                    to an audit report for a broker or dealer that is under
                    the jurisdiction of such self-regulatory
                    organization,''.

        SEC. 983. PORTFOLIO MARGINING.
        (a) Advances.--Section 9(a)(1) of the Securities Investor
    Protection Act of 1970 (15 U.S.C. 78fff3(a)(1)) is amended by inserting
    ``or options on commodity futures contracts'' after ``claim for
    securities''.
        (b) Definitions.--Section 16 of the Securities Investor Protection
    Act of 1970 (15 U.S.C. 78lll) is amended--
            (1) by striking paragraph (2) and inserting the following:
            ``(2) Customer.--
                ``(A) In general.--The term `customer' of a debtor means
            any person (including any person with whom the debtor deals as
            principal or agent) who has a claim on account of securities
            received, acquired, or held by the debtor in the ordinary
            course of its business as a broker or dealer from or for the
            securities accounts of such person for safekeeping, with a view
            to sale, to cover consummated sales, pursuant to purchases, as
            collateral, security, or for purposes of effecting transfer.
                ``(B) Included persons.--The term `customer' includes--
                    ``(i) any person who has deposited cash with the debtor
                for the purpose of purchasing securities;
                    ``(ii) any person who has a claim against the debtor
                for 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; and
                    ``(iii) any person who has a claim against the debtor
                arising out of sales or conversions of such securities.
                ``(C) Excluded persons.--The term `customer' does not
            include any person, to the extent that--
                    ``(i) the claim of such person arises out of
                transactions with a foreign subsidiary of a member of SIPC;
                or
                    ``(ii) 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.'';
            (2) in paragraph (4)--
                (A) in subparagraph (C), by striking ``and'' at the end;
                (B) by redesignating subparagraph (D) as subparagraph (E);
            and
                (C) by inserting after subparagraph (C) the following:
                ``(D) in the case of a portfolio margining account of a
            customer that is carried as a securities account pursuant to a
            portfolio margining program approved by the Commission, a
            futures contract or an option on a futures contract received,
            acquired, or held by or for the account of a debtor from or for
            such portfolio margining account, and the proceeds thereof;
            and'';
            (3) in paragraph (9), in the matter following subparagraph (L),
        by inserting after ``Such term'' the following: ``includes revenues
        earned by a broker or dealer in connection with a transaction in
        the portfolio margining account of a customer carried as securities
        accounts pursuant to a portfolio margining program approved by the
        Commission. Such term''; and
            (4) in paragraph (11)--
                (A) in subparagraph (A)--
                    (i) by striking ``filing date, all'' and all that
                follows through the end of the subparagraph and inserting
                the following: ``filing date--
                    ``(i) all securities positions of such customer (other
                than customer name securities reclaimed by such customer);
                and
                    ``(ii) all positions in futures contracts and options
                on futures contracts held in a portfolio margining account
                carried as a securities account pursuant to a portfolio
                margining program approved by the Commission, including all
                property collateralizing such positions, to the extent that
                such property is not otherwise included herein; minus'';
                and
                (B) in the matter following subparagraph (C), by striking
            ``In determining'' and inserting the following: ``A claim for a
            commodity futures contract received, acquired, or held in a
            portfolio margining account pursuant to a portfolio margining
            program approved by the Commission or a claim for a security
            futures contract, shall be deemed to be a claim with respect to
            such contract as of the filing date, and such claim shall be
            treated as a claim for cash. In determining''.
        SEC. 984. LOAN OR BORROWING OF SECURITIES.
        (a) Rulemaking Authority.--Section 10 of the Securities Exchange
    Act of 1934 (15 U.S.C. 78j) is amended by adding at the end the
    following:
            ``(c)(1) To effect, accept, or facilitate a transaction
        involving the loan or borrowing of securities in contravention of
        such rules and regulations as the Commission may prescribe as
        necessary or appropriate in the public interest or for the
        protection of investors.
            ``(2) Nothing in paragraph (1) may be construed to limit the
        authority of the appropriate Federal banking agency (as defined in
        section 3(q) of the Federal Deposit Insurance Act (12 U.S.C.
        1813(q))), the National Credit Union Administration, or any other
        Federal department or agency having a responsibility under Federal
        law to prescribe rules or regulations restricting 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.''.
        (b) Rulemaking Required.--Not later than 2 years after the date of
    enactment of this Act, the Commission shall promulgate rules that are
    designed to increase the transparency of information available to
    brokers, dealers, and investors, with respect to the loan or borrowing
    of securities.
        SEC. 985. TECHNICAL CORRECTIONS TO FEDERAL SECURITIES LAWS.
        (a) Securities Act of 1933.--The Securities Act of 1933 (15 U.S.C.
    77a et seq.) is amended--
            (1) in section 3(a)(4) (15 U.S.C. 77c(a)(4)), by striking
        ``individual;'' and inserting ``individual,'';
            (2) in section 18 (15 U.S.C. 77r)--
                (A) in subsection (b)(1)(C), by striking ``is a security''
            and inserting ``a security''; and
                (B) in subsection (c)(2)(B)(i), by striking ``State, or''
            and inserting ``State or'';
            (3) in section 19(d)(6)(A) (15 U.S.C. 77s(d)(6)(A)), by
        striking ``in paragraph (1) of (3)'' and inserting ``in paragraph
        (1) or (3)''; and
            (4) in section 27A(c)(1)(B)(ii) (15 U.S.C. 77z-2(c)(1)(B)(ii)),
        by striking ``business entity;'' and inserting ``business
        entity,''.
        (b) Securities Exchange Act of 1934.--The Securities Exchange Act
    of 1934 (15 U.S.C. 78a et seq.) is amended--
            (1) in section 2 (15 U.S.C. 78b), by striking ``affected'' and
        inserting ``effected'';
            (2) in section 3 (15 U.S.C. 78c)--
                (A) in subsection (a)(55)(A), by striking ``section
            3(a)(12) of the Securities Exchange Act of 1934'' and inserting
            ``section 3(a)(12) of this title''; and
                (B) in subsection (g), by striking ``company, account
            person, or entity'' and inserting ``company, account, person,
            or entity'';
            (3) in section 10A(i)(1)(B) (15 U.S.C. 78j-1(i)(1)(B))--
                (A) in the subparagraph heading, by striking ``minimus''
            and inserting ``minimis''; and
                (B) in clause (i), by striking ``nonaudit'' and inserting
            ``non-audit'';
            (4) in section 13(b)(1) (15 U.S.C. 78m(b)(1)), by striking
        ``earning statement'' and inserting ``earnings statement'';
            (5) in section 15 (15 U.S.C. 78o)--
                (A) in subsection (b)(1)--
                    (i) in subparagraph (B), by striking ``The order
                granting'' and all that follows through ``from such
                membership.''; and
                    (ii) in the undesignated matter immediately following
                subparagraph (B), by inserting after the first sentence the
                following: ``The order granting registration shall not be
                effective until such broker or dealer has become a member
                of a registered securities association, or until such
                broker or dealer has become a member of a national
                securities exchange, if such broker or dealer effects
                transactions solely on that exchange, unless the Commission
                has exempted such broker or dealer, by rule or order, from
                such membership.'';
            (6) in section 15C(a)(2) (15 U.S.C. 78o-5(a)(2))--
                (A) by redesignating clauses (i) and (ii) as subparagraphs
            (A) and (B), respectively, and adjusting the subparagraph
            margins accordingly;
                (B) in subparagraph (B), as so redesignated, by striking
            ``The order granting'' and all that follows through ``from such
            membership.''; and
                (C) in the matter following subparagraph (B), as so
            redesignated, by inserting after the first sentence the
            following: ``The order granting registration shall not be
            effective until such government securities broker or government
            securities dealer has become a member of a national securities
            exchange registered under section 6 of this title, or a
            securities association registered under section 15A of this
            title, unless the Commission has exempted such government
            securities broker or government securities dealer, by rule or
            order, from such membership.'';
            (7) in section 17(b)(1)(B) (15 U.S.C. 78q(b)(1)(B)), by
        striking ``15A(k) gives'' and inserting ``15A(k), give''; and
            (8) in section 21C(c)(2) (15 U.S.C. 78u-3(c)(2)), by striking
        ``paragraph (1) subsection'' and inserting ``Paragraph (1)''.
        (c) Trust Indenture Act of 1939.--The Trust Indenture Act of 1939
    (15 U.S.C. 77aaa et seq.) is amended--
            (1) in section 304(b) (15 U.S.C. 77ddd(b)), by striking
        ``section 2 of such Act'' and inserting ``section 2(a) of such
        Act''; and
            (2) in section 317(a)(1) (15 U.S.C. 77qqq(a)(1)), by striking
        ``, in the'' and inserting ``in the''.
        (d) Investment Company Act of 1940.--The Investment Company Act of
    1940 (15 U.S.C. 80a-1 et seq.) is amended--
            (1) in section 2(a)(19) (15 U.S.C. 80a-2(a)(19)), in the matter
        following subparagraph (B)(vii)--
                (A) by striking ``clause (vi)'' each place that term
            appears and inserting ``clause (vii)''; and
                (B) in each of subparagraphs (A)(vi) and (B)(vi), by adding
            ``and'' at the end of subclause (III);
            (2) in section 9(b)(4)(B) (15 U.S.C. 80a-9(b)(4)(B)), by adding
        ``or'' after the semicolon at the end;
            (3) in section 12(d)(1)(J) (15 U.S.C. 80a-12(d)(1)(J)), by
        striking ``any provision of this subsection'' and inserting ``any
        provision of this paragraph'';
            (4) in section 17(f) (15 U.S.C. 80a-17(f))--
                (A) in paragraph (4), by striking ``No such member'' and
            inserting ``No member of a national securities exchange''; and
                (B) in paragraph (6), by striking ``company may serve'' and
            inserting ``company, may serve''; and
            (5) in section 61(a)(3)(B)(iii) (15 U.S.C. 80a-
        60(a)(3)(B)(iii))--
                (A) by striking ``paragraph (1) of section 205'' and
            inserting ``section 205(a)(1)''; and
                (B) by striking ``clause (A) or (B) of that section'' and
            inserting ``paragraph (1) or (2) of section 205(b)''.
        (e) Investment Advisers Act of 1940.--The Investment Advisers Act
    of 1940 (15 U.S.C. 80b-1 et seq.) is amended--
            (1) in section 203 (15 U.S.C. 80b-3)--
                (A) in subsection (c)(1)(A), by striking ``principal
            business office and'' and inserting ``principal office,
            principal place of business, and''; and
                (B) in subsection (k)(4)(B), in the matter following clause
            (ii), by striking ``principal place of business'' and inserting
            ``principal office or place of business'';
            (2) in section 206(3) (15 U.S.C. 80b-6(3)), by adding ``or''
        after the semicolon at the end;
            (3) in section 213(a) (15 U.S.C. 80b-13(a)), by striking
        ``principal place of business'' and inserting ``principal office or
        place of business''; and
            (4) in section 222 (15 U.S.C. 80b-18a), by striking ``principal
        place of business'' each place that term appears and inserting
        ``principal office and place of business''.
        SEC. 986. CONFORMING AMENDMENTS RELATING TO REPEAL OF THE PUBLIC
          UTILITY HOLDING COMPANY ACT OF 1935.
        (a) Securities Exchange Act of 1934.--The Securities Exchange Act
    of 1934 (15 U.S.C. 78 et seq.) is amended--
            (1) in section 3(a)(47) (15 U.S.C. 78c(a)(47)), by striking
        ``the Public Utility Holding Company Act of 1935 (15 U.S.C. 79a et
        seq.),'';
            (2) in section 12(k) (15 U.S.C. 78l(k)), by amending paragraph
        (7) to read as follows:
            ``(7) Definition.--For purposes of this subsection, the term
        `emergency' means--
                ``(A) a major market disturbance characterized by or
            constituting--
                    ``(i) sudden and excessive fluctuations of securities
                prices generally, or a substantial threat thereof, that
                threaten fair and orderly markets; or
                    ``(ii) a substantial disruption of the safe or
                efficient operation of the national system for clearance
                and settlement of transactions in securities, or a
                substantial threat thereof; or
                ``(B) a major disturbance that substantially disrupts, or
            threatens to substantially disrupt--
                    ``(i) the functioning of securities markets, investment
                companies, or any other significant portion or segment of
                the securities markets; or
                    ``(ii) the transmission or processing of securities
                transactions.''; and
            (3) in section 21(h)(2) (15 U.S.C. 78u(h)(2)), by striking
        ``section 18(c) of the Public Utility Holding Company Act of
        1935,''.
        (b) Trust Indenture Act of 1939.--The Trust Indenture Act of 1939
    (15 U.S.C. 77aaa et seq.) is amended--
            (1) in section 303 (15 U.S.C. 77ccc), by striking paragraph
        (17) and inserting the following:
            ``(17) The terms `Securities Act of 1933' and `Securities
        Exchange Act of 1934' shall be deemed to refer, respectively, to
        such Acts, as amended, whether amended prior to or after the
        enactment of this title.'';
            (2) in section 308 (15 U.S.C. 77hhh), by striking ``Securities
        Act of 1933, the Securities Exchange Act of 1934, or the Public
        Utility Holding Company Act of 1935'' each place that term appears
        and inserting ``Securities Act of 1933 or the Securities Exchange
        Act of 1934'';
            (3) in section 310 (15 U.S.C. 77jjj), by striking subsection
        (c);
            (4) in section 311 (15 U.S.C. 77kkk), by striking subsection
        (c);
            (5) in section 323(b) (15 U.S.C. 77www(b)), by striking
        ``Securities Act of 1933, or the Securities Exchange Act of 1934,
        or the Public Utility Holding Company Act of 1935'' and inserting
        ``Securities Act of 1933 or the Securities Exchange Act of 1934'';
        and
            (6) in section 326 (15 U.S.C. 77zzz), by striking ``Securities
        Act of 1933, or the Securities Exchange Act of 1934, or the Public
        Utility Holding Company Act of 1935,'' and inserting ``Securities
        Act of 1933 or the Securities Exchange Act of 1934''.
        (c) Investment Company Act of 1940.--The Investment Company Act of
    1940 (15 U.S.C. 80a-1 et seq.) is amended--
            (1) in section 2(a)(44) (15 U.S.C. 80a-2(a)(44)), by striking
        ```Public Utility Holding Company Act of 1935','';
            (2) in section 3(c) (15 U.S.C. 80a-3(c)), by striking paragraph
        (8) and inserting the following:
            ``(8) [Repealed]'';
            (3) in section 38(b) (15 U.S.C. 80a-37(b)), by striking ``the
        Public Utility Holding Company Act of 1935,''; and
            (4) in section 50 (15 U.S.C. 80a-49), by striking ``the Public
        Utility Holding Company Act of 1935,''.
        (d) Investment Advisers Act of 1940.--Section 202(a)(21) of the
    Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)(21)) is amended by
    striking ```Public Utility Holding Company Act of 1935',''.
        SEC. 987. AMENDMENT TO DEFINITION OF MATERIAL LOSS AND NONMATERIAL
          LOSSES TO THE DEPOSIT INSURANCE FUND FOR PURPOSES OF INSPECTOR
          GENERAL REVIEWS.
        (a) In General.--Section 38(k) of the Federal Deposit Insurance Act
    (U.S.C. 1831o(k)) is amended--
            (1) in paragraph (2), by striking subparagraph (B) and
        inserting the following:
                ``(B) Material loss defined.--The term `material loss'
            means any estimated loss in excess of--
                    ``(i) $200,000,000, if the loss occurs during the
                period beginning on January 1, 2010, and ending on December
                31, 2011;
                    ``(ii) $150,000,000, if the loss occurs during the
                period beginning on January 1, 2012, and ending on December
                31, 2013; and
                    ``(iii) $50,000,000, if the loss occurs on or after
                January 1, 2014, provided that if the inspector general of
                a Federal banking agency certifies to the Committee on
                Banking, Housing, and Urban Affairs of the Senate and the
                Committee on Financial Services of the House of
                Representatives that the number of projected failures of
                depository institutions that would require material loss
                reviews for the following 12 months will be greater than 30
                and would hinder the effectiveness of its oversight
                functions, then the definition of `material loss' shall be
                $75,000,000 for a duration of 1 year from the date of the
                certification.'';
            (2) in paragraph (4)(A) by striking ``the report'' and
        inserting ``any report on losses required under this subsection,'';
            (3) by striking paragraph (6);
            (4) by redesignating paragraph (5) as paragraph (6); and
            (5) by inserting after paragraph (4) the following:
            ``(5) Losses that are not material.--
                ``(A) Semiannual report.--For the 6-month period ending on
            March 31, 2010, and each 6-month period thereafter, the
            Inspector General of each Federal banking agency shall--
                    ``(i) identify losses that the Inspector General
                estimates have been incurred by the Deposit Insurance Fund
                during that 6-month period, with respect to the insured
                depository institutions supervised by the Federal banking
                agency;
                    ``(ii) for each loss incurred by the Deposit Insurance
                Fund that is not a material loss, determine--

                        ``(I) the grounds identified by the Federal banking
                    agency or State bank supervisor for appointing the
                    Corporation as receiver under section 11(c)(5); and
                        ``(II) whether any unusual circumstances exist that
                    might warrant an in-depth review of the loss; and

                    ``(iii) prepare and submit a written report to the
                appropriate Federal banking agency and to Congress on the
                results of any determination by the Inspector General,
                including--

                        ``(I) an identification of any loss that warrants
                    an in-depth review, together with the reasons why such
                    review is warranted, or, if the Inspector General
                    determines that no review is warranted, an explanation
                    of such determination; and
                        ``(II) for each loss identified under subclause (I)
                    that warrants an in-depth review, the date by which
                    such review, and a report on such review prepared in a
                    manner consistent with reports under paragraph (1)(A),
                    will be completed and submitted to the Federal banking
                    agency and Congress.

                ``(B) Deadline for semiannual report.--The Inspector
            General of each Federal banking agency shall--
                    ``(i) submit each report required under paragraph (A)
                expeditiously, and not later than 90 days after the end of
                the 6-month period covered by the report; and
                    ``(ii) provide a copy of the report required under
                paragraph (A) to any Member of Congress, upon request.''.
        (b) Technical and Conforming Amendment.--The heading for subsection
    (k) of section 38 of the Federal Deposit Insurance Act (U.S.C.
    1831o(k)) is amended to read as follows:
        ``(k) Reviews Required When Deposit Insurance Fund Incurs Losses.--
    ''.
        SEC. 988. AMENDMENT TO DEFINITION OF MATERIAL LOSS AND NONMATERIAL
          LOSSES TO THE NATIONAL CREDIT UNION SHARE INSURANCE FUND FOR
          PURPOSES OF INSPECTOR GENERAL REVIEWS.
        (a) In General.--Section 216(j) of the Federal Credit Union Act (12
    U.S.C. 1790d(j)) is amended to read as follows:
        ``(j) Reviews Required When Share Insurance Fund Experiences
    Losses.--
            ``(1) In general.--If the Fund incurs a material loss with
        respect to an insured credit union, the Inspector General of the
        Board shall--
                ``(A) submit to the Board a written report reviewing the
            supervision of the credit union by the Administration
            (including the implementation of this section by the
            Administration), which shall include--
                    ``(i) a description of the reasons why the problems of
                the credit union resulted in a material loss to the Fund;
                and
                    ``(ii) recommendations for preventing any such loss in
                the future; and
                ``(B) submit a copy of the report under subparagraph (A)
            to--
                    ``(i) the Comptroller General of the United States;
                    ``(ii) the Corporation;
                    ``(iii) in the case of a report relating to a State
                credit union, the appropriate State supervisor; and
                    ``(iv) to any Member of Congress, upon request.
            ``(2) Material loss defined.--For purposes of determining
        whether the Fund has incurred a material loss with respect to an
        insured credit union, a loss is material if it exceeds the sum of--
                ``(A) $25,000,000; and
                ``(B) an amount equal to 10 percent of the total assets of
            the credit union on the date on which the Board initiated
            assistance under section 208 or was appointed liquidating
            agent.
            ``(3) Public disclosure required.--
                ``(A) In general.--The Board shall disclose a report under
            this subsection, upon request under section 552 of title 5,
            United States Code, without excising--
                    ``(i) any portion under section 552(b)(5) of title 5,
                United States Code; or
                    ``(ii) any information about the insured credit union
                (other than trade secrets) under section 552(b)(8) of title
                5, United States Code.
                ``(B) Rule of construction.--Subparagraph (A) may not be
            construed as requiring the agency to disclose the name of any
            customer of the insured credit union (other than an
            institution-affiliated party), or information from which the
            identity of such customer could reasonably be ascertained.
            ``(4) Losses that are not material.--
                ``(A) Semiannual report.--For the 6-month period ending on
            March 31, 2010, and each 6-month period thereafter, the
            Inspector General of the Board shall--
                    ``(i) identify any losses that the Inspector General
                estimates were incurred by the Fund during such 6-month
                period, with respect to insured credit unions;
                    ``(ii) for each loss to the Fund that is not a material
                loss, determine--

                        ``(I) the grounds identified by the Board or the
                    State official having jurisdiction over a State credit
                    union for appointing the Board as the liquidating agent
                    for any Federal or State credit union; and
                        ``(II) whether any unusual circumstances exist that
                    might warrant an in-depth review of the loss; and

                    ``(iii) prepare and submit a written report to the
                Board and to Congress on the results of the determinations
                of the Inspector General that includes--

                        ``(I) an identification of any loss that warrants
                    an in-depth review, and the reasons such review is
                    warranted, or if the Inspector General determines that
                    no review is warranted, an explanation of such
                    determination; and
                        ``(II) for each loss identified in subclause (I)
                    that warrants an in-depth review, the date by which
                    such review, and a report on the review prepared in a
                    manner consistent with reports under paragraph (1)(A),
                    will be completed.

                ``(B) Deadline for semiannual report.--The Inspector
            General of the Board shall--
                    ``(i) submit each report required under subparagraph
                (A) expeditiously, and not later than 90 days after the end
                of the 6-month period covered by the report; and
                    ``(ii) provide a copy of the report required under
                subparagraph (A) to any Member of Congress, upon request.
            ``(5) GAO review.--The Comptroller General of the United States
        shall, under such conditions as the Comptroller General determines
        to be appropriate--
                ``(A) review each report made under paragraph (1),
            including the extent to which the Inspector General of the
            Board complied with the requirements under section 8L of the
            Inspector General Act of 1978 (5 U.S.C. App.) with respect to
            each such report; and
                ``(B) recommend improvements to the supervision of insured
            credit unions (including improvements relating to the
            implementation of this section).''.
        SEC. 989. GOVERNMENT ACCOUNTABILITY OFFICE STUDY ON PROPRIETARY
          TRADING.
        (a) Definitions.--In this section--
            (1) the term ``covered entity'' means--
                (A) an insured depository institution, an affiliate of an
            insured depository institution, a bank holding company, a
            financial holding company, or a subsidiary of a bank holding
            company or a financial holding company, as those terms are
            defined in the Bank Holding Company Act of 1956 (12 U.S.C. 1841
            et seq.); and
                (B) any other entity, as the Comptroller General of the
            United States may determine; and
            (2) the term ``proprietary trading'' means the act of a covered
        entity investing as a principal in securities, commodities,
        derivatives, hedge funds, private equity firms, or such other
        financial products or entities as the Comptroller General may
        determine.
        (b) Study.--
            (1) In general.--The Comptroller General of the United States
        shall conduct a study regarding the risks and conflicts associated
        with proprietary trading by and within covered entities, including
        an evaluation of--
                (A) whether proprietary trading presents a material
            systemic risk to the stability of the United States financial
            system, and if so, the costs and benefits of options for
            mitigating such systemic risk;
                (B) whether proprietary trading presents material risks to
            the safety and soundness of the covered entities that engage in
            such activities, and if so, the costs and benefits of options
            for mitigating such risks;
                (C) whether proprietary trading presents material conflicts
            of interest between covered entities that engage in proprietary
            trading and the clients of the institutions who use the firm to
            execute trades or who rely on the firm to manage assets, and if
            so, the costs and benefits of options for mitigating such
            conflicts of interest;
                (D) whether adequate disclosure regarding the risks and
            conflicts of proprietary trading is provided to the depositors,
            trading and asset management clients, and investors of covered
            entities that engage in proprietary trading, and if not, the
            costs and benefits of options for the improvement of such
            disclosure; and
                (E) whether the banking, securities, and commodities
            regulators of institutions that engage in proprietary trading
            have in place adequate systems and controls to monitor and
            contain any risks and conflicts of interest related to
            proprietary trading, and if not, the costs and benefits of
            options for the improvement of such systems and controls.
            (2) Considerations.--In carrying out the study required under
        paragraph (1), the Comptroller General shall consider--
                (A) current practice relating to proprietary trading;
                (B) the advisability of a complete ban on proprietary
            trading;
                (C) limitations on the scope of activities that covered
            entities may engage in with respect to proprietary trading;
                (D) the advisability of additional capital requirements for
            covered entities that engage in proprietary trading;
                (E) enhanced restrictions on transactions between
            affiliates related to proprietary trading;
                (F) enhanced accounting disclosures relating to proprietary
            trading;
                (G) enhanced public disclosure relating to proprietary
            trading; and
                (H) any other options the Comptroller General deems
            appropriate.
        (c) Report to Congress.--Not later than 15 months after the date of
    enactment of this Act, the Comptroller General shall submit a report to
    Congress on the results of the study conducted under subsection (b).
        (d) Access by Comptroller General.--For purposes of conducting the
    study required under subsection (b), 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 a
    covered entity that engages in proprietary trading, and to the
    officers, directors, employees, independent public accountants,
    financial advisors, staff, and agents and representatives of a covered
    entity (as related to the activities of the agent or representative on
    behalf of the covered entity), 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.
        (e) Confidentiality of Reports.--
            (1) In general.--Except as provided in paragraph (2), the
        Comptroller General may not disclose information regarding--
                (A) any proprietary trading activity of a covered entity,
            unless such information is disclosed at a level of generality
            that does not reveal the investment or trading position or
            strategy of the covered entity for any specific security,
            commodity, derivative, or other investment or financial
            product; or
                (B) any individual interviewed by the Comptroller General
            for purposes of the study under subsection (b), unless such
            information is disclosed at a level of generality that does not
            reveal--
                    (i) the name of or identifying details relating to such
                individual; or
                    (ii) in the case of an individual who is an employee of
                a third party that provides professional services to a
                covered entity believed to be engaged in proprietary
                trading, the name of or any identifying details relating to
                such third party.
            (2) Exceptions.--The Comptroller General may disclose the
        information described in paragraph (1)--
                (A) to a department, agency, or official of the Federal
            Government, for official use, upon request;
                (B) to a committee of Congress, upon request; and
                (C) to a court, upon an order of such court.
    SEC. 989A. SENIOR INVESTOR PROTECTIONS.
        (a) Definitions.--As used in this section--
            (1) the term ``eligible entity'' means--
                (A) a securities commission (or any agency or office
            performing like functions) of a State that the Office
            determines has adopted rules on the appropriate use of
            designations in the offer or sale of securities or the
            provision of investment advice that meet or exceed the minimum
            requirements of the NASAA Model Rule on the Use of Senior-
            Specific Certifications and Professional Designations (or any
            successor thereto);
                (B) the insurance commission (or any agency or office
            performing like functions) of any State that the Office
            determines has--
                    (i) adopted rules on the appropriate use of
                designations in the sale of insurance products that, to the
                extent practicable, conform to the 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 (or any successor thereto); and
                    (ii) adopted rules with respect to fiduciary or
                suitability requirements in the sale of annuities that meet
                or exceed the minimum requirements established by the
                Suitability in Annuity Transactions Model Regulation of the
                National Association of Insurance Commissioners (or any
                successor thereto); or
                (C) a consumer protection agency of any State, if--
                    (i) the securities commission (or any agency or office
                performing like functions) of the State is eligible under
                subparagraph (A); or
                    (ii) the insurance commission (or any agency or office
                performing like functions) of the State is eligible under
                subparagraph (B);
            (2) the term ``financial product'' means a security, an
        insurance product (including an insurance product that pays a
        return, whether fixed or variable), a bank product, and a loan
        product;
            (3) the term ``misleading designation''--
                (A) means a certification, professional designation, or
            other purported credential that indicates or implies that a
            salesperson or adviser has special certification or training in
            advising or servicing seniors; and
                (B) does not include a certification, professional
            designation, license, or other credential that--
                    (i) was issued by or obtained from an academic
                institution having regional accreditation;
                    (ii) meets the standards for certifications and
                professional designations outlined by the NASAA Model Rule
                on the Use of Senior-Specific Certifications and
                Professional Designations (or any successor thereto) or by
                the Model Regulations on the Use of Senior-Specific
                Certifications and Professional Designations in the Sale of
                Life Insurance and Annuities, adopted by the National
                Association of Insurance Commissioners (or any successor
                thereto); or
                    (iii) was issued by or obtained from a State;
            (4) the term ``misleading or fraudulent marketing'' means the
        use of a misleading designation by a person that sells to or
        advises a senior in connection with the sale of a financial
        product;
            (5) the term ``NASAA'' means the North American Securities
        Administrators Association;
            (6) the term ``Office'' means the Office of Financial Literacy
        of the Bureau;
            (7) the term ``senior'' means any individual who has attained
        the age of 62 years or older; and
            (8) the term ``State'' has the same meaning as in section 3 of
        the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).
        (b) Grants to States for Enhanced Protection of Seniors From Being
    Misled by False Designations.--The Office shall establish a program
    under which the Office may make grants to States or eligible entities--
            (1) to hire staff to identify, investigate, and prosecute
        (through civil, administrative, or criminal enforcement actions)
        cases involving misleading or fraudulent marketing;
            (2) to fund technology, equipment, and training for regulators,
        prosecutors, and law enforcement officers, in order to identify
        salespersons and advisers who target seniors through the use of
        misleading designations;
            (3) to fund technology, equipment, and training for prosecutors
        to increase the successful prosecution of salespersons and advisers
        who target seniors with the use of misleading designations;
            (4) to provide educational materials and training to regulators
        on the appropriateness of the use of designations by salespersons
        and advisers in connection with the sale and marketing of financial
        products;
            (5) to provide educational materials and training to seniors to
        increase awareness and understanding of misleading or fraudulent
        marketing;
            (6) to develop comprehensive plans to combat misleading or
        fraudulent marketing of financial products to seniors; and
            (7) to enhance provisions of State law to provide protection
        for seniors against misleading or fraudulent marketing.
        (c) Applications.--A State or eligible entity desiring a grant
    under this section shall submit an application to the Office, in such
    form and in such a manner as the Office may determine, that includes--
            (1) a proposal for activities to protect seniors from
        misleading or fraudulent marketing that are proposed to be funded
        using a grant under this section, including--
                (A) an identification of the scope of the problem of
            misleading or fraudulent marketing in the State;
                (B) a description of how the proposed activities would--
                    (i) protect seniors from misleading or fraudulent
                marketing in the sale of financial products, including by
                proactively identifying victims of misleading and
                fraudulent marketing who are seniors;
                    (ii) assist in the investigation and prosecution of
                those using misleading or fraudulent marketing; and
                    (iii) discourage and reduce cases of misleading or
                fraudulent marketing; and
                (C) a description of how the proposed activities would be
            coordinated with other State efforts; and
            (2) any other information, as the Office determines is
        appropriate.
        (d) Performance Objectives and Reporting Requirements.--The Office
    may establish such performance objectives and reporting requirements
    for States and eligible entities receiving a grant under this section
    as the Office determines are necessary to carry out and assess the
    effectiveness of the program under this section.
        (e) Maximum Amount.--The amount of a grant under this section may
    not exceed--
            (1) $500,000 for each of 3 consecutive fiscal years, if the
        recipient is a State, or an eligible entity of a State, that has
        adopted rules--
                (A) on the appropriate use of designations in the offer or
            sale of securities or investment advice that meet or exceed the
            minimum requirements of the NASAA Model Rule on the Use of
            Senior-Specific Certifications and Professional Designations
            (or any successor thereto);
                (B) on the appropriate use of designations in the sale of
            insurance products that, to the extent practicable, conform to
            the 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 (or any successor
            thereto); and
                (C) with respect to fiduciary or suitability requirements
            in the sale of annuities that meet or exceed the minimum
            requirements established by the Suitability in Annuity
            Transactions Model Regulation of the National Association of
            Insurance Commissioners (or any successor thereto); and
            (2) $100,000 for each of 3 consecutive fiscal years, if the
        recipient is a State, or an eligible entity of a State, that has
        adopted--
                (A) rules on the appropriate use of designations in the
            offer or sale of securities or investment advice that meet or
            exceed the minimum requirements of the NASAA Model Rule on the
            Use of Senior-Specific Certifications and Professional
            Designations (or any successor thereto); or
                (B) rules--
                    (i) on the appropriate use of designations in the sale
                of insurance products that, to the extent practicable,
                conform to the 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
                (or any successor thereto); and
                    (ii) with respect to fiduciary or suitability
                requirements in the sale of annuities that meet or exceed
                the minimum requirements established by the Suitability in
                Annuity Transactions Model Regulation of the National
                Association of Insurance Commissioners (or any successor
                thereto).
        (f) Subgrants.--A State or eligible entity that receives a grant
    under this section may make a subgrant, as the State or eligible entity
    determines is necessary to carry out the activities funded using a
    grant under this section.
        (g) Reapplication.--A State or eligible entity that receives a
    grant under this section may reapply for a grant under this section,
    notwithstanding the limitations on grant amounts under subsection (e).
        (h) Authorization of Appropriations.--There are authorized to be
    appropriated to carry out this section, $8,000,000 for each of fiscal
    years 2011 through 2015.
    SEC. 989B. DESIGNATED FEDERAL ENTITY INSPECTORS GENERAL INDEPENDENCE.
        Section 8G of the Inspector General Act of 1978 (5 U.S.C. App.) is
    amended--
            (1) in subsection (a)(4)--
                (A) in the matter preceding subparagraph (A), by inserting
            ``the board or commission of the designated Federal entity, or
            in the event the designated Federal entity does not have a
            board or commission,'' after ``means'';
                (B) in subparagraph (A), by striking ``and'' after the
            semicolon; and
                (C) by adding after subparagraph (B) the following:
                ``(C) with respect to the Federal Labor Relations
            Authority, such term means the members of the Authority
            (described under section 7104 of title 5, United States Code);
                ``(D) with respect to the National Archives and Records
            Administration, such term means the Archivist of the United
            States;
                ``(E) with respect to the National Credit Union
            Administration, such term means the National Credit Union
            Administration Board (described under section 102 of the
            Federal Credit Union Act (12 U.S.C. 1752a);
                ``(F) with respect to the National Endowment of the Arts,
            such term means the National Council on the Arts;
                ``(G) with respect to the National Endowment for the
            Humanities, such term means the National Council on the
            Humanities; and
                ``(H) with respect to the Peace Corps, such term means the
            Director of the Peace Corps;''; and
            (2) in subsection (h), by inserting ``if the designated Federal
        entity is not a board or commission, include'' after ``designated
        Federal entities and''.
    SEC. 989C. STRENGTHENING INSPECTOR GENERAL ACCOUNTABILITY.
        Section 5(a) of the Inspector General Act of 1978 (5 U.S.C. App.)
    is amended--
            (1) in paragraph (12), by striking ``and'' after the semicolon;
            (2) in paragraph (13), by striking the period and inserting a
        semicolon; and
            (3) by adding at the end the following:
            ``(14)(A) an appendix containing the results of any peer review
        conducted by another Office of Inspector General during the
        reporting period; or
            ``(B) if no peer review was conducted within that reporting
        period, a statement identifying the date of the last peer review
        conducted by another Office of Inspector General;
            ``(15) a list of any outstanding recommendations from any peer
        review conducted by another Office of Inspector General that have
        not been fully implemented, including a statement describing the
        status of the implementation and why implementation is not
        complete; and
            ``(16) a list of any peer reviews conducted by the Inspector
        General of another Office of the Inspector General during the
        reporting period, including a list of any outstanding
        recommendations made from any previous peer review (including any
        peer review conducted before the reporting period) that remain
        outstanding or have not been fully implemented.''.
    SEC. 989D. REMOVAL OF INSPECTORS GENERAL OF DESIGNATED FEDERAL
    ENTITIES.
        Section 8G(e) of the Inspector General Act of 1978 (5 U.S.C. App.)
    is amended--
            (1) by redesignating the sentences following ``(e)'' as
        paragraph (2); and
            (2) by striking ``(e)'' and inserting the following:
        ``(e)(1) In the case of a designated Federal entity for which a
    board or commission is the head of the designated Federal entity, a
    removal under this subsection may only be made upon the written
    concurrence of a \2/3\ majority of the board or commission.''.
    SEC. 989E. ADDITIONAL OVERSIGHT OF FINANCIAL REGULATORY SYSTEM.
        (a) Council of Inspectors General on Financial Oversight.--
            (1) Establishment and membership.--There is established a
        Council of Inspectors General on Financial Oversight (in this
        section referred to as the ``Council of Inspectors General'')
        chaired by the Inspector General of the Department of the Treasury
        and composed of the inspectors general of the following:
                (A) The Board of Governors of the Federal Reserve System.
                (B) The Commodity Futures Trading Commission.
                (C) The Department of Housing and Urban Development.
                (D) The Department of the Treasury.
                (E) The Federal Deposit Insurance Corporation.
                (F) The Federal Housing Finance Agency.
                (G) The National Credit Union Administration.
                (H) The Securities and Exchange Commission.
                (I) The Troubled Asset Relief Program (until the
            termination of the authority of the Special Inspector General
            for such program under section 121(k) of the Emergency Economic
            Stabilization Act of 2008 (12 U.S.C. 5231(k))).
            (2) Duties.--
                (A) Meetings.--The Council of Inspectors General shall meet
            not less than once each quarter, or more frequently if the
            chair considers it appropriate, to facilitate the sharing of
            information among inspectors general and to discuss the ongoing
            work of each inspector general who is a member of the Council
            of Inspectors General, with a focus on concerns that may apply
            to the broader financial sector and ways to improve financial
            oversight.
                (B) Annual report.--Each year the Council of Inspectors
            General shall submit to the Council and to Congress a report
            including--
                    (i) for each inspector general who is a member of the
                Council of Inspectors General, a section within the
                exclusive editorial control of such inspector general that
                highlights the concerns and recommendations of such
                inspector general in such inspector general's ongoing and
                completed work, with a focus on issues that may apply to
                the broader financial sector; and
                    (ii) a summary of the general observations of the
                Council of Inspectors General based on the views expressed
                by each inspector general as required by clause (i), with a
                focus on measures that should be taken to improve financial
                oversight.
            (3) Working groups to evaluate council.--
                (A) Convening a working group.--The Council of Inspectors
            General may, by majority vote, convene a Council of Inspectors
            General Working Group to evaluate the effectiveness and
            internal operations of the Council.
                (B) Personnel and resources.--The inspectors general who
            are members of the Council of Inspectors General may detail
            staff and resources to a Council of Inspectors General Working
            Group established under this paragraph to enable it to carry
            out its duties.
                (C) Reports.--A Council of Inspectors General Working Group
            established under this paragraph shall submit regular reports
            to the Council and to Congress on its evaluations pursuant to
            this paragraph.
        (b) Response to Report by Council.--The Council shall respond to
    the concerns raised in the report of the Council of Inspectors General
    under subsection (a)(2)(B) for such year.
    SEC. 989F. GAO STUDY OF PERSON TO PERSON LENDING.
        (a) Study.--
            (1) In general.--The Comptroller General of the United States
        shall conduct a study of person to person lending to determine the
        optimal Federal regulatory structure.
            (2) Consultation.--In conducting the study required under
        paragraph (1), the Comptroller General shall consult with Federal
        banking agencies, the Commission, consumer groups, outside experts,
        and the person to person lending industry.
            (3) Content of study.--The study required under paragraph (1)
        shall include an examination of--
                (A) the regulatory structure as it exists on the date of
            enactment of this Act, as determined by the Commission, with
            particular attention to--
                    (i) the application of the Securities Act of 1933 to
                person to person lending platforms;
                    (ii) the posting of consumer loan information on the
                EDGAR database of the Commission; and
                    (iii) the treatment of privately held person to person
                lending platforms as public companies;
                (B) the State and other Federal regulators responsible for
            the oversight and regulation of person to person lending
            markets;
                (C) any Federal, State, or local government or private
            studies of person to person lending completed or in progress on
            the date of enactment of this Act;
                (D) consumer privacy and data protections, minimum credit
            standards, anti-money laundering and risk management in the
            regulatory structure as it exists on the date of enactment of
            this Act, and whether additional or alternative safeguards are
            needed; and
                (E) the uses of person to person lending.
        (b) Report.--
            (1) In general.--Not later than 1 year after the date of
        enactment of this Act, the Comptroller General shall submit a
        report on the study required under subsection (a) to the Committee
        on Banking, Housing, and Urban Affairs of the Senate and the
        Committee on Financial Services of the House of Representatives.
            (2) Content of report.--The report required under paragraph (1)
        shall include alternative regulatory options, including--
                (A) the involvement of other Federal agencies; and
                (B) alternative approaches by the Commission and
            recommendations on whether the alternative approaches are
            effective.
    SEC. 989G. EXEMPTION FOR NONACCELERATED FILERS.
        (a) Exemption.--Section 404 of the Sarbanes-Oxley Act of 2002 is
    amended by adding at the end the following:
        ``(c) Exemption for Smaller Issuers.--Subsection (b) shall not
    apply with respect to any audit report prepared for an issuer that is
    neither a `large accelerated filer' nor an `accelerated filer' as those
    terms are defined in Rule 12b-2 of the Commission (17 C.F.R. 240.12b-
    2).''.
        (b) Study.--The Securities and Exchange Commission shall conduct a
    study to determine how the Commission could reduce the burden of
    complying with section 404(b) of the Sarbanes-Oxley Act of 2002 for
    companies whose market capitalization is between $75,000,000 and
    $250,000,000 for the relevant reporting period while maintaining
    investor protections for such companies. The study shall also consider
    whether any such methods of reducing the compliance burden or a
    complete exemption for such companies from compliance with such section
    would encourage companies to list on exchanges in the United States in
    their initial public offerings. Not later than 9 months after the date
    of the enactment of this subtitle, the Commission shall transmit a
    report of such study to Congress.
    SEC. 989H. CORRECTIVE RESPONSES BY HEADS OF CERTAIN ESTABLISHMENTS TO
    DEFICIENCIES IDENTIFIED BY INSPECTORS GENERAL.
        The Chairman of the Board of Governors of the Federal Reserve
    System, the Chairman of the Commodity Futures Trading Commission, the
    Chairman of the National Credit Union Administration, the Director of
    the Pension Benefit Guaranty Corporation, and the Chairman of the
    Securities and Exchange Commission shall each--
            (1) take action to address deficiencies identified by a report
        or investigation of the Inspector General of the establishment
        concerned; or
            (2) certify to both Houses of Congress that no action is
        necessary or appropriate in connection with a deficiency described
        in paragraph (1).
    SEC. 989I. GAO STUDY REGARDING EXEMPTION FOR SMALLER ISSUERS.
        (a) Study Regarding Exemption for Smaller Issuers.--The Comptroller
    General of the United States shall carry out a study on the impact of
    the amendments made by this Act to section 404(b) of the Sarbanes-Oxley
    Act of 2002 (15 U.S.C. 7262(b)), which shall include an analysis of--
            (1) whether issuers that are exempt from such section 404(b)
        have fewer or more restatements of published accounting statements
        than issuers that are required to comply with such section 404(b);
            (2) the cost of capital for issuers that are exempt from such
        section 404(b) compared to the cost of capital for issuers that are
        required to comply with such section 404(b);
            (3) whether there is any difference in the confidence of
        investors in the integrity of financial statements of issuers that
        comply with such section 404(b) and issuers that are exempt from
        compliance with such section 404(b);
            (4) whether issuers that do not receive the attestation for
        internal controls required under such section 404(b) should be
        required to disclose the lack of such attestation to investors; and
            (5) the costs and benefits to issuers that are exempt from such
        section 404(b) that voluntarily have obtained the attestation of an
        independent auditor.
        (b) Report.--Not later than 3 years after the date of enactment of
    this Act, the Comptroller General shall submit 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 the
    results of the study required under subsection (a).
    SEC. 989J. FURTHER PROMOTING THE ADOPTION OF THE NAIC MODEL REGULATIONS
    THAT ENHANCE PROTECTION OF SENIORS AND OTHER CONSUMERS.
        (a) In General.--The Commission shall treat as exempt securities
    described under section 3(a)(8) of the Securities Act of 1933 (15
    U.S.C. 77c(a)(8)) any insurance or endowment policy or annuity contract
    or optional annuity contract--
            (1) the value of which does not vary according to the
        performance of a separate account;
            (2) that--
                (A) satisfies standard nonforfeiture laws or similar
            requirements of the applicable State at the time of issue; or
                (B) in the absence of applicable standard nonforfeiture
            laws or requirements, satisfies the Model Standard
            Nonforfeiture Law for Life Insurance or Model Standard
            Nonforfeiture Law for Individual Deferred Annuities, or any
            successor model law, as published by the National Association
            of Insurance Commissioners; and
            (3) that is issued--
                (A) on and after June 16, 2013, in a State, or issued by an
            insurance company that is domiciled in a State, that--
                    (i) adopts rules that govern suitability requirements
                in the sale of an insurance or endowment policy or annuity
                contract or optional annuity contract, which shall
                substantially meet or exceed the minimum requirements
                established by the Suitability in Annuity Transactions
                Model Regulation adopted by the National Association of
                Insurance Commissioners in March 2010; and
                    (ii) adopts rules that substantially meet or exceed the
                minimum requirements of any successor modifications to the
                model regulations described in subparagraph (A) within 5
                years of the adoption by the Association of any further
                successors thereto; or
                (B) by an insurance company that adopts and implements
            practices on a nationwide basis for the sale of any insurance
            or endowment policy or annuity contract or optional annuity
            contract that meet or exceed the minimum requirements
            established by the National Association of Insurance
            Commissioners Suitability in Annuity Transactions Model
            Regulation (Model 275), and any successor thereto, and is
            therefore subject to examination by the State of domicile of
            the insurance company, or by any other State where the
            insurance company conducts sales of such products, for the
            purpose of monitoring compliance under this section.
        (b) Rule of Construction.--Nothing in this section shall be
    construed to affect whether any insurance or endowment policy or
    annuity contract or optional annuity contract that is not described in
    this section is or is not an exempt security under section 3(a)(8) of
    the Securities Act of 1933 (15 U.S.C. 77c(a)(8)).

          Subtitle J--Securities and Exchange Commission Match Funding

        SEC. 991. SECURITIES AND EXCHANGE COMMISSION MATCH FUNDING.
        (a) Match Funding Authority.--
            (1) Amendments.--Section 31 of the Securities Exchange Act of
        1934 (15 U.S.C. 78ee) is amended--
                (A) by striking subsection (a) and inserting the following:
        ``(a) Recovery of Costs of Annual Appropriation.--The Commission
    shall, in accordance with this section, collect transaction fees and
    assessments that are designed to recover the costs to the Government of
    the annual appropriation to the Commission by Congress.'';
                (B) in subsection (e)(2), by striking ``September 30'' and
            inserting ``September 25'';
                (C) in subsection (g), by striking ``April 30 of the fiscal
            year preceding the fiscal year to which such rate applies'' and
            inserting ``30 days after the date on which an Act making a
            regular appropriation to the Commission for such fiscal year is
            enacted'';
                (D) by striking subsection (j) and inserting the following:
        ``(j) Adjustments to Fee Rates.--
            ``(1) Annual adjustment.--Subject to subsections (i)(1)(B) and
        (k), for each fiscal year, the Commission shall by order adjust
        each of the rates applicable under subsections (b) and (c) for such
        fiscal year to a uniform adjusted rate that, when applied to the
        baseline estimate of the aggregate dollar amount of sales for such
        fiscal year, is reasonably likely to produce aggregate fee
        collections under this section (including assessments collected
        under subsection (d) of this section) that are equal to the regular
        appropriation to the Commission by Congress for such fiscal year.
            ``(2) Mid-year adjustment.--Subject to subsections (i)(1)(B)
        and (k), for each fiscal year, the Commission shall determine, by
        March 1 of such fiscal year, whether, based on the actual aggregate
        dollar volume of sales during the first 5 months of such fiscal
        year, the baseline estimate of the aggregate dollar volume of sales
        used under paragraph (1) for such fiscal year is reasonably likely
        to be 10 percent (or more) greater or less than the actual
        aggregate dollar volume of sales for such fiscal year. If the
        Commission so determines, the Commission shall by order, no later
        than March 1, adjust each of the rates applicable under subsections
        (b) and (c) for such fiscal year to a uniform adjusted rate that,
        when applied to the revised estimate of the aggregate dollar amount
        of sales for the remainder of such fiscal year, is reasonably
        likely to produce aggregate fee collections under this section
        (including fees collected during such five-month period and
        assessments collected under subsection (d) of this section) that
        are equal to the regular appropriation to the Commission by
        Congress for such fiscal year. In making such revised estimate, the
        Commission shall, after consultation with the Congressional Budget
        Office and the Office of Management and Budget, use the same
        methodology required by subsection (l).
            ``(3) Review.--In exercising its authority under this
        subsection, the Commission shall not be required to comply with the
        provisions of section 553 of title 5, United States Code. An
        adjusted rate prescribed under paragraph (1) or (2) and published
        under subsection (g) shall not be subject to judicial review.
            ``(4) Effective date.--
                ``(A) Annual adjustment.--Subject to subsections (i)(1)(B)
            and (k), an adjusted rate prescribed under paragraph (1) shall
            take effect on the later of--
                    ``(i) the first day of the fiscal year to which such
                rate applies; or
                    ``(ii) 60 days after the date on which an Act making a
                regular appropriation to the Commission for such fiscal
                year is enacted.
                ``(B) Mid-year adjustment.--An adjusted rate prescribed
            under paragraph (2) shall take effect on April 1 of the fiscal
            year to which such rate applies.'';
                (E) in subsection (k), by striking ``30 days'' and
            inserting ``60 days''; and
                (F) in subsection (l), by striking ``Definitions.--'' and
            all that follows through ``sales.--The baseline'' and inserting
            ``Baseline Estimate of the Aggregate Dollar Amount of Sales.--
            The baseline''.
            (2) Effective date.--The amendments made by this subsection
        shall take effect on the later of--
                (A) October 1, 2011; or
                (B) the date of enactment of an Act making a regular
            appropriation to the Commission for fiscal year 2012.
        (b) Amendments to Registration Fee Provisions.--
            (1) Section 6(b) of the securities act of 1933.--Section 6(b)
        of the Securities Act of 1933 (15 U.S.C. 77f(b)) is amended--
                (A) by striking ``offsetting'' each place that term appears
            and inserting ``fee'';
                (B) by striking paragraphs (1), (3), (4), (6), (8), and
            (9);
                (C) by redesignating paragraph (2) as paragraph (1);
                (D) by redesignating paragraph (5) as paragraph (2);
                (E) by redesignating paragraph (7) as paragraph (3);
                (F) by redesignating paragraph (10) as paragraph (5);
                (G) by redesignating paragraph (11) as paragraph (6);
                (H) in paragraph (1), as so redesignated, by striking
            ``paragraph (5) or (6).'' and inserting ``paragraph (2).'';
                (I) in paragraph (2), as so redesignated--
                    (i) by striking ``of the fiscal years 2003 through
                2011'' and inserting ``fiscal year''; and
                    (ii) by striking ``paragraph (2)'' and inserting
                ``paragraph (1)'';
                (J) by inserting after paragraph (3), as so redesignated,
            the following:
            ``(4) Review and effective date.--In exercising its authority
        under this subsection, the Commission shall not be required to
        comply with the provisions of section 553 of title 5, United States
        Code. An adjusted rate prescribed under paragraph (2) and published
        under paragraph (5) shall not be subject to judicial review. An
        adjusted rate prescribed under paragraph (2) shall take effect on
        the first day of the fiscal year to which such rate applies.'';
                (K) in paragraph (5), as redesignated, by striking ``April
            30'' and inserting ``August 31'';
                (L) in paragraph (6), as so redesignated--
                    (i) by striking ``of the fiscal years 2002 through
                2011'' and inserting ``fiscal year''; and
                    (ii) by inserting at the end of the table in
                subparagraph (A) the following:

      ``2012
      $425,000,000
      2013
      $455,000,000
      2014
      $485,000,000
      2015
      $515,000,000
      2016
      $550,000,000
      2017
      $585,000,000
      2018
      $620,000,000
      2019
      $660,000,000
      2020
      $705,000,000
      2021 and each fiscal year thereafter
      An amount that is equal to the target fee collection amount for the
        prior fiscal year, adjusted by the rate of inflation.''.

            (2) Section 13(e) of the securities exchange act of 1934.--
        Section 13(e) of the Securities Exchange Act of 1934 (15 U.S.C.
        78m(e)) is amended--
                (A) in paragraph (3), by striking ``paragraphs (5) and
            (6)'' and inserting ``paragraph (4)'';
                (B) by striking paragraphs (4), (5), and (6);
                (C) by inserting after paragraph (3) the following:
            ``(4) Annual adjustment.--For each fiscal year, the Commission
        shall by order adjust the rate required by paragraph (3) for such
        fiscal year to a rate that is equal to the rate (expressed in
        dollars per million) that is applicable under section 6(b) of the
        Securities Act of 1933 for such fiscal year.
            ``(5) Fee collections.--Fees collected pursuant to this
        subsection for fiscal year 2012 and each fiscal year thereafter
        shall be deposited and credited as general revenue of the Treasury
        and shall not be available for obligation.
            ``(6) Effective date; publication.--In exercising its authority
        under this subsection, the Commission shall not be required to
        comply with the provisions of section 553 of title 5, United States
        Code. An adjusted rate prescribed under paragraph (4) shall be
        published and take effect in accordance with section 6(b) of the
        Securities Act of 1933 (15 U.S.C. 77f(b)).''; and
                (D) by striking paragraphs (8), (9), and (10).
            (3) Section 14(g) of the securities exchange act of 1934.--
        Section 14(g) of the Securities Exchange Act of 1934 (15 U.S.C.
        78n(g)) is amended--
                (A) in paragraph (1), by striking ``paragraphs (5) and
            (6)'' each time that term appears and inserting ``paragraph
            (4)'';
                (B) in paragraph (3), by striking ``paragraphs (5) and
            (6)'' and inserting ``paragraph (4)'';
                (C) by striking paragraphs (4), (5), and (6);
                (D) by inserting after paragraph (3) the following:
            ``(4) Annual adjustment.--For each fiscal year, the Commission
        shall by order adjust the rate required by paragraphs (1) and (3)
        for such fiscal year to a rate that is equal to the rate (expressed
        in dollars per million) that is applicable under section 6(b) of
        the Securities Act of 1933 (15 U.S.C. 77f(b)) for such fiscal year.
            ``(5) Fee collection.--Fees collected pursuant to this
        subsection for fiscal year 2012 and each fiscal year thereafter
        shall be deposited and credited as general revenue of the Treasury
        and shall not be available for obligation.
            ``(6) Review; effective date; publication.--In exercising its
        authority under this subsection, the Commission shall not be
        required to comply with the provisions of section 553 of title 5,
        United States Code. An adjusted rate prescribed under paragraph (4)
        shall be published and take effect in accordance with section 6(b)
        of the Securities Act of 1933 (15 U.S.C. 77f(b)).'';
                (E) by striking paragraphs (8), (9), and (10); and
                (F) by redesignating paragraph (11) as paragraph (8).
            (4) Effective date.--The amendments made by this subsection
        shall take effect on October 1, 2011, except that for fiscal year
        2012, the Commission shall publish the rate established under
        section 6(b) of the Securities Act of 1933 (15 U.S.C. 77f(b)), as
        amended by this Act, on August 31, 2011.
        (c) Authorization of Appropriations.--Section 35 of the Securities
    Exchange Act of 1934 (15 U.S.C. 78kk) is amended to read as follows:
      ``SEC. 35. AUTHORIZATION OF APPROPRIATIONS.
        ``In addition to any other funds authorized to be appropriated to
    the Commission, there are authorized to be appropriated to carry out
    the functions, powers, and duties of the Commission--
            ``(1) for fiscal year 2011, $1,300,000,000;
            ``(2) for fiscal year 2012, $1,500,000,000;
            ``(3) for fiscal year 2013, $1,750,000,000;
            ``(4) for fiscal year 2014, $2,000,000,000; and
            ``(5) for fiscal year 2015, $2,250,000,000.''.
        (d) Transmittal of Budget Requests.--
            (1) Amendment.--Section 31 of the Securities Exchange Act of
        1934 (15 U.S.C. 78ee) is amended by adding at the end the
        following:
        ``(m) Transmittal of Commission Budget Requests.--
            ``(1) Budget required.--For fiscal year 2012, and each fiscal
        year thereafter, the Commission shall prepare and submit a budget
        to the President. Whenever the Commission submits a budget estimate
        or request to the President or the Office of Management and Budget,
        the Commission shall concurrently transmit copies of the estimate
        or request to the Committee on Appropriations of the Senate, the
        Committee on Appropriations of the House of Representatives, the
        Committee on Banking, Housing, and Urban Affairs of the Senate, and
        the Committee on Financial Services of the House of
        Representatives.
            ``(2) Submission to congress.--The President shall submit each
        budget submitted under paragraph (1) to Congress, in unaltered
        form, together with the annual budget for the Administration
        submitted by the President.
            ``(3) Contents.--The Commission shall include in each budget
        submitted under paragraph (1)--
                ``(A) an itemization of the amount of funds necessary to
            carry out the functions of the Commission.
                ``(B) an amount to be designated as contingency funding to
            be used by the Commission to address unanticipated needs; and
                ``(C) a designation of any activities of the Commission for
            which multi-year budget authority would be suitable.''.
            (2) Budget of the president.--For fiscal year 2012, and each
        fiscal year thereafter, the annual budget for the Administration
        submitted by the President to Congress shall reflect the amendments
        made by this section.
        (e) Securities and Exchange Commission Reserve Fund.--
            (1) Amendment.--Section 4 of the Securities Exchange Act of
        1934 (15 U.S.C. 78d), as amended by this Act, is amended by adding
        at the end the following:
        ``(i) Securities and Exchange Commission Reserve Fund.--
            ``(1) Reserve fund established.--There is established in the
        Treasury of the United States a separate fund, to be known as the
        `Securities and Exchange Commission Reserve Fund' (referred to in
        this subsection as the `Reserve Fund').
            ``(2) Reserve fund amounts.--
                ``(A) In general.--Except as provided in subparagraph (B),
            any registration fees collected by the Commission under section
            6(b) of the Securities Act of 1933 (15 U.S.C. 77f(b)) or
            section 24(f) of the Investment Company Act of 1940 (15 U.S.C.
            80a-24(f)) shall be deposited into the Reserve Fund.
                ``(B) Limitations.--For any 1 fiscal year--
                    ``(i) the amount deposited in the Fund may not exceed
                $50,000,000; and
                    ``(ii) the balance in the Fund may not exceed
                $100,000,000.
                ``(C) Excess fees.--Any amounts in excess of the
            limitations described in subparagraph (B) that the Commission
            collects from registration fees under section 6(b) of the
            Securities Act of 1933 (15 U.S.C. 77f(b)) or section 24(f) of
            the Investment Company Act of 1940 (15 U.S.C. 80a-24(f)) shall
            be deposited in the General Fund of the Treasury of the United
            States and shall not be available for obligation by the
            Commission.
            ``(3) Use of amounts in reserve fund.--The Commission may
        obligate amounts in the Reserve Fund, not to exceed a total of
        $100,000,000 in any 1 fiscal year, as the Commission determines is
        necessary to carry out the functions of the Commission. Any amounts
        in the reserve fund shall remain available until expended. Not
        later than 10 days after the date on which the Commission obligates
        amounts under this paragraph, the Commission shall notify Congress
        of the date, amount, and purpose of the obligation.
            ``(4) Rule of construction.--Amounts collected and deposited in
        the Reserve Fund shall not be construed to be Government funds or
        appropriated monies and shall not be subject to apportionment for
        the purpose of chapter 15 of title 31, United States Code, or under
        any other authority.''.
            (2) Effective date.--The amendment made by this subsection
        shall take effect on October 1, 2011.

                TITLE X--BUREAU OF CONSUMER FINANCIAL PROTECTION

    SEC. 1001. SHORT TITLE.
        This title may be cited as the ``Consumer Financial Protection Act
    of 2010''.
    SEC. 1002. DEFINITIONS.
        Except as otherwise provided in this title, for purposes of this
    title, the following definitions shall apply:
            (1) Affiliate.--The term ``affiliate'' means any person that
        controls, is controlled by, or is under common control with another
        person.
            (2) Bureau.--The term ``Bureau'' means the Bureau of Consumer
        Financial Protection.
            (3) Business of insurance.--The term ``business of insurance''
        means the writing of insurance or the reinsuring of risks by an
        insurer, including all acts necessary to such writing or reinsuring
        and the activities relating to the writing of insurance or the
        reinsuring of risks conducted by persons who act as, or are,
        officers, directors, agents, or employees of insurers or who are
        other persons authorized to act on behalf of such persons.
            (4) Consumer.--The term ``consumer'' means an individual or an
        agent, trustee, or representative acting on behalf of an
        individual.
            (5) Consumer financial product or service.--The term ``consumer
        financial product or service'' means any financial product or
        service that is described in one or more categories under--
                (A) paragraph (15) and is offered or provided for use by
            consumers primarily for personal, family, or household
            purposes; or
                (B) clause (i), (iii), (ix), or (x) of paragraph (15)(A),
            and is delivered, offered, or provided in connection with a
            consumer financial product or service referred to in
            subparagraph (A).
            (6) Covered person.--The term ``covered person'' means--
                (A) any person that engages in offering or providing a
            consumer financial product or service; and
                (B) any affiliate of a person described in subparagraph (A)
            if such affiliate acts as a service provider to such person.
            (7) Credit.--The term ``credit'' means the right granted by a
        person to a consumer to defer payment of a debt, incur debt and
        defer its payment, or purchase property or services and defer
        payment for such purchase.
            (8) Deposit-taking activity.--The term ``deposit-taking
        activity'' means--
                (A) the acceptance of deposits, maintenance of deposit
            accounts, or the provision of services related to the
            acceptance of deposits or the maintenance of deposit accounts;
                (B) the acceptance of funds, the provision of other
            services related to the acceptance of funds, or the maintenance
            of member share accounts by a credit union; or
                (C) the receipt of funds or the equivalent thereof, as the
            Bureau may determine by rule or order, received or held by a
            covered person (or an agent for a covered person) for the
            purpose of facilitating a payment or transferring funds or
            value of funds between a consumer and a third party.
            (9) Designated transfer date.--The term ``designated transfer
        date'' means the date established under section 1062.
            (10) Director.--The term ``Director'' means the Director of the
        Bureau.
            (11) Electronic conduit services.--The term ``electronic
        conduit services''--
                (A) means the provision, by a person, of electronic data
            transmission, routing, intermediate or transient storage, or
            connections to a telecommunications system or network; and
                (B) does not include a person that provides electronic
            conduit services if, when providing such services, the person--
                    (i) selects or modifies the content of the electronic
                data;
                    (ii) transmits, routes, stores, or provides connections
                for electronic data, including financial data, in a manner
                that such financial data is differentiated from other types
                of data of the same form that such person transmits,
                routes, or stores, or with respect to which, provides
                connections; or
                    (iii) is a payee, payor, correspondent, or similar
                party to a payment transaction with a consumer.
            (12) Enumerated consumer laws.--Except as otherwise
        specifically provided in section 1029, subtitle G or subtitle H,
        the term ``enumerated consumer laws'' means--
                (A) the Alternative Mortgage Transaction Parity Act of 1982
            (12 U.S.C. 3801 et seq.);
                (B) the Consumer Leasing Act of 1976 (15 U.S.C. 1667 et
            seq.);
                (C) the Electronic Fund Transfer Act (15 U.S.C. 1693 et
            seq.), except with respect to section 920 of that Act;
                (D) the Equal Credit Opportunity Act (15 U.S.C. 1691 et
            seq.);
                (E) the Fair Credit Billing Act (15 U.S.C. 1666 et seq.);
                (F) the Fair Credit Reporting Act (15 U.S.C. 1681 et seq.),
            except with respect to sections 615(e) and 628 of that Act (15
            U.S.C. 1681m(e), 1681w);
                (G) the Home Owners Protection Act of 1998 (12 U.S.C. 4901
            et seq.);
                (H) the Fair Debt Collection Practices Act (15 U.S.C. 1692
            et seq.);
                (I) subsections (b) through (f) of section 43 of the
            Federal Deposit Insurance Act (12 U.S.C. 1831t(c)-(f));
                (J) sections 502 through 509 of the Gramm-Leach-Bliley Act
            (15 U.S.C. 6802-6809) except for section 505 as it applies to
            section 501(b);
                (K) the Home Mortgage Disclosure Act of 1975 (12 U.S.C.
            2801 et seq.);
                (L) the Home Ownership and Equity Protection Act of 1994
            (15 U.S.C. 1601 note);
                (M) the Real Estate Settlement Procedures Act of 1974 (12
            U.S.C. 2601 et seq.);
                (N) the S.A.F.E. Mortgage Licensing Act of 2008 (12 U.S.C.
            5101 et seq.);
                (O) the Truth in Lending Act (15 U.S.C. 1601 et seq.);
                (P) the Truth in Savings Act (12 U.S.C. 4301 et seq.);
                (Q) section 626 of the Omnibus Appropriations Act, 2009
            (Public Law 111-8); and
                (R) the Interstate Land Sales Full Disclosure Act (15
            U.S.C. 1701).
            (13) Fair lending.--The term ``fair lending'' means fair,
        equitable, and nondiscriminatory access to credit for consumers.
            (14) Federal consumer financial law.--The term ``Federal
        consumer financial law'' means the provisions of this title, the
        enumerated consumer laws, the laws for which authorities are
        transferred under subtitles F and H, and any rule or order
        prescribed by the Bureau under this title, an enumerated consumer
        law, or pursuant to the authorities transferred under subtitles F
        and H. The term does not include the Federal Trade Commission Act.
            (15) Financial product or service.--
                (A) In general.--The term ``financial product or service''
            means--
                    (i) extending credit and servicing loans, including
                acquiring, purchasing, selling, brokering, or other
                extensions of credit (other than solely extending
                commercial credit to a person who originates consumer
                credit transactions);
                    (ii) extending or brokering leases of personal or real
                property that are the functional equivalent of purchase
                finance arrangements, if--

                        (I) the lease is on a non-operating basis;
                        (II) the initial term of the lease is at least 90
                    days; and
                        (III) in the case of a lease 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 Bureau;

                    (iii) providing real estate settlement services, except
                such services excluded under subparagraph (C), or
                performing appraisals of real estate or personal property;
                    (iv) engaging in deposit-taking activities,
                transmitting or exchanging funds, or otherwise acting as a
                custodian of funds or any financial instrument for use by
                or on behalf of a consumer;
                    (v) selling, providing, or issuing stored value or
                payment instruments, except that, in the case of a sale of,
                or transaction to reload, stored value, only if the seller
                exercises substantial control over the terms or conditions
                of the stored value provided to the consumer where, for
                purposes of this clause--

                        (I) a seller shall not be found to exercise
                    substantial control over the terms or conditions of the
                    stored value if the seller is not a party to the
                    contract with the consumer for the stored value
                    product, and another person is principally responsible
                    for establishing the terms or conditions of the stored
                    value; and
                        (II) advertising the nonfinancial goods or services
                    of the seller on the stored value card or device is not
                    in itself an exercise of substantial control over the
                    terms or conditions;

                    (vi) providing check cashing, check collection, or
                check guaranty services;
                    (vii) providing payments or other financial data
                processing products or services to a consumer by any
                technological means, including processing or storing
                financial or banking data for any payment instrument, or
                through any payments systems or network used for processing
                payments data, including payments made through an online
                banking system or mobile telecommunications network, except
                that a person shall not be deemed to be a covered person
                with respect to financial data processing solely because
                the person--

                        (I) is a merchant, retailer, or seller of any
                    nonfinancial good or service who engages in financial
                    data processing by transmitting or storing payments
                    data about a consumer exclusively for purpose of
                    initiating payments instructions by the consumer to pay
                    such person for the purchase of, or to complete a
                    commercial transaction for, such nonfinancial good or
                    service sold directly by such person to the consumer;
                    or
                        (II) provides access to a host server to a person
                    for purposes of enabling that person to establish and
                    maintain a website;

                    (viii) providing financial advisory services (other
                than services relating to securities provided by a person
                regulated by the Commission or a person regulated by a
                State securities Commission, but only to the extent that
                such person acts in a regulated capacity) to consumers on
                individual financial matters or relating to proprietary
                financial products or services (other than by 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),
                including--

                        (I) providing credit counseling to any consumer;
                    and
                        (II) providing services to assist a consumer with
                    debt management or debt settlement, modifying the terms
                    of any extension of credit, or avoiding foreclosure;

                    (ix) collecting, analyzing, maintaining, or providing
                consumer report information or other account information,
                including information relating to the credit history of
                consumers, used or expected to be used in connection with
                any decision regarding the offering or provision of a
                consumer financial product or service, except to the extent
                that--

                        (I) a person--

                            (aa) collects, analyzes, or maintains
                        information that relates solely to the transactions
                        between a consumer and such person;
                            (bb) provides the information described in item
                        (aa) to an affiliate of such person; or
                            (cc) provides information that is used or
                        expected to be used solely in any decision
                        regarding the offering or provision of a product or
                        service that is not a consumer financial product or
                        service, including a decision for employment,
                        government licensing, or a residential lease or
                        tenancy involving a consumer; and

                        (II) the information described in subclause (I)(aa)
                    is not used by such person or affiliate in connection
                    with any decision regarding the offering or provision
                    of a consumer financial product or service to the
                    consumer, other than credit described in section
                    1027(a)(2)(A);

                    (x) collecting debt related to any consumer financial
                product or service; and
                    (xi) such other financial product or service as may be
                defined by the Bureau, by regulation, for purposes of this
                title, if the Bureau finds that such financial product or
                service is--

                        (I) entered into or conducted as a subterfuge or
                    with a purpose to evade any Federal consumer financial
                    law; or
                        (II) permissible for a bank or for a financial
                    holding company to offer or to provide under any
                    provision of a Federal law or regulation applicable to
                    a bank or a financial holding company, and has, or
                    likely will have, a material impact on consumers.

                (B) Rule of construction.--
                    (i) In general.--For purposes of subparagraph
                (A)(xi)(II), and subject to clause (ii) of this
                subparagraph, the following activities provided to a
                covered person shall not, for purposes of this title, be
                considered incidental or complementary to a financial
                activity permissible for a financial holding company to
                engage in under any provision of a Federal law or
                regulation applicable to a financial holding company:

                        (I) Providing information products or services to a
                    covered person for identity authentication.
                        (II) Providing information products or services for
                    fraud or identify theft detection, prevention, or
                    investigation.
                        (III) Providing document retrieval or delivery
                    services.
                        (IV) Providing public records information
                    retrieval.
                        (V) Providing information products or services for
                    anti-money laundering activities.

                    (ii) Limitation.--Nothing in clause (i) may be
                construed as modifying or limiting the authority of the
                Bureau to exercise any--

                        (I) examination or enforcement powers authority
                    under this title with respect to a covered person or
                    service provider engaging in an activity described in
                    subparagraph (A)(ix); or
                        (II) powers authorized by this title to prescribe
                    rules, issue orders, or take other actions under any
                    enumerated consumer law or law for which the
                    authorities are transferred under subtitle F or H.

                (C) Exclusions.--The term ``financial product or service''
            does not include--
                    (i) the business of insurance; or
                    (ii) electronic conduit services.
            (16) Foreign exchange.--The term ``foreign exchange'' means the
        exchange, for compensation, of currency of the United States or of
        a foreign government for currency of another government.
            (17) Insured credit union.--The term ``insured credit union''
        has the same meaning as in section 101 of the Federal Credit Union
        Act (12 U.S.C. 1752).
            (18) Payment instrument.--The term ``payment instrument'' means
        a check, draft, warrant, money order, traveler's check, electronic
        instrument, or other instrument, payment of funds, or monetary
        value (other than currency).
            (19) Person.--The term ``person'' means an individual,
        partnership, company, corporation, association (incorporated or
        unincorporated), trust, estate, cooperative organization, or other
        entity.
            (20) Person regulated by the commodity futures trading
        commission.--The term ``person regulated by the Commodity Futures
        Trading Commission'' means any person that is registered, or
        required by statute or regulation to be registered, with the
        Commodity Futures Trading Commission, but only to the extent that
        the activities of such person are subject to the jurisdiction of
        the Commodity Futures Trading Commission under the Commodity
        Exchange Act.
            (21) Person regulated by the commission.--The term ``person
        regulated by the Commission'' means a person who is--
                (A) a broker or dealer that is required to be registered
            under the Securities Exchange Act of 1934;
                (B) an investment adviser that is registered under the
            Investment Advisers Act of 1940;
                (C) an investment company that is required to be registered
            under the Investment Company Act of 1940, and any company that
            has elected to be regulated as a business development company
            under that Act;
                (D) a national securities exchange that is required to be
            registered under the Securities Exchange Act of 1934;
                (E) a transfer agent that is required to be registered
            under the Securities Exchange Act of 1934;
                (F) a clearing corporation that is required to be
            registered under the Securities Exchange Act of 1934;
                (G) any self-regulatory organization that is required to be
            registered with the Commission;
                (H) any nationally recognized statistical rating
            organization that is required to be registered with the
            Commission;
                (I) any securities information processor that is required
            to be registered with the Commission;
                (J) any municipal securities dealer that is required to be
            registered with the Commission;
                (K) any other person that is required to be registered with
            the Commission under the Securities Exchange Act of 1934; and
                (L) any employee, agent, or contractor acting on behalf of,
            registered with, or providing services to, any person described
            in any of subparagraphs (A) through (K), but only to the extent
            that any person described in any of subparagraphs (A) through
            (K), or the employee, agent, or contractor of such person, acts
            in a regulated capacity.
            (22) Person regulated by a state insurance regulator.--The term
        ``person regulated by a State insurance regulator'' means any
        person that is engaged in the business of insurance and subject to
        regulation by any State insurance regulator, but only to the extent
        that such person acts in such capacity.
            (23) Person that performs income tax preparation activities for
        consumers.--The term ``person that performs income tax preparation
        activities for consumers'' means--
                (A) any tax return preparer (as defined in section
            7701(a)(36) of the Internal Revenue Code of 1986), regardless
            of whether compensated, but only to the extent that the person
            acts in such capacity;
                (B) any person regulated by the Secretary under section 330
            of title 31, United States Code, but only to the extent that
            the person acts in such capacity; and
                (C) any authorized IRS e-file Providers (as defined for
            purposes of section 7216 of the Internal Revenue Code of 1986),
            but only to the extent that the person acts in such capacity.
            (24) Prudential regulator.--The term ``prudential regulator''
        means--
                (A) in the case of an insured depository institution or
            depository institution holding company (as defined in section 3
            of the Federal Deposit Insurance Act), or subsidiary of such
            institution or company, the appropriate Federal banking agency,
            as that term is defined in section 3 of the Federal Deposit
            Insurance Act; and
                (B) in the case of an insured credit union, the National
            Credit Union Administration.
            (25) Related person.--The term ``related person''--
                (A) shall apply only with respect to a covered person that
            is not a bank holding company (as that term is defined in
            section 2 of the Bank Holding Company Act of 1956), credit
            union, or depository institution;
                (B) shall be deemed to mean a covered person for all
            purposes of any provision of Federal consumer financial law;
            and
                (C) means--
                    (i) any director, officer, or employee charged with
                managerial responsibility for, or controlling shareholder
                of, or agent for, such covered person;
                    (ii) any shareholder, consultant, joint venture
                partner, or other person, as determined by the Bureau (by
                rule or on a case-by-case basis) who materially
                participates in the conduct of the affairs of such covered
                person; and
                    (iii) any independent contractor (including any
                attorney, appraiser, or accountant) who knowingly or
                recklessly participates in any--

                        (I) violation of any provision of law or
                    regulation; or
                        (II) breach of a fiduciary duty.

            (26) Service provider.--
                (A) In general.--The term ``service provider'' means any
            person that provides a material service to a covered person in
            connection with the offering or provision by such covered
            person of a consumer financial product or service, including a
            person that--
                    (i) participates in designing, operating, or
                maintaining the consumer financial product or service; or
                    (ii) processes transactions relating to the consumer
                financial product or service (other than unknowingly or
                incidentally transmitting or processing financial data in a
                manner that such data is undifferentiated from other types
                of data of the same form as the person transmits or
                processes).
                (B) Exceptions.--The term ``service provider'' does not
            include a person solely by virtue of such person offering or
            providing to a covered person--
                    (i) a support service of a type provided to businesses
                generally or a similar ministerial service; or
                    (ii) time or space for an advertisement for a consumer
                financial product or service through print, newspaper, or
                electronic media.
                (C) Rule of construction.--A person that is a service
            provider shall be deemed to be a covered person to the extent
            that such person engages in the offering or provision of its
            own consumer financial product or service.
            (27) State.--The term ``State'' means any State, territory, or
        possession of the United States, the District of Columbia, the
        Commonwealth of Puerto Rico, the 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)).
            (28) Stored value.--
                (A) In general.--The term ``stored value'' 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 includes a prepaid debit card
            or product, or any other similar product, regardless of whether
            the amount of the funds or monetary value may be increased or
            reloaded.
                (B) Exclusion.--Notwithstanding subparagraph (A), the term
            ``stored value'' does not include a special purpose card or
            certificate, which shall be defined for purposes of this
            paragraph as funds or monetary value represented in any
            electronic format, whether or not specially encrypted, that
            is--
                    (i) issued by a merchant, retailer, or other seller of
                nonfinancial goods or services;
                    (ii) redeemable only for transactions with the
                merchant, retailer, or seller of nonfinancial goods or
                services or with an affiliate of such person, which
                affiliate itself is a merchant, retailer, or seller of
                nonfinancial goods or services;
                    (iii) issued in a specified amount that, except in the
                case of a card or product used solely for telephone
                services, may not be increased or reloaded;
                    (iv) purchased on a prepaid basis in exchange for
                payment; and
                    (v) honored upon presentation to such merchant,
                retailer, or seller of nonfinancial goods or services or an
                affiliate of such person, which affiliate itself is a
                merchant, retailer, or seller of nonfinancial goods or
                services, only for any nonfinancial goods or services.
            (29) Transmitting or exchanging funds.--The term ``transmitting
        or exchanging funds'' means receiving currency, monetary value, or
        payment instruments from a consumer 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 through other businesses that
        facilitate third-party transfers within the United States or to or
        from the United States.

              Subtitle A--Bureau of Consumer Financial Protection

    SEC. 1011. ESTABLISHMENT OF THE BUREAU OF CONSUMER FINANCIAL
    PROTECTION.
        (a) Bureau Established.--There is established in the Federal
    Reserve System, an independent bureau to be known as the ``Bureau of
    Consumer Financial Protection'', which shall regulate the offering and
    provision of consumer financial products or services under the Federal
    consumer financial laws. The Bureau shall be considered an Executive
    agency, as defined in section 105 of title 5, United States Code.
    Except as otherwise provided expressly by law, all Federal laws dealing
    with public or Federal contracts, property, works, officers, employees,
    budgets, or funds, including the provisions of chapters 5 and 7 of
    title 5, shall apply to the exercise of the powers of the Bureau.
        (b) Director and Deputy Director.--
            (1) In general.--There is established the position of the
        Director, who shall serve as the head of the Bureau.
            (2) Appointment.--Subject to paragraph (3), the Director shall
        be appointed by the President, by and with the advice and consent
        of the Senate.
            (3) Qualification.--The President shall nominate the Director
        from among individuals who are citizens of the United States.
            (4) Compensation.--The Director shall be compensated at the
        rate prescribed for level II of the Executive Schedule under
        section 5313 of title 5, United States Code.
            (5) Deputy director.--There is established the position of
        Deputy Director, who shall--
                (A) be appointed by the Director; and
                (B) serve as acting Director in the absence or
            unavailability of the Director.
        (c) Term.--
            (1) In general.--The Director shall serve for a term of 5
        years.
            (2) Expiration of term.--An individual may serve as Director
        after the expiration of the term for which appointed, until a
        successor has been appointed and qualified.
            (3) Removal for cause.--The President may remove the Director
        for inefficiency, neglect of duty, or malfeasance in office.
        (d) Service Restriction.--No Director or Deputy Director may hold
    any office, position, or employment in any Federal reserve bank,
    Federal home loan bank, covered person, or service provider during the
    period of service of such person as Director or Deputy Director.
        (e) Offices.--The principal office of the Bureau shall be in the
    District of Columbia. The Director may establish regional offices of
    the Bureau, including in cities in which the Federal reserve banks, or
    branches of such banks, are located, in order to carry out the
    responsibilities assigned to the Bureau under the Federal consumer
    financial laws.
    SEC. 1012. EXECUTIVE AND ADMINISTRATIVE POWERS.
        (a) Powers of the Bureau.--The Bureau is authorized to establish
    the general policies of the Bureau with respect to all executive and
    administrative functions, including--
            (1) the establishment of rules for conducting the general
        business of the Bureau, in a manner not inconsistent with this
        title;
            (2) to bind the Bureau and enter into contracts;
            (3) directing the establishment and maintenance of divisions or
        other offices within the Bureau, in order to carry out the
        responsibilities under the Federal consumer financial laws, and to
        satisfy the requirements of other applicable law;
            (4) to coordinate and oversee the operation of all
        administrative, enforcement, and research activities of the Bureau;
            (5) to adopt and use a seal;
            (6) to determine the character of and the necessity for the
        obligations and expenditures of the Bureau;
            (7) the appointment and supervision of personnel employed by
        the Bureau;
            (8) the distribution of business among personnel appointed and
        supervised by the Director and among administrative units of the
        Bureau;
            (9) the use and expenditure of funds;
            (10) implementing the Federal consumer financial laws through
        rules, orders, guidance, interpretations, statements of policy,
        examinations, and enforcement actions; and
            (11) performing such other functions as may be authorized or
        required by law.
        (b) Delegation of Authority.--The Director of the Bureau may
    delegate to any duly authorized employee, representative, or agent any
    power vested in the Bureau by law.
        (c) Autonomy of the Bureau.--
            (1) Coordination with the board of governors.--Notwithstanding
        any other provision of law applicable to the supervision or
        examination of persons with respect to Federal consumer financial
        laws, the Board of Governors may delegate to the Bureau the
        authorities to examine persons subject to the jurisdiction of the
        Board of Governors for compliance with the Federal consumer
        financial laws.
            (2) Autonomy.--Notwithstanding the authorities granted to the
        Board of Governors under the Federal Reserve Act, the Board of
        Governors may not--
                (A) intervene in any matter or proceeding before the
            Director, including examinations or enforcement actions, unless
            otherwise specifically provided by law;
                (B) appoint, direct, or remove any officer or employee of
            the Bureau; or
                (C) merge or consolidate the Bureau, or any of the
            functions or responsibilities of the Bureau, with any division
            or office of the Board of Governors or the Federal reserve
            banks.
            (3) Rules and orders.--No rule or order of the Bureau shall be
        subject to approval or review by the Board of Governors. The Board
        of Governors may not delay or prevent the issuance of any rule or
        order of the Bureau.
            (4) Recommendations and testimony.--No officer or agency of the
        United States shall have any authority to require the Director or
        any other officer of the Bureau to submit legislative
        recommendations, or testimony or comments on legislation, to any
        officer or agency of the United States for approval, comments, or
        review prior to the submission of such recommendations, testimony,
        or comments to the Congress, if such recommendations, testimony, or
        comments to the Congress include a statement indicating that the
        views expressed therein are those of the Director or such officer,
        and do not necessarily reflect the views of the Board of Governors
        or the President.
            (5) Clarification of autonomy of the bureau in legal
        proceedings.--The Bureau shall not be liable under any provision of
        law for any action or inaction of the Board of Governors, and the
        Board of Governors shall not be liable under any provision of law
        for any action or inaction of the Bureau.
    SEC. 1013. ADMINISTRATION.
        (a) Personnel.--
            (1) Appointment.--
                (A) In general.--The Director may fix the number of, and
            appoint and direct, all employees of the Bureau, in accordance
            with the applicable provisions of title 5, United States Code.
                (B) Employees of the bureau.--The Director is authorized to
            employ attorneys, compliance examiners, compliance supervision
            analysts, economists, statisticians, and other employees as may
            be deemed necessary to conduct the business of the Bureau.
            Unless otherwise provided expressly by law, any individual
            appointed under this section shall be an employee as defined in
            section 2105 of title 5, United States Code, and subject to the
            provisions of such title and other laws generally applicable to
            the employees of an Executive agency.
                (C) Waiver authority.--
                    (i) In general.--In making any appointment under
                subparagraph (A), the Director may waive the requirements
                of chapter 33 of title 5, United States Code, and the
                regulations implementing such chapter, to the extent
                necessary to appoint employees on terms and conditions that
                are consistent with those set forth in section 11(1) of the
                Federal Reserve Act (12 U.S.C. 248(1)), while providing
                for--

                        (I) fair, credible, and transparent methods of
                    establishing qualification requirements for,
                    recruitment for, and appointments to positions;
                        (II) fair and open competition and equitable
                    treatment in the consideration and selection of
                    individuals to positions;
                        (III) fair, credible, and transparent methods of
                    assigning, reassigning, detailing, transferring, and
                    promoting employees.

