[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 2756 Introduced in Senate (IS)]

111th CONGRESS
  1st Session
                                S. 2756

 To establish the Financial Services Systemic Risk Oversight Council, 
                        and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            November 9, 2009

  Mr. Warner introduced the following bill; which was read twice and 
    referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
 To establish the Financial Services Systemic Risk Oversight Council, 
                        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 ``Financial Services Systemic Risk 
Oversight Council Act of 2009''.

SEC. 2. FINANCIAL SERVICES SYSTEMIC RISK OVERSIGHT COUNCIL ESTABLISHED.

    (a) Establishment.--There is established the Financial Services 
Systemic Risk Oversight Council, which shall be an independent 
establishment, as defined in section 104 of title 5, United States 
Code.
    (b) Appointment.--
            (1) In general.--The Chairman of the Council shall be 
        appointed by the President, by and with the advice and consent 
        of the Senate, for a term of 6 years.
            (2) Prohibition.--The Chairman may not hold any other 
        office for which appointment by the President and confirmation 
        by the Senate are required, during service as the Chairman.
            (3) Prohibition on political campaigning.--The Chairman may 
        not participate in Federal election campaign activities.
    (c) Members.--
            (1) In general.--The members of the Council shall be--
                    (A) the Chairman;
                    (B) the Secretary of the Treasury;
                    (C) the Chairman of the Board of Governors of the 
                Federal Reserve System;
                    (D) the Comptroller of the Currency, or any 
                successor thereto;
                    (E) the Director of the Office of Thrift 
                Supervision, or any successor thereto;
                    (F) 1 individual, designated by the President, 
                having expertise and experience in the protection of 
                consumers of financial products, subject to paragraph 
                (2)(B);
                    (G) the Chairman of the Securities and Exchange 
                Commission;
                    (H) the Chairman of the Commodity Futures Trading 
                Commission;
                    (I) the Chairman of the Federal Deposit Insurance 
                Corporation; and
                    (J) 1 individual designated by the President.
            (2) Terms of designated members.--
                    (A) Length of terms.--Each member designated by the 
                President under subparagraph (F) or (J) of paragraph 
                (1) shall serve for a term of 6 years, except that--
                            (i) the first individual designated under 
                        paragraph (1)(F) shall serve for a term of 5 
                        years; and
                            (ii) the first individual designated under 
                        paragraph (1)(J) shall serve for a term of 3 
                        years.
                    (B) Successive terms.--No member designated under 
                subparagraph (A), (F), or (J) of paragraph (1) may 
                serve for more than 2 consecutive terms.
                    (C) Removal.--No member designated under 
                subparagraph (F) or (J) of paragraph (1) may be 
                removed, except for cause.
            (3) Succession.--If Congress establishes an agency in the 
        executive branch that acts as a consumer financial protection 
        agency--
                    (A) the director of such office shall be a member 
                of the Council;
                    (B) the individual designated by the President 
                under paragraph (1)(F) shall not be a member of the 
                Council; and
                    (C) the limitations under paragraph (2) shall not 
                apply to the director of such office.
    (d) Technical and Professional Advisory Committees.--
            (1) In general.--The Council may establish an advisory, 
        technical, or professional committees to assist the Council in 
        carrying out the duties of the Council under this Act.
            (2) Members.--A committee established under paragraph (1) 
        may include a member of the Council.
    (e) Meetings.--The Council shall meet--
            (1) not less frequently than once each quarter;
            (2) at such time as the Chairman determines is necessary; 
        and
            (3) upon the request of any member of the Council.
    (f) Agenda.--The Chairman shall prepare an agenda for each meeting 
that shall include any item requested by a member of the Council.

SEC. 3. DUTIES OF THE COUNCIL AND THE CHAIRMAN.

    (a) Duties of the Council.--The Council shall--
            (1) be the systemic risk regulator for the financial system 
        of the United States;
            (2) advise the President on issues relating to systemic 
        risk mitigation;
            (3) monitor the financial markets and financial companies 
        to identify and address potential systemic risk;
            (4) evaluate the ability of the financial markets to 
        function appropriately throughout the failure of United States 
        financial companies and foreign financial companies in a way 
        that minimizes systemic risk;
            (5) ensure that each financial institution is adequately 
        supervised and regulated for systemic risk purposes;
            (6) establish criteria specifying the need for the 
        assignment of a primary prudential regulator to a financial 
        institution which may pose a systemic risk which are not 
        already subject to Federal prudential regulation; and
            (7) promote the integrity, efficiency, orderliness, and 
        stability of the financial markets, by--
                    (A) making recommendations to the Federal financial 
                regulators for the mitigation of systemic risk; and
                    (B) establishing minimum, mandatory prudential 
                standards for the mitigation of systemic risk.
    (b) Duties of the Chairman.--The Chairman shall--
            (1) coordinate areas of overlapping or joint jurisdiction 
        among the Federal financial regulators, by identifying 
        regulations of the Federal financial regulators that should be 
        amended--
                    (A) to ensure that financial markets and financial 
                companies are--
                            (i) sufficiently regulated by the Federal 
                        financial regulators to mitigate systemic risk; 
                        and
                            (ii) subject to consistent regulations in 
                        the case of overlapping jurisdiction;
                    (B) to ensure that comparable financial products, 
                activities, and institutions receive comparable 
                regulation and supervision; and
                    (C) to improve the exchange of information by the 
                Federal financial regulators;
            (2) review the rules, regulations, and regulatory actions 
        of each Federal financial regulator, as such rules, 
        regulations, and actions relate to the mitigation of systemic 
        risk, and provide comments to each Federal financial regulator 
        relating to such review;
            (3) identify any deficiencies in the authority of a Federal 
        financial regulator that would prevent the Federal financial 
        regulator from issuing regulations to mitigate systemic risk;
            (4) recommend to the Council any revision to the rules or 
        regulations of a Federal financial regulator necessary to 
        monitor or prevent systemic risk;
            (5) ensure that the Council--
                    (A) collects and analyzes sufficiently 
                comprehensive data relating to financial companies and 
                financial markets, wherever possible from existing 
                governmental agencies and sources, to identify systemic 
                risks; and
                    (B) shares such information with the members of the 
                Council;
            (6) propose minimum prudential standards and risk 
        management standards for consideration by the Council; and
            (7) provide testimony before Congress that reflects his or 
        her own views of systemic risk and its mitigation through 
        financial regulation and market structures.

