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

111th CONGRESS
  1st Session
                                H. R. 4173

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


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            December 2, 2009

  Mr. Frank of Massachusetts introduced the following bill; which was 
referred to the Committee on Financial Services, and in addition to the 
 Committees on Agriculture, Energy and Commerce, the Judiciary, Rules, 
the Budget, Oversight and Government Reform, and Ways and Means, for a 
 period to be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the jurisdiction of the 
                          committee concerned

_______________________________________________________________________

                                 A BILL


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

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``The Wall Street Reform and Consumer 
Protection Act of 2009''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

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

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

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

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

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

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

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

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

Sec. 1601. Short title.
Sec. 1602. Definitions.
Sec. 1603. Systemic risk determination.
Sec. 1604. Resolution; stabilization.
Sec. 1605. Judicial review.
Sec. 1606. Directors not liable for acquiescing in appointment of 
                            receiver.
Sec. 1607. Termination and exclusion of other actions.
Sec. 1608. Rulemaking.
Sec. 1609. Powers and duties of corporation.
Sec. 1610. Clarification of prohibition regarding concealment of assets 
                            from receiver or liquidating agent.
Sec. 1611. Office of Resolution.
Sec. 1612. Miscellaneous provisions.
Sec. 1613. Amendment to Federal Deposit Insurance Act.
Sec. 1614. Application of executive compensation limitations.
  Subtitle H--Additional Improvements for Financial Crisis Management

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

Sec. 1801. Inclusion of minorities and women; Diversity in agency 
                            workforce.
             Subtitle J--International Policy Coordination

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

Sec. 1951. Access to United States financial market by foreign 
                            institutions.
TITLE II--CORPORATE AND FINANCIAL INSTITUTION COMPENSATION FAIRNESS ACT

Sec. 2001. Short title.
Sec. 2002. Shareholder vote on executive compensation disclosures.
Sec. 2003. Compensation committee independence.
Sec. 2004. Enhanced compensation structure reporting to reduce perverse 
                            incentives.
          TITLE III--OVER-THE-COUNTER DERIVATIVES MARKETS ACT

Sec. 3001. Short title.
                 Subtitle A--Regulation of Swap Markets

Sec. 3101. Definitions.
Sec. 3102. Jurisdiction.
Sec. 3103. Clearing.
Sec. 3104. Public reporting of aggregate swap data.
Sec. 3105. Swap repositories.
Sec. 3106. Reporting and recordkeeping.
Sec. 3107. Registration and regulation of swap dealers and major swap 
                            participants.
Sec. 3108. Segregation of assets held as collateral in swap 
                            transactions.
Sec. 3109. Conflicts of interest.
Sec. 3110. Swap execution facilities.
Sec. 3111. Derivatives transaction execution facilities and exempt 
                            boards of trade.
Sec. 3112. Designated contract markets.
Sec. 3113. Position limits.
Sec. 3114. Enhanced authority over registered entities.
Sec. 3115. Foreign boards of trade.
Sec. 3116. Legal certainty for swaps.
Sec. 3117. Multilateral clearing organizations.
Sec. 3118. Primary enforcement authority.
Sec. 3119. Enforcement.
Sec. 3120. Retail commodity transactions.
Sec. 3121. Large swap trader reporting.
Sec. 3122. Authority to ban abusive swaps.
Sec. 3123. International harmonization.
Sec. 3124. Authority to ban access to the United States Financial 
                            System.
Sec. 3125. Other authority.
Sec. 3126. Antitrust.
Sec. 3127. Effective date.
         Subtitle B--Regulation of Security-Based Swap Markets

Sec. 3201. Definitions under the Securities Exchange Act of 1934.
Sec. 3202. Repeal of prohibition on regulation of security-based swaps.
Sec. 3203. Amendments to the Securities Exchange Act of 1934.
Sec. 3204. Registration and regulation of swap dealers and major swap 
                            participants.
Sec. 3205. National security exchange registration requirements.
Sec. 3206. Reporting and recordkeeping.
Sec. 3207. State gaming and bucket shop laws.
Sec. 3208. Amendments to the Securities Act of 1933; treatment of 
                            security-based swaps.
Sec. 3209. Other authority.
Sec. 3210. Jurisdiction.
Sec. 3211. Effective date.
                       Subtitle C--Miscellaneous

Sec. 3301. Study on feasibility of requiring use of standardized 
                            algorithmic descriptions for financial 
                            derivatives.
Sec. 3302. Study of desirability and feasibility of establishing single 
                            regulator for all transactions involving 
                            financial derivatives.
Sec. 3303. Recommendations for changes to insolvency laws.
Sec. 3304. Prohibition against government assistance.
           TITLE IV--CONSUMER FINANCIAL PROTECTION AGENCY ACT

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

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

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

Sec. 4301. Prohibiting unfair, deceptive, or abusive acts or practices.
Sec. 4302. Disclosures.
Sec. 4303. Sales practices.
Sec. 4304. Pilot disclosures.
Sec. 4305. Adopting operational standards to deter unfair, deceptive, 
                            or abusive practices.
Sec. 4306. Duties.
Sec. 4307. Consumer rights to access information.
Sec. 4308. Prohibited acts.
Sec. 4309. Treatment of remittance transfers.
Sec. 4310. Effective date.
Sec. 4311. No authority to require the offering of financial products 
                            or services.
Sec. 4312. Appraisal independence requirements.
                 Subtitle D--Preservation of State Law

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

Sec. 4501. Definitions.
Sec. 4502. Investigations and administrative discovery.
Sec. 4503. Hearings and adjudication proceedings.
Sec. 4504. Litigation authority.
Sec. 4505. Relief available.
Sec. 4506. Referrals for criminal proceedings.
Sec. 4507. Employee protection.
Sec. 4508. Effective date.
     Subtitle F--Transfer of Functions and Personnel; Transitional 
                               Provisions

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

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

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

Sec. 4901. Amendments to the Federal Trade Commission Act.
                        TITLE V--CAPITAL MARKETS

     Subtitle A--Private Fund Investment Advisers Registration Act

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

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

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

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

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

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

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

Sec. 7501. Increasing the minimum assessment paid by SIPC members.
Sec. 7502. Increasing the borrowing limit on treasury loans.
Sec. 7503. Increasing the cash limit of protection.
Sec. 7504. SIPC as trustee in SIPA liquidation proceedings.
Sec. 7505. Insiders ineligible for SIPC advances.
Sec. 7506. Eligibility for direct payment procedure.
Sec. 7507. Increasing the fine for prohibited acts under SIPA.
Sec. 7508. Penalty for misrepresentation of SIPC membership or 
                            protection.
Sec. 7509. Futures held in a portfolio margin securities account 
                            protection.
Sec. 7510. Study and report on the feasibility of risk-based 
                            assessments for SIPC members.
Sec. 7511. Budgetary treatment of Commission loans to SIPC.
                 Part 6--Sarbanes-Oxley Act Amendments

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

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

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

Sec. 8001. Short title.
Sec. 8002. Federal Insurance Office established.
Sec. 8003. Report on global reinsurance market.
Sec. 8004. Study on modernization and improvement of insurance 
                            regulation in the United States.

              TITLE I--FINANCIAL STABILITY IMPROVEMENT ACT

SEC. 1000. SHORT TITLE; DEFINITIONS.

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

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

    (a) In General.--Notwithstanding any other provision of law, the 
Comptroller General of the United States shall perform an audit of all 
actions taken by the Board of Governors of the Federal Reserve System 
and the Federal reserve banks during the current economic crisis 
pursuant to the authority granted under section 13(c) of the Federal 
Reserve Act. Such audit shall be completed as expeditiously as possible 
after the date of the enactment of the Financial Stability Improvement 
Act of 2009.
    (b) Report.--
            (1) Required.--Not later than the end of the 90-day period 
        beginning on the date the audit referred to in subsection (a) 
        is completed, the Comptroller General of the United States 
        shall submit a report to the Congress, and make such report 
        available to the public.
            (2) Contents.--The report under paragraph (1) shall include 
        a detailed description of the findings and conclusion of the 
        Comptroller General with respect to the audit that is the 
        subject of the report, together with such recommendations for 
        legislative or administrative action as the Comptroller General 
        may determine to be appropriate.

          Subtitle A--The Financial Services Oversight Council

SEC. 1001. FINANCIAL SERVICES OVERSIGHT COUNCIL ESTABLISHED.

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

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

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

SEC. 1003. TECHNICAL AND PROFESSIONAL ADVISORY COMMITTEES.

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

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

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

SEC. 1005. COUNCIL STAFF AND FUNDING.

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

SEC. 1006. REPORTS TO THE CONGRESS.

    (a) In General.--Semiannually the Council shall submit a report to 
the Committee on Financial Services of the House of Representatives, 
the Committee on Banking, Housing, and Urban Affairs of the Senate, and 
the Comptroller General of the United States that--
            (1) describes significant financial and regulatory 
        developments, including insurance and accounting regulations 
        and standards, and assesses the impact of those developments on 
        the stability of the financial system;
            (2) recommends actions that will improve financial 
        stability;
            (3) details the size, scale, scope, concentration, 
        activities, and interconnectedness of the 50 largest financial 
        institutions, by total assets, in the United States;
            (4) describes plans developed by the Council to respond to 
        potential threats to the stability of the United States 
        financial system and the outcome of exercises conducted in 
        furtherance of those plans;
            (5) describes the nature and scope of any company or 
        activities identified under subtitle B and steps taken to 
        address them; and
            (6) describes any dispute resolutions undertaken under 
        section 1002 and the result of such resolutions.
    (b) Evaluation of Annual Report by GAO.--Not later than 120 days 
after receiving the report required by subsection (a), the Comptroller 
General of the United States shall submit an evaluation of such report 
to the Committee on Financial Services of the House of Representatives 
and the Committee on Banking, Housing, and Urban Affairs of the Senate.
    (c) Statements by Voting Members of the Council.--At the time each 
report is submitted under subsection (a), each voting member of the 
Council shall--
            (1) if such member believes that the Council, the 
        Government, and the private sector are taking all reasonable 
        steps to ensure financial stability and to prevent systemic 
        risk that would negatively affect the economy, submit a signed 
        statement to the Committee on Financial Services of the House 
        of Representatives and the Committee on Banking, Housing, and 
        Urban Affairs of the Senate stating such belief; or
            (2) if such member does not believe that all reasonable 
        steps described under paragraph (1) are being taken, submit a 
        signed statement to the Committee on Financial Services of the 
        House of Representatives and the Committee on Banking, Housing, 
        and Urban Affairs of the Senate stating what actions such 
        member believes need to be taken in order to ensure that all 
        reasonable steps described under paragraph (1) are taken.
    (d) Testimony by the Chairman.--The Chairman of the Council shall 
appear before the Committee on Financial Services of the House of 
Representatives and the Committee on Banking, Housing, and Urban 
Affairs of the Senate at a semi-annual hearing, after the report is 
submitted under subsection (a)--
            (1) to discuss the efforts, activities, objectives, and 
        plans of the Council; and
            (2) to discuss and answer questions concerning such report.

SEC. 1007. APPLICABILITY OF CERTAIN FEDERAL LAWS.

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

SEC. 1008. OVERSIGHT BY GAO.

    (a) Authority to Audit.--The Comptroller General of the United 
States may audit the activities and financial transactions of--
            (1) the Council; and
            (2) any person or entity acting on behalf of or under the 
        authority of the Council, to the extent such activities and 
        financial transactions relate to such person's or entity's work 
        for the Council.
    (b) Access to Information.--
            (1) In general.--Notwithstanding any other provision of 
        law, the Comptroller General of the United States shall have 
        access, upon request and at such reasonable time and in such 
        reasonable form as the Comptroller General may request, to--
                    (A) any records or other information under the 
                control of the Council; and
                    (B) any records or other information under the 
                control of a person or entity acting on behalf of or 
                under the authority of the Council, to the extent such 
                records or other information is relevant to an audit 
                under subsection (a).
            (2) Certain information specified.--Access under paragraph 
        (1) includes access to--
                    (A) information provided to the Council by its 
                voting and nonvoting members under section 1101; and
                    (B) the identity of each financial holding company 
                subject to stricter standards.
    (c) Periodic Evaluations.--The Comptroller General of the United 
States shall periodically evaluate the processes and activities of the 
Council and the extent to which the Council is fulfilling its duties 
under this title. The Comptroller General shall submit to the Committee 
on Financial Services of the House of Representatives and the Committee 
on Banking, Housing, and Urban Affairs of the Senate a report on the 
results of each such evaluation.
    (d) Confidentiality.--Any committees or Members of Congress 
receiving reports or other information from the Comptroller General of 
the United States shall maintain the confidentiality of any such 
information relating to--
            (1) dispute resolutions undertaken under section 1002, 
        including the result of such dispute resolutions; and
            (2) financial holding companies subject to stricter 
        standards.

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

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

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

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

    (a) In General.--The Council is authorized to issue formal 
recommendations, publicly or privately, that a Federal financial 
regulatory agency adopt stricter prudential standards for firms it 
regulates to mitigate systemic risk.
    (b) Agency Authority to Implement Standards.--A Federal financial 
regulatory agency specifically is authorized to impose, require reports 
regarding, examine for compliance with, and enforce stricter prudential 
standards and safeguards for the firms it regulates to mitigate 
systemic risk. This authority is in addition to and does not limit any 
other authority of the Federal financial regulatory agencies. 
Compliance by an entity with actions taken by a Federal financial 
regulatory agency under this section shall be enforceable in accordance 
with the statutes governing the respective Federal financial regulatory 
agency's jurisdiction over the entity as if the agency action were 
taken under those statutes.
    (c) Agency Notice to Council.--A Federal financial regulatory 
agency shall, within 60 days of receiving a Council recommendation 
under this section, notify the Council in writing regarding--
            (1) the actions the Federal financial regulatory agency has 
        taken in response to the Council's recommendation, additional 
        actions contemplated, and timetables therefore; or
            (2) the reason the Federal financial regulatory agency has 
        failed to respond to the Council's request.

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

    (a) In General.--The Council shall, in consultation with the Board 
and any other primary financial regulatory agency that regulates the 
financial company or a subsidiary of such company, subject a financial 
company to stricter prudential standards under this subtitle if the 
Council determines that--
            (1) material financial distress at the company could pose a 
        threat to financial stability or the economy; or
            (2) the nature, scope, size, scale, concentration, and 
        interconnectedness, or mix of the company's activities could 
        pose a threat to financial stability or the economy.
    (b) Criteria.--In making a determination under subsection (a), the 
Council shall consider the following criteria:
            (1) The amount and nature of the company's financial 
        assets.
            (2) The amount and nature of the company's liabilities, 
        including the degree of reliance on short-term funding.
            (3) The extent of the company's leverage.
            (4) The extent and nature of the company's off-balance 
        sheet exposures.
            (5) The extent and nature of the company's transactions and 
        relationships with other financial companies.
            (6) The company's importance as a source of credit for 
        households, businesses, and State and local governments and as 
        a source of liquidity for the financial system.
            (7) The nature, scope, and mix of the company's activities.
            (8) The degree to which the company is already regulated by 
        one or more Federal financial regulatory agencies.
            (9) Any other factors that the Council deems appropriate.
    (c) Notification of Decision.--The Board, in an executive capacity 
on behalf of the Council, shall immediately upon the Council's decision 
notify the financial company by order, which shall be public, that the 
financial company is subject to stricter prudential standards, as 
prescribed by the Board in accordance with section 1104.
    (d) Periodic Review and Rescission of Findings.--
            (1) Submission of assessment.--The Board shall periodically 
        submit a report to the Council containing an assessment of 
        whether each company subjected to stricter prudential standards 
        should continue to be subject to such standards.
            (2) Review and rescission.--The Council shall--
                    (A) review the assessment submitted pursuant to 
                paragraph (1) and any information or recommendation 
                submitted by members of the Council regarding whether a 
                financial holding company subject to stricter standards 
                continues to merit stricter prudential standards; and
                    (B) rescind the action subjecting a company to 
                stricter prudential standards if the Council determines 
                that the company no longer meets the conditions for 
                being subjected to stricter prudential standards in 
                subsections (a) and (b).
    (e) Emergency Exception to Majority Vote of Council Requirement.--
If each of the Secretary of the Treasury, the Board, and the Federal 
Deposit Insurance Corporation determines that a financial company must 
be subjected to stricter prudential standards in accordance with this 
section immediately to prevent destabilization of the financial system 
or economy, the Secretary, the Board, and the Corporation may, upon 
approval by the President, subject such company to stricter prudential 
standards under this section.
    (f) Appeal.--
            (1) Administrative.--The Council and the Board, in an 
        executive capacity on behalf of the Council, shall establish a 
        procedure through which a financial company that has been 
        subjected to stricter prudential standards in accordance with 
        this section may appeal being subjected to stricter prudential 
        standards.
            (2) Judicial review.--Any financial company which has been 
        subjected to stricter prudential standards may seek judicial 
        review by filing a petition for such review in the United 
        States Court of Appeals for the District of Columbia.
    (g) Effect of Council Decision.--
            (1) Application of the bank holding company act.--A 
        financial company that is not a bank holding company as defined 
        in the Bank Holding Company Act at the time the financial 
        company is subjected to stricter prudential standards in 
        accordance with this section, shall--
                    (A) if such company conducts at the time such 
                company is subjected to stricter prudential standards 
                in accordance with this section only activities that 
                are determined to be financial in nature or incidental 
                thereto under section 4(k) of the Bank Holding Company 
                Act of 1956, be treated as a bank holding company that 
                has elected to be a financial holding company for 
                purposes of the Bank Holding Company Act of 1956, the 
                Federal Deposit Insurance Act, and all other Federal 
                laws and regulations governing bank holding companies 
                and financial holding companies and be the financial 
                holding company subject to stricter standards for 
                purposes of this subtitle; or
                    (B) if such company conducts at the time that such 
                company is subjected to stricter prudential standards 
                in accordance with this section 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, be required to establish and 
                conduct all its activities that are determined to be 
                financial in nature or incidental thereto under section 
                4(k) of the Bank Holding Company Act of 1956 in an 
                intermediate holding company established under section 
                6 of the Bank Holding Company Act of 1956, which 
                intermediate holding company shall be treated as a bank 
                holding company that has elected to be a financial 
                holding company for purposes of the Bank Holding 
                Company Act of 1956, the Federal Deposit Insurance Act, 
                and all other Federal laws and regulations governing 
                bank holding companies and financial holding companies, 
                and such section 6 holding company shall be a financial 
                holding company subject to stricter standards for 
                purposes of this title.
            (2) Exemptive authority.--Notwithstanding any provision of 
        the Bank Holding Company Act of 1956, the Board may, if it 
        determines such action is necessary to ensure appropriate 
        stricter prudential supervision, issue such exemptions from 
        that Act as may be necessary with regard to financial holding 
        companies subject to stricter standards that do not control an 
        insured depository institution.
            (3) Leverage limitation.--The Board shall require each 
        financial holding company subject to stricter standards to 
        maintain a debt to equity ratio of no more than 15 to 1, and 
        the Board shall issue regulations containing procedures and 
        timelines for how a financial holding company subject to 
        stricter standards with a debt to equity ratio of more than 15 
        to 1 at the time such company becomes a financial holding 
        company subject to stricter standards shall reduce such ratio.

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

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

SEC. 1105. MITIGATION OF SYSTEMIC RISK.

    (a) Council Authority to Restrict Operations and Activities.--If 
the Council determines, after notice and an opportunity for hearing, 
that despite the higher prudential standards imposed pursuant to 
section 1104(a)(2), the size of a financial holding company subject to 
stricter standards or the scope, nature, scale, concentration, 
interconnectedness, or mix of activities directly or indirectly 
conducted by a financial holding company subject to stricter standards 
poses a grave threat to the financial stability or economy of the 
United States, the Council shall require the company to undertake 1 or 
more mitigatory actions described in subsection (d).
    (b) Consultation With Federal Financial Regulatory Agencies.--The 
Council, in determining whether to impose any requirement under this 
section that is likely to have a significant impact on a functionally 
regulated subsidiary, or a subsidiary depository institution, of a 
financial company subjected to stricter prudential standards under this 
title, shall consult with the Federal financial regulatory agency for 
any such subsidiary.
    (c) Factors for Consideration.--In reaching a determination 
described in subsection (a), the Council shall take into consideration 
the following factors, as appropriate--
            (1) the amount and nature of the company's financial 
        assets;
            (2) the amount and nature of the company's liabilities, 
        including the degree of reliance on short-term funding;
            (3) the extent and nature of the company's off-balance 
        sheet exposures;
            (4) the company's reliance on leverage;
            (5) the extent and nature of the company's transactions, 
        relationships, and interconnectedness with other financial and 
        non-financial companies;
            (6) the company's importance as a source of credit for 
        households, businesses, and State and local governments and as 
        a source of liquidity for the financial system;
            (7) the scope, nature, size, scale, concentration, 
        interconnectedness and mix of the company's activities;
            (8) the extent to which prudential regulations mitigate the 
        risk posed; and
            (9) any other factors identified that the Council 
        determines appropriate.
    (d) Mitigatory Actions.--
            (1) In general.--Mitigatory action may include--
                    (A) modifying the prudential standards imposed 
                pursuant to section 1104(a);
                    (B) terminating 1 or more activities;
                    (C) imposing conditions on the manner in which a 
                financial holding company subject to stricter standards 
                conducts 1 or more activities;
                    (D) limiting the ability to merge with, acquire, 
                consolidate with, or otherwise become affiliated with 
                another company;
                    (E) restricting the ability to offer a financial 
                product or products; and
                    (F) in the event the Council deems subparagraphs 
                (A) through (E) inadequate as a means to address the 
                identified risks, selling, divesting, or otherwise 
                transferring business units, branches, assets, or off-
                balance sheet items to unaffiliated companies.
            (2) International competitiveness considerations.--In 
        making any decision pursuant to paragraph (1), the Council 
        shall consider--
                    (A) the need to maintain the international 
                competitiveness of the United States financial services 
                industry; and
                    (B) the extent to which other countries with a 
                significant financial services industry have 
                established corresponding regimes to mitigate threats 
                to financial stability or the economy posed by 
                financial companies.
    (e) Due Process.--
            (1) Notice and hearing.--The Council shall give notice to a 
        financial company subject to stricter prudential standards, and 
        opportunity for hearing if requested, that the financial 
        company is being considered for mitigatory action pursuant to 
        subsection (a). The hearing shall occur no later than 30 days 
        after the financial company receives notice of the proposed 
        action from the Council.
            (2) Notice.--The Council shall notify the financial company 
        subject to stricter prudential standards of the Council's 
        determination, and, if the Council determines that mitigatory 
        action is appropriate, require the company to submit a plan to 
        the Council to implement the required mitigatory action.
            (3) Submission of plan.--The financial holding company 
        subject to stricter standards shall submit its proposed plan to 
        implement the required mitigatory action or actions to the 
        Council within 60 days from the date it receives notice under 
        paragraph (2) or such shorter timeframe as the Council may 
        require, if the Council determines an emergency situation 
        merits expeditious implementation.
            (4) Approval or amendment of the plan.--The Council shall 
        review the plan submitted pursuant to paragraph (3) and 
        determine whether the plan achieves the goal of mitigating a 
        grave threat to the financial stability or the economy of the 
        United States. The Council may approve or disapprove the plan 
        with or without amendment.
            (5) Effect of plan approval.--The Council shall--
                    (A) notify a financial holding company subject to 
                stricter standards by order, which shall be public, 
                that the Council has approved the plan with or without 
                amendment; and
                    (B) direct the Board to require a financial holding 
                company subject to stricter standards to comply with 
                the plan to implement mitigatory action or actions 
                within a reasonable timeframe after the Council's 
                approval and in accordance with such deadlines 
                established in the plan.
    (f) Treasury Secretary Concurrence.--Mitigatory action imposed by 
the Council involving the sale, divestiture, or transfer of more than 
$10,000,000,000 in total assets by a financial holding company subject 
to stricter standards shall require the Secretary of the Treasury's 
concurrence before the issuance of the notice in subsection (e)(5)(A). 
If the sale, divestiture, or transfer of total assets by a financial 
holding company subject to stricter standards exceeds $100,000,000,000, 
the Secretary of the Treasury shall consult with the President before 
concurrence.
    (g) Failure to Implement the Plan.--If a financial holding company 
subject to stricter standards fails to implement a plan for mitigatory 
action imposed pursuant to subsection (e)(5) within a reasonable 
timeframe, the Council shall direct the Board to take such actions as 
necessary to ensure compliance with the plan.
    (h) Judicial Review.--For any plan required under this section, a 
financial holding company subject to stricter standards may, not later 
than 30 days after receipt of the Council's notice under subsection 
(e)(5), bring an action in the United States district court for the 
judicial district in which the home office of such company is located, 
or in the United States District Court for the District of Columbia, 
for an order requiring that the requirement for a mitigatory action be 
rescinded. Judicial review under this section shall be limited to the 
imposition of a mitigatory action. In reviewing the Council's 
imposition of a mitigatory action, the court shall rescind or dismiss 
only those mitigatory actions it finds to be imposed in an arbitrary 
and capricious manner.

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

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

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

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

SEC. 1108. EFFECT OF RESCISSION OF IDENTIFICATION.

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

SEC. 1109. EMERGENCY FINANCIAL STABILIZATION.

    (a) In General.--Upon the written determination of the Council that 
a liquidity event exists that could destabilize the financial system 
(which determination shall be made upon a vote of not less than two-
thirds of the members of the Council then serving) and with the written 
consent of the Secretary of the Treasury (after certification by the 
President that an emergency exists), the Corporation may create a 
widely-available program designed to avoid or mitigate adverse effects 
on systemic economic conditions or financial stability by guaranteeing 
obligations of solvent insured depository institutions or other solvent 
companies that are predominantly engaged in activities that are 
financial in nature or are incidental thereto pursuant to section 4(k) 
of the Bank Holding Company Act, if necessary to prevent systemic 
financial instability during times of severe economic distress, except 
that a guarantee of obligations under this section may not include 
provision of equity in any form.
    (b) Policies and Procedures.--Prior to exercising any authority 
under this section, the Corporation shall establish policies and 
procedures governing the issuance of guarantees. The terms and 
conditions of any guarantees issued shall be established by the 
Corporation with the approval of the Secretary of the Treasury and the 
Financial Stability Oversight Council.
    (c) Funding.--
            (1) Administrative expenses and cost of guarantees.--A 
        program established pursuant to this section shall require 
        funding only for the purposes of paying administrative expenses 
        and for paying a guarantee in the event that a guaranteed loan 
        defaults.
            (2) Fees and other charges.--The Corporation shall charge 
        fees or other charges to all participants in such program 
        established pursuant to this section. To the extent that a 
        program established pursuant to this section has expenses or 
        losses, the program will be funded entirely through fees or 
        other charges assessed on participants in such program.
            (3) Excess funds.--If at the conclusion of such program 
        there are any excess funds collected from the fees associated 
        with such program, the funds will be deposited into the 
        Systemic Resolution Fund established pursuant to section 
        1609(n).
            (4) Authority of corporation.--For purposes of conducting a 
        program established pursuant to this section, the Corporation--
                    (A) may borrow funds from the Secretary of the 
                Treasury, which shall be repaid in full with interest 
                through fees and charges paid by participants in 
                accordance with paragraph (2), and, to the extent such 
                additional amounts are necessary, assessments on large 
                financial companies under paragraph (5), and there 
                shall be available to the Corporation amounts in the 
                Treasury not otherwise appropriated, including for the 
                payment of reasonable administrative expenses;
                    (B) may not borrow funds from the Deposit Insurance 
                Fund established pursuant to section 11(a)(4) of the 
                Federal Deposit Insurance Act; and
                    (C) may not borrow funds from the Systemic 
                Resolution Fund established pursuant to section 
                1609(n).
            (5) Back-up special assessment.--To the extent that the 
        funds collected pursuant to paragraph (2) are insufficient to 
        cover any losses or expenses (including monies borrowed 
        pursuant to paragraph (4)) arising from a program established 
        pursuant to this section, the Corporation shall impose a 
        special assessment on--
                    (A) large financial companies subject to 
                assessments under section 1609(n) (whether or not such 
                company participated in such program) in the manner 
                provided in such section 1609(n); and
                    (B) participants in the program that are not large 
                financial companies paying assessments pursuant to 
                section 1609(n).
    (d) Plan for Maintenance or Increase of Lending.--In connection 
with any application or request to participate in such program 
authorized pursuant to this section, a solvent company seeking to 
participate in such program shall be required to submit to the 
Corporation a plan detailing how the use of such guaranteed funds will 
facilitate the increase or maintenance of such solvent company's level 
of lending to consumers or small businesses.
    (e) Definitions.--For purposes of this section, the following 
definitions apply:
            (1) Activities that are financial in nature.--The term 
        ``activities that are financial in nature'' means activities 
        that are determined to be financial in nature, or incidental to 
        such activities, under section 4(k) of the Bank Holding Company 
        Act of 1956 (12 U.S.C. 1843(k)) and activities that are 
        identified for stricter prudential standards under section 
        1106.
            (2) 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.
            (3) Corporation.--The term ``Corporation'' means the 
        Federal Deposit Insurance Corporation.
            (4) Insured depository institution.--The term ``insured 
        depository institution'' shall have the same meaning as in 
        section 3 of the Federal Deposit Insurance Act (12 U.S.C. 
        1813).
            (5) Solvent.--The term ``solvent'' means assets are more 
        than the obligations to creditors.
    (f) Sunset of Corporation's Authority.--The Corporation's authority 
under subsections (a) and (c) and the authority to borrow or obligate 
funds under section 1609(n) shall expire on December 31, 2013, unless 
the President transmits to the Congress a request for renewal of the 
authority and there is enacted a joint resolution, as defined in 
subsection (g).
    (g) Joint Resolution.--
            (1) Terms.--For purposes of subsection (f), the term 
        ``joint resolution'' means only a joint resolution which is 
        introduced within a 2-day period beginning on the date on which 
        the President transmits the request to the Congress under 
        subsection (f), and--
                    (A) which does not have a preamble;
                    (B) the matter after the resolving clause of which 
                is as follows: ``That Congress approves the request for 
                renewal of authority provided under sections 1108 and 
                1609(n) of the Financial Stability Improvement Act of 
                2009 as submitted by the President on _______'', the 
                blank space being filled in with the appropriate date; 
                and
                    (C) the title of which is as follows: ``Joint 
                resolution approving the renewal of financial 
                stabilization authority.''.
            (2) Referral.--A resolution described in paragraph (1) that 
        is introduced in the House of Representatives shall be referred 
        to the Committee on Financial Services of the House of 
        Representatives. A resolution described in paragraph (1) 
        introduced in the Senate shall be referred to the Committee on 
        Banking, Housing, and Urban Affairs of the Senate.
            (3) Discharge.--If the committee to which a resolution 
        described in paragraph (1) is referred has not reported such 
        resolution (or an identical resolution) by the end of the 2-day 
        period beginning on the date on which the President transmits 
        the request to the Congress under subsection (f), such 
        committee shall be, at the end of such period, discharged from 
        further consideration of such resolution, and such resolution 
        shall be placed on the appropriate calendar of the House 
        involved.
            (4) Consideration.--
                    (A) In general.--On or after the day after the date 
                on which the committee to which such a resolution is 
                referred has reported, or has been discharged (under 
                paragraph (3)) from further consideration of, such a 
                resolution, it is in order (even though a previous 
                motion to the same effect has been disagreed to) for 
                any Member of the respective House to move to proceed 
                to the consideration of the resolution. A Member may 
                make the motion only on the day after the calendar day 
                on which the Member announces to the House concerned 
                the Member's intention to make the motion, except that, 
                in the case of the House of Representatives, the motion 
                may be made without such prior announcement if the 
                motion is made by direction of the committee to which 
                the resolution was referred. All points of order 
                against the resolution (and against consideration of 
                the resolution) are waived. The motion is highly 
                privileged in the House of Representatives and is 
                privileged in the Senate and is not debatable. The 
                motion is not subject to amendment, or to a motion to 
                postpone, or to a motion to proceed to the 
                consideration of other business. 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 
                respective House shall immediately proceed to 
                consideration of the joint resolution without 
                intervening motion, order, or other business, and the 
                resolution shall remain the unfinished business of the 
                respective House until disposed of.
                    (B) Debate.--Debate on the resolution, and on all 
                debatable motions and appeals in connection therewith, 
                shall be limited to not more than 2 hours, which shall 
                be divided equally between those favoring and those 
                opposing the resolution. An amendment to the resolution 
                is not in order. A motion to limit further debate is in 
                order and not debatable. A motion to postpone, or a 
                motion to proceed to the consideration of other 
                business, or a motion to recommit the resolution is not 
                in order. A motion to reconsider the vote by which the 
                resolution is agreed to or disagreed to is not in 
                order.
                    (C) Vote.--Immediately following the conclusion of 
                the debate on a resolution described in paragraph (1) 
                and a single quorum call at the conclusion of the 
                debate, if requested in accordance with the rules of 
                the appropriate House, the vote on final passage of the 
                resolution shall occur.
                    (D) Rules appeals.--Appeals of the decisions of the 
                Chair relating to the application of the rules of the 
                Senate or the House of Representatives, as the case may 
                be, to the procedure relating to a resolution described 
                in paragraph (1) shall be decided without debate.
            (5) Consideration by other house.--
                    (A) In general.--If, before the passage by one 
                House of a resolution of that House described in 
                paragraph (1), that House receives from the other House 
                a resolution described in paragraph (1), then the 
                following procedures shall apply:
                            (i) The resolution of the other House shall 
                        not be referred to a committee and may not be 
                        considered in the House receiving it except in 
                        the case of final passage as provided in clause 
                        (ii)(II).
                            (ii) With respect to a resolution described 
                        in paragraph (1) of the House receiving the 
                        resolution--
                                    (I) the procedure in that House 
                                shall be the same as if no resolution 
                                had been received from the other House; 
                                but
                                    (II) the vote on final passage 
                                shall be on the resolution of the other 
                                House.
                    (B) Consideration.--Upon disposition of the 
                resolution received from the other House, it shall no 
                longer be in order to consider the resolution that 
                originated in the receiving House.
            (6) Rules of the senate and house.--This subsection is 
        enacted by the Congress--
                    (A) as an exercise of the rulemaking power of the 
                Senate and House of Representatives, respectively, and 
                as such it is deemed a part of the rules of each House, 
                respectively, but applicable only with respect to the 
                procedure to be followed in that House in the case of a 
                resolution described in paragraph (1), and it 
                supersedes other rules only to the extent that it is 
                inconsistent with such rules; and
                    (B) with full recognition of the constitutional 
                right of either House to change the rules (so far as 
                relating to the procedure of that House) at any time, 
                in the same manner, and to the same extent as in the 
                case of any other rule of that House.
            (7) Effective period.--The Presidential request referred to 
        in paragraph (1) shall specify the period of time that such 
        authority is extended and the adoption of the joint resolution 
        shall extend such powers for such period of time.

SEC. 1110. CORPORATION MUST RECEIVE WARRANTS WHEN PAYING OR RISKING 
              TAXPAYER FUNDS.

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

SEC. 1111. EXAMINATIONS AND ENFORCEMENT ACTIONS FOR INSURANCE AND 
              RESOLUTIONS PURPOSES.

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

SEC. 1112. STUDY OF THE EFFECTS OF SIZE AND COMPLEXITY OF FINANCIAL 
              INSTITUTIONS ON CAPITAL MARKET EFFICIENCY AND ECONOMIC 
              GROWTH.

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

SEC. 1113. EXERCISE OF FEDERAL RESERVE AUTHORITY.

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

SEC. 1114. STRESS TESTS.

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

SEC. 1115. CONTINGENT CAPITAL.

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

SEC. 1116. RESTRICTION ON PROPRIETARY TRADING BY DESIGNATED FINANCIAL 
              HOLDING COMPANIES.

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

SEC. 1117. RULE OF CONSTRUCTION.

    The authorities granted to agencies under this subtitle are in 
addition to any rulemaking, report-related, examination, enforcement, 
or other authority that such agencies may have under other law and in 
no way shall be construed to limit such other authority, except that 
any standards imposed for financial stability purposes under this 
subtitle shall supersede any conflicting less stringent requirements of 
the primary financial regulatory agency but only the extent of the 
conflict.

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

SEC. 1201. DEFINITIONS.

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

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

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

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

SEC. 1203. AMENDMENTS TO THE REVISED STATUTES.

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

``SEC. 324. COMPTROLLER OF THE CURRENCY.

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

``SEC. 327 DEPUTY COMPTROLLERS.

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

SEC. 1204. POWER AND DUTIES TRANSFERRED.

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

SEC. 1205. TRANSFER DATE.

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

SEC. 1206. EXPIRATION OF TERM OF COMPTROLLER.

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

SEC. 1207. OFFICE OF THRIFT SUPERVISION ABOLISHED.

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

SEC. 1208. SAVINGS PROVISIONS.

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

SEC. 1209. REGULATIONS AND ORDERS.

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

SEC. 1210. COORDINATION OF TRANSITION ACTIVITIES.

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

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

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

SEC. 1212. EMPLOYEES TRANSFERRED.

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

SEC. 1213. PROPERTY TRANSFERRED.

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

SEC. 1214. FUNDS TRANSFERRED.

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

SEC. 1215. DISPOSITION OF AFFAIRS.

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

SEC. 1216. CONTINUATION OF SERVICES.

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

SEC. 1217. CONTRACTING AND LEASING AUTHORITY.

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

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

    Section 10 of the Home Owners' Loan Act (12 U.S.C. 1467a) is 
amended as follows:
            (1) In subsection (m)--
                    (A) in paragraph (2), by striking ``Director'' and 
                inserting ``Comptroller'';
                    (B) in paragraph (2), by striking ``Director may 
                grant'' and inserting ``Comptroller of the Currency may 
                grant'';
                    (C) in paragraph (2), by striking ``the Director 
                deems'' and inserting ``the Comptroller deems'';
                    (D) in paragraph (2)(A), by striking ``Director'' 
                and inserting ``Comptroller'';
                    (E) in paragraph (2)(B), by striking ``Director'' 
                and inserting ``Comptroller'';
                    (F) in paragraph (2)(B)(iii), by striking 
                ``Director'' and inserting ``Comptroller'';
                    (G) by striking subparagraph (A) of paragraph (3) 
                and inserting the following new subparagraph:
                    ``(A) In general.--A savings association that fails 
                to become or remain a qualified thrift lender shall--
                            ``(i) immediately be subject to the 
                        restrictions in subparagraph (B); and
                            ``(ii) become one or more banks (other than 
                        a savings bank) within one year after the date 
                        on which the savings association should have 
                        become or ceases to be a qualified thrift 
                        lender, except as provided in subparagraph 
                        (C)(i).'';
                    (H) by striking subclause (III) of paragraph 
                (3)(B)(i) and inserting the following new subclause:
                                    ``(III) Dividends.--The savings 
                                association shall be prohibited from 
                                paying dividends except for such 
                                dividends--
                                            ``(aa) as would be 
                                        permissible for a national 
                                        bank;
                                            ``(bb) that are necessary 
                                        to meet obligations of a 
                                        company that controls such 
                                        savings association; and
                                            ``(cc) that are 
                                        specifically approved by the 
                                        Comptroller and the Board of 
                                        Governors after prior written 
                                        request of at least 30 days to 
                                        the Comptroller and the Board 
                                        of Governors.'';
                    (I) by striking clause (ii) of paragraph (3)(B);
                    (J) by striking subparagraphs (C) and (D) of 
                paragraph (3) and inserting the following new 
                subparagraphs:
                    ``(C) Regulatory authority.--A savings association 
                that fails to become or remain a qualified thrift 
                lender shall be deemed to have violated section 5 of 
                the Home Owners' Loan Act and subject to actions 
                authorized by section 5(d) of the Home Owners' Loan 
                Act.
                    ``(D) Requalifications.--
                            ``(i) A savings association that should 
                        have become or ceases to be a qualified thrift 
                        lender shall not be subject to subparagraph 
                        (A)(ii) if the savings association becomes a 
                        qualified thrift lender by meeting the 
                        qualified thrift lender requirement in 
                        paragraph (1) on a monthly average basis in 9 
                        out of the preceding 12 months and remains a 
                        qualified thrift lender.
                            ``(ii) If the savings association referred 
                        to in clause (i) (or any savings association 
                        that acquired all or substantially all of its 
                        assets from that savings association) at any 
                        time thereafter ceases to be a qualified thrift 
                        lender it shall immediately be subject to 
                        subparagraph (A)(ii) as if the one-year time 
                        period provided for in subparagraph (A)(ii) 
                        already has expired, and as if the exception in 
                        clause (i) was not applicable or available to 
                        such savings association.'';
                    (K) in paragraph (4)(D) by striking ``Director'' 
                and inserting ``Comptroller'';
                    (L) in paragraph (4)(E) by striking ``Director'' 
                and inserting ``Comptroller''; and
                    (M) in paragraph (7)(B) by striking ``Director'' 
                and inserting ``Comptroller''.
            (2) In subsection (o)--
                    (A) in paragraph (3) in the heading by striking 
                ``Director'' and inserting ``Board'';
                    (B) in paragraph (3)(A) by striking ``Director'' 
                and inserting ``Board'';
                    (C) in paragraph (3)(B) by striking ``Director'' 
                and inserting ``Board'';
                    (D) in paragraph (3)(C) by striking ``Director'' 
                and inserting ``Board'';
                    (E) in paragraph (3)(D) by striking ``Director'' 
                and inserting ``Comptroller'';
                    (F) in paragraph (5)(E), by striking ``activities 
                described in subsection (c)(2) or (c)(9)(A)(ii)'' and 
                inserting ``activities otherwise permissible for the 
                company pursuant to, and in accordance with, section 4 
                of the Bank Holding Company Act of 1956'';
                    (G) in paragraph (7) by striking ``chartered by the 
                Director'' and inserting ``chartered by the 
                Comptroller''; and
                    (H) in paragraph (7) by striking ``regulations as 
                the Director may'' and inserting ``regulations as the 
                Board may''.

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

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

SEC. 1220. IMPLEMENTATION PLAN AND REPORTS.

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

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

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

SEC. 1222. AMENDMENTS TO SECTION 3.

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

SEC. 1223. AMENDMENTS TO SECTION 7.

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

SEC. 1224. AMENDMENTS TO SECTION 8.

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

SEC. 1225. AMENDMENTS TO SECTION 11.

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

SEC. 1226. AMENDMENTS TO SECTION 13.

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

SEC. 1227. AMENDMENTS TO SECTION 18.

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

SEC. 1228. AMENDMENTS TO SECTION 28.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SEC. 1240. AMENDMENTS TO THE FEDERAL RESERVE ACT.

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

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

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

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

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

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

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

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

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

SEC. 1245. AMENDMENTS TO THE NATIONAL HOUSING ACT.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    (a) Amendment to Section 309.--Section 309 of title 31, United 
States Code, is amended to read as follows:
``Sec. 309. Division of Thrift Supervision
    ``The Division of Thrift Supervision established under section 3(a) 
of the Home Owners' Loan Act shall be a division in the Office of the 
Comptroller of the Currency.''.
    (b) Amendments to Section 321.--Section 321 of title 31, United 
States Code, is amended--
            (1) in subsection (c)--
                    (A) in paragraph (1), by adding ``and'' at the end;
                    (B) in paragraph (2), by striking ``; and'' and 
                inserting a period; and
                    (C) by striking paragraph (3); and
            (2) by striking subsection (e).
    (c) Amendments to Section 714.--Section 714 of title 31, United 
States Code, is amended--
            (1) in subsection (a), by striking ``the Office of the 
        Comptroller of the Currency, and the Office of Thrift 
        Supervision.'' and inserting ``and the Office of the 
        Comptroller of the Currency.'';
            (2) in subsection (b), by striking all after ``has 
        consented in writing.'' and inserting the following: ``Audits 
        of the Federal Reserve Board and Federal reserve banks shall 
        not include unreleased transcripts or minutes of meetings of 
        the Board of Governors or of the Federal Open Market Committee. 
        To the extent that an audit deals with individual market 
        actions, records related to such actions shall only be released 
        by the Comptroller General after 180 days have elapsed 
        following the effective date of such actions.'';
            (3) in subsection (c)(1), in the first sentence, by 
        striking ``subsection,'' and inserting ``subsection or in the 
        audits or audit reports referring or relating to the Federal 
        Reserve Board or Reserve Banks,''; and
            (4) by adding at the end the following:
    ``(f) Audit and Report of the Federal Reserve System.--
            ``(1) In general.--An audit of the Board of Governors of 
        the Federal Reserve System and the Federal reserve banks under 
        subsection (b) shall be completed within 12 months of the 
        enactment of the Financial Stability Improvement Act of 2009.
            ``(2) Report.--
                    ``(A) Required.--A report on the audit referred to 
                in paragraph (1) shall be submitted by the Comptroller 
                General to the Congress before the end of the 90-day 
                period beginning on the date on which such audit is 
                completed and made available to--
                            ``(i) the Speaker of the House of 
                        Representatives;
                            ``(ii) the majority and minority leaders of 
                        the House of Representatives;
                            ``(iii) the majority and minority leaders 
                        of the Senate;
                            ``(iv) the Chairman and Ranking Member of 
                        the committee and each subcommittee of 
                        jurisdiction in the House of Representatives 
                        and the Senate; and
                            ``(v) any other Member of Congress who 
                        requests it.
                    ``(B) Contents.--The report under subparagraph (A) 
                shall include a detailed description of the findings 
                and conclusion of the Comptroller General with respect 
                to the audit that is the subject of the report.
            ``(3) Construction.--Nothing in this subsection shall be 
        construed--
                    ``(A) as interference in or dictation of monetary 
                policy to the Federal Reserve System by the Congress or 
                the Government Accountability Office; or
                    ``(B) to limit the ability of the Government 
                Accountability Office to perform additional audits of 
                the Board of Governors of the Federal Reserve System or 
                of the Federal reserve banks.''.

SEC. 1255. REQUIREMENT FOR COUNTERCYCLICAL CAPITAL REQUIREMENTS.

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

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

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

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

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

    (a) Definitions.--Section 2 of the Bank Holding Company Act of 1956 
(12 U.S.C. 1841) is amended--
            (1) by striking subsection (a)(1) and inserting the 
        following:
    ``(a) Bank Holding Company.--
            ``(1) In general.--Except as provided in paragraph (5), the 
        term `bank holding company' means--
                    ``(A) any company, other than a company described 
                in section 4(p), which has control over any bank or 
                over any company that is or becomes a bank holding 
                company by virtue of this Act; and
                    ``(B) any section 6 holding company established by 
                a company described in section 6(a)(1)(C).''.
            (2) in subsection (a)(5), by adding at the end the 
        following new subparagraph:
                    ``(G) No company is a bank holding company by 
                virtue of its ownership or control of a section 6 
                holding company or any subsidiary of a section 6 
                holding company, so long as the requirements of 
                sections 4(p) and 6 of this Act are met, as applicable, 
                by the section 6 holding company;'';
            (3) in subsection (c)(1)(A), by striking ``insured bank'' 
        and inserting ``insured depository institution'', and by 
        striking ``section 3(h) of the Federal Deposit Insurance Act'' 
        and inserting ``section 3(c)(2) of the Federal Deposit 
        Insurance Act'';
            (4) in subsection (c)(2)--
                    (A) in subparagraph (B), by inserting before the 
                period the following: ``that is controlled by a company 
                that is, on a consolidated basis, predominantly engaged 
                in the business of insurance''; and
                    (B) by striking subparagraph (H); and
            (5) by adding at the end the following new subsection:
    ``(r) Section 6 Holding Companies.--The term `section 6 holding 
company' means a company that is required to be established as an 
intermediate holding company under section 6 of this Act.''.
    (b) Nonbanking Activities Exceptions.--Section 4 of the Bank 
Holding Company Act of 1956 (12 U.S.C. 1843) is amended--
            (1) in subsection (f)(1)(B) by striking ``for purposes of 
        this Act'' and inserting ``for purposes of section 4(a)''; and
            (2) in subsection (f)(2)--
                    (A) in subparagraph (B)(ii), by striking ``; or'' 
                and inserting a semicolon;
                    (B) in subparagraph (C), by striking the period and 
                inserting ``; or''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(D) such company fails to--
                            ``(i) establish and register a section 6 
                        holding company pursuant to section 6 of this 
                        Act within 180 days after the adoption of rules 
                        required by this section; and
                            ``(ii) conduct such activities which are 
                        permissible for a financial holding company, as 
                        determined under section 4(k), through such 
                        section 6 holding company, other than internal 
                        financial activities conducted for such company 
                        or any affiliate, including, but not limited to 
                        internal treasury, investment, and employee 
                        benefit functions, provided that with respect 
                        to any internal financial activity engaged in 
                        for the company or an affiliate and a 
                        nonaffiliate during the year prior to date of 
                        enactment, the company (or an affiliate not a 
                        subsidiary of the section 6 company) may 
                        continue to engage in that activity so long as 
                        at least two-thirds of the assets or two-thirds 
                        of the revenues generated from the activity are 
                        from or attributable to the company or an 
                        affiliate, subject to review by the Board to 
                        determine whether engaging in such activity 
                        presents undue risk to the section 6 company or 
                        undue systemic risk.''; and
            (3) by inserting at the end the following new subsections:
    ``(p) Certain Companies Not Subject to This Act.--
            ``(1) In general.--Except as provided in paragraphs (6) and 
        (7), any company which--
                    ``(A) was--
                            ``(i) a unitary savings and loan holding 
                        company on May 4, 1999, or became a unitary 
                        savings and loan holding company pursuant to an 
                        application pending before the Director of the 
                        Office of Thrift Supervision on of before that 
                        date, and that--
                                    ``(I) on June 30, 2009, continued 
                                to control not fewer than 1 savings 
                                association that it controlled on May 
                                4, 1999, or that such company acquired 
                                pursuant to an application pending 
                                before the Director of the Office of 
                                Thrift Supervision on or before such 
                                date, which became a bank for purposes 
                                of the Bank Holding Company Act as a 
                                result of the enactment of section 
                                1301(a)(4)(A); and
                                    ``(II) on June 30, 2009, and the 
                                date of enactment of the Financial 
                                Stability Improvement Act of 2009, such 
                                savings association subsidiary was and 
                                remains a qualified thrift lender (as 
                                determined by section 10 of the Home 
                                Owners' Loan Act); or
                            ``(ii) on November 23, 2009--
                                    ``(I) controlled an institution 
                                which became a bank as a result of the 
                                enactment of section 1301(a)(3)(B) of 
                                the Financial Stability Improvement Act 
                                of 2009;
                                    ``(II) had an application pending, 
                                or approved but not executed, before 
                                the Federal Deposit Insurance 
                                Corporation, that, if approved, would 
                                permit the applicant to control an 
                                industrial loan company, industrial 
                                bank, or other similar institution--
                                            ``(aa) that is a federally 
                                        insured, State-chartered 
                                        depository institution;
                                            ``(bb) that is organized 
                                        under the laws of a State that 
                                        on March 5, 1987, had in 
                                        effect, or had under 
                                        consideration in the 
                                        legislature of such State, a 
                                        statute that required such 
                                        institution to obtain insurance 
                                        under the Federal Deposit 
                                        Insurance Act; and
                                            ``(cc) that--

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

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

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

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

    ``(a) Establishment, Purpose and Requirements of Special Purpose 
Holding Companies.--
            ``(1) Requirement.--A special purpose holding company 
        (hereafter in this section referred to as a `section 6 holding 
        company') shall be established and maintained by a company--
                    ``(A) described in section 4(f)(1) as required by 
                section 4(f)(2)(D) of this Act;
                    ``(B) described in section 4(p)(1) as required by 
                section 4(p)(2)(A) of this Act; or
                    ``(C) that--
                            ``(i) is subject to stricter prudential 
                        standards under subtitle B of the Financial 
                        Stability Improvement Act of 2009;
                            ``(ii) is not--
                                    ``(I) a bank holding company, or
                                    ``(II) subject to the Bank Holding 
                                Company Act by reason of section 8(a) 
                                of the International Banking Act of 
                                1978 (12 U.S.C. 3106(a)); and
                            ``(iii) directly or indirectly controlled 
                        shares or engaged in activities that did not, 
                        on the date the company is first subject to 
                        stricter prudential standards pursuant to 
                        subtitle B of the Financial Stability 
                        Improvement Act of 2009, comply with the 
                        activity or investment restrictions on 
                        financial holding companies in section 4 in 
                        accordance with regulations prescribed by the 
                        Board.
            ``(2) Purpose.--
                    ``(A) The purpose of this section is to provide for 
                consolidated supervision of certain financial companies 
                by the Board.
                    ``(B) A company that is required to form a section 
                6 holding company shall conduct such activities which 
                are permissible for a financial holding company, as 
                determined under section 4(k), through such section 6 
                holding company, other than internal financial 
                activities conducted for such company or any affiliate, 
                including, but not limited to internal treasury, 
                investment, and employee benefit functions, provided 
                that with respect to any internal financial activity 
                engaged in for the company or an affiliate and a 
                nonaffiliate during the year prior to date of 
                enactment, the company (or an affiliate not a 
                subsidiary of the section 6 company) may continue to 
                engage in that activity so long as at least two-thirds 
                of the assets or two-thirds of the revenues of 
                generated from the activity are from or attributable to 
                the company or an affiliate, subject to review by the 
                Board to determine whether engaging in such activity 
                presents undue risk to the section 6 company or undue 
                systemic risk.
                    ``(C) A section 6 holding company shall be 
                prohibited from conducting any nonbanking activities or 
                investing in any nonbank companies other than those 
                permissible for a financial holding company under 
                sections 3 and 4, unless the Board specifically 
                determines otherwise in accordance with paragraph (6), 
                and provided that, for purposes of this paragraph, a 
                company designated as a section 6 holding company and 
                described under paragraph (4) (or any permitted 
                successor) is not prohibited from continuing to engage 
                in any impermissible activity in which it was engaged 
                continuously during the 6 months prior to the date of 
                enactment, from owning any shares or types of assets 
                related to such activity, or continuing to own such 
                other shares or assets that it owned on the date of 
                enactment.
            ``(3) Registration.--
                    ``(A) A section 6 holding company required to be 
                established by a company described in paragraph (1)(A) 
                shall be established, and such company shall register 
                with the Board as a bank holding company, pursuant to 
                the requirements in section 4(f).
                    ``(B) A section 6 holding company required to be 
                established by a company described in paragraph (1)(B) 
                shall be established, and such company shall register 
                with the Board as a bank holding company, pursuant to 
                the requirements in section 4(p).
                    ``(C) A section 6 holding company required to be 
                established by a company described in paragraph (1)(C) 
                shall be--
                            ``(i) established, and such company shall 
                        register with the Board, as a bank holding 
                        company within 90 days after such company or 
                        such company's parent holding company has been 
                        notified by the Board that such company is 
                        subject to stricter prudential standards under 
                        subtitle B of the Financial Stability 
                        Improvement Act of 2009, unless the Board 
                        grants an extension of such period for 
                        compliance which shall not exceed 180 
                        additional days;
                            ``(ii) treated as a financial holding 
                        company under this Act; and
                            ``(iii) subject to the authority of the 
                        Board to enforce compliance with the provisions 
                        of this section under section 8 of the Federal 
                        Deposit Insurance Act in the same manner and to 
                        the same extent as if such company were a bank 
                        holding company.
            ``(4) Rule of construction.--For purposes of this section, 
        designation of an already established intermediate holding 
        company that will serve as the section 6 holding company shall 
        satisfy the requirement to establish a section 6 holding 
        company, provided that such existing intermediate holding 
        company complies with all other provisions applicable to a 
        section 6 holding company.
            ``(5) Limitations on authority of commercial parent.--A 
        company that is not a bank holding company or treated as a bank 
        holding company pursuant to section 8(a) of the International 
        Bank Act of 1978 that has been notified that it is a financial 
        holding company subject to stricter standards, pursuant to 
        subtitle A of the Financial Stability Improvement Act of 2009, 
        shall--
                    ``(A) not be deemed to be, or treated as, a bank 
                holding company, solely because of its ownership or 
                control of a section 6 holding company; and
                    ``(B) not be subject to this Act, except for such 
                provisions as are explicitly made applicable in this 
                section.
            ``(6) Board authority.--
                    ``(A) Rules and exemptions.--In addition to any 
                other authority of the Board, the Board shall prescribe 
                rules and regulations or issue orders providing for the 
                establishment and registration of section 6 holding 
                companies and shall provide exemptions from the 
                requirements of this Act (including an order in 
                response to a request from an affected company), 
                including, but not limited to, exemptions--
                            ``(i) with respect to the requirement to 
                        conduct such activities which are financial in 
                        nature, as determined under section 4(k), other 
                        than financial activities conducted for such 
                        company or any affiliate, including any 
                        financial activity engaged in for both the 
                        company or an affiliate and a nonaffiliate as 
                        permitted under section 4(f)(2)(D) or section 
                        6(a)(2)(B), through such section 6 holding 
                        company, if the Board makes a finding that such 
                        exemption--
                                    ``(I)(aa) would facilitate the 
                                extension of credit to individuals, 
                                households, and businesses; or
                                    ``(bb) would allow for greater 
                                efficiency, improved customer service, 
                                or other public benefits in the conduct 
                                of financial activities by affected 
                                companies;
                                    ``(II) would not threaten the 
                                safety and soundness of the section 6 
                                holding company, or of any insured 
                                depository institution or other 
                                subsidiary of the section 6 holding 
                                company;
                                    ``(III) would not increase systemic 
                                risk or threaten the stability of the 
                                overall financial system;
                                    ``(IV) would not, as applied to the 
                                activities that are the subject of the 
                                rule, order or request, result in 
                                substantially lessening competition, or 
                                to tend to create a monopoly, or which 
                                in any other manner would be in 
                                restraint of trade, unless the Board 
                                finds that the anticompetitive effects 
                                are outweighed in the public interest 
                                by the probable effect of the exemption 
                                in meeting the convenience and needs of 
                                the community to be served; and
                                    ``(V) would meet the financial and 
                                managerial standards for financial 
                                holding companies described in 
                                subparagraphs (A) and (B) of section 
                                4(j)(4); and
                            ``(ii) from the affiliate transaction 
                        requirements of subsection (b), including but 
                        not limited to exemptions that would facilitate 
                        extensions of credit to unaffiliated persons 
                        for the personal, household, or business 
                        purposes of such unaffiliated persons, unless 
                        the Board makes a finding that such exemption--
                                    ``(I) is not consistent with the 
                                purposes of section 23A and section 23B 
                                of the Federal Reserve Act;
                                    ``(II) would threaten the safety 
                                and soundness of the section 6 holding 
                                company, or any insured depository 
                                institution or other subsidiary of the 
                                section 6 holding company;
                                    ``(III) would increase systemic 
                                risk or threaten the stability of the 
                                overall financial system;
                                    ``(IV) would not, as applied to the 
                                activities that are the subject of the 
                                rule, order or request result in 
                                substantially lessening competition, or 
                                to tend to create a monopoly, or which 
                                in any other manner would be in 
                                restraint of trade, unless the Board 
                                finds that the anticompetitive effects 
                                are outweighed in the public interest 
                                by the probable effect of the exemption 
                                in meeting the convenience and needs of 
                                the community to be served; or
                                    ``(V) would permit an unfair, 
                                deceptive, abusive, or unsafe-and-
                                unsound act or practice.
                    ``(B) Parent company reports.--The Board may, from 
                time to time, require reports under oath from a company 
                that controls a section 6 holding company, and 
                appropriate officers or directors of such company, 
                solely for purposes of ensuring compliance with the 
                provisions of this section (including assessing the 
                company's ability to serve as a source of financial 
                strength pursuant to subsection (g)) and enforcing such 
                compliance.
                    ``(C) Limited parent company enforcement.--
                            ``(i) In general.--In addition to any other 
                        power of the Board, the Board may enforce 
                        compliance with the provisions of this 
                        subsection which are applicable to any company 
                        described in paragraph (1), and any bank 
                        controlled by such company, under section 8 of 
                        the Federal Deposit Insurance Act and such 
                        company or bank shall be subject to such 
                        section (for such purposes) in the same manner 
                        and to the same extent as if such company were 
                        a bank holding company.
                            ``(ii) Application of other act.--Any 
                        violation of this subsection by any company 
                        that controls a section 6 holding company or 
                        any bank controlled by such a company, may also 
                        be treated as a violation of the Federal 
                        Deposit Insurance Act for purposes of clause 
                        (i).
                            ``(iii) No effect on other authority.--No 
                        provision of this subparagraph shall be 
                        construed as limiting any authority of the 
                        Board or any other Federal agency under any 
                        other provision of law.
    ``(b) Restrictions on Affiliate Transactions.--
            ``(1) Section 23a and 23b applicability.--
                    ``(A) In general.--Transactions between a section 6 
                holding company (or any nonbank subsidiary thereof) and 
                any affiliate not controlled by the section 6 holding 
                company shall be subject to the restrictions and 
                limitations contained in section 23A and section 23B of 
                the Federal Reserve Act as if the section 6 holding 
                company were a member bank, provided, that a 
                transaction that otherwise would be a covered 
                transaction shall not be a covered transaction if the 
                transaction is in connection with the bona fide 
                acquisition or lease by an unaffiliated person of 
                assets, goods or services but shall be subject to 
                review under section 23A(f)(1) of such Act.
                    ``(B) Covered transactions.--A depository 
                institution controlled by a section 6 holding company 
                may not engage in a covered transaction (as defined in 
                section 23A(b)(7) of the Federal Reserve Act) with any 
                affiliate that is not the section 6 holding company or 
                a subsidiary of the section 6 holding company; provided 
                that, for purposes of the prohibition, a transaction 
                that otherwise would be a covered transaction shall not 
                be a covered transaction if the transaction is in 
                connection with the bona fide acquisition or lease by 
                an unaffiliated person of assets, goods or services, 
                but shall be subject to review under section 23A(f)(1) 
                of the Federal Reserve Act.
            ``(2) Rule of construction.--No provision of this 
        subsection shall be construed as exempting any subsidiary 
        insured depository institution of a section 6 holding company 
        from compliance with section 23A or 23B of the Federal Reserve 
        Act with respect to each affiliate of such institution (as 
        defined in section 23A or 23B of the Federal Reserve Act), 
        including any affiliate that is the section 6 holding company 
        or subsidiary of the section 6 holding company.
    ``(c) Tying Provisions.--A company that directly or indirectly 
controls a section 6 holding company shall be--
            ``(1) treated as a bank holding company for purposes of 
        section 106 of the Bank Holding Company Act Amendments of 1970 
        and section 22(h) of the Federal Reserve Act and any regulation 
        prescribed under any such section; and
            ``(2) subject to the restrictions of section 106 of the 
        Bank Holding Company Act Amendments of 1970, in connection with 
        any transaction involving the products or services of such 
        company or affiliate and those of a bank affiliate, as if such 
        company or affiliate were a bank and such bank were a 
        subsidiary of a bank holding company.
    ``(d) Financial Holding Company Requirements.--A section 6 holding 
company shall be subject to--
            ``(1) the conditions for engaging in expanded financial 
        activities in section 4(l); and
            ``(2) the provisions applicable to financial holding 
        companies that fail to meet certain requirements in section 
        4(m).
    ``(e) Independence of Section 6 Holding Company.--
            ``(1) No less than 25 percent of the members of the board 
        of directors of a section 6 holding company, and each 
        subsidiary of a section 6 holding company, shall be independent 
        of the parent company of the section 6 holding company and any 
        subsidiary of such parent company. For purposes of this 
        subsection, a director shall be independent of the parent 
        company if such person is not currently serving, and has not 
        within the previous two-year period served, as a director, 
        officer, or employee of any affiliate of the section 6 holding 
        company that is not a subsidiary of the section 6 holding 
        company.
            ``(2) No executive officer of a section 6 holding company 
        or any subsidiary of a section 6 holding company may serve as a 
        director, officer, or employee of an affiliate of the section 6 
        holding company that is not a subsidiary of the section 6 
        holding company.
            ``(3) The Board shall issue regulations that require 
        effective legal and operational separation of the functions of 
        a section 6 holding company from its affiliates that are not 
        subsidiaries of such section 6 holding company, provided, 
        however that such rules shall not require operational 
        separation of internal functions including, but not limited to, 
        human resources management, employee benefit plans, and 
        information technology.
    ``(f) Source of Strength.--A company that directly or indirectly 
controls a section 6 holding company shall serve as a source of 
financial strength to its subsidiary section 6 holding company.''.
    (d) Conforming Changes.--Section 4(h) of the Bank Holding Company 
Act of 1956 (12 U.S.C. 1843(h)), is amended--
            (1) in paragraph (1), by striking ``subparagraph (D), (F), 
        (G), or (H)'' and inserting ``subparagraph (C) or (D)''; and
            (2) in paragraph (2), by striking ``subparagraph (D), (F), 
        (G), or (H)'' and inserting ``subparagraph (C) or (D)''.

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

    Section 5 of the Bank Holding Company Act of 1956 (12 U.S.C. 1844) 
is amended by inserting at the end the following new subsection:
    ``(h) Conversion to Bank Holding Company by Operation of Law.--
            ``(1) Conversion by operation of law.--A company that, on 
        the day before the date of enactment of the Financial Stability 
        Improvement Act of 2009, was not a bank holding company but 
        which, by reason of sections 4(p) and 6 becomes a bank holding 
        company by operation of law, shall register as a bank holding 
        company with the Board in accordance with section 5(a) within 
        90 days of the date of enactment of that Act.
            ``(2) Compliance with bank holding company act.--With 
        respect to any company described in paragraph (1), the Board 
        may grant temporary exemptions or provide other appropriate 
        temporary relief to permit such company to implement measures 
        necessary to comply with the requirements under the Bank 
        Holding Company Act.''.

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

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

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

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

SEC. 1305. STANDARDS FOR INTERSTATE ACQUISITIONS.

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

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

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

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

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

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

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

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

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

``SEC. 7. PROHIBITION ON CERTAIN CONVERSIONS.

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

SEC. 1310. LENDING LIMITS TO INSIDERS.