                    (ii) Veterans preferences.--In implementing this
                subparagraph, the Director shall comply with the provisions
                of section 2302(b)(11), regarding veterans' preference
                requirements, in a manner consistent with that in which
                such provisions are applied under chapter 33 of title 5,
                United States Code. The authority under this subparagraph
                to waive the requirements of that chapter 33 shall expire 5
                years after the date of enactment of this Act.
            (2) Compensation.--Notwithstanding any otherwise applicable
        provision of title 5, United States Code, concerning compensation,
        including the provisions of chapter 51 and chapter 53, the
        following provisions shall apply with respect to employees of the
        Bureau:
                (A) The rates of basic pay for all employees of the Bureau
            may be set and adjusted by the Director.
                (B) The Director shall at all times provide compensation
            (including benefits) to each class of employees that, at a
            minimum, are comparable to the compensation and benefits then
            being provided by the Board of Governors for the corresponding
            class of employees.
                (C) All such employees shall be compensated (including
            benefits) on terms and conditions that are consistent with the
            terms and conditions set forth in section 11(l) of the Federal
            Reserve Act (12 U.S.C. 248(l)).
            (3) Bureau participation in federal reserve system retirement
        plan and federal reserve system thrift plan.--
                (A) Employee election.--Employees appointed to the Bureau
            may elect to participate in either--
                    (i) both the Federal Reserve System Retirement Plan and
                the Federal Reserve System Thrift Plan, under the same
                terms on which such participation is offered to employees
                of the Board of Governors who participate in such plans and
                under the terms and conditions specified under section
                1064(i)(1)(C); or
                    (ii) the Civil Service Retirement System under chapter
                83 of title 5, United States Code, or the Federal Employees
                Retirement System under chapter 84 of title 5, United
                States Code, if previously covered under one of those
                Federal employee retirement systems.
                (B) Election period.--Bureau employees shall make an
            election under this paragraph not later than 1 year after the
            date of appointment by, or transfer under subtitle F to, the
            Bureau. Participation in, and benefit accruals under, any other
            retirement plan established or maintained by the Federal
            Government shall end not later than the date on which
            participation in, and benefit accruals under, the Federal
            Reserve System Retirement Plan and Federal Reserve System
            Thrift Plan begin.
                (C) Employer contribution.--The Bureau shall pay an
            employer contribution to the Federal Reserve System Retirement
            Plan, in the amount established as an employer contribution
            under the Federal Employees Retirement System, as established
            under chapter 84 of title 5, United States Code, for each
            Bureau employee who elects to participate in the Federal
            Reserve System Retirement Plan. The Bureau shall pay an
            employer contribution to the Federal Reserve System Thrift Plan
            for each Bureau employee who elects to participate in such
            plan, as required under the terms of such plan.
                (D) Controlled group status.--The Bureau is the same
            employer as the Federal Reserve System (as comprised of the
            Board of Governors and each of the 12 Federal reserve banks
            prior to the date of enactment of this Act) for purposes of
            subsections (b), (c), (m), and (o) of section 414 of the
            Internal Revenue Code of 1986, (26 U.S.C. 414).
            (4) Labor-management relations.--Chapter 71 of title 5, United
        States Code, shall apply to the Bureau and the employees of the
        Bureau.
            (5) Agency ombudsman.--
                (A) Establishment required.--Not later than 180 days after
            the designated transfer date, the Bureau shall appoint an
            ombudsman.
                (B) Duties of ombudsman.--The ombudsman appointed in
            accordance with subparagraph (A) shall--
                    (i) act as a liaison between the Bureau and any
                affected person with respect to any problem that such party
                may have in dealing with the Bureau, resulting from the
                regulatory activities of the Bureau; and
                    (ii) assure that safeguards exist to encourage
                complainants to come forward and preserve confidentiality.
        (b) Specific Functional Units.--
            (1) Research.--The Director shall establish a unit whose
        functions shall include researching, analyzing, and reporting on--
                (A) developments in markets for consumer financial products
            or services, including market areas of alternative consumer
            financial products or services with high growth rates and areas
            of risk to consumers;
                (B) access to fair and affordable credit for traditionally
            underserved communities;
                (C) consumer awareness, understanding, and use of
            disclosures and communications regarding consumer financial
            products or services;
                (D) consumer awareness and understanding of costs, risks,
            and benefits of consumer financial products or services;
                (E) consumer behavior with respect to consumer financial
            products or services, including performance on mortgage loans;
            and
                (F) experiences of traditionally underserved consumers,
            including un-banked and under-banked consumers.
            (2) Community affairs.--The Director shall establish a unit
        whose functions shall include providing information, guidance, and
        technical assistance regarding the offering and provision of
        consumer financial products or services to traditionally
        underserved consumers and communities.
            (3) Collecting and tracking complaints.--
                (A) In general.--The Director shall establish a unit whose
            functions shall include establishing a single, toll-free
            telephone number, a website, and a database or utilizing an
            existing database to facilitate the centralized collection of,
            monitoring of, and response to consumer complaints regarding
            consumer financial products or services. The Director shall
            coordinate with the Federal Trade Commission or other Federal
            agencies to route complaints to such agencies, where
            appropriate.
                (B) Routing calls to states.--To the extent practicable,
            State agencies may receive appropriate complaints from the
            systems established under subparagraph (A), if--
                    (i) the State agency system has the functional capacity
                to receive calls or electronic reports routed by the Bureau
                systems;
                    (ii) the State agency has satisfied any conditions of
                participation in the system that the Bureau may establish,
                including treatment of personally identifiable information
                and sharing of information on complaint resolution or
                related compliance procedures and resources; and
                    (iii) participation by the State agency includes
                measures necessary to provide for protection of personally
                identifiable information that conform to the standards for
                protection of the confidentiality of personally
                identifiable information and for data integrity and
                security that apply to the Federal agencies described in
                subparagraph (D).
                (C) Reports to the congress.--The Director shall present an
            annual report to Congress not later than March 31 of each year
            on the complaints received by the Bureau in the prior year
            regarding consumer financial products and services. Such report
            shall include information and analysis about complaint numbers,
            complaint types, and, where applicable, information about
            resolution of complaints.
                (D) Data sharing required.--To facilitate preparation of
            the reports required under subparagraph (C), supervision and
            enforcement activities, and monitoring of the market for
            consumer financial products and services, the Bureau shall
            share consumer complaint information with prudential
            regulators, the Federal Trade Commission, other Federal
            agencies, and State agencies, subject to the standards
            applicable to Federal agencies for protection of the
            confidentiality of personally identifiable information and for
            data security and integrity. The prudential regulators, the
            Federal Trade Commission, and other Federal agencies shall
            share data relating to consumer complaints regarding consumer
            financial products and services with the Bureau, subject to the
            standards applicable to Federal agencies for protection of
            confidentiality of personally identifiable information and for
            data security and integrity.
        (c) Office of Fair Lending and Equal Opportunity.--
            (1) Establishment.--The Director shall establish within the
        Bureau the Office of Fair Lending and Equal Opportunity.
            (2) Functions.--The Office of Fair Lending and Equal
        Opportunity shall have such powers and duties as the Director may
        delegate to the Office, including--
                (A) providing oversight and enforcement of Federal laws
            intended to ensure the fair, equitable, and nondiscriminatory
            access to credit for both individuals and communities that are
            enforced by the Bureau, including the Equal Credit Opportunity
            Act and the Home Mortgage Disclosure Act;
                (B) coordinating fair lending efforts of the Bureau with
            other Federal agencies and State regulators, as appropriate, to
            promote consistent, efficient, and effective enforcement of
            Federal fair lending laws;
                (C) working with private industry, fair lending, civil
            rights, consumer and community advocates on the promotion of
            fair lending compliance and education; and
                (D) providing annual reports to Congress on the efforts of
            the Bureau to fulfill its fair lending mandate.
            (3) Administration of office.--There is established the
        position of Assistant Director of the Bureau for Fair Lending and
        Equal Opportunity, who--
                (A) shall be appointed by the Director; and
                (B) shall carry out such duties as the Director may
            delegate to such Assistant Director.
        (d) Office of Financial Education.--
            (1) Establishment.--The Director shall establish an Office of
        Financial Education, which shall be responsible for developing and
        implementing initiatives intended to educate and empower consumers
        to make better informed financial decisions.
            (2) Other duties.--The Office of Financial Education shall
        develop and implement a strategy to improve the financial literacy
        of consumers that includes measurable goals and objectives, in
        consultation with the Financial Literacy and Education Commission,
        consistent with the National Strategy for Financial Literacy,
        through activities including providing opportunities for consumers
        to access--
                (A) financial counseling, including community-based
            financial counseling, where practicable;
                (B) information to assist with the evaluation of credit
            products and the understanding of credit histories and scores;
                (C) savings, borrowing, and other services found at
            mainstream financial institutions;
                (D) activities intended to--
                    (i) prepare the consumer for educational expenses and
                the submission of financial aid applications, and other
                major purchases;
                    (ii) reduce debt; and
                    (iii) improve the financial situation of the consumer;
                (E) assistance in developing long-term savings strategies;
            and
                (F) wealth building and financial services during the
            preparation process to claim earned income tax credits and
            Federal benefits.
            (3) Coordination.--The Office of Financial Education shall
        coordinate with other units within the Bureau in carrying out its
        functions, including--
                (A) working with the Community Affairs Office to implement
            the strategy to improve financial literacy of consumers; and
                (B) working with the research unit established by the
            Director to conduct research related to consumer financial
            education and counseling.
            (4) Report.--Not later than 24 months after the designated
        transfer date, and annually thereafter, the Director shall submit a
        report on its financial literacy activities and strategy to improve
        financial literacy of consumers to--
                (A) the Committee on Banking, Housing, and Urban Affairs of
            the Senate; and
                (B) the Committee on Financial Services of the House of
            Representatives.
            (5) Membership in financial literacy and education
        commission.--Section 513(c)(1) of the Financial Literacy and
        Education Improvement Act (20 U.S.C. 9702(c)(1)) is amended--
                (A) in subparagraph (B), by striking ``and'' at the end;
                (B) by redesignating subparagraph (C) as subparagraph (D);
            and
                (C) by inserting after subparagraph (B) the following new
            subparagraph:
                ``(C) the Director of the Bureau of Consumer Financial
            Protection; and''.
            (6) Conforming amendment.--Section 513(d) of the Financial
        Literacy and Education Improvement Act (20 U.S.C. 9702(d)) is
        amended by adding at the end the following: ``The Director of the
        Bureau of Consumer Financial Protection shall serve as the Vice
        Chairman.''.
            (7) Study and report on financial literacy program.--
                (A) In general.--The Comptroller General of the United
            States shall conduct a study to identify--
                    (i) the feasibility of certification of persons
                providing the programs or performing the activities
                described in paragraph (2), including recognizing
                outstanding programs, and developing guidelines and
                resources for community-based practitioners, including--

                        (I) a potential certification process and standards
                    for certification;
                        (II) appropriate certifying entities;
                        (III) resources required for funding such a
                    process; and
                        (IV) a cost-benefit analysis of such certification;

                    (ii) technological resources intended to collect,
                analyze, evaluate, or promote financial literacy and
                counseling programs;
                    (iii) effective methods, tools, and strategies intended
                to educate and empower consumers about personal finance
                management; and
                    (iv) recommendations intended to encourage the
                development of programs that effectively improve financial
                education outcomes and empower consumers to make better
                informed financial decisions based on findings.
                (B) Report.--Not later than 1 year after the date of
            enactment of this Act, the Comptroller General of the United
            States shall submit a report on the results of the study
            conducted under this paragraph to the Committee on Banking,
            Housing, and Urban Affairs of the Senate and the Committee on
            Financial Services of the House of Representatives.
        (e) Office of Service Member Affairs.--
            (1) In general.--The Director shall establish an Office of
        Service Member Affairs, which shall be responsible for developing
        and implementing initiatives for service members and their families
        intended to--
                (A) educate and empower service members and their families
            to make better informed decisions regarding consumer financial
            products and services;
                (B) coordinate with the unit of the Bureau established
            under subsection (b)(3), in order to monitor complaints by
            service members and their families and responses to those
            complaints by the Bureau or other appropriate Federal or State
            agency; and
                (C) coordinate efforts among Federal and State agencies, as
            appropriate, regarding consumer protection measures relating to
            consumer financial products and services offered to, or used
            by, service members and their families.
            (2) Coordination.--
                (A) Regional services.--The Director is authorized to
            assign employees of the Bureau as may be deemed necessary to
            conduct the business of the Office of Service Member Affairs,
            including by establishing and maintaining the functions of the
            Office in regional offices of the Bureau located near military
            bases, military treatment facilities, or other similar military
            facilities.
                (B) Agreements.--The Director is authorized to enter into
            memoranda of understanding and similar agreements with the
            Department of Defense, including any branch or agency as
            authorized by the department, in order to carry out the
            business of the Office of Service Member Affairs.
            (3) Definition.--As used in this subsection, the term ``service
        member'' means any member of the United States Armed Forces and any
        member of the National Guard or Reserves.
        (f) Timing.--The Office of Fair Lending and Equal Opportunity, the
    Office of Financial Education, and the Office of Service Member Affairs
    shall each be established not later than 1 year after the designated
    transfer date.
        (g) Office of Financial Protection for Older Americans.--
            (1) Establishment.--Before the end of the 180-day period
        beginning on the designated transfer date, the Director shall
        establish the Office of Financial Protection for Older Americans,
        the functions of which shall include activities designed to
        facilitate the financial literacy of individuals who have attained
        the age of 62 years or more (in this subsection, referred to as
        ``seniors'') on protection from unfair, deceptive, and abusive
        practices and on current and future financial choices, including
        through the dissemination of materials to seniors on such topics.
            (2) Assistant director.--The Office of Financial Protection for
        Older Americans (in this subsection referred to as the ``Office'')
        shall be headed by an assistant director.
            (3) Duties.--The Office shall--
                (A) develop goals for programs that provide seniors
            financial literacy and counseling, including programs that--
                    (i) help seniors recognize warning signs of unfair,
                deceptive, or abusive practices, protect themselves from
                such practices;
                    (ii) provide one-on-one financial counseling on issues
                including long-term savings and later-life economic
                security; and
                    (iii) provide personal consumer credit advocacy to
                respond to consumer problems caused by unfair, deceptive,
                or abusive practices;
                (B) monitor certifications or designations of financial
            advisors who advise seniors and alert the Commission and State
            regulators of certifications or designations that are
            identified as unfair, deceptive, or abusive;
                (C) not later than 18 months after the date of the
            establishment of the Office, submit to Congress and the
            Commission any legislative and regulatory recommendations on
            the best practices for--
                    (i) disseminating information regarding the legitimacy
                of certifications of financial advisers who advise seniors;
                    (ii) methods in which a senior can identify the
                financial advisor most appropriate for the senior's needs;
                and
                    (iii) methods in which a senior can verify a financial
                advisor's credentials;
                (D) conduct research to identify best practices and
            effective methods, tools, technology and strategies to educate
            and counsel seniors about personal finance management with a
            focus on--
                    (i) protecting themselves from unfair, deceptive, and
                abusive practices;
                    (ii) long-term savings; and
                    (iii) planning for retirement and long-term care;
                (E) coordinate consumer protection efforts of seniors with
            other Federal agencies and State regulators, as appropriate, to
            promote consistent, effective, and efficient enforcement; and
                (F) work with community organizations, non-profit
            organizations, and other entities that are involved with
            educating or assisting seniors (including the National
            Education and Resource Center on Women and Retirement
            Planning).
    SEC. 1014. CONSUMER ADVISORY BOARD.
        (a) Establishment Required.--The Director shall establish a
    Consumer Advisory Board to advise and consult with the Bureau in the
    exercise of its functions under the Federal consumer financial laws,
    and to provide information on emerging practices in the consumer
    financial products or services industry, including regional trends,
    concerns, and other relevant information.
        (b) Membership.--In appointing the members of the Consumer Advisory
    Board, the Director shall seek to assemble experts in consumer
    protection, financial services, community development, fair lending and
    civil rights, and consumer financial products or services and
    representatives of depository institutions that primarily serve
    underserved communities, and representatives of communities that have
    been significantly impacted by higher-priced mortgage loans, and seek
    representation of the interests of covered persons and consumers,
    without regard to party affiliation. Not fewer than 6 members shall be
    appointed upon the recommendation of the regional Federal Reserve Bank
    Presidents, on a rotating basis.
        (c) Meetings.--The Consumer Advisory Board shall meet from time to
    time at the call of the Director, but, at a minimum, shall meet at
    least twice in each year.
        (d) Compensation and Travel Expenses.--Members of the Consumer
    Advisory Board who are not full-time employees of the United States
    shall--
            (1) be entitled to receive compensation at a rate fixed by the
        Director while attending meetings of the Consumer Advisory Board,
        including travel time; and
            (2) be allowed travel expenses, including transportation and
        subsistence, while away from their homes or regular places of
        business.
    SEC. 1015. COORDINATION.
        The Bureau shall coordinate with the Commission, the Commodity
    Futures Trading Commission, the Federal Trade Commission, and other
    Federal agencies and State regulators, as appropriate, to promote
    consistent regulatory treatment of consumer financial and investment
    products and services.
    SEC. 1016. APPEARANCES BEFORE AND REPORTS TO CONGRESS.
        (a) Appearances Before Congress.--The Director of the Bureau shall
    appear before the Committee on Banking, Housing, and Urban Affairs of
    the Senate and the Committee on Financial Services and the Committee on
    Energy and Commerce of the House of Representatives at semi-annual
    hearings regarding the reports required under subsection (b).
        (b) Reports Required.--The Bureau shall, concurrent with each semi-
    annual hearing referred to in subsection (a), prepare and submit to the
    President and to the Committee on Banking, Housing, and Urban Affairs
    of the Senate and the Committee on Financial Services and the Committee
    on Energy and Commerce of the House of Representatives, a report,
    beginning with the session following the designated transfer date. The
    Bureau may also submit such report to the Committee on Commerce,
    Science, and Transportation of the Senate.
        (c) Contents.--The reports required by subsection (b) shall
    include--
            (1) a discussion of the significant problems faced by consumers
        in shopping for or obtaining consumer financial products or
        services;
            (2) a justification of the budget request of the previous year;
            (3) a list of the significant rules and orders adopted by the
        Bureau, as well as other significant initiatives conducted by the
        Bureau, during the preceding year and the plan of the Bureau for
        rules, orders, or other initiatives to be undertaken during the
        upcoming period;
            (4) an analysis of complaints about consumer financial products
        or services that the Bureau has received and collected in its
        central database on complaints during the preceding year;
            (5) a list, with a brief statement of the issues, of the public
        supervisory and enforcement actions to which the Bureau was a party
        during the preceding year;
            (6) the actions taken regarding rules, orders, and supervisory
        actions with respect to covered persons which are not credit unions
        or depository institutions;
            (7) an assessment of significant actions by State attorneys
        general or State regulators relating to Federal consumer financial
        law;
            (8) an analysis of the efforts of the Bureau to fulfill the
        fair lending mission of the Bureau; and
            (9) an analysis of the efforts of the Bureau to increase
        workforce and contracting diversity consistent with the procedures
        established by the Office of Minority and Women Inclusion.
    SEC. 1017. FUNDING; PENALTIES AND FINES.
        (a) Transfer of Funds From Board Of Governors.--
            (1) In general.--Each year (or quarter of such year), beginning
        on the designated transfer date, and each quarter thereafter, the
        Board of Governors shall transfer to the Bureau from the combined
        earnings of the Federal Reserve System, the amount determined by
        the Director to be reasonably necessary to carry out the
        authorities of the Bureau under Federal consumer financial law,
        taking into account such other sums made available to the Bureau
        from the preceding year (or quarter of such year).
            (2) Funding cap.--
                (A) In general.--Notwithstanding paragraph (1), and in
            accordance with this paragraph, the amount that shall be
            transferred to the Bureau in each fiscal year shall not exceed
            a fixed percentage of the total operating expenses of the
            Federal Reserve System, as reported in the Annual Report, 2009,
            of the Board of Governors, equal to--
                    (i) 10 percent of such expenses in fiscal year 2011;
                    (ii) 11 percent of such expenses in fiscal year 2012;
                and
                    (iii) 12 percent of such expenses in fiscal year 2013,
                and in each year thereafter.
                (B) Adjustment of amount.--The dollar amount referred to in
            subparagraph (A)(iii) shall be adjusted annually, using the
            percent increase, if any, in the employment cost index for
            total compensation for State and local government workers
            published by the Federal Government, or the successor index
            thereto, for the 12-month period ending on September 30 of the
            year preceding the transfer.
                (C) Reviewability.--Notwithstanding any other provision in
            this title, the funds derived from the Federal Reserve System
            pursuant to this subsection shall not be subject to review by
            the Committees on Appropriations of the House of
            Representatives and the Senate.
            (3) Transition period.--Beginning on the date of enactment of
        this Act and until the designated transfer date, the Board of
        Governors shall transfer to the Bureau the amount estimated by the
        Secretary needed to carry out the authorities granted to the Bureau
        under Federal consumer financial law, from the date of enactment of
        this Act until the designated transfer date.
            (4) Budget and financial management.--
                (A) Financial operating plans and forecasts.--The Director
            shall provide to the Director of the Office of Management and
            Budget copies of the financial operating plans and forecasts of
            the Director, as prepared by the Director in the ordinary
            course of the operations of the Bureau, and copies of the
            quarterly reports of the financial condition and results of
            operations of the Bureau, as prepared by the Director in the
            ordinary course of the operations of the Bureau.
                (B) Financial statements.--The Bureau shall prepare
            annually a statement of--
                    (i) assets and liabilities and surplus or deficit;
                    (ii) income and expenses; and
                    (iii) sources and application of funds.
                (C) Financial management systems.--The Bureau shall
            implement and maintain financial management systems that comply
            substantially with Federal financial management systems
            requirements and applicable Federal accounting standards.
                (D) Assertion of internal controls.--The Director shall
            provide to the Comptroller General of the United States an
            assertion as to the effectiveness of the internal controls that
            apply to financial reporting by the Bureau, using the standards
            established in section 3512(c) of title 31, United States Code.
                (E) Rule of construction.--This subsection may not be
            construed as implying any obligation on the part of the
            Director to consult with or obtain the consent or approval of
            the Director of the Office of Management and Budget with
            respect to any report, plan, forecast, or other information
            referred to in subparagraph (A) or any jurisdiction or
            oversight over the affairs or operations of the Bureau.
                (F) Financial statements.--The financial statements of the
            Bureau shall not be consolidated with the financial statements
            of either the Board of Governors or the Federal Reserve System.
            (5) Audit of the bureau.--
                (A) In general.--The Comptroller General shall annually
            audit the financial transactions of the Bureau in accordance
            with the United States generally accepted government auditing
            standards, as may be prescribed by the Comptroller General of
            the United States. The audit shall be conducted at the place or
            places where accounts of the Bureau are normally kept. The
            representatives of the Government Accountability Office shall
            have access to the personnel and to all books, accounts,
            documents, papers, records (including electronic records),
            reports, files, and all other papers, automated data, things,
            or property belonging to or under the control of or used or
            employed by the Bureau pertaining to its financial transactions
            and necessary to facilitate the audit, and such representatives
            shall be afforded full facilities for verifying transactions
            with the balances or securities held by depositories, fiscal
            agents, and custodians. All such books, accounts, documents,
            records, reports, files, papers, and property of the Bureau
            shall remain in possession and custody of the Bureau. The
            Comptroller General may obtain and duplicate any such books,
            accounts, documents, records, working papers, automated data
            and files, or other information relevant to such audit without
            cost to the Comptroller General, and the right of access of the
            Comptroller General to such information shall be enforceable
            pursuant to section 716(c) of title 31, United States Code.
                (B) Report.--The Comptroller General shall submit to the
            Congress a report of each annual audit conducted under this
            subsection. The report to the Congress shall set forth the
            scope of the audit and shall include the statement of assets
            and liabilities and surplus or deficit, the statement of income
            and expenses, the statement of sources and application of
            funds, and such comments and information as may be deemed
            necessary to inform Congress of the financial operations and
            condition of the Bureau, together with such recommendations
            with respect thereto as the Comptroller General may deem
            advisable. A copy of each report shall be furnished to the
            President and to the Bureau at the time submitted to the
            Congress.
                (C) Assistance and costs.--For the purpose of conducting an
            audit under this subsection, the Comptroller General may, in
            the discretion of the Comptroller General, employ by contract,
            without regard to section 3709 of the Revised Statutes of the
            United States (41 U.S.C. 5), professional services of firms and
            organizations of certified public accountants for temporary
            periods or for special purposes. Upon the request of the
            Comptroller General, the Director of the Bureau shall transfer
            to the Government Accountability Office from funds available,
            the amount requested by the Comptroller General to cover the
            full costs of any audit and report conducted by the Comptroller
            General. The Comptroller General shall credit funds transferred
            to the account established for salaries and expenses of the
            Government Accountability Office, and such amount shall be
            available upon receipt and without fiscal year limitation to
            cover the full costs of the audit and report.
        (b) Consumer Financial Protection Fund.--
            (1) Separate fund in federal reserve established.--There is
        established in the Federal Reserve a separate fund, to be known as
        the ``Bureau of Consumer Financial Protection Fund'' (referred to
        in this section as the ``Bureau Fund''). The Bureau Fund shall be
        maintained and established at a Federal reserve bank, in accordance
        with such requirements as the Board of Governors may impose.
            (2) Fund receipts.--All amounts transferred to the Bureau under
        subsection (a) shall be deposited into the Bureau Fund.
            (3) Investment authority.--
                (A) Amounts in bureau fund may be invested.--The Bureau may
            request the Board of Governors to direct the investment of the
            portion of the Bureau Fund that is not, in the judgment of the
            Bureau, required to meet the current needs of the Bureau.
                (B) Eligible investments.--Investments authorized by this
            paragraph shall be made 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
            Bureau Fund, as determined by the Bureau.
                (C) Interest and proceeds credited.--The interest on, and
            the proceeds from the sale or redemption of, any obligations
            held in the Bureau Fund shall be credited to the Bureau Fund.
        (c) Use of Funds.--
            (1) In general.--Funds obtained by, transferred to, or credited
        to the Bureau Fund shall be immediately available to the Bureau and
        under the control of the Director, and shall remain available until
        expended, to pay the expenses of the Bureau in carrying out its
        duties and responsibilities. The compensation of the Director and
        other employees of the Bureau and all other expenses thereof may be
        paid from, obtained by, transferred to, or credited to the Bureau
        Fund under this section.
            (2) Funds that are not government funds.--Funds obtained by or
        transferred to the Bureau Fund shall not be construed to be
        Government funds or appropriated monies.
            (3) Amounts not subject to apportionment.--Notwithstanding any
        other provision of law, amounts in the Bureau Fund and in the Civil
        Penalty Fund established under subsection (d) shall not be subject
        to apportionment for purposes of chapter 15 of title 31, United
        States Code, or under any other authority.
        (d) Penalties and Fines.--
            (1) Establishment of victims relief fund.--There is established
        in the Federal Reserve a separate fund, to be known as the
        ``Consumer Financial Civil Penalty Fund'' (referred to in this
        section as the ``Civil Penalty Fund''). The Civil Penalty Fund
        shall be maintained and established at a Federal reserve bank, in
        accordance with such requirements as the Board of Governors may
        impose. If the Bureau obtains a civil penalty against any person in
        any judicial or administrative action under Federal consumer
        financial laws, the Bureau shall deposit into the Civil Penalty
        Fund, the amount of the penalty collected.
            (2) Payment to victims.--Amounts in the Civil Penalty Fund
        shall be available to the Bureau, without fiscal year limitation,
        for payments to the victims of activities for which civil penalties
        have been imposed under the Federal consumer financial laws. To the
        extent that such victims cannot be located or such payments are
        otherwise not practicable, the Bureau may use such funds for the
        purpose of consumer education and financial literacy programs.
        (e) Authorization of Appropriations; Annual Report.--
            (1) Determination regarding need for appropriated funds.--
                (A) In general.--The Director is authorized to determine
            that sums available to the Bureau under this section will not
            be sufficient to carry out the authorities of the Bureau under
            Federal consumer financial law for the upcoming year.
                (B) Report required.--When making a determination under
            subparagraph (A), the Director shall prepare a report regarding
            the funding of the Bureau, including the assets and liabilities
            of the Bureau, and the extent to which the funding needs of the
            Bureau are anticipated to exceed the level of the amount set
            forth in subsection (a)(2). The Director shall submit the
            report to the President and to the Committee on Appropriations
            of the Senate and the Committee on Appropriations of the House
            of Representatives.
            (2) Authorization of appropriations.--If the Director makes the
        determination and submits the report pursuant to paragraph (1),
        there are hereby authorized to be appropriated to the Bureau, for
        the purposes of carrying out the authorities granted in Federal
        consumer financial law, $200,000,000 for each of fiscal years 2010,
        2011, 2012, 2013, and 2014.
            (3) Apportionment.--Notwithstanding any other provision of law,
        the amounts in paragraph (2) 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.
            (4) Annual report.--The Director shall prepare and submit a
        report, on an annual basis, to the Committee on Appropriations of
        the Senate and the Committee on Appropriations of the House of
        Representatives regarding the financial operating plans and
        forecasts of the Director, the financial condition and results of
        operations of the Bureau, and the sources and application of funds
        of the Bureau, including any funds appropriated in accordance with
        this subsection.
    SEC. 1018. EFFECTIVE DATE.
        This subtitle shall become effective on the date of enactment of
    this Act.

                    Subtitle B--General Powers of the Bureau

    SEC. 1021. PURPOSE, OBJECTIVES, AND FUNCTIONS.
        (a) Purpose.--The Bureau shall seek to implement and, where
    applicable, enforce Federal consumer financial law consistently for the
    purpose of ensuring that all consumers have access to markets for
    consumer financial products and services and that markets for consumer
    financial products and services are fair, transparent, and competitive.
        (b) Objectives.--The Bureau is authorized to exercise its
    authorities under Federal consumer financial law for the purposes of
    ensuring that, with respect to consumer financial products and
    services--
            (1) consumers are provided with timely and understandable
        information to make responsible decisions about financial
        transactions;
            (2) consumers are protected from unfair, deceptive, or abusive
        acts and practices and from discrimination;
            (3) outdated, unnecessary, or unduly burdensome regulations are
        regularly identified and addressed in order to reduce unwarranted
        regulatory burdens;
            (4) Federal consumer financial law is enforced consistently,
        without regard to the status of a person as a depository
        institution, in order to promote fair competition; and
            (5) markets for consumer financial products and services
        operate transparently and efficiently to facilitate access and
        innovation.
        (c) Functions.--The primary functions of the Bureau are--
            (1) conducting financial education programs;
            (2) collecting, investigating, and responding to consumer
        complaints;
            (3) collecting, researching, monitoring, and publishing
        information relevant to the functioning of markets for consumer
        financial products and services to identify risks to consumers and
        the proper functioning of such markets;
            (4) subject to sections 1024 through 1026, supervising covered
        persons for compliance with Federal consumer financial law, and
        taking appropriate enforcement action to address violations of
        Federal consumer financial law;
            (5) issuing rules, orders, and guidance implementing Federal
        consumer financial law; and
            (6) performing such support activities as may be necessary or
        useful to facilitate the other functions of the Bureau.
    SEC. 1022. RULEMAKING AUTHORITY.
        (a) In General.--The Bureau is authorized to exercise its
    authorities under Federal consumer financial law to administer,
    enforce, and otherwise implement the provisions of Federal consumer
    financial law.
        (b) Rulemaking, Orders, and Guidance.--
            (1) General authority.--The Director may prescribe rules and
        issue orders and guidance, as may be necessary or appropriate to
        enable the Bureau to administer and carry out the purposes and
        objectives of the Federal consumer financial laws, and to prevent
        evasions thereof.
            (2) Standards for rulemaking.--In prescribing a rule under the
        Federal consumer financial laws--
                (A) the Bureau shall consider--
                    (i) the potential benefits and costs to consumers and
                covered persons, including the potential reduction of
                access by consumers to consumer financial products or
                services resulting from such rule; and
                    (ii) the impact of proposed rules on covered persons,
                as described in section 1026, and the impact on consumers
                in rural areas;
                (B) the Bureau shall consult with the appropriate
            prudential regulators or other Federal agencies prior to
            proposing a rule and during the comment process regarding
            consistency with prudential, market, or systemic objectives
            administered by such agencies; and
                (C) if, during the consultation process described in
            subparagraph (B), a prudential regulator provides the Bureau
            with a written objection to the proposed rule of the Bureau or
            a portion thereof, the Bureau shall include in the adopting
            release a description of the objection and the basis for the
            Bureau decision, if any, regarding such objection, except that
            nothing in this clause shall be construed as altering or
            limiting the procedures under section 1023 that may apply to
            any rule prescribed by the Bureau.
            (3) Exemptions.--
                (A) In general.--The Bureau, by rule, may conditionally or
            unconditionally exempt any class of covered persons, service
            providers, or consumer financial products or services, from any
            provision of this title, or from any rule issued under this
            title, as the Bureau determines necessary or appropriate to
            carry out the purposes and objectives of this title, taking
            into consideration the factors in subparagraph (B).
                (B) Factors.--In issuing an exemption, as permitted under
            subparagraph (A), the Bureau shall, as appropriate, take into
            consideration--
                    (i) the total assets of the class of covered persons;
                    (ii) the volume of transactions involving consumer
                financial products or services in which the class of
                covered persons engages; and
                    (iii) existing provisions of law which are applicable
                to the consumer financial product or service and the extent
                to which such provisions provide consumers with adequate
                protections.
            (4) Exclusive rulemaking authority.--
                (A) In general.--Notwithstanding any other provisions of
            Federal law and except as provided in section 1061(b)(5), to
            the extent that a provision of Federal consumer financial law
            authorizes the Bureau and another Federal agency to issue
            regulations under that provision of law for purposes of
            assuring compliance with Federal consumer financial law and any
            regulations thereunder, the Bureau shall have the exclusive
            authority to prescribe rules subject to those provisions of
            law.
                (B) Deference.--Notwithstanding any power granted to any
            Federal agency or to the Council under this title, and subject
            to section 1061(b)(5)(E), the deference that a court affords to
            the Bureau with respect to a determination by the Bureau
            regarding the meaning or interpretation of any provision of a
            Federal consumer financial law shall be applied as if the
            Bureau were the only agency authorized to apply, enforce,
            interpret, or administer the provisions of such Federal
            consumer financial law.
        (c) Monitoring.--
            (1) In general.--In order to support its rulemaking and other
        functions, the Bureau shall monitor for risks to consumers in the
        offering or provision of consumer financial products or services,
        including developments in markets for such products or services.
            (2) Considerations.--In allocating its resources to perform the
        monitoring required by this section, the Bureau may consider, among
        other factors--
                (A) likely risks and costs to consumers associated with
            buying or using a type of consumer financial product or
            service;
                (B) understanding by consumers of the risks of a type of
            consumer financial product or service;
                (C) the legal protections applicable to the offering or
            provision of a consumer financial product or service, including
            the extent to which the law is likely to adequately protect
            consumers;
                (D) rates of growth in the offering or provision of a
            consumer financial product or service;
                (E) the extent, if any, to which the risks of a consumer
            financial product or service may disproportionately affect
            traditionally underserved consumers; or
                (F) the types, number, and other pertinent characteristics
            of covered persons that offer or provide the consumer financial
            product or service.
            (3) Significant findings.--
                (A) In general.--The Bureau shall publish not fewer than 1
            report of significant findings of its monitoring required by
            this subsection in each calendar year, beginning with the first
            calendar year that begins at least 1 year after the designated
            transfer date.
                (B) Confidential information.--The Bureau may make public
            such information obtained by the Bureau under this section as
            is in the public interest, through aggregated reports or other
            appropriate formats designed to protect confidential
            information in accordance with paragraphs (4), (6), (8), and
            (9).
            (4) Collection of information.--
                (A) In general.--In conducting any monitoring or assessment
            required by this section, the Bureau shall have the authority
            to gather information from time to time regarding the
            organization, business conduct, markets, and activities of
            covered persons and service providers.
                (B) Methodology.--In order to gather information described
            in subparagraph (A), the Bureau may--
                    (i) gather and compile information from a variety of
                sources, including examination reports concerning covered
                persons or service providers, consumer complaints,
                voluntary surveys and voluntary interviews of consumers,
                surveys and interviews with covered persons and service
                providers, and review of available databases; and
                    (ii) require covered persons and service providers
                participating in consumer financial services markets to
                file with the Bureau, under oath or otherwise, in such form
                and within such reasonable period of time as the Bureau may
                prescribe by rule or order, annual or special reports, or
                answers in writing to specific questions, furnishing
                information described in paragraph (4), as necessary for
                the Bureau to fulfill the monitoring, assessment, and
                reporting responsibilities imposed by Congress.
                (C) Limitation.--The Bureau may not use its authorities
            under this paragraph to obtain records from covered persons and
            service providers participating in consumer financial services
            markets for purposes of gathering or analyzing the personally
            identifiable financial information of consumers.
            (5) Limited information gathering.--In order to assess whether
        a nondepository is a covered person, as defined in section 1002,
        the Bureau may require such nondepository to file with the Bureau,
        under oath or otherwise, in such form and within such reasonable
        period of time as the Bureau may prescribe by rule or order, annual
        or special reports, or answers in writing to specific questions.
            (6) Confidentiality rules.--
                (A) Rulemaking.--The Bureau shall prescribe rules regarding
            the confidential treatment of information obtained from persons
            in connection with the exercise of its authorities under
            Federal consumer financial law.
                (B) Access by the bureau to reports of other regulators.--
                    (i) Examination and financial condition reports.--Upon
                providing reasonable assurances of confidentiality, the
                Bureau shall have access to any report of examination or
                financial condition made by a prudential regulator or other
                Federal agency having jurisdiction over a covered person or
                service provider, and to all revisions made to any such
                report.
                    (ii) Provision of other reports to the bureau.--In
                addition to the reports described in clause (i), a
                prudential regulator or other Federal agency having
                jurisdiction over a covered person or service provider may,
                in its discretion, furnish to the Bureau any other report
                or other confidential supervisory information concerning
                any insured depository institution, credit union, or other
                entity examined by such agency under authority of any
                provision of Federal law.
                (C) Access by other regulators to reports of the bureau.--
                    (i) Examination reports.--Upon providing reasonable
                assurances of confidentiality, a prudential regulator, a
                State regulator, or any other Federal agency having
                jurisdiction over a covered person or service provider
                shall have access to any report of examination made by the
                Bureau with respect to such person, and to all revisions
                made to any such report.
                    (ii) Provision of other reports to other regulators.--
                In addition to the reports described in clause (i), the
                Bureau may, in its discretion, furnish to a prudential
                regulator or other agency having jurisdiction over a
                covered person or service provider any other report or
                other confidential supervisory information concerning such
                person examined by the Bureau under the authority of any
                other provision of Federal law.
            (7) Registration.--
                (A) In general.--The Bureau may prescribe rules regarding
            registration requirements applicable to a covered person, other
            than an insured depository institution, insured credit union,
            or related person.
                (B) Registration information.--Subject to rules prescribed
            by the Bureau, the Bureau may publicly disclose registration
            information to facilitate the ability of consumers to identify
            covered persons that are registered with the Bureau.
                (C) Consultation with state agencies.--In developing and
            implementing registration requirements under this paragraph,
            the Bureau shall consult with State agencies regarding
            requirements or systems (including coordinated or combined
            systems for registration), where appropriate.
            (8) Privacy considerations.--In collecting information from any
        person, publicly releasing information held by the Bureau, or
        requiring covered persons to publicly report information, the
        Bureau shall take steps to ensure that proprietary, personal, or
        confidential consumer information that is protected from public
        disclosure under section 552(b) or 552a of title 5, United States
        Code, or any other provision of law, is not made public under this
        title.
            (9) Consumer privacy.--
                (A) In general.--The Bureau may not obtain from a covered
            person or service provider any personally identifiable
            financial information about a consumer from the financial
            records of the covered person or service provider, except--
                    (i) if the financial records are reasonably described
                in a request by the Bureau and the consumer provides
                written permission for the disclosure of such information
                by the covered person or service provider to the Bureau; or
                    (ii) as may be specifically permitted or required under
                other applicable provisions of law and in accordance with
                the Right to Financial Privacy Act of 1978 (12 U.S.C. 3401
                et seq.).
                (B) Treatment of covered person or service provider.--With
            respect to the application of any provision of the Right to
            Financial Privacy Act of 1978, to a disclosure by a covered
            person or service provider subject to this subsection, the
            covered person or service provider shall be treated as if it
            were a ``financial institution'', as defined in section 1101 of
            that Act (12 U.S.C. 3401).
        (d) Assessment of Significant Rules.--
            (1) In general.--The Bureau shall conduct an assessment of each
        significant rule or order adopted by the Bureau under Federal
        consumer financial law. The assessment shall address, among other
        relevant factors, the effectiveness of the rule or order in meeting
        the purposes and objectives of this title and the specific goals
        stated by the Bureau. The assessment shall reflect available
        evidence and any data that the Bureau reasonably may collect.
            (2) Reports.--The Bureau shall publish a report of its
        assessment under this subsection not later than 5 years after the
        effective date of the subject rule or order.
            (3) Public comment required.--Before publishing a report of its
        assessment, the Bureau shall invite public comment on
        recommendations for modifying, expanding, or eliminating the newly
        adopted significant rule or order.
    SEC. 1023. REVIEW OF BUREAU REGULATIONS.
        (a) Review of Bureau Regulations.--On the petition of a member
    agency of the Council, the Council may set aside a final regulation
    prescribed by the Bureau, or any provision thereof, if the Council
    decides, in accordance with subsection (c), that the regulation or
    provision would put the safety and soundness of the United States
    banking system or the stability of the financial system of the United
    States at risk.
        (b) Petition.--
            (1) Procedure.--An agency represented by a member of the
        Council may petition the Council, in writing, and in accordance
        with rules prescribed pursuant to subsection (f), to stay the
        effectiveness of, or set aside, a regulation if the member agency
        filing the petition--
                (A) has in good faith attempted to work with the Bureau to
            resolve concerns regarding the effect of the rule on the safety
            and soundness of the United States banking system or the
            stability of the financial system of the United States; and
                (B) files the petition with the Council not later than 10
            days after the date on which the regulation has been published
            in the Federal Register.
            (2) Publication.--Any petition filed with the Council under
        this section shall be published in the Federal Register and
        transmitted contemporaneously with filing to the Committee on
        Banking, Housing, and Urban Affairs of the Senate and the Committee
        on Financial Services of the House of Representatives.
        (c) Stays and Set Asides.--
            (1) Stay.--
                (A) In general.--Upon the request of any member agency, the
            Chairperson of the Council may stay the effectiveness of a
            regulation for the purpose of allowing appropriate
            consideration of the petition by the Council.
                (B) Expiration.--A stay issued under this paragraph shall
            expire on the earlier of--
                    (i) 90 days after the date of filing of the petition
                under subsection (b); or
                    (ii) the date on which the Council makes a decision
                under paragraph (3).
            (2) No adverse inference.--After the expiration of any stay
        imposed under this section, no inference shall be drawn regarding
        the validity or enforceability of a regulation which was the
        subject of the petition.
            (3) Vote.--
                (A) In general.--The decision to issue a stay of, or set
            aside, any regulation under this section shall be made only
            with the affirmative vote in accordance with subparagraph (B)
            of \2/3\ of the members of the Council then serving.
                (B) Authorization to vote.--A member of the Council may
            vote to stay the effectiveness of, or set aside, a final
            regulation prescribed by the Bureau only if the agency or
            department represented by that member has--
                    (i) considered any relevant information provided by the
                agency submitting the petition and by the Bureau; and
                    (ii) made an official determination, at a public
                meeting where applicable, that the regulation which is the
                subject of the petition would put the safety and soundness
                of the United States banking system or the stability of the
                financial system of the United States at risk.
            (4) Decisions to set aside.--
                (A) Effect of decision.--A decision by the Council to set
            aside a regulation prescribed by the Bureau, or provision
            thereof, shall render such regulation, or provision thereof,
            unenforceable.
                (B) Timely action required.--The Council may not issue a
            decision to set aside a regulation, or provision thereof, which
            is the subject of a petition under this section after the
            expiration of the later of--
                    (i) 45 days following the date of filing of the
                petition, unless a stay is issued under paragraph (1); or
                    (ii) the expiration of a stay issued by the Council
                under this section.
                (C) Separate authority.--The issuance of a stay under this
            section does not affect the authority of the Council to set
            aside a regulation.
            (5) Dismissal due to inaction.--A petition under this section
        shall be deemed dismissed if the Council has not issued a decision
        to set aside a regulation, or provision thereof, within the period
        for timely action under paragraph (4)(B).
            (6) Publication of decision.--Any decision under this
        subsection to issue a stay of, or set aside, a regulation or
        provision thereof shall be published by the Council in the Federal
        Register as soon as practicable after the decision is made, with an
        explanation of the reasons for the decision.
            (7) Rulemaking procedures inapplicable.--The notice and comment
        procedures under section 553 of title 5, United States Code, shall
        not apply to any decision under this section of the Council to
        issue a stay of, or set aside, a regulation.
            (8) Judicial review of decisions by the council.--A decision by
        the Council to set aside a regulation prescribed by the Bureau, or
        provision thereof, shall be subject to review under chapter 7 of
        title 5, United States Code.
        (d) Application of Other Law.--Nothing in this section shall be
    construed as altering, limiting, or restricting the application of any
    other provision of law, except as otherwise specifically provided in
    this section, including chapter 5 and chapter 7 of title 5, United
    States Code, to a regulation which is the subject of a petition filed
    under this section.
        (e) Savings Clause.--Nothing in this section shall be construed as
    limiting or restricting the Bureau from engaging in a rulemaking in
    accordance with applicable law.
        (f) Implementing Rules.--The Council shall prescribe procedural
    rules to implement this section.
    SEC. 1024. SUPERVISION OF NONDEPOSITORY COVERED PERSONS.
        (a) Scope of Coverage.--
            (1) Applicability.--Notwithstanding any other provision of this
        title, and except as provided in paragraph (3), this section shall
        apply to any covered person who--
                (A) offers or provides origination, brokerage, or servicing
            of loans secured by real estate for use by consumers primarily
            for personal, family, or household purposes, or loan
            modification or foreclosure relief services in connection with
            such loans;
                (B) is a larger participant of a market for other consumer
            financial products or services, as defined by rule in
            accordance with paragraph (2);
                (C) the Bureau has reasonable cause to determine, by order,
            after notice to the covered person and a reasonable opportunity
            for such covered person to respond, based on complaints
            collected through the system under section 1013(b)(3) or
            information from other sources, that such covered person is
            engaging, or has engaged, in conduct that poses risks to
            consumers with regard to the offering or provision of consumer
            financial products or services;
                (D) offers or provides to a consumer any private education
            loan, as defined in section 140 of the Truth in Lending Act (15
            U.S.C. 1650), notwithstanding section 1027(a)(2)(A) and subject
            to section 1027(a)(2)(C); or
                (E) offers or provides to a consumer a payday loan.
            (2) Rulemaking to define covered persons subject to this
        section.--The Bureau shall consult with the Federal Trade
        Commission prior to issuing a rule, in accordance with paragraph
        (1)(B), to define covered persons subject to this section. The
        Bureau shall issue its initial rule not later than 1 year after the
        designated transfer date.
            (3) Rules of construction.--
                (A) Certain persons excluded.--This section shall not apply
            to persons described in section 1025(a) or 1026(a).
                (B) Activity levels.--For purposes of computing activity
            levels under paragraph (1) or rules issued thereunder,
            activities of affiliated companies (other than insured
            depository institutions or insured credit unions) shall be
            aggregated.
        (b) Supervision.--
            (1) In general.--The Bureau shall require reports and conduct
        examinations on a periodic basis of persons described in subsection
        (a)(1) for purposes of--
                (A) assessing compliance with the requirements of Federal
            consumer financial law;
                (B) obtaining information about the activities and
            compliance systems or procedures of such person; and
                (C) detecting and assessing risks to consumers and to
            markets for consumer financial products and services.
            (2) Risk-based supervision program.--The Bureau shall exercise
        its authority under paragraph (1) in a manner designed to ensure
        that such exercise, with respect to persons described in subsection
        (a)(1), is based on the assessment by the Bureau of the risks posed
        to consumers in the relevant product markets and geographic
        markets, and taking into consideration, as applicable--
                (A) the asset size of the covered person;
                (B) the volume of transactions involving consumer financial
            products or services in which the covered person engages;
                (C) the risks to consumers created by the provision of such
            consumer financial products or services;
                (D) the extent to which such institutions are subject to
            oversight by State authorities for consumer protection; and
                (E) any other factors that the Bureau determines to be
            relevant to a class of covered persons.
            (3) Coordination.--To minimize regulatory burden, the Bureau
        shall coordinate its supervisory activities with the supervisory
        activities conducted by prudential regulators and the State bank
        regulatory authorities, including establishing their respective
        schedules for examining persons described in subsection (a)(1) and
        requirements regarding reports to be submitted by such persons.
            (4) Use of existing reports.--The Bureau shall, to the fullest
        extent possible, use--
                (A) reports pertaining to persons described in subsection
            (a)(1) that have been provided or required to have been
            provided to a Federal or State agency; and
                (B) information that has been reported publicly.
            (5) Preservation of authority.--Nothing in this title may be
        construed as limiting the authority of the Director to require
        reports from persons described in subsection (a)(1), as permitted
        under paragraph (1), regarding information owned or under the
        control of such person, regardless of whether such information is
        maintained, stored, or processed by another person.
            (6) Reports of tax law noncompliance.--The Bureau shall provide
        the Commissioner of Internal Revenue with any report of examination
        or related information identifying possible tax law noncompliance.
            (7) Registration, recordkeeping and other requirements for
        certain persons.--
                (A) In general.--The Bureau shall prescribe rules to
            facilitate supervision of persons described in subsection
            (a)(1) and assessment and detection of risks to consumers.
                (B) Recordkeeping.--The Bureau may require a person
            described in subsection (a)(1), to generate, provide, or retain
            records for the purposes of facilitating supervision of such
            persons and assessing and detecting risks to consumers.
                (C) Requirements concerning obligations.--The Bureau may
            prescribe rules regarding a person described in subsection
            (a)(1), to ensure that such persons are legitimate entities and
            are able to perform their obligations to consumers. Such
            requirements may include background checks for principals,
            officers, directors, or key personnel and bonding or other
            appropriate financial requirements.
                (D) Consultation with state agencies.--In developing and
            implementing requirements under this paragraph, the Bureau
            shall consult with State agencies regarding requirements or
            systems (including coordinated or combined systems for
            registration), where appropriate.
        (c) Enforcement Authority.--
            (1) The bureau to have enforcement authority.--Except as
        provided in paragraph (3) and section 1061, with respect to any
        person described in subsection (a)(1), to the extent that Federal
        law authorizes the Bureau and another Federal agency to enforce
        Federal consumer financial law, the Bureau shall have exclusive
        authority to enforce that Federal consumer financial law.
            (2) Referral.--Any Federal agency authorized to enforce a
        Federal consumer financial law described in paragraph (1) may
        recommend in writing to the Bureau that the Bureau initiate an
        enforcement proceeding, as the Bureau is authorized by that Federal
        law or by this title.
            (3) Coordination with the federal trade commission.--
                (A) In general.--The Bureau and the Federal Trade
            Commission shall negotiate an agreement for coordinating with
            respect to enforcement actions by each agency regarding the
            offering or provision of consumer financial products or
            services by any covered person that is described in subsection
            (a)(1), or service providers thereto. The agreement shall
            include procedures for notice to the other agency, where
            feasible, prior to initiating a civil action to enforce any
            Federal law regarding the offering or provision of consumer
            financial products or services.
                (B) Civil actions.--Whenever a civil action has been filed
            by, or on behalf of, the Bureau or the Federal Trade Commission
            for any violation of any provision of Federal law described in
            subparagraph (A), or any regulation prescribed under such
            provision of law--
                    (i) the other agency may not, during the pendency of
                that action, institute a civil action under such provision
                of law against any defendant named in the complaint in such
                pending action for any violation alleged in the complaint;
                and
                    (ii) the Bureau or the Federal Trade Commission may
                intervene as a party in any such action brought by the
                other agency, and, upon intervening--

                        (I) be heard on all matters arising in such
                    enforcement action; and
                        (II) file petitions for appeal in such actions.

                (C) Agreement terms.--The terms of any agreement negotiated
            under subparagraph (A) may modify or supersede the provisions
            of subparagraph (B).
                (D) Deadline.--The agencies shall reach the agreement
            required under subparagraph (A) not later than 6 months after
            the designated transfer date.
        (d) Exclusive Rulemaking and Examination Authority.--
    Notwithstanding any other provision of Federal law and except as
    provided in section 1061, to the extent that Federal law authorizes the
    Bureau and another Federal agency to issue regulations or guidance,
    conduct examinations, or require reports from a person described in
    subsection (a)(1) under such law for purposes of assuring compliance
    with Federal consumer financial law and any regulations thereunder, the
    Bureau shall have the exclusive authority to prescribe rules, issue
    guidance, conduct examinations, require reports, or issue exemptions
    with regard to a person described in subsection (a)(1), subject to
    those provisions of law.
        (e) Service Providers.--A service provider to a person described in
    subsection (a)(1) shall be subject to the authority of the Bureau under
    this section, to the same extent as if such service provider were
    engaged in a service relationship with a bank, and the Bureau were an
    appropriate Federal banking agency under section 7(c) of the Bank
    Service Company Act (12 U.S.C. 1867(c)). In conducting any examination
    or requiring any report from a service provider subject to this
    subsection, the Bureau shall coordinate with the appropriate prudential
    regulator, as applicable.
        (f) Preservation of Farm Credit Administration Authority.--No
    provision of this title may be construed as modifying, limiting, or
    otherwise affecting the authority of the Farm Credit Administration.
    SEC. 1025. SUPERVISION OF VERY LARGE BANKS, SAVINGS ASSOCIATIONS, AND
    CREDIT UNIONS.
        (a) Scope of Coverage.--This section shall apply to any covered
    person that is--
            (1) an insured depository institution with total assets of more
        than $10,000,000,000 and any affiliate thereof; or
            (2) an insured credit union with total assets of more than
        $10,000,000,000 and any affiliate thereof.
        (b) Supervision.--
            (1) In general.--The Bureau shall have exclusive authority to
        require reports and conduct examinations on a periodic basis of
        persons described in subsection (a) for purposes of--
                (A) assessing compliance with the requirements of Federal
            consumer financial laws;
                (B) obtaining information about the activities subject to
            such laws and the associated compliance systems or procedures
            of such persons; and
                (C) detecting and assessing associated risks to consumers
            and to markets for consumer financial products and services.
            (2) Coordination.--To minimize regulatory burden, the Bureau
        shall coordinate its supervisory activities with the supervisory
        activities conducted by prudential regulators and the State bank
        regulatory authorities, including consultation regarding their
        respective schedules for examining such persons described in
        subsection (a) and requirements regarding reports to be submitted
        by such persons.
            (3) Use of existing reports.--The Bureau shall, to the fullest
        extent possible, use--
                (A) reports pertaining to a person described in subsection
            (a) that have been provided or required to have been provided
            to a Federal or State agency; and
                (B) information that has been reported publicly.
            (4) Preservation of authority.--Nothing in this title may be
        construed as limiting the authority of the Director to require
        reports from a person described in subsection (a), as permitted
        under paragraph (1), regarding information owned or under the
        control of such person, regardless of whether such information is
        maintained, stored, or processed by another person.
            (5) Reports of tax law noncompliance.--The Bureau shall provide
        the Commissioner of Internal Revenue with any report of examination
        or related information identifying possible tax law noncompliance.
        (c) Primary Enforcement Authority.--
            (1) The bureau to have primary enforcement authority.--To the
        extent that the Bureau and another Federal agency are authorized to
        enforce a Federal consumer financial law, the Bureau shall have
        primary authority to enforce that Federal consumer financial law
        with respect to any person described in subsection (a).
            (2) Referral.--Any Federal agency, other than the Federal Trade
        Commission, that is authorized to enforce a Federal consumer
        financial law may recommend, in writing, to the Bureau that the
        Bureau initiate an enforcement proceeding with respect to a person
        described in subsection (a), as the Bureau is authorized to do by
        that Federal consumer financial law.
            (3) Backup enforcement authority of other federal agency.--If
        the Bureau does not, before the end of the 120-day period beginning
        on the date on which the Bureau receives a recommendation under
        paragraph (2), initiate an enforcement proceeding, the other agency
        referred to in paragraph (2) may initiate an enforcement
        proceeding, including performing follow up supervisory and support
        functions incidental thereto, to assure compliance with such
        proceeding.
        (d) Service Providers.--A service provider to a person described in
    subsection (a) shall be subject to the authority of the Bureau under
    this section, to the same extent as if the Bureau were an appropriate
    Federal banking agency under section 7(c) of the Bank Service Company
    Act 12 U.S.C. 1867(c). In conducting any examination or requiring any
    report from a service provider subject to this subsection, the Bureau
    shall coordinate with the appropriate prudential regulator.
        (e) Simultaneous and Coordinated Supervisory Action.--
            (1) Examinations.--A prudential regulator and the Bureau shall,
        with respect to each insured depository institution, insured credit
        union, or other covered person described in subsection (a) that is
        supervised by the prudential regulator and the Bureau,
        respectively--
                (A) coordinate the scheduling of examinations of the
            insured depository institution, insured credit union, or other
            covered person described in subsection (a);
                (B) conduct simultaneous examinations of each insured
            depository institution or insured credit union, unless such
            institution requests examinations to be conducted separately;
                (C) 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
                (D) prior to issuing a final report of examination or
            taking supervisory action, take into consideration concerns, if
            any, raised in the comments made by the other agency.
            (2) Coordination with state bank supervisors.--The Bureau shall
        pursue arrangements and agreements with State bank supervisors to
        coordinate examinations, consistent with paragraph (1).
            (3) Avoidance of conflict in supervision.--
                (A) Request.--If the proposed supervisory determinations of
            the Bureau and a prudential regulator (in this section referred
            to collectively as the ``agencies'') are conflicting, an
            insured depository institution, insured credit union, or other
            covered person described in subsection (a) may request the
            agencies to coordinate and present a joint statement of
            coordinated supervisory action.
                (B) Joint statement.--The agencies shall provide a joint
            statement under subparagraph (A), not later than 30 days after
            the date of receipt of the request of the insured depository
            institution, credit union, or covered person described in
            subsection (a).
            (4) Appeals to governing panel.--
                (A) In general.--If the agencies do not resolve the
            conflict or issue a joint statement required by subparagraph
            (B), or if either of the agencies takes or attempts to take any
            supervisory action relating to the request for the joint
            statement without the consent of the other agency, an insured
            depository institution, insured credit union, or other covered
            person described in subsection (a) may institute an appeal to a
            governing panel, as provided in this subsection, not later than
            30 days after the expiration of the period during which a joint
            statement is required to be filed under paragraph (3)(B).
                (B) Composition of governing panel.--The governing panel
            for an appeal under this paragraph shall be composed of--
                    (i) a representative from the Bureau and a
                representative of the prudential regulator, both of whom--

                        (I) have not participated in the material
                    supervisory determinations under appeal; and
                        (II) do not directly or indirectly report to the
                    person who participated materially in the supervisory
                    determinations under appeal; and

                    (ii) one individual representative, to be determined on
                a rotating basis, from among the Board of Governors, the
                Corporation, the National Credit Union Administration, and
                the Office of the Comptroller of the Currency, other than
                any agency involved in the subject dispute.
                (C) Conduct of appeal.--In an appeal under this paragraph--
                    (i) the insured depository institution, insured credit
                union, or other covered person described in subsection
                (a)--

                        (I) shall include in its appeal all the facts and
                    legal arguments pertaining to the matter; and
                        (II) may, through counsel, employees, or
                    representatives, appear before the governing panel in
                    person or by telephone; and

                    (ii) the governing panel--

                        (I) may request the insured depository institution,
                    insured credit union, or other covered person described
                    in subsection (a), the Bureau, or the prudential
                    regulator to produce additional information relevant to
                    the appeal; and
                        (II) by a majority vote of its members, shall
                    provide a final determination, in writing, not later
                    than 30 days after the date of filing of an
                    informationally complete appeal, or such longer period
                    as the panel and the insured depository institution,
                    insured credit union, or other covered person described
                    in subsection (a) may jointly agree.

                (D) Public availability of determinations.--A governing
            panel shall publish all information contained in a
            determination by the governing panel, with appropriate
            redactions of information that would be subject to an exemption
            from disclosure under section 552 of title 5, United States
            Code.
                (E) Prohibition against retaliation.--The Bureau and the
            prudential regulators shall prescribe rules to provide
            safeguards from retaliation against the insured depository
            institution, insured credit union, or other covered person
            described in subsection (a) instituting an appeal under this
            paragraph, as well as their officers and employees.
                (F) Limitation.--The process provided in this paragraph
            shall not apply to a determination by a prudential regulator 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 (12 U.S.C.
            1831o) or section 212 of the Federal Credit Union Act (112
            U.S.C. 1790a), as applicable.
                (G) Effect on other authority.--Nothing in this section
            shall modify or limit the authority of the Bureau to interpret,
            or take enforcement action under, any Federal consumer
            financial law, or the authority of a prudential regulator to
            interpret or take enforcement action under any other provision
            of Federal law for safety and soundness purposes.
    SEC. 1026. OTHER BANKS, SAVINGS ASSOCIATIONS, AND CREDIT UNIONS.
        (a) Scope of Coverage.--This section shall apply to any covered
    person that is--
            (1) an insured depository institution with total assets of
        $10,000,000,000 or less; or
            (2) an insured credit union with total assets of
        $10,000,000,000 or less.
        (b) Reports.--The Director may require reports from a person
    described in subsection (a), as necessary to support the role of the
    Bureau in implementing Federal consumer financial law, to support its
    examination activities under subsection (c), and to assess and detect
    risks to consumers and consumer financial markets.
            (1) Use of existing reports.--The Bureau shall, to the fullest
        extent possible, use--
                (A) reports pertaining to a person described in subsection
            (a) that have been provided or required to have been provided
            to a Federal or State agency; and
                (B) information that has been reported publicly.
            (2) Preservation of authority.--Nothing in this subsection may
        be construed as limiting the authority of the Director from
        requiring from a person described in subsection (a), as permitted
        under paragraph (1), information owned or under the control of such
        person, regardless of whether such information is maintained,
        stored, or processed by another person.
            (3) Reports of tax law noncompliance.--The Bureau shall provide
        the Commissioner of Internal Revenue with any report of examination
        or related information identifying possible tax law noncompliance.
        (c) Examinations.--
            (1) In general.--The Bureau may, at its discretion, include
        examiners on a sampling basis of the examinations performed by the
        prudential regulator to assess compliance with the requirements of
        Federal consumer financial law of persons described in subsection
        (a).
            (2) Agency coordination.--The prudential regulator shall--
                (A) provide all reports, records, and documentation related
            to the examination process for any institution included in the
            sample referred to in paragraph (1) to the Bureau on a timely
            and continual basis;
                (B) involve such Bureau examiner in the entire examination
            process for such person; and
                (C) consider input of the Bureau concerning the scope of an
            examination, conduct of the examination, the contents of the
            examination report, the designation of matters requiring
            attention, and examination ratings.
        (d) Enforcement.--
            (1) In general.--Except for requiring reports under subsection
        (b), the prudential regulator is authorized to enforce the
        requirements of Federal consumer financial laws and, with respect
        to a covered person described in subsection (a), shall have
        exclusive authority (relative to the Bureau) to enforce such laws .
            (2) Coordination with prudential regulator.--
                (A) Referral.--When the Bureau has reason to believe that a
            person described in subsection (a) has engaged in a material
            violation of a Federal consumer financial law, the Bureau shall
            notify the prudential regulator in writing and recommend
            appropriate action to respond.
                (B) Response.--Upon receiving a recommendation under
            subparagraph (A), the prudential regulator shall provide a
            written response to the Bureau not later than 60 days
            thereafter.
        (e) Service Providers.--A service provider to a substantial number
    of persons described in subsection (a) shall be subject to the
    authority of the Bureau under section 1025 to the same extent as if the
    Bureau were an appropriate Federal bank agency under section 7(c) of
    the Bank Service Company Act (12 U.S.C. 1867(c)). When conducting any
    examination or requiring any report from a service provider subject to
    this subsection, the Bureau shall coordinate with the appropriate
    prudential regulator.
    SEC. 1027. LIMITATIONS ON AUTHORITIES OF THE BUREAU; PRESERVATION OF
    AUTHORITIES.
        (a) Exclusion for Merchants, Retailers, and Other Sellers of
    Nonfinancial Goods or Services.--
            (1) Sale or brokerage of nonfinancial good or service.--The
        Bureau may not exercise any rulemaking, supervisory, enforcement or
        other authority under this title with respect to a person who is a
        merchant, retailer, or seller of any nonfinancial good or service
        and is engaged in the sale or brokerage of such nonfinancial good
        or service, except to the extent that such person is engaged in
        offering or providing any consumer financial product or service, or
        is otherwise subject to any enumerated consumer law or any law for
        which authorities are transferred under subtitle F or H.
            (2) Offering or provision of certain consumer financial
        products or services in connection with the sale or brokerage of
        nonfinancial good or service.--
                (A) In general.--Except as provided in subparagraph (B),
            and subject to subparagraph (C), the Bureau may not exercise
            any rulemaking, supervisory, enforcement, or other authority
            under this title with respect to a merchant, retailer, or
            seller of nonfinancial goods or services, but only to the
            extent that such person--
                    (i) extends credit directly to a consumer, in a case in
                which the good or service being provided is not itself a
                consumer financial product or service (other than credit
                described in this subparagraph), exclusively for the
                purpose of enabling that consumer to purchase such
                nonfinancial good or service directly from the merchant,
                retailer, or seller;
                    (ii) directly, or through an agreement with another
                person, collects debt arising from credit extended as
                described in clause (i); or
                    (iii) sells or conveys debt described in clause (i)
                that is delinquent or otherwise in default.
                (B) Applicability.--Subparagraph (A) does not apply to any
            credit transaction or collection of debt, other than as
            described in subparagraph (C)(i), arising from a transaction
            described in subparagraph (A)--
                    (i) in which the merchant, retailer, or seller of
                nonfinancial goods or services assigns, sells or otherwise
                conveys to another person such debt owed by the consumer
                (except for a sale of debt that is delinquent or otherwise
                in default, as described in subparagraph (A)(iii));
                    (ii) in which the credit extended significantly exceeds
                the market value of the nonfinancial good or service
                provided, or the Bureau otherwise finds that the sale of
                the nonfinancial good or service is done as a subterfuge,
                so as to evade or circumvent the provisions of this title;
                or
                    (iii) in which the merchant, retailer, or seller of
                nonfinancial goods or services regularly extends credit and
                the credit is subject to a finance charge.
                (C) Limitations.--
                    (i) In general.--Notwithstanding subparagraph (B),
                subparagraph (A) shall apply with respect to a merchant,
                retailer, or seller of nonfinancial goods or services that
                is not engaged significantly in offering or providing
                consumer financial products or services.
                    (ii) Exception.--Subparagraph (A) and clause (i) of
                this subparagraph do not apply to any merchant, retailer,
                or seller of nonfinancial goods or services--

                        (I) if such merchant, retailer, or seller of
                    nonfinancial goods or services is engaged in a
                    transaction described in subparagraph (B)(i) or
                    (B)(ii); or
                        (II) to the extent that such merchant, retailer, or
                    seller is subject to any enumerated consumer law or any
                    law for which authorities are transferred under
                    subtitle F or H, but the Bureau may exercise such
                    authority only with respect to that law.

                (D) Rules.--
                    (i) Authority of other agencies.--No provision of this
                title shall be construed as modifying, limiting, or
                superseding the supervisory or enforcement authority of the
                Federal Trade Commission or any other agency (other than
                the Bureau) 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 nonfinancial
                goods or services directly from the merchant or retailer.
                    (ii) Small businesses.--A merchant, retailer, or seller
                of nonfinancial goods or services that would otherwise be
                subject to the authority of the Bureau solely by virtue of
                the application of subparagraph (B)(iii) shall be deemed
                not to be engaged significantly in offering or providing
                consumer financial products or services under subparagraph
                (C)(i), if such person--

                        (I) only extends credit for the sale of
                    nonfinancial goods or services, as described in
                    subparagraph (A)(i);
                        (II) retains such credit on its own accounts
                    (except to sell or convey such debt that is delinquent
                    or otherwise in default); and
                        (III) meets the relevant industry size threshold to
                    be a small business concern, based on annual receipts,
                    pursuant to section 3 of the Small Business Act (15
                    U.S.C. 632) and the implementing rules thereunder.

                    (iii) Initial year.--A merchant, retailer, or seller of
                nonfinancial goods or services shall be deemed to meet the
                relevant industry size threshold described in clause
                (ii)(III) during the first year of operations of that
                business concern if, during that year, the receipts of that
                business concern reasonably are expected to meet that size
                threshold.
                    (iv) Other standards for small business.--With respect
                to a merchant, retailer, or seller of nonfinancial goods or
                services that is a classified on a basis other than annual
                receipts for the purposes of section 3 of the Small
                Business Act (15 U.S.C. 632) and the implementing rules
                thereunder, such merchant, retailer, or seller shall be
                deemed to meet the relevant industry size threshold
                described in clause (ii)(III) if such merchant, retailer,
                or seller meets the relevant industry size threshold to be
                a small business concern based on the number of employees,
                or other such applicable measure, established under that
                Act.
                (E) Exception from state enforcement.--To the extent that
            the Bureau may not exercise authority under this subsection
            with respect to a merchant, retailer, or seller of nonfinancial
            goods or services, no action by a State attorney general or
            State regulator with respect to a claim made under this title
            may be brought under subsection 1042(a), with respect to an
            activity described in any of clauses (i) through (iii) of
            subparagraph (A) by such merchant, retailer, or seller of
            nonfinancial goods or services.
        (b) Exclusion for Real Estate Brokerage Activities.--
            (1) Real estate brokerage activities excluded.--Without
        limiting subsection (a), and except as permitted in paragraph (2),
        the Bureau may not exercise any rulemaking, supervisory,
        enforcement, or other authority under this title with respect to a
        person that is licensed or registered as a real estate broker or
        real estate agent, in accordance with State law, to the extent that
        such person--
                (A) acts as a real estate agent or broker for a buyer,
            seller, lessor, or lessee of real property;
                (B) brings together parties interested in the sale,
            purchase, lease, rental, or exchange of real property;
                (C) negotiates, on behalf of any party, any portion of a
            contract relating to the sale, purchase, lease, rental, or
            exchange of real property (other than in connection with the
            provision of financing with respect to any such transaction);
            or
                (D) offers to engage in any activity, or act in any
            capacity, described in subparagraph (A), (B), or (C).
            (2) Description of activities.--The Bureau may exercise
        rulemaking, supervisory, enforcement, or other authority under this
        title with respect to a person described in paragraph (1) when such
        person is--
                (A) engaged in an activity of offering or providing any
            consumer financial product or service, except that the Bureau
            may exercise such authority only with respect to that activity;
            or
                (B) otherwise subject to any enumerated consumer law or any
            law for which authorities are transferred under subtitle F or
            H, but the Bureau may exercise such authority only with respect
            to that law.
        (c) Exclusion for Manufactured Home Retailers and Modular Home
    Retailers.--
            (1) In general.--The Director may not exercise any rulemaking,
        supervisory, enforcement, or other authority over a person to the
        extent that--
                (A) such person is not described in paragraph (2); and
                (B) such person--
                    (i) acts as an agent or broker for a buyer or seller of
                a manufactured home or a modular home;
                    (ii) 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
                    (iii) offers to engage in any activity described in
                clause (i) or (ii).
            (2) Description of activities.--A person is described in this
        paragraph to the extent that such person is engaged in the offering
        or provision of any consumer financial product or service or is
        otherwise subject to any enumerated consumer law or any law for
        which authorities are transferred under subtitle F or H.
            (3) Definitions.--For purposes of this subsection, the
        following definitions shall apply:
                (A) Manufactured home.--The term ``manufactured home'' has
            the same meaning as in section 603 of the National Manufactured
            Housing Construction and Safety Standards Act of 1974 (42
            U.S.C. 5402).
                (B) Modular home.--The term ``modular home'' means a house
            built in a factory in 2 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.
        (d) Exclusion for Accountants and Tax Preparers.--
            (1) In general.--Except as permitted in paragraph (2), the
        Bureau may not exercise any rulemaking, supervisory, enforcement,
        or other authority over--
                (A) any person that is a certified public accountant,
            permitted to practice as a certified public accounting firm, or
            certified or licensed for such purpose by a State, or any
            individual who is employed by or holds an ownership interest
            with respect to a person described in this subparagraph, when
            such person is performing or offering to perform--
                    (i) customary and usual accounting activities,
                including the provision of accounting, tax, advisory, or
                other services that are subject to the regulatory authority
                of a State board of accountancy or a Federal authority; or
                    (ii) other services that are incidental to such
                customary and usual accounting activities, to the extent
                that such incidental services are not offered or provided--

                        (I) by the person separate and apart from such
                    customary and usual accounting activities; or
                        (II) to consumers who are not receiving such
                    customary and usual accounting activities; or

                (B) any person, other than a person described in
            subparagraph (A) that performs income tax preparation
            activities for consumers.
            (2) Description of activities.--
                (A) In general.--Paragraph (1) shall not apply to any
            person described in paragraph (1)(A) or (1)(B) to the extent
            that 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 the offering or
            provision of any consumer financial product or service, except
            to the extent that a person described in paragraph (1)(A) is
            engaged in an activity which is a customary and usual
            accounting activity described in paragraph (1)(A), or
            incidental thereto.
                (B) Not a customary and usual accounting activity.--For
            purposes of this subsection, extending or brokering credit is
            not a customary and usual accounting activity, or incidental
            thereto.
                (C) Rule of construction.--For purposes of subparagraphs
            (A) and (B), a person described in paragraph (1)(A) shall not
            be deemed to be extending credit, if such person is only
            extending credit directly to a consumer, exclusively for the
            purpose of enabling such consumer to purchase services
            described in clause (i) or (ii) of paragraph (1)(A) directly
            from such person, and such credit is--
                    (i) not subject to a finance charge; and
                    (ii) not payable by written agreement in more than 4
                installments.
                (D) Other limitations.--Paragraph (1) does not apply to any
            person described in paragraph (1)(A) or (1)(B) that is
            otherwise subject to any enumerated consumer law or any law for
            which authorities are transferred under subtitle F or H.
        (e) Exclusion for Practice of Law.--
            (1)  In general.--Except as provided under paragraph (2), the
        Bureau may not exercise any supervisory or enforcement authority
        with respect to an activity engaged in by an attorney as part of
        the practice of law under the laws of a State in which the attorney
        is licensed to practice law.
            (2)  Rule of construction.--Paragraph (1) shall not be
        construed so as to limit the exercise by the Bureau of any
        supervisory, enforcement, or other authority regarding the offering
        or provision of a consumer financial product or service described
        in any subparagraph of section 1002(5)--
                (A) that is not offered or provided as part of, or
            incidental to, the practice of law, occurring exclusively
            within the scope of the attorney-client relationship; or
                (B) that is otherwise offered or provided by the attorney
            in question with respect to any consumer who is not receiving
            legal advice or services from the attorney in connection with
            such financial product or service.
            (3)  Existing authority.--Paragraph (1) shall not be construed
        so as to limit the authority of the Bureau with respect to any
        attorney, to the extent that such attorney is otherwise subject to
        any of the enumerated consumer laws or the authorities transferred
        under subtitle F or H.
        (f) Exclusion for Persons Regulated by a State Insurance
    Regulator.--
            (1) In general.--No provision of this title shall be construed
        as altering, amending, or affecting the authority of any State
        insurance regulator to adopt rules, initiate enforcement
        proceedings, or take any other action with respect to a person
        regulated by a State insurance regulator. Except as provided in
        paragraph (2), the Bureau shall have no authority to exercise any
        power to enforce this title with respect to a person regulated by a
        State insurance regulator.
            (2) Description of activities.--Paragraph (1) does not apply to
        any person described in such paragraph to the extent that such
        person is engaged in the offering or provision of any consumer
        financial product or service or is otherwise subject to any
        enumerated consumer law or any law for which authorities are
        transferred under subtitle F or H.
            (3) State insurance authority under gramm-leach-bliley.--
        Notwithstanding paragraph (2), the Bureau shall not exercise any
        authorities that are granted a State insurance authority under
        section 505(a)(6) of the Gramm-Leach-Bliley Act with respect to a
        person regulated by a State insurance authority.
        (g) Exclusion for Employee Benefit and Compensation Plans and
    Certain Other Arrangements Under the Internal Revenue Code of 1986.--
            (1) Preservation of authority of other agencies.--No provision
        of this title shall be construed as altering, amending, or
        affecting the authority of the Secretary of the Treasury, the
        Secretary of Labor, or the Commissioner of Internal Revenue to
        adopt regulations, initiate enforcement proceedings, or take any
        actions with respect to any specified plan or arrangement.
            (2) Activities not constituting the offering or provision of
        any consumer financial product or service.--For purposes of this
        title, a person shall not be treated as having engaged in the
        offering or provision of any consumer financial product or service
        solely because such person is--
                (A) a specified plan or arrangement;
                (B) 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;
            or
                (C) engaged in the activity of establishing or maintaining
            a qualified tuition program under section 529(b)(1) of the
            Internal Revenue Code of 1986 offered by a State or other
            prepaid tuition program offered by a State.
            (3) Limitation on bureau authority.--
                (A) In general.--Except as provided under subparagraphs (B)
            and (C), the Bureau may not exercise any rulemaking or
            enforcement authority with respect to products or services that
            relate to any specified plan or arrangement.
                (B) Bureau action pursuant to agency request.--
                    (i) Agency request.--The Secretary and the Secretary of
                Labor may jointly issue a written request to the Bureau
                regarding implementation of appropriate consumer protection
                standards under this title with respect to the provision of
                services relating to any specified plan or arrangement.
                    (ii) Agency response.--In response to a request by the
                Bureau, the Secretary and the Secretary of Labor shall
                jointly issue a written response, not later than 90 days
                after receipt of such request, to grant or deny the request
                of the Bureau regarding implementation of appropriate
                consumer protection standards under this title with respect
                to the provision of services relating to any specified plan
                or arrangement.
                    (iii) Scope of bureau action.--Subject to a request or
                response pursuant to clause (i) or clause (ii) by the
                agencies made under this subparagraph, the Bureau may
                exercise rulemaking authority, and may act to enforce a
                rule prescribed pursuant to such request or response, in
                accordance with the provisions of this title. A request or
                response made by the Secretary and the Secretary of Labor
                under this subparagraph shall describe the basis for, and
                scope of, appropriate consumer protection standards to be
                implemented under this title with respect to the provision
                of services relating to any specified plan or arrangement.
                (C) Description of products or services.--To the extent
            that a person engaged in providing products or services
            relating to any specified plan or arrangement is subject to any
            enumerated consumer law or any law for which authorities are
            transferred under subtitle F or H, subparagraph (A) shall not
            apply with respect to that law.
            (4) Specified plan or arrangement.--For purposes of this
        subsection, the term ``specified plan or arrangement'' means any
        plan, account, or arrangement described in section 220, 223,
        401(a), 403(a), 403(b), 408, 408A, 529, or 530 of the Internal
        Revenue Code of 1986, or any employee benefit or compensation plan
        or arrangement, including a plan that is subject to title I of the
        Employee Retirement Income Security Act of 1974, or any prepaid
        tuition program offered by a State.
        (h) Persons Regulated by a State Securities Commission.--
            (1) In general.--No provision of this title shall be construed
        as altering, amending, or affecting the authority of any securities
        commission (or any agency or office performing like functions) of
        any State to adopt rules, initiate enforcement proceedings, or take
        any other action with respect to a person regulated by any
        securities commission (or any agency or office performing like
        functions) of any State. Except as permitted in paragraph (2) and
        subsection (f), the Bureau shall have no authority to exercise any
        power to enforce this title with respect to a person regulated by
        any securities commission (or any agency or office performing like
        functions) of any State, but only to the extent that the person
        acts in such regulated capacity.
            (2) Description of activities.--Paragraph (1) shall not apply
        to any person to the extent such person is engaged in the offering
        or provision of any consumer financial product or service, or is
        otherwise subject to any enumerated consumer law or any law for
        which authorities are transferred under subtitle F or H.
        (i) Exclusion for Persons Regulated by the Commission.--
            (1) In general.--No provision of this title may be construed as
        altering, amending, or affecting the authority of the Commission to
        adopt rules, initiate enforcement proceedings, or take any other
        action with respect to a person regulated by the Commission. The
        Bureau shall have no authority to exercise any power to enforce
        this title with respect to a person regulated by the Commission.
            (2) Consultation and coordination.--Notwithstanding paragraph
        (1), the Commission shall consult and coordinate, where feasible,
        with the Bureau 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 Bureau under this title or under
        any other law. In carrying out this paragraph, the agencies shall
        negotiate an agreement to establish procedures for such
        coordination, including procedures for providing advance notice to
        the Bureau when the Commission is initiating a rulemaking.
        (j) Exclusion for Persons Regulated by the Commodity Futures
    Trading Commission.--
            (1) In general.--No provision of this title shall be construed
        as altering, amending, or affecting the authority of the Commodity
        Futures Trading Commission to adopt rules, initiate enforcement
        proceedings, or take any other action with respect to a person
        regulated by the Commodity Futures Trading Commission. The Bureau
        shall have no authority to exercise any power to enforce this title
        with respect to a person regulated by the Commodity Futures Trading
        Commission.
            (2) Consultation and coordination.--Notwithstanding paragraph
        (1), the Commodity Futures Trading Commission shall consult and
        coordinate with the Bureau 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 Bureau under this title or under
        any other law.
        (k) Exclusion for Persons Regulated by the Farm Credit
    Administration.--
            (1) In general.--No provision of this title shall be construed
        as altering, amending, or affecting the authority of the Farm
        Credit Administration to adopt rules, initiate enforcement
        proceedings, or take any other action with respect to a person
        regulated by the Farm Credit Administration. The Bureau shall have
        no authority to exercise any power to enforce this title with
        respect to a person regulated by the Farm Credit Administration.
            (2) Definition.--For purposes of this subsection, the term
        ``person regulated by the Farm Credit Administration'' means any
        Farm Credit System institution that is chartered and subject to the
        provisions of the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.).
        (l) Exclusion for Activities Relating to Charitable
    Contributions.--
            (1) In general.--The Director and the Bureau may not exercise
        any rulemaking, supervisory, enforcement, or other authority,
        including authority to order penalties, over any activities related
        to the solicitation or making of voluntary contributions to 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 any donor or potential donor relating to a
        contribution to the organization.
            (2) Limitation.--The exclusion in paragraph (1) does not apply
        to other activities not described in paragraph (1) that are the
        offering or provision of any consumer financial product or service,
        or are otherwise subject to any enumerated consumer law or any law
        for which authorities are transferred under subtitle F or H.
        (m) Insurance.--The Bureau may not define as a financial product or
    service, by regulation or otherwise, engaging in the business of
    insurance.
        (n) Limited Authority of the Bureau.--Notwithstanding subsections
    (a) through (h) and (l), a person subject to or described in one or
    more of such provisions--
            (1) may be a service provider; and
            (2) may be subject to requests from, or requirements imposed
        by, the Bureau regarding information in order to carry out the
        responsibilities and functions of the Bureau and in accordance with
        section 1022, 1052, or 1053.
        (o) No Authority To Impose Usury Limit.--No provision of this title
    shall be construed as conferring authority on the Bureau 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.
        (p) Attorney General.--No provision of this title, including
    section 1024(c)(1), shall affect the authorities of the Attorney
    General under otherwise applicable provisions of law.
        (q) Secretary of the Treasury.--No provision of this title shall
    affect the authorities of the Secretary, including with respect to
    prescribing rules, initiating enforcement proceedings, or taking other
    actions with respect to a person that performs income tax preparation
    activities for consumers.
        (r) Deposit Insurance and Share Insurance.--Nothing in this title
    shall affect the authority of the Corporation under the Federal Deposit
    Insurance Act or the National Credit Union Administration Board under
    the Federal Credit Union Act as to matters related to deposit insurance
    and share insurance, respectively.
        (s) Fair Housing Act.--No provision of this title shall be
    construed as affecting any authority arising under the Fair Housing
    Act.
    SEC. 1028. AUTHORITY TO RESTRICT MANDATORY PRE-DISPUTE ARBITRATION.
        (a) Study and Report.--The Bureau shall conduct a study of, and
    shall provide a report to Congress concerning, the use of agreements
    providing for arbitration of any future dispute between covered persons
    and consumers in connection with the offering or providing of consumer
    financial products or services.
        (b) Further Authority.--The Bureau, by regulation, may prohibit or
    impose conditions or limitations on the use of an 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 Bureau finds that such a prohibition or imposition of
    conditions or limitations is in the public interest and for the
    protection of consumers. The findings in such rule shall be consistent
    with the study conducted under subsection (a).
        (c) Limitation.--The authority described in subsection (b) may not
    be construed to prohibit or restrict a consumer from entering into a
    voluntary arbitration agreement with a covered person after a dispute
    has arisen.
        (d) Effective Date.--Notwithstanding any other provision of law,
    any regulation prescribed by the Bureau under subsection (b) 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 Bureau.
    SEC. 1029. EXCLUSION FOR AUTO DEALERS.
        (a) Sale, Servicing, and Leasing of Motor Vehicles Excluded.--
    Except as permitted in subsection (b), the Bureau may not exercise any
    rulemaking, supervisory, enforcement or any other authority, including
    any authority to order assessments, over a motor vehicle dealer that is
    predominantly engaged in the sale and servicing of motor vehicles, the
    leasing and servicing of motor vehicles, or both.
        (b) Certain Functions Excepted.--Subsection (a) shall not apply to
    any person, to the extent that such person--
            (1) provides consumers with any services related to residential
        or commercial mortgages or self-financing transactions involving
        real property;
            (2) operates a line of business--
                (A) that involves the extension of retail credit or retail
            leases involving motor vehicles; and
                (B) in which--
                    (i) the extension of retail credit or retail leases are
                provided directly to consumers; and
                    (ii) the contract governing such extension of retail
                credit or retail leases is not routinely assigned to an
                unaffiliated third party finance or leasing source; or
            (3) offers or provides a consumer financial product or service
        not involving or related to the sale, financing, leasing, rental,
        repair, refurbishment, maintenance, or other servicing of motor
        vehicles, motor vehicle parts, or any related or ancillary product
        or service.
        (c) Preservation of Authorities of Other Agencies.--Except as
    provided in subsections (b) and (d), nothing in this title, including
    subtitle F, shall be construed as modifying, limiting, or superseding
    the operation of any provision of Federal law, or otherwise affecting
    the authority of the Board of Governors, the Federal Trade Commission,
    or any other Federal agency, with respect to a person described in
    subsection (a).
        (d) Federal Trade Commission Authority.--Notwithstanding section 18
    of the Federal Trade Commission Act, the Federal Trade Commission is
    authorized to prescribe rules under sections 5 and 18(a)(1)(B) of the
    Federal Trade Commission Act. in accordance with section 553 of title
    5, United States Code, with respect to a person described in subsection
    (a).
        (e) Coordination With Office Of Service Member Affairs.--The Board
    of Governors and the Federal Trade Commission shall coordinate with the
    Office of Service Member Affairs, to ensure that--
            (1) service members and their families are educated and
        empowered to make better informed decisions regarding consumer
        financial products and services offered by motor vehicle dealers,
        with a focus on motor vehicle dealers in the proximity of military
        installations; and
            (2) complaints by service members and their families concerning
        such motor vehicle dealers are effectively monitored and responded
        to, and where appropriate, enforcement action is pursued by the
        authorized agencies.
        (f) Definitions.--For purposes of this section, the following
    definitions shall apply:
            (1) Motor vehicle.--The term ``motor vehicle'' means--
                (A) any self-propelled vehicle designed for transporting
            persons or property on a street, highway, or other road;
                (B) recreational boats and marine equipment;
                (C) motorcycles;
                (D) motor homes, recreational vehicle trailers, and slide-
            in campers, as those terms are defined in sections 571.3 and
            575.103 (d) of title 49, Code of Federal Regulations, or any
            successor thereto; and
                (E) other vehicles that are titled and sold through
            dealers.
            (2) Motor vehicle dealer.--The term ``motor vehicle dealer''
        means any person or resident in the United States, or any territory
        of the United States, who--
                (A) is licensed by a State, a territory of the United
            States, or the District of Columbia to engage in the sale of
            motor vehicles; and
                (B) takes title to, holds an ownership in, or takes
            physical custody of motor vehicles.
    SEC. 1029A. EFFECTIVE DATE.
        This subtitle shall become effective on the designated transfer
    date, except that sections 1022, 1024, and 1025(e) shall become
    effective on the date of enactment of this Act.