SEC. 4. PRUDENTIAL REGULATION OF NONBANK FINANCIAL COMPANIES.

    (a) Assignment of a Primary Prudential Regulator for Financial 
Companies.--
            (1) Designation.--
                    (A) In general.--Upon a majority vote of the 
                members of the Council, the Council may, by rule or 
                order, assign a primary prudential regulator to any 
                United States financial company or foreign financial 
                company for which the Council determines a primary 
                prudential regulator is necessary to mitigate systemic 
                risk related to the financial company.
                    (B) Criteria for assignment of a primary prudential 
                regulator.--
                            (i) In general.--In making an assignment 
                        under subparagraph (A), the Council shall 
                        consider--
                                    (I) the amount and nature of the 
                                financial assets of the United States 
                                financial company or the foreign 
                                financial company;
                                    (II) the amount and type of the 
                                liabilities of the United States 
                                financial company or the foreign 
                                financial company, including the degree 
                                of reliance by the United States 
                                financial company or the foreign 
                                financial company on short-term 
                                funding;
                                    (III) the extent of the activities 
                                and risk of the United States financial 
                                company or the foreign financial 
                                company that are held off-balance 
                                sheet;
                                    (IV) the extent of the transactions 
                                and relationships of the United States 
                                financial company or the foreign 
                                financial company with other major 
                                financial companies;
                                    (V) the importance of the United 
                                States financial company or the foreign 
                                financial company as--
                                            (aa) a source of credit for 
                                        households, businesses, and 
                                        State and local governments; 
                                        and
                                            (bb) a source of liquidity 
                                        for the financial system;
                                    (VI) any recommendation of a member 
                                of the Council relating to the United 
                                States financial company or the foreign 
                                financial company; and
                                    (VII) any other factor that the 
                                Council determines is appropriate.
                            (ii) Specific criteria for foreign 
                        financial companies.--In making an assignment 
                        under subparagraph (A) with respect to a 
                        foreign financial company, the Council shall 
                        consider--
                                    (I) only the assets, liabilities, 
                                and activities of the foreign financial 
                                company that are held or conducted in 
                                the United States; and
                                    (II) the principles of national 
                                treatment and equality of competitive 
                                opportunity.
                    (C) Prohibition relating to foreign financial 
                companies.--The Council may not assign a primary 
                prudential regulator for a foreign financial company if 
                the foreign financial company does not have substantial 
                assets , liabilities, counterparty relationships or 
                operations in the United States.
            (2) Evaluation and recission of assignment.--
                    (A) Evaluation.--Not less frequently than annually, 
                the Council shall evaluate each assignment made under 
                paragraph (1).
                    (B) Termination.--Subject to paragraph (3), if the 
                Council determines that a United States financial 
                company or a foreign financial company no longer meets 
                the criteria for assignment under paragraph (1), the 
                Council shall, by order, terminate the assignment under 
                paragraph (1).
            (3) Notice and hearing.--
                    (A) Notice.--The Council shall provide to a United 
                States financial company or a foreign financial company 
                notice of any assignment that the Council proposes to 
                make under paragraph (1) or (2)(B) in relation to the 
                United States financial company or foreign financial 
                company.
                    (B) Request for hearing.--Not later than 30 days 
                after the date of receipt of the notice under 
                subparagraph (A), a United States financial company or 
                foreign financial company may make a written request 
                for a written or oral hearing by the Council to contest 
                the proposed assignment under paragraph (1) or (2)(B).
                    (C) Time and place of hearing.--Upon receipt of a 
                timely request under subparagraph (B), the Council 
                shall fix a date that is not more than 30 days after 
                receipt of the request and place at which a United 
                States financial company or foreign financial company 
                may, in person or through counsel--
                            (i) submit written materials in relation to 
                        the proposed assignment under paragraph (1) or 
                        (2)(B); or
                            (ii) at the discretion of the Council, 
                        submit oral testimony and oral argument in 
                        relation to the proposed assignment under 
                        paragraph (1) or (2)(B).
                    (D) Notice of determination.--
                            (i) Hearing.--Not later than 60 days after 
                        the date of a hearing under subparagraph (C), 
                        and upon a majority vote of the members of the 
                        Council, the Council shall transmit to the 
                        United States financial company or foreign 
                        financial company--
                                    (I) notice of the determination of 
                                the Council; and
                                    (II) a statement of the basis for 
                                the determination of the Council.
                            (ii) No hearing.--If a United States 
                        financial company or a foreign financial 
                        company does not make a timely request under 
                        clause (ii), the Council shall notify the 
                        United States financial company or the foreign 
                        financial company, in writing, of any 