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

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

    (a) Section 18 of the Federal Deposit Insurance Act (12 U.S.C. 
1828) is amended by inserting after subsection (y) (as added by section 
1408) the following new subsection:
    ``(z) General Prohibition.--An insured depository institution shall 
not purchase an asset from, or sell an asset to, one of its executive 
officers, directors, or principal shareholders or any related interest 
of such person (as such terms are defined in section 22(h) of Federal 
Reserve Act) unless the transaction is on market terms and, if the 
transaction represents more than 10 percent of the institution's 
capital stock and surplus, the transaction has been approved in advance 
by a majority of the institution's board of directors (with interested 
directors of the insured depository institution not participating in 
the approval of the transaction).''.
    (b) FDIC Rulemaking Authority.--The Federal Deposit Insurance 
Corporation may prescribe rules to implement the requirements of 
subsection (a) and the amendments made by subsection (a).
    (c) Amendments to the Federal Reserve Act.--Section 22 of the 
Federal Reserve Act (12 U.S.C. 375) is amended by striking subsection 
(d).

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

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

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

    (a) Bank Acquisitions.--Section 3(c) of the Bank Holding Company 
Act of 1956 (12 U.S.C. 1842(c)) is amended by inserting at the end the 
following new paragraph:
            ``(7) Financial stability.--
                    ``(A) In general.--In every case, the Board shall 
                take into consideration the extent to which the 
                proposed acquisition, merger, or consolidation may pose 
                risk to the stability of the United States financial 
                system or the economy of the United States , including 
                the resulting scope, nature, size, scale, 
                concentration, or interconnectedness of activities that 
                are financial in nature.
                    ``(B) Standards for approval.--The Board may in its 
                sole discretion disapprove any acquisition, merger, or 
                consolidation of, or by, a financial company subject to 
                stricter prudential standards if the Board determines 
                that the resulting concentration of liabilities on a 
                consolidated basis is likely to pose a greater threat 
                to financial stability during times of severe economic 
                distress.''.
    (b) Nonbank Acquisitions.--
            (1) Section 4(j)(2)(A) of the Bank Holding Company is 
        amended by--
                    (A) striking ``or'' before ``unsound banking 
                practices''; and
                    (B) inserting before the period at the end the 
                following: ``, or risk to the stability of the United 
                States financial system or the economy of the United 
                States''.
            (2) Section 4(k)(6) of the Bank Holding Company Act of 1956 
        is amended by striking subparagraph (B) and inserting the 
        following new subparagraph:
                    ``(B) A financial holding company may commence any 
                activity or acquire any company, pursuant to paragraph 
                (4) or any regulation prescribed or order issued under 
                paragraph (5), without prior approval of the Board, 
                except--
                            ``(i) for a transaction in which the total 
                        assets to be acquired by the financial holding 
                        company exceed $25 billion; and
                            ``(ii) as provided in subsection (j) with 
                        regard to the acquisition of a savings 
                        association.''.
    (c) Bank Merger Act Transactions.--Section 8(c)(5) of the Federal 
Deposit Insurance Act (12 U.S.C. 1828(c)(5)) is amended by--
            (1) by striking ``and'' before ``the convenience and needs 
        of the community to be served''; and
            (2) by inserting before the period at the end the 
        following: ``, and the risk to the stability of the United 
        States financial system and the economy of the United States 
        based on, among other things, the scope, nature, size, scale, 
        concentration, or interconnectedness of activities that are 
        financial in nature''.

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

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

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

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

``SEC. 5A. EXAMINATION FEES.

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

     Subtitle E--Improvements to the Federal Deposit Insurance Fund

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

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

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

    Section 7(b)(2) of such Act, as amended, is further amended by 
amending subparagraph (C) to read as follows:
                    ``(C) Assessment.--The assessment of any insured 
                depository institution imposed under this subsection 
                shall be an amount equal to the product of--
                            ``(i) an assessment rate established by the 
                        Corporation; and
                            ``(ii) the amount of the insured depository 
                        institution's average total assets during the 
                        assessment period minus the amount of the 
                        insured depository institution's average 
                        tangible equity during the assessment 
                        period.''.

SEC. 1403. ELIMINATION OF PROCYCLICAL ASSESSMENTS.

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

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

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

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

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

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

SEC. 1501. SHORT TITLE.

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

SEC. 1502. CREDIT RISK RETENTION.

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

``SEC. 29. CREDIT RISK RETENTION.

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

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

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

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

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

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

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

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

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

               Subtitle G--Enhanced Dissolution Authority

SEC. 1601. SHORT TITLE.

    This subtitle may be cited as the ``Dissolution Authority for 
Large, Interconnected Financial Companies Act of 2009''.

SEC. 1602. DEFINITIONS.

    For purposes of this subtitle, the following definitions shall 
apply:
            (1) Appropriate regulatory agency.--
                    (A) Corporation and commission.--The term 
                ``appropriate regulatory agency'' means--
                            (i) the Corporation;
                            (ii) the Commission, if the financial 
                        company, or an affiliate thereof, is a broker 
                        or dealer registered with the Commission under 
                        section 15(b) of the Securities Exchange Act of 
                        1934 (15 U.S.C. 78o(b) (other than an insured 
                        depository institution)); and
                            (iii) if the financial company or an 
                        affiliate of the financial company is an 
                        insurance company (other than an insured 
                        depository institution), the applicable State 
                        insurance authority of the State in which the 
                        insurance company is domiciled.
                    (B) Rules of construction.--More than 1 agency may 
                be an appropriate regulatory agency with respect to any 
                given financial company. In such instances, the 
                Commission shall be the appropriate regulatory agency 
                for purposes of section 1603 if the largest subsidiary 
                of the financial company is a broker or dealer as 
                measured by total assets as of the end of the previous 
                calendar quarter, the applicable State insurance 
                authority of the State in which the insurance company 
                is domiciled shall be the appropriate regulatory agency 
                for purposes of section 1603 if the largest subsidiary 
                of the financial company is an insurance company as 
                measured by total assets as of the end of the previous 
                calendar quarter, and otherwise the Corporation shall 
                be the appropriate regulatory agency for purposes of 
                section 1603.
            (2) Bridge financial company.--The term ``bridge financial 
        company'' means a new financial company organized in accordance 
        with section 1609(h) by the Corporation.
            (3) Commission.--The term ``Commission'' means the 
        Securities and Exchange Commission.
            (4) Corporation.--The term ``Corporation'' means the 
        Federal Deposit Insurance Corporation.
            (5) Covered financial company.--The term ``covered 
        financial company'' means a financial company for which a 
        determination has been made pursuant to and in accordance with 
        section 1603(b).
            (6) Covered subsidiary.--The term ``covered subsidiary'' 
        means a subsidiary covered in paragraph (9)(B)(v).
            (7) Customer property.--The term ``customer property'' has 
        the meaning ascribed to it in the Securities Investor 
        Protection Act of 1970.
            (8) Federal reserve board.--The term ``Federal Reserve 
        Board'' means the Board of Governors of the Federal Reserve 
        System.
            (9) Financial company.--The term ``financial company'' 
        means any company that--
                    (A) is incorporated or organized under Federal law 
                or the laws of any State;
                    (B) is--
                            (i) any bank holding company as defined in 
                        section 2(a) of the Bank Holding Company Act of 
                        1956 (12 U.S.C. 1841(a));
                            (ii) any company that has been subjected to 
                        stricter prudential regulation under section 
                        1103;
                            (iii) any insurance company;
                            (iv) any company predominantly engaged in 
                        activities that are financial in nature or 
                        incidental thereto for purposes of section 4(k) 
                        of the Bank Holding Company Act of 1956 (12 
                        U.S.C. 1843(k)) or that have been identified 
                        for stricter prudential standards under section 
                        1103 of this title; or
                            (v) any subsidiary of companies described 
                        in clauses (i) through (iv) (other than an 
                        insured depository institution or any broker or 
                        dealer registered with the Commission under 
                        section 15(b) of the Securities Exchange Act of 
                        1934 (15 U.S.C. 78o(b)) that is a member of the 
                        Securities Investor Protection Corporation).
            (10) Fund.--The term ``Fund'' means the Systemic 
        Dissolution Fund established in accordance with section 
        1609(n).
            (11) Insurance company.--The term ``insurance company'' 
        includes any person engaged in the business of insurance to the 
        extent of such activities.
            (12) Secretary.--The term ``Secretary'' shall mean the 
        Secretary of the Treasury.
            (13) State.--The term ``State'' means any State, 
        commonwealth, territory, or possession of the United States, 
        the District of Columbia, the Commonwealth of Puerto Rico, the 
        Commonwealth of the Northern Mariana Islands, American Samoa, 
        Guam, and the United States Virgin Islands.
            (14) Certain other terms.--The terms ``affiliate,'' 
        ``company,'' ``control,'' ``deposit,'' ``depository 
        institution,'' ``foreign bank,'' ``insured depository 
        institution,'' and ``subsidiary'' have the same meanings as in 
        section 3 of the Federal Deposit Insurance Act (12 U.S.C. 
        1813).

SEC. 1603. SYSTEMIC RISK DETERMINATION.

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

SEC. 1604. RESOLUTION; STABILIZATION.

    (a) Appointment of Receiver.--
            (1) In general.--Upon the Secretary making a determination 
        in accordance with section 1603(b), the Secretary shall appoint 
        the Corporation as receiver for the covered financial company.
            (2) Time limit on receivership authority.--Any appointment 
        of the Corporation as receiver under paragraph (1) shall 
        terminate on the date that is the end of the 1-year period 
        beginning on the date such appointment is made.
    (b) Resolution Limitations.--
            (1) In general.--An insolvent financial company may be 
        resolved under this subtitle only if the failure and resolution 
        of such company under title 11, United States Code, would be 
        systemically destabilizing, as determined by the appropriate 
        Federal regulatory agencies and the Secretary of the Treasury 
        (in consultation with the President) in accordance with section 
        1603(b).
            (2) Liquidation.--A financial company that comes within 
        coverage of this subtitle for resolution shall be placed in 
        liquidation, and the associated liquidation costs shall be paid 
        from the company's assets and borne by the shareholders and 
        unsecured creditors of such company.
            (3) Assessment for excess liquidation costs.--Any 
        liquidation costs that exceed the amount of liquidated assets 
        of the company shall be paid through assessments on large 
        financial companies.
    (c) Consultation.--The Corporation, as receiver--
            (1) shall consult with the regulators of the covered 
        financial company and its covered subsidiaries for purposes of 
        ensuring an orderly resolution of the covered financial 
        company;
            (2) may consult with, or under section 1609(a)(1)(B)(v) or 
        section 1609(a)(1)(K) acquire services of, any outside experts 
        as appropriate to inform and aid the Corporation in the 
        resolution process; and
            (3) shall consult with the primary regulators of any 
        subsidiaries of the covered financial company that are not 
        covered subsidiaries as described in section 1602(9)(B)(iv) 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.
    (d) Emergency Stabilization After Appointment of Receiver.--Upon 
the Secretary appointing the Corporation as receiver under subsection 
(a), the Corporation may, in its corporate capacity and as an agency of 
the United States, with the approval of the Secretary and subject to 
the conditions in subsections (f) through (g), take the following 
actions under such terms and conditions that the Corporation and the 
Secretary jointly deem appropriate:
            (1) Making loans to, or purchasing any debt obligation of, 
        the covered financial company or any covered subsidiary.
            (2) Purchasing assets of the covered financial company or 
        any covered subsidiary directly or through an entity 
        established by the Corporation for such purpose.
            (3) Assuming or guaranteeing the obligations of the covered 
        financial company or any covered subsidiary to one or more 
        third parties.
            (4) Taking a lien on any or all assets of the covered 
        financial company or any covered subsidiary, including a first 
        priority lien on all unencumbered assets of the company or any 
        covered subsidiary to secure repayment of any transactions 
        conducted under this subsection.
            (5) Selling or transferring all, or any part thereof, of 
        such acquired assets, liabilities, or obligations of the 
        covered financial company or any covered subsidiary.
    (e) Treatment of Certain Insurance Subsidiaries.--
            (1) In general.--Notwithstanding subsection (a), if a 
        covered financial company is an insurance company covered by a 
        State law designed specifically to deal with the insolvency of 
        an insurance company, resolution of such company, and any 
        subsidiary of such company, will be conducted as provided under 
        such State law.
            (2) Exception for covered subsidiaries.--The requirement of 
        paragraph (1) shall not apply with respect to any covered 
        subsidiary of such an insurance company.
            (3) Backup authority.--Notwithstanding paragraph (1), with 
        respect to a covered financial company described under 
        paragraph (1), if, after the end of the 60-day period beginning 
        on the date a determination is made under section 1603(b) with 
        respect to such company, the appropriate regulatory agency has 
        not filed the appropriate judicial action in the appropriate 
        State court to place such company into resolution under the 
        State's laws and requirements, the Corporation shall have the 
        authority to stand in the place of the appropriate regulatory 
        agency and file the appropriate judicial action in the 
        appropriate State court to place such company into resolution 
        under the State's laws and requirements.
    (f) Mandatory Terms and Conditions for All Stabilization Actions.--
The Corporation as receiver is authorized to take the stabilization 
actions listed in subsection (d) only if--
            (1) the Secretary and the Corporation determine that such 
        action is necessary for the purpose of financial stability and 
        not for the purpose of preserving the covered financial 
        company;
            (2) the Corporation ensures that the shareholders of a 
        covered financial company do not receive payment until after 
        all other claims are fully paid;
            (3) the Corporation ensures that any funds from taxpayers 
        shall be repaid as part of the resolution process before 
        payments are made to creditors;
            (4) the Corporation ensures that unsecured creditors bear 
        losses;
            (5) the Corporation ensures that management responsible for 
        the failed condition of the covered financial company is 
        removed (if such management has not already been removed at the 
        time the Corporation is appointed as receiver); and
            (6) the Corporation ensures that the members of the board 
        of directors (or body performing similar functions) responsible 
        for the failed condition of the covered financial company are 
        removed (if such members have not already been removed at the 
        time the Corporation is appointed as receiver).
    (g) Recoupment of Funds Expended for Systemic Stabilization 
Purposes.--Amounts expended from the Fund by the Corporation under this 
section shall be repaid in full to the Fund from the following sources:
            (1) Resolution process.--Amounts attributable to the 
        proceeds of the sale of, or income from, the assets of the 
        covered financial company.
            (2) Industry assessments.--If the sources described in 
        paragraph (1) are insufficient to repay the amount of the 
        stabilization action in full, the difference shall be recouped 
        through assessments on financial companies in accordance with 
        section 1609(o).

SEC. 1605. JUDICIAL REVIEW.

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

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

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

SEC. 1607. TERMINATION AND EXCLUSION OF OTHER ACTIONS.

    The Corporation's acting as receiver for a covered financial 
company under this title shall immediately, and by operation of law, 
terminate any case commenced with respect to the covered financial 
company under title 11, United States Code, or any proceeding under any 
State insolvency law with respect to the covered financial company, and 
no such case or proceeding may be commenced with respect to the covered 
financial company at any time while the Corporation acts as receiver 
for the covered financial company.

SEC. 1608. RULEMAKING.

    The Corporation may prescribe such regulations as the Corporation 
considers necessary or appropriate to implement the provisions of this 
title.

SEC. 1609. POWERS AND DUTIES OF CORPORATION.

    (a) Powers and Authorities.--
            (1) General powers.--
                    (A) Successor to covered financial company.--The 
                Corporation shall, upon appointment as receiver for a 
                covered financial company under section 1604, and by 
                operation of law, succeed to--
                            (i) all rights, titles, powers, and 
                        privileges of the covered financial company, 
                        and of any stockholder, member, officer, or 
                        director of such institution with respect to 
                        the covered financial company and the assets of 
                        the covered financial company; and
                            (ii) title to the books, records, and 
                        assets of any previous receiver or other legal 
                        custodian of such covered financial company.
                    (B) Operate the covered financial company.--The 
                Corporation as receiver for a covered financial company 
                may--
                            (i) take over the assets of and operate the 
                        covered financial company with all the powers 
                        of the members or shareholders, the directors, 
                        and the officers of the covered financial 
                        company and conduct all business of the covered 
                        financial company;
                            (ii) collect all obligations and money due 
                        the covered financial company;
                            (iii) perform all functions of the covered 
                        financial company in the name of the covered 
                        financial company;
                            (iv) preserve and conserve the assets and 
                        property of the covered financial company; and
                            (v) provide by contract for assistance in 
                        fulfilling any function, activity, action, or 
                        duty of the Corporation as receiver.
                    (C) Functions of covered financial company's 
                officers, directors, and shareholders.--
                            (i) In general.--The Corporation may 
                        provide for the exercise of any function by any 
                        member or stockholder, director, or officer of 
                        any covered financial company for which the 
                        Corporation has been appointed as receiver 
                        under this section.
                            (ii) Presumption.--There shall be a strong 
                        presumption that the Corporation, as receiver, 
                        will remove management responsible for the 
                        failed condition of the covered financial 
                        company (if such management has not already 
                        been removed at the time the Corporation is 
                        appointed as receiver).
                    (D) Additional powers as receiver.--The Corporation 
                may, as receiver, and subject to all legally 
                enforceable and perfected security interests, place the 
                covered financial company in liquidation and proceed to 
                realize upon the assets of the covered financial 
                company in such manner as the Corporation deems 
                appropriate, including through the sale of assets, the 
                transfer of assets to a bridge financial company 
                established under subsection (h), or the exercise of 
                any other rights or privileges granted to the receiver 
                under this section.
                    (E) Organization of new companies.--The Corporation 
                as receiver may organize a bridge financial company 
                under subsection (h).
                    (F) Merger; transfer of assets and liabilities.--
                            (i) In general.--Subject to clause (ii), 
                        the Corporation as receiver may--
                                    (I) merge the covered financial 
                                company with another company; or
                                    (II) transfer any asset or 
                                liability of the covered financial 
                                company (including assets and 
                                liabilities associated with any trust 
                                or custody business) without obtaining 
                                any approval, assignment, or consent 
                                with respect to such transfer.
                            (ii) Federal agency approval; antitrust 
                        review.--
                                    (I) In general.--If a transaction 
                                described in clause (i) requires 
                                approval by a Federal agency, the 
                                transaction may not be consummated 
                                before the 5th calendar day after the 
                                date of approval by the Federal agency 
                                responsible for such approval with 
                                respect thereto. If, in connection with 
                                any such approval, a report on 
                                competitive factors is required, the 
                                Federal agency responsible for such 
                                approval shall promptly notify the 
                                Attorney General of the proposed 
                                transaction and the Attorney General 
                                shall provide the required report 
                                within 10 days of the request. If a 
                                filing is required under the Hart 
                                Scott-Rodino Antitrust Improvements Act 
                                of 1976 with the Department of Justice 
                                or the Federal Trade Commission, the 
                                waiting period shall expire not later 
                                than the 30th day following such filing 
                                notwithstanding any other provision of 
                                Federal law or any attempt by any 
                                Federal agency to extend such waiting 
                                period, and no further request for 
                                information by any Federal agency shall 
                                be permitted.
                                    (II) Emergency.--If the Secretary 
                                in consultation with the Chairman of 
                                the Federal Reserve Board has found 
                                that the Corporation must act 
                                immediately to prevent the probable 
                                failure of 1 or more of the covered 
                                financial companies involved, the 
                                approvals and filings referred to in 
                                subclause (I) shall not be required and 
                                the transactions may be consummated 
                                immediately by the Corporation.
                    (G) Payment of valid obligations.--The Corporation, 
                as receiver, shall, to the extent funds are available, 
                pay all valid obligations of the covered financial 
                company that are due and payable at the time of the 
                appointment of the Corporation as receiver in 
                accordance with the prescriptions and limitations of 
                this title.
                    (H) Subpoena authority.--
                            (i) In general.--The Corporation may, for 
                        purposes of carrying out any power, authority, 
                        or duty with respect to a covered financial 
                        company (including determining any claim 
                        against the covered financial company and 
                        determining and realizing upon any asset of any 
                        person in the course of collecting money due 
                        the covered financial company), exercise any 
                        power established under section 8(n) of the 
                        Federal Deposit Insurance Act as if the covered 
                        financial company were an insured depository 
                        institution.
                            (ii) Rule of construction.--This section 
                        shall not be construed as limiting any rights 
                        that the Corporation, in any capacity, might 
                        otherwise have to exercise any powers described 
                        in clause (i) under any other provision of law.
                    (I) Incidental powers.--The Corporation, as 
                receiver, may--
                            (i) exercise all powers and authorities 
                        specifically granted to receivers under this 
                        section and such incidental powers as shall be 
                        necessary to carry out such powers; and
                            (ii) take any action authorized by this 
                        section, which the Corporation determines is in 
                        the best interests of the covered financial 
                        company, its customers, its creditors, its 
                        counterparties, or the stability of the 
                        financial system.
                    (J) Utilization of private sector.--In carrying out 
                its responsibilities in the management and disposition 
                of assets from a covered financial company, the 
                Corporation, as receiver, may utilize the services of 
                private persons, including real estate and loan 
                portfolio asset management, property management, 
                auction marketing, legal, and brokerage services, if 
                such services are available in the private sector and 
                the Corporation determines utilization of such services 
                is practicable, efficient, and cost effective.
                    (K) Shareholders and creditors of covered financial 
                company.--Notwithstanding any other provision of law, 
                the Corporation as receiver for a covered financial 
                company pursuant to this section and its succession, by 
                operation of law, to the rights, titles, powers, and 
                privileges described in subparagraph (A) shall 
                terminate all rights and claims that the stockholders 
                and creditors of the covered financial company may have 
                against the assets of the covered financial company or 
                the Corporation arising out of their status as 
                stockholders or creditors, except for their right to 
                payment, resolution, or other satisfaction of their 
                claims, as permitted under this section. The 
                Corporation shall ensure that shareholders and 
                unsecured creditors bear losses, consistent with the 
                priority of claims provisions in section 1609(b).
                    (L) Coordination with foreign financial 
                authorities.--The Corporation as receiver for a covered 
                financial company shall coordinate with the appropriate 
                foreign financial authorities regarding the resolution 
                of subsidiaries of the covered financial company that 
                are established in a country other than the United 
                States.
            (2) Authority of corporation to determine claims.--
                    (A) In general.--The Corporation may, as receiver, 
                determine claims in accordance with the requirements of 
                this subsection and regulations prescribed under 
                paragraph (3).
                    (B) Notice requirements.--The receiver, in any case 
                involving the liquidation or winding up of the affairs 
                of a covered financial company, shall--
                            (i) promptly publish a notice to the 
                        covered financial company's creditors to 
                        present their claims, together with proof, to 
                        the receiver by a date specified in the notice 
                        which shall be not less than 90 days after the 
                        publication of such notice; and
                            (ii) republish such notice approximately 1 
                        month and 2 months, respectively, after the 
                        publication under clause (i).
                    (C) Mailing required.--The receiver shall mail a 
                notice similar to the notice published under 
                subparagraph (B)(i) at the time of such publication to 
                any creditor shown on the covered financial company's 
                books--
                            (i) at the creditor's last address 
                        appearing in such books; or
                            (ii) upon discovery of the name and address 
                        of a claimant not appearing on the covered 
                        financial company's books, within 30 days after 
                        the discovery of such name and address.
            (3) Rulemaking authority relating to determination of 
        claims.--
                    (A) In general.--Subject to subsection (b), the 
                Corporation shall prescribe rules and regulations 
                regarding the allowance or disallowance of claims by 
                the Corporation and providing for administrative 
                determination of claims and review of such 
                determination.
                    (B) Existing rules.--The Corporation may elect to 
                use the regulations adopted pursuant to the provisions 
                of section 11 of the Federal Deposit Insurance Act with 
                respect to the determination of claims for a covered 
                financial company as if the covered financial company 
                were an insured depository institution.
            (4) Procedures for determination of claims.--
                    (A) Determination period.--
                            (i) In general.--Before the end of the 180-
                        day period beginning on the date any claim 
                        against a covered financial company is filed 
                        with the Corporation as receiver, the 
                        Corporation shall determine whether to allow or 
                        disallow the claim and shall notify the 
                        claimant of any determination with respect to 
                        such claim.
                            (ii) Extension of time.--The period 
                        described in clause (i) may be extended by a 
                        written agreement between the claimant and the 
                        Corporation.
                            (iii) Mailing of notice sufficient.--The 
                        requirements of clause (i) shall be deemed to 
                        be satisfied if the notice of any determination 
                        with respect to any claim is mailed to the last 
                        address of the claimant which appears--
                                    (I) on the covered financial 
                                company's books;
                                    (II) in the claim filed by the 
                                claimant; or
                                    (III) in documents submitted in 
                                proof of the claim.
                            (iv) Contents of notice of disallowance.--
                        If any claim filed under clause (i) is 
                        disallowed, the notice to the claimant shall 
                        contain--
                                    (I) a statement of each reason for 
                                the disallowance; and
                                    (II) the procedures available for 
                                obtaining agency review of the 
                                determination to disallow the claim or 
                                judicial determination of the claim.
                    (B) Allowance of proven claim.--The Corporation 
                shall allow any claim received on or before the date 
                specified in the notice published under paragraph 
                (2)(B)(i) by the Corporation from any claimant which is 
                proved to the satisfaction of the Corporation.
                    (C) Disallowance of claims filed after end of 
                filing period.--
                            (i) In general.--Except as provided in 
                        clause (ii), claims filed after the date 
                        specified in the notice published under 
                        paragraph (2)(B)(i) shall be disallowed and 
                        such disallowance shall be final.
                            (ii) Certain exceptions.--Clause (i) shall 
                        not apply with respect to any claim filed by 
                        any claimant after the date specified in the 
                        notice published under paragraph (2)(B)(i) and 
                        such claim may be considered by the receiver 
                        if--
                                    (I) the claimant did not receive 
                                notice of the appointment of the 
                                receiver in time to file such claim 
                                before such date; and
                                    (II) such claim is filed in time to 
                                permit payment of such claim.
                    (D) Authority to disallow claims.--
                            (i) In general.--The Corporation may 
                        disallow any portion of any claim by a creditor 
                        or claim of security, preference, or priority 
                        which is not proved to the satisfaction of the 
                        Corporation.
                            (ii) Payments to less than fully secured 
                        creditors.--In the case of a claim of a 
                        creditor against a covered financial company 
                        which is secured by any property or other asset 
                        of such covered financial company, the 
                        receiver--
                                    (I) may treat the portion of such 
                                claim which exceeds an amount equal to 
                                the fair market value of such property 
                                or other asset as an unsecured claim 
                                against the covered financial company; 
                                and
                                    (II) may not make any payment with 
                                respect to such unsecured portion of 
                                the claim other than in connection with 
                                the disposition of all claims of 
                                unsecured creditors of the covered 
                                financial company.
                            (iii) Exceptions.--No provision of this 
                        paragraph shall apply with respect to--
                                    (I) any extension of credit from 
                                any Federal Reserve bank, or the 
                                Corporation, to any covered financial 
                                company; or
                                    (II) subject to clause (ii), any 
                                legally enforceable or perfected 
                                security interest in the assets of the 
                                covered financial company securing any 
                                such extension of credit.
                            (iv) Payments to fully secured creditors.--
                        Notwithstanding any other provision of law, in 
                        any receivership of a covered financial company 
                        in which amounts realized from the resolution 
                        are insufficient to satisfy completely any 
                        amounts owed to the United States or to the 
                        Fund, as determined in the receiver's sole 
                        discretion, an allowed claim under a legally 
                        enforceable or perfected security interest 
                        (that became a legally enforceable or perfected 
                        security interest after the date of the 
                        enactment of this clause), other than a legally 
                        enforceable or perfected security interest of 
                        the Federal Government, in any of the assets of 
                        the covered financial company in receivership 
                        may be treated as an unsecured claim in the 
                        amount of up to 20 percent as necessary to 
                        satisfy any amounts owed to the United States 
                        or to the Fund. Any balance of such claim that 
                        is treated as an unsecured claim under this 
                        subparagraph shall be paid as a general 
                        liability of the covered financial company.
                    (E) No judicial review of determination pursuant to 
                subparagraph (d).--No court may review the Corporation 
                determination pursuant to subparagraph (D) to disallow 
                a claim.
                    (F) Legal effect of filing.--
                            (i) Statute of limitation tolled.--For 
                        purposes of any applicable statute of 
                        limitations, the filing of a claim with the 
                        Corporation shall constitute a commencement of 
                        an action.
                            (ii) No prejudice to other actions.--
                        Subject to paragraph (9), the filing of a claim 
                        with the Corporation shall not prejudice any 
                        right of the claimant to continue any action 
                        which was filed before the appointment of the 
                        Corporation as receiver for the covered 
                        financial company.
            (5) Provision for judicial determination of claims.--
                    (A) In general.--Before the end of the 60-day 
                period beginning on the earlier of--
                            (i) the end of the period described in 
                        paragraph (4)(A)(i) (or, if extended by 
                        agreement of the Corporation and the claimant, 
                        the period described in paragraph (4)(A)(ii)) 
                        with respect to any claim against a covered 
                        financial company for which the Corporation is 
                        receiver; or
                            (ii) the date of any notice of disallowance 
                        of such claim pursuant to paragraph (4)(A)(i),
                the claimant may file suit on a claim (or continue an 
                action commenced before the appointment of the 
                receiver) in the district or territorial court of the 
                United States for the district within which the covered 
                financial company's principal place of business is 
                located or the United States District Court for the 
                District of Columbia (and such court shall have 
                jurisdiction to hear such claim).
                    (B) Statute of limitations.--If any claimant fails 
                to file suit on such claim (or continue an action 
                commenced before the appointment of the receiver) 
                before the end of the 60-day period described in 
                subparagraph (A), the claim shall be deemed to be 
                disallowed (other than any portion of such claim which 
                was allowed by the receiver) as of the end of such 
                period, such disallowance shall be final, and the 
                claimant shall have no further rights or remedies with 
                respect to such claim.
            (6) Expedited determination of claims.--
                    (A) Establishment required.--The Corporation shall 
                establish a procedure for expedited relief outside of 
                the routine claims process established under paragraph 
                (4) for claimants who--
                            (i) allege the existence of legally valid 
                        and enforceable or perfected security interests 
                        in assets of any covered financial company for 
                        which the Corporation has been appointed as 
                        receiver; and
                            (ii) allege that irreparable injury will 
                        occur if the routine claims procedure is 
                        followed.
                    (B) Determination period.--Before the end of the 
                90-day period beginning on the date any claim is filed 
                in accordance with the procedures established pursuant 
                to subparagraph (A), the Corporation shall--
                            (i) determine--
                                    (I) whether to allow or disallow 
                                such claim; or
                                    (II) whether such claim should be 
                                determined pursuant to the procedures 
                                established pursuant to paragraph (4); 
                                and
                            (ii) notify the claimant of the 
                        determination, and if the claim is disallowed, 
                        provide a statement of each reason for the 
                        disallowance and the procedure for obtaining 
                        judicial determination.
                    (C) Period for filing or renewing suit.--Any 
                claimant who files a request for expedited relief shall 
                be permitted to file a suit, or to continue such a suit 
                filed before the appointment of the Corporation as 
                receiver, seeking a determination of the claimant's 
                rights with respect to such security interest after the 
                earlier of--
                            (i) the end of the 90-day period beginning 
                        on the date of the filing of a request for 
                        expedited relief; or
                            (ii) the date the Corporation denies the 
                        claim.
                    (D) Statute of limitations.--If an action described 
                in subparagraph (C) is not filed, or the motion to 
                renew a previously filed suit is not made, before the 
                end of the 30-day period beginning on the date on which 
                such action or motion may be filed in accordance with 
                subparagraph (B), the claim shall be deemed to be 
                disallowed as of the end of such period (other than any 
                portion of such claim which was allowed by the 
                receiver), such disallowance shall be final, and the 
                claimant shall have no further rights or remedies with 
                respect to such claim.
                    (E) Legal effect of filing.--
                            (i) Statute of limitation tolled.--For 
                        purposes of any applicable statute of 
                        limitations, the filing of a claim with the 
                        receiver shall constitute a commencement of an 
                        action.
                            (ii) No prejudice to other actions.--
                        Subject to paragraph (9), the filing of a claim 
                        with the receiver shall not prejudice any right 
                        of the claimant to continue any action which 
                        was filed before the appointment of the 
                        Corporation as receiver for the covered 
                        financial company.
            (7) Agreements against interest of the receiver.--No 
        agreement that tends to diminish or defeat the interest of the 
        Corporation as receiver in any asset acquired by the receiver 
        under this section shall be valid against the receiver unless 
        such agreement is in writing and executed by an authorized 
        officer or representative of the covered financial company.
            (8) Payment of claims.--
                    (A) In general.--The Corporation as receiver may, 
                in its discretion and to the extent funds are 
                available, pay creditor claims, in such manner and 
                amounts as are authorized under this section, which 
                are--
                            (i) allowed by the receiver;
                            (ii) approved by the Corporation pursuant 
                        to a final determination pursuant to paragraph 
                        (6); or
                            (ii) determined by the final judgment of 
                        any court of competent jurisdiction.
                    (B) Payment of dividends on claims.--The receiver 
                may, in the receiver's sole discretion and to the 
                extent otherwise permitted by this section, pay 
                dividends on proven claims at any time, and no 
                liability shall attach to the Corporation (in the 
                Corporation's capacity as receiver), by reason of any 
                such payment, for failure to pay dividends to a 
                claimant whose claim is not proved at the time of any 
                such payment.
                    (C) Rulemaking authority of corporation.--The 
                Corporation may prescribe such rules, including 
                definitions of terms, as it deems appropriate to 
                establish a single uniform interest rate for, or to 
                make payments of post insolvency interest to creditors 
                holding proven claims against the receivership estates 
                of a covered financial company following satisfaction 
                by the receiver of the principal amount of all creditor 
                claims.
            (9) Suspension of legal actions.--
                    (A) In general.--After the appointment of the 
                Corporation as receiver for a covered financial 
                company, the Corporation may request a stay for a 
                period not to exceed 90 days in any noncriminal 
                judicial action or proceeding to which such covered 
                financial company is or becomes a party.
                    (B) Grant of stay by all courts required.--Upon 
                receipt of a request by the Corporation pursuant to 
                subparagraph (A) for a stay of any non-criminal 
                judicial action or proceeding in any court with 
                jurisdiction of such action or proceeding, the court 
                shall grant such stay as to all parties.
            (10) Additional rights and duties.--
                    (A) Prior final adjudication.--The Corporation 
                shall abide by any final unappealable judgment of any 
                court of competent jurisdiction which was rendered 
                before the appointment of the Corporation as receiver.
                    (B) Rights and remedies of receiver.--In the event 
                of any appealable judgment, the Corporation as receiver 
                shall--
                            (i) have all the rights and remedies 
                        available to the covered financial company 
                        (before the appointment of the receiver under 
                        section 1604) and the Corporation, including 
                        but not limited to removal to Federal court and 
                        all appellate rights; and
                            (ii) not be required to post any bond in 
                        order to pursue such remedies.
                    (C) No attachment or execution.--No attachment or 
                execution may issue by any court upon assets in the 
                possession of the receiver.
                    (D) Limitation on judicial review.--Except as 
                otherwise provided in this subsection, no court shall 
                have jurisdiction over--
                            (i) any claim or action for payment from, 
                        or any action seeking a determination of rights 
                        with respect to, the assets of any covered 
                        financial company for which the Corporation has 
                        been appointed receiver, including any assets 
                        which the Corporation may acquire from itself 
                        as such receiver; or
                            (ii) any claim relating to any act or 
                        omission of such covered financial company or 
                        the Corporation as receiver.
                    (E) Disposition of assets.--In exercising any 
                right, power, privilege, or authority as receiver in 
                connection with any covered financial company for which 
                the Corporation is acting as receiver under this 
                section, the Corporation shall, to the greatest extent 
                practicable, conduct its operations in a manner which--
                            (i) maximizes the net present value return 
                        from the sale or disposition of such assets;
                            (ii) minimizes the amount of any loss 
                        realized in the resolution of cases;
                            (iii) minimizes the cost to the general 
                        fund of the Treasury;
                            (iv) mitigates the potential for serious 
                        adverse effects to the financial system and the 
                        U.S. economy;
                            (v) ensures timely and adequate competition 
                        and fair and consistent treatment of offerors; 
                        and
                            (vi) prohibits discrimination on the basis 
                        of race, sex, or ethnic groups in the 
                        solicitation and consideration of offers.
            (11) Statute of limitations for actions brought by 
        receiver.--
                    (A) In general.--Notwithstanding any provision of 
                any contract, the applicable statute of limitations 
                with regard to any action brought by the Corporation as 
                receiver shall be--
                            (i) in the case of any contract claim, the 
                        longer of--
                                    (I) the 6-year period beginning on 
                                the date the claim accrues; or
                                    (II) the period applicable under 
                                State law; and
                            (ii) in the case of any tort claim, the 
                        longer of--
                                    (I) the 3-year period beginning on 
                                the date the claim accrues; or
                                    (II) the period applicable under 
                                State law.
                    (B) Determination of the date on which a claim 
                accrues.--For purposes of subparagraph (A), the date on 
                which the statute of limitations begins to run on any 
                claim described in such subparagraph shall be the later 
                of--
                            (i) the date of the appointment of the 
                        Corporation as receiver under this title; or
                            (ii) the date on which the cause of action 
                        accrues.
                    (C) Revival of expired state causes of action.--
                            (i) In general.--In the case of any tort 
                        claim described in clause (ii) for which the 
                        statute of limitation applicable under State 
                        law with respect to such claim has expired not 
                        more than 5 years before the appointment of the 
                        Corporation as receiver, the Corporation may 
                        bring an action as receiver on such claim 
                        without regard to the expiration of the statute 
                        of limitation applicable under State law.
                            (ii) Claims described.--A tort claim 
                        referred to in clause (i) is a claim arising 
                        from fraud, intentional misconduct resulting in 
                        unjust enrichment, or intentional misconduct 
                        resulting in substantial loss to the covered 
                        financial company.
            (12) Fraudulent transfers.--
                    (A) In general.--The Corporation, as receiver for 
                any covered financial company, may avoid a transfer of 
                any interest of an institution affiliated party, or any 
                person who the Corporation determines is a debtor of 
                the covered financial company, in property, or any 
                obligation incurred by such party or person, that was 
                made within 5 years of the date on which the 
                Corporation was appointed receiver if such party or 
                person voluntarily or involuntarily made such transfer 
                or incurred such liability with the intent to hinder, 
                delay, or defraud the covered financial company or the 
                Corporation.
                    (B) Right of recovery.--To the extent a transfer is 
                avoided under subparagraph (A), the Corporation may 
                recover, for the benefit of the covered financial 
                company, the property transferred or, if a court so 
                orders, the value of such property (at the time of such 
                transfer) from--
                            (i) the initial transferee of such transfer 
                        or the institution-affiliated party or person 
                        for whose benefit such transfer was made; or
                            (ii) any immediate or mediate transferee of 
                        any such initial transferee.
                    (C) Rights of transferee or obligee.--The 
                Corporation may not recover under subparagraph (B)--
                            (i) any transfer that takes for value, 
                        including satisfaction or securing of a present 
                        or antecedent debt, in good faith, or
                            (ii) any immediate or mediate good faith 
                        transferee of such transferee.
                    (D) Rights under this subsection.--The rights of 
                the Corporation as receiver of a covered financial 
                company under this subsection shall be superior to any 
                rights of a trustee or any other party (other than any 
                party which is a Federal agency) under title 11, United 
                States Code.
                    (E) Definition.--For purposes of this subsection, 
                the term ``institution affiliated party'' means--
                            (i) any director, officer, employee, or 
                        controlling stockholder of, or agent for, a 
                        covered financial company;
                            (ii) any shareholder, consultant, joint 
                        venture partner, and any other person as 
                        determined by the Corporation (by regulation or 
                        otherwise) who participates in the conduct of 
                        the affairs of a covered financial company; and
                            (iii) any independent contractor (including 
                        any attorney, appraiser, or accountant) who 
                        knowingly or recklessly participates in--
                                    (I) any violation of any law or 
                                regulation;
                                    (II) any breach of fiduciary duty; 
                                or
                                    (III) any unsafe or unsound 
                                practice,
                        which caused or is likely to cause more than a 
                        minimal financial loss to, or a significant 
                        adverse effect on, the covered financial 
                        company.
            (13) Attachment of assets and other injunctive relief.--
        Subject to paragraph (14), any court of competent jurisdiction 
        may, at the request of the Corporation, issue an order in 
        accordance with Rule 65 of the Federal Rules of Civil 
        Procedure, including an order placing the assets of any person 
        designated by the Corporation under the control of the court 
        and appointing a trustee to hold such assets.
            (14) Standards.--
                    (A) Showing.--Rule 65 of the Federal Rules of Civil 
                Procedure shall apply with respect to any proceeding 
                under paragraph (13) without regard to the requirement 
                of such rule that the applicant show that the injury, 
                loss, or damage is irreparable and immediate.
                    (B) State proceeding.--If, in the case of any 
                proceeding in a State court, the court determines that 
                rules of civil procedure available under the laws of 
                such State provide substantially similar protections to 
                such party's right to due process as Rule 65 (as 
                modified with respect to such proceeding by 
                subparagraph (A)), the relief sought by the Corporation 
                pursuant to paragraph (14) may be requested under the 
                laws of such State.
            (15) Treatment of claims arising from breach of contracts 
        executed by the corporation as receiver.--Notwithstanding any 
        other provision of this subsection, any final and unappealable 
        judgment for monetary damages entered against the Corporation 
        as receiver for a covered financial company for the breach of 
        an agreement executed or approved by the Corporation after the 
        date of its appointment shall be paid as an administrative 
        expense of the receiver. Nothing in this paragraph shall be 
        construed to limit the power of a receiver to exercise any 
        rights under contract or law, including to terminate, breach, 
        cancel, or otherwise discontinue such agreement.
            (16) Accounting and recordkeeping requirements.--
                    (A) In general.--The Corporation as receiver shall, 
                consistent with the accounting and reporting practices 
                and procedures established by the Corporation, maintain 
                a full accounting of each receivership or other 
                disposition of any covered financial company.
                    (B) Annual accounting or report.--With respect to 
                each receivership to which the Corporation was 
                appointed, the Corporation shall make an annual 
                accounting or report, as appropriate, available to the 
                Secretary and the Comptroller General of the United 
                States.
                    (C) Availability of reports.--Any report prepared 
                pursuant to subparagraph (B) shall be made available by 
                the Corporation upon request to any member of the 
                public.
                    (D) Recordkeeping requirement.--
                            (i) In general.--Except as provided in 
                        clause (ii), after the end of the 6-year period 
                        beginning on the date the Corporation is 
                        appointed as receiver of a covered financial 
                        company the Corporation may destroy any records 
                        of such covered financial company which the 
                        Corporation, in the Corporation's discretion, 
                        determines to be unnecessary unless directed 
                        not to do so by a court of competent 
                        jurisdiction or governmental agency, or 
                        prohibited by law.
                            (ii) Old records.--Notwithstanding clause 
                        (i), the Corporation may destroy records of a 
                        covered financial company which are at least 10 
                        years old as of the date on which the 
                        Corporation is appointed as the receiver of 
                        such company in accordance with clause (i) at 
                        any time after such appointment is final, 
                        without regard to the 6-year period of 
                        limitation contained in clause (i).
    (b) Priority of Expenses and Unsecured Claims.--
            (1) In general.--Unsecured claims against a covered 
        financial company, or the receiver for such covered financial 
        company under this section, that are proven to the satisfaction 
        of the receiver shall have priority in the following order:
                    (A) Administrative expenses of the receiver.
                    (B) Any amounts owed to the United States, unless 
                the United States agrees or consents otherwise.
                    (C) Any other general or senior liability of the 
                covered financial company (which is not a liability 
                described under subparagraph (D) or (E)).
                    (D) Any obligation subordinated to general 
                creditors (which is not an obligation described under 
                subparagraph (E)).
                    (E) Any obligation to shareholders, members, 
                general partners, limited partners or other persons 
                with interests in the equity of the covered financial 
                company arising as a result of their status as 
                shareholders, members, general partners, limited 
                partners or other persons with interests in the equity 
                of the covered financial company.
            (2) Post-receivership financing priority.--In the event 
        that the Corporation as receiver is unable to obtain unsecured 
        credit for the covered financial company from commercial 
        sources, the Corporation as receiver may obtain credit or incur 
        debt on the part of the covered financial company which shall 
        have priority over any or all administrative expenses of the 
        receiver under paragraph (1)(A).
            (3) Claims of the united states.--Unsecured claims of the 
        United States shall, at a minimum, have a higher priority than 
        liabilities of the covered financial company that count as 
        regulatory capital.
            (4) Creditors similarly situated.--Subject to the 
        priorities established under paragraphs (2) and (3), all 
        claimants of a covered financial company that are similarly 
        situated under paragraph (1) shall be treated in a similar 
        manner, except that the receiver may take any action (including 
        making payments) that does not comply with this subsection, 
        if--
                    (A) the Corporation determines that such action is 
                necessary to maximize the value of the assets of the 
                covered financial company, to maximize the present 
                value return from the sale or other disposition of the 
                assets of the covered financial company, to minimize 
                the amount of any loss realized upon the sale or other 
                disposition of the assets of the covered financial 
                company, or to contain or address serious adverse 
                effects on financial stability or the U.S. economy; and
                    (B) all claimants that are similarly situated under 
                paragraph (1) receive not less than the amount provided 
                in subsection (d)(2).
            (3) Secured claims unaffected.--This subsection shall not 
        affect secured claims, except to the extent that the security 
        is insufficient to satisfy the claim and then only with regard 
        to the difference between the claim and the amount realized 
        from the security.
            (4) Definitions.--As used in this subsection, the term 
        ``administrative expenses of the receiver'' includes--
                    (A) the actual, necessary costs and expenses 
                incurred by the receiver in preserving the assets of a 
                covered financial company or liquidating or otherwise 
                resolving the affairs of a covered financial company 
                for which the Corporation has been appointed as 
                receiver; and
                    (B) any obligations that the receiver determines 
                are necessary and appropriate to facilitate the smooth 
                and orderly liquidation or other resolution of the 
                covered financial company.
    (c) Provisions Relating to Contracts Entered Into Before 
Appointment of Receiver.--
            (1) Authority to repudiate contracts.--In addition to any 
        other rights a receiver may have, the Corporation as receiver 
        for any covered financial company may disaffirm or repudiate 
        any contract or lease--
                    (A) to which the covered financial company is a 
                party;
                    (B) the performance of which the receiver, in the 
                receiver's discretion, determines to be burdensome; and
                    (C) the disaffirmance or repudiation of which the 
                receiver determines, in the receiver's discretion, will 
                promote the orderly administration of the covered 
                financial company's affairs.
            (2) Timing of repudiation.--The receiver appointed for any 
        covered financial company under section 1604 shall determine 
        whether or not to exercise the rights of repudiation under this 
        subsection within a reasonable period following such 
        appointment.
            (3) Claims for damages for repudiation.--
                    (A) In general.--Except as otherwise provided in 
                subparagraph (C) and paragraphs (4), (5), and (6), the 
                liability of the receiver for the disaffirmance or 
                repudiation of any contract pursuant to paragraph (1) 
                shall be--
                            (i) limited to actual direct compensatory 
                        damages; and
                            (ii) determined as of--
                                    (I) the date of the appointment of 
                                the receiver; or
                                    (II) in the case of any contract or 
                                agreement referred to in paragraph (8), 
                                the date of the disaffirmance or 
                                repudiation of such contract or 
                                agreement.
                    (B) No liability for other damages.--For purposes 
                of subparagraph (A), the term ``actual direct 
                compensatory damages'' does not include--
                            (i) punitive or exemplary damages;
                            (ii) damages for lost profits or 
                        opportunity; or
                            (iii) damages for pain and suffering.
                    (C) Measure of damages for repudiation of qualified 
                financial contracts.--In the case of any qualified 
                financial contract or agreement to which paragraph (8) 
                applies, compensatory damages shall be--
                            (i) deemed to include normal and reasonable 
                        costs of cover or other reasonable measures of 
                        damages utilized in the industries for such 
                        contract and agreement claims; and
                            (ii) paid in accordance with this 
                        subsection and subsection (d) except as 
                        otherwise specifically provided in this 
                        subsection.
            (4) Leases under which the covered financial company is the 
        lessee.--
                    (A) In general.--If the receiver disaffirms or 
                repudiates a lease under which the covered financial 
                company was the lessee, the receiver shall not be 
                liable for any damages (other than damages determined 
                pursuant to subparagraph (B)) for the disaffirmance or 
                repudiation of such lease.
                    (B) Payments of rent.--Notwithstanding subparagraph 
                (A), the lessor under a lease to which such 
                subparagraph applies shall--
                            (i) be entitled to the contractual rent 
                        accruing before the later of the date--
                                    (I) the notice of disaffirmance or 
                                repudiation is mailed; or
                                    (II) the disaffirmance or 
                                repudiation becomes effective, unless 
                                the lessor is in default or breach of 
                                the terms of the lease;
                            (ii) have no claim for damages under any 
                        acceleration clause or other penalty provision 
                        in the lease; and
                            (iii) have a claim for any unpaid rent, 
                        subject to all appropriate offsets and 
                        defenses, due as of the date of the appointment 
                        which shall be paid in accordance with this 
                        subsection and subsection (d).
            (5) Leases under which the covered financial company is the 
        lessor.--
                    (A) In general.--If the receiver repudiates an 
                unexpired written lease of real property of the covered 
                financial company under which the covered financial 
                company is the lessor and the lessee is not, as of the 
                date of such repudiation, in default, the lessee under 
                such lease may either--
                            (i) treat the lease as terminated by such 
                        repudiation; or
                            (ii) remain in possession of the leasehold 
                        interest for the balance of the term of the 
                        lease unless the lessee defaults under the 
                        terms of the lease after the date of such 
                        repudiation.
                    (B) Provisions applicable to lessee remaining in 
                possession.--If any lessee under a lease described in 
                subparagraph (A) remains in possession of a leasehold 
                interest pursuant to clause (ii) of such subparagraph--
                            (i) the lessee--
                                    (I) shall continue to pay the 
                                contractual rent pursuant to the terms 
                                of the lease after the date of the 
                                repudiation of such lease;
                                    (II) may offset against any rent 
                                payment which accrues after the date of 
                                the repudiation of the lease, any 
                                damages which accrue after such date 
                                due to the nonperformance of any 
                                obligation of the covered financial 
                                company under the lease after such 
                                date; and
                            (ii) the receiver shall not be liable to 
                        the lessee for any damages arising after such 
                        date as a result of the repudiation other than 
                        the amount of any offset allowed under clause 
                        (i)(II).
            (6) Contracts for the sale of real property.--
                    (A) In general.--If the receiver repudiates any 
                contract (which meets the requirements of subsection 
                (a)(7)) for the sale of real property and the purchaser 
                of such real property under such contract is in 
                possession and is not, as of the date of such 
                repudiation, in default, such purchaser may either--
                            (i) treat the contract as terminated by 
                        such repudiation; or
                            (ii) remain in possession of such real 
                        property.
                    (B) Provisions applicable to purchaser remaining in 
                possession.--If any purchaser of real property under 
                any contract described in subparagraph (A) remains in 
                possession of such property pursuant to clause (ii) of 
                such subparagraph--
                            (i) the purchaser--
                                    (I) shall continue to make all 
                                payments due under the contract after 
                                the date of the repudiation of the 
                                contract; and
                                    (II) may offset against any such 
                                payments any damages which accrue after 
                                such date due to the nonperformance 
                                (after such date) of any obligation of 
                                the covered financial company under the 
                                contract; and
                            (ii) the receiver shall--
                                    (I) not be liable to the purchaser 
                                for any damages arising after such date 
                                as a result of the repudiation other 
                                than the amount of any offset allowed 
                                under clause (i)(II);
                                    (II) deliver title to the purchaser 
                                in accordance with the provisions of 
                                the contract; and
                                    (III) have no obligation under the 
                                contract other than the performance 
                                required under subclause (II).
                    (C) Assignment and sale allowed.--
                            (i) In general.--No provision of this 
                        paragraph shall be construed as limiting the 
                        right of the receiver to assign the contract 
                        described in subparagraph (A) and sell the 
                        property subject to the contract and the 
                        provisions of this paragraph.
                            (ii) No liability after assignment and 
                        sale.--If an assignment and sale described in 
                        clause (i) is consummated, the receiver shall 
                        have no further liability under the contract 
                        described in subparagraph (A) or with respect 
                        to the real property which was the subject of 
                        such contract.
            (7) Provisions applicable to service contracts.--
                    (A) Services performed before appointment.--In the 
                case of any contract for services between any person 
                and any covered financial company for which the 
                Corporation has been appointed receiver, any claim of 
                such person for services performed before the 
                appointment of the receiver shall be--
                            (i) a claim to be paid in accordance with 
                        subsections (a), (b) and (d); and
                            (ii) deemed to have arisen as of the date 
                        the receiver was appointed.
                    (B) Services performed after appointment and prior 
                to repudiation.--If, in the case of any contract for 
                services described in subparagraph (A), the receiver 
                accepts performance by the other person before the 
                receiver makes any determination to exercise the right 
                of repudiation of such contract under this section--
                            (i) the other party shall be paid under the 
                        terms of the contract for the services 
                        performed; and
                            (ii) the amount of such payment shall be 
                        treated as an administrative expense of the 
                        receivership.
                    (C) Acceptance of performance no bar to subsequent 
                repudiation.--The acceptance by any receiver of 
                services referred to in subparagraph (B) in connection 
                with a contract described in such subparagraph shall 
                not affect the right of the receiver to repudiate such 
                contract under this section at any time after such 
                performance.
            (8) Certain qualified financial contracts.--
                    (A) Rights of parties to contracts.--Subject to 
                paragraphs (9) and (10) of this subsection and 
                notwithstanding any other provision of this section 
                (other than subsection (a)(7)), any other Federal law, 
                or the law of any State, no person shall be stayed or 
                prohibited from exercising--
                            (i) any right such person has to cause the 
                        termination, liquidation, or acceleration of 
                        any qualified financial contract with a covered 
                        financial company which arises upon the 
                        appointment of the Corporation as receiver for 
                        such covered financial company at any time 
                        after such appointment;
                            (ii) any right under any security agreement 
                        or arrangement or other credit enhancement 
                        related to one or more qualified financial 
                        contracts described in clause (i).
                            (iii) any right to offset or net out any 
                        termination value, payment amount, or other 
                        transfer obligation arising under or in 
                        connection with 1 or more contracts and 
                        agreements described in clause (i), including 
                        any master agreement for such contracts or 
                        agreements.
                    (B) Applicability of other provisions.--Subsection 
                (a)(9) shall apply in the case of any judicial action 
                or proceeding brought against any receiver referred to 
                in subparagraph (A), or the covered financial company 
                for which such receiver was appointed, by any party to 
                a contract or agreement described in subparagraph 
                (A)(i) with such company.
                    (C) Certain transfers not avoidable.--
                            (i) In general.--Notwithstanding paragraph 
                        (11), section 5242 of the Revised Statutes of 
                        the United States or any other provision of 
                        Federal or State law relating to the avoidance 
                        of preferential or fraudulent transfers, the 
                        Corporation, whether acting as such or as 
                        receiver of a covered financial company, may 
                        not avoid any transfer of money or other 
                        property in connection with any qualified 
                        financial contract with a covered financial 
                        company.
                            (ii) Exception for certain transfers.--
                        Clause (i) shall not apply to any transfer of 
                        money or other property in connection with any 
                        qualified financial contract with a covered 
                        financial company if the Corporation determines 
                        that the transferee had actual intent to 
                        hinder, delay, or defraud such company, the 
                        creditors of such company, or any receiver 
                        appointed for such company.
                    (D) Certain contacts and agreements defined.--For 
                purposes of this subsection, the following definitions 
                shall apply:
                            (i) Qualified financial contract.--The term 
                        ``qualified financial contract'' means any 
                        securities contract, commodity contract, 
                        forward contract, repurchase agreement, swap 
                        agreement, and any similar agreement that the 
                        Corporation determines by regulation, 
                        resolution, or order to be a qualified 
                        financial contract for purposes of this 
                        paragraph.
                            (ii) Securities contract.--The term 
                        ``securities contract''--
                                    (I) means a contract for the 
                                purchase, sale, or loan of a security, 
                                a certificate of deposit, a mortgage 
                                loan, any interest in a mortgage loan, 
                                a group or index of securities, 
                                certificates of deposit, or mortgage 
                                loans or interests therein (including 
                                any interest therein or based on the 
                                value thereof) or any option on any of 
                                the foregoing, including any option to 
                                purchase or sell any such security, 
                                certificate of deposit, mortgage loan, 
                                interest, group or index, or option, 
                                and including any repurchase or reverse 
                                repurchase transaction on any such 
                                security, certificate of deposit, 
                                mortgage loan, interest, group or 
                                index, or option (whether or not such 
                                repurchase or reverse repurchase 
                                transaction is a ``repurchase 
                                agreement,'' as defined in clause (v));
                                    (II) does not include any purchase, 
                                sale, or repurchase obligation under a 
                                participation in a commercial mortgage 
                                loan unless the Corporation determines 
                                by regulation, resolution, or order to 
                                include any such agreement within the 
                                meaning of such term;
                                    (III) means any option entered into 
                                on a national securities exchange 
                                relating to foreign currencies;
                                    (IV) means the guarantee (including 
                                by novation) by or to any securities 
                                clearing agency of any settlement of 
                                cash, securities, certificates of 
                                deposit, mortgage loans or interests 
                                therein, group or index of securities, 
                                certificates of deposit or mortgage 
                                loans or interests therein (including 
                                any interest therein or based on the 
                                value thereof) or option on any of the 
                                foregoing, including any option to 
                                purchase or sell any such security, 
                                certificate of deposit, mortgage loan, 
                                interest, group or index, or option 
                                (whether or not such settlement is in 
                                connection with any agreement or 
                                transaction referred to in subclauses 
                                (I) through (XII) (other than subclause 
                                (II));
                                    (V) means any margin loan;
                                    (VI) means any extension of credit 
                                for the clearance or settlement of 
                                securities transactions;
                                    (VII) means any loan transaction 
                                coupled with a securities collar 
                                transaction, any prepaid securities 
                                forward transaction, or any total 
                                return swap transaction coupled with a 
                                securities sale transaction;
                                    (VIII) means any other agreement or 
                                transaction that is similar to any 
                                agreement or transaction referred to in 
                                this clause;
                                    (IX) means any combination of the 
                                agreements or transactions referred to 
                                in this clause;
                                    (X) means any option to enter into 
                                any agreement or transaction referred 
                                to in this clause;
                                    (XI) means a master agreement that 
                                provides for an agreement or 
                                transaction referred to in subclause 
                                (I), (III), (IV), (V), (VI), (VII), 
                                (VIII), (IX), or (X), together with all 
                                supplements to any such master 
                                agreement, without regard to whether 
                                the master agreement provides for an 
                                agreement or transaction that is not a 
                                securities contract under this clause, 
                                except that the master agreement shall 
                                be considered to be a securities 
                                contract under this clause only with 
                                respect to each agreement or 
                                transaction under the master agreement 
                                that is referred to in subclause (I), 
                                (III), (IV), (V), (VI), (VII), (VIII), 
                                (IX), or (X); and
                                    (XII) means any security agreement 
                                or arrangement or other credit 
                                enhancement related to any agreement or 
                                transaction referred to in this clause, 
                                including any guarantee or 
                                reimbursement obligation in connection 
                                with any agreement or transaction 
                                referred to in this clause.
                            (iii) Commodity contract.--The term 
                        ``commodity contract'' means--
                                    (I) with respect to a futures 
                                commission merchant, a contract for the 
                                purchase or sale of a commodity for 
                                future delivery on, or subject to the 
                                rules of, a contract market or board of 
                                trade;
                                    (II) with respect to a foreign 
                                futures commission merchant, a foreign 
                                future;
                                    (III) with respect to a leverage 
                                transaction merchant, a leverage 
                                transaction;
                                    (IV) with respect to a clearing 
                                organization, a contract for the 
                                purchase or sale of a commodity for 
                                future delivery on, or subject to the 
                                rules of, a contract market or board of 
                                trade that is cleared by such clearing 
                                organization, or commodity option 
                                traded on, or subject to the rules of, 
                                a contract market or board of trade 
                                that is cleared by such clearing 
                                organization;
                                    (V) with respect to a commodity 
                                options dealer, a commodity option;
                                    (VI) any other agreement or 
                                transaction that is similar to any 
                                agreement or transaction referred to in 
                                this clause;
                                    (VII) any combination of the 
                                agreements or transactions referred to 
                                in this clause;
                                    (VIII) any option to enter into any 
                                agreement or transaction referred to in 
                                this clause;
                                    (IX) a master agreement that 
                                provides for an agreement or 
                                transaction referred to in subclause 
                                (I), (II), (III), (IV), (V), (VI), 
                                (VII), or (VIII), together with all 
                                supplements to any such master 
                                agreement, without regard to whether 
                                the master agreement provides for an 
                                agreement or transaction that is not a 
                                commodity contract under this clause, 
                                except that the master agreement shall 
                                be considered to be a commodity 
                                contract under this clause only with 
                                respect to each agreement or 
                                transaction under the master agreement 
                                that is referred to in subclause (I), 
                                (II), (III), (IV), (V), (VI), (VII), or 
                                (VIII); or
                                    (X) any security agreement or 
                                arrangement or other credit enhancement 
                                related to any agreement or transaction 
                                referred to in this clause, including 
                                any guarantee or reimbursement 
                                obligation in connection with any 
                                agreement or transaction referred to in 
                                this clause.
                            (iv) Forward contract.--The term ``forward 
                        contract'' means--
                                    (I) a contract (other than a 
                                commodity contract) for the purchase, 
                                sale, or transfer of a commodity or any 
                                similar good, article, service, right, 
                                or interest which is presently or in 
                                the future becomes the subject of 
                                dealing in the forward contract trade, 
                                or product or byproduct thereof, with a 
                                maturity date more than 2 days after 
                                the date the contract is entered into, 
                                including a repurchase or reverse 
                                repurchase transaction (whether or not 
                                such repurchase or reverse repurchase 
                                transaction is a ``repurchase 
                                agreement'', as defined in clause (v)), 
                                consignment, lease, swap, hedge 
                                transaction, deposit, loan, option, 
                                allocated transaction, unallocated 
                                transaction, or any other similar 
                                agreement;
                                    (II) any combination of agreements 
                                or transactions referred to in 
                                subclauses (I) and (III);
                                    (III) any option to enter into any 
                                agreement or transaction referred to in 
                                subclause (I) or (II);
                                    (IV) a master agreement that 
                                provides for an agreement or 
                                transaction referred to in subclauses 
                                (I), (II), or (III), together with all 
                                supplements to any such master 
                                agreement, without regard to whether 
                                the master agreement provides for an 
                                agreement or transaction that is not a 
                                forward contract under this clause, 
                                except that the master agreement shall 
                                be considered to be a forward contract 
                                under this clause only with respect to 
                                each agreement or transaction under the 
                                master agreement that is referred to in 
                                subclause (I), (II), or (III); or
                                    (V) any security agreement or 
                                arrangement or other credit enhancement 
                                related to any agreement or transaction 
                                referred to in subclause (I), (II), 
                                (III), or (IV), including any guarantee 
                                or reimbursement obligation in 
                                connection with any agreement or 
                                transaction referred to in any such 
                                subclause.
                            (v) Repurchase agreement.--The term 
                        ``repurchase agreement'' (which definition also 
                        applies to a reverse repurchase agreement)--
                                    (I) means an agreement, including 
                                related terms, which provides for the 
                                transfer of one or more certificates of 
                                deposit, mortgage-related securities 
                                (as such term is defined in the 
                                Securities Exchange Act of 1934), 
                                mortgage loans, interests in mortgage-
                                related securities or mortgage loans, 
                                eligible bankers' acceptances, 
                                qualified foreign government securities 
                                (which for purposes of this clause 
                                shall mean a security that is a direct 
                                obligation of, or that is fully 
                                guaranteed by, the central government 
                                of a member of the Organization for 
                                Economic Cooperation and Development as 
                                determined by regulation or order 
                                adopted by the Federal Reserve Board) 
                                or securities that are direct 
                                obligations of, or that are fully 
                                guaranteed by, the United States or any 
                                agency of the United States against the 
                                transfer of funds by the transferee of 
                                such certificates of deposit, eligible 
                                bankers' acceptances, securities, 
                                mortgage loans, or interests with a 
                                simultaneous agreement by such 
                                transferee to transfer to the 
                                transferor thereof certificates of 
                                deposit, eligible bankers' acceptances, 
                                securities, mortgage loans, or 
                                interests as described above, at a date 
                                certain not later than 1 year after 
                                such transfers or on demand, against 
                                the transfer of funds, or any other 
                                similar agreement;
                                    (II) does not include any 
                                repurchase obligation under a 
                                participation in a commercial mortgage 
                                loan unless the Corporation determines 
                                by regulation, resolution, or order to 
                                include any such participation within 
                                the meaning of such term;
                                    (III) means any combination of 
                                agreements or transactions referred to 
                                in subclauses (I) and (IV);
                                    (IV) means any option to enter into 
                                any agreement or transaction referred 
                                to in subclause (I) or (III);
                                    (V) means a master agreement that 
                                provides for an agreement or 
                                transaction referred to in subclause 
                                (I), (III), or (IV), together with all 
                                supplements to any such master 
                                agreement, without regard to whether 
                                the master agreement provides for an 
                                agreement or transaction that is not a 
                                repurchase agreement under this clause, 
                                except that the master agreement shall 
                                be considered to be a repurchase 
                                agreement under this subclause only 
                                with respect to each agreement or 
                                transaction under the master agreement 
                                that is referred to in subclause (I), 
                                (III), or (IV); and
                                    (VI) means any security agreement 
                                or arrangement or other credit 
                                enhancement related to any agreement or 
                                transaction referred to in subclause 
                                (I), (III), (IV), or (V), including any 
                                guarantee or reimbursement obligation 
                                in connection with any agreement or 
                                transaction referred to in any such 
                                subclause.
                            (vi) Swap agreement.--The term ``swap 
                        agreement'' means--
                                    (I) any agreement, including the 
                                terms and conditions incorporated by 
                                reference in any such agreement, which 
                                is an interest rate swap, option, 
                                future, or forward agreement, including 
                                a rate floor, rate cap, rate collar, 
                                cross-currency rate swap, and basis 
                                swap; a spot, same day-tomorrow, 
                                tomorrow-next, forward, or other 
                                foreign exchange, precious metals, or 
                                other commodity agreement; a currency 
                                swap, option, future, or forward 
                                agreement; an equity index or equity 
                                swap, option, future, or forward 
                                agreement; a debt index or debt swap, 
                                option, future, or forward agreement; a 
                                total return, credit spread or credit 
                                swap, option, future, or forward 
                                agreement; a commodity index or 
                                commodity swap, option, future, or 
                                forward agreement; weather swap, 
                                option, future, or forward agreement; 
                                an emissions swap, option, future, or 
                                forward agreement; or an inflation 
                                swap, option, future, or forward 
                                agreement;
                                    (II) any agreement or transaction 
                                that is similar to any other agreement 
                                or transaction referred to in this 
                                clause and that is of a type that has 
                                been, is presently, or in the future 
                                becomes, the subject of recurrent 
                                dealings in the swap or other 
                                derivatives markets (including terms 
                                and conditions incorporated by 
                                reference in such agreement) and that 
                                is a forward, swap, future, option or 
                                spot transaction on one or more rates, 
                                currencies, commodities, equity 
                                securities or other equity instruments, 
                                debt securities or other debt 
                                instruments, quantitative measures 
                                associated with an occurrence, extent 
                                of an occurrence, or contingency 
                                associated with a financial, 
                                commercial, or economic consequence, or 
                                economic or financial indices or 
                                measures of economic or financial risk 
                                or value;
                                    (III) any combination of agreements 
                                or transactions referred to in this 
                                clause;
                                    (IV) any option to enter into any 
                                agreement or transaction referred to in 
                                this clause;
                                    (V) a master agreement that 
                                provides for an agreement or 
                                transaction referred to in subclause 
                                (I), (II), (III), or (IV), together 
                                with all supplements to any such master 
                                agreement, without regard to whether 
                                the master agreement contains an 
                                agreement or transaction that is not a 
                                swap agreement under this clause, 
                                except that the master agreement shall 
                                be considered to be a swap agreement 
                                under this clause only with respect to 
                                each agreement or transaction under the 
                                master agreement that is referred to in 
                                subclause (I), (II), (III), or (IV); 
                                and
                                    (VI) any security agreement or 
                                arrangement or other credit enhancement 
                                related to any agreements or 
                                transactions referred to in subclause 
                                (I), (II), (III), (IV), or (V), 
                                including any guarantee or 
                                reimbursement obligation in connection 
                                with any agreement or transaction 
                                referred to in any such subclause.
                            (vii) Definitions relating to default.--
                        When used in this paragraph and paragraph 
                        (10)--
                                    (I) The term ``default'' shall 
                                mean, with respect to a covered 
                                financial company, any adjudication or 
                                other official determination by any 
                                court of competent jurisdiction, or 
                                other public authority pursuant to 
                                which a conservator, receiver, or other 
                                legal custodian is appointed; and
                                    (II) The term ``in danger of 
                                default'' shall mean a covered 
                                financial company with respect to which 
                                the Corporation or appropriate State 
                                authority has determined that--
                                            (aa) in the opinion of the 
                                        Corporation or such authority--