                    Subtitle C--Specific Bureau Authorities

    SEC. 1031. PROHIBITING UNFAIR, DECEPTIVE, OR ABUSIVE ACTS OR PRACTICES.
        (a) In General.--The Bureau may take any action authorized under
    subtitle E to prevent a covered person or service provider from
    committing or engaging in an unfair, deceptive, or abusive act or
    practice under Federal law in connection with any transaction with a
    consumer for a consumer financial product or service, or the offering
    of a consumer financial product or service.
        (b) Rulemaking.--The Bureau may prescribe rules applicable to a
    covered person or service provider 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.
    Rules under this section may include requirements for the purpose of
    preventing such acts or practices.
        (c) Unfairness.--
            (1) In general.--The Bureau shall have no authority under this
        section to declare an act or practice in connection with a
        transaction with a consumer for a consumer financial product or
        service, or the offering of a consumer financial product or
        service, to be unlawful on the grounds that such act or practice is
        unfair, unless the Bureau has a reasonable basis to conclude that--
                (A) the act or practice causes or is likely to cause
            substantial injury to consumers which is not reasonably
            avoidable by consumers; and
                (B) such substantial injury is not outweighed by
            countervailing benefits to consumers or to competition.
            (2) Consideration of public policies.--In determining whether
        an act or practice is unfair, the Bureau may consider established
        public policies as evidence to be considered with all other
        evidence. Such public policy considerations may not serve as a
        primary basis for such determination.
        (d) Abusive.--The Bureau shall have no authority under this section
    to declare an act or practice abusive in connection with the provision
    of a consumer financial product or service, unless the act or
    practice--
            (1) materially interferes with the ability of a consumer to
        understand a term or condition of a consumer financial product or
        service; or
            (2) takes unreasonable advantage of--
                (A) a lack of understanding on the part of the consumer of
            the material risks, costs, or conditions of the product or
            service;
                (B) the inability of the consumer to protect the interests
            of the consumer in selecting or using a consumer financial
            product or service; or
                (C) the reasonable reliance by the consumer on a covered
            person to act in the interests of the consumer.
        (e) Consultation.--In prescribing rules under this section, the
    Bureau shall consult with the Federal banking agencies, or other
    Federal agencies, as appropriate, concerning the consistency of the
    proposed rule with prudential, market, or systemic objectives
    administered by such agencies.
        (f) Consideration of Seasonal Income.--The rules of the Bureau
    under this section shall provide, with respect to an extension of
    credit secured by residential real estate or a dwelling, if documented
    income of the borrower, including income from a small business, is a
    repayment source for an extension of credit secured by residential real
    estate or a dwelling, the creditor may consider the seasonality and
    irregularity of such income in the underwriting of and scheduling of
    payments for such credit.
    SEC. 1032. DISCLOSURES.
        (a) In General.--The Bureau may prescribe rules to ensure that the
    features of any consumer financial product or service, both initially
    and over the term of the product or service, are fully, accurately, and
    effectively disclosed to consumers in a manner that permits consumers
    to understand the costs, benefits, and risks associated with the
    product or service, in light of the facts and circumstances.
        (b) Model Disclosures.--
            (1) In general.--Any final rule prescribed by the Bureau under
        this section requiring disclosures may include a model form that
        may be used at the option of the covered person for provision of
        the required disclosures.
            (2) Format.--A model form issued pursuant to paragraph (1)
        shall contain a clear and conspicuous disclosure that, at a
        minimum--
                (A) uses plain language comprehensible to consumers;
                (B) contains a clear format and design, such as an easily
            readable type font; and
                (C) succinctly explains the information that must be
            communicated to the consumer.
            (3) Consumer testing.--Any model form issued pursuant to this
        subsection shall be validated through consumer testing.
        (c) Basis for Rulemaking.--In prescribing rules under this section,
    the Bureau shall consider available evidence about consumer awareness,
    understanding of, and responses to disclosures or communications about
    the risks, costs, and benefits of consumer financial products or
    services.
        (d) Safe Harbor.--Any covered person that uses a model form
    included with a rule issued under this section shall be deemed to be in
    compliance with the disclosure requirements of this section with
    respect to such model form.
        (e) Trial Disclosure Programs.--
            (1) In general.--The Bureau may permit a covered person to
        conduct a trial program that is limited in time and scope, subject
        to specified standards and procedures, for the purpose of providing
        trial disclosures to consumers that are designed to improve upon
        any model form issued pursuant to subsection (b)(1), or any other
        model form issued to implement an enumerated statute, as
        applicable.
            (2) Safe harbor.--The standards and procedures issued by the
        Bureau shall be designed to encourage covered persons to conduct
        trial disclosure programs. For the purposes of administering this
        subsection, the Bureau may establish a limited period during which
        a covered person conducting a trial disclosure program shall be
        deemed to be in compliance with, or may be exempted from, a
        requirement of a rule or an enumerated consumer law.
            (3) Public disclosure.--The rules of the Bureau shall provide
        for public disclosure of trial disclosure programs, which public
        disclosure may be limited, to the extent necessary to encourage
        covered persons to conduct effective trials.
        (f) Combined Mortgage Loan Disclosure.--Not later than 1 year after
    the designated transfer date, the Bureau shall propose for public
    comment rules and model disclosures that combine the disclosures
    required under the Truth in Lending Act and sections 4 and 5 of the
    Real Estate Settlement Procedures Act of 1974, into a single,
    integrated disclosure for mortgage loan transactions covered by those
    laws, unless the Bureau determines that any proposal issued by the
    Board of Governors and the Secretary of Housing and Urban Development
    carries out the same purpose.
    SEC. 1033. CONSUMER RIGHTS TO ACCESS INFORMATION.
        (a) In General.--Subject to rules prescribed by the Bureau, a
    covered person shall make available to a consumer, upon request,
    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. The information shall be made available
    in an electronic form usable by consumers.
        (b) Exceptions.--A covered person may not be required by this
    section to make available to the consumer--
            (1) any confidential commercial information, including an
        algorithm used to derive credit scores or other risk scores or
        predictors;
            (2) any information collected by the covered person for the
        purpose of preventing fraud or money laundering, or detecting, or
        making any report regarding other unlawful or potentially unlawful
        conduct;
            (3) any information required to be kept confidential by any
        other provision of law; or
            (4) any information that the covered person cannot retrieve in
        the ordinary course of its business with respect to that
        information.
        (c) No Duty To Maintain Records.--Nothing in this section shall be
    construed to impose any duty on a covered person to maintain or keep
    any information about a consumer.
        (d) Standardized Formats for Data.--The Bureau, by rule, shall
    prescribe standards applicable to covered persons to promote the
    development and use of standardized formats for information, including
    through the use of machine readable files, to be made available to
    consumers under this section.
        (e) Consultation.--The Bureau shall, when prescribing any rule
    under this section, consult with the Federal banking agencies and the
    Federal Trade Commission to ensure, to the extent appropriate, that the
    rules--
            (1) impose substantively similar requirements on covered
        persons;
            (2) take into account conditions under which covered persons do
        business both in the United States and in other countries; and
            (3) do not require or promote the use of any particular
        technology in order to develop systems for compliance.
    SEC. 1034. RESPONSE TO CONSUMER COMPLAINTS AND INQUIRIES.
        (a) Timely Regulator Response to Consumers.--The Bureau shall
    establish, in consultation with the appropriate Federal regulatory
    agencies, reasonable procedures to provide a timely response to
    consumers, in writing where appropriate, to complaints against, or
    inquiries concerning, a covered person, including--
            (1) steps that have been taken by the regulator in response to
        the complaint or inquiry of the consumer;
            (2) any responses received by the regulator from the covered
        person; and
            (3) any follow-up actions or planned follow-up actions by the
        regulator in response to the complaint or inquiry of the consumer.
        (b) Timely Response to Regulator by Covered Person.--A covered
    person subject to supervision and primary enforcement by the Bureau
    pursuant to section 1025 shall provide a timely response, in writing
    where appropriate, to the Bureau, the prudential regulators, and any
    other agency having jurisdiction over such covered person concerning a
    consumer complaint or inquiry, including--
            (1) steps that have been taken by the covered person to respond
        to the complaint or inquiry of the consumer;
            (2) responses received by the covered person from the consumer;
        and
            (3) follow-up actions or planned follow-up actions by the
        covered person to respond to the complaint or inquiry of the
        consumer.
        (c) Provision of Information to Consumers.--
            (1) In general.--A covered person subject to supervision and
        primary enforcement by the Bureau pursuant to section 1025 shall,
        in a timely manner, comply with a consumer request for information
        in the control or possession of such covered person concerning the
        consumer financial product or service that the consumer obtained
        from such covered person, including supporting written
        documentation, concerning the account of the consumer.
            (2) Exceptions.--A covered person subject to supervision and
        primary enforcement by the Bureau pursuant to section 1025, a
        prudential regulator, and any other agency having jurisdiction over
        a covered person subject to supervision and primary enforcement by
        the Bureau pursuant to section 1025 may not be required by this
        section to make available to the consumer--
                (A) any confidential commercial information, including an
            algorithm used to derive credit scores or other risk scores or
            predictors;
                (B) 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;
                (C) any information required to be kept confidential by any
            other provision of law; or
                (D) any nonpublic or confidential information, including
            confidential supervisory information.
        (d) Agreements With Other Agencies.--The Bureau shall enter into a
    memorandum of understanding with any affected Federal regulatory agency
    regarding procedures by which any covered person, and the prudential
    regulators, and any other agency having jurisdiction over a covered
    person, including the Secretary of the Department of Housing and Urban
    Development and the Secretary of Education, shall comply with this
    section.
    SEC. 1035. PRIVATE EDUCATION LOAN OMBUDSMAN.
        (a) Establishment.--The Secretary, in consultation with the
    Director, shall designate a Private Education Loan Ombudsman (in this
    section referred to as the ``Ombudsman'') within the Bureau, to provide
    timely assistance to borrowers of private education loans.
        (b) Public Information.--The Secretary and the Director shall
    disseminate information about the availability and functions of the
    Ombudsman to borrowers and potential borrowers, as well as institutions
    of higher education, lenders, guaranty agencies, loan servicers, and
    other participants in private education student loan programs.
        (c) Functions of Ombudsman.--The Ombudsman designated under this
    subsection shall--
            (1) in accordance with regulations of the Director, receive,
        review, and attempt to resolve informally complaints from borrowers
        of loans described in subsection (a), including, as appropriate,
        attempts to resolve such complaints in collaboration with the
        Department of Education and with institutions of higher education,
        lenders, guaranty agencies, loan servicers, and other participants
        in private education loan programs;
            (2) not later than 90 days after the designated transfer date,
        establish a memorandum of understanding with the student loan
        ombudsman established under section 141(f) of the Higher Education
        Act of 1965 (20 U.S.C. 1018(f)), to ensure coordination in
        providing assistance to and serving borrowers seeking to resolve
        complaints related to their private education or Federal student
        loans;
            (3) compile and analyze data on borrower complaints regarding
        private education loans; and
            (4) make appropriate recommendations to the Director, the
        Secretary, the Secretary of Education, the Committee on Banking,
        Housing, and Urban Affairs and the Committee on Health, Education,
        Labor, and Pensions of the Senate and the Committee on Financial
        Services and the Committee on Education and Labor of the House of
        Representatives.
        (d) Annual Reports.--
            (1) In general.--The Ombudsman shall prepare an annual report
        that describes the activities, and evaluates the effectiveness of
        the Ombudsman during the preceding year.
            (2) Submission.--The report required by paragraph (1) shall be
        submitted on the same date annually to the Secretary, the Secretary
        of Education, the Committee on Banking, Housing, and Urban Affairs
        and the Committee on Health, Education, Labor, and Pensions of the
        Senate and the Committee on Financial Services and the Committee on
        Education and Labor of the House of Representatives.
        (e) Definitions.--For purposes of this section, the terms ``private
    education loan'' and ``institution of higher education'' have the same
    meanings as in section 140 of the Truth in Lending Act (15 U.S.C.
    1650).
    SEC. 1036. PROHIBITED ACTS.
        (a) In General.--It shall be unlawful for--
            (1) any covered person or service provider--
                (A) to offer or provide to a consumer any financial product
            or service not in conformity with Federal consumer financial
            law, or otherwise commit any act or omission in violation of a
            Federal consumer financial law; or
                (B) to engage in any unfair, deceptive, or abusive act or
            practice;
            (2) any covered person or service provider to fail or refuse,
        as required by Federal consumer financial law, or any rule or order
        issued by the Bureau thereunder--
                (A) to permit access to or copying of records;
                (B) to establish or maintain records; or
                (C) to make reports or provide information to the Bureau;
            or
            (3) any person to knowingly or recklessly provide substantial
        assistance to a covered person or service provider in violation of
        the provisions of section 1031, or any rule or order issued
        thereunder, and notwithstanding any provision of this title, the
        provider of such substantial assistance shall be deemed to be in
        violation of that section to the same extent as the person to whom
        such assistance is provided.
        (b) Exception.--No person shall be held to have violated subsection
    (a)(1) solely by virtue of providing or selling time or space to a
    covered person or service provider placing an advertisement.
    SEC. 1037. EFFECTIVE DATE.
        This subtitle shall take effect on the designated transfer date.

                     Subtitle D--Preservation of State Law

    SEC. 1041. RELATION TO STATE LAW.
        (a) In General.--
            (1) Rule of construction.--This title, other than sections 1044
        through 1048, may not be construed as annulling, altering, or
        affecting, or exempting any person subject to the provisions of
        this title from complying with, the statutes, regulations, orders,
        or interpretations in effect in any State, except to the extent
        that any such provision of law is inconsistent with the provisions
        of this title, and then only to the extent of the inconsistency.
            (2) Greater protection under state law.--For 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 that such statute, regulation, order, or
        interpretation affords to 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 Bureau on its own motion or in response to a nonfrivolous
        petition initiated by any interested person.
        (b) Relation to Other Provisions of Enumerated Consumer Laws That
    Relate to State Law.--No provision of this title, except as provided in
    section 1083, shall be construed as modifying, limiting, or superseding
    the operation of any provision of an enumerated consumer law that
    relates to the application of a law in effect in any State with respect
    to such Federal law.
        (c) Additional Consumer Protection Regulations in Response to State
    Action.--
            (1) Notice of proposed rule required.--The Bureau 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 Bureau.
            (2) Bureau considerations required for issuance of final
        regulation.--Before prescribing a final regulation based upon a
        notice issued pursuant to paragraph (1), the Bureau shall take into
        account whether--
                (A) the proposed regulation would afford greater protection
            to consumers than any existing regulation;
                (B) the intended benefits of the proposed regulation for
            consumers would outweigh any increased costs or inconveniences
            for consumers, and would not discriminate unfairly against any
            category or class of consumers; and
                (C) a Federal banking agency has advised that the proposed
            regulation is likely to present an unacceptable safety and
            soundness risk to insured depository institutions.
            (3) Explanation of considerations.--The Bureau--
                (A) shall include a discussion of the considerations
            required in paragraph (2) in the Federal Register notice of a
            final regulation prescribed pursuant to this subsection; and
                (B) whenever the Bureau 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 Banking, Housing, and
            Urban Affairs of the Senate, and the Committee on Financial
            Services of the House of Representatives.
            (4) Reservation of authority.--No provision of this subsection
        shall be construed as limiting or restricting the authority of the
        Bureau to enhance consumer protection standards established
        pursuant to this title in response to its own motion or in response
        to a request by any other interested person.
            (5) Rule of construction.--No provision of this subsection
        shall be construed as exempting the Bureau from complying with
        subchapter II of chapter 5 of title 5, United States Code.
            (6) Definition.--For purposes of this subsection, the term
        ``consumer protection regulation'' means a regulation that the
        Bureau is authorized to prescribe under the Federal consumer
        financial laws.
    SEC. 1042. PRESERVATION OF ENFORCEMENT POWERS OF STATES.
        (a) In General.--
            (1) Action by state.--Except as provided in paragraph (2), the
        attorney general (or the equivalent thereof) of any State may bring
        a civil action in the name of such State in any district court of
        the United States in that State or in State court that is located
        in that State and that has jurisdiction over the defendant, to
        enforce provisions of this title or regulations issued under this
        title, and to secure remedies under provisions of this title or
        remedies otherwise provided under other law. A State regulator may
        bring a civil action or other appropriate proceeding to enforce the
        provisions of this title or regulations issued under this title
        with respect to any entity that is State-chartered, incorporated,
        licensed, or otherwise authorized to do business under State law
        (except as provided in paragraph (2)), and to secure remedies under
        provisions of this title or remedies otherwise provided under other
        provisions of law with respect to such an entity.
            (2) Action by state against national bank or federal savings
        association to enforce rules.--
                (A) In general.--Except as permitted under subparagraph
            (B), the attorney general (or equivalent thereof) of any State
            may not bring a civil action in the name of such State against
            a national bank or Federal savings association to enforce a
            provision of this title.
                (B) Enforcement of rules permitted.--The attorney general
            (or the equivalent thereof) of any State may bring a civil
            action in the name of such State against a national bank or
            Federal savings association in any district court of the United
            States in the State or in State court that is located in that
            State and that has jurisdiction over the defendant to enforce a
            regulation prescribed by the Bureau under a provision of this
            title and to secure remedies under provisions of this title or
            remedies otherwise provided under other law.
            (3) Rule of construction.--No provision of this title shall be
        construed as modifying, limiting, or superseding the operation of
        any provision of an enumerated consumer law that relates to the
        authority of a State attorney general or State regulator to enforce
        such Federal law.
        (b) Consultation Required.--
            (1) Notice.--
                (A) In general.--Before initiating any action in a court or
            other administrative or regulatory proceeding against any
            covered person as authorized by subsection (a) to enforce any
            provision of this title, including any regulation prescribed by
            the Bureau 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 Bureau and the prudential regulator, if any,
            or the designee thereof.
                (B) Emergency action.--If prior notice is not practicable,
            the State attorney general or State regulator shall provide a
            copy of the complete complaint and the notice to the Bureau and
            the prudential regulator, if any, immediately upon instituting
            the action or proceeding.
                (C) Contents of notice.--The notification required under
            this paragraph shall, at a minimum, describe--
                    (i) the identity of the parties;
                    (ii) the alleged facts underlying the proceeding; and
                    (iii) whether there may be a need to coordinate the
                prosecution of the proceeding so as not to interfere with
                any action, including any rulemaking, undertaken by the
                Bureau, a prudential regulator, or another Federal agency.
            (2) Bureau response.--In any action described in paragraph (1),
        the Bureau may--
                (A) intervene in the action as a party;
                (B) upon intervening--
                    (i) remove the action to the appropriate United States
                district court, if the action was not originally brought
                there; and
                    (ii) be heard on all matters arising in the action; and
                (C) appeal any order or judgment, to the same extent as any
            other party in the proceeding may.
        (c) Regulations.--The Bureau shall prescribe regulations to
    implement the requirements of this section and, from time to time,
    provide guidance in order to further coordinate actions with the State
    attorneys general and other regulators.
        (d) Preservation of State Authority.--
            (1) State claims.--No provision of this section shall be
        construed as altering, limiting, or affecting the authority of a
        State attorney general or any other regulatory or enforcement
        agency or authority to bring an action or other regulatory
        proceeding arising solely under the law in effect in that State.
            (2) State securities regulators.--No provision of this title
        shall be construed as altering, limiting, or affecting the
        authority of a State securities commission (or any agency or office
        performing like functions) under State law to adopt rules, initiate
        enforcement proceedings, or take any other action with respect to a
        person regulated by such commission or authority.
            (3) State insurance regulators.--No provision of this title
        shall be construed as altering, limiting, or affecting the
        authority of a State insurance commission or State insurance
        regulator under State law to adopt rules, initiate enforcement
        proceedings, or take any other action with respect to a person
        regulated by such commission or regulator.
    SEC. 1043. PRESERVATION OF EXISTING CONTRACTS.
        This title, and regulations, orders, guidance, and interpretations
    prescribed, issued, or established by the Bureau, 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 enactment of this Act, by national banks, Federal savings
    associations, or subsidiaries thereof that are regulated and supervised
    by the Comptroller of the Currency or the Director of the Office of
    Thrift Supervision, respectively.
    SEC. 1044. STATE LAW PREEMPTION STANDARDS FOR NATIONAL BANKS AND
    SUBSIDIARIES CLARIFIED.
        (a) In General.--Chapter one of title LXII of the Revised Statutes
    of the United States (12 U.S.C. 21 et seq.) is amended by inserting
    after section 5136B the following new section:
    ``SEC. 5136C. STATE LAW PREEMPTION STANDARDS FOR NATIONAL BANKS AND
    SUBSIDIARIES CLARIFIED.
        ``(a) Definitions.--For purposes of this section, the following
    definitions shall apply:
            ``(1) National bank.--The term `national bank' includes--
                ``(A) any bank organized under the laws of the United
            States; and
                ``(B) any Federal branch established in accordance with the
            International Banking Act of 1978.
            ``(2) State consumer financial laws.--The term `State consumer
        financial law' means a State law that does not directly or
        indirectly discriminate against national banks and that directly
        and specifically regulates the manner, content, or terms and
        conditions of any financial transaction (as may be authorized for
        national banks to engage in), or any account related thereto, with
        respect to a consumer.
            ``(3) Other definitions.--The terms `affiliate', `subsidiary',
        `includes', and `including' have the same meanings as in section 3
        of the Federal Deposit Insurance Act.
        ``(b) Preemption Standard.--
            ``(1) In general.--State consumer financial laws are preempted,
        only if--
                ``(A) application of a State consumer financial law would
            have a discriminatory effect on national banks, in comparison
            with the effect of the law on a bank chartered by that State;
                ``(B) in accordance with the legal standard for preemption
            in the decision of the Supreme Court of the United States in
            Barnett Bank of Marion County, N. A. v. Nelson, Florida
            Insurance Commissioner, et al., 517 U.S. 25 (1996), the State
            consumer financial law prevents or significantly interferes
            with the exercise by the national bank of its powers; and any
            preemption determination under this subparagraph may be made by
            a court, or by regulation or order of the Comptroller of the
            Currency on a case-by-case basis, in accordance with applicable
            law; or
                ``(C) the State consumer financial law is preempted by a
            provision of Federal law other than this title.
            ``(2) Savings clause.--This title and section 24 of the Federal
        Reserve Act (12 U.S.C. 371) do not preempt, annul, or affect the
        applicability of any State law to any subsidiary or affiliate of a
        national bank (other than a subsidiary or affiliate that is
        chartered as a national bank).
            ``(3) Case-by-case basis.--
                ``(A) Definition.--As used in this section the term `case-
            by-case basis' refers to a determination pursuant to this
            section made by the Comptroller concerning the impact of a
            particular State consumer financial law on any national bank
            that is subject to that law, or the law of any other State with
            substantively equivalent terms.
                ``(B) Consultation.--When making a determination on a case-
            by-case basis that a State consumer financial law of another
            State has substantively equivalent terms as one that the
            Comptroller is preempting, the Comptroller shall first consult
            with the Bureau of Consumer Financial Protection and shall take
            the views of the Bureau into account when making the
            determination.
            ``(4) Rule of construction.--This title does not occupy the
        field in any area of State law.
            ``(5) Standards of review.--
                ``(A) Preemption.--A court reviewing any determinations
            made by the Comptroller regarding preemption of a State law by
            this title or section 24 of the Federal Reserve Act (12 U.S.C.
            371) shall assess the validity of such determinations,
            depending upon the thoroughness evident in the consideration of
            the agency, the validity of the reasoning of the agency, the
            consistency with other valid determinations made by the agency,
            and other factors which the court finds persuasive and relevant
            to its decision.
                ``(B) Savings clause.--Except as provided in subparagraph
            (A), nothing in this section shall affect the deference that a
            court may afford to the Comptroller in making determinations
            regarding the meaning or interpretation of title LXII of the
            Revised Statutes of the United States or other Federal laws.
            ``(6) Comptroller determination not delegable.--Any regulation,
        order, or determination made by the Comptroller of the Currency
        under paragraph (1)(B) shall be made by the Comptroller, and shall
        not be delegable to another officer or employee of the Comptroller
        of the Currency.
        ``(c) Substantial Evidence.--No regulation or order of the
    Comptroller of the Currency prescribed under subsection (b)(1)(B),
    shall be interpreted or applied so as to invalidate, or otherwise
    declare inapplicable to a national bank, the provision of the State
    consumer financial law, unless substantial evidence, made on the record
    of the proceeding, supports the specific finding regarding the
    preemption of such provision in accordance with the legal standard of
    the decision of the Supreme Court of the United States in Barnett Bank
    of Marion County, N.A. v. Nelson, Florida Insurance Commissioner, et
    al., 517 U.S. 25 (1996).
        ``(d) Periodic Review of Preemption Determinations.--
            ``(1) In general.--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 publish a
        notice in the Federal Register announcing the decision to continue
        or rescind the determination or a proposal to amend the
        determination. Any such notice of a proposal to amend a
        determination and the subsequent resolution of such proposal shall
        comply 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), (b)).
            ``(2) Reports to congress.--At the time of issuing a review
        conducted under paragraph (1), the Comptroller of the Currency
        shall submit a report regarding such review to the Committee on
        Financial Services of the House of Representatives and the
        Committee on Banking, Housing, and Urban Affairs of the Senate. The
        report submitted to the respective committees shall address whether
        the agency intends to continue, rescind, or propose to amend any
        determination that a provision of Federal law preempts a State
        consumer financial law, and the reasons therefor.
        ``(e) Application of State Consumer Financial Law to Subsidiaries
    and Affiliates.--Notwithstanding any provision of this title or section
    24 of Federal Reserve Act (12 U.S.C. 371), a State consumer financial
    law shall apply to a subsidiary or affiliate of a national bank (other
    than a subsidiary or affiliate that is chartered as 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.
        ``(f) Preservation of Powers Related to Charging Interest.--No
    provision of this title shall be construed as altering or otherwise
    affecting the authority conferred by section 5197 of the Revised
    Statutes of the United States (12 U.S.C. 85) for the charging of
    interest by a national bank at the rate allowed by the laws of the
    State, territory, or district where the bank is located, including with
    respect to the meaning of `interest' under such provision.
        ``(g) Transparency of OCC Preemption Determinations.--The
    Comptroller of the Currency shall publish and update no less frequently
    than quarterly, a list of preemption determinations by the Comptroller
    of the Currency then in effect that identifies the activities and
    practices covered by each determination and the requirements and
    constraints determined to be preempted.''.
        (b) Clerical Amendment.--The table of sections for chapter one of
    title LXII of the Revised Statutes of the United States is amended by
    inserting after the item relating to section 5136B the following new
    item:

    ``Sec. 5136C. State law preemption standards for national banks and
              subsidiaries clarified.''.
    SEC. 1045. CLARIFICATION OF LAW APPLICABLE TO NONDEPOSITORY INSTITUTION
    SUBSIDIARIES.
        Section 5136C of the Revised Statutes of the United States (as
    added by this subtitle) is amended by adding at the end the following:
        ``(h) Clarification of Law Applicable to Nondepository Institution
    Subsidiaries and Affiliates of National Banks.--
            ``(1) Definitions.--For purposes of this subsection, the terms
        `depository institution', `subsidiary', and `affiliate' have the
        same meanings as in section 3 of the Federal Deposit Insurance Act.
            ``(2) Rule of construction.--No provision of this title or
        section 24 of the Federal Reserve Act (12 U.S.C. 371) shall be
        construed as preempting, annulling, or affecting the applicability
        of State law to any subsidiary, affiliate, or agent of a national
        bank (other than a subsidiary, affiliate, or agent that is
        chartered as a national bank).''.
    SEC. 1046. STATE LAW PREEMPTION STANDARDS FOR FEDERAL SAVINGS
    ASSOCIATIONS AND SUBSIDIARIES CLARIFIED.
        (a) In General.--The Home Owners' Loan Act (12 U.S.C. 1461 et seq.)
    is amended by inserting after section 5 the following new section:
    ``SEC. 6. STATE LAW PREEMPTION STANDARDS FOR FEDERAL SAVINGS
    ASSOCIATIONS CLARIFIED.
        ``(a) In General.--Any determination by a court or by the Director
    or any successor officer or agency regarding the relation of State law
    to a provision of this Act or any regulation or order prescribed under
    this Act shall be made in accordance with the laws and legal standards
    applicable to national banks regarding the preemption of State law.
        ``(b) Principles of Conflict Preemption Applicable.--
    Notwithstanding the authorities granted under sections 4 and 5, this
    Act does not occupy the field in any area of State law.''.
        (b) Clerical Amendment.--The table of sections for the Home Owners'
    Loan Act (12 U.S.C. 1461 et seq.) is amended by striking the item
    relating to section 6 and inserting the following new item:

        ``Sec. 6. State law preemption standards for Federal savings
                  associations and subsidiaries clarified.''.
    SEC. 1047. VISITORIAL STANDARDS FOR NATIONAL BANKS AND SAVINGS
    ASSOCIATIONS.
        (a) National Banks.--Section 5136C of the Revised Statutes of the
    United States (as added by this subtitle) is amended by adding at the
    end the following:
        ``(i) Visitorial Powers.--
            ``(1) In general.--In accordance with the decision of the
        Supreme Court of the United States in Cuomo v. Clearing House
        Assn., L. L. C. (129 S. Ct. 2710 (2009)), 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 an action against a national bank in a court of
        appropriate jurisdiction to enforce an applicable law and to seek
        relief as authorized by such law.
        ``(j) Enforcement Actions.--The ability of the Comptroller of the
    Currency to bring an enforcement action under this title or section 5
    of the Federal Trade Commission Act does not preclude any private party
    from enforcing rights granted under Federal or State law in the
    courts.''.
        (b) Savings Associations.--Section 6 of the Home Owners' Loan Act
    (as added by this title) is amended by adding at the end the following:
        ``(c) Visitorial Powers.--The provisions of sections 5136C(i) of
    the Revised Statutes of the United States shall apply to Federal
    savings associations, and any subsidiary thereof, to the same extent
    and in the same manner as if such savings associations, or subsidiaries
    thereof, were national banks or subsidiaries of national banks,
    respectively.''
        ``(d) Enforcement Actions.--The ability of the Comptroller of the
    Currency to bring an enforcement action under this Act or section 5 of
    the Federal Trade Commission Act does not preclude any private party
    from enforcing rights granted under Federal or State law in the
    courts.''.
    SEC. 1048. EFFECTIVE DATE.
        This subtitle shall become effective on the designated transfer
    date.

                         Subtitle E--Enforcement Powers

    SEC. 1051. DEFINITIONS.
        For purposes of this subtitle, the following definitions shall
    apply:
            (1) Bureau investigation.--The term ``Bureau investigation''
        means any inquiry conducted by a Bureau investigator for the
        purpose of ascertaining whether any person is or has been engaged
        in any conduct that is a violation, as defined in this section.
            (2) Bureau investigator.--The term ``Bureau investigator''
        means any attorney or investigator employed by the Bureau who is
        charged with the duty of enforcing or carrying into effect any
        Federal consumer financial law.
            (3) Custodian.--The term ``custodian'' means the custodian or
        any deputy custodian designated by the Bureau.
            (4) Documentary material.--The term ``documentary material''
        includes the original or any copy of any book, document, record,
        report, memorandum, paper, communication, tabulation, chart, logs,
        electronic files, or other data or data compilations stored in any
        medium.
            (5) Violation.--The term ``violation'' means any act or
        omission that, if proved, would constitute a violation of any
        provision of Federal consumer financial law.
    SEC. 1052. INVESTIGATIONS AND ADMINISTRATIVE DISCOVERY.
        (a) Joint Investigations.--
            (1) In general.--The Bureau or, where appropriate, a Bureau
        investigator, may engage in joint investigations and requests for
        information, as authorized under this title.
            (2) Fair lending.--The authority under paragraph (1) includes
        matters relating to fair lending, and where appropriate, joint
        investigations with, and requests for information from, the
        Secretary of Housing and Urban Development, the Attorney General of
        the United States, or both.
        (b) Subpoenas.--
            (1) In general.--The Bureau or a Bureau investigator may issue
        subpoenas for the attendance and testimony of witnesses and the
        production of relevant papers, books, documents, or other material
        in connection with hearings under this title.
            (2) Failure to obey.--In the case of contumacy or refusal to
        obey a subpoena issued pursuant to this paragraph and served upon
        any person, the district court of the United States for any
        district in which such person is found, resides, or transacts
        business, upon application by the Bureau or a Bureau investigator
        and after notice to such person, may issue an order requiring such
        person to appear and give testimony or to appear and produce
        documents or other material.
            (3) Contempt.--Any failure to obey an order of the court under
        this subsection may be punished by the court as a contempt thereof.
        (c) Demands.--
            (1) In general.--Whenever the Bureau 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 Bureau may, before the
        institution of any proceedings under the Federal consumer financial
        law, issue in writing, and cause to be served upon such person, a
        civil investigative demand requiring such person to--
                (A) produce such documentary material for inspection and
            copying or reproduction in the form or medium requested by the
            Bureau;
                (B) submit such tangible things;
                (C) file written reports or answers to questions;
                (D) give oral testimony concerning documentary material,
            tangible things, or other information; or
                (E) furnish any combination of such material, answers, or
            testimony.
            (2) Requirements.--Each civil investigative demand shall state
        the nature of the conduct constituting the alleged violation which
        is under investigation and the provision of law applicable to such
        violation.
            (3) Production of documents.--Each civil investigative demand
        for the production of documentary material shall--
                (A) describe each class of documentary material to be
            produced under the demand with such definiteness and certainty
            as to permit such material to be fairly identified;
                (B) prescribe a return date or dates which will provide a
            reasonable period of time within which the material so demanded
            may be assembled and made available for inspection and copying
            or reproduction; and
                (C) identify the custodian to whom such material shall be
            made available.
            (4) Production of things.--Each civil investigative demand for
        the submission of tangible things shall--
                (A) describe each class of tangible things to be submitted
            under the demand with such definiteness and certainty as to
            permit such things to be fairly identified;
                (B) prescribe a return date or dates which will provide a
            reasonable period of time within which the things so demanded
            may be assembled and submitted; and
                (C) identify the custodian to whom such things shall be
            submitted.
            (5) Demand for written reports or answers.--Each civil
        investigative demand for written reports or answers to questions
        shall--
                (A) propound with definiteness and certainty the reports to
            be produced or the questions to be answered;
                (B) prescribe a date or dates at which time written reports
            or answers to questions shall be submitted; and
                (C) identify the custodian to whom such reports or answers
            shall be submitted.
            (6) Oral testimony.--Each civil investigative demand for the
        giving of oral testimony shall--
                (A) prescribe a date, time, and place at which oral
            testimony shall be commenced; and
                (B) identify a Bureau investigator who shall conduct the
            investigation and the custodian to whom the transcript of such
            investigation shall be submitted.
            (7) Service.--Any civil investigative demand issued, and any
        enforcement petition filed, under this section may be served--
                (A) by any Bureau investigator at any place within the
            territorial jurisdiction of any court of the United States; and
                (B) upon any person who is not found within the territorial
            jurisdiction of any court of the United States--
                    (i) in such manner as the Federal Rules of Civil
                Procedure prescribe for service in a foreign nation; and
                    (ii) to the extent that the courts of the United States
                have authority to assert jurisdiction over such person,
                consistent with due process, the United States District
                Court for the District of Columbia shall have the same
                jurisdiction to take any action respecting compliance with
                this section by such person that such district court would
                have if such person were personally within the jurisdiction
                of such district court.
            (8) Method of service.--Service of any civil investigative
        demand or any enforcement petition filed under this section may be
        made upon a person, including any legal entity, by--
                (A) delivering a duly executed copy of such demand or
            petition to the individual or to any partner, executive
            officer, managing agent, or general agent of such person, or to
            any agent of such person authorized by appointment or by law to
            receive service of process on behalf of such person;
                (B) delivering a duly executed copy of such demand or
            petition to the principal office or place of business of the
            person to be served; or
                (C) depositing a duly executed copy in the United States
            mails, by registered or certified mail, return receipt
            requested, duly addressed to such person at the principal
            office or place of business of such person.
            (9) Proof of service.--
                (A) In general.--A verified return by the individual
            serving any civil investigative demand or any enforcement
            petition filed under this section setting forth the manner of
            such service shall be proof of such service.
                (B) Return receipts.--In the case of service by registered
            or certified mail, such return shall be accompanied by the
            return post office receipt of delivery of such demand or
            enforcement petition.
            (10) Production of documentary material.--The production of
        documentary material in response to a civil investigative demand
        shall be made under a sworn certificate, in such form as the demand
        designates, by the person, if a natural person, to whom the demand
        is directed or, if not a natural person, by any person having
        knowledge of the facts and circumstances relating to such
        production, to the effect that all of the documentary material
        required by the demand and in the possession, custody, or control
        of the person to whom the demand is directed has been produced and
        made available to the custodian.
            (11) Submission of tangible things.--The submission of tangible
        things in response to a civil investigative demand shall be made
        under a sworn certificate, in such form as the demand designates,
        by the person to whom the demand is directed or, if not a natural
        person, by any person having knowledge of the facts and
        circumstances relating to such production, to the effect that all
        of the tangible things required by the demand and in the
        possession, custody, or control of the person to whom the demand is
        directed have been submitted to the custodian.
            (12) Separate answers.--Each reporting requirement or question
        in a civil investigative demand shall be answered separately and
        fully in writing under oath, unless it is objected to, in which
        event the reasons for the objection shall be stated in lieu of an
        answer, and it shall be submitted under a sworn certificate, in
        such form as the demand designates, by the person, if a natural
        person, to whom the demand is directed or, if not a natural person,
        by any person responsible for answering each reporting requirement
        or question, to the effect that all information required by the
        demand and in the possession, custody, control, or knowledge of the
        person to whom the demand is directed has been submitted.
            (13) Testimony.--
                (A) In general.--
                    (i) Oath and recordation.--The examination of any
                person pursuant to a demand for oral testimony served under
                this subsection shall be taken before an officer authorized
                to administer oaths and affirmations by the laws of the
                United States or of the place at which the examination is
                held. The officer before whom oral testimony is to be taken
                shall put the witness on oath or affirmation and shall
                personally, or by any individual acting under the direction
                of and in the presence of the officer, record the testimony
                of the witness.
                    (ii) Transcription.--The testimony shall be taken
                stenographically and transcribed.
                    (iii) Transmission to custodian.--After the testimony
                is fully transcribed, the officer investigator before whom
                the testimony is taken shall promptly transmit a copy of
                the transcript of the testimony to the custodian.
                (B) Parties present.--Any Bureau 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 that person,
            the officer before whom the testimony is to be taken, an
            investigator or representative of an agency with which the
            Bureau is engaged in a joint investigation, and any
            stenographer taking such testimony.
                (C) Location.--The oral testimony of any person taken
            pursuant to a civil investigative demand shall be taken in the
            judicial district of the United States in which such person
            resides, is found, or transacts business, or in such other
            place as may be agreed upon by the Bureau investigator before
            whom the oral testimony of such person is to be taken and such
            person.
                (D) Attorney representation.--
                    (i) In general.--Any person compelled to appear under a
                civil investigative demand for oral testimony pursuant to
                this section may be accompanied, represented, and advised
                by an attorney.
                    (ii) Authority.--The attorney may advise a person
                described in clause (i), in confidence, either upon the
                request of such person or upon the initiative of the
                attorney, with respect to any question asked of such
                person.
                    (iii) Objections.--A person described in clause (i), or
                the attorney for that person, may object on the record to
                any question, in whole or in part, and such person shall
                briefly state for the record the reason for the objection.
                An objection may properly be made, received, and entered
                upon the record when it is claimed that such person 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 such person or attorney shall not otherwise
                interrupt the oral examination.
                    (iv) Refusal to answer.--If a person described in
                clause (i) refuses to answer any question--

                        (I) the Bureau may petition the district court of
                    the United States pursuant to this section for an order
                    compelling such person to answer such question; and
                        (II) if the refusal is on grounds of the privilege
                    against self-incrimination, the testimony of such
                    person may be compelled in accordance with the
                    provisions of section 6004 of title 18, United States
                    Code.

                (E) Transcripts.--For purposes of this subsection--
                    (i) after the testimony of any witness is fully
                transcribed, the Bureau investigator shall afford the
                witness (who may be accompanied by an attorney) a
                reasonable opportunity to examine the transcript;
                    (ii) the transcript shall be read to or by the witness,
                unless such examination and reading are waived by the
                witness;
                    (iii) any changes in form or substance which the
                witness desires to make shall be entered and identified
                upon the transcript by the Bureau investigator, with a
                statement of the reasons given by the witness for making
                such changes;
                    (iv) 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; and
                    (v) if the transcript is not signed by the witness
                during the 30-day period following the date on which the
                witness is first afforded a reasonable opportunity to
                examine the transcript, the Bureau investigator shall sign
                the transcript and state on the record the fact of the
                waiver, illness, absence of the witness, or the refusal to
                sign, together with any reasons given for the failure to
                sign.
                (F) Certification by investigator.--The Bureau investigator
            shall certify on the transcript that the witness was duly sworn
            by him or her and that the transcript is a true record of the
            testimony given by the witness, and the Bureau investigator
            shall promptly deliver the transcript or send it by registered
            or certified mail to the custodian.
                (G) Copy of transcript.--The Bureau investigator shall
            furnish a copy of the transcript (upon payment of reasonable
            charges for the transcript) to the witness only, except that
            the Bureau may for good cause limit such witness to inspection
            of the official transcript of his testimony.
                (H) Witness fees.--Any witness appearing for the taking of
            oral testimony pursuant to a civil investigative demand shall
            be entitled to the same fees and mileage which are paid to
            witnesses in the district courts of the United States.
        (d) Confidential Treatment of Demand Material.--
            (1) In general.--Documentary materials and tangible things
        received as a result of a civil investigative demand shall be
        subject to requirements and procedures regarding confidentiality,
        in accordance with rules established by the Bureau.
            (2) Disclosure to congress.--No rule established by the Bureau
        regarding the confidentiality of materials submitted to, or
        otherwise obtained by, the Bureau shall be intended to prevent
        disclosure to either House of Congress or to an appropriate
        committee of the Congress, except that the Bureau is permitted to
        adopt rules allowing prior notice to any party that owns or
        otherwise provided the material to the Bureau and had designated
        such material as confidential.
        (e) Petition for Enforcement.--
            (1) In general.--Whenever any person fails to comply with any
        civil investigative demand duly served upon him 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 Bureau, through such
        officers or attorneys as it may designate, may file, in the
        district court of the United States for any judicial district in
        which such person resides, is found, or transacts business, and
        serve upon such person, a petition for an order of such court for
        the enforcement of this section.
            (2) Service of process.--All process of any court to which
        application may be made as provided in this subsection may be
        served in any judicial district.
        (f) Petition for Order Modifying or Setting Aside Demand.--
            (1) In general.--Not later than 20 days after the service of
        any civil investigative demand upon any person under subsection
        (b), or at any time before the return date specified in the demand,
        whichever period is shorter, or within such period exceeding 20
        days after service or in excess of such return date as may be
        prescribed in writing, subsequent to service, by any Bureau
        investigator named in the demand, such person may file with the
        Bureau a petition for an order by the Bureau modifying or setting
        aside the demand.
            (2) Compliance during pendency.--The time permitted for
        compliance with the demand in whole or in part, as determined
        proper and ordered by the Bureau, shall not run during the pendency
        of a petition under paragraph (1) at the Bureau, except that such
        person shall comply with any portions of the demand not sought to
        be modified or set aside.
            (3) Specific grounds.--A petition under paragraph (1) shall
        specify each ground upon which the petitioner relies in seeking
        relief, and may be based upon any failure of the demand to comply
        with the provisions of this section, or upon any constitutional or
        other legal right or privilege of such person.
        (g) Custodial Control.--At any time during which any custodian is
    in custody or control of any documentary material, tangible things,
    reports, answers to questions, or transcripts of oral testimony given
    by any person in compliance with any civil investigative demand, such
    person may file, in the district court of the United States for the
    judicial district within which the office of such custodian is
    situated, and serve upon such custodian, a petition for an order of
    such court requiring the performance by such custodian of any duty
    imposed upon him by this section or rule promulgated by the Bureau.
        (h) Jurisdiction of Court.--
            (1) In general.--Whenever any petition is filed in any district
        court of the United States under this section, such court shall
        have jurisdiction to hear and determine the matter so presented,
        and to enter such order or orders as may be required to carry out
        the provisions of this section.
            (2) Appeal.--Any final order entered as described in paragraph
        (1) shall be subject to appeal pursuant to section 1291 of title
        28, United States Code.
    SEC. 1053. HEARINGS AND ADJUDICATION PROCEEDINGS.
        (a) In General.--The Bureau is authorized to conduct hearings and
    adjudication proceedings with respect to any person in the manner
    prescribed by chapter 5 of title 5, United States Code in order to
    ensure or enforce compliance with--
            (1) the provisions of this title, including any rules
        prescribed by the Bureau under this title; and
            (2) any other Federal law that the Bureau is authorized to
        enforce, including an enumerated consumer law, and any regulations
        or order prescribed thereunder, unless such Federal law
        specifically limits the Bureau from conducting a hearing or
        adjudication proceeding and only to the extent of such limitation.
        (b) Special Rules for Cease-and-desist Proceedings.--
            (1) Orders authorized.--
                (A) In general.--If, in the opinion of the Bureau, any
            covered person or service provider is engaging or has engaged
            in an activity that violates a law, rule, or any condition
            imposed in writing on the person by the Bureau, the Bureau may,
            subject to sections 1024, 1025, and 1026, issue and serve upon
            the covered person or service provider a notice of charges in
            respect thereof.
                (B) Content of notice.--The notice under subparagraph (A)
            shall contain a statement of the facts constituting the alleged
            violation or violations, and shall fix a time and place at
            which a hearing will be held to determine whether an order to
            cease and desist should issue against the covered person or
            service provider, such hearing to be held not earlier than 30
            days nor later than 60 days after the date of service of such
            notice, unless an earlier or a later date is set by the Bureau,
            at the request of any party so served.
                (C) Consent.--Unless the party or parties served under
            subparagraph (B) appear at the hearing personally or by a duly
            authorized representative, such person shall be deemed to have
            consented to the issuance of the cease-and-desist order.
                (D) Procedure.--In the event of consent under subparagraph
            (C), or if, upon the record, made at any such hearing, the
            Bureau finds that any violation specified in the notice of
            charges has been established, the Bureau may issue and serve
            upon the covered person or service provider an order to cease
            and desist from the violation or practice. Such order may, by
            provisions which may be mandatory or otherwise, require the
            covered person or service provider to cease and desist from the
            subject activity, and to take affirmative action to correct the
            conditions resulting from any such violation.
            (2) Effectiveness of order.--A cease-and-desist order shall
        become effective at the expiration of 30 days after the date of
        service of an order under paragraph (1) upon the covered person or
        service provider concerned (except in the case of a cease-and-
        desist order issued upon consent, which shall become effective at
        the time specified therein), and shall remain effective and
        enforceable as provided therein, except to such extent as the order
        is stayed, modified, terminated, or set aside by action of the
        Bureau or a reviewing court.
            (3) Decision and appeal.--Any hearing provided for in this
        subsection shall be held in the Federal judicial district or in the
        territory in which the residence or principal office or place of
        business 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. After
        such hearing, and within 90 days after the Bureau has notified the
        parties that the case has been submitted to the Bureau for final
        decision, the Bureau shall render its decision (which shall include
        findings of fact upon which its decision is predicated) and shall
        issue and 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. Unless a petition for review is timely filed in a court
        of appeals of the United States, as provided in paragraph (4), and
        thereafter until the record in the proceeding has been filed as
        provided in paragraph (4), the Bureau may at any time, upon such
        notice and in such manner as the Bureau shall determine proper,
        modify, terminate, or set aside any such order. Upon filing of the
        record as provided, the Bureau may modify, terminate, or set aside
        any such order with permission of the court.
            (4) Appeal to court of appeals.--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 Bureau be modified, terminated, or
        set aside. A copy of such petition shall be forthwith transmitted
        by the clerk of the court to the Bureau, and thereupon the Bureau
        shall file in the court the record in the proceeding, as provided
        in section 2112 of title 28 of the United States Code. Upon the
        filing of such petition, 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
        Bureau. Review of such proceedings shall be had as provided in
        chapter 7 of title 5 of the United States Code. The judgment and
        decree of the court shall be final, except that the same shall be
        subject to review by the Supreme Court of the United States, upon
        certiorari, as provided in section 1254 of title 28 of the United
        States Code.
            (5) No stay.--The commencement of proceedings for judicial
        review under paragraph (4) shall not, unless specifically ordered
        by the court, operate as a stay of any order issued by the Bureau.
        (c) Special Rules for Temporary Cease-and-desist Proceedings.--
            (1) In general.--Whenever the Bureau 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 thereof, 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 Bureau 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. Such order may
        include any requirement authorized under this subtitle. Such order
        shall become effective upon service upon the person and, unless set
        aside, limited, or suspended by a court in proceedings authorized
        by paragraph (2), shall remain effective and enforceable pending
        the completion of the administrative proceedings pursuant to such
        notice and until such time as the Bureau shall dismiss the charges
        specified in such notice, or if a cease-and-desist order is issued
        against the person, until the effective date of such order.
            (2) Appeal.--Not later than 10 days after the covered person or
        service provider 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 residence or
        principal office or place of business of the person is located, or
        the United States District Court for the District of Columbia, for
        an injunction setting aside, limiting, or suspending the
        enforcement, operation, or effectiveness of such order pending the
        completion of the administrative proceedings pursuant to the notice
        of charges served upon the person under subsection (b), and such
        court shall have jurisdiction to issue such injunction.
            (3) Incomplete or inaccurate records.--
                (A) Temporary order.--If a notice of charges served under
            subsection (b) specifies, on the basis of particular facts and
            circumstances, that the books and records of a covered person
            or service provider are so incomplete or inaccurate that the
            Bureau 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 Bureau may issue a temporary
            order requiring--
                    (i) the cessation of any activity or practice which
                gave rise, whether in whole or in part, to the incomplete
                or inaccurate state of the books or records; or
                    (ii) affirmative action to restore such books or
                records to a complete and accurate state, until the
                completion of the proceedings under subsection (b)(1).
                (B) Effective period.--Any temporary order issued under
            subparagraph (A)--
                    (i) shall become effective upon service; and
                    (ii) unless set aside, limited, or suspended by a court
                in proceedings under paragraph (2), shall remain in effect
                and enforceable until the earlier of--

                        (I) the completion of the proceeding initiated
                    under subsection (b) in connection with the notice of
                    charges; or
                        (II) the date the Bureau determines, by examination
                    or otherwise, that the books and records of the covered
                    person or service provider are accurate and reflect the
                    financial condition thereof.

        (d) Special Rules for Enforcement of Orders.--
            (1) In general.--The Bureau may in its discretion apply to the
        United States district court within the jurisdiction of which the
        principal office or place of business of the person is located, for
        the enforcement of any effective and outstanding notice or order
        issued under this section, and such court shall have jurisdiction
        and power to order and require compliance herewith.
            (2) Exception.--Except as otherwise provided in this
        subsection, no court shall have jurisdiction to affect by
        injunction or otherwise the issuance or enforcement of any notice
        or order or to review, modify, suspend, terminate, or set aside any
        such notice or order.
        (e) Rules.--The Bureau shall prescribe rules establishing such
    procedures as may be necessary to carry out this section.
    SEC. 1054. LITIGATION AUTHORITY.
        (a) In General.--If any person violates a Federal consumer
    financial law, the Bureau may, subject to sections 1024, 1025, and
    1026, commence a civil action against such person to impose a civil
    penalty or to seek all appropriate legal and equitable relief including
    a permanent or temporary injunction as permitted by law.
        (b) Representation.--The Bureau may act in its own name and through
    its own attorneys in enforcing any provision of this title, rules
    thereunder, or any other law or regulation, or in any action, suit, or
    proceeding to which the Bureau is a party.
        (c) Compromise of Actions.--The Bureau may compromise or settle any
    action if such compromise is approved by the court.
        (d) Notice to the Attorney General.--
            (1) In general.--When commencing a civil action under Federal
        consumer financial law, or any rule thereunder, the Bureau shall
        notify the Attorney General and, with respect to a civil action
        against an insured depository institution or insured credit union,
        the appropriate prudential regulator.
            (2) Notice and coordination.--
                (A) Notice of other actions.--In addition to any notice
            required under paragraph (1), the Bureau shall notify the
            Attorney General concerning any action, suit, or proceeding to
            which the Bureau is a party, except an action, suit, or
            proceeding that involves the offering or provision of consumer
            financial products or services.
                (B) Coordination.--In order to avoid conflicts and promote
            consistency regarding litigation of matters under Federal law,
            the Attorney General and the Bureau shall consult regarding the
            coordination of investigations and proceedings, including by
            negotiating an agreement for coordination by not later than 180
            days after the designated transfer date. The agreement under
            this subparagraph shall include provisions to ensure that
            parallel investigations and proceedings involving the Federal
            consumer financial laws are conducted in a manner that avoids
            conflicts and does not impede the ability of the Attorney
            General to prosecute violations of Federal criminal laws.
                (C) Rule of construction.--Nothing in this paragraph shall
            be construed to limit the authority of the Bureau under this
            title, including the authority to interpret Federal consumer
            financial law.
        (e) Appearance Before the Supreme Court.--The Bureau may represent
    itself in its own name before the Supreme Court of the United States,
    provided that the Bureau 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 the Attorney General concurs with such request or
    fails to take action within 60 days of the request of the Bureau.
        (f) Forum.--Any civil action brought under this title may be
    brought in a United States district court or in any court of competent
    jurisdiction of a state in a district in which the defendant is located
    or resides or is doing business, and such court shall have jurisdiction
    to enjoin such person and to require compliance with any Federal
    consumer financial law.
        (g) Time for Bringing Action.--
            (1) In general.--Except as otherwise permitted by law or
        equity, no action may be brought under this title more than 3 years
        after the date of discovery of the violation to which an action
        relates.
            (2) Limitations under other federal laws.--
                (A) In general.--An action arising under this title does
            not include claims arising solely under enumerated consumer
            laws.
                (B) Bureau authority.--In any action arising solely under
            an enumerated consumer law, the Bureau may commence, defend, or
            intervene in the action in accordance with the requirements of
            that provision of law, as applicable.
                (C) Transferred authority.--In any action arising solely
            under laws for which authorities were transferred under
            subtitles F and H, the Bureau may commence, defend, or
            intervene in the action in accordance with the requirements of
            that provision of law, as applicable.
    SEC. 1055. RELIEF AVAILABLE.
        (a) Administrative Proceedings or Court Actions.--
            (1) Jurisdiction.--The court (or the Bureau, as the case may
        be) in an action or adjudication proceeding brought under Federal
        consumer financial law, shall have jurisdiction to grant any
        appropriate legal or equitable relief with respect to a violation
        of Federal consumer financial law, including a violation of a rule
        or order prescribed under a Federal consumer financial law.
            (2) Relief.--Relief under this section may include, without
        limitation--
                (A) rescission or reformation of contracts;
                (B) refund of moneys or return of real property;
                (C) restitution;
                (D) disgorgement or compensation for unjust enrichment;
                (E) payment of damages or other monetary relief;
                (F) public notification regarding the violation, including
            the costs of notification;
                (G) limits on the activities or functions of the person;
            and
                (H) civil money penalties, as set forth more fully in
            subsection (c).
            (3) No exemplary or punitive damages.--Nothing in this
        subsection shall be construed as authorizing the imposition of
        exemplary or punitive damages.
        (b) Recovery of Costs.--In any action brought by the Bureau, a
    State attorney general, or any State regulator to enforce any Federal
    consumer financial law, the Bureau, the State attorney general, or the
    State regulator may recover its costs in connection with prosecuting
    such action if the Bureau, the State attorney general, or the State
    regulator is the prevailing party in the action.
        (c) Civil Money Penalty in Court and Administrative Actions.--
            (1) In general.--Any person that violates, through any act or
        omission, any provision of Federal consumer financial law shall
        forfeit and pay a civil penalty pursuant to this subsection.
            (2) Penalty amounts.--
                (A) First tier.--For any violation of a law, rule, or final
            order or condition imposed in writing by the Bureau, a civil
            penalty may not exceed $5,000 for each day during which such
            violation or failure to pay continues.
                (B) Second tier.--Notwithstanding paragraph (A), for any
            person that recklessly engages in a violation of a Federal
            consumer financial law, a civil penalty may not exceed $25,000
            for each day during which such violation continues.
                (C) Third tier.--Notwithstanding subparagraphs (A) and (B),
            for any person that knowingly violates a Federal consumer
            financial law, a civil penalty may not exceed $1,000,000 for
            each day during which such violation continues.
            (3) Mitigating factors.--In determining the amount of any
        penalty assessed under paragraph (2), the Bureau or the court shall
        take into account the appropriateness of the penalty with respect
        to--
                (A) the size of financial resources and good faith of the
            person charged;
                (B) the gravity of the violation or failure to pay;
                (C) the severity of the risks to or losses of the consumer,
            which may take into account the number of products or services
            sold or provided;
                (D) the history of previous violations; and
                (E) such other matters as justice may require.
            (4) Authority to modify or remit penalty.--The Bureau may
        compromise, modify, or remit any penalty which may be assessed or
        had already been assessed under paragraph (2). 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.
            (5) Notice and hearing.--No civil penalty may be assessed under
        this subsection with respect to a violation of any Federal consumer
        financial law, unless--
                (A) the Bureau gives notice and an opportunity for a
            hearing to the person accused of the violation; or
                (B) the appropriate court has ordered such assessment and
            entered judgment in favor of the Bureau.
    SEC. 1056. REFERRALS FOR CRIMINAL PROCEEDINGS.
        If the Bureau obtains evidence that any person, domestic or
    foreign, has engaged in conduct that may constitute a violation of
    Federal criminal law, the Bureau shall transmit such evidence to the
    Attorney General of the United States, who may institute criminal
    proceedings under appropriate law. Nothing in this section affects any
    other authority of the Bureau to disclose information.
    SEC. 1057. EMPLOYEE PROTECTION.
        (a) In General.--No covered person or service provider 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 initiative of the
    employee or in the ordinary course of the duties of the employee (or
    any person acting pursuant to a request of the employee), has--
            (1) provided, caused to be provided, or is about to provide or
        cause to be provided, information to the employer, the Bureau, or
        any other State, local, or Federal, government authority or law
        enforcement agency relating to any violation of, or any act or
        omission that the employee reasonably believes to be a violation
        of, any provision of this title or any other provision of law that
        is subject to the jurisdiction of the Bureau, or any rule, order,
        standard, or prohibition prescribed by the Bureau;
            (2) testified or will testify in any proceeding resulting from
        the administration or enforcement of any provision of this title or
        any other provision of law that is subject to the jurisdiction of
        the Bureau, or any rule, order, standard, or prohibition prescribed
        by the Bureau;
            (3) filed, instituted, or caused to be filed or instituted any
        proceeding under any Federal consumer financial law; or
            (4) 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,
        order, standard, or prohibition, subject to the jurisdiction of, or
        enforceable by, the Bureau.
        (b) Definition of Covered Employee.--For the purposes of this
    section, the term ``covered employee'' means any individual performing
    tasks related to the offering or provision of a consumer financial
    product or service.
        (c) Procedures and Timetables.--
            (1) Complaint.--
                (A) In general.--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 alleged 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.
                (B) Actions of secretary of labor.--Upon receipt of such a
            complaint, the Secretary of Labor shall notify, in writing, the
            person named in the complaint who is alleged to have committed
            the violation, of--
                    (i) the filing of the complaint;
                    (ii) the allegations contained in the complaint;
                    (iii) the substance of evidence supporting the
                complaint; and
                    (iv) opportunities that will be afforded to such person
                under paragraph (2).
            (2) Investigation by secretary of labor.--
                (A) In general.--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
            who is alleged to have committed the violation that is the
            basis for the complaint an opportunity to submit to the
            Secretary of Labor a written response to the complaint and an
            opportunity to meet with a representative of the Secretary of
            Labor to present statements from witnesses, the Secretary of
            Labor shall--
                    (i) initiate an investigation and determine whether
                there is reasonable cause to believe that the complaint has
                merit; and
                    (ii) notify the complainant and the person alleged to
                have committed the violation of subsection (a), in writing,
                of such determination.
                (B) Notice of relief available.--If the Secretary of Labor
            concludes that there is reasonable cause to believe that a
            violation of subsection (a) has occurred, the Secretary of
            Labor shall, together with the notice under subparagraph
            (A)(ii), issue a preliminary order providing the relief
            prescribed by paragraph (4)(B).
                (C) Request for hearing.--Not later than 30 days after the
            date of receipt of notification of a determination of the
            Secretary of Labor 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, and 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.
            (3) Grounds for determination of complaints.--
                (A) In general.--The Secretary of Labor shall dismiss a
            complaint filed under this subsection, and shall not conduct an
            investigation otherwise required under paragraph (2), 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.
                (B) Rebuttal evidence.--Notwithstanding a finding by the
            Secretary of Labor that the complainant has made the showing
            required under subparagraph (A), no investigation otherwise
            required under paragraph (2) 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.
                (C) Evidentiary standards.--The Secretary of Labor 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. 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.
            (4) Issuance of final orders; review procedures.--
                (A) Timing.--Not later than 120 days after the date of
            conclusion of any hearing under paragraph (2), the Secretary of
            Labor 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 of Labor, the complainant, and
            the person alleged to have committed the violation.
                (B) Penalties.--
                    (i) Order of secretary of labor.--If, in response to a
                complaint filed under paragraph (1), the Secretary of Labor
                determines that a violation of subsection (a) has occurred,
                the Secretary of Labor shall order the person who committed
                such violation--

                        (I) to take affirmative action to abate the
                    violation;
                        (II) to reinstate the complainant to his or her
                    former position, together with compensation (including
                    back pay) and restore the terms, conditions, and
                    privileges associated with his or her employment; and
                        (III) to provide compensatory damages to the
                    complainant.

                    (ii) Penalty.--If an order is issued under clause (i),
                the Secretary of Labor, 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 attorney fees and expert witness
                fees) reasonably incurred, as determined by the Secretary
                of Labor, by the complainant for, or in connection with,
                the bringing of the complaint upon which the order was
                issued.
                (C) Penalty for frivolous claims.--If the Secretary of
            Labor finds that a complaint under paragraph (1) is frivolous
            or has been brought in bad faith, the Secretary of Labor may
            award to the prevailing employer a reasonable attorney fee, not
            exceeding $1,000, to be paid by the complainant.
                (D) De novo review.--
                    (i) Failure of the secretary to act.--If the Secretary
                of Labor has not issued a final order within 210 days after
                the date of filing of a complaint under this subsection, or
                within 90 days after the date of receipt of 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 having 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.
                    (ii) Procedures.--A proceeding under clause (i) shall
                be governed by the same legal burdens of proof specified in
                paragraph (3). The court shall have jurisdiction to grant
                all relief necessary to make the employee whole, including
                injunctive relief and compensatory damages, including--

                        (I) reinstatement with the same seniority status
                    that the employee would have had, but for the discharge
                    or discrimination;
                        (II) the amount of back pay, with interest; and
                        (III) compensation for any special damages
                    sustained as a result of the discharge or
                    discrimination, including litigation costs, expert
                    witness fees, and reasonable attorney fees.

                (E) Other appeals.--Unless the complainant brings an action
            under subparagraph (D), any person adversely affected or
            aggrieved by a final order issued under subparagraph (A) may
            file a petition for 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, not later than 60 days after the date of the
            issuance of the final order of the Secretary of Labor under
            subparagraph (A). 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. An order of the Secretary of Labor with
            respect to which review could have been obtained under this
            subparagraph shall not be subject to judicial review in any
            criminal or other civil proceeding.
            (5) Failure to comply with order.--
                (A) Actions by the secretary.--If any person has failed to
            comply with a final order issued under paragraph (4), the
            Secretary of Labor may file a civil action in the United States
            district court for the district in which the violation was
            found to have occurred, 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
            injunctive relief and compensatory damages.
                (B) Civil actions to compel compliance.--A person on whose
            behalf an order was issued under paragraph (4) 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.
                (C) Award of costs authorized.--The court, in issuing any
            final order under this paragraph, may award costs of litigation
            (including reasonable attorney and expert witness fees) to any
            party, whenever the court determines such award is appropriate.
                (D) Mandamus proceedings.--Any nondiscretionary duty
            imposed by this section shall be enforceable in a mandamus
            proceeding brought under section 1361 of title 28, United
            States Code.
        (d) Unenforceability of Certain Agreements.--
            (1) No waiver of rights and remedies.--Except as provided under
        paragraph (3), and notwithstanding any other provision of law, the
        rights and remedies provided for in this section may not be waived
        by any agreement, policy, form, or condition of employment,
        including by any predispute arbitration agreement.
            (2) No predispute arbitration agreements.--Except as provided
        under paragraph (3), and notwithstanding any other provision of
        law, no predispute arbitration agreement shall be valid or
        enforceable to the extent that it requires arbitration of a dispute
        arising under this section.
            (3) Exception.--Notwithstanding paragraphs (1) and (2), an
        arbitration provision in a collective bargaining agreement shall be
        enforceable as to disputes arising under subsection (a)(4), unless
        the Bureau determines, by rule, that such provision is inconsistent
        with the purposes of this title.
    SEC. 1058. EFFECTIVE DATE.
        This subtitle shall become effective on the designated transfer
    date.

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

    SEC. 1061. TRANSFER OF CONSUMER FINANCIAL PROTECTION FUNCTIONS.
        (a) Defined Terms.--For purposes of this subtitle--
            (1) the term ``consumer financial protection functions''
        means--
                (A) all authority to prescribe rules or issue orders or
            guidelines pursuant to any Federal consumer financial law,
            including performing appropriate functions to promulgate and
            review such rules, orders, and guidelines; and
                (B) the examination authority described in subsection
            (c)(1), with respect to a person described in subsection
            1025(a); and
            (2) the terms ``transferor agency'' and ``transferor agencies''
        mean, respectively--
                (A) the Board of Governors (and any Federal reserve bank,
            as the context requires), the Federal Deposit Insurance
            Corporation, the Federal Trade Commission, the National Credit
            Union Administration, the Office of the Comptroller of the
            Currency, the Office of Thrift Supervision, and the Department
            of Housing and Urban Development, and the heads of those
            agencies; and
                (B) the agencies listed in subparagraph (A), collectively.
        (b) In General.--Except as provided in subsection (c), consumer
    financial protection functions are transferred as follows:
            (1) Board of governors.--
                (A) Transfer of functions.--All consumer financial
            protection functions of the Board of Governors are transferred
            to the Bureau.
                (B) Board of governors authority.--The Bureau 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.
            (2) Comptroller of the currency.--
                (A) Transfer of functions.--All consumer financial
            protection functions of the Comptroller of the Currency are
            transferred to the Bureau.
                (B) Comptroller authority.--The Bureau shall have all
            powers and duties that were vested in the Comptroller of the
            Currency, relating to consumer financial protection functions,
            on the day before the designated transfer date.
            (3) Director of the office of thrift supervision.--
                (A) Transfer of functions.--All consumer financial
            protection functions of the Director of the Office of Thrift
            Supervision are transferred to the Bureau.
                (B) Director authority.--The Bureau shall have all powers
            and duties that were vested in the Director of the Office of
            Thrift Supervision, relating to consumer financial protection
            functions, on the day before the designated transfer date.
            (4) Federal deposit insurance corporation.--
                (A) Transfer of functions.--All consumer financial
            protection functions of the Federal Deposit Insurance
            Corporation are transferred to the Bureau.
                (B) Corporation authority.--The Bureau shall have all
            powers and duties that were vested in the Federal Deposit
            Insurance Corporation, relating to consumer financial
            protection functions, on the day before the designated transfer
            date.
            (5) Federal trade commission.--
                (A) Transfer of functions.--The authority of the Federal
            Trade Commission under an enumerated consumer law to prescribe
            rules, issue guidelines, or conduct a study or issue a report
            mandated under such law shall be transferred to the Bureau on
            the designated transfer date. Nothing in this title shall be
            construed to require a mandatory transfer of any employee of
            the Federal Trade Commission.
                (B) Bureau authority.--
                    (i) In general.--The Bureau shall have all powers and
                duties under the enumerated consumer laws to prescribe
                rules, issue guidelines, or to conduct studies or issue
                reports mandated by such laws, that were vested in the
                Federal Trade Commission on the day before the designated
                transfer date.
                    (ii) Federal trade commission act.--Subject to subtitle
                B, the Bureau may enforce a rule prescribed under the
                Federal Trade Commission Act by the Federal Trade
                Commission with respect to an unfair or deceptive act or
                practice to the extent that such rule applies to a covered
                person or service provider with respect to the offering or
                provision of a consumer financial product or service as if
                it were a rule prescribed under section 1031 of this title.
                (C) Authority of the federal trade commission.--
                    (i) In general.--No provision of this title shall be
                construed as modifying, limiting, or otherwise affecting
                the authority of the Federal Trade Commission (including
                its authority with respect to affiliates described in
                section 1025(a)(1)) under the Federal Trade Commission Act
                or any other law, other than the authority under an
                enumerated consumer law to prescribe rules, issue official
                guidelines, or conduct a study or issue a report mandated
                under such law.
                    (ii) Commission authority relating to rules prescribed
                by the bureau.--Subject to subtitle B, the Federal Trade
                Commission shall have authority to enforce under the
                Federal Trade Commission Act (15 U.S.C. 41 et seq.) a rule
                prescribed by the Bureau under this title with respect to a
                covered person subject to the jurisdiction of the Federal
                Trade Commission under that Act, and a violation of such a
                rule by such a person shall be treated as a violation of a
                rule issued under section 18 of that Act (15 U.S.C. 57a)
                with respect to unfair or deceptive acts or practices.
                (D) Coordination.--To avoid duplication of or conflict
            between rules prescribed by the Bureau under section 1031 of
            this title and the Federal Trade Commission under section
            18(a)(1)(B) of the Federal Trade Commission Act that apply to a
            covered person or service provider with respect to the offering
            or provision of consumer financial products or services, the
            agencies shall negotiate an agreement with respect to
            rulemaking by each agency, including consultation with the
            other agency prior to proposing a rule and during the comment
            period.
                (E) Deference.--No provision of this title shall be
            construed as altering, limiting, expanding, or otherwise
            affecting the deference that a court affords to the--
                    (i) Federal Trade Commission in making determinations
                regarding the meaning or interpretation of any provision of
                the Federal Trade Commission Act, or of any other Federal
                law for which the Commission has authority to prescribe
                rules; or
                    (ii) Bureau in making determinations regarding the
                meaning or interpretation of any provision of a Federal
                consumer financial law (other than any law described in
                clause (i)).
            (6) National credit union administration.--
                (A) Transfer of functions.--All consumer financial
            protection functions of the National Credit Union
            Administration are transferred to the Bureau.
                (B) National credit union administration authority.--The
            Bureau shall have all powers and duties that were vested in the
            National Credit Union Administration, relating to consumer
            financial protection functions, on the day before the
            designated transfer date.
            (7) Department of housing and urban development.--
                (A) Transfer of functions.--All consumer protection
            functions of the Secretary of the Department of Housing and
            Urban Development relating to the Real Estate Settlement
            Procedures Act of 1974 (12 U.S.C. 2601 et seq.), the Secure and
            Fair Enforcement for Mortgage Licensing Act of 2008 (12 U.S.C.
            5102 et seq.), and the Interstate Land Sales Full Disclosure
            Act (15 U.S.C. 1701 et seq.) are transferred to the Bureau.
                (B) Authority of the department of housing and urban
            development.--The Bureau shall have all powers and duties that
            were vested in the Secretary of the Department of Housing and
            Urban Development relating to the Real Estate Settlement
            Procedures Act of 1974 (12 U.S.C. 2601 et seq.), the Secure and
            Fair Enforcement for Mortgage Licensing Act of 2008 (12 U.S.C.
            5101 et seq.), and the Interstate Land Sales Full Disclosure
            Act (15 U.S.C. 1701 et seq.), on the day before the designated
            transfer date.
        (c) Authorities of the Prudential Regulators.--
            (1) Examination.--A transferor agency that is a prudential
        regulator shall have--
                (A) authority to require reports from and conduct
            examinations for compliance with Federal consumer financial
            laws with respect to a person described in section 1025(a),
            that is incidental to the backup and enforcement procedures
            provided to the regulator under section 1025(c); and
                (B) exclusive authority (relative to the Bureau) to require
            reports from and conduct examinations for compliance with
            Federal consumer financial laws with respect to a person
            described in section 1026(a), except as provided to the Bureau
            under subsections (b) and (c) of section 1026.
            (2) Enforcement.--
                (A) Limitation.--The authority of a transferor agency that
            is a prudential regulator to enforce compliance with Federal
            consumer financial laws with respect to a person described in
            section 1025(a), shall be limited to the backup and enforcement
            procedures in described in section 1025(c).
                (B) Exclusive authority.--A transferor agency that is a
            prudential regulator shall have exclusive authority (relative
            to the Bureau) to enforce compliance with Federal consumer
            financial laws with respect to a person described in section
            1026(a), except as provided to the Bureau under subsections (b)
            and (c) of section 1026.
                (C) Statutory enforcement.--For purposes of carrying out
            the authorities under, and subject to the limitations of,
            subtitle B, each prudential regulator may enforce compliance
            with the requirements imposed under this title, and any rule or
            order prescribed by the Bureau under this title, under--
                    (i) the Federal Credit Union Act (12 U.S.C. 1751 et
                seq.), by the National Credit Union Administration Board
                with respect to any covered person or service provider that
                is an insured credit union, or service provider thereto, or
                any affiliate of an insured credit union, who is subject to
                the jurisdiction of the Board under that Act; and
                    (ii) section 8 of the Federal Deposit Insurance Act (12
                U.S.C. 1818), by the appropriate Federal banking agency, as
                defined in section 3(q) of the Federal Deposit Insurance
                Act (12 U.S.C. 1813(q)), with respect to a covered person
                or service provider that is a person described in section
                3(q) of that Act and who is subject to the jurisdiction of
                that agency, as set forth in sections 3(q) and 8 of the
                Federal Deposit Insurance Act; or
                    (iii) the Bank Service Company Act (12 U.S.C. 1861 et
                seq.).
        (d) Effective Date.--Subsections (b) and (c) shall become effective
    on the designated transfer date.
    SEC. 1062. DESIGNATED TRANSFER DATE.
        (a) In General.--Not later than 60 days after the date of enactment
    of this Act, the Secretary shall--
            (1) in consultation with the Chairman of the Board of
        Governors, the Chairperson of the 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, the Secretary of the
        Department of Housing and Urban Development, and the Director of
        the Office of Management and Budget, designate a single calendar
        date for the transfer of functions to the Bureau under section
        1061; and
            (2) publish notice of that designated date in the Federal
        Register.
        (b) Changing Designation.--The Secretary--
            (1) may, in 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, the Secretary of the Department of Housing and Urban
        Development, and the Director of the Office of Management and
        Budget, change the date designated under subsection (a); and
            (2) shall publish notice of any changed designated date in the
        Federal Register.
        (c) Permissible Dates.--
            (1) In general.--Except as provided in paragraph (2), any date
        designated under this section shall be not earlier than 180 days,
        nor later than 12 months, after the date of enactment of this Act.
            (2) Extension of time.--The Secretary may designate a date that
        is later than 12 months after the date of enactment of this Act if
        the Secretary transmits to appropriate committees of Congress--
                (A) a written determination that orderly implementation of
            this title is not feasible before the date that is 12 months
            after the date of enactment of this Act;
                (B) an explanation of why an extension is necessary for the
            orderly implementation of this title; and
                (C) a description of the steps that will be taken to effect
            an orderly and timely implementation of this title within the
            extended time period.
            (3) Extension limited.--In no case may any date designated
        under this section be later than 18 months after the date of
        enactment of this Act.
    SEC. 1063. SAVINGS PROVISIONS.
        (a) Board of Governors.--
            (1) Existing rights, duties, and obligations not affected.--
        Section 1061(b)(1) does not affect the validity of any right, duty,
        or obligation of the United States, the Board of Governors (or any
        Federal reserve bank), or any other person that--
                (A) arises under any provision of law relating to any
            consumer financial protection function of the Board of
            Governors transferred to the Bureau by this title; and
                (B) existed on the day before the designated transfer date.
            (2) Continuation of suits.--No provision of this Act shall
        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
        Bureau by this title, except that the Bureau, subject to sections
        1024, 1025, and 1026, shall be substituted for the Board of
        Governors (or Federal reserve bank) as a party to any such
        proceeding as of the designated transfer date.
        (b) Federal Deposit Insurance Corporation.--
            (1) Existing rights, duties, and obligations not affected.--
        Section 1061(b)(4) does not affect the validity of any right, duty,
        or obligation of the United States, the Federal Deposit Insurance
        Corporation, the Board of Directors of that Corporation, or any
        other person, that--
                (A) arises under any provision of law relating to any
            consumer financial protection function of the Federal Deposit
            Insurance Corporation transferred to the Bureau by this title;
            and
                (B) existed on the day before the designated transfer date.
            (2) Continuation of suits.--No provision of this Act shall
        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 Bureau by this title,
        except that the Bureau, subject to sections 1024, 1025, and 1026,
        shall be substituted for the Federal Deposit Insurance Corporation
        (or Board of Directors) as a party to any such proceeding as of the
        designated transfer date.
        (c) Federal Trade Commission.--Section 1061(b)(5) does not affect
    the validity of any right, duty, or obligation of the United States,
    the Federal Trade Commission, or any other person, that--
            (1) arises under any provision of law relating to any consumer
        financial protection function of the Federal Trade Commission
        transferred to the Bureau by this title; and
            (2) existed on the day before the designated transfer date.
        (d) National Credit Union Administration.--
            (1) Existing rights, duties, and obligations not affected.--
        Section 1061(b)(6) does not affect the validity of any right, duty,
        or obligation of the United States, the National Credit Union
        Administration, the National Credit Union Administration Board, or
        any other person, that--
                (A) arises under any provision of law relating to any
            consumer financial protection function of the National Credit
            Union Administration transferred to the Bureau by this title;
            and
                (B) existed on the day before the designated transfer date.
            (2) Continuation of suits.--No provision of this Act shall
        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 Bureau by this title, except that
        the Bureau, subject to sections 1024, 1025, and 1026, shall be
        substituted for the National Credit Union Administration (or
        National Credit Union Administration Board) as a party to any such
        proceeding as of the designated transfer date.
        (e) Office of the Comptroller of the Currency.--
            (1) Existing rights, duties, and obligations not affected.--
        Section 1061(b)(2) does not affect the validity of any right, duty,
        or obligation of the United States, the Comptroller of the
        Currency, the Office of the Comptroller of the Currency, or any
        other person, that--
                (A) arises under any provision of law relating to any
            consumer financial protection function of the Comptroller of
            the Currency transferred to the Bureau by this title; and
                (B) existed on the day before the designated transfer date.
            (2) Continuation of suits.--No provision of this Act shall
        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 Bureau by this title
        before the designated transfer date, except that the Bureau,
        subject to sections 1024, 1025, and 1026, shall be substituted for
        the Comptroller of the Currency (or the Office of the Comptroller
        of the Currency) as a party to any such proceeding as of the
        designated transfer date.
        (f) Office of Thrift Supervision.--
            (1) Existing rights, duties, and obligations not affected.--
        Section 1061(b)(3) does not affect the validity of any right, duty,
        or obligation of the United States, the Director of the Office of
        Thrift Supervision, the Office of Thrift Supervision, or any other
        person, that--
                (A) arises under any provision of law relating to any
            consumer financial protection function of the Director of the
            Office of Thrift Supervision transferred to the Bureau by this
            title; and
                (B) that existed on the day before the designated transfer
            date.
            (2) Continuation of suits.--No provision of this Act shall
        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
        Bureau by this title before the designated transfer date, except
        that the Bureau, subject to sections 1024, 1025, and 1026, shall be
        substituted for the Director (or the Office of Thrift Supervision)
        as a party to any such proceeding as of the designated transfer
        date.
        (g) Department of Housing and Urban Development.--
            (1) Existing rights, duties, and obligations not affected.--
        Section 1061(b)(7) shall not affect the validity of any right,
        duty, or obligation of the United States, the Secretary of the
        Department of Housing and Urban Development (or the Department of
        Housing and Urban Development), or any other person, that--
                (A) arises under any provision of law relating to any
            function of the Secretary of the Department of Housing and
            Urban Development with respect to the Real Estate Settlement
            Procedures Act of 1974 (12 U.S.C. 2601 et seq.), the Secure and
            Fair Enforcement for Mortgage Licensing Act of 2008 (12 U.S.C.
            5102 et seq.), or the Interstate Land Sales Full Disclosure Act
            (15 U.S.C. 1701 et seq) transferred to the Bureau by this
            title; and
                (B) existed on the day before the designated transfer date.
            (2) Continuation of suits.--This title shall not abate any
        proceeding commenced by or against the Secretary of the Department
        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 the Department of Housing
        and Urban Development transferred to the Bureau by this title
        before the designated transfer date, except that the Bureau,
        subject to sections 1024, 1025, and 1026, shall be substituted for
        the Secretary of the Department of Housing and Urban Development
        (or the Department of Housing and Urban Development) as a party to
        any such proceeding as of the designated transfer date.
        (h) Continuation of Existing Orders, Rulings, Determinations,
    Agreements, and Resolutions.--
            (1) In general.--Except as provided in paragraph (2) and under
        subsection (i), all orders, resolutions, determinations,
        agreements, and rulings that have been issued, made, prescribed, or
        allowed to become effective by any transferor agency 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, and shall continue to be enforceable by the
        appropriate transferor agency, according to the terms of those
        orders, resolutions, determinations, agreements, and rulings, and
        shall not be enforceable by or against the Bureau.
            (2) Exception for orders applicable to persons described in
        section 1025(a).--All orders, resolutions, determinations,
        agreements, and rulings that have been issued, made, prescribed, or
        allowed to become effective by any transferor agency 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 with
        respect to any person described in section 1025(a), shall continue
        in effect, according to the terms of those orders, resolutions,
        determinations, agreements, and rulings, and shall be enforceable
        by or against the Bureau or transferor agency.
        (i) Identification of Rules and Orders Continued.--Not later than
    the designated transfer date, the Bureau--
            (1) shall, after consultation with the head of each transferor
        agency, identify the rules and orders that will be enforced by the
        Bureau; and
            (2) shall publish a list of such rules and orders in the
        Federal Register.
        (j) Status of Rules Proposed or Not Yet Effective.--
            (1) Proposed rules.--Any proposed rule of a transferor agency
        which that agency, in performing consumer financial protection
        functions transferred by this title, has proposed before the
        designated transfer date, but has not been published as a final
        rule before that date, shall be deemed to be a proposed rule of the
        Bureau.
            (2) Rules not yet effective.--Any interim or final rule of a
        transferor agency 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 become effective as a rule
        of the Bureau according to its terms.
    SEC. 1064. TRANSFER OF CERTAIN PERSONNEL.
        (a) In General.--
            (1) Certain federal reserve system employees transferred.--
                (A) Identifying employees for transfer.--The Bureau and the
            Board of Governors shall--
                    (i) jointly determine the number of employees of the
                Board of Governors necessary to perform or support the
                consumer financial protection functions of the Board of
                Governors that are transferred to the Bureau by this title;
                and
                    (ii) consistent with the number determined under clause
                (i), jointly identify employees of the Board of Governors
                for transfer to the Bureau, in a manner that the Bureau and
                the Board of Governors, in their sole discretion, determine
                equitable.
                (B) Identified employees transferred.--All employees of the
            Board of Governors identified under subparagraph (A)(ii) shall
            be transferred to the Bureau for employment.
                (C) Federal reserve bank employees.--Employees of any
            Federal reserve bank who are performing consumer financial
            protection functions on behalf of the Board of Governors shall
            be treated as employees of the Board of Governors for purposes
            of subparagraphs (A) and (B).
            (2) Certain fdic employees transferred.--
                (A) Identifying employees for transfer.--The Bureau and the
            Board of Directors of the Federal Deposit Insurance Corporation
            shall--
                    (i) jointly determine the number of employees of that
                Corporation necessary to perform or support the consumer
                financial protection functions of the Corporation that are
                transferred to the Bureau by this title; and
                    (ii) consistent with the number determined under clause
                (i), jointly identify employees of the Corporation for
                transfer to the Bureau, in a manner that the Bureau and the
                Board of Directors of the Corporation, in their sole
                discretion, determine equitable.
                (B) Identified employees transferred.--All employees of the
            Corporation identified under subparagraph (A)(ii) shall be
            transferred to the Bureau for employment.
            (3) Certain ncua employees transferred.--
                (A) Identifying employees for transfer.--The Bureau and the
            National Credit Union Administration Board shall--
                    (i) jointly determine the number of employees of the
                National Credit Union Administration necessary to perform
                or support the consumer financial protection functions of
                the National Credit Union Administration that are
                transferred to the Bureau by this title; and
                    (ii) consistent with the number determined under clause
                (i), jointly identify employees of the National Credit
                Union Administration for transfer to the Bureau, in a
                manner that the Bureau and the National Credit Union
                Administration Board, in their sole discretion, determine
                equitable.
                (B) Identified employees transferred.--All employees of the
            National Credit Union Administration identified under
            subparagraph (A)(ii) shall be transferred to the Bureau for
            employment.
            (4) Certain office of the comptroller of the currency employees
        transferred.--
                (A) Identifying employees for transfer.--The Bureau and the
            Comptroller of the Currency shall--
                    (i) jointly determine the number of employees of the
                Office of the Comptroller of the Currency necessary to
                perform or support the consumer financial protection
                functions of the Office of the Comptroller of the Currency
                that are transferred to the Bureau by this title; and
                    (ii) consistent with the number determined under clause
                (i), jointly identify employees of the Office of the
                Comptroller of the Currency for transfer to the Bureau, in
                a manner that the Bureau and the Office of the Comptroller
                of the Currency, in their sole discretion, determine
                equitable.
                (B) Identified employees transferred.--All employees of the
            Office of the Comptroller of the Currency identified under
            subparagraph (A)(ii) shall be transferred to the Bureau for
            employment.
            (5) Certain office of thrift supervision employees
        transferred.--
                (A) Identifying employees for transfer.--The Bureau and the
            Director of the Office of Thrift Supervision shall--
                    (i) jointly determine the number of employees of the
                Office of Thrift Supervision necessary to perform or
                support the consumer financial protection functions of the
                Office of Thrift Supervision that are transferred to the
                Bureau by this title; and
                    (ii) consistent with the number determined under clause
                (i), jointly identify employees of the Office of Thrift
                Supervision for transfer to the Bureau, in a manner that
                the Bureau and the Office of Thrift Supervision, in their
                sole discretion, determine equitable.
                (B) Identified employees transferred.--All employees of the
            Office of Thrift Supervision identified under subparagraph
            (A)(ii) shall be transferred to the Bureau for employment.
            (6) Certain employees of department of housing and urban
        development transferred.--
                (A) Identifying employees for transfer.--The Bureau and the
            Secretary of the Department of Housing and Urban Development
            shall--
                    (i) jointly determine the number of employees of the
                Department of Housing and Urban Development necessary to
                perform or support the consumer protection functions of the
                Department that are transferred to the Bureau by this
                title; and
                    (ii) consistent with the number determined under clause
                (i), jointly identify employees of the Department of
                Housing and Urban Development for transfer to the Bureau in
                a manner that the Bureau and the Secretary of the
                Department of Housing and Urban Development, in their sole
                discretion, deem equitable.
                (B) Identified employees transferred.--All employees of the
            Department of Housing and Urban Development identified under
            subparagraph (A)(ii) shall be transferred to the Bureau for
            employment.
            (7) Consumer education, financial literacy, consumer
        complaints, and research functions.--The Bureau and each of the
        transferor agencies (except the Federal Trade Commission) shall
        jointly determine the number of employees and the types and grades
        of employees necessary to perform the functions of the Bureau under
        subtitle A, including consumer education, financial literacy,
        policy analysis, responses to consumer complaints and inquiries,
        research, and similar functions. All employees jointly identified
        under this paragraph shall be transferred to the Bureau for
        employment.
            (8) Authority of the president to resolve disputes.--
                (A) Action authorized.--In the event that the Bureau and a
            transferor agency are unable to reach an agreement under
            paragraphs (1) through (7) by the designated transfer date, the
            President, or the designee thereof, may issue an order or
            directive to the transferor agency to effect the transfer of
            personnel and property under this subtitle.
                (B) Transmittal to congress required.--If an order or
            directive is issued under subparagraph (A), the President shall
            transmit a copy of the written determination made with respect
            to such order or directive, including an explanation for the
            need for the order or directive, to the Committee on Banking,
            Housing, and Urban Affairs and the Committee on Appropriations
            of the Senate and the Committee on Financial Services and the
            Committee on Appropriations of the House of Representatives.
                (C) Sunset.--The authority provided in this paragraph shall
            terminate 3 years after the designated transfer date.
            (9) Appointment authority for excepted service and senior
        executive service transferred.--
                (A) In general.--In the case of an employee occupying a
            position in the excepted service or the Senior Executive
            Service, any appointment authority established pursuant to law
            or regulations of the Office of Personnel Management for
            filling such positions shall be transferred, subject to
            subparagraph (B).
                (B) Declining transfers allowed.--An agency or entity may
            decline to make 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, and
            non-career positions in the Senior Executive Service (within
            the meaning of section 3132(a)(7) of title 5, United States
            Code).
        (b) Timing of Transfers and Position Assignments.--Each employee to
    be transferred under this section shall--
            (1) be transferred not later than 90 days after the designated
        transfer date; and
            (2) receive notice of a position assignment not later than 120
        days after the effective date of his or her transfer.
        (c) Transfer of Function.--
            (1) In general.--Notwithstanding any other provision of law,
        the transfer of employees shall be deemed a transfer of functions
        for the purpose of section 3503 of title 5, United States Code.
            (2) Priority of this title.--If any provisions of this title
        conflict with any protection provided to transferred employees
        under section 3503 of title 5, United States Code, the provisions
        of this title shall control.
        (d) Equal Status and Tenure Positions.--
            (1) Employees transferred from the federal reserve system,
        fdic, hud, ncua, occ, and ots.--Each employee transferred to the
        Bureau from the Board of Governors, a Federal reserve bank, the
        Federal Deposit Insurance Corporation, 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 Bureau with
        the same status and tenure as that employee held on the day before
        the designated transfer date.
            (2) Employees transferred from the federal reserve system.--For
        purposes of determining the status and position placement of a
        transferred employee, any period of service with the Board of
        Governors or a Federal reserve bank shall be credited as a period
        of service with a Federal agency.
        (e) Additional Certification Requirements Limited.--Examiners
    transferred to the Bureau are not subject to any additional
    certification requirements before being placed in a comparable examiner
    position at the Bureau examining the same types of institutions as they
    examined before they were transferred.
        (f) Personnel Actions Limited.--
            (1) 2-year protection.--Except as provided in paragraph (2),
        each transferred employee holding a permanent position on the day
        before the designated transfer date may not, during the 2-year
        period beginning on the designated transfer date, be involuntarily
        separated, or involuntarily reassigned outside his or her locality
        pay area.
            (2) Exceptions.--Paragraph (1) does not limit the right of the
        Bureau--
                (A) to separate an employee for cause or for unacceptable
            performance;
                (B) to terminate an appointment to a position excepted from
            the competitive service because of its confidential policy-
            making, policy-determining, or policy-advocating character; or
                (C) to reassign a supervisory employee outside of his or
            her locality pay area when the Bureau determines that the
            reassignment is necessary for the efficient operation of the
            Bureau.
        (g) Pay.--
            (1) 2-year protection.--
                (A) In general.--Except as provided in paragraph (2), each
            transferred employee shall, during the 2-year period beginning
            on the designated transfer date, receive pay at a rate equal to
            not less than the basic rate of pay (including any geographic
            differential) that the employee received during the pay period
            immediately preceding the date of transfer.
                (B) Limitation.--Notwithstanding subparagraph (A), if the
            employee was receiving a higher rate of basic pay on a
            temporary basis (because of a temporary assignment, temporary
            promotion, or other temporary action) immediately before the
            date of transfer, the Bureau may reduce the rate of basic pay
            on the date on which the rate would have been reduced but for
            the transfer, and the protected rate for the remainder of the
            2-year period shall be the reduced rate that would have
            applied, but for the transfer.
            (2) Exceptions.--Paragraph (1) does not limit the right of the
        Bureau to reduce the rate of basic pay of a transferred employee--
                (A) for cause;
                (B) for unacceptable performance; or
                (C) with the consent of the employee.
            (3) Protection only while employed.--Paragraph (1) applies to a
        transferred employee only while that employee remains employed by
        the Bureau.
            (4) Pay increases permitted.--Paragraph (1) does not limit the
        authority of the Bureau to increase the pay of a transferred
        employee.
        (h) Reorganization.--
            (1) Between 1st and 3rd year.--
                (A) In general.--If the Bureau determines, during the 2-
            year period beginning 1 year after the designated transfer
            date, that a reorganization of the staff of the Bureau is
            required--
                    (i) that reorganization shall be deemed a ``substantial
                reorganization'' for purposes of affording affected
                employees retirement under section 8336(d)(2) or
                8414(b)(1)(B) of title 5, United States Code;
                    (ii) before the reorganization occurs, all employees in
                the same locality pay area as defined by the Office of
                Personnel Management shall be placed in a uniform position
                classification system; and
                    (iii) any resulting reduction in force shall be
                governed by the provisions of chapter 35 of title 5, United
                States Code, except that the Bureau shall--

                        (I) establish competitive areas (as that term is
                    defined in regulations issued by the Office of
                    Personnel Management) to include at a minimum all
                    employees in the same locality pay area as defined by
                    the Office of Personnel Management;
                        (II) establish competitive levels (as that term is
                    defined in regulations issued by the Office of
                    Personnel Management) without regard to whether the
                    particular employees have been appointed to positions
                    in the competitive service or the excepted service; and
                        (III) afford employees appointed to positions in
                    the excepted service (other than to a position excepted
                    from the competitive service because of its
                    confidential policy-making, policy-determining, or
                    policy-advocating character) the same assignment rights
                    to positions within the Bureau as employees appointed
                    to positions in the competitive service.