                        assignment under paragraph (1) or (2)(B), not 
                        later than 40 days after the date of receipt of 
                        the notice under subparagraph (A).
                    (E) Emergency waiver or modification.--
                            (i) In general.--The Council may waive or 
                        modify the requirements of this paragraph with 
                        respect to a United States financial company or 
                        a foreign financial company if the Council 
                        determines, by an affirmative vote of not fewer 
                        than 5 members (or, if there are fewer than 5 
                        members then serving, by a unanimous vote of 
                        all members then serving) that such waiver or 
                        modification is necessary or appropriate to 
                        prevent or mitigate threats posed by the United 
                        States financial company or foreign financial 
                        company to the financial stability of the 
                        United States.
                            (ii) Notice.--The Council shall provide 
                        notice to a United States financial company or 
                        a foreign financial company of a waiver or 
                        modification under clause (i) as soon as is 
                        practicable, and in no case later than 24 hours 
                        after the waiver or modification is made.
                            (iii) Request for hearing.--Not later than 
                        10 days after the date of receipt of notice 
                        under clause (ii), the United States financial 
                        company or the foreign financial company may 
                        make a written request for a written or oral 
                        hearing by the Council to contest the waiver or 
                        modification.
                            (iv) Time and place of hearing.--Upon 
                        receipt of a timely request under clause (iii), 
                        the Council shall fix a date that is not more 
                        than 30 days after the date of receipt of the 
                        request and place at which a United States 
                        financial company or foreign financial company 
                        may, in person or through counsel--
                                    (I) submit written materials in 
                                relation to the waiver or modification 
                                under clause (i); or
                                    (II) at the discretion of the 
                                Council, submit oral testimony and oral 
                                argument in relation to the waiver or 
                                modification under clause (i).
                            (v) Notice of determination.--Not later 
                        than 30 days after a hearing under clause (iv), 
                        and upon a majority vote of the members of the 
                        Council, the Council shall transmit to a United 
                        States financial company or a foreign financial 
                        company--
                                    (I) notice of the determination of 
                                the Council in relation to the waiver 
                                or modification; and
                                    (II) a statement of the basis for 
                                the determination of the Council.
            (4) Consultation required.--If a United States financial 
        company or a foreign financial company has 1 or more 
        subsidiaries subject to regulation by a Federal financial 
        regulator, the Council shall consult with the Federal financial 
        regulator before making any assignment under paragraph (1) in 
        relation to the United States financial company or foreign 
        financial company.
    (b) Registration of Financial Companies Assigned a Primary 
Prudential Regulator.--
            (1) Registration required.--Not later than 180 days after 
        the date an assignment is made under subsection (a)(1), a 
        United States financial company or a foreign financial company 
        that has been assigned a primary prudential regulator under 
        subsection (a)(1) shall register with the Council, using such 
        forms and providing such information as the Council may deem 
        necessary or appropriate to carry out this Act.
            (2) Regulations.--The Council, in consultation with the 
        appropriate Federal financial regulators, shall issue 
        regulations to carry out this subsection.
    (c) Primary Prudential Regulator.--Each primary prudential 
regulator shall act as the primary prudential regulator of the entire 
financial company, and each affiliate thereof.
    (d) Resolution Plans for Certain Financial Companies.--
            (1) Resolution plan required.--The Federal Deposit 
        Insurance Corporation, in consultation with or at the direction 
        of the Council (upon a majority vote of the members of the 
        Council) shall require, by rule, a United States any financial 
        company or foreign financial company that may pose a systemic 
        risk to develop a plan for rapid and orderly resolution that--
                    (A) is designed to mitigate systemic risk; and
                    (B) does not contemplate and is not dependent upon 
                the use of any extraordinary systemic resolution 
                process that requires the approval of the President.
            (2) Revision of plans.--
                    (A) Revision of plans.--The Federal Deposit 
                Insurance Corporation may require a financial company 
                to revise a plan developed under paragraph (1).
                    (B) Plan not established.--
                            (i) In general.--If a plan cannot be 
                        established under this paragraph, the Federal 
                        Deposit Insurance Corporation may request any 
                        Federal financial regulator with jurisdiction 
                        over the financial company to take such steps 
                        as are necessary for an acceptable plan to be 
                        approved.
                            (ii) Disagreement between federal deposit 
                        insurance corporation and federal financial 
                        regulator.--If a Federal financial regulator 
                        fails to take the steps requested by the 
                        Federal Deposit Insurance Corporation under 
                        clause (i)--
                                    (I) the Federal Deposit Insurance 
                                Corporation may submit a plan for the 
                                financial company to the Council; and
                                    (II) the Council may, upon a 
                                majority vote of the members of the 
                                Council, require the financial company 
                                to adopt--
                                            (aa) the plan described in 
                                        subclause (I); or
                                            (bb) any other plan 
                                        selected by the Council.
            (3) Regulations.--The Federal Deposit Insurance Corporation 
        shall issue such regulations as are necessary to carry out this 
        subsection.

SEC. 5. BACKUP REGULATORY AUTHORITY OF THE COUNCIL.