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

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

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

                                            (bb) the covered financial 
                                        company has incurred or is 
                                        likely to incur losses that 
                                        will deplete all or 
                                        substantially all of its 
                                        capital; and
                                            (cc) there is no reasonable 
                                        prospect that the capital will 
                                        be replenished without Federal 
                                        assistance.
                            (viii) Treatment of master agreement as one 
                        agreement.--Any master agreement for any 
                        contract or agreement described in any 
                        preceding clause of this subparagraph (or any 
                        master agreement for such master agreement or 
                        agreements), together with all supplements to 
                        such master agreement, shall be treated as a 
                        single agreement and a single qualified 
                        financial contact. If a master agreement 
                        contains provisions relating to agreements or 
                        transactions that are not themselves qualified 
                        financial contracts, the master agreement shall 
                        be deemed to be a qualified financial contract 
                        only with respect to those transactions that 
                        are themselves qualified financial contracts.
                            (ix) Transfer.--The term ``transfer'' means 
                        every mode, direct or indirect, absolute or 
                        conditional, voluntary or involuntary, of 
                        disposing of or parting with property or with 
                        an interest in property, including retention of 
                        title as a security interest and foreclosure of 
                        the covered financial company's equity of 
                        redemption.
                            (x) Person.--The term ``person'' includes 
                        any governmental entity in addition to any 
                        entity included in the definition of such term 
                        in section 1, title 1, United States Code.
                    (E) Clarification.--No provision of law shall be 
                construed as limiting the right or power of the 
                Corporation, or authorizing any court or agency to 
                limit or delay, in any manner, the right or power of 
                the Corporation to transfer any qualified financial 
                contract in accordance with paragraphs (9) and (10) of 
                this subsection or to disaffirm or repudiate any such 
                contract in accordance with subsection (c)(1) of this 
                section.
                    (F) Walkaway clauses not effective.--
                            (i) In general.--Notwithstanding the 
                        provisions of subparagraph (A) and sections 403 
                        and 404 of the Federal Deposit Insurance 
                        Corporation Improvement Act of 1991, no 
                        walkaway clause shall be enforceable in a 
                        qualified financial contract of a covered 
                        financial company in default.
                            (ii) Limited suspension of certain 
                        obligations.--In the case of a qualified 
                        financial contract referred to in clause (i), 
                        any payment or delivery obligations otherwise 
                        due from a party pursuant to the qualified 
                        financial contract shall be suspended from the 
                        time the receiver is appointed until the 
                        earlier of--
                                    (I) the time such party receives 
                                notice that such contract has been 
                                transferred pursuant to paragraph 
                                (10)(A); or
                                    (II) 5:00 p.m. (eastern time) on 
                                the business day following the date of 
                                the appointment of the receiver.
                            (iii) Walkaway clause defined.--For 
                        purposes of this subparagraph, the term 
                        ``walkaway clause'' means any provision in a 
                        qualified financial contract that suspends, 
                        conditions, or extinguishes a payment 
                        obligation of a party, in whole or in part, or 
                        does not create a payment obligation of a party 
                        that would otherwise exist, solely because of 
                        such party's status as a nondefaulting party in 
                        connection with the insolvency of a covered 
                        financial company that is a party to the 
                        contract or the appointment of or the exercise 
                        of rights or powers by a receiver of such 
                        covered financial company, and not as a result 
                        of a party's exercise of any right to offset, 
                        setoff, or net obligations that exist under the 
                        contract, any other contract between those 
                        parties, or applicable law.
                    (G) Recordkeeping.--The Corporation, in 
                consultation with the Federal Reserve Board, may 
                prescribe regulations requiring that the covered 
                financial company maintain such records with respect to 
                qualified financial contracts (including market 
                valuations) as the Corporation determines to be 
                necessary or appropriate in order to assist the 
                receiver of the covered financial company in being able 
                to exercise its rights and fulfill its obligations 
                under this paragraph or paragraph (9) or (10).
            (9) Transfer of qualified financial contracts.--
                    (A) In general.--In making any transfer of assets 
                or liabilities of a covered financial company in 
                default which includes any qualified financial 
                contract, the receiver for such covered financial 
                company shall either--
                            (i) transfer to one financial institution, 
                        other than a financial institution for which a 
                        conservator, receiver, trustee in bankruptcy, 
                        or other legal custodian has been appointed or 
                        which is otherwise the subject of a bankruptcy 
                        or insolvency proceeding--
                                    (I) all qualified financial 
                                contracts between any person or any 
                                affiliate of such person and the 
                                covered financial company in default;
                                    (II) all claims of such person or 
                                any affiliate of such person against 
                                such covered financial company under 
                                any such contract (other than any claim 
                                which, under the terms of any such 
                                contract, is subordinated to the claims 
                                of general unsecured creditors of such 
                                company);
                                    (III) all claims of such covered 
                                financial company against such person 
                                or any affiliate of such person under 
                                any such contract; and
                                    (IV) all property securing or any 
                                other credit enhancement for any 
                                contract described in subclause (I) or 
                                any claim described in subclause (II) 
                                or (III) under any such contract; or
                            (ii) transfer none of the qualified 
                        financial contracts, claims, property or other 
                        credit enhancement referred to in clause (i) 
                        (with respect to such person and any affiliate 
                        of such person).
                    (B) Transfer to foreign bank, financial 
                institution, or branch or agency thereof.--In 
                transferring any qualified financial contracts and 
                related claims and property under subparagraph (A)(i), 
                the receiver for the covered financial company shall 
                not make such transfer to a foreign bank, financial 
                institution organized under the laws of a foreign 
                country, or a branch or agency of a foreign bank or 
                financial institution unless, under the law applicable 
                to such bank, financial institution, branch or agency, 
                to the qualified financial contracts, and to any 
                netting contract, any security agreement or arrangement 
                or other credit enhancement related to one or more 
                qualified financial contracts, the contractual rights 
                of the parties to such qualified financial contracts, 
                netting contracts, security agreements or arrangements, 
                or other credit enhancements are enforceable 
                substantially to the same extent as permitted under 
                this section.
                    (C) Transfer of contracts subject to the rules of a 
                clearing organization.--In the event that a receiver 
                transfers any qualified financial contract and related 
                claims, property, and credit enhancements pursuant to 
                subparagraph (A)(i) and such contract is cleared by or 
                subject to the rules of a clearing organization, the 
                clearing organization shall not be required to accept 
                the transferee as a member by virtue of the transfer.
                    (D) Definitions.--For purposes of this paragraph, 
                the term ``financial institution'' means a broker or 
                dealer, a depository institution, a futures commission 
                merchant, a bridge financial company, or any other 
                institution determined by the Corporation by regulation 
                to be a financial institution, and the term ``clearing 
                organization'' has the same meaning as in section 402 
                of the Federal Deposit Insurance Corporation 
                Improvement Act of 1991.
            (10) Notification of transfer.--
                    (A) In general.--If--
                            (i) the receiver for a covered financial 
                        company in default or in danger of default 
                        transfers any assets and liabilities of the 
                        covered financial company; and
                            (ii) the transfer includes any qualified 
                        financial contract,
                the receiver shall notify any person who is a party to 
                any such contract of such transfer by 5:00 p.m. 
                (eastern time) on the business day following the date 
                of the appointment of the receiver.
                    (B) Certain rights not enforceable.--
                            (i) Receivership.--A person who is a party 
                        to a qualified financial contract with a 
                        covered financial company may not exercise any 
                        right that such person has to terminate, 
                        liquidate, or net such contract under paragraph 
                        (8)(A) of this subsection solely by reason of 
                        or incidental to the appointment under this 
                        section of a receiver for the covered financial 
                        company (or the insolvency or financial 
                        condition of the covered financial company for 
                        which the receiver has been appointed)--
                                    (I) until 5:00 p.m. (eastern time) 
                                on the business day following the date 
                                of the appointment of the receiver; or
                                    (II) after the person has received 
                                notice that the contract has been 
                                transferred pursuant to paragraph 
                                (9)(A).
                            (ii) Notice.--For purposes of this 
                        paragraph, the receiver for a covered financial 
                        company shall be deemed to have notified a 
                        person who is a party to a qualified financial 
                        contract with such covered financial company if 
                        the receiver has taken steps reasonably 
                        calculated to provide notice to such person by 
                        the time specified in subparagraph (A).
                    (C) Treatment of bridge financial company.--For 
                purposes of paragraph (9), a bridge financial company 
                shall not be considered to be a financial institution 
                for which a conservator, receiver, trustee in 
                bankruptcy, or other legal custodian has been appointed 
                or which is otherwise the subject of a bankruptcy or 
                insolvency proceeding.
                    (D) Business day defined.--For purposes of this 
                paragraph, the term ``business day'' means any day 
                other than any Saturday, Sunday, or any day on which 
                either the New York Stock Exchange or the Federal 
                Reserve Bank of New York is closed.
            (11) Disaffirmance or repudiation of qualified financial 
        contracts.--In exercising the rights of disaffirmance or 
        repudiation of a receiver with respect to any qualified 
        financial contract to which a covered financial company is a 
        party, the receiver for such covered financial shall either--
                    (A) disaffirm or repudiate all qualified financial 
                contracts between--
                            (i) any person or any affiliate of such 
                        person; and
                            (ii) the covered financial company in 
                        default; or
                    (B) disaffirm or repudiate none of the qualified 
                financial contracts referred to in subparagraph (A) 
                (with respect to such person or any affiliate of such 
                person).
            (12) Certain security and customer interests not 
        avoidable.--No provision of this subsection shall be construed 
        as permitting the avoidance of any--
                    (A) legally enforceable or perfected security 
                interest in any of the assets of any covered financial 
                company except where such an interest is taken in 
                contemplation of the company's insolvency or with the 
                intent to hinder, delay, or defraud the company or the 
                creditors of such company; or
                    (B) legally enforceable interest in customer 
                property.
            (13) Authority to enforce contracts.--
                    (A) In general.--The receiver may enforce any 
                contract, other than a director's or officer's 
                liability insurance contract or a financial institution 
                bond, entered into by the covered financial company 
                notwithstanding any provision of the contract providing 
                for termination, default, acceleration, or exercise of 
                rights upon, or solely by reason of, insolvency or the 
                appointment of or the exercise of rights or powers by a 
                receiver.
                    (B) Certain rights not affected.--No provision of 
                this paragraph may be construed as impairing or 
                affecting any right of the receiver to enforce or 
                recover under a director's or officer's liability 
                insurance contract or financial institution bond under 
                other applicable law.
                    (C) Consent requirement.--
                            (i) In general.--Except as otherwise 
                        provided by this section, no person may 
                        exercise any right or power to terminate, 
                        accelerate, or declare a default under any 
                        contract to which the covered financial company 
                        is a party, or to obtain possession of or 
                        exercise control over any property of the 
                        covered financial company or affect any 
                        contractual rights of the covered financial 
                        company, without the consent of the receiver, 
                        as appropriate, of the covered financial 
                        company during the 90-day period beginning on 
                        the date of the appointment of the receiver, as 
                        applicable.
                            (ii) Certain exceptions.--No provision of 
                        this subparagraph shall apply to a director or 
                        officer liability insurance contract or a 
                        financial institution bond, to the rights of 
                        parties to certain qualified financial 
                        contracts pursuant to paragraph (8), or to the 
                        rights of parties to netting contracts pursuant 
                        to subtitle A of title IV of the Federal 
                        Deposit Insurance Corporation Improvement Act 
                        of 1991 (12 U.S.C. 4401 et seq.), or shall be 
                        construed as permitting the receiver to fail to 
                        comply with otherwise enforceable provisions of 
                        such contract.
            (14) Exception for federal reserve banks and corporation 
        security interest.--No provision of this subsection shall apply 
        with respect to--
                    (A) any extension of credit from any Federal 
                Reserve bank or the Corporation to any covered 
                financial company; or
                    (B) any security interest in the assets of the 
                covered financial company securing any such extension 
                of credit.
            (15) Savings clause.--The meanings of terms used in this 
        subsection are applicable for purposes of this subsection only, 
        and shall not be construed or applied so as to challenge or 
        affect the characterization, definition, or treatment of any 
        similar terms under any other statute, regulation, or rule, 
        including, but not limited, to the Gramm-Leach-Bliley Act, the 
        Legal Certainty for Bank Products Act of 2000, the securities 
        laws (as that term is defined in section 3(a)(47) of the 
        Securities Exchange Act of 1934), and the Commodity Exchange 
        Act.
    (d) Valuation of Claims in Default.--
            (1) In general.--Notwithstanding any other provision of 
        Federal law or the law of any State, and regardless of the 
        method which the Corporation determines to utilize with respect 
        to a covered financial company, including transactions 
        authorized under subsection (h), this subsection shall govern 
        the rights of the creditors of such covered financial company.
            (2) Maximum liability.--The maximum liability of the 
        Corporation, acting as receiver or in any other capacity, to 
        any person having a claim against the receiver or the covered 
        financial company for which such receiver is appointed shall 
        equal the amount such claimant would have received if--
                    (A) a determination had not been made under section 
                1603(b) with respect to the covered financial company; 
                and
                    (B) the covered financial company had been 
                liquidated under title 11, United States Code, or any 
                case related to title 11, United States Code (including 
                a case initiated by the Securities Investor Protection 
                Corporation with respect to a financial company subject 
                to the Securities Investor Protection Act of 1970), or 
                any State insolvency law.
            (3) Additional payments authorized.--
                    (A) In general.--The Corporation may, as receiver 
                and with the approval of the Secretary, make additional 
                payments or credit additional amounts to or with 
                respect to or for the account of any claimant or 
                category of claimants of a covered financial company if 
                the Corporation determines that such payments or 
                credits are necessary or appropriate to--
                            (i) minimize losses to the receiver from 
                        the resolution of the covered financial company 
                        under this section; or
                            (ii) prevent or mitigate serious adverse 
                        effects to financial stability or the United 
                        States economy.
                    (B) Manner of payment.--The Corporation may make 
                payments or credit amounts under subparagraph (A) 
                directly to the claimants or may make such payments or 
                credit such amounts to a company other than a covered 
                financial company or a bridge financial company 
                established with respect thereto in order to induce 
                such other company to accept liability for such claims.
    (e) Limitation on Court Action.--Except as provided in this section 
or at the request of the receiver appointed for a covered financial 
company, no court may take any action to restrain or affect the 
exercise of powers or functions of the receiver hereunder.
    (f) Liability of Directors and Officers.--
            (1) In general.--A director or officer of a covered 
        financial company may be held personally liable for monetary 
        damages in any civil action described in paragraph (2) by, on 
        behalf of, or at the request or direction of the Corporation, 
        which action is prosecuted wholly or partially for the benefit 
        of the Corporation--
                    (A) acting as receiver of such covered financial 
                company;
                    (B) acting based upon a suit, claim, or cause of 
                action purchased from, assigned by, or otherwise 
                conveyed by such receiver; or
                    (C) acting based upon a suit, claim, or cause of 
                action purchased from, assigned by, or otherwise 
                conveyed in whole or in part by a covered financial 
                company or its affiliate in connection with assistance 
                provided under section 1604.
            (2) Actions covered.--Paragraph (1) shall apply with 
        respect to actions for gross negligence, including any similar 
        conduct or conduct that demonstrates a greater disregard of a 
        duty of care (than gross negligence) including intentional 
        tortious conduct, as such terms are defined and determined 
        under applicable State law.
            (3) Savings clause.--Nothing in this subsection shall 
        impair or affect any right of the Corporation under other 
        applicable law.
    (g) Damages.--In any proceeding related to any claim against a 
covered financial company's director, officer, employee, agent, 
attorney, accountant, appraiser, or any other party employed by or 
providing services to a covered financial company, recoverable damages 
determined to result from the improvident or otherwise improper use or 
investment of any covered financial company's assets shall include 
principal losses and appropriate interest.
    (h) Bridge Financial Companies.--
            (1) Organization.--
                    (A) Purpose.--The Corporation, as receiver of one 
                or more covered financial companies may organize one or 
                more bridge financial companies in accordance with this 
                subsection.
                    (B) Authorities.--Upon the creation of a bridge 
                financial company under subparagraph (A) with respect 
                to a covered financial company, such bridge financial 
                company may--
                            (i) assume such liabilities (including 
                        liabilities associated with any trust or 
                        custody business but excluding any liabilities 
                        that count as regulatory capital) of such 
                        covered financial company as the Corporation 
                        may, in its discretion, determine to be 
                        appropriate;
                            (ii) purchase such assets (including assets 
                        associated with any trust or custody business) 
                        of such covered financial company as the 
                        Corporation may, in its discretion, determine 
                        to be appropriate; and
                            (iii) perform any other temporary function 
                        which the Corporation may, in its discretion, 
                        prescribe in accordance with this section.
            (2) Charter and establishment.--
                    (A) Establishment.--If the Corporation is appointed 
                as receiver for a covered financial company, the 
                Corporation may grant a Federal charter to and approve 
                articles of association for one or more bridge 
                financial company or companies with respect to such 
                covered financial company which shall, by operation of 
                law and immediately upon issuance of its charter and 
                approval of its articles of association, be established 
                and operate in accordance with, and subject to, such 
                charter, articles, and this section.
                    (B) Management.--Upon its establishment, a bridge 
                financial company shall be under the management of a 
                board of directors appointed by the Corporation.
                    (C) Articles of association.--The articles of 
                association and organization certificate of a bridge 
                financial shall have such terms as the Corporation may 
                provide, and shall be executed by such representatives 
                as the Corporation may designate.
                    (D) Terms of charter; rights and privileges.--
                Subject to and in accordance with the provisions of 
                this subsection, the Corporation shall--
                            (i) establish the terms of the charter of a 
                        bridge financial company and the rights, 
                        powers, authorities and privileges of a bridge 
                        financial company granted by the charter or as 
                        an incident thereto; and
                            (ii) provide for, and establish the terms 
                        and conditions governing, the management 
                        (including, but not limited to, the bylaws and 
                        the number of directors of the board of 
                        directors) and operations of the bridge 
                        financial company.
                    (E) Transfer of rights and privileges of covered 
                financial company.--
                            (i) In general.--Notwithstanding any other 
                        provision of Federal law or the law of any 
                        State, the Corporation may provide for a bridge 
                        financial company to succeed to and assume any 
                        rights, powers, authorities or privileges of 
                        the covered financial company with respect to 
                        which the bridge financial company was 
                        established and, upon such determination by the 
                        Corporation, the bridge financial company shall 
                        immediately and by operation of law succeed to 
                        and assume such rights, powers, authorities and 
                        privileges.
                            (ii) Effective without approval.--Any 
                        succession to or assumption by a bridge 
                        financial company of rights, powers, 
                        authorities or privileges of a covered 
                        financial company under clause (i) or otherwise 
                        shall be effective without any further approval 
                        under Federal or State law, assignment, or 
                        consent with respect thereto.
                    (F) Corporate governance and election and 
                designation of body of law.--To the extent permitted by 
                the Corporation and consistent with this section and 
                any rules, regulations or directives issued by the 
                Corporation under this section, a bridge financial 
                company may elect to follow the corporate governance 
                practices and procedures as are applicable to a 
                corporation incorporated under the general corporation 
                law of the State of Delaware, or the State of 
                incorporation or organization of the covered financial 
                company with respect to which the bridge financial 
                company was established, as such law may be amended 
                from time to time.
                    (G) Capital.--
                            (i) Capital not required.--Notwithstanding 
                        any other provision of Federal or State law, a 
                        bridge financial company may, if permitted by 
                        the Corporation, operate without any capital or 
                        surplus, or with such capital or surplus as the 
                        Corporation may in its discretion determine to 
                        be appropriate.
                            (ii) No contribution by the corporation 
                        required.--The Corporation is not required to 
                        pay capital into a bridge financial company or 
                        to issue any capital stock on behalf of a 
                        bridge financial company established under this 
                        subsection.
                            (iii) Authority.--If the Corporation 
                        determines that such action is advisable, the 
                        Corporation may cause capital stock or other 
                        securities of a bridge financial company 
                        established with respect to a covered financial 
                        company to be issued and offered for sale in 
                        such amounts and on such terms and conditions 
                        as the Corporation may, in its discretion, 
                        determine.
            (3) Interests in and assets and obligations of covered 
        financial company.--Notwithstanding paragraphs (1) or (2) or 
        any other provision of law--
                    (A) a bridge financial company shall assume, 
                acquire, or succeed to the assets or liabilities of a 
                covered financial company (including the assets or 
                liabilities associated with any trust or custody 
                business) only to the extent that such assets or 
                liabilities are transferred by the Corporation to the 
                bridge financial company in accordance with, and 
                subject to the restrictions set forth in, paragraph 
                (1)(B); and
                    (B) a bridge financial company shall not assume, 
                acquire, or succeed to any obligation that a covered 
                financial company for which a receiver has been 
                appointed may have to any shareholder, member, general 
                partner, limited partner, or other person with an 
                interest in the equity of the covered financial company 
                that arises as a result of the status of that person 
                having an equity claim in the covered financial 
                company.
            (4) Bridge financial company treated as being in default 
        for certain purposes.--A bridge financial company shall be 
        treated as a covered financial company in default at such times 
        and for such purposes as the Corporation may, in its 
        discretion, determine.
            (5) Transfer of assets and liabilities.--
                    (A) Transfer of assets and liabilities.--The 
                Corporation, as receiver, may transfer any assets and 
                liabilities of a covered financial company (including 
                any assets or liabilities associated with any trust or 
                custody business) to one or more bridge financial 
                companies in accordance with and subject to the 
                restrictions of paragraph (1)(B).
                    (B) Subsequent transfers.--At any time after the 
                establishment of a bridge financial company with 
                respect to a covered financial company, the 
                Corporation, as receiver, may transfer any assets and 
                liabilities of such covered financial company as the 
                Corporation may, in its discretion, determine to be 
                appropriate in accordance with and subject to the 
                restrictions of paragraph (1)(B).
                    (C) Treatment of trust or custody business.--For 
                purposes of this paragraph, the trust or custody 
                business, including fiduciary appointments, held by any 
                covered financial company is included among its assets 
                and liabilities.
                    (D) Effective without approval.--The transfer of 
                any assets or liabilities, including those associated 
                with any trust or custody business of a covered 
                financial company to a bridge financial company shall 
                be effective without any further approval under Federal 
                or State law, assignment, or consent with respect 
                thereto.
                    (E) Equitable treatment of similarly situated 
                creditors.--The Corporation shall treat all creditors 
                of a covered financial company that are similarly 
                situated under subsection (b)(1) in a similar manner in 
                exercising the authority of the Corporation under this 
                subsection to transfer any assets or liabilities of the 
                covered financial company to one or more bridge 
                financial companies established with respect to such 
                covered financial company, except that the Corporation 
                may take actions (including making payments) that do 
                not comply with this subparagraph, if--
                            (i) the Corporation determines that such 
                        actions are necessary to maximize the value of 
                        the assets of the covered financial company, to 
                        maximize the present value return from the sale 
                        or other disposition of the assets of the 
                        covered financial company, to minimize the 
                        amount of any loss realized upon the sale or 
                        other disposition of the assets of the covered 
                        financial company, or to contain or address 
                        serious adverse effects to financial stability 
                        or the U.S. economy; and
                            (ii) all creditors that are similarly 
                        situated under subsection (b)(1) receive not 
                        less than the amount provided in subsection 
                        (d)(2).
                    (F) Limitation on transfer of liabilities.--
                Notwithstanding any other provision of law, the 
                aggregate amount of liabilities of a covered financial 
                company that are transferred to, or assumed by, a 
                bridge financial company from a covered financial 
                company may not exceed the aggregate amount of the 
                assets of the covered financial company that are 
                transferred to, or purchased by, the bridge financial 
                company from the covered financial company.
            (6) Stay of judicial action.--Any judicial action to which 
        a bridge financial company becomes a party by virtue of its 
        acquisition of any assets or assumption of any liabilities of a 
        covered financial company shall be stayed from further 
        proceedings for a period of up to 45 days (or such longer 
        period as may be agreed to upon the consent of all parties) at 
        the request of the bridge financial company.
            (7) Agreements against interest of the bridge financial 
        company.--No agreement that tends to diminish or defeat the 
        interest of the bridge financial company in any asset of a 
        covered financial company acquired by the bridge financial 
        company shall be valid against the bridge financial company 
        unless such agreement is in writing and executed by an 
        authorized officer or representative of the covered financial 
        company.
            (8) No federal status.--
                    (A) Agency status.--A bridge financial company is 
                not an agency, establishment, or instrumentality of the 
                United States.
                    (B) Employee status.--Representatives for purposes 
                of paragraph (1)(B), directors, officers, employees, or 
                agents of a bridge financial company are not, solely by 
                virtue of service in any such capacity, officers or 
                employees of the United States. Any employee of the 
                Corporation or of any Federal instrumentality who 
                serves at the request of the Corporation as a 
                representative for purposes of paragraph (1)(B), 
                director, officer, employee, or agent of a bridge 
                financial company shall not--
                            (i) solely by virtue of service in any such 
                        capacity lose any existing status as an officer 
                        or employee of the United States for purposes 
                        of title 5, United States Code, or any other 
                        provision of law; or
                            (ii) receive any salary or benefits for 
                        service in any such capacity with respect to a 
                        bridge financial company in addition to such 
                        salary or benefits as are obtained through 
                        employment with the Corporation or such Federal 
                        instrumentality.
            (9) Exempt tax status.--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.
            (10) Federal agency approval; antitrust review.--
                    (A) In general.--If a transaction involving the 
                merger or sale of a bridge financial company requires 
                approval by a Federal agency, the transaction may not 
                be consummated before the 5th calendar day after the 
                date of approval by the Federal agency responsible for 
                such approval with respect thereto. If, in connection 
                with any such approval a report on competitive factors 
                from the Attorney General is required, the Federal 
                agency responsible for such approval shall promptly 
                notify the Attorney General of the proposed transaction 
                and the Attorney General shall provide the required 
                report within 10 days of the request. If a filing is 
                required under the Hart-Scott-Rodino Antitrust 
                Improvements Act of 1976 with the Department of Justice 
                or the Federal Trade Commission, the waiting period 
                shall expire not later than the 30th day following such 
                filing notwithstanding any other provision of Federal 
                law or any attempt by any Federal agency to extend such 
                waiting period, and no further request for information 
                by any Federal agency shall be permitted.
                    (B) Emergency.--If the Secretary, in consultation 
                with the Chairman of the Federal Reserve Board, has 
                found that the Corporation must act immediately to 
                prevent the probable failure of the covered financial 
                company involved, the approvals and filings referred to 
                in subparagraph (A) shall not be required and the 
                transaction may be consummated immediately by the 
                Corporation.
            (11) Duration of bridge financial company.--Subject to 
        paragraphs (12), (13) and (14), the status of a bridge 
        financial company as such shall terminate at the end of the 2-
        year period following the date it was granted a charter. The 
        Corporation may, in its discretion, extend the status of the 
        bridge financial company as such for 3 additional 1-year 
        periods.
            (12) Termination of bridge financial company status.--The 
        status of any bridge financial company as such shall terminate 
        upon the earliest of--
                    (A) the merger or consolidation of the bridge 
                financial company with a company that is not a bridge 
                financial company;
                    (B) at the election of the Corporation, the sale of 
                a majority of the capital stock of the bridge financial 
                company to a company other than the Corporation and 
                other than another bridge financial company;
                    (C) the sale of 80 percent, or more, of the capital 
                stock of the bridge financial company to a person other 
                than the Corporation and other than another bridge 
                financial company;
                    (D) at the election of the Corporation, either the 
                assumption of all or substantially all of the 
                liabilities of the bridge financial company by a 
                company that is not a bridge financial company, or the 
                acquisition of all or substantially all of the assets 
                of the bridge financial company by a company that is 
                not a bridge financial company, or other entity as 
                permitted under applicable law; and
                    (E) the expiration of the period provided in 
                paragraph (11), or the earlier dissolution of the 
                bridge financial company as provided in paragraph (14).
            (13) Effect of termination events.--
                    (A) Merger or consolidation.--A merger or 
                consolidation as provided in paragraph (12)(A) shall be 
                conducted in accordance with, and shall have the effect 
                provided in, the provisions of applicable law. For the 
                purpose of effecting such a merger or consolidation, 
                the bridge financial company shall be treated as a 
                corporation organized under the laws of the State of 
                Delaware (unless the law of another State has been 
                selected by the bridge financial company in accordance 
                with paragraph (2)(F)), and the Corporation shall be 
                treated as the sole shareholder thereof, 
                notwithstanding any other provision of State or Federal 
                law.
                    (B) Charter conversion.--Following the sale of a 
                majority of the capital stock of the bridge financial 
                company as provided in paragraph (12)(B), the 
                Corporation may amend the charter of the bridge 
                financial company to reflect the termination of the 
                status of the bridge financial company as such, 
                whereupon the company shall have all of the rights, 
                powers, and privileges under its constituent documents 
                and applicable State or Federal law. In connection 
                therewith, the Corporation may take such steps as may 
                be necessary or convenient to reincorporate the bridge 
                financial company under the laws of a State and, 
                notwithstanding any provisions of State or Federal law, 
                such State-chartered corporation shall be deemed to 
                succeed by operation of law to such rights, titles, 
                powers and interests of the bridge financial company as 
                the Corporation may provide, with the same effect as if 
                the bridge financial company had merged with the State-
                chartered corporation under provisions of the corporate 
                laws of such State.
                    (C) Sale of stock.--Following the sale of 80 
                percent or more of the capital stock of a bridge 
                financial company as provided in paragraph (12)(C), the 
                company shall have all of the rights, powers, and 
                privileges under its constituent documents and 
                applicable State or Federal law. In connection 
                therewith, the Corporation may take such steps as may 
                be necessary or convenient to reincorporate the bridge 
                financial company under the laws of a State and, 
                notwithstanding any provisions of State or Federal law, 
                the State-chartered corporation shall be deemed to 
                succeed by operation of law to such rights, titles, 
                powers and interests of the bridge financial company as 
                the Corporation may provide, with the same effect as if 
                the bridge financial company had merged with the State-
                chartered corporation under provisions of the corporate 
                laws of such State.
                    (D) Assumption of liabilities and sale of assets.--
                Following the assumption of all or substantially all of 
                the liabilities of the bridge financial company, or the 
                sale of all or substantially all of the assets of the 
                bridge financial company, as provided in paragraph 
                (12)(D), at the election of the Corporation the bridge 
                financial company may retain its status as such for the 
                period provided in paragraph (11) or may be dissolved 
                at the election of the Corporation.
                    (E) Amendments to charter.--Following the 
                consummation of a transaction described in subparagraph 
                (A), (B), (C), or (D) of paragraph (12), the charter of 
                the resulting company shall be amended to reflect the 
                termination of bridge financial company status, if 
                appropriate.
            (14) Dissolution of bridge financial company.--
                    (A) In general.--Notwithstanding any other 
                provision of State or Federal law, if a bridge 
                financial company's status as such has not previously 
                been terminated by the occurrence of an event specified 
                in subparagraph (A), (B), (C), or (D) of paragraph 
                (12)--
                            (i) the Corporation may, in its discretion, 
                        dissolve the bridge financial company in 
                        accordance with this paragraph at any time; and
                            (ii) the Corporation shall promptly 
                        commence dissolution proceedings in accordance 
                        with this paragraph upon the expiration of the 
                        2-year period following the date the bridge 
                        financial company was chartered, or any 
                        extension thereof, as provided in paragraph 
                        (11).
                    (B) Procedures.--The Corporation shall remain the 
                receiver of a bridge financial company for the purpose 
                of dissolving the bridge financial company. The 
                Corporation as such receiver shall wind up the affairs 
                of the bridge financial company in conformity with the 
                provisions of law relating to the liquidation of 
                covered financial companies. With respect to any such 
                bridge financial company, the Corporation as receiver 
                shall have all the rights, powers, and privileges and 
                shall perform the duties related to the exercise of 
                such rights, powers, or privileges granted by law to a 
                receiver of a covered financial company and, 
                notwithstanding any other provision of law, in the 
                exercise of such rights, powers, and privileges the 
                Corporation shall not be subject to the direction or 
                supervision of any State agency or other Federal 
                agency.
            (15) Authority to obtain credit.--
                    (A) In general.--A bridge financial company may 
                obtain unsecured credit and issue unsecured debt.
                    (B) Inability to obtain credit.--If a bridge 
                financial company is unable to obtain unsecured credit 
                or issue unsecured debt, the Corporation may authorize 
                the obtaining of credit or the issuance of debt by the 
                bridge financial company--
                            (i) with priority over any or all of the 
                        obligations of the bridge financial company;
                            (ii) secured by a lien on property of the 
                        bridge financial company that is not otherwise 
                        subject to a lien; or
                            (iii) secured by a junior lien on property 
                        of the bridge financial company that is subject 
                        to a lien.
                    (C) Limitations.--
                            (i) In general.--The Corporation, after 
                        notice and a hearing, may authorize the 
                        obtaining of credit or the issuance of debt by 
                        a bridge financial company that is secured by a 
                        senior or equal lien on property of the bridge 
                        financial company that is subject to a lien 
                        only if--
                                    (I) the bridge financial company is 
                                unable to otherwise obtain such credit 
                                or issue such debt; and
                                    (II) there is adequate protection 
                                of the interest of the holder of the 
                                lien on the property with respect to 
                                which such senior or equal lien is 
                                proposed to be granted.
                    (D) Burden of proof.--In any hearing under this 
                subsection, the Corporation has the burden of proof on 
                the issue of adequate protection.
            (16) Effect on debts and liens.--The reversal or 
        modification on appeal of an authorization under this 
        subsection to obtain credit or issue debt, or of a grant under 
        this section of a priority or a lien, does not affect the 
        validity of any debt so issued, or any priority or lien so 
        granted, to an entity that extended such credit in good faith, 
        whether or not such entity knew of the pendency of the appeal, 
        unless such authorization and the issuance of such debt, or the 
        granting of such priority or lien, were stayed pending appeal.
    (i) Sharing Records.--Whenever the Corporation has been appointed 
as receiver for a covered financial company, the Federal Reserve Board 
and the company's primary appropriate regulatory agency, if any, shall 
each make all records relating to the company available to the receiver 
which may be used by the receiver in any manner the receiver determines 
to be appropriate.
    (j) Expedited Procedures for Certain Claims.--
            (1) Time for filing notice of appeal.--The notice of appeal 
        of any order, whether interlocutory or final, entered in any 
        case brought by the Corporation against a covered financial 
        company's director, officer, employee, agent, attorney, 
        accountant, or appraiser or any other person employed by or 
        providing services to a covered financial company shall be 
        filed not later than 30 days after the date of entry of the 
        order. The hearing of the appeal shall be held not later than 
        120 days after the date of the notice of appeal. The appeal 
        shall be decided not later than 180 days after the date of the 
        notice of appeal.
            (2) Scheduling.--A court of the United States shall 
        expedite the consideration of any case brought by the 
        Corporation against a covered financial company's director, 
        officer, employee, agent, attorney, accountant, or appraiser or 
        any other person employed by or providing services to a covered 
        financial company. As far as practicable, the court shall give 
        such case priority on its docket.
            (3) Judicial discretion.--The court may modify the schedule 
        and limitations stated in paragraphs (1) and (2) in a 
        particular case, based on a specific finding that the ends of 
        justice that would be served by making such a modification 
        would outweigh the best interest of the public in having the 
        case resolved expeditiously.
    (k) Foreign Investigations.--The Corporation, as receiver of any 
covered financial company and for purposes of carrying out any power, 
authority, or duty with respect to a covered financial company--
            (1) may request the assistance of any foreign financial 
        authority and provide assistance to any foreign financial 
        authority in accordance with section 8(v) of the Federal 
        Deposit Insurance Act as if the covered financial company were 
        an insured depository institution, the Corporation were the 
        appropriate Federal banking agency for the company and any 
        foreign financial authority were the foreign banking authority; 
        and
            (2) may maintain an office to coordinate foreign 
        investigations or investigations on behalf of foreign financial 
        authorities.
    (l) Prohibition on Entering Secrecy Agreements and Protective 
Orders.--The Corporation may not enter into any agreement or approve 
any protective order which prohibits the Corporation from disclosing 
the terms of any settlement of an administrative or other action for 
damages or restitution brought by the Corporation in its capacity as 
receiver for a covered financial company.
    (m) Liquidation of Certain Covered Financial Companies or Bridge 
Financial Companies.--Notwithstanding any other provision of law (other 
than a conflicting provision of this section), the Corporation, in 
connection with the liquidation of any covered financial company or 
bridge financial company with respect to which the Corporation has been 
appointed as receiver, shall--
            (1) in the case of any covered financial company or bridge 
        financial company that is or has a subsidiary that is a 
        stockbroker (as that term is defined in section 101 of title 11 
        of the United States Code) but is not a member of the 
        Securities Investor Protection Corporation, apply the 
        provisions of subchapter III of chapter 7 of title 11 of the 
        United States Code in respect of the distribution to any 
        ``customer'' of all ``customer name securities'' and ``customer 
        property'' (as such terms are defined in section 741 of such 
        title 11) as if such covered financial company or bridge 
        financial company were a debtor for purposes of such 
        subchapter; or
            (2) in the case of any covered financial company or bridge 
        financial company that is a commodity broker (as that term is 
        defined in section 101 of title 11 of the United States Code), 
        apply the provisions of subchapter IV of chapter 7 of title 11 
        of the United States Code in respect of the distribution to any 
        ``customer'' of all ``customer property'' (as such terms are 
        defined in section 761 of such title 11) as if such covered 
        financial company or bridge financial company were a debtor for 
        purposes of such subchapter.
    (n) Systemic Dissolution Fund.--
            (1) Establishment and purpose.--
                    (A) In general.--There is established in the 
                Treasury a separate fund to be known as the ``Systemic 
                Dissolution Fund''--
                            (i) to facilitate and provide for the 
                        orderly and complete dissolution of any failed 
                        financial company or companies that pose a 
                        systemic threat to the financial markets or 
                        economy, as determined under 1603(b); and
                            (ii) to ensure that any taxpayer funds 
                        utilized to facilitate such liquidations are 
                        fully repaid from assessments levied on 
                        financial companies that have assets of 
                        $50,000,000,000, adjusted for inflation, or 
                        more.
                    (B) Adjustment of threshold.--The threshold 
                referred to in subparagraph (A)(ii) shall be adjusted 
                on an annual basis, based on the growth of assets owned 
                or managed by financial companies (as defined in 
                section 1602(9)).
            (2) Authority.--The Systemic Dissolution Fund shall be 
        administered by the Corporation, which shall have exclusive 
        authority to--
                    (A) impose assessments on covered financial 
                companies in accordance with paragraphs (6) through 
                (8);
                    (B) maintain and administer the Fund in a manner so 
                as to make clear to the general public that such Fund 
                is unrelated to any other Fund maintained and 
                administered by the Corporation, including the Deposit 
                Insurance Fund;
                    (C) utilize the Fund to facilitate the dissolution 
                of a covered financial company (as defined by section 
                1602(5)) as provided in paragraph (3), or take such 
                other actions as are authorized by this subtitle;
                    (D) invest the Fund in accordance with section 
                13(a) of the Federal Deposit Insurance Act; and
                    (E) exercise borrowing authority as prescribed in 
                subsection (o).
            (3) Uses.--
                    (A) The Fund shall be available to the Corporation 
                for use with respect to the dissolution of a covered 
                financial company to--
                            (i) cover the costs incurred by the 
                        Corporation, including as receiver, in 
                        exercising its rights, authorities, and powers 
                        and fulfilling its obligations and 
                        responsibilities under this section;
                            (ii) repay such funds in accordance with 
                        subsection (o)(6); and
                            (iii) cover the costs of systemic 
                        stabilization actions, pursuant to subsections 
                        (d) and (f) of section 1604.
                    (B) The Fund shall not be used in any manner to 
                benefit any officer or director of such company removed 
                pursuant to section 1604(f)(6).
            (4) Deposits to fund.--All amounts assessed against a 
        financial company under this section shall be deposited into 
        the Fund.
            (5) Size of fund.--The Corporation shall, by rule, 
        establish the minimum size of the Fund consistent with 
        subparagraphs (C) and (D) of paragraph (6).
            (6) Assessments.--
                    (A) Assessments to maintain fund.--The Corporation 
                shall impose risk-based assessments on financial 
                companies in such amount and manner and subject to such 
                terms and conditions that the Corporation determines, 
                by regulation and in consultation with the Council, are 
                necessary for the amount in the Fund to at least equal 
                the minimum size established pursuant to paragraph (5).
                    (B) Assessments to replenish the fund.--If the Fund 
                falls below the minimum size established pursuant to 
                paragraph (5), the Corporation shall impose assessments 
                on financial companies in such amounts and manner and 
                subject to such terms and conditions as the Corporation 
                determines, by regulation and in consultation with the 
                Council, are necessary to replenish the fund subject to 
                the limitations in subparagraph (D).
                    (C) Minimum assessment threshold.--
                            (i) In general.--The Corporation shall not 
                        assess financial companies with less than 
                        $50,000,000,000, adjusted for inflation, of 
                        assets on a consolidated basis, subject to any 
                        differentiation as permitted in paragraph (8) 
                        and shall assess financial companies with 
                        $10,000,000,000, adjusted for inflation or more 
                        in assets in accordance with paragraphs (7) and 
                        (8).
                            (ii) Hedge funds.--The Corporation shall 
                        not assess financial companies that manage 
                        hedge funds (as defined by the Corporation for 
                        the purpose of this section, in consultation 
                        with the Securities and Exchange Commission) 
                        with less than $10,000,000,000, adjusted for 
                        inflation, of assets, under management on a 
                        consolidated basis, subject to any 
                        differentiation as permitted in paragraph (8) 
                        and shall assess any financial companies that 
                        manage hedge funds with $10,000,000,000 or more 
                        of assets under management in accordance with 
                        paragraphs (7) and (8).
                    (D) Maximum size of fund via assessments.--
                            (i) In general.--The Corporation shall 
                        suspend assessments on financial companies on 
                        the day after the date on which the total of 
                        the assessments, excluding interest or other 
                        earnings from investments made pursuant to 
                        paragraph (2)(D), equals $150,000,000,000.
                            (ii) Exceptions.--Any suspension of 
                        assessments under clause (i)--
                                    (I) may be set aside if the Fund 
                                falls below $150,000,000,000; and
                                    (II) shall be set aside if the Fund 
                                falls below the minimum level 
                                established in subparagraph (C).
            (7) Factors.--The Corporation, in consultation with the 
        Council shall establish a risk matrix to be used in 
        establishing assessments that takes into account--
                    (A) the actual or expected risk of losses to the 
                Fund;
                    (B) economic conditions generally affecting 
                financial companies so as to allow assessments and the 
                Fund to increase during more favorable economic 
                conditions and to decrease during less favorable 
                economic conditions;
                    (C) any assessments imposed on a financial company 
                or an affiliate of a financial company that--
                            (i) is an insured depository institution, 
                        assessed pursuant to section 7 or 13(c)(4)(G) 
                        of the Federal Deposit Insurance Act;
                            (ii) is a member of the Securities Investor 
                        Protection Corporation, assessed pursuant to 
                        section 4 of the Securities Investor Protection 
                        Act of 1970 (15 U.S.C. 78ddd);
                            (iii) is an insured credit union, assessed 
                        pursuant to section 202(c)(1)(A)(i) of the 
                        Federal Credit Union Act (12 U.S.C. 
                        1782(c)(1)(A)(i)); or
                            (iv) is an insurance company, assessed 
                        pursuant to applicable State law to cover (or 
                        reimburse payments made to cover) the costs of 
                        the rehabilitation, liquidation or other State 
                        insolvency proceeding with respect to 1 or more 
                        insurance companies;
                    (D) the risks presented by the financial company to 
                the financial system and the extent to which the 
                financial company has benefitted, or likely would 
                benefit, from the dissolution of a financial company 
                under this title, including--
                            (i) the amount, different categories, and 
                        concentrations of assets of the financial 
                        company and its affiliates, including both on-
                        balance sheet and off-balance sheet assets;
                            (ii) the activities of the financial 
                        company and its affiliates;
                            (iii) the relevant market share of the 
                        financial company and its affiliates;
                            (iv) the extent to which the financial 
                        company is leveraged;
                            (v) the potential exposure to sudden calls 
                        on liquidity precipitated by economic distress;
                            (vi) the amount, maturity, volatility, and 
                        stability of the company's financial 
                        obligations to, and relationship with, other 
                        financial companies;
                            (vii) the amount, maturity, volatility, and 
                        stability of the company's liabilities, 
                        including the degree of reliance on short-term 
                        funding, taking into consideration existing 
                        systems for measuring a company's risk-based 
                        capital;
                            (viii) the stability and variety of the 
                        company's sources of funding;
                            (ix) the company's importance as a source 
                        of credit for households, businesses, and State 
                        and local governments and as a source of 
                        liquidity for the financial system;
                            (x) the extent to which assets are simply 
                        managed and not owned by the financial company 
                        and the extent to which ownership of assets 
                        under management is diffuse; and
                            (xi) the amount, different categories, and 
                        concentrations of liabilities, both insured and 
                        uninsured, contingent and noncontingent, 
                        including both on-balance sheet and off-balance 
                        sheet liabilities, of the financial company and 
                        its affiliates; and
                    (E) such other factors as the Corporation, in 
                consultation with the Council, may determine to be 
                appropriate.
            (8) Requirement for equitable treatment in assessments.--In 
        establishing the assessment system for the Fund, the 
        Corporation, by regulation and in consultation with the 
        Council, shall differentiate among financial companies based on 
        complexity of operations or organization, interconnectedness, 
        size, direct or indirect activities, and any other factors the 
        Corporation or the Council may deem appropriate to ensure that 
        the assessments charged equitably reflect the risk posed to the 
        Fund by particular classes of financial companies.
            (9) Minimum comment period.--In order to ensure sufficient 
        opportunity for public and congressional review and evaluation 
        of any assessment system, any proposed regulations regarding 
        the implementation of the assessment system under this subtitle 
        shall provide an opportunity for public comment during a period 
        of not less than 60 days.
    (o) Borrowing Authority.--
            (1) Borrowing from treasury.--
                    (A) In general.--Subject to paragraphs (3), (4), 
                and (5), the Corporation may borrow from the Treasury, 
                and the Secretary of the Treasury is authorized to lend 
                to the Corporation on such terms as may be fixed by the 
                Corporation and the Secretary, such funds as in the 
                judgment of the Board of Directors of the Corporation 
                are required, in addition to the funds available in the 
                Systemic Dissolution Fund, to permit the orderly 
                dissolution of 1 or more covered systemically 
                significant financial companies, covered affiliates, or 
                covered subsidiaries under this title.
                    (B) Rate of interest.--The rate of interest to be 
                charged in connection with any loan made pursuant to 
                this subsection shall not be less than an amount 
                determined by the Secretary of the Treasury, taking 
                into consideration current market yields on outstanding 
                marketable obligations of the United States of 
                comparable maturities.
            (2) Public debt issuances.--For the purposes described in 
        subsection (1), the Secretary of the Treasury may use as a 
        public-debt transaction the proceeds of the sale of any 
        securities hereafter issued under chapter 31 of title 31, and 
        the purposes for which securities may be issued under chapter 
        31 of title 31 are extended to include such loans. All loans 
        and repayments under this subsection shall be treated as 
        public-debt transactions of the United States.
            (3) Borrowing authority when fund assets are less than 
        $150,000,000,000.--
                    (A) Subject to paragraph (B), the borrowing 
                authority granted in paragraph (1) shall be available 
                to the Corporation where--
                            (i) the value of the Fund is less than 
                        $150,000,000,000;
                            (ii) the Corporation determines that the 
                        immediate dissolution of a financial company or 
                        financial companies requires more funds than 
                        are available in the Fund; and
                            (iii) the Corporation has provided a 
                        specific plan for repayment under paragraph 
                        (7)(A).
                    (B) The Corporation may borrow, and the Secretary 
                may lend, any amount of funds that, when added to the 
                amount available in the Fund on the date the 
                Corporation makes a request to borrow funds, would not 
                exceed $150,000,000,000.
                    (C) For purposes of paragraph (1), the 
                Corporation's total debt may not exceed 
                $150,000,000,000 (not including any funds borrowed 
                pursuant to subsection (s)).
            (4) Additional borrowing authority.--
                    (A) If at any time the Corporation anticipates that 
                the dissolution of any financial company or financial 
                companies will require funds in excess of 
                $150,000,000,000--
                            (i) the Corporation shall submit to the 
                        Secretary and the President a written request 
                        for additional borrowing authority subject to 
                        the limitation in subparagraph (5), which shall 
                        be accompanied by a certification indicating 
                        the anticipated amount needed, the basis on 
                        which such amount was determined, and any such 
                        information as the Secretary may deem 
                        necessary; and
                            (ii) the President shall transmit a request 
                        to the House of Representatives and the Senate 
                        requesting the additional borrowing authority, 
                        which shall include the certification referred 
                        to in clause (i) and which includes a repayment 
                        schedule as outlined in paragraph (7).
                    (B) Any request for borrowing authority under 
                paragraph (A) shall be effective only if approved by 
                affirmative vote of the House of Representatives and 
                the Senate in accordance with subsection (s).
            (5) Limitations on additional borrowing authority.--
                    (A) No request for borrowing authority is permitted 
                under paragraph (4) unless the President, in 
                consultation with the Council, certifies to the House 
                of Representatives and the Senate that the borrowing 
                authority is necessary to avoid or mitigate an imminent 
                financial emergency.
                    (B) The amount of borrowing authority requested 
                under subparagraph (A)(i) may not exceed 
                $50,000,000,000.
            (6) Proceeds from liquidation, repayment of funds.--
                    (A) In general.--The Corporation shall take such 
                measures as may be appropriate to maximize the amount 
                of funds from any dissolution that may be available for 
                repayment under subparagraph (B) consistent with 
                systemic concerns.
                    (B) Repayment priority.--Amounts realized from the 
                dissolution of any financial company under this 
                subtitle that are not otherwise utilized by the 
                Corporation to dissolve a financial company under 
                subsection (n)(3)(A) shall be paid--
                            (i) first, to repay any costs incurred in 
                        exercising the borrowing authority granted in 
                        paragraph (1); and
                            (ii) second, to recapitalize the Fund to 
                        such level as the Corporation deems necessary, 
                        but not to exceed $150,000,000,000.
            (7) Repayment plan and schedules required for any 
        borrowing.--
                    (A) In general.--No amount may be provided by the 
                Secretary of the Treasury to the Corporation under 
                paragraph (1) unless an agreement is in effect between 
                the Secretary and the Corporation which--
                            (i) provides a specific plan and schedule 
                        for assessments under (n)(6) to achieve the 
                        repayment of the outstanding amount of any 
                        borrowing under such subsection; and
                            (ii) demonstrates that income to the 
                        Corporation from assessments under this section 
                        will be sufficient to amortize the outstanding 
                        balance within the period established in the 
                        repayment schedule and pay the interest 
                        accruing on such balance.
                    (B) Consultation with and report to congress.--The 
                Secretary of the Treasury and the Corporation shall--
                            (i) consult with the Committee on Financial 
                        Services of the House of Representatives and 
                        the Committee on Banking, Housing, and Urban 
                        Affairs of the Senate on the terms of any 
                        repayment schedule agreement; and
                            (ii) submit a copy of each repayment 
                        schedule agreement to the Committee on 
                        Financial Services of the House of 
                        Representatives and the Committee on Banking, 
                        Housing, and Urban Affairs of the Senate before 
                        the end of the 30-day period beginning on the 
                        date any amount is provided by the Secretary of 
                        the Treasury to the Corporation under paragraph 
                        (1).
    (p) Information Gathering and Verification; Payments .--
            (1) In general.--The Corporation may require each financial 
        company to make available such information as the Corporation 
        may require--
                    (A) for purposes of--
                            (i) determining the financial company's 
                        assessment under this section;
                            (ii) verifying the accuracy of information; 
                        and
                            (iii) preparing for resolution, including a 
                        resolution plan as required by this section; 
                        and
                    (B) for such other purposes as may be appropriate 
                and necessary to promote the orderly dissolution of the 
                financial company.
            (2) Use of existing reports.--The Corporation shall, to the 
        fullest extent possible, accept--
                    (A) reports that a financial company has provided 
                or been required to provide to other Federal or State 
                supervisors or to appropriate self-regulatory 
                organizations;
                    (B) information that is otherwise required to be 
                reported publicly; and
                    (C) externally audited financial statements.
            (3) Authority for on-site inspection.--The Corporation may 
        make on-site inspections of a financial company's books and 
        records as necessary to carry out the purposes of this 
        subsection.
            (4) Rulemaking.--The Corporation may promulgate such rules 
        or regulations as are necessary or appropriate to implement 
        this subsection.
            (5) Payments of assessments required .--
                    (A) In general.--Any financial company subject to 
                an assessment under this section shall pay to the 
                Corporation such assessment.
                    (B) Form of payment.--The payments required under 
                this section shall be made in such manner and at such 
                time or times as the Corporation, in consultation with 
                the Council, shall prescribe by regulation.
            (6) Penalty for failure to timely pay assessments.--Any 
        financial company that fails or refuses to pay any assessment 
        under this section shall be subject to a penalty under section 
        18(h) of the Federal Deposit Insurance Act, as if that 
        financial company were an insured depository institution.
    (q) Assessment Actions.--
            (1) In general.--The Corporation, in any court of competent 
        jurisdiction, shall be entitled to recover from any financial 
        company the amount of any unpaid assessment lawfully payable by 
        such company.
            (2) Statute of limitations.--Notwithstanding any other 
        provision in Federal law, or the law of any State--
                    (A) any action by a financial company to recover 
                from the Corporation the overpaid amount of any 
                assessment shall be brought within 3 years after the 
                date the assessment payment was due, subject to 
                subparagraph (C);
                    (B) any action by the Corporation to recover from a 
                financial company the underpaid amount of any 
                assessment shall be brought within 3 years after the 
                date the assessment payment was due, subject to 
                subparagraph (C); and
                    (C) if a financial company has made a false or 
                fraudulent statement with intent to evade any or all of 
                its assessment, the Corporation shall have until 3 
                years after the date of discovery of the false or 
                fraudulent statement in which to bring an action to 
                recover the underpaid amount.
    (r) Requirement to Maintain Systemic Dissolution Fund as Separate 
Fund.--The Systemic Dissolution Fund shall at all times be administered 
in a manner that is separate and distinct from the Deposit Insurance 
Fund, and the Corporation shall take such actions as may be necessary 
to ensure that such distinction is made with respect to internal 
processes and procedures as well as with regard to any public 
information, discussion or other communications involving either Fund.
    (s) Congressional Approval of Additional Borrowing Authority.--
            (1) Introduction.--On the day on which the request of the 
        President is received by the House of Representatives and the 
        Senate under subsection (o)(4)(A)(ii), a joint resolution 
        specified in paragraph (5) shall be introduced in the House by 
        the majority leader and minority leader of the House and in the 
        Senate by the majority leader and minority leader of the 
        Senate. If either House is not in session on the day on which 
        such a request is received, the joint resolution with respect 
        to such request shall be introduced in that House, as provided 
        in the preceding sentence, on the first day thereafter on which 
        that House is in session.
            (2) Consideration in the house of representatives.--
                    (A) Reporting and discharge.--Any committee of the 
                House of Representatives to which a joint resolution 
                introduced under paragraph (1) is referred shall report 
                such joint resolution to the House not later than 5 
                calendar days after the applicable date of introduction 
                of the joint resolution. If a committee fails to report 
                such joint resolution within that period, the committee 
                shall be discharged from further consideration of the 
                joint resolution and the joint resolution shall be 
                referred to the appropriate calendar.
                    (B) Proceeding to consideration.--After all 
                committees authorized to consider a joint resolution 
                have reported such joint resolution to the House or 
                have been discharged from its consideration, it shall 
                be in order, not later than the sixth day after the 
                applicable date of introduction of the joint 
                resolution, to move to proceed to consider the joint 
                resolution in the House. Such a motion shall not be in 
                order after the House has disposed of a motion to 
                proceed on the joint resolution and shall not be in 
                order if the House has received a message from the 
                Senate under paragraph (4)(C). The previous question 
                shall be considered as ordered on the motion to its 
                adoption without intervening motion. A motion to 
                reconsider the vote by which the motion is disposed of 
                shall not be in order.
                    (C) Consideration.--The joint resolution shall be 
                considered in the House and shall be considered as 
                read. All points of order against a joint resolution 
                and against its consideration are waived. The previous 
                question shall be considered as ordered on the joint 
                resolution to its passage without intervening motion 
                except two hours of debate equally divided and 
                controlled by the proponent and an opponent. A motion 
                to reconsider the vote on passage of a joint resolution 
                shall not be in order.
            (3) Consideration in the senate.--
                    (A) Placement on calendar.--Upon introduction in 
                the Senate, the joint resolution shall be placed 
                immediately on the calendar.
                    (B) Floor consideration.--
                            (i) In general.--Notwithstanding rule XXII 
                        of the Standing Rules of the Senate, it is in 
                        order at any time during the period beginning 
                        on the 4th day after the applicable date of 
                        introduction in the Senate and ending on the 
                        6th day after the applicable date of 
                        introduction in the Senate (even though a 
                        previous motion to the same effect has been 
                        disagreed to) to move to proceed to the 
                        consideration of the joint resolution, and all 
                        points of order against the joint resolution 
                        (and against consideration of the joint 
                        resolution) are waived. The motion to proceed 
                        is not debatable. The motion is not subject to 
                        a motion to postpone. A motion to reconsider 
                        the vote by which the motion is agreed to or 
                        disagreed to shall not be in order. If a motion 
                        to proceed to the consideration of the 
                        resolution is agreed to, the joint resolution 
                        shall remain the unfinished business until 
                        disposed of.
                            (ii) Debate.--Debate on the joint 
                        resolution, and on all debatable motions and 
                        appeals in connection therewith, shall be 
                        limited to not more than 10 hours, which shall 
                        be divided equally between the majority and 
                        minority leaders or their designees. A motion 
                        further to limit debate is in order and not 
                        debatable. An amendment to, or a motion to 
                        postpone, or a motion to proceed to the 
                        consideration of other business, or a motion to 
                        recommit the joint resolution is not in order.
                            (iii) Vote on passage.--The vote on passage 
                        shall occur immediately following the 
                        conclusion of the debate on a joint resolution, 
                        and a single quorum call at the conclusion of 
                        the debate if requested in accordance with the 
                        rules of the Senate.
                            (iv) Rulings of the chair on procedure.--
                        Appeals from the decisions of the Chair 
                        relating to the application of the rules of the 
                        Senate, as the case may be, to the procedure 
                        relating to a joint resolution shall be decided 
                        without debate.
            (4) Rules relating to senate and house of 
        representatives.--
                    (A) Coordination with action by other house.--If, 
                before the passage by one House of a joint resolution 
                of that House, that House receives from the other House 
                a joint resolution, then the following procedures shall 
                apply:
                            (i) The joint resolution of the other House 
                        shall not be referred to a committee.
                            (ii) With respect to the joint resolution 
                        of the House receiving the resolution, the 
                        procedure in that House shall be the same as if 
                        no such joint resolution had been received from 
                        the other House; but the vote on passage shall 
                        be on the joint resolution of the other House.
                    (B) Treatment of companion measures.--If, following 
                passage of a joint resolution in the Senate, the Senate 
                then receives the companion measure from the House of 
                Representatives, the companion measure shall not be 
                debatable.
                    (C) Failure of joint resolution in the senate.--
                            (i) If, in the Senate, the motion to 
                        proceed to the consideration of the joint 
                        resolution fails on adoption, the Secretary of 
                        the Senate shall transmit a message to that 
                        effect to the House of Representatives.
                            (ii) If, in the Senate, the joint 
                        resolution fails on passage, the Secretary of 
                        the Senate shall transmit a message to that 
                        effect to the House of Representatives.
                    (D) Rules of house of representatives and senate.--
                This paragraph and the preceding paragraphs are enacted 
                by Congress--
                            (i) as an exercise of the rulemaking power 
                        of the Senate and House of Representatives, 
                        respectively, and as such it is deemed a part 
                        of the rules of each House, respectively, but 
                        applicable only with respect to the procedure 
                        to be followed in that House in the case of a 
                        joint resolution, and it supersedes other rules 
                        only to the extent that it is inconsistent with 
                        such rules; and
                            (ii) with full recognition of the 
                        constitutional right of either House to change 
                        the rules (so far as relating to the procedure 
                        of that House) at any time, in the same manner, 
                        and to the same extent as in the case of any 
                        other rule of that House.
            (5) Definition.--In this section, the term ``joint 
        resolution'' means only a joint resolution--
                    (A) which does not have a preamble;
                    (B) the title of which is as follows: ``Joint 
                resolution relating to the approval of request for 
                borrowing authority under the Financial Stability 
                Improvement Act of 2009.''; and
                    (C) the sole matter after the resolving clause of 
                which is as follows: ``That the Congress approves the 
                request for additional borrowing authority transmitted 
                to the Congress on ___ by the President under section 
                1609(o)(4)(A)(ii) of the Financial Stability 
                Improvement Act of 2009.'', the blank space being 
                filled with the appropriate date.
    (t) No Federal Status.--
            (1) Agency status.--A covered financial company (or any 
        covered subsidiary thereof) that is placed into receivership is 
        not a department, agency, or instrumentality of the United 
        States for purposes of statutes that confer powers on or impose 
        obligations on government entities.
            (2) Employee status.--Interim directors, directors, 
        officers, employees, or agents of a covered financial company 
        that is placed into receivership are not, solely by virtue of 
        service in any such capacity, officers or employees of the 
        United States. Any employee of the Corporation, acting as 
        receiver or of any Federal agency who serves at the request of 
        the receiver as an interim director, director, officer, 
        employee, or agent of a covered financial company that is 
        placed into receivership shall not--
                    (A) solely by virtue of service in any such 
                capacity lose any existing status as an officer or 
                employee of the United States for purposes of title 5, 
                United States Code, or any other provision of law, or;
                    (B) receive any salary or benefits for service in 
                any such capacity with respect to a covered financial 
                company that is placed into receivership in addition to 
                such salary or benefits as are obtained through 
                employment with the Corporation or other Federal 
                agency.

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

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

SEC. 1611. OFFICE OF RESOLUTION.

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

SEC. 1612. MISCELLANEOUS PROVISIONS.

    (a) Bankruptcy Code Amendments.--Section 109(b)(2) of title 11 of 
the United States Code is amended by inserting ``covered financial 
company (as that term is defined in section 1602(5) of the Dissolution 
Authority for Large, Interconnected Financial Companies Act of 2009),'' 
after ``a domestic insurance company,''.
    (b) Federal Deposit Insurance Act and Federal Deposit Insurance 
Corporation Improvement Act of 1991.--
            (1) Section 18(c)(4)(G)(i) of the Federal Deposit Insurance 
        Act (12 U.S.C. 1823(c)(4)(G)(i)) is amended by inserting at the 
        end the following new sentence: ``The determination with regard 
        to the Corporation's exercise of authority under this 
        subparagraph shall apply to only an insured depository 
        institution except when severe financial conditions exist which 
        threaten the stability of a significant number of insured 
        depository institutions.''.
            (2) Section 403(a) of the Federal Deposit Insurance 
        Corporation Improvement Act of 1991 (12 U.S.C. 4403(a)) is 
        amended by inserting ``section 1609(c) of the Resolution 
        Authority for Large, Interconnected Financial Companies Act of 
        2009, section 1367 of the Federal Housing Enterprises Financial 
        Safety and Soundness Act of 1992 (12 U.S.C. 4617(d)),'' after 
        ``section 11(e) of the Federal Deposit Insurance Act,''.