                (B) Service credit for reductions in force.--For purposes
            of this paragraph, periods of service with a Federal home loan
            bank, a joint office of the Federal home loan banks, the Board
            of Governors, a Federal reserve bank, the Federal Deposit
            Insurance Corporation, or the National Credit Union
            Administration shall be credited as periods of service with a
            Federal agency.
            (2) After 3rd year.--
                (A) In general.--If the Bureau determines, at any time
            after the 3-year period beginning on the designated transfer
            date, that a reorganization of the staff of the Bureau 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 Bureau shall establish competitive levels (as
            that term is defined in regulations issued by the Office of
            Personnel Management) without regard to types of appointment
            held by particular employees transferred under this section.
                (B) Service credit for reductions in force.--For purposes
            of this paragraph, periods of service with a Federal home loan
            bank, a joint office of the Federal home loan banks, the Board
            of Governors, a Federal reserve bank, the Federal Deposit
            Insurance Corporation, or the National Credit Union
            Administration shall be credited as periods of service with a
            Federal agency.
        (i) Benefits.--
            (1) Retirement benefits for transferred employees.--
                (A) In general.--
                    (i) Continuation of existing retirement plan.--Unless
                an election is made under clause (iii) or subparagraph (B),
                each employee transferred pursuant to this subtitle shall
                remain enrolled in the existing retirement plan of that
                employee as of the date of transfer, through any period of
                continuous employment with the Bureau.
                    (ii) Employer contribution.--The Bureau shall pay any
                employer contributions to the existing retirement plan of
                each transferred employee, as required under that plan.
                    (iii) Option to elect into the federal reserve system
                retirement plan and federal reserve system thrift plan.--
                Any employee transferred pursuant to this subtitle may,
                during the 1-year period beginning 6 months after the
                designated transfer date, elect to end their participation
                and benefit accruals under their existing retirement plan
                or plans and elect to participate in both the Federal
                Reserve System Retirement Plan and the Federal Reserve
                System Thrift Plan, through any period of continuous
                employment with the Bureau, under the same terms as are
                applicable to Federal Reserve System transferred employees,
                as provided in subparagraph (C). An election of coverage by
                the Federal Reserve System Retirement Plan and the Federal
                Reserve System Thrift Plan shall begin on the day following
                the end of the 18-month period beginning on the designated
                transfer date, and benefit accruals under the existing
                retirement plan of the transferred employee shall end on
                the last day of the 18-month period beginning on the
                designated transfer date If an employee elects to
                participate in the Federal Reserve System Retirement Plan
                and the Federal Reserve System Thrift Plan, all of the
                service of the employee that was creditable under their
                existing retirement plan shall be transferred to the
                Federal Reserve System Retirement Plan on the day following
                the end of the 18-month period beginning on the designated
                transfer date.
                    (iv) Bureau contribution.--The Bureau shall pay an
                employer contribution to the Federal Reserve System
                Retirement Plan, in the amount established as an employer
                contribution under the Federal Employees Retirement System,
                as established under chapter 84 of title 5, United States
                Code, for each Bureau employee who elects to participate in
                the Federal Reserve System Retirement Plan under this
                subparagraph. The Bureau shall pay an employer contribution
                to the Federal Reserve System Thrift Plan for each Bureau
                employee who elects to participate in such plan, as
                required under the terms of the Federal Reserve System
                Thrift Plan.
                    (v) Additional funding.--The Bureau shall transfer to
                the Federal Reserve System Retirement Plan an amount
                determined by the Board of Governors, in consultation with
                the Bureau, to be necessary to reimburse the Federal
                Reserve System Retirement Plan for the costs to such plan
                of providing benefits to employees electing coverage under
                the Federal Reserve System Retirement Plan under
                subparagraph (iii), and who were transferred to the Bureau
                from outside of the Federal Reserve System.
                    (vi) Option to elect into thrift plan created by the
                bureau.--If the Bureau chooses to establish a thrift plan,
                the employees transferred pursuant to this subtitle shall
                have the option to elect, under such terms and conditions
                as the Bureau may establish, coverage under such a thrift
                plan established by the Bureau. Transferred employees may
                not remain in the thrift plan of the agency from which the
                employee transferred under this subtitle, if the employee
                elects to participate in a thrift plan established by the
                Bureau.
                (B) Option for employees transferred from federal reserve
            system to be subject to the federal employee retirement
            program.--
                    (i) Election.--Any Federal Reserve System transferred
                employee who was enrolled in the Federal Reserve System
                Retirement Plan on the day before the date of his or her
                transfer to the Bureau may, during the 1-year period
                beginning 6 months after the designated transfer date,
                elect to be subject to the Federal Employee Retirement
                Program.
                    (ii) Effective date of coverage.--An election of
                coverage by the Federal Employee Retirement Program under
                this subparagraph shall begin on the day following the end
                of the 18-month period beginning on the designated transfer
                date, and benefit accruals under the existing retirement
                plan of the Federal Reserve System transferred employee
                shall end on the last day of the 18-month period beginning
                on the designated transfer date.
                (C) Bureau participation in federal reserve system
            retirement plan.--
                    (i) Benefits provided.--Federal Reserve System
                employees transferred pursuant to this subtitle shall
                continue to be eligible to participate in the Federal
                Reserve System Retirement Plan and Federal Reserve System
                Thrift Plan through any period of continuous employment
                with the Bureau, unless the employee makes an election
                under subparagraph (A)(vi) or (B). The retirement benefits,
                formulas, and features offered to the Federal Reserve
                System transferred employees shall be the same as those
                offered to employees of the Board of Governors who
                participate in the Federal Reserve System Retirement Plan
                and the Federal Reserve System Thrift Plan, as amended from
                time to time.
                    (ii) Limitation.--The Bureau shall not have
                responsibility or authority--

                        (I) to amend an existing retirement plan (including
                    the Federal Reserve System Retirement Plan or Federal
                    Reserve System Thrift Plan);
                        (II) for administering an existing retirement plan
                    (including the Federal Reserve System Retirement Plan
                    or Federal Reserve System Thrift Plan); or
                        (III) for ensuring the plans comply with applicable
                    laws, fiduciary rules, and related responsibilities.

                    (iii) Tax qualified status.--Notwithstanding any other
                provision of law, providing benefits to Federal Reserve
                System employees transferred to the Bureau pursuant to this
                subtitle, and to employees who elect coverage pursuant to
                subparagraph (A)(iii) or under section 1013(a)(2)(B), shall
                not cause any existing retirement plan (including the
                Federal Reserve System Retirement Plan and the Federal
                Reserve System Thrift Plan) to lose its tax-qualified
                status under sections 401(a) and 501(a) of the Internal
                Revenue Code of 1986.
                    (iv) Bureau contribution.--The Bureau shall pay any
                employer contributions to the existing retirement plan
                (including the Federal Reserve System Retirement Plan and
                the Federal Reserve System Thrift Plan) for each Federal
                Reserve System transferred employee participating in those
                plans, as required under the plan, after the designated
                transfer date.
                    (v) Controlled group status.--The Bureau is the same
                employer as the Federal Reserve System (as comprised of the
                Board of Governors and each of the 12 Federal reserve banks
                prior to the date of enactment of this Act) for purposes of
                subsections (b), (c), (m), and (o) of section 414 of the
                Internal Revenue Code of 1986 (26 U.S.C. 414).
                (D) Definitions.--For purposes of this paragraph--
                    (i) the term ``existing retirement plan'' means, with
                respect to an employee transferred pursuant to this
                subtitle, the retirement plan (including the Financial
                Institutions Retirement Fund) and any associated thrift
                savings plan, of the agency from which the employee was
                transferred under this subtitle, in which the employee was
                enrolled on the day before the date on which the employee
                was transferred;
                    (ii) the term ``Federal Employee Retirement Program''
                means either the Civil Service Retirement System
                established under chapter 83 of title 5, United States
                Code, or the Federal Employees Retirement System
                established under chapter 84 of title 5, United States
                Code, depending upon the service history of the individual;
                    (iii) the term ``Federal Reserve System transferred
                employee'' means a transferred employee who is an employee
                of the Board of Governors or a Federal reserve bank on the
                day before the designated transfer date, and who is
                transferred to the Bureau on the designated transfer date
                pursuant to this subtitle;
                    (iv) the term ``Federal Reserve System Retirement
                Plan'' means the Retirement Plan for Employees of the
                Federal Reserve System; and
                    (v) the term ``Federal Reserve System Thrift Plan''
                means the Thrift Plan for Employees of the Federal Reserve
                System.
            (2) Benefits other than retirement benefits for transferred
        employees.--
                (A) During 1st year.--
                    (i) Existing plans continue.--Each employee transferred
                pursuant to this subtitle 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 medical, dental,
                vision, long term care, or life insurance program, to which
                the employee belonged on the day before the designated
                transfer date.
                    (ii) Employer contribution.--The Bureau shall reimburse
                the agency or bank from which an employee was transferred
                for any cost incurred by that agency or bank in continuing
                to extend coverage in the benefit program to the employee,
                as required under that program or negotiated agreements.
                (B) Medical, dental, vision, or life insurance after first
            year.--If, at the end of the 1-year period beginning on the
            designated transfer date, the Bureau has not established its
            own, or arranged for participation in another entity's,
            medical, dental, vision, or life insurance program, an employee
            transferred pursuant to this subtitle who was a member of such
            a program at the agency or Federal reserve bank from which the
            employee transferred may, before the coverage of that employee
            ends under subparagraph (A)(i), elect to enroll, without regard
            to any regularly scheduled open season, in--
                    (i) the enhanced dental benefits program established
                under chapter 89A of title 5, United States Code;
                    (ii) the enhanced vision benefits established under
                chapter 89B of title 5, United States Code;
                    (iii) the Federal Employees Group Life Insurance
                Program established under chapter 87 of title 5, United
                States Code, without regard to any requirement of
                insurability; and
                    (iv) the Federal Employees Health Benefits Program
                established under chapter 89 of title 5, United States
                Code.
                (C) Long term care insurance after 1st year.--If, at the
            end of the 1-year period beginning on the designated transfer
            date, the Bureau has not established its own, or arranged for
            participation in another entity's, long term care insurance
            program, an employee transferred pursuant to this subtitle who
            was a member of such a program at the agency or Federal reserve
            bank from which the employee transferred may, before the
            coverage of that employee ends under subparagraph (A)(i), elect
            to apply for coverage under the Federal Long Term Care
            Insurance Program established under chapter 90 of title 5,
            United States Code, under the underwriting requirements
            applicable to a new active workforce member (as defined in part
            875 of title 5, Code of Federal Regulations).
                (D) Employee contribution.--An individual enrolled in the
            Federal Employees Health Benefits program shall pay any
            employee contribution required by the plan.
                (E) Additional funding.--The Bureau 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 Bureau 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
            paragraph.
                (F) Credit for time enrolled in other plans.--For employees
            transferred under this title, enrollment in a health benefits
            plan administered by a transferor agency or a Federal reserve
            bank, as the case may be, immediately before enrollment in a
            health benefits plan under chapter 89 of title 5, United States
            Code, shall be considered as enrollment in a health benefits
            plan under that chapter for purposes of section 8905(b)(1)(A)
            of title 5, United States Code.
                (G) Special provisions to ensure continuation of life
            insurance benefits.--
                    (i) In general.--An annuitant (as defined in section
                8901(3) of title 5, United States Code) who is enrolled in
                a life insurance plan administered by a transferor agency
                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 Bureau, without regard to any regularly scheduled
                open season and requirement of insurability.
                    (ii) Employee contribution.--An individual enrolled in
                a life insurance plan under this subparagraph shall pay any
                employee contribution required by the plan.
                    (iii) Additional funding.--The Bureau 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 Bureau 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 (ii).
                    (iv) Credit for time enrolled in other plans.--For
                employees transferred under this title, enrollment in a
                life insurance plan administered by a transferor agency
                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.
            (3) OPM rules.--The Office of Personnel Management shall issue
        such rules as are necessary to carry out this subsection.
        (j) Implementation of Uniform Pay and Classification System.--Not
    later than 2 years after the designated transfer date, the Bureau shall
    implement a uniform pay and classification system for all employees
    transferred under this title.
        (k) Equitable Treatment.--In administering the provisions of this
    section, the Bureau--
            (1) shall take no action that would unfairly disadvantage
        transferred employees relative to each other based on their prior
        employment by the Board of Governors, the Federal Deposit Insurance
        Corporation, the 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, a Federal home loan bank, or a joint office of the
        Federal home loan banks; and
            (2) may take such action as is appropriate in individual cases
        so that employees transferred under this section receive equitable
        treatment, with respect to the status, tenure, pay, benefits (other
        than benefits under programs administered by the Office of
        Personnel Management), and accrued leave or vacation time of those
        employees, for prior periods of service with any Federal agency,
        including the Board of Governors, the Corporation, 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, a Federal
        home loan bank, or a joint office of the Federal home loan banks.
        (l) Implementation.--In implementing the provisions of this
    section, the Bureau shall coordinate with the Office of Personnel
    Management and other entities having expertise in matters related to
    employment to ensure a fair and orderly transition for affected
    employees.
    SEC. 1065. INCIDENTAL TRANSFERS.
        (a) Incidental Transfers Authorized.--The Director of the Office of
    Management and Budget, in consultation with the Secretary, shall make
    such additional incidental transfers and dispositions of assets and
    liabilities held, used, arising from, available, or to be made
    available, in connection with the functions transferred by this title,
    as the Director may determine necessary to accomplish the purposes of
    this title.
        (b) Sunset.--The authority provided in this section shall terminate
    5 years after the date of enactment of this Act.
    SEC. 1066. INTERIM AUTHORITY OF THE SECRETARY.
        (a) In General.--The Secretary is authorized to perform the
    functions of the Bureau under this subtitle until the Director of the
    Bureau is confirmed by the Senate in accordance with section 1011.
        (b) Interim Administrative Services by the Department of the
    Treasury.--The Department of the Treasury may provide administrative
    services necessary to support the Bureau before the designated transfer
    date.
    SEC. 1067. TRANSITION OVERSIGHT.
        (a) Purpose.--The purpose of this section is to ensure that the
    Bureau--
            (1) has an orderly and organized startup;
            (2) attracts and retains a qualified workforce; and
            (3) establishes comprehensive employee training and benefits
        programs.
        (b) Reporting Requirement.--
            (1) In general.--The Bureau shall submit an annual report to
        the Committee on Banking, Housing, and Urban Affairs of the Senate
        and the Committee on Financial Services of the House of
        Representatives that includes the plans described in paragraph (2).
            (2) Plans.--The plans described in this paragraph are as
        follows:
                (A) Training and workforce development plan.--The Bureau
            shall submit a training and workforce development plan that
            includes, to the extent practicable--
                    (i) identification of skill and technical expertise
                needs and actions taken to meet those requirements;
                    (ii) steps taken to foster innovation and creativity;
                    (iii) leadership development and succession planning;
                and
                    (iv) effective use of technology by employees.
                (B) Workplace flexibilities plan.--The Bureau shall submit
            a workforce flexibility plan that includes, to the extent
            practicable--
                    (i) telework;
                    (ii) flexible work schedules;
                    (iii) phased retirement;
                    (iv) reemployed annuitants;
                    (v) part-time work;
                    (vi) job sharing;
                    (vii) parental leave benefits and childcare assistance;
                    (viii) domestic partner benefits;
                    (ix) other workplace flexibilities; or
                    (x) any combination of the items described in clauses
                (i) through (ix).
                (C) Recruitment and retention plan.--The Bureau shall
            submit a recruitment and retention plan that includes, to the
            extent practicable, provisions relating to--
                    (i) the steps necessary to target highly qualified
                applicant pools with diverse backgrounds;
                    (ii) streamlined employment application processes;
                    (iii) the provision of timely notification of the
                status of employment applications to applicants; and
                    (iv) the collection of information to measure
                indicators of hiring effectiveness.
        (c) Expiration.--The reporting requirement under subsection (b)
    shall terminate 5 years after the date of enactment of this Act.
        (d) Rule of Construction.--Nothing in this section may be construed
    to affect--
            (1) a collective bargaining agreement, as that term is defined
        in section 7103(a)(8) of title 5, United States Code, that is in
        effect on the date of enactment of this Act; or
            (2) the rights of employees under chapter 71 of title 5, United
        States Code.
        (e) Participation in Examinations.--In order to prepare the Bureau
    to conduct examinations under section 1025 upon the designated transfer
    date, the Bureau and the applicable prudential regulator may agree to
    include, on a sampling basis, examiners on examinations of the
    compliance with Federal consumer financial law of institutions
    described in section 1025(a) conducted by the prudential regulators
    prior to the designated transfer date.

                      Subtitle G--Regulatory Improvements

    SEC. 1071. SMALL BUSINESS DATA COLLECTION.
        (a) In General.--The Equal Credit Opportunity Act (15 U.S.C. 1691
    et seq.) is amended by inserting after section 704A the following:
    ``SEC. 704B. SMALL BUSINESS LOAN DATA COLLECTION.
        ``(a) Purpose.--The purpose of this section is to facilitate
    enforcement of fair lending laws and enable communities, governmental
    entities, and creditors to identify business and community development
    needs and opportunities of women-owned, minority-owned, and small
    businesses.
        ``(b) Information Gathering.--Subject to the requirements of this
    section, in the case of any application to a financial institution for
    credit for women-owned, minority-owned, or small business, the
    financial institution shall--
            ``(1) inquire whether the business is a women-owned, minority-
        owned, or small business, without regard to whether such
        application is received in person, by mail, by telephone, by
        electronic mail or other form of electronic transmission, or by any
        other means, and whether or not such application is in response to
        a solicitation by the financial institution; and
            ``(2) maintain a record of the responses to such inquiry,
        separate from the application and accompanying information.
        ``(c) Right To Refuse.--Any applicant for credit may refuse to
    provide any information requested pursuant to subsection (b) in
    connection with any application for credit.
        ``(d) No Access by Underwriters.--
            ``(1) Limitation.--Where feasible, no loan underwriter or other
        officer or employee of a financial institution, or any affiliate of
        a financial institution, involved in making any determination
        concerning an application for credit shall have access to any
        information provided by the applicant pursuant to a request under
        subsection (b) in connection with such application.
            ``(2) Limited access.--If a financial institution determines
        that a 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 shall provide notice to the applicant of the access of
        the underwriter to such information, along with notice that the
        financial institution may not discriminate on the basis of such
        information.
        ``(e) Form and Manner of Information.--
            ``(1) In general.--Each financial institution shall compile and
        maintain, in accordance with regulations of the Bureau, a record of
        the information provided by any loan applicant pursuant to a
        request under subsection (b).
            ``(2) Itemization.--Information compiled and maintained under
        paragraph (1) shall be itemized in order to clearly and
        conspicuously disclose--
                ``(A) the number of the application and the date on which
            the application was received;
                ``(B) the type and purpose of the loan or other credit
            being applied for;
                ``(C) the amount of the credit or credit limit applied for,
            and the amount of the credit transaction or the credit limit
            approved for such applicant;
                ``(D) the type of action taken with respect to such
            application, and the date of such action;
                ``(E) the census tract in which is located the principal
            place of business of the women-owned, minority-owned, or small
            business loan applicant;
                ``(F) the gross annual revenue of the business in the last
            fiscal year of the women-owned, minority-owned, or small
            business loan applicant preceding the date of the application;
                ``(G) the race, sex, and ethnicity of the principal owners
            of the business; and
                ``(H) any additional data that the Bureau determines would
            aid in fulfilling the purposes of this section.
            ``(3) No personally identifiable information.--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, or
        any other personally identifiable information concerning any
        individual who is, or is connected with, the women-owned, minority-
        owned, or small business loan applicant.
            ``(4) Discretion to delete or modify publicly available data.--
        The Bureau may, at its discretion, delete or modify data collected
        under this section which is or will be available to the public, if
        the Bureau determines that the deletion or modification of the data
        would advance a privacy interest.
        ``(f) Availability of Information.--
            ``(1) Submission to bureau.--The data required to be compiled
        and maintained under this section by any financial institution
        shall be submitted annually to the Bureau.
            ``(2) Availability of information.--Information compiled and
        maintained under this section shall be--
                ``(A) retained for not less than 3 years after the date of
            preparation;
                ``(B) made available to any member of the public, upon
            request, in the form required under regulations prescribed by
            the Bureau;
                ``(C) annually made available to the public generally by
            the Bureau, in such form and in such manner as is determined by
            the Bureau, by regulation.
            ``(3) Compilation of aggregate data.--The Bureau may, at its
        discretion--
                ``(A) compile and aggregate data collected under this
            section for its own use; and
                ``(B) make public such compilations of aggregate data.
        ``(g) Bureau Action.--
            ``(1) In general.--The Bureau shall prescribe such rules and
        issue such guidance as may be necessary to carry out, enforce, and
        compile data pursuant to this section.
            ``(2) Exceptions.--The Bureau, by rule or order, may adopt
        exceptions to any requirement of this section and may,
        conditionally or unconditionally, exempt any financial institution
        or class of financial institutions from the requirements of this
        section, as the Bureau deems necessary or appropriate to carry out
        the purposes of this section.
            ``(3) Guidance.--The Bureau 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-owned,
        minority-owned, or small businesses for purposes of this section.
        ``(h) Definitions.--For purposes of this section, the following
    definitions shall apply:
            ``(1) Financial institution.--The term `financial institution'
        means any partnership, company, corporation, association
        (incorporated or unincorporated), trust, estate, cooperative
        organization, or other entity that engages in any financial
        activity.
            ``(2) Small business.--The term `small business' has the same
        meaning as the term `small business concern' in section 3 of the
        Small Business Act (15 U.S.C. 632).
            ``(3) Small business loan.--The term `small business loan'
        means a loan made to a small business.
            ``(4) Minority.--The term `minority' has the same meaning as in
        section 1204(c)(3) of the Financial Institutions Reform, Recovery,
        and Enforcement Act of 1989.
            ``(5) Minority-owned business.--The term `minority-owned
        business' means a business--
                ``(A) more than 50 percent of the ownership or control of
            which is held by 1 or more minority individuals; and
                ``(B) more than 50 percent of the net profit or loss of
            which accrues to 1 or more minority individuals.
            ``(6) Women-owned business.--The term `women-owned business'
        means a business--
                ``(A) more than 50 percent of the ownership or control of
            which is held by 1 or more women; and
                ``(B) more than 50 percent of the net profit or loss of
            which accrues to 1 or more women.''.
        (b) Technical and Conforming Amendments.--Section 701(b) of the
    Equal Credit Opportunity Act (15 U.S.C. 1691(b)) is amended--
            (1) in paragraph (3), by striking ``or'' at the end;
            (2) in paragraph (4), by striking the period at the end and
        inserting ``; or''; and
            (3) by inserting after paragraph (4), the following:
            ``(5) to make an inquiry under section 704B, in accordance with
        the requirements of that section.''.
        (c) Clerical Amendment.--The table of sections for title VII of the
    Consumer Credit Protection Act is amended by inserting after the item
    relating to section 704A the following new item:

    ``704B. Small business loan data collection.''.

        (d) Effective Date.--This section shall become effective on the
    designated transfer date.
    SEC. 1072. ASSISTANCE FOR ECONOMICALLY VULNERABLE INDIVIDUALS AND
    FAMILIES.
        (a) HERA Amendments.--Section 1132 of the Housing and Economic
    Recovery Act of 2008 (12 U.S.C. 1701x note) is amended--
            (1) in subsection (a), by inserting in each of paragraphs (1),
        (2), (3), and (4) ``or economically vulnerable individuals and
        families'' after ``homebuyers'' each place that term appears;
            (2) in subsection (b)(1), by inserting ``or economically
        vulnerable individuals and families'' after ``homebuyers'';
            (3) in subsection (c)(1)--
                (A) in subparagraph (A), by striking ``or'' at the end;
                (B) in subparagraph (B), by striking the period at the end
            and inserting ``; or''; and
                (C) by adding at the end the following:
                ``(C) a nonprofit corporation that--
                    ``(i) is exempt from taxation under section 501(c)(3)
                of the Internal Revenue Code of 1986; and
                    ``(ii) specializes or has expertise in working with
                economically vulnerable individuals and families, but whose
                primary purpose is not provision of credit counseling
                services.''; and
            (4) in subsection (d)(1), by striking ``not more than 5''.
        (b) Applicability.--Amendments made by subsection (a) shall not
    apply to programs authorized by section 1132 of the Housing and
    Economic Recovery Act of 2008 (12 U.S.C. 1701x note) that are funded
    with appropriations prior to fiscal year 2011.
    SEC. 1073. REMITTANCE TRANSFERS.
        (a) Treatment of Remittance Transfers.--The Electronic Fund
    Transfer Act (15 U.S.C. 1693 et seq.) is amended--
            (1) in section 902(b) (15 U.S.C. 1693(b)), by inserting ``and
        remittance'' after ``electronic fund'';
            (2) in section 904(c) (15 U.S.C. 1693b(c)), in the first
        sentence, by inserting ``or remittance transfers'' after
        ``electronic fund transfers'';
            (3) by redesignating sections 919, 920, 921, and 922 as
        sections 920, 921, 922, and 923, respectively; and
            (4) by inserting after section 918 the following:
        ``SEC. 919. REMITTANCE TRANSFERS.
        ``(a) Disclosures Required for Remittance Transfers.--
            ``(1) In general.--Each remittance transfer provider shall make
        disclosures as required under this section and in accordance with
        rules prescribed by the Board. Disclosures required under this
        section shall be in addition to any other disclosures applicable
        under this title.
            ``(2) Disclosures.--Subject to rules prescribed by the Board, a
        remittance transfer provider shall provide, in writing and in a
        form that the sender may keep, to each sender requesting a
        remittance transfer, as applicable to the transaction--
                ``(A) at the time at which the sender requests a remittance
            transfer to be initiated, and prior to the sender making any
            payment in connection with the remittance transfer, a
            disclosure describing--
                    ``(i) the amount of currency that will be received by
                the designated recipient, using the values of the currency
                into which the funds will be exchanged;
                    ``(ii) the amount of transfer and any other fees
                charged by the remittance transfer provider for the
                remittance transfer; and
                    ``(iii) any exchange rate to be used by the remittance
                transfer provider for the remittance transfer, to the
                nearest 1/100th of a point; and
                ``(B) at the time at which the sender makes payment in
            connection with the remittance transfer--
                    ``(i) a receipt showing--

                        ``(I) the information described in subparagraph
                    (A);
                        ``(II) the promised date of delivery to the
                    designated recipient; and
                        ``(III) the name and either the telephone number or
                    the address of the designated recipient, if either the
                    telephone number or the address of the designated
                    recipient is provided by the sender; and

                    ``(ii) a statement containing--

                        ``(I) information about the rights of the sender
                    under this section regarding the resolution of errors;
                    and
                        ``(II) appropriate contact information for--

                            ``(aa) the remittance transfer provider; and
                            ``(bb) the State agency that regulates the
                        remittance transfer provider and the Board,
                        including the toll-free telephone number
                        established under section 1013 of the Consumer
                        Financial Protection Act of 2010.
            ``(3) Requirements relating to disclosures.--With respect to
        each disclosure required to be provided under paragraph (2) a
        remittance transfer provider shall--
                ``(A) provide an initial notice and receipt, as required by
            subparagraphs (A) and (B) of paragraph (2), and an error
            resolution statement, as required by subsection (d), that
            clearly and conspicuously describe the information required to
            be disclosed therein; and
                ``(B) with respect to any transaction that a sender
            conducts electronically, comply with the Electronic Signatures
            in Global and National Commerce Act (15 U.S.C. 7001 et seq.).
            ``(4) Exception for disclosures of amount received.--
                ``(A) In general.--Subject to the rules prescribed by the
            Board, and except as provided under subparagraph (B), the
            disclosures required regarding the amount of currency that will
            be received by the designated recipient shall be deemed to be
            accurate, so long as the disclosures provide a reasonably
            accurate estimate of the foreign currency to be received. This
            paragraph shall apply only to a remittance transfer provider
            who is an insured depository institution, as defined in section
            3 of the Federal Deposit Insurance Act (12 U.S.C. 1813), or an
            insured credit union, as defined in section 101 of the Federal
            Credit Union Act (12 U.S.C. 1752), and if--
                    ``(i) a remittance transfer is conducted through a
                demand deposit, savings deposit, or other asset account
                that the sender holds with such remittance transfer
                provider; and
                    ``(ii) at the time at which the sender requests the
                transaction, the remittance transfer provider is unable to
                know, for reasons beyond its control, the amount of
                currency that will be made available to the designated
                recipient.
                ``(B) Deadline.--The application of subparagraph (A) shall
            terminate 5 years after the date of enactment of the Consumer
            Financial Protection Act of 2010, unless the Board determines
            that termination of such provision would negatively affect the
            ability of remittance transfer providers described in
            subparagraph (A) to send remittances to locations in foreign
            countries, in which case, the Board may, by rule, extend the
            application of subparagraph (A) to not longer than 10 years
            after the date of enactment of the Consumer Financial
            Protection Act of 2010.
            ``(5) Exemption authority.--The Board may, by rule, permit a
        remittance transfer provider to satisfy the requirements of--
                ``(A) paragraph (2)(A) orally, if the transaction is
            conducted entirely by telephone;
                ``(B) paragraph (2)(B), in the case of a transaction
            conducted entirely by telephone, by mailing the disclosures
            required under such subparagraph to the sender, not later than
            1 business day after the date on which the transaction is
            conducted, or by including such documents in the next periodic
            statement, if the telephone transaction is conducted through a
            demand deposit, savings deposit, or other asset account that
            the sender holds with the remittance transfer provider;
                ``(C) subparagraphs (A) and (B) of paragraph (2) together
            in one written disclosure, but only to the extent that the
            information provided in accordance with paragraph (3)(A) is
            accurate at the time at which payment is made in connection
            with the subject remittance transfer; and
                ``(D) paragraph (2)(A), without compliance with section
            101(c) of the Electronic Signatures in Global Commerce Act, if
            a sender initiates the transaction electronically and the
            information is displayed electronically in a manner that the
            sender can keep.
            ``(6) Storefront and internet notices.--
                ``(A) In general.--
                    ``(i) Prominent posting.--Subject to subparagraph (B),
                the Board may prescribe rules to require a remittance
                transfer provider to prominently post, and timely update, a
                notice describing a model remittance transfer for one or
                more amounts, as the Board may determine, which notice
                shall show the amount of currency that will be received by
                the designated recipient, using the values of the currency
                into which the funds will be exchanged.
                    ``(ii) Onsite displays.--The Board may require the
                notice prescribed under this subparagraph to be displayed
                in every physical storefront location owned or controlled
                by the remittance transfer provider.
                    ``(iii) Internet notices.--Subject to paragraph (3),
                the Board shall prescribe rules to require a remittance
                transfer provider that provides remittance transfers via
                the Internet to provide a notice, comparable to a
                storefront notice described in this subparagraph, located
                on the home page or landing page (with respect to such
                remittance transfer services) owned or controlled by the
                remittance transfer provider.
                    ``(iv) Rulemaking authority.--In prescribing rules
                under this subparagraph, the Board may impose standards or
                requirements regarding the provision of the storefront and
                Internet notices required under this subparagraph and the
                provision of the disclosures required under paragraphs (2)
                and (3).
                ``(B) Study and analysis.--Prior to proposing rules under
            subparagraph (A), the Board shall undertake appropriate studies
            and analyses, which shall be consistent with section 904(a)(2),
            and may include an advanced notice of proposed rulemaking, to
            determine whether a storefront notice or Internet notice
            facilitates the ability of a consumer--
                    ``(i) to compare prices for remittance transfers; and
                    ``(ii) to understand the types and amounts of any fees
                or costs imposed on remittance transfers.
        ``(b) Foreign Language Disclosures.--The disclosures required under
    this section shall be made in English and in each of the foreign
    languages principally used by the remittance transfer provider, or any
    of its agents, to advertise, solicit, or market, either orally or in
    writing, at that office.
        ``(c) Regulations Regarding Transfers to Certain Nations.--If the
    Board determines that a recipient nation does not legally allow, or the
    method by which transactions are made in the recipient country do not
    allow, a remittance transfer provider to know the amount of currency
    that will be received by the designated recipient, the Board may
    prescribe rules (not later than 18 months after the date of enactment
    of the Consumer Financial Protection Act of 2010) addressing the issue,
    which rules shall include standards for a remittance transfer provider
    to provide--
            ``(1) a receipt that is consistent with subsections (a) and
        (b); and
            ``(2) a reasonably accurate estimate of the foreign currency to
        be received, based on the rate provided to the sender by the
        remittance transfer provider at the time at which the transaction
        was initiated by the sender.
        ``(d) Remittance Transfer Errors.--
            ``(1) Error resolution.--
                ``(A) In general.--If a remittance transfer provider
            receives oral or written notice from the sender within 180 days
            of the promised date of delivery that an error occurred with
            respect to a remittance transfer, including the amount of
            currency designated in subsection (a)(3)(A) that was to be sent
            to the designated recipient of the remittance transfer, using
            the values of the currency into which the funds should have
            been exchanged, but was not made available to the designated
            recipient in the foreign country, the remittance transfer
            provider shall resolve the error pursuant to this subsection
            and investigate the reason for the error.
                ``(B) Remedies.--Not later than 90 days after the date of
            receipt of a notice from the sender pursuant to subparagraph
            (A), the remittance transfer provider shall, as applicable to
            the error and as designated by the sender--
                    ``(i) refund to the sender the total amount of funds
                tendered by the sender in connection with the remittance
                transfer which was not properly transmitted;
                    ``(ii) make available to the designated recipient,
                without additional cost to the designated recipient or to
                the sender, the amount appropriate to resolve the error;
                    ``(iii) provide such other remedy, as determined
                appropriate by rule of the Board for the protection of
                senders; or
                    ``(iv) provide written notice to the sender that there
                was no error with an explanation responding to the specific
                complaint of the sender.
            ``(2) Rules.--The Board shall establish, by rule issued not
        later than 18 months after the date of enactment of the Consumer
        Financial Protection Act of 2010, clear and appropriate standards
        for remittance transfer providers with respect to error resolution
        relating to remittance transfers, to protect senders from such
        errors. Standards prescribed under this paragraph shall include
        appropriate standards regarding record keeping, as required,
        including documentation--
                ``(A) of the complaint of the sender;
                ``(B) that the sender provides the remittance transfer
            provider with respect to the alleged error; and
                ``(C) of the findings of the remittance transfer provider
            regarding the investigation of the alleged error that the
            sender brought to their attention.
            ``(3) Cancellation and refund policy rules.--Not later than 18
        months after the date of enactment of the Consumer Financial
        Protection Act of 2010, the Board shall issue final rules regarding
        appropriate remittance transfer cancellation and refund policies
        for consumers.
        ``(e) Applicability of This Title.--
            ``(1) In general.--A remittance transfer that is not an
        electronic fund transfer, as defined in section 903, shall not be
        subject to any of the provisions of sections 905 through 913. A
        remittance transfer that is an electronic fund transfer, as defined
        in section 903, shall be subject to all provisions of this title,
        except for section 908, that are otherwise applicable to electronic
        fund transfers under this title.
            ``(2) Rule of construction.--Nothing in this section shall be
        construed--
                ``(A) to affect the application to any transaction, to any
            remittance provider, or to any other person of any of the
            provisions of subchapter II of chapter 53 of title 31, United
            States Code, section 21 of the Federal Deposit Insurance Act
            (12 U.S.C. 1829b), or chapter 2 of title I of Public Law 91-508
            (12 U.S.C. 1951-1959), or any regulations promulgated
            thereunder; or
                ``(B) to cause any fund transfer that would not otherwise
            be treated as such under paragraph (1) 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 regulations promulgated thereunder.
        ``(f) Acts of Agents.--
            ``(1) In general.--A remittance transfer provider shall be
        liable for any violation of this section by any agent, authorized
        delegate, or person affiliated with such provider, when such agent,
        authorized delegate, or affiliate acts for that remittance transfer
        provider.
            ``(2) Obligations of remittance transfer providers.--The Board
        shall prescribe rules to implement appropriate standards or
        conditions of, liability of a remittance transfer provider,
        including a provider who acts through an agent or authorized
        delegate. An agency charged with enforcing the requirements of this
        section, or rules prescribed by the Board under this section, may
        consider, in any action or other proceeding against a remittance
        transfer provider, the extent to which the provider had established
        and maintained policies or procedures for compliance, including
        policies, procedures, or other appropriate oversight measures
        designed to assure compliance by an agent or authorized delegate
        acting for such provider.
        ``(g) Definitions.--As used in this section--
            ``(1) the term `designated recipient' means any person located
        in a foreign country and identified by the sender as the authorized
        recipient of a remittance transfer to be made by a remittance
        transfer provider, except that a designated recipient shall not be
        deemed to be a consumer for purposes of this Act;
            ``(2) the term `remittance transfer'--
                ``(A) means the electronic (as defined in section 106(2) of
            the Electronic Signatures in Global and National Commerce Act
            (15 U.S.C. 7006(2))) transfer of funds requested by a sender
            located in any State to a designated recipient that is
            initiated by a remittance transfer provider, whether or not the
            sender holds an account with the remittance transfer provider
            or whether or not the remittance transfer is also an electronic
            fund transfer, as defined in section 903; and
                ``(B) does not include a transfer described in subparagraph
            (A) in an amount that is equal to or lesser than the amount of
            a small-value transaction determined, by rule, to be excluded
            from the requirements under section 906(a);
            ``(3) the term `remittance transfer provider' means any person
        or financial institution that provides remittance transfers for a
        consumer in the normal course of its business, whether or not the
        consumer holds an account with such person or financial
        institution; and
            ``(4) the term `sender' means a consumer who requests a
        remittance provider to send a remittance transfer for the consumer
        to a designated recipient.''.
        (b) Automated Clearinghouse System.--
            (1) Expansion of system.--The Board of Governors shall work
        with the Federal reserve banks and the Department of the Treasury
        to expand the use of the automated clearinghouse system and other
        payment mechanisms for remittance transfers to foreign countries,
        with a focus on countries that receive significant remittance
        transfers from the United States, based on--
                (A) the number, volume, and size of such transfers;
                (B) the significance of the volume of such transfers
            relative to the external financial flows of the receiving
            country, including--
                    (i) the total amount transferred; and
                    (ii) the total volume of payments made by United States
                Government agencies to beneficiaries and retirees living
                abroad;
                (C) the feasibility of such an expansion; and
                (D) the ability of the Federal Reserve System to establish
            payment gateways in different geographic regions and currency
            zones to receive remittance transfers and route them through
            the payments systems in the destination countries.
            (2) Report to congress.--Not later than one calendar year after
        the date of enactment of this Act, and on April 30 biennially
        thereafter during the 10-year period beginning on that date of
        enactment, the Board of Governors shall submit a report to 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 subsection. The
        report shall include an analysis of adoption rates of International
        ACH Transactions rules and formats, the efficacy of increasing
        adoption rates, and potential recommendations to increase adoption.
        (c) Expansion of Financial Institution Provision of Remittance
    Transfers.--
            (1) Provision of guidelines to institutions.--Each of the
        Federal banking agencies and the National Credit Union
        Administration shall provide guidelines to financial institutions
        under the jurisdiction of the agency regarding the offering of low-
        cost remittance transfers and no-cost or low-cost basic consumer
        accounts, as well as agency services to remittance transfer
        providers.
            (2) Assistance to financial literacy commission.--As part of
        its duties as members of the Financial Literacy and Education
        Commission, the Bureau, the Federal banking agencies, and the
        National Credit Union Administration shall assist the Financial
        Literacy and Education Commission in executing the Strategy for
        Assuring Financial Empowerment (or the ``SAFE Strategy''), as it
        relates to remittances.
        (d) Federal Credit Union Act Conforming Amendment.--Paragraph (12)
    of section 107 of the Federal Credit Union Act (12 U.S.C. 1757) is
    amended to read as follows:
            ``(12) in accordance with regulations prescribed by the Board--
                ``(A) to sell, to persons in the field of membership,
            negotiable checks (including travelers checks), money orders,
            and other similar money transfer instruments (including
            international and domestic electronic fund transfers and
            remittance transfers, as defined in section 919 of the
            Electronic Fund Transfer Act); and
                ``(B) to cash checks and money orders for persons in the
            field of membership for a fee;''.
        (e) Report on Feasibility of and Impediments to Use of Remittance
    History in Calculation of Credit Score.--Before the end of the 365-day
    period beginning on the date of enactment of this Act, the Director
    shall submit a report to the President, the Committee on Banking,
    Housing, and Urban Affairs of the Senate, and the Committee on
    Financial Services of the House of Representatives regarding--
            (1) the manner in which the remittance history of a consumer
        could be used to enhance the credit score of the consumer;
            (2) the current legal and business model barriers and
        impediments that impede the use of the remittance history of the
        consumer to enhance the credit score of the consumer; and
            (3) recommendations on the manner in which maximum transparency
        and disclosure to consumers of exchange rates for remittance
        transfers subject to this title and the amendments made by 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
        sections 919(a)(2)(D) and 919(a)(3) of the Electronic Fund Transfer
        Act (as amended by this section).
    SEC. 1074. DEPARTMENT OF THE TREASURY STUDY ON ENDING THE
    CONSERVATORSHIP OF FANNIE MAE, FREDDIE MAC, AND REFORMING THE HOUSING
    FINANCE SYSTEM.
        (a) Study Required.--
            (1) In general.--The Secretary of the Treasury shall conduct a
        study of and develop recommendations regarding the options for
        ending the conservatorship of the Federal National Mortgage
        Association (in this section referred to as ``Fannie Mae'') and the
        Federal Home Loan Mortgage Corporation (in this section referred to
        as ``Freddie Mac''), while minimizing the cost to taxpayers,
        including such options as--
                (A) the gradual wind-down and liquidation of such entities;
                (B) the privatization of such entities;
                (C) the incorporation of the functions of such entities
            into a Federal agency;
                (D) the dissolution of Fannie Mae and Freddie Mac into
            smaller companies; or
                (E) any other measures the Secretary determines
            appropriate.
            (2) Analyses.--The study required under paragraph (1) shall
        include an analysis of--
                (A) the role of the Federal Government in supporting a
            stable, well-functioning housing finance system, and whether
            and to what extent the Federal Government should bear risks in
            meeting Federal housing finance objectives;
                (B) how the current structure of the housing finance system
            can be improved;
                (C) how the housing finance system should support the
            continued availability of mortgage credit to all segments of
            the market;
                (D) how the housing finance system should be structured to
            ensure that consumers continue to have access to 30-year, fixed
            rate, pre-payable mortgages and other mortgage products that
            have simple terms that can be easily understood;
                (E) the role of the Federal Housing Administration and the
            Department of Veterans Affairs in a future housing system;
                (F) the impact of reforms of the housing finance system on
            the financing of rental housing;
                (G) the impact of reforms of the housing finance system on
            secondary market liquidity;
                (H) the role of standardization in the housing finance
            system;
                (I) how housing finance systems in other countries offer
            insights that can help inform options for reform in the United
            States; and
                (J) the options for transition to a reformed housing
            finance system.
        (b) Report and Recommendations.--Not later than January 31, 2011,
    the Secretary of the Treasury shall submit the report and
    recommendations required under subsection (a) to the Committee on
    Banking, Housing, and Urban Affairs of the Senate and the Committee on
    Financial Services of the House of Representatives.
    SEC. 1075. REASONABLE FEES AND RULES FOR PAYMENT CARD TRANSACTIONS.
        (a) In General.--The Electronic Fund Transfer Act (15 U.S.C. 1693
    et seq.) is amended--
            (1) by redesignating sections 920 and 921 as sections 921 and
        922, respectively; and
            (2) by inserting after section 919 the following:
        ``SEC. 920. REASONABLE FEES AND RULES FOR PAYMENT CARD
          TRANSACTIONS.
        ``(a) Reasonable Interchange Transaction Fees for Electronic Debit
    Transactions.--
            ``(1) Regulatory authority over interchange transaction fees.--
        The Board may prescribe regulations, pursuant to section 553 of
        title 5, United States Code, regarding any interchange transaction
        fee that an issuer may receive or charge with respect to an
        electronic debit transaction, to implement this subsection
        (including related definitions), and to prevent circumvention or
        evasion of this subsection.
            ``(2) Reasonable interchange transaction fees.--The amount of
        any interchange transaction fee that an issuer may receive or
        charge with respect to an electronic debit transaction shall be
        reasonable and proportional to the cost incurred by the issuer with
        respect to the transaction.
            ``(3) Rulemaking required.--
                ``(A) In general.--The Board shall prescribe regulations in
            final form not later than 9 months after the date of enactment
            of the Consumer Financial Protection Act of 2010, to establish
            standards for assessing whether the amount of any interchange
            transaction fee described in paragraph (2) is reasonable and
            proportional to the cost incurred by the issuer with respect to
            the transaction.
                ``(B) Information collection.--The Board may require any
            issuer (or agent of an issuer) or payment card network to
            provide the Board with such information as may be necessary to
            carry out the provisions of this subsection and the Board, in
            issuing rules under subparagraph (A) and on at least a bi-
            annual basis thereafter, shall disclose such aggregate or
            summary information concerning the costs incurred, and
            interchange transaction fees charged or received, by issuers or
            payment card networks in connection with the authorization,
            clearance or settlement of electronic debit transactions as the
            Board considers appropriate and in the public interest.
            ``(4) Considerations; consultation.--In prescribing regulations
        under paragraph (3)(A), the Board shall--
                ``(A) consider the functional similarity between--
                    ``(i) electronic debit transactions; and
                    ``(ii) checking transactions that are required within
                the Federal Reserve bank system to clear at par;
                ``(B) distinguish between--
                    ``(i) the incremental cost incurred by an issuer for
                the role of the issuer in the authorization, clearance, or
                settlement of a particular electronic debit transaction,
                which cost shall be considered under paragraph (2); and
                    ``(ii) other costs incurred by an issuer which are not
                specific to a particular electronic debit transaction,
                which costs shall not be considered under paragraph (2);
                and
                ``(C) consult, as appropriate, with the Comptroller of the
            Currency, the Board of Directors of the Federal Deposit
            Insurance Corporation, the Director of the Office of Thrift
            Supervision, the National Credit Union Administration Board,
            the Administrator of the Small Business Administration, and the
            Director of the Bureau of Consumer Financial Protection.
            ``(5) Adjustments to interchange transaction fees for fraud
        prevention costs.--
                ``(A) Adjustments.--The Board may allow for an adjustment
            to the fee amount received or charged by an issuer under
            paragraph (2), if--
                    ``(i) such adjustment is reasonably necessary to make
                allowance for costs incurred by the issuer in preventing
                fraud in relation to electronic debit transactions
                involving that issuer; and
                    ``(ii) the issuer complies with the fraud-related
                standards established by the Board under subparagraph (B),
                which standards shall--

                        ``(I) be designed to ensure that any fraud-related
                    adjustment of the issuer is limited to the amount
                    described in clause (i) and takes into account any
                    fraud-related reimbursements (including amounts from
                    charge-backs) received from consumers, merchants, or
                    payment card networks in relation to electronic debit
                    transactions involving the issuer; and
                        ``(II) require issuers to take effective steps to
                    reduce the occurrence of, and costs from, fraud in
                    relation to electronic debit transactions, including
                    through the development and implementation of cost-
                    effective fraud prevention technology.

                ``(B) Rulemaking required.--
                    ``(i) In general.--The Board shall prescribe
                regulations in final form not later than 9 months after the
                date of enactment of the Consumer Financial Protection Act
                of 2010, to establish standards for making adjustments
                under this paragraph.
                    ``(ii) Factors for consideration.--In issuing the
                standards and prescribing regulations under this paragraph,
                the Board shall consider--

                        ``(I) the nature, type, and occurrence of fraud in
                    electronic debit transactions;
                        ``(II) the extent to which the occurrence of fraud
                    depends on whether authorization in an electronic debit
                    transaction is based on signature, PIN, or other means;
                        ``(III) the available and economical means by which
                    fraud on electronic debit transactions may be reduced;
                        ``(IV) the fraud prevention and data security costs
                    expended by each party involved in electronic debit
                    transactions (including consumers, persons who accept
                    debit cards as a form of payment, financial
                    institutions, retailers and payment card networks);
                        ``(V) the costs of fraudulent transactions absorbed
                    by each party involved in such transactions (including
                    consumers, persons who accept debit cards as a form of
                    payment, financial institutions, retailers and payment
                    card networks);
                        ``(VI) the extent to which interchange transaction
                    fees have in the past reduced or increased incentives
                    for parties involved in electronic debit transactions
                    to reduce fraud on such transactions; and
                        ``(VII) such other factors as the Board considers
                    appropriate.

            ``(6) Exemption for small issuers.--
                ``(A) In general.--This subsection shall not apply to any
            issuer that, together with its affiliates, has assets of less
            than $10,000,000,000, and the Board shall exempt such issuers
            from regulations prescribed under paragraph (3)(A).
                ``(B) Definition.--For purposes of this paragraph, the term
            ``issuer'' shall be limited to the person holding the asset
            account that is debited through an electronic debit
            transaction.
            ``(7) Exemption for government-administered payment programs
        and reloadable prepaid cards.--
                ``(A) In general.--This subsection shall not apply to an
            interchange transaction fee charged or received with respect to
            an electronic debit transaction in which a person uses--
                    ``(i) a debit card or general-use prepaid card that has
                been provided to a person pursuant to a Federal, State or
                local government-administered payment program, in which the
                person may only use the debit card or general-use prepaid
                card to transfer or debit funds, monetary value, or other
                assets that have been provided pursuant to such program; or
                    ``(ii) a plastic card, payment code, or device that
                is--

                        ``(I) linked to funds, monetary value, or assets
                    which are purchased or loaded on a prepaid basis;
                        ``(II) not issued or approved for use to access or
                    debit any account held by or for the benefit of the
                    card holder (other than a subaccount or other method of
                    recording or tracking funds purchased or loaded on the
                    card on a prepaid basis);
                        ``(III) redeemable at multiple, unaffiliated
                    merchants or service providers, or automated teller
                    machines;
                        ``(IV) used to transfer or debit funds, monetary
                    value, or other assets; and
                        ``(V) reloadable and not marketed or labeled as a
                    gift card or gift certificate.

                ``(B) Exception.--Notwithstanding subparagraph (A), after
            the end of the 1-year period beginning on the effective date
            provided in paragraph (9), this subsection shall apply to an
            interchange transaction fee charged or received with respect to
            an electronic debit transaction described in subparagraph
            (A)(i) in which a person uses a general-use prepaid card, or an
            electronic debit transaction described in subparagraph (A)(ii),
            if any of the following fees may be charged to a person with
            respect to the card:
                    ``(i) A fee for an overdraft, including a shortage of
                funds or a transaction processed for an amount exceeding
                the account balance.
                    ``(ii) A fee imposed by the issuer for the first
                withdrawal per month from an automated teller machine that
                is part of the issuer's designated automated teller machine
                network.
                ``(C) Definition.--For purposes of subparagraph (B), the
            term `designated automated teller machine network' means
            either--
                    ``(i) all automated teller machines identified in the
                name of the issuer; or
                    ``(ii) any network of automated teller machines
                identified by the issuer that provides reasonable and
                convenient access to the issuer's customers.
                ``(D) Reporting.--Beginning 12 months after the date of
            enactment of the Consumer Financial Protection Act of 2010, the
            Board shall annually provide a report to the Congress regarding
            --
                    ``(i) the prevalence of the use of general-use prepaid
                cards in Federal, State or local government-administered
                payment programs; and
                    ``(ii) the interchange transaction fees and cardholder
                fees charged with respect to the use of such general-use
                prepaid cards.
            ``(8) Regulatory authority over network fees.--
                ``(A) In general.--The Board may prescribe regulations,
            pursuant to section 553 of title 5, United States Code,
            regarding any network fee.
                ``(B) Limitation.--The authority under subparagraph (A) to
            prescribe regulations shall be limited to regulations to ensure
            that--
                    ``(i) a network fee is not used to directly or
                indirectly compensate an issuer with respect to an
                electronic debit transaction; and
                    ``(ii) a network fee is not used to circumvent or evade
                the restrictions of this subsection and regulations
                prescribed under such subsection.
                ``(C) Rulemaking required.--The Board shall prescribe
            regulations in final form before the end of the 9-month period
            beginning on the date of the enactment of the Consumer
            Financial Protection Act of 2010, to carry out the authorities
            provided under subparagraph (A).
            ``(9) Effective date.--This subsection shall take effect at the
        end of the 12-month period beginning on the date of the enactment
        of the Consumer Financial Protection Act of 2010.
        ``(b) Limitation on Payment Card Network Restrictions.--
            ``(1) Prohibitions against exclusivity arrangements.--
                ``(A) No exclusive network.--The Board shall, before the
            end of the 1-year period beginning on the date of the enactment
            of the Consumer Financial Protection Act of 2010, prescribe
            regulations providing that an issuer or payment card network
            shall not directly or through any agent, processor, or licensed
            member of a payment card network, by contract, requirement,
            condition, penalty, or otherwise, restrict the number of
            payment card networks on which an electronic debit transaction
            may be processed to--
                    ``(i) 1 such network; or
                    ``(ii) 2 or more such networks which are owned,
                controlled, or otherwise operated by --

                        ``(I) affiliated persons; or
                        ``(II) networks affiliated with such issuer.

                ``(B) No routing restrictions.--The Board shall, before the
            end of the 1-year period beginning on the date of the enactment
            of the Consumer Financial Protection Act of 2010, prescribe
            regulations providing that an issuer or payment card network
            shall not, directly or through any agent, processor, or
            licensed member of the network, by contract, requirement,
            condition, penalty, or otherwise, inhibit the ability of any
            person who accepts debit cards for payments to direct the
            routing of electronic debit transactions for processing over
            any payment card network that may process such transactions.
            ``(2) Limitation on restrictions on offering discounts for use
        of a form of payment.--
                ``(A) In general.--A payment card network shall not,
            directly or through any agent, processor, or licensed member of
            the network, by contract, requirement, condition, penalty, or
            otherwise, inhibit the ability of any person to provide a
            discount or in-kind incentive for payment by the use of cash,
            checks, debit cards, or credit cards to the extent that--
                    ``(i) in the case of a discount or in-kind incentive
                for payment by the use of debit cards, the discount or in-
                kind incentive does not differentiate on the basis of the
                issuer or the payment card network;
                    ``(ii) in the case of a discount or in-kind incentive
                for payment by the use of credit cards, the discount or in-
                kind incentive does not differentiate on the basis of the
                issuer or the payment card network; and
                    ``(iii) to the extent required by Federal law and
                applicable State law, such discount or in-kind incentive is
                offered to all prospective buyers and disclosed clearly and
                conspicuously.
                ``(B) Lawful discounts.--For purposes of this paragraph,
            the network may not penalize any person for the providing of a
            discount that is in compliance with Federal law and applicable
            State law.
            ``(3) Limitation on restrictions on setting transaction
        minimums or maximums.--
                ``(A) In general.--A payment card network shall not,
            directly or through any agent, processor, or licensed member of
            the network, by contract, requirement, condition, penalty, or
            otherwise, inhibit the ability--
                    ``(i) of any person to set a minimum dollar value for
                the acceptance by that person of credit cards, to the
                extent that --

                        ``(I) such minimum dollar value does not
                    differentiate between issuers or between payment card
                    networks; and
                        ``(II) such minimum dollar value does not exceed
                    $10.00; or

                    ``(ii) of any Federal agency or institution of higher
                education to set a maximum dollar value for the acceptance
                by that Federal agency or institution of higher education
                of credit cards, to the extent that such maximum dollar
                value does not differentiate between issuers or between
                payment card networks.
                ``(B) Increase in minimum dollar amount.--The Board may, by
            regulation prescribed pursuant to section 553 of title 5,
            United States Code, increase the amount of the dollar value
            listed in subparagraph (A)(i)(II).
            ``(4) Rule of construction:.--No provision of this subsection
        shall be construed to authorize any person--
                ``(A) to discriminate between debit cards within a payment
            card network on the basis of the issuer that issued the debit
            card; or
                ``(B) to discriminate between credit cards within a payment
            card network on the basis of the issuer that issued the credit
            card.
        ``(c) Definitions.--For purposes of this section, the following
    definitions shall apply:
            ``(1) Affiliate.--The term `affiliate' means any company that
        controls, is controlled by, or is under common control with another
        company.
            ``(2) Debit card.--The term `debit card'--
                ``(A) means any card, or other payment code or device,
            issued or approved for use through a payment card network to
            debit an asset account (regardless of the purpose for which the
            account is established), whether authorization is based on
            signature, PIN, or other means;
                ``(B) includes a general-use prepaid card, as that term is
            defined in section 915(a)(2)(A); and
                ``(C) does not include paper checks.
            ``(3) Credit card.--The term `credit card' has the same meaning
        as in section 103 of the Truth in Lending Act.
            ``(4) Discount.--The term `discount'--
                ``(A) means a reduction made from the price that customers
            are informed is the regular price; and
                ``(B) does not include any means of increasing the price
            that customers are informed is the regular price.
            ``(5) Electronic debit transaction.--The term `electronic debit
        transaction' means a transaction in which a person uses a debit
        card.
            ``(6) Federal agency.--The term `Federal agency' means--
                ``(A) an agency (as defined in section 101 of title 31,
            United States Code); and
                ``(B) a Government corporation (as defined in section 103
            of title 5, United States Code).
            ``(7) Institution of higher education.--The term `institution
        of higher education' has the same meaning as in 101 and 102 of the
        Higher Education Act of 1965 (20 U.S.C. 1001, 1002).
            ``(8) Interchange transaction fee.--The term `interchange
        transaction fee' means any fee established, charged or received by
        a payment card network for the purpose of compensating an issuer
        for its involvement in an electronic debit transaction.
            ``(9) Issuer.--The term `issuer' means any person who issues a
        debit card, or credit card, or the agent of such person with
        respect to such card.
            ``(10) Network fee.--The term `network fee' means any fee
        charged and received by a payment card network with respect to an
        electronic debit transaction, other than an interchange transaction
        fee.
            ``(11) Payment card network.--The term `payment card network'
        means an entity that directly, or through licensed members,
        processors, or agents, provides the proprietary services,
        infrastructure, and software that route information and data to
        conduct debit card or credit card transaction authorization,
        clearance, and settlement, and that a person uses in order to
        accept as a form of payment a brand of debit card, credit card or
        other device that may be used to carry out debit or credit
        transactions.
        ``(d) Enforcement.--
            ``(1) In general.--Compliance with the requirements imposed
        under this section shall be enforced under section 918.
            ``(2) Exception.--Sections 916 and 917 shall not apply with
        respect to this section or the requirements imposed pursuant to
        this section.''.
        (b) Amendment to the Food and Nutrition Act of 2008.--Section
    7(h)(10) of the Food and Nutrition Act of 2008 (7 U.S.C. 2016(h)(10))
    is amended to read as follows:
            ``(10) Federal law not applicable.--Section 920 of the
        Electronic Fund Transfer Act shall not apply to electronic benefit
        transfer or reimbursement systems under this Act.''.
        (c) Amendment to the Farm Security and Rural Investment Act of
    2002.--Section 4402 of the Farm Security and Rural Investment Act of
    2002 (7 U.S.C. 3007) is amended by adding at the end the following new
    subsection:
        ``(f) Federal Law Not Applicable.--Section 920 of the Electronic
    Fund Transfer Act shall not apply to electronic benefit transfer
    systems established under this section.''.
        (d) Amendment to the Child Nutrition Act of 1966.--Section 11 of
    the Child Nutrition Act of 1966 (42 U.S.C. 1780) is amended by adding
    at the end the following:
        ``(c) Federal Law Not Applicable.--Section 920 of the Electronic
    Fund Transfer Act shall not apply to electronic benefit transfer
    systems established under this Act or the Richard B. Russell National
    School Lunch Act (42 U.S.C. 1751 et seq.).''.
    SEC. 1076. REVERSE MORTGAGE STUDY AND REGULATIONS.
        (a) Study.--Not later than 1 year after the designated transfer
    date, the Bureau shall conduct a study on reverse mortgage
    transactions.
        (b) Regulations.--
            (1) In general.--If the Bureau determines through the study
        required under subsection (a) that conditions or limitations on
        reverse mortgage transactions are necessary or appropriate for
        accomplishing the purposes and objectives of this title, including
        protecting borrowers with respect to the obtaining of reverse
        mortgage loans for the purpose of funding investments, annuities,
        and other investment products and the suitability of a borrower in
        obtaining a reverse mortgage for such purpose.
            (2) Identified practices and integrated disclosures.--The
        regulations prescribed under paragraph (1) may, as the Bureau may
        so determine--
                (A) identify any practice as unfair, deceptive, or abusive
            in connection with a reverse mortgage transaction; and
                (B) provide for an integrated disclosure standard and model
            disclosures for reverse mortgage transactions, consistent with
            section 4302(d), that combines the relevant disclosures
            required under the Truth in Lending Act (15 U.S.C. 1601 et
            seq.) and the Real Estate Settlement Procedures Act, with the
            disclosures required to be provided to consumers for Home
            Equity Conversion Mortgages under section 255 of the National
            Housing Act.
        (c) Rule of Construction.--This section shall not be construed as
    limiting the authority of the Bureau to issue regulations, orders, or
    guidance that apply to reverse mortgages prior to the completion of the
    study required under subsection (a).
    SEC. 1077. REPORT ON PRIVATE EDUCATION LOANS AND PRIVATE EDUCATIONAL
    LENDERS.
        (a) Report.--Not later than 2 years after the date of enactment of
    this Act, the Director and the Secretary of Education, in consultation
    with the Commissioners of the Federal Trade Commission, and the
    Attorney General of the United States, shall submit a report to the
    Committee on Banking, Housing, and Urban Affairs and the Committee on
    Health, Education, Labor, and Pensions of the Senate and the Committee
    on Financial Services and the Committee on Education and Labor of the
    House of Representatives, 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).
        (b) Content.--The report required by this section shall examine, at
    a minimum--
            (1) the growth and changes of the private education loan market
        in the United States;
            (2) factors influencing such growth and changes;
            (3) 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;
            (4) the characteristics of private education loan borrowers,
        including--
                (A) the types of institutions of higher education that they
            attend;
                (B) socioeconomic characteristics (including income and
            education levels, racial characteristics, geographical
            background, age, and gender);
                (C) what other forms of financing borrowers use to pay for
            education;
                (D) whether they exhaust their Federal loan options before
            taking out a private loan;
                (E) 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;
                (F) 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
                (G) if practicable, employment and repayment behaviors;
            (5) the characteristics of private educational lenders,
        including whether such creditors are for-profit, non-profit, or
        institutions of higher education;
            (6) 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);
            (7) the terms, conditions, and pricing of private education
        loans;
            (8) 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;
            (9) 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 lender
        compliance with fair lending laws; and
            (10) 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.
    SEC. 1078. STUDY AND REPORT ON CREDIT SCORES.
        (a) Study.--The Bureau shall conduct a study on 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.
        (b) Report to Congress.--The Bureau shall submit a report to
    Congress on the results of the study conducted under subsection (a) not
    later than 1 year after the date of enactment of this Act.
    SEC. 1079. REVIEW, REPORT, AND PROGRAM WITH RESPECT TO EXCHANGE
    FACILITATORS.
        (a) Review.--The Director shall review all Federal laws and
    regulations relating to the protection of consumers who use exchange
    facilitators for transactions primarily for personal, family, or
    household purposes.
        (b) Report.--Not later than 1 year after the designated transfer
    date, the Director shall submit to Congress a report describing--
            (1) recommendations for legislation to ensure the appropriate
        protection of consumers who use exchange facilitators for
        transactions primarily for personal, family, or household purposes;
            (2) recommendations for updating the regulations of Federal
        departments and agencies to ensure the appropriate protection of
        such consumers; and
            (3) recommendations for regulations to ensure the appropriate
        protection of such consumers.
        (c) Program.--Not later than 2 years after the date of the
    submission of the report under subsection (b), the Bureau shall,
    consistent with subtitle B, propose regulations or otherwise establish
    a program to protect consumers who use exchange facilitators.
        (d) Exchange Facilitator Defined.--In this section, the term
    ``exchange facilitator'' means a person that--
            (1) facilitates, for a fee, an exchange of like kind property
        by entering into an agreement with a taxpayer by which the exchange
        facilitator acquires from the taxpayer the contractual rights to
        sell the taxpayer's relinquished property and transfers a
        replacement property to the taxpayer as a qualified intermediary
        (within the meaning of Treasury Regulations section 1.1031(k)-
        1(g)(4)) or enters into an agreement with the taxpayer to take
        title to a property as an exchange accommodation titleholder
        (within the meaning of Revenue Procedure 2000-37) or enters into an
        agreement with a taxpayer to act as a qualified trustee or
        qualified escrow holder (within the meaning of Treasury Regulations
        section 1.1031(k)-1(g)(3));
            (2) maintains an office for the purpose of soliciting business
        to perform the services described in paragraph (1); or
            (3) advertises any of the services described in paragraph (1)
        or solicits clients in printed publications, direct mail,
        television or radio advertisements, telephone calls, facsimile
        transmissions, or other electronic communications directed to the
        general public for purposes of providing any such services.
    SEC. 1079A. FINANCIAL FRAUD PROVISIONS.
        (a) Sentencing Guidelines.--
            (1) Securities fraud.--
                (A) Directive.--Pursuant to its authority under section 994
            of title 28, United States Code, and in accordance with this
            paragraph, the United States Sentencing Commission shall review
            and, if appropriate, amend the Federal Sentencing Guidelines
            and policy statements applicable to persons convicted of
            offenses relating to securities fraud or any other similar
            provision of law, in order to reflect the intent of Congress
            that penalties for the offenses under the guidelines and policy
            statements appropriately account for the potential and actual
            harm to the public and the financial markets from the offenses.
                (B) Requirements.--In making any amendments to the Federal
            Sentencing Guidelines and policy statements under subparagraph
            (A), the United States Sentencing Commission shall--
                    (i) ensure that the guidelines and policy statements,
                particularly section 2B1.1(b)(14) and section 2B1.1(b)(17)
                (and any successors thereto), reflect--

                        (I) the serious nature of the offenses described in
                    subparagraph (A);
                        (II) the need for an effective deterrent and
                    appropriate punishment to prevent the offenses; and
                        (III) the effectiveness of incarceration in
                    furthering the objectives described in subclauses (I)
                    and (II);

                    (ii) consider the extent to which the guidelines
                appropriately account for the potential and actual harm to
                the public and the financial markets resulting from the
                offenses;
                    (iii) ensure reasonable consistency with other relevant
                directives and guidelines and Federal statutes;
                    (iv) make any necessary conforming changes to
                guidelines; and
                    (v) ensure that the guidelines adequately meet the
                purposes of sentencing, as set forth in section 3553(a)(2)
                of title 18, United States Code.
            (2) Financial institution fraud.--
                (A) Directive.--Pursuant to its authority under section 994
            of title 28, United States Code, and in accordance with this
            paragraph, the United States Sentencing Commission shall review
            and, if appropriate, amend the Federal Sentencing Guidelines
            and policy statements applicable to persons convicted of fraud
            offenses relating to financial institutions or federally
            related mortgage loans and any other similar provisions of law,
            to reflect the intent of Congress that the penalties for the
            offenses under the guidelines and policy statements ensure
            appropriate terms of imprisonment for offenders involved in
            substantial bank frauds or other frauds relating to financial
            institutions.
                (B) Requirements.--In making any amendments to the Federal
            Sentencing Guidelines and policy statements under subparagraph
            (A), the United States Sentencing Commission shall--
                    (i) ensure that the guidelines and policy statements
                reflect--

                        (I) the serious nature of the offenses described in
                    subparagraph (A);
                        (II) the need for an effective deterrent and
                    appropriate punishment to prevent the offenses; and
                        (III) the effectiveness of incarceration in
                    furthering the objectives described in subclauses (I)
                    and (II);

                    (ii) consider the extent to which the guidelines
                appropriately account for the potential and actual harm to
                the public and the financial markets resulting from the
                offenses;
                    (iii) ensure reasonable consistency with other relevant
                directives and guidelines and Federal statutes;
                    (iv) make any necessary conforming changes to
                guidelines; and
                    (v) ensure that the guidelines adequately meet the
                purposes of sentencing, as set forth in section 3553(a)(2)
                of title 18, United States Code.
        (b) Extension of Statute of Limitations for Securities Fraud
    Violations.--
            (1) In general.--Chapter 213 of title 18, United States Code,
        is amended by adding at the end the following:
    ``Sec. 3301. Securities fraud offenses
        ``(a) Definition.--In this section, the term `securities fraud
    offense' means a violation of, or a conspiracy or an attempt to
    violate--
            ``(1) section 1348;
            ``(2) section 32(a) of the Securities Exchange Act of 1934 (15
        U.S.C. 78ff(a));
            ``(3) section 24 of the Securities Act of 1933 (15 U.S.C. 77x);
            ``(4) section 217 of the Investment Advisers Act of 1940 (15
        U.S.C. 80b-17);
            ``(5) section 49 of the Investment Company Act of 1940 (15
        U.S.C. 80a-48); or
            ``(6) section 325 of the Trust Indenture Act of 1939 (15 U.S.C.
        77yyy).
        ``(b) Limitation.--No person shall be prosecuted, tried, or
    punished for a securities fraud offense, unless the indictment is found
    or the information is instituted within 6 years after the commission of
    the offense.''.
            (2) Technical and conforming amendment.--The table of sections
        for chapter 213 of title 18, United States Code, is amended by
        adding at the end the following:

    ``3301. Securities fraud offenses.''.

        (c) Amendments to the False Claims Act Relating to Limitations on
    Actions.--Section 3730(h) of title 31, United States Code, is amended--
            (1) in paragraph (1), by striking ``or agent on behalf of the
        employee, contractor, or agent or associated others in furtherance
        of other efforts to stop 1 or more violations of this subchapter''
        and inserting ``agent or associated others in furtherance of an
        action under this section or other efforts to stop 1 or more
        violations of this subchapter''; and
            (2) by adding at the end the following:
            ``(3) Limitation on bringing civil action.--A civil action
        under this subsection may not be brought more than 3 years after
        the date when the retaliation occurred.''.