    (a) Purposes.--The purposes of this section are to ensure that--
            (1) all regulations of the Federal financial regulators 
        that relate to matters over which the Federal financial 
        regulators have overlapping or joint jurisdiction are 
        consistent;
            (2) comparable financial products, activities, and 
        companies receive comparable regulation and supervision; and
            (3) regulations issued by the Federal financial regulators 
        are sufficient to prevent and mitigate systemic risk.
    (b) Coordination of Existing Regulations of Federal Financial 
Regulators.--
            (1) Joint rulemaking.--The Chairman may request that a 
        Federal financial regulator participate in a joint rulemaking 
        with another Federal financial regulator to improve 
        coordination among Federal financial regulators.
            (2) Coordination by council.--If a Federal financial 
        regulator fails to participate in a joint rulemaking under 
        subparagraph (B), upon a majority vote of the members of the 
        Council, the Council may issue regulations for the purpose of 
        improving coordination among Federal financial regulators.
    (c) Minimum Prudential Standards and Risk Management Standards.--
            (1) Establishment of standards.--In order to mitigate risks 
        to the United States financial system and to address systemic 
        risk, upon a majority vote of the members of the Council, the 
        Council shall--
                    (A) establish minimum prudential standards for 
                United States financial companies and foreign financial 
                companies, including--
                            (i) capital requirements;
                            (ii) leverage limits;
                            (iii) liquidity requirements;
                            (iv) underwriting standards;
                            (v) counterparty risk limits;
                            (vi) restrictions on activities;
                            (vii) margin requirements;
                            (viii) compensation standards; and
                            (ix) any other requirements, standards, or 
                        limits it deems necessary to mitigate systemic 
                        risk; and
                    (B) prescribe minimum risk management standards for 
                United States financial companies and foreign financial 
                companies to address issues, including--
                            (i) the risk management policies and 
                        procedures of United States financial companies 
                        or foreign financial companies;
                            (ii) the ability of United States financial 
                        companies or foreign financial companies to 
                        complete timely clearing and settlement of 
                        financial transactions; and
                            (iii) any other issue that the Council 
                        determines that it is necessary to address in 
                        order to--
                                    (I) promote robust risk management 
                                by United States financial companies or 
                                foreign financial companies;
                                    (II) promote safety and soundness 
                                of United States financial companies or 
                                foreign financial companies;
                                    (III) reduce systemic risk; and
                                    (IV) support the stability of the 
                                United States financial system.
            (2) Rule of construction relating to conflicting 
        standards.--A standard established by the Council under this 
        subsection shall be construed as a minimum standard that may be 
        exceeded by a standard established by the primary prudential 
        regulator of a United States financial company, a foreign 
        financial company, or financial market utility.
    (d) Insufficient Regulations or Failure To Act.--The Chairman may 
issue findings relating to any regulation of a Federal financial 
regulator that the Chairman determines is not--
            (1) sufficient to prevent or mitigate the effects of 
        systemic risk; or
            (2) consistent with regulations issued by the Council.
    (e) Conflict Between Regulations of the Council and Regulations of 
a Federal Financial Regulator.--If the Council determines that the 
provisions of a regulation of the Council and a regulation of a Federal 
financial regulator are inconsistent, the provisions of the regulation 
of the Council shall apply.

SEC. 6. ENFORCEMENT OF REGULATIONS AND ORDERS OF COUNCIL.

    (a) Enforcement by Appropriate Federal Financial Agencies.--Subject 
to subsection (b), the appropriate Federal financial regulator shall 
enforce the regulations and orders of the Council.
    (b) Backup Authority.--
            (1) In general.--If the Council determines that it is 
        necessary to prevent or mitigate systemic risk, the Council may 
        enforce the regulations and orders of the Council with respect 
        to--
                    (A) a United States financial company;
                    (B) a foreign financial company operating in the 
                United States; or
                    (C) a financial market utility.
            (2) Manner of enforcement.--In carrying out this 
        subsection, the Council shall have the powers and duties of the 
        appropriate Federal banking agencies under section 8 of the 
        Federal Deposit Insurance Act (12 U.S.C. 1818), as if--
                    (A) the United States financial company, foreign 
                financial company, or financial market utility were an 
                insured depository institution, as defined in section 3 
                of the Federal Deposit Insurance Act (12 U.S.C. 1813); 
                and
                    (B) the Council were the appropriate Federal 
                banking agency, as defined in section 3 of the Federal 
                Deposit Insurance Act (12 U.S.C. 1813).
            (3) Regulations.--The Council shall, by regulation, 
        establish the conditions under which the Council will exercise 
        enforcement authority under this subsection.

SEC. 7. RESOLUTION OF FINANCIAL COMPANIES PRESENTING SYSTEMIC RISK.