SEC. 1613. AMENDMENT TO FEDERAL DEPOSIT INSURANCE ACT.

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

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

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

SEC. 1614. APPLICATION OF EXECUTIVE COMPENSATION LIMITATIONS.

    The provisions of section 111 of the Emergency Economic 
Stabilization Act of 2008 shall apply to a covered financial 
institution for which a receiver has been appointed pursuant to section 
1604. Such covered financial institution shall be considered a TARP 
recipient for purposes of such section 111 for so long as such 
institution is in receivership.

  Subtitle H--Additional Improvements for Financial Crisis Management

SEC. 1701. ADDITIONAL IMPROVEMENTS FOR FINANCIAL CRISIS MANAGEMENT.

    Section 13 of the Federal Reserve Act (12 U.S.C. 343) is amended by 
striking the 3rd undesignated paragraph and inserting the following new 
subsection:
    ``(c) Financial Crisis Management.--
            ``(1) In general.--In unusual and exigent circumstances, 
        the Board of Governors of the Federal Reserve System, upon the 
        written determination, pursuant to section 1109 of the 
        Financial Stability Improvement Act of 2009, of the Financial 
        Stability Oversight Council, that a liquidity event exists that 
        could destabilize the financial system (which determination 
        shall be made upon a vote of not less than two-thirds of the 
        members of such Council then serving), and with the written 
        consent of the Secretary of the Treasury (after certification 
        by the President that an emergency exists), may authorize any 
        Federal reserve bank, during such periods as the Board may 
        determine and at rates established in accordance with the 
        provision designated as (d) of section 14, to discount for an 
        individual, partnership, or corporation, notes, drafts, and 
        bills of exchange when such notes, drafts, and bills of 
        exchange are indorsed or otherwise secured to the satisfaction 
        of the Federal reserve bank and in conformance with regulations 
        or guidelines issued by the Board of Governors regarding the 
        quality of notes, drafts, and bills of exchange available for 
        discount and of the security for those notes, drafts and bills 
        of exchange, unless a joint resolution (as defined in paragraph 
        (5)) is adopted. Upon making any determination under this 
        paragraph, with the consent of the Secretary of the Treasury, 
        the Financial Stability Oversight Council shall promptly submit 
        a notice of such determination to the Congress. The amounts 
        made available under this subsection shall not exceed 
        $4,000,000,000,000.
            ``(2) Clarification of `secured to the satisfaction of the 
        federal reserve bank'.--No member of the Board of Governors of 
        the Federal Reserve System shall vote to authorize any action 
        permitted under paragraph (1) and the Secretary of the Treasury 
        shall not provide the written consent required by paragraph (1) 
        unless that member believes and the Secretary of the Treasury 
        believes:
                    ``(A) that there is at least a 99 percent 
                likelihood that all funds disbursed or put at risk by 
                such action will be repaid to the Federal Reserve 
                System; and
                    ``(B) that there is at least a 99 percent 
                likelihood that all interest due on any funds disbursed 
                will also be paid to the Federal Reserve System.
            ``(3) Low quality assets excluded.--The notes, drafts, and 
        bills of exchange available for discount for purposes of 
        paragraph (1), and the security for those notes, drafts and 
        bills of exchange may only include any of the following assets 
        if such asset is used to further enhance the security for those 
        notes, drafts and bills of exchange which shall be fully 
        secured with assets that are not any of the following assets:
                    ``(A) An asset (including a security) that would be 
                classified as ``substandard,'' ``doubtful,'' or 
                ``loss,'' or treated as ``special mention'' or ``other 
                transfer risk problems,'' in a report of examination or 
                inspection of bank or an affiliate of a bank prepared 
                by either a Federal or State supervisory agency or in 
                any internal classification system used by such 
                individual, partnership or corporation.
                    ``(B) An asset in a nonaccrual status.
                    ``(C) An asset on which principal or interest 
                payments are more than 30 days past due.
                    ``(D) An asset whose terms have been renegotiated 
                or compromised due to the deteriorating financial 
                condition of the obligor unless such asset has been 
                performing for at least 6 months since the 
                renegotiation.
            ``(4) No single or specific beneficiaries.--The Board of 
        Governors of the Federal Reserve System may authorize a Federal 
        reserve bank to discount notes, drafts, or bills of exchange 
        under this section only as part of a broadly available credit 
        or other facility and may not authorize a Federal Reserve bank 
        to discount notes, drafts, or bills of exchange for only a 
        single and specific individual, partnership, or corporation.
            ``(5) Evidence of unavailability of credit.--Before 
        discounting any note, draft, or bill of exchange under this 
        subsection for an individual, a partnership or corporation as 
        part of a broadly available credit or other facility the 
        Federal reserve bank shall obtain evidence that such 
        individual, partnership, or corporation is unable to secure 
        adequate credit accommodations from other banking institutions. 
        All discounts under this subsection for individuals, 
        partnerships, or corporations shall be subject to such 
        limitations, restrictions, and regulations as the Board of 
        Governors of the Federal Reserve System may prescribe.
            ``(6) Congressional disapproval of additional borrowing 
        authority.--
                    ``(A) Introduction.--Within 90 days of the day on 
                which notice from the Financial Stability Oversight 
                Council is received by the House of Representatives and 
                the Senate under paragraph (1), a joint resolution 
                specified in subparagraph (E) may be introduced in the 
                House by the majority leader and minority leader of the 
                House and in the Senate by the majority leader and 
                minority leader of the Senate.
                    ``(B) Consideration in the house of 
                representatives.--
                            ``(i) Reporting and discharge.--Any 
                        committee of the House of Representatives to 
                        which a joint resolution introduced under 
                        subparagraph (A) is referred shall report such 
                        joint resolution to the House not later than 5 
                        calendar days after the applicable date of 
                        introduction of the joint resolution. If a 
                        committee fails to report such joint resolution 
                        within that period, the committee shall be 
                        discharged from further consideration of the 
                        joint resolution and the joint resolution shall 
                        be referred to the appropriate calendar.
                            ``(ii) Proceeding to consideration.--After 
                        each committee authorized to consider a joint 
                        resolution reports such joint resolution to the 
                        House or has been discharged from its 
                        consideration, it shall be in order, not later 
                        than the sixth day after the applicable date of 
                        introduction of the joint resolution, to move 
                        to proceed to consider the joint resolution in 
                        the House. Such a motion shall not be in order 
                        after the House has disposed of a motion to 
                        proceed on the joint resolution and shall not 
                        be in order if the House has received a message 
                        from the Senate under subparagraph (D)(iii)(I). 
                        The previous question shall be considered as 
                        ordered on the motion to its adoption without 
                        intervening motion. A motion to reconsider the 
                        vote by which the motion is disposed of shall 
                        not be in order.
                            ``(iii) Consideration.--The joint 
                        resolution shall be considered in the House and 
                        shall be considered as read. All points of 
                        order against a joint resolution and against 
                        its consideration are waived. The previous 
                        question shall be considered as ordered on the 
                        joint resolution to its passage without 
                        intervening motion except two hours of debate 
                        equally divided and controlled by the proponent 
                        and an opponent. A motion to reconsider the 
                        vote on passage of a joint resolution shall not 
                        be in order.
                    ``(C) Consideration in the senate.--
                            ``(i) Placement on calendar.--Upon 
                        introduction in the Senate, the joint 
                        resolution shall be placed immediately on the 
                        calendar.
                            ``(ii) Floor consideration.--
                                    ``(I) In general.--Notwithstanding 
                                rule XXII of the Standing Rules of the 
                                Senate, it is in order at any time 
                                during the period beginning on the 4th 
                                day after the applicable date of 
                                introduction of the joint resolution 
                                and ending on the 6th day after the 
                                applicable date of introduction (even 
                                though a previous motion to the same 
                                effect has been disagreed to) to move 
                                to proceed to the consideration of the 
                                joint resolution, and all points of 
                                order against the joint resolution (and 
                                against consideration of the joint 
                                resolution) are waived. The motion to 
                                proceed is not debatable. The motion is 
                                not subject to a motion to postpone. A 
                                motion to reconsider the vote by which 
                                the motion is agreed to or disagreed to 
                                shall not be in order. If a motion to 
                                proceed to the consideration of the 
                                resolution is agreed to, the joint 
                                resolution shall remain the unfinished 
                                business until disposed of.
                                    ``(II) Debate.--Debate on the joint 
                                resolution, and on all debatable 
                                motions and appeals in connection 
                                therewith, shall be limited to not more 
                                than 10 hours, which shall be divided 
                                equally between the majority and 
                                minority leaders or their designees. A 
                                motion further to limit debate is in 
                                order and not debatable. An amendment 
                                to, or a motion to postpone, or a 
                                motion to proceed to the consideration 
                                of other business, or a motion to 
                                recommit the joint resolution is not in 
                                order.
                                    ``(III) Vote on passage.--The vote 
                                on passage shall occur immediately 
                                following the conclusion of the debate 
                                on a joint resolution, and a single 
                                quorum call at the conclusion of the 
                                debate if requested in accordance with 
                                the rules of the Senate.
                                    ``(IV) Rulings of the chair on 
                                procedure.--Appeals from the decisions 
                                of the Chair relating to the 
                                application of the rules of the Senate, 
                                as the case may be, to the procedure 
                                relating to a joint resolution shall be 
                                decided without debate.
                    ``(D) Rules relating to senate and house of 
                representatives.--
                            ``(i) Coordination with action by other 
                        house.--If, before the passage by one House of 
                        a joint resolution of that House, that House 
                        receives from the other House a joint 
                        resolution, then the following procedures shall 
                        apply:
                                    ``(I) The joint resolution of the 
                                other House shall not be referred to a 
                                committee.
                                    ``(II) With respect to the joint 
                                resolution of the House receiving the 
                                resolution, the procedure in that House 
                                shall be the same as if no such joint 
                                resolution had been received from the 
                                other House; but the vote on passage 
                                shall be on the joint resolution of the 
                                other House.
                            ``(ii) Treatment of companion measures.--
                        If, following passage of a joint resolution in 
                        the Senate, the Senate then receives the 
                        companion measure from the House of 
                        Representatives, the companion measure shall 
                        not be debatable.
                            ``(iii) Failure of joint resolution in the 
                        senate.--
                                    ``(I) If, in the Senate, the motion 
                                to proceed to the consideration of the 
                                joint resolution fails, the Secretary 
                                of the Senate shall transmit a message 
                                to that effect to the House of 
                                Representatives.
                                    ``(II) If, in the Senate, the joint 
                                resolution fails on passage, the 
                                Secretary of the Senate shall transmit 
                                a message to that effect to the House 
                                of Representatives.
                            ``(iv) Rules of house of representatives 
                        and senate.--This paragraph and the preceding 
                        paragraphs are enacted by Congress--
                                    ``(I) as an exercise of the 
                                rulemaking power of the Senate and 
                                House of Representatives, respectively, 
                                and as such it is deemed a part of the 
                                rules of each House, respectively, but 
                                applicable only with respect to the 
                                procedure to be followed in that House 
                                in the case of a joint resolution, and 
                                it supersedes other rules only to the 
                                extent that it is inconsistent with 
                                such rules; and
                                    ``(II) with full recognition of the 
                                constitutional right of either House to 
                                change the rules (so far as relating to 
                                the procedure of that House) at any 
                                time, in the same manner, and to the 
                                same extent as in the case of any other 
                                rule of that House.
                    ``(E) Definition.--In this paragraph, the term 
                `joint resolution' means only a joint resolution--
                            ``(i) which does not have a preamble;
                            ``(ii) the title of which is as follows: 
                        `Joint resolution relating to the use of 
                        authority relevant to section 13(c) of the 
                        Federal Reserve Act under the Financial 
                        Stability Improvement Act of 2009.'; and
                            ``(iii) the sole matter after the resolving 
                        clause of which is as follows: `That the 
                        Congress disapproves the use of authority 
                        pursuant to use of authority relevant to 
                        section 13(c) of the Federal Reserve Act 
                        transmitted to the Congress on ___ by the Board 
                        of Governors of the Federal Reserve System', 
                        the blank space being filled with the 
                        appropriate date.
                    ``(F) Nonscoring of joint resolutions of 
                disapproval.--A joint resolution of disapproval shall 
                be treated as having no budgetary effect by the 
                Congressional Budget Office and the Office of 
                Management and Budget for any purpose under the Rules 
                of the House of Representatives, the Standing Rules of 
                the Senate, the Congressional Budget Act of 1974, or 
                any statutory pay-as-you-go requirement.''.

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

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

SEC. 1703. ADDITIONAL OVERSIGHT OF FINANCIAL REGULATORY SYSTEM.

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

                       Subtitle I--Miscellaneous

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

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

             Subtitle J--International Policy Coordination

SEC. 1901. INTERNATIONAL POLICY COORDINATION.

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

             Subtitle K--International Financial Provisions

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

    (a) Establishment of Foreign Bank Offices in the United States.--
Subsection 7(d)(3) of the International Banking Act of 1978 ( U.S.C. 
3105(d)(3)) is amended--
            (1) by striking ``and'' at the end of subparagraph (C);
            (2) by striking the period at the end of subparagraph (D) 
        and inserting ``; and''; and
            (3) by adding at the end the following new subparagraph:
                    ``(E) for a foreign bank that presents a systemic 
                risk to the United States (as determined in accordance 
                with section 1603 of the Financial Stability 
                Improvement Act of 2009), whether the home country of 
                the foreign bank has adopted, or is making demonstrable 
                progress toward adopting, an appropriate system of 
                financial regulation for the financial system of such 
                home country to mitigate such systemic risk.''.
    (b) Termination of Foreign Bank Offices in the United States.--
Subsection 7(e)(1) of the International Banking Act of 1978 ( U.S.C. 
3105(e)(1)) is amended--
            (1) by striking ``or'' at the end of subparagraph (A);
            (2) by striking the period at the end of subparagraph (B) 
        and inserting ``; or''; and
            (3) by inserting after subparagraph (B), the following new 
        subparagraph:
                    ``(C) for a foreign bank that presents a systemic 
                risk to the United States (as determined in accordance 
                with section 1603 of the Financial Stability 
                Improvement Act of 2009), the home country of the 
                foreign bank has not adopted or made demonstrable 
                progress toward adopting an appropriate system of 
                financial regulation to mitigate such systemic risk.''.
    (c) Registration or Succession to United States Brokerage or Dealer 
and Termination of Such Registration.--Section 15 of the Securities 
Exchange Act of 1934 (15 U.S.C. 78o) is amended by adding at the end 
the following new subsections:
    ``(k) Registration or Succession to a United States Broker or 
Dealer.--In determining whether to permit a foreign person or an 
affiliate of a foreign person to register as a United States broker or 
dealer, or succeed to the registration of a United States broker or 
dealer, the Securities and Exchange Commission may consider whether, 
for a foreign person, or an affiliate of a foreign person that presents 
a systemic risk to the United States (as determined in accordance with 
section 1603 of the Financial Stability Improvement Act of 2009), the 
home country of the foreign person has adopted or made demonstrable 
progress toward adopting an appropriate system of financial regulation 
to mitigate such systemic risk.
    ``(l) Termination of a United States Broker or Dealer.--For a 
foreign person or an affiliate of a foreign person that presents such a 
systemic risk to the United States, the Securities and Exchange 
Commission may determine to terminate the registration of such foreign 
person or an affiliate of such foreign person as a broker or dealer in 
the United States if the Commission determines that the home country of 
the foreign person has not adopted, or made demonstrable progress 
toward adopting, an appropriate system of financial regulation to 
mitigate such systemic risk.''.

TITLE II--CORPORATE AND FINANCIAL INSTITUTION COMPENSATION FAIRNESS ACT

SEC. 2001. SHORT TITLE.

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

SEC. 2002. SHAREHOLDER VOTE ON EXECUTIVE COMPENSATION DISCLOSURES.

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

SEC. 2003. COMPENSATION COMMITTEE INDEPENDENCE.

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

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

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

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

    (a) Enhanced Disclosure and Reporting of Compensation 
Arrangements.--
            (1) In general.--Not later than 9 months after the date of 
        enactment of this title, the appropriate Federal regulators 
        jointly shall prescribe regulations to require each covered 
        financial institution to disclose to the appropriate Federal 
        regulator the structures of all incentive-based compensation 
        arrangements offered by such covered financial institutions 
        sufficient to determine whether the compensation structure--
                    (A) is aligned with sound risk management;
                    (B) is structured to account for the time horizon 
                of risks; and
                    (C) meets such other criteria as the appropriate 
                Federal regulators jointly may determine to be 
                appropriate to reduce unreasonable incentives offered 
                by such institutions for employees to take undue risks 
                that--
                            (i) could threaten the safety and soundness 
                        of covered financial institutions; or
                            (ii) could have serious adverse effects on 
                        economic conditions or financial stability.
            (2) Rules of construction.--Nothing in this subsection 
        shall be construed as requiring the reporting of the actual 
        compensation of particular individuals. Nothing in this 
        subsection shall be construed to require a covered financial 
        institution that does not have an incentive-based payment 
        arrangement to make the disclosures required under this 
        subsection.
    (b) Prohibition on Certain Compensation Arrangements.--Not later 
than 9 months after the date of enactment of this title, and taking 
into account the factors described in subparagraphs (A), (B), and (C) 
of subsection (a)(1), the appropriate Federal regulators shall jointly 
prescribe regulations that prohibit any incentive-based payment 
arrangement, or any feature of any such arrangement, that the 
regulators determine encourages inappropriate risks by covered 
financial institutions that--
            (1) could threaten the safety and soundness of covered 
        financial institutions; or
            (2) could have serious adverse effects on economic 
        conditions or financial stability.
    (c) Enforcement.--The provisions of this section shall be enforced 
under section 505 of the Gramm-Leach-Bliley Act and, for purposes of 
such section, a violation of this section shall be treated as a 
violation of subtitle A of title V of such Act.
    (d) Definitions.--As used in this section--
            (1) the term ``appropriate Federal regulator'' means--
                    (A) the Board of Governors of the Federal Reserve 
                System;
                    (B) the Office of the Comptroller of the Currency;
                    (C) the Board of Directors of the Federal Deposit 
                Insurance Corporation;
                    (D) the Director of the Office of Thrift 
                Supervision;
                    (E) the National Credit Union Administration Board;
                    (F) the Securities and Exchange Commission; and
                    (G) the Federal Housing Finance Agency; and
            (2) the term ``covered financial institution'' means--
                    (A) a depository institution or depository 
                institution holding company, as such terms are defined 
                in section 3 of the Federal Deposit Insurance Act (12 
                U.S.C. 1813);
                    (B) a broker-dealer registered under section 15 of 
                the Securities Exchange Act of 1934 (15 U.S.C. 78o);
                    (C) a credit union, as described in section 
                19(b)(1)(A)(iv) of the Federal Reserve Act;
                    (D) an investment advisor, as such term is defined 
                in section 202(a)(11) of the Investment Advisers Act of 
                1940 (15 U.S.C. 80b-2(a)(11));
                    (E) the Federal National Mortgage Association;
                    (F) the Federal Home Loan Mortgage Corporation; and
                    (G) any other financial institution that the 
                appropriate Federal regulators, jointly, by rule, 
                determine should be treated as a covered financial 
                institution for purposes of this section.
    (e) Exemption for Certain Financial Institutions.--The requirements 
of this section shall not apply to covered financial institutions with 
assets of less than $1,000,000,000.
    (f) Limitation.--No regulation promulgated pursuant to this section 
shall be allowed to require the recovery of incentive-based 
compensation under compensation arrangements in effect on the date of 
enactment of this title, provided such compensation agreements are for 
a period of no more than 24 months. Nothing in this title shall prevent 
or limit the recovery of incentive-based compensation under any other 
applicable law.
    (g) GAO Study.--
            (1) Study required.--
                    (A) In general.--The Comptroller General of the 
                United States shall carry out a study to determine 
                whether there is a correlation between compensation 
                structures and excessive risk taking.
                    (B) Factors to consider.--In carrying out the study 
                required under subparagraph (A), the Comptroller 
                General shall--
                            (i) consider compensation structures used 
                        by companies from 2000 to 2008; and
                            (ii) compare companies that failed, or 
                        nearly failed but for government assistance, to 
                        companies that remained viable throughout the 
                        housing and credit market crisis of 2007 and 
                        2008, including the compensation practices of 
                        all such companies.
                    (C) Determining companies that failed or nearly 
                failed.--In determining whether a company failed, or 
                nearly failed but for government assistance, for 
                purposes of subparagraph (B)(ii), the Comptroller 
                General shall focus on--
                            (i) companies that received exceptional 
                        assistance under the Troubled Asset Relief 
                        Program under title I of the Emergency Economic 
                        Stabilization Act of 2009 (12 U.S.C. 5211 et 
                        seq.) or other forms of significant government 
                        assistance, including under the Automotive 
                        Industry Financing Program, the Targeted 
                        Investment Program, the Asset Guarantee 
                        Program, and the Systemically Significant 
                        Failing Institutions Program;
                            (ii) the Federal National Mortgage 
                        Association;
                            (iii) the Federal Home Loan Mortgage 
                        Corporation; and
                            (iv) companies that participated in the 
                        Security and Exchange Commission's Consolidated 
                        Supervised Entities Program as of January 2008.
            (2) Report.--Not later than the end of the 1-year period 
        beginning on the date of the enactment of this title, the 
        Comptroller General shall issue a report to the Congress 
        containing the results of the study required under paragraph 
        (1).

          TITLE III--OVER-THE-COUNTER DERIVATIVES MARKETS ACT

SEC. 3001. SHORT TITLE.

    This title may be cited as the ``Over-the-Counter Derivatives 
Markets Act of 2009''.

                 Subtitle A--Regulation of Swap Markets

SEC. 3101. DEFINITIONS.

    (a) Amendments to Definitions in the Commodity Exchange Act.--
Section 1a of the Commodity Exchange Act (7 U.S.C. 1a) is amended--
            (1) by redesignating paragraphs (9) through (34) as 
        paragraphs (10) through (35), respectively;
            (2) by adding after paragraph (8) the following:
            ``(9) Derivative.--The term `derivative' means--
                    ``(A) a contract of sale of a commodity for future 
                delivery; or
                    ``(B) a swap.'';
            (3) by redesignating paragraph (35) (as redesignated by 
        paragraph (1)) as paragraph (36);
            (4) by adding after paragraph (34) (as redesignated by 
        paragraph (1)) the following:
            ``(35) Swap.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `swap' means any agreement, 
                contract, or transaction that--
                            ``(i) is a put, call, cap, floor, collar, 
                        or similar option of any kind for the purchase 
                        or sale of, or based on the value of, one or 
                        more interest or other rates, currencies, 
                        commodities, securities, instruments of 
                        indebtedness, indices, quantitative measures, 
                        or other financial or economic interests or 
                        property of any kind;
                            ``(ii) provides for any purchase, sale, 
                        payment, or delivery (other than a dividend on 
                        an equity security) that is dependent on the 
                        occurrence, non-occurrence, or the extent of 
                        the occurrence of an event or contingency 
                        associated with a potential financial, 
                        economic, or commercial consequence;
                            ``(iii) provides on an executory basis for 
                        the exchange, on a fixed or contingent basis, 
                        of one or more payments based on the value or 
                        level of one 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 an interest rate swap, a rate floor, 
                        rate cap, rate collar, cross-currency rate 
                        swap, basis swap, currency swap, total return 
                        swap, equity index swap, equity swap, debt 
                        index swap, debt swap, credit spread, credit 
                        default swap, credit swap, weather swap, energy 
                        swap, metal swap, agricultural swap, emissions 
                        swap, or commodity swap;
                            ``(iv) is an agreement, contract, or 
                        transaction that is, or in the future becomes, 
                        commonly known to the trade as a swap; or
                            ``(v) is any combination or permutation of, 
                        or option on, any agreement, contract, or 
                        transaction described in any of clauses (i) 
                        through (iv).
                    ``(B) Exclusions.--The term `swap' does not 
                include:
                            ``(i) any contract of sale of a commodity 
                        for future delivery or security futures product 
                        traded on or subject to the rules of any board 
                        of trade designated as a contract market under 
                        section 5 or 5f;
                            ``(ii) any sale of a nonfinancial commodity 
                        for deferred shipment or delivery, so long as 
                        such transaction is physically settled;
                            ``(iii) any put, call, straddle, option, or 
                        privilege on any security, certificate of 
                        deposit, or group or index of securities, 
                        including any interest therein or based on the 
                        value thereof, that is subject to the 
                        Securities Act of 1933 (15 U.S.C. 77a et seq.) 
                        and the Securities Exchange Act of 1934 (15 
                        U.S.C. 78a et seq.);
                            ``(iv) any put, call, straddle, option, or 
                        privilege relating to foreign currency entered 
                        into on a national securities exchange 
                        registered pursuant to section 6(a) of the 
                        Securities Exchange Act of 1934 (15 U.S.C. 
                        78f(a));
                            ``(v) any agreement, contract, or 
                        transaction providing for the purchase or sale 
                        of one or more securities on a fixed basis that 
                        is subject to the Securities Act of 1933 (15 
                        U.S.C. 77a et seq.) and the Securities Exchange 
                        Act of 1934 (15 U.S.C. 78a et seq.);
                            ``(vi) any agreement, contract, or 
                        transaction providing for the purchase or sale 
                        of one 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 such agreement, contract, or transaction 
                        predicates such 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 
                                such agreement, contract, or 
                                transaction is entered into to manage a 
                                risk associated with capital raising;
                            ``(ix) any foreign exchange swap;
                            ``(x) any foreign exchange forward;
                            ``(xi) any agreement, contract, or 
                        transaction a counterparty of which is a 
                        Federal Reserve bank or the United States 
                        Government, or an agency of the United States 
                        Government that is expressly backed by the full 
                        faith and credit of the United States; and
                            ``(xii) any security-based swap, other than 
                        a security-based swap as described in paragraph 
                        (38)(C).
                    ``(C) Rule of construction regarding master 
                agreements.--The term `swap' shall be construed to 
                include a master agreement that provides for an 
                agreement, contract, or transaction that is a swap 
                pursuant to subparagraph (A), together with all 
                supplements to any such master agreement, without 
                regard to whether the master agreement contains an 
                agreement, contract, or transaction that is not a swap 
                pursuant to subparagraph (A), except that the master 
                agreement shall be considered to be a swap only with 
                respect to each agreement, contract, or transaction 
                under the master agreement that is a swap pursuant to 
                subparagraph (A).'';
            (5) in paragraph (13) (as redesignated by paragraph (1))--
                    (A) in subparagraph (A)--
                            (i) in clause (vii), by striking 
                        ``$25,000,000'' and inserting ``$50,000,000''; 
                        and
                            (ii) in clause (xi), by striking ``total 
                        assets in an amount'' and inserting ``amounts 
                        invested on a discretionary basis''; and
                    (B) in subparagraph (C), by striking ``determines'' 
                and inserting ``and the Securities and Exchange 
                Commission may jointly determine'';
            (6) in paragraph (30) (as redesignated by paragraph (1)), 
        by--
                    (A) redesignating subparagraph (E) as subparagraph 
                (G);
                    (B) in subparagraph (D), by striking ``and''; and
                    (C) inserting after subparagraph (D) the following:
                    ``(E) a swap execution facility registered under 
                section 5h;
                    ``(F) a swap repository; and'';
            (7) by adding after paragraph (36) (as redesignated by 
        paragraph (3)) the following:
            ``(37) Board.--The term `Board' means the Board of 
        Governors of the Federal Reserve System.'';
            (8) by adding after paragraph (37) the following:
            ``(38) Security-based swap.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `security-based swap' means 
                any agreement, contract, or transaction that would be a 
                swap under paragraph (35) (without regard to paragraph 
                (35)(B)(xii)), and that--
                            ``(i) is based on an index that is a 
                        narrow-based security index, including any 
                        interest therein or based on the value thereof;
                            ``(ii) is based on a single security or 
                        loan, including any interest therein or based 
                        on the value thereof; or
                            ``(iii) is based on the occurrence, non-
                        occurrence, or extent of the occurrence of an 
                        event relating to a single issuer of a security 
                        or the issuers of securities in a narrow-based 
                        security index, provided that such event must 
                        directly affect the financial statements, 
                        financial condition, or financial obligations 
                        of the issuer.
                    ``(B) Exclusion.--The term `security-based swap' 
                does not include any agreement, contract, or 
                transaction that meets the definition of security-based 
                swap only because it references or is based upon a 
                government security.
                    ``(C) 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 one 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)).
                    ``(D) 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).'';
            (9) by adding after paragraph (38) the following:
            ``(39) Swap dealer.--
                    ``(A) In general.--The term `swap dealer' means any 
                person engaged in the business of buying and selling 
                swaps for such person's own account, through a broker 
                or otherwise.
                    ``(B) Exception.--The term `swap dealer' does not 
                include a person that buys or sells swaps for such 
                person's own account, either individually or in a 
                fiduciary capacity, but not as a part of a regular 
                business.'';
            (10) by adding after paragraph (39) the following:
            ``(40) Major swap participant.--
                    ``(A) In general.--The term `major swap 
                participant' means any person who is not a swap dealer 
                and--
                            ``(i) who maintains a substantial net 
                        position in outstanding swaps, excluding 
                        positions held primarily for hedging, reducing, 
                        or otherwise mitigating commercial risk; or
                            ``(ii) whose outstanding swaps create 
                        substantial net counterparty exposure (current 
                        and potential future) that would expose 
                        counterparties to significant credit losses 
                        that could have a material adverse effect on 
                        capital of the counterparties.
                    ``(B) Definitions.--The Commission and the 
                Securities and Exchange Commission shall jointly define 
                by rule or regulation the term `substantial net 
                position' and `substantial net counterparty exposure' 
                at a threshold that the Commissions determine prudent 
                for the effective monitoring of, management and 
                oversight of the financial system. In the event the 
                Commissions are unable to agree upon a level within 60 
                days of the commencement of such consultations, the 
                Secretary of the Treasury shall make such 
                determination, which shall be binding on and adopted by 
                such Commissions.
            ``(41) Major security-based swap participant.--
                    ``(A) In general.--The term `major security-based 
                swap participant' means any person who is not a swap 
                dealer and--
                            ``(i) who maintains a substantial net 
                        position in outstanding security-based swaps, 
                        excluding positions held primarily for hedging, 
                        reducing, or otherwise mitigating commercial 
                        risk; or
                            ``(ii) whose outstanding security-based 
                        swaps create substantial net counterparty 
                        exposure (current and potential future) that 
                        would expose counterparties to significant 
                        credit losses that could have a material 
                        adverse effect on capital of the 
                        counterparties.
                    ``(B) Definitions.--The Commission and the 
                Securities and Exchange Commission shall jointly define 
                by rule or regulation the term `substantial net 
                position' and `substantial net counterparty exposure' 
                at a threshold that the Commissions determine prudent 
                for the effective monitoring of, management and 
                oversight of the financial system. In the event the 
                Commissions are unable to agree upon a level within 60 
                days of the commencement of such consultations, the 
                Secretary of the Treasury shall make such 
                determination, which shall be binding on and adopted by 
                such Commissions.'';
            (11) by adding after paragraph (41) the following:
            ``(42) 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)).'';
            (12) by adding after paragraph (42) the following:
            ``(43) Prudential regulator.--The term `Prudential 
        Regulator' means--
                    ``(A) the Board in the case of a swap dealer, major 
                swap participant, security-based swap dealer or major 
                security-based swap participant that is--
                            ``(i) a State-chartered bank that is a 
                        member of the Federal Reserve System; or
                            ``(ii) a State-chartered branch or agency 
                        of a foreign bank;
                    ``(B) the Office of the Comptroller of the Currency 
                in the case of a swap dealer, major swap participant, 
                security-based swap dealer or major security-based swap 
                participant that is--
                            ``(i) a national bank; or
                            ``(ii) a federally chartered branch or 
                        agency of a foreign bank; and
                    ``(C) the Federal Deposit Insurance Corporation in 
                the case of a swap dealer, major swap participant, 
                security-based swap dealer or major security-based swap 
                participant that is a State-chartered bank that is not 
                a member of the Federal Reserve System.'';
            (13) by adding after paragraph (43) the following:
            ``(44) Security-based swap dealer.--
                    ``(A) In general.--The term `security-based swap 
                dealer' means any person engaged in the business of 
                buying and selling security-based swaps for such 
                person's own account, through a broker or otherwise.
                    ``(B) Exception.--The term `security-based swap 
                dealer' does not include a person that buys or sells 
                security-based swaps for such person's own account, 
                either individually or in a fiduciary capacity, but not 
                as a part of a regular business.'';
            (14) by adding after paragraph (44) the following:
            ``(45) Government security.--The term `government security' 
        has the same meaning as in section 3(a)(42) of the Securities 
        Exchange Act of 1934 (15 U.S.C. 78c(a)(42)).'';
            (15) by adding after paragraph (45) the following:
            ``(46) Foreign exchange forward.--The term `foreign 
        exchange forward' means a transaction that solely involves the 
        exchange of 2 different currencies on a specific future date at 
        a fixed rate agreed at the inception of the contract.'';
            (16) by adding after paragraph (46) the following:
            ``(47) Foreign exchange swap.--The term `foreign exchange 
        swap' means a transaction that solely involves the exchange of 
        2 different currencies on a specific date at a fixed rate 
        agreed at the inception of the contract, and a reverse exchange 
        of the same 2 currencies at a date further in the future and at 
        a fixed rate agreed at the inception of the contract.'';
            (17) by adding after paragraph (47) the following:
            ``(48) Person associated with a security-based swap dealer 
        or major security-based swap participant.--The term `person 
        associated with a security-based swap dealer or major security-
        based swap participant' or `associated person of a security-
        based swap dealer or major security-based swap participant' 
        means any partner, officer, director, or branch manager of such 
        security-based swap dealer or major security-based swap 
        participant (or any person occupying a similar status or 
        performing similar functions), any person directly or 
        indirectly controlling, controlled by, or under common control 
        with such security-based swap dealer or major security-based 
        swap participant, or any employee of such security-based swap 
        dealer or major security-based swap participant, except that 
        any person associated with a security-based swap dealer or 
        major security-based swap participant whose functions are 
        solely clerical or ministerial shall not be included in the 
        meaning of such term other than for purposes of section 
        15F(e)(2) of the Securities Exchange Act of 1934 (15 U.S.C. 
        78o-10).'';
            (18) by adding after paragraph (48) the following:
            ``(49) Person associated with a swap dealer or major swap 
        participant.--The term `person associated with a swap dealer or 
        major swap participant' or `associated person of a swap dealer 
        or major swap participant' means any partner, officer, 
        director, or branch manager of such swap dealer or major swap 
        participant (or any person occupying a similar status or 
        performing similar functions), any person directly or 
        indirectly controlling, controlled by, or under common control 
        with such swap dealer or major swap participant, or any 
        employee of such swap dealer or major swap participant, except 
        that any person associated with a swap dealer or major swap 
        participant whose functions are solely clerical or ministerial 
        shall not be included in the meaning of such term other than 
        for purposes of section 4s(b)(6).''; and
            (19) by adding after paragraph (49) the following:
            ``(50) Swap repository.--The term `swap repository' means 
        an entity that collects and maintains the records of the terms 
        and conditions of swaps or security-based swaps entered into by 
        third parties.
            ``(51) Restricted owner.--The term `restricted owner' means 
        any swap dealer, security-based swap dealer, major swap 
        participant, major security-based swap participant, person 
        associated with a swap dealer or major swap participant, or 
        person associated with a security-based swap dealer or major 
        security-based swap participant.''.
    (b) Joint Rulemaking on Further Definition of Terms.--
            (1) In general.--The Commodity Futures Trading Commission 
        and the Securities and Exchange Commission shall jointly adopt 
        a rule further defining the terms ``swap'', ``security-based 
        swap'', ``swap dealer'', ``security-based swap dealer'', 
        ``major swap participant'',``major security-based swap 
        participant'', and ``eligible contract participant'' no later 
        than 180 days after the effective date of this title.
            (2) Prevention of evasions.--The Commodity Futures Trading 
        Commission and the Securities and Exchange Commission may 
        prescribe rules defining the term ``swap'' or ``security-based 
        swap'' to include transactions that have been structured to 
        evade this title.
    (c) Joint Rulemaking Under This Title.--
            (1) Uniform rules.--Rules and regulations prescribed 
        jointly under this title by the Commodity Futures Trading 
        Commission and the Securities and Exchange Commission shall be 
        uniform.
            (2) Treasury department.--In the event that the Commodity 
        Futures Trading Commission and the Securities and Exchange 
        Commission fail to jointly prescribe uniform rules and 
        regulations under any provision of this title in a timely 
        manner, the Secretary of the Treasury, in consultation with the 
        Commodity Futures Trading Commission and the Securities and 
        Exchange Commission, shall prescribe rules and regulations 
        under such provision. A rule prescribed by the Secretary of the 
        Treasury shall be enforced as if prescribed jointly by the 
        Commodity Futures Trading Commission and the Securities and 
        Exchange Commission and shall remain in effect until the 
        Secretary rescinds the rule or until the effective date of a 
        corresponding rule prescribed jointly by the Commodity Futures 
        Trading Commission and the Securities and Exchange Commission 
        in accordance with this section, whichever is later.
            (3) Deadline.--The Secretary of the Treasury shall adopt 
        rules and regulations under paragraph (2) within 180 days of 
        the time that the Commodity Futures Trading Commission and the 
        Securities and Exchange Commission failed to adopt uniform 
        rules and regulations.
            (4) Treatment of similar products.--In adopting joint rules 
        and regulations under this title, the Commodity Futures Trading 
        Commission and the Securities and Exchange Commission shall 
        prescribe requirements to treat functionally or economically 
        similar products similarly.
            (5) Treatment of dissimilar products.--Nothing in this 
        title shall be construed to require the Commodity Futures 
        Trading Commission and the Securities and Exchange Commission 
        to adopt joint rules that treat functionally or economically 
        different products identically.
            (6) Joint interpretation.--Any interpretation of, or 
        guidance 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 
        if this title requires the Commodity Futures Trading Commission 
        and the Securities and Exchange Commission to issue joint 
        regulations to implement the provision.

SEC. 3102. JURISDICTION.

    (a) Exclusive Jurisdiction.--The first sentence of section 
2(a)(1)(A) of the Commodity Exchange Act (7 U.S.C. 2(a)(1)(A)) is 
amended--
            (1) by striking ``(C) and (D)'' and inserting ``(C), (D), 
        and (G)'';
            (2) by striking ``subsections (c) through (i)'' and 
        inserting ``subsections (c) and (f)''; and
            (3) by striking ``involving contracts of sale'' and 
        inserting ``involving swaps or contracts of sale''.
    (b) No Limitation.--Section 2(a)(1) of the Commodity Exchange Act 
(7 U.S.C. 2(a)(1)) is amended by inserting after subparagraph (F) the 
following:
                    ``(G) Nothing contained in this paragraph shall 
                supersede or limit the jurisdiction conferred on the 
                Securities and Exchange Commission or other regulatory 
                authority by, or otherwise restrict the authority of 
                the Securities and Exchange Commission or other 
                regulatory authority under, the Over-the-Counter 
                Derivatives Markets Act of 2009, including with respect 
                to a security-based swap as described in section 
                1a(38)(C) of this Act.''.
    (c) Additions.--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''.

SEC. 3103. CLEARING.

    (a) Clearing Requirement.--
            (1) Sections 2(d), 2(e), 2(g), and 2(h) of the Commodity 
        Exchange Act (7 U.S.C. 2(d), 2(e), 2(g), and 2(h)) are 
        repealed.
            (2) Section 2 of the Commodity Exchange Act (7 U.S.C. 2) is 
        further amended by inserting after subsection (c) the 
        following:
    ``(d) Swaps.--Nothing in this Act (other than subsections 
(a)(1)(A), (a)(1)(B), (f), and (j), sections 4a, 4b, 4b-1, 4c(a), 
4c(b), 4o, 4r, 4s, 4t, 4u, 5b, 5c, 5h, 6(c), 6(d), 6c, 6d, 8, 8a, 9, 
12(e)(2), 12(f), 13(a), 13(b), 21, and 22(a)(4) and such other 
provisions of this Act as are applicable by their terms to registered 
entities and Commission registrants) governs or applies to a swap.
    ``(e) Limitation on Participation.--It shall be unlawful for any 
person, other than an eligible contract participant, to enter into a 
swap unless the swap is entered into on or subject to the rules of a 
board of trade designated as a contract market under section 5.''.
            (3) Section 2 of the Commodity Exchange Act (7 U.S.C. 2) is 
        further amended by inserting after subsection (i) the 
        following:
    ``(j) Clearing of Swaps.--
            ``(1) In general.--
                    ``(A) Presumption of clearing.--A swap shall be 
                submitted for clearing if a derivatives clearing 
                organization that is registered under this Act will 
                accept the swap for clearing.
                    ``(B) Open access.--The rules of a derivatives 
                clearing organization described in subparagraph (A) 
                shall--
                            ``(i) prescribe that all swaps submitted to 
                        the derivatives clearing organization with the 
                        same terms and conditions are economically 
                        equivalent and may be offset with each other 
                        within the derivatives clearing organization; 
                        and
                            ``(ii) provide for non-discriminatory 
                        clearing of a swap executed on or through the 
                        rules of an unaffiliated designated contract 
                        market or swap execution facility.
            ``(2) Commission approval.--
                    ``(A) In general.--A derivatives clearing 
                organization shall submit to the Commission for prior 
                approval each swap, or any group, category, type, or 
                class of swaps, that it seeks to accept for clearing, 
                which submission the Commission shall make available to 
                the public.
                    ``(B) Deadline.--The Commission shall take final 
                action on a request submitted pursuant to subparagraph 
                (A) not later than 90 days after submission of the 
                request, unless the derivatives clearing organization 
                submitting the request agrees to an extension of the 
                time limitation established under this subparagraph. A 
                request on which the Commission fails to take final 
                action within the time limitation established under 
                this subparagraph is deemed approved.
                    ``(C) Approval.--The Commission shall approve, 
                unconditionally or subject to such terms and conditions 
                as the Commission determines to be appropriate, any 
                request submitted pursuant to subparagraph (A) if the 
                Commission finds that the request is consistent with 
                section 5b(c)(2).
                    ``(D) Rules.--Not later than 180 days after the 
                date of the enactment of the Over-the-Counter 
                Derivatives Markets Act of 2009, the Commission shall 
                adopt rules for a derivatives clearing organization's 
                submission for approval, pursuant to this paragraph, of 
                a swap, or a group, category, type or class of swaps, 
                that it seeks to accept for clearing.
            ``(3) Stay of clearing requirement.--At any time after 
        issuance of an approval pursuant to paragraph (2):
                    ``(A) Review process.--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 
                        section 5b(c)(2); 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 180 days after the 
                date of the enactment of the Over-the-Counter 
                Derivatives Markets Act of 2009, the Commission shall 
                adopt rules for reviewing, pursuant to this paragraph, 
                a derivatives clearing organization's clearing of a 
                swap, or a group, category, type, or class of swaps, 
                that it has accepted for clearing.
            ``(4) Prevention of evasion.--The Commission and the 
        Securities and Exchange Commission shall have authority to 
        prescribe rules under this subsection, or issue interpretations 
        of such rules, as necessary to prevent evasions of this Act 
        provided that any such rules or interpretations must be issued 
        jointly to be effective.
            ``(5) Required reporting.--
                    ``(A) In general.--All swap transactions that are 
                not accepted for clearing by any derivatives clearing 
                organization shall be reported to either a swap 
                repository described in section 21 or, if there is no 
                repository that would accept the swap, to the 
                Commission pursuant to section 4r within such time 
                period as the Commission may by rule or regulation 
                prescribe.
                    ``(B) Authority of swap dealer to report.--
                Counterparties may agree which counterparty will report 
                the swap transaction. In transactions where only 1 
                counterparty is a swap dealer, the swap dealer will 
                report the transaction.
            ``(6) Transition rules.--Rules adopted by the Commission 
        under this section shall provide for the reporting of data, as 
        follows:
                    ``(A) Swaps that were entered into before the date 
                of enactment of the Over-the-Counter Derivatives 
                Markets Act of 2009 shall be reported to a registered 
                swap repository or the Commission no later than 180 
                days after the effective date of the Over-the-Counter 
                Derivatives Markets Act of 2009.
                    ``(B) Swaps that were entered into on or after the 
                date of enactment of the Over-the-Counter Derivatives 
                Markets Act of 2009 shall be reported to a registered 
                swap repository or the Commission no later than the 
                later of--
                            ``(i) 90 days after the effective date of 
                        the Over-the-Counter Derivatives Markets Act of 
                        2009; or
                            ``(ii) such other time after entering into 
                        the swap as the Commission may prescribe by 
                        rule or regulation.
            ``(7) Trade execution.--
                    ``(A) In general.--With respect to transactions 
                involving swaps subject to the clearing requirement of 
                paragraph (1) and where both counterparties are either 
                swap dealers or major swap participants, such 
                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 with the 
                        Commission.
                    ``(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.
                    ``(C) Required reporting.--If the exception of 
                subparagraph (B) applies and there is no facility that 
                makes the swap available to trade, the counterparties 
                shall comply with any recordkeeping and transaction 
                reporting requirements as may be prescribed by the 
                Commission with respect to swaps subject to the 
                requirements of paragraph (1).
            ``(8) Exchange trading.--In adopting rules and regulations, 
        the Commission shall endeavor to eliminate unnecessary 
        impediments to the trading on boards of trade designated as 
        contract markets under section 5 of contracts, agreements or 
        transactions that would be security-based swaps but for the 
        trading of such contracts, agreements or transactions on such a 
        designated contract market.
            ``(9) Exceptions.--The requirements of paragraph (1) shall 
        not apply to a swap if--
                    ``(A) no derivatives clearing organization 
                registered under this Act will accept the swap for 
                clearing; or
                    ``(B) one of the counterparties to the swap is not 
                a swap dealer or major swap participant.
            ``(10) Exclusion.--Paragraph (1) shall not apply to a swap 
        1 party to which is not a swap dealer or major swap 
        participant, and which is entered into before the end of the 
        90-day period that begins with the effective date of this 
        paragraph.''.
    (b) Derivatives Clearing Organizations.--
            (1) Subsections (a) and (b) of section 5b of the Commodity 
        Exchange Act (7 U.S.C. 7a-1) are amended to read as follows:
    ``(a) Registration Requirement.--It shall be unlawful for a 
derivatives clearing organization, unless registered with the 
Commission, directly or indirectly to make use of the mails or any 
means or instrumentality of interstate commerce to perform the 
functions of a derivatives clearing organization described in section 
1a(10) of this Act with respect to--
            ``(1) a contract of sale of a commodity for future delivery 
        (or option on such a contract) or option on a commodity, in 
        each case unless the contract or option is--
                    ``(A) excluded from this Act by section 
                2(a)(1)(C)(i), 2(c), or 2(f); or
                    ``(B) 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
            ``(2) a swap.
    ``(b) Voluntary Registration.--
            ``(1) Derivatives clearing organizations.--A person that 
        clears agreements, contracts, or transactions that are not 
        required to be cleared under this Act may register with the 
        Commission as a derivatives clearing organization.
            ``(2) Clearing agencies.--A derivatives clearing 
        organization may clear security-based swaps that are required 
        to be cleared by a person who is registered as a clearing 
        agency under the Securities Exchange Act of 1934 (15 U.S.C. 78a 
        et seq.).''.
            (2) Section 5b of the Commodity Exchange Act (7 U.S.C. 7a-
        1) is amended by adding at the end the following:
    ``(g) Required Registration for Banks and Clearing Agencies.--A 
person that is required to be registered as a derivatives clearing 
organization under this section shall register with the Commission 
regardless of whether the person is also a bank or a clearing agency 
registered with the Securities and Exchange Commission under the 
Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.).
    ``(h) Harmonization of Rules.--Not later than 180 days after the 
effective date of the Over-the-Counter Derivatives Markets Act of 2009, 
the Commission and the Securities and Exchange Commission shall jointly 
adopt uniform rules governing persons that are registered as 
derivatives clearing organizations for swaps under this subsection and 
persons that are registered as clearing agencies for security-based 
swaps under the Securities Exchange Act of 1934 (15 U.S.C. 78a et 
seq.).
    ``(i) Consultation.--The Commission and the Securities and Exchange 
Commission shall consult with the appropriate Federal banking agencies 
prior to adopting rules under this section with respect to swaps.
    ``(j) 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 finds 
that such derivatives clearing organization is subject to comparable, 
comprehensive supervision and regulation on a consolidated basis by the 
Securities and Exchange Commission, a Prudential Regulator or the 
appropriate governmental authorities in the organization's home 
country.
    ``(k) Designation of Compliance Officer.--
            ``(1) In general.--Each derivatives clearing organization 
        shall designate an individual to serve as a compliance officer.
            ``(2) Duties.--The compliance officer--
                    ``(A) shall report directly to the board or to the 
                senior officer of the derivatives clearing 
                organization;
                    ``(B) shall--
                            ``(i) review compliance with the core 
                        principles in section 5b(c)(2);
                            ``(ii) in consultation with the board of 
                        the derivatives clearing organization, a body 
                        performing a function similar to that of a 
                        board, or the senior officer of the derivatives 
                        clearing organization, resolve any conflicts of 
                        interest that may arise;
                            ``(iii) be responsible for administering 
                        the policies and procedures required to be 
                        established pursuant to this section; and
                            ``(iv) ensure compliance with commodity 
                        laws and the rules and regulations issued 
                        thereunder, including rules prescribed by the 
                        Commission pursuant to this section; and
                    ``(C) shall establish procedures for remediation of 
                noncompliance issues found during compliance office 
                reviews, lookbacks, internal or external audit 
                findings, self-reported errors, or through validated 
                complaints. Procedures will establish the handling, 
                management response, remediation, retesting, and 
                closing of noncompliant issues.
            ``(3) Annual reports required.--The compliance officer 
        shall annually prepare and sign a report on the compliance of 
        the derivatives clearing organization with the commodity laws 
        and its policies and procedures, including its code of ethics 
        and conflict of interest policies, in accordance with rules 
        prescribed by the Commission. Such compliance report shall 
        accompany the financial reports of the derivatives clearing 
        organization that are required to be furnished to the 
        Commission pursuant to this section and shall include a 
        certification that, under penalty of law, the report is 
        accurate and complete.''.
            (3) Section 5b(c)(2) of the Commodity Exchange Act (7 
        U.S.C. 7a-1(c)(2)) is amended to read as follows:
            ``(2) Core principles for derivatives clearing 
        organizations.--To be registered and to maintain registration 
        as a derivatives clearing organization, a derivatives clearing 
        organization shall comply with the core principles specified in 
        subparagraphs (B) through (N) this paragraph. The Commission 
        may conform the core principles to reflect evolving United 
        States and international standards.''.
            (4) Section 5b of the Commodity Exchange Act (7 U.S.C. 7a-
        1) is further amended by adding after subsection (k), as added 
        by paragraph (2), the following:
    ``(l) Reporting.--
            ``(1) In general.--A derivatives clearing organization that 
        clears swaps shall provide to the Commission and any designated 
        swap repository all information determined by the Commission to 
        be necessary to perform its responsibilities under this Act. 
        The Commission shall adopt data collection and maintenance 
        requirements for swaps cleared by derivatives clearing 
        organizations that are comparable to the corresponding 
        requirements for swaps accepted by swap repositories and swaps 
        traded on swap execution facilities. A derivatives clearing 
        organization that clears security-based swap agreements (as 
        defined in section 3(a)(76) of the Securities Exchange Act of 
        1934) shall, upon request, make available to the Securities and 
        Exchange Commission all information (including information on a 
        real-time basis) relating to such security-based swap 
        agreements. Subject to section 8, the Commission shall share 
        such information, upon request, with the Board, the Securities 
        and Exchange Commission (with respect to swaps other than 
        security-based swap agreements), the appropriate Federal 
        banking agencies, the Financial Services Oversight Council, and 
        the Department of Justice or to other persons the Commission 
        deems appropriate, including foreign financial supervisors 
        (including foreign futures authorities), foreign central banks, 
        and foreign ministries.
            ``(2) Public information.--A derivatives clearing 
        organization that clears swaps shall provide to the Commission, 
        or its designee, such information as is required by, and in a 
        form and at a frequency to be determined by, the Commission, in 
        order to comply with the public reporting requirements 
        contained in section 8(j).''.
            (5) Section 8(e) of the Commodity Exchange Act (7 U.S.C. 
        12(e)) is amended in the last sentence by adding ``central bank 
        and ministries'' after ``department'' each place it appears.
    (c) Legal Certainty for Identified Banking Products.--
            (1) Repeal.--Sections 402(d), 404, 407, 408(b), and 
        408(c)(2) of the Legal Certainty for Bank Products Act of 2000 
        (7 U.S.C. 27(d), 27b, 27e, 27f(b), and 27f(c)(2)) are repealed.
            (2) Legal certainty.--Section 403 of the Legal Certainty 
        for Bank Products Act of 2000 (7 U.S.C. 27a) is amended to read 
        as follows:

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

    ``(a) Exclusion.--Except as provided in subsection (b) or (c), no 
provisions of the Commodity Exchange Act (7 U.S.C. 1 et seq.) shall 
apply to, and the Commodity Futures Trading Commission and the 
Securities and Exchange Commission shall not exercise regulatory 
authority under the Commodity Exchange Act with respect to, an 
identified banking product.
    ``(b) Exception.--An appropriate Federal banking agency may except 
an identified banking product or 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 swap in section 1a(35) 
        of the Commodity Exchange Act (7 U.S.C. 1a(35)) or security-
        based swap in section 1a(38) of the Commodity Exchange Act (7 
        U.S.C. 1a(38)); 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) Additional Exception.--The exclusion in subsection (a) shall 
not apply to an identified banking product that--
            ``(1) is a product of a bank that is not under the 
        regulatory jurisdiction of an appropriate Federal banking 
        agency;
            ``(2) meets the definition of swap in section 1a(35) of the 
        Commodity Exchange Act or security-based swap in section 
        3(a)(68) of the Securities and Exchange Act of 1934; and
            ``(3) has become known to the trade as a swap or security-
        based swap, or has been structured as an identified banking 
        product for the purpose of evading the provisions of the 
        Commodity Exchange Act (7 U.S.C. 1 et seq.), the Securities Act 
        of 1933 (15 U.S.C. 77a et seq.), or the Securities Exchange Act 
        of 1934 (15 U.S.C. 78a et seq.).''.

SEC. 3104. PUBLIC REPORTING OF AGGREGATE SWAP DATA.

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

SEC. 3105. SWAP REPOSITORIES.

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

``SEC. 21. SWAP REPOSITORIES.

    ``(a) Registration Requirement.--
            ``(1) In general.--It shall be unlawful for any person, 
        unless registered with the Commission, directly or indirectly 
        to make use of the mails or any means or instrumentality of 
        interstate commerce to perform the functions of a swap 
        repository.
            ``(2) Inspection and examination.--Registered swap 
        repositories shall be subject to inspection and examination by 
        any representative of the Commission.
    ``(b) Standard Setting.--
            ``(1) Data identification.--The Commission shall prescribe 
        standards that specify the data elements for each swap that 
        shall be collected and maintained by each registered swap 
        repository.
            ``(2) Data collection and maintenance.--The Commission 
        shall prescribe data collection and data maintenance standards 
        for swap repositories.
            ``(3) Comparability.--The standards prescribed by the 
        Commission under this subsection shall be comparable to the 
        data standards imposed by the Commission on derivatives 
        clearing organizations that clear swaps.
    ``(c) Duties.--A swap repository shall--
            ``(1) accept data prescribed by the Commission for each 
        swap under subsection (b);
            ``(2) maintain such data in such form and manner and for 
        such period as may be required by the Commission;
            ``(3) provide to the Commission, or its designee, such 
        information as is required by, and in a form and at a frequency 
        to be determined by, the Commission, in order to comply with 
        the public reporting requirements contained in section 8(j); 
        and
            ``(4) make available, on a confidential basis pursuant to 
        section 8, all data obtained by the swap repository, including 
        individual counterparty trade and position data, to the 
        Commission, the appropriate Federal banking agencies, the 
        Financial Services Oversight Council, the Securities and 
        Exchange Commission, and the Department of Justice or to other 
        persons the Commission deems appropriate, including foreign 
        financial supervisors (including foreign futures authorities), 
        foreign central banks, and foreign ministries.
    ``(d) Required Registration for Security-based Swap Repositories.--
Any person that is required to be registered as a swap repository under 
this section shall register with the Commission regardless of whether 
that person also is registered with the Securities and Exchange 
Commission as a security-based swap repository.
    ``(e) Harmonization of Rules.--Not later than 180 days after the 
effective date of the Over-the-Counter Derivatives Markets Act of 2009, 
the Commission and the Securities and Exchange Commission shall jointly 
adopt uniform rules governing persons that are registered under this 
section and persons that are registered as security-based swap 
repositories under the Securities Exchange Act of 1934 (15 U.S.C. 78a 
et seq.), including uniform rules that specify the data elements that 
shall be collected and maintained by each repository.
    ``(f) Exemptions.--The Commission may exempt, conditionally or 
unconditionally, a swap repository from the requirements of this 
section if the Commission finds that such swap repository is subject to 
comparable, comprehensive supervision and regulation on a consolidated 
basis by the Securities and Exchange Commission, a Prudential Regulator 
or the appropriate governmental authorities in the organization's home 
country.''.

SEC. 3106. REPORTING AND RECORDKEEPING.

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

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

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

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

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

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

    ``(a) Registration.--
            ``(1) It shall be unlawful for any person to act as a swap 
        dealer unless such person is registered as a swap dealer with 
        the Commission.
            ``(2) It shall be unlawful for any person to act as a major 
        swap participant unless such person shall have registered as a 
        major swap participant with the Commission.
    ``(b) Requirements.--
            ``(1) In general.--A person shall register as a swap dealer 
        or major swap participant by filing a registration application 
        with the Commission.
            ``(2) Contents.--The application shall be made in such form 
        and manner as prescribed by the Commission, giving any 
        information and facts as the Commission may deem necessary 
        concerning the business in which the applicant is or will be 
        engaged. Such person, when registered as a swap dealer or major 
        swap participant, shall continue to report and furnish to the 
        Commission such information pertaining to such person's 
        business as the Commission may require.
            ``(3) Expiration.--Each registration shall expire at such 
        time as the Commission may by rule or regulation prescribe.
            ``(4) Rules.--Except as provided in subsections (c), (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 adopted under this section shall 
        provide for the registration of swap dealers and major swap 
        participants no later than one year after the effective date of 
        the Over-the-Counter Derivatives Markets Act of 2009.
            ``(6) Statutory disqualification.--Except to the extent 
        otherwise specifically provided by rule, regulation, or order, 
        it shall be unlawful for a swap dealer or a major swap 
        participant to permit any person associated with a swap dealer 
        or a major swap participant who is subject to a statutory 
        disqualification to effect or be involved in effecting swaps on 
        behalf of such swap dealer or major swap participant, if such 
        swap dealer or major swap participant knew, or in the exercise 
        of reasonable care should have known, of such 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 that person also is a 
        bank 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 that 
        person also is a bank or is registered with the Securities and 
        Exchange Commission as a major security-based swap participant.
    ``(d) Joint Rules.--
            ``(1) In general.--Not later than 180 days after the 
        effective date of the Over-the-Counter Derivatives Markets Act 
        of 2009, the Commission and the Securities and Exchange 
        Commission shall jointly adopt uniform rules for persons that 
        are registered as swap dealers or major swap participants under 
        this section and persons that are registered as security-based 
        swap dealers or major security-based swap participants under 
        the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.).
            ``(2) Exception for prudential requirements.--The 
        Commission and the Securities and Exchange Commission shall not 
        prescribe rules imposing prudential requirements (including 
        activity restrictions) on swap dealers, major swap 
        participants, security-based swap dealers, or major security-
        based swap participants for which there is a Prudential 
        Regulator. This provision shall not be construed as limiting 
        the authority of the Commission and the Securities and Exchange 
        Commission to prescribe appropriate business conduct, 
        reporting, and recordkeeping requirements to protect investors.
    ``(e) Capital and Margin Requirements.--
            ``(1) In general.--
                    ``(A) Bank swap dealers and major swap 
                participants.--Each registered swap dealer and major 
                swap participant for which there is a Prudential 
                Regulator shall meet such minimum capital requirements 
                and minimum margin requirements as the Prudential 
                Regulators shall by rule or regulation jointly 
                prescribe to help ensure the safety and soundness of 
                the swap dealer or major swap participant.
                    ``(B) Nonbank swap dealers and major swap 
                participants.--Each registered swap dealer and major 
                swap participant for which there is not a Prudential 
                Regulator shall meet such minimum capital requirements 
                and minimum margin requirements as the Commission and 
                the Securities and Exchange Commission shall by rule or 
                regulation jointly prescribe to help ensure the safety 
                and soundness of the swap dealer or major swap 
                participant.
            ``(2) Joint rules.--
                    ``(A) Bank swap dealers and major swap 
                participants.--Within 180 days of the enactment of the 
                Over-the-Counter Derivatives Markets Act of 2009, the 
                Prudential Regulators, in consultation with the 
                Commission and the Securities and Exchange Commission, 
                shall jointly adopt rules imposing capital and margin 
                requirements under this subsection for swap dealers and 
                major swap participants.
                    ``(B) Nonbank swap dealers and major swap 
                participants.--Within 180 days of the enactment of the 
                Over-the-Counter Derivatives Markets Act of 2009, the 
                Commission and the Securities and Exchange Commission, 
                in consultation with the Prudential Regulators, shall 
                jointly adopt rules imposing capital and margin 
                requirements under this subsection for swap dealers and 
                major swap participants for which there is no 
                Prudential Regulator.
            ``(3) Capital.--
                    ``(A) Bank swap dealers and major swap 
                participants.--In setting capital requirements under 
                this subsection, the Prudential Regulators shall 
                impose:
                            ``(i) a capital requirement that is greater 
                        than zero for swaps that are cleared by a 
                        derivatives clearing organization; and
                            ``(ii) to offset the greater risk to the 
                        swap dealer or major swap participant and to 
                        the financial system arising from the use of 
                        swaps that are not centrally cleared, higher 
                        capital requirements for swaps that are not 
                        cleared by a registered derivatives clearing 
                        organization than for swaps that are centrally 
                        cleared.
                    ``(B) Exclusion.--Subparagraph (A) shall not apply 
                to a swap 1 party to which is not a swap dealer or 
                major swap participant, and which is entered into 
                before the end of the 90-day period that begins with 
                the effective date of this subparagraph.
                    ``(C) Nonbank swap dealers and major swap 
                participants.--Capital requirements set by the 
                Commission and the Securities and Exchange Commission 
                under this subsection shall be as strict as or stricter 
                than the capital requirements set by the Prudential 
                Regulators under this subsection.
                    ``(D) Bank holding companies.--Capital requirements 
                set by the Board for swaps of bank holding companies on 
                a consolidated basis shall be as strict as or stricter 
                than the capital requirements set by the Prudential 
                Regulators under this subsection.
                    ``(E) 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 it is subject.
            ``(4) Margin.--
                    ``(A) Bank swap dealers and major swap 
                participants.--The Prudential Regulators shall impose 
                margin requirements under this subsection on all swaps 
                that are not cleared by a registered derivatives 
                clearing organization.
                    ``(B) Non-swap dealers or major swap 
                participants.--The Prudential Regulators may, but are 
                not required to, impose margin requirements with 
                respect to swaps in which one of the counterparties is 
                neither a swap dealer, major swap participant, 
                security-based swap dealer nor a major security-based 
                swap participant. Any such margin requirements for 
                swaps shall provide for the use of non-cash collateral.
                    ``(C) Exclusion.--Subparagraph (B) shall not apply 
                to a swap 1 party to which is not a swap dealer or 
                major swap participant, and which is entered into 
                before the end of the 90-day period that begins with 
                the effective date of this subparagraph.
                    ``(D) Nonbank swap dealers and major swap 
                participants.--Margin requirements for swaps set by the 
                Commission and the Securities and Exchange Commission 
                under this subsection shall be as strict as or stricter 
                than margin requirements for swaps set by the 
                Prudential Regulators.
    ``(f) Reporting and Recordkeeping.--
            ``(1) In general.--Each registered swap dealer and major 
        swap participant--
                    ``(A) shall make such reports as are prescribed by 
                the Commission by rule or regulation regarding the 
                transactions and positions and financial condition of 
                such person;
                    ``(B) for which--
                            ``(i) there is a Prudential Regulator shall 
                        keep books and records of all activities 
                        related to its business as a swap dealer or 
                        major swap participant in such form and manner 
                        and for such period as may be prescribed by the 
                        Commission by rule or regulation;
                            ``(ii) there is no Prudential Regulator 
                        shall keep books and records in such form and 
                        manner and for such period as may be prescribed 
                        by the Commission by rule or regulation;
                    ``(C) shall keep such books and records open to 
                inspection and examination by any representative of the 
                Commission; and
                    ``(D) shall keep any such books and records 
                relating to transactions in swaps based on one or more 
                securities open to inspection and examination by the 
                Securities and Exchange Commission.
            ``(2) Rules.--Within 365 days of the enactment of the Over-
        the-Counter Derivatives Markets Act of 2009, the Commission and 
        the Securities and Exchange Commission, in consultation with 
        the appropriate Federal banking agencies, shall jointly adopt 
        rules governing reporting and recordkeeping for swap dealers, 
        major swap participants, security-based swap dealers, and major 
        security-based swap participants.
    ``(g) Daily Trading Records.--
            ``(1) In general.--Each registered swap dealer and major 
        swap participant shall maintain daily trading records of its 
        swaps and all related records (including related cash or 
        forward transactions) and recorded communications including but 
        not limited to electronic mail, instant messages, and 
        recordings of telephone calls, for such period as may be 
        prescribed by the Commission by rule or regulation.
            ``(2) Information requirements.--The daily trading records 
        shall include such information as the Commission shall 
        prescribe by rule or regulation.
            ``(3) Customer records.--Each registered swap dealer and 
        major swap participant shall maintain daily trading records for 
        each customer or counterparty in such manner and form as to be 
        identifiable with each swap transaction.
            ``(4) Audit trail.--Each registered swap dealer and major 
        swap participant shall maintain a complete audit trail for 
        conducting comprehensive and accurate trade reconstructions.
            ``(5) Rules.--Within 365 days of the enactment of the Over-
        the-Counter Derivatives Markets Act of 2009, the Commission and 
        the Securities and Exchange Commission, in consultation with 
        the appropriate Federal banking agencies, shall jointly adopt 
        rules governing daily trading records for swap dealers, major 
        swap participants, security-based swap dealers, and major 
        security-based swap participants.
    ``(h) Business Conduct Standards.--
            ``(1) In general.--Each registered swap dealer and major 
        swap participant shall conform with business conduct standards 
        as may be prescribed by the Commission by rule or regulation 
        addressing--
                    ``(A) fraud, manipulation, and other abusive 
                practices involving swaps (including swaps that are 
                offered but not entered into);
                    ``(B) diligent supervision of its business as a 
                swap dealer;
                    ``(C) adherence to all applicable position limits;
                    ``(D) the prevention of self-dealing, by limiting 
                the extent to which such a swap dealer or major swap 
                participant may conduct business with a derivatives 
                clearing organization, a board of trade, or an 
                alternative swap execution facility that clears or 
                trades swaps and in which such a swap dealer or major 
                swap participant has a material debt or equity 
                investment; and
                    ``(D) such other matters as the Commission shall 
                determine to be necessary or appropriate.
            ``(2) Business conduct requirements.--Business conduct 
        requirements adopted by the Commission shall--
                    ``(A) establish the standard of care for a swap 
                dealer or major swap participant to verify that any 
                counterparty meets the eligibility standards for an 
                eligible contract participant;
                    ``(B) require disclosure by the swap dealer or 
                major swap participant to any counterparty to the 
                transaction (other than a swap dealer, 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) for cleared swaps, upon the request 
                        of the counterparty, the daily mark from the 
                        appropriate clearinghouse and for non-cleared 
                        swaps, upon the request of the counterparty, 
                        the daily mark of the swap dealer or major swap 
                        participant; and
                            ``(iii) any other material incentives or 
                        conflicts of interest that the swap dealer or 
                        major swap participant may have in connection 
                        with the swap; and
                    ``(C) establish such other standards and 
                requirements as the Commission may determine are 
                necessary or appropriate in the public interest, for 
                the protection of investors, or otherwise in 
                furtherance of the purposes of this Act.
            ``(3) Rules.--The Commission and the Securities and 
        Exchange Commission, in consultation with the appropriate 
        Federal banking agencies, shall jointly prescribe rules under 
        this subsection governing business conduct standards for swap 
        dealers, major swap participants, security-based swap dealers, 
        and major security-based swap participants within 365 days of 
        the enactment of the Over-the-Counter Derivatives Markets Act 
        of 2009.
    ``(i) Documentation and Back Office Standards.--
            ``(1) In general.--Each registered swap dealer and major 
        swap participant shall conform with standards, as may be 
        prescribed by the Commission by rule or regulation, addressing 
        timely and accurate confirmation, processing, netting, 
        documentation, and valuation of all swaps.
            ``(2) Rules.--Within 365 days of the enactment of the Over-
        the-Counter Derivatives Markets Act of 2009, the Commission and 
        the Securities and Exchange Commission, in consultation with 
        the appropriate Federal banking agencies, shall adopt rules 
        governing documentation and back office standards for swap 
        dealers, major swap participants, security-based swap dealers, 
        and major security-based swap participants.
    ``(j) Dealer Responsibilities.--Each registered swap dealer and 
major swap participant at all times shall comply with the following 
requirements:
            ``(1) Monitoring of trading.--The swap dealer or major swap 
        participant shall monitor its trading in swaps to prevent 
        violations of applicable position limits.
            ``(2) Disclosure of general information.--The swap dealer 
        or major swap participant shall disclose to the Commission and 
        to the Prudential Regulator for such swap dealer or major swap 
        participant, as applicable, information concerning--
                    ``(A) terms and conditions of its swaps;
                    ``(B) swap trading operations, mechanisms, and 
                practices;
                    ``(C) financial integrity protections relating to 
                swaps; and
                    ``(D) other information relevant to its trading in 
                swaps.
            ``(3) Ability to obtain information.--The swap dealer or 
        major swap participant shall--
                    ``(A) establish and enforce internal systems and 
                procedures to obtain any necessary information to 
                perform any of the functions described in this section; 
                and
                    ``(B) provide the information to the Commission and 
                to the Prudential Regulator for such swap dealer or 
                major swap participant, as applicable, upon request.
            ``(4) Conflicts of interest.--The swap dealer and major 
        swap participant shall implement conflict-of-interest systems 
        and procedures that--
                    ``(A) establish structural and institutional 
                safeguards to assure that the activities of any person 
                within the firm relating to research or analysis of the 
                price or market for any commodity are separated by 
                appropriate informational partitions within the firm 
                from the review, pressure, or oversight of those whose 
                involvement in trading or clearing activities might 
                potentially bias their judgment or supervision; and
                    ``(B) address such other issues as the Commission 
                determines appropriate.
            ``(5) Antitrust considerations.--Unless necessary or 
        appropriate to achieve the purposes of this Act, the swap 
        dealer or major swap participant shall avoid--
                    ``(A) adopting any processes or taking any actions 
                that result in any unreasonable restraints of trade; or
                    ``(B) imposing any material anticompetitive burden 
                on trading.
    ``(k) Rules.--The Commission, the Securities and Exchange 
Commission, and the Prudential Regulators shall consult with each other 
prior to adopting any rules under the Over-the-Counter Derivatives 
Markets Act of 2009.
    ``(l) Exemptions.--The Commission may exempt, conditionally or 
unconditionally, a swap dealer or major swap participant from the 
prudential requirements of the Over-the-Counter Derivatives Markets Act 
of 2009 if the Commission finds that such swap dealer or major swap 
participant is subject to comparable, comprehensive supervision and 
regulation on a consolidated basis by the Securities and Exchange 
Commission, a Prudential Regulator or the appropriate governmental 
authorities in the organization's home country.
    ``(m) Exemptive Authority.--
            ``(1) In general.--The Commission, by rule or regulation, 
        may conditionally or unconditionally exempt any person, 
        derivative, or transaction, or any class or classes of persons, 
        derivatives, or transactions, from any provision of this Act 
        that was added by an amendment in the Over-the-Counter 
        Derivatives Markets Act of 2009, to the extent that such 
        exemption is necessary or appropriate in the public interest, 
        and is consistent with the purposes of such Act.
            ``(2) Procedures.--The Commission shall, by rule or 
        regulation, determine the procedures under which an exemptive 
        order under this subsection shall be granted and may, in its 
        sole discretion, decline to entertain any application for an 
        order of exemption under this subsection.''.