                       Subtitle H--Conforming Amendments

    SEC. 1081. AMENDMENTS TO THE INSPECTOR GENERAL ACT.
        Effective on the date of enactment of this Act, the Inspector
    General Act of 1978 (5 U.S.C. App. 3) is amended--
            (1) in section 8G(a)(2), by inserting ``and the Bureau of
        Consumer Financial Protection'' after ``Board of Governors of the
        Federal Reserve System'';
            (2) in section 8G(c), by adding at the end the following: ``For
        purposes of implementing this section, the Chairman of the Board of
        Governors of the Federal Reserve System shall appoint the Inspector
        General of the Board of Governors of the Federal Reserve System and
        the Bureau of Consumer Financial Protection. The Inspector General
        of the Board of Governors of the Federal Reserve System and the
        Bureau of Consumer Financial Protection shall have all of the
        authorities and responsibilities provided by this Act with respect
        to the Bureau of Consumer Financial Protection, as if the Bureau
        were part of the Board of Governors of the Federal Reserve
        System.''; and
            (3) in section 8G(g)(3), by inserting ``and the Bureau of
        Consumer Financial Protection'' after ``Board of Governors of the
        Federal Reserve System'' the first place that term appears.
    SEC. 1082. AMENDMENTS TO THE PRIVACY ACT OF 1974.
        Effective on the date of enactment of this Act, section 552a of
    title 5, United States Code, is amended by adding at the end the
    following:
        ``(w) Applicability to Bureau of Consumer Financial Protection.--
    Except as provided in the Consumer Financial Protection Act of 2010,
    this section shall apply with respect to the Bureau of Consumer
    Financial Protection.''.
    SEC. 1083. AMENDMENTS TO THE ALTERNATIVE MORTGAGE TRANSACTION PARITY
    ACT OF 1982.
        (a) In General.--The Alternative Mortgage Transaction Parity Act of
    1982 (12 U.S.C. 3801 et seq.) is amended--
            (1) in section 803 (12 U.S.C. 3802(1)), by striking ``1974''
        and all that follows through ``described and defined'' and
        inserting the following: ``1974), in which the interest rate or
        finance charge may be adjusted or renegotiated, described and
        defined''; and
            (2) in section 804 (12 U.S.C. 3803)--
                (A) in subsection (a)--
                    (i) in each of paragraphs (1), (2), and (3), by
                inserting after ``transactions made'' each place that term
                appears ``on or before the designated transfer date, as
                determined under section 1062 of the Consumer Financial
                Protection Act of 2010,'';
                    (ii) in paragraph (2), by striking ``and'' at the end;
                    (iii) in paragraph (3), by striking the period at the
                end and inserting ``; and''; and
                    (iv) by adding at the end the following new paragraph:
            ``(4) with respect to transactions made after the designated
        transfer date, only in accordance with regulations governing
        alternative mortgage transactions, as issued by the Bureau of
        Consumer Financial Protection for federally chartered housing
        creditors, in accordance with the rulemaking authority granted to
        the Bureau of Consumer Financial Protection with regard to
        federally chartered housing creditors under provisions of law other
        than this section.'';
                (B) by striking subsection (c) and inserting the following:
        ``(c) Preemption of State Law.--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. For purposes of this
    subsection, a State constitution, law, or regulation that prohibits an
    alternative mortgage transaction does not include any State
    constitution, law, or regulation that regulates mortgage transactions
    generally, including any restriction on prepayment penalties or late
    charges.''; and
                (C) by adding at the end the following:
        ``(d) Bureau Actions.--The Bureau of Consumer Financial Protection
    shall--
            ``(1) review the regulations identified by the Comptroller of
        the Currency and the National Credit Union Administration, (as
        those rules exist on the designated transfer date), as applicable
        under paragraphs (1) through (3) of subsection (a);
            ``(2) determine whether such regulations are fair and not
        deceptive and otherwise meet the objectives of the Consumer
        Financial Protection Act of 2010; and
            ``(3) promulgate regulations under subsection (a)(4) after the
        designated transfer date.
        ``(e) Designated Transfer Date.--As used in this section, the term
    `designated transfer date' means the date determined under section 1062
    of the Consumer Financial Protection Act of 2010.''.
        (b) Effective Date.--This section and the amendments made by this
    section shall become effective on the designated transfer date.
        (c) Rule of Construction.--The amendments made by subsection (a)
    shall not affect any transaction covered by the Alternative Mortgage
    Transaction Parity Act of l982 (12 U.S.C. 3801 et seq.) and entered
    into on or before the designated transfer date.
    SEC. 1084. AMENDMENTS TO THE ELECTRONIC FUND TRANSFER ACT.
        The Electronic Fund Transfer Act (15 U.S.C. 1693 et seq.) is
    amended--
            (1) by striking ``Board'' each place that term appears and
        inserting ``Bureau'', except in subsections (a) and (e) of section
        904 (as amended in paragraph (3) of this section) and in 918 (15
        U.S.C. 1693o) (as so designated by the Credit Card Act of 2009) and
        section 920 (as added by section 1076);
            (2) in section 903 (15 U.S.C. 1693a)--
                (A) by redesignating paragraphs (3) through (11) as
            paragraphs (4) through (12), respectively; and
                (B) by inserting after paragraph (3) the following:
            ``(4) the term `Bureau' means the Bureau of Consumer Financial
        Protection;'';
            (3) in section 904 (15 U.S.C. 1693b)--
                (A) in subsection (a), by striking ``(a) Prescription by
            Board.--The Board shall prescribe regulations to carry out the
            purposes of this title.'' and inserting the following:
        ``(a) Prescription by the Bureau and the Board.--
            ``(1) In general.--Except as provided in paragraph (2), the
        Bureau shall prescribe rules to carry out the purposes of this
        title.
            ``(2) Authority of the board.--The Board shall have sole
        authority to prescribe rules--
                ``(A) to carry out the purposes of this title with respect
            to a person described in section 1029(a) of the Consumer
            Financial Protection Act of 2010; and
                ``(B) to carry out the purposes of section 920.''; and
                (B) by adding at the end the following new subsection:
        ``(e) Deference.--No provision of this title may be construed as
    altering, limiting, or otherwise affecting the deference that a court
    affords to--
            ``(1) the Bureau in making determinations regarding the meaning
        or interpretation of any provision of this title for which the
        Bureau has authority to prescribe regulations; or
            ``(2) the Board in making determinations regarding the meaning
        or interpretation of section 920.''.
            (4) in section 916(d) (15 U.S.C. 1693m) (as so designated by
        the Credit CARD Act of 2009)--
                (A) in the subsection heading, by striking ``of Board or
            Approval of Duly Authorized Official or Employee of Federal
            Reserve System'';
                (B) by inserting ``Bureau or the'' before ``Board'' each
            place that term appears; and
                (C) by inserting ``Bureau of Consumer Financial Protection
            or the'' before ``Federal Reserve System''; and
            (5) in section 918 (15 U.S.C. 1693o) (as so designated by the
        Credit CARD Act of 2009)--
                (A) in subsection (a)--
                    (i) by striking ``Compliance'' and inserting ``Subject
                to subtitle B of the Consumer Financial Protection Act of
                2010, compliance'';
                    (ii) by striking paragraphs (1) and (2), and inserting
                the following:
            ``(1) section 8 of the Federal Deposit Insurance Act, by the
        appropriate Federal banking agency, as defined in section 3(q) of
        the Federal Deposit Insurance Act (12 U.S.C. 1813(q)), with respect
        to--
                ``(A) national banks, Federal savings associations, and
            Federal branches and Federal agencies of foreign banks;
                ``(B) member banks of the Federal Reserve System (other
            than national banks), branches and agencies of foreign banks
            (other than Federal branches, Federal agencies, and insured
            State branches of foreign banks), commercial lending companies
            owned or controlled by foreign banks, and organizations
            operating under section 25 or 25A of the Federal Reserve Act;
            and
                ``(C) banks and State savings associations insured by the
            Federal Deposit Insurance Corporation (other than members of
            the Federal Reserve System), and insured State branches of
            foreign banks;'';
                    (iii) by redesignating paragraphs (3) through (5) as
                paragraphs (2) through (4), respectively;
                    (iv) in paragraph (2) (as so redesignated), by striking
                the period at the end and inserting a semicolon;
                    (v) in paragraph (3) (as so redesignated), by striking
                ``and'' at the end;
                    (vi) in paragraph (4) (as so redesignated), by striking
                the period at the end and inserting ``and''; and
                    (vii) by adding at the end the following:
            ``(5) subtitle E of the Consumer Financial Protection Act of
        2010, by the Bureau, with respect to any person subject to this
        title, except that the Bureau shall not have authority to enforce
        the requirements of section 920 or any regulations prescribed by
        the Board under section 920.'';
                (B) in subsection (b), by inserting ``any of paragraphs (1)
            through (4) of'' before ``subsection (a)'' each place that term
            appears; and
                (C) by striking subsection (c) and inserting the following:
        ``(c) Overall Enforcement Authority of the Federal Trade
    Commission.--Except to the extent that enforcement of the requirements
    imposed under this title is specifically committed to some other
    Government agency under any of paragraphs (1) through (4) of subsection
    (a), and subject to subtitle B of the Consumer Financial Protection Act
    of 2010, the Federal Trade Commission shall be authorized to 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 Federal Trade
    Commission to enforce compliance by any person subject to the
    jurisdiction of the Federal Trade Commission with the requirements
    imposed under this title, irrespective of whether that person is
    engaged in commerce or meets any other jurisdictional tests under the
    Federal Trade Commission Act.''.
    SEC. 1085. AMENDMENTS TO THE EQUAL CREDIT OPPORTUNITY ACT.
        The Equal Credit Opportunity Act (15 U.S.C. 1691 et seq.) is
    amended--
            (1) by striking ``Board'' each place that term appears, other
        than in section 703(f) (as added by this section) and section
        704(a)(4) (15 U.S.C. 1691c(a)(4)), and inserting ``Bureau'';
            (2) in section 702 (15 U.S.C. 1691a), by striking subsection
        (c) and inserting the following:
        ``(c) The term `Bureau' means the Bureau of Consumer Financial
    Protection.'';
            (3) in section 703 (15 U.S.C. 1691b)--
                (A) by striking the section heading and inserting the
            following:
        ``SEC. 703. PROMULGATION OF REGULATIONS BY THE BUREAU.'';
                (B) by striking ``(a) Regulations.--'';
                (C) by striking subsection (b);
                (D) by redesignating paragraphs (1) through (5) as
            subsections (a) through (e), respectively;
                (E) in subsection (c), as so redesignated, by striking
            ``paragraph (2)'' and inserting ``subsection (b)''; and
                (F) by adding at the end the following:
        ``(f) Board Authority.--Notwithstanding subsection (a), the Board
    shall prescribe regulations to carry out the purposes of this title
    with respect to a person described in section 1029(a) of the Consumer
    Financial Protection Act of 2010. These regulations may contain but are
    not limited to such classifications, differentiation, or other
    provision, and may provide for such adjustments and exceptions for any
    class of transactions, as in the judgment of the Board are necessary or
    proper to effectuate the purposes of this title, to prevent
    circumvention or evasion thereof, or to facilitate or substantiate
    compliance therewith.
        ``(g) Deference.--Notwithstanding any power granted to any Federal
    agency under this title, the deference that a court affords to a
    Federal agency with respect to a determination made by such agency
    relating to the meaning or interpretation of any provision of this
    title that is subject to the jurisdiction of such agency shall be
    applied as if that agency were the only agency authorized to apply,
    enforce, interpret, or administer the provisions of this title'';
            (4) in section 704 (15 U.S.C. 1691c)--
                (A) in subsection (a)--
                    (i) by striking ``Compliance'' and inserting ``Subject
                to subtitle B of the Consumer Protection Financial
                Protection Act of 2010'';
                    (ii) by striking paragraphs (1) and (2) and inserting
                the following:
            ``(1) section 8 of the Federal Deposit Insurance Act, by the
        appropriate Federal banking agency, as defined in section 3(q) of
        the Federal Deposit Insurance Act (12 U.S.C. 1813(q)), with respect
        to--
                ``(A) national banks, Federal savings associations, and
            Federal branches and Federal agencies of foreign banks;
                ``(B) member banks of the Federal Reserve System (other
            than national banks), branches and agencies of foreign banks
            (other than Federal branches, Federal agencies, and insured
            State branches of foreign banks), commercial lending companies
            owned or controlled by foreign banks, and organizations
            operating under section 25 or 25A of the Federal Reserve Act;
            and
                ``(C) banks and State savings associations insured by the
            Federal Deposit Insurance Corporation (other than members of
            the Federal Reserve System), and insured State branches of
            foreign banks;'';
                    (iii) by redesignating paragraphs (3) through (9) as
                paragraphs (2) through (8), respectively;
                    (iv) in paragraph (7) (as so redesignated), by striking
                ``and'' at the end;
                    (v) in paragraph (8) (as so redesignated), by striking
                the period at the end, and inserting ``; and''; and
                    (vi) by adding at the end the following:
            ``(9) Subtitle E of the Consumer Financial Protection Act of
        2010, by the Bureau, with respect to any person subject to this
        title.'';
                (B) by striking subsection (c) and inserting the following:
        ``(c) Overall Enforcement Authority of Federal Trade Commission.--
    Except to the extent that enforcement of the requirements imposed under
    this title is specifically committed to some other Government agency
    under any of paragraphs (1) through (8) of subsection (a), and subject
    to subtitle B of the Consumer Financial Protection Act of 2010, the
    Federal Trade Commission shall be authorized to 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 (15 U.S.C. 41 et seq.), a violation of any requirement
    imposed under this subchapter 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 Federal Trade 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 under the Federal Trade Commission Act, including
    the power to enforce any rule prescribed by the Bureau under this title
    in the same manner as if the violation had been a violation of a
    Federal Trade Commission trade regulation rule.''; and
                (C) in subsection (d), by striking ``Board'' and inserting
            ``Bureau'';
            (5) in section 706(e) (15 U.S.C. 1691e(e))--
                (A) in the subsection heading--
                    (i) by striking ``Board'' each place that term appears
                and inserting ``Bureau''; and
                    (ii) by striking ``Federal Reserve System'' and
                inserting ``Bureau of Consumer Financial Protection''; and
                (B) by striking ``Federal Reserve System'' and inserting
            ``Bureau of Consumer Financial Protection'';
            (6) in section 706(g) (15 U.S.C. 1691e(g)), by striking ``(3)''
        and inserting ``(9)''; and
            (7) in section 706(f) (15 U.S.C. 1691e(f)), by striking ``two
        years from'' each place that term appears and inserting ``5 years
        after''.
    SEC. 1086. AMENDMENTS TO THE EXPEDITED FUNDS AVAILABILITY ACT.
        (a) Amendment to Section 603.--Section 603(d)(1) of the Expedited
    Funds Availability Act (12 U.S.C. 4002) is amended by inserting after
    ``Board'' the following ``, jointly with the Director of the Bureau of
    Consumer Financial Protection,''.
        (b) Amendments to Section 604.--Section 604 of the Expedited Funds
    Availability Act (12 U.S.C. 4003) is amended--
            (1) by inserting after ``Board'' each place that term appears,
        other than in subsection (f), the following: ``, jointly with the
        Director of the Bureau of Consumer Financial Protection,''; and
            (2) in subsection (f), by striking ``Board.'' each place that
        term appears and inserting the following: ``Board, jointly with the
        Director of the Bureau of Consumer Financial Protection.''.
        (c) Amendments to Section 605.--Section 605 of the Expedited Funds
    Availability Act (12 U.S.C. 4004) is amended--
            (1) by inserting after ``Board'' each place that term appears,
        other than in the heading for section 605(f)(1), the following: ``,
        jointly with the Director of the Bureau of Consumer Financial
        Protection,''; and
            (2) in subsection (f)(1), in the paragraph heading, by
        inserting ``and bureau'' after ``board''.
        (d) Amendments to Section 609.--Section 609 of the Expedited Funds
    Availability Act (12 U.S.C. 4008) is amended:
            (1) in subsection (a), by inserting after ``Board'' the
        following ``, jointly with the Director of the Bureau of Consumer
        Financial Protection,''; and
            (2) by striking subsection (e) and inserting the following:
        ``(e) Consultations.--In prescribing regulations under subsections
    (a) and (b), the Board and the Director of the Bureau of Consumer
    Financial Protection, in the case of subsection (a), and the Board, in
    the case of subsection (b), shall consult with the Comptroller of the
    Currency, the Board of Directors of the Federal Deposit Insurance
    Corporation, and the National Credit Union Administration Board.''.
        (e) Expedited Funds Availability Improvements.--Section 603 of the
    Expedited Funds Availability Act (12 U.S.C. 4002) is amended--
            (1) in subsection (a)(2)(D), by striking ``$100'' and inserting
        ``$200''; and
            (2) in subsection (b)(3)(C), in the subparagraph heading, by
        striking ``$100'' and inserting ``$200''; and
            (3) in subsection (c)(1)(B)(iii), in the clause heading, by
        striking ``$100'' and inserting ``$200''.
        (f) Regular Adjustments for Inflation.--Section 607 of the
    Expedited Funds Availability Act (12 U.S.C. 4006) is amended by adding
    at the end the following:
        ``(f) Adjustments to Dollar Amounts for Inflation.--The dollar
    amounts under this title shall be adjusted every 5 years after December
    31, 2011, by the annual percentage increase in the Consumer Price Index
    for Urban Wage Earners and Clerical Workers, as published by the Bureau
    of Labor Statistics, rounded to the nearest multiple of $25.''.
    SEC. 1087. AMENDMENTS TO THE FAIR CREDIT BILLING ACT.
        The Fair Credit Billing Act (15 U.S.C. 1666-1666j) is amended by
    striking ``Board'' each place that term appears, other than in section
    105(i) (as added by this subtitle) and inserting ``Bureau''.
    SEC. 1088. AMENDMENTS TO THE FAIR CREDIT REPORTING ACT AND THE FAIR AND
    ACCURATE CREDIT TRANSACTIONS ACT OF 2003.
        (a) Fair Credit Reporting Act.--The Fair Credit Reporting Act (15
    U.S.C. 1681 et seq.) is amended--
            (1) in section 603 (15 U.S.C. 1681a)--
                (A) by redesignating subsections (w) and (x) as subsections
            (x) and (y), respectively; and
                (B) by inserting after subsection (v) the following:
        ``(w) The term `Bureau' means the Bureau of Consumer Financial
    Protection.''; and
            (2) except as otherwise specifically provided in this
        subsection--
                (A) by striking ``Federal Trade Commission'' each place
            that term appears and inserting ``Bureau'';
                (B) by striking ``FTC'' each place that term appears and
            inserting ``Bureau'';
                (C) by striking ``the Commission'' each place that term
            appears, other than sections 615(e) (15 U.S.C. 1681m(e)) and
            628(a)(1) (15 U.S.C. 1681w(a)(1)), and inserting ``the
            Bureau''; and
                (D) by striking ``The Federal banking agencies, the
            National Credit Union Administration, and the Commission shall
            jointly'' each place that term appears, other than section
            615(e)(1) (15 U.S.C. 1681m(e)) and section 628(a)(1) (15 U.S.C.
            1681w(a)(1)), and inserting ``The Bureau shall'';
            (3) in section 603(k)(2) (15 U.S.C. 1681a(k)(2)), by striking
        ``Board of Governors of the Federal Reserve System'' and inserting
        ``Bureau'';
            (4) in section 604(g) (15 U.S.C. 1681b(g))--
                (A) in paragraph (3), by striking subparagraph (C) and
            inserting the following:
                ``(C) as otherwise determined to be necessary and
            appropriate, by regulation or order, by the Bureau or the
            applicable State insurance authority (with respect to any
            person engaged in providing insurance or annuities).''; and
                (B) by striking paragraph (5) and inserting the following:
            ``(5) Regulations and effective date for paragraph (2).--
                ``(A) Regulations required.--The Bureau may, after notice
            and opportunity for comment, prescribe regulations that permit
            transactions under paragraph (2) that are determined to be
            necessary and appropriate to protect legitimate operational,
            transactional, risk, consumer, and other needs (and which shall
            include permitting actions necessary for administrative
            verification purposes), consistent with the intent of paragraph
            (2) to restrict the use of medical information for
            inappropriate purposes.'';
            (5) in section 605(h)(2)(A) (15 U.S.C. 1681c(h)(2)(A)), by
        striking ``with respect to the entities that are subject to their
        respective enforcement authority under section 621'' and inserting
        ``, in consultation with the Federal banking agencies, the National
        Credit Union Administration, and the Federal Trade Commission,''.
            (6) in section 611(e)(2) (15 U.S.C. 1681i(e)), by striking
        paragraph (2) and inserting the following:
            ``(2) Exclusion.--Complaints received or obtained by the Bureau
        pursuant to its investigative authority under the Consumer
        Financial Protection Act of 2010 shall not be subject to paragraph
        (1).'';
            (7) in section 615(d)(2)(B) (15 U.S.C. 1681m(d)(2)(B)), by
        striking ``the Federal banking agencies'' and inserting ``the
        Federal Trade Commission, the Federal banking agencies,'';
            (8) in section 615(e)(1) (15 U.S.C. 1681m(e)(1)), by striking
        ``and the Commission'' and inserting ``the Federal Trade
        Commission, the Commodity Futures Trading Commission, and the
        Securities and Exchange Commission'';
            (9) in section 615(h)(6) (15 U.S.C. 1681m(h)(6)), by striking
        subparagraph (A) and inserting the following:
                ``(A) Rules required.--The Bureau shall prescribe rules to
            carry out this subsection.'';
            (10) in section 621 (15 U.S.C. 1681s)--
                (A) by striking subsection (a) and inserting the following:
        ``(a) Enforcement by Federal Trade Commission.--
            ``(1) In general.--The Federal Trade Commission shall be
        authorized to enforce compliance with the requirements imposed by
        this title under the Federal Trade Commission Act (15 U.S.C. 41 et
        seq.), 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 under any of subparagraphs (A)
        through (G) of subsection (b)(1), and subject to subtitle B of the
        Consumer Financial Protection Act of 2010, subsection (b). 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 (15 U.S.C. 45(a)), and shall be subject to
        enforcement by the Federal Trade Commission under section 5(b) of
        that Act with respect to any consumer reporting agency or person
        that is 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 under
        the Federal Trade Commission Act. The Federal Trade Commission
        shall have such procedural, investigative, and enforcement powers,
        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 of such Act are part of
        this title.
            ``(2) Penalties.--
                ``(A) Knowing violations.--Except as otherwise provided by
            subtitle B of the Consumer Financial Protection Act of 2010, in
            the event of a knowing violation, which constitutes a pattern
            or practice of violations of this title, the Federal Trade
            Commission may commence a civil action to recover a civil
            penalty in a district court of the United States against any
            person that violates this title. In such action, such person
            shall be liable for a civil penalty of not more than $2,500 per
            violation.
                ``(B) Determining penalty amount.--In determining the
            amount of a civil penalty under subparagraph (A), the court
            shall take into account the degree of culpability, any history
            of such prior conduct, ability to pay, effect on ability to
            continue to do business, and such other matters as justice may
            require.
                ``(C) Limitation.--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, and has violated the
            injunction or order, and the court may not impose any civil
            penalty for any violation occurring before the date of the
            violation of the injunction or order.'';
                (B) by striking subsection (b) and inserting the following:
        ``(b) Enforcement by Other Agencies.--
            ``(1) In general.--Subject to subtitle B of the Consumer
        Financial Protection Act of 2010, 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 section 615(d) shall be enforced
        under--
                ``(A) section 8 of the Federal Deposit Insurance Act (12
            U.S.C. 1818), by the appropriate Federal banking agency, as
            defined in section 3(q) of the Federal Deposit Insurance Act
            (12 U.S.C. 1813(q)), with respect to--
                    ``(i) any national bank or State savings association,
                and any Federal branch or Federal agency of a foreign bank;
                    ``(ii) any member bank of the Federal Reserve System
                (other than a national bank), a branch or agency of a
                foreign bank (other than a Federal branch, Federal agency,
                or insured State branch of a foreign bank), a commercial
                lending company owned or controlled by a foreign bank, and
                any organization operating under section 25 or 25A of the
                Federal Reserve Act; and
                    ``(iii) any bank or Federal savings association insured
                by the Federal Deposit Insurance Corporation (other than a
                member of the Federal Reserve System) and any insured State
                branch of a foreign bank;
                ``(B) the Federal Credit Union Act (12 U.S.C. 1751 et
            seq.), by the Administrator of the National Credit Union
            Administration with respect to any Federal credit union;
                ``(C) 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;
                ``(D) the Federal Aviation Act of 1958 (49 U.S.C. App. 1301
            et seq.), by the Secretary of Transportation, with respect to
            any air carrier or foreign air carrier subject to that Act;
                ``(E) the Packers and Stockyards Act, 1921 (7 U.S.C. 181 et
            seq.) (except as provided in section 406 of that Act), by the
            Secretary of Agriculture, with respect to any activities
            subject to that Act;
                ``(F) the Commodity Exchange Act, with respect to a person
            subject to the jurisdiction of the Commodity Futures Trading
            Commission;
                ``(G) the Federal securities laws, and any other laws that
            are subject to the jurisdiction of the Securities and Exchange
            Commission, with respect to a person that is subject to the
            jurisdiction of the Securities and Exchange Commission; and
                ``(H) subtitle E of the Consumer Financial Protection Act
            of 2010, by the Bureau, with respect to any person subject to
            this title.
            ``(2) Incorporated definitions.--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)) have the same meanings as in section 1(b) of the
        International Banking Act of 1978 (12 U.S.C. 3101).'';
                (C) in subsection (c)(2)--
                    (i) by inserting ``and the Federal Trade Commission''
                before ``or the appropriate''; and
                    (ii) by inserting ``and the Federal Trade Commission''
                before ``or appropriate'' each place that term appears;
                (D) in subsection (c)(4), by inserting before ``or the
            appropriate'' each place that term appears the following: ``,
            the Federal Trade Commission,'';
                (E) by striking subsection (e) and inserting the following:
        ``(e) Regulatory Authority.--
            ``(1) In general.--The Bureau shall prescribe such regulations
        as are necessary to carry out the purposes of this title, except
        with respect to sections 615(e) and 628. The Bureau may prescribe
        regulations as may be necessary or appropriate to administer and
        carry out the purposes and objectives of this title, and to prevent
        evasions thereof or to facilitate compliance therewith. Except as
        provided in section 1029(a) of the Consumer Financial Protection
        Act of 2010, the regulations prescribed by the Bureau under this
        title shall apply to any person that is subject to this title,
        notwithstanding the enforcement authorities granted to other
        agencies under this section.
            ``(2) Deference.--Notwithstanding any power granted to any
        Federal agency under this title, the deference that a court affords
        to a Federal agency with respect to a determination made by such
        agency relating to the meaning or interpretation of any provision
        of this title that is subject to the jurisdiction of such agency
        shall be applied as if that agency were the only agency authorized
        to apply, enforce, interpret, or administer the provisions of this
        title The regulations prescribed by the Bureau under this title
        shall apply to any person that is subject to this title,
        notwithstanding the enforcement authorities granted to other
        agencies under this section.''; and
                (F) in subsection (f)(2), by striking ``the Federal banking
            agencies'' and insert ``the Federal Trade Commission, the
            Federal banking agencies,'';
            (11) in section 623 (15 U.S.C. 1681s-2)--
                (A) in subsection (a)(7), by striking subparagraph (D) and
            inserting the following:
                ``(D) Model disclosure.--
                    ``(i) Duty of bureau.--The Bureau shall prescribe a
                brief model disclosure that a financial institution may use
                to comply with subparagraph (A), which shall not exceed 30
                words.
                    ``(ii) Use of model not required.--No provision of this
                paragraph may be construed to require a financial
                institution to use any such model form prescribed by the
                Bureau.
                    ``(iii) Compliance using model.--A financial
                institution shall be deemed to be in compliance with
                subparagraph (A) if the financial institution uses any
                model form prescribed by the Bureau under this
                subparagraph, or the financial institution uses any such
                model form and rearranges its format.'';
                (B) in subsection (a)(8), by inserting ``, in consultation
            with the Federal Trade Commission, the Federal banking
            agencies, and the National Credit Union Administration,''
            before ``shall jointly''; and
                (C) by striking subsection (e) and inserting the following:
        ``(e) Accuracy Guidelines and Regulations Required.--
            ``(1) Guidelines.--The Bureau shall, with respect to persons or
        entities that are subject to the enforcement authority of the
        Bureau under section 621--
                ``(A) establish and maintain guidelines for use by each
            person that furnishes information to a consumer reporting
            agency regarding the accuracy and integrity of the information
            relating to consumers that such entities furnish to consumer
            reporting agencies, and update such guidelines as often as
            necessary; and
                ``(B) prescribe regulations requiring each person that
            furnishes information to a consumer reporting agency to
            establish reasonable policies and procedures for implementing
            the guidelines established pursuant to subparagraph (A).
            ``(2) Criteria.--In developing the guidelines required by
        paragraph (1)(A), the Bureau shall--
                ``(A) identify patterns, practices, and specific forms of
            activity that can compromise the accuracy and integrity of
            information furnished to consumer reporting agencies;
                ``(B) review the methods (including technological means)
            used to furnish information relating to consumers to consumer
            reporting agencies;
                ``(C) determine whether persons that furnish information to
            consumer reporting agencies maintain and enforce policies to
            ensure the accuracy and integrity of information furnished to
            consumer reporting agencies; and
                ``(D) examine the policies and processes that persons that
            furnish information to consumer reporting agencies employ to
            conduct reinvestigations and correct inaccurate information
            relating to consumers that has been furnished to consumer
            reporting agencies.'';
            (12) in section 628(a)(1) (15 U.S.C. 1681w(a)(1)), by striking
        ``Not later than'' and all that follows through ``Exchange
        Commission,'' and inserting ``The Federal Trade Commission, the
        Securities and Exchange Commission, the Commodity Futures Trading
        Commission, the Federal banking agencies, and the National Credit
        Union Administration, with respect to the entities that are subject
        to their respective enforcement authority under section 621,''; and
            (13) in section 628(a)(3) (15 U.S.C. 1681w(a)(3)), by striking
        ``the Federal banking agencies, the National Credit Union
        Administration, the Commission, and the Securities and Exchange
        Commission'' and inserting ``the agencies identified in paragraph
        (1)''.
        (b) Fair and Accurate Credit Transactions Act of 2003.--The Fair
    and Accurate Credit Transactions Act of 2003 (Public Law 108-159) is
    amended--
            (1) in section 112(b) (15 U.S.C. 1681c-1 note), by striking
        ``Commission'' and inserting ``Bureau'';
            (2) in section 211(d) (15 U.S.C. 1681j note), by striking
        ``Commission'' each place that term appears and inserting
        ``Bureau'';
            (3) in section 214(b) (15 U.S.C. 1681s-3 note), by striking
        paragraph (1) and inserting the following:
            ``(1) In general.--Regulations to carry out section 624 of the
        Fair Credit Reporting Act (15 U.S.C. 1681s-3), shall be prescribed,
        as described in paragraph (2), by--
                ``(A) the Commodity Futures Trading Commission, with
            respect to entities subject to its enforcement authorities;
                ``(B) the Securities and Exchange Commission, with respect
            to entities subject to its enforcement authorities; and
                ``(C) the Bureau, with respect to other entities subject to
            this Act.''; and
            (4) in section 214(e)(1) (15 U.S.C. 1681s-3 note), by striking
        ``Commission'' and inserting ``Bureau''.
    SEC. 1089. AMENDMENTS TO THE FAIR DEBT COLLECTION PRACTICES ACT.
        The Fair Debt Collection Practices Act (15 U.S.C. 1692 et seq.) is
    amended--
            (1) by striking ``Commission'' each place that term appears and
        inserting ``Bureau'';
            (2) in section 803 (15 U.S.C. 1692a)--
                (A) by striking paragraph (1) and inserting the following:
            ``(1) The term `Bureau' means the Bureau of Consumer Financial
        Protection.'';
            (3) in section 814 (15 U.S.C. 1692l)--
                (A) by striking subsection (a) and inserting the following:
        ``(a) Federal Trade Commission.--The Federal Trade Commission shall
    be authorized to enforce compliance with this title, except to the
    extent that enforcement of the requirements imposed under this title is
    specifically committed to another Government agency under any of
    paragraphs (1) through (5) of subsection (b), subject to subtitle B of
    the Consumer Financial Protection Act of 2010. For purpose of the
    exercise by the Federal Trade Commission of its functions and powers
    under the Federal Trade Commission Act (15 U.S.C. 41 et seq.), 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 Federal Trade Commission under the Federal Trade Commission Act are
    available to the Federal Trade 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 under 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.''; and
                (B) in subsection (b)--
                    (i) by striking ``Compliance'' and inserting ``Subject
                to subtitle B of the Consumer Financial Protection Act of
                2010, compliance'';
                    (ii) by striking paragraphs (1) and (2) and inserting
                the following:
            ``(1) section 8 of the Federal Deposit Insurance Act, by the
        appropriate Federal banking agency, as defined in section 3(q) of
        the Federal Deposit Insurance Act (12 U.S.C. 1813(q)), with respect
        to--
                ``(A) national banks, Federal savings associations, and
            Federal branches and Federal agencies of foreign banks;
                ``(B) member banks of the Federal Reserve System (other
            than national banks), branches and agencies of foreign banks
            (other than Federal branches, Federal agencies, and insured
            State branches of foreign banks), commercial lending companies
            owned or controlled by foreign banks, and organizations
            operating under section 25 or 25A of the Federal Reserve Act;
            and
                ``(C) banks and State savings associations insured by the
            Federal Deposit Insurance Corporation (other than members of
            the Federal Reserve System), and insured State branches of
            foreign banks;'';
                    (iii) by redesignating paragraphs (3) through (6), as
                paragraphs (2) through (5), respectively;
                    (iv) in paragraph (4) (as so redesignated), by striking
                ``and'' at the end;
                    (v) in paragraph (5) (as so redesignated), by striking
                the period at the end and inserting ``; and''; and
                    (vi) by inserting before the undesignated matter at the
                end the following:
            ``(6) subtitle E of the Consumer Financial Protection Act of
        2010, by the Bureau, with respect to any person subject to this
        title.''.
            (4) in subsection (d), by striking ``Neither the Commission''
        and all that follows through the end of the subsection and
        inserting the following: ``Except as provided in section 1029(a) of
        the Consumer Financial Protection Act of 2010, the Bureau may
        prescribe rules with respect to the collection of debts by debt
        collectors, as defined in this title.''.
    SEC. 1090. AMENDMENTS TO THE FEDERAL DEPOSIT INSURANCE ACT.
        The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) is
    amended--
            (1) in section 8(t) (12 U.S.C. 1818(t)), by adding at the end
        the following:
            ``(6) Referral to bureau of consumer financial protection.--
        Subject to subtitle B of the Consumer Financial Protection Act of
        2010, each appropriate Federal banking agency shall make a referral
        to the Bureau of Consumer Financial Protection when the Federal
        banking agency has a reasonable belief that a violation of an
        enumerated consumer law, as defined in the Consumer Financial
        Protection Act of 2010, has been committed by any insured
        depository institution or institution-affiliated party within the
        jurisdiction of that appropriate Federal banking agency.''; and
            (2) in section 43 (12 U.S.C. 1831t)--
                (A) in subsection (c), by striking ``Federal Trade
            Commission'' and inserting ``Bureau'';
                (B) in subsection (d), by striking ``Federal Trade
            Commission'' and inserting ``Bureau'';
                (C) in subsection (e)--
                    (i) in paragraph (2), by striking ``Federal Trade
                Commission'' and inserting ``Bureau''; and
                    (ii) by adding at the end the following new paragraph:
            ``(5) Bureau.--The term `Bureau' means the Bureau of Consumer
        Financial Protection.''; and
                (D) in subsection (f)--
                    (i) by striking paragraph (1) and inserting the
                following:
            ``(1) Limited enforcement authority.--Compliance with the
        requirements of subsections (b), (c), and (e), and any regulation
        prescribed or order issued under such subsection, shall be enforced
        under the Consumer Financial Protection Act of 2010, by the Bureau,
        subject to subtitle B of the Consumer Financial Protection Act of
        2010, and under the Federal Trade Commission Act (15 U.S.C. 41 et
        seq.) by the Federal Trade Commission.''; and
                    (ii) in paragraph (2), by striking subparagraph (C) and
                inserting the following:
                ``(C) Limitation on state action while federal action
            pending.--If the Bureau or Federal Trade Commission has
            instituted an enforcement action for a violation of this
            section, no appropriate State supervisory agency may, during
            the pendency of such action, bring an action under this section
            against any defendant named in the complaint of the Bureau or
            Federal Trade Commission for any violation of this section that
            is alleged in that complaint.''.
    SEC. 1091. AMENDMENT TO FEDERAL FINANCIAL INSTITUTIONS EXAMINATION
    COUNCIL ACT OF 1978.
        Section 1004(a)(4) of the Federal Financial Institutions
    Examination Council Act of 1978 (12 U.S.C. 3303(a)(4)) is amended by
    striking ``Director, Office of Thrift Supervision'' and inserting
    ``Director of the Consumer Financial Protection Bureau''.
    SEC. 1092. AMENDMENTS TO THE FEDERAL TRADE COMMISSION ACT.
        Section 18(f) of the Federal Trade Commission Act (15 U.S.C.
    57a(f)) is amended--
            (1) by striking the subsection heading and inserting the
        following:
        ``(f) Definitions of Banks, Savings and Loan Institutions, and
    Federal Credit Unions.--''.
            (2) by striking paragraph (1) and inserting the following:
            ``(1) [Repealed.]'';
            (3) by striking paragraphs (5) through (7);
            (4) in paragraph (2)--
                (A) by striking ``(2) Enforcement'' and all that follows
            through ``in the case of'' and inserting the following:
            ``(2) Definition.--For purposes of this Act, the term `bank'
        means'';
                (B) in subparagraph (A), by striking ``, by the division''
            and all that follows through ``Currency'';
                (C) in subparagraph (B)--
                    (i) by striking ``, by the division'' and all that
                follows through ``System''; and
                    (ii) by striking ``25(a)'' and inserting ``25A''; and
                (D) in subparagraph (C)--
                    (i) by striking ``(other'' and inserting ``(other
                than''; and
                    (ii) by striking ``, by the division'' and all that
                follows through ``Corporation'';
            (5) in paragraph (3), by striking ``Compliance'' and all that
        follows through ``as defined in'' and inserting the following:
        ``For purposes of this Act, the term ``savings and loan
        institution'' has the same meaning as in''; and
            (6) in paragraph (4), by striking ``Compliance'' and all that
        follows through ``credit unions under'' and inserting the
        following: ``For purposes of this Act, the term ``Federal credit
        union'' has the same meaning as in''.
    SEC. 1093. AMENDMENTS TO THE GRAMM-LEACH-BLILEY ACT.
        Title V of the Gramm-Leach-Bliley Act (15 U.S.C. 6801 et seq.) is
    amended--
            (1) in section 501(b) (15 U.S.C. 6801(b)), by inserting ``,
        other than the Bureau of Consumer Financial Protection,'' after
        ``505(a)'';
            (2) in section 502(e)(5) (15 U.S.C. 6802(e)(5)), by inserting
        ``the Bureau of Consumer Financial Protection'' after
        ``(including'';
            (3) in section 504(a) (15 U.S.C. 6804(a))--
                (A) by striking paragraphs (1) and (2) and inserting the
            following:
            ``(1) Rulemaking.--
                ``(A) In general.--Except as provided in subparagraph (C),
            the Bureau of Consumer Financial Protection and the Securities
            and Exchange Commission shall have authority to prescribe such
            regulations as may be necessary to carry out the purposes of
            this subtitle with respect to financial institutions and other
            persons subject to their respective jurisdiction under section
            505 (and notwithstanding subtitle B of the Consumer Financial
            Protection Act of 2010), except that the Bureau of Consumer
            Financial Protection shall not have authority to prescribe
            regulations with respect to the standards under section 501.
                ``(B) CFTC.--The Commodity Futures Trading Commission shall
            have authority to prescribe such regulations as may be
            necessary to carry out the purposes of this subtitle with
            respect to financial institutions and other persons subject to
            the jurisdiction of the Commodity Futures Trading Commission
            under section 5g of the Commodity Exchange Act.
                ``(C) Federal trade commission authority.--Notwithstanding
            the authority of the Bureau of Consumer Financial Protection
            under subparagraph (A), the Federal Trade Commission shall have
            authority to prescribe such regulations as may be necessary to
            carry out the purposes of this subtitle with respect to any
            financial institution that is a person described in section
            1029(a) of the Consumer Financial Protection Act of 2010.
                ``(D) Rule of construction.--Nothing in this paragraph
            shall be construed to alter, affect, or otherwise limit the
            authority of a State insurance authority to adopt regulations
            to carry out this subtitle.
            ``(2) Coordination, consistency, and comparability.--Each of
        the agencies authorized under paragraph (1) to prescribe
        regulations shall consult and coordinate with the other such
        agencies and, as appropriate, and with representatives of State
        insurance authorities designated by the National Association of
        Insurance Commissioners, for the purpose of assuring, to the extent
        possible, that the regulations prescribed by each such agency are
        consistent and comparable with the regulations prescribed by the
        other such agencies.''; and
                (B) in paragraph (3), by striking ``, and shall be issued
            in final form not later than 6 months after the date of
            enactment of this Act'';
            (4) in section 505(a) (15 U.S.C. 6805(a))--
                (A) by striking ``This subtitle'' and all that follows
            through ``as follows:'' and inserting ``Subject to subtitle B
            of the Consumer Financial Protection Act of 2010, this subtitle
            and the regulations prescribed thereunder shall be enforced by
            the Bureau of Consumer Financial Protection, the Federal
            functional regulators, the State insurance authorities, and the
            Federal Trade Commission with respect to financial institutions
            and other persons subject to their jurisdiction under
            applicable law, as follows:'';
                (B) in paragraph (1)--
                    (i) in the matter preceding subparagraph (A), by
                inserting ``by the appropriate Federal banking agency, as
                defined in section 3(q) of the Federal Deposit Insurance
                Act,'' after ``Act,'';
                    (ii) in subparagraph (A), by striking ``, by the Office
                of the Comptroller of the Currency'';
                    (iii) in subparagraph (B), by striking ``, by the Board
                of Governors of the Federal Reserve System'';
                    (iv) in subparagraph (C), by striking ``, by the Board
                of Directors of the Federal Deposit Insurance
                Corporation''; and
                    (v) in subparagraph (D), by striking ``, by the
                Director of the Office of Thrift Supervision''; and
                (C) by adding at the end the following:
            ``(8) Under subtitle E of the Consumer Financial Protection Act
        of 2010, by the Bureau of Consumer Financial Protection, in the
        case of any financial institution and other covered person or
        service provider that is subject to the jurisdiction of the Bureau
        and any person subject to this subtitle, but not with respect to
        the standards under section 501.'';
            (5) in section 505(b)(1) (15 U.S.C. 6805(b)(1)), by inserting
        ``, other than the Bureau of Consumer Financial Protection,'' after
        ``subsection (a)''; and
            (6) in section 507(b) (15 U.S.C. 6807), by striking ``Federal
        Trade Commission'' and inserting ``Bureau of Consumer Financial
        Protection''.
    SEC. 1094. AMENDMENTS TO THE HOME MORTGAGE DISCLOSURE ACT OF 1975.
        The Home Mortgage Disclosure Act of 1975 (12 U.S.C. 2801 et seq.)
    is amended--
            (1) by striking ``Board'' each place that term appears, other
        than in sections 303, 304(h), 305(b) (as amended by this section),
        and 307(a) (as amended by this section) and inserting ``Bureau''.
            (2) in section 303 (12 U.S.C. 2802)--
                (A) by redesignating paragraphs (1) through (6) as
            paragraphs (2) through (7), respectively; and
                (B) by inserting before paragraph (2) the following:
            ``(1) the term `Bureau' means the Bureau of Consumer Financial
        Protection;'';
            (3) in section 304 (12 U.S.C. 2803)--
                (A) in subsection (b)--
                    (i) in paragraph (4), by inserting ``age,'' before
                ``and gender'';
                    (ii) in paragraph (3), by striking ``and'' at the end;
                    (iii) in paragraph (4), by striking the period at the
                end and inserting a semicolon; and
                    (iv) by adding at the end the following:
            ``(5) the number and dollar amount of mortgage loans grouped
        according to measurements of--
                ``(A) the total points and fees payable at origination in
            connection with the mortgage as determined by the Bureau,
            taking into account 15 U.S.C. 1602(aa)(4);
                ``(B) the difference between the annual percentage rate
            associated with the loan and a benchmark rate or rates for all
            loans;
                ``(C) the term in months of any prepayment penalty or other
            fee or charge payable on repayment of some portion of principal
            or the entire principal in advance of scheduled payments; and
                ``(D) such other information as the Bureau may require; and
            ``(6) the number and dollar amount of mortgage loans and
        completed applications grouped according to measurements of--
                ``(A) the value of the real property pledged or proposed to
            be pledged as collateral;
                ``(B) the actual or proposed term in months of any
            introductory period after which the rate of interest may
            change;
                ``(C) the presence of contractual terms or proposed
            contractual terms that would allow the mortgagor or applicant
            to make payments other than fully amortizing payments during
            any portion of the loan term;
                ``(D) the actual or proposed term in months of the mortgage
            loan;
                ``(E) the channel through which application was made,
            including retail, broker, and other relevant categories;
                ``(F) as the Bureau may determine to be appropriate, a
            unique identifier that identifies the loan originator as set
            forth in section 1503 of the S.A.F.E. Mortgage Licensing Act of
            2008;
                ``(G) as the Bureau may determine to be appropriate, a
            universal loan identifier;
                ``(H) as the Bureau may determine to be appropriate, the
            parcel number that corresponds to the real property pledged or
            proposed to be pledged as collateral;
                ``(I) the credit score of mortgage applicants and
            mortgagors, in such form as the Bureau may prescribe; and
                ``(J) such other information as the Bureau may require.'';
                (B) by striking subsection (h) and inserting the following:
        ``(h) Submission to Agencies.--
            ``(1) In general.--The data required to be disclosed under
        subsection (b) shall be submitted to the Bureau or to the
        appropriate agency for the institution reporting under this title,
        in accordance with rules prescribed by the Bureau. Notwithstanding
        the requirement of subsection (a)(2)(A) for disclosure by census
        tract, the Bureau, in consultation with other appropriate agencies
        described in paragraph (2) and, after notice and comment, shall
        develop regulations that--
                ``(A) prescribe the format for such disclosures, the method
            for submission of the data to the appropriate agency, and the
            procedures for disclosing the information to the public;
                ``(B) require the collection of data required to be
            disclosed under subsection (b) with respect to loans sold by
            each institution reporting under this title;
                ``(C) require disclosure of the class of the purchaser of
            such loans;
                ``(D) permit any reporting institution to submit in writing
            to the Bureau or to the appropriate agency such additional data
            or explanations as it deems relevant to the decision to
            originate or purchase mortgage loans; and
                ``(E) modify or require modification of itemized
            information, for the purpose of protecting the privacy
            interests of the mortgage applicants or mortgagors, that is or
            will be available to the public.
            ``(2) Other appropriate agencies.--The appropriate agencies
        described in this paragraph are--
                ``(A) the appropriate Federal banking agencies, as defined
            in section 3(q) of the Federal Deposit Insurance Act (12 U.S.C.
            1813(q)), with respect to the entities that are subject to the
            jurisdiction of each such agency, respectively;
                ``(B) the Federal Deposit Insurance Corporation for banks
            insured by the Federal Deposit Insurance Corporation (other
            than members of the Federal Reserve System), mutual savings
            banks, insured State branches of foreign banks, and any other
            depository institution described in section 303(2)(A) which is
            not otherwise referred to in this paragraph;
                ``(C) the National Credit Union Administration Board with
            respect to credit unions; and
                ``(D) the Secretary of Housing and Urban Development with
            respect to other lending institutions not regulated by the
            agencies referred to in subparagraph (A) or (B).
            ``(3) Rules for modifications under paragraph (1).--
                ``(A) Application.--A modification under paragraph (1)(E)
            shall apply to information concerning--
                    ``(i) credit score data described in subsection
                (b)(6)(I), in a manner that is consistent with the purpose
                described in paragraph (1)(E); and
                    ``(ii) age or any other category of data described in
                paragraph (5) or (6) of subsection (b), as the Bureau
                determines to be necessary to satisfy the purpose described
                in paragraph (1)(E), and in a manner consistent with that
                purpose.
                ``(B) Standards.--The Bureau shall prescribe standards for
            any modification under paragraph (1)(E) to effectuate the
            purposes of this title, in light of the privacy interests of
            mortgage applicants or mortgagors. Where necessary to protect
            the privacy interests of mortgage applicants or mortgagors, the
            Bureau shall provide for the disclosure of information
            described in subparagraph (A) in aggregate or other reasonably
            modified form, in order to effectuate the purposes of this
            title.'';
                (C) in subsection (i), by striking ``subsection (b)(4)''
            and inserting ``subsections (b)(4), (b)(5), and (b)(6)'';
                (D) in subsection (j)--
                    (i) by striking paragraph (3) and inserting the
                following:
            ``(3) Change of form not required.--A depository institution
        meets the disclosure requirement of paragraph (1) if the
        institution provides the information required under such paragraph
        in such formats as the Bureau may require''; and
                    (ii) in paragraph (2)(A), by striking ``in the format
                in which such information is maintained by the
                institution'' and inserting ``in such formats as the Bureau
                may require'';
                (E) in subsection (m), by striking paragraph (2) and
            inserting the following:
            ``(2) Form of information.--In complying with paragraph (1), a
        depository institution shall provide the person requesting the
        information with a copy of the information requested in such
        formats as the Bureau may require.''; and
                (F) by adding at the end the following:
        ``(n) Timing of Certain Disclosures.--The data required to be
    disclosed under subsection (b) shall be submitted to the Bureau or to
    the appropriate agency for any institution reporting under this title,
    in accordance with regulations prescribed by the Bureau. Institutions
    shall not be required to report new data under paragraph (5) or (6) of
    subsection (b) before the first January 1 that occurs after the end of
    the 9-month period beginning on the date on which regulations are
    issued by the Bureau in final form with respect to such disclosures.'';
            (4) in section 305 (12 U.S.C. 2804)--
                (A) by striking subsection (b) and inserting the following:
        ``(b) Powers of Certain Other Agencies.--
            ``(1) In general.--Subject to subtitle B of the Consumer
        Financial Protection Act of 2010, compliance with the requirements
        of this title shall be enforced--
                ``(A) under section 8 of the Federal Deposit Insurance Act,
            the appropriate Federal banking agency, as defined in section
            3(q) of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)),
            with respect to--
                    ``(i) any national bank or Federal savings association,
                and any Federal branch or Federal agency of a foreign bank;
                    ``(ii) any member bank of the Federal Reserve System
                (other than a national bank), branch or agency of a foreign
                bank (other than a Federal branch, Federal agency, and
                insured State branch of a foreign bank), commercial lending
                company owned or controlled by a foreign bank, and any
                organization operating under section 25 or 25A of the
                Federal Reserve Act; and
                    ``(iii) any bank or State savings association insured
                by the Federal Deposit Insurance Corporation (other than a
                member of the Federal Reserve System), any mutual savings
                bank as, defined in section 3(f) of the Federal Deposit
                Insurance Act (12 U.S.C. 1813(f)), any insured State branch
                of a foreign bank, and any other depository institution not
                referred to in this paragraph or subparagraph (B) or (C);
                ``(B) under subtitle E of the Consumer Financial Protection
            Act of 2010, by the Bureau, with respect to any person subject
            to this subtitle;
                ``(C) under the Federal Credit Union Act, by the
            Administrator of the National Credit Union Administration with
            respect to any insured credit union; and
                ``(D) with respect to other lending institutions, by the
            Secretary of Housing and Urban Development.
            ``(2) Incorporated definitions.--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 same meanings as in section 1(b) of the
        International Banking Act of 1978 (12 U.S.C. 3101).''; and
                (B) by adding at the end the following:
        ``(d) Overall Enforcement Authority of the Bureau of Consumer
    Financial Protection.--Subject to subtitle B of the Consumer Financial
    Protection Act of 2010, enforcement of the requirements imposed under
    this title is committed to each of the agencies under subsection (b).
    To facilitate research, examinations, and enforcement, all data
    collected pursuant to section 304 shall be available to the entities
    listed under subsection (b). The Bureau may exercise its authorities
    under the Consumer Financial Protection Act of 2010 to exercise
    principal authority to examine and enforce compliance by any person
    with the requirements of this title.'';
            (5) in section 306 (12 U.S.C. 2805(b)), by striking subsection
        (b) and inserting the following:
        ``(b) Exemption Authority.--The Bureau may, by regulation, exempt
    from the requirements of this title any State-chartered depository
    institution within any State or subdivision thereof, if the agency
    determines that, under the law of such State or subdivision, that
    institution is subject to requirements that are 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 Office of the Comptroller of the
    Currency under section 8 of the Federal Deposit Insurance Act, in the
    case of national banks and Federal savings associations, the deposits
    of which are insured by the Federal Deposit Insurance Corporation.'';
    and
            (6) by striking section 307 (12 U.S.C. 2806) and inserting the
        following:
        ``SEC. 307. COMPLIANCE IMPROVEMENT METHODS.
        ``(a) In General.--
            ``(1) Consultation required.--The Director of the Bureau of
        Consumer Financial Protection, 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 Bureau deems
        appropriate, shall develop or assist in the improvement of, methods
        of matching addresses and census tracts to facilitate compliance by
        depository institutions in as economical a manner as possible with
        the requirements of this title.
            ``(2) Authorization of appropriations.--There are authorized to
        be appropriated, such sums as may be necessary to carry out this
        subsection.
            ``(3) Contracting authority.--The Director of the Bureau of
        Consumer Financial Protection is authorized to utilize, contract
        with, act through, or compensate any person or agency in order to
        carry out this subsection.
        ``(b) Recommendations to Congress.--The Director of the Bureau of
    Consumer Financial Protection shall recommend to the Committee on
    Banking, Housing, and Urban Affairs of the Senate and the Committee on
    Financial Services of the House of Representatives, such additional
    legislation as the Director of the Bureau of Consumer Financial
    Protection deems appropriate to carry out the purpose of this title.''.
    SEC. 1095. AMENDMENTS TO THE HOMEOWNERS PROTECTION ACT OF 1998.
        Section 10 of the Homeowners Protection Act of 1998 (12 U.S.C.
    4909) is amended--
            (1) in subsection (a)--
                (A) by striking ``Compliance'' and all that follows through
            the end of paragraph (1) and inserting the following: ``Subject
            to subtitle B of the Consumer Financial Protection Act of 2010,
            compliance with the requirements imposed under this Act shall
            be enforced under--
            ``(1) section 8 of the Federal Deposit Insurance Act, by the
        appropriate Federal banking agency (as defined in section 3(q) of
        that Act), with respect to--
                ``(A) insured depository institutions (as defined in
            section 3(c)(2) of that Act);
                ``(B) depository institutions described in clause (i),
            (ii), or (iii) of section 19(b)(1)(A) of the Federal Reserve
            Act which are not insured depository institutions (as defined
            in section 3(c)(2) of the Federal Deposit Insurance Act); and
                ``(C) depository institutions described in clause (v) or
            (vi) of section 19(b)(1)(A) of the Federal Reserve Act which
            are not insured depository institutions (as defined in section
            3(c)(2) of the Federal Deposit Insurance Act);'';
                (B) in paragraph (2), by striking ``and'' at the end;
                (C) in paragraph (3), by striking the period at the end and
            inserting ``; and''; and
                (D) by adding at the end the following:
            ``(4) subtitle E of the Consumer Financial Protection Act of
        2010, by the Bureau of Consumer Financial Protection, with respect
        to any person subject to this Act.''; and
            (2) in subsection (b)(2), by inserting before the period at the
        end the following: ``, subject to subtitle B of the Consumer
        Financial Protection Act of 2010''.
    SEC. 1096. AMENDMENTS TO THE HOME OWNERSHIP AND EQUITY PROTECTION ACT
    OF 1994.
        The Home Ownership and Equity Protection Act of 1994 (15 U.S.C.
    1601 note) is amended--
            (1) in section 158(a), by striking ``Board of Governors of the
        Federal Reserve System, in consultation with the Consumer Advisory
        Council of the Board'' and inserting ``Bureau, in consultation with
        the Advisory Board to the Bureau''; and
            (2) in section 158(b), by striking ``Board of Governors of the
        Federal Reserve System'' and inserting ``Bureau''.
    SEC. 1097. AMENDMENTS TO THE OMNIBUS APPROPRIATIONS ACT, 2009.
        Section 626 of the Omnibus Appropriations Act, 2009 (15 U.S.C. 1638
    note) is amended--
            (1) by striking subsection (a) and inserting the following:
        ``(a)(1) The Bureau of Consumer Financial Protection shall have
    authority to prescribe rules 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 rule prescribed under this paragraph shall be
    treated as a violation of a rule prohibiting unfair, deceptive, or
    abusive acts or practices under the Consumer Financial Protection Act
    of 2010 and a violation of a rule under section 18 of the Federal Trade
    Commission Act (15 U.S.C. 57a) regarding unfair or deceptive acts or
    practices.
        ``(2) The Bureau of Consumer Financial Protection shall enforce the
    rules 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
    Act of 2010 were incorporated into and made part of this subsection.
        ``(3) Subject to subtitle B of the Consumer Financial Protection
    Act of 2010, the Federal Trade Commission shall enforce the rules
    issued under paragraph (1), in the same manner, by the same means, and
    with the same jurisdiction, as though all applicable terms and
    provisions of the Federal Trade Commission Act were incorporated into
    and made part of this section.''; and
            (2) in subsection (b)--
                (A) by striking paragraph (1) and inserting the following:
            ``(1) Except as provided in paragraph (6), in any case in which
        the attorney general of a State has reason to believe that an
        interest of the residents of the State has been or is threatened or
        adversely affected by the engagement of any person subject to a
        rule prescribed under subsection (a) in practices that violate such
        rule, the State, as parens patriae, may bring a civil action on
        behalf of its residents in an appropriate district court of the
        United States or other court of competent jurisdiction--
                ``(A) to enjoin that practice;
                ``(B) to enforce compliance with the rule;
                ``(C) to obtain damages, restitution, or other compensation
            on behalf of the residents of the State; or
                ``(D) to obtain penalties and relief provided under the
            Consumer Financial Protection Act of 2010, the Federal Trade
            Commission Act, and such other relief as the court deems
            appropriate.'';
                (B) in paragraphs (2) and (3), by striking ``the primary
            Federal regulator'' each time the term appears and inserting
            ``the Bureau of Consumer Financial Protection or the
            Commission, as appropriate'';
                (C) in paragraph (3), by inserting ``and subject to
            subtitle B of the Consumer Financial Protection Act of 2010,''
            after ``paragraph (2),''; and
                (D) in paragraph (6), by striking ``the primary Federal
            regulator'' each place that term appears and inserting ``the
            Bureau of Consumer Financial Protection or the Commission''.
    SEC. 1098. AMENDMENTS TO THE REAL ESTATE SETTLEMENT PROCEDURES ACT OF
    1974.
        The Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2601
    et seq.) is amended--
            (1) in section 3 (12 U.S.C. 2602)--
                (A) in paragraph (7), by striking ``and'' at the end;
                (B) in paragraph (8), by striking the period at the end and
            inserting ``; and''; and
                (C) by adding at the end the following:
            ``(9) the term `Bureau' means the Bureau of Consumer Financial
        Protection.'';
            (2) in section 4 (12 U.S.C. 2603)--
                (A) in subsection (a), by striking the first sentence and
            inserting the following: ``The Bureau shall publish a single,
            integrated disclosure for mortgage loan transactions (including
            real estate settlement cost statements) which includes the
            disclosure requirements of this section and section 5, in
            conjunction with the disclosure requirements of the Truth in
            Lending Act that, taken together, may apply to a transaction
            that is subject to both or either provisions of law. The
            purpose of such model disclosure shall be to facilitate
            compliance with the disclosure requirements of this title and
            the Truth in Lending Act, and to aid the borrower or lessee in
            understanding the transaction by utilizing readily
            understandable language to simplify the technical nature of the
            disclosures.'';
                (B) by striking ``Secretary'' each place that term appears
            and inserting ``Bureau''; and
                (C) by striking ``form'' each place that term appears and
            inserting ``forms'';
            (3) in section 5 (12 U.S.C. 2604)--
                (A) by striking ``Secretary'' each place that term appears
            and inserting ``Bureau''; and
                (B) in subsection (a), by striking the first sentence and
            inserting the following: ``The Bureau shall prepare and
            distribute booklets jointly addressing compliance with the
            requirements of the Truth in Lending Act 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.'';
            (4) in section 6(j)(3) (12 U.S.C. 2605(j)(3))--
                (A) by striking ``Secretary'' and inserting ``Bureau''; and
                (B) by striking ``, by regulations that shall take effect
            not later than April 20, 1991,'';
            (5) in section 7(b) (12 U.S.C. 2606(b)) by striking
        ``Secretary'' and inserting ``Bureau'';
            (6) in section 8(c)(5) (12 U.S.C. 2607(c)(5)), by striking
        ``Secretary'' and inserting ``Bureau'';
            (7) in section 8(d) (12 U.S.C. 2607(d))--
                (A) in the subsection heading, by inserting ``Bureau and''
            before ``Secretary''; and
                (B) by striking paragraph (4), and inserting the following:
            ``(4) The Bureau, the Secretary, or the attorney general or the
        insurance commissioner of any State may bring an action to enjoin
        violations of this section. Except, to the extent that a person is
        subject to the jurisdiction of the Bureau, the Secretary, or the
        attorney general or the insurance commissioner of any State, the
        Bureau shall have primary authority to enforce or administer this
        section, subject to subtitle B of the Consumer Financial Protection
        Act of 2010.'';
            (8) in section 10(c) (12 U.S.C. 2609(c) and (d)), by striking
        ``Secretary'' and inserting ``Bureau'';
            (9) in section 16 (12 U.S.C. 2614), by inserting ``the
        Bureau,'' before ``the Secretary'';
            (10) in section 18 (12 U.S.C. 2616), by striking ``Secretary''
        each place that term appears and inserting ``Bureau''; and
            (11) in section 19 (12 U.S.C. 2617)--
                (A) in the section heading by striking ``secretary'' and
            inserting ``bureau'';
                (B) in subsection (a), by striking ``Secretary'' each place
            that term appears and inserting ``Bureau''; and
                (C) in subsections (b) and (c), by striking ``the
            Secretary'' each place that term appears and inserting ``the
            Bureau''.
    SEC. 1098A. AMENDMENTS TO THE INTERSTATE LAND SALES FULL DISCLOSURE
    ACT.
        The Interstate Land Sales Full Disclosure Act (15 U.S.C. 1701 et
    seq.) is amended--
            (1) by striking ``Secretary'' each place that term appears and
        inserting ``Director'';
            (2) by striking ``Department of Housing and Urban Development''
        each place that term appears and inserting ``Bureau of Consumer
        Financial Protection'';
            (3) by striking ``Department'' each place that term appears and
        inserting ``Bureau'';
            (4) in section 1402 (15 U.S.C. 1701)--
                (A) by striking paragraph (1) and inserting the following:
            ``(1) `Director' means the Director of the Bureau of Consumer
        Financial Protection;'';
                (B) in paragraph (10), by striking ``and'' at the end;
                (C) in paragraph (11), by striking the period at the end
            and inserting ``; and''; and
                (D) by adding at the end the following:
            ``(12) `Bureau' means the Bureau of Consumer Financial
        Protection.''; and
            (5) in section 1416(a) (15 U.S.C. 1715(a)), by striking
        ``Secretary of Housing and Urban Development'' and inserting
        ``Director of the Bureau of Consumer Financial Protection''.
    SEC. 1099. AMENDMENTS TO THE RIGHT TO FINANCIAL PRIVACY ACT OF 1978.
        The Right to Financial Privacy Act of 1978 (12 U.S.C. 3401 et seq.)
    is amended--
            (1) in section 1101--
                (A) in paragraph (6)--
                    (i) in subparagraph (A), by inserting ``and'' after the
                semicolon;
                    (ii) in subparagraph (B), by striking ``and'' at the
                end; and
                    (iii) by striking subparagraph (C); and
                (B) in paragraph (7), by striking subparagraph (B), and
            inserting the following:
                ``(B) the Bureau of Consumer Financial Protection;'';
            (2) in section 1112(e) (12 U.S.C. 3412(e)), by striking ``and
        the Commodity Futures Trading Commission is permitted'' and
        inserting ``the Commodity Futures Trading Commission, and the
        Bureau of Consumer Financial Protection is permitted''; and
            (3) in section 1113 (12 U.S.C. 3413), by adding at the end the
        following new subsection:
        ``(r) Disclosure to the Bureau of Consumer Financial Protection.--
    Nothing in this title shall apply to the examination by or disclosure
    to the Bureau of Consumer Financial Protection of financial records or
    information in the exercise of its authority with respect to a
    financial institution.''.
    SEC. 1100. AMENDMENTS TO THE SECURE AND FAIR ENFORCEMENT FOR MORTGAGE
    LICENSING ACT OF 2008.
        The S.A.F.E. Mortgage Licensing Act of 2008 (12 U.S.C. 5101 et
    seq.) is amended--
            (1) by striking ``a Federal banking agency'' each place that
        term appears, other than in paragraphs (7) and (11) of section 1503
        and section 1507(a)(1), and inserting ``the Bureau'';
            (2) by striking ``Federal banking agencies'' each place that
        term appears and inserting ``Bureau''; and
            (3) by striking ``Secretary'' each place that term appears and
        inserting ``Director'';
            (4) in section 1503 (12 U.S.C. 5102)--
                (A) by redesignating paragraphs (2) through (12) as (3)
            through (13), respectively;
                (B) by striking paragraph (1) and inserting the following:
            ``(1) Bureau.--The term `Bureau' means the Bureau of Consumer
        Financial Protection.
            ``(2) Federal banking agency.--The term `Federal banking
        agency' means the Board of Governors of the Federal Reserve System,
        the Office of the Comptroller of the Currency, the National Credit
        Union Administration, and the Federal Deposit Insurance
        Corporation.''; and
                (C) by striking paragraph (10), as so designated by this
            section, and inserting the following:
            ``(10) Director.--The term `Director' means the Director of the
        Bureau of Consumer Financial Protection.''; and
            (5) in section 1507 (12 U.S.C. 5106)--
                (A) in subsection (a)--
                    (i) by striking paragraph (1) and inserting the
                following:
            ``(1) In general.--The Bureau shall develop and maintain a
        system for registering employees of a 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 the end of the 1-year period beginning on the
        date of enactment of the Consumer Financial Protection Act of
        2010.''; and
                    (ii) in paragraph (2)--

                        (I) by striking ``appropriate Federal banking
                    agency and the Farm Credit Administration'' and
                    inserting ``Bureau''; and
                        (II) by striking ``employees's identity'' and
                    inserting ``identity of the employee''; and

                (B) in subsection (b), by striking ``through the Financial
            Institutions Examination Council, and the Farm Credit
            Administration'', and inserting ``and the Bureau of Consumer
            Financial Protection'';
            (6) in section 1508 (12 U.S.C. 5107)--
                (A) by striking the section heading and inserting the
            following: ``sec. 1508. bureau of consumer financial protection
            backup authority to establish loan originator licensing
            system.''; and
                (B) by adding at the end the following:
        ``(f) Regulation Authority.--
            ``(1) In general.--The Bureau is authorized to promulgate
        regulations setting minimum net worth or surety bond requirements
        for residential mortgage loan originators and minimum requirements
        for recovery funds paid into by loan originators.
            ``(2) Considerations.--In issuing regulations under paragraph
        (1), the Bureau 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 consumer access to
        affordable and sustainable mortgage loans.'';
            (7) by striking section 1510 (12 U.S.C. 5109) and inserting the
        following:
    ``SEC. 1510. FEES.
        ``The Bureau, the Farm Credit Administration, 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.'';
            (8) by striking section 1513 (12 U.S.C. 5112) and inserting the
        following:
    ``SEC. 1513. LIABILITY PROVISIONS.
        ``The Bureau, 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
    be 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.''; and
            (9) in section 1514 (12 U.S.C. 5113) in the section heading, by
        striking ``under hud backup licensing system'' and inserting ``by
        the bureau''.
    SEC. 1100A. AMENDMENTS TO THE TRUTH IN LENDING ACT.
        The Truth in Lending Act (15 U.S.C. 1601 et seq.) is amended--
            (1) in section 103 (15 U.S.C. 1602)--
                (A) by redesignating subsections (b) through (bb) as
            subsections (c) through (cc), respectively; and
                (B) by inserting after subsection (a) the following:
        ``(b) Bureau.--The term `Bureau' means the Bureau of Consumer
    Financial Protection.'';
            (2) by striking ``Board'' each place that term appears, other
        than in section 140(d) and sections 105(i) and 108(a), as amended
        by this section, and inserting ``Bureau'';
            (3) by striking ``Federal Trade Commission'' each place that
        term appears, other than in section 108(c) and section 129(m), as
        amended by this Act, and other than in the context of a reference
        to the Federal Trade Commission Act, and inserting ``Bureau'';
            (4) in section 105(a) (15 U.S.C. 1604(a)), in the second
        sentence--
                (A) by striking ``Except in the case of a mortgage referred
            to in section 103(aa), these regulations may contain such'' and
            inserting ``Except with respect to the provisions of section
            129 that apply to a mortgage referred to in section 103(aa),
            such regulations may contain such additional requirements,'';
            and
                (B) by inserting ``all or'' after ``exceptions for'';
            (5) in section 105(b) (15 U.S.C. 1604(b)), by striking the
        first sentence and inserting the following: ``The Bureau shall
        publish a single, integrated disclosure for mortgage loan
        transactions (including real estate settlement cost statements)
        which includes the disclosure requirements of this title in
        conjunction with the disclosure requirements of the Real Estate
        Settlement Procedures Act of 1974 that, taken together, may apply
        to a transaction that is subject to both or either provisions of
        law. The purpose of such model disclosure shall be to facilitate
        compliance with the disclosure requirements of this title and the
        Real Estate Settlement Procedures Act of 1974, and to aid the
        borrower or lessee in understanding the transaction by utilizing
        readily understandable language to simplify the technical nature of
        the disclosures.'';
            (6) in section 105(f)(1) (15 U.S.C. 1604(f)(1)), by inserting
        ``all or'' after ``from all or part of this title'';
            (7) in section 105 (15 U.S.C. 1604), by adding at the end the
        following:
                    ``(i) Authority of the board to prescribe rules.--
                Notwithstanding subsection (a), the Board shall have
                authority to prescribe rules under this title with respect
                to a person described in section 1029(a) of the Consumer
                Financial Protection Act of 2010. Regulations prescribed
                under this subsection may contain such classifications,
                differentiations, or other provisions, as in the judgment
                of the Board are necessary or proper to effectuate the
                purposes of this title, to prevent circumvention or evasion
                thereof, or to facilitate compliance therewith.'';
            (8) in section 108 (15 U.S.C. 1604), by adding at the end the
        following:
                (A) by striking subsection (a) and inserting the following:
        ``(a) Enforcing Agencies.--Subject to subtitle B of the Consumer
    Financial Protection Act of 2010, compliance with the requirements
    imposed under this title shall be enforced under--
            ``(1) section 8 of the Federal Deposit Insurance Act, by the
        appropriate Federal banking agency, as defined in section 3(q) of
        the Federal Deposit Insurance Act (12 U.S.C. 1813(q)), with respect
        to--
                ``(A) national banks, Federal savings associations, and
            Federal branches and Federal agencies of foreign banks;
                ``(B) member banks of the Federal Reserve System (other
            than national banks), branches and agencies of foreign banks
            (other than Federal branches, Federal agencies, and insured
            State branches of foreign banks), commercial lending companies
            owned or controlled by foreign banks, and organizations
            operating under section 25 or 25A of the Federal Reserve Act;
            and
                ``(C) banks and State savings associations insured by the
            Federal Deposit Insurance Corporation (other than members of
            the Federal Reserve System), and insured State branches of
            foreign banks;
            ``(2) the Federal Credit Union Act, by the Director of the
        National Credit Union Administration, with respect to any Federal
        credit union;
            ``(3) 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;
            ``(4) 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;
            ``(5) the Farm Credit Act of 1971, by the Farm Credit
        Administration with respect to any Federal land bank, Federal land
        bank association, Federal intermediate credit bank, or production
        credit association; and
            ``(6) subtitle E of the Consumer Financial Protection Act of
        2010, by the Bureau, with respect to any person subject to this
        title.''; and
                (B) by striking subsection (c) and inserting the following:
        ``(c) Overall Enforcement Authority of the Federal Trade
    Commission.--Except to the extent that enforcement of the requirements
    imposed under this title is specifically committed to some other
    Government agency under any of paragraphs (1) through (5) of subsection
    (a), and subject to subtitle B of the Consumer Financial Protection Act
    of 2010, the Federal Trade Commission shall be authorized to 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 Federal Trade
    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 under the Federal
    Trade Commission Act.''; and
            (9) in section 129 (15 U.S.C. 1639), by striking subsection (m)
        and inserting the following:
        ``(m) Civil Penalties in Federal Trade Commission Enforcement
    Actions.--For purposes of enforcement by the Federal Trade Commission,
    any violation of a regulation issued by the Bureau pursuant to
    subsection (l)(2) shall be treated as a violation of a rule promulgated
    under section 18 of the Federal Trade Commission Act (15 U.S.C. 57a)
    regarding unfair or deceptive acts or practices.''; and
            (10) in chapter 5 (15 U.S.C. 1667 et seq.)--
                (A) by striking ``the Board'' each place that term appears
            and inserting ``the Bureau''; and
                (B) by striking ``The Board'' each place that term appears
            and inserting ``The Bureau''.
    SEC. 1100B. AMENDMENTS TO THE TRUTH IN SAVINGS ACT.
        The Truth in Savings Act (12 U.S.C. 4301 et seq.) is amended--
            (1) by striking ``Board'' each place that term appears, other
        than in section 272(b) (12 U.S.C. 4311), and inserting ``Bureau'';
            (2) in section 270(a) (12 U.S.C. 4309)--
                (A) by striking ``Compliance'' and all that follows through
            the end of paragraph (1) and inserting: ``Subject to subtitle B
            of the Consumer Financial Protection Act of 2010, compliance
            with the requirements imposed under this subtitle shall be
            enforced under--
            ``(1) section 8 of the Federal Deposit Insurance Act by the
        appropriate Federal banking agency (as defined in section 3(q) of
        that Act), with respect to--
                ``(A) insured depository institutions (as defined in
            section 3(c)(2) of that Act);
                ``(B) depository institutions described in clause (i),
            (ii), or (iii) of section 19(b)(1)(A) of the Federal Reserve
            Act which are not insured depository institutions (as defined
            in section 3(c)(2) of the Federal Deposit Insurance Act); and
                ``(C) depository institutions described in clause (v) or
            (vi) of section 19(b)(1)(A) of the Federal Reserve Act which
            are not insured depository institutions (as defined in section
            3(c)(2) of the Federal Deposit Insurance Act);'';
                (B) in paragraph (2), by striking the period at the end and
            inserting ``; and''; and
                (C) by adding at the end the following:
            ``(3) subtitle E of the Consumer Financial Protection Act of
        2010, by the Bureau, with respect to any person subject to this
        subtitle.'';
            (3) in section 272(b) (12 U.S.C. 4311(b)), by striking
        ``regulation prescribed by the Board'' each place that term appears
        and inserting ``regulation prescribed by the Bureau''; and
            (4) in section 274 (12 U.S.C. 4313), by striking paragraph (4)
        and inserting the following:
            ``(4) Bureau.--The term `Bureau' means the Bureau of Consumer
        Financial Protection.''.
    SEC. 1100C. AMENDMENTS TO THE TELEMARKETING AND CONSUMER FRAUD AND
    ABUSE PREVENTION ACT.
        (a) Amendments to Section 3.--Section 3 of the Telemarketing and
    Consumer Fraud and Abuse Prevention Act (15 U.S.C. 6102) is amended by
    striking subsections (b) and (c) and inserting the following:
        ``(b) Rulemaking Authority.--The Commission shall have authority to
    prescribe rules under subsection (a), in accordance with section 553 of
    title 5, United States Code. In prescribing a rule under this section
    that relates to the provision of a consumer financial product or
    service that is subject to the Consumer Financial Protection Act of
    2010, including any enumerated consumer law thereunder, the Commission
    shall consult with the Bureau of Consumer Financial Protection
    regarding the consistency of a proposed rule with standards, purposes,
    or objectives administered by the Bureau of Consumer Financial
    Protection.
        ``(c) Violations.--Any violation of any rule prescribed under
    subsection (a)--
            ``(1) shall be treated as a violation of a rule under section
        18 of the Federal Trade Commission Act regarding unfair or
        deceptive acts or practices; and
            ``(2) that is committed by a person subject to the Consumer
        Financial Protection Act of 2010 shall be treated as a violation of
        a rule under section 1031 of that Act regarding unfair, deceptive,
        or abusive acts or practices.''.
        (b) Amendments to Section 4.--Section 4(d) of the Telemarketing and
    Consumer Fraud and Abuse Prevention Act (15 U.S.C. 6103(d)) is amended
    by inserting after ``Commission'' each place that term appears the
    following: ``or the Bureau of Consumer Financial Protection''.
        (c) Amendments to Section 5.--Section 5(c) of the Telemarketing and
    Consumer Fraud and Abuse Prevention Act (15 U.S.C. 6104(c)) is amended
    by inserting after ``Commission'' each place that term appears the
    following: ``or the Bureau of Consumer Financial Protection''.
        (d) Amendment to Section 6.--Section 6 of the Telemarketing and
    Consumer Fraud and Abuse Prevention Act (15 U.S.C. 6105) is amended by
    adding at the end the following:
        ``(d) Enforcement by Bureau of Consumer Financial Protection.--
    Except as otherwise provided in sections 3(d), 3(e), 4, and 5, and
    subject to subtitle B of the Consumer Financial Protection Act of 2010,
    this Act shall be enforced by the Bureau of Consumer Financial
    Protection under subtitle E of the Consumer Financial Protection Act of
    2010, with respect to the offering or provision of a consumer financial
    product or service subject to that Act.''.
    SEC. 1100D. AMENDMENTS TO THE PAPERWORK REDUCTION ACT.
        (a) Designation as an Independent Agency.--Section 2(5) of the
    Paperwork Reduction Act (44 U.S.C. 3502(5)) is amended by inserting
    ``the Bureau of Consumer Financial Protection, the Office of Financial
    Research,'' after ``the Securities and Exchange Commission,''.
        (b) Comparable Treatment.--Section 3513 of title 44, United States
    Code, is amended by adding at the end the following:
        ``(c) Comparable Treatment.--Notwithstanding any other provision of
    law, the Director shall treat or review a rule or order prescribed or
    proposed by the Director of the Bureau of Consumer Financial Protection
    on the same terms and conditions as apply to any rule or order
    prescribed or proposed by the Board of Governors of the Federal Reserve
    System.''.
    SEC. 1100E. ADJUSTMENTS FOR INFLATION IN THE TRUTH IN LENDING ACT.
        (a) Caps.--
            (1) Credit transactions.--Section 104(3) of the Truth in
        Lending Act (15 U.S.C. 1603(3)) is amended by striking ``$25,000''
        and inserting ``$50,000''.
            (2) Consumer leases.--Section 181(1) of the Truth in Lending
        Act (15 U.S.C. 1667(1)) is amended by striking ``$25,000'' and
        inserting ``$50,000''.
        (b) Adjustments for Inflation.--On and after December 31, 2011, the
    Bureau shall adjust annually the dollar amounts described in sections
    104(3) and 181(1) of the Truth in Lending Act (as amended by this
    section), by the annual percentage increase in the Consumer Price Index
    for Urban Wage Earners and Clerical Workers, as published by the Bureau
    of Labor Statistics, rounded to the nearest multiple of $100, or
    $1,000, as applicable.
    SEC. 1100F. USE OF CONSUMER REPORTS.
        Section 615 of the Fair Credit Reporting Act (15 U.S.C. 1681m) is
    amended--
            (1) in subsection (a)--
                (A) by redesignating paragraphs (2) and (3) as paragraphs
            (3) and (4), respectively;
                (B) by inserting after paragraph (1) the following:
            ``(2) provide to the consumer written or electronic
        disclosure--
                ``(A) of a numerical credit score as defined in section
            609(f)(2)(A) used by such person in taking any adverse action
            based in whole or in part on any information in a consumer
            report; and
                ``(B) of the information set forth in subparagraphs (B)
            through (E) of section 609(f)(1);''; and
                (C) in paragraph (4) (as so redesignated), by striking
            ``paragraph (2)'' and inserting ``paragraph (3)''; and
            (2) in subsection (h)(5)--
                (A) in subparagraph (C), by striking ``; and'' and
            inserting a semicolon;
                (B) in subparagraph (D), by striking the period and
            inserting ``; and''; and
                (C) by inserting at the end the following:
                ``(E) include a statement informing the consumer of--
                    ``(i) a numerical credit score as defined in section
                609(f)(2)(A), used by such person in making the credit
                decision described in paragraph (1) based in whole or in
                part on any information in a consumer report; and
                    ``(ii) the information set forth in subparagraphs (B)
                through (E) of section 609(f)(1).''.
    SEC. 1100G. SMALL BUSINESS FAIRNESS AND REGULATORY TRANSPARENCY.
        (a) Panel Requirement.--Section 609(d) of title 5, United States
    Code, is amended by striking ``means the'' and all that follows and
    inserting the following: ``means--
            ``(1) the Environmental Protection Agency;
            ``(2) the Consumer Financial Protection Bureau of the Federal
        Reserve System; and
            ``(3) the Occupational Safety and Health Administration of the
        Department of Labor.''.
        (b) Initial Regulatory Flexibility Analysis.--Section 603 of title
    5, United States Code, is amended by adding at the end the following:
        ``(d)(1) For a covered agency, as defined in section 609(d)(2),
    each initial regulatory flexibility analysis shall include a
    description of--
            ``(A) any projected increase in the cost of credit for small
        entities;
            ``(B) any significant alternatives to the proposed rule which
        accomplish the stated objectives of applicable statutes and which
        minimize any increase in the cost of credit for small entities; and
            ``(C) advice and recommendations of representatives of small
        entities relating to issues described in subparagraphs (A) and (B)
        and subsection (b).
        ``(2) A covered agency, as defined in section 609(d)(2), shall, for
    purposes of complying with paragraph (1)(C)--
            ``(A) identify representatives of small entities in
        consultation with the Chief Counsel for Advocacy of the Small
        Business Administration; and
            ``(B) collect advice and recommendations from the
        representatives identified under subparagraph (A) relating to
        issues described in subparagraphs (A) and (B) of paragraph (1) and
        subsection (b).''.
        (c) Final Regulatory Flexibility Analysis.--Section 604(a) of title
    5, United States Code, is amended--
            (1) in paragraph (4), by striking ``and'' at the end;
            (2) in paragraph (5), by striking the period at the end and
        inserting ``; and''; and
            (3) by adding at the end the following:
            ``(6) for a covered agency, as defined in section 609(d)(2), a
        description of the steps the agency has taken to minimize any
        additional cost of credit for small entities.''.
    SEC. 1100H. EFFECTIVE DATE.
        Except as otherwise provided in this subtitle and the amendments
    made by this subtitle, this subtitle and the amendments made by this
    subtitle, other than sections 1081 and 1082, shall become effective on
    the designated transfer date.

                  TITLE XI--FEDERAL RESERVE SYSTEM PROVISIONS

    SEC. 1101. FEDERAL RESERVE ACT AMENDMENTS ON EMERGENCY LENDING
    AUTHORITY.
        (a) Federal Reserve Act.--The third undesignated paragraph of
    section 13 of the Federal Reserve Act (12 U.S.C. 343) (relating to
    emergency lending authority) is amended--
            (1) by inserting ``(3)(A)'' before ``In unusual'';
            (2) by striking ``individual, partnership, or corporation'' the
        first place that term appears and inserting the following:
        ``participant in any program or facility with broad-based
        eligibility'';
            (3) by striking ``exchange for an individual or a partnership
        or corporation'' and inserting ``exchange,'';
            (4) by striking ``such individual, partnership, or
        corporation'' and inserting the following: ``such participant in
        any program or facility with broad-based eligibility'';
            (5) by striking ``for individuals, partnerships, corporations''
        and inserting ``for any participant in any program or facility with
        broad-based eligibility''; and
            (6) by striking ``may prescribe.'' and inserting the following:
        ``may prescribe.
                ``(B)(i) As soon as is practicable after the date of
            enactment of this subparagraph, the Board shall establish, by
            regulation, in consultation with the Secretary of the Treasury,
            the policies and procedures governing emergency lending under
            this paragraph. Such policies and procedures shall be designed
            to ensure that any emergency lending program or facility is for
            the purpose of providing liquidity to the financial system, and
            not to aid a failing financial company, and that the security
            for emergency loans is sufficient to protect taxpayers from
            losses and that any such program is terminated in a timely and
            orderly fashion. The policies and procedures established by the
            Board shall require that a Federal reserve bank assign,
            consistent with sound risk management practices and to ensure
            protection for the taxpayer, a lendable value to all collateral
            for a loan executed by a Federal reserve bank under this
            paragraph in determining whether the loan is secured
            satisfactorily for purposes of this paragraph.
                ``(ii) The Board shall establish procedures to prohibit
            borrowing from programs and facilities by borrowers that are
            insolvent. Such procedures may include a certification from the
            chief executive officer (or other authorized officer) of the
            borrower, at the time the borrower initially borrows under the
            program or facility (with a duty by the borrower to update the
            certification if the information in the certification
            materially changes), that the borrower is not insolvent. A
            borrower shall be considered insolvent for purposes of this
            subparagraph, if the borrower is in bankruptcy, resolution
            under title II of the Dodd-Frank Wall Street Reform and
            Consumer Protection Act, or any other Federal or State
            insolvency proceeding.
                ``(iii) A program or facility that is structured to remove
            assets from the balance sheet of a single and specific company,
            or that is established for the purpose of assisting a single
            and specific company avoid bankruptcy, resolution under title
            II of the Dodd-Frank Wall Street Reform and Consumer Protection
            Act, or any other Federal or State insolvency proceeding, shall
            not be considered a program or facility with broad-based
            eligibility.
                ``(iv) The Board may not establish any program or facility
            under this paragraph without the prior approval of the
            Secretary of the Treasury.
                ``(C) The Board shall provide to the Committee on Banking,
            Housing, and Urban Affairs of the Senate and the Committee on
            Financial Services of the House of Representatives--
                    ``(i) not later than 7 days after the Board authorizes
                any loan or other financial assistance under this
                paragraph, a report that includes--

                        ``(I) the justification for the exercise of
                    authority to provide such assistance;
                        ``(II) the identity of the recipients of such
                    assistance;
                        ``(III) the date and amount of the assistance, and
                    form in which the assistance was provided; and
                        ``(IV) the material terms of the assistance,
                    including--

                            ``(aa) duration;
                            ``(bb) collateral pledged and the value
                        thereof;
                            ``(cc) all interest, fees, and other revenue or
                        items of value to be received in exchange for the
                        assistance;
                            ``(dd) any requirements imposed on the
                        recipient with respect to employee compensation,
                        distribution of dividends, or any other corporate
                        decision in exchange for the assistance; and
                            ``(ee) the expected costs to the taxpayers of
                        such assistance; and
                    ``(ii) once every 30 days, with respect to any
                outstanding loan or other financial assistance under this
                paragraph, written updates on--

                        ``(I) the value of collateral;
                        ``(II) the amount of interest, fees, and other
                    revenue or items of value received in exchange for the
                    assistance; and
                        ``(III) the expected or final cost to the taxpayers
                    of such assistance.