    (a) Receivership.--
            (1) In general.--The Council may recommend to the President 
        that systemic resolution procedures be used to effect the 
        orderly failure of a financial company, if a majority of the 
        members of the Council finds that--
                    (A) a United States financial company or Foreign 
                financial company operating in the United States is in 
                default or in danger of default; and
                    (B) the financial company could pose a systemic 
                risk to the United States.
            (2) Default or danger of default.--For purposes of this 
        paragraph, a United States financial company or foreign 
        financial company is in default or in danger of default if--
                    (A) an action under the provisions of title 11, 
                United States Code, has been, or is reasonably likely 
                to be commenced with respect to the financial company;
                    (B) the financial company is critically 
                undercapitalized, as such term is defined by the 
                appropriate regulator;
                    (C) the financial company has incurred, or is 
                likely to incur, unavoidable losses that will deplete 
                all or substantially all of the capital of the 
                financial company;
                    (D) the assets of the financial company are, or are 
                likely to be, less than the obligations of the 
                financial company to creditors and others; or
                    (E) the financial company is, or is likely to be, 
                unable to pay the obligations of the financial company 
                (other than any obligation that is the subject of a 
                bona fide dispute) in the normal course of business.
            (3) Systemic risk.--In determining whether a financial 
        company poses a systemic risk for purposes of this subsection, 
        the Council shall take into account--
                    (A) the amount and nature of the financial assets 
                of the financial company;
                    (B) the amount and type of the liabilities of the 
                financial company, including the degree of reliance by 
                the financial company on short-term funding;
                    (C) the extent of the off-balance sheet exposures 
                of the financial company;
                    (D) the extent of the transactions and 
                relationships of the financial company with other major 
                financial companies;
                    (E) the importance of the financial company as a 
                source of--
                            (i) credit for individuals, businesses, and 
                        State and local governments; and
                            (ii) liquidity for the financial system; 
                        and
                    (F) any other factor that the Council determines is 
                appropriate.
    (b) Report to Congress and the President.--Upon making any 
recommendation to the President that systemic resolution procedures be 
used to effect the orderly failure of a financial company, the Council 
shall make a report to the President and to Congress explaining--
            (1) how and why financial regulation failed to mitigate the 
        systemic risk posed by the institution prior to its failure;
            (2) why non-systemic resolution procedures were unsuitable 
        for the financial company subject to the recommendation; and
            (3) what steps are necessary to prevent a recurrence of the 
        systemic risk posed by the failing institution from other 
        sources.

SEC. 8. COLLECTION OF DATA AND INFORMATION BY COUNCIL.

    (a) Collection of Data by Council.--
            (1) Duty to collect data.--The Council shall collect and 
        analyze sufficiently comprehensive data regarding the financial 
        sector in order to understand and mitigate systemic risks.
            (2) Power to collect data.--The Council may collect data 
        from any United States financial company or foreign financial 
        company, whether or not the financial company is regulated by a 
        member of the Council, to carry out this section.
            (3) Burden minimization.--The Council shall make every 
        effort to utilize data already collected by other Federal 
        agencies and departments.
    (b) Submission of Data and Information Required.--The Federal 
financial regulators shall, upon request, submit to the Chairman any 
data or information that the Chairman determines is necessary to carry 
out this Act.
    (c) Direction To Obtain Data or Information.--
            (1) In general.--The Chairman may, if the Chairman 
        determines that such action is necessary to carry out this Act, 
        direct a Federal financial regulator, consistent with the 
        authorities of such regulator, to require the production of any 
        data or information from any entity regarding any activity that 
        is financial in nature, as determined by the Chairman.
            (2) Coordination by council.--Before directing a Federal 
        financial regulator to require the production of data or 
        information under paragraph (1) from an entity regulated a 
        member of the Council, the Chairman shall coordinate with 
        members of the Council to prevent duplicative requests for data 
        and information.
    (d) Submissions by Federal Financial Regulators.--Any Federal 
financial regulator in possession of data or information relevant to 
preventing systemic risk shall provide such data or information to the 
Chairman in a timely manner.
    (e) Requests to Insurers for Data and Information.--The Chairman 
may request data and information from an insurer regulated by a State 
or the affiliate of such insurer relating to any product or activity of 
the insurer or affiliate that the Chairman determines is financial in 
nature.
    (f) Data and Information Sharing.--The Chairman, in consultation 
with the members of the Council--
            (1) shall--
                    (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 of Governors of the Federal Reserve System 
                on a real-time basis; and
                    (C) issue any regulations necessary to carry out 
                this subsection; and
            (2) may 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.
    (g) 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--
            (1) the Council;
            (2) any Federal financial regulator or State financial 
        regulator, in any capacity; or
            (3) any other agency of the Federal Government (as defined 
        in section 6 of title 18, United States Code).
    (h) 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.
    (i) 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, in 
consultation with 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.
    (j) Subpoenas.--
            (1) Authority.--The Chairman may, for the purpose of 
        carrying out this section, require by subpoena, access to the 
        documents of--
                    (A) any United States financial company or foreign 
                financial company; and
                    (B) any Federal financial regulator.
            (2) Issuance and enforcement of subpoenas.--
                    (A) Issuance.--Subpoenas issued under this section 
                shall--
                            (i) bear the signature of the Chairman; and
                            (ii) be served by any person or class of 
                        persons designated by the Chairman for that 
                        purpose.
                    (B) Enforcement.--In the case of contumacy or 
                failure to obey a subpoena issued under this section, 
                the United States district court for the District of 
                Columbia may issue an order requiring compliance. Any 
                failure to obey the order of the court may be punished 
                by the court as a contempt that court.

SEC. 9. REPORTS OF FEDERAL FINANCIAL REGULATORS.

    (a) Report Required.--Each Federal financial regulator shall submit 
to the Council and to the Committee on Banking, Housing, and Urban 
Affairs of the Senate and the Committee on Financial Services of the 
House of Representatives an annual report that contains--
            (1) an explanation of how the regulations, examinations, 
        and enforcement actions of the Federal financial regulator 
        prevent, reduce, and mitigate the effects of systemic risk;
            (2) an explanation of specific actions taken by the Federal 
        financial regulator during the preceding fiscal year in 
        response to any systemic risk under the jurisdiction of the 
        Federal financial regulator;
            (3) information relating to emerging sources of systemic 
        risk--
                    (A) within the jurisdiction of the Federal 
                financial regulator; and
                    (B) outside the jurisdiction of the Federal 
                financial regulator; and
            (4) recommendations, if any, for legislative or regulatory 
        action which could prevent, reduce, or mitigate emerging 
        systemic risk.
    (b) Timing of Report.--Each Federal financial regulator shall 
submit the report required under subsection (a)--
            (1) at a time that is prior to the first appearance 
        required under section 10(a) of each calendar year; and
            (2) determined by the Chairman, in consultation with the 
        members of the Council.