SEC. 3108. SEGREGATION OF ASSETS HELD AS COLLATERAL IN SWAP 
              TRANSACTIONS.

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

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

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

SEC. 3109. CONFLICTS OF INTEREST.

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

SEC. 3110. SWAP EXECUTION FACILITIES.

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

``SEC. 5H. SWAP EXECUTION FACILITIES.

    ``(a) Registration.--
            ``(1) In general.--
                    ``(A) No person may operate a swap execution 
                facility unless the facility is registered under this 
                section.
                    ``(B) The term `swap execution facility' means an 
                entity that facilitates the execution of swaps between 
                two persons through any means of interstate commerce 
                but which is not a designated contract market.
            ``(2) Dual registration.--Any person that is required to be 
        registered as a swap execution facility under this section 
        shall register with the Commission regardless of whether that 
        person also is registered with the Securities and Exchange 
        Commission as a swap execution facility.
    ``(b) Requirements for Trading.--A swap execution facility that is 
registered under subsection (a) may trade any swap.
    ``(c) Trading by Contract Markets.--A board of trade that operates 
a contract market shall, to the extent that the board of trade also 
operates a swap execution facility and uses the same electronic trade 
execution system for trading on the contract market and the swap 
execution facility, identify whether the electronic trading is taking 
place on the contract market or the swap execution facility.
    ``(d) Criteria for Registration.--
            ``(1) In general.--To be registered as a swap execution 
        facility, the facility shall be required to demonstrate to the 
        Commission that it meets the criteria specified herein.
            ``(2) Deterrence of abuses.--The swap execution facility 
        shall establish and enforce trading and participation rules 
        that will deter abuses and have the capacity to detect, 
        investigate, and enforce those rules, including means to--
                    ``(A) obtain information necessary to perform the 
                functions required under this section; or
                    ``(B) use means to--
                            ``(i) provide market participants with 
                        impartial access to the market; and
                            ``(ii) capture information that may be used 
                        in establishing whether rule violations have 
                        occurred.
            ``(3) Trading procedures.--The swap execution facility 
        shall establish and enforce rules or terms and conditions 
        defining, or specifications detailing, trading procedures to be 
        used in entering and executing orders traded on or through its 
        facilities.
            ``(4) Financial integrity of transactions.--The swap 
        execution facility shall establish and enforce rules and 
        procedures for ensuring the financial integrity of swaps 
        entered on or through its facilities, including the clearance 
        and settlement of the swaps pursuant to section 2(j)(1).
    ``(e) Core Principles for Swap Execution Facilities.--
            ``(1) In general.--To maintain its registration as a swap 
        execution facility, the facility shall comply with the core 
        principles specified in this subsection and any requirement 
        that the Commission may impose by rule or regulation pursuant 
        to section 8a(5). Except where the Commission determines 
        otherwise by rule or regulation, the facility shall have 
        reasonable discretion in establishing the manner in which it 
        complies with these core principles.
            ``(2) Compliance with rules.--The swap execution facility 
        shall monitor and enforce compliance with any of the rules of 
        the facility, including the terms and conditions of the swaps 
        traded on or through the facility and any limitations on access 
        to the facility.
            ``(3) Swaps not readily susceptible to manipulation.--The 
        swap execution facility shall permit trading only in swaps that 
        are not readily susceptible to manipulation.
            ``(4) Monitoring of trading.--The swap execution facility 
        shall 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 
                subsection;
                    ``(B) provide the information to the Commission 
                upon request; and
                    ``(C) have the capacity to carry out such 
                international information-sharing agreements as the 
                Commission may require.
            ``(6) Emergency authority.--The swap execution facility 
        shall adopt rules to provide for the exercise of emergency 
        authority, in consultation or cooperation with the Commission, 
        where necessary and appropriate, including the authority to 
        liquidate or transfer open positions in any swap or to suspend 
        or curtail trading in a swap.
            ``(7) Timely publication of trading information.--The swap 
        execution facility shall make public timely information on 
        price, trading volume, and other trading data on swaps to the 
        extent prescribed by the Commission.
            ``(8) Recordkeeping and reporting.--The swap execution 
        facility shall maintain records of all activities related to 
        the business of the facility, including a complete audit trail, 
        in a form and manner acceptable to the Commission for a period 
        of 5 years, and report to the Commission all information 
        determined by the Commission to be necessary or appropriate for 
        the Commission to perform its responsibilities under this Act 
        in a form and manner acceptable to the Commission. The swap 
        execution facility shall, upon request, make available to the 
        Securities and Exchange Commission all information (including 
        information on a real-time basis) relating to transactions in 
        security-based swap agreements (as defined in section 3(a)(76) 
        of the Securities Exchange Act of 1934). The Commission shall 
        adopt data collection and reporting requirements for swap 
        execution facilities that are comparable to corresponding 
        requirements for derivatives clearing organizations and swap 
        repositories.
            ``(9) Antitrust considerations.--Unless necessary or 
        appropriate to achieve the purposes of this Act, the swap 
        execution facility shall avoid--
                    ``(A) adopting any rules or taking any actions that 
                result in any unreasonable restraints of trade; or
                    ``(B) imposing any material anticompetitive burden 
                on trading on the swap execution facility.
            ``(10) Conflicts of interest.--
                    ``(A) The swap execution facility shall establish 
                and enforce rules to minimize conflicts of interest in 
                its decision-making process, and establish a process 
                for resolving any such conflicts of interest.
                    ``(B) The rules of the swap execution facility 
                shall provide that a restricted owner shall not be 
                permitted directly or indirectly to acquire beneficial 
                ownership of interests in the facility or in persons 
                with a controlling interest in the facility, to the 
                extent that such an acquisition would result in 
                restricted owners controlling more than 20 percent of 
                the votes entitled to be cast on any matter by the 
                holders of the ownership interests.
                    ``(C) The rules of the swap execution facility 
                shall provide that a majority of the directors of the 
                facility shall not be associated with a restricted 
                owner.
            ``(11) Designation of compliance officer.--
                    ``(A) In general.--Each swap execution facility 
                shall designate an individual to serve as a compliance 
                officer.
                    ``(B) Duties.--The compliance officer shall--
                            ``(i) report directly to the board or to 
                        the senior officer of the facility;
                            ``(ii) shall--
                                    ``(I) review compliance with the 
                                core principles in this subsection;
                                    ``(II) in consultation with the 
                                board of the facility, a body 
                                performing a function similar to that 
                                of a board, or the senior officer of 
                                the facility, resolve any conflicts of 
                                interest that may arise;
                                    ``(III) be responsible for 
                                administering the policies and 
                                procedures required to be established 
                                pursuant to this section; and
                                    ``(IV) ensure compliance with 
                                commodity laws and the rules and 
                                regulations issued thereunder, 
                                including rules prescribed by the 
                                Commission pursuant to this section; 
                                and
                            ``(iii) establish procedures for 
                        remediation of non-compliance issues found 
                        during compliance office reviews, lookbacks, 
                        internal or external audit findings, self-
                        reported errors, or through validated 
                        complaints. Procedures will establish the 
                        handling, management response, remediation, re-
                        testing, and closing of non-compliant issues.
                    ``(C) Annual reports required.--The compliance 
                officer shall annually prepare and sign a report on the 
                compliance of the facility with the commodity laws and 
                its policies and procedures, including its code of 
                ethics and conflict of interest policies, in accordance 
                with rules prescribed by the Commission. Such 
                compliance report shall accompany the financial reports 
                of the facility that are required to be furnished to 
                the Commission pursuant to this section and shall 
                include a certification that, under penalty of law, the 
                report is accurate and complete.
    ``(f) Exemptions.--The Commission may exempt, conditionally or 
unconditionally, a swap execution facility from registration under this 
section if the Commission finds that such facility is subject to 
comparable, comprehensive supervision and regulation on a consolidated 
basis by the Securities and Exchange Commission, a Prudential Regulator 
or the appropriate governmental authorities in the organization's home 
country.
    ``(g) Harmonization of Rules.--Within 180 days of the enactment of 
the Over-the-Counter Derivatives Markets Act of 2009, the Commission 
and the Securities and Exchange Commission shall jointly prescribe 
rules governing the regulation of swap execution facilities under this 
section and section 3B of the Securities Exchange Act of 1934 (15 
U.S.C. 78c-2).''.

SEC. 3111. DERIVATIVES TRANSACTION EXECUTION FACILITIES AND EXEMPT 
              BOARDS OF TRADE.

    Sections 5a and 5d of the Commodity Exchange Act (7 U.S.C. 7 and 
7a-3) are repealed.

SEC. 3112. DESIGNATED CONTRACT MARKETS.

    (a) Section 5(d) of the Commodity Exchange Act (7 U.S.C. 7(d)) is 
amended by striking paragraph (9) and inserting the following:
            ``(9) Execution of transactions.--
                    ``(A) The board of trade shall provide a 
                competitive, open, and efficient market and mechanism 
                for executing transactions that protects the price 
                discovery process of trading in the board of trade's 
                centralized market.
                    ``(B) The rules may authorize, for bona fide 
                business purposes--
                            ``(i) transfer trades or office trades;
                            ``(ii) an exchange of--
                                    ``(I) futures in connection with a 
                                cash commodity transaction;
                                    ``(II) futures for cash 
                                commodities; or
                                    ``(III) futures for swaps; or
                            ``(iii) a futures commission merchant, 
                        acting as principal or agent, to enter into or 
                        confirm the execution of a contract for the 
                        purchase or sale of a commodity for future 
                        delivery if the contract is reported, recorded, 
                        or cleared in accordance with the rules of the 
                        contract market or a derivatives clearing 
                        organization.''.
    (b) Section 5(d) of the Commodity Exchange Act (7 U.S.C. 7(d)) is 
amended by striking paragraph (15) and inserting the following:
            ``(15) Conflicts of interest.--
                    ``(A) The board of trade shall establish and 
                enforce rules to minimize conflicts of interest in the 
                decisionmaking process of the contract market, and 
                establish a process for resolving any such conflicts of 
                interest.
                    ``(B) The rules of a board of trade that trades 
                swaps shall provide that a restricted owner shall not 
                be permitted directly or indirectly to acquire 
                beneficial ownership of interests in the board of trade 
                or in persons with a controlling interest in the board 
                of trade, to the extent that such an acquisition would 
                result in restricted owners controlling more than 20 
                percent of the votes entitled to be cast on any matter 
                by the holders of the ownership interests.
                    ``(C) The rules of a board of trade that trades 
                swaps shall provide that a majority of the directors of 
                the board of trade shall not be associated with a 
                restricted owner.''.
    (c) Section 5(d) of the Commodity Exchange Act (7 U.S.C. 7(d)) is 
amended by adding after paragraph (18) the following:
            ``(19) Financial resources.--The board of trade shall 
        demonstrate that it has adequate financial, operational, and 
        managerial resources to discharge the responsibilities of a 
        contract market. For the board of trade's financial resources 
        to be considered adequate, their value shall exceed the total 
        amount that would enable the contract market to cover its 
        operating costs for a period of one year, calculated on a 
        rolling basis.
            ``(20) System safeguards.--The board of trade shall--
                    ``(A) establish and maintain a program of risk 
                analysis and oversight to identify and minimize sources 
                of operational risk through the development of 
                appropriate controls and procedures, and the 
                development of automated systems, that are reliable, 
                secure, and give adequate scalable capacity;
                    ``(B) establish and maintain emergency procedures, 
                backup facilities, and a plan for disaster recovery 
                that allow for the timely recovery and resumption of 
                operations and the fulfillment of the board of trade's 
                responsibilities and obligations; and
                    ``(C) periodically conduct tests to verify that 
                back-up resources are sufficient to ensure continued 
                order processing and trade matching, price reporting, 
                market surveillance, and maintenance of a comprehensive 
                and accurate audit trail.''.

SEC. 3113. POSITION LIMITS.

    (a) Section 4a(a) of the Commodity Exchange Act (7 U.S.C. 6a(a)) is 
amended by--
            (1) inserting ``(1)'' after ``(a)'';
            (2) striking ``on electronic trading facilities with 
        respect to a significant price discovery contract'' in the 
        first sentence and inserting ``swaps that perform or affect a 
        significant price discovery function with respect to regulated 
        markets'';
            (3) inserting ``, including any group or class of 
        traders,'' in the second sentence after ``held by any person'';
            (4) striking ``on an electronic trading facility with 
        respect to a significant price discovery contract,'' in the 
        second sentence and inserting ``swaps that perform or affect a 
        significant price discovery function with respect to regulated 
        markets,''; and
            (5) inserting at the end the following:
            ``(2) Aggregate position limits.--The Commission may, 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) 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 markets.
            ``(3) 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.
            ``(4) 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, or any 
        transaction or class of transactions from any requirement it 
        may establish under this section with respect to position 
        limits.''.
    (b) Section 4a(b) of 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 electronic trading facility'' 
        and inserting ``or swap execution facility''.

SEC. 3114. ENHANCED AUTHORITY OVER REGISTERED ENTITIES.

    (a) Section 5(d)(1) of the Commodity Exchange Act (7 U.S.C. 
7(d)(1)) is amended by striking ``The board of trade shall have'' and 
inserting ``Except where the Commission otherwise determines by rule or 
regulation pursuant to section 8a(5), the board of trade shall have''.
    (b) Section 5c(c) of the Commodity Exchange Act (7 U.S.C. 7a-2(c)) 
is amended to read as follows:
    ``(c) New Contracts, New Rules, and Rule Amendments.--
            ``(1) In general.--Subject to paragraph (2), 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) 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 under subparagraph (A) 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 (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 for 
                which there is 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.
            ``(3) Approval.--The Commission shall approve any such new 
        contract or instrument, new rule, or rule amendment unless the 
        Commission finds that the new contract or instrument, new rule, 
        or rule amendment would violate this Act.''.

SEC. 3115. FOREIGN BOARDS OF TRADE.

    (a) Section 4(b) of the Commodity Exchange Act (7 U.S.C. 6(b)) is 
amended by striking ``No rule or regulation'' and inserting ``Except as 
provided in paragraphs (1) and (2), no rule or regulation''.
    (b) Section 4(b) of the Commodity Exchange Act (7 U.S.C. 6(b)) is 
further amended by inserting before ``The Commission'' the following: 
``(1) 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 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.
    ``(2) It shall be unlawful for a foreign board of trade to provide 
to the members of the foreign board of trade or other participants 
located in the United States direct access to the electronic trading 
and order-matching system of the foreign board of trade with respect to 
an agreement, contract, or transaction that settles against any price 
(including the daily or final settlement price) of 1 or more contracts 
listed for trading on a registered entity, unless the Commission 
determines that--
            ``(A) the foreign board of trade makes public daily trading 
        information regarding the agreement, contract, or transaction 
        that is comparable to the daily trading information published 
        by the registered entity for the 1 or more contracts against 
        which the agreement, contract, or transaction traded on the 
        foreign board of trade settles; and
            ``(B) the foreign board of trade (or the foreign futures 
        authority that oversees the foreign board of trade)--
                    ``(i) adopts position limits (including related 
                hedge exemption provisions) for the agreement, 
                contract, or transaction that are comparable to the 
                position limits (including related hedge exemption 
                provisions) adopted by the registered entity for the 1 
                or more contracts against which the agreement, 
                contract, or transaction traded on the foreign board of 
                trade settles;
                    ``(ii) has the authority to require or direct 
                market participants to limit, reduce, or liquidate any 
                position the foreign board of trade (or the foreign 
                futures authority that oversees the foreign board of 
                trade) determines to be necessary to prevent or reduce 
                the threat of price manipulation, excessive speculation 
                as described in section 4a, price distortion, or 
                disruption of delivery or the cash settlement process;
                    ``(iii) agrees to promptly notify the Commission, 
                with regard to the agreement, contract, or transaction 
                that settles against any price (including the daily or 
                final settlement price) of 1 or more contracts listed 
                for trading on a registered entity, of any change 
                regarding--
                            ``(I) the information that the foreign 
                        board of trade will make publicly available;
                            ``(II) the position limits that the foreign 
                        board of trade or foreign futures authority 
                        will adopt and enforce;
                            ``(III) the position reductions required to 
                        prevent manipulation, excessive speculation as 
                        described in section 4a, price distortion, or 
                        disruption of delivery or the cash settlement 
                        process; and
                            ``(IV) any other area of interest expressed 
                        by the Commission to the foreign board of trade 
                        or foreign futures authority;
                    ``(iv) provides information to the Commission 
                regarding large trader positions in the agreement, 
                contract, or transaction that is comparable to the 
                large trader position information collected by the 
                Commission for the 1 or more contracts against which 
                the agreement, contract, or transaction traded on the 
                foreign board of trade settles; and
                    ``(v) provides the Commission with information 
                necessary to publish reports on aggregate trader 
                positions for the agreement, contract, or transaction 
                traded on the foreign board of trade that are 
                comparable to 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.
    ``(3) Paragraphs (1) and (2) shall not be effective with respect to 
any foreign board of trade to which the Commission has granted direct 
access permission before the date of the enactment of this subsection 
until the date that is 180 days after such date of enactment.
    ``(4)''.
    (c) Liability of Registered Persons Trading on a Foreign Board of 
Trade.--
            (1) Section 4(a) of the Commodity Exchange Act (7. U.S.C. 
        6(a)) is amended by inserting ``or by subsection (f)'' after 
        ``Unless exempted by the Commission pursuant to subsection 
        (c)''; and
            (2) Section 4 of the Commodity Exchange Act (7 U.S.C. 6) is 
        further amended by adding at the end the following:
    ``(f) 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 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 has complied with subsections (b)(1) and (b)(2).''.
    (d) Contract Enforcement for Foreign Futures Contracts.--Section 
22(a) of the Commodity Exchange Act (7 U.S.C. 25(a)) is amended by 
adding at the end the following:
            ``(5) Contract enforcement for foreign futures contracts.--
        A contract of sale of a commodity for future delivery traded or 
        executed on or through the facilities of a board of trade, 
        exchange, or market located outside the United States for 
        purposes of section 4(a) shall not be void, voidable, or 
        unenforceable, and a party to such a contract shall not be 
        entitled to rescind or recover any payment made with respect to 
        the contract, based on the failure of the foreign board of 
        trade to comply with any provision of this Act.''.

SEC. 3116. LEGAL CERTAINTY FOR SWAPS.

    Section 22(a)(4) of the Commodity Exchange Act (7 U.S.C. 25(a)(4)) 
is amended to read as follows:
            ``(4) Contract enforcement between eligible 
        counterparties.--
                    ``(A) No hybrid instrument sold to any investor 
                shall be void, voidable, or unenforceable, and no party 
                to such hybrid instrument shall be entitled to rescind, 
                or recover any payment made with respect to, such a 
                hybrid instrument under this section or any other 
                provision of Federal or State law, based solely on the 
                failure of the hybrid instrument to comply with the 
                terms or conditions of section 2(f) or regulations of 
                the Commission.
                    ``(B) 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 thereto shall be entitled to rescind, or 
                recover any payment made with respect to, such 
                agreement, contract, or transaction under this section 
                or any other provision of Federal or State law, based 
                solely on the failure of the agreement, contract, or 
                transaction to meet the definition of a swap set forth 
                in section 1a or to be cleared pursuant to section 
                2(j)(1).''.

SEC. 3117. MULTILATERAL CLEARING ORGANIZATIONS.

    (a) Section 408(2)(C) of the Federal Deposit Insurance Corporation 
Improvement Act of 1991 (12 U.S.C. 4421(2)(C)) is amended by striking 
``section 2(c), 2(d), 2(f), or 2(g) of such Act, or exempted under 
section 2(h) or 4(c) of such Act'' and inserting ``section 2(c) or 2(f) 
of such Act''.
    (b) Section 408 of the Federal Deposit Insurance Corporation 
Improvement Act of 1991 (12 U.S.C. 4421) is further amended by 
inserting at the end the following:
            ``(4) The term `over-the-counter derivative instrument' 
        does not include a swap or a security-based swap as defined in 
        sections 1a(35) and 1a(38) of the Commodity Exchange Act (7 
        U.S.C. 1a(35) and 1a(38)).''.

SEC. 3118. PRIMARY ENFORCEMENT AUTHORITY.

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

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

    ``(a) CFTC.--Except as provided in subsections (b), (c), and (d), 
the Commission shall have primary authority to enforce the provisions 
of Subtitle A of the Over-the-Counter Derivatives Markets Act of 2009 
with respect to any person.
    ``(b) Prudential Regulators.--The Prudential Regulators shall have 
exclusive authority to enforce the provisions of section 4s(e) and 
other prudential requirements of this Act with respect to banks, and 
branches or agencies of foreign banks that are swap dealers or major 
swap participants.
    ``(c) Referral.--If the Prudential Regulator for a swap dealer or 
major swap participant has cause to believe that such swap dealer or 
major swap participant may have engaged in conduct that constitutes a 
violation of the nonprudential requirements of section 4s or rules 
adopted by the Commission thereunder, that Prudential Regulator may 
recommend in writing to the Commission that the Commission initiate an 
enforcement proceeding as authorized under this Act. The recommendation 
shall be accompanied by a written explanation of the concerns giving 
rise to the recommendation.
    ``(d) Backstop Enforcement Authority.--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 recommendation 
under subsection (c), the Prudential Regulator may initiate an 
enforcement proceeding as permitted under Federal law.''.

SEC. 3119. ENFORCEMENT.

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

SEC. 3120. RETAIL COMMODITY TRANSACTIONS.

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

SEC. 3121. LARGE SWAP TRADER REPORTING.

    The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by 
adding after section 4t (as added by section 3108) the following:

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

    ``(a) It shall be unlawful for any person to enter into any swap 
that performs or affects a significant price discovery function with 
respect to regulated markets if--
            ``(1) such person shall directly or indirectly enter into 
        such swaps during any one day in an amount equal to or in 
        excess of such amount as shall be fixed from time to time by 
        the Commission; and
            ``(2) such person shall directly or indirectly have or 
        obtain a position in such swaps equal to or in excess of such 
        amount as shall be fixed from time to time by the Commission,
unless such person files or causes to be filed with the properly 
designated officer of the Commission such reports regarding any 
transactions or positions described in paragraphs (1) and (2) as the 
Commission may by rule or regulation require and unless, in accordance 
with the rules and regulations of the Commission, such person shall 
keep books and records of all such swaps and any transactions and 
positions in any related commodity traded on or subject to the rules of 
any board of trade, and of cash or spot transactions in, inventories 
of, and purchase and sale commitments of, such a commodity.
    ``(b) Such books and records shall show complete details concerning 
all transactions and positions as the Commission may by rule or 
regulation prescribe.
    ``(c) Such books and records shall be open at all times to 
inspection and examination by any representative of the Commission.
    ``(d) Any such books and records relating to transactions in 
security-based swap agreements (as defined in section 3(a)(76) of the 
Securities Exchange Act of 1934) shall be open at all times to 
inspection and examination by the Securities and Exchange Commission.
    ``(e) For the purpose of this section, the swaps, futures and cash 
or spot transactions and positions of any person shall include such 
transactions and positions of any persons directly or indirectly 
controlled by such person.
    ``(f) In making a determination whether a swap performs or affects 
a significant price discovery function with respect to regulated 
markets, the Commission shall consider the factors set forth in section 
4a(a)(3).''.

SEC. 3122. AUTHORITY TO BAN ABUSIVE SWAPS.

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

SEC. 3123. INTERNATIONAL HARMONIZATION.

    In order to promote effective and consistent global regulation of 
swaps, the Securities and Exchange Commission, the Commodity Futures 
Trading Commission, the Prudential Regulators (as defined in section 
1a(43) of the Commodity Exchange Act), and the financial stability 
regulator, shall consult and coordinate with foreign regulatory 
authorities on the establishment of consistent international standards 
with respect to the regulation of swaps, and may agree to such 
information-sharing arrangements as may be deemed to be necessary or 
appropriate in the public interest or for the protection of investors 
and swap counterparties.

SEC. 3124. AUTHORITY TO BAN ACCESS TO THE UNITED STATES FINANCIAL 
              SYSTEM.

    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 U.S. financial system, either Commission, in 
consultation with the Secretary of the Treasury, may prohibit an entity 
domiciled in that country from participating in the United States in 
any swap or security-based swap activities.

SEC. 3125. OTHER AUTHORITY.

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

SEC. 3126. ANTITRUST.

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

SEC. 3127. EFFECTIVE DATE.

    This subtitle is effective 270 days after the date of enactment.

         Subtitle B--Regulation of Security-Based Swap Markets

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

    Section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 
78c(a)) is amended--
            (1) in paragraph (5)(A) and (B), by inserting ``(but not 
        security-based swaps, other than security-based swaps with or 
        for persons that are not eligible contract participants)'' 
        after ``securities'' in each place it appears;
            (2) in paragraph (10) by inserting ``security-based swaps'' 
        after ``security future,''
            (3) in paragraph (13), by adding at the end the following: 
        ``For security-based swaps, such terms include the execution, 
        termination (prior to its scheduled maturity date), assignment, 
        exchange, or similar transfer or conveyance of, or 
        extinguishing of rights or obligations under, a security-based 
        swap, as the context may require.'';
            (4) in paragraph (14), by adding at the end the following: 
        ``For security-based swaps, such terms include the execution, 
        termination (prior to its scheduled maturity date), assignment, 
        exchange, or similar transfer or conveyance of, or 
        extinguishing of rights or obligations under, a security-based 
        swap, as the context may require.'';
            (5) in paragraph (39)--
                    (A) by striking ``or government securities dealer'' 
                and inserting ``government securities dealer, security-
                based swap dealer or major security-based swap 
                participant'' in subparagraph (B)(i)(I);
                    (B) by inserting ``security-based swap dealer, 
                major security-based swap participant,'' after 
                ``government securities dealer,'' in subparagraph 
                (B)(i)(II);
                    (C) by striking ``or government securities dealer'' 
                and inserting ``government securities dealer, security-
                based swap dealer or major security-based swap 
                participant'' in subparagraph (C); and
                    (D) by inserting ``security-based swap dealer, 
                major security-based swap participant,'' after 
                ``government securities dealer,'' in subparagraph (D); 
                and
            (6) by adding at the end the following:
            ``(65) Eligible contract participant.--The term `eligible 
        contract participant' has the same meaning as in section 1a(13) 
        of the Commodity Exchange Act (7 U.S.C. 1a(13)).
            ``(66) Major swap participant.--The term `major swap 
        participant' has the same meaning as in section 1a(40) of the 
        Commodity Exchange Act (7 U.S.C. 1a(40)).
            ``(67) Major security-based swap participant.--The term 
        `major security-based swap participant' has the same meaning as 
        in section 1a(41) of the Commodity Exchange Act (7 U.S.C. 
        1a(41)).
            ``(68) Security-based swap.--The term `security-based swap' 
        has the same meaning as in section 1a(38) of the Commodity 
        Exchange Act (7 U.S.C. 1a(38)).
            ``(69) Swap.--The term `swap' has the same meaning as in 
        section 1a(35) of the Commodity Exchange Act (7 U.S.C. 1a(35)).
            ``(70) Person associated with a security-based swap dealer 
        or major security-based swap participant.--The term `person 
        associated with a security-based swap dealer or major security-
        based swap participant' or `associated person of a security-
        based swap dealer or major security-based swap participant' has 
        the same meaning as in section 1a(48) of the Commodity Exchange 
        Act (7 U.S.C. 1a(48)).
            ``(71) Security-based swap dealer.--The term `security-
        based swap dealer' has the same meaning as in section 1a(44) of 
        the Commodity Exchange Act (7 U.S.C. 1a(44)).
            ``(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(43) of the 
        Commodity Exchange Act (7 U.S.C. 1a(43)).
            ``(75) Swap dealer.--The term `swap dealer' has the same 
        meaning as in section 1a(39) of the Commodity Exchange Act (7 
        U.S.C. 1a(39)).
            ``(76) Security-based swap agreement.--
                    ``(A) In general.--For purposes of sections 10, 16, 
                20, and 21A of this Act, and section 17 of the 
                Securities Act of 1933 (15 U.S.C. 77q), the term 
                `security-based swap agreement' means a swap agreement 
                as defined in section 206A of the Gramm-Leach-Bliley 
                Act (15 U.S.C. 78c note) of which a material term is 
                based on the price, yield, value, or volatility of any 
                security or any group or index of securities, or any 
                interest therein.
                    ``(B) Exclusions.--The term `security-based swap 
                agreement' does not include any security-based swap.
            ``(77) Restricted owner.--The term `restricted owner' has 
        the same meaning as in section 1a(51) of the Commodity Exchange 
        Act.''.

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

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

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

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

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

    ``(a) Clearing Requirement.--
            ``(1) In general.--
                    ``(A) Presumption of clearing.--A security-based 
                swap shall be submitted for clearing if a clearing 
                agency that is registered under this Act will accept 
                the security-based swap for clearing;
                    ``(B) Open access.--The rules of a clearing agency 
                described in subparagraph (A) shall--
                            ``(i) prescribe that all security-based 
                        swaps submitted to the clearing agency with the 
                        same terms and conditions are fungible and may 
                        be offset with each other; and
                            ``(ii) provide for non-discriminatory 
                        clearing of a security-based swap executed on 
                        or through the rules of an unaffiliated 
                        exchange or alternative swap execution 
                        facility.
            ``(2) Commission approval.--
                    ``(A) In general.--A clearing agency shall submit 
                to the Commission for prior approval each security-
                based swap, or any group, category, type or class of 
                security-based swaps, that it seeks to accept for 
                clearing, which submission the Commission shall make 
                available to the public.
                    ``(B) Deadline.--The Commission shall take final 
                action on a request submitted pursuant to subparagraph 
                (A) not later than 90 days after submission of the 
                request, unless the clearing agency submitting the 
                request agrees to an extension of the time limitation 
                established under this subparagraph. A request on which 
                the Commission fails to take final action within the 
                time limitation established under this subparagraph 
                shall be deemed approved.
                    ``(C) Approval.--The Commission shall approve, 
                unconditionally or subject to such terms and conditions 
                as the Commission determines to be appropriate, any 
                request submitted pursuant to subparagraph (A) if it 
                finds that the request is consistent with the core 
                principles specified under subsection (l).
                    ``(D) Rules.--Not later than 180 days after the 
                date of enactment of the Over-the-Counter Derivatives 
                Markets Act of 2009, the Commission shall adopt rules 
                for a clearing agency's submission for approval, 
                pursuant to this paragraph, of a security-based swap, 
                or a group, category, type or class of security-based 
                swaps, that it seeks to accept for clearing.
            ``(3) Stay of clearing requirement.--At any time after 
        issuance of an approval pursuant to paragraph (2)--
                    ``(A) Review process.--The Commission, on 
                application of a counterparty to a security-based 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 security-based 
                swap (or the group, category, type or class of 
                security-based 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 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 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 
                        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 the 
                        securities laws; or
                            ``(ii) determine that the clearing 
                        requirement of paragraph (1) shall not apply to 
                        the security-based swap, or group, category, 
                        type or class of security-based swaps.
                    ``(D) Rules.--Not later than 180 days after the 
                date of enactment of the Over-the-Counter Derivatives 
                Markets Act of 2009, the Commission shall adopt rules 
                for reviewing, pursuant to this paragraph, 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.
            ``(4) Prevention of evasion.--The Commission and the 
        Commodities Futures Trading Commission shall have authority to 
        prescribe rules under this section, or issue interpretations of 
        such rules, as necessary to prevent evasions of this Act. Any 
        such rules or interpretations of rules shall be prescribed and 
        issued jointly by both Commissions.
            ``(5) Required reporting.--
                    ``(A) In general.--Any security-based swap that is 
                not accepted for clearing by any clearing agency shall 
                be reported to either a security-based swap repository 
                described in section 13(n) or, if there is no 
                repository that would accept the security-based swap, 
                to the Commission pursuant to section 13A within such 
                time period as the Commission may by rule prescribe.
                    ``(B) Reporting by security-based swap dealers and 
                major security-based swap participants.--In 
                transactions where 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 
                transaction. In transactions where neither counterparty 
                is a security-based swap dealer or major security-based 
                swap participant, only 1 counterparty shall be required 
                to report the transaction and the counterparties shall 
                determine the reporting party by contract or otherwise.
            ``(6) Transition rules.--Rules adopted by the Commission 
        under this section shall provide for the reporting of data, as 
        follows:
                    ``(A) Security-based swaps that were entered into 
                before the date of enactment of the Over-the-Counter 
                Derivatives Markets Act of 2009 shall be reported to a 
                registered security-based swap repository or the 
                Commission no later than 180 days after the effective 
                date of such Act.
                    ``(B) Security-based swaps that were entered into 
                on or after the date of enactment of the Over-the-
                Counter Derivatives Markets Act of 2009 shall be 
                reported to a registered security-based swap repository 
                or the Commission no later than the later of--
                            ``(i) 90 days after the effective date of 
                        such Act; or
                            ``(ii) such other time after entering into 
                        the swap as the Commission may prescribe by 
                        rule or regulation.
            ``(7) Exception.--The requirements of paragraph (1) shall 
        not apply to a security-based swap if--
                    ``(A) no clearing agency registered under this Act 
                will accept the security-based swap for clearing; or
                    ``(B) one of the counterparties to the security-
                based swap is not a security-based swap dealer or major 
                security-based swap participant.
            ``(8) Exclusion.--Paragraph (1) shall not apply to a 
        security-based swap one party to which is not a security-based 
        swap dealer or major security-based swap participant, and which 
        is entered into before the end of the 180-day period that 
        begins with the effective date of this paragraph.
    ``(b) Consultation.--The Commission and the Commodity Futures 
Trading Commission shall consult with the appropriate Federal banking 
agencies and each other prior to adopting rules under this section.''.
    (b) Clearing Agency Requirements.--Section 17A of the Securities 
Exchange Act of 1934 (15 U.S.C. 78q) is amended by adding at the end 
the following new subsections:
    ``(g) Registration Requirement.--It shall be unlawful for a 
clearing agency, unless registered with the Commission, directly or 
indirectly to make use of the mails or any means or instrumentality of 
interstate commerce to perform the functions of a clearing agency with 
respect to a swap.
    ``(h) Voluntary Registration.--
            ``(1) Clearing agencies.--A person that clears agreements, 
        contracts, or transactions that are not required to be cleared 
        under this Act may register with the Commission as a clearing 
        agency.
            ``(2) Derivatives clearing organizations.--A clearing 
        agency may clear swaps that are required to be cleared by a 
        person who is registered as a derivatives clearing organization 
        under the Commodity Exchange Act (7 U.S.C. 1, et seq.).
    ``(i) Required Registration for Banks and Clearing Agencies.--A 
person that is required to be registered as a clearing agency under 
this section shall register with the Commission regardless of whether 
the person is also a bank or a derivatives clearing organization 
registered with the Commodity Futures Trading Commission under the 
Commodity Exchange Act (7 U.S.C. 1, et seq.).
    ``(j) Reporting.--
            ``(1) In general.--A clearing agency that clears security-
        based swaps shall provide to the Commission and any designated 
        swap repository all information determined by the Commission to 
        be necessary to perform its responsibilities under this Act. 
        The Commission shall adopt data collection and maintenance 
        requirements for security-based swaps cleared by clearing 
        agencies that are comparable to the corresponding requirements 
        for security-based swaps accepted by security-based swap 
        repositories and security-based swaps traded on swap execution 
        facilities. The Commission shall share such information, upon 
        request, with the Board, the Commodity Futures Trading 
        Commission, the appropriate Federal banking agencies, the 
        Financial Services Oversight Council, and the Department of 
        Justice or to other persons the Commission deems appropriate, 
        including foreign financial supervisors (including foreign 
        futures authorities), foreign central banks, and foreign 
        ministries.
            ``(2) Public information.--A clearing agency that clears 
        security-based swaps shall provide to the Commission, or its 
        designee, such information as is required by, and in a form and 
        at a frequency to be determined by, the Commission, in order to 
        comply with the public reporting requirements contained in 
        section 13.
    ``(k) Designation of Compliance Officer.--
            ``(1) In general.--Each clearing agency that clears 
        security-based swaps shall designate an individual to serve as 
        a compliance officer.
            ``(2) Duties.--The compliance officer shall--
                    ``(A) report directly to the board or to the senior 
                officer of the clearing agency;
                    ``(B) in consultation with the board of the 
                clearing agency, a body performing a function similar 
                to that of a board, or the senior officer of the 
                clearing agency, resolve any conflicts of interest that 
                may arise;
                    ``(C) be responsible for administering the policies 
                and procedures required to be established pursuant to 
                this section;
                    ``(D) ensure compliance with securities laws and 
                the rules and regulations issued thereunder, including 
                rules prescribed by the Commission pursuant to this 
                section; and
                    ``(E) establish procedures for remediation of 
                noncompliance issues found during compliance office 
                reviews, lookbacks, internal or external audit 
                findings, self-reported errors, or through validated 
                complaints which will establish the handling, 
                management response, remediation, retesting, and 
                closing of noncompliance issues.
            ``(3) Annual reports required.--The compliance officer 
        shall annually prepare and sign a report on the compliance of 
        the clearing agency with the securities laws and its policies 
        and procedures, including its code of ethics and conflict of 
        interest policies, in accordance with rules prescribed by the 
        Commission. Such compliance report shall accompany the 
        financial reports of the clearing agency that are required to 
        be furnished to the Commission pursuant to this section and 
        shall include a certification that, under penalty of law, the 
        report is accurate and complete.
    ``(l) Standards for Clearing Agencies Clearing Swap Transactions.--
To be registered and to maintain registration as a clearing agency that 
clears swap transactions, a clearing agency shall comply with such 
standards as the Commission may establish by rule. In establishing any 
such standards, and in the exercise of its oversight of such a clearing 
agency pursuant to this title, the Commission may conform such 
standards or oversight to reflect evolving United States and 
international standards. Except where the Commission determines 
otherwise by rule or regulation, a clearing agency shall have 
reasonable discretion in establishing the manner in which it complies 
with any such standards.
    ``(m) Consultation.--The Commission and the Commodity Futures 
Trading Commission shall consult with the appropriate Federal banking 
agencies and each other prior to adopting rules under this section.
    ``(n) Harmonization of Rules.--Not later than 180 days after the 
effective date of the Over-the-Counter Derivatives Markets Act of 2009, 
the Commission and the Commodity Futures Trading Commission shall 
jointly adopt uniform rules governing persons that are registered as 
derivatives clearing organizations for swaps under the Commodity 
Exchange Act (7 U.S.C. 1, et seq.) and persons that are registered as 
clearing agencies for security-based swaps under the Securities 
Exchange Act of 1934 (15 U.S.C. 78a, et seq.).''.
    (c) Execution of Security-based Swaps.--The Securities Exchange Act 
of 1934 (15 U.S.C. 78a, et seq.) is amended by inserting after section 
5 the following:

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

    ``(a) Trade Execution.--
            ``(1) In general.--With respect to transactions involving 
        security-based swaps subject to the clearing requirement of 
        section 3B and where both counterparties are either security-
        based swap dealers or major security-based swap participants, 
        such counterparties shall--
                    ``(A) execute the transaction on a national 
                securities exchange registered pursuant to section 6(a) 
                (in which event such transaction shall be subject to 
                regulation under this title as a transaction in a 
                security); or
                    ``(B) execute the transaction on a swap execution 
                facility registered with the Commission.
            ``(2) Exception.--The requirements of subparagraphs (A) or 
        (B) of paragraph (1) shall not apply if no board of trade or 
        swap execution facility makes the swap available to trade.
            ``(3) Required reporting.--If the exception of paragraph 
        (2) applies and there is no facility that makes the swap 
        available to trade, the counterparties shall comply with any 
        recordkeeping and transaction reporting requirements as may be 
        prescribed by the Commission with respect to security-based 
        swaps subject to the requirements of section 3B and where both 
        counterparties are either security-based swap dealers or major 
        security-based swap participants.
    ``(b) Exchange Trading.--In adopting rules and regulations, the 
Commission shall endeavor to eliminate unnecessary impediments to the 
trading on national securities exchanges or swap execution facilities, 
agreements or transactions that would be commodity swaps but for the 
trading of such contracts, agreements or transactions on such a 
designated contract market.''.
    (d) Swap Execution Facilities.--The Securities Exchange Act of 1934 
(15 U.S.C. 78a, et seq.) is further amended by adding after section 3B 
(as added by subsection (a)) the following:

``SEC. 3C. SWAP EXECUTION FACILITIES.

    ``(a) Registration.--
            ``(1) In general.--
                    ``(A) No person may operate a swap execution 
                facility unless such facility is registered under this 
                section.
                    ``(B) For purposes of this section, the term `swap 
                execution facility' means an entity that facilitates 
                the execution of swaps between 2 persons through any 
                means of interstate commerce but which is not a 
                designated contract market.
            ``(2) Dual registration.--Any person that is required to be 
        registered as a swap execution facility under this section 
        shall register with the Commission regardless of whether that 
        person also is registered with the Commodity Futures Trading 
        Commission as a swap execution facility.
    ``(b) Requirements for Trading.--A swap execution facility that is 
registered under subsection (a) may trade any security-based swap.
    ``(c) Trading by Exchanges.--An exchange shall, to the extent that 
the exchange also operates a swap execution facility and uses the same 
electronic trade execution system for trading on the exchange and the 
swap execution facility, identify whether the electronic trading is 
taking place on the exchange or the swap execution facility.
    ``(d) Criteria for Registration.--
            ``(1) In general.--To be registered as a swap execution 
        facility, the facility shall be required to demonstrate to the 
        Commission that it meets the criteria specified herein.
            ``(2) Deterrence of abuses.--The swap execution facility 
        shall establish and enforce trading and participation rules 
        that will deter abuses and have the capacity to detect, 
        investigate, and enforce those rules, including means to--
                    ``(A) obtain information necessary to perform the 
                functions required under this section; or
                    ``(B) use means to--
                            ``(i) provide market participants with 
                        impartial access to the market; and
                            ``(ii) capture information that may be used 
                        in establishing whether rule violations have 
                        occurred.
            ``(3) Trading procedures.--The swap execution facility 
        shall establish and enforce rules or terms and conditions 
        defining, or specifications detailing, trading procedures to be 
        used in entering and executing orders traded on or through its 
        facilities.
            ``(4) Financial integrity of transactions.--The swap 
        execution facility shall establish and enforce rules and 
        procedures for ensuring the financial integrity of security-
        based swaps entered on or through its facilities, including the 
        clearance and settlement of the security-based swaps.
    ``(e) Core Principles for Swap Execution Facilities.--
            ``(1) In general.--To maintain its registration as a swap 
        execution facility, the facility shall comply with the core 
        principles specified in this subsection and any requirement 
        that the Commission may impose by rule or regulation. Except 
        where the Commission determines otherwise by rule or 
        regulation, the facility shall have reasonable discretion in 
        establishing the manner in which it complies with these core 
        principles.
            ``(2) Compliance with rules.--The swap execution facility 
        shall monitor and enforce compliance with any of the rules of 
        the facility, including the terms and conditions of the 
        security-based swaps traded on or through the facility and any 
        limitations on access to the facility.
            ``(3) Security-based swaps not readily susceptible to 
        manipulation.--The swap execution facility shall permit trading 
        only in security-based swaps that are not readily susceptible 
        to manipulation.
            ``(4) Monitoring of trading.--The swap execution facility 
        shall monitor trading in security-based swaps to prevent 
        manipulation and price distortion 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 
                subsection;
                    ``(B) provide the information to the Commission 
                upon request; and
                    ``(C) have the capacity to carry out such 
                international information-sharing agreements as the 
                Commission may require.
            ``(6) Emergency authority.--The swap execution facility 
        shall adopt rules to provide for the exercise of emergency 
        authority, in consultation or cooperation with the Commission, 
        where necessary and appropriate, including the authority to 
        suspend or curtail trading in a security-based swap.
            ``(7) Timely publication of trading information.--The swap 
        execution facility shall make public timely information on 
        price, trading volume, and other trading data to the extent 
        prescribed by the Commission.
            ``(8) Recordkeeping and reporting.--The swap execution 
        facility shall maintain records of all activities related to 
        the business of the facility, including a complete audit trail, 
        in a form and manner acceptable to the Commission for a period 
        of 5 years, and report to the Commission all information 
        determined by the Commission to be necessary or appropriate for 
        the Commission to perform its responsibilities under this Act 
        in a form and manner acceptable to the Commission. The 
        Commission shall adopt data collection and reporting 
        requirements for swap execution facilities that are comparable 
        to corresponding requirements for clearing agencies and 
        security-based swap repositories.
            ``(9) Antitrust considerations.--Unless necessary or 
        appropriate to achieve the purposes of this Act, the swap 
        execution facility shall avoid--
                    ``(A) adopting any rules or taking any actions that 
                result in any unreasonable restraints of trade; or
                    ``(B) imposing any material anticompetitive burden 
                on trading on the swap execution facility.
            ``(10) Conflicts of interest.--
                    ``(A) In general.--The swap execution facility 
                shall establish and enforce rules to minimize conflicts 
                of interest in its decision-making process and 
                establish a process for resolving such conflicts of 
                interest.
                    ``(B) Beneficial ownership by a restricted owner.--
                The rules of the swap execution facility shall provide 
                that a restricted owner shall not be permitted directly 
                or indirectly to acquire beneficial ownership of 
                interests in the facility or in persons with a 
                controlling interest in the facility, to the extent 
                that such an acquisition would result in restricted 
                owners controlling more than 20 percent of the votes 
                entitled to be cast on any matter by the holders of the 
                ownership interests.
                    ``(C) Association with a restricted owner.--The 
                rules of the swap execution facility shall provide that 
                a majority of the directors of the facility shall not 
                be associated with a restricted owner.
            ``(11) Designation of compliance officer.--
                    ``(A) In general.--Each swap execution facility 
                shall designate an individual to serve as a compliance 
                officer.
                    ``(B) Duties.--The compliance officer--
                            ``(i) shall report directly to the board or 
                        to the senior officer of the facility;
                            ``(ii) shall--
                                    ``(I) review compliance with the 
                                core principles in section 3B(e);
                                    ``(II) in consultation with the 
                                board of the facility, a body 
                                performing a function similar to that 
                                of a board, or the senior officer of 
                                the facility, resolve any conflicts of 
                                interest that may arise;
                                    ``(III) be responsible for 
                                administering the policies and 
                                procedures required to be established 
                                pursuant to this section; and
                                    ``(IV) ensure compliance with 
                                securities laws and the rules and 
                                regulations issued thereunder, 
                                including rules prescribed by the 
                                Commission pursuant to this section; 
                                and
                            ``(iii) shall establish procedures for 
                        remediation of non-compliance issues found 
                        during compliance office reviews, lookbacks, 
                        internal or external audit findings, self-
                        reported errors, or through validated 
                        complaints. Procedures will establish the 
                        handling, management response, remediation, 
                        retesting, and closing of noncompliant issues.
                    ``(C) Annual reports required.--The compliance 
                officer shall annually prepare and sign a report on the 
                compliance of the facility with the securities laws and 
                its policies and procedures, including its code of 
                ethics and conflict of interest policies, in accordance 
                with rules prescribed by the Commission. Such 
                compliance report shall accompany the financial reports 
                of the facility that are required to be furnished to 
                the Commission pursuant to this section and shall 
                include a certification that, under penalty of law, the 
                report is accurate and complete.
    ``(f) Exemptions.--The Commission may exempt, conditionally or 
unconditionally, a swap execution facility from registration under this 
section if the Commission finds that such organization is subject to 
comparable, comprehensive supervision and regulation on a consolidated 
basis by the Commodity Futures Trading Commission, a Prudential 
Regulator or the appropriate governmental authorities in the 
organization's home country.
    ``(g) Harmonization of Rules.--Not later than 180 days after the 
date of enactment of the Over-the-Counter Derivatives Markets Act of 
2009, the Commission and the Commodity Futures Trading Commission shall 
jointly prescribe rules governing the regulation of swap execution 
facilities under this section and section 5h of the Commodity Exchange 
Act (7 U.S.C. 7b-3).''.
    (e) Segregation of Assets Held as Collateral in Swap 
Transactions.--The Securities Exchange Act of 1934 (15 U.S.C. 78a, et 
seq.) is further amended by adding after section 3C (as added by 
subsection (b)) the following:

``SEC. 3D. SEGREGATION OF ASSETS HELD AS COLLATERAL IN OVER-THE-COUNTER 
              SWAP TRANSACTIONS.

    ``(a) Segregation.--At the request of a counterparty to a security-
based swap who provides funds or other property to a swap dealer as 
variation or initial margin or collateral to secure the obligations of 
the counterparty under a security-based swap between the counterparty 
and the swap dealer that is not submitted for clearing to a derivatives 
clearing agency, the swap dealer shall segregate the variation or 
initial margin or collateral for the benefit of the counterparty, and 
maintain the variation or initial margin or collateral in an account 
which is carried by an independent third-party custodian and designated 
as a segregated account for the counterparty, in accordance with such 
rules and regulations as the Commission or Prudential Regulator may 
prescribe. If a securities-based swap counterparty is a swap dealer or 
major securities-based swap participant who owns more than 20 percent 
of, or has more than 50 percent representation on the board of 
directors of, a custodian, the custodian shall not be considered 
independent from the securities-based swap counterparties for purposes 
of the preceding sentence. This subsection shall not be interpreted to 
preclude commercial arrangements regarding the investment of the 
segregated funds or other property and the related allocation of gains 
and losses resulting from any such investment.
    ``(b) Back Office Audit Reporting.--If a security-based swap dealer 
does not segregate funds at the request of a security-based swap 
counterparty in accordance with subsection (a), the security-based swap 
dealer shall report to its counterparty on a quarterly basis that its 
back office procedures relating to margin and collateral requirements 
are in compliance with the agreement of the counterparties.''.
    (f) Trading in Security-based Swap Agreements.--Section 6 of the 
Securities Exchange Act of 1934 (15 U.S.C. 78f) is amended by adding at 
the end the following:
    ``(l) It shall be unlawful for any person to effect a transaction 
in a security-based swap with or for a person that is not an eligible 
contract participant unless such transaction is effected on a national 
securities exchange registered pursuant to subsection (b).''.
    (g) Additions of Security-based Swaps to Certain Enforcement 
Provisions.--Paragraphs (1) through (3) of section 9(b) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78i(b)(1)-(3)) are amended 
to read as follows:
            ``(1) any transaction in connection with any security 
        whereby any party to such transaction acquires (A) any put, 
        call, straddle, or other option or privilege of buying the 
        security from or selling the security to another without being 
        bound to do so; (B) any security futures product on the 
        security; or (C) any security-based swap involving the security 
        or the issuer of the security;
            ``(2) any transaction in connection with any security with 
        relation to which he has, directly or indirectly, any interest 
        in any (A) such put, call, straddle, option, or privilege; (B) 
        such security futures product; or (C) such security-based swap; 
        or
            ``(3) any transaction in any security for the account of 
        any person who he has reason to believe has, and who actually 
        has, directly or indirectly, any interest in (A) any such put, 
        call, straddle, option, or privilege; (B) such security futures 
        product with relation to such security; or (C) any security-
        based swap involving such security or the issuer of such 
        security.''.
    (h) Rulemaking Authority To Prevent Fraud, Manipulation, and 
Deceptive Conduct in Security-based Swaps and Security-based Swap 
Agreements.--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 or any security-based swap 
agreement, 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.''.
    (i) Position Limits and Position Accountability for Security-based 
Swaps.--The Securities Exchange Act of 1934 is further amended by 
inserting after section 10B (15 U.S.C. 78j-1) (as added by section 
2003(a)) the following new section:

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

    ``(a) Position Limits.--As a means reasonably designed to prevent 
fraud and manipulation, the Commission may, by rule or regulation, as 
necessary or appropriate in the public interest or for the protection 
of investors, establish limits (including related hedge exemption 
provisions) on the size of positions in any security-based swap or 
security-based swap agreement that may be held by any person. In 
establishing such limits, the Commission may require any person to 
aggregate positions in--
            ``(1) any security-based swap and any security or loan or 
        group or index of securities or loans on which such security-
        based swap is based, which such security-based swap references, 
        or to which such security-based swap is related as described in 
        section 3(a)(68), and any security-based swap agreement and any 
        other instrument relating to such security or loan or group or 
        index of securities or loans; or
            ``(2) any security-based swap and (A) any security or group 
        or index of securities, the price, yield, value, or volatility 
        of which, or of which any interest therein, is the basis for a 
        material term of such security-based swap as described in 
        section 3(a)(76) and (B) any security-based swap and any other 
        instrument relating to the same security or group or index of 
        securities.
    ``(b) Exemptions.--The Commission, by rule, regulation, or order, 
may conditionally or unconditionally exempt any person or class of 
persons, any security-based swap or class of security-based swaps, or 
any transaction or class of transactions from any requirement it may 
establish under this section with respect to position limits.
    ``(c) SRO Rules.--
            ``(1) In general.--As a means reasonably designed to 
        prevent fraud or manipulation, the Commission, by rule, 
        regulation, or order, as necessary or appropriate in the public 
        interest, for the protection of investors, or otherwise in 
        furtherance of the purposes of this title, may direct a self-
        regulatory organization--
                    ``(A) to adopt rules regarding the size of 
                positions in any security-based swap that may be held 
                by--
                            ``(i) any member of such self-regulatory 
                        organization; or
                            ``(ii) any person for whom a member of such 
                        self-regulatory organization effects 
                        transactions in such security-based swap or 
                        other security-based swap agreement; and
                    ``(B) to adopt rules reasonably designed to ensure 
                compliance with requirements prescribed by the 
                Commission under subparagraph (A).
            ``(2) Requirement to aggregate positions.--In establishing 
        such limits, the self-regulatory organization may require such 
        member or person to aggregate positions in--
                    ``(A) any security-based swap and any security or 
                loan or group or index of securities or loans on which 
                such security-based swap is based, which such security-
                based swap references, or to which such security-based 
                swap is related as described in section 3(a)(68), and 
                any security-based swap agreement and any other 
                instrument relating to such security or loan or group 
                or index of securities or loans; or
                    ``(B)(i) any security-based swap;
                    ``(ii) any security or group or index of 
                securities, the price, yield, value, or volatility of 
                which, or of which any interest therein, is the basis 
                for a material term of such security-based swap as 
                described in section 3(a)(76); and
                    ``(iii) any security-based swap and any other 
                instrument relating to the same security or group or 
                index of securities.
    ``(d) Large Trader Reporting.--The Commission, by rule or 
regulation, may require any person that effects transactions for such 
person's own account or the account of others in any securities-based 
swap or security-based swap agreement and any security or loan or group 
or index of securities or loans as set forth in paragraphs (1) and (2) 
of subsection (a) to report such information as the Commission may 
prescribe regarding any position or positions in any security-based 
swap or security-based swap agreement and any security or loan or group 
or index of securities or loans and any other instrument relating to 
such security or loan or group or index of securities or loans as set 
forth in paragraphs (1) and (2) of subsection (a).''.
    (j) Public Reporting and Repositories for Security-based Swap 
Agreements.--Section 13 of the Securities Exchange Act of 1934 (15 
U.S.C. 78m) is amended by adding at the end the following:
    ``(m) Public Reporting of Aggregate Security-based Swap Data.--
            ``(1) In general.--The Commission, or a person designated 
        by the Commission pursuant to paragraph (2), shall make 
        available to the public, in a manner that does not disclose the 
        business transactions and market positions of any person, 
        aggregate data on security-based swap trading volumes and 
        positions from the sources set forth in paragraph (3).
            ``(2) Designee of the commission.--The Commission may 
        designate a clearing agency or a security-based swap repository 
        to carry out the public reporting described in paragraph (1).
            ``(3) Sources of information.--The sources of the 
        information to be publicly reported as described in paragraph 
        (1) are--
                    ``(A) clearing agencies pursuant to section 3A;
                    ``(B) security-based swap repositories pursuant to 
                subsection (n); and
                    ``(C) reports received by the Commission pursuant 
                to section 13A.
    ``(n) Security-based Swap Repositories.--
            ``(1) Registration requirement.--
                    ``(A) In general.--It shall be unlawful for a 
                security-based swap repository, unless registered with 
                the Commission, directly or indirectly to make use of 
                the mails or any means or instrumentality of interstate 
                commerce to perform the functions of a security-based 
                swap repository.
                    ``(B) Inspection and examination.--Registered 
                security-based swap repositories shall be subject to 
                inspection and examination by any representatives of 
                the Commission.
            ``(2) Standard setting.--
                    ``(A) Data identification.--The Commission shall 
                prescribe standards that specify the data elements for 
                each security-based swap that shall be collected and 
                maintained by each security-based swap repository.
                    ``(B) Data collection and maintenance.--The 
                Commission shall prescribe data collection and data 
                maintenance standards for security-based swap 
                repositories.
                    ``(C) Comparability.--The standards prescribed by 
                the Commission under this subsection shall be 
                comparable to the data standards imposed by the 
                Commission on clearing agencies that clear security-
                based swaps.
            ``(3) Duties.--A security-based swap repository shall--
                    ``(A) accept data prescribed by the Commission for 
                each security-based swap under this paragraph (2);
                    ``(B) maintain such data in such form and manner 
                and for such period as may be required by the 
                Commission;
                    ``(C) provide to the Commission, or its designee, 
                such information as is required by, and in a form and 
                at a frequency to be determined by, the Commission, in 
                order to comply with the public reporting requirements 
                contained in subsection (m); and
                    ``(D) make available, on a confidential basis, all 
                data obtained by the security-based swap repository, 
                including individual counterparty trade and position 
                data, to the Commission, the appropriate Federal 
                banking agencies, the Commodity Futures Trading 
                Commission, the Financial Services Oversight Council, 
                and the Department of Justice or to other persons the 
                Commission deems appropriate, including foreign 
                financial supervisors (including foreign futures 
                authorities), foreign central banks, and foreign 
                ministries.
            ``(4) Required registration for security-based swap 
        repositories.--Any person that is required to be registered as 
        a securities-based swap repository under this subsection shall 
        register with the Commission, regardless of whether that person 
        also is registered with the Commodity Futures Trading 
        Commission as a swap repository.
            ``(5) Harmonization of rules.--Not later than 180 days 
        after the date of enactment of the Over-the-Counter Derivatives 
        Markets Act of 2009, the Commission and the Commodity Futures 
        Trading Commission shall jointly adopt uniform rules governing 
        persons that are registered under this section and persons that 
        are registered as swap repositories under the Commodity 
        Exchange Act (7 U.S.C. 1, et seq.), including uniform rules 
        that specify the data elements that shall be collected and 
        maintained by each repository.
            ``(6) Exemptions.--The Commission may exempt, conditionally 
        or unconditionally, a security-based swap repository from the 
        requirements of this section if the Commission finds that such 
        security-based swap repository is subject to comparable, 
        comprehensive supervision or regulation on a consolidated basis 
        by the Commodity Futures Trading Commission, a Prudential 
        Regulator or the appropriate governmental authorities in the 
        organization's home country.''.