                ``(D) The information required to be submitted to Congress
            under subparagraph (C) related to--
                    ``(i) the identity of the participants in an emergency
                lending program or facility commenced under this paragraph;
                    ``(ii) the amounts borrowed by each participant in any
                such program or facility;
                    ``(iii) identifying details concerning the assets or
                collateral held by, under, or in connection with such a
                program or facility,
            shall be kept confidential, upon the written request of the
            Chairman of the Board, in which case such information shall be
            made available only to the Chairpersons or Ranking Members of
            the Committees described in subparagraph (C).
                ``(E) If an entity to which a Federal reserve bank has
            provided a loan under this paragraph becomes a covered
            financial company, as defined in section 201 of the Dodd-Frank
            Wall Street Reform and Consumer Protection Act, at any time
            while such loan is outstanding, and the Federal reserve bank
            incurs a realized net loss on the loan, then the Federal
            reserve bank shall have a claim equal to the amount of the net
            realized loss against the covered entity, with the same
            priority as an obligation to the Secretary of the Treasury
            under section 210(b) of the Dodd-Frank Wall Street Reform and
            Consumer Protection Act.''.
        (b) Conforming Amendment.--Section 507(a)(2) of title 11, United
    States Code, is amended by inserting ``unsecured claims of any Federal
    reserve bank related to loans made through programs or facilities
    authorized under section 13(3) of the Federal Reserve Act (12 U.S.C.
    343),'' after ``this title,''.
        (c) References.--On and after the date of enactment of this Act,
    any reference in any provision of Federal law to the third undesignated
    paragraph of section 13 of the Federal Reserve Act (12 U.S.C. 343)
    shall be deemed to be a reference to section 13(3) of the Federal
    Reserve Act, as so designated by this section.
    SEC. 1102. AUDITS OF SPECIAL FEDERAL RESERVE CREDIT FACILITIES.
        (a) Audits.--Section 714 of title 31, United States Code, is
    amended by adding at the end the following:
        ``(f) Audits of Credit Facilities of the Federal Reserve System.--
            ``(1) Definitions.--In this subsection, the following
        definitions shall apply:
                ``(A) Credit facility.--The term `credit facility' means a
            program or facility, including any special purpose vehicle or
            other entity established by or on behalf of the Board of
            Governors of the Federal Reserve System or a Federal reserve
            bank, authorized by the Board of Governors under section 13(3)
            of the Federal Reserve Act (12 U.S.C. 343), that is not subject
            to audit under subsection (e).
                ``(B) Covered transaction.--The term `covered transaction'
            means any open market transaction or discount window advance
            that meets the definition of `covered transaction' in section
            11(s) of the Federal Reserve Act.
            ``(2) Authority for audits and examinations.--Subject to
        paragraph (3), and notwithstanding any limitation in subsection (b)
        on the auditing and oversight of certain functions of the Board of
        Governors of the Federal Reserve System or any Federal reserve
        bank, the Comptroller General of the United States may conduct
        audits, including onsite examinations, of the Board of Governors, a
        Federal reserve bank, or a credit facility, if the Comptroller
        General determines that such audits are appropriate, solely for the
        purposes of assessing, with respect to a credit facility or a
        covered transaction--
                ``(A) the operational integrity, accounting, financial
            reporting, and internal controls governing the credit facility
            or covered transaction;
                ``(B) the effectiveness of the security and collateral
            policies established for the facility or covered transaction in
            mitigating risk to the relevant Federal reserve bank and
            taxpayers;
                ``(C) whether the credit facility or the conduct of a
            covered transaction inappropriately favors one or more specific
            participants over other institutions eligible to utilize the
            facility; and
                ``(D) the policies governing the use, selection, or payment
            of third-party contractors by or for any credit facility or to
            conduct any covered transaction.
            ``(3) Reports and delayed disclosure.--
                ``(A) Reports required.--A report on each audit conducted
            under paragraph (2) 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.
                ``(B) Contents.--The report under subparagraph (A) shall
            include a detailed description of the findings and conclusions
            of the Comptroller General with respect to the matters
            described in paragraph (2) that were audited and are the
            subject of the report, together with such recommendations for
            legislative or administrative action relating to such matters
            as the Comptroller General may determine to be appropriate.
                ``(C) Delayed release of certain information.--
                    ``(i) In general.--The Comptroller General shall not
                disclose to any person or entity, including to Congress,
                the names or identifying details of specific participants
                in any credit facility or covered transaction, the amounts
                borrowed by or transferred by or to specific participants
                in any credit facility or covered transaction, or
                identifying details regarding assets or collateral held or
                transferred by, under, or in connection with any credit
                facility or covered transaction, and any report provided
                under subparagraph (A) shall be redacted to ensure that
                such names and details are not disclosed.
                    ``(ii) Delayed release.--The nondisclosure obligation
                under clause (i) shall expire with respect to any
                participant on the date on which the Board of Governors,
                directly or through a Federal reserve bank, publicly
                discloses the identity of the subject participant or the
                identifying details of the subject assets, collateral, or
                transaction.
                    ``(iii) General release.--The Comptroller General shall
                release a nonredacted version of any report on a credit
                facility 1 year after the effective date of the termination
                by the Board of Governors of the authorization for the
                credit facility. For purposes of this clause, a credit
                facility shall be deemed to have terminated 24 months after
                the date on which the credit facility ceases to make
                extensions of credit and loans, unless the credit facility
                is otherwise terminated by the Board of Governors.
                    ``(iv) Exceptions.--The nondisclosure obligation under
                clause (i) shall not apply to the credit facilities Maiden
                Lane, Maiden Lane II, and Maiden Lane III.
                    ``(v) Release of covered transaction information.--The
                Comptroller General shall release a nonredacted version of
                any report regarding covered transactions upon the release
                of the information regarding such covered transactions by
                the Board of Governors of the Federal Reserve System, as
                provided in section 11(s) of the Federal Reserve Act.''.
        (b) Access to Records.--Section 714(d) of title 31, United States
    Code, is amended--
            (1) in paragraph (2), by inserting ``or any person or entity
        described in paragraph (3)(A)'' after ``used by an agency'';
            (2) in paragraph (3), by inserting ``or (f)'' after
        ``subsection (e)'' each place that term appears;
            (3) in clauses (i) and (ii) of paragraph (3)(A), by inserting
        ``or the Federal Reserve banks'' after ``by the Board'' each place
        that term appears;
            (4) in paragraph (3)(A)(ii), by inserting ``participating in
        or'' after ``any entity''; and
            (5) in paragraph (3)(B), by adding at the end the following:
        ``The Comptroller General may make and retain copies of books,
        accounts, and other records provided under subparagraph (A) as the
        Comptroller General deems appropriate. The Comptroller General
        shall provide to any person or entity described in subparagraph (A)
        a current list of officers and employees to whom, with proper
        identification, records and property may be made available, and who
        may make notes or copies necessary to carry out a audit or
        examination under this subsection.''.
    SEC. 1103. PUBLIC ACCESS TO INFORMATION.
        (a) In General.--Section 2B of the Federal Reserve Act (12 U.S.C.
    225b) is amended by adding at the end the following:
        ``(c) Public Access to Information.--The Board shall place on its
    home Internet website, a link entitled `Audit', which shall link to a
    webpage that shall serve as a repository of information made available
    to the public for a reasonable period of time, not less than 6 months
    following the date of release of the relevant information, including--
            ``(1) the reports prepared by the Comptroller General under
        section 714 of title 31, United States Code;
            ``(2) the annual financial statements prepared by an
        independent auditor for the Board in accordance with section 11B;
            ``(3) the reports to the Committee on Banking, Housing, and
        Urban Affairs of the Senate required under section 13(3) (relating
        to emergency lending authority); and
            ``(4) such other information as the Board reasonably believes
        is necessary or helpful to the public in understanding the
        accounting, financial reporting, and internal controls of the Board
        and the Federal reserve banks.''.
        (b) Federal Reserve Transparency and Release of Information.--
    Section 11 of the Federal Reserve Act (12 U.S.C. 248) is amended by
    adding at the end the following new subsection:
        ``(s) Federal Reserve Transparency and Release of Information.--
            ``(1) In general.--In order to ensure the disclosure in a
        timely manner consistent with the purposes of this Act of
        information concerning the borrowers and counterparties
        participating in emergency credit facilities, discount window
        lending programs, and open market operations authorized or
        conducted by the Board or a Federal reserve bank, the Board of
        Governors shall disclose, as provided in paragraph (2)--
                ``(A) the names and identifying details of each borrower,
            participant, or counterparty in any credit facility or covered
            transaction;
                ``(B) the amount borrowed by or transferred by or to a
            specific borrower, participant, or counterparty in any credit
            facility or covered transaction;
                ``(C) the interest rate or discount paid by each borrower,
            participant, or counterparty in any credit facility or covered
            transaction; and
                ``(D) information identifying the types and amounts of
            collateral pledged or assets transferred in connection with
            participation in any credit facility or covered transaction.
            ``(2) Mandatory release date.--In the case of--
                ``(A) a credit facility, the Board shall disclose the
            information described in paragraph (1) on the date that is 1
            year after the effective date of the termination by the Board
            of the authorization of the credit facility; and
                ``(B) a covered transaction, the Board shall disclose the
            information described in paragraph (1) on the last day of the
            eighth calendar quarter following the calendar quarter in which
            the covered transaction was conducted.
            ``(3) Earlier release date authorized.--The Chairman of the
        Board may publicly release the information described in paragraph
        (1) before the relevant date specified in paragraph (2), if the
        Chairman determines that such disclosure would be in the public
        interest and would not harm the effectiveness of the relevant
        credit facility or the purpose or conduct of covered transactions.
            ``(4) Definitions.--For purposes of this subsection, the
        following definitions shall apply:
                ``(A) Credit facility.--The term `credit facility' has the
            same meaning as in section 714(f)(1)(A) of title 31, United
            States Code.
                ``(B) Covered transaction.--The term `covered transaction'
            means--
                    ``(i) any open market transaction with a
                nongovernmental third party conducted under the first
                undesignated paragraph of section 14 or subparagraph (a),
                (b), or (c) of the 2nd undesignated paragraph of such
                section, after the date of enactment of the Dodd-Frank Wall
                Street Reform and Consumer Protection Act; and
                    ``(ii) any advance made under section 10B after the
                date of enactment of that Act.
            ``(5) Termination of credit facility by operation of law.--A
        credit facility shall be deemed to have terminated as of the end of
        the 24-month period beginning on the date on which the credit
        facility ceases to make extensions of credit and loans, unless the
        credit facility is otherwise terminated by the Board before such
        date.
            ``(6) Consistent treatment of information.--Except as provided
        in this subsection or section 13(3)(D), or in section 714(f)(3)(C)
        of title 31, United States Code, the information described in
        paragraph (1) and information concerning the transactions described
        in section 714(f) of such title, shall be confidential, including
        for purposes of section 552(b)(3) of title 5 of such Code, until
        the relevant mandatory release date described in paragraph (2),
        unless the Chairman of the Board determines that earlier disclosure
        of such information would be in the public interest and would not
        harm the effectiveness of the relevant credit facility or the
        purpose of conduct of the relevant transactions.
            ``(7) Protection of personal privacy.--This subsection and
        section 13(3)(C), section 714(f)(3)(C) of title 31, United States
        Code, and subsection (a) or (c) of section 1109 of the Dodd-Frank
        Wall Street Reform and Consumer Protection Act shall not be
        construed as requiring any disclosure of nonpublic personal
        information (as defined for purposes of section 502 of the Gramm-
        Leach-Bliley Act (12 U.S.C. 6802)) concerning any individual who is
        referenced in collateral pledged or assets transferred in
        connection with a credit facility or covered transaction, unless
        the person is a borrower, participant, or counterparty under the
        credit facility or covered transaction.
            ``(8) Study of foia exemption impact.--
                ``(A) Study.--The Inspector General of the Board of
            Governors of the Federal Reserve System shall--
                    ``(i) conduct a study on the impact that the exemption
                from section 552(b)(3) of title 5 (known as the Freedom of
                Information Act) established under paragraph (6) has had on
                the ability of the public to access information about the
                administration by the Board of Governors of emergency
                credit facilities, discount window lending programs, and
                open market operations; and
                    ``(ii) make any recommendations on whether the
                exemption described in clause (i) should remain in effect.
                ``(B) Report.--Not later than 30 months after the date of
            enactment of this section, the Inspector General of the Board
            of Governors of the Federal Reserve System shall submit a
            report on the findings of the study required under subparagraph
            (A) to the Committee on Banking, Housing, and Urban Affairs of
            the Senate and the Committee on Financial Services of the House
            of Representatives, and publish the report on the website of
            the Board.
            ``(9) Rule of construction.--Nothing in this section is meant
        to affect any pending litigation or lawsuit filed under section 552
        of title 5, United States Code (popularly known as the Freedom of
        Information Act), on or before the date of enactment of the Dodd-
        Frank Wall Street Reform and Consumer Protection Act.''.
    SEC. 1104. LIQUIDITY EVENT DETERMINATION.
        (a) Determination and Written Recommendation.--
            (1) Determination request.--The Secretary may request the
        Corporation and the Board of Governors to determine whether a
        liquidity event exists that warrants use of the guarantee program
        authorized under section 1105.
            (2) Requirements of determination.--Any determination pursuant
        to paragraph (1) shall--
                (A) be written; and
                (B) contain an evaluation of the evidence that--
                    (i) a liquidity event exists;
                    (ii) failure to take action would have serious adverse
                effects on financial stability or economic conditions in
                the United States; and
                    (iii) actions authorized under section 1105 are needed
                to avoid or mitigate potential adverse effects on the
                United States financial system or economic conditions.
        (b) Procedures.--Notwithstanding any other provision of Federal or
    State law, upon the determination of both the Corporation (upon a vote
    of not fewer than \2/3\ of the members of the Corporation then serving)
    and the Board of Governors (upon a vote of not fewer than \2/3\ of the
    members of the Board of Governors then serving) under subsection (a)
    that a liquidity event exists that warrants use of the guarantee
    program authorized under section 1105, and with the written consent of
    the Secretary--
            (1) the Corporation shall take action in accordance with
        section 1105(a); and
            (2) the Secretary (in consultation with the President) shall
        take action in accordance with section 1105(c).
        (c) Documentation and Review.--
            (1) Documentation.--The Secretary shall--
                (A) maintain the written documentation of each
            determination of the Corporation and the Board of Governors
            under this section; and
                (B) provide the documentation for review under paragraph
            (2).
            (2) GAO review.--The Comptroller General of the United States
        shall review and report to Congress on any determination of the
        Corporation and the Board of Governors under subsection (a),
        including--
                (A) the basis for the determination; and
                (B) the likely effect of the actions taken.
        (d) Report to Congress.--On the earlier of the date of a submission
    made to Congress under section 1105(c), or within 30 days of the date
    of a determination under subsection (a), the Secretary shall provide
    written notice of the determination of the Corporation and the Board of
    Governors to the Committee on Banking, Housing, and Urban Affairs of
    the Senate and the Committee on Financial Services of the House of
    Representatives, including a description of the basis for the
    determination.
    SEC. 1105. EMERGENCY FINANCIAL STABILIZATION.
        (a) In General.--Upon the written determination of the Corporation
    and the Board of Governors under section 1104, the Corporation shall
    create a widely available program to guarantee obligations of solvent
    insured depository institutions or solvent depository institution
    holding companies (including any affiliates thereof) during times of
    severe economic distress, except that a guarantee of obligations under
    this section may not include the provision of equity in any form.
        (b) Rulemaking and Terms and Conditions.--
            (1) Policies and procedures.--As soon as is practicable after
        the date of enactment of this Act, the Corporation shall establish,
        by regulation, and in consultation with the Secretary, policies and
        procedures governing the issuance of guarantees authorized by this
        section. Such policies and procedures may include a requirement of
        collateral as a condition of any such guarantee.
            (2) Terms and conditions.--The terms and conditions of any
        guarantee program shall be established by the Corporation, with the
        concurrence of the Secretary.
        (c) Determination of Guaranteed Amount.--
            (1) In general.--In connection with any program established
        pursuant to subsection (a) and subject to paragraph (2) of this
        subsection, the Secretary (in consultation with the President)
        shall determine the maximum amount of debt outstanding that the
        Corporation may guarantee under this section, and the President may
        transmit to Congress a written report on the plan of the
        Corporation to exercise the authority under this section to issue
        guarantees up to that maximum amount and a request for approval of
        such plan. The Corporation shall exercise the authority under this
        section to issue guarantees up to that specified maximum amount
        upon passage of the joint resolution of approval, as provided in
        subsection (d). Absent such approval, the Corporation shall issue
        no such guarantees.
            (2) Additional debt guarantee authority.--If the Secretary (in
        consultation with the President) determines, after a submission to
        Congress under paragraph (1), that the maximum guarantee amount
        should be raised, and the Council concurs with that determination,
        the President may transmit to Congress a written report on the plan
        of the Corporation to exercise the authority under this section to
        issue guarantees up to the increased maximum debt guarantee amount.
        The Corporation shall exercise the authority under this section to
        issue guarantees up to that specified maximum amount upon passage
        of the joint resolution of approval, as provided in subsection (d).
        Absent such approval, the Corporation shall issue no such
        guarantees.
        (d) Resolution of Approval.--
            (1) Additional debt guarantee authority.--A request by the
        President under this section 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.
            (2) Fast track consideration in senate.--
                (A) Reconvening.--Upon receipt of a request under
            subsection (c), if the Senate has adjourned or recessed for
            more than 2 days, the majority leader of the Senate, after
            consultation with the minority leader of the Senate, shall
            notify the Members of the Senate that, pursuant to this
            section, the Senate shall convene not later than the second
            calendar day after receipt of such message.
                (B) Placement on calendar.--Upon introduction in the
            Senate, the joint resolution shall be placed immediately on the
            calendar.
                (C) Floor consideration.--
                    (i) In general.--Notwithstanding Rule XXII of the
                Standing Rules of the Senate, it is in order at any time
                during the period beginning on the 4th day after the date
                on which Congress receives a request under subsection (c),
                and ending on the 7th day after that date (even though a
                previous motion to the same effect has been disagreed to)
                to move to proceed to the consideration of the joint
                resolution, and all points of order against the joint
                resolution (and against consideration of the joint
                resolution) are waived. The motion to proceed is not
                debatable. The motion is not subject to a motion to
                postpone. A motion to reconsider the vote by which the
                motion is agreed to or disagreed to shall not be in order.
                If a motion to proceed to the consideration of the
                resolution is agreed to, the joint resolution shall remain
                the unfinished business until disposed of.
                    (ii) Debate.--Debate on the joint resolution, and on
                all debatable motions and appeals in connection therewith,
                shall be limited to not more than 10 hours, which shall be
                divided equally between the majority and minority leaders
                or their designees. A motion further to limit debate is in
                order and not debatable. An amendment to, or a motion to
                postpone, or a motion to proceed to the consideration of
                other business, or a motion to recommit the joint
                resolution is not in order.
                    (iii) Vote on passage.--The vote on passage shall occur
                immediately following the conclusion of the debate on the
                joint resolution, and a single quorum call at the
                conclusion of the debate if requested in accordance with
                the rules of the Senate.
                    (iv) Rulings of the chair on procedure.--Appeals from
                the decisions of the Chair relating to the application of
                the rules of the Senate, as the case may be, to the
                procedure relating to a joint resolution shall be decided
                without debate.
            (3) Rules.--
                (A) Coordination with action by house of representatives.--
            If, before the passage by the Senate of a joint resolution of
            the Senate, the Senate receives a joint resolution, from the
            House of Representatives, then the following procedures shall
            apply:
                    (i) The joint resolution of the House of
                Representatives shall not be referred to a committee.
                    (ii) With respect to a joint resolution of the Senate--

                        (I) the procedure in the Senate shall be the same
                    as if no joint resolution had been received from the
                    other House; but
                        (II) the vote on passage shall be on the joint
                    resolution of the House of Representatives.

                (B) Treatment of joint resolution of house of
            representatives.--If the Senate fails to introduce or consider
            a joint resolution under this section, the joint resolution of
            the House of Representatives shall be entitled to expedited
            floor procedures under this subsection.
                (C) Treatment of companion measures.--If, following passage
            of the joint resolution in the Senate, the Senate then receives
            the companion measure from the House of Representatives, the
            companion measure shall not be debatable.
                (D) Rules of the senate.--This subsection is enacted by
            Congress--
                    (i) as an exercise of the rulemaking power of the
                Senate, and as such it is deemed a part of the rules of the
                Senate, but applicable only with respect to the procedure
                to be followed in the Senate in the case of a joint
                resolution, and it supersedes other rules, only to the
                extent that it is inconsistent with such rules; and
                    (ii) with full recognition of the constitutional right
                of the Senate to change the rules (so far as relating to
                the procedure of the Senate) at any time, in the same
                manner, and to the same extent as in the case of any other
                rule of the Senate.
            (4) Definition.--As used in this subsection, the term ``joint
        resolution'' means only a joint resolution--
                (A) that is introduced not later than 3 calendar days after
            the date on which the request referred to in subsection (c) is
            received by Congress;
                (B) that does not have a preamble;
                (C) the title of which is as follows: ``Joint resolution
            relating to the approval of a plan to guarantee obligations
            under section 1105 of the Dodd-Frank Wall Street Reform and
            Consumer Protection Act''; and
                (D) the matter after the resolving clause of which is as
            follows: ``That Congress approves the obligation of any amount
            described in section 1105(c) of the Dodd-Frank Wall Street
            Reform and Consumer Protection Act.''.
        (e) Funding.--
            (1) Fees and other charges.--The Corporation shall charge fees
        and other assessments to all participants in the program
        established pursuant to this section, in such amounts as are
        necessary to offset projected losses and administrative expenses,
        including amounts borrowed pursuant to paragraph (3), and such
        amounts shall be available to the Corporation.
            (2) Excess funds.--If, at the conclusion of the program
        established under this section, there are any excess funds
        collected from the fees associated with such program, the funds
        shall be deposited in the General Fund of the Treasury.
            (3) Authority of corporation.--The Corporation--
                (A) may borrow funds from the Secretary of the Treasury and
            issue obligations of the Corporation to the Secretary for
            amounts borrowed, and the amounts borrowed shall be available
            to the Corporation for purposes of carrying out a program
            established pursuant to this section, including the payment of
            reasonable costs of administering the program, and the
            obligations issued shall be repaid in full with interest
            through fees and charges paid by participants in accordance
            with paragraphs (1) and (4), as applicable; and
                (B) may not borrow funds from the Deposit Insurance Fund
            established pursuant to section 11(a)(4) of the Federal Deposit
            Insurance Act.
            (4) Backup special assessments.--To the extent that the funds
        collected pursuant to paragraph (1) are insufficient to cover any
        losses or expenses, including amounts borrowed pursuant to
        paragraph (3), arising from a program established pursuant to this
        section, the Corporation shall impose a special assessment solely
        on participants in the program, in amounts necessary to address
        such insufficiency, and which shall be available to the Corporation
        to cover such losses or expenses.
            (5) Authority of the secretary.--The Secretary may purchase any
        obligations issued under paragraph (3)(A). For such purpose, the
        Secretary may use the proceeds of the sale of any securities issued
        under chapter 31 of title 31, United States Code, and the purposes
        for which securities may be issued under that chapter 31 are
        extended to include such purchases, and the amount of any
        securities issued under that chapter 31 for such purpose shall be
        treated in the same manner as securities issued under section
        208(n)(5)(E).
        (f) Rule of Construction.--For purposes of this section, a
    guarantee of deposits held by insured depository institutions shall not
    be treated as a debt guarantee program.
        (g) Definitions.--For purposes of this section, the following
    definitions shall apply:
            (1) Company.--The term ``company'' means any entity other than
        a natural person that is incorporated or organized under Federal
        law or the laws of any State.
            (2) Depository institution holding company.--The term
        ``depository institution holding company'' has the same meaning as
        in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813).
            (3) Liquidity event.--The term ``liquidity event'' means--
                (A) an exceptional and broad reduction in the general
            ability of financial market participants--
                    (i) to sell financial assets without an unusual and
                significant discount; or
                    (ii) to borrow using financial assets as collateral
                without an unusual and significant increase in margin; or
                (B) an unusual and significant reduction in the ability of
            financial market participants to obtain unsecured credit.
            (4) Solvent.--The term ``solvent'' means that the value of the
        assets of an entity exceed its obligations to creditors.
    SEC. 1106. ADDITIONAL RELATED AMENDMENTS.
        (a) Suspension of Parallel Federal Deposit Insurance Act
    Authority.--Effective upon the date of enactment of this section, 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
    1105 would provide authority.
        (b) Federal Deposit Insurance Act.--Section 13(c)(4)(G) of the
    Federal Deposit Insurance Act (12 U.S.C. 1823(c)(4)(G)) is amended--
            (1) in clause (i)--
                (A) in subclause (I), by inserting ``for which the
            Corporation has been appointed receiver'' before ``would have
            serious''; and
                (B) in the undesignated matter following subclause (II), by
            inserting ``for the purpose of winding up the insured
            depository institution for which the Corporation has been
            appointed receiver'' after ``provide assistance under this
            section''; and
            (2) in clause (v)(I), by striking ``The'' and inserting ``Not
        later than 3 days after making a determination under clause (i),
        the''.
        (c) Effect of Default on an FDIC Guarantee.--If an insured
    depository institution or depository institution holding company (as
    those terms are defined in section 3 of the Federal Deposit Insurance
    Act) participating in a program under section 1105, 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 shall--
            (1) appoint itself as receiver for the insured depository
        institution that defaults; and
            (2) with respect to any other participating company that is not
        an insured depository institution that defaults--
                (A) require--
                    (i) consideration of whether a determination shall be
                made, as provided in section 203 to resolve the company
                under section 202; and
                    (ii) the company to file a petition for bankruptcy
                under section 301 of title 11, United States Code, if the
                Corporation is not appointed receiver pursuant to section
                202 within 30 days of the date of default; or
                (B) file a petition for involuntary bankruptcy on behalf of
            the company under section 303 of title 11, United States Code.
    SEC. 1107. FEDERAL RESERVE ACT AMENDMENTS ON FEDERAL RESERVE BANK
    GOVERNANCE.
        The 5th subparagraph of the 4th undesignated paragraph of section 4
    of the Federal Reserve Act (12 U.S.C. 341) is amended by striking the
    2nd sentence and inserting the following: ``The president shall be the
    chief executive officer of the bank and shall be appointed by the Class
    B and Class C directors of the bank, with the approval of the Board of
    Governors of the Federal Reserve System, for a term of 5 years; and all
    other executive officers and all employees of the bank shall be
    directly responsible to the president.''.
    SEC. 1108. FEDERAL RESERVE ACT AMENDMENTS ON SUPERVISION AND REGULATION
    POLICY.
        (a) Establishment of the Position of Vice Chairman for
    Supervision.--
            (1) Position established.--The second undesignated paragraph of
        section 10 of the Federal Reserve Act (12 U.S.C. 242) (relating to
        the Chairman and Vice Chairman of the Board) is amended by striking
        the third sentence and inserting the following: ``Of the persons
        thus appointed, 1 shall be designated by the President, by and with
        the advice and consent of the Senate, to serve as Chairman of the
        Board for a term of 4 years, and 2 shall be designated by the
        President, by and with the advice and consent of the Senate, to
        serve as Vice Chairmen of the Board, each for a term of 4 years, 1
        of whom shall serve in the absence of the Chairman, as provided in
        the fourth undesignated paragraph of this section, and 1 of whom
        shall be designated Vice Chairman for Supervision. The Vice
        Chairman for Supervision shall develop policy recommendations for
        the Board regarding supervision and regulation of depository
        institution holding companies and other financial firms supervised
        by the Board, and shall oversee the supervision and regulation of
        such firms.''.
            (2) Effective date.--The amendment made by subsection (a) takes
        effect on the date of enactment of this title and applies to
        individuals who are designated by the President on or after that
        date to serve as Vice Chairman of Supervision.
        (b) Appearances Before Congress.--Section 10 of the Federal Reserve
    Act (12 U.S.C. 241 et seq.) is amended by adding at the end the
    following:
            ``(12) Appearances before congress.--The Vice Chairman for
        Supervision shall appear before the Committee on Banking, Housing,
        and Urban Affairs of the Senate and the Committee on Financial
        Services of the House of Representatives and at semi-annual
        hearings regarding the efforts, activities, objectives, and plans
        of the Board with respect to the conduct of supervision and
        regulation of depository institution holding companies and other
        financial firms supervised by the Board.''.
        (c) Board Responsibility To Set Supervision and Regulatory
    Policy.--Section 11 of the Federal Reserve Act (12 U.S.C. 248)
    (relating to enumerated powers of the Board) is amended by adding at
    the end of subsection (k) (relating to delegation) the following: ``The
    Board of Governors may not delegate to a Federal reserve bank its
    functions for the establishment of policies for the supervision and
    regulation of depository institution holding companies and other
    financial firms supervised by the Board of Governors.''.
        (d) Exercise of Federal Reserve Authority.--
            (1) No decisions by federal reserve bank presidents.--No
        provision of title I relating to the authority of the Board of
        Governors shall be construed as conferring any decision-making
        authority on presidents of Federal reserve banks.
            (2) Voting decisions by board.--The Board of Governors shall
        not delegate the authority to make any voting decision that the
        Board of Governors is authorized or required to make under title I
        of this Act in contravention of section 11(k) of the Federal
        Reserve Act.
    SEC. 1109. GAO AUDIT OF THE FEDERAL RESERVE FACILITIES; PUBLICATION OF
    BOARD ACTIONS.
        (a) GAO Audit.--
            (1) In general.--Notwithstanding section 714(b) of title 31,
        United States Code, or any other provision of law, the Comptroller
        General of the United States (in this subsection referred to as the
        ``Comptroller General'') shall conduct a one-time audit of all
        loans and other financial assistance provided during the period
        beginning on December 1, 2007 and ending on the date of enactment
        of this Act by the Board of Governors or a Federal reserve bank
        under the Asset-Backed Commercial Paper Money Market Mutual Fund
        Liquidity Facility, the Term Asset-Backed Securities Loan Facility,
        the Primary Dealer Credit Facility, the Commercial Paper Funding
        Facility, the Term Securities Lending Facility, the Term Auction
        Facility, Maiden Lane, Maiden Lane II, Maiden Lane III, the agency
        Mortgage-Backed Securities program, foreign currency liquidity swap
        lines, and any other program created as a result of section 13(3)
        of the Federal Reserve Act (as so designated by this title).
            (2) Assessments.--In conducting the audit under paragraph (1),
        the Comptroller General shall assess--
                (A) the operational integrity, accounting, financial
            reporting, and internal controls of the credit facility;
                (B) the effectiveness of the security and collateral
            policies established for the facility in mitigating risk to the
            relevant Federal reserve bank and taxpayers;
                (C) whether the credit facility inappropriately favors one
            or more specific participants over other institutions eligible
            to utilize the facility;
                (D) the policies governing the use, selection, or payment
            of third-party contractors by or for any credit facility; and
                (E) whether there were conflicts of interest with respect
            to the manner in which such facility was established or
            operated.
            (3) Timing.--The audit required by this subsection shall be
        commenced not later than 30 days after the date of enactment of
        this Act, and shall be completed not later than 12 months after
        that date of enactment.
            (4) Report required.--The Comptroller General shall submit a
        report on the audit conducted under paragraph (1) to the Congress
        not later than 12 months after the date of enactment of this Act,
        and such report shall be made available to--
                (A) the Speaker of the House of Representatives;
                (B) the majority and minority leaders of the House of
            Representatives;
                (C) the majority and minority leaders of the Senate;
                (D) the Chairman and Ranking Member of the Committee on
            Banking, Housing, and Urban Affairs of the Senate and of the
            Committee on Financial Services of the House of
            Representatives; and
                (E) any member of Congress who requests it.
        (b) Audit of Federal Reserve Bank Governance.--
            (1) Audit.--
                (A) In general.--Not later than 1 year after the date of
            enactment of this Act, the Comptroller General shall complete
            an audit of the governance of the Federal reserve bank system.
                (B) Required examinations.--The audit required under
            subparagraph (A) shall--
                    (i) examine the extent to which the current system of
                appointing Federal reserve bank directors effectively
                represents ``the public, without discrimination on the
                basis of race, creed, color, sex or national origin, and
                with due but not exclusive consideration to the interests
                of agriculture, commerce, industry, services, labor, and
                consumers'' in the selection of bank directors, as such
                requirement is set forth under section 4 of the Federal
                Reserve Act;
                    (ii) examine whether there are actual or potential
                conflicts of interest created when the directors of Federal
                reserve banks, which execute the supervisory functions of
                the Board of Governors of the Federal Reserve System, are
                elected by member banks;
                    (iii) examine the establishment and operations of each
                facility described in subsection (a)(1) and each Federal
                reserve bank involved in the establishment and operations
                thereof; and
                    (iv) identify changes to selection procedures for
                Federal reserve bank directors, or to other aspects of
                Federal reserve bank governance, that would--

                        (I) improve how the public is represented;
                        (II) eliminate actual or potential conflicts of
                    interest in bank supervision;
                        (III) increase the availability of information
                    useful for the formation and execution of monetary
                    policy; or
                        (IV) in other ways increase the effectiveness or
                    efficiency of reserve banks.

            (2) Report required.--A report on the audit conducted under
        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 such report shall be made
        available to--
                (A) the Speaker of the House of Representatives;
                (B) the majority and minority leaders of the House of
            Representatives;
                (C) the majority and minority leaders of the Senate;
                (D) the Chairman and Ranking Member of the Committee on
            Banking, Housing, and Urban Affairs of the Senate and of the
            Committee on Financial Services of the House of
            Representatives; and
                (E) any member of Congress who requests it.
        (c) Publication of Board Actions.--Notwithstanding any other
    provision of law, the Board of Governors shall publish on its website,
    not later than December 1, 2010, with respect to all loans and other
    financial assistance provided during the period beginning on December
    1, 2007 and ending on the date of enactment of this Act under the
    Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity
    Facility, the Term Asset-Backed Securities Loan Facility, the Primary
    Dealer Credit Facility, the Commercial Paper Funding Facility, the Term
    Securities Lending Facility, the Term Auction Facility, Maiden Lane,
    Maiden Lane II, Maiden Lane III, the agency Mortgage-Backed Securities
    program, foreign currency liquidity swap lines, and any other program
    created as a result of section 13(3) of the Federal Reserve Act (as so
    designated by this title)--
            (1) the identity of each business, individual, entity, or
        foreign central bank to which the Board of Governors or a Federal
        reserve bank has provided such assistance;
            (2) the type of financial assistance provided to that business,
        individual, entity, or foreign central bank;
            (3) the value or amount of that financial assistance;
            (4) the date on which the financial assistance was provided;
            (5) the specific terms of any repayment expected, including the
        repayment time period, interest charges, collateral, limitations on
        executive compensation or dividends, and other material terms; and
            (6) the specific rationale for each such facility or program.

        TITLE XII--IMPROVING ACCESS TO MAINSTREAM FINANCIAL INSTITUTIONS

    SEC. 1201. SHORT TITLE.
        This title may be cited as the ``Improving Access to Mainstream
    Financial Institutions Act of 2010''.
    SEC. 1202. PURPOSE.
        The purpose of this title is to encourage initiatives for financial
    products and services that are appropriate and accessible for millions
    of Americans who are not fully incorporated into the financial
    mainstream.
    SEC. 1203. DEFINITIONS.
        In this title, the following definitions shall apply:
            (1) Account.--The term ``account'' means an agreement between
        an individual and an eligible entity under which the individual
        obtains from or through the entity 1 or more banking products and
        services, and includes a deposit account, a savings account
        (including a money market savings account), an account for a
        closed-end loan, and other products or services, as the Secretary
        deems appropriate.
            (2) Community development financial institution.--The term
        ``community development financial institution'' has the same
        meaning as in section 103(5) of the Community Development Banking
        and Financial Institutions Act of 1994 (12 U.S.C. 4702(5)).
            (3) Eligible entity.--The term ``eligible entity'' means--
                (A) an organization described in section 501(c)(3) of the
            Internal Revenue Code of 1986, and exempt from tax under
            section 501(a) of such Code;
                (B) a federally insured depository institution;
                (C) a community development financial institution;
                (D) a State, local, or tribal government entity; or
                (E) a partnership or other joint venture comprised of 1 or
            more of the entities described in subparagraphs (A) through
            (D), in accordance with regulations prescribed by the Secretary
            under this title.
            (4) Federally insured depository institution.--The term
        ``federally insured depository institution'' means any insured
        depository institution (as that term is defined in section 3 of the
        Federal Deposit Insurance Act (12 U.S.C. 1813)) and any insured
        credit union (as that term is defined in section 101 of the Federal
        Credit Union Act (12 U.S.C. 1752)).
    SEC. 1204. EXPANDED ACCESS TO MAINSTREAM FINANCIAL INSTITUTIONS.
        (a) In General.--The Secretary is authorized to establish a
    multiyear program of grants, cooperative agreements, financial agency
    agreements, and similar contracts or undertakings to promote
    initiatives designed--
            (1) to enable low- and moderate-income individuals to establish
        one or more accounts in a federally insured depository institution
        that are appropriate to meet the financial needs of such
        individuals; and
            (2) to improve access to the provision of accounts, on
        reasonable terms, for low- and moderate-income individuals.
        (b) Program Eligibility and Activities.--
            (1) In general.--The Secretary shall restrict participation in
        any program established under subsection (a) to an eligible entity.
        Subject to regulations prescribed by the Secretary under this
        title, 1 or more eligible entities may participate in 1 or several
        programs established under subsection (a).
            (2) Account activities.--Subject to regulations prescribed by
        the Secretary, an eligible entity may, in participating in a
        program established under subsection (a), offer or provide to low-
        and moderate-income individuals products and services relating to
        accounts, including--
                (A) small-dollar value loans; and
                (B) financial education and counseling relating to
            conducting transactions in and managing accounts.
    SEC. 1205. LOW-COST ALTERNATIVES TO SMALL DOLLAR LOANS.
        (a) Grants Authorized.--The Secretary is authorized to establish
    multiyear demonstration programs by means of grants, cooperative
    agreements, financial agency agreements, and similar contracts or
    undertakings, with eligible entities to provide low-cost, small loans
    to consumers that will provide alternatives to more costly small dollar
    loans.
        (b) Terms and Conditions.--
            (1) In general.--Loans under this section shall be made on
        terms and conditions, and pursuant to lending practices, that are
        reasonable for consumers.
            (2) Financial literacy and education opportunities.--
                (A) In general.--Each eligible entity awarded a grant under
            this section shall promote and take appropriate steps to ensure
            the provision of financial literacy and education
            opportunities, such as relevant counseling services,
            educational courses, or wealth building programs, to each
            consumer provided with a loan pursuant to this section.
                (B) Authority to expand access.--As part of the grants,
            agreements, and undertakings established under this section,
            the Secretary may implement reasonable measures or programs
            designed to expand access to financial literacy and education
            opportunities, including relevant counseling services,
            educational courses, or wealth building programs to be provided
            to individuals who obtain loans from eligible entities under
            this section.
    SEC. 1206. GRANTS TO ESTABLISH LOAN-LOSS RESERVE FUNDS.
        The Community Development Banking and Financial Institutions Act of
    1994 (12 U.S.C. 4701 et seq.) is amended by adding at the end the
    following:
        ``SEC. 122. GRANTS TO ESTABLISH LOAN-LOSS RESERVE FUNDS.
        ``(a) Purposes.--The purposes of this section are--
            ``(1) to make financial assistance available from the Fund in
        order to help community development financial institutions defray
        the costs of operating small dollar loan programs, by providing the
        amounts necessary for such institutions to establish their own loan
        loss reserve funds to mitigate some of the losses on such small
        dollar loan programs; and
            ``(2) to encourage community development financial institutions
        to establish and maintain small dollar loan programs that would
        help give consumers access to mainstream financial institutions and
        combat high cost small dollar lending.
        ``(b) Grants.--
            ``(1) Loan-loss reserve fund grants.--The Fund shall make
        grants to community development financial institutions or to any
        partnership between such community development financial
        institutions and any other federally insured depository institution
        with a primary mission to serve targeted investment areas, as such
        areas are defined under section 103(16), to enable such
        institutions or any partnership of such institutions to establish a
        loan-loss reserve fund in order to defray the costs of a small
        dollar loan program established or maintained by such institution.
            ``(2) Matching requirement.--A community development financial
        institution or any partnership of institutions established pursuant
        to paragraph (1) shall provide non-Federal matching funds in an
        amount equal to 50 percent of the amount of any grant received
        under this section.
            ``(3) Use of funds.--Any grant amounts received by a community
        development financial institution or any partnership between or
        among such institutions under paragraph (1)--
                ``(A) may not be used by such institution to provide direct
            loans to consumers;
                ``(B) may be used by such institution to help recapture a
            portion or all of a defaulted loan made under the small dollar
            loan program of such institution; and
                ``(C) may be used to designate and utilize a fiscal agent
            for services normally provided by such an agent.
            ``(4) Technical assistance grants.--The Fund shall make
        technical assistance grants to community development financial
        institutions or any partnership between or among such institutions
        to support and maintain a small dollar loan program. Any grant
        amounts received under this paragraph may be used for technology,
        staff support, and other costs associated with establishing a small
        dollar loan program.
        ``(c) Definitions.--For purposes of this section--
            ``(1) the term `consumer reporting agency that compiles and
        maintains files on consumers on a nationwide basis' has the same
        meaning given such term in section 603(p) of the Fair Credit
        Reporting Act (15 U.S.C. 1681a(p)); and
            ``(2) the term `small dollar loan program' means a loan program
        wherein a community development financial institution or any
        partnership between or among such institutions offers loans to
        consumers that--
                ``(A) are made in amounts not exceeding $2,500;
                ``(B) must be repaid in installments;
                ``(C) have no pre-payment penalty;
                ``(D) the institution has to report payments regarding the
            loan to at least 1 of the consumer reporting agencies that
            compiles and maintains files on consumers on a nationwide
            basis; and
                ``(E) meet any other affordability requirements as may be
            established by the Administrator.''.
    SEC. 1207. PROCEDURAL PROVISIONS.
        An eligible entity desiring to participate in a program or obtain a
    grant under this title shall submit an application to the Secretary, in
    such form and containing such information as the Secretary may require.
    SEC. 1208. AUTHORIZATION OF APPROPRIATIONS.
        (a) Authorization to the Secretary.--There are authorized to be
    appropriated to the Secretary, such sums as are necessary to both
    administer and fund the programs and projects authorized by this title,
    to remain available until expended.
        (b) Authorization to the Fund.--There is authorized to be
    appropriated to the Fund for each fiscal year beginning in fiscal year
    2010, an amount equal to the amount of the administrative costs of the
    Fund for the operation of the grant program established under this
    title.
    SEC. 1209. REGULATIONS.
        (a) In General.--The Secretary is authorized to promulgate
    regulations to implement and administer the grant programs and
    undertakings authorized by this title.
        (b) Regulatory Authority.--Regulations prescribed under this
    section may contain such classifications, differentiations, or other
    provisions, and may provide for such adjustments and exceptions for any
    class of grant programs, undertakings, or eligible entities, as, in the
    judgment of the Secretary, are necessary or proper to effectuate the
    purposes of this title, to prevent circumvention or evasion of this
    title, or to facilitate compliance with this title.
    SEC. 1210. EVALUATION AND REPORTS TO CONGRESS.
        For each fiscal year in which a program or project is carried out
    under this title, the Secretary shall submit a report to the Committee
    on Banking, Housing, and Urban Affairs of the Senate and the Committee
    on Financial Services of the House of Representatives containing a
    description of the activities funded, amounts distributed, and
    measurable results, as appropriate and available.

                          TITLE XIII--PAY IT BACK ACT

    SEC. 1301. SHORT TITLE.
        This title may be cited as the ``Pay It Back Act''.
    SEC. 1302. AMENDMENT TO REDUCE TARP AUTHORIZATION.
        Section 115(a) of the Emergency Economic Stabilization Act of 2008
    (12 U.S.C. 5225(a)) is amended--
            (1) in paragraph (3)--
                (A) by striking ``, $700,000,000,000, as such amount is
            reduced by $1,259,000,000, as such amount is reduced by
            $1,244,000,000'' and inserting ``$475,000,000,000''; and
                (B) by striking ``outstanding at any one time''; and
            (2) by adding at the end the following:
            ``(4) For purposes of this subsection, the amount of authority
        considered to be exercised by the Secretary shall not be reduced
        by--
                ``(A) any amounts received by the Secretary before, on, or
            after the date of enactment of the Pay It Back Act from
            repayment of the principal of financial assistance by an entity
            that has received financial assistance under the TARP or any
            other program enacted by the Secretary under the authorities
            granted to the Secretary under this Act;
                ``(B) any amounts committed for any guarantees pursuant to
            the TARP that became or become uncommitted; or
                ``(C) any losses realized by the Secretary.
            ``(5) No authority under this Act may be used to incur any
        obligation for a program or initiative that was not initiated prior
        to June 25, 2010.''.
    SEC. 1303. REPORT.
        Section 106 of the Emergency Economic Stabilization Act of 2008 (12
    U.S.C. 5216) is amended by inserting at the end the following:
        ``(f) Report.--The Secretary of the Treasury shall report to
    Congress every 6 months on amounts received and transferred to the
    general fund under subsection (d).''.
    SEC. 1304. AMENDMENTS TO HOUSING AND ECONOMIC RECOVERY ACT OF 2008.
        (a) Sale of Fannie Mae Obligations and Securities by the Treasury;
    Deficit Reduction.--Section 304(g)(2) of the Federal National Mortgage
    Association Charter Act (12 U.S.C. 1719(g)(2)) is amended--
            (1) by redesignating subparagraph (C) as subparagraph (D); and
            (2) by inserting after subparagraph (B) the following:
                ``(C) Deficit reduction.--The Secretary of the Treasury
            shall deposit in the General Fund of the Treasury any amounts
            received by the Secretary from the sale of any obligation
            acquired by the Secretary under this subsection, where such
            amounts shall be--
                    ``(i) dedicated for the sole purpose of deficit
                reduction; and
                    ``(ii) prohibited from use as an offset for other
                spending increases or revenue reductions.''.
        (b) Sale of Freddie Mac Obligations and Securities by the Treasury;
    Deficit Reduction.--Section 306(l)(2) of the Federal Home Loan Mortgage
    Corporation Act (12 U.S.C. 1455(l)(2)) is amended--
            (1) by redesignating subparagraph (C) as subparagraph (D); and
            (2) by inserting after subparagraph (B) the following:
                ``(C) Deficit reduction.--The Secretary of the Treasury
            shall deposit in the General Fund of the Treasury any amounts
            received by the Secretary from the sale of any obligation
            acquired by the Secretary under this subsection, where such
            amounts shall be--
                    ``(i) dedicated for the sole purpose of deficit
                reduction; and
                    ``(ii) prohibited from use as an offset for other
                spending increases or revenue reductions.''.
        (c) Sale of Federal Home Loan Banks Obligations by the Treasury;
    Deficit Reduction.--Section 11(l)(2) of the Federal Home Loan Bank Act
    (12 U.S.C. 1431(l)(2)) is amended--
            (1) by redesignating subparagraph (C) as subparagraph (D); and
            (2) by inserting after subparagraph (B) the following:
                ``(C) Deficit reduction.--The Secretary of the Treasury
            shall deposit in the General Fund of the Treasury any amounts
            received by the Secretary from the sale of any obligation
            acquired by the Secretary under this subsection, where such
            amounts shall be--
                    ``(i) dedicated for the sole purpose of deficit
                reduction; and
                    ``(ii) prohibited from use as an offset for other
                spending increases or revenue reductions.''.
        (d) Repayment of Fees.--Any periodic commitment fee or any other
    fee or assessment paid by the Federal National Mortgage Association or
    Federal Home Loan Mortgage Corporation to the Secretary of the Treasury
    as a result of any preferred stock purchase agreement, mortgage-backed
    security purchase program, or any other program or activity authorized
    or carried out pursuant to the authorities granted to the Secretary of
    the Treasury under section 1117 of the Housing and Economic Recovery
    Act of 2008 (Public Law 110-289; 122 Stat. 2683), including any fee
    agreed to by contract between the Secretary and the Association or
    Corporation, shall be deposited in the General Fund of the Treasury
    where such amounts shall be--
            (1) dedicated for the sole purpose of deficit reduction; and
            (2) prohibited from use as an offset for other spending
        increases or revenue reductions.
    SEC. 1305. FEDERAL HOUSING FINANCE AGENCY REPORT.
        The Director of the Federal Housing Finance Agency shall submit to
    Congress a report on the plans of the Agency to continue to support and
    maintain the Nation's vital housing industry, while at the same time
    guaranteeing that the American taxpayer will not suffer unnecessary
    losses.
    SEC. 1306. REPAYMENT OF UNOBLIGATED ARRA FUNDS.
        (a) Rejection of ARRA Funds by State.--Section 1607 of the American
    Recovery and Reinvestment Act of 2009 (Public Law 111-5; 123 Stat. 305)
    is amended by adding at the end the following:
        ``(d) Statewide Rejection of Funds.--If funds provided to any State
    in any division of this Act are not accepted for use by the Governor of
    the State pursuant to subsection (a) or by the State legislature
    pursuant to subsection (b), then all such funds shall be--
            ``(1) rescinded; and
            ``(2) deposited in the General Fund of the Treasury where such
        amounts shall be--
                ``(A) dedicated for the sole purpose of deficit reduction;
            and
                ``(B) prohibited from use as an offset for other spending
            increases or revenue reductions.''.
        (b) Withdrawal or Recapture of Unobligated Funds.--Title XVI of the
    American Recovery and Reinvestment Act of 2009 (Public Law 111-5; 123
    Stat. 302) is amended by adding at the end the following:
    ``SEC. 1613. WITHDRAWAL OR RECAPTURE OF UNOBLIGATED FUNDS.
        ``Notwithstanding any other provision of this Act, if the head of
    any executive agency withdraws or recaptures for any reason funds
    appropriated or otherwise made available under this division, and such
    funds have not been obligated by a State to a local government or for a
    specific project, such recaptured funds shall be--
            ``(1) rescinded; and
            ``(2) deposited in the General Fund of the Treasury where such
        amounts shall be--
                ``(A) dedicated for the sole purpose of deficit reduction;
            and
                ``(B) prohibited from use as an offset for other spending
            increases or revenue reductions.''.
        (c) Return of Unobligated Funds by End of 2012.--Section 1603 of
    the American Recovery and Reinvestment Act of 2009 (Public Law 111-5;
    123 Stat. 302) is amended by--
            (1) striking ``All funds'' and inserting ``(a) In General.--All
        funds''; and
            (2) adding at the end the following:
        ``(b) Repayment of Unobligated Funds.--Any discretionary
    appropriations made available in this division that have not been
    obligated as of December 31, 2012, are hereby rescinded, and such
    amounts shall be deposited in the General Fund of the Treasury where
    such amounts shall be--
            ``(1) dedicated for the sole purpose of deficit reduction; and
            ``(2) prohibited from use as an offset for other spending
        increases or revenue reductions.
        ``(c) Presidential Waiver Authority.--
            ``(1) In general.--The President may waive the requirements
        under subsection (b), if the President determines that it is not in
        the best interest of the Nation to rescind a specific unobligated
        amount after December 31, 2012.
            ``(2) Requests.--The head of an executive agency may also apply
        to the President for a waiver from the requirements under
        subsection (b).''.

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

    SEC. 1400. SHORT TITLE; DESIGNATION AS ENUMERATED CONSUMER LAW.
        (a) Short Title.--This title may be cited as the ``Mortgage Reform
    and Anti-Predatory Lending Act''.
        (b) Designation as Enumerated Consumer Law Under the Purview of the
    Bureau of Consumer Financial Protection.--Subtitles A, B, C, and E and
    sections 1471, 1472, 1475, and 1476, and the amendments made by such
    subtitles and sections, shall be enumerated consumer laws, as defined
    in section 1002, and come under the purview of the Bureau of Consumer
    Financial Protection for purposes of title X, including the transfer of
    functions and personnel under subtitle F of title X and the savings
    provisions of such subtitle.
        (c) Regulations; Effective Date.--
            (1) Regulations.--The regulations required to be prescribed
        under this title or the amendments made by this title shall--
                (A) be prescribed in final form before the end of the 18-
            month period beginning on the designated transfer date; and
                (B) take effect not later than 12 months after the date of
            issuance of the regulations in final form.
            (2) Effective date established by rule.--Except as provided in
        paragraph (3), a section, or provision thereof, of this title shall
        take effect on the date on which the final regulations implementing
        such section, or provision, take effect.
            (3) Effective date.--A section of this title for which
        regulations have not been issued on the date that is 18 months
        after the designated transfer date shall take effect on such date.

          Subtitle A--Residential Mortgage Loan Origination Standards

    SEC. 1401. DEFINITIONS.
        Section 103 of the Truth in Lending Act (15 U.S.C. 1602) is amended
    by adding at the end the following new subsection:
        ``(cc) Definitions Relating to Mortgage Origination and Residential
    Mortgage Loans.--
            ``(1) Commission.--Unless otherwise specified, the term
        `Commission' means the Federal Trade Commission.
            ``(2) Mortgage originator.--The term `mortgage originator'--
                ``(A) means any person who, for direct or indirect
            compensation or gain, or in the expectation of direct or
            indirect compensation or gain--
                    ``(i) takes a residential mortgage loan application;
                    ``(ii) assists a consumer in obtaining or applying to
                obtain a residential mortgage loan; or
                    ``(iii) offers or negotiates terms of a residential
                mortgage loan;
                ``(B) includes any person who represents to the public,
            through advertising or other means of communicating or
            providing information (including the use of business cards,
            stationery, brochures, signs, rate lists, or other promotional
            items), that such person can or will provide any of the
            services or perform any of the activities described in
            subparagraph (A);
                ``(C) does not include any person who is (i) not otherwise
            described in subparagraph (A) or (B) and who performs purely
            administrative or clerical tasks on behalf of a person who is
            described in any such subparagraph, or (ii) an employee of a
            retailer of manufactured homes who is not described in clause
            (i) or (iii) of subparagraph (A) and who does not advise a
            consumer on loan terms (including rates, fees, and other
            costs);
                ``(D) does not include a person or entity that only
            performs real estate brokerage activities and is licensed or
            registered in accordance with applicable State law, unless such
            person or entity is compensated by a lender, a mortgage broker,
            or other mortgage originator or by any agent of such lender,
            mortgage broker, or other mortgage originator;
                ``(E) does not include, with respect to a residential
            mortgage loan, a person, estate, or trust that provides
            mortgage financing for the sale of 3 properties in any 12-month
            period to purchasers of such properties, each of which is owned
            by such person, estate, or trust and serves as security for the
            loan, provided that such loan--
                    ``(i) is not made by a person, estate, or trust that
                has constructed, or acted as a contractor for the
                construction of, a residence on the property in the
                ordinary course of business of such person, estate, or
                trust;
                    ``(ii) is fully amortizing;
                    ``(iii) 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;
                    ``(iv) 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
                    ``(v) meets any other criteria the Board may prescribe;
                ``(F) does not include the creditor (except the creditor in
            a table-funded transaction) under paragraph (1), (2), or (4) of
            section 129B(c); and
                ``(G) 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.
            ``(3) Nationwide mortgage licensing system and registry.--The
        term `Nationwide Mortgage Licensing System and Registry' has the
        same meaning as in the Secure and Fair Enforcement for Mortgage
        Licensing Act of 2008.
            ``(4) Other definitions relating to mortgage originator.--For
        purposes of this subsection, a person `assists a consumer in
        obtaining or applying to obtain a residential mortgage loan' by,
        among other things, advising on residential mortgage loan terms
        (including rates, fees, and other costs), preparing residential
        mortgage loan packages, or collecting information on behalf of the
        consumer with regard to a residential mortgage loan.
            ``(5) Residential mortgage loan.--The term `residential
        mortgage loan' means any consumer credit transaction that is
        secured by a mortgage, deed of trust, or other equivalent
        consensual security interest on a dwelling or on residential real
        property that includes a dwelling, other than a consumer credit
        transaction under an open end credit plan or, for purposes of
        sections 129B and 129C and section 128(a) (16), (17), (18), and
        (19), and sections 128(f) and 130(k), and any regulations
        promulgated thereunder, an extension of credit relating to a plan
        described in section 101(53D) of title 11, United States Code.
            ``(6) Secretary.--The term `Secretary', when used in connection
        with any transaction or person involved with a residential mortgage
        loan, means the Secretary of Housing and Urban Development.
            ``(7) Servicer.--The term `servicer' has the same meaning as in
        section 6(i)(2) of the Real Estate Settlement Procedures Act of
        1974 (12 U.S.C. 2605(i)(2)).''.
    SEC. 1402. RESIDENTIAL MORTGAGE LOAN ORIGINATION.
        (a) In General.--Chapter 2 of the Truth in Lending Act (15 U.S.C.
    1631 et seq.) is amended--
            (1) by redesignating the 2nd of the 2 sections designated as
        section 129 (15 U.S.C. 1639a) (relating to duty of servicers of
        residential mortgages) as section 129A; and
            (2) by inserting after section 129A (as so redesignated) the
        following new section:
    ``Sec. 129B. Residential mortgage loan origination
        ``(a) Finding and Purpose.--
            ``(1) Finding.--The Congress finds that economic stabilization
        would be enhanced by the protection, limitation, and regulation of
        the terms of residential mortgage credit and the practices related
        to such credit, while ensuring that responsible, affordable
        mortgage credit remains available to consumers.
            ``(2) Purpose.--It is the purpose of this section and section
        129C to assure that consumers are offered and receive residential
        mortgage loans on terms that reasonably reflect their ability to
        repay the loans and that are understandable and not unfair,
        deceptive or abusive.
        ``(b) Duty of Care.--
            ``(1) Standard.--Subject to regulations prescribed under this
        subsection, each mortgage originator shall, in addition to the
        duties imposed by otherwise applicable provisions of State or
        Federal law--
                ``(A) be qualified and, when required, registered and
            licensed as a mortgage originator in accordance with applicable
            State or Federal law, including the Secure and Fair Enforcement
            for Mortgage Licensing Act of 2008; and
                ``(B) include on all loan documents any unique identifier
            of the mortgage originator provided by the Nationwide Mortgage
            Licensing System and Registry.
            ``(2) Compliance procedures required.--The Board shall
        prescribe regulations requiring depository institutions to
        establish and maintain procedures reasonably designed to assure and
        monitor the compliance of such depository institutions, the
        subsidiaries of such institutions, and the employees of such
        institutions or subsidiaries with the requirements of this section
        and the registration procedures established under section 1507 of
        the Secure and Fair Enforcement for Mortgage Licensing Act of
        2008.''.
        (b) Clerical Amendment.--The table of sections for chapter 2 of the
    Truth in Lending Act is amended by inserting after the item relating to
    section 129 the following new items:

    ``129A. Fiduciary duty of servicers of pooled residential mortgages.
    ``129B. Residential mortgage loan origination.''.
    SEC. 1403. PROHIBITION ON STEERING INCENTIVES.
        Section 129B of the Truth in Lending Act (as added by section
    1402(a)) is amended by inserting after subsection (b) the following new
    subsection:
        ``(c) Prohibition on Steering Incentives.--
            ``(1) In general.--For any residential mortgage loan, no
        mortgage originator shall receive from any person and no person
        shall pay to a mortgage originator, directly or indirectly,
        compensation that varies based on the terms of the loan (other than
        the amount of the principal).
            ``(2) Restructuring of financing origination fee.--
                ``(A) In general.--For any mortgage loan, a mortgage
            originator may not receive from any person other than the
            consumer and no person, other than the consumer, who knows or
            has reason to know that a consumer has directly compensated or
            will directly compensate a mortgage originator may pay a
            mortgage originator any origination fee or charge except bona
            fide third party charges not retained by the creditor, mortgage
            originator, or an affiliate of the creditor or mortgage
            originator .
                ``(B) Exception.--Notwithstanding subparagraph (A), a
            mortgage originator may receive from a person other than the
            consumer an origination fee or charge, and a person other than
            the consumer may pay a mortgage originator an origination fee
            or charge, if--
                    ``(i) the mortgage originator does not receive any
                compensation directly from the consumer; and
                    ``(ii) the consumer does not make an upfront payment of
                discount points, origination points, or fees, however
                denominated (other than bona fide third party charges not
                retained by the mortgage originator, creditor, or an
                affiliate of the creditor or originator), except that the
                Board may, by rule, waive or provide exemptions to this
                clause if the Board determines that such waiver or
                exemption is in the interest of consumers and in the public
                interest.
            ``(3) Regulations.--The Board shall prescribe regulations to
        prohibit--
                ``(A) mortgage originators from steering any consumer to a
            residential mortgage loan that--
                    ``(i) the consumer lacks a reasonable ability to repay
                (in accordance with regulations prescribed under section
                129C(a)); or
                    ``(ii) has predatory characteristics or effects (such
                as equity stripping, excessive fees, or abusive terms);
                ``(B) mortgage originators from steering any consumer from
            a residential mortgage loan for which the consumer is qualified
            that is a qualified mortgage (as defined in section 129C(b)(2))
            to a residential mortgage loan that is not a qualified
            mortgage;
                ``(C) abusive or unfair lending practices that promote
            disparities among consumers of equal credit worthiness but of
            different race, ethnicity, gender, or age; and
                ``(D) mortgage originators from--
                    ``(i) mischaracterizing the credit history of a
                consumer or the residential mortgage loans available to a
                consumer;
                    ``(ii) mischaracterizing or suborning the
                mischaracterization of the appraised value of the property
                securing the extension of credit; or
                    ``(iii) if unable to suggest, offer, or recommend to a
                consumer a loan that is not more expensive than a loan for
                which the consumer qualifies, discouraging a consumer from
                seeking a residential mortgage loan secured by a consumer's
                principal dwelling from another mortgage originator.
            ``(4) Rules of construction.--No provision of this subsection
        shall be construed as--
                ``(A) permitting any yield spread premium or other similar
            compensation that would, for any residential mortgage loan,
            permit the total amount of direct and indirect compensation
            from all sources permitted to a mortgage originator to vary
            based on the terms of the loan (other than the amount of the
            principal);
                ``(B) limiting or affecting the amount of compensation
            received by a creditor upon the sale of a consummated loan to a
            subsequent purchaser;
                ``(C) 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 right to receive such fees or
            costs (including compensation) from any person, subject to
            paragraph (2)(B), so long as such fees or costs 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
                ``(D) prohibiting incentive payments to a mortgage
            originator based on the number of residential mortgage loans
            originated within a specified period of time.''.
    SEC. 1404. LIABILITY.
        Section 129B of the Truth in Lending Act is amended by inserting
    after subsection (c) (as added by section 1403) the following new
    subsection:
        ``(d) Liability for Violations.--
            ``(1) In general.--For purposes of providing a cause of action
        for any failure by a mortgage originator, other than a creditor, to
        comply with any requirement imposed under this section and any
        regulation prescribed under this section, section 130 shall be
        applied with respect to any such failure by substituting `mortgage
        originator' for `creditor' each place such term appears in each
        such subsection.
            ``(2) Maximum.--The maximum amount of any liability of a
        mortgage originator under paragraph (1) to a consumer for any
        violation of this section shall not exceed the greater of actual
        damages or an amount equal to 3 times the total amount of direct
        and indirect compensation or gain accruing to the mortgage
        originator in connection with the residential mortgage loan
        involved in the violation, plus the costs to the consumer of the
        action, including a reasonable attorney's fee.''.
    SEC. 1405. REGULATIONS.
        (a) Discretionary Regulatory Authority.--Section 129B of the Truth
    in Lending Act is amended by inserting after subsection (d) (as added
    by section 1404) the following new subsection:
        ``(e) Discretionary Regulatory Authority.--
            ``(1) In general.--The Board shall, by regulations, prohibit or
        condition terms, acts or practices relating to residential mortgage
        loans that the Board finds to be abusive, unfair, deceptive,
        predatory, 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
        129C, necessary or proper to effectuate the purposes of this
        section and section 129C, to prevent circumvention or evasion
        thereof, or to facilitate compliance with such sections, or are not
        in the interest of the borrower.
            ``(2) Application.--The regulations prescribed under paragraph
        (1) shall be applicable to all residential mortgage loans and shall
        be applied in the same manner as regulations prescribed under
        section 105.
        ``(f) Section 129B and any regulations promulgated thereunder do
    not apply to an extension of credit relating to a plan described in
    section 101(53D) of title 11, United States Code.''.
        (b) Disclosures.--Notwithstanding any other provision of this
    title, in order to improve consumer awareness and understanding of
    transactions involving residential mortgage loans through the use of
    disclosures, the Board may, by rule, exempt from or modify disclosure
    requirements, in whole or in part, for any class of residential
    mortgage loans if the Board determines that such exemption or
    modification is in the interest of consumers and in the public
    interest.
    SEC. 1406. STUDY OF SHARED APPRECIATION MORTGAGES.
        (a) Study.--The Secretary of Housing and Urban Development, in
    consultation with the Secretary of the Treasury and other relevant
    agencies, shall conduct a comprehensive study to determine prudent
    statutory and regulatory requirements sufficient to provide for the
    widespread use of shared appreciation mortgages to strengthen local
    housing markets, provide new opportunities for affordable
    homeownership, and enable homeowners at risk of foreclosure to
    refinance or modify their mortgages.
        (b) Report.--Not later than the expiration of the 6-month period
    beginning on the date of the enactment of this Act, the Secretary of
    Housing and Urban Development shall submit a report to the Congress on
    the results of the study, which shall include recommendations for the
    regulatory and legislative requirements referred to in subsection (a).

                  Subtitle B--Minimum Standards For Mortgages

    SEC. 1411. ABILITY TO REPAY.
        (a) In General.--
            (1) Rule of construction.--No regulation, order, or guidance
        issued by the Bureau under this title shall be construed as
        requiring a depository institution to apply mortgage underwriting
        standards that do not meet the minimum underwriting standards
        required by the appropriate prudential regulator of the depository
        institution.
            (2) Amendment to truth in lending act.--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 1402(a)) the following new
        section:
    ``Sec. 129C. Minimum standards for residential mortgage loans
        ``(a) Ability To Repay.--
            ``(1) In general.--In accordance with regulations prescribed by
        the Board, 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
        (including mortgage guarantee insurance), and assessments.
            ``(2) Multiple loans.--If the creditor knows, or has reason to
        know, that 1 or more residential mortgage loans secured by the same
        dwelling will be made to the same consumer, the creditor shall make
        a reasonable and good faith determination, based on verified and
        documented information, that the consumer has a reasonable ability
        to repay the combined payments of all loans on the same dwelling
        according to the terms of those loans and all applicable taxes,
        insurance (including mortgage guarantee insurance), and
        assessments.
            ``(3) Basis for determination.--A determination under this
        subsection of a consumer's ability to repay a residential mortgage
        loan shall include consideration of the consumer's credit history,
        current income, expected income the consumer is reasonably assured
        of receiving, current obligations, debt-to-income ratio or the
        residual income the consumer will have after paying non-mortgage
        debt and mortgage-related obligations, employment status, and other
        financial resources other than the consumer's equity in the
        dwelling or real property that secures repayment of the loan. A
        creditor shall determine the ability of the consumer to repay using
        a payment schedule that fully amortizes the loan over the term of
        the loan.
            ``(4) Income verification.--A creditor making a residential
        mortgage loan shall verify amounts of income or assets that such
        creditor relies on to determine repayment ability, including
        expected income or assets, by reviewing the consumer's Internal
        Revenue Service Form W-2, tax returns, payroll receipts, financial
        institution records, or other third-party documents that provide
        reasonably reliable evidence of the consumer's income or assets. In
        order to safeguard against fraudulent reporting, any consideration
        of a consumer's income history in making a determination under this
        subsection shall include the verification of such income by the use
        of--
                ``(A) Internal Revenue Service transcripts of tax returns;
            or
                ``(B) a method that quickly and effectively verifies income
            documentation by a third party subject to rules prescribed by
            the Board.
            ``(5) Exemption.--With respect to loans made, guaranteed, or
        insured by Federal departments or agencies identified in subsection
        (b)(3)(B)(ii), such departments or agencies may exempt refinancings
        under a streamlined refinancing from this income verification
        requirement as long as the following conditions are met:
                ``(A) The consumer is not 30 days or more past due on the
            prior existing residential mortgage loan.
                ``(B) The refinancing does not increase the principal
            balance outstanding on the prior existing residential mortgage
            loan, except to the extent of fees and charges allowed by the
            department or agency making, guaranteeing, or insuring the
            refinancing.
                ``(C) Total points and fees (as defined in section
            103(aa)(4), other than bona fide third party charges not
            retained by the mortgage originator, creditor, or an affiliate
            of the creditor or mortgage originator) payable in connection
            with the refinancing do not exceed 3 percent of the total new
            loan amount.
                ``(D) The interest rate on the refinanced loan is lower
            than the interest rate of the original loan, unless the
            borrower is refinancing from an adjustable rate to a fixed-rate
            loan, under guidelines that the department or agency shall
            establish for loans they make, guarantee, or issue.
                ``(E) The refinancing is subject to a payment schedule that
            will fully amortize the refinancing in accordance with the
            regulations prescribed by the department or agency making,
            guaranteeing, or insuring the refinancing.
                ``(F) The terms of the refinancing do not result in a
            balloon payment, as defined in subsection (b)(2)(A)(ii).
                ``(G) Both the residential mortgage loan being refinanced
            and the refinancing satisfy all requirements of the department
            or agency making, guaranteeing, or insuring the refinancing.
            ``(6) Nonstandard loans.--
                ``(A) Variable rate loans that defer repayment of any
            principal or interest.--For purposes of determining, under this
            subsection, a consumer's ability to repay a variable rate
            residential mortgage loan that allows or requires the consumer
            to defer the repayment of any principal or interest, the
            creditor shall use a fully amortizing repayment schedule.
                ``(B) Interest-only loans.--For purposes of determining,
            under this subsection, a consumer's ability to repay a
            residential mortgage loan that permits or requires the payment
            of interest only, the creditor shall use the payment amount
            required to amortize the loan by its final maturity.
                ``(C) Calculation for negative amortization.--In making any
            determination under this subsection, a creditor shall also take
            into consideration any balance increase that may accrue from
            any negative amortization provision.
                ``(D) Calculation process.--For purposes of making any
            determination under this subsection, a creditor shall calculate
            the monthly payment amount for principal and interest on any
            residential mortgage loan by assuming--
                    ``(i) the loan proceeds are fully disbursed on the date
                of the consummation of the loan;
                    ``(ii) the loan is to be repaid in substantially equal
                monthly amortizing payments for principal and interest over
                the entire term of the loan with no balloon payment, unless
                the loan contract requires more rapid repayment (including
                balloon payment), in which case the calculation shall be
                made (I) in accordance with regulations prescribed by the
                Board, with respect to any loan which has an annual
                percentage rate that does not exceed the average prime
                offer rate for a comparable transaction, as of the date the
                interest rate is set, by 1.5 or more percentage points for
                a first lien residential mortgage loan; and by 3.5 or more
                percentage points for a subordinate lien residential
                mortgage loan; or (II) using the contract's repayment
                schedule, with respect to a loan which has an annual
                percentage rate, as of the date the interest rate is set,
                that is at least 1.5 percentage points above the average
                prime offer rate for a first lien residential mortgage
                loan; and 3.5 percentage points above the average prime
                offer rate for a subordinate lien residential mortgage
                loan; and
                    ``(iii) the interest rate over the entire term of the
                loan is a fixed rate equal to the fully indexed rate at the
                time of the loan closing, without considering the
                introductory rate.
                ``(E) Refinance of hybrid loans with current lender.--In
            considering any application for refinancing an existing hybrid
            loan by the creditor into a standard loan to be made by the
            same creditor in any case in which there would be a reduction
            in monthly payment and the mortgagor has not been delinquent on
            any payment on the existing hybrid loan, the creditor may--
                    ``(i) consider the mortgagor's good standing on the
                existing mortgage;
                    ``(ii) consider if the extension of new credit would
                prevent a likely default should the original mortgage reset
                and give such concerns a higher priority as an acceptable
                underwriting practice; and
                    ``(iii) offer rate discounts and other favorable terms
                to such mortgagor that would be available to new customers
                with high credit ratings based on such underwriting
                practice.
            ``(7) Fully-indexed rate defined.--For purposes of this
        subsection, the term `fully indexed rate' means the index rate
        prevailing on a residential mortgage loan at the time the loan is
        made plus the margin that will apply after the expiration of any
        introductory interest rates.
            ``(8) Reverse mortgages and bridge loans.--This subsection
        shall not apply with respect to any reverse mortgage or temporary
        or bridge loan with a term of 12 months or less, including to any
        loan to purchase a new dwelling where the consumer plans to sell a
        different dwelling within 12 months.
            ``(9) Seasonal income.--If documented income, including income
        from a small business, is a repayment source for a residential
        mortgage loan, a creditor may consider the seasonality and
        irregularity of such income in the underwriting of and scheduling
        of payments for such credit.''.
        (b) Clerical Amendment.--The table of sections for chapter 2 of the
    Truth in Lending Act is amended by inserting after the item relating to
    section 129B (as added by section 1402(b)) the following new item:

    ``129C. Minimum standards for residential mortgage loans.''.
    SEC. 1412. SAFE HARBOR AND REBUTTABLE PRESUMPTION.
        Section 129C of the Truth in Lending Act is amended by inserting
    after subsection (a) (as added by section 1411) the following new
    subsection:
        ``(b) Presumption of Ability To Repay.--
            ``(1) In general.--Any creditor with respect to any residential
        mortgage loan, and any assignee of such loan subject to liability
        under this title, may presume that the loan has met the
        requirements of subsection (a), if the loan is a qualified
        mortgage.
            ``(2) Definitions.--For purposes of this subsection, the
        following definitions shall apply:
                ``(A) Qualified mortgage.--The term `qualified mortgage'
            means any residential mortgage loan--
                    ``(i) for which the regular periodic payments for the
                loan may not--

                        ``(I) result in an increase of the principal
                    balance; or
                        ``(II) except as provided in subparagraph (E),
                    allow the consumer to defer repayment of principal;

                    ``(ii) except as provided in subparagraph (E), the
                terms of which do not result in a balloon payment, where a
                `balloon payment' is a scheduled payment that is more than
                twice as large as the average of earlier scheduled
                payments;
                    ``(iii) for which the income and financial resources
                relied upon to qualify the obligors on the loan are
                verified and documented;
                    ``(iv) 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;
                    ``(v) 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 5 years, and a payment
                schedule that fully amortizes the loan over the loan term
                and takes into account all applicable taxes, insurance, and
                assessments;
                    ``(vi) that complies with any guidelines or regulations
                established by the Board relating to ratios of total
                monthly debt to monthly income or alternative measures of
                ability to pay regular expenses after payment of total
                monthly debt, taking into account the income levels of the
                borrower and such other factors as the Board may determine
                relevant and consistent with the purposes described in
                paragraph (3)(B)(i);
                    ``(vii) for which the total points and fees (as defined
                in subparagraph (C)) payable in connection with the loan do
                not exceed 3 percent of the total loan amount;
                    ``(viii) for which the term of the loan does not exceed
                30 years, except as such term may be extended under
                paragraph (3), such as in high-cost areas; and
                    ``(ix) in the case of a reverse mortgage (except for
                the purposes of subsection (a) of section 129C, to the
                extent that such mortgages are exempt altogether from those
                requirements), a reverse mortgage which meets the standards
                for a qualified mortgage, as set by the Board in rules that
                are consistent with the purposes of this subsection.
                ``(B) Average prime offer rate.--The term `average prime
            offer rate' means the average prime offer rate for a comparable
            transaction as of the date on which the interest rate for the
            transaction is set, as published by the Board..
                ``(C) Points and fees.--
                    ``(i) In general.--For purposes of subparagraph (A),
                the term `points and fees' means points and fees as defined
                by section 103(aa)(4) (other than bona fide third party
                charges not retained by the mortgage originator, creditor,
                or an affiliate of the creditor or mortgage originator).
                    ``(ii) Computation.--For purposes of computing the
                total points and fees under this subparagraph, the total
                points and fees shall exclude either of the amounts
                described in the following subclauses, but not both:

                        ``(I) 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 the average
                    prime offer rate.
                        ``(II) Unless 2 bona fide discount points have been
                    excluded under subclause (I), 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 the average prime offer rate.

                    ``(iii) Bona fide discount points defined.--For
                purposes of clause (ii), the term `bona fide discount
                points' means loan discount points which are knowingly paid
                by the consumer for the purpose of reducing, and which in
                fact result in a bona fide reduction of, the interest rate
                or time-price differential applicable to the mortgage.
                    ``(iv) Interest rate reduction.--Subclauses (I) and
                (II) of clause (ii) 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.
                ``(D) Smaller loans.--The Board shall prescribe rules
            adjusting the criteria under subparagraph (A)(vii) in order to
            permit lenders that extend smaller loans to meet the
            requirements of the presumption of compliance under paragraph
            (1). In prescribing such rules, the Board shall consider the
            potential impact of such rules on rural areas and other areas
            where home values are lower.
                ``(E) Balloon loans.--The Board may, by regulation, provide
            that the term `qualified mortgage' includes a balloon loan--
                    ``(i) that meets all of the criteria for a qualified
                mortgage under subparagraph (A) (except clauses (i)(II),
                (ii), (iv), and (v) of such subparagraph);
                    ``(ii) for which the creditor makes a determination
                that the consumer is able to make all scheduled payments,
                except the balloon payment, out of income or assets other
                than the collateral;
                    ``(iii) for which the underwriting is based on a
                payment schedule that fully amortizes the loan over a
                period of not more than 30 years and takes into account all
                applicable taxes, insurance, and assessments; and
                    ``(iv) that is extended by a creditor that--

                        ``(I) operates predominantly in rural or
                    underserved areas;
                        ``(II) together with all affiliates, has total
                    annual residential mortgage loan originations that do
                    not exceed a limit set by the Board;
                        ``(III) retains the balloon loans in portfolio; and
                        ``(IV) meets any asset size threshold and any other
                    criteria as the Board may establish, consistent with
                    the purposes of this subtitle.

            ``(3) Regulations.--
                ``(A) In general.--The Board shall prescribe regulations to
            carry out the purposes of this subsection.
                ``(B) Revision of safe harbor criteria.--
                    ``(i) In general.--The Board may prescribe regulations
                that revise, add to, or subtract from the criteria that
                define a qualified mortgage upon a finding that such
                regulations are necessary or proper to ensure that
                responsible, affordable mortgage credit remains available
                to consumers in a manner consistent with the purposes of
                this section, necessary and appropriate to effectuate the
                purposes of this section and section 129B, to prevent
                circumvention or evasion thereof, or to facilitate
                compliance with such sections.
                    ``(ii) Loan definition.--The following agencies shall,
                in consultation with the Board, prescribe rules defining
                the types of loans they insure, guarantee, or administer,
                as the case may be, that are qualified mortgages for
                purposes of paragraph (2)(A), and such rules may revise,
                add to, or subtract from the criteria used to define a
                qualified mortgage under paragraph (2)(A), upon a finding
                that such rules are consistent with the purposes of this
                section and section 129B, to prevent circumvention or
                evasion thereof, or to facilitate compliance with such
                sections:

                        ``(I) The Department of Housing and Urban
                    Development, with regard to mortgages insured under the
                    National Housing Act (12 U.S.C. 1707 et seq.).
                        ``(II) The Department of Veterans Affairs, with
                    regard to a loan made or guaranteed by the Secretary of
                    Veterans Affairs.
                        ``(III) The Department of Agriculture, with regard
                    loans guaranteed by the Secretary of Agriculture
                    pursuant to 42 U.S.C. 1472(h).
                        ``(IV) The Rural Housing Service, with regard to
                    loans insured by the Rural Housing Service.''.

    SEC. 1413. DEFENSE TO FORECLOSURE.
        Section 130 of the Truth in Lending Act (15 U.S.C. 1640) is amended
    by adding at the end the following new subsection:
        ``(k) Defense to Foreclosure.--
            ``(1) In general.--Notwithstanding any other provision of law,
        when a creditor, assignee, or other holder of a residential
        mortgage loan or anyone acting on behalf of such creditor,
        assignee, or holder, initiates a judicial or nonjudicial
        foreclosure of the residential mortgage loan, or any other action
        to collect the debt in connection with such loan, a consumer may
        assert a violation by a creditor of paragraph (1) or (2) of section
        129B(c), or of section 129C(a), as a matter of defense by
        recoupment or set off without regard for the time limit on a
        private action for damages under subsection (e).
            ``(2) Amount of recoupment or setoff.--
                ``(A) In general.--The amount of recoupment or set-off
            under paragraph (1) shall equal the amount to which the
            consumer would be entitled under subsection (a) for damages for
            a valid claim brought in an original action against the
            creditor, plus the costs to the consumer of the action,
            including a reasonable attorney's fee.
                ``(B) Special rule.--Where such judgment is rendered after
            the expiration of the applicable time limit on a private action
            for damages under subsection (e), the amount of recoupment or
            set-off under paragraph (1) derived from damages under
            subsection (a)(4) shall not exceed the amount to which the
            consumer would have been entitled under subsection (a)(4) for
            damages computed up to the day preceding the expiration of the
            applicable time limit.''.
    SEC. 1414. ADDITIONAL STANDARDS AND REQUIREMENTS.
        (a) In General.--Section 129C of the Truth in Lending Act is
    amended by inserting after subsection (b) (as added by this title) the
    following new subsections:
        ``(c) Prohibition on Certain Prepayment Penalties.--
            ``(1) Prohibited on certain loans.--
                ``(A) In general.--A residential mortgage loan that is not
            a `qualified mortgage', as defined under subsection (b)(2), 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.
                ``(B) Exclusions.--For purposes of this subsection, a
            `qualified mortgage' may not include a residential mortgage
            loan that--
                    ``(i) has an adjustable rate; or
                    ``(ii) has an annual percentage rate that exceeds the
                average prime offer rate for a comparable transaction, as
                of the date the interest rate is set--

                        ``(I) by 1.5 or more percentage points, in the case
                    of a first lien residential mortgage loan having a
                    original principal obligation amount that is equal to
                    or less than the amount of the maximum limitation on
                    the original principal obligation of mortgage in effect
                    for a residence of the applicable size, as of the date
                    of such interest rate set, pursuant to the 6th sentence
                    of section 305(a)(2) the Federal Home Loan Mortgage
                    Corporation Act (12 U.S.C. 1454(a)(2));
                        ``(II) by 2.5 or more percentage points, in the
                    case of a first lien residential mortgage loan having a
                    original principal obligation amount that is more than
                    the amount of the maximum limitation on the original
                    principal obligation of mortgage in effect for a
                    residence of the applicable size, as of the date of
                    such interest rate set, pursuant to the 6th sentence of
                    section 305(a)(2) the Federal Home Loan Mortgage
                    Corporation Act (12 U.S.C. 1454(a)(2)); and
                        ``(III) by 3.5 or more percentage points, in the
                    case of a subordinate lien residential mortgage loan.