SEC. 10. APPEARANCE AT HEARINGS AND REPORT BY COUNCIL.

    (a) Appearances Before Congress.--
            (1) In general.--The Chairman of the Council shall appear 
        before Congress at semi-annual hearings regarding--
                    (A) the efforts, activities, objectives and plans 
                of the Council with respect to--
                            (i) the conduct of financial regulation;
                            (ii) the prevention of systemic risk; and
                            (iii) the mitigation of harm from systemic 
                        risk;
                    (B) the development of financial markets; and
                    (C) the prospects for the future of financial 
                regulation of systemic risk.
            (2) Timing of appearances; committees.--The Chairman of the 
        Council shall appear--
                    (A) before the Committee on Banking, Housing, and 
                Urban Affairs of the Senate--
                            (i) in July of each odd-numbered calendar 
                        year;
                            (ii) in February of each even-numbered 
                        calendar year; and
                            (iii) upon request, after any appearance 
                        required under subparagraph (B); and
                    (B) before the Committee on Financial Services of 
                the House of Representatives--
                            (i) in February of each odd-numbered 
                        calendar year;
                            (ii) in July of each even-numbered calendar 
                        year; and
                            (iii) upon request, after any appearance 
                        required under subparagraph (A).
    (b) Report.--At each appearance required under subsection (a), the 
Council shall submit to the Committee on Banking, Housing, and Urban 
Affairs of the Senate and the Committee on Financial Services of the 
House of Representatives a written report that contains a description 
of--
            (1) the conduct of financial regulation systemic risk 
        prevention and mitigation, including actions taken by Federal 
        financial regulators and the Council;
            (2) developments in the financial markets; and
            (3) prospects for the future, taking into account past and 
        prospective developments--
                    (A) relating to the Federal financial regulators, 
                as such developments are described in the reports of 
                the Federal financial regulators under section 7; and
                    (B) outside the United States.

SEC. 11. CIVIL PENALTIES.

    (a) In General.--Any person who violates this Act or fails to 
comply with a rule, regulation, or order of the Council issued under 
this Act shall be subject to a civil penalty in an amount established 
by the Council and published under subsection (b). Each such violation 
or failure shall constitute a separate civil offense.
    (b) Publication.--The Council shall annually prescribe and publish 
in the Federal Register a schedule of the maximum authorized civil 
penalty for any violation of this Act or any regulatory action of the 
Council under this Act.

SEC. 12. FUNDING OF THE COUNCIL.

    (a) In General.--
            (1) Determination by chairman.--For each fiscal year, the 
        Chairman shall determine the amount necessary for the Council 
        to carry out its duties under this Act.
            (2) Funding.--The Board of Governors of the Federal Reserve 
        System shall transfer to the Council an amount equal to the 
        amount described in paragraph (1).
    (b) Regulations.--The Chairman may issue such regulations as are 
necessary to carry out this section.
    (c) Annual Reports on Council Operations.--
            (1) In general.--The Council shall annually submit a full 
        report of its operations, activities, budget, receipts, and 
        expenditures for the preceding 12-month period.
            (2) Manner of submission.--Such report shall be submitted 
        to the President of the Senate and the Speaker of the House of 
        Representatives (who shall cause the same to be printed for the 
        information of Congress) and the President as soon as 
        practicable after the first day of January each year.
    (d) Quarterly Reports to the Secretary of the Treasury.--
            (1) Financial operating plans and forecasts.--Before the 
        beginning of each fiscal quarter, the Council shall provide to 
        the Secretary of the Treasury a copy of the financial operating 
        plans and forecasts of the Council.
            (2) Rule of construction.--The requirement to provide 
        plans, forecasts, and reports to the Secretary of the Treasury 
        under this subsection may not be construed as implying any 
        obligation on the part of the Council to obtain the consent or 
        approval of such Secretary with respect to such plans, 
        forecasts, and reports.
    (e) Audit.--
            (1) Audit required.--The Comptroller General shall audit 
        annually the operations and financial transactions of the 
        Council in accordance with generally accepted government 
        auditing standards.
            (2) Access to books and records.--All books, records, 
        accounts, reports, files, and property belonging to or used by 
        the Council, or by an independent certified public accountant 
        retained to audit the Council's financial statements, shall be 
        made available to the Comptroller General.
            (3) Report.--A report of each audit conducted under 
        paragraph (1) shall be made by the Comptroller General to the 
        Congress not later than six and one-half months following the 
        close of the last year covered by such audit. The report to the 
        Congress shall set forth the scope of the audit and shall 
        include a statement of expenses and information as may be 
        deemed necessary to inform Congress of the operations and 
        condition of the Council, together with such recommendations 
        with respect thereto as the Comptroller General may deem 
        advisable. The report shall also show specifically any program, 
        expenditure, or other financial transaction or undertaking 
        observed in the course of the audit, which, in the opinion of 
        the Comptroller General, has been carried on or made without 
        authority of law. A copy of each report shall be furnished to 
        the President, to the Secretary of the Treasury, and to the 
        Council at the time submitted to the Congress.
            (4) Employment authority.--For the purpose of conducting 
        such audit the Comptroller General is authorized in his 
        discretion to employ by contract, without regard to section 
        3709 of the Revised Statutes, professional services of firms 
        and organizations of certified public accountants, with the 
        concurrence of the Council, for temporary periods or for 
        special purposes. The Council shall reimburse the Government 
        Accountability Office for the cost of any such audit as billed 
        therefor by the Comptroller General, and the Government 
        Accountability Office shall deposit the sums so reimbursed into 
        the Treasury as miscellaneous receipts.