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

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

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

    ``(a) Registration.--
            ``(1) It shall be unlawful for any person to act as a 
        security-based swap dealer unless such person is registered as 
        a security-based swap dealer with the Commission.
            ``(2) It shall be unlawful for any person to act as a major 
        security-based swap participant unless such person is 
        registered as a major security-based swap participant with the 
        Commission.
    ``(b) Requirements.--
            ``(1) In general.--A person shall register as a security-
        based swap dealer or major security-based swap participant by 
        filing a registration application with the Commission.
            ``(2) Contents.--The application shall be made in such form 
        and manner as prescribed by the Commission, giving any 
        information and facts as the Commission may deem necessary 
        concerning the business in which the applicant is or will be 
        engaged. Such person, when registered as a security-based swap 
        dealer or major security-based swap participant, shall continue 
        to report and furnish to the Commission such information 
        pertaining to such person's business as the Commission may 
        require.
            ``(3) Expiration.--Each registration shall expire at such 
        time as the Commission may by rule or regulation prescribe.
            ``(4) Rules.--Except as provided in subsections (c), (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 
        security-based swap dealers and major security-based swap 
        participants. Except as provided in subsections (c) and (e), 
        the Commission may provide conditional or unconditional 
        exemptions from rules prescribed under this section for 
        security-based swap dealers and major security-based swap 
        participants that are subject to substantially similar 
        requirements as brokers or dealers.
            ``(5) Transition.--Rules adopted under this section shall 
        provide for the registration of security-based swap dealers and 
        major security-based swap participants no later than 1 year 
        after the effective date of the Over-the-Counter Derivatives 
        Markets Act of 2009.
    ``(c) Dual Registration.--
            ``(1) Security-based swap dealers.--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 that person also is a bank or is registered with the 
        Commodity Futures Trading Commission as a swap dealer.
            ``(2) Major security-based swap participants.--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 that person also is a bank or 
        is registered with the Commodity Futures Trading Commission as 
        a major swap participant.
    ``(d) Joint Rules.--
            ``(1) In general.--Not later than 180 days after the 
        effective date of the Over-the-Counter Derivatives Markets Act 
        of 2009, the Commission and the Commodity Futures Trading 
        Commission shall jointly adopt uniform rules for persons that 
        are registered as security-based swap dealers or major 
        security-based swap participants under this Act and persons 
        that are registered as swap dealers or major swap participants 
        under the Commodity Exchange Act (7 U.S.C. 1, et seq.).
            ``(2) Exception for prudential requirements.--The 
        Commission and the Commodity Futures Trading Commission shall 
        not prescribe rules imposing prudential requirements (including 
        activity restrictions) on security-based swap dealers or major 
        security-based swap participants for which there is a 
        Prudential Regulator. This provision shall not be construed as 
        limiting the authority of the Commission and the Commodity 
        Futures Trading Commission to prescribe appropriate business 
        conduct, reporting, and recordkeeping requirements to protect 
        investors.
    ``(e) Capital and Margin Requirements.--
            ``(1) In general.--
                    ``(A) Bank security-based swap dealers and major 
                security-based swap participants.--Each registered 
                security-based swap dealer and major security-based 
                swap participant for which there is a Prudential 
                Regulator shall meet such minimum capital requirements 
                and minimum margin requirements as the Prudential 
                Regulators shall by rule or regulation jointly 
                prescribe to help ensure the safety and soundness of 
                the security-based swap dealer or major security-based 
                swap participant.
                    ``(B) Nonbank security-based swap dealers and major 
                security-based swap participants.--Each registered 
                security-based swap dealer and major security-based 
                swap participant for which there is not a Prudential 
                Regulator shall meet such minimum capital requirements 
                and minimum margin requirements as the Commission and 
                the Commodity Futures Trading Commission shall by rule 
                or regulation jointly prescribe to help ensure the 
                safety and soundness of the security-based swap dealer 
                or major security-based swap participant.
            ``(2) Joint rules.--
                    ``(A) Bank security-based swap dealers and major 
                security-based swap participants.--Within 180 days of 
                the enactment of the Over-the-Counter Derivatives 
                Markets Act of 2009, the Prudential Regulators, in 
                consultation with the Commission and the Commodity 
                Futures Trading Commission, shall jointly adopt rules 
                imposing capital and margin requirements under this 
                subsection for security-based swap dealers and major 
                security-based swap participants.
                    ``(B) Nonbank security-based swap dealers and major 
                security-based swap participants.--Within 180 days of 
                the enactment of the Over-the-Counter Derivatives 
                Markets Act of 2009, the Commission and the Commodity 
                Futures Trading Commission, in consultation with the 
                Prudential Regulators, shall jointly adopt rules 
                imposing capital and margin requirements under this 
                subsection for security-based swap dealers and major 
                security-based swap participants for which there is no 
                Prudential Regulator.
            ``(3) Capital.--
                    ``(A) Bank security-based swap dealers and major 
                security-based swap participants.--In setting capital 
                requirements under this subsection, the Prudential 
                Regulators shall impose--
                            ``(i) a capital requirement that is greater 
                        than zero for security-based swaps that are 
                        cleared by a clearing agency; and
                            ``(ii) to offset the greater risk to the 
                        security-based swap dealer or major security-
                        based swap participant and to the financial 
                        system arising from the use of security-based 
                        swaps that are not centrally cleared, higher 
                        capital requirements for security-based swaps 
                        that are not cleared by a clearing agency than 
                        for security-based swaps that are centrally 
                        cleared.
                    ``(B) Exclusion.--Subparagraph (A) shall not apply 
                to a security-based swap one party to which is not a 
                security-based swap dealer or major security-based swap 
                participant, and which is entered into before the end 
                of the 90-day period that begins with the effective 
                date of this subparagraph.
                    ``(C) Nonbank security-based swap dealers and major 
                security-based swap participants.--Capital requirements 
                set by the Commission and the Commodity Futures Trading 
                Commission under this subsection shall be as strict as 
                or stricter than the capital requirements set by the 
                Prudential Regulators under this subsection.
                    ``(D) Bank holding companies.--Capital requirements 
                set by the Board for security-based swaps of bank 
                holding companies on a consolidated basis shall be as 
                strict as or stricter than the capital requirements set 
                by the Prudential Regulators under this subsection.
            ``(4) Margin.--
                    ``(A) Bank security-based swap dealers and major 
                security-based swap participants.--The Prudential 
                Regulators shall impose margin requirements under this 
                subsection on all security-based swaps that are not 
                cleared by a registered clearing agency.
                    ``(B) Non-swap dealers and major market 
                participants.--The Prudential Regulators may, but are 
                not required to, impose margin requirements with 
                respect to security-based swaps in which one of the 
                counterparties is not a swap dealer, major swap 
                participant, security-based swap dealer or major 
                security-based swap participant. Margin requirements 
                for swaps set by the Commission and the Commodity 
                Futures Trading Commission shall provide for the use of 
                non-cash assets as collateral.
                    ``(C) Exclusion.--Subparagraph (B) shall not apply 
                to a security-based swap one party to which is not a 
                security-based swap dealer or major security-based swap 
                participant, and which is entered into before the end 
                of the 90-day period that begins with the effective 
                date of this subparagraph.
                    ``(D) Nonbank security-based swap dealers and major 
                security-based swap participants.--Margin requirements 
                for security-based swaps set by the Commission and the 
                Commodity Futures Trading Commission under this 
                subsection shall be as strict as or stricter than 
                margin requirements for security-based swaps set by the 
                Prudential Regulators.
    ``(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 prescribed by 
                the Commission by rule or regulation regarding the 
                transactions and positions and financial condition of 
                such person;
                    ``(B) for which--
                            ``(i) there is a Prudential Regulator, 
                        shall keep books and records of all activities 
                        related to its business as a security-based 
                        swap dealer or major security-based swap 
                        participant in such form and manner and for 
                        such period as may be prescribed by the 
                        Commission by rule or regulation; or
                            ``(ii) there is no Prudential Regulator, 
                        shall keep books and records in such form and 
                        manner and for such period as may be prescribed 
                        by the Commission by rule or regulation;
                    ``(C) shall keep such books and records open to 
                inspection and examination by any representative of the 
                Commission; and
                    ``(D) shall keep any such books and records 
                relating to transactions in swaps based on 1 or more 
                securities open to inspection and examination by the 
                Commission.
            ``(2) Rules.--Not later than 1 year after the date of 
        enactment of the Over-the-Counter Derivatives Markets Act of 
        2009, the Commission and the Commodity Futures Trading 
        Commission, in consultation with the appropriate Federal 
        banking agencies, shall jointly adopt rules governing reporting 
        and recordkeeping for swap dealers, major swap participants, 
        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 its security-based swaps and all 
        related records (including related transactions) and recorded 
        communications including but not limited to electronic mail, 
        instant messages, and recordings of telephone calls, for such 
        period as may be prescribed by the Commission by rule or 
        regulation.
            ``(2) Information requirements.--The daily trading records 
        shall include such information as the Commission shall 
        prescribe by rule or regulation.
            ``(3) Customer records.--Each registered security-based 
        swap dealer or major security-based swap participant shall 
        maintain daily trading records for each customer or 
        counterparty in such manner and form as to be identifiable with 
        each security-based swap transaction.
            ``(4) Audit trail.--Each registered security-based swap 
        dealer or major security-based swap participant shall maintain 
        a complete audit trail for conducting comprehensive and 
        accurate trade reconstructions.
            ``(5) Rules.--Not later than 1 year after the date of 
        enactment of the Over-the-Counter Derivatives Markets Act of 
        2009, the Commission and the Commodity Futures Trading 
        Commission, in consultation with the appropriate Federal 
        banking agencies, shall jointly adopt rules governing daily 
        trading records for swap dealers, major swap participants, 
        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 business conduct standards as may be prescribed by the 
        Commission by rule or regulation addressing--
                    ``(A) fraud, manipulation, and other abusive 
                practices involving security-based swaps (including 
                security-based swaps that are offered but not entered 
                into);
                    ``(B) diligent supervision of its business as a 
                security-based swap dealer;
                    ``(C) adherence to all applicable position limits;
                    ``(D) the prevention of self-dealing by limiting 
                the extent to which a security-based swap dealer or 
                major security-based swap participant may conduct 
                business with a clearing agency, an exchange, or an 
                alternative swap execution facility that clears or 
                trades security-based swaps and in which such a dealer 
                or participant has a material debt or equity 
                investment; and
                    ``(E) such other matters as the Commission shall 
                determine to be necessary or appropriate.
            ``(2) Business conduct requirements.--Business conduct 
        requirements adopted by the Commission shall--
                    ``(A) establish the standard of care for a 
                security-based swap dealer or major security-based swap 
                participant to verify that any security-based swap 
                counterparty meets the eligibility standards for an 
                eligible contract participant;
                    ``(B) require disclosure by the security-based swap 
                dealer or major security-based swap participant to any 
                counterparty to the security-based swap (other than a 
                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 security-based swap;
                            ``(ii) for cleared swaps, upon the request 
                        of the counterparty, the daily mark from the 
                        appropriate clearinghouse and for non-cleared 
                        swaps, upon the request of the counterparty, 
                        the daily mark of the security-based swap 
                        dealer or major security-based swap 
                        participant; and
                            ``(iii) any other material incentives or 
                        conflicts of interest that the security-based 
                        swap dealer or major security-based swap 
                        participant may have in connection with the 
                        security-based swap; and
                    ``(C) establish such other standards and 
                requirements as the Commission may determine are 
                necessary or appropriate in the public interest, for 
                the protection of investors, or otherwise in 
                furtherance of the purposes of this title.
            ``(3) Rules.--Not later than 1 year after the date of 
        enactment of the Over-the-Counter Derivatives Markets Act of 
        2009, the Commission and the Commodity Futures Trading 
        Commission, in consultation with the appropriate Federal 
        banking agencies, shall jointly prescribe rules under this 
        subsection governing business conduct standards for swap 
        dealers, major swap participants, security-based swap dealers, 
        and major security-based swap participants.
    ``(i) Documentation and Back Office Standards.--
            ``(1) In general.--Each registered security-based swap 
        dealer and major security-based swap participant shall conform 
        with standards, as may be prescribed by the Commission by rule 
        or regulation, addressing timely and accurate confirmation, 
        processing, netting, documentation, and valuation of all 
        security-based swaps.
            ``(2) Rules.--Not later than 1 year after the date of 
        enactment of the Over-the-Counter Derivatives Markets Act of 
        2009, the Commission and the Commodity Futures Trading 
        Commission, in consultation with the appropriate Federal 
        banking agencies, shall jointly adopt rules governing 
        documentation and back office standards for swap dealers, major 
        swap participants, security-based swap dealers, and major 
        security-based swap participants.
    ``(j) Dealer Responsibilities.--Each registered security-based swap 
dealer and major security-based swap participant at all times shall 
comply with the following requirements:
            ``(1) Monitoring of trading.--The security-based swap 
        dealer or major security-based swap participant shall monitor 
        its trading in security-based swaps to prevent violations of 
        applicable position limits.
            ``(2) Disclosure of general information.--The security-
        based swap dealer or major security-based swap participant 
        shall disclose to the Commission and to the Prudential 
        Regulator for such security-based swap dealer or major 
        security-based swap participant, as applicable, information 
        concerning--
                    ``(A) terms and conditions of its security-based 
                swaps;
                    ``(B) security-based swap trading operations, 
                mechanisms, and practices;
                    ``(C) financial integrity protections relating to 
                security-based swaps; and
                    ``(D) other information relevant to its trading in 
                security-based swaps.
            ``(3) Ability to obtain information.--The security-based 
        swap dealer or major swap security-based participant shall--
                    ``(A) establish and enforce internal systems and 
                procedures to obtain any necessary information to 
                perform any of the functions described in this section; 
                and
                    ``(B) provide the information to the Commission and 
                to the Prudential Regulator for such security-based 
                swap dealer or major security-based swap participant, 
                as applicable, upon request.
            ``(4) Conflicts of interest.--The security-based swap 
        dealer and major security-based swap participant shall 
        implement conflict-of-interest systems and procedures that--
                    ``(A) establish structural and institutional 
                safeguards to assure that the activities of any person 
                within the firm relating to research or analysis of the 
                price or market for any security are separated by 
                appropriate informational partitions within the firm 
                from the review, pressure, or oversight of those whose 
                involvement in trading or clearing activities might 
                potentially bias their judgment or supervision; and
                    ``(B) address such other issues as the Commission 
                determines appropriate.
            ``(5) Antitrust considerations.--Unless necessary or 
        appropriate to achieve the purposes of this Act, the security-
        based swap dealer or major security-based swap participant 
        shall avoid--
                    ``(A) adopting any processes or taking any actions 
                that result in any unreasonable restraints of trade; or
                    ``(B) imposing any material anticompetitive burden 
                on trading.
    ``(k) Rules.--The Commission, the Commodity Futures Trading 
Commission, and the Prudential Regulators shall consult with each other 
prior to adopting any rules under the Over-the-Counter Derivatives 
Markets Act of 2009.
    ``(l) Statutory Disqualification.--Except to the extent otherwise 
specifically provided by rule, regulation, or order of the Commission, 
it shall be unlawful for a security-based swap dealer or a major 
security-based swap participant to permit any person associated with a 
security-based swap dealer or a major security-based swap participant 
who is subject to a statutory disqualification to effect or be involved 
in effecting security-based swaps on behalf of such security-based swap 
dealer or major security-based swap participant, if such security-based 
swap dealer or major security-based swap participant knew, or in the 
exercise of reasonable care should have known, of such statutory 
disqualification.
    ``(m) Enforcement and Administrative Proceeding Authority.--
            ``(1) Primary enforcement authority.--
                    ``(A) SEC.--Except as provided in subsection (b), 
                the Commission shall have primary authority to enforce 
                the provisions of the amendments made by subtitle B of 
                the Over-the-Counter Derivatives Markets Act of 2009 
                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 Act with respect to banks, and 
                branches or agencies of foreign banks that are 
                security-based swap dealers or major security-based 
                swap participants.
                    ``(C) Referral.--If the Prudential Regulator for a 
                security-based swap dealer or major security-based swap 
                participant has cause to believe that such security-
                based swap dealer or major security-based swap 
                participant may have engaged in conduct that 
                constitutes a violation of the nonprudential 
                requirements of section 15F or rules adopted by the 
                Commission thereunder, that Prudential Regulator may 
                recommend in writing to the Commission that the 
                Commission initiate an enforcement proceeding as 
                authorized under this Act. The recommendation shall be 
                accompanied by a written explanation of the concerns 
                giving rise to the recommendation.
                    ``(D) Backstop enforcement authority.--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 recommendation 
                under subparagraph (C), the Prudential Regulator may 
                initiate an enforcement proceeding as permitted under 
                Federal law.
            ``(2) Censure, denial, suspension; notice and hearing.--The 
        Commission, by order, shall censure, place limitations on the 
        activities, functions, or operations of, or revoke the 
        registration of any security-based swap dealer or major 
        security-based swap participant that has registered with the 
        Commission pursuant to subsection (b) if it finds, on the 
        record after notice and opportunity for hearing, that such 
        censure, placing of limitations, or revocation is in the public 
        interest and that such security-based swap dealer or major 
        security-based swap participant, or any person associated with 
        such security-based swap dealer or major security-based swap 
        participant effecting or involved in effecting transactions in 
        security-based swaps on behalf of such security-based swap 
        dealer or major security-based swap participant, whether prior 
        or subsequent to becoming so associated--
                    ``(A) has committed or omitted any act, or is 
                subject to an order or finding, enumerated in 
                subparagraph (A), (D), or (E) of paragraph (4) of 
                section 15(b);
                    ``(B) has been convicted of any offense specified 
                in subparagraph (B) of such paragraph (4) within 10 
                years of the commencement of the proceedings under this 
                subsection;
                    ``(C) is enjoined from any action, conduct, or 
                practice specified in subparagraph (C) of such 
                paragraph (4);
                    ``(D) is subject to an order or a final order 
                specified in subparagraph (F) or (H), respectively, of 
                such paragraph (4); or
                    ``(E) has been found by a foreign financial 
                regulatory authority to have committed or omitted any 
                act, or violated any foreign statute or regulation, 
                enumerated in subparagraph (G) of such paragraph (4).
            ``(3) 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) 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.
            ``(5) Exemptions.--The Commission may exempt, conditionally 
        or unconditionally, a security-based swap dealer or major 
        security-based swap participant from the prudential 
        requirements of the Over-the-Counter Derivatives Markets Act of 
        2009 if the Commission finds that such security-based swap 
        dealer or major security-based swap participant is subject to 
        comparable, comprehensive supervision and regulation on a 
        consolidated basis by the Commodity Futures Trading Commission, 
        a Prudential Regulator or the appropriate governmental 
        authorities in the organization's home country.
    ``(n) Exemptive Authority.--
            ``(1) In general.--The Commission, by rule or regulation, 
        may conditionally or unconditionally exempt any person, 
        derivative, or transaction, or any class or classes of persons, 
        derivatives, or transactions, from any provision of this Act 
        that was added by an amendment in the Over-the-Counter 
        Derivatives Markets Act of 2009, to the extent that such 
        exemption is necessary or appropriate in the public interest, 
        and is consistent with the purposes of such Act.
            ``(2) Procedures.--The Commission shall, by rule or 
        regulation, determine the procedures under which an exemptive 
        order under this subsection shall be granted and may, in its 
        sole discretion, decline to entertain any application for an 
        order of exemption under this subsection.''.

SEC. 3205. NATIONAL SECURITY EXCHANGE REGISTRATION REQUIREMENTS.

    Section 6(b) of the Securities Exchange Act of 1934 (15 U.S.C. 
78f(b)) is amended by adding at the end the following new paragraphs:
            ``(10) The rules of the exchange minimize conflicts of 
        interest in its decision-making process and establish a process 
        for resolving such conflicts of interest.
            ``(11) The rules of an exchange that trades security-based 
        swaps provide that a majority of the directors of the exchange 
        shall not be associated with a restricted owner.
            ``(12) The rules of an exchange that trades security-based 
        swaps provide that a restricted owner shall not be permitted 
        directly or indirectly to acquire beneficial ownership of 
        interests in the exchange or in persons with a controlling 
        interest in the exchange, to the extent that such an 
        acquisition would result in restricted owners controlling more 
        than 20 percent of the votes entitled to be cast on any matter 
        by the holders of the ownership interests.''.

SEC. 3206. 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 
section:

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

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

SEC. 3207. STATE GAMING AND BUCKET SHOP LAWS.

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

SEC. 3208. AMENDMENTS TO THE SECURITIES ACT OF 1933; TREATMENT OF 
              SECURITY-BASED SWAPS.

    (a) Definitions.--Section 2(a) of the Securities Act of 1933 (15 
U.S.C. 77b(a)) is amended--
            (1) in paragraph (1), by inserting ``security-based swap,'' 
        after ``security future,'';
            (2) in paragraph (3) by adding at the end the following: 
        ``Any offer or sale of a security-based swap by or on behalf of 
        the issuer of the securities upon which such security-based 
        swap is based or is referenced, an affiliate of the issuer, or 
        an underwriter, shall constitute a contract for sale of, sale 
        of, offer for sale, or offer to sell such securities.''; and
            (3) by adding at the end the following:
            ``(17) The terms `swap' and `security-based swap' have the 
        same meanings as provided in sections 1a(35) and (38) of the 
        Commodity Exchange Act (7 U.S.C. 1a(35) and (38)).
            ``(18) The terms `purchase' or `sale' of a security-based 
        swap shall be deemed to mean the execution, termination (prior 
        to its scheduled maturity date), assignment, exchange, or 
        similar transfer or conveyance of, or extinguishing of rights 
        or obligations under, a security-based swap, as the context may 
        require.''.
    (b) Exemption From Registration.--Section 3(a) of the Securities 
Act of 1933 is amended by adding at the end the following:
            ``(15) Any security-based swap, as defined in section 
        2(a)(17) that is not otherwise a security as defined in section 
        2(a)(1) and that satisfies such conditions as established by 
        rule or regulation by the Commission consistent with the 
        provisions of the Over-the-Counter Derivatives Markets Act of 
        2009. The Commission shall promulgate rules implementing this 
        exemption.''.
    (c) Registration of Security-based Swaps.--Section 5 of the 
Securities Act of 1933 (15 U.S.C. 77e) is amended by adding at the end 
the following:
    ``(d) Notwithstanding the provisions of section 3 or section 4, 
unless a registration statement meeting the requirements of subsection 
(a) of section 10 is in effect as to a security-based swap, it shall be 
unlawful for any person, directly or indirectly, to make use of any 
means or instruments of transportation or communication in interstate 
commerce or of the mails to offer to sell, offer to buy or purchase or 
sell a security-based swap to any person who is not an eligible 
contract participant as defined in section 1a(13) of the Commodity 
Exchange Act (7 U.S.C. 1a(13)).''.

SEC. 3209. OTHER AUTHORITY.

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

SEC. 3210. JURISDICTION.

    Section 36 of the Securities Exchange Act of 1934 (15 U.S.C. 78mm) 
is amended by adding at the end the following new subsection:
    ``(c) Exemptive Authority.--The Commission may use its authority 
under subsection (a) to exempt any person, security, or transaction, or 
any class of persons, securities, or transactions from any provision or 
provisions of this title or of any rule or regulation thereunder that 
applies to such person, security, or transaction solely because a 
security-based swap is a security, as such term is defined in section 
3(a) of this title.''.

SEC. 3211. EFFECTIVE DATE.

    This subtitle is effective 270 days after the date of enactment.

                       Subtitle C--Miscellaneous

SEC. 3301. STUDY ON FEASIBILITY OF REQUIRING USE OF STANDARDIZED 
              ALGORITHMIC DESCRIPTIONS FOR FINANCIAL DERIVATIVES.

    (a) 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.
    (b) 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:
            (1) commercial users and traders of derivatives;
            (2) derivative clearing houses, exchanges and electronic 
        trading platforms;
            (3) trade repositories and regulator investigations of 
        market activities; and
            (4) 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.
    (c) 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.
    (d) Report.--Within 8 months after the date of the enactment of 
this title, 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 subsections (a) 
through (c).

SEC. 3302. STUDY OF DESIRABILITY AND FEASIBILITY OF ESTABLISHING SINGLE 
              REGULATOR FOR ALL TRANSACTIONS INVOLVING FINANCIAL 
              DERIVATIVES.

    (a) In General.--The Secretary of the Treasury, the Commodity 
Futures Trading Commission, and the Securities and Exchange Commission 
shall conduct a joint study of the desirability and feasibility of 
establishing, by January 1, 2012, a single regulator for all 
transactions involving financial derivatives.
    (b) Report to the Congress.--Not later than December 1, 2010, 
Secretary of the Treasury, the Commodity Futures Trading Commission, 
and the Securities and Exchange Commission shall jointly submit to the 
Committees on Agriculture and on Financial Services of the House of 
Representatives and the Committees on Agriculture, Nutrition, and 
Forestry and on Banking, Housing, and Urban Affairs of the Senate a 
written report that contains the results of the study required by 
subsection (a).

SEC. 3303. RECOMMENDATIONS FOR CHANGES TO INSOLVENCY LAWS.

    Not later than 180 days after the date of enactment of this title, 
the Securities and Exchange Commission, the Commodity Futures Trading 
Commission, and the Prudential Regulators (as defined in section 1a of 
the Commodity Exchange Act, as amended by section 3101 of this title) 
shall transmit to Congress recommendations for legislative changes to 
the Federal insolvency laws--
            (1) in order to enhance the legal certainty with respect to 
        swap participants clearing non-proprietary swap positions with 
        a swap clearinghouse, including--
                    (A) customer rights to recover margin deposits or 
                custodial property held at or through an insolvent swap 
                clearinghouse, or clearing participant; and
                    (B) the enforceability of clearing rules relating 
                to the portability of customer swap positions (and 
                associated margin) upon the insolvency of a clearing 
                participant;
            (2) to clarify and harmonize the insolvency law framework 
        applicable to entities that are both commodity brokers (as 
        defined in section 101(6) of title 11, United States Code) and 
        registered brokers or dealers (as defined in section 3(a) of 
        the Securities Exchange Act of 1934 (15 U.S.C. 78c(a))); and
            (3) to facilitate the portfolio margining of securities and 
        commodity futures and options positions held through entities 
        that are both futures commission merchants (as defined in 
        section 1a of the Commodity Exchange Act) and registered 
        brokers or dealers (as defined in section 3 of the Securities 
        Exchange Act of 1934 (15 U.S.C. 78c(a))).

SEC. 3304. PROHIBITION AGAINST GOVERNMENT ASSISTANCE.

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

           TITLE IV--CONSUMER FINANCIAL PROTECTION AGENCY ACT

SEC. 4001. SHORT TITLE.

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

SEC. 4002. DEFINITIONS.

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

                Subtitle A--Establishment of the Agency

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

    (a) Agency Established.--There is established the Consumer 
Financial Protection Agency as an independent agency to regulate the 
provision of consumer financial products or services under this title, 
the enumerated consumer laws, and the authorities transferred under 
subtitles F and H.
    (b) Principal Office.--The principal office of the Agency shall be 
located in the city of Washington, District of Columbia, at 1 or more 
sites.

SEC. 4102. DIRECTOR.

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

SEC. 4103. CONSUMER FINANCIAL PROTECTION OVERSIGHT BOARD.

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

SEC. 4104. EXECUTIVE AND ADMINISTRATIVE POWERS.

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

SEC. 4105. ADMINISTRATION.

    (a) Officers.--The Director shall appoint the following officials:
            (1) A secretary, who shall be charged with maintaining the 
        records of the Agency and performing such other activities as 
        the Director directs.
            (2) A general counsel, who shall be charged with overseeing 
        the legal affairs of the Agency and performing such other 
        activities as the Director directs.
            (3) An inspector general, who shall have the authority and 
        functions of an inspector general of a designated Federal 
        entity under the Inspector General Act of 1978 (5 U.S.C. App. 
        3).
            (4) An Ombudsperson, who shall--
                    (A) develop and maintain expertise in and 
                understanding of the law relating to consumer financial 
                products;
                    (B) at the request of a Federal agency or a State 
                agency, and with the prior approval of the Director, 
                advise such agency with respect to actions that may 
                affect consumers;
                    (C) advise consumers who may have a legitimate 
                potential or actual claim against a Federal agency 
                involving the provision of consumer financial products 
                regarding their rights under this title;
                    (D) identify Federal agency actions that have 
                potential implications for consumers and, if 
                appropriate, and with the prior approval of the 
                Director, advise the relevant Federal agencies with 
                respect to those implications;
                    (E) provide information to private citizens, civic 
                groups, Federal agencies, State agencies, and other 
                interested parties regarding the rights of those 
                parties under this title;
                    (F) develop, maintain, and provide expertise 
                designed to assist covered persons, especially smaller 
                depository institutions and other smaller entities to 
                comply with regulations and other requirements issued 
                to implement the provisions of this title, and where 
                such assistance for smaller depository institutions 
                shall be provided jointly by the Agency and the 
                appropriate Federal banking agency;
                    (G) develop procedures to assist covered persons, 
                especially smaller depository institutions and other 
                smaller entities, in responding to or challenging 
                actions taken by the Director or the Agency to 
                implement the provisions of this title and to ensure 
                that safeguards exist to preserve the confidentiality 
                of covered persons using those procedures; and
                    (H) perform such other duties as the Director may 
                delegate to the Ombudsperson.
    (b) Personnel.--
            (1) Appointment.--
                    (A) In general.--The Director may fix the number 
                of, and appoint and direct, all employees of the 
                Agency.
                    (B) Expedited hiring.--The Director may appoint, 
                without regard to the provisions of sections 3309 
                through 3318, of title 5, United States Code, 
                candidates directly to positions for which public 
                notice has been given.
                    (C) Hiring veterans.--In hiring employees of the 
                Agency, the Director shall establish appropriate 
                targets, including timetables, to hire veterans (as 
                defined in paragraphs (1) and (2) of section 2108 of 
                title 5, United States Code) as employees of the 
                Agency. In establishing appropriate targets under this 
                paragraph, the Director may consider, among other 
                relevant factors, the proportion of veterans hired by 
                Federal agencies with comparable functions or types of 
                occupations and their experiences in hiring veterans.
            (2) Compensation.--
                    (A) Pay.--The Director shall fix, adjust, and 
                administer the pay for all employees of the Agency 
                without regard to the provisions of chapter 51 or 
                subchapter III of chapter 53 of title 5, United States 
                Code.
                    (B) Benefits.--The Director may provide additional 
                benefits to Agency employees if the same type of 
                benefits are then being provided by the Board of 
                Governors or, if not then being provided, could be 
                provided by the Board of Governors under applicable 
                provisions of law or regulations.
                    (C) Minimum standard.--The Director shall at all 
                times provide compensation and benefits to classes of 
                employees that, at a minimum, are equivalent to the 
                compensation and benefits provided by the Board of 
                Governors for the corresponding class of employees in 
                any fiscal year.
    (c) Specific Functional Units.--
            (1) Research.--The Agency shall establish a unit whose 
        functions shall include--
                    (A) conducting research on consumer financial 
                counseling and education, including--
                            (i) on the topics of debt, credit, savings, 
                        financial product usage, and financial 
                        planning;
                            (ii) exploring effective methods, tools, 
                        and approaches; and
                            (iii) identifying ways to incorporate new 
                        technology for the delivery and evaluation of 
                        financial counseling and education efforts;
                    (B) researching, analyzing, and reporting on--
                            (i) current and prospective developments in 
                        markets for consumer financial products or 
                        services, including market areas of alternative 
                        consumer financial products or services with 
                        high growth rates;
                            (ii) consumer awareness, understanding, and 
                        use of disclosures and communications regarding 
                        consumer financial products or services;
                            (iii) consumer awareness and understanding 
                        of costs, risks, and benefits of consumer 
                        financial products or services;
                            (iv) consumer behavior with respect to 
                        consumer financial products or services, 
                        including performance on mortgage loan; and
                            (v) experiences of traditionally 
                        underserved consumers, including un-banked and 
                        under-banked consumers, regarding consumer 
                        financial products or services;
                    (C) identifying priorities for consumer financial 
                education efforts, based on consumer complaints, 
                research or analysis conducted pursuant to subparagraph 
                (A), or other information; and
                    (D) testing and identifying methods of educating 
                consumers to determine which methods are most 
                effective.
            (2) Community affairs.--The Director shall establish a unit 
        whose functions shall include providing information, guidance, 
        and technical assistance regarding the provision of consumer 
        financial products or services to traditionally underserved 
        consumers and communities.
            (3) Consumer complaints.--
                    (A) In general.--The Director shall establish a 
                unit whose functions shall include establishing a 
                central database, or utilizing an existing database, 
                for collecting and tracking information on consumer 
                complaints about consumer financial products or 
                services and resolution of complaints.
                    (B) Coordination.--In performing the functions 
                described in subparagraph (A), the Director shall 
                coordinate with the Federal banking agencies, other 
                Federal agencies, and other regulatory agencies or 
                enforcement authorities.
                    (C) Data sharing required.--To the extent permitted 
                by law and the regulations prescribed by the Director 
                regarding the confidential treatment of information, 
                the Director shall share data relating to consumer 
                complaints with Federal banking agencies, other Federal 
                agencies, and State regulators. To the extent permitted 
                by law and the regulations prescribed by the Federal 
                banking agencies and other Federal agencies regarding 
                the confidential treatment of information, the Federal 
                banking agencies and other Federal agencies, 
                respectively, shall share data relating to consumer 
                complaints with the Director and the Agency.
            (4) Consumer financial education.--
                    (A) In general.--The Agency shall establish a unit 
                to be named the Office of Financial Literacy, whose 
                functions shall include activities designed to 
                facilitate the education of consumers on consumer 
                financial products and services, including through the 
                dissemination of materials to consumers on such topics.
                    (B) Director.--The Office of Financial Literacy 
                shall be headed by a director.
                    (C) Duties.--Such unit shall--
                            (i) develop goals for programs to be 
                        provided by persons that provide consumer 
                        financial education and counseling, including 
                        programs through which such persons--
                                    (I) provide one-on-one financial 
                                counseling;
                                    (II) help individuals understand 
                                basic banking and savings tools;
                                    (III) help individuals understand 
                                their credit history and credit score;
                                    (IV) assist individuals in efforts 
                                to plan for major purchases, reduce 
                                their debt, and improve their financial 
                                stability; and
                                    (V) work with individuals to design 
                                plans for long-term savings;
                            (ii) develop recommendations regarding 
                        effective certification of persons providing 
                        programs, or performing the activities, 
                        described in clause (i), including 
                        recommendations regarding--
                                    (I) certification processes and 
                                standards for certification;
                                    (II) appropriate certifying bodies; 
                                and
                                    (III) mechanisms for funding the 
                                certification processes;
                            (iii) develop a technology tool to collect 
                        data on financial education and counseling 
                        outcomes; and
                            (iv) conduct research to identify effective 
                        methods, tools, technoloy, and strategies to 
                        educate and counsel consumers about personal 
                        finance management, including on the topics of 
                        debt, credit, savings, financial product usage, 
                        and financial planning.
                    (D) Coordination.--Such unit shall coordinate with 
                other units within the Agency in carrying out its 
                functions, including--
                            (i) working with the unit established under 
                        paragraph (2) to--
                                    (I) provide information and 
                                resources to community organizations, 
                                nonprofit organizations, and other 
                                entities to assist in helping educate 
                                consumers about consumer financial 
                                products and services; and
                                    (II) develop a marketing strategy 
                                to promote financial education and one-
                                on-one counseling; and
                            (ii) working with the unit established 
                        under paragraph (1) to conduct research related 
                        to consumer financial education and counseling.
    (d) Single Toll-free Telephone Number for Consumer Complaints and 
Inquiries.--
            (1) Call intake system.--The Consumer Financial Protection 
        Agency shall establish a single, toll-free telephone number for 
        consumer complaints and inquiries concerning institutions 
        regulated by such agencies and a system for collecting and 
        monitoring complaints and, as soon as practicable, a system for 
        routing such calls to the Federal financial institution 
        regulatory agency that primarily supervises the financial 
        institution, or that is otherwise the appropriate Federal 
        agency to address the subject of the complaint or inquiry.
            (2) Routing calls to states.--To the extent practicable, 
        State agencies may receive appropriate call transfers from the 
        system established under paragraph (1) if--
                    (A) the State agency's system has the functional 
                capacity to receive calls routed by the system; and
                    (B) the State agency has satisfied any conditions 
                of participation in the system that the Council, 
                coordinating with State agencies through the 
                chairperson of the State Liaison Committee, may 
                establish.
    (e) Report to the Congress.--Before the end of the 6-month period 
beginning on the date of the enactment of this title, the Federal 
financial institution regulatory agencies shall submit a report to the 
Committee on Financial Services of the House of Representatives and the 
Committee on Banking, Housing, and Urban Affairs of the Senate 
describing the agencies' efforts to establish--
            (1) a public interagency Web site for directing and 
        referring Internet consumer complaints and inquiries concerning 
        any financial institution to the Consumer Financial Protection 
        Agency for purposes of collecting, monitoring, and responding 
        to such complaints and, where appropriate, a system for 
        referring complaints to the Federal financial institution 
        regulatory agency, other Federal agency, or State agency that 
        is otherwise the appropriate agency to address the subject of 
        the complaint or inquiry; and
            (2) a system to expedite the prompt and effective rerouting 
        of any misdirected consumer complaint or inquiry documents 
        between or among the agencies, with prompt referral of any 
        complaint or inquiry to the appropriate Federal financial 
        institution regulatory agency, and to participating State 
        agencies.
    (f) Office of Fair Lending and Equal Opportunity.--
            (1) Establishment.--Before the end of the 180-day period 
        beginning on the date of the enactment of this title, the 
        Director shall establish within the Agency the Office of Fair 
        Lending and Equal Opportunity.
            (2) Functions.--The Office of Fair Lending and Equal 
        Opportunity shall have such powers and duties as the Director 
        may delegate the Office which shall include the following 
        functions:
                    (A) Providing oversight and enforcement of Federal 
                laws intended to ensure the fair, equitable, and 
                nondiscriminatory access to credit for both individuals 
                and communities that are enforced by the Agency, 
                including the Equal Credit Opportunity Act and the Home 
                Mortgage Disclosure Act.
                    (B) Coordinating fair lending enforcement efforts 
                of the Agency with other Federal agencies and State 
                regulators, as appropriate, to promote consistent, 
                efficient and effective enforcement of Federal fair 
                lending laws.
                    (C) Working with private industry, fair lending, 
                civil rights, consumer and community advocates on the 
                promotion of fair lending compliance and education.
                    (D) Providing annual reports to the Congress on the 
                Agency's efforts to fulfill its fair lending mandate.
            (3) Administration of office.--There is hereby established 
        the position of Assistant Director of the Agency for Fair 
        Lending and Equal Opportunity who--
                    (A) shall be appointed by the Director;
                    (B) shall carry out such duties as the Director may 
                delegate to such Assistant Director; and
                    (C) shall serve as the Director of the Office of 
                Fair Lending and Equal Opportunity.
            (4) Prohibitions on participation in programs with respect 
        to certain indicted organizations.--
                    (A) Prohibition.--The Director of the Office of 
                Fair Lending and Equal Opportunity may not allow a 
                covered organization to participate in any program 
                established by such Director.
                    (B) Covered organization.--In this paragraph, the 
                term ``covered organization'' means any of the 
                following:
                            (i) Any organization that has been indicted 
                        for a violation under any Federal or State law 
                        governing the financing of a campaign for 
                        election for public office or any law governing 
                        the administration of an election for public 
                        office, including a law relating to voter 
                        registration.
                            (ii) Any organization that had its State 
                        corporate charter terminated due to its failure 
                        to comply with Federal or State lobbying 
                        disclosure requirements.
                            (iii) Any organization that has filed a 
                        fraudulent form with any Federal or State 
                        regulatory agency.
                            (iv) Any organization that--
                                    (I) employs any applicable 
                                individual, in a permanent or temporary 
                                capacity;
                                    (II) has under contract or retains 
                                any applicable individual; or
                                    (III) has any applicable individual 
                                acting on the organization's behalf or 
                                with the express or apparent authority 
                                of the organization.
                    (C) Additional definitions.--In this paragraph:
                            (i) The term ``organization'' includes the 
                        Association of Community Organizations for 
                        Reform Now (in this paragraph referred to as 
                        ``ACORN'') and any ACORN-related affiliate.
                            (ii) The term ``ACORN-related affiliate'' 
                        means any of the following:
                                    (I) Any State chapter of ACORN 
                                registered with the Secretary of 
                                State's office in that State.
                                    (II) Any organization that shares 
                                directors, employees, or independent 
                                contractors with ACORN.
                                    (III) Any organization that has a 
                                financial stake in ACORN.
                                    (IV) Any organization whose 
                                finances, whether federally funded, 
                                donor-funded, or raised through 
                                organizational goods and services, are 
                                shared or controlled by ACORN.
                            (iii) The term ``applicable individual'' 
                        means an individual who has been indicted for a 
                        violation under Federal or State law relating 
                        to an election for Federal or State office.
                    (D) Revision of federal acquisition regulation.--
                The Federal Acquisition Regulation shall be revised to 
                carry out the provisions of this paragraph relating to 
                contracts.
                    (E) Severability.--If any provision of this section 
                or any application of such provision to any person or 
                circumstance is held to be unconstitutional, the 
                remainder of this section and the application of the 
                provision to any other person or circumstance shall not 
                be affected.

SEC. 4106. CONSUMER ADVISORY BOARD.

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

SEC. 4107. COORDINATION.

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

SEC. 4108. REPORTS TO THE CONGRESS.

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

SEC. 4109. FUNDING; FEES AND ASSESSMENTS; PENALTIES AND FINES.

    (a) Transfer of Funds From the Board of Governors.--
            (1) Transfer required.--Each year, beginning on the 
        designated transfer date, the Board of Governors shall transfer 
        funds in an amount equaling 10 percent of the Federal Reserve 
        System's total system expenses (as reported in the Budget 
        Review of the Board of Governors most recent Annual Report to 
        Congress) to the Director for the purposes of carrying out the 
        authorities granted in this title, under the enumerated 
        consumer laws, and transferred under subtitles F and H.
            (2) Procedures.--The Board of Governors, in consultation 
        with the Agency, shall make appropriate arrangements to 
        transfer funds to the Director in accordance with this 
        subsection.
    (b) Fees and Assessments.--
            (1) Assessment required.--
                    (A) In general.--Taking into account such other 
                sums available to the Agency and subject to the 
                provisions of this subsection and subsection (d), the 
                Director shall assess fees on covered persons to meet 
                the Agency's expenses for carrying out the duties and 
                responsibilities of the Agency, including supervising 
                such covered persons.
                    (B) Basis for assessment.--The Agency shall assess 
                fees on covered persons pursuant to this subsection 
                based on the size and complexity of the covered person, 
                and the compliance record of the covered person under 
                the enumerated consumer laws, the laws and authorities 
                transferred under subtitles F and H, and this title.
            (2) Regulations.--
                    (A) In general.--The Director shall prescribe 
                regulations to govern the imposition and collection of 
                fees and assessments.
                    (B) Factors required to be addressed.--Regulations 
                prescribed by the Director under this subsection shall 
                specify and define--
                            (i) the basis of fees or assessments (such 
                        as the outstanding number of consumer credit 
                        accounts, off-balance sheet receivables 
                        attributable to the covered person, total 
                        consolidated assets, total assets under 
                        management, or volume of consumer financial 
                        transactions or use of service providers);
                            (ii) the amount and frequency of fees or 
                        assessments; and
                            (iii) such other factors that the Director 
                        determines are appropriate, which shall include 
                        a covered person's compliance record under the 
                        enumerated consumer laws, the authorities 
                        transferred under subtitles F and H, and this 
                        title.
            (3) Assessments on depository institution covered 
        persons.--
                    (A) Depository institution covered person 
                defined.--For purposes of this section, the term 
                ``depository institution covered person'' means a 
                covered person that is an insured depository 
                institution or credit union.
                    (B) Assessments.--
                            (i) Fees required.--The Director shall 
                        assess fees for supervision as are appropriate 
                        on depository institution covered persons, 
                        taking into account the size and complexity of 
                        the covered person, and the compliance record 
                        of the covered person under the enumerated 
                        consumer laws, the laws and authorities 
                        transferred under subtitles F and H, and this 
                        title.
                            (ii) Limitation on certain fees.--The 
                        Agency shall not assess examination fees on an 
                        institution referred to in section 4203(a), or 
                        an institution whose examination 
                        responsibilities have been delegated to an 
                        appropriate agency, pursuant to section 
                        4202(c)(11).
                            (iii) Basis for fee amounts.--Fees assessed 
                        by the Director under this subparagraph may be 
                        established at levels necessary to meet the 
                        Agency's expenses for carrying out the duties 
                        and responsibilities of the Director and the 
                        Agency under this title with regard to 
                        depository institution covered persons.
                    (C) Coordination during implementation period.--The 
                Director and the agencies responsible for chartering 
                and or supervising depository institution covered 
                persons shall coordinate on the levels of fees assessed 
                on depository institution covered persons under this 
                paragraph, so that levels of assessments under this 
                subparagraph combined with levels of assessments by 
                agencies responsible for chartering and or supervising 
                depository institution covered persons shall be no more 
                than the assessments such depository institution 
                covered person was required to pay for the 12-month 
                period ending on December 31, 2009.
                    (D) Marginal assessment rate.--
                            (i) In general.--In setting assessment 
                        rates for depository institution covered 
                        persons, the Director shall not impose 
                        assessments that result in higher marginal 
                        assessment rates for depository institution 
                        covered persons with assets of less than 
                        $25,000,000,000 than the marginal rates for 
                        depository institutions covered persons with 
                        assets that exceed that amount.
                            (ii) Rule of construction.--Clause (i) 
                        shall not be construed as limiting or impairing 
                        the authority of the Director to set 
                        assessments that would result in higher 
                        marginal assessment rates on the larger 
                        depository institution covered persons.
                    (E) Limitations on assessments.--
                            (i) Assessments for administrative costs.--
                        Notwithstanding any provision in this title, no 
                        depository institution covered person shall be 
                        charged an assessment to be used for the 
                        supervision, examination, enforcement or 
                        regulation by the Agency of nondepository 
                        covered persons.
                            (ii) Amounts paid for consumer compliance 
                        supervision.--Notwithstanding any provision in 
                        this title, no depository institution covered 
                        person shall pay more for consumer compliance 
                        supervision than it paid before the date of 
                        enactment of this title.
            (4) Assessments on nondepository covered persons.--
                    (A) Nondepository covered person defined.--For 
                purposes of this section, the term ``nondepository 
                covered person''--
                            (i) means a covered person that is not a 
                        credit union or insured depository institution; 
                        and
                            (ii) includes any bank holding company.
                    (B) Assessments.--
                            (i) Fees required.--The Director shall 
                        assess fees for registration, examination, and 
                        supervision of nondepository covered persons.
                            (ii) Basis for fee amounts.--Fees assessed 
                        by the Director under this subparagraph may be 
                        established at levels necessary to meet the 
                        Agency's expenses for carrying out the duties 
                        and responsibilities of the Director and the 
                        Agency, including supervising such covered 
                        persons, taking into account such other sums 
                        available to the Agency.
                            (iii) Registration fee minimums.--
                        Registration fees imposed on a nondepository 
                        covered person under this paragraph shall, at a 
                        minimum, be imposed on such covered person at 
                        the time the person registers (or periodically 
                        renews any such registration) with the Agency, 
                        in accordance with regulations prescribed by 
                        the Director.
                    (C) Nondepository covered person assessment not 
                less than for depository covered persons.--Assessment 
                rates levied by the Director under this section on a 
                nondepository institution covered persons shall be no 
                less than assessments levied by the Agency under this 
                section on a depository institution covered person with 
                similar characteristics.
    (c) Authorization of Appropriations.--
            (1) In general.--For the purposes of carrying out the 
        authorities granted in this title, under the enumerated 
        consumer laws, and the laws and authorities transferred under 
        subtitles F and H, there are authorized to be appropriated to 
        the Director such sums as may be necessary for any fiscal year.
            (2) Apportionment.--Notwithstanding any other provision of 
        law, such amounts shall be subject to apportionment under 
        section 1517 of title 31, United States Code, and restrictions 
        that generally apply to the use of appropriated funds in title 
        31, United States Code, and other laws.
            (3) Other available funds taken into account.--Sums 
        appropriated under this subsection shall take into account such 
        other sums available to the Agency under this section.
    (d) Consumer Financial Protection Agency Depository Institution 
Fund.--
            (1) Establishment.--
                    (A) In general.--There is established in the 
                Treasury a separate fund to be known as the ``Consumer 
                Financial Protection Agency Depository Institution 
                Fund'' (hereafter in this section referred to as the 
                ``CFPA Depository Fund'').
                    (B) Amounts in fund not available for certain 
                purposes.--Other than pursuant to subsection (f), 
                amounts on deposit in the CFPA Depository Fund shall 
                not be used in the supervision and examination of 
                nondepository institution covered persons.
            (2) All transferred funds deposited.--All amounts 
        transferred to the Agency under subsection (a) shall be 
        deposited into the CFPA Depository Fund.
            (3) All applicable supervisory fees and assessments 
        deposited.--The Director shall deposit all amounts received 
        from assessments under subsection (b)(3) in the CFPA Depository 
        Fund.
    (e) Consumer Financial Protection Agency Nondepository Institution 
Fund.--
            (1) Establishment.--
                    (A) In general.--There is established in the 
                Treasury a separate fund called the Consumer Financial 
                Protection Agency Nondepository Institution Fund 
                (hereafter in this section referred to as the ``CFPA 
                Nondepository Fund'').
                    (B) Amounts in fund not available for certain 
                purposes.--Other than pursuant to subsection (f), 
                amounts on deposit in the CFPA Nondepository Fund shall 
                not be used for the supervision and examination of 
                depository institution covered persons.
            (2) All applicable supervisory fees and assessments 
        deposited.--The Director shall deposit all amounts received 
        from assessments under subsection (b)(4) in the CFPA 
        Nondepository Fund.
    (f) General Provisions Relating to Funds.--
            (1) Maintenance of funds.--
                    (A) Agency funds maintained by treasury.--The 
                Consumer Financial Protection Agency Depository 
                Institution Fund established under subsection (d) and 
                the Consumer Financial Protection Agency Nondepository 
                Institution Fund established under subsection (e) shall 
                each be--
                            (i) maintained and administered by the 
                        Secretary; and
                            (ii) maintained separately and not 
                        commingled.
                    (B) Agency's authority.--Any provision of this 
                title forbidding the commingling or use of the CFPA 
                Depository Fund and the CFPA Nondepository Fund shall 
                not be construed as limiting or impairing the authority 
                of the Agency to use the same facilities and resources 
                in the course of conducting supervisory and regulatory 
                functions with respect to depository institutions and 
                nondepository institutions, or to integrate such 
                functions.
                    (C) Accounting requirements.--
                            (i) Accounting for use of facilities and 
                        resources.--The Agency shall keep a full and 
                        complete accounting of all costs and expenses 
                        associated with the use of any facility or 
                        resource used in the course of any function 
                        specified in subparagraph (B) and shall 
                        allocate, in the manner provided in 
                        subparagraph (D), any such costs and expenses 
                        incurred by the Agency--
                                    (I) with respect to depository 
                                institution covered persons, to the 
                                CFPA Depository Fund; and
                                    (II) with respect to nondepository 
                                covered persons, to the CFPA 
                                Nondepository fund.
                    (D) Allocation of administrative expenses.--Any 
                personnel, administrative, or other overhead expense of 
                the Agency shall be allocated--
                            (i) fully to the CFPA Depository Fund if 
                        the expense was incurred directly as a result 
                        of the Agency's responsibilities solely with 
                        respect to depository institution covered 
                        persons;
                            (ii) fully to the CFPA Nondepository Fund, 
                        if the expense was incurred directly as a 
                        result of the Agency's responsibilities solely 
                        with respect to nondepository covered persons;
                            (iii) between the CFPA Depository Fund and 
                        the CFPA Nondepository Fund, in amounts 
                        reflecting the relative degree to which the 
                        expense was incurred as a result of the 
                        activities of depository institution covered 
                        persons, and nondepository covered persons; and
                            (iv) if the Director is unable to make a 
                        complete allocation under clause (i), (ii), or 
                        (iii), between the CFPA Depository Fund and the 
                        CFPA Nondepository Fund, in amounts reflecting 
                        the relative proportion that, as of the end of 
                        the preceding year--
                                    (I) the aggregate assets of all 
                                depository institution covered persons 
                                bears to the aggregate assets of all 
                                covered persons; and
                                    (II) the aggregate assets of all 
                                nondepository covered persons bears to 
                                the aggregate assets of all covered 
                                persons.
                    (E) Agency fund.--The ``Agency fund'' means the 
                Consumer Financial Protection Agency Depository 
                Institution Fund established under subsection (d), and, 
                the Consumer Financial Protection Agency Nondepository 
                Institution Fund established under subsection (e), and 
                the Consumer Financial Protection Agency Civil Penalty 
                Fund established under subsection (g).
            (2) Investment.--
                    (A) Amounts in funds may be invested.--The Director 
                may request the Secretary to invest the portion of any 
                Agency fund that, in the Director's judgment, is not 
                required to meet the current needs of such fund.
                    (B) Eligible investments.--Investments pursuant to 
                subparagraph (A) shall be made by the Secretary in 
                obligations of the United States or obligations that 
                are guaranteed as to principal and interest by the 
                United States, with maturities suitable to the needs of 
                the Agency fund involved, as determined by the 
                Director.
                    (C) Interest and proceeds credited.--The interest 
                on, and the proceeds from the sale or redemption of, 
                any obligations held in the respective Agency Fund 
                shall be credited to and form a part of the respective 
                Agency Fund.
            (3) Use of funds.--Funds obtained by, transferred to, or 
        credited to any Agency fund shall be immediately available to 
        the Agency, and remain available until expended, to pay the 
        expenses of the Agency in carrying out the duties and 
        responsibilities of the Director and the Agency, including the 
        payment of compensation of the Director and officers and 
        employees of the Agency.
            (2) Fees, assessments and other funds not government 
        funds.--Funds obtained by or transferred to any Agency 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 any Agency fund shall 
        not be subject to apportionment for purposes of chapter 15 of 
        title 31, United States Code, or under any other authority.
    (g) Penalties and Fines.--
            (1) Establishment of victims relief fund.--There is 
        established in the Treasury of the United States a fund to be 
        known as the ``Consumer Financial Protection Agency Civil 
        Penalty Fund'' (hereafter in this section referred to as the 
        ``Civil Penalty Fund'').
            (2) Deposits.--If the Agency obtains a civil penalty 
        against any person in any judicial or administrative action 
        under this title, any law or authority transferred under 
        subtitles F and H, or any enumerated consumer law, the Agency 
        shall deposit into the Civil Penalty Fund the amount of the 
        penalty collected.
            (3) Payment to victims.--Amounts in the Civil Penalty Fund 
        shall be available to the Director, without fiscal year 
        limitation, for payments to the victims of activities for which 
        civil penalties have been imposed under this title, the law and 
        authorities transferred under subtitles F and H, or any 
        enumerated consumer law.

SEC. 4110. AMENDMENTS RELATING TO OTHER ADMINISTRATIVE PROVISIONS.

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

SEC. 4111. EFFECTIVE DATE.

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

         Subtitle B--General Powers of the Director and Agency

SEC. 4201. MANDATE AND OBJECTIVES.

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

SEC. 4202. AUTHORITIES.

    (a) In General.--The Director may exercise the authorities granted 
in this title, in the enumerated consumer laws, and transferred under 
subtitles F and H, to administer, enforce, and otherwise implement the 
provisions of this title, the authorities transferred in subtitles F 
and H, and the enumerated consumer laws.
    (b) Rulemaking, Orders, and Guidance.--
            (1) In general.--The Director may prescribe regulations and 
        issue orders and guidance as may be necessary or appropriate to 
        enable it to administer and carry out the purposes and 
        objectives of this title, the authorities transferred under 
        subtitles F and H, and the enumerated consumer laws, and to 
        prevent evasions of this title, any such authority, and any 
        such law.
            (2) Standards for rulemaking.--In prescribing a regulation 
        under this title or pursuant to the authorities transferred 
        under subtitles F and H or the enumerated consumer laws, the 
        Director shall--
                    (A) consider the potential benefits and costs to 
                consumers and covered persons, including the potential 
                reduction of consumers' access to consumer financial 
                products or services, resulting from such regulation; 
                and
                    (B) consult with the Federal banking agencies, 
                State bank supervisors, the Federal Trade Commission, 
                or other Federal agencies, as appropriate, regarding 
                the consistency of a proposed regulation with 
                prudential, consumer protection, civil rights, market, 
                or systemic objectives administered by such agencies or 
                supervisors.
            (3) Exemptions.--
                    (A) In general.--The Director, by regulation or 
                order, may conditionally or unconditionally exempt any 
                covered person, service provider, or any consumer 
                financial product or service or any class of covered 
                persons, class of service providers, or consumer 
                financial products or services, from any provision of 
                this title, any enumerated consumer law, or from any 
                regulation under any such provision or law, as the 
                Director deems necessary or appropriate to carry out 
                the purposes and objectives of this title taking into 
                consideration the factors in subparagraph (B).
                    (B) Factors.--In issuing an exemption by regulation 
                or order as permitted in subparagraph (A), the Director 
                shall as appropriate take into consideration the 
                following:
                            (i) The total assets of the covered person.
                            (ii) The volume of transactions involving 
                        consumer financial products or services in 
                        which the covered person engages.
                            (iii) The extent to which the covered 
                        person engages in 1 or more financial 
                        activities.
                            (iv) Existing laws or regulations which are 
                        applicable to the consumer financial product or 
                        service and the extent to which such laws or 
                        regulations provide consumers with adequate 
                        protections.
                    (C) Rule of construction.--No provision of this 
                section shall be construed as altering, amending, or 
                affecting any authority under sections 304(a), 304(i), 
                305(a), and 306(b) of the Home Mortgage Disclosure Act 
                of 1975 and sections 703(a)(1), 703(a)(2), 703(a)(3), 
                705(f), and 705(g) of the Equal Credit Opportunity Act 
                for determining whether a covered person should be 
                provided an exemption.
    (c) Examinations and Reports.--
            (1) In general.--Except as provided under section 4203, the 
        Director may on a periodic basis examine a covered person or 
        service provider, with respect to any consumer financial 
        product or service, for purposes of ensuring compliance with 
        the requirements of this title, the enumerated consumer laws, 
        and any regulations prescribed by the Director under this title 
        or pursuant to the authorities transferred under subtitles F 
        and H, and enforcing compliance with such requirements.
            (2) Examination program.--The Director shall exercise any 
        authority of the Director under paragraph (1) in a manner 
        designed to ensure that such authorities are exercised with 
        respect to covered persons or service providers, without regard 
        to charter or corporate form, based on the Director's 
        assessment of the risks posed to consumers in the relevant 
        product markets and geographic markets, and taking into 
        consideration, as applicable, the following factors:
                    (A) The asset size of the covered persons.
                    (B) The volume of transactions involving consumer 
                financial products or services in which the covered 
                persons engage.
                    (C) The risks to consumers created by the provision 
                of such consumer financial products or services.
                    (D) In the case of State-chartered institutions, 
                the extent to which such institutions are subject to 
                oversight by State authorities for consumer protection.
            (3) Coordination.--The Director shall coordinate the 
        Agency's supervisory activities with the supervisory activities 
        conducted by the Federal banking agencies and the State bank 
        supervisors, including establishing their respective schedules 
        for examining covered persons and requirements regarding 
        reports to be submitted by covered persons.
            (4) Reports.--The Director may require reports from a 
        covered person for purposes of ensuring compliance with the 
        requirements of this title, the enumerated consumers laws, and 
        any regulation prescribed by the Director under this title or 
        pursuant to the authorities transferred under subtitles F and 
        H, and enforcing compliance with such requirements.
            (5) Content of reports.--The reports authorized in 
        paragraph (4) may include such information as necessary to keep 
        the Agency informed as to--
                    (A) the compliance systems or procedures of the 
                covered person or any affiliate thereof, with 
                applicable provisions of this title or any other law 
                that the Agency has jurisdiction to enforce; and
                    (B) matters related to the provision of consumer 
                financial products or services including the servicing 
                or maintenance of accounts or extensions of credit.
            (6) Use of existing reports.--In general, the Agency shall, 
        to the fullest extent possible, use--
                    (A) reports that a covered person, or any affiliate 
                thereof, or any service provider to such covered person 
                or affiliate, has provided or been required to provide 
                to a Federal or State agency; and
                    (B) information that has been reported publicly.
            (7) Access by the agency to reports of other regulators.--
                    (A) Examination and financial condition reports.--
                Upon providing reasonable assurances of 
                confidentiality, the Agency shall have access to any 
                report of examination or financial condition, including 
                a report containing data regarding consumer complaints, 
                made by a Federal banking agency or other Federal 
                agency having supervision of a covered person, or a 
                service provider, (other than returns and return 
                information described in section 6103 of the Internal 
                Revenue Code of 1986) and to all revisions made to any 
                such report.
                    (B) Provision of other reports to agency.--In 
                addition to the reports described in subparagraph (A), 
                a Federal banking agency may, in its discretion, 
                furnish to the Agency any other report or other 
                confidential supervisory information concerning any 
                insured depository institution, any credit union, or 
                other entity examined by such agency under authority of 
                any Federal law.
            (8) Access by other regulators to reports of the agency.--
                    (A) Examination reports.--Upon providing reasonable 
                assurances of confidentiality, a Federal banking 
                agency, a State regulator, or any other Federal agency 
                having supervision of a covered person shall have 
                access to any report of examination made by the Agency 
                with respect to the covered person or service provider, 
                and to all revisions made to any such report.
                    (B) Provision of other reports to other 
                regulators.--In addition to the reports described in 
                paragraph (A), the Agency may, in the discretion of the 
                Agency, furnish to a Federal banking agency any other 
                report or other confidential supervisory information 
                concerning any insured depository institution, any 
                credit union, or other entity examined by the Agency 
                under authority of any Federal law.
            (9) Preservation of authority.--No provision in paragraph 
        (3) shall be construed as preventing the Agency from conducting 
        an examination authorized by this title or under the 
        authorities transferred under subtitles F and H or pursuant to 
        any enumerated consumer law. No provision of this title shall 
        be construed as limiting the authority of the Director to 
        require reports from a covered person, as permitted under 
        paragraph (4), regarding information owned or under the control 
        of the covered person, regardless of whether such information 
        is maintained, stored, or processed by another person.
            (10) Reports of tax law noncompliance.--The Director shall 
        provide the Commissioner of Internal Revenue with any report of 
        examination or related information identifying possible tax law 
        noncompliance.
            (11) Delegation.--
                    (A) In general.--The Director may delegate the 
                examination authorities of the Agency under this title 
                to any appropriate agency, as defined in section 4203, 
                for any insured depository institution or insured 
                credit union that is not subject to section 4203 upon a 
                petition by an appropriate agency.
                    (B) Standard for delegation.--The Director shall 
                provide such delegation if, in the Director's sole 
                discretion, the Director determines that--
                            (i) the delegation is consistent with the 
                        public interest;
                            (ii) the appropriate agency is capable of 
                        enforcing compliance with this title, and with 
                        any regulation prescribed under this title; and
                            (iii) such capability is comparable to or 
                        superior to the capability of the Agency, in 
                        terms of expertise, demonstrated commitment, 
                        and overall effectiveness, in enforcing such 
                        compliance.
                    (C) Effect of delegation.--The insured depository 
                institution or insured credit union shall be subject to 
                the examination process described in section 4203(b).
                    (D) No effect on enforcement.--The Director's 
                delegation authority under this paragraph shall not 
                apply to the Director's enforcement responsibilities 
                under subsection (e).
    (d) Exclusive Rulemaking and Examination Authority.--
Notwithstanding any other provision of Federal law other than section 
4203 and subsections (f) and (h) of this section, to the extent that a 
Federal law authorizes the Director and another Federal agency to 
prescribe regulations, issue guidance, conduct examinations, or require 
reports under that law for purposes of assuring compliance with this 
title, any enumerated consumer law, the laws for which authorities were 
transferred under subtitles F and H, and any regulations prescribed 
under this title or pursuant to any such authority, the Director shall 
have the exclusive authority to prescribe regulations, issue guidance, 
conduct examinations, require reports, or issue exemptions with regard 
to any person subject to that law and with respect to any activity 
regulated under any enumerated consumer law.
    (e) Primary Enforcement Authority.--
            (1) The agency to have primary enforcement authority.--To 
        the extent that a Federal law authorizes the Agency and another 
        Federal agency to enforce that law, the Agency shall have 
        primary authority to enforce that Federal law with respect to 
        any person in accordance with this subsection.
            (2) Coordination with federal trade commission.--
                    (A) Notice.--If the Commission is authorized to 
                enforce any Federal law described in paragraph (1), or 
                a regulation prescribed under any such Federal law, the 
                Commission shall serve written notice to the Director 
                of any enforcement action at least 30 days prior to 
                initiating such an enforcement action, except that if 
                exigent circumstances are present, the Commission may 
                provide notice immediately upon initiating such 
                enforcement action.
                    (B) Intervention by the director.--Upon receiving 
                any notice under subparagraph (A) with respect to an 
                enforcement action, the Director may intervene in such 
                enforcement action and upon intervening--
                            (i) be heard on all matters arising in such 
                        enforcement action; and
                            (ii) file petitions for appeal in such 
                        enforcement action.
                    (C) Pendency of agency action.--Whenever a civil 
                action has been instituted by or on behalf of the 
                Agency for any violation of any Federal law described 
                in paragraph (1), or a regulation prescribed under any 
                such Federal law, the Commission may not, during the 
                pendency of that action instituted by or on behalf of 
                the Agency, institute a civil action under such law or 
                regulation against any defendant named in the Agency 
                complaint in such action for any violation alleged in 
                the Agency complaint.
                    (D) Agreements between agencies.--
                            (i) Negotiations authorized.--The Director 
                        may negotiate an agreement with the Commission 
                        to establish procedures to ensure that the 
                        enforcement actions of the 2 agencies are 
                        appropriately coordinated.
                            (ii) Scope of negotiated agreement.--The 
                        terms of any agreement negotiated pursuant to 
                        clause (i) may modify or supersede the 
                        provisions of subparagraphs (A), (B), and (C).
            (3) Coordination with other federal agency.--
                    (A) Referral.--Any Federal agency (other than the 
                Federal Trade Commission) that is authorized to enforce 
                a Federal law described in paragraph (1) may recommend 
                in writing to the Director that the Agency initiate an 
                enforcement proceeding to the extent the Agency is 
                authorized by that Federal law or by this title. The 
                recommendation shall be accompanied by a written 
                explanation of the concerns giving rise to the 
                recommendation.
                    (B) Backstop enforcement authority of other federal 
                agency.--If the Agency does not, before the end of the 
                120-day period beginning on the date on which the 
                Director receives a recommendation under subparagraph 
                (A), initiate an enforcement proceeding, the other 
                agency referred to in subparagraph (A) may initiate an 
                enforcement proceeding as permitted by that Federal 
                law.
            (4) Institutions subject to special examination and 
        enforcement procedures.--This subsection shall not apply to 
        institutions subject to section 4203.
    (f) Preservation of Other Authority.--
            (1) Attorney general.--No provision of this title shall be 
        construed as affecting any authority of the Attorney General.
            (2) Secretary of the treasury.--No provision of this title 
        shall be construed as affecting any authority of the Secretary 
        of the Treasury, including with respect to prescribing 
        regulations, initiating enforcement proceedings, or taking 
        other actions with respect to a person providing tax planning 
        or tax preparation services.
            (3) Fair housing act.--No provision of this title shall be 
        construed as affecting any authority arising under the Fair 
        Housing Act.
    (g) Effect on Other Authority.--No provision of this section or 
section 4203 shall be construed as modifying or limiting the authority 
of any appropriate Federal banking agency or the Director or Agency to 
interpret, or take enforcement action under, any law or regulation the 
interpretation or enforcement of which is committed to the banking 
agency or the Director or Agency, which shall include, in the case of 
the Director and the Agency, this title, the enumerated consumer laws, 
and the regulations prescribed under this title or such laws.
    (h) Preservation of Federal Trade Commission Authority.--No 
provision of this title shall be construed as modifying, limiting, or 
otherwise affecting the authority of the Federal Trade Commission under 
the Federal Trade Commission Act or other laws other than the 
enumerated consumer laws.