            ``(2)  Publication of average prime offer rate and apr
        thresholds.--The Board--
                ``(A) shall publish, and update at least weekly, average
            prime offer rates;
                ``(B) may publish multiple rates based on varying types of
            mortgage transactions; and
                ``(C) shall adjust the thresholds established under
            subclause (I), (II), and (III) of paragraph (1)(B)(ii) as
            necessary to reflect significant changes in market conditions
            and to effectuate the purposes of the Mortgage Reform and Anti-
            Predatory Lending Act.
            ``(3) Phased-out penalties on qualified mortgages.--A qualified
        mortgage (as defined in subsection (b)(2)) may not contain terms
        under which a consumer must pay a prepayment penalty for paying all
        or part of the principal after the loan is consummated in excess of
        the following limitations:
                ``(A) During the 1-year period beginning on the date the
            loan is consummated, the prepayment penalty shall not exceed an
            amount equal to 3 percent of the outstanding balance on the
            loan.
                ``(B) During the 1-year period beginning after the period
            described in subparagraph (A), the prepayment penalty shall not
            exceed an amount equal to 2 percent of the outstanding balance
            on the loan.
                ``(C) During the 1-year period beginning after the 1-year
            period described in subparagraph (B), the prepayment penalty
            shall not exceed an amount equal to 1 percent of the
            outstanding balance on the loan.
                ``(D) After the end of the 3-year period beginning on the
            date the loan is consummated, no prepayment penalty may be
            imposed on a qualified mortgage.
            ``(4) Option for no prepayment penalty required.--A creditor
        may not offer a consumer a residential mortgage loan product that
        has a prepayment penalty for paying all or part of the principal
        after the loan is consummated as a term of the loan without
        offering the consumer a residential mortgage loan product that does
        not have a prepayment penalty as a term of the loan.
        ``(d) Single Premium Credit Insurance Prohibited.--No creditor may
    finance, directly or indirectly, in connection with any residential
    mortgage loan or with any extension of credit under an open end
    consumer credit plan secured by the principal dwelling of the consumer,
    any credit life, credit disability, credit unemployment, or credit
    property insurance, or any other accident, loss-of-income, life, or
    health insurance, or any payments directly or indirectly for any debt
    cancellation or suspension agreement or contract, except that--
            ``(1) insurance premiums or debt cancellation or suspension
        fees calculated and paid in full on a monthly basis shall not be
        considered financed by the creditor; and
            ``(2) this subsection shall not apply to credit unemployment
        insurance for which the unemployment insurance premiums are
        reasonable, the creditor receives no direct or indirect
        compensation in connection with the unemployment insurance
        premiums, and the unemployment insurance premiums are paid pursuant
        to another insurance contract and not paid to an affiliate of the
        creditor.
        ``(e) Arbitration.--
            ``(1) In general.--No residential mortgage loan and no
        extension of credit under an open end consumer credit plan secured
        by the principal dwelling of the consumer may include terms which
        require arbitration or any other nonjudicial procedure as the
        method for resolving any controversy or settling any claims arising
        out of the transaction.
            ``(2) Post-controversy agreements.--Subject to paragraph (3),
        paragraph (1) shall not be construed as limiting the right of the
        consumer and the creditor or any assignee to agree to arbitration
        or any other nonjudicial procedure as the method for resolving any
        controversy at any time after a dispute or claim under the
        transaction arises.
            ``(3) No waiver of statutory cause of action.--No provision of
        any residential mortgage loan or of any extension of credit under
        an open end consumer credit plan secured by the principal dwelling
        of the consumer, 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.
        ``(f) Mortgages With Negative Amortization.--No creditor may extend
    credit to a borrower in connection with a consumer credit transaction
    under an open or closed end consumer credit plan secured by a dwelling
    or residential real property that includes a dwelling, other than a
    reverse mortgage, that provides or permits a payment plan that may, at
    any time over the term of the extension of credit, result in negative
    amortization unless, before such transaction is consummated--
            ``(1) the creditor provides the consumer with a statement
        that--
                ``(A) the pending transaction will or may, as the case may
            be, result in negative amortization;
                ``(B) describes negative amortization in such manner as the
            Board shall prescribe;
                ``(C) negative amortization increases the outstanding
            principal balance of the account; and
                ``(D) negative amortization reduces the consumer's equity
            in the dwelling or real property; and
            ``(2) in the case of a first-time borrower with respect to a
        residential mortgage loan that is not a qualified mortgage, the
        first-time borrower provides the creditor with sufficient
        documentation to demonstrate that the consumer received
        homeownership counseling from organizations or counselors certified
        by the Secretary of Housing and Urban Development as competent to
        provide such counseling.''.
        (b) Conforming Amendment Relating to Enforcement.--Section 108(a)
    of the Truth in Lending Act (15 U.S.C. 1607(a)) is amended by inserting
    after paragraph (6) the following new paragraph:
            ``(7) sections 21B and 21C of the Securities Exchange Act of
        1934, in the case of a broker or dealer, other than a depository
        institution, by the Securities and Exchange Commission.''.
        (c) Protection Against Loss of Anti-deficiency Protection.--Section
    129C of the Truth in Lending Act is amended by inserting after
    subsection (f) (as added by subsection (a)) the following new
    subsection:
        ``(g) Protection Against Loss of Anti-deficiency Protection.--
            ``(1) Definition.--For purposes of this subsection, the term
        `anti-deficiency law' means the law of any State which provides
        that, in the event of foreclosure on the residential property of a
        consumer securing a mortgage, the consumer is not liable, in
        accordance with the terms and limitations of such State law, for
        any deficiency between the sale price obtained on such property
        through foreclosure and the outstanding balance of the mortgage.
            ``(2) Notice at time of consummation.--In the case of any
        residential mortgage loan that is, or upon consummation will be,
        subject to protection under an anti-deficiency law, the creditor or
        mortgage originator shall provide a written notice to the consumer
        describing the protection provided by the anti-deficiency law and
        the significance for the consumer of the loss of such protection
        before such loan is consummated.
            ``(3) Notice before refinancing that would cause loss of
        protection.--In the case of any residential mortgage loan that is
        subject to protection under an anti-deficiency law, if a creditor
        or mortgage originator provides an application to a consumer, or
        receives an application from a consumer, for any type of
        refinancing for such loan that would cause the loan to lose the
        protection of such anti-deficiency law, the creditor or mortgage
        originator shall provide a written notice to the consumer
        describing the protection provided by the anti-deficiency law and
        the significance for the consumer of the loss of such protection
        before any agreement for any such refinancing is consummated.''.
        (d) Policy Regarding Acceptance of Partial Payment.--Section 129C
    of the Truth in Lending Act is amended by inserting after subsection
    (g) (as added by subsection (c)) the following new subsection:
        ``(h) Policy Regarding Acceptance of Partial Payment.--In the case
    of any residential mortgage loan, a creditor shall disclose prior to
    settlement or, in the case of a person becoming a creditor with respect
    to an existing residential mortgage loan, at the time such person
    becomes a creditor--
            ``(1) the creditor's policy regarding the acceptance of partial
        payments; and
            ``(2) if partial payments are accepted, how such payments will
        be applied to such mortgage and if such payments will be placed in
        escrow.
        ``(i) Timeshare Plans.--This section and any regulations
    promulgated under this section do not apply to an extension of credit
    relating to a plan described in section 101(53D) of title 11, United
    States Code.''.
    SEC. 1415. RULE OF CONSTRUCTION.
        Except as otherwise expressly provided in section 129B or 129C of
    the Truth in Lending Act (as added by this title), no provision of such
    section 129B or 129C shall be construed as superseding, repealing, or
    affecting any duty, right, obligation, privilege, or remedy of any
    person under any other provision of the Truth in Lending Act or any
    other provision of Federal or State law.
    SEC. 1416. AMENDMENTS TO CIVIL LIABILITY PROVISIONS.
        (a) Increase in Amount of Civil Money Penalties for Certain
    Violations.--Section 130(a) of the Truth in Lending Act (15 U.S.C.
    1640(a)) is amended--
            (1) in paragraph (2)(A)(ii)--
                (A) by striking ``$100'' and inserting ``$200''; and
                (B) by striking ``$1,000'' and inserting ``$2,000'';
            (2) in paragraph (2)(B), by striking ``$500,000'' and inserting
        ``$1,000,000''; and
            (3) in paragraph (4), by inserting ``, paragraph (1) or (2) of
        section 129B(c), or section 129C(a)'' after ``section 129''.
        (b) Statute of Limitations Extended for Section 129 Violations.--
    Section 130(e) of the Truth in Lending Act (15 U.S.C. 1640(e)) is
    amended--
            (1) in the first sentence, by striking ``Any action'' and
        inserting ``Except as provided in the subsequent sentence, any
        action''; and
            (2) by inserting after the first sentence the following new
        sentence: ``Any action under this section with respect to any
        violation of section 129, 129B, or 129C may be brought in any
        United States district court, or in any other court of competent
        jurisdiction, before the end of the 3-year period beginning on the
        date of the occurrence of the violation.''.
    SEC. 1417. LENDER RIGHTS IN THE CONTEXT OF BORROWER DECEPTION.
        Section 130 of the Truth in Lending Act (15 U.S.C. 1640) is amended
    by adding after subsection (k) (as added by this title) the following
    new subsection:
        ``(l) Exemption From Liability and Rescission in Case of Borrower
    Fraud or Deception.--In addition to any other remedy available by law
    or contract, no creditor or assignee shall be liable to an obligor
    under this section, if such obligor, or co-obligor has been convicted
    of obtaining by actual fraud such residential mortgage loan.''.
    SEC. 1418. SIX-MONTH NOTICE REQUIRED BEFORE RESET OF HYBRID ADJUSTABLE
    RATE MORTGAGES.
        (a) In General.--Chapter 2 of the Truth in Lending Act (15 U.S.C.
    1631 et seq.) is amended by inserting after section 128 the following
    new section:
    ``Sec. 128A. Reset of hybrid adjustable rate mortgages
        ``(a) Hybrid Adjustable Rate Mortgages Defined.--For purposes of
    this section, the term `hybrid adjustable rate mortgage' means a
    consumer credit transaction secured by the consumer's principal
    residence with a fixed interest rate for an introductory period that
    adjusts or resets to a variable interest rate after such period.
        ``(b) Notice of Reset and Alternatives.--During the 1-month period
    that ends 6 months before the date on which the interest rate in effect
    during the introductory period of a hybrid adjustable rate mortgage
    adjusts or resets to a variable interest rate or, in the case of such
    an adjustment or resetting that occurs within the first 6 months after
    consummation of such loan, at consummation, the creditor or servicer of
    such loan shall provide a written notice, separate and distinct from
    all other correspondence to the consumer, that includes the following:
            ``(1) Any index or formula used in making adjustments to or
        resetting the interest rate and a source of information about the
        index or formula.
            ``(2) An explanation of how the new interest rate and payment
        would be determined, including an explanation of how the index was
        adjusted, such as by the addition of a margin.
            ``(3) A good faith estimate, based on accepted industry
        standards, of the creditor or servicer of the amount of the monthly
        payment that will apply after the date of the adjustment or reset,
        and the assumptions on which this estimate is based.
            ``(4) A list of alternatives consumers may pursue before the
        date of adjustment or reset, and descriptions of the actions
        consumers must take to pursue these alternatives, including--
                ``(A) refinancing;
                ``(B) renegotiation of loan terms;
                ``(C) payment forbearances; and
                ``(D) pre-foreclosure sales.
            ``(5) The names, addresses, telephone numbers, and Internet
        addresses of counseling agencies or programs reasonably available
        to the consumer that have been certified or approved and made
        publicly available by the Secretary of Housing and Urban
        Development or a State housing finance authority (as defined in
        section 1301 of the Financial Institutions Reform, Recovery, and
        Enforcement Act of 1989).
            ``(6) The address, telephone number, and Internet address for
        the State housing finance authority (as so defined) for the State
        in which the consumer resides.
        ``(c) Savings Clause.--The Board may require the notice in
    paragraph (b) or other notice consistent with this Act for adjustable
    rate mortgage loans that are not hybrid adjustable rate mortgage
    loans.''.
        (b) Clerical Amendment.--The table of sections for chapter 2 of the
    Truth in Lending Act is amended by inserting after the item relating to
    section 128 the following new item:

    ``128A. Reset of hybrid adjustable rate mortgages.''.
    SEC. 1419. REQUIRED DISCLOSURES.
        Section 128(a) of Truth in Lending Act (15 U.S.C. 1638(a)) is
    amended by adding at the end the following new paragraphs:
            ``(16) In the case of a variable rate residential mortgage loan
        for which an escrow or impound account will be established for the
        payment of all applicable taxes, insurance, and assessments--
                ``(A) the amount of initial monthly payment due under the
            loan for the payment of principal and interest, and the amount
            of such initial monthly payment including the monthly payment
            deposited in the account for the payment of all applicable
            taxes, insurance, and assessments; and
                ``(B) the amount of the fully indexed monthly payment due
            under the loan for the payment of principal and interest, and
            the amount of such fully indexed monthly payment including the
            monthly payment deposited in the account for the payment of all
            applicable taxes, insurance, and assessments.
            ``(17) In the case of a residential mortgage loan, the
        aggregate amount of settlement charges for all settlement services
        provided in connection with the loan, the amount of charges that
        are included in the loan and the amount of such charges the
        borrower must pay at closing, the approximate amount of the
        wholesale rate of funds in connection with the loan, and the
        aggregate amount of other fees or required payments in connection
        with the loan.
            ``(18) In the case of a residential mortgage loan, the
        aggregate amount of fees paid to the mortgage originator in
        connection with the loan, the amount of such fees paid directly by
        the consumer, and any additional amount received by the originator
        from the creditor.
            ``(19) In the case of a residential mortgage loan, the total
        amount of interest that the consumer will pay over the life of the
        loan as a percentage of the principal of the loan. Such amount
        shall be computed assuming the consumer makes each monthly payment
        in full and on-time, and does not make any over-payments.''.
    SEC. 1420. DISCLOSURES REQUIRED IN MONTHLY STATEMENTS FOR RESIDENTIAL
    MORTGAGE LOANS.
        Section 128 of the Truth in Lending Act (15 U.S.C. 1638) is amended
    by adding at the end the following new subsection:
        ``(f) Periodic Statements for Residential Mortgage Loans.--
            ``(1) In general.--The creditor, assignee, or servicer with
        respect to any residential mortgage loan shall transmit to the
        obligor, for each billing cycle, a statement setting forth each of
        the following items, to the extent applicable, in a conspicuous and
        prominent manner:
                ``(A) The amount of the principal obligation under the
            mortgage.
                ``(B) The current interest rate in effect for the loan.
                ``(C) The date on which the interest rate may next reset or
            adjust.
                ``(D) The amount of any prepayment fee to be charged, if
            any.
                ``(E) A description of any late payment fees.
                ``(F) A telephone number and electronic mail address that
            may be used by the obligor to obtain information regarding the
            mortgage.
                ``(G) The names, addresses, telephone numbers, and Internet
            addresses of counseling agencies or programs reasonably
            available to the consumer that have been certified or approved
            and made publicly available by the Secretary of Housing and
            Urban Development or a State housing finance authority (as
            defined in section 1301 of the Financial Institutions Reform,
            Recovery, and Enforcement Act of 1989).
                ``(H) Such other information as the Board may prescribe in
            regulations.
            ``(2) Development and use of standard form.--The Board shall
        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.
            ``(3) Exception.--Paragraph (1) shall not apply to any fixed
        rate residential mortgage loan where the creditor, assignee, or
        servicer provides the obligor with a coupon book that provides the
        obligor with substantially the same information as required in
        paragraph (1).''.
    SEC. 1421. REPORT BY THE GAO.
        (a) Report Required.--The Comptroller General of the United States
    shall conduct a study to determine the effects the enactment of this
    Act will have on the availability and affordability of credit for
    consumers, small businesses, homebuyers, and mortgage lending,
    including the effect--
            (1) on the mortgage market for mortgages that are not within
        the safe harbor provided in the amendments made by this subtitle;
            (2) on the ability of prospective homebuyers to obtain
        financing;
            (3) on the ability of homeowners facing resets or adjustments
        to refinance--for example, do they have fewer refinancing options
        due to the unavailability of certain loan products that were
        available before the enactment of this Act;
            (4) on minorities' ability to access affordable credit compared
        with other prospective borrowers;
            (5) on home sales and construction;
            (6) of extending the rescission right, if any, on adjustable
        rate loans and its impact on litigation;
            (7) of State foreclosure laws and, if any, an investor's
        ability to transfer a property after foreclosure;
            (8) of expanding the existing provisions of the Home Ownership
        and Equity Protection Act of 1994;
            (9) of prohibiting prepayment penalties on high-cost mortgages;
        and
            (10) of establishing counseling services under the Department
        of Housing and Urban Development and offered through the Office of
        Housing Counseling.
        (b) Report.--Before the end of the 1-year period beginning on the
    date of the enactment of this Act, the Comptroller General shall submit
    a report to the Congress containing the findings and conclusions of the
    Comptroller General with respect to the study conducted pursuant to
    subsection (a).
        (c) Examination Related to Certain Credit Risk Retention
    Provisions.--The report required by subsection (b) shall also include
    an analysis by the Comptroller General of the effect on the capital
    reserves and funding of lenders of credit risk retention provisions for
    non-qualified mortgages, including an analysis of the exceptions and
    adjustments authorized in section 129C(b)(3) of the Truth in Lending
    Act and a recommendation on whether a uniform standard is needed.
        (d) Analysis of Credit Risk Retention Provisions.--The report
    required by subsection (b) shall also include--
            (1) an analysis by the Comptroller General of whether the
        credit risk retention provisions have significantly reduced risks
        to the larger credit market of the repackaging and selling of
        securitized loans on a secondary market; and
            (2) recommendations to the Congress on adjustments that should
        be made, or additional measures that should be undertaken.
    SEC. 1422. STATE ATTORNEY GENERAL ENFORCEMENT AUTHORITY.
        Section 130(e) of the Truth in Lending Act (15 U.S.C. 1640(e)) is
    amended by striking ``section 129 may also'' and inserting ``section
    129, 129B, 129C, 129D, 129E, 129F, 129G, or 129H of this Act may
    also''.

                        Subtitle C--High-Cost Mortgages

    SEC. 1431. DEFINITIONS RELATING TO HIGH-COST MORTGAGES.
        (a) High-cost Mortgage Defined.--Section 103(aa) of the Truth in
    Lending Act (15 U.S.C. 1602(aa)) is amended by striking all that
    precedes paragraph (2) and inserting the following:
        ``(aa) High-cost Mortgage.--
            ``(1) Definition.--
                ``(A) In general.--The term `high-cost mortgage', and a
            mortgage referred to in this subsection, means a consumer
            credit transaction that is secured by the consumer's principal
            dwelling, other than a reverse mortgage transaction, if--
                    ``(i) in the case of a credit transaction secured--

                        ``(I) by a first mortgage on the consumer's
                    principal dwelling, the annual percentage rate at
                    consummation of the transaction will exceed by more
                    than 6.5 percentage points (8.5 percentage points, if
                    the dwelling is personal property and the transaction
                    is for less than $50,000) the average prime offer rate,
                    as defined in section 129C(b)(2)(B), for a comparable
                    transaction; or
                        ``(II) by a subordinate or junior mortgage on the
                    consumer's principal dwelling, the annual percentage
                    rate at consummation of the transaction will exceed by
                    more than 8.5 percentage points the average prime offer
                    rate, as defined in section 129C(b)(2)(B), for a
                    comparable transaction;

                    ``(ii) the total points and fees payable in connection
                with the transaction, other than bona fide third party
                charges not retained by the mortgage originator, creditor,
                or an affiliate of the creditor or mortgage originator,
                exceed--

                        ``(I) in the case of a transaction for $20,000 or
                    more, 5 percent of the total transaction amount; or
                        ``(II) in the case of a transaction for less than
                    $20,000, the lesser of 8 percent of the total
                    transaction amount or $1,000 (or such other dollar
                    amount as the Board shall prescribe by regulation); or

                    ``(iii) the credit transaction documents permit the
                creditor to charge or collect prepayment fees or penalties
                more than 36 months after the transaction closing or such
                fees or penalties exceed, in the aggregate, more than 2
                percent of the amount prepaid.
                ``(B) Introductory rates taken into account.--For purposes
            of subparagraph (A)(i), the annual percentage rate of interest
            shall be determined based on the following interest rate:
                    ``(i) In the case of a fixed-rate transaction in which
                the annual percentage rate will not vary during the term of
                the loan, the interest rate in effect on the date of
                consummation of the transaction.
                    ``(ii) In the case of a transaction in which the rate
                of interest varies solely in accordance with an index, the
                interest rate determined by adding the index rate in effect
                on the date of consummation of the transaction to the
                maximum margin permitted at any time during the loan
                agreement.
                    ``(iii) In the case of any other transaction in which
                the rate may vary at any time during the term of the loan
                for any reason, the interest charged on the transaction at
                the maximum rate that may be charged during the term of the
                loan.
                ``(C) Mortgage insurance.--For the purposes of computing
            the total points and fees under paragraph (4), the total points
            and fees shall exclude--
                    ``(i) any premium provided by an agency of the Federal
                Government or an agency of a State;
                    ``(ii) any amount that is not in excess of the amount
                payable under policies in effect at the time of origination
                under section 203(c)(2)(A) of the National Housing Act (12
                U.S.C. 1709(c)(2)(A)), provided that the premium, charge,
                or fee is required to be refundable on a pro-rated basis
                and the refund is automatically issued upon notification of
                the satisfaction of the underlying mortgage loan; and
                    ``(iii) any premium paid by the consumer after
                closing.''.
        (b) Adjustment of Percentage Points.--Section 103(aa)(2) of the
    Truth in Lending Act (15 U.S.C. 1602(aa)(2)) is amended by striking
    subparagraph (B) and inserting the following new subparagraph:
                ``(B) An increase or decrease under subparagraph (A)--
                    ``(i) may not result in the number of percentage points
                referred to in paragraph (1)(A)(i)(I) being less than 6
                percentage points or greater than 10 percentage points; and
                    ``(ii) may not result in the number of percentage
                points referred to in paragraph (1)(A)(i)(II) being less
                than 8 percentage points or greater than 12 percentage
                points.''.
        (c) Points and Fees Defined.--
            (1) In general.--Section 103(aa)(4) of the Truth in Lending Act
        (15 U.S.C. 1602(aa)(4)) is amended--
                (A) by striking subparagraph (B) and inserting the
            following:
                ``(B) all compensation paid directly or indirectly by a
            consumer or creditor to a mortgage originator from any source,
            including a mortgage originator that is also the creditor in a
            table-funded transaction;'';
                (B) by redesignating subparagraph (D) as subparagraph (G);
            and
                (C) by inserting after subparagraph (C) the following new
            subparagraphs:
                ``(D) premiums or other charges payable at or before
            closing for any credit life, credit disability, credit
            unemployment, or credit property insurance, or any other
            accident, loss-of-income, life or health insurance, or any
            payments directly or indirectly for any debt cancellation or
            suspension agreement or contract, except that insurance
            premiums or debt cancellation or suspension fees calculated and
            paid in full on a monthly basis shall not be considered
            financed by the creditor;
                ``(E) the maximum prepayment fees and penalties which may
            be charged or collected under the terms of the credit
            transaction;
                ``(F) all prepayment fees or penalties that are incurred by
            the consumer if the loan refinances a previous loan made or
            currently held by the same creditor or an affiliate of the
            creditor; and''.
            (2) Calculation of points and fees for open-end consumer credit
        plans.--Section 103(aa) of the Truth in Lending Act (15 U.S.C.
        1602(aa)) is amended--
                (A) by redesignating paragraph (5) as paragraph (6); and
                (B) by inserting after paragraph (4) the following new
            paragraph:
            ``(5) Calculation of points and fees for open-end consumer
        credit plans.--In the case of open-end consumer credit plans,
        points and fees shall be calculated, for purposes of this section
        and section 129, by adding the total points and fees known at or
        before closing, including the maximum prepayment penalties which
        may be charged or collected under the terms of the credit
        transaction, plus the minimum additional fees the consumer would be
        required to pay to draw down an amount equal to the total credit
        line.''.
        (d) Bona Fide Discount Loan Discount Points.--Section 103 of the
    Truth in Lending Act (15 U.S.C. 1602) is amended by inserting after
    subsection (cc) (as added by section 1401) the following new
    subsection:
        ``(dd) Bona Fide Discount Points and Prepayment Penalties.--For the
    purposes of determining the amount of points and fees for purposes of
    subsection (aa), either the amounts described in paragraph (1) or (2)
    of the following paragraphs, but not both, shall be excluded:
            ``(1) Up to and including 2 bona fide discount points payable
        by the consumer in connection with the mortgage, but only if the
        interest rate from which the mortgage's interest rate will be
        discounted does not exceed by more than 1 percentage point--
                ``(A) the average prime offer rate, as defined in section
            129C; or
                ``(B) if secured by a personal property loan, the average
            rate on a loan in connection with which insurance is provided
            under title I of the National Housing Act (12 U.S.C. 1702 et
            seq.).
            ``(2) Unless 2 bona fide discount points have been excluded
        under paragraph (1), up to and including 1 bona fide discount point
        payable by the consumer in connection with the mortgage, but only
        if the interest rate from which the mortgage's interest rate will
        be discounted does not exceed by more than 2 percentage points--
                ``(A) the average prime offer rate, as defined in section
            129C; or
                ``(B) if secured by a personal property loan, the average
            rate on a loan in connection with which insurance is provided
            under title I of the National Housing Act (12 U.S.C. 1702 et
            seq.).
            ``(3) For purposes of paragraph (1), the term `bona fide
        discount points' means loan discount points which are knowingly
        paid by the consumer for the purpose of reducing, and which in fact
        result in a bona fide reduction of, the interest rate or time-price
        differential applicable to the mortgage.
            ``(4) Paragraphs (1) and (2) shall not apply to discount points
        used to purchase an interest rate reduction unless the amount of
        the interest rate reduction purchased is reasonably consistent with
        established industry norms and practices for secondary mortgage
        market transactions.''.
    SEC. 1432. AMENDMENTS TO EXISTING REQUIREMENTS FOR CERTAIN MORTGAGES.
        (a) Prepayment Penalty Provisions.--Section 129(c)(2) of the Truth
    in Lending Act (15 U.S.C. 1639(c)(2)) is hereby repealed.
        (b) No Balloon Payments.--Section 129(e) of the Truth in Lending
    Act (15 U.S.C. 1639(e)) is amended to read as follows:
        ``(e) No Balloon Payments.--No high-cost mortgage may contain a
    scheduled payment that is more than twice as large as the average of
    earlier scheduled payments. This subsection shall not apply when the
    payment schedule is adjusted to the seasonal or irregular income of the
    consumer.''.
    SEC. 1433. ADDITIONAL REQUIREMENTS FOR CERTAIN MORTGAGES.
        (a) Additional Requirements for Certain Mortgages.--Section 129 of
    the Truth in Lending Act (15 U.S.C. 1639) is amended--
            (1) by redesignating subsections (j), (k), (l) and (m) as
        subsections (n), (o), (p), and (q) respectively; and
            (2) by inserting after subsection (i) the following new
        subsections:
        ``(j) Recommended Default.--No creditor shall recommend or
    encourage default on an existing loan or other debt prior to and in
    connection with the closing or planned closing of a high-cost mortgage
    that refinances all or any portion of such existing loan or debt.
        ``(k) Late Fees.--
            ``(1) In general.--No creditor may impose a late payment charge
        or fee in connection with a high-cost mortgage--
                ``(A) in an amount in excess of 4 percent of the amount of
            the payment past due;
                ``(B) unless the loan documents specifically authorize the
            charge or fee;
                ``(C) before the end of the 15-day period beginning on the
            date the payment is due, or in the case of a loan on which
            interest on each installment is paid in advance, before the end
            of the 30-day period beginning on the date the payment is due;
            or
                ``(D) more than once with respect to a single late payment.
            ``(2) Coordination with subsequent late fees.--If a payment is
        otherwise a full payment for the applicable period and is paid on
        its due date or within an applicable grace period, and the only
        delinquency or insufficiency of payment is attributable to any late
        fee or delinquency charge assessed on any earlier payment, no late
        fee or delinquency charge may be imposed on such payment.
            ``(3) Failure to make installment payment.--If, in the case of
        a loan agreement the terms of which provide that any payment shall
        first be applied to any past due principal balance, the consumer
        fails to make an installment payment and the consumer subsequently
        resumes making installment payments but has not paid all past due
        installments, the creditor may impose a separate late payment
        charge or fee for any principal due (without deduction due to late
        fees or related fees) until the default is cured.
        ``(l) Acceleration of Debt.--No high-cost mortgage may contain a
    provision which permits the creditor to accelerate the indebtedness,
    except when repayment of the loan has been accelerated by default in
    payment, or pursuant to a due-on-sale provision, or pursuant to a
    material violation of some other provision of the loan document
    unrelated to payment schedule.
        ``(m) Restriction on Financing Points and Fees.--No creditor may
    directly or indirectly finance, in connection with any high-cost
    mortgage, any of the following:
            ``(1) Any prepayment fee or penalty payable by the consumer in
        a refinancing transaction if the creditor or an affiliate of the
        creditor is the noteholder of the note being refinanced.
            ``(2) Any points or fees.''.
        (b) Prohibitions on Evasions.--Section 129 of the Truth in Lending
    Act (15 U.S.C. 1639) is amended by inserting after subsection (q) (as
    so redesignated by subsection (a)(1)) the following new subsection:
        ``(r) Prohibitions on Evasions, Structuring of Transactions, and
    Reciprocal Arrangements.--A creditor may not take any action in
    connection with a high-cost mortgage--
            ``(1) to structure a loan transaction as an open-end credit
        plan or another form of loan for the purpose and with the intent of
        evading the provisions of this title; or
            ``(2) to divide any loan transaction into separate parts for
        the purpose and with the intent of evading provisions of this
        title.''.
        (c) Modification or Deferral Fees.--Section 129 of the Truth in
    Lending Act (15 U.S.C. 1639) is amended by inserting after subsection
    (r) (as added by subsection (b) of this section) the following new
    subsection:
        ``(s) Modification and Deferral Fees Prohibited.--A creditor,
    successor in interest, assignee, or any agent of any of the above, 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.''.
        (d) Payoff Statement.--Section 129 of the Truth in Lending Act (15
    U.S.C. 1639) is amended by inserting after subsection (s) (as added by
    subsection (c) of this section) the following new subsection:
        ``(t) Payoff Statement.--
            ``(1) Fees.--
                ``(A) In general.--Except as provided in subparagraph (B),
            no creditor or servicer may charge a fee for informing or
            transmitting to any person the balance due to pay off the
            outstanding balance on a high-cost mortgage.
                ``(B) Transaction fee.--When payoff information referred to
            in subparagraph (A) is provided by facsimile transmission or by
            a courier service, a creditor or servicer may charge a
            processing fee to cover the cost of such transmission or
            service in an amount not to exceed an amount that is comparable
            to fees imposed for similar services provided in connection
            with consumer credit transactions that are secured by the
            consumer's principal dwelling and are not high-cost mortgages.
                ``(C) Fee disclosure.--Prior to charging a transaction fee
            as provided in subparagraph (B), a creditor or servicer shall
            disclose that payoff balances are available for free pursuant
            to subparagraph (A).
                ``(D) Multiple requests.--If a creditor or servicer has
            provided payoff information referred to in subparagraph (A)
            without charge, other than the transaction fee allowed by
            subparagraph (B), on 4 occasions during a calendar year, the
            creditor or servicer may thereafter charge a reasonable fee for
            providing such information during the remainder of the calendar
            year.
            ``(2) Prompt delivery.--Payoff balances shall be provided
        within 5 business days after receiving a request by a consumer or a
        person authorized by the consumer to obtain such information.''.
        (e) Pre-Loan Counseling Required.--Section 129 of the Truth in
    Lending Act (15 U.S.C. 1639) is amended by inserting after subsection
    t) (as added by subsection (d) of this section) the following new
    subsection:
        ``(u) Pre-Loan Counseling.--
            ``(1) In general.--A creditor may not extend credit to a
        consumer under a high-cost mortgage without first receiving
        certification from a counselor that is approved by the Secretary of
        Housing and Urban Development, or at the discretion of the
        Secretary, a State housing finance authority, that the consumer has
        received counseling on the advisability of the mortgage. Such
        counselor shall not be employed by the creditor or an affiliate of
        the creditor or be affiliated with the creditor.
            ``(2) Disclosures required prior to counseling.--No counselor
        may certify that a consumer has received counseling on the
        advisability of the high-cost mortgage unless the counselor can
        verify that the consumer has received each statement required (in
        connection with such loan) by this section or the Real Estate
        Settlement Procedures Act of 1974 with respect to the transaction.
            ``(3) Regulations.--The Board may prescribe such regulations as
        the Board determines to be appropriate to carry out the
        requirements of paragraph (1).''.
        (f) Corrections and Unintentional Violations.--Section 129 of the
    Truth in Lending Act (15 U.S.C. 1639) is amended by inserting after
    subsection (u) (as added by subsection (e)) the following new
    subsection:
        ``(v) Corrections and Unintentional Violations.--A creditor or
    assignee in a high-cost mortgage who, when acting in good faith, fails
    to comply with any requirement under this section will not be deemed to
    have violated such requirement if the creditor or assignee establishes
    that either--
            ``(1) within 30 days of the loan closing and prior to the
        institution of any action, the consumer is notified of or discovers
        the violation, appropriate restitution is made, and whatever
        adjustments are necessary are made to the loan to either, at the
        choice of the consumer--
                ``(A) make the loan satisfy the requirements of this
            chapter; or
                ``(B) in the case of a high-cost mortgage, change the terms
            of the loan in a manner beneficial to the consumer so that the
            loan will no longer be a high-cost mortgage; or
            ``(2) within 60 days of the creditor's discovery or receipt of
        notification of an unintentional violation or bona fide error and
        prior to the institution of any action, the consumer is notified of
        the compliance failure, appropriate restitution is made, and
        whatever adjustments are necessary are made to the loan to either,
        at the choice of the consumer--
                ``(A) make the loan satisfy the requirements of this
            chapter; or
                ``(B) in the case of a high-cost mortgage, change the terms
            of the loan in a manner beneficial so that the loan will no
            longer be a high-cost mortgage.''.

                    Subtitle D--Office of Housing Counseling

    SEC. 1441. SHORT TITLE.
        This subtitle may be cited as the ``Expand and Preserve Home
    Ownership Through Counseling Act''.
    SEC. 1442. ESTABLISHMENT OF OFFICE OF HOUSING COUNSELING.
        Section 4 of the Department of Housing and Urban Development Act
    (42 U.S.C. 3533) is amended by adding at the end the following new
    subsection:
        ``(g) Office of Housing Counseling.--
            ``(1) Establishment.--There is established, in the Department,
        the Office of Housing Counseling.
            ``(2) Director.--There is established the position of Director
        of Housing Counseling. The Director shall be the head of the Office
        of Housing Counseling and shall be appointed by, and shall report
        to, the Secretary. Such position shall be a career-reserved
        position in the Senior Executive Service.
            ``(3) Functions.--
                ``(A) In general.--The Director shall have primary
            responsibility within the Department for all activities and
            matters relating to homeownership counseling and rental housing
            counseling, including--
                    ``(i) research, grant administration, public outreach,
                and policy development relating to such counseling; and
                    ``(ii) establishment, coordination, and administration
                of all regulations, requirements, standards, and
                performance measures under programs and laws administered
                by the Department that relate to housing counseling,
                homeownership counseling (including maintenance of homes),
                mortgage-related counseling (including home equity
                conversion mortgages and credit protection options to avoid
                foreclosure), and rental housing counseling, including the
                requirements, standards, and performance measures relating
                to housing counseling.
                ``(B) Specific functions.--The Director shall carry out the
            functions assigned to the Director and the Office under this
            section and any other provisions of law. Such functions shall
            include establishing rules necessary for--
                    ``(i) the counseling procedures under section 106(g)(1)
                of the Housing and Urban Development Act of 1968 (12 U.S.C.
                1701x(h)(1));
                    ``(ii) carrying out all other functions of the
                Secretary under section 106(g) of the Housing and Urban
                Development Act of 1968, including the establishment,
                operation, and publication of the availability of the toll-
                free telephone number under paragraph (2) of such section;
                    ``(iii) contributing to the distribution of home buying
                information booklets pursuant to section 5 of the Real
                Estate Settlement Procedures Act of 1974 (12 U.S.C. 2604);
                    ``(iv) carrying out the certification program under
                section 106(e) of the Housing and Urban Development Act of
                1968 (12 U.S.C. 1701x(e));
                    ``(v) carrying out the assistance program under section
                106(a)(4) of the Housing and Urban Development Act of 1968,
                including criteria for selection of applications to receive
                assistance;
                    ``(vi) carrying out any functions regarding abusive,
                deceptive, or unscrupulous lending practices relating to
                residential mortgage loans that the Secretary considers
                appropriate, which shall include conducting the study under
                section 6 of the Expand and Preserve Home Ownership Through
                Counseling Act;
                    ``(vii) providing for operation of the advisory
                committee established under paragraph (4) of this
                subsection;
                    ``(viii) collaborating with community-based
                organizations with expertise in the field of housing
                counseling; and
                    ``(ix) providing for the building of capacity to
                provide housing counseling services in areas that lack
                sufficient services, including underdeveloped areas that
                lack basic water and sewer systems, electricity services,
                and safe, sanitary housing.
            ``(4) Advisory committee.--
                ``(A) In general.--The Secretary shall appoint an advisory
            committee to provide advice regarding the carrying out of the
            functions of the Director.
                ``(B) Members.--Such advisory committee shall consist of
            not more than 12 individuals, and the membership of the
            committee shall equally represent the mortgage and real estate
            industry, including consumers and housing counseling agencies
            certified by the Secretary.
                ``(C) Terms.--Except as provided in subparagraph (D), each
            member of the advisory committee shall be appointed for a term
            of 3 years. Members may be reappointed at the discretion of the
            Secretary.
                ``(D) Terms of initial appointees.--As designated by the
            Secretary at the time of appointment, of the members first
            appointed to the advisory committee, 4 shall be appointed for a
            term of 1 year and 4 shall be appointed for a term of 2 years.
                ``(E) Prohibition of pay; travel expenses.--Members of the
            advisory committee shall serve without pay, but shall receive
            travel expenses, including per diem in lieu of subsistence, in
            accordance with applicable provisions under subchapter I of
            chapter 57 of title 5, United States Code.
                ``(F) Advisory role only.--The advisory committee shall
            have no role in reviewing or awarding housing counseling
            grants.
            ``(5) Scope of homeownership counseling.--In carrying out the
        responsibilities of the Director, the Director shall ensure that
        homeownership counseling provided by, in connection with, or
        pursuant to any function, activity, or program of the Department
        addresses the entire process of homeownership, including the
        decision to purchase a home, the selection and purchase of a home,
        issues arising during or affecting the period of ownership of a
        home (including refinancing, default and foreclosure, and other
        financial decisions), and the sale or other disposition of a
        home.''.
    SEC. 1443. COUNSELING PROCEDURES.
        (a) In General.--Section 106 of the Housing and Urban Development
    Act of 1968 (12 U.S.C. 1701x) is amended by adding at the end the
    following new subsection:
        ``(g) Procedures and Activities.--
            ``(1) Counseling procedures.--
                ``(A) In general.--The Secretary shall establish,
            coordinate, and monitor the administration by the Department of
            Housing and Urban Development of the counseling procedures for
            homeownership counseling and rental housing counseling provided
            in connection with any program of the Department, including all
            requirements, standards, and performance measures that relate
            to homeownership and rental housing counseling.
                ``(B) Homeownership counseling.--For purposes of this
            subsection and as used in the provisions referred to in this
            subparagraph, the term `homeownership counseling' means
            counseling related to homeownership and residential mortgage
            loans. Such term includes counseling related to homeownership
            and residential mortgage loans that is provided pursuant to--
                    ``(i) section 105(a)(20) of the Housing and Community
                Development Act of 1974 (42 U.S.C. 5305(a)(20));
                    ``(ii) in the United States Housing Act of 1937--

                        ``(I) section 9(e) (42 U.S.C. 1437g(e));
                        ``(II) section 8(y)(1)(D) (42 U.S.C.
                    1437f(y)(1)(D));
                        ``(III) section 18(a)(4)(D) (42 U.S.C.
                    1437p(a)(4)(D));
                        ``(IV) section 23(c)(4) (42 U.S.C. 1437u(c)(4));
                        ``(V) section 32(e)(4) (42 U.S.C. 1437z-4(e)(4));
                        ``(VI) section 33(d)(2)(B) (42 U.S.C. 1437z-
                    5(d)(2)(B));
                        ``(VII) sections 302(b)(6) and 303(b)(7) (42 U.S.C.
                    1437aaa-1(b)(6), 1437aaa-2(b)(7)); and
                        ``(VIII) section 304(c)(4) (42 U.S.C. 1437aaa-
                    3(c)(4));

                    ``(iii) section 302(a)(4) of the American Homeownership
                and Economic Opportunity Act of 2000 (42 U.S.C. 1437f
                note);
                    ``(iv) sections 233(b)(2) and 258(b) of the Cranston-
                Gonzalez National Affordable Housing Act (42 U.S.C.
                12773(b)(2), 12808(b));
                    ``(v) this section and section 101(e) of the Housing
                and Urban Development Act of 1968 (12 U.S.C. 1701x,
                1701w(e));
                    ``(vi) section 220(d)(2)(G) of the Low-Income Housing
                Preservation and Resident Homeownership Act of 1990 (12
                U.S.C. 4110(d)(2)(G));
                    ``(vii) sections 422(b)(6), 423(b)(7), 424(c)(4),
                442(b)(6), and 443(b)(6) of the Cranston-Gonzalez National
                Affordable Housing Act (42 U.S.C. 12872(b)(6), 12873(b)(7),
                12874(c)(4), 12892(b)(6), and 12893(b)(6));
                    ``(viii) section 491(b)(1)(F)(iii) of the McKinney-
                Vento Homeless Assistance Act (42 U.S.C.
                11408(b)(1)(F)(iii));
                    ``(ix) sections 202(3) and 810(b)(2)(A) of the Native
                American Housing and Self-Determination Act of 1996 (25
                U.S.C. 4132(3), 4229(b)(2)(A));
                    ``(x) in the National Housing Act--

                        ``(I) in section 203 (12 U.S.C. 1709), the
                    penultimate undesignated paragraph of paragraph (2) of
                    subsection (b), subsection (c)(2)(A), and subsection
                    (r)(4);
                        ``(II) subsections (a) and (c)(3) of section 237
                    (12 U.S.C. 1715z-2); and
                        ``(III) subsections (d)(2)(B) and (m)(1) of section
                    255 (12 U.S.C. 1715z-20);

                    ``(xi) section 502(h)(4)(B) of the Housing Act of 1949
                (42 U.S.C. 1472(h)(4)(B));
                    ``(xii) section 508 of the Housing and Urban
                Development Act of 1970 (12 U.S.C. 1701z-7); and
                    ``(xiii) section 106 of the Energy Policy Act of 1992
                (42 U.S.C. 12712 note).
                ``(C) Rental housing counseling.--For purposes of this
            subsection, the term `rental housing counseling' means
            counseling related to rental of residential property, which may
            include counseling regarding future homeownership opportunities
            and providing referrals for renters and prospective renters to
            entities providing counseling and shall include counseling
            related to such topics that is provided pursuant to--
                    ``(i) section 105(a)(20) of the Housing and Community
                Development Act of 1974 (42 U.S.C. 5305(a)(20));
                    ``(ii) in the United States Housing Act of 1937--

                        ``(I) section 9(e) (42 U.S.C. 1437g(e));
                        ``(II) section 18(a)(4)(D) (42 U.S.C.
                    1437p(a)(4)(D));
                        ``(III) section 23(c)(4) (42 U.S.C. 1437u(c)(4));
                        ``(IV) section 32(e)(4) (42 U.S.C. 1437z-4(e)(4));
                        ``(V) section 33(d)(2)(B) (42 U.S.C. 1437z-
                    5(d)(2)(B)); and
                        ``(VI) section 302(b)(6) (42 U.S.C. 1437aaa-
                    1(b)(6));

                    ``(iii) section 233(b)(2) of the Cranston-Gonzalez
                National Affordable Housing Act (42 U.S.C. 12773(b)(2));
                    ``(iv) section 106 of the Housing and Urban Development
                Act of 1968 (12 U.S.C. 1701x);
                    ``(v) section 422(b)(6) of the Cranston-Gonzalez
                National Affordable Housing Act (42 U.S.C. 12872(b)(6));
                    ``(vi) section 491(b)(1)(F)(iii) of the McKinney-Vento
                Homeless Assistance Act (42 U.S.C. 11408(b)(1)(F)(iii));
                    ``(vii) sections 202(3) and 810(b)(2)(A) of the Native
                American Housing and Self-Determination Act of 1996 (25
                U.S.C. 4132(3), 4229(b)(2)(A)); and
                    ``(viii) the rental assistance program under section 8
                of the United States Housing Act of 1937 (42 U.S.C. 1437f).
            ``(2) Standards for materials.--The Secretary, in consultation
        with the advisory committee established under subsection (g)(4) of
        the Department of Housing and Urban Development Act, shall
        establish standards for materials and forms to be used, as
        appropriate, by organizations providing homeownership counseling
        services, including any recipients of assistance pursuant to
        subsection (a)(4).
            ``(3) Mortgage software systems.--
                ``(A) Certification.--The Secretary shall provide for the
            certification of various computer software programs for
            consumers to use in evaluating different residential mortgage
            loan proposals. The Secretary shall require, for such
            certification, that the mortgage software systems take into
            account--
                    ``(i) the consumer's financial situation and the cost
                of maintaining a home, including insurance, taxes, and
                utilities;
                    ``(ii) the amount of time the consumer expects to
                remain in the home or expected time to maturity of the
                loan; and
                    ``(iii) such other factors as the Secretary considers
                appropriate to assist the consumer in evaluating whether to
                pay points, to lock in an interest rate, to select an
                adjustable or fixed rate loan, to select a conventional or
                government-insured or guaranteed loan and to make other
                choices during the loan application process.
            If the Secretary determines that available existing software is
            inadequate to assist consumers during the residential mortgage
            loan application process, the Secretary shall arrange for the
            development by private sector software companies of new
            mortgage software systems that meet the Secretary's
            specifications.
                ``(B) Use and initial availability.--Such certified
            computer software programs shall be used to supplement, not
            replace, housing counseling. The Secretary shall provide that
            such programs are initially used only in connection with the
            assistance of housing counselors certified pursuant to
            subsection (e).
                ``(C) Availability.--After a period of initial availability
            under subparagraph (B) as the Secretary considers appropriate,
            the Secretary shall take reasonable steps to make mortgage
            software systems certified pursuant to this paragraph widely
            available through the Internet and at public locations,
            including public libraries, senior-citizen centers, public
            housing sites, offices of public housing agencies that
            administer rental housing assistance vouchers, and housing
            counseling centers.
                ``(D) Budget compliance.--This paragraph shall be effective
            only to the extent that amounts to carry out this paragraph are
            made available in advance in appropriations Acts.
            ``(4) National public service multimedia campaigns to promote
        housing counseling.--
                ``(A) In general.--The Director of Housing Counseling shall
            develop, implement, and conduct national public service
            multimedia campaigns designed to make persons facing mortgage
            foreclosure, persons considering a subprime mortgage loan to
            purchase a home, elderly persons, persons who face language
            barriers, low-income persons, minorities, and other potentially
            vulnerable consumers aware that it is advisable, before seeking
            or maintaining a residential mortgage loan, to obtain
            homeownership counseling from an unbiased and reliable sources
            and that such homeownership counseling is available, including
            through programs sponsored by the Secretary of Housing and
            Urban Development.
                ``(B) Contact information.--Each segment of the multimedia
            campaign under subparagraph (A) shall publicize the toll-free
            telephone number and website of the Department of Housing and
            Urban Development through which persons seeking housing
            counseling can locate a housing counseling agency in their
            State that is certified by the Secretary of Housing and Urban
            Development and can provide advice on buying a home, renting,
            defaults, foreclosures, credit issues, and reverse mortgages.
                ``(C) Authorization of appropriations.--There are
            authorized to be appropriated to the Secretary, not to exceed
            $3,000,000 for fiscal years 2009, 2010, and 2011, for the
            development, implementation, and conduct of national public
            service multimedia campaigns under this paragraph.
                ``(D) Foreclosure rescue education programs.--
                    ``(i) In general.--Ten percent of any funds
                appropriated pursuant to the authorization under
                subparagraph (C) shall be used by the Director of Housing
                Counseling to conduct an education program in areas that
                have a high density of foreclosure. Such program shall
                involve direct mailings to persons living in such areas
                describing--

                        ``(I) tips on avoiding foreclosure rescue scams;
                        ``(II) tips on avoiding predatory lending mortgage
                    agreements;
                        ``(III) tips on avoiding for-profit foreclosure
                    counseling services; and
                        ``(IV) local counseling resources that are approved
                    by the Department of Housing and Urban Development.

                    ``(ii) Program emphasis.--In conducting the education
                program described under clause (i), the Director of Housing
                Counseling shall also place an emphasis on serving
                communities that have a high percentage of retirement
                communities or a high percentage of low-income minority
                communities.
                    ``(iii) Terms defined.--For purposes of this
                subparagraph:

                        ``(I) High density of foreclosures.--An area has a
                    `high density of foreclosures' if such area is one of
                    the metropolitan statistical areas (as that term is
                    defined by the Director of the Office of Management and
                    Budget) with the highest home foreclosure rates.
                        ``(II) High percentage of retirement communities.--
                    An area has a `high percentage of retirement
                    communities' if such area is one of the metropolitan
                    statistical areas (as that term is defined by the
                    Director of the Office of Management and Budget) with
                    the highest percentage of residents aged 65 or older.
                        ``(III) High percentage of low-income minority
                    communities.--An area has a `high percentage of low-
                    income minority communities' if such area contains a
                    higher-than-normal percentage of residents who are both
                    minorities and low-income, as defined by the Director
                    of Housing Counseling.

            ``(5) Education programs.--The Secretary shall provide advice
        and technical assistance to States, units of general local
        government, and nonprofit organizations regarding the establishment
        and operation of, including assistance with the development of
        content and materials for, educational programs to inform and
        educate consumers, particularly those most vulnerable with respect
        to residential mortgage loans (such as elderly persons, persons
        facing language barriers, low-income persons, minorities, and other
        potentially vulnerable consumers), regarding home mortgages,
        mortgage refinancing, home equity loans, home repair loans, and
        where appropriate by region, any requirements and costs associated
        with obtaining flood or other disaster-specific insurance
        coverage.''.
        (b) Conforming Amendments to Grant Program for Homeownership
    Counseling Organizations.--Section 106(c)(5)(A)(ii) of the Housing and
    Urban Development Act of 1968 (12 U.S.C. 1701x(c)(5)(A)(ii)) is
    amended--
            (1) in subclause (III), by striking ``and'' at the end;
            (2) in subclause (IV) by striking the period at the end and
        inserting ``; and''; and
            (3) by inserting after subclause (IV) the following new
        subclause:

                        ``(V) notify the housing or mortgage applicant of
                    the availability of mortgage software systems provided
                    pursuant to subsection (g)(3).''.

    SEC. 1444. GRANTS FOR HOUSING COUNSELING ASSISTANCE.
        Section 106(a) of the Housing and Urban Development Act of 1968 (12
    U.S.C. 1701x(a)) is amended by adding at the end the following new
    paragraph:
        ``(4) Homeownership and Rental Counseling Assistance.--
            ``(A) In general.--The Secretary shall make financial
        assistance available under this paragraph to HUD-approved housing
        counseling agencies and State housing finance agencies.
            ``(B) Qualified entities.--The Secretary shall establish
        standards and guidelines for eligibility of organizations
        (including governmental and nonprofit organizations) to receive
        assistance under this paragraph, in accordance with subparagraph
        (D).
            ``(C) Distribution.--Assistance made available under this
        paragraph shall be distributed in a manner that encourages
        efficient and successful counseling programs and that ensures
        adequate distribution of amounts for rural areas having
        traditionally low levels of access to such counseling services,
        including areas with insufficient access to the Internet. In
        distributing such assistance, the Secretary may give priority
        consideration to entities serving areas with the highest home
        foreclosure rates.
            ``(D) Limitation on distribution of assistance.--
                ``(i) In general.--None of the amounts made available under
            this paragraph shall be distributed to--
                    ``(I) any organization which has been convicted for a
                violation under Federal law relating to an election for
                Federal office; or
                    ``(II) any organization which employs applicable
                individuals.
                ``(ii) Definition of applicable individuals.--In this
            subparagraph, the term `applicable individual' means an
            individual who--
                    ``(I) is--

                        ``(aa) employed by the organization in a permanent
                    or temporary capacity;
                        ``(bb) contracted or retained by the organization;
                    or
                        ``(cc) acting on behalf of, or with the express or
                    apparent authority of, the organization; and

                    ``(II) has been convicted for a violation under Federal
                law relating to an election for Federal office.
            ``(E) Grantmaking process.--In making assistance available
        under this paragraph, the Secretary shall consider appropriate ways
        of streamlining and improving the processes for grant application,
        review, approval, and award.
            ``(F) Authorization of appropriations.--There are authorized to
        be appropriated $45,000,000 for each of fiscal years 2009 through
        2012 for--
                ``(i) the operations of the Office of Housing Counseling of
            the Department of Housing and Urban Development;
                ``(ii) the responsibilities of the Director of Housing
            Counseling under paragraphs (2) through (5) of subsection (g);
            and
                ``(iii) assistance pursuant to this paragraph for entities
            providing homeownership and rental counseling.''.
    SEC. 1445. REQUIREMENTS TO USE HUD-CERTIFIED COUNSELORS UNDER HUD
    PROGRAMS.
        Section 106(e) of the Housing and Urban Development Act of 1968 (12
    U.S.C. 1701x(e)) is amended--
            (1) by striking paragraph (1) and inserting the following new
        paragraph:
            ``(1) Requirement for assistance.--An organization may not
        receive assistance for counseling activities under subsection
        (a)(1)(iii), (a)(2), (a)(4), (c), or (d) of this section, or under
        section 101(e), unless the organization, or the individuals through
        which the organization provides such counseling, has been certified
        by the Secretary under this subsection as competent to provide such
        counseling.'';
            (2) in paragraph (2)--
                (A) by inserting ``and for certifying organizations''
            before the period at the end of the first sentence; and
                (B) in the second sentence by striking ``for
            certification'' and inserting ``, for certification of an
            organization, that each individual through which the
            organization provides counseling shall demonstrate, and, for
            certification of an individual,'';
            (3) in paragraph (3), by inserting ``organizations and'' before
        ``individuals'';
            (4) by redesignating paragraph (3) as paragraph (5); and
            (5) by inserting after paragraph (2) the following new
        paragraphs:
            ``(3) Requirement under hud programs.--Any homeownership
        counseling or rental housing counseling (as such terms are defined
        in subsection (g)(1)) required under, or provided in connection
        with, any program administered by the Department of Housing and
        Urban Development shall be provided only by organizations or
        counselors certified by the Secretary under this subsection as
        competent to provide such counseling.
            ``(4) Outreach.--The Secretary shall take such actions as the
        Secretary considers appropriate to ensure that individuals and
        organizations providing homeownership or rental housing counseling
        are aware of the certification requirements and standards of this
        subsection and of the training and certification programs under
        subsection (f).''.
    SEC. 1446. STUDY OF DEFAULTS AND FORECLOSURES.
        The Secretary of Housing and Urban Development shall conduct an
    extensive study of the root causes of default and foreclosure of home
    loans, using as much empirical data as are available. The study shall
    also examine the role of escrow accounts in helping prime and nonprime
    borrowers to avoid defaults and foreclosures, and the role of computer
    registries of mortgages, including those used for trading mortgage
    loans. Not later than 12 months after the date of the enactment of this
    Act, the Secretary shall submit to the Congress a preliminary report
    regarding the study. Not later than 24 months after such date of
    enactment, the Secretary shall submit a final report regarding the
    results of the study, which shall include any recommended legislation
    relating to the study, and recommendations for best practices and for a
    process to identify populations that need counseling the most.
    SEC. 1447. DEFAULT AND FORECLOSURE DATABASE.
        (a) Establishment.--The Secretary of Housing and Urban Development
    and the Director of the Bureau, 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, subject
    to subsection (e).
        (b) Census Tract Data.--Information in the database may be
    collected, aggregated, and made available on a census tract basis.
        (c) Requirements.--Information collected and made available through
    the database shall include--
            (1) the number and percentage of such mortgage loans that are
        delinquent by more than 30 days;
            (2) the number and percentage of such mortgage loans that are
        delinquent by more than 90 days;
            (3) the number and percentage of such properties that are real
        estate-owned;
            (4) number and percentage of such mortgage loans that are in
        the foreclosure process;
            (5) the number and percentage of such mortgage loans that have
        an outstanding principal obligation amount that is greater than the
        value of the property for which the loan was made; and
            (6) such other information as the Secretary of Housing and
        Urban Development and the Director of the Bureau consider
        appropriate.
        (d) Rule of Construction.--Nothing in this section shall be
    construed to encourage discriminatory or unsound allocation of credit
    or lending policies or practices.
        (e) Privacy and Confidentiality.--In establishing and maintaining
    the database described in subsection (a), the Secretary of Housing and
    Urban Development and the Director of the Bureau shall--
            (1) be subject to the standards applicable to Federal agencies
        for the protection of the confidentiality of personally
        identifiable information and for data security and integrity;
            (2) implement the necessary measures to conform to the
        standards for data integrity and security described in paragraph
        (1); and
            (3) collect and make available information under this section,
        in accordance with paragraphs (5) and (6) of section 1022(c) and
        the rules prescribed under such paragraphs, in order to protect
        privacy and confidentiality.
    SEC. 1448. DEFINITIONS FOR COUNSELING-RELATED PROGRAMS.
        Section 106 of the Housing and Urban Development Act of 1968 (12
    U.S.C. 1701x), as amended by the preceding provisions of this subtitle,
    is amended by adding at the end the following new subsection:
        ``(h) Definitions.--For purposes of this section:
            ``(1) Nonprofit organization.--The term `nonprofit
        organization' has the meaning given such term in section 104(5) of
        the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C.
        12704(5)), except that subparagraph (D) of such section shall not
        apply for purposes of this section.
            ``(2) State.--The term `State' means each of the several
        States, the Commonwealth of Puerto Rico, the District of Columbia,
        the Commonwealth of the Northern Mariana Islands, Guam, the Virgin
        Islands, American Samoa, the Trust Territories of the Pacific, or
        any other possession of the United States.
            ``(3) Unit of general local government.--The term `unit of
        general local government' means any city, county, parish, town,
        township, borough, village, or other general purpose political
        subdivision of a State.
            ``(4) HUD-approved counseling agency.--The term `HUD-approved
        counseling agency' means a private or public nonprofit organization
        that is--
                ``(A) exempt from taxation under section 501(c) of the
            Internal Revenue Code of 1986; and
                ``(B) certified by the Secretary to provide housing
            counseling services.
            ``(5) State housing finance agency.--The term `State housing
        finance agency' means any public body, agency, or instrumentality
        specifically created under State statute that is authorised to
        finance activities designed to provide housing and related
        facilities throughout an entire State through land acquisition,
        construction, or rehabilitation.''.
    SEC. 1449. ACCOUNTABILITY AND TRANSPARENCY FOR GRANT RECIPIENTS.
        Section 106 of the Housing and Urban Development Act of 1968 (12
    U.S.C. 1701x), as amended by the preceding provisions of this subtitle,
    is amended by adding at the end the following:
        ``(i) Accountability for Recipients of Covered Assistance.--
            ``(1) Tracking of funds.--The Secretary shall--
                ``(A) develop and maintain a system to ensure that any
            organization or entity that receives any covered assistance
            uses all amounts of covered assistance in accordance with this
            section, the regulations issued under this section, and any
            requirements or conditions under which such amounts were
            provided; and
                ``(B) require any organization or entity, as a condition of
            receipt of any covered assistance, to agree to comply with such
            requirements regarding covered assistance as the Secretary
            shall establish, which shall include--
                    ``(i) appropriate periodic financial and grant activity
                reporting, record retention, and audit requirements for the
                duration of the covered assistance to the organization or
                entity to ensure compliance with the limitations and
                requirements of this section, the regulations under this
                section, and any requirements or conditions under which
                such amounts were provided; and
                    ``(ii) any other requirements that the Secretary
                determines are necessary to ensure appropriate
                administration and compliance.
            ``(2) Misuse of funds.--If any organization or entity that
        receives any covered assistance is determined by the Secretary to
        have used any covered assistance in a manner that is materially in
        violation of this section, the regulations issued under this
        section, or any requirements or conditions under which such
        assistance was provided--
                ``(A) the Secretary shall require that, within 12 months
            after the determination of such misuse, the organization or
            entity shall reimburse the Secretary for such misused amounts
            and return to the Secretary any such amounts that remain unused
            or uncommitted for use; and
                ``(B) such organization or entity shall be ineligible, at
            any time after such determination, to apply for or receive any
            further covered assistance.
        The remedies under this paragraph are in addition to any other
        remedies that may be available under law.
            ``(3) Covered assistance.--For purposes of this subsection, the
        term `covered assistance' means any grant or other financial
        assistance provided under this section.''.
    SEC. 1450. UPDATING AND SIMPLIFICATION OF MORTGAGE INFORMATION BOOKLET.
        Section 5 of the Real Estate Settlement Procedures Act of 1974 (12
    U.S.C. 2604) is amended--
            (1) in the section heading, by striking ``special'' and
        inserting ``home buying'';
            (2) by striking subsections (a) and (b) and inserting the
        following new subsections:
        ``(a) Preparation and Distribution.--The Director of the Bureau of
    Consumer Financial Protection (hereafter in this section referred to as
    the `Director') shall prepare, at least once every 5 years, a booklet
    to help consumers applying for federally related mortgage loans to
    understand the nature and costs of real estate settlement services. The
    Director shall prepare the booklet in various languages and cultural
    styles, as the Director determines to be appropriate, so that the
    booklet is understandable and accessible to homebuyers of different
    ethnic and cultural backgrounds. The Director shall distribute such
    booklets to all lenders that make federally related mortgage loans. The
    Director shall also distribute to such lenders lists, organized by
    location, of homeownership counselors certified under section 106(e) of
    the Housing and Urban Development Act of 1968 (12 U.S.C. 1701x(e)) for
    use in complying with the requirement under subsection (c) of this
    section.
        ``(b) Contents.--Each booklet shall be in such form and detail as
    the Director shall prescribe and, in addition to such other information
    as the Director may provide, shall include in plain and understandable
    language the following information:
            ``(1) A description and explanation of the nature and purpose
        of the costs incident to a real estate settlement or a federally
        related mortgage loan. The description and explanation shall
        provide general information about the mortgage process as well as
        specific information concerning, at a minimum--
                ``(A) balloon payments;
                ``(B) prepayment penalties;
                ``(C) the advantages of prepayment; and
                ``(D) the trade-off between closing costs and the interest
            rate over the life of the loan.
            ``(2) An explanation and sample of the uniform settlement
        statement required by section 4.
            ``(3) A list and explanation of lending practices, including
        those prohibited by the Truth in Lending Act or other applicable
        Federal law, and of other unfair practices and unreasonable or
        unnecessary charges to be avoided by the prospective buyer with
        respect to a real estate settlement.
            ``(4) A list and explanation of questions a consumer obtaining
        a federally related mortgage loan should ask regarding the loan,
        including whether the consumer will have the ability to repay the
        loan, whether the consumer sufficiently shopped for the loan,
        whether the loan terms include prepayment penalties or balloon
        payments, and whether the loan will benefit the borrower.
            ``(5) An explanation of the right of rescission as to certain
        transactions provided by sections 125 and 129 of the Truth in
        Lending Act.
            ``(6) A brief explanation of the nature of a variable rate
        mortgage and a reference to the booklet entitled `Consumer Handbook
        on Adjustable Rate Mortgages', published by the Director, or to any
        suitable substitute of such booklet that the Director may
        subsequently adopt pursuant to such section.
            ``(7) A brief explanation of the nature of a home equity line
        of credit and a reference to the pamphlet required to be provided
        under section 127A of the Truth in Lending Act.
            ``(8) Information about homeownership counseling services made
        available pursuant to section 106(a)(4) of the Housing and Urban
        Development Act of 1968 (12 U.S.C. 1701x(a)(4)), a recommendation
        that the consumer use such services, and notification that a list
        of certified providers of homeownership counseling in the area, and
        their contact information, is available.
            ``(9) An explanation of the nature and purpose of escrow
        accounts when used in connection with loans secured by residential
        real estate and the requirements under section 10 of this Act
        regarding such accounts.
            ``(10) An explanation of the choices available to buyers of
        residential real estate in selecting persons to provide necessary
        services incidental to a real estate settlement.
            ``(11) An explanation of a consumer's responsibilities,
        liabilities, and obligations in a mortgage transaction.
            ``(12) An explanation of the nature and purpose of real estate
        appraisals, including the difference between an appraisal and a
        home inspection.
            ``(13) Notice that the Office of Housing of the Department of
        Housing and Urban Development has made publicly available a
        brochure regarding loan fraud and a World Wide Web address and
        toll-free telephone number for obtaining the brochure.
    The booklet prepared pursuant to this section shall take into
    consideration differences in real estate settlement procedures that may
    exist among the several States and territories of the United States and
    among separate political subdivisions within the same State and
    territory.'';
            (3) in subsection (c), by inserting at the end the following
        new sentence: ``Each lender shall also include with the booklet a
        reasonably complete or updated list of homeownership counselors who
        are certified pursuant to section 106(e) of the Housing and Urban
        Development Act of 1968 (12 U.S.C. 1701x(e)) and located in the
        area of the lender.''; and
            (4) in subsection (d), by inserting after the period at the end
        of the first sentence the following: ``The lender shall provide the
        booklet in the version that is most appropriate for the person
        receiving it.''.
    SEC. 1451. HOME INSPECTION COUNSELING.
        (a) Public Outreach.--
            (1) In general.--The Secretary of Housing and Urban Development
        (in this section referred to as the ``Secretary'') shall take such
        actions as may be necessary to inform potential homebuyers of the
        availability and importance of obtaining an independent home
        inspection. Such actions shall include--
                (A) publication of the HUD/FHA form HUD 92564-CN entitled
            ``For Your Protection: Get a Home Inspection'', in both English
            and Spanish languages;
                (B) publication of the HUD/FHA booklet entitled ``For Your
            Protection: Get a Home Inspection'', in both English and
            Spanish languages;
                (C) development and publication of a HUD booklet entitled
            ``For Your Protection--Get a Home Inspection'' that does not
            reference FHA-insured homes, in both English and Spanish
            languages; and
                (D) publication of the HUD document entitled ``Ten
            Important Questions To Ask Your Home Inspector'', in both
            English and Spanish languages.
            (2) Availability.--The Secretary shall make the materials
        specified in paragraph (1) available for electronic access and,
        where appropriate, inform potential homebuyers of such availability
        through home purchase counseling public service announcements and
        toll-free telephone hotlines of the Department of Housing and Urban
        Development. The Secretary shall give special emphasis to reaching
        first-time and low-income homebuyers with these materials and
        efforts.
            (3) Updating.--The Secretary may periodically update and revise
        such materials, as the Secretary determines to be appropriate.
        (b) Requirement for FHA-approved Lenders.--Each mortgagee approved
    for participation in the mortgage insurance programs under title II of
    the National Housing Act shall provide prospective homebuyers, at first
    contact, whether upon pre-qualification, pre-approval, or initial
    application, the materials specified in subparagraphs (A), (B), and (D)
    of subsection (a)(1).
        (c) Requirements for HUD-approved Counseling Agencies.--Each
    counseling agency certified pursuant by the Secretary to provide
    housing counseling services shall provide each of their clients, as
    part of the home purchase counseling process, the materials specified
    in subparagraphs (C) and (D) of subsection (a)(1).
        (d) Training.--Training provided the Department of Housing and
    Urban Development for housing counseling agencies, whether such
    training is provided directly by the Department or otherwise, shall
    include--
            (1) providing information on counseling potential homebuyers of
        the availability and importance of getting an independent home
        inspection;
            (2) providing information about the home inspection process,
        including the reasons for specific inspections such as radon and
        lead-based paint testing;
            (3) providing information about advising potential homebuyers
        on how to locate and select a qualified home inspector; and
            (4) review of home inspection public outreach materials of the
        Department.
    SEC. 1452. WARNINGS TO HOMEOWNERS OF FORECLOSURE RESCUE SCAMS.
        (a) Assistance to NRC.--Notwithstanding any other provision of law,
    of any amounts made available for any fiscal year pursuant to section
    106(a)(4)(F) of the Housing and Urban Development Act of 1968 (12
    U.S.C. 1701x(a)(4)(F)) (as added by section 1444), 10 percent shall be
    used only for assistance to the Neighborhood Reinvestment Corporation
    for activities, in consultation with servicers of residential mortgage
    loans, to provide notice to borrowers under such loans who are
    delinquent with respect to payments due under such loans that makes
    such borrowers aware of the dangers of fraudulent activities associated
    with foreclosure.
        (b) Notice.--The Neighborhood Reinvestment Corporation, in
    consultation with servicers of residential mortgage loans, shall use
    the amounts provided pursuant to subsection (a) to carry out activities
    to inform borrowers under residential mortgage loans--
            (1) that the foreclosure process is complex and can be
        confusing;
            (2) that the borrower may be approached during the foreclosure
        process by persons regarding saving their home and they should use
        caution in any such dealings;
            (3) that there are Federal Government and nonprofit agencies
        that may provide information about the foreclosure process,
        including the Department of Housing and Urban Development;
            (4) that they should contact their lender immediately, contact
        the Department of Housing and Urban Development to find a housing
        counseling agency certified by the Department to assist in avoiding
        foreclosure, or visit the Department's website regarding tips for
        avoiding foreclosure; and
            (5) of the telephone number of the loan servicer or successor,
        the telephone number of the Department of Housing and Urban
        Development housing counseling line, and the Uniform Resource
        Locators (URLs) for the Department of Housing and Urban Development
        Web sites for housing counseling and for tips for avoiding
        foreclosure.

                         Subtitle E--Mortgage Servicing

    SEC. 1461. ESCROW AND IMPOUND ACCOUNTS RELATING TO CERTAIN CONSUMER
    CREDIT TRANSACTIONS.
        (a) In General.--Chapter 2 of the Truth in Lending Act (15 U.S.C.
    1631 et seq.) is amended by inserting after section 129C (as added by
    section 1411) the following new section:
    ``Sec. 129D. Escrow or impound accounts relating to certain consumer
        credit transactions
        ``(a) In General.--Except as provided in subsection (b), (c), (d),
    or (e), a creditor, in connection with the consummation of a consumer
    credit transaction secured by a first lien on the principal dwelling of
    the consumer, other than a consumer credit transaction under an open
    end credit plan or a reverse mortgage, shall establish, before the
    consummation of such transaction, an escrow or impound account for the
    payment of taxes and hazard insurance, and, if applicable, flood
    insurance, mortgage insurance, ground rents, and any other required
    periodic payments or premiums with respect to the property or the loan
    terms, as provided in, and in accordance with, this section.
        ``(b) When Required.--No impound, trust, or other type of account
    for the payment of property taxes, insurance premiums, or other
    purposes relating to the property may be required as a condition of a
    real property sale contract or a loan secured by a first deed of trust
    or mortgage on the principal dwelling of the consumer, other than a
    consumer credit transaction under an open end credit plan or a reverse
    mortgage, except when--
            ``(1) any such impound, trust, or other type of escrow or
        impound account for such purposes is required by Federal or State
        law;
            ``(2) a loan is made, guaranteed, or insured by a State or
        Federal governmental lending or insuring agency;
            ``(3) the transaction is secured by a first mortgage or lien on
        the consumer's principal dwelling having an original principal
        obligation amount that--
                ``(A) does not exceed the amount of the maximum limitation
            on the original principal obligation of mortgage in effect for
            a residence of the applicable size, as of the date such
            interest rate set, pursuant to the sixth sentence of section
            305(a)(2) the Federal Home Loan Mortgage Corporation Act (12
            U.S.C. 1454(a)(2)), and the annual percentage rate will exceed
            the average prime offer rate as defined in section 129C by 1.5
            or more percentage points; or
                ``(B) exceeds the amount of the maximum limitation on the
            original principal obligation of mortgage in effect for a
            residence of the applicable size, as of the date such interest
            rate set, pursuant to the sixth sentence of section 305(a)(2)
            the Federal Home Loan Mortgage Corporation Act (12 U.S.C.
            1454(a)(2)), and the annual percentage rate will exceed the
            average prime offer rate as defined in section 129C by 2.5 or
            more percentage points; or
            ``(4) so required pursuant to regulation.
        ``(c) Exemptions.--The Board may, by regulation, exempt from the
    requirements of subsection (a) a creditor that--
            ``(1) operates predominantly in rural or underserved areas;
            ``(2) together with all affiliates, has total annual mortgage
        loan originations that do not exceed a limit set by the Board;
            ``(3) retains its mortgage loan originations in portfolio; and
            ``(4) meets any asset size threshold and any other criteria the
        Board may establish, consistent with the purposes of this subtitle.
        ``(d) Duration of Mandatory Escrow or Impound Account.--An escrow
    or impound account established pursuant to subsection (b) shall remain
    in existence for a minimum period of 5 years, beginning with the date
    of the consummation of the loan, unless and until--
            ``(1) 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;
            ``(2) such borrower is delinquent;
            ``(3) such borrower otherwise has not complied with the legal
        obligation, as established by rule; or
            ``(4) the underlying mortgage establishing the account is
        terminated.
        ``(e) Limited Exemptions for Loans Secured by Shares in a
    Cooperative or in Which an Association Must Maintain a Master Insurance
    Policy.--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 dwellings or units, where the
    borrower must join an association as a condition of ownership, and that
    association has an obligation to the dwelling or unit owners to
    maintain a master policy insuring the dwellings or units.
        ``(f) Clarification on Escrow Accounts for Loans Not Meeting
    Statutory Test.--For mortgages not covered by the requirements of
    subsection (b), no provision of this section shall be construed as
    precluding the establishment of an impound, trust, or other type of
    account for the payment of property taxes, insurance premiums, or other
    purposes relating to the property--
            ``(1) on terms mutually agreeable to the parties to the loan;
            ``(2) at the discretion of the lender or servicer, as provided
        by the contract between the lender or servicer and the borrower; or
            ``(3) pursuant to the requirements for the escrowing of flood
        insurance payments for regulated lending institutions in section
        102(d) of the Flood Disaster Protection Act of 1973.
        ``(g) Administration of Mandatory Escrow or Impound Accounts.--
            ``(1) In general.--Except as may otherwise be provided for in
        this title or in regulations prescribed by the Board, escrow or
        impound accounts established pursuant to subsection (b) shall be
        established in a federally insured depository institution or credit
        union.
            ``(2) Administration.--Except as provided in this section or
        regulations prescribed under this section, an escrow or impound
        account subject to this section shall be administered in accordance
        with--
                ``(A) the Real Estate Settlement Procedures Act of 1974 and
            regulations prescribed under such Act;
                ``(B) the Flood Disaster Protection Act of 1973 and
            regulations prescribed under such Act; and
                ``(C) the law of the State, if applicable, where the real
            property securing the consumer credit transaction is located.
            ``(3) Applicability of payment of interest.--If prescribed by
        applicable State or Federal law, each creditor shall pay interest
        to the consumer on the amount held in any impound, trust, or escrow
        account that is subject to this section in the manner as prescribed
        by that applicable State or Federal law.
            ``(4) Penalty coordination with respa.--Any action or omission
        on the part of any person which constitutes a violation of the Real
        Estate Settlement Procedures Act of 1974 or any regulation
        prescribed under such Act for which the person has paid any fine,
        civil money penalty, or other damages shall not give rise to any
        additional fine, civil money penalty, or other damages under this
        section, unless the action or omission also constitutes a direct
        violation of this section.
        ``(h) Disclosures Relating to Mandatory Escrow or Impound
    Account.--In the case of any impound, trust, or escrow account that is
    required under subsection (b), the creditor shall disclose by written
    notice to the consumer at least 3 business days before the consummation
    of the consumer credit transaction giving rise to such account or in
    accordance with timeframes established in prescribed regulations the
    following information:
            ``(1) The fact that an escrow or impound account will be
        established at consummation of the transaction.
            ``(2) The amount required at closing to initially fund the
        escrow or impound account.
            ``(3) The amount, in the initial year after the consummation of
        the transaction, of the estimated taxes and hazard insurance,
        including flood insurance, if applicable, and any other required
        periodic payments or premiums that reflects, as appropriate, either
        the taxable assessed value of the real property securing the
        transaction, including the value of any improvements on the
        property or to be constructed on the property (whether or not such
        construction will be financed from the proceeds of the transaction)
        or the replacement costs of the property.
            ``(4) The estimated monthly amount payable to be escrowed for
        taxes, hazard insurance (including flood insurance, if applicable)
        and any other required periodic payments or premiums.
            ``(5) The fact that, if the consumer chooses to terminate the
        account in the future, the consumer will become responsible for the
        payment of all taxes, hazard insurance, and flood insurance, if
        applicable, as well as any other required periodic payments or
        premiums on the property unless a new escrow or impound account is
        established.
            ``(6) Such other information as the Board determines necessary
        for the protection of the consumer.
        ``(i) Definitions.--For purposes of this section, the following
    definitions shall apply:
            ``(1) Flood insurance.--The term `flood insurance' means flood
        insurance coverage provided under the national flood insurance
        program pursuant to the National Flood Insurance Act of 1968.
            ``(2) Hazard insurance.--The term `hazard insurance' shall have
        the same meaning as provided for `hazard insurance', `casualty
        insurance', `homeowner's insurance', or other similar term under
        the law of the State where the real property securing the consumer
        credit transaction is located.''.
        (b) Exemptions and Modifications.--The Board may prescribe rules
    that revise, add to, or subtract from the criteria of section 129D(b)
    of the Truth in Lending Act if the Board determines that such rules are
    in the interest of consumers and in the public interest.
        (c) Clerical Amendment.--The table of sections for chapter 2 of the
    Truth in Lending Act is amended by inserting after the item relating to
    section 129C (as added by section 1411) the following new item:

    ``129D. Escrow or impound accounts relating to certain consumer credit
              transactions.''.
    SEC. 1462. DISCLOSURE NOTICE REQUIRED FOR CONSUMERS WHO WAIVE ESCROW
    SERVICES.
        Section 129D of the Truth in Lending Act (as added by section 1461)
    is amended by adding at the end the following new subsection:
        ``(j) Disclosure Notice Required for Consumers Who Waive Escrow
    Services.--
            ``(1) In general.--If--
                ``(A) an impound, trust, or other type of account for the
            payment of property taxes, insurance premiums, or other
            purposes relating to real property securing a consumer credit
            transaction is not established in connection with the
            transaction; or
                ``(B) a consumer chooses, and provides written notice to
            the creditor or servicer of such choice, at any time after such
            an account is established in connection with any such
            transaction and in accordance with any statute, regulation, or
            contractual agreement, to close such account,
        the creditor or servicer shall provide a timely and clearly written
        disclosure to the consumer that advises the consumer of the
        responsibilities of the consumer and implications for the consumer
        in the absence of any such account.
            ``(2) Disclosure requirements.--Any disclosure provided to a
        consumer under paragraph (1) shall include the following:
                ``(A) Information concerning any applicable fees or costs
            associated with either the non-establishment of any such
            account at the time of the transaction, or any subsequent
            closure of any such account.
                ``(B) A clear and prominent statement that the consumer is
            responsible for personally and directly paying the non-escrowed
            items, in addition to paying the mortgage loan payment, in the
            absence of any such account, and the fact that the costs for
            taxes, insurance, and related fees can be substantial.
                ``(C) A clear explanation of the consequences of any
            failure to pay non-escrowed items, including the possible
            requirement for the forced placement of insurance by the
            creditor or servicer and the potentially higher cost (including
            any potential commission payments to the servicer) or reduced
            coverage for the consumer in the event of any such creditor-
            placed insurance.
                ``(D) Such other information as the Board determines
            necessary for the protection of the consumer.''.
    SEC. 1463. REAL ESTATE SETTLEMENT PROCEDURES ACT OF 1974 AMENDMENTS.
        (a) Servicer Prohibitions.--Section 6 of the Real Estate Settlement
    Procedures Act of 1974 (12 U.S.C. 2605) is amended by adding at the end
    the following new subsections:
        ``(k) Servicer Prohibitions.--
            ``(1) In general.--A servicer of a federally related mortgage
        shall not--
                ``(A) obtain force-placed hazard insurance unless there is
            a reasonable basis to believe the borrower has failed to comply
            with the loan contract's requirements to maintain property
            insurance;
                ``(B) charge fees for responding to valid qualified written
            requests (as defined in regulations which the Bureau of
            Consumer Financial Protection shall prescribe) under this
            section;
                ``(C) fail to take timely action to respond to a borrower's
            requests to correct errors relating to allocation of payments,
            final balances for purposes of paying off the loan, or avoiding
            foreclosure, or other standard servicer's duties;
                ``(D) fail to respond within 10 business days to a request
            from a borrower to provide the identity, address, and other
            relevant contact information about the owner or assignee of the
            loan; or
                ``(E) fail to comply with any other obligation found by the
            Bureau of Consumer Financial Protection, by regulation, to be
            appropriate to carry out the consumer protection purposes of
            this Act.
            ``(2) Force-placed insurance defined.--For purposes of this
        subsection and subsections (l) and (m), the term `force-placed
        insurance' means hazard insurance coverage obtained by a servicer
        of a federally related mortgage when the borrower has failed to
        maintain or renew hazard insurance on such property as required of
        the borrower under the terms of the mortgage.
        ``(l) Requirements for Force-placed Insurance.--A servicer of a
    federally related mortgage shall not be construed as having a
    reasonable basis for obtaining force-placed insurance unless the
    requirements of this subsection have been met.
            ``(1) Written notices to borrower.--A servicer may not impose
        any charge on any borrower for force-placed insurance with respect
        to any property securing a federally related mortgage unless--
                ``(A) the servicer has sent, by first-class mail, a written
            notice to the borrower containing--
                    ``(i) a reminder of the borrower's obligation to
                maintain hazard insurance on the property securing the
                federally related mortgage;
                    ``(ii) a statement that the servicer does not have
                evidence of insurance coverage of such property;
                    ``(iii) a clear and conspicuous statement of the
                procedures by which the borrower may demonstrate that the
                borrower already has insurance coverage; and
                    ``(iv) a statement that the servicer may obtain such
                coverage at the borrower's expense if the borrower does not
                provide such demonstration of the borrower's existing
                coverage in a timely manner;
                ``(B) the servicer has sent, by first-class mail, a second
            written notice, at least 30 days after the mailing of the
            notice under subparagraph (A) that contains all the information
            described in each clause of such subparagraph; and
                ``(C) the servicer has not received from the borrower any
            demonstration of hazard insurance coverage for the property
            securing the mortgage by the end of the 15-day period beginning
            on the date the notice under subparagraph (B) was sent by the
            servicer.
            ``(2) Sufficiency of demonstration.--A servicer of a federally
        related mortgage shall accept any reasonable form of written
        confirmation from a borrower of existing insurance coverage, which
        shall include the existing insurance policy number along with the
        identity of, and contact information for, the insurance company or
        agent, or as otherwise required by the Bureau of Consumer Financial
        Protection.
            ``(3) Termination of force-placed insurance.--Within 15 days of
        the receipt by a servicer of confirmation of a borrower's existing
        insurance coverage, the servicer shall--
                ``(A) terminate the force-placed insurance; and
                ``(B) refund to the consumer all force-placed insurance
            premiums paid by the borrower during any period during which
            the borrower's insurance coverage and the force-placed
            insurance coverage were each in effect, and any related fees
            charged to the consumer's account with respect to the force-
            placed insurance during such period.
            ``(4) Clarification with respect to flood disaster protection
        act.--No provision of this section shall be construed as
        prohibiting a servicer from providing simultaneous or concurrent
        notice of a lack of flood insurance pursuant to section 102(e) of
        the Flood Disaster Protection Act of 1973.
        ``(m) Limitations on Force-placed Insurance Charges.--All charges,
    apart from charges subject to State regulation as the business of
    insurance, related to force-placed insurance imposed on the borrower by
    or through the servicer shall be bona fide and reasonable.''.
        (b) Increase in Penalty Amounts.--Section 6(f) of the Real Estate
    Settlement Procedures Act of 1974 (12 U.S.C. 2605(f)) is amended--
            (1) in paragraphs (1)(B) and (2)(B), by striking ``$1,000''
        each place such term appears and inserting ``$2,000''; and
            (2) in paragraph (2)(B)(i), by striking ``$500,000'' and
        inserting ``$1,000,000''.
        (c) Decrease in Response Times.--Section 6(e) of the Real Estate
    Settlement Procedures Act of 1974 (12 U.S.C. 2605(e)) is amended--
            (1) in paragraph (1)(A), by striking ``20 days'' and inserting
        ``5 days'';
            (2) in paragraph (2), by striking ``60 days'' and inserting
        ``30 days''; and
            (3) by adding at the end the following new paragraph:
            ``(4) Limited extension of response time.--The 30-day period
        described in paragraph (2) may be extended for not more than 15
        days if, before the end of such 30-day period, the servicer
        notifies the borrower of the extension and the reasons for the
        delay in responding.''.
        (d) Prompt Refund of Escrow Accounts Upon Payoff.--Section 6(g) of
    the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2605(g))
    is amended by adding at the end the following new sentence: ``Any
    balance in any such account that is within the servicer's control at
    the time the loan is paid off shall be promptly returned to the
    borrower within 20 business days or credited to a similar account for a
    new mortgage loan to the borrower with the same lender.''.
    SEC. 1464. TRUTH IN LENDING ACT AMENDMENTS.
        (a) Requirements for Prompt Crediting of Home Loan Payments.--
    Chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et seq.) is
    amended by inserting after section 129E (as added by section 1472) the
    following new section:
    ``Sec. 129F. Requirements for prompt crediting of home loan payments
        ``(a) In General.--In connection with a consumer credit transaction
    secured by a consumer's principal dwelling, no servicer shall fail to
    credit a payment to the consumer's loan account as of the date of
    receipt, except when a delay in crediting does not result in any charge
    to the consumer or in the reporting of negative information to a
    consumer reporting agency, except as required in subsection (b).
        ``(b) Exception.--If a servicer specifies in writing requirements
    for the consumer to follow in making payments, but accepts a payment
    that does not conform to the requirements, the servicer shall credit
    the payment as of 5 days after receipt.''.
        (b) Requests for Payoff Amounts.--Chapter 2 of the Truth in Lending
    Act (15 U.S.C. 1631 et seq.), as amended by this title, is amended by
    inserting after section 129F (as added by subsection (a)) the following
    new section:
    ``Sec. 129G. Requests for payoff amounts of home loan
        ``A creditor or servicer of a home loan shall send an accurate
    payoff balance within a reasonable time, but in no case more than 7
    business days, after the receipt of a written request for such balance
    from or on behalf of the borrower.''.
    SEC. 1465. ESCROWS INCLUDED IN REPAYMENT ANALYSIS.
        Section 128(b) of the Truth in Lending Act (15 U.S.C. 1638(b)) is
    amended by adding at the end the following new paragraph:
            ``(4) Repayment analysis required to include escrow payments.--
                ``(A) In general.--In the case of any consumer credit
            transaction secured by a first mortgage or lien on the
            principal dwelling of the consumer, other than a consumer
            credit transaction under an open end credit plan or a reverse
            mortgage, for which an impound, trust, or other type of account
            has been or will be established in connection with the
            transaction for the payment of property taxes, hazard and flood
            (if any) insurance premiums, or other periodic payments or
            premiums with respect to the property, the information required
            to be provided under subsection (a) with respect to the number,
            amount, and due dates or period of payments scheduled to repay
            the total of payments shall take into account the amount of any
            monthly payment to such account for each such repayment in
            accordance with section 10(a)(2) of the Real Estate Settlement
            Procedures Act of 1974.
                ``(B) Assessment value.--The amount taken into account
            under subparagraph (A) for the payment of property taxes,
            hazard and flood (if any) insurance premiums, or other periodic
            payments or premiums with respect to the property shall reflect
            the taxable assessed value of the real property securing the
            transaction after the consummation of the transaction,
            including the value of any improvements on the property or to
            be constructed on the property (whether or not such
            construction will be financed from the proceeds of the
            transaction), if known, and the replacement costs of the
            property for hazard insurance, in the initial year after the
            transaction.''.

                        Subtitle F--Appraisal Activities

    SEC. 1471. PROPERTY APPRAISAL REQUIREMENTS.
        Chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et seq.) is
    amended by inserting after 129G (as added by section 1464(b)) the
    following new section:
    ``Sec. 129H. Property appraisal requirements
        ``(a) In General.--A creditor may not extend credit in the form of
    a higher-risk mortgage to any consumer without first obtaining a
    written appraisal of the property to be mortgaged prepared in
    accordance with the requirements of this section.
        ``(b) Appraisal Requirements.--
            ``(1) Physical property visit.--Subject to the rules prescribed
        under paragraph (4), an appraisal of property to be secured by a
        higher-risk mortgage does not meet the requirement of this section
        unless it is performed by a certified or licensed appraiser who
        conducts a physical property visit of the interior of the mortgaged
        property.
            ``(2) Second appraisal under certain circumstances.--
                ``(A) In general.--If the purpose of a higher-risk 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 certified or
            licensed appraiser. The second appraisal shall include an
            analysis of the difference in sale prices, changes in market
            conditions, and any improvements made to the property between
            the date of the previous sale and the current sale.
                ``(B) No cost to applicant.--The cost of any second
            appraisal required under subparagraph (A) may not be charged to
            the applicant.
            ``(3) Certified or licensed appraiser defined.--For purposes of
        this section, the term `certified or licensed appraiser' means a
        person who--
                ``(A) is, at a minimum, certified or licensed by the State
            in which the property to be appraised is located; and
                ``(B) performs each appraisal in conformity with the
            Uniform Standards of Professional Appraisal Practice and title
            XI of the Financial Institutions Reform, Recovery, and
            Enforcement Act of 1989, and the regulations prescribed under
            such title, as in effect on the date of the appraisal.
            ``(4) Regulations.--
                ``(A) In general.--The Board, the Comptroller of the
            Currency, the Federal Deposit Insurance Corporation, the
            National Credit Union Administration Board, the Federal Housing
            Finance Agency, and the Bureau shall jointly prescribe
            regulations to implement this section.
                ``(B) Exemption.--The agencies listed in subparagraph (A)
            may jointly exempt, by rule, a class of loans from the
            requirements of this subsection or subsection (a) if the
            agencies determine that the exemption is in the public interest
            and promotes the safety and soundness of creditors.
        ``(c) Free Copy of Appraisal.--A creditor shall provide 1 copy of
    each appraisal conducted in accordance with this section in connection
    with a higher-risk mortgage to the applicant without charge, and at
    least 3 days prior to the transaction closing date.
        ``(d) Consumer Notification.--At the time of the initial mortgage
    application, the applicant shall be provided with a statement by the
    creditor that any appraisal prepared for the mortgage is for the sole
    use of the creditor, and that the applicant may choose to have a
    separate appraisal conducted at the expense of the applicant.
        ``(e) Violations.--In addition to any other liability to any person
    under this title, a creditor found to have willfully failed to obtain
    an appraisal as required in this section shall be liable to the
    applicant or borrower for the sum of $2,000.
        ``(f) Higher-risk Mortgage Defined.--For purposes of this section,
    the term `higher-risk mortgage' means a residential mortgage loan,
    other than a reverse mortgage loan that is a qualified mortgage, as
    defined in section 129C, secured by a principal dwelling--
            ``(1) that is not a qualified mortgage, as defined in section
        129C; and
            ``(2) with an annual percentage rate that exceeds the average
        prime offer rate for a comparable transaction, as defined in
        section 129C, as of the date the interest rate is set--
                ``(A) 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));
                ``(B) 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
                ``(C) by 3.5 or more percentage points for a subordinate
            lien residential mortgage loan.''.
    SEC. 1472. APPRAISAL INDEPENDENCE REQUIREMENTS.
        (a) In General.--Chapter 2 of the Truth in Lending Act (15 U.S.C.
    1631 et seq.) is amended by inserting after section 129D (as added by
    section 1461(a)) the following new section:
    ``Sec. 129E. Appraisal independence requirements
        ``(a) In General.--It shall be unlawful, in extending credit or in
    providing any services for a consumer credit transaction secured by the
    principal dwelling of the consumer, to engage in any act or practice
    that violates appraisal independence as described in or pursuant to
    regulations prescribed under this section.
        ``(b) Appraisal Independence.--For purposes of subsection (a), acts
    or practices that violate appraisal independence shall include--
            ``(1) any appraisal of a property offered as security for
        repayment of the consumer credit transaction that is conducted in
        connection with such transaction in which a person with an interest
        in the underlying transaction compensates, coerces, extorts,
        colludes, instructs, induces, bribes, or intimidates a person,
        appraisal management company, firm, or other entity conducting or
        involved in an appraisal, or attempts, to compensate, coerce,
        extort, collude, instruct, induce, bribe, or intimidate such a
        person, for the purpose of causing the appraised value assigned,
        under the appraisal, to the property to be based on any factor
        other than the independent judgment of the appraiser;
            ``(2) mischaracterizing, or suborning any mischaracterization
        of, the appraised value of the property securing the extension of
        the credit;
            ``(3) seeking to influence an appraiser or otherwise to
        encourage a targeted value in order to facilitate the making or
        pricing of the transaction; and
            ``(4) withholding or threatening to withhold timely payment for
        an appraisal report or for appraisal services rendered when the
        appraisal report or services are provided for in accordance with
        the contract between the parties.
        ``(c) Exceptions.--The requirements of subsection (b) shall not be
    construed as prohibiting a mortgage lender, mortgage broker, mortgage
    banker, real estate broker, appraisal management company, employee of
    an appraisal management company, consumer, or any other person with an
    interest in a real estate transaction from asking an appraiser to
    undertake 1 or more of the following:
            ``(1) Consider additional, appropriate property information,
        including the consideration of additional comparable properties to
        make or support an appraisal.
            ``(2) Provide further detail, substantiation, or explanation
        for the appraiser's value conclusion.
            ``(3) Correct errors in the appraisal report.
        ``(d) Prohibitions on Conflicts of Interest.--No certified or
    licensed appraiser conducting, and no appraisal management company
    procuring or facilitating, an appraisal in connection with a consumer
    credit transaction secured by the principal dwelling of a consumer may
    have a direct or indirect interest, financial or otherwise, in the
    property or transaction involving the appraisal.
        ``(e) Mandatory Reporting.--Any mortgage lender, mortgage broker,
    mortgage banker, real estate broker, appraisal management company,
    employee of an appraisal management company, or any other person
    involved in a real estate transaction involving an appraisal in
    connection with a consumer credit transaction secured by the principal
    dwelling of a consumer who has a reasonable basis to believe an
    appraiser is failing to comply with the Uniform Standards of
    Professional Appraisal Practice, is violating applicable laws, or is
    otherwise engaging in unethical or unprofessional conduct, shall refer
    the matter to the applicable State appraiser certifying and licensing
    agency.
        ``(f) No Extension of Credit.--In connection with a consumer credit
    transaction secured by a consumer's principal dwelling, a creditor who
    knows, at or before loan consummation, of a violation of the appraisal
    independence standards established in subsections (b) or (d) shall not
    extend credit based on such appraisal unless the creditor documents
    that the creditor has acted with reasonable diligence to determine that
    the appraisal does not materially misstate or misrepresent the value of
    such dwelling.
        ``(g) Rules and Interpretive Guidelines.--
            ``(1) In general.--Except as provided under paragraph (2), the
        Board, the Comptroller of the Currency, the Federal Deposit
        Insurance Corporation, the National Credit Union Administration
        Board, the Federal Housing Finance Agency, and the Bureau may
        jointly issue rules, interpretive guidelines, and general
        statements of policy with respect to acts or practices that violate
        appraisal independence 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), (f), (h), and (i).
            ``(2) Interim final regulations.--The Board shall, for purposes
        of this section, prescribe interim final regulations no later than
        90 days after the date of enactment of this section defining with
        specificity acts or practices that violate appraisal independence
        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. Rules prescribed by the
        Board under this paragraph shall be deemed to be rules prescribed
        by the agencies jointly under paragraph (1).
        ``(h) Appraisal Report Portability.--Consistent with the
    requirements of this section, the Board, the Comptroller of the
    Currency, the Federal Deposit Insurance Corporation, the National
    Credit Union Administration Board, the Federal Housing Finance Agency,
    and the Bureau may jointly issue regulations that address the issue of
    appraisal report portability, including regulations that ensure the
    portability of the appraisal report between lenders for a consumer
    credit transaction secured by a 1-4 unit single family residence that
    is the principal dwelling of the consumer, or mortgage brokerage
    services for such a transaction.
        ``(i) Customary and Reasonable Fee.--
            ``(1) In general.--Lenders and their agents shall compensate
        fee appraisers at a rate that is customary and reasonable for
        appraisal services performed in the market area of the property
        being appraised. Evidence for such fees may be established by
        objective third-party information, such as government agency fee
        schedules, academic studies, and independent private sector
        surveys. Fee studies shall exclude assignments ordered by known
        appraisal management companies.
            ``(2) Fee appraiser definition.--For purposes of this section,
        the term `fee appraiser' means a person who is not an employee of
        the mortgage loan originator or appraisal management company
        engaging the appraiser and is--
                ``(A) a State licensed or certified appraiser who receives
            a fee for performing an appraisal and certifies that the
            appraisal has been prepared in accordance with the Uniform
            Standards of Professional Appraisal Practice; or
                ``(B) a company not subject to the requirements of section
            1124 of the Financial Institutions Reform, Recovery, and
            Enforcement Act of 1989 (12 U.S.C. 3331 et seq.) that utilizes
            the services of State licensed or certified appraisers and
            receives a fee for performing appraisals in accordance with the
            Uniform Standards of Professional Appraisal Practice.
            ``(3) Exception for complex assignments.--In the case of an
        appraisal involving a complex assignment, the customary and
        reasonable fee may reflect the increased time, difficulty, and
        scope of the work required for such an appraisal and include an
        amount over and above the customary and reasonable fee for non-
        complex assignments.
        ``(j) Sunset.--Effective on the date the interim final regulations
    are promulgated pursuant to subsection (g), the Home Valuation Code of
    Conduct announced by the Federal Housing Finance Agency on December 23,
    2008, shall have no force or effect.
        ``(k) Penalties.--
            ``(1) First violation.--In addition to the enforcement
        provisions referred to in section 130, each person who violates
        this section shall forfeit and pay a civil penalty of not more than
        $10,000 for each day any such violation continues.
            ``(2) Subsequent violations.--In the case of any person on whom
        a civil penalty has been imposed under paragraph (1), paragraph (1)
        shall be applied by substituting `$20,000' for `$10,000' with
        respect to all subsequent violations.
            ``(3) Assessment.--The agency referred to in subsection (a) or
        (c) of section 108 with respect to any person described in
        paragraph (1) shall assess any penalty under this subsection to
        which such person is subject.''.
        (b) Clerical Amendment.--The table of sections for chapter 2 of the
    Truth in Lending Act is amended by inserting after the item relating to
    section 129D (as added by section 1461(c)) the following new items:

    ``129E. Appraisal independence requirements.
    ``129F. Requirements for prompt crediting of home loan payments.
    ``129G. Requests for payoff amounts of home loan.
    ``129H. Property appraisal requirements.''.