SEC. 13. TRANSITIONAL ASSISTANCE FROM FEDERAL AGENCIES.

    (a) Members of the Council.--On the request of the Chairman and 
until such time as the Council has sufficient staff, a member of the 
Council shall provide to the permanent staff of the Council and any 
advisory, technical, or professional committee established by the 
Council such technical assistance, professional support, or other 
services as are necessary for the Council to carry out this Act.
    (b) Other Departments and Agencies.--Upon the request of the 
Council, a Federal department or agency may provide to the Council, and 
any advisory, technical, or professional committee established by the 
Council, such services, funds, facilities, staff, and other support 
services as the Federal department or agency may determine advisable.

SEC. 14. PERSONNEL MATTERS.

    (a) Council Staff.--
            (1) In general.--The Chairman may appoint and terminate 
        such personnel as may be necessary to enable to the Council to 
        perform its duties. The Chairman may establish positions in the 
        excepted service for employees of the Council.
            (2) Compensation.--The Chairman may fix the compensation of 
        Council personnel without regard to the provisions of chapter 
        51 and subchapter III of chapter 53 of title 5, United States 
        Code, relating to classification of positions and General 
        Schedule pay rates, except that the rate of pay for such 
        personnel may not exceed the rate payable for level V of the 
        Executive Schedule under section 5316 of such title.
            (3) Other personnel authorities.--The Chairman may exercise 
        any personnel authority of any of the Federal financial 
        regulators for the purposes of recruiting, hiring, or retention 
        of Council personnel.
    (b) Detail of Government Employees.--Any Federal Government 
employee may be detailed to the Council without reimbursement, and such 
detail shall be without interruption or loss of civil service status or 
privilege.
    (c) Procurement of Temporary and Intermittent Services.--The 
Chairman may procure temporary and intermittent services under section 
3109(b) of title 5, United States Code, at rates for individuals that 
do not exceed the daily equivalent of the annual rate of basic pay 
prescribed for level V of the Executive Schedule under section 5316 of 
such title.

SEC. 15. APPLICABILITY OF FEDERAL ADVISORY COMMITTEE ACT.

    The Federal Advisory Committee Act (5 U.S.C. App. 1 et seq.) shall 
not apply to the Council, or to any advisory, technical, or 
professional committee established by the Council.

SEC. 16. JUDICIAL REVIEW.

    Nothing in this Act affects any otherwise available judicial review 
of agency action or creates any right or benefit, substantive or 
procedural, enforceable at law or equity by a party against the United 
States, its agencies or instrumentalities, its officers or employees, 
or any other person.

SEC. 17. CONFLICTING PROVISIONS TERMINATED.

    Executive Order Number 12631, issued by the President on March 18, 
1988, may not be enforced on or after the date of enactment of this 
Act.

SEC. 18. EXECUTIVE SCHEDULE MATTERS.

    Section 5312 of title 5, United States Code, is amended by adding 
at the end the following new item:
    ``Chairman of the Financial Services Systemic Risk Oversight 
Council.''.

SEC. 19. RULE OF CONSTRUCTION.

    Nothing in this Act may be construed to interfere with the 
authority of--
            (1) the Board of Governors of the Federal Reserve System, 
        with respect to monetary policy;
            (2) the Securities Exchange Commission to set or enforce 
        standards for accounting or auditing practices or auditor 
        independence; or
            (3) any Federal financial regulator to establish and 
        enforce consumer and investor protection regulations.

SEC. 20. TECHNICAL AND CONFORMING AMENDMENTS.

    (a) Independence in Congressional Testimony and Recommendations.--
Section 111 of Public Law No. 93-495 (12 U.S.C. 250) is amended by 
inserting ``the Financial Services Systemic Risk Oversight Council,'' 
after ``the Federal Housing Finance Agency,''.
    (b) Paperwork Reduction.--Section 3502(5) of title 44, United 
States Code, is amended by inserting ``the Financial Services Systemic 
Risk Oversight Council,'' after ``the Securities and Exchange 
Commission,''.

SEC. 21. DEFINITIONS.