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

     (a) Scope of Institutions Subject to This Section.--
            (1) Institutions covered.--This section shall apply to--
                    (A) any insured depository institution with total 
                assets of $10,000,000,000 or less; or
                    (B) any insured credit union with total assets of 
                $1,500,000,000 or less.
            (2) Appropriate agency.--For purposes of this title, the 
        term ``appropriate agency'' means--
                    (A) in the case of an insured depository 
                institution, the appropriate Federal banking agency as 
                such term is defined in section 3 of the Federal 
                Deposit Insurance Act; and
                    (B) in the case of an insured credit union, the 
                National Credit Union Administration.
    (b) Examinations.--
            (1) In general.--The appropriate agency shall on a periodic 
        basis examine, or require reports from, an institution referred 
        to in subsection (a) for purposes of ensuring compliance with 
        the requirements of this title, the enumerated consumer laws, 
        and any regulation prescribed by the Director under this title 
        or pursuant to the authorities transferred under subtitles F 
        and H, and enforcing compliance with such requirements.
            (2) Agency role in examinations.--
                    (A) The appropriate agency shall provide all 
                reports, records, and documentation related to the 
                examination process to the Agency on a timely and 
                ongoing basis.
                    (B) The Director and Agency may, at its discretion, 
                include an examiner on any examination conducted under 
                paragraph (1). The appropriate agency shall involve 
                such Agency examiner in the entire examination process, 
                including setting the scope of an examination, 
                participating in the examination, and providing input 
                on the examination report, matters requiring attention 
                and examination ratings.
    (c) Enforcement.--
            (1) In general.--Notwithstanding any other provision of 
        this title other than this subsection, the appropriate agency 
        shall have primary authority to enforce violations identified 
        at institutions referred to in subsection (a) of any of the 
        requirements of this title, the enumerated consumers laws, and 
        any regulation prescribed by the Director under this title or 
        pursuant to the authorities transferred under subtitles F and 
        H.
            (2) Coordination with appropriate agency.--
                    (A) Referral.--
                            (i) In general.--The Agency may recommend 
                        in writing to the appropriate agency that the 
                        appropriate agency initiate an enforcement 
                        proceeding to the extent the appropriate agency 
                        is authorized by that Federal law or by this 
                        title.
                            (ii) Explanation.--Any recommendation under 
                        clause (i) shall be accompanied by a written 
                        explanation of the concerns giving rise to the 
                        recommendation.
                    (B) Backstop enforcement authority of agency.--If 
                the appropriate agency does not, before the end of the 
                120-day period beginning on the date on which the 
                appropriate agency receives a recommendation under 
                subparagraph (A), initiate an enforcement proceeding, 
                the Agency may initiate an enforcement proceeding as 
                permitted by Federal law.
    (d) Actions Arising Out of Consumer Complaint System.--
Notwithstanding any provision of this section, if through the consumer 
complaint system administered by the Agency under section 4105(c)(3), 
the Director has reasonable cause to believe that an institution 
referred to in subsection (a) demonstrates noncompliance with any 
provision of this title, the enumerated consumer laws, or any 
regulation prescribed by the Director under this title or pursuant to 
the authorities transferred under subtitles F and H, the Director may 
directly investigate such institution for such noncompliance and take 
any action permitted under subtitle E that the Director deems 
appropriate.
    (e) Removal of Appropriate Agency for Particular Institution.--
            (1) Heightened supervision.--The Director--
                    (A) may provide notice to an appropriate agency 
                that the Director is considering issuing a removal 
                order under paragraph (2); and
                    (B) shall have an Agency examiner participate in 
                the examination process under subsection (b) for at 
                least 1 examination cycle.
            (2) Removal by order.--If, after the completion of at least 
        1 examination cycle following the provision of notice to an 
        appropriate agency under paragraph (1), the Director determines 
        in writing that the appropriate agency has failed to adequately 
        conduct consumer compliance examinations or bring appropriate 
        enforcement actions against an institution referred to in 
        subsection (a), the Director may order the removal of the 
        appropriate agency from its responsibilities under this section 
        for such institution.
            (3) Agency authority upon removal.--Upon removal pursuant 
        to paragraph (2), the Agency shall examine and enforce against 
        such institution as if the institution were subject to section 
        4202.
            (4) Effective date.--An order under paragraph (2) shall 
        take effect 30 days after a determination by the Secretary of 
        the Treasury pursuant to paragraphs (5) and (6).
            (5) Automatic appeal.--An order issued by the Director 
        pursuant to paragraph (2) shall be automatically appealed to 
        the Secretary.
            (6) Decision by the secretary of the treasury.--
                    (A) Determination.--The order issued pursuant to 
                paragraph (2) shall be deemed affirmed unless the 
                Secretary of the Treasury denies the determination of 
                the Director within 120 days of the issuance of the 
                order pursuant to paragraph (2).
                    (B) Rule of construction.--Nothing in subparagraph 
                (A) shall be construed as prohibiting the Secretary of 
                the Treasury from making a determination to either 
                affirm or deny an order issued pursuant to paragraph 
                (2) prior to the passage of the time period in 
                subparagraph (A).
            (7) Regulations.--By the transfer date, the Secretary shall 
        issue regulations that establish the standards the Director 
        shall apply in making a determination to remove an appropriate 
        agency and the process, procedures, and standards for an 
        appeal. Such standards shall require the Director to consider 
        at least the following in issuing an order removing an 
        appropriate agency for an institution referred to in subsection 
        (a)(1):
                    (A) Reports of examination of such institution.
                    (B) Any enforcement actions taken by an appropriate 
                agency against such institution and the results of 
                those actions.
                    (C) Consumer complaints issued against such 
                institution.
                    (D) Actions taken by State attorneys general and 
                private rights of action against such institution.
    (f) Policies and Procedures.--Within 180 days after the designated 
transfer date, the Agency and the appropriate agency shall develop 
policies and procedures for implementing this section.
    (g) Assessments.--
            (1) Limitation on certain fees.--The Agency shall not 
        assess examination fees on an institution referred to in 
        subsection (a).
            (2) Rule of construction.--No provision of this section 
        shall be construed as preventing the appropriate agency from 
        assessing fees on an institution referred to in paragraph (1) 
        to meet the appropriate agency's expenses for carrying out such 
        examination and supervision responsibilities pursuant to this 
        section.

SEC. 4204. SIMULTANEOUS AND COORDINATED SUPERVISORY ACTION.

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

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

    (a)  Exclusion for Merchants, Retailers, and Sellers of 
Nonfinancial Services.--
            (1) In general.--Notwithstanding any provision of this 
        title (other than paragraph (4)) and subject to paragraph (2), 
        the Director and the Agency may not exercise any rulemaking, 
        supervisory, enforcement or other authority, including 
        authority to order assessments, under this title with respect 
        to--
                    (A) credit extended directly by a merchant, 
                retailer, or seller of nonfinancial services to a 
                consumer, in a case in which the good or service being 
                provided is not itself a consumer financial product or 
                service, exclusively for the purpose of enabling that 
                consumer to purchase goods or services directly from 
                the merchant, retailer, or seller of nonfinancial 
                services; or
                    (B) collection of debt, directly by the merchant, 
                retailer, or seller of nonfinancial services, arising 
                from such credit extended.
            (2) Exception for existing authority.--The Director may 
        exercise any rulemaking authority regarding an extension of 
        credit described in paragraph (1)(A) or the collection of debt 
        arising from such extension, as may be authorized by the 
        enumerated consumer laws or any law or authority transferred 
        under subtitle F or H.
            (3) Rule of construction.--No provision of this title shall 
        be construed as modifying, limiting, or superseding the 
        authority of the Federal Trade Commission or any other agency 
        with respect to credit extended, or the collection of debt 
        arising from such extension, directly by a merchant, retailer, 
        or seller of nonfinancial services to a consumer exclusively 
        for the purpose of enabling that consumer to purchase goods or 
        services directly from the merchant, retailer, or seller of 
        nonfinancial services.
            (4) Exclusion not applicable to certain credit 
        transactions.--Paragraph (1) shall not apply to--
                    (A) any credit transaction, including the 
                collection of the debt arising from such extension, in 
                which the merchant, retailer, or seller of nonfinancial 
                services assigns, sells, or otherwise conveys such debt 
                owed by the consumer to another person; or
                    (B) any credit transaction--
                            (i) in which the credit provided 
                        significantly exceeds the market value of the 
                        product or service provided, and
                            (ii) with respect to which the Director 
                        finds that the sale of the product or service 
                        is done as a subterfuge so as to evade or 
                        circumvent the provisions of this title.
    (b) Exclusion for Persons Regulated by the Securities and Exchange 
Commission.--
            (1) In general.--No provision of this title shall be 
        construed as altering, amending, or affecting the authority of 
        the Securities and Exchange Commission or any securities 
        commission (or any agency or office performing like functions) 
        of any State to adopt rules, initiate enforcement proceedings, 
        or take any other action with respect to a person regulated by 
        the Securities and Exchange Commission or any securities 
        commission (or any agency or office performing like functions) 
        of any State. The Director and Agency shall have no authority 
        to exercise any power to enforce this title with respect to a 
        person regulated by the Securities and Exchange Commission or 
        any securities commission (or any agency or office performing 
        like functions) of any State.
            (2) Consultation and coordination.--Notwithstanding 
        paragraph (1), the Securities and Exchange Commission shall 
        consult and coordinate with the Director with respect to any 
        rule (including any advance notice of proposed rulemaking) 
        regarding an investment product or service that is the same 
        type of product as, or that competes directly with, a consumer 
        financial product or service that is subject to the 
        jurisdiction of the Agency under this title or under any other 
        law.
    (c) Exclusion for Persons Regulated by the Commodity Futures 
Trading Commission.--
            (1) In general.--No provision of this title shall be 
        construed as altering, amending, or affecting the authority of 
        the Commodity Futures Trading Commission to adopt rules, 
        initiate enforcement proceedings, or take any other action with 
        respect to a person regulated by the Commodity Futures Trading 
        Commission. The Director and the Agency shall have no authority 
        to exercise any power to enforce this title with respect to a 
        person regulated by the Commodity Futures Trading Commission.
            (2) Consultation and coordination.--Notwithstanding 
        paragraph (1), the Commodity Futures Trading Commission shall 
        consult and coordinate with the Director with respect to any 
        rule (including any advance notice of proposed rulemaking) 
        regarding a product or service that is the same type of product 
        as, or that competes directly with, a consumer financial 
        product or service that is subject to the jurisdiction of the 
        Agency under this title or under any other law.
    (d) Exclusion for Persons Regulated by a State Insurance 
Regulator.--
            (1) In general.--No provision of this title shall be 
        construed as altering, amending, or affecting the authority of 
        any State insurance regulator to adopt rules, initiate 
        enforcement proceedings, or take any other action with respect 
        to a person regulated by any State insurance regulator. Except 
        as provided in paragraphs (2) and (3), the Agency shall have no 
        authority to exercise any power to enforce this title with 
        respect to a person regulated by any State insurance regulator.
            (2) Description of activities.--Paragraph (1) shall not 
        apply to any person described in such paragraph to the extent 
        such person is engaged in any financial activity described in 
        any subparagraph of section 4002(19) or is otherwise subject to 
        any of the enumerated consumer laws or the authorities 
        transferred under subtitle F or H.
            (3) Preservation of certain authorities.--Nothing in this 
        title shall be construed as limiting the authority of the 
        Director and the Agency from exercising powers under this title 
        with respect to the provision by a covered person of a product 
        or service, not otherwise subject to this title, for or on 
        behalf of a person regulated by a State insurance regulator, in 
        connection with a financial activity.
    (e) Exclusion for Persons Regulated by the Federal Housing Finance 
Agency.--No provision of this title shall be construed as altering, 
amending, or affecting the authority of the Federal Housing Finance 
Agency to adopt rules, initiate enforcement proceedings, or take any 
other action with respect to a person regulated by the Federal Housing 
Finance Agency. The Director and Agency shall have no authority to 
exercise any power to enforce this title with respect to a person 
regulated by the Federal Housing Agency. For purposes of this 
subsection, the term ``person regulated by the Federal Housing Finance 
Agency'' means any Federal home loan bank, and any joint office of 1 or 
more Federal home loan banks.
    (f) Exclusion for Qualified Retirement or Eligible Deferred 
Compensation Plans and Arrangements.--
            (1) In general.--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--
                    (A) any retirement or eligible deferred 
                compensation plan or arrangement qualified under or 
                meeting the requirements of section 401(a), 403(a), 
                403(b), 457(b), 408 or 408A of the Internal Revenue 
                Code; or
                    (B) any educational savings arrangement under 
                section 529 of such Code.
            (2) Limitation on agency authority.--
                    (A) In general.--The Director and the Agency may 
                not exercise any power to enforce this title with 
                respect to services provided directly (or indirectly if 
                the services relate to the operation of such plan or 
                arrangement) to--
                            (i) any retirement or eligible deferred 
                        compensation plan or arrangement qualified 
                        under or meeting the requirements of section 
                        401(a), 403(a), 403(b), 457(b), 408, or 408A of 
                        the Internal Revenue Code; or
                            (ii) any educational savings arrangement 
                        under section 529 of such Code.
                    (B) Services defined.--For purposes subparagraph 
                (A), the term ``services'' shall include, for example, 
                services for custody and investment of assets, 
                administration, compliance, and participant assistance.
    (g) Exclusion for Accountants, Tax Preparers, and Attorneys.--
            (1) In general.--Except as permitted in paragraph (2), the 
        Director and the Agency may not exercise any rulemaking, 
        supervisory, enforcement or other authority, including 
        authority to order assessments, over--
                    (A) any person that is a certified public 
                accountant, permitted to practice as a certified public 
                accounting firm, or certified or licensed for such 
                purpose by a State, or any individual who is employed 
                by or holds an ownership interest with respect to a 
                person described in this subparagraph when such person 
                is performing or offering to perform customary and 
                usual accounting activities, including the provision of 
                accounting, tax, advisory, other services that are 
                subject to the regulatory authority of a state board of 
                accountancy or a federal authority, or other services 
                that are incidental to such customary and usual 
                accounting activities, to the extent that such 
                incidental services are not offered or provided by the 
                person separate and apart from such customary and usual 
                accounting activities and are not offered or provided 
                to consumers who are not receiving such customary and 
                usual accounting activities;
                    (B) any person other than a person described in 
                subparagraph (A) that performs income tax preparation 
                activities for consumers; or
                    (C) any individual who is providing legal advice or 
                services for which a license to practice law is 
                required under the law of the State in which the advice 
                or services are provided and which are performed within 
                the scope of an attorney-client relationship 
                established by an agreement, but only to the extent of 
                such legal advice or services.
            (2) No exclusion with respect to registration of most 
        attorneys.--Notwithstanding paragraph (1), this subsection 
        shall not apply to any authority granted to the Director or the 
        Agency under section 4209 with respect to a licensed attorney, 
        except to the extent a licensed attorney is solely providing 
        legal services in connection with--
                    (A) the preparation and filing of a bankruptcy 
                petition; or
                    (B) court proceedings to avoid a foreclosure.
            (3) Description of activities.--Paragraph (1) shall not 
        apply to--
                    (A) any person described in paragraph (1)(A) to the 
                extent such person is engaged in any activity which is 
                not a customary and usual accounting activity described 
                in paragraph (1)(A) or incidental thereto but which is 
                a financial activity described in any subparagraph of 
                section 4002(19);
                    (B) any person described in paragraph (1)(B) or 
                (1)(C) to the extent such person is engaged in any 
                activity which is a financial activity described in any 
                subparagraph of section 4002(19); or
                    (C) any person described in paragraph (1)(A), 
                (1)(B) or (1)(C) that is otherwise subject to any of 
                the enumerated consumer laws or the authorities 
                transferred under subtitle F or H.
    (h) Exclusion for Real Estate Licensees.--
            (1) In general.--Except as permitted in paragraph (2), the 
        Director and the Agency may not exercise any rulemaking, 
        supervisory, enforcement or other authority, including 
        authority to order assessments, over a person that is licensed 
        or registered as a real estate broker, real estate agent, in 
        accordance with State law, but only to the extent that such 
        person--
                    (A) acts as a real estate agent or broker for a 
                buyer, seller, lessor, or lessee of real property;
                    (B) brings together parties interested in the sale, 
                purchase, lease, rental, or exchange of real property;
                    (C) negotiates, on behalf of any party, any portion 
                of a contract relating to the sale, purchase, lease, 
                rental, or exchange of real property (other than in 
                connection with providing financing with respect to any 
                such transaction);
                    (D) engages in any activity for which a person 
                engaged in the activity is required to be registered or 
                licensed as a real estate agent or real estate broker 
                under any applicable law; or
                    (E) offers to engage in any activity, or act in any 
                capacity, described in subparagraph (A), (B), (C), or 
                (D).
            (2) Description of activities.--Paragraph (1) shall not 
        apply to any person described in such paragraph to the extent 
        such person is engaged in any financial activity described in 
        any subparagraph of section 4002(19) or is otherwise subject to 
        any of the enumerated consumer laws or the authorities 
        transferred under subtitle F or H.
    (i) Exclusion for Auto Dealers.--
            (1) In general.--The Director and the Agency may not 
        exercise any rulemaking, supervisory, enforcement or any other 
        authority, including authority to order assessments, over--
                    (A) a motor vehicle dealer that is primarily 
                engaged in the sale and servicing of motor vehicles, 
                the leasing and servicing of motor vehicles, or both; 
                or
                    (B) a person that--
                            (i) is controlled by, or is under common 
                        control with, one or more motor vehicle 
                        dealers; and
                            (ii) primarily engages in the extension of, 
                        or arranging for the extension of, retail 
                        credit or retail leases involving motor 
                        vehicles, where 90 percent of such extension, 
                        or arranging for such extension, is made with 
                        respect to customers of one or more motor 
                        vehicle dealers that control such person or 
                        with which such person is under common control.
            (2) Certain functions excepted.--The provisions of 
        paragraph (1) shall not apply to any person to the extent that 
        person--
                    (A) provides consumers with any services related to 
                residential mortgages; or
                    (B) operates a line of business that involves the 
                extension of retail credit or retail leases involving 
                motor vehicles, and in which--
                            (i) the extension of retail credit or 
                        retail leases is routinely provided directly to 
                        consumers; and
                            (ii) the contract governing such extension 
                        of retail credit or retail leases is not 
                        routinely assigned to a third party finance or 
                        leasing source.
            (3) No impact on prior authority.--Nothing in this 
        subsection shall be construed to modify, limit, or supersede 
        the rulemaking or enforcement authority over motor vehicle 
        dealers that could be exercised by any Federal department or 
        agency on the day prior to the enactment of this title.
            (4) No transfer of certain authority.--Notwithstanding 
        subtitle F or any other provision of law under this title, the 
        consumer financial protection functions of the Board of 
        Governors and the Federal Trade Commission shall not be 
        transferred to the Director or the Agency to the extent such 
        functions are with respect to a person described under 
        paragraph (1).
            (5) Definitions.--For purposes of this subsection:
                    (A) Motor vehicle.--The term ``motor vehicle'' 
                means any self-propelled vehicle designed for 
                transporting persons or property on a street, highway, 
                or other road.
                    (B) Motor vehicle dealer.--The term ``motor vehicle 
                dealer'' means any person resident in the United States 
                or any territory of the United States, and licensed by 
                a State, a territory of the United States, or the 
                District of Columbia to engage in the sale of motor 
                vehicles.
    (j) No Authority to Impose Usury Limit.--No provision of this title 
shall be construed as conferring authority on the Director or the 
Agency to establish a usury limit applicable to an extension of credit 
offered or made by a covered person to a consumer, unless explicitly 
authorized by law.
    (k) Exclusion for Manufactured Home Retailers and Modular Home 
Retailers.--
            (1) In general.--The Director and the Agency may not 
        exercise any rulemaking, supervisory, enforcement or other 
        authority, including authority to order assessments, over a 
        person to the extent such person--
                    (A) acts as an agent or broker for a buyer or 
                seller of a manufactured home or a modular home;
                    (B) facilitates the purchase by a consumer of a 
                manufactured home or modular home, by negotiating the 
                purchase price or terms of the sales contract (other 
                than providing financing with respect to such 
                transaction); or
                    (C) offers to engage in any activity described in 
                subparagraphs (A) or (B).
            (2) Description of activities.--Paragraph (1) shall not 
        apply to any person described in such paragraph to the extent 
        such person is engaged in any financial activity described in 
        any subparagraph of section 4002(19) or is otherwise subject to 
        any of the enumerated consumer laws or the authorities 
        transferred under subtitle F or H.
            (3) Definitions.--For purposes of this subsection:
                    (A) Manufactured home.--The term ``manufactured 
                home'' has the meaning given such term in section 603 
                of the National Manufactured Housing Construction and 
                Safety Standards Act of 1974 (42 U.S.C. 5402).
                    (B) Modular home.--The term ``modular home'' means 
                a house built in a factory in two or more modules that 
                meet the State or local building codes where the house 
                will be located and where such modules are transported 
                to the building site, installed on foundations, and 
                completed.

SEC. 4206. COLLECTION OF INFORMATION; CONFIDENTIALITY REGULATIONS.

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

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

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

SEC. 4208. AUTHORITY TO RESTRICT MANDATORY PREDISPUTE ARBITRATION.

    (a) In General.--The Director, by regulation, may prohibit or 
impose conditions or limitations on the use of any agreement between a 
covered person and a consumer for a consumer financial product or 
service providing for arbitration of any future dispute between the 
parties if the Director finds that such a prohibition or imposition of 
conditions or limitations are in the public interest and for the 
protection of consumers.
    (b) Effective Date.--Notwithstanding any other provision of law, 
any regulation prescribed by the Director under subsection (a) shall 
apply, consistent with the terms of the regulation, to any agreement 
between a consumer and a covered person entered into after the end of 
the 180-day period beginning on the effective date of the regulation, 
as established by the Director.

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

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

SEC. 4210. EFFECTIVE DATE.

    This subtitle shall take effect on the designated transfer date.

                    Subtitle C--Specific Authorities

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

    (a) In General.--The Agency may take any action authorized under 
subtitle E to prevent a person from committing or engaging in an 
unfair, deceptive, or abusive act or practice under Federal law in 
connection with any transaction with a consumer for a consumer 
financial product or service, or the offering of a consumer financial 
product or service.
    (b) Regulations.--
            (1) In general.--The Director may prescribe regulations 
        identifying as unlawful unfair, deceptive, or abusive acts or 
        practices in connection with any transaction with a consumer 
        for a consumer financial product or service or the offering of 
        a consumer financial product or service.
            (2) Includes prevention measures.--Regulations prescribed 
        under this section may include requirements for the purpose of 
        preventing such acts or practices.
    (c) Unfairness.--
            (1) In general.--The Director and the Agency 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 Agency has a 
        reasonable basis to conclude that the act or practice causes or 
        is likely to cause substantial injury to consumers which is not 
        reasonably avoidable by consumers and such substantial injury 
        is not outweighed by countervailing benefits to consumers or to 
        competition.
            (2) Established public policy as factor.--In determining 
        whether an act or practice is unfair, the Agency may consider 
        established public policies as evidence to be considered with 
        all other evidence.
    (d) Consultation.--In prescribing any regulation under this 
section, the Director shall consult with the Federal banking agencies, 
State bank supervisors, the Federal Trade Commission, or other Federal 
agencies, as appropriate, regarding the consistency of a proposed 
regulation with prudential, consumer protection, civil rights, market, 
or systemic objectives administered by such agencies or supervisors.

SEC. 4302. DISCLOSURES.

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

SEC. 4303. SALES PRACTICES.

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

SEC. 4304. PILOT DISCLOSURES.

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

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

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

SEC. 4306. DUTIES.

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

SEC. 4307. CONSUMER RIGHTS TO ACCESS INFORMATION.

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

SEC. 4308. PROHIBITED ACTS.

    It shall be unlawful for any person--
            (1) to advertise, market, offer, sell, enforce, or attempt 
        to enforce, any term, agreement, change in terms, fee, or 
        charge in connection with a consumer financial product or 
        service that is not in conformity with this title or applicable 
        regulation prescribed or order issued by the Director or to 
        engage in any unfair, deceptive, or abusive act or practice, 
        except that no person shall be held to have violated this 
        subsection solely by virtue of providing or selling time or 
        space to a person placing an advertisement;
            (2) to fail or refuse to pay any fee or assessment imposed 
        by the Agency under this title, to fail or refuse to permit 
        access to or copying of records, to fail or refuse to establish 
        or maintain records, or to fail or refuse to make reports or 
        provide information to the Agency, as required by this title, 
        an enumerated consumer law, or pursuant to the authorities 
        transferred by subtitles F and H, or any regulation prescribed 
        or order issued by the Director this title or pursuant to any 
        such authority; or
            (3) to knowingly or recklessly provide substantial 
        assistance to another person in violation of the provisions of 
        section 4301, or any regulation prescribed or order issued 
        under such section, and any such person shall be deemed to be 
        in violation of that section to the same extent as the person 
        to whom such assistance is provided.

SEC. 4309. TREATMENT OF REMITTANCE TRANSFERS.

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

SEC. 4310. EFFECTIVE DATE.

    This subtitle shall take effect on the designated transfer date.

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

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

SEC. 4312. APPRAISAL INDEPENDENCE REQUIREMENTS.

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

                 Subtitle D--Preservation of State Law

SEC. 4401. RELATION TO STATE LAW.

    (a) In General.--
            (1) Rule of construction.--This title shall not be 
        construed as annulling, altering, or affecting, or exempting 
        any person subject to the provisions of this title from 
        complying with, the laws, regulations, orders, or 
        interpretations, in effect in any State, except to the extent 
        that such statute, regulation, order, or interpretation is 
        inconsistent with the provisions of this title and then only to 
        the extent of the inconsistency.
            (2) Greater protection under state law.--For the purposes 
        of this subsection, a statute, regulation, order, or 
        interpretation in effect in any State is not inconsistent with 
        the provisions of this title if the protection such statute, 
        regulation, order, or interpretation affords consumers is 
        greater than the protection provided under this title. A 
        determination regarding whether a statute, regulation, order, 
        or interpretation in effect in any State is inconsistent with 
        the provisions of this title may be made by the Agency on its 
        own motion or in response to a nonfrivolous petition initiated 
        by any interested person.
    (b) Relation to Other Provisions of Enumerated Consumer Laws That 
Relate to State Law.--No provision of this title, except as provided in 
section 4803, shall be construed as modifying, limiting, or superseding 
the operation of any provision of an enumerated consumer law that 
relates to the application of a law in effect in any State with respect 
to such Federal law.

SEC. 4402. PRESERVATION OF ENFORCEMENT POWERS OF STATES.

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

SEC. 4403. PRESERVATION OF EXISTING CONTRACTS.

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

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

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

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

    ``(a) Definitions.--For purposes of this section, the following 
definitions shall apply:
            ``(1) National bank.--The term `national bank' includes--
                    ``(A) any bank organized under the laws of the 
                United States; and
                    ``(B) any Federal branch established in accordance 
                with the International Banking Act of 1978.
            ``(2) State consumer financial laws.--The term `State 
        consumer financial law' means a State law that does not 
        directly or indirectly discriminate against national banks and 
        that regulates the manner, content, or terms and conditions of 
        any financial transaction (as may be authorized for national 
        banks to engage in), or any account related thereto, with 
        respect to a consumer.
            ``(3) Other definitions.--The terms `affiliate', 
        `subsidiary', `includes', and `including' have the same meaning 
        as in section 3 of the Federal Deposit Insurance Act.
    ``(b) Preemption Standard.--
            ``(1) In general.--National banks shall generally comply 
        with State laws. State laws are preempted only if--
                    ``(A) application of a state law would have a 
                discriminatory effect on national banks in comparison 
                with the effect of the law on a bank chartered by that 
                State;
                    ``(B) the Comptroller of the Currency determines by 
                regulation or order on a case-by-case basis that a 
                State law prevents or significantly interferes with the 
                ability of an insured depository institution chartered 
                as national bank to engage in the business of banking; 
                or
                    ``(C) the State law is preempted by Federal law 
                other than this Act.
            ``(2) Savings clause.--This Act does not preempt or alter 
        the applicability of any State law to any national bank 
        subsidiary, affiliate, or other entity that is not an insured 
        depository institution chartered as a national bank.
            ``(3) Rule of construction.--This Act does not occupy the 
        field in any area of State law and a court shall review any 
        claim that a State law is preempted by this Act as a matter of 
        law and without deference to any agency claim that a State law 
        is preempted under this Act.
            ``(4) Review of preemption decisions.--A court shall review 
        any claim that a State law is preempted by this Act as a matter 
        of law and without deference to any agency claim that a state 
        law is preempted under this Act. Nothing in this subsection 
        shall affect the deference that a court affords to the 
        Comptroller of the Currency regarding the meaning or 
        interpretation of the National Bank Act or other Federal laws.
    ``(c) Substantial Evidence.--No regulation of the Comptroller of 
the Currency prescribed under subsection (b)(1)(B), shall be 
interpreted or applied so as to invalidate, or otherwise declare 
inapplicable to a national bank, the provision of the State consumer 
financial law unless substantial evidence, made on the record of the 
proceeding, supports the specific finding that the provision prevents 
or significantly interferes with the national bank's exercise of a 
power explicitly granted by the Congress.
    ``(d) Other Federal Laws.--Notwithstanding any other provision of 
law, the Comptroller of the Currency may not prescribe regulation 
pursuant to subsection (b)(1)(B) until the Comptroller of the Currency, 
after consultation with the Consumer Financial Protection Agency, makes 
a finding, in writing, that a Federal law provides a substantive 
standard, applicable to a national bank, which regulates the particular 
conduct, activity, or authority that is subject to such provision of 
the State consumer financial law.
    ``(e) Periodic Review of Preemption Determinations.--The 
Comptroller of the Currency shall periodically conduct a review, 
through notice and public comment, of each determination that a 
provision of Federal law preempts a State consumer financial law. The 
agency shall conduct such review within the 5-year period after 
prescribing or otherwise issuing such determination, and at least once 
during each 5-year period thereafter. After conducting the review of, 
and inspecting the comments made on, the determination, the agency 
shall timely propose to continue, amend or rescind it, as may be 
appropriate, in accordance with the procedures set forth in subsections 
(a) and (b) of section 5244 (12 U.S.C. 43(a)-(b)).
    ``(f) Application of State Consumer Financial Law to Subsidiaries 
and Affiliates.--Notwithstanding any provision of this title, a State 
consumer financial law shall apply to a subsidiary or affiliate of a 
national bank to the same extent that the State consumer financial law 
applies to any person, corporation, or other entity subject to such 
State law.''.
    (b) Clerical Amendment.--The table of sections for chapter one of 
title LXII of the Revised Statutes of the United States is amended by 
inserting after the item relating to section 5136B the following new 
item:

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

SEC. 4405. VISITORIAL STANDARDS.

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

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

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

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

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

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

    ``(a) State Consumer Financial Law Defined.--For purposes of this 
section, the term `State consumer financial law' means a State law that 
does not directly or indirectly discriminate against Federal savings 
associations and that regulates the manner, content, or terms and 
conditions of any financial transaction (as may be authorized for 
Federal savings associations to engage in), or any account related 
thereto, with respect to a consumer.
    ``(b) Preemption Standard.--
            ``(1) In general.--Federal savings associations shall 
        generally comply with State laws. State laws are preempted only 
        if--
                    ``(A) application of a state law would have a 
                discriminatory effect on Federal savings associations 
                in comparison with the effect of the law on a bank 
                chartered by that State;
                    ``(B) the Director of the Office of Thrift 
                Supervision determines by regulation or order on a 
                case-by-case basis that a State law prevents or 
                significantly interferes with the ability of an insured 
                depository institution chartered as a Federal savings 
                associations to engage in the business of banking; or
                    ``(C) the State law is preempted by Federal law 
                other than this Act.
            ``(2) Savings clause.--This Act does not preempt or alter 
        the applicability of any State law to any Federal savings 
        associations subsidiary, affiliate, or other entity that is not 
        an insured depository institution chartered as a national bank.
            ``(3) Rule of construction.--This Act does not occupy the 
        field in any area of State law and a court shall review any 
        claim that a State law is preempted by this Act as a matter of 
        law and without deference to any agency claim that a State law 
        is preempted under this Act.
            ``(4) Review of preemption decisions.--A court shall review 
        any claim that a State law is preempted by this Act as a matter 
        of law and without deference to any agency claim that a state 
        law is preempted under this Act. Nothing in this subsection 
        shall affect the deference that a court affords to the Director 
        of the Office of Thrift Supervision regarding the meaning or 
        interpretation of the National Bank Act or other Federal laws.
    ``(c) Other Federal Law.--Notwithstanding any other provision of 
law, the Director of the Office of Thrift Supervision may not prescribe 
any regulation pursuant to subsection (b)(1)(B) until such Director, 
after consultation with the Consumer Financial Protection Agency, makes 
a finding, in writing, that a Federal law provides a substantive 
standard, applicable to a Federal savings association, which regulates 
the particular conduct, activity, or authority that is subject to such 
provision of the State consumer financial law.
    ``(d) Substantial Evidence.--No regulation prescribed by the 
Director of the Office of Thrift Supervision issued under subsection 
(b)(1)(B) shall be interpreted or applied so as to invalidate, or 
otherwise declare inapplicable to a Federal savings association, the 
provision of the State consumer financial law unless substantial 
evidence, made on the record of the proceeding, supports the specific 
finding that the provision prevents or significantly interferes with 
the Federal savings association's exercise of a power explicitly 
granted by the Congress.
    ``(e) Periodic Review of Preemption Determinations.--The Director 
of the Office of Thrift Supervision shall periodically conduct a 
review, through notice and public comment, of each determination that a 
provision of Federal law preempts a State consumer financial law. The 
agency shall conduct such review within the 5-year period after 
prescribing or otherwise issuing such determination, and at least once 
during each 5-year period thereafter. After conducting the review of, 
and inspecting the comments made on, the determination, the agency 
shall timely propose to continue, amend or rescind it, as may be 
appropriate, in accordance with the procedures set forth in subsections 
(a) and (b) of section 5244 of the Revised Statutes of the United 
States (12 U.S.C. 43(a)-(b)).
    ``(f) Application of State Consumer Financial Law to Subsidiaries 
and Affiliates.--Notwithstanding any provision of this Act, a State 
consumer financial law shall apply to a subsidiary or affiliate of a 
Federal savings association to the same extent that the State consumer 
financial law applies to any person, corporation, or other entity 
subject to such State law and consistent with Federal law.''.
    (b) Clerical Amendment.--The table of sections for the Home Owners' 
Loan Act (12 U.S.C. 1461 et seq.) is amended by striking the item 
relating to section 6 and inserting the following new item:

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

SEC. 4408. VISITORIAL STANDARDS.

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

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

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

SEC. 4410. EFFECTIVE DATE.

    This subtitle shall take effect on the designated transfer date.

                     Subtitle E--Enforcement Powers

SEC. 4501. DEFINITIONS.

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

SEC. 4502. INVESTIGATIONS AND ADMINISTRATIVE DISCOVERY.

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

SEC. 4503. HEARINGS AND ADJUDICATION PROCEEDINGS.

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

SEC. 4504. LITIGATION AUTHORITY.

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

SEC. 4505. RELIEF AVAILABLE.

    (a) Administrative Proceedings or Court Actions.--
            (1) Jurisdiction.--The court (or Agency, as the case may 
        be) in an action or adjudication proceeding brought under this 
        title, any enumerated consumer law, or any law for which 
        authorities were transferred by subtitles F and H, shall have 
        jurisdiction to grant any appropriate legal or equitable relief 
        with respect to a violation of this title, any enumerated 
        consumer law, and any law for which authorities were 
        transferred by subtitles F and H, including a violation of a 
        regulation prescribed or order issued under this title, any 
        enumerated consumer law and any law for which authorities were 
        transferred by subtitles F and H.
            (2) Relief.--Such relief may include--
                    (A) rescission or reformation of contracts;
                    (B) refund of moneys or return of real property;
                    (C) restitution;
                    (D) disgorgement or compensation for unjust 
                enrichment;
                    (E) payment of damages;
                    (F) public notification regarding the violation, 
                including the costs of notification;
                    (G) limits on the activities or functions of the 
                person; and
                    (H) civil money penalties under subsection (c).
            (3) No exemplary or punitive damages.--Nothing in this 
        subsection shall be construed as authorizing the imposition of 
        exemplary or punitive damages.
    (b) Recovery of Costs.--In any action brought by the Agency, a 
State attorney general, or a State bank supervisor to enforce any 
provision of this title, any enumerated consumer law, any law for which 
authorities were transferred by subtitles F and H, or any regulation 
prescribed or order issued by the Director under this title or pursuant 
to any such authority, the Agency, State attorney general, or State 
bank supervisor may recover the costs incurred by such Agency, attorney 
general, or supervisor in connection with prosecuting such action if 
the Agency, State attorney general, or State bank supervisors (as the 
case may be) is the prevailing party in the action.
    (c) Civil Money Penalty in Court and Administrative Actions.--
            (1) Any person that violates, through any act or omission, 
        any provision of this title, any enumerated consumer law, or 
        any regulation prescribed or order issued by the Director under 
        this title shall forfeit and pay a civil penalty pursuant to 
        this subsection determined as follows:
                    (A) First tier.--For any violation of any law, 
                regulation, final order or condition imposed in writing 
                by the Agency, or for any failure to pay any fee or 
                assessment imposed by the Agency (including any fee or 
                assessment for which a related person may be liable), a 
                civil penalty shall not exceed $5,000 for each day 
                during which such violation continues.
                    (B) Second tier.--Notwithstanding paragraph (A), 
                for any violation of a regulation prescribed under 
                section 4306 or for any person that recklessly engages 
                in a violation of this title, any enumerated consumer 
                law, or any regulation prescribed or order issued by 
                the Director under this title, relating to the 
                provision of an alternative consumer financial product 
                or service, a civil penalty shall not exceed $25,000 
                for each day during which such violation continues.
                    (C) Third tier.--Notwithstanding subparagraphs (A) 
                and (B), for any person that knowingly violates this 
                title, any enumerated consumer law, or any regulation 
                prescribed or order issued by the Director under this 
                title, a civil penalty shall not exceed $1,000,000 for 
                each day during which such violation continues.
            (2) Mitigating factors.--In determining the amount of any 
        penalty assessed under paragraph (1), the Agency or the court 
        shall take into account the appropriateness of the penalty with 
        respect to--
                    (A) the size of financial resources and good faith 
                of the person charged;
                    (B) the gravity of the violation or failure to pay;
                    (C) the severity of the risks to or losses of the 
                consumer, which may take into account the number of 
                products or services sold or provided;
                    (D) the history of previous violations; and
                    (E) such other matters as justice may require.
            (3) Authority to modify or remit penalty.--The Agency may 
        compromise, modify, or remit any penalty which may be assessed 
        or had already been assessed under paragraph (1). The amount of 
        such penalty, when finally determined, shall be exclusive of 
        any sums owed by the person to the United States in connection 
        with the costs of the proceeding, and may be deducted from any 
        sums owing by the United States to the person charged.
            (4) Notice and hearing.--No civil penalty may be assessed 
        with respect to a violation of this title, any enumerated 
        consumer law, or any regulation prescribed or order issued by 
        the Director, unless--
                    (A) the Agency gives notice and an opportunity for 
                a hearing to the person accused of the violation; or
                    (B) the appropriate court has ordered such 
                assessment and entered judgment in favor of the Agency.

SEC. 4506. REFERRALS FOR CRIMINAL PROCEEDINGS.

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

SEC. 4507. EMPLOYEE PROTECTION.

    (a) 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 employee's 
initiative or in the ordinary course of the employee's duties (or any 
person acting pursuant to a request of the employee)--
            (1) has provided information to the Agency or to any other 
        State, local, or Federal Government authority or law 
        enforcement official information relating to any violation of, 
        or any act or omission the employee reasonably believes to be a 
        violation of any provision of this title or any other law that 
        is subject to the jurisdiction of the Agency, or any 
        regulation, order, standard, or prohibition prescribed by the 
        Director;
            (2) has testified or is about to testify in any proceeding 
        resulting from the administration or enforcement of any 
        provision of this title or any other law that is subject to the 
        jurisdiction of the Agency, or any regulation, order, standard, 
        or prohibition prescribed by the Director;
            (3) has filed or instituted, or has caused to be filed or 
        instituted, any proceeding under any enumerated consumer law or 
        any law for which authorities were transferred by subtitles F 
        and H; or
            (4) has 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, regulation, order, standard, or prohibition, 
        subject to the jurisdiction of, or enforceable by, the Agency.
    (b) Covered Employee Defined.--For the purposes of this section, 
the term ``covered employee'' means any individual performing tasks 
related to the provision of a financial product or service to a 
consumer.
    (c) Timetables.--
            (1) Filing complaint.--Any individual who believes that 
        such individual has been discharged or otherwise discriminated 
        against by any person in violation of subsection (a) may, 
        before the end of the 180-day period beginning on the date on 
        which such violation occurs, file (or have any person file on 
        behalf of such individual) a complaint with the Secretary of 
        Labor (hereafter in this subsection referred to as the 
        ``Secretary'', notwithstanding section 4002(34)) alleging such 
        discharge or discrimination and identifying the person 
        responsible for such act.
            (2) Secretary's action on receipt of complaint.--Upon 
        receipt of a complaint by any individual under paragraph (1), 
        the Secretary shall notify, in writing, the person named in the 
        complaint who is alleged to have committed the violation of--
                    (A) the filing of the complaint;
                    (B) the allegations contained in the complaint;
                    (C) the substance of the evidence supporting the 
                complaint; and
                    (D) the opportunities that will be afforded to such 
                person under paragraph (3).
            (3) Investigation, hearing, and orders.--
                    (A) Findings.--Not later than 60 days after the 
                date of receipt of a complaint filed under paragraph 
                (1) and after affording the individual filing the 
                complaint and the person named in the complaint who is 
                alleged to have committed the violation an opportunity 
                to submit to the Secretary a written response to the 
                complaint and an opportunity to meet with a 
                representative of the Secretary to present statements 
                from witnesses, the Secretary shall initiate an 
                investigation and determine whether there is reasonable 
                cause to believe that the complaint has merit and 
                notify, in writing, the complainant and the person 
                alleged to have committed a violation of subsection (a) 
                of the Secretary's findings.
                    (B) Preliminary order.--If the Secretary concludes 
                that there is reasonable cause to believe that a 
                violation of subsection (a) has occurred, the Secretary 
                shall accompany the Secretary's findings with a 
                preliminary order providing the relief prescribed by 
                paragraph (3)(B).
                    (C) Objections to findings or preliminary order.--
                Not later than 30 days after the date of notification 
                of findings under subparagraph (A), 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.
                    (D) Objections do not constitute a stay.--The 
                filing of objections under subparagraph (C) shall not 
                operate to stay any reinstatement remedy contained in 
                the preliminary order.
                    (E) Expeditious hearing.--Any hearing requested 
                under subparagraph (C) shall be conducted 
                expeditiously.
                    (F) Finality of order.--If a hearing is not 
                requested under subparagraph (C) with respect to any 
                findings of the Secretary under subparagraph (A) within 
                the 30-day period described in subparagraph (C), the 
                preliminary order shall be deemed a final order that is 
                not subject to judicial review.
            (4) Standards for determination.--
                    (A) Prima facie evidence of contribution.--The 
                Secretary shall dismiss a complaint filed under 
                paragraph (1) and shall not conduct an investigation 
                otherwise required under paragraph (3)(A) unless the 
                individual filing the complaint makes a prima facie 
                showing that any behavior described in paragraph (1), 
                (2), (3), or (4) of subsection (a) was a contributing 
                factor in the unfavorable personnel action alleged in 
                the complaint.
                    (B) Prohibition on investigation in case of clear 
                and convincing evidence of independent basis.--
                Notwithstanding a finding by the Secretary that the 
                complainant has made the showing required under 
                subparagraph (A), no investigation otherwise required 
                under paragraph (3) 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) Contributing factor requirement.--The Secretary 
                may determine that a violation of subsection (a) has 
                occurred only if the complainant demonstrates that any 
                behavior described in paragraph (1), (2), (3), or (4) 
                of subsection (a) was a contributing factor in the 
                unfavorable personnel action alleged in the complaint.
                    (D) Prohibition on final order in case of clear and 
                convincing evidence of independent basis.--Relief may 
                not be ordered under paragraph (3) 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.
            (5) Final order.--
                    (A) In general.--Not later than 120 days after the 
                date of conclusion of any hearing under paragraph (3), 
                the Secretary shall issue a final order providing the 
                relief prescribed by this subsection or denying the 
                complaint.
                    (B) Settlement agreement.--At any time before 
                issuance of a final order, a proceeding under this 
                subsection may be terminated on the basis of a 
                settlement agreement entered into by the Secretary, the 
                complainant, and the person alleged to have committed 
                the violation.
                    (C) Contents of order.--If, in response to a 
                complaint filed under paragraph (1), the Secretary 
                determines that a violation of subsection (a) has 
                occurred, the Secretary shall order the person who 
                committed such violation--
                            (i) to take affirmative action to abate the 
                        violation;
                            (ii) to reinstate the complainant to such 
                        individual's former position together with 
                        compensation (including back pay) and restore 
                        the terms, conditions, and privileges 
                        associated with such individual's employment; 
                        and
                            (iii) to provide compensatory damages to 
                        the complainant.
                    (D) Costs and attorneys fees.--If an order is 
                issued under this paragraph, the Secretary, at the 
                request of the complainant, shall assess against the 
                person against whom the order is issued a sum equal to 
                the aggregate amount of all costs and expenses 
                (including attorneys' and expert witness fees) 
                reasonably incurred, as determined by the Secretary, by 
                the complainant for, or in connection with, the 
                bringing of the complaint upon which the order was 
                issued.
                    (E) Frivolous or bad faith complaints.--If the 
                Secretary finds that a complaint under paragraph (1) is 
                frivolous or has been brought in bad faith, the 
                Secretary may award to the prevailing employer a 
                reasonable attorneys' fee, not exceeding $1,000, to be 
                paid by the complainant.
            (6) De novo action on claim.--
                    (A) Action at law or equity.--If the Secretary has 
                not issued a final decision within 210 days after the 
                filing of the complaint, or within 90 days after 
                receiving a written determination, the complainant who 
                filed such complaint may bring an action at law or 
                equity for de novo review in the appropriate district 
                court of the United States.
                    (B) Jury trial.--At the request of either party to 
                an action brought under subparagraph (A), such action 
                shall be tried by the court with a jury.
                    (C) Standards for determination.--The standards for 
                determination established under paragraph (4) shall 
                apply in any action under this paragraph.
                    (D) Relief.--The court shall have jurisdiction to 
                grant all relief, including injunctive relief and 
                compensatory damages , that necessary to make the 
                complainant who sought de novo review whole, 
                including--
                            (i) reinstatement with the same seniority 
                        status that the complainant 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's 
                        fees.
                    (E) Not reviewable.--The decision of the court 
                shall be final without further review.
            (7) Judicial review of final order.--
                    (A) In general.--Unless a complainant brings a de 
                novo action under paragraph (6), any person adversely 
                affected or aggrieved by a final order issued under 
                paragraph (5) may obtain review of the order in the 
                United States Court of Appeals for the circuit in which 
                the violation, with respect to which the order was 
                issued, allegedly occurred or the circuit in which the 
                complainant resided on the date of such violation.
                    (B) Statute of limitation .--Any petition for 
                review of a final order under subsection shall be filed 
                not later than 60 days after the date of the issuance 
                of the final order by the Secretary.
                    (C) Standards for review.--The standards for review 
                established under chapter 7 of title 5, United States 
                Code, shall apply in any review of a final order under 
                this paragraph.
                    (D) Effect of proceedings as stay.--The 
                commencement of proceedings under this paragraph shall 
                not operate as a stay of the final order of the 
                Secretary under review, unless so ordered by the court.
                    (E) Limitation on effect of other proceedings.--
                Except as provided in paragraph (6) and this paragraph, 
                an order of the Secretary with respect to which review 
                could have been obtained under subparagraph (A) shall 
                not be subject to judicial review in any criminal or 
                other civil proceeding.
            (8) Enforcement of orders by secretary.--
                    (A) In general.--Whenever any person has failed to 
                comply with an order issued under paragraph (5), the 
                Secretary may file a civil action in the United States 
                district court for the district in which the violation 
                was found to occur, or in the United States district 
                court for the District of Columbia, to enforce such 
                order.
                    (B) Relief.--In actions brought under this 
                paragraph, the district courts shall have jurisdiction 
                to grant all appropriate relief including injunctive 
                relief and compensatory damages.
            (9) Enforcement of order by aggrieved party .--
                    (A) In general.--A person on whose behalf an order 
                was issued under paragraph (5) may commence a civil 
                action against the person to whom such order was issued 
                to require compliance with such order.
                    (B) Relief.--The court, in issuing any final order 
                under this paragraph, may award costs of litigation 
                (including reasonable attorneys' and expert witness 
                fees) to any party whenever the court determines such 
                award is appropriate.
    (d) Action in Nature of Mandamus.--Any nondiscretionary duty 
imposed by this section shall be enforceable in a mandamus proceeding 
brought under section 1361 of title 28, United States Code.
    (e) Unenforceability of Certain Agreements.--
            (1) No waiver of rights and remedies.--Notwithstanding any 
        law and except as provided under paragraph (3), the rights and 
        remedies provided for in this section may not be waived by any 
        agreement, policy, form, or condition of employment, including 
        by any predispute arbitration agreement.
            (2) Predispute arbitration agreements.--Notwithstanding any 
        law and except as provided under paragraph (3), no predispute 
        arbitration agreement shall be valid or enforceable and to the 
        extent the agreement 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)(2) unless the Director determines by regulation that such 
        provision is inconsistent with the purposes of this title.

SEC. 4508. EFFECTIVE DATE.

    This subtitle shall take effect on the designated transfer date.

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

SEC. 4601. TRANSFER OF CERTAIN FUNCTIONS.

    (a) In General.--Except as provided in subsection (b), consumer 
financial protection functions are transferred as follows:
            (1) Board of governors.--
                    (A) Transfer of functions.--All consumer financial 
                protection functions of the Board of Governors are 
                transferred to the Director.
                    (B) Board of governors' authority.--The Director 
                shall have all powers and duties that were vested in 
                the Board of Governors, relating to consumer financial 
                protection functions, on the day before the designated 
                transfer date.
            (2) Comptroller of the currency.--
                    (A) Transfer of functions.--All consumer financial 
                protection functions of the Comptroller of the Currency 
                are transferred to the Director.
                    (B) Comptroller's authority.--The Director shall 
                have all powers and duties that were vested in the 
                Comptroller of the Currency, relating to consumer 
                financial protection functions, on the day before the 
                designated transfer date.
            (3) Director of the office of thrift supervision.--
                    (A) Transfer of functions.--All consumer financial 
                protection functions of the Director of the Office of 
                Thrift Supervision are transferred to the Director.
                    (B) Director's authority.--The Director shall have 
                all powers and duties that were vested in the Director 
                of the Office of Thrift Supervision, relating to 
                consumer financial protection functions, on the day 
                before the designated transfer date.
            (4) Federal deposit insurance corporation.--
                    (A) Transfer of functions.--All consumer financial 
                protection functions of the Federal Deposit Insurance 
                Corporation are transferred to the Director.
                    (B) Corporation's authority.--The Director shall 
                have all powers and duties that were vested in the 
                Federal Deposit Insurance Corporation, relating to 
                consumer financial protection functions, on the day 
                before the designated transfer date.
            (5) Federal trade commission.--
                    (A) Transfer of functions.--Except as provided in 
                subparagraph (C), the consumer financial protection 
                functions of the Federal Trade Commission that are 
                contained within the enumerated consumer laws are 
                transferred to the Agency, except as provided in 
                section 4202(e).
                    (B) Commission's authority.--Except as provided in 
                subparagraph (C), the Director shall have all powers 
                and duties that were vested in the Federal Trade 
                Commission, relating to consumer financial protection 
                functions, on the day before the designated transfer 
                date.
                    (C) Continuation of certain commission 
                authorities.--Notwithstanding subparagraphs (A) and 
                (B), the Federal Trade Commission shall continue to 
                enforce the following provisions of law and prescribe 
                regulations under such provisions:
                            (i) The Credit Repair Organizations Act.
                            (ii) Section 5 of the Federal Trade 
                        Commission Act.
                            (iii) The Telemarketing and Consumer Fraud 
                        and Abuse Prevention Act.
            (6) National credit union administration.--
                    (A) Transfer of functions.--All consumer financial 
                protection functions of the National Credit Union 
                Administration are transferred to the Director.
                    (B) National credit union administration's 
                authority.--The Director shall have all powers and 
                duties that were vested in the National Credit Union 
                Administration, relating to consumer financial 
                protection functions, on the day before the designated 
                transfer date.
            (7) Secretary of housing and urban development.--
                    (A) Transfer of functions.--All consumer protection 
                functions of the Secretary of Housing and Urban 
                Development relating to the Real Estate Settlement 
                Procedures Act of 1974 and the Secure and Fair 
                Enforcement for Mortgage Licensing Act of 2008 are 
                transferred to the Director.
                    (B) Secretary of hud's authority.--The Director 
                shall have all powers and duties that were vested in 
                the Secretary of Housing and Urban Development relating 
                to the Real Estate Settlement Procedures Act of 1974 
                and the Secure and Fair Enforcement for Mortgage 
                Licensing Act of 2008, on the day before the designated 
                transfer date
    (b) Transfers of Functions Subject to Backstop Enforcement 
Authority Remaining With Transferor Agencies.--The transfers of 
functions in subsection (a) shall not affect the authority of the 
agencies identified in subsection (a) from initiating enforcement 
proceedings under the circumstances described in section 4202(e)(3).
    (c) Termination of Authority of Transferor Agencies To Collect Fees 
for Consumer Financial Protection Purposes.--Authorities of the 
agencies identified in subsection (a) to assess and collect fees to 
cover the cost of conducting consumer financial protection functions 
shall terminate on the day before the designated transfer date.
    (d) Consumer Financial Protection Functions Defined.--For purposes 
of this subtitle, the term ``consumer financial protection functions'' 
means research, rulemaking, issuance of orders or guidance, 
supervision, examination, and enforcement activities, powers, and 
duties relating to the provision of consumer financial products or 
services, including the authority to assess and collect fees for those 
purposes, except that such term shall not include any such function 
relating to an agency's responsibilities under the Community 
Reinvestment Act of 1977.
    (e) Effective Date.--Subsections (a) and (b) shall take effect on 
the designated transfer date.

SEC. 4602. DESIGNATED TRANSFER DATE.

    (a) In General.--Not later than 60 days after the date of the 
enactment of this title, the Secretary--
            (1) shall, 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 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 Director under section 4601; and
            (2) shall publish notice of that designation 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 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 designation 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 18 months after the date of the 
        enactment of this title.
            (2) Extension of time.--The Secretary may designate a date 
        that is later than 18 months after the date of the enactment of 
        this title if the Secretary transmits to appropriate committees 
        of Congress--
                    (A) a written determination that orderly 
                implementation of this title is not feasible on the 
                date that is 18 months after the date of the enactment 
                of this title;
                    (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 shall any date 
        designated under this section be later than 24 months after the 
        date of the enactment of this title.

SEC. 4603. SAVINGS PROVISIONS.

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

SEC. 4604. TRANSFER OF CERTAIN PERSONNEL.

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

SEC. 4605. INCIDENTAL TRANSFERS.

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

SEC. 4606. INTERIM AUTHORITY OF THE SECRETARY.

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

                  Subtitle G--Regulatory Improvements

SEC. 4701. COLLECTION OF DEPOSIT ACCOUNT DATA.

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

SEC. 4702. SMALL BUSINESS DATA COLLECTION.

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

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

SEC. 4703. ANNUAL FINANCIAL AUTOPSY.

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

                   Subtitle H--Conforming Amendments

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

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

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

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

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

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

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

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

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

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

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

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

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

    (a) Section 504.--Section 504(a)(1) of the Gramm-Leach-Bliley Act 
(15 U.S.C. 6804(a)(1)) is amended--
            (1) by striking ``The Federal banking agencies, the 
        National Credit Union Administration, the Secretary of the 
        Treasury,'' and inserting ``The Consumer Financial Protection 
        Agency and''; and
            (2) by striking ``, and the Federal Trade Commission''.
    (b) Section 505.--
            (1) Section 505(a) of the Gramm-Leach-Bliley Act (15 U.S.C. 
        6805(a)) is amended--
                    (A) in the matter preceding paragraph (1), by 
                striking ``This subtitle and the regulations prescribed 
                thereunder shall be enforced by'' and inserting 
                ``Subject to section 4202 of the Consumer Financial 
                Protection Agency Act of 2009, this subtitle and the 
                regulations prescribed under this title shall be 
                enforced by the Consumer Financial Protection 
                Agency,''; and
                    (B) by inserting after paragraph (7) the following 
                new paragraph:
            ``(8) Under the Consumer Financial Protection Agency Act of 
        2009, by the Consumer Financial Protection Agency in the case 
        of financial institutions and other covered persons and service 
        providers subject to the jurisdiction of the Agency under that 
        Act, but not with respect to the standards under section 
        501.''.
            (2) Section 505(b)(1) of the Gramm-Leach-Bliley Act (15 
        U.S.C. 6805(b)(1)) is amended by inserting ``, other than the 
        Consumer Financial Protection Agency,'' after ``described in 
        subsection (a)''.

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

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

``SEC. 307. RESEARCH AND IMPROVED METHODS.

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

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

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

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

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

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

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

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

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

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

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

``SEC. 1510. FEES.

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

``SEC. 1513. LIABILITY PROVISIONS.

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

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

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

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

    (a) Section 3.--Section 3 of the Telemarketing and Consumer Fraud 
and Abuse Prevention Act (15 U.S.C. 6102) is amended--
            (1) in subsection (b), by inserting after the 2nd sentence 
        ``In prescribing a regulation under this Act that relates to 
        the provision of a consumer financial product or service that 
        is subject to the Consumer Financial Protection Agency Act, 
        including any enumerated consumer law thereunder, the 
        Commission shall consult with the Consumer Financial Protection 
        Agency regarding the consistency of a proposed regulation with 
        standards, purposes, or objectives administered by the Consumer 
        Financial Protection Agency.''; and
            (2) in subsection (c), by adding at the end ``Any violation 
        of any regulation prescribed under subsection (a) committed by 
        a person subject to the Consumer Financial Protection Agency 
        Act shall be treated as a violation of a regulation under 
        section 4301 of the Consumer Financial Protection Agency 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--
            (1) in the subsection heading, by inserting after 
        ``Commission'' the following: ``or the Consumer Financial 
        Protection Agency''; and
            (2) by inserting after ``Commission'' each place such term 
        appears ``or the Consumer Financial Protection Agency''.
    (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 such term appears ``or the 
Consumer Financial Protection Agency''.
    (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 new subsection:
    ``(d) Enforcement by Consumer Financial Protection Agency.--Except 
as otherwise provided in sections 3(d), 3(e), 4, and 5, this Act shall 
be enforced by the Consumer Financial Protection Agency under subtitle 
E of the Consumer Financial Protection Agency Act.''.

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

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

SEC. 4817. EFFECTIVE DATE.

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

      Subtitle I--Improvements to the Federal Trade Commission Act

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

    (a) Section 5(m)(1)(A) of the Federal Trade Commission Act (15 
U.S.C. 45(m)(1)(A)) is amended--
            (1) by inserting ``this Act or'' after ``violates'' the 
        first place such term appears; and
            (2) by inserting ``a violation of this Act or is'' before 
        ``prohibited''.
    (b) Section 5 of the Federal Trade Commission Act (15 U.S.C. 45) is 
amended by adding at the end thereof the following new subsection:
    ``(o) Unlawful Assistance.--It is unlawful for any person, 
knowingly or recklessly, to provide substantial assistance to another 
in violating any provision of this Act or of any other Act enforceable 
by the Commission that relates to unfair or deceptive acts or 
practices. Any such violation shall constitute an unfair or deceptive 
act or practice described in section 5(a)(1) of this Act.''.
    (c) Section 18 of the Federal Trade Commission Act (15 U.S.C. 
57a(b)) is amended--
            (1) by amending subsection (b) to read as follows:
    ``(b) Procedure Applicable.--When prescribing a rule under 
subsection (a)(1)(B) of this section, the Commission shall proceed in 
accordance with section 553 of Title 5 (without regard to any reference 
in such section to sections 556 and 557 of such title).'';
            (2)(A) in subsection (d), by striking all that precedes 
        paragraph (3);
            (B) by striking subsections (c), (f), (i), and (j); and
            (C) by redesignating subsections (e), (g) and (h) as 
        subsections (d), (e) and (f);
            (3) by redesignating paragraph (3) of subsection (d) as 
        subsection (c); and
            (4) in subsection (d) (as redesignated)--
                    (A) in paragraph (1)(B), by striking ``the 
                transcript required by subsection (c)(5),'';
                    (B) in paragraph (3), by striking ``error)'' all 
                that follows and inserting ``error).''; and
                    (C) in paragraph (5), by striking subparagraph (C).

                        TITLE V--CAPITAL MARKETS

     Subtitle A--Private Fund Investment Advisers Registration Act

SEC. 5001. SHORT TITLE.

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

SEC. 5002. DEFINITIONS.

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

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

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

SEC. 5004. COLLECTION OF SYSTEMIC RISK DATA.

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

SEC. 5005. ELIMINATION OF DISCLOSURE PROVISION.

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

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

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

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

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

SEC. 5008. CLARIFICATION OF RULEMAKING AUTHORITY.

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

SEC. 5009. GAO STUDY.

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

SEC. 5010. EFFECTIVE DATE; TRANSITION PERIOD.

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

SEC. 5011. QUALIFIED CLIENT STANDARD.

    Section 205(e) of the Investment Advisers Act of 1940 (15 U.S.C. 
80b-5(e)) is amended by adding at the end the following: ``With respect 
to any factor used 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, not later than one year after the date of the 
enactment of the Private Fund Investment Advisers Registration Act of 
2009, and every 5 years thereafter, adjust for the effects of inflation 
on such test. Any such adjustment that is not a multiple of $1,000 
shall be rounded to the nearest multiple of $1,000.''.

   Subtitle B--Accountability and Transparency in Rating Agencies Act

SEC. 6001. SHORT TITLE.

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

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

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

SEC. 6003. STANDARDS FOR PRIVATE ACTIONS.

    (a) In General.--Section 21D(b)(2) of the Securities Exchange Act 
of 1934 (15 U.S.C. 78u-4(b)(2)) is amended by inserting before the 
period at the end of the following: ``, and in the case of an action 
brought under this title for money damages against a nationally 
recognized statistical rating organization, it shall be sufficient for 
purposes of pleading any required state of mind for purposes of such 
action that the complaint shall state with particularity facts giving 
rise to a strong inference that the nationally recognized statistical 
rating organization knowingly or recklessly violated the securities 
laws''.
    (b) Pleading Standard.--Section 15E(m) of the Securities Exchange 
Act of 1934 (15 U.S.C. 78o-7(m)) amended to read as follows:
    ``(m) Application of Enforcement Provisions; Pleading Standard in 
Private Rights of Action.--Statements made by nationally recognized 
statistical rating organizations shall not be deemed forward looking 
statements for purposes of section 21E. In any private right of action 
commenced against a nationally recognized statistical rating 
organization under this title, the same pleading standards with respect 
to knowledge and recklessness shall apply to the nationally recognized 
statistical rating organization as would apply to any other person in 
the same or a similar private right of action against such person.''.

SEC. 6004. ISSUER DISCLOSURE OF PRELIMINARY RATINGS.

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

SEC. 6005. CHANGE TO DESIGNATION.

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

SEC. 6006. TIMELINE FOR REGULATIONS.

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

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

    Not later than 90 days after the date of enactment of this 
subtitle, the Securities Exchange Commission shall revise Regulation FD 
(17 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. 6008. ADVISORY BOARD.