        (c) Deference.--Section 105 of the Truth in Lending Act (15 U.S.C.
    1604) is amended by adding at the end the following:
        ``(h) Deference.--Notwithstanding any power granted to any Federal
    agency under this title, the deference that a court affords to the
    Bureau with respect to a determination made by the Bureau relating to
    the meaning or interpretation of any provision of this title, other
    than section 129E or 129H, shall be applied as if the Bureau were the
    only agency authorized to apply, enforce, interpret, or administer the
    provisions of this title.''.
        (d) Conforming Amendments in Title X Not Applicable to Sections
    129E and 129H.--Notwithstanding section 1099A, the term ``Board'' in
    sections 129E and 129H, as added by this subtitle, shall not be
    substituted by the term ``Bureau''.
    SEC. 1473. AMENDMENTS RELATING TO APPRAISAL SUBCOMMITTEE OF FFIEC,
    APPRAISER INDEPENDENCE MONITORING, APPROVED APPRAISER EDUCATION,
    APPRAISAL MANAGEMENT COMPANIES, APPRAISER COMPLAINT HOTLINE, AUTOMATED
    VALUATION MODELS, AND BROKER PRICE OPINIONS.
        (a) Threshold Levels.--Section 1112(b) of the Financial
    Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
    3341(b)) is amended by inserting before the period the following: ``,
    and receives concurrence from the Bureau of Consumer Financial
    Protection that such threshold level provides reasonable protection for
    consumers who purchase 1-4 unit single-family residences''.
        (b) Annual Report of Appraisal Subcommittee.--Section 1103(a) of
    the Financial Institutions Reform, Recovery, and Enforcement Act of
    1989 (12 U.S.C. 3332(a)) is amended at the end by inserting the
    following new paragraph:
            ``(5) transmit an annual report to the Congress not later than
        June 15 of each year that describes the manner in which each
        function assigned to the Appraisal Subcommittee has been carried
        out during the preceding year. The report shall also detail the
        activities of the Appraisal Subcommittee, including the results of
        all audits of State appraiser regulatory agencies, and provide an
        accounting of disapproved actions and warnings taken in the
        previous year, including a description of the conditions causing
        the disapproval and actions taken to achieve compliance.''.
        (c) Open Meetings.--Section 1104(b) of the Financial Institutions
    Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3333(b)) is
    amended--
            (1) by inserting ``in public session after notice in the
        Federal Register, but may close certain portions of these meetings
        related to personnel and review of preliminary State audit
        reports,'' after ``shall meet''; and
            (2) by adding after the final period the following: ``The
        subject matter discussed in any closed or executive session shall
        be described in the Federal Register notice of the meeting.''.
        (d) Regulations.--Section 1106 of the Financial Institutions
    Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3335) is
    amended--
            (1) by inserting ``prescribe regulations in accordance with
        chapter 5 of title 5, United States Code (commonly referred to as
        the Administrative Procedures Act) after notice and opportunity for
        comment,'' after ``hold hearings''; and
            (2) at the end by inserting ``Any regulations prescribed by the
        Appraisal Subcommittee shall (unless otherwise provided in this
        title) be limited to the following functions: temporary practice,
        national registry, information sharing, and enforcement. For
        purposes of prescribing regulations, the Appraisal Subcommittee
        shall establish an advisory committee of industry participants,
        including appraisers, lenders, consumer advocates, real estate
        agents, and government agencies, and hold meetings as necessary to
        support the development of regulations.''.
        (e) Appraisal Reviews and Complex Appraisals.--
            (1) Section 1110.--Section 1110 of the Financial Institutions
        Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3339) is
        amended--
                (A) in paragraph (1), by striking ``and'';
                (B) in paragraph (2), by striking the period at the end and
            inserting ``; and''; and
                (C) by inserting after paragraph (2) the following:
            ``(3) that such appraisals shall be subject to appropriate
        review for compliance with the Uniform Standards of Professional
        Appraisal Practice.''.
            (2) Section 1113.--Section 1113 of the Financial Institutions
        and Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3342)
        is amended by inserting before the period the following: ``, where
        a complex 1-to-4 unit single family residential appraisal means an
        appraisal for which the property to be appraised, the form of
        ownership, the property characteristics, or the market conditions
        are atypical''.
        (f) Appraisal Management Services.--
            (1) Supervision of third party providers of appraisal
        management services.--Section 1103(a) of the Financial Institutions
        Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3332(a))
        (as previously amended by this section) is amended--
                (A) by amending paragraph (1) to read as follows:
            ``(1) monitor the requirements established by States--
                ``(A) for the certification and licensing of individuals
            who are qualified to perform appraisals in connection with
            federally related transactions, including a code of
            professional responsibility; and
                ``(B) for the registration and supervision of the
            operations and activities of an appraisal management
            company;''; and
                (B) by adding at the end the following new paragraph:
            ``(6) maintain a national registry of appraisal management
        companies that either are registered with and subject to
        supervision of a State appraiser certifying and licensing agency or
        are operating subsidiaries of a Federally regulated financial
        institution.''.
            (2) Appraisal management company minimum requirements.--Title
        XI of the Financial Institutions Reform, Recovery, and Enforcement
        Act of 1989 (12 U.S.C. 3331 et seq.) is amended by adding at the
        end the following new section (and amending the table of contents
        accordingly):
    ``SEC. 1124. APPRAISAL MANAGEMENT COMPANY MINIMUM REQUIREMENTS.
        ``(a) In General.--The Board of Governors of the Federal Reserve
    System, the Comptroller of the Currency, the Federal Deposit Insurance
    Corporation, the National Credit Union Administration Board, the
    Federal Housing Finance Agency, and the Bureau of Consumer Financial
    Protection shall jointly, by rule, establish minimum requirements to be
    applied by a State in the registration of appraisal management
    companies. Such requirements shall include a requirement that such
    companies--
            ``(1) register with and be subject to supervision by a State
        appraiser certifying and licensing agency in each State in which
        such company operates;
            ``(2) verify that only licensed or certified appraisers are
        used for federally related transactions;
            ``(3) require that appraisals coordinated by an appraisal
        management company comply with the Uniform Standards of
        Professional Appraisal Practice; and
            ``(4) require that appraisals are conducted independently and
        free from inappropriate influence and coercion pursuant to the
        appraisal independence standards established under section 129E of
        the Truth in Lending Act.
        ``(b) Relation to State Law.--Nothing in this section shall be
    construed to prevent States from establishing requirements in addition
    to any rules promulgated under subsection (a).
        ``(c) Federally Regulated Financial Institutions.--The requirements
    of subsection (a) shall 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. An
    appraisal management company that is a subsidiary owned and controlled
    by a financial institution regulated by a Federal financial institution
    regulatory agency shall not be required to register with a State.
        ``(d) Registration Limitations.--An appraisal management company
    shall not be registered by a State or included on the national registry
    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.
        ``(e) Reporting.--The Board of Governors of the Federal Reserve
    System, the Comptroller of the Currency, the Federal Deposit Insurance
    Corporation, the National Credit Union Administration Board, the
    Federal Housing Finance Agency, and the Bureau of Consumer Financial
    Protection shall jointly promulgate regulations for the reporting of
    the activities of appraisal management companies to the Appraisal
    Subcommittee in determining the payment of the annual registry fee.
        ``(f) Effective Date.--
            ``(1) In general.--No appraisal management company may perform
        services related to a federally related transaction in a State
        after the date that is 36 months after the date on which the
        regulations required to be prescribed under subsection (a) are
        prescribed in final form unless such company is registered with
        such State or subject to oversight by a Federal financial
        institutions regulatory agency.
            ``(2) Extension of effective date.--Subject to the approval of
        the Council, the Appraisal Subcommittee may extend by an additional
        12 months the requirements for the registration and supervision of
        appraisal management companies if it makes a written finding that a
        State has made substantial progress in establishing a State
        appraisal management company registration and supervision system
        that appears to conform with the provisions of this title.''.
            (3) State appraiser certifying and licensing agency
        authority.--Section 1117 of the Financial Institutions Reform,
        Recovery, and Enforcement Act of 1989 (12 U.S.C. 3346) is amended
        by adding at the end the following: ``The duties of such agency may
        additionally include the registration and supervision of appraisal
        management companies and the addition of information about the
        appraisal management company to the national registry.''.
            (4) Appraisal management company definition.--Section 1121 of
        the Financial Institutions Reform, Recovery, and Enforcement Act of
        1989 (12 U.S.C. 3350) is amended by adding at the end the
        following:
            ``(11) Appraisal management company.--The term `appraisal
        management company' means, in connection with valuing properties
        collateralizing mortgage loans or mortgages incorporated into a
        securitization, any external third party authorized either by a
        creditor of a consumer credit transaction secured by a consumer's
        principal dwelling or by an underwriter of or other principal in
        the secondary mortgage markets, that oversees a network or panel of
        more than 15 certified or licensed appraisers in a State or 25 or
        more nationally within a given year--
                ``(A) to recruit, select, and retain appraisers;
                ``(B) to contract with licensed and certified appraisers to
            perform appraisal assignments;
                ``(C) to manage the process of having an appraisal
            performed, including providing administrative duties such as
            receiving appraisal orders and appraisal reports, submitting
            completed appraisal reports to creditors and underwriters,
            collecting fees from creditors and underwriters for services
            provided, and reimbursing appraisers for services performed; or
                ``(D) to review and verify the work of appraisers.''.
        (g) State Agency Reporting Requirement.--Section 1109(a) of the
    Financial Institutions Reform, Recovery, and Enforcement Act of 1989
    (12 U.S.C. 3338(a)) is amended--
            (1) by striking ``and'' after the semicolon in paragraph (1);
            (2) by redesignating paragraph (2) as paragraph (4); and
            (3) by inserting after paragraph (1) the following new
        paragraphs:
            ``(2) transmit reports on the issuance and renewal of licenses
        and certifications, sanctions, disciplinary actions, license and
        certification revocations, and license and certification
        suspensions on a timely basis to the national registry of the
        Appraisal Subcommittee;
            ``(3) transmit reports on a timely basis of supervisory
        activities involving appraisal management companies or other third-
        party providers of appraisals and appraisal management services,
        including investigations initiated and disciplinary actions taken;
        and''.
        (h) Registry Fees Modified.--
            (1) In general.--Section 1109(a) of the Financial Institutions
        Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3338(a))
        is amended--
                (A) by amending paragraph (4) (as modified by section
            1473(g)) to read as follows:
            ``(4) collect--
                ``(A) from such individuals who perform or seek to perform
            appraisals in federally related transactions, an annual
            registry fee of not more than $40, such fees to be transmitted
            by the State agencies to the Council on an annual basis; and
                ``(B) from an appraisal management company that either has
            registered with a State appraiser certifying and licensing
            agency in accordance with this title or operates as a
            subsidiary of a federally regulated financial institution, an
            annual registry fee of--
                    ``(i) in the case of such a company that has been in
                existence for more than a year, $25 multiplied by the
                number of appraisers working for or contracting with such
                company in such State during the previous year, but where
                such $25 amount may be adjusted, up to a maximum of $50, at
                the discretion of the Appraisal Subcommittee, if necessary
                to carry out the Subcommittee's functions under this title;
                and
                    ``(ii) in the case of such a company that has not been
                in existence for more than a year, $25 multiplied by an
                appropriate number to be determined by the Appraisal
                Subcommittee, and where such number will be used for
                determining the fee of all such companies that were not in
                existence for more than a year, but where such $25 amount
                may be adjusted, up to a maximum of $50, at the discretion
                of the Appraisal Subcommittee, if necessary to carry out
                the Subcommittee's functions under this title.''; and
                (B) by amending the matter following paragraph (4), as
            redesignated, to read as follows:
    ``Subject to the approval of the Council, the Appraisal Subcommittee
    may adjust the dollar amount of registry fees under paragraph (4)(A),
    up to a maximum of $80 per annum, as necessary to carry out its
    functions under this title. The Appraisal Subcommittee shall consider
    at least once every 5 years whether to adjust the dollar amount of the
    registry fees to account for inflation. In implementing any change in
    registry fees, the Appraisal Subcommittee shall provide flexibility to
    the States for multi-year certifications and licenses already in place,
    as well as a transition period to implement the changes in registry
    fees. In establishing the amount of the annual registry fee for an
    appraisal management company, the Appraisal Subcommittee shall have the
    discretion to impose a minimum annual registry fee for an appraisal
    management company to protect against the under reporting of the number
    of appraisers working for or contracted by the appraisal management
    company.''.
            (2) Incremental revenues.--Incremental revenues collected
        pursuant to the increases required by this subsection shall be
        placed in a separate account at the United States Treasury,
        entitled the ``Appraisal Subcommittee Account''.
        (i) Grants and Reports.--Section 1109(b) of the Financial
    Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
    3338(b)) is amended--
            (1) by striking ``and'' after the semicolon in paragraph (3);
            (2) by striking the period at the end of paragraph (4) and
        inserting a semicolon;
            (3) by adding at the end the following new paragraphs:
            ``(5) to make grants to State appraiser certifying and
        licensing agencies, in accordance with policies to be developed by
        the Appraisal Subcommittee, to support the efforts of such agencies
        to comply with this title, including--
                ``(A) the complaint process, complaint investigations, and
            appraiser enforcement activities of such agencies; and
                ``(B) the submission of data on State licensed and
            certified appraisers and appraisal management companies to the
            National appraisal registry, including information affirming
            that the appraiser or appraisal management company meets the
            required qualification criteria and formal and informal
            disciplinary actions; and
            ``(6) to report to all State appraiser certifying and licensing
        agencies when a license or certification is surrendered, revoked,
        or suspended.''.
    Obligations authorized under this subsection may not exceed 75 percent
    of the fiscal year total of incremental increase in fees collected and
    deposited in the ``Appraisal Subcommittee Account'' pursuant to
    subsection (h).
        (j) Criteria.--Section 1116 of the Financial Institutions Reform,
    Recovery, and Enforcement Act of 1989 (12 U.S.C. 3345) is amended--
            (1) in subsection (c), by inserting ``whose criteria for the
        licensing of a real estate appraiser currently meet or exceed the
        minimum criteria issued by the Appraisal Qualifications Board of
        The Appraisal Foundation for the licensing of real estate
        appraisers'' before the period at the end; and
            (2) by striking subsection (e) and inserting the following new
        subsection:
        ``(e) Minimum Qualification Requirements.--Any requirements
    established for individuals in the position of `Trainee Appraiser' and
    `Supervisory Appraiser' shall meet or exceed the minimum qualification
    requirements of the Appraiser Qualifications Board of The Appraisal
    Foundation. The Appraisal Subcommittee shall have the authority to
    enforce these requirements.''.
        (k) Monitoring of State Appraiser Certifying and Licensing
    Agencies.--Section 1118 of the Financial Institutions Reform, Recovery,
    and Enforcement Act of 1989 (12 U.S.C. 3347) is amended--
            (1) by amending subsection (a) to read as follows:
        ``(a) In General.--The Appraisal Subcommittee shall monitor each
    State appraiser certifying and licensing agency for the purposes of
    determining whether such agency--
            ``(1) has policies, practices, funding, staffing, and
        procedures that are consistent with this title;
            ``(2) processes complaints and completes investigations in a
        reasonable time period;
            ``(3) appropriately disciplines sanctioned appraisers and
        appraisal management companies;
            ``(4) maintains an effective regulatory program; and
            ``(5) reports complaints and disciplinary actions on a timely
        basis to the national registries on appraisers and appraisal
        management companies maintained by the Appraisal Subcommittee.
    The Appraisal Subcommittee shall have the authority to remove a State
    licensed or certified appraiser or a registered appraisal management
    company from a national registry on an interim basis, not to exceed 90
    days, 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 analysis of the licensing and certification of appraisers,
    the registration of appraisal management companies, the issuance of
    temporary licenses and certifications for appraisers, the receiving and
    tracking of submitted complaints against appraisers and appraisal
    management companies, the investigation of complaints, and enforcement
    actions against appraisers and appraisal management companies. The
    Appraisal Subcommittee shall have the authority to impose interim
    actions and suspensions against a State agency as an alternative to, or
    in advance of, the derecognition of a State agency.''.
            (2) in subsection (b)(2), by inserting after ``authority'' the
        following: ``or sufficient funding''.
        (l) Reciprocity.--Subsection (b) of section 1122 of the Financial
    Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
    3351(b)) is amended to read as follows:
        ``(b) Reciprocity.--Notwithstanding any other provisions of this
    title, a federally related transaction shall not be appraised by a
    certified or licensed appraiser unless the State appraiser certifying
    or licensing agency of the State certifying or licensing such appraiser
    has in place a policy of issuing a reciprocal certification or license
    for an individual from another State when--
            ``(1) the appraiser licensing and certification program of such
        other State is in compliance with the provisions of this title; and
            ``(2) the appraiser holds a valid certification from a State
        whose requirements for certification or licensing meet or exceed
        the licensure standards established by the State where an
        individual seeks appraisal licensure.''.
        (m) Consideration of Professional Appraisal Designations.--Section
    1122(d) of the Financial Institutions Reform, Recovery, and Enforcement
    Act of 1989 (12 U.S.C. 3351(d)) is amended by striking ``shall not
    exclude'' and all that follows through the end of the subsection and
    inserting the following: ``may include education achieved, experience,
    sample appraisals, and references from prior clients. Membership in a
    nationally recognized professional appraisal organization may be a
    criteria considered, though lack of membership therein shall not be the
    sole bar against consideration for an assignment under these
    criteria.''.
        (n) Appraiser Independence.--Section 1122 of the Financial
    Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
    3351) is amended by adding at the end the following new subsection:
        ``(g) Appraiser Independence Monitoring.--The Appraisal
    Subcommittee shall monitor each State appraiser certifying and
    licensing agency for the purpose of determining whether such agency's
    policies, practices, and procedures are consistent with the purposes of
    maintaining appraiser independence and whether such State has adopted
    and maintains effective laws, regulations, and policies aimed at
    maintaining appraiser independence.''.
        (o) Appraiser Education.--Section 1122 of the Financial
    Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
    3351) is amended by inserting after subsection (g) (as added by
    subsection (l) of this section) the following new subsection:
        ``(h) Approved Education.--The Appraisal Subcommittee shall
    encourage the States to accept courses approved by the Appraiser
    Qualification Board's Course Approval Program.''.
        (p) Appraisal Complaint Hotline.--Section 1122 of the Financial
    Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
    3351), as amended by this section, is amended by adding at the end the
    following new subsection:
        ``(i) Appraisal Complaint National Hotline.--If, 6 months after the
    date of the enactment of this subsection, the Appraisal Subcommittee
    determines that no national hotline exists to receive complaints of
    non-compliance with appraisal independence standards and Uniform
    Standards of Professional Appraisal Practice, including complaints from
    appraisers, individuals, or other entities concerning the improper
    influencing or attempted improper influencing of appraisers or the
    appraisal process, the Appraisal Subcommittee shall establish and
    operate such a national hotline, which shall include a toll-free
    telephone number and an email address. If the Appraisal Subcommittee
    operates such a national hotline, the Appraisal Subcommittee shall
    refer complaints for further action to appropriate governmental bodies,
    including a State appraiser certifying and licensing agency, a
    financial institution regulator, or other appropriate legal
    authorities. For complaints referred to State appraiser certifying and
    licensing agencies or to Federal regulators, the Appraisal Subcommittee
    shall have the authority to follow up such complaint referrals in order
    to determine the status of the resolution of the complaint.''.
        (q) Automated Valuation Models.--Title XI of the Financial
    Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
    3331 et seq.), as amended by this section, is amended by adding at the
    end the following new section (and amending the table of contents
    accordingly):
    ``SEC. 1125. AUTOMATED VALUATION MODELS USED TO ESTIMATE COLLATERAL
    VALUE FOR MORTGAGE LENDING PURPOSES.
        ``(a) In General.--Automated valuation models shall adhere to
    quality control standards designed to--
            ``(1) ensure a high level of confidence in the estimates
        produced by automated valuation models;
            ``(2) protect against the manipulation of data;
            ``(3) seek to avoid conflicts of interest;
            ``(4) require random sample testing and reviews; and
            ``(5) account for any other such factor that the agencies
        listed in subsection (b) determine to be appropriate.
        ``(b) Adoption of Regulations.--The Board, the Comptroller of the
    Currency, the Federal Deposit Insurance Corporation, the National
    Credit Union Administration Board, the Federal Housing Finance Agency,
    and the Bureau of Consumer Financial Protection, in consultation with
    the staff of the Appraisal Subcommittee and the Appraisal Standards
    Board of the Appraisal Foundation, shall promulgate regulations to
    implement the quality control standards required under this section.
        ``(c) Enforcement.--Compliance with regulations issued under this
    subsection shall be enforced by--
            ``(1) with respect to a financial institution, or subsidiary
        owned and controlled by a financial institution and regulated by a
        Federal financial institution regulatory agency, the Federal
        financial institution regulatory agency that acts as the primary
        Federal supervisor of such financial institution or subsidiary; and
            ``(2) with respect to other participants in the market for
        appraisals of 1-to-4 unit single family residential real estate,
        the Federal Trade Commission, the Bureau of Consumer Financial
        Protection, and a State attorney general.
        ``(d) Automated Valuation Model Defined.--For purposes of this
    section, the term `automated valuation model' means any computerized
    model used by mortgage originators and secondary market issuers to
    determine the collateral worth of a mortgage secured by a consumer's
    principal dwelling.''.
        (r) Broker Price Opinions.--Title XI of the Financial Institutions
    Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3331 et seq.),
    as amended by this section, is amended by adding at the end the
    following new section (and amending the table of contents accordingly):
    ``SEC. 1126. BROKER PRICE OPINIONS.
        ``(a) General Prohibition.--In conjunction with the purchase of a
    consumer's principal dwelling, broker price opinions may not be used as
    the primary basis to determine the value of a piece of property for the
    purpose of a loan origination of a residential mortgage loan secured by
    such piece of property.
        ``(b) Broker Price Opinion Defined.--For purposes of this section,
    the term `broker price opinion' means an estimate prepared by a real
    estate broker, agent, or sales person that details the probable selling
    price of a particular piece of real estate property and provides a
    varying level of detail about the property's condition, market, and
    neighborhood, and information on comparable sales, but does not include
    an automated valuation model, as defined in section 1125(c).''.
        (s) Amendments to Appraisal Subcommittee.--Section 1011 of the
    Federal Financial Institutions Examination Council Act of 1978 (12
    U.S.C. 3310) is amended--
            (1) in the first sentence, by adding before the period the
        following: ``, the Bureau of Consumer Financial Protection, and the
        Federal Housing Finance Agency''; and
            (2) by inserting at the end the following: ``At all times at
        least one member of the Appraisal Subcommittee shall have
        demonstrated knowledge and competence through licensure,
        certification, or professional designation within the appraisal
        profession.''.
        (t) Technical Corrections.--
            (1) Section 1119(a)(2) of the Financial Institutions Reform,
        Recovery, and Enforcement Act of 1989 (12 U.S.C. 3348(a)(2)) is
        amended by striking ``council,'' and inserting ``Council,''.
            (2) Section 1121(6) of the Financial Institutions Reform,
        Recovery, and Enforcement Act of 1989 (12 U.S.C. 3350(6)) is
        amended by striking ``Corporations,'' and inserting
        ``Corporation,''.
            (3) Section 1121(8) of the Financial Institutions Reform,
        Recovery, and Enforcement Act of 1989 (12 U.S.C. 3350(8)) is
        amended by striking ``council'' and inserting ``Council''.
            (4) Section 1122 of the Financial Institutions Reform,
        Recovery, and Enforcement Act of 1989 (12 U.S.C. 3351) is amended--
                (A) in subsection (a)(1) by moving the left margin of
            subparagraphs (A), (B), and (C) 2 ems to the right; and
                (B) in subsection (c)--
                    (i) by striking ``Federal Financial Institutions
                Examination Council'' and inserting ``Financial
                Institutions Examination Council''; and
                    (ii) by striking ``the council's functions'' and
                inserting ``the Council's functions''.
    SEC. 1474. EQUAL CREDIT OPPORTUNITY ACT AMENDMENT.
        Subsection (e) of section 701 of the Equal Credit Opportunity Act
    (15 U.S.C. 1691) is amended to read as follows:
        ``(e) Copies Furnished to Applicants.--
            ``(1) In general.--Each creditor shall furnish to an applicant
        a copy of any and all written appraisals and valuations developed
        in connection with the applicant's application for a loan that is
        secured or would have been secured by a first lien on a dwelling
        promptly upon completion, but in no case later than 3 days prior to
        the closing of the loan, whether the creditor grants or denies the
        applicant's request for credit or the application is incomplete or
        withdrawn.
            ``(2) Waiver.--The applicant may waive the 3 day requirement
        provided for in paragraph (1), except where otherwise required in
        law.
            ``(3) Reimbursement.--The applicant may be required to pay a
        reasonable fee to reimburse the creditor for the cost of the
        appraisal, except where otherwise required in law.
            ``(4) Free copy.--Notwithstanding paragraph (3), the creditor
        shall provide a copy of each written appraisal or valuation at no
        additional cost to the applicant.
            ``(5) Notification to applicants.--At the time of application,
        the creditor shall notify an applicant in writing of the right to
        receive a copy of each written appraisal and valuation under this
        subsection.
            ``(6) Valuation defined.--For purposes of this subsection, the
        term `valuation' shall include any estimate of the value of a
        dwelling developed in connection with a creditor's decision to
        provide credit, including those values developed pursuant to a
        policy of a government sponsored enterprise or by an automated
        valuation model, a broker price opinion, or other methodology or
        mechanism.''.
    SEC. 1475. REAL ESTATE SETTLEMENT PROCEDURES ACT OF 1974 AMENDMENT
    RELATING TO CERTAIN APPRAISAL FEES.
        Section 4 of the Real Estate Settlement Procedures Act of 1974 is
    amended by adding at the end the following new subsection:
        ``(c) The standard form described in subsection (a) may include, in
    the case of an appraisal coordinated by an appraisal management company
    (as such term is defined in section 1121(11) of the Financial
    Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
    3350(11))), a clear disclosure of--
            ``(1) the fee paid directly to the appraiser by such company;
        and
            ``(2) the administration fee charged by such company.''.
    SEC. 1476. GAO STUDY ON THE EFFECTIVENESS AND IMPACT OF VARIOUS
    APPRAISAL METHODS, VALUATION MODELS AND DISTRIBUTIONS CHANNELS, AND ON
    THE HOME VALUATION CODE OF CONDUCT AND THE APPRAISAL SUBCOMMITTEE.
        (a) In General.--The Government Accountability Office shall conduct
    a study on--
            (1) the effectiveness and impact of--
                (A) appraisal methods, including the cost approach, the
            comparative sales approach, the income approach, and others
            that may be available;
                (B) appraisal valuation models, including licensed and
            certified appraisals, broker-priced opinions, and automated
            valuation models; and
                (C) appraisal distribution channels, including appraisal
            management companies, independent appraisal operations within
            mortgage originators, and fee-for-service appraisers;
            (2) the Home Valuation Code of Conduct; and
            (3) the Appraisal Subcommittee's functions pursuant to title XI
        of the Financial Institutions Reform, Recovery, and Enforcement Act
        of 1989.
        (b) Study.--Not later than--
            (1) 12 months after the date of enactment of this Act, the
        Government Accountability Office shall submit a study to the
        Committee on Banking, Housing, and Urban Affairs of the Senate and
        the Committee on Financial Services of the House of
        Representatives; and
            (2) 90 days after the date of enactment of this Act, the
        Government Accountability Office shall provide a report on the
        status of the study and any preliminary findings to the Committee
        on Banking, Housing, and Urban Affairs of the Senate and the
        Committee on Financial Services of the House of Representatives.
        (c) Content of Study.--The study required by this section shall
    include an examination of the following:
            (1) Appraisal approaches, valuation models, and distribution
        channels.--
                (A) The prevalence, alone or in combination, of certain
            appraisal approaches, models, and channels in purchase-money
            and refinance mortgage transactions.
                (B) The accuracy of these approaches, models, and channels
            in assessing the property as collateral.
                (C) Whether and how these approaches, models, and channels
            contributed to price speculation during the previous cycle.
                (D) The costs to consumers of these approaches, models, and
            channels.
                (E) The disclosure of fees to consumers in the appraisal
            process.
                (F) To what extent the usage of these approaches, models,
            and channels may be influenced by a conflict of interest
            between the mortgage lender and the appraiser and the mechanism
            by which the lender selects and compensates the appraiser.
                (G) The suitability of these approaches, models, and
            channels in rural versus urban areas.
            (2) Home valuation code of conduct (hvcc).--
                (A) How the HVCC affects mortgage lenders' selection of
            appraisers.
                (B) How the HVCC affects State regulation of appraisers and
            appraisal distribution channels.
                (C) How the HVCC affects the quality and cost of appraisals
            and the length of time to obtain an appraisal.
                (D) How the HVCC affects mortgage brokers, small
            businesses, and consumers.
        (d) Additional Study Required.--
            (1) In general.--Not later than 18 months after the date of
        enactment of this Act, the Government Accountability Office shall
        submit a study to the Committee on Banking, Housing, and Urban
        Affairs of the Senate and the Committee on Financial Services of
        the House of Representatives.
            (2) Content of additional study.--The study required under
        paragraph (1) shall include--
                (A) an examination of--
                    (i) the Appraisal Subcommittee's ability to monitor and
                enforce State and Federal certification requirements and
                standards, including by providing a summary with a
                statistical breakdown of enforcement actions taken during
                the last 10 years;
                    (ii) whether existing Federal financial institutions
                regulatory agency exemptions on appraisals for federally
                related transactions needs to be revised; and
                    (iii) whether new means of data collection, such as the
                establishment of a national repository, would benefit the
                Appraisal Subcommittee's ability to perform its functions;
                and
                (B) recommendations from this examination for
            administrative and legislative action at the Federal and State
            level.

                Subtitle G--Mortgage Resolution and Modification

    SEC. 1481. MULTIFAMILY MORTGAGE RESOLUTION PROGRAM.
        (a) Establishment.--The Secretary of Housing and Urban Development
    shall develop a program under this subsection to ensure the protection
    of current and future tenants and at-risk multifamily properties, where
    feasible, based on criteria that may include--
            (1) creating sustainable financing of such properties, that may
        take into consideration such factors as--
                (A) the rental income generated by such properties; and
                (B) the preservation of adequate operating reserves;
            (2) maintaining the level of Federal, State, and city subsidies
        in effect as of the date of the enactment of this Act;
            (3) providing funds for rehabilitation; and
            (4) facilitating the transfer of such properties, when
        appropriate and with the agreement of owners, to responsible new
        owners and ensuring affordability of such properties.
        (b) Coordination.--The Secretary of Housing and Urban Development
    may, in carrying out the program developed under this section,
    coordinate with the Secretary of the Treasury, the Federal Deposit
    Insurance Corporation, the Board of Governors of the Federal Reserve
    System, the Federal Housing Finance Agency, and any other Federal
    Government agency that the Secretary considers appropriate.
        (c) Definition.--For purposes of this section, the term
    ``multifamily properties'' means a residential structure that consists
    of 5 or more dwelling units.
        (d) Prevention of Qualification for Criminal Applicants.--
            (1) In general.--No person shall be eligible to begin receiving
        assistance from the Making Home Affordable Program authorized under
        the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5201 et
        seq.), or any other mortgage assistance program authorized or
        funded by that Act, on or after 60 days after the date of the
        enactment of this Act, if such person, in connection with a
        mortgage or real estate transaction, has been convicted, within the
        last 10 years, of any one of the following:
                (A) Felony larceny, theft, fraud, or forgery.
                (B) Money laundering.
                (C) Tax evasion.
            (2) Procedures.--The Secretary shall establish procedures to
        ensure compliance with this subsection.
            (3) Report.--The Secretary shall 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 implementation of this provision. The report shall
        also describe the steps taken to implement this subsection.
    SEC. 1482. HOME AFFORDABLE MODIFICATION PROGRAM GUIDELINES.
        (a) Net Present Value Input Data.--The Secretary of the Treasury
    (in this section referred to as the ``Secretary'') shall revise the
    supplemental directives and other guidelines for the Home Affordable
    Modification Program of the Making Home Affordable initiative of the
    Secretary of the Treasury, authorized under the Emergency Economic
    Stabilization Act of 2008 (Public Law 110-343), to require each
    mortgage servicer participating in such program to provide each
    borrower under a mortgage whose request for a mortgage modification
    under the Program is denied with all borrower-related and mortgage-
    related input data used in any net present value (NPV) analyses
    performed in connection with the subject mortgage. Such input data
    shall be provided to the borrower at the time of such denial.
        (b) Web-based Site for NPV Calculator and Application.--
            (1) NPV calculator.--In carrying out the Home Affordable
        Modification Program, the Secretary shall establish and maintain a
        site on the World Wide Web that provides a calculator for net
        present value analyses of a mortgage, based on the Secretary's
        methodology for calculating such value, that mortgagors can use to
        enter information regarding their own mortgages and that provides a
        determination after entering such information regarding a mortgage
        of whether such mortgage would be accepted or rejected for
        modification under the Program, using such methodology.
            (2) Disclosure.--Such Web site shall also prominently disclose
        that each mortgage servicer participating in such Program may use a
        method for calculating net present value of a mortgage that is
        different than the method used by such calculator.
            (3) Application.--The Secretary shall make a reasonable effort
        to include on such World Wide Web site a method for homeowners to
        apply for a mortgage modification under the Home Affordable
        Modification Program.
        (c) Public Availability of NPV Methodology, Computer Model, and
    Variables.--The Secretary shall make publicly available, including by
    posting on a World Wide Web site of the Secretary--
            (1) the Secretary's methodology and computer model, including
        all formulae used in such computer model, used for calculating net
        present value of a mortgage that is used by the calculator
        established pursuant to subsection (b); and
            (2) all non-proprietary variables used in such net present
        value analysis.
    SEC. 1483. PUBLIC AVAILABILITY OF INFORMATION OF MAKING HOME AFFORDABLE
    PROGRAM.
        (a) Revisions to Program Guidelines.--The Secretary of the Treasury
    (in this section referred to as the ``Secretary'') shall revise the
    guidelines for the Home Affordable Modification Program of the Making
    Home Affordable initiative of the Secretary of the Treasury, authorized
    under the Emergency Economic Stabilization Act of 2008 (Public Law 110-
    343), to provide that the data being collected by the Secretary from
    each mortgage servicer and lender participating in the Program is made
    public in accordance with subsection (b).
        (b) Public Availability.--Data shall be made available according to
    the following guidelines:
            (1) Not more than 14 days after each monthly deadline for
        submission of data by mortgage servicers and lenders participating
        in the Program, reports shall be made publicly available by means
        of a World Wide Web site of the Secretary, and by submitting a
        report to the Congress, that shall includes the following
        information:
                (A) The number of requests for mortgage modifications under
            the Program that the servicer or lender has received.
                (B) The number of requests for mortgage modifications under
            the Program that the servicer or lender has processed.
                (C) The number of requests for mortgage modifications under
            the Program that the servicer or lender has approved.
                (D) The number of requests for mortgage modifications under
            the Program that the servicer or lender has denied.
            (2) Not more than 60 days after each monthly deadline for
        submission of data by mortgage servicers and lenders participating
        in the Program, the Secretary shall make data tables available to
        the public at the individual record level. The Secretary shall
        issue regulations prescribing--
                (A) the procedures for disclosing such data to the public;
            and
                (B) such deletions as the Secretary may determine to be
            appropriate to protect any privacy interest of any mortgage
            modification applicant, including the deletion or alteration of
            the applicant's name and identification number.
    SEC. 1484. PROTECTING TENANTS AT FORECLOSURE EXTENSION AND
    CLARIFICATION.
        The Protecting Tenants at Foreclosure Act is amended--
            (1) in section 702 (12 U.S.C. 5220 note)--
                (A) in subsection (a)(2), by striking ``, as of the date of
            such notice of foreclosure''; and
                (B) in subsection (c), by inserting after the period the
            following: ``For purposes of this section, the date of a notice
            of foreclosure shall be deemed to be the date on which complete
            title to a property is transferred to a successor entity or
            person as a result of an order of a court or pursuant to
            provisions in a mortgage, deed of trust, or security deed.'';
            and
            (2) in section 704 (12 U.S.C. 5201 note), by striking ``2012''
        and inserting ``2014''.

                      Subtitle H--Miscellaneous Provisions

    SEC. 1491. SENSE OF CONGRESS REGARDING THE IMPORTANCE OF GOVERNMENT-
    SPONSORED ENTERPRISES REFORM TO ENHANCE THE PROTECTION, LIMITATION, AND
    REGULATION OF THE TERMS OF RESIDENTIAL MORTGAGE CREDIT.
        (a) Findings.--The Congress finds as follows:
            (1) The Government-sponsored enterprises, Federal National
        Mortgage Association (Fannie Mae) and the Federal Home Loan
        Mortgage Corporation (Freddie Mac), were chartered by Congress to
        ensure a reliable and affordable supply of mortgage funding, but
        enjoy a dual legal status as privately owned corporations with
        Government mandated affordable housing goals.
            (2) In 1996, the Department of Housing and Urban Development
        required that 42 percent of Fannie Mae's and Freddie Mac's mortgage
        financing should go to borrowers with income levels below the
        median for a given area.
            (3) In 2004, the Department of Housing and Urban Development
        revised those goals, increasing them to 56 percent of their overall
        mortgage purchases by 2008, and additionally mandated that 12
        percent of all mortgage purchases by Fannie Mae and Freddie Mac be
        ``special affordable'' loans made to borrowers with incomes less
        than 60 percent of an area's median income, a target that
        ultimately increased to 28 percent for 2008.
            (4) To help fulfill those mandated affordable housing goals, in
        1995 the Department of Housing and Urban Development authorized
        Fannie Mae and Freddie Mac to purchase subprime securities that
        included loans made to low-income borrowers.
            (5) After this authorization to purchase subprime securities,
        subprime and near-prime loans increased from 9 percent of
        securitized mortgages in 2001 to 40 percent in 2006, while the
        market share of conventional mortgages dropped from 78.8 percent in
        2003 to 50.1 percent by 2007 with a corresponding increase in
        subprime and Alt-A loans from 10.1 percent to 32.7 percent over the
        same period.
            (6) In 2004 alone, Fannie Mae and Freddie Mac purchased
        $175,000,000,000 in subprime mortgage securities, which accounted
        for 44 percent of the market that year, and from 2005 through 2007,
        Fannie Mae and Freddie Mac purchased approximately
        $1,000,000,000,000 in subprime and Alt-A loans, while Fannie Mae's
        acquisitions of mortgages with less than 10 percent down payments
        almost tripled.
            (7) According to data from the Federal Housing Finance Agency
        (FHFA) for the fourth quarter of 2008, Fannie Mae and Freddie Mac
        own or guarantee 75 percent of all newly originated mortgages, and
        Fannie Mae and Freddie Mac currently own 13.3 percent of
        outstanding mortgage debt in the United States and have issued
        mortgage-backed securities for 31.0 percent of the residential debt
        market, a combined total of 44.3 percent of outstanding mortgage
        debt in the United States.
            (8) On September 7, 2008, the FHFA placed Fannie Mae and
        Freddie Mac into conservatorship, with the Treasury Department
        subsequently agreeing to purchase at least $200,000,000,000 of
        preferred stock from each enterprise in exchange for warrants for
        the purchase of 79.9 percent of each enterprise's common stock.
            (9) The conservatorship for Fannie Mae and Freddie Mac has
        potentially exposed taxpayers to upwards of $5,300,000,000,000
        worth of risk.
            (10) The hybrid public-private status of Fannie Mae and Freddie
        Mac is untenable and must be resolved to assure that consumers are
        offered and receive residential mortgage loans on terms that
        reasonably reflect their ability to repay the loans and that are
        understandable and not unfair, deceptive, or abusive.
        (b) Sense of the Congress.--It is the sense of the Congress that
    efforts to enhance by the protection, limitation, and regulation of the
    terms of residential mortgage credit and the practices related to such
    credit would be incomplete without enactment of meaningful structural
    reforms of Fannie Mae and Freddie Mac.
    SEC. 1492. GAO STUDY REPORT ON GOVERNMENT EFFORTS TO COMBAT MORTGAGE
    FORECLOSURE RESCUE SCAMS AND LOAN MODIFICATION FRAUD.
        (a) Study.--The Comptroller General of the United States shall
    conduct a study of the current inter-agency efforts of the Secretary of
    the Treasury, the Secretary of Housing and Urban Development, the
    Attorney General, and the Federal Trade Commission to crackdown on
    mortgage foreclosure rescue scams and loan modification fraud in order
    to advise the Congress to the risks and vulnerabilities of emerging
    schemes in the loan modification arena.
        (b) Report.--
            (1) In general.--The Comptroller General shall submit a report
        to the Congress on the study conducted under subsection (a)
        containing such recommendations for legislative and administrative
        actions as the Comptroller General may determine to be appropriate
        in addition to the recommendations required under paragraph (2).
            (2) Specific topics.--The report made under paragraph (1) shall
        include--
                (A) an evaluation of the effectiveness of the inter-agency
            task force current efforts to combat mortgage foreclosure
            rescue scams and loan modification fraud scams;
                (B) specific recommendations on agency or legislative
            action that are essential to properly protect homeowners from
            mortgage foreclosure rescue scams and loan modification fraud
            scams; and
                (C) the adequacy of financial resources that the Federal
            Government is allocating to--
                    (i) crackdown on loan modification and foreclosure
                rescue scams; and
                    (ii) the education of homeowners about fraudulent scams
                relating to loan modification and foreclosure rescues.
    SEC. 1493. REPORTING OF MORTGAGE DATA BY STATE.
        (a) In General.--Section 104(a) of the Helping Families Save Their
    Homes Act of 2009 (division A of Public Law 111-22) is amended--
            (1) in paragraph (2), by striking ``resulting'' and inserting
        ``in each State that result'';
            (2) in paragraph (3), by inserting ``each State for'' after
        ``modifications in''; and
            (3) in paragraph (4), by inserting ``in each State'' after
        ``total number of loans''.
        (b) Conforming Amendment.--Section 104(b)(1)(A) of such Act is
    amended by adding at the end the following sentence: ``Not later than
    60 days after the date of the enactment of the Dodd-Frank Wall Street
    Reform and Consumer Protection Act, 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.''.
    SEC. 1494. STUDY OF EFFECT OF DRYWALL PRESENCE ON FORECLOSURES.
        (a) Study.--The Secretary of Housing and Urban Development, in
    consultation with the Secretary of the Treasury, shall conduct a study
    of the effect on residential mortgage loan foreclosures of--
            (1) the presence in residential structures subject to such
        mortgage loans of drywall that was imported from China during the
        period beginning with 2004 and ending at the end of 2007; and
            (2) the availability of property insurance for residential
        structures in which such drywall is present.
        (b) Report.--Not later than the expiration of the 120-day period
    beginning on the date of the enactment of this Act, the Secretary of
    Housing and Urban Development shall submit to the Congress a report on
    the study conducted under subsection (a) containing its findings,
    conclusions, and recommendations.
    SEC. 1495. DEFINITION.
        For purposes of this title, the term ``designated transfer date''
    means the date established under section 1062 of this Act.
    SEC. 1496. EMERGENCY MORTGAGE RELIEF.
        (a) Emergency Homeowners' Relief Fund.--Effective October 1, 2010,
    and notwithstanding any other provision of law, there is hereby made
    available to the Secretary of Housing and Urban Development such sums
    as are necessary to provide $1,000,000,000 in assistance through the
    Emergency Homeowners' Relief Fund, which such Secretary shall establish
    pursuant to section 107 of the Emergency Housing Act of 1975 (12 U.S.C.
    2706), as such Act is amended by this section, for use for emergency
    mortgage assistance in accordance with title I of such Act.
        (b) Reauthorization of Emergency Mortgage Relief Program.--Title I
    of the Emergency Housing Act of 1975 is amended--
            (1) in section 103 (12 U.S.C. 2702)--
                (A) in paragraph (2)--
                    (i) by striking ``have indicated'' and all that follows
                through ``regulation of the holder'' and insert ``have
                certified'';
                    (ii) by striking ``(such as the volume of delinquent
                loans in its portfolio)''; and
                    (iii) by striking ``, except that such statement'' and
                all that follows through ``purposes of this title''; and
                (B) in paragraph (4), by inserting ``or medical
            conditions'' after ``adverse economic conditions'';
            (2) in section 104 (12 U.S.C. 2703)--
                (A) in subsection (b), by striking ``, but such
            assistance'' and all that follows through the period at the end
            and inserting the following: ``. The amount of assistance
            provided to a homeowner under this title shall be an amount
            that the Secretary determines is reasonably necessary to
            supplement such amount as the homeowner is capable of
            contributing toward such mortgage payment, except that the
            aggregate amount of such assistance provided for any homeowner
            shall not exceed $50,000.'';
                (B) in subsection (d), by striking ``interest on a loan or
            advance'' and all that follows through the end of the
            subsection and inserting the following: ``(1) the rate of
            interest on any loan or advance of credit insured under this
            title shall be fixed for the life of the loan or advance of
            credit and shall not exceed the rate of interest that is
            generally charged for mortgages on single-family housing
            insured by the Secretary of Housing and Urban Development under
            title II of the National Housing Act at the time such loan or
            advance of credit is made, and (2) no interest shall be charged
            on interest which is deferred on a loan or advance of credit
            made under this title. In establishing rates, terms and
            conditions for loans or advances of credit made under this
            title, the Secretary shall take into account a homeowner's
            ability to repay such loan or advance of credit.''; and
                (C) in subsection (e), by inserting after the period at the
            end of the first sentence the following: ``Any eligible
            homeowner who receives a grant or an advance of credit under
            this title may repay the loan in full, without penalty, by lump
            sum or by installment payments at any time before the loan
            becomes due and payable.'';
            (3) in section 105 (12 U.S.C. 2704)--
                (A) by striking subsection (b);
                (B) in subsection (e)--
                    (i) by inserting ``and emergency mortgage relief
                payments made under section 106'' after ``insured under
                this section''; and
                    (ii) by striking ``$1,500,000,000 at any one time'' and
                inserting ``$3,000,000,000'';
                (C) by redesignating subsections (c), (d), and (e) as
            subsections (b), (c), and (d), respectively; and
                (D) by adding at the end the following new subsection:
        ``(e) The Secretary shall establish underwriting guidelines or
    procedures to allocate amounts made available for loans and advances
    insured under this section and for emergency relief payments made under
    section 106 based on the likelihood that a mortgagor will be able to
    resume mortgage payments, pursuant to the requirement under section
    103(5).'';
            (4) in section 107--
                (A) by striking ``(a)''; and
                (B) by striking subsection (b);
            (5) in section 108 (12 U.S.C. 2707), by adding at the end the
        following new subsection:
        ``(d) Coverage of Existing Programs.--The Secretary shall allow
    funds to be administered by a State that has an existing program that
    is determined by the Secretary to provide substantially similar
    assistance to homeowners. After such determination is made such State
    shall not be required to modify such program to comply with the
    provisions of this title.'';
            (6) in section 109 (12 U.S.C. 2708)--
                (A) in the section heading, by striking ``authorization
            and'';
                (B) by striking subsection (a);
                (C) by striking ``(b)''; and
                (D) by striking ``1977'' and inserting ``2011'';
            (7) by striking sections 110, 111, and 113 (12 U.S.C. 2709,
        2710, 2712); and
            (8) by redesignating section 112 (12 U.S.C. 2711) as section
        110.
    SEC. 1497. ADDITIONAL ASSISTANCE FOR NEIGHBORHOOD STABILIZATION
    PROGRAM.
        (a) In General.--Effective October 1, 2010, out of funds in the
    Treasury not otherwise appropriated, there is hereby made available to
    the Secretary of Housing and Urban Development $1,000,000,000, and the
    Secretary of Housing and Urban Development shall use such amounts for
    assistance to States and units of general local government for the
    redevelopment of abandoned and foreclosed homes, in accordance with the
    same provisions applicable under the second undesignated paragraph
    under the heading ``Community Planning and Development--Community
    Development Fund'' in title XII of division A of the American Recovery
    and Reinvestment Act of 2009 (Public Law 111-5; 123 Stat. 217) to
    amounts made available under such second undesignated paragraph, except
    as follows:
            (1) Notwithstanding the matter of such second undesignated
        paragraph that precedes the first proviso, amounts made available
        by this section shall remain available until expended.
            (2) The 3rd, 4th, 5th, 6th, 7th, and 15th provisos of such
        second undesignated paragraph shall not apply to amounts made
        available by this section.
            (3) Amounts made available by this section shall be allocated
        based on a funding formula for such amounts established by the
        Secretary in accordance with section 2301(b) of the Housing and
        Economic Recovery Act of 2008 (42 U.S.C. 5301 note), except that--
                (A) notwithstanding paragraph (2) of such section 2301(b),
            the formula shall be established not later than 30 days after
            the date of the enactment of this Act;
                (B) notwithstanding such section 2301(b), each State shall
            receive, at a minimum, not less than 0.5 percent of funds made
            available under this section;
                (C) the Secretary may establish a minimum grant amount for
            direct allocations to units of general local government located
            within a State, which shall not exceed $1,000,000;
                (D) each State and local government receiving grant amounts
            shall establish procedures to create preferences for the
            development of affordable rental housing for properties
            assisted with amounts made available by this section; and
                (E) the Secretary may use not more than 2 percent of the
            funds made available under this section for technical
            assistance to grantees.
            (4) Paragraph (1) of section 2301(c) of the Housing and
        Economic Recovery Act of 2008 shall not apply to amounts made
        available by this section.
            (5) The fourth proviso from the end of such second undesignated
        paragraph shall be applied to amounts made available by this
        section by substituting ``2013'' for ``2012''.
            (6) Notwithstanding section 2301(a) of the Housing and Economic
        Recovery Act of 2008, the term ``State'' means any State, as
        defined in section 102 of the Housing and Community Development Act
        of 1974 (42 U.S.C. 5302), and the District of Columbia, for
        purposes of this section and this title, as applied to amounts made
        available by this section.
            (7)(A) None of the amounts made available by this section shall
        be distributed to--
                (i) any organization which has been convicted for a
            violation under Federal law relating to an election for Federal
            office; or
                (ii) any organization which employs applicable individuals.
            (B) In this paragraph, the term ``applicable individual'' means
        an individual who--
                (i) is--
                    (I) employed by the organization in a permanent or
                temporary capacity;
                    (II) contracted or retained by the organization; or
                    (III) acting on behalf of, or with the express or
                apparent authority of, the organization; and
                (ii) has been convicted for a violation under Federal law
            relating to an election for Federal office.
            (8) An eligible entity receiving a grant under this section
        shall, to the maximum extent feasible, provide for the hiring of
        employees who reside in the vicinity, as such term is defined by
        the Secretary, of projects funded under this section or contract
        with small businesses that are owned and operated by persons
        residing in the vicinity of such projects.
        (b) Additional Amendments.--
            (1) Section 2301.--Section 2301(f)(3)(A)(ii) of the Housing and
        Economic Recovery Act of 2008 (42 U.S.C. 5301(f)(3)(A)(ii))--
                (A) is amended by striking ``for the purchase and
            redevelopment of abandoned and foreclosed upon homes or
            residential properties that will be used''; and
                (B) shall apply with respect to any unexpended or
            unobligated balances, including recaptured and reallocated
            funds made available under this Act, section 2301 of the
            Housing and Economic Recovery Act of 2008 (42 U.S.C. 5301), and
            the heading ``Community Planning and Development--Community
            Development Fund'' in title XII of division A of the American
            Recovery and Reinvestment Act of 2009 (Public Law 111-5; 123
            Stat. 217).
            (2) Notice of foreclosure.--For any amounts made available
        under this section, under division B, title III of the Housing and
        Economic Recovery Act of 2008 (42 U.S.C. 5301), or under the
        heading ``Community Planning and Development--Community Development
        Fund'' in title XII of division A of the American Recovery and
        Reinvestment Act of 2009 (Public Law 111-5; 123 Stat. 217), the
        date of a notice of foreclosure shall be deemed to be the date on
        which complete title to a property is transferred to a successor
        entity or person as a result of an order of a court or pursuant to
        provisions in a mortgage, deed of trust, or security deed.
    SEC. 1498. LEGAL ASSISTANCE FOR FORECLOSURE-RELATED ISSUES.
        (a) Establishment.--The Secretary of Housing and Urban Development
    (hereafter in this section referred to as the ``Secretary'') shall
    establish a program for making grants for providing a full range of
    foreclosure legal assistance to low- and moderate-income homeowners and
    tenants related to home ownership preservation, home foreclosure
    prevention, and tenancy associated with home foreclosure.
        (b) Competitive Allocation.--The Secretary shall allocate amounts
    made available for grants under this section to State and local legal
    organizations on the basis of a competitive process. For purposes of
    this subsection ``State and local legal organizations'' are those State
    and local organizations whose primary business or mission is to provide
    legal assistance.
        (c) Priority to Certain Areas.--In allocating amounts in accordance
    with subsection (b), the Secretary shall give priority consideration to
    State and local legal organizations that are operating in the 125
    metropolitan statistical areas (as that term is defined by the Director
    of the Office of Management and Budget) with the highest home
    foreclosure rates.
        (d) Legal Assistance.--
            (1) In general.--Any State or local legal organization that
        receives financial assistance pursuant to this section may use such
        amounts only to assist--
                (A) homeowners of owner-occupied homes with mortgages in
            default, in danger of default, or subject to or at risk of
            foreclosure; and
                (B) tenants at risk of or subject to eviction as a result
            of foreclosure of the property in which such tenant resides.
            (2) Commence use within 90 days.--Any State or local legal
        organization that receives financial assistance pursuant to this
        section shall begin using any financial assistance received under
        this section within 90 days after receipt of the assistance.
            (3) Prohibition on class actions.--No funds provided to a State
        or local legal organization under this section may be used to
        support any class action litigation.
            (4) Limitation on legal assistance.--Legal assistance funded
        with amounts provided under this section shall be limited to
        mortgage-related default, eviction, or foreclosure proceedings,
        without regard to whether such foreclosure is judicial or
        nonjudicial.
            (5) Effective date.--Notwithstanding any other provision of
        this Act, this subsection shall take effect on the date of the
        enactment of this Act.
        (e) Limitation on Distribution of Assistance.--
            (1) In general.--None of the amounts made available under this
        section shall be distributed to--
                (A) any organization which has been convicted for a
            violation under Federal law relating to an election for Federal
            office; or
                (B) any organization which employs applicable individuals.
            (2) Definition of applicable individuals.--In this subsection,
        the term ``applicable individual'' means an individual who--
                (A) is--
                    (i) employed by the organization in a permanent or
                temporary capacity;
                    (ii) contracted or retained by the organization; or
                    (iii) acting on behalf of, or with the express or
                apparent authority of, the organization; and
                (B) has been convicted for a violation under Federal law
            relating to an election for Federal office.
        (f) Authorization of Appropriations.--There are authorized to be
    appropriated to the Secretary $35,000,000 for each of fiscal years 2011
    through 2012 for grants under this section.

                       TITLE XV--MISCELLANEOUS PROVISIONS

    SEC. 1501. RESTRICTIONS ON USE OF UNITED STATES FUNDS FOR FOREIGN
    GOVERNMENTS; PROTECTION OF AMERICAN TAXPAYERS.
        The Bretton Woods Agreements Act (22 U.S.C. 286 et seq.) is amended
    by adding at the end the following:
      ``SEC. 68. RESTRICTIONS ON USE OF UNITED STATES FUNDS FOR FOREIGN
          GOVERNMENTS; PROTECTION OF AMERICAN TAXPAYERS.
        ``(a) In General.--The Secretary of the Treasury shall instruct the
    United States Executive Director at the International Monetary Fund--
            ``(1) to evaluate, prior to consideration by the Board of
        Executive Directors of the Fund , any proposal submitted to the
        Board for the Fund to make a loan to a country if--
                ``(A) the amount of the public debt of the country exceeds
            the gross domestic product of the country as of the most recent
            year for which such information is available; and
                ``(B) the country is not eligible for assistance from the
            International Development Association.
            ``(2) Opposition to loans unlikely to be repaid in full.--If
        any such evaluation indicates that the proposed loan is not likely
        to be repaid in full, the Secretary of the Treasury shall instruct
        the United States Executive Director at the Fund to use the voice
        and vote of the United States to oppose the proposal.
        ``(b) Reports to Congress.--Within 30 days after the Board of
    Executive Directors of the Fund approves a proposal described in
    subsection (a), and annually thereafter by June 30, for the duration of
    any program approved under such proposals, the Secretary of the
    Treasury shall report in writing to the Committee on Financial Services
    of the House of Representatives and the Committee on Foreign Relations
    and the Committee on Banking, Housing, and Urban Affairs of the Senate
    assessing the likelihood that loans made pursuant to such proposals
    will be repaid in full, including--
            ``(1) the borrowing country's current debt status, including,
        to the extent possible, its maturity structure, whether it has
        fixed or floating rates, whether it is indexed, and by whom it is
        held;
            ``(2) the borrowing country's external and internal
        vulnerabilities that could potentially affect its ability to repay;
        and
            ``(3) the borrowing country's debt management strategy.''.
    SEC. 1502. CONFLICT MINERALS.
        (a) Sense of Congress on Exploitation and Trade of Conflict
    Minerals Originating in the Democratic Republic of the Congo.--It is
    the sense of Congress that the exploitation and trade of conflict
    minerals originating in the Democratic Republic of the Congo is helping
    to finance conflict characterized by extreme levels of violence in the
    eastern Democratic Republic of the Congo, particularly sexual- and
    gender-based violence, and contributing to an emergency humanitarian
    situation therein, warranting the provisions of section 13(p) of the
    Securities Exchange Act of 1934, as added by subsection (b).
        (b) Disclosure Relating to Conflict Minerals Originating in the
    Democratic Republic of the Congo.--Section 13 of the Securities
    Exchange Act of 1934 (15 U.S.C. 78m), as amended by this Act, is
    amended by adding at the end the following new subsection:
        ``(p) Disclosures Relating to Conflict Minerals Originating in the
    Democratic Republic of the Congo.--
            ``(1) Regulations.--
                ``(A) In general.--Not later than 270 days after the date
            of the enactment of this subsection, the Commission shall
            promulgate regulations requiring any person described in
            paragraph (2) to disclose annually, beginning with the person's
            first full fiscal year that begins after the date of
            promulgation of such regulations, whether conflict minerals
            that are necessary as described in paragraph (2)(B), in the
            year for which such reporting is required, did originate in the
            Democratic Republic of the Congo or an adjoining country and,
            in cases in which such conflict minerals did originate in any
            such country, submit to the Commission a report that includes,
            with respect to the period covered by the report--
                    ``(i) a description of the measures taken by the person
                to exercise due diligence on the source and chain of
                custody of such minerals, which measures shall include an
                independent private sector audit of such report submitted
                through the Commission that is conducted in accordance with
                standards established by the Comptroller General of the
                United States, in accordance with rules promulgated by the
                Commission, in consultation with the Secretary of State;
                and
                    ``(ii) a description of the products manufactured or
                contracted to be manufactured that are not DRC conflict
                free (`DRC conflict free' is defined to mean the products
                that do not contain minerals that directly or indirectly
                finance or benefit armed groups in the Democratic Republic
                of the Congo or an adjoining country), the entity that
                conducted the independent private sector audit in
                accordance with clause (i), the facilities used to process
                the conflict minerals, the country of origin of the
                conflict minerals, and the efforts to determine the mine or
                location of origin with the greatest possible specificity.
                ``(B) Certification.--The person submitting a report under
            subparagraph (A) shall certify the audit described in clause
            (i) of such subparagraph that is included in such report. Such
            a certified audit shall constitute a critical component of due
            diligence in establishing the source and chain of custody of
            such minerals.
                ``(C) Unreliable determination.--If a report required to be
            submitted by a person under subparagraph (A) relies on a
            determination of an independent private sector audit, as
            described under subparagraph (A)(i), or other due diligence
            processes previously determined by the Commission to be
            unreliable, the report shall not satisfy the requirements of
            the regulations promulgated under subparagraph (A)(i).
                ``(D) DRC conflict free.--For purposes of this paragraph, a
            product may be labeled as `DRC conflict free' if the product
            does not contain conflict minerals that directly or indirectly
            finance or benefit armed groups in the Democratic Republic of
            the Congo or an adjoining country.
                ``(E) Information available to the public.--Each person
            described under paragraph (2) shall make available to the
            public on the Internet website of such person the information
            disclosed by such person under subparagraph (A).
            ``(2) Person described.--A person is described in this
        paragraph if--
                ``(A) the person is required to file reports with the
            Commission pursuant to paragraph (1)(A); and
                ``(B) conflict minerals are necessary to the functionality
            or production of a product manufactured by such person.
            ``(3) Revisions and waivers.--The Commission shall revise or
        temporarily waive the requirements described in paragraph (1) if
        the President transmits to the Commission a determination that--
                ``(A) such revision or waiver is in the national security
            interest of the United States and the President includes the
            reasons therefor; and
                ``(B) establishes a date, not later than 2 years after the
            initial publication of such exemption, on which such exemption
            shall expire.
            ``(4) Termination of disclosure requirements.--The requirements
        of paragraph (1) shall terminate on the date on which the President
        determines and certifies to the appropriate congressional
        committees, but in no case earlier than the date that is one day
        after the end of the 5-year period beginning on the date of the
        enactment of this subsection, that no armed groups continue to be
        directly involved and benefitting from commercial activity
        involving conflict minerals.
            ``(5) Definitions.--For purposes of this subsection, the terms
        `adjoining country', `appropriate congressional committees', `armed
        group', and `conflict mineral' have the meaning given those terms
        under section 1502 of the Dodd-Frank Wall Street Reform and
        Consumer Protection Act.''.
        (c) Strategy and Map to Address Linkages Between Conflict Minerals
    and Armed Groups.--
            (1) Strategy.--
                (A) In general.--Not later than 180 days after the date of
            the enactment of this Act, the Secretary of State, in
            consultation with the Administrator of the United States Agency
            for International Development, shall submit to the appropriate
            congressional committees a strategy to address the linkages
            between human rights abuses, armed groups, mining of conflict
            minerals, and commercial products.
                (B) Contents.--The strategy required by subparagraph (A)
            shall include the following:
                    (i) A plan to promote peace and security in the
                Democratic Republic of the Congo by supporting efforts of
                the Government of the Democratic Republic of the Congo,
                including the Ministry of Mines and other relevant
                agencies, adjoining countries, and the international
                community, in particular the United Nations Group of
                Experts on the Democratic Republic of Congo, to--

                        (I) monitor and stop commercial activities
                    involving the natural resources of the Democratic
                    Republic of the Congo that contribute to the activities
                    of armed groups and human rights violations in the
                    Democratic Republic of the Congo; and
                        (II) develop stronger governance and economic
                    institutions that can facilitate and improve
                    transparency in the cross-border trade involving the
                    natural resources of the Democratic Republic of the
                    Congo to reduce exploitation by armed groups and
                    promote local and regional development.

                    (ii) A plan to provide guidance to commercial entities
                seeking to exercise due diligence on and formalize the
                origin and chain of custody of conflict minerals used in
                their products and on their suppliers to ensure that
                conflict minerals used in the products of such suppliers do
                not directly or indirectly finance armed conflict or result
                in labor or human rights violations.
                    (iii) A description of punitive measures that could be
                taken against individuals or entities whose commercial
                activities are supporting armed groups and human rights
                violations in the Democratic Republic of the Congo.
            (2) Map.--
                (A) In general.--Not later than 180 days after the date of
            the enactment of this Act, the Secretary of State shall, in
            accordance with the recommendation of the United Nations Group
            of Experts on the Democratic Republic of the Congo in their
            December 2008 report--
                    (i) produce a map of mineral-rich zones, trade routes,
                and areas under the control of armed groups in the
                Democratic Republic of the Congo and adjoining countries
                based on data from multiple sources, including--

                        (I) the United Nations Group of Experts on the
                    Democratic Republic of the Congo;
                        (II) the Government of the Democratic Republic of
                    the Congo, the governments of adjoining countries, and
                    the governments of other Member States of the United
                    Nations; and
                        (III) local and international nongovernmental
                    organizations;

                    (ii) make such map available to the public; and
                    (iii) provide to the appropriate congressional
                committees an explanatory note describing the sources of
                information from which such map is based and the
                identification, where possible, of the armed groups or
                other forces in control of the mines depicted.
                (B) Designation.--The map required under subparagraph (A)
            shall be known as the ``Conflict Minerals Map'', and mines
            located in areas under the control of armed groups in the
            Democratic Republic of the Congo and adjoining countries, as
            depicted on such Conflict Minerals Map, shall be known as
            ``Conflict Zone Mines''.
                (C) Updates.--The Secretary of State shall update the map
            required under subparagraph (A) not less frequently than once
            every 180 days until the date on which the disclosure
            requirements under paragraph (1) of section 13(p) of the
            Securities Exchange Act of 1934, as added by subsection (b),
            terminate in accordance with the provisions of paragraph (4) of
            such section 13(p).
                (D) Publication in federal register.--The Secretary of
            State shall add minerals to the list of minerals in the
            definition of conflict minerals under section 1502, as
            appropriate. The Secretary shall publish in the Federal
            Register notice of intent to declare a mineral as a conflict
            mineral included in such definition not later than one year
            before such declaration.
        (d) Reports.--
            (1) Baseline report.--Not later than 1 year after the date of
        the enactment of this Act and annually thereafter until the
        termination of the disclosure requirements under section 13(p) of
        the Securities Exchange Act of 1934, the Comptroller General of the
        United States shall submit to appropriate congressional committees
        a report that includes an assessment of the rate of sexual- and
        gender-based violence in war-torn areas of the Democratic Republic
        of the Congo and adjoining countries.
            (2) Regular report on effectiveness.--Not later than 2 years
        after the date of the enactment of this Act and annually
        thereafter, the Comptroller General of the United States shall
        submit to the appropriate congressional committees a report that
        includes the following:
                (A) An assessment of the effectiveness of section 13(p) of
            the Securities Exchange Act of 1934, as added by subsection
            (b), in promoting peace and security in the Democratic Republic
            of the Congo and adjoining countries.
                (B) A description of issues encountered by the Securities
            and Exchange Commission in carrying out the provisions of such
            section 13(p).
                (C)(i) A general review of persons described in clause (ii)
            and whether information is publicly available about--
                    (I) the use of conflict minerals by such persons; and
                    (II) whether such conflict minerals originate from the
                Democratic Republic of the Congo or an adjoining country.
                (ii) A person is described in this clause if--
                    (I) the person is not required to file reports with the
                Securities and Exchange Commission pursuant to section
                13(p)(1)(A) of the Securities Exchange Act of 1934, as
                added by subsection (b); and
                    (II) conflict minerals are necessary to the
                functionality or production of a product manufactured by
                such person.
            (3) Report on private sector auditing.--Not later than 30
        months after the date of the enactment of this Act, and annually
        thereafter, the Secretary of Commerce shall submit to the
        appropriate congressional committees a report that includes the
        following:
                (A) An assessment of the accuracy of the independent
            private sector audits and other due diligence processes
            described under section 13(p) of the Securities Exchange Act of
            1934.
                (B) Recommendations for the processes used to carry out
            such audits, including ways to--
                    (i) improve the accuracy of such audits; and
                    (ii) establish standards of best practices.
                (C) A listing of all known conflict mineral processing
            facilities worldwide.
        (e) Definitions.--For purposes of this section:
            (1) Adjoining country.--The term ``adjoining country'', with
        respect to the Democratic Republic of the Congo, means a country
        that shares an internationally recognized border with the
        Democratic Republic of the Congo.
            (2) Appropriate congressional committees.--The term
        ``appropriate congressional committees'' means--
                (A) the Committee on Appropriations, the Committee on
            Foreign Affairs, the Committee on Ways and Means, and the
            Committee on Financial Services of the House of
            Representatives; and
                (B) the Committee on Appropriations, the Committee on
            Foreign Relations, the Committee on Finance, and the Committee
            on Banking, Housing, and Urban Affairs of the Senate.
            (3) Armed group.--The term ``armed group'' means an armed group
        that is identified as perpetrators of serious human rights abuses
        in the annual Country Reports on Human Rights Practices under
        sections 116(d) and 502B(b) of the Foreign Assistance Act of 1961
        (22 U.S.C. 2151n(d) and 2304(b)) relating to the Democratic
        Republic of the Congo or an adjoining country.
            (4) Conflict mineral.--The term ``conflict mineral'' means--
                (A) columbite-tantalite (coltan), cassiterite, gold,
            wolframite, or their derivatives; or
                (B) any other mineral or its derivatives determined by the
            Secretary of State to be financing conflict in the Democratic
            Republic of the Congo or an adjoining country.
            (5) Under the control of armed groups.--The term ``under the
        control of armed groups'' means areas within the Democratic
        Republic of the Congo or adjoining countries in which armed
        groups--
                (A) physically control mines or force labor of civilians to
            mine, transport, or sell conflict minerals;
                (B) tax, extort, or control any part of trade routes for
            conflict minerals, including the entire trade route from a
            Conflict Zone Mine to the point of export from the Democratic
            Republic of the Congo or an adjoining country; or
                (C) tax, extort, or control trading facilities, in whole or
            in part, including the point of export from the Democratic
            Republic of the Congo or an adjoining country.
    SEC. 1503. REPORTING REQUIREMENTS REGARDING COAL OR OTHER MINE SAFETY.
        (a) Reporting Mine Safety Information.--Each issuer that is
    required to file reports pursuant to section 13(a) or 15(d) of the
    Securities Exchange Act of 1934 (15 U.S.C. 78m, 78o) and that is an
    operator, or that has a subsidiary that is an operator, of a coal or
    other mine shall include, in each periodic report filed with the
    Commission under the securities laws on or after the date of enactment
    of this Act, the following information for the time period covered by
    such report:
            (1) For each coal or other mine of which the issuer or a
        subsidiary of the issuer is an operator--
                (A) the total number of violations of mandatory health or
            safety standards that could significantly and substantially
            contribute to the cause and effect of a coal or other mine
            safety or health hazard under section 104 of the Federal Mine
            Safety and Health Act of 1977 (30 U.S.C. 814) for which the
            operator received a citation from the Mine Safety and Health
            Administration;
                (B) the total number of orders issued under section 104(b)
            of such Act (30 U.S.C. 814(b));
                (C) the total number of citations and orders for
            unwarrantable failure of the mine operator to comply with
            mandatory health or safety standards under section 104(d) of
            such Act (30 U.S.C. 814(d));
                (D) the total number of flagrant violations under section
            110(b)(2) of such Act (30 U.S.C. 820(b)(2));
                (E) the total number of imminent danger orders issued under
            section 107(a) of such Act (30 U.S.C. 817(a));
                (F) the total dollar value of proposed assessments from the
            Mine Safety and Health Administration under such Act (30 U.S.C.
            801 et seq.); and
                (G) the total number of mining-related fatalities.
            (2) A list of such coal or other mines, of which the issuer or
        a subsidiary of the issuer is an operator, that receive written
        notice from the Mine Safety and Health Administration of--
                (A) a pattern of violations of mandatory health or safety
            standards that are of such nature as could have significantly
            and substantially contributed to the cause and effect of coal
            or other mine health or safety hazards under section 104(e) of
            such Act (30 U.S.C. 814(e)); or
                (B) the potential to have such a pattern.
            (3) Any pending legal action before the Federal Mine Safety and
        Health Review Commission involving such coal or other mine.
        (b) Reporting Shutdowns and Patterns of Violations.--Beginning on
    and after the date of enactment of this Act, each issuer that is an
    operator, or that has a subsidiary that is an operator, of a coal or
    other mine shall file a current report with the Commission on Form 8-K
    (or any successor form) disclosing the following regarding each coal or
    other mine of which the issuer or subsidiary is an operator:
            (1) The receipt of an imminent danger order issued under
        section 107(a) of the Federal Mine Safety and Health Act of 1977
        (30 U.S.C. 817(a)).
            (2) The receipt of written notice from the Mine Safety and
        Health Administration that the coal or other mine has--
                (A) a pattern of violations of mandatory health or safety
            standards that are of such nature as could have significantly
            and substantially contributed to the cause and effect of coal
            or other mine health or safety hazards under section 104(e) of
            such Act (30 U.S.C. 814(e)); or
                (B) the potential to have such a pattern.
        (c) Rule of Construction.--Nothing in this section shall be
    construed to affect any obligation of a person to make a disclosure
    under any other applicable law in effect before, on, or after the date
    of enactment of this Act.
        (d) Commission Authority.--
            (1) Enforcement.--A violation by any person of this section, or
        any rule or regulation of the Commission issued under this section,
        shall be treated for all purposes in the same manner as a violation
        of the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) or
        the rules and regulations issued thereunder, consistent with the
        provisions of this section, and any such person shall be subject to
        the same penalties, and to the same extent, as for a violation of
        such Act or the rules or regulations issued thereunder.
            (2) Rules and regulations.--The Commission is authorized to
        issue such rules or regulations as are necessary or appropriate for
        the protection of investors and to carry out the purposes of this
        section.
        (e) Definitions.--In this section--
            (1) the terms ``issuer'' and ``securities laws'' have the
        meaning given the terms in section 3 of the Securities Exchange Act
        of 1934 (15 U.S.C. 78c);
            (2) the term ``coal or other mine'' means a coal or other mine,
        as defined in section 3 of the Federal Mine Safety and Health Act
        of 1977 (30 U.S.C. 802), that is subject to the provisions of such
        Act (30 U.S.C. 801 et seq.); and
            (3) the term ``operator'' has the meaning given the term in
        section 3 of the Federal Mine Safety and Health Act of 1977 (30
        U.S.C. 802).
        (f) Effective Date.--This section shall take effect on the day that
    is 30 days after the date of enactment of this Act.
    SEC. 1504. DISCLOSURE OF PAYMENTS BY RESOURCE EXTRACTION ISSUERS.
        Section 13 of the Securities Exchange Act of 1934 (15 U.S.C. 78m),
    as amended by this Act, is amended by adding at the end the following:
        ``(q) Disclosure of Payments by Resource Extraction Issuers.--
            ``(1) Definitions.--In this subsection--
                ``(A) the term `commercial development of oil, natural gas,
            or minerals' includes exploration, extraction, processing,
            export, and other significant actions relating to oil, natural
            gas, or minerals, or the acquisition of a license for any such
            activity, as determined by the Commission;
                ``(B) the term `foreign government' means a foreign
            government, a department, agency, or instrumentality of a
            foreign government, or a company owned by a foreign government,
            as determined by the Commission;
                ``(C) the term `payment'--
                    ``(i) means a payment that is--

                        ``(I) made to further the commercial development of
                    oil, natural gas, or minerals; and
                        ``(II) not de minimis; and

                    ``(ii) includes taxes, royalties, fees (including
                license fees), production entitlements, bonuses, and other
                material benefits, that the Commission, consistent with the
                guidelines of the Extractive Industries Transparency
                Initiative (to the extent practicable), determines are part
                of the commonly recognized revenue stream for the
                commercial development of oil, natural gas, or minerals;
                ``(D) the term `resource extraction issuer' means an issuer
            that--
                    ``(i) is required to file an annual report with the
                Commission; and
                    ``(ii) engages in the commercial development of oil,
                natural gas, or minerals;
                ``(E) the term `interactive data format' means an
            electronic data format in which pieces of information are
            identified using an interactive data standard; and
                ``(F) the term `interactive data standard' means
            standardized list of electronic tags that mark information
            included in the annual report of a resource extraction issuer.
            ``(2) Disclosure.--
                ``(A) Information required.--Not later than 270 days after
            the date of enactment of the Dodd-Frank Wall Street Reform and
            Consumer Protection Act, the Commission shall issue final rules
            that require each resource extraction issuer to include in an
            annual report of the resource extraction issuer information
            relating to any payment made by the resource extraction issuer,
            a subsidiary of the resource extraction issuer, or an entity
            under the control of the resource extraction issuer to a
            foreign government or the Federal Government for the purpose of
            the commercial development of oil, natural gas, or minerals,
            including--
                    ``(i) the type and total amount of such payments made
                for each project of the resource extraction issuer relating
                to the commercial development of oil, natural gas, or
                minerals; and
                    ``(ii) the type and total amount of such payments made
                to each government.
                ``(B) Consultation in rulemaking.--In issuing rules under
            subparagraph (A), the Commission may consult with any agency or
            entity that the Commission determines is relevant.
                ``(C) Interactive data format.--The rules issued under
            subparagraph (A) shall require that the information included in
            the annual report of a resource extraction issuer be submitted
            in an interactive data format.
                ``(D) Interactive data standard.--
                    ``(i) In general.--The rules issued under subparagraph
                (A) shall establish an interactive data standard for the
                information included in the annual report of a resource
                extraction issuer.
                    ``(ii) Electronic tags.--The interactive data standard
                shall include electronic tags that identify, for any
                payments made by a resource extraction issuer to a foreign
                government or the Federal Government--

                        ``(I) the total amounts of the payments, by
                    category;
                        ``(II) the currency used to make the payments;
                        ``(III) the financial period in which the payments
                    were made;
                        ``(IV) the business segment of the resource
                    extraction issuer that made the payments;
                        ``(V) the government that received the payments,
                    and the country in which the government is located;
                        ``(VI) the project of the resource extraction
                    issuer to which the payments relate; and
                        ``(VII) such other information as the Commission
                    may determine is necessary or appropriate in the public
                    interest or for the protection of investors.

                ``(E) International transparency efforts.--To the extent
            practicable, the rules issued under subparagraph (A) shall
            support the commitment of the Federal Government to
            international transparency promotion efforts relating to the
            commercial development of oil, natural gas, or minerals.
                ``(F) Effective date.--With respect to each resource
            extraction issuer, the final rules issued under subparagraph
            (A) shall take effect on the date on which the resource
            extraction issuer is required to submit an annual report
            relating to the fiscal year of the resource extraction issuer
            that ends not earlier than 1 year after the date on which the
            Commission issues final rules under subparagraph (A).
            ``(3) Public availability of information.--
                ``(A) In general.--To the extent practicable, the
            Commission shall make available online, to the public, a
            compilation of the information required to be submitted under
            the rules issued under paragraph (2)(A).
                ``(B) Other information.--Nothing in this paragraph shall
            require the Commission to make available online information
            other than the information required to be submitted under the
            rules issued under paragraph (2)(A).
            ``(4) Authorization of appropriations.--There are authorized to
        be appropriated to the Commission such sums as may be necessary to
        carry out this subsection.''.
    SEC. 1505. STUDY BY THE COMPTROLLER GENERAL.
        (a) In General.--Not later than 1 year after the date of enactment
    of this Act, the Comptroller General of the United States shall issue a
    report assessing the relative independence, effectiveness, and
    expertise of presidentially appointed inspectors general and inspectors
    general of designated Federal entities, as such term is defined under
    section 8G of the Inspector General Act of 1978, and the effects on
    independence of the amendments to the Inspector General Act of 1978
    made by this Act.
        (b) Report.--The report required by subsection (a) shall be issued
    to the Committees on Financial Services and Oversight and Government
    Reform of the House of Representatives and the Committees on Banking,
    Housing, and Urban Affairs and Homeland Security and Governmental
    Affairs of the Senate.
    SEC. 1506. STUDY ON CORE DEPOSITS AND BROKERED DEPOSITS.
        (a) Study.--The Corporation shall conduct a study to evaluate--
            (1) the definition of core deposits for the purpose of
        calculating the insurance premiums of banks;
            (2) the potential impact on the Deposit Insurance Fund of
        revising the definitions of brokered deposits and core deposits to
        better distinguish between them;
            (3) an assessment of the differences between core deposits and
        brokered deposits and their role in the economy and banking sector
        of the United States;
            (4) the potential stimulative effect on local economies of
        redefining core deposits; and
            (5) the competitive parity between large institutions and
        community banks that could result from redefining core deposits.
        (b) Report to Congress.--Not later than 1 year after the date of
    enactment of this Act, the Corporation shall submit 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 the
    results of the study under subsection (a) that includes legislative
    recommendations, if any, to address concerns arising in connection with
    the definitions of core deposits and brokered deposits.

                       TITLE XVI--SECTION 1256 CONTRACTS

    SEC. 1601. CERTAIN SWAPS, ETC., NOT TREATED AS SECTION 1256 CONTRACTS.
        (a) In General.--Subsection (b) of section 1256 of the Internal
    Revenue Code of 1986 is amended--
            (1) by redesignating paragraphs (1) through (5) as
        subparagraphs (A) through (E), respectively, and by indenting such
        subparagraphs (as so redesignated) accordingly,
            (2) by striking ``For purposes of'' and inserting the
        following:
            ``(1) In general.--For purposes of'', and
            (3) by striking the last sentence and inserting the following
        new paragraph:
            ``(2) Exceptions.--The term `section 1256 contract' shall not
        include--
                ``(A) any securities futures contract or option on such a
            contract unless such contract or option is a dealer securities
            futures contract, or
                ``(B) any interest rate swap, currency swap, basis swap,
            interest rate cap, interest rate floor, commodity swap, equity
            swap, equity index swap, credit default swap, or similar
            agreement.''.
        (b) Effective Date.--The amendments made by this section shall
    apply to taxable years beginning after the date of the enactment of
    this Act.

                                   Speaker of the House of Representatives.

                                Vice President of the United States and
                                                   President of the Senate.