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

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

    (a) Federal Deposit Insurance Act.--The Federal Deposit Insurance 
Act (12 U.S.C. 1811 et seq.) is amended--
            (1) in section 28(d)--
                    (A) in the subsection heading, by striking ``Not of 
                Investment Grade'';
                    (B) in paragraph (1), by striking ``not of 
                investment grade'' and inserting ``that does not meet 
                standards of credit-worthiness as established by the 
                Corporation'';
                    (C) in paragraph (2), by striking ``not of 
                investment grade'';
                    (D) by striking paragraph (3) and redesignating 
                paragraph (4) as paragraph (3); and
                    (E) in paragraph (3) (as so redesignated)--
                            (i) by striking subparagraph (A) and 
                        redesignating subparagraphs (B) and (C) as 
                        subparagraphs (A) and (B), respectively; and
                            (ii) in subparagraph (B) (as so 
                        redesignated), by striking ``not of investment 
                        grade'' and inserting ``that does not meet 
                        standards of credit-worthiness as established 
                        by the Corporation'';
            (2) in section 28(e)--
                    (A) in the subsection heading, by striking ``Not of 
                Investment Grade'';
                    (B) in paragraph (1), by striking ``not of 
                investment grade'' and inserting ``that does not meet 
                standards of credit-worthiness as established by the 
                Corporation''; and
                    (C) in paragraphs (2) and (3), by striking ``not of 
                investment grade'' each place that it appears and 
                inserting ``that does not meet standards of credit-
                worthiness established by the Corporation''; and
            (3) in section 7(b)(1)(E)(i), by striking ``credit rating 
        entities, and other private economic'' and insert ``private 
        economic, credit,''.
    (b) Federal Housing Enterprises Financial Safety and Soundness Act 
of 1992.--Section 1319 of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 (12 U.S.C. 4519) is amended--
            (1) in the section heading, by striking ``by rating 
        organization''; and
            (2) by striking ``that is a nationally recognized 
        statistical rating organization, as such term is defined in 
        section 3(a) of the Securities Exchange Act of 1934,''.
    (c) Investment Company Act of 1940.--Section 6(a)(5)(A)(iv)(I) 
Investment Company Act of 1940 (15 U.S.C. 80a-6(a)(5)(A)(iv)(I)) is 
amended by striking ``is rated investment grade by not less than 1 
nationally recognized statistical rating organization'' and inserting 
``meets such standards of credit-worthiness that the Commission shall 
adopt''.
    (d) Revised Statutes.--Section 5136A of title LXII of the Revised 
Statutes of the United States (12 U.S.C. 24a) is amended--
            (1) in subsection (a)(2)(E), by striking ``any applicable 
        rating'' and inserting ``standards of credit-worthiness 
        established by the Comptroller of the Currency'';
            (2) in the heading for subsection (a)(3) by striking 
        ``Rating or Comparable Requirement'' and inserting 
        ``Requirement'';
            (3) subsection (a)(3), by amending subparagraph (A) to read 
        as follows:
                    ``(A) In general.--A national bank meets the 
                requirements of this paragraph if the bank is one of 
                the 100 largest insured banks and has not fewer than 1 
                issue of outstanding debt that meets standards of 
                credit-worthiness or other criteria as the Secretary of 
                the Treasury and the Board of Governors of the Federal 
                Reserve System may jointly establish.''.
            (4) in the heading for subsection (f), by striking 
        ``Maintain Public Rating or'' and inserting ``Meet Standards of 
        Credit-worthiness''; and
            (5) in subsection (f)(1), by striking ``any applicable 
        rating'' and inserting ``standards of credit-worthiness 
        established by the Comptroller of the Currency''.
    (e) Securities Exchange Act of 1934.--Section 3(a) Securities 
Exchange Act of 1934 (15 U.S.C. 78a(3)(a)) is amended--
            (1) in paragraph (41), by striking ``is rated in one of the 
        two highest rating categories by at least one nationally 
        recognized statistical rating organization'' and inserting 
        ``meets standards of credit-worthiness as defined by the 
        Commission''; and
            (2) in paragraph (53)(A), by striking ``is rated in 1 of 
        the 4 highest rating categories by at least 1 nationally 
        recognized statistical rating organization'' and inserting 
        ``meets standards of credit-worthiness as defined by the 
        Commission''.
    (f) World Bank Discussions.--Section 3(a)(6) of the amendment in 
the nature of a substitute to the text of H.R. 4645, as ordered 
reported from the Committee on Banking, Finance and Urban Affairs on 
September 22, 1988, as enacted into law by section 555 of Public Law 
100-461, (22 U.S.C. 286hh(a)(6)), is amended by striking ``rating'' and 
inserting ``worthiness''.
    (g) Effective Date.--The amendments made by this section shall take 
effect after the end of the 6-month period beginning on the date of the 
enactment of this subtitle.

SEC. 6010. REVIEW OF RELIANCE ON RATINGS.

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

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

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

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

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

SEC. 6013. STUDIES.

    (a) GAO Study.--
            (1) In general.--The Comptroller General shall conduct a 
        study of--
                    (A) the implementation of this subtitle and the 
                amendments made by this subtitle by the Securities and 
                Exchange Commission;
                    (B) the appropriateness of relying on ratings for 
                use in Federal, State, and local securities and banking 
                regulations, including for determining capital 
                requirements; and
                    (C) the effect of liability in private actions 
                arising under the Securities Exchange Act of 1934;
                    (D) alternative means for compensating credit 
                rating agencies that would create incentives for 
                accurate credit ratings and what, if any, statutory 
                changes would be required to permit or facilitate the 
                use of such alternative means of compensation; and
                    (E) alternative methodologies to assess credit 
                risk, including market-based measures.
            (2) Report.--Not later than 30 months after the date of 
        enactment of this subtitle, the Comptroller General shall 
        submit to Congress and the Securities Exchange Commission, a 
        report containing the findings under the study required by 
        subsection (a).
    (b) SEC Study on Assigning Credit Rating Agencies on a Rotating 
Basis.--The Securities and Exchange Commission shall undertake a study 
on creating a system whereby nationally recognized statistical rating 
organizations are assigned on a rotating basis to issuers and obligors 
seeking a credit rating. Not later than 1 year after the date of 
enactment of this subtitle, the Securities and Exchange Commission 
shall transmit to Congress a report containing the findings of the 
study.
    (c) SEC Study on Effect of New Requirements on NRSRO 
Registration.--The Securities and Exchange Commission shall conduct a 
study on the effect of the amendments made by section 2 on credit 
rating agencies seeking to register as nationally recognized 
statistical rating organizations, including whether the new 
requirements in such amendments deter credit rating agencies from 
registering as nationally recognized statistical rating organizations. 
Not later than 1 year after the date of enactment of this subtitle, the 
Commission shall transmit to the Committee on Financial Services of the 
House of Representatives and the Committee on Banking, Housing, and 
Urban Affairs of the Senate a report on the findings of such study.
    (d) Study of Credit Ratings of Different Classes of Bonds.--
            (1) Study.--The Securities and Exchange Commission shall 
        conduct a study of the treatment of different classes of bonds 
        (municipal versus corporate) by the nationally recognized 
        statistical rating organizations. Such study shall examine--
                    (A) whether there are fundamental differences in 
                the treatment of different classes of bonds by such 
                rating organizations that cause some classes of bonds 
                to suffer from undue discrimination;
                    (B) if there are such differences, what are the 
                causes of such differences and how can they be 
                alleviated;
                    (C) whether there are factors other than risk of 
                loss that are appropriate for the credit ratings 
                agencies to consider when rating bonds, and do those 
                factors vary across different sectors
                    (D) the types of financing arrangement used by 
                municipal issuers
                    (E) the differing legal and regulatory regimes 
                governing disclosures for corporate bonds and municipal 
                bonds;
                    (F) the extent to which retail investors could be 
                disadvantaged by a single ratings scale; and
                    (G) practices, policies, and methodologies by the 
                nationally recognized statistical rating organizations 
                with respect to rating municipal bonds.
            (2) Report.--Within 6 months after the date of enactment of 
        this subtitle, the Securities and Exchange Commission shall 
        submit a report on the results of the study required by 
        paragraph (1) to the Committee on Financial Services of the 
        House of Representatives and the Committee on Banking, Housing, 
        and Urban Development of the Senate. Such report shall include 
        as assessment of each of the issues and subjects described in 
        subparagraphs (A) through (G) of paragraph (1).
    (e) SEC Study on Meaningful Multi Digit Rating Symbols.--
            (1) Study.--The Securities and Exchange Commission shall 
        conduct a study on the feasibility and desirability of 
        implementing a standardized rating system whereby ratings 
        symbols contain multiple characters, each representing a range 
        of default probabilities and loss expectations under 
        standardized and increasingly severe levels of market stress. 
        The study shall optimize the definitions of the symbols to 
        maximize their overall usefulness for users of credit ratings.
            (2) Initial example for guidance.--An example to provide 
        initial guidance for the study is a ratings symbol consisting 
        of three digits, each of which corresponds to default 
        probabilities under different levels of market stress as 
        follows:
                    (A) The first digit represents the default 
                probability under ``normal'' market stress, 
                characterized by normal economic fluctuations in 
                addition to a 5 percent decline in asset value and 2 
                percent increase in unemployment.
                    (B) The second digit represents the default 
                probability under more severe market stress, 
                characterized a 20 percent decline in asset value and 5 
                percent increase in unemployment.
                    (C) The third digit represents the default 
                probability under extreme market stress, characterized 
                by a 50 percent decline in asset value and 10 percent 
                increase in unemployment.
            (3) Report.--Not later than 1 year after the date of the 
        enactment of this subtitle, the Commission shall transmit to 
        Congress a report of the study conducted pursuant to paragraph 
        (1), including recommendations on whether the system similar to 
        that described in paragraph (2) should be implemented and, if 
        so, any necessary legislation required to implement such a 
        system.
    (f) SEC Study on Ratings Standardization.--
            (1) In general.--The Securities and Exchange Commission 
        shall undertake a study on the feasability and desirability 
        of--
                    (A) standardizing credit ratings terminology, so 
                that all credit rating agencies issue credit ratings 
                using identical terms;
                    (B) standardizing the market stress conditions 
                under which ratings are evaluated;
                    (C) requiring a quantitative correspondence between 
                credit ratings and a range of default probabilities and 
                loss expectations under standardized conditions of 
                economic stress; and
                    (D) standardizing credit rating terminology across 
                asset classes, so that named ratings shall correspond 
                to a standard range of default probabilities and 
                expected losses independent of asset class and issuing 
                entity.
            (2) Report.--Not later than 1 year after the date of 
        enactment of this subtitle, the Securities and Exchange 
        Commission shall transmit to Congress a report containing the 
        findings of the study and the recommendations of the 
        Commission.

                  Subtitle C--Investor Protection Act

SEC. 7001. SHORT TITLE.

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

                           PART 1--DISCLOSURE

SEC. 7101. INVESTOR ADVISORY COMMITTEE ESTABLISHED.

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

``SEC. 4D. INVESTOR ADVISORY COMMITTEE.

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

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

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

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

    (a) In General.--
            (1) Securities exchange act of 1934.--Section 15 of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78o) (as amended by 
        section 1951(c)) is further amended by adding at the end the 
        following new subsections:
    ``(m) Standard of Conduct.--
            ``(1) In general.--Notwithstanding any other provision of 
        this Act or the Investment Advisers Act of 1940, the Commission 
        shall promulgate rules to provide that, with respect to a 
        broker or dealer, when providing personalized investment advice 
        about securities to a retail customer (and such other customers 
        as the Commission may by rule provide), the standard of conduct 
        for such broker or dealer with respect to such customer shall 
        be the same as the standard of conduct applicable to an 
        investment adviser under 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.
            ``(2) Disclosure of range of products offered.--Where a 
        broker or dealer sells only proprietary or other limited range 
        of products, as determined by the Commission, the Commission 
        shall by rule require that such broker or dealer provide notice 
        to each retail customer and obtain the consent or 
        acknowledgment of the customer. The sale of only proprietary or 
        other limited range of products by a broker or dealer shall 
        not, in and of itself, be considered a violation of the 
        standard set forth in paragraph (1).
            ``(3) Retail customer defined.--For purposes of this 
        subsection, the term `retail customer' means a natural person, 
        or the legal representative of such natural person, who--
                    ``(A) receives personalized investment advice about 
                securities from a broker or dealer; and
                    ``(B) uses such advice primarily for personal, 
                family, or household purposes.
    ``(n) Other Matters.--The Commission shall--
            ``(1) facilitate the provision of simple and clear 
        disclosures to investors regarding the terms of their 
        relationships with brokers, dealers, and investment advisers, 
        including any material conflicts of interest; and
            ``(2) examine and, where appropriate, promulgate rules 
        prohibiting or restricting certain sales practices, conflicts 
        of interest, and compensation schemes for brokers, dealers, and 
        investment advisers that the Commission deems contrary to the 
        public interest and the protection of investors.''.
            (3) Investment advisers act of 1940.--Section 211 of the 
        Investment Advisers Act of 1940, as amended by section 7102(d), 
        is further amended by adding at the end the following new 
        subsections:
    ``(g) Standard of Conduct.--
            ``(1) In general.--The Commission shall promulgate rules to 
        provide that the standard of conduct for all brokers, dealers, 
        and investment advisers, when providing personalized investment 
        advice about securities to retail customers (and such other 
        customers as the Commission may by rule provide), shall be to 
        act in the best interest of the customer without regard to the 
        financial or other interest of the broker, dealer, or 
        investment adviser providing the advice. In accordance with 
        such rules, any material conflicts of interest shall be 
        disclosed and may be consented to by the customer. Such rules 
        shall provide that such standard of conduct shall be no less 
        stringent than the standard applicable to investment advisers 
        under section 206(1) and (2) of this Act when providing 
        personalized investment advice about securities, except the 
        Commission shall not ascribe a meaning to the term `customer' 
        that would include an investor in a private fund managed by an 
        investment adviser, where such private fund has entered into an 
        advisory contract with such adviser. The receipt of 
        compensation based on commission or fees shall not, in and of 
        itself, be considered a violation of such standard applied to a 
        broker, dealer, or investment adviser.
            ``(2) Retail customer defined.--For purposes of this 
        subsection, the term `retail customer' means a natural person, 
        or the legal representative of such natural person, who--
                    ``(A) receives personalized investment advice about 
                securities from a broker, dealer, or investment 
                adviser; and
                    ``(B) uses such advice primarily for personal, 
                family, or household purposes.
    ``(h) Other Matters.--The Commission shall--
            ``(1) facilitate the provision of simple and clear 
        disclosures to investors regarding the terms of their 
        relationships with brokers, dealers, and investment advisers, 
        including any material conflicts of interest; and
            ``(2) examine and, where appropriate, promulgate rules 
        prohibiting or restricting certain sales practices, conflicts 
        of interest, and compensation schemes for brokers, dealers, and 
        investment advisers that the Commission deems contrary to the 
        public interest and the protection of investors.''.
    (b) Harmonization of Enforcement.--
            (1) Securities exchange act of 1934.--Section 15 of the 
        Securities Exchange Act of 1934, as amended by subsection 
        (a)(1), is further amended by adding at the end the following 
        new subsection:
    ``(o) Harmonization of Enforcement.--The enforcement authority of 
the Commission with respect to violations of the standard of conduct 
applicable to a broker or dealer providing personalized investment 
advice about securities to a retail customer shall include--
            ``(1) the enforcement authority of the Commission with 
        respect to such violations provided under this Act, and
            ``(2) the enforcement authority of the Commission with 
        respect to violations of the standard of conduct applicable to 
        an investment advisor under the Investment Advisers Act of 
        1940, including the authority to impose sanctions for such 
        violations, and
the Commission shall seek to prosecute and sanction violators of the 
standard of conduct applicable to a broker or dealer providing 
personalized investment advice about securities to a retail customer 
under this Act to same extent as the Commission prosecutes and 
sanctions violators of the standard of conduct applicable to an 
investment advisor under the Investment Advisers Act of 1940.''.
            (2) Investment advisers act of 1940.--Section 211 of the 
        Investment Advisers Act of 1940, as amended by subsection 
        (a)(2), is further amended by adding at the end the following 
        new subsection:
    ``(i) Harmonization of Enforcement.--The enforcement authority of 
the Commission with respect to violations of the standard of conduct 
applicable to an investment adviser shall include--
            ``(1) the enforcement authority of the Commission with 
        respect to such violations provided under this Act, and
            ``(2) the enforcement authority of the Commission with 
        respect to violations of the standard of conduct applicable to 
        a broker or dealer providing personalized investment advice 
        about securities to a retail customer under the Securities 
        Exchange Act of 1934, including the authority to impose 
        sanctions for such violations, and
the Commission shall seek to prosecute and sanction violators of the 
standard of conduct applicable to an investment advisor under this Act 
to same extent as the Commission prosecutes and sanctions violators of 
the standard of conduct applicable to a broker or dealer providing 
personalized investment advice about securities to a retail customer 
under the Securities Exchange Act of 1934.''.

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

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

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

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

SEC. 7106. REVISION TO RECORDKEEPING RULES.

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

SEC. 7107. STUDY ON ENHANCING INVESTMENT ADVISOR EXAMINATIONS.

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

SEC. 7108. GAO STUDY OF FINANCIAL PLANNING.

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

                    PART 2--ENFORCEMENT AND REMEDIES

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

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

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

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

SEC. 7203. WHISTLEBLOWER PROTECTION.

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

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

    ``(a) In General.--In any judicial or administrative action brought 
by the Commission under the securities laws that results in monetary 
sanctions exceeding $1,000,000, the Commission, under regulations 
prescribed by the Commission and subject to subsection (b), may pay an 
award or awards not exceeding an amount equal to 30 percent, in total, 
of the monetary sanctions imposed in the action or related actions to 
one or more whistleblowers who voluntarily provided original 
information to the Commission that led to the successful enforcement of 
the action. Any amount payable under the preceding sentence shall be 
paid from the fund described in subsection (f).
    ``(b) Determination of Amount of Award; Denial of Award.--
            ``(1) Determination of amount of award.--The determination 
        of the amount of an award, within the limit specified in 
        subsection (a), shall be in the sole discretion of the 
        Commission. The Commission may take into account the 
        significance of the whistleblower's information to the success 
        of the judicial or administrative action described in 
        subsection (a), the degree of assistance provided by the 
        whistleblower and any legal representative of the whistleblower 
        in such action, the Commission's programmatic interest in 
        deterring violations of the securities laws by making awards to 
        whistleblowers who provide information that leads to the 
        successful enforcement of such laws, and such additional 
        factors as the Commission may establish by rules or 
        regulations.
            ``(2) Denial of award.--No award under subsection (a) shall 
        be made--
                    ``(A) to any whistleblower who is, or was at the 
                time he or she acquired the original information 
                submitted to the Commission, a member, officer, or 
                employee of any appropriate regulatory agency, the 
                Department of Justice, the Public Company Accounting 
                Oversight Board, or a self-regulatory organization;
                    ``(B) to any whistleblower who is convicted of a 
                criminal violation related to the judicial or 
                administrative action for which the whistleblower 
                otherwise could receive an award under this section; or
                    ``(C) to any whistleblower who fails to submit 
                information to the Commission in such form as the 
                Commission may, by rule, require.
    ``(c) Representation.--
            ``(1) Permitted representation.--Any whistleblower who 
        makes a claim for an award under subsection (a) may be 
        represented by counsel.
            ``(2) Required representation.--Any whistleblower who makes 
        a claim for an award under subsection (a) must be represented 
        by counsel if the whistleblower submits the information upon 
        which the claim is based anonymously. Prior to the payment of 
        an award, the whistleblower must disclose his or her identity 
        and provide such other information as the Commission may 
        require.
    ``(d) No Contract Necessary.--No contract with the Commission is 
necessary for any whistleblower to receive an award under subsection 
(a), unless the Commission, by rule or regulation, so requires.
    ``(e) Appeals.--Any determinations under this section, including 
whether, to whom, or in what amounts to make awards, shall be in the 
sole discretion of the Commission, and any such determinations shall be 
final and not subject to judicial review.
    ``(f) Investor Protection Fund.--
            ``(1) Fund established.--There is established in the 
        Treasury of the United States a fund to be known as the 
        `Securities and Exchange Commission Investor Protection Fund' 
        (referred to in this section as the `Fund').
            ``(2) Use of fund.--The Fund shall be available to the 
        Commission, without further appropriation or fiscal year 
        limitation, for the following purposes:
                    ``(A) Paying awards to whistleblowers as provided 
                in subsection (a).
                    ``(B) Funding investor education initiatives 
                designed to help investors protect themselves against 
                securities fraud or other violations of the securities 
                laws, or the rules and regulations thereunder.
            ``(3) Deposits and credits.--There shall be deposited into 
        or credited to the Fund--
                    ``(A) any monetary sanction collected by the 
                Commission in any judicial or administrative action 
                brought by the Commission under the securities laws 
                that is not added to a disgorgement fund or other fund 
                pursuant to section 308 of the Sarbanes-Oxley Act of 
                2002 or otherwise distributed to victims of a violation 
                of the securities laws, or the rules and regulations 
                thereunder, underlying such action, unless the balance 
                of the Fund at the time the monetary sanction is 
                collected exceeds $100,000,000;
                    ``(B) any monetary sanction added to a disgorgement 
                fund or other fund pursuant to section 308 of the 
                Sarbanes-Oxley Act of 2002 that is not distributed to 
                the victims for whom the disgorgement fund or other 
                fund was established, unless the balance of the Fund at 
                the time the determination is made not to distribute 
                the monetary sanction to such victims exceeds 
                $100,000,000; and
                    ``(C) all income from investments made under 
                paragraph (4).
            ``(4) Investments.--
                    ``(A) Amounts in fund may be invested.--The 
                Commission may request the Secretary of the Treasury to 
                invest the portion of the Fund that is not, in the 
                Commission's judgment, required to meet the current 
                needs of the Fund.
                    ``(B) Eligible investments.--Investments shall be 
                made by the Secretary of the Treasury in obligations of 
                the United States or obligations that are guaranteed as 
                to principal and interest by the United States, with 
                maturities suitable to the needs of the Fund as 
                determined by the Commission.
                    ``(C) Interest and proceeds credited.--The interest 
                on, and the proceeds from the sale or redemption of, 
                any obligations held in the Fund shall be credited to, 
                and form a part of, the Fund.
            ``(5) Reports to congress.--Not later than October 30 of 
        each year, the Commission shall transmit to the Committee on 
        Banking, Housing, and Urban Affairs of the Senate, and the 
        Committee on Financial Services of the House of Representatives 
        a report on--
                    ``(A) the Commission's whistleblower award program 
                under this section, including a description of the 
                number of awards that were granted and the types of 
                cases in which awards were granted during the preceding 
                fiscal year;
                    ``(B) investor education initiatives described in 
                paragraph (2)(B) that were funded by the Fund during 
                the preceding fiscal year;
                    ``(C) the balance of the Fund at the beginning of 
                the preceding fiscal year;
                    ``(D) the amounts deposited into or credited to the 
                Fund during the preceding fiscal year;
                    ``(E) the amount of earnings on investments of 
                amounts in the Fund during the preceding fiscal year;
                    ``(F) the amount paid from the Fund during the 
                preceding fiscal year to whistleblowers pursuant to 
                subsection (a);
                    ``(G) the amount paid from the Fund during the 
                preceding fiscal year for investor education 
                initiatives described in paragraph (1)(B);
                    ``(H) the balance of the Fund at the end of the 
                preceding fiscal year; and
                    ``(I) a complete set of audited financial 
                statements, including a balance sheet, income 
                statement, and cash flow analysis.
    ``(g) Protection of Whistleblowers.--
            ``(1) Prohibition against retaliation.--
                    ``(A) In general.--No employer may discharge, 
                demote, suspend, threaten, harass, or in any other 
                manner discriminate against an employee, contractor, or 
                agent in the terms and conditions of employment because 
                of any lawful act done by the employee, contractor, or 
                agent in providing information to the Commission in 
                accordance with subsection (a), or in assisting in any 
                investigation or judicial or administrative action of 
                the Commission based upon or related to such 
                information.
                    ``(B) Enforcement.--
                            ``(i) Cause of action.--An individual who 
                        alleges discharge or other discrimination in 
                        violation of subparagraph (A) may bring an 
                        action under this subsection in the appropriate 
                        district court of the United States for the 
                        relief provided in subparagraph (C).
                            ``(ii) Subpoenas.--A subpoena requiring the 
                        attendance of a witness at a trial or hearing 
                        conducted under this section may be served at 
                        any place in the United States.
                            ``(iii) Statute of limitations.--An action 
                        under this subsection may not be brought more 
                        than 6 years after the date on which the 
                        violation of subparagraph (A) occurred, or more 
                        than 3 years after the date when facts material 
                        to the right of action are known or reasonably 
                        should have been known by the employee alleging 
                        a violation of subparagraph (A), but in no 
                        event after 10 years after the date on which 
                        the violation occurs.
                    ``(C) Relief.--An employee, contractor, or agent 
                prevailing in any action brought under subparagraph (B) 
                shall be entitled to all relief necessary to make that 
                employee, contractor, or agent whole, including 
                reinstatement with the same seniority status that the 
                employee, contractor, or agent would have had, but for 
                the discrimination, 2 times the amount of back pay, 
                with interest, and compensation for any special damages 
                sustained as a result of the discrimination, including 
                litigation costs, expert witness fees, and reasonable 
                attorneys' fees.
            ``(2) Confidentiality.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), all information provided to the 
                Commission by a whistleblower shall be confidential and 
                privileged as an evidentiary matter (and shall not be 
                subject to civil discovery or other legal process) in 
                any proceeding in any Federal or State court or 
                administrative agency, and shall be exempt from 
                disclosure, in the hands of an agency or establishment 
                of the Federal Government, under the Freedom of 
                Information Act (5 U.S.C. 552), or otherwise, unless 
                and until required to be disclosed to a defendant or 
                respondent in connection with a proceeding instituted 
                by the Commission or any entity described in 
                subparagraph (B). For purposes of section 552 of title 
                5, United States Code, this paragraph shall be 
                considered a statute described in subsection (b)(3)(B) 
                of such section 552. Nothing herein is intended to 
                limit the Attorney General's ability 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.
                    ``(B) Availability to government agencies.--Without 
                the loss of its status as confidential and privileged 
                in the hands of the Commission, all information 
                referred to in subparagraph (A) may, in the discretion 
                of the Commission, when determined by the Commission to 
                be necessary to accomplish the purposes of this Act and 
                protect investors, be made available to--
                            ``(i) the Attorney General of the United 
                        States,
                            ``(ii) an appropriate regulatory authority,
                            ``(iii) a self-regulatory organization,
                            ``(iv) the Public Company Accounting 
                        Oversight Board,
                            ``(v) State attorneys general in connection 
                        with any criminal investigation, and
                            ``(vi) any appropriate State regulatory 
                        authority,
                each of which shall maintain such information as 
                confidential and privileged, in accordance with the 
                requirements in subparagraph (A).
            ``(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.
    ``(h) Provision of False Information.--Any whistleblower who 
knowingly and willfully makes any false, fictitious, or fraudulent 
statement or representation, or makes or uses any false writing or 
document knowing the same to contain any false, fictitious, or 
fraudulent statement or entry, shall not be entitled to an award under 
this section and shall be subject to prosecution under section 1001 of 
title 18, United States Code.
    ``(i) Rulemaking Authority.--The Commission shall have the 
authority to issue such rules and regulations as may be necessary or 
appropriate to implement the provisions of this section.
    ``(j) Definitions.--For purposes of this section, the following 
terms have the following meanings:
            ``(1) Original information.--The term `original 
        information' means information that--
                    ``(A) is based on the direct and independent 
                knowledge or analysis of a whistleblower;
                    ``(B) is not known to the Commission from any other 
                source, unless the whistleblower is the initial source 
                of the information; and
                    ``(C) is not based on allegations in a judicial or 
                administrative hearing, in a governmental report, 
                hearing, audit, or investigation, or from the news 
                media, unless the whistleblower is the initial source 
                of the information that resulted in the judicial or 
                administrative hearing, governmental report, hearing, 
                audit, or investigation, or the news media's report on 
                the allegations.
            ``(2) Monetary sanctions.--The term `monetary sanctions', 
        when used with respect to any judicial or administrative 
        action, means any monies, including but not limited to 
        penalties, disgorgement, and interest, ordered to be paid, and 
        any monies deposited into a disgorgement fund or other fund 
        pursuant to section 308(b) of the Sarbanes-Oxley Act of 2002 
        (15 U.S.C. 7246(b)), as a result of such action or any 
        settlement of such action.
            ``(3) Related action.--The term `related action', when used 
        with respect to any judicial or administrative action brought 
        by the Commission under the securities laws, means any judicial 
        or administrative action brought by an entity described in 
        subsection (g)(2)(B) that is based upon the same original 
        information provided by a whistleblower pursuant to subsection 
        (a) that led to the successful enforcement of the Commission 
        action.
            ``(4) Whistleblower.--The term `whistleblower' means an 
        individual, or two or more individuals acting jointly, who 
        submit information to the Commission as provided in this 
        section.''.
    (b) Administration and Enforcement.--The Securities and Exchange 
Commission shall establish a separate office within the Commission to 
administer and enforce the provisions of section 21F of the Securities 
Exchange Act of 1934, as added by subsection (a). Such office shall 
report annually to Congress on its activities, whistleblower 
complaints, and the response of the Commission to such complaints.

SEC. 7204. CONFORMING AMENDMENTS FOR WHISTLEBLOWER PROTECTION.

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

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

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

SEC. 7206. COLLATERAL BARS.

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

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

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

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

    Section 209 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-
9) is amended by inserting at the end the following new subsections:
    ``(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.
    ``(g) Enforcement by National Securities Associations.--The 
Commission may permit or require a national securities association 
registered under the Securities Exchange Act of 1934 to enforce 
compliance by its members and persons associated with its members with 
the provisions of this Act, the rules and regulations thereunder, and 
to adopt such rules (subject to any rule or order of the Commission 
pursuant to the Securities Exchange Act of 1934) as the association may 
deem necessary and in the public interest to further the purposes of 
this Act.''.

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

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

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

    ``(a) Enforcement Investigations.--
            ``(1) In general.--Not later than 180 days after the date 
        on which Commission staff provide a written Wells notification 
        to any person, the Commission staff shall either file an action 
        against such person or provide notice to the Director of the 
        Division of Enforcement of its intent to not file an action.
            ``(2) Exceptions for certain complex actions.--
        Notwithstanding paragraph (1), if the head of any division or 
        office within the Commission or his 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 head of any division or office 
        within the Commission or his 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 head of any division or office 
        within the Commission or his 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 head of any division or office within the 
        Commission or his 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 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 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 or his designee may, 
        after providing notice to the Chairman of the Commission, 
        extend such deadline as needed for one additional 180-day 
        period.''.

SEC. 7210. NATIONWIDE SERVICE OF SUBPOENAS.

    (a) Securities Act of 1933.--Section 22(a) of the Securities Act of 
1933 (15 U.S.C. 77v(a)) is amended by inserting after the second 
sentence the following: ``In any action or proceeding instituted by the 
Commission under this title in a United States district court for any 
judicial district, subpoenas issued to compel the attendance of 
witnesses or the production of documents or tangible things (or both) 
at a hearing or trial may be served at any place within the United 
States.''.
    (b) Securities Exchange Act of 1934.--Section 27 of the Securities 
Exchange Act of 1934 (15 U.S.C. 78aa) is amended by inserting after the 
third sentence the following: ``In any action or proceeding instituted 
by the Commission under this title in a United States district court 
for any judicial district, subpoenas issued to compel the attendance of 
witnesses 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.''.
    (c) Investment Company Act of 1940.--Section 44 of the Investment 
Company Act of 1940 (15 U.S.C. 80a-43) is amended by inserting after 
the fourth sentence the following: ``In any action or proceeding 
instituted by the Commission under this title in a United States 
district court for any judicial district, subpoenas issued to compel 
the attendance of witnesses 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.''.
    (d) Investment Advisers Act of 1940.--Section 214 of the Investment 
Advisers Act of 1940 (15 U.S.C. 80b-14) is amended by inserting after 
the third sentence the following: ``In any action or proceeding 
instituted by the Commission under this title in a United States 
district court for any judicial district, subpoenas issued to compel 
the attendance of witnesses 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.''.

SEC. 7211. AUTHORITY TO IMPOSE CIVIL PENALTIES IN CEASE AND DESIST 
              PROCEEDINGS.

    (a) Under the Securities Act of 1933.--Section 8A of the Securities 
Act of 1933 (15 U.S.C. 77h-1) is amended by adding at the end the 
following new subsection:
    ``(g) Authority to Impose Money Penalties.--
            ``(1) Grounds for imposing.--In any cease-and-desist 
        proceeding under subsection (a), the Commission may impose a 
        civil penalty on a person if it finds, on the record after 
        notice and opportunity for hearing, that--
                    ``(A) such person--
                            ``(i) is violating or has violated any 
                        provision of this title, or any rule or 
                        regulation thereunder; or
                            ``(ii) is or was a cause of the violation 
                        of any provision of this title, or any rule or 
                        regulation thereunder; and
                    ``(B) such penalty is in the public interest.
            ``(2) Maximum amount of penalty.--
                    ``(A) First tier.--The maximum amount of penalty 
                for each act or omission described in paragraph (1) 
                shall be $7,500 for a natural person or $75,000 for any 
                other person.
                    ``(B) Second tier.--Notwithstanding paragraph (A), 
                the maximum amount of penalty for each such act or 
                omission shall be $75,000 for a natural person or 
                $375,000 for any other person if the act or omission 
                described in paragraph (1) involved fraud, deceit, 
                manipulation, or deliberate or reckless disregard of a 
                regulatory requirement.
                    ``(C) Third tier.--Notwithstanding paragraphs (A) 
                and (B), the maximum amount of penalty for each such 
                act or omission shall be $150,000 for a natural person 
                or $725,000 for any other person if--
                            ``(i) the act or omission described in 
                        paragraph (1) involved fraud, deceit, 
                        manipulation, or deliberate or reckless 
                        disregard of a regulatory requirement; and
                            ``(ii) such act or omission directly or 
                        indirectly resulted in substantial losses or 
                        created a significant risk of substantial 
                        losses to other persons or resulted in 
                        substantial pecuniary gain to the person who 
                        committed the act or omission.
            ``(3) Evidence concerning ability to pay.--In any 
        proceeding in which the Commission may impose a penalty under 
        this section, a respondent may present evidence of the 
        respondent's ability to pay such penalty. The Commission may, 
        in its discretion, consider such evidence in determining 
        whether such penalty is in the public interest. Such evidence 
        may relate to the extent of such person's ability to continue 
        in business and the collectability of a penalty, taking into 
        account any other claims of the United States or third parties 
        upon such person's assets and the amount of such person's 
        assets.''.
    (b) Under the Securities Exchange Act of 1934.--Subsection (a) of 
section 21B of the Securities Exchange Act of 1934 (15 U.S.C. 78u-2(a)) 
is amended--
            (1) by striking ``(a) Commission Authority To Assess Money 
        Penalties.--In any proceeding'' and inserting the following:
    ``(a) Commission Authority To Assess Money Penalties.--
            ``(1) In general.--In any proceeding'';
            (2) by redesignating paragraphs (1) through (4) of such 
        subsection as subparagraphs (A) through (D), respectively, and 
        moving such redesignated subparagraphs and the matter following 
        such subparagraphs 2 ems to the right; and
            (3) by adding at the end of such subsection the following 
        new paragraph:
            ``(2) Cease-and-desist proceedings.--In any proceeding 
        instituted pursuant to section 21C of this title against any 
        person, the Commission may impose a civil penalty if it finds, 
        on the record after notice and opportunity for hearing, that 
        such person--
                    ``(A) is violating or has violated any provision of 
                this title, or any rule or regulation thereunder; or
                    ``(B) is or was a cause of the violation of any 
                provision of this title, or any rule or regulation 
                thereunder.''.
    (c) Under the Investment Company Act of 1940.--Paragraph (1) of 
section 9(d) of the Investment Company Act of 1940 (15 U.S.C. 80a-
9(d)(1)) is amended--
            (1) by striking ``(1) Authority of commission.--In any 
        proceeding'' and inserting the following:
            ``(1) Authority of commission.--
                    ``(A) In general.--In any proceeding'';
            (2) by redesignating subparagraphs (A) through (C) of such 
        paragraph as clauses (i) through (iii), respectively, and by 
        moving such redesignated clauses and the matter following such 
        subparagraphs 2 ems to the right; and
            (3) by adding at the end of such paragraph the following 
        new subparagraph:
                    ``(B) Cease-and-desist proceedings.--In any 
                proceeding instituted pursuant to subsection (f) 
                against any person, the Commission may impose a civil 
                penalty if it finds, on the record after notice and 
                opportunity for hearing, that such person--
                            ``(i) is violating or has violated any 
                        provision of this title, or any rule or 
                        regulation thereunder; or
                            ``(ii) is or was a cause of the violation 
                        of any provision of this title, or any rule or 
                        regulation thereunder.''.
    (d) Under the Investment Advisers Act of 1940.--Paragraph (1) of 
section 203(i) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-
3(i)(1)) is amended--
            (1) by striking ``(1) Authority of commission.--In any 
        proceeding'' and inserting the following:
            ``(1) Authority of commission.--
                    ``(A) In general.--In any proceeding'';
            (2) by redesignating subparagraphs (A) through (D) of such 
        paragraph as clauses (i) through (iv), respectively, and moving 
        such redesignated clauses and the matter following such 
        subparagraphs 2 ems to the right; and
            (3) by adding at the end of such paragraph the following 
        new subparagraph:
                    ``(B) Cease-and-desist proceedings.--In any 
                proceeding instituted pursuant to subsection (k) 
                against any person, the Commission may impose a civil 
                penalty if it finds, on the record after notice and 
                opportunity for hearing, that such person--
                            ``(i) is violating or has violated any 
                        provision of this title, or any rule or 
                        regulation thereunder; or
                            ``(ii) is or was a cause of the violation 
                        of any provision of this title, or any rule or 
                        regulation thereunder.''.

SEC. 7212. FORMERLY ASSOCIATED PERSONS.

    (a) Member or Employee of the Municipal Securities Rulemaking 
Board.--Section 15B(c)(8) of the Securities Exchange Act of 1934 (15 
U.S.C. 78o-4(c)(8)) is amended by striking ``any member or employee'' 
and inserting ``any person who is, or at the time of the alleged 
misconduct was, a member or employee''.
    (b) Person Associated With a Government Securities Broker or 
Dealer.--Section 15C of the Securities Exchange Act of 1934 (15 U.S.C. 
78o-5) is amended--
            (1) in subsection (c)(1)(C), by striking ``or seeking to 
        become associated,'' and inserting ``seeking to become 
        associated, or, at the time of the alleged misconduct, 
        associated or seeking to become associated'';
            (2) in subsection (c)(2)(A), by inserting ``, seeking to 
        become associated, or, at the time of the alleged misconduct, 
        associated or seeking to become associated'' after ``any person 
        associated''; and
            (3) in subsection (c)(2)(B), by inserting ``, seeking to 
        become associated, or, at the time of the alleged misconduct, 
        associated or seeking to become associated'' after ``any person 
        associated''.
    (c) Person Associated With a Member of a National Securities 
Exchange or Registered Securities Association.--Section 21(a)(1) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78u(a)(1)) is amended by 
inserting ``, or, as to any act or practice, or omission to act, while 
associated with a member, formerly associated'' after ``member or a 
person associated''.
    (d) Participant of a Registered Clearing Agency.--Section 21(a)(1) 
of the Securities Exchange Act of 1934 (15 U.S.C. 78u(a)(1)) is amended 
by inserting ``or, as to any act or practice, or omission to act, while 
a participant, was a participant,'' after ``in which such person is a 
participant,''.
    (e) Officer or Director of a Self-regulatory Organization.--Section 
19(h)(4) of the Securities Exchange Act of 1934 (15 U.S.C. 78s(h)(4)) 
is amended--
            (1) by striking ``any officer or director'' and inserting 
        ``any person who is, or at the time of the alleged misconduct 
        was, an officer or director''; and
            (2) by striking ``such officer or director'' and inserting 
        ``such person''.
    (f) Officer or Director of an Investment Company.--Section 36(a) of 
the Investment Company Act of 1940 (15 U.S.C. 80a-35(a)) is amended--
            (1) by striking ``a person serving or acting'' and 
        inserting ``a person who is, or at the time of the alleged 
        misconduct was, serving or acting''; and
            (2) by striking ``such person so serves or acts'' and 
        inserting ``such person so serves or acts, or at the time of 
        the alleged misconduct, so served or acted''.
    (g) Person Associated With a Public Accounting Firm.--
            (1) Sarbanes-oxley act of 2002 amendment.--Section 2(a)(9) 
        of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7201(9)) is 
        amended by adding at the end the following new subparagraph:
                    ``(C) Investigative and enforcement authority.--For 
                purposes of the provisions of sections 3(c), 101(c), 
                105, and 107(c) and Board or Commission rules 
                thereunder, except to the extent specifically excepted 
                by such rules, the terms defined in subparagraph (A) 
                shall include any person associated, seeking to become 
                associated, or formerly associated with a public 
                accounting firm, except--
                            ``(i) the authority to conduct an 
                        investigation of such person under section 
                        105(b) shall apply only with respect to any act 
                        or practice, or omission to act, while such 
                        person was associated or seeking to become 
                        associated with a registered public accounting 
                        firm; and
                            ``(ii) the authority to commence a 
                        proceeding under section 105(c)(1), or impose 
                        disciplinary sanctions under section 105(c)(4), 
                        against such person shall apply only on--
                                    ``(I) the basis of conduct 
                                occurring while such person was 
                                associated or seeking to become 
                                associated with a registered public 
                                accounting firm; or
                                    ``(II) non-cooperation as described 
                                in section 105(b)(3) with respect to a 
                                demand in a Board investigation for 
                                testimony, documents, or other 
                                information relating to a period when 
                                such person was associated or seeking 
                                to become associated with a registered 
                                public accounting firm.''.
            (2) Securities exchange act of 1934 amendment.--Section 
        21(a)(1) of the Securities Exchange Act of 1934 (15 U.S.C. 
        78u(a)(1)) is amended by striking ``or a person associated with 
        such a firm'' and inserting ``, a person associated with such a 
        firm, or, as to any act, practice, or omission to act while 
        associated with such firm, a person formerly associated with 
        such a firm''.
    (h) Supervisory Personnel of an Audit Firm.--Section 105(c)(6) of 
the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7215(c)(6)) is amended--
            (1) in subparagraph (A), by striking ``the supervisory 
        personnel'' and inserting ``any person who is, or at the time 
        of the alleged failure reasonably to supervise was, a 
        supervisory person''; and
            (2) in subparagraph (B)--
                    (A) by striking ``No associated person'' and 
                inserting ``No current or former supervisory person''; 
                and
                    (B) by striking ``any other person'' and inserting 
                ``any associated person''.
    (i) Member of the Public Company Accounting Oversight Board.--
Section 107(d)(3) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 
7217(d)(3)) is amended by striking ``any member'' and inserting ``any 
person who is, or at the time of the alleged misconduct was, a 
member''.

SEC. 7213. SHARING PRIVILEGED INFORMATION WITH OTHER AUTHORITIES.

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

SEC. 7214. EXPANDED ACCESS TO GRAND JURY MATERIAL.

    (a) In General.--Title VI of the Sarbanes-Oxley Act of 2002 is 
amended by adding at the end the following new section:

``SEC. 605. ACCESS TO GRAND JURY INFORMATION.

    ``(a) Disclosure.--
            ``(1) In general.--Upon motion of an attorney for the 
        government, a court may direct disclosure of matters occurring 
        before a grand jury during an investigation of conduct that may 
        constitute a violation of any provision of the securities laws 
        to the Commission for use in relation to any matter within the 
        jurisdiction of the Commission.
            ``(2) Substantial need required.--A court may issue an 
        order under paragraph (1) only upon a finding of a substantial 
        need in the public interest.
    ``(b) Use of Matter.--A person to whom a matter has been disclosed 
under this section shall not use such matter other than for the purpose 
for which such disclosure was authorized.
    ``(c) Definitions.--As used in this section, the terms `attorney 
for the government' and `grand jury information' have the meanings 
given to those terms in section 3322 of title 18, United States 
Code.''.
    (b) Conforming Amendment.--The table of contents in section 1(b) of 
the Sarbanes-Oxley Act of 2002 is amended by inserting after the item 
relating to section 604 the following:

``Sec. 605. Access to grand jury information.''.

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

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

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

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

SEC. 7217. FIDELITY BONDING.

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

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

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

SEC. 7219. INVESTMENT COMPANY EXAMINATIONS.

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

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

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

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

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

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

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

              PART 3--COMMISSION FUNDING AND ORGANIZATION

SEC. 7301. AUTHORIZATION OF APPROPRIATIONS.

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

``SEC. 35. AUTHORIZATION OF APPROPRIATIONS.

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

SEC. 7302. INVESTMENT ADVISER REGULATION FUNDING.

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

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

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

SEC. 7304. COMMISSION ORGANIZATIONAL STUDY AND REFORM.

    (a) Study Required.--
            (1) In general.--Not later than the end of the 90-day 
        period beginning on the date of the enactment of this subtitle, 
        the Securities and Exchange Commission (hereinafter in this 
        section referred to as the ``SEC'') shall hire an independent 
        consultant of high caliber and with expertise in organizational 
        restructuring and the operations of capital markets to examine 
        the internal operations, structure, funding, and the need for 
        comprehensive reform of the SEC, as well as the SEC's 
        relationship with 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);
            (2) recommendations for legislative, regulatory, or 
        administrative action that the consultant determines 
        appropriate to enable the SEC and other entities on which it 
        reports to perform their statutorily or otherwise mandated 
        missions.
    (c) SEC Report.--Not later than the end of the 6-month period 
beginning on the date the consultant issues the report under subsection 
(b), and every 6-months thereafter during the 2-year period following 
the date on which the consultant issues such report, the SEC shall 
issue a report to the Committee on Financial Services of the House of 
Representatives and the Committee on Banking, Housing, and Urban 
Affairs of the Senate describing the SEC's implementation of the 
regulatory and administrative recommendations contained in the 
consultant's report.

SEC. 7305. CAPITAL MARKETS SAFETY BOARD.

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

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

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

SEC. 7307. JOINT ADVISORY COMMITTEE.

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

                 PART 4--ADDITIONAL COMMISSION REFORMS

SEC. 7401. REGULATION OF SECURITIES LENDING.

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

SEC. 7402. LOST AND STOLEN SECURITIES.

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

SEC. 7403. FINGERPRINTING.

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

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

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

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

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

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

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

SEC. 7407. PROMOTING TRANSPARENCY IN FINANCIAL REPORTING.

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

SEC. 7408. UNLAWFUL MARGIN LENDING.

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

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

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

SEC. 7410. TECHNICAL CORRECTIONS.

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

SEC. 7411. MUNICIPAL SECURITIES.

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

SEC. 7412. INTERESTED PERSON DEFINITION.

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

SEC. 7413. RULEMAKING AUTHORITY TO PROTECT REDEEMING INVESTORS.

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

SEC. 7414. STUDY ON SEC REVOLVING DOOR.

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

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

    (a) Study Required.--The Government Accountability Office and the 
Securities and Exchange Commission shall each conduct a study 
evaluating the costs and benefits of complying with section 404(b) of 
the Sarbanes-Oxley Act of 2002 (15 U.S.C. Sec.  7262(b)) on issuers who 
are not accelerated or large accelerated filers as defined by 
Commission Rule 12b-2. The study shall--
            (1) include recommendations, administrative reforms, and 
        legislative proposals on implementation steps that could be 
        taken to reduce compliance burdens on these issuers; and
            (2) determine the efficacy of the Securities and Exchange 
        Commission's measures to limit the cost of compliance on 
        smaller issuers.
    (b) Reports Required.--On or before June 1, 2010, the Government 
Accountability Office and the Securities and Exchange Commission shall 
submit separate reports to Congress containing the findings and 
conclusions of the studies required under subsection (a), together with 
such recommendations for regulatory, legislative, or administrative 
action as may be appropriate.
    (c) Effective Date Contingent on Reports.--Requirements under 
section 404(b) of the Sarbanes-Oxley Act of 2002 on issuers described 
under subsection (a) shall not become effective until the results of 
the report are delivered, but in no case before June 1, 2011.

SECTION 7416. ANALYSIS OF RULE REGARDING SMALLER REPORTING COMPANIES.

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

SEC. 7417. FINANCIAL REPORTING FORUM.

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

SEC. 7418. INVESTMENT ADVISERS SUBJECT TO STATE AUTHORITIES.

    Section 203A(a) of the Investment Advisers Act of 1940 (15 U.S.C. 
80b-3a(a)) is amended--
            (1) by redesignating paragraph (2) as paragraph (3); and
            (2) by inserting after paragraph (1) the following new 
        paragraph:
            ``(2) Treatment of certain mid-sized investment advisers.--
        Notwithstanding paragraph (1), an investment adviser that--
                    ``(A) is regulated and examined, or required to be 
                regulated and examined, by a State; and
                    ``(B) has assets under management between--
                            ``(i) the amount specified under 
                        subparagraph (A) of paragraph (1), as such 
                        amount may have been adjusted by the Commission 
                        pursuant to that subparagraph, and
                            ``(ii) $100,000,000, or such higher amount 
                        as the Commission may, by rule, deem 
                        appropriate in accordance with the purposes of 
                        this title,
                shall register with, and be subject to examination by, 
                such State. The Commission shall publish a list of the 
                States that regulate and examine, or require regulation 
                and examination of, investment advisers to which the 
                requirements of this paragraph apply.''.

SEC. 7419. CUSTODIAL REQUIREMENTS.

    Not later than 180 days after the date of the enactment of this 
subtitle, the Securities and Exchange Commission shall adopt a rule 
pursuant to its authority under section 211(a) of the Investment 
Advisers Act of 1940 making it unlawful under section 206(4) of such 
Act for an investment adviser registered under the Act to have custody 
of funds or securities of a client the value of which exceeds 
$10,000,000, subject to such exception the Commission determines in 
such rule are in the public interest and consistent with the protection 
of investors, unless--
            (1) the funds and securities are maintained with a 
        qualified custodian either in a separate account for each 
        client under the client's name, or in accounts that contain 
        only client funds and securities under the name of the 
        investment adviser as agent or trustee for the client; and
            (2) the qualified custodian does not directly or indirectly 
        provide investment advice with respect to such funds or 
        securities.

SEC. 7420. OMBUDSMAN.

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

         PART 5--SECURITIES INVESTOR PROTECTION ACT AMENDMENTS

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

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

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

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

SEC. 7503. INCREASING THE CASH LIMIT OF PROTECTION.

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

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

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

SEC. 7505. INSIDERS INELIGIBLE FOR SIPC ADVANCES.

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

SEC. 7506. ELIGIBILITY FOR DIRECT PAYMENT PROCEDURE.

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

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

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

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

    Section 14 of the Securities Investor Protection Act of 1970 (15 
U.S.C. 78jjj) is amended by adding at the end the following new 
subsection:
    ``(d) Misrepresentation of SIPC Membership or Protection.--
            ``(1) In general.--Any person who falsely represents by any 
        means (including, without limitation, through the Internet or 
        any other medium of mass communication), with actual knowledge 
        of the falsity of the representation and with an intent to 
        deceive or cause injury to another, that such person, or 
        another person, is a member of SIPC or that any person or 
        account is protected or is eligible for protection under this 
        Act or by SIPC, shall be liable for any damages caused thereby 
        and shall be fined not more than $250,000 or imprisoned for not 
        more than five years.
            ``(2) Internet service providers.--Any Internet service 
        provider that, on or through a system or network controlled or 
        operated by the Internet service provider, transmits, routes, 
        provides connections for, or stores any material containing any 
        misrepresentation of the kind prohibited in paragraph (1) shall 
        be liable for any damages caused thereby, including damages 
        suffered by SIPC, if the Internet service provider--
                    ``(A) has actual knowledge that the material 
                contains a misrepresentation of the kind prohibited in 
                paragraph (1), or
                    ``(B) in the absence of actual knowledge, is aware 
                of facts or circumstances from which it is apparent 
                that the material contains a misrepresentation of the 
                kind prohibited in paragraph (1), and
        upon obtaining such knowledge or awareness, fails to act 
        expeditiously to remove, or disable access to, the material.
            ``(3) 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) or (2). Any such injunction may be served 
        anywhere in the United States on the person enjoined, shall be 
        operative throughout the United States, and shall be 
        enforceable, by proceedings in contempt or otherwise, by any 
        United States court having jurisdiction over that person. The 
        clerk of the court granting the injunction shall, when 
        requested by any other court in which enforcement of the 
        injunction is sought, transmit promptly to the other court a 
        certified copy of all papers in the case on file in such 
        clerk's office.''.

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

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

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

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

SEC. 7511. BUDGETARY TREATMENT OF COMMISSION LOANS TO SIPC.

    Section 4(g) of the Securities Investor Protection Act of 1970 (15 
U.S.C. 78ddd(g)) is amended by adding at the end the following: ``Any 
loan made by the Commission to SIPC under this subsection shall not be 
considered to result in a new direct loan obligation or a new loan 
guarantee commitment for purposes of section 504 of the Federal Credit 
Reform Act of 1990.''.

                 PART 6--SARBANES-OXLEY ACT AMENDMENTS

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

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

``SEC. 110. DEFINITIONS.

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

``Sec. 110. Definitions.''.
    (b) Establishment and Administration of the Public Company 
Accounting Oversight Board.--Section 101 of such Act is amended--
            (1) by striking ``issuers'' each place it appears and 
        inserting ``issuers, brokers, and dealers'';
            (2) in subsection (a), by striking ``public companies'' and 
        inserting ``companies''; and
            (3) in subsection (a), by striking ``for companies the 
        securities of which are sold to, and held by and for, public 
        investors''.
    (c) Registration With the Board.--Section 102 of such Act is 
amended--
            (1) in subsection (a), by striking ``Beginning 180 days 
        after the date of the determination of the Commission under 
        section 101(d), it'' and inserting ``It'';
            (2) in subsections (a) and (b)(2)(G), by striking 
        ``issuer'' each place it appears and inserting ``issuer, 
        broker, or dealer''; and
            (3) in subsection (b)(2)(A), by striking ``issuers'' and 
        inserting ``issuers, brokers, and dealers''.
    (d) Auditing and Independence.--Section 103(a) of such Act is 
amended--
            (1) in paragraph (1), by striking ``and such ethics 
        standards'' and inserting ``such ethics standards, and such 
        independence standards'';
            (2) in paragraph (2)(A)(iii), by striking ``describe in 
        each audit report'' and inserting ``in each audit report for an 
        issuer, describe''; and
            (3) in paragraph (2)(B)(i), by striking ``issuers'' and 
        inserting ``issuers, brokers, and dealers''.
    (e) Inspections of Registered Public Accounting Firms.--Section 104 
of such Act is amended--
            (1) in subsection (a), by striking ``issuers'' and 
        inserting ``issuers, brokers, and dealers'';
            (2) in subsection (b)(1)(A)--
                    (A) by striking ``audit reports'' and inserting 
                ``audit reports on annual financial statements''; and
                    (B) by striking ``and'';
            (3) in subsection (b)(1)(B)--
                    (A) by striking ``audit reports'' and inserting 
                ``audit reports on annual financial statements''; and
                    (B) by striking the period at the end and inserting 
                ``; and''; and
            (4) by adding at the end of subsection (b)(1) the following 
        new subparagraph:
                    ``(C) with respect to each registered public 
                accounting firm that regularly provides audit reports 
                and is not described under subparagraph (A) or (B), on 
                a basis to be determined by the Board, by rule, 
                consistent with the public interest and protection of 
                investors.''.
    (f) Investigations and Disciplinary Proceedings.--Section 
105(c)(7)(B) of such Act is amended--
            (1) in the subparagraph heading, by inserting ``, broker, 
        or dealer'' after ``issuer'';
            (2) by striking ``any issuer'' each place it appears and 
        inserting ``any issuer, broker, or dealer''; and
            (3) by striking ``an issuer under this subsection'' and 
        inserting ``a registered public accounting firm under this 
        subsection''.
    (g) Foreign Public Accounting Firms.--Section 106 of such Act is 
amended--
            (1) in subsection (a)(1), by striking ``issuer'' and 
        inserting ``issuer, broker, or dealer''; and
            (2) in subsection (a)(2), by striking ``issuers'' and 
        inserting ``issuers, brokers, or dealers''.
    (h) Funding.--Section 109 of such Act is amended--
            (1) in subsection (c)(2), by striking ``subsection (i)'' 
        and inserting ``subsection (j)'';
            (2) in subsection (d)(2), by striking ``allowing for 
        differentiation among classes of issuers, as appropriate'' and 
        inserting ``and among brokers and dealers in accordance with 
        subsection (h), and allowing for differentiation among classes 
        of issuers and brokers and dealers, as appropriate'';
            (3) in subsection (d), by inserting at the end the 
        following new paragraph:
            ``(3) Brokers and dealers.--The rules of the Board under 
        paragraph (1) shall provide that the allocation, assessment, 
        and collection by the Board (or an agent appointed by the 
        Board) of the fee established under paragraph (1) with respect 
        to brokers and dealers shall not begin until the first day of 
        the first full fiscal year beginning after the date of the 
        enactment of this paragraph.'';
            (4) by redesignating subsections (h), (i), and (j) as 
        subsections (i), (j), and (k), respectively; and
            (5) by inserting after subsection (g) the following new 
        subsection:
    ``(h) Allocation of Accounting Support Fees Among Brokers and 
Dealers.--
            ``(1) In general.--Any amount due from brokers and dealers 
        (or a particular class of such brokers and dealers) under this 
        section to fund the budget of the Board shall be allocated 
        among and payable by such brokers and dealers (or such brokers 
        and dealers in a particular class, as applicable). A broker or 
        dealer's allocation shall be in proportion to the broker or 
        dealer's net capital compared to the total net capital of all 
        brokers and dealer, in accordance with the rules of the Board.
            ``(2) Obligation to pay.--Every broker or dealer shall pay 
        the share of a reasonable annual accounting support fee or fees 
        allocated to such broker or dealer under this section.''.
    (i) Referral of Investigations to a Self-regulatory Organization.--
Section 105(b)(4)(B) of the Sarbanes-Oxley Act of 2002 is amended--
            (1) by redesignating clauses (ii) and (iii) as clauses 
        (iii) and (iv), respectively; and
            (2) by inserting after clause (i) the following new clause:
                            ``(ii) to a self-regulatory organization, 
                        in the case of an investigation that concerns 
                        an audit report for a broker or dealer that is 
                        subject to the jurisdiction of such self-
                        regulatory organization;''.
    (j) Use of Documents Related to an Inspection or Investigation.--
Section 105(b)(5)(B)(ii) of such Act is amended--
            (1) in subclause (III), by striking ``and'';
            (2) in subclause (IV), by striking the comma and inserting 
        ``; and''; and
            (3) by inserting after subclause (IV) the following new 
        subclause:
                                    ``(V) a self-regulatory 
                                organization, with respect to an audit 
                                report for a broker or dealer that is 
                                subject to the jurisdiction of such 
                                self-regulatory organization,''.

SEC. 7602. FOREIGN REGULATORY INFORMATION SHARING.

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

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

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

SEC. 7604. CONFORMING AMENDMENT RELATED TO REGISTRATION.

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

SEC. 7605. FAIR FUND AMENDMENTS.

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

SEC. 7606. EXEMPTION FOR NONACCELERATED FILERS.

    (a) Exemption.--Section 404 of the Sarbanes-Oxley Act of 2002 is 
amended by adding at the end the following:
    ``(c) Exemption for Smaller Issuers.--Subsection (b) shall not 
apply with respect to any audit report prepared for an issuer that is 
not an accelerated filer within the meaning Rule 12b-2 of the 
Commission (17 C.F.R. 240.12b-2).''.
    (b) Study.--The Securities and Exchange Commission and the 
Comptroller General shall jointly 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 180 days after the date of the enactment of 
this subtitle, the Commission and the Comptroller General shall 
transmit a report of such study to Congress.

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

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

SEC. 7608. CONGRESSIONAL ACCESS TO INFORMATION.

    Section 101 of the Sarbanes-Oxley Act of 2002 is amended by adding 
at the end the following:
    ``(i) Congressional Access to Information.--Nothing in this section 
shall--
            ``(1) affect the Boards obligations, if any, to provide 
        access to records under the Right to Financial Privacy Act; or
            ``(2) authorize the Board to withhold information from 
        Congress or prevent the Board from complying with an order of a 
        court of the United States in an action commenced by the United 
        States or the Board.''.

SEC. 7609. CREATION OF OMBUDSMAN FOR THE PCAOB.

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

``SEC. 111. OMBUDSMAN.

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

``Sec. 111. Ombudsman.''.

SEC. 7610. AUDITING OVERSIGHT BOARD.

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

                  PART 7--SENIOR INVESTMENT PROTECTION

SEC. 7701. FINDINGS.

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

SEC. 7702. DEFINITIONS.

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

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

    (a) Grant Program.--The Securities and Exchange Commission (in this 
part referred to as the ``Commission'')--
            (1) shall establish a program in accordance with this part 
        to provide grants to States--
                    (A) to investigate and prosecute misleading and 
                fraudulent marketing practices; or
                    (B) to develop educational materials and training 
                aimed at reducing misleading and fraudulent marketing 
                of financial products toward seniors; and
            (2) may establish such performance objectives, reporting 
        requirements, and application procedures for States and State 
        agencies receiving grants under this part as the Commission 
        determines are necessary to carry out and assess the 
        effectiveness of the program under this part.
    (b) Use of Grant Amounts.--A grant under this part may be used 
(including through subgrants) by the State or the appropriate State 
agency designated by the State--
            (1) to fund additional staff to identify, investigate, and 
        prosecute (through civil, administrative, or criminal 
        enforcement actions) cases involving misleading or fraudulent 
        marketing of financial products to seniors;
            (2) to fund technology, equipment, and training for 
        regulators, prosecutors, and law enforcement in order to 
        identify salespersons and advisers who target seniors through 
        the use of misleading designations;
            (3) to fund technology, equipment, and training for 
        prosecutors to increase the successful prosecution of those 
        targeting seniors with the use of misleading designations;
            (4) to provide educational materials and training to 
        regulators on the appropriateness of the use of designations by 
        salespersons and advisers of financial products;
            (5) to provide educational materials and training to 
        seniors to increase their awareness and understanding of 
        designations; and
            (6) to develop comprehensive plans to combat misleading or 
        fraudulent marketing of financial products to seniors.
    (c) Grant Requirements.--
            (1) Maximum.--The amount of a grant under this part may not 
        exceed $500,000 per fiscal year per State, if all requirements 
        of paragraphs (2), (3), (4), and (5) are met. Such amount shall 
        be limited to $100,000 per fiscal year per State in any case in 
        which the State meets the requirements of--
                    (A) paragraphs (2) and (3), but not each of 
                paragraphs (4) and (5); or
                    (B) paragraphs (4) and (5), but not each of 
                paragraphs (2) and (3).
            (2) Standard designation rules for securities.--A State 
        shall have adopted rules on the appropriate use of designations 
        in the offer or sale of securities or investment advice, which 
        shall meet or exceed the minimum requirements of the NASAA 
        Model Rule on the Use of Senior-Specific Certifications and 
        Professional Designations, as in effect on the date of the 
        enactment of this subtitle, or any successor thereto.
            (3) Suitability rules for securities.--A State shall have 
        adopted standard rules on the suitability requirements in the 
        sale of securities, which shall, to the extent practicable, 
        conform to the minimum requirements on suitability imposed by 
        self-regulatory organization rules under the securities laws 
        (as defined in section 3 of the Securities Exchange Act of 
        1934).
            (4) Standard designation rules for insurance products.--A 
        State shall have adopted standard rules on the appropriate use 
        of designations in the sale of insurance products, which shall, 
        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, as in effect on the date of the enactment of this 
        subtitle, or any successor thereto.
            (5) Suitability and supervision rules for annuity 
        products.--
                    (A) In general.--A State shall have adopted rules 
                governing insurer supervision of, suitability of, and 
                insurer and insurance producer conduct relating to, the 
                sale of annuity products, including fixed and index 
                annuities.
                    (B) Annuity products criteria.--The rules required 
                by subparagraph (A) shall, to the extent practicable, 
                provide--
                            (i) that insurers, and insurance producers 
                        are responsible for, and liable for penalties 
                        for, the suitability of each recommended 
                        annuity transaction;
                            (ii) that insurers and insurance producers 
                        are required to apply a standard for 
                        determining the suitability of each recommended 
                        annuity transaction, including fixed and index 
                        annuities, that is at least as protective of 
                        the interests of the consumer as rule 2821(b) 
                        of the Financial Industry Regulatory Authority 
                        (in this paragraph referred to as ``FINRA''), 
                        as in effect on the date of the enactment of 
                        this subtitle, or any successor to such rule;
                            (iii) that insurers and insurance producers 
                        are required to maintain a process for review 
                        of the suitability, and approval or 
                        disapproval, of each recommended annuity 
                        transaction that is at least as protective of 
                        the interests of the consumer as the principal 
                        review required under rule 2821(c) of FINRA, as 
                        in effect on the date of the enactment of this 
                        subtitle, or any successor to such rule;
                            (iv) that insurers and insurance producers 
                        are required to maintain processes for the 
                        supervision of direct annuity sales and 
                        insurance producer-recommended annuity sales 
                        (including procedures for the insurer to obtain 
                        and confirm consumer suitability information 
                        and for the insurer to confirm consumer 
                        understanding of the annuity transaction) that 
                        are at least as protective of the interests of 
                        the consumer as member broker and dealer 
                        supervision requirements of FINRA, as in effect 
                        on the date of the enactment of this subtitle, 
                        or any successor to such requirements;
                            (v) that insurers are required to verify 
                        that each insurance producer successfully 
                        completes, and each insurance producer is 
                        required to receive, training designed to 
                        ensure that the insurance producer is competent 
                        to recommend each class of annuity;
                            (vi) that insurers are required to verify 
                        that insurance producers receive, and insurance 
                        producers are required to receive, training 
                        regarding the features of each offered annuity 
                        product, to an extent that is at least as 
                        protective of the interests of the consumer as 
                        the FINRA firm element training requirements, 
                        as in effect on the date of the enactment of 
                        this subtitle, or any successor to such 
                        requirements;
                            (vii) for coordination of such rules with 
                        the rules of FINRA governing member brokers, 
                        dealers, and security representatives, to the 
                        extent appropriate, consistent with protecting 
                        the interests of consumers, for State insurance 
                        regulators to rely on, or to avoid duplication 
                        of FINRA rules; and
                            (viii) for exemption from such rules only 
                        if such exemption is consistent with the 
                        protection of consumers.

SEC. 7704. APPLICATIONS.

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

SEC. 7705. LENGTH OF PARTICIPATION.

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

SEC. 7706. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to carry out this part, 
$8,000,000 for each of the fiscal years 2011 through 2015.

          PART 8--REGISTRATION OF MUNICIPAL FINANCIAL ADVISORS

SEC. 7801. MUNICIPAL FINANCIAL ADVISER REGISTRATION REQUIREMENT.

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

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

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

SEC. 7802. CONFORMING AMENDMENTS.

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

SEC. 7803. EFFECTIVE DATES.

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

                   TITLE VI--FEDERAL INSURANCE OFFICE

SEC. 8001. SHORT TITLE.

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

SEC. 8002. FEDERAL INSURANCE OFFICE ESTABLISHED.

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

``SEC. 313. FEDERAL INSURANCE OFFICE.

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

``SEC. 314. COVERED AGREEMENTS.

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

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

SEC. 8003. REPORT ON GLOBAL REINSURANCE MARKET.

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

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

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