    In this Act--
            (1) the term ``appropriate Federal financial regulator'' 
        means--
                    (A) the Office of the Comptroller of the Currency, 
                in the case of a national bank, or a Federal branch or 
                agency of a foreign bank;
                    (B) the Board of Governors of the Federal Reserve 
                System, in the case of--
                            (i) a State member bank, as defined in 
                        section 3 of the Federal Deposit Insurance Act 
                        (12 U.S.C. 1813);
                            (ii) a branch or agency of a foreign bank 
                        (other than a Federal branch, Federal agency, 
                        or insured State branch of a foreign bank);
                            (iii) a commercial lending company owned or 
                        controlled by a foreign bank;
                            (iv) an organization operating under 
                        section 25 or 25A of the Federal Reserve Act 
                        (12 U.S.C. 601 et seq.);
                            (v) a bank holding company, as defined in 
                        section 2 of the Bank Holding Company Act of 
                        1956 (12 U.S.C. 1841);
                            (vi) an investment bank holding company, as 
                        defined in section 17(i)(5) of the Securities 
                        Exchange Act of 1934 (15 U.S.C. 78q(i)(5)); or
                            (vii) a United States financial company, a 
                        foreign financial company operating in the 
                        United States, or a financial market utility 
                        over which no other Federal or State regulatory 
                        agency has enforcement authority;
                    (C) the Federal Deposit Insurance Corporation, in 
                the case of--
                            (i) a national nonmember bank or a State 
                        nonmember bank, as those terms are defined in 
                        section 3 of the Federal Deposit Insurance Act 
                        (12 U.S.C. 1813), the deposits of which are 
                        insured by the Federal Deposit Insurance 
                        Corporation; or
                            (ii) an insured State branch of a foreign 
                        bank;
                    (D) the Director of the Office of Thrift 
                Supervision, in the case of--
                            (i) a savings association, as defined in 
                        section 3 of the Federal Deposit Insurance Act 
                        (12 U.S.C. 1813), the deposits of which are 
                        insured by the Federal Deposit Insurance 
                        Corporation; or
                            (ii) a savings and loan holding company, as 
                        defined in section 3 of the Federal Deposit 
                        Insurance Act (12 U.S.C. 1813);
                    (E) the National Credit Union Administration Board, 
                in the case of any insured credit union, as defined in 
                section 101 of the Federal Credit Union Act (12 U.S.C. 
                1752);
                    (F) the Securities and Exchange Commission, in the 
                case of--
                            (i) a United States financial company or 
                        foreign financial company operating in the 
                        United States that is subject to regulation by 
                        the Commission; or
                            (ii) a financial market utility that is 
                        subject to regulation by the Commission and is 
                        not subject to regulation by any other Federal 
                        financial regulator; and
                    (G) the Commodity Futures Trading Commission, in 
                the case of--
                            (i) a United States financial company or 
                        foreign financial company operating in the 
                        United States that is subject to regulation by 
                        the Commission; or
                            (ii) a financial market utility that is 
                        subject to regulation by the Commission and is 
                        not subject to regulation by any other Federal 
                        financial regulator;
            (2) the term ``Chairman'' means the Chairman of the 
        Financial Services Systemic Risk Oversight Council appointed 
        under section 4;
            (3) the term ``Council'' means the Financial Services 
        Systemic Risk Oversight Council established under section 3;
            (4) the terms ``depository institution'' and ``insured 
        depository institution'' have the same meanings as in section 3 
        of the Federal Deposit Insurance Act (12 U.S.C. 1813);
            (5) the term ``Federal financial regulator'' means--
                    (A) the Comptroller of the Currency;
                    (B) the Board of Governors of the Federal Reserve 
                System;
                    (C) the Federal Deposit Insurance Corporation;
                    (D) the National Credit Union Administration;
                    (E) the Securities and Exchange Commission;
                    (F) the Public Company Accounting Oversight Board;
                    (G) the Federal Housing Finance Agency;
                    (H) the Federal Trade Commission;
                    (I) the Farm Credit Administration;
                    (J) the Commodity Futures Trading Commission;
                    (K) the Department of Housing and Urban 
                Development, in carrying out the duties of the 
                Secretary of Housing and Urban Development under the 
                Real Estate Settlement Procedures Act of 1974 (12 
                U.S.C. 2601 et seq.);
                    (L) the Federal Housing Administration; and
                    (M) the Department of Veterans Affairs, in the case 
                of a guarantee by the Secretary of Veterans Affairs of 
                an extension of credit, including a mortgage loan and a 
                small business loan;
            (6) the term ``activity that is financial in nature'' means 
        an activity--
                    (A) described in section 4(k)(4) of the Bank 
                Holding Company Act of 1956 (12 U.S.C. 1843(k)(4)); or
                    (B) that the Board of Governors of the Federal 
                Reserve System has determined is financial in nature 
                under section 4(k) of the Bank Holding Company Act of 
                1956;
            (7) the term ``foreign financial company'' means a bank 
        holding company, as those terms are defined in section 2 of the 
        Bank Holding Company Act of 1954 (12 U.S.C. 1841), and any 
        affiliate thereof, or any other person that--
                    (A) is incorporated or organized in a country other 
                than the United States; and
                    (B) is, directly or indirectly (including through a 
                branch operating in the United States), engaged in any 
                activity that is financial in nature in the United 
                States;
            (8) the term ``financial market utility'' means a 
        corporation, company, association, firm, partnership, society, 
        joint stock company, or other legal entity (other than a 
        natural person) that manages or operates a multilateral system 
        for the purpose of transferring, clearing, or settling 
        payments, securities, or other financial transactions--
                    (A) among United States financial companies or 
                foreign financial companies in the United States; or
                    (B) between a United States financial company, or 
                foreign financial company in the United States, and the 
                corporation, company, association, firm, partnership, 
                society, joint stock company, or other legal entity;
            (9) the term ``financial transaction'' includes a fund 
        transfer, a securities contract, a contract for sale of a 
        commodity for future delivery, a forward contract, a repurchase 
        agreement, a swap agreement, a foreign exchange contract, a 
        financial derivatives contract, and any similar transaction 
        that the Council determines, by rule or order, to be a 
        financial transaction for purposes of this Act;
            (10) the term ``payment, clearing, or settlement activity'' 
        means an activity carried out by a United States financial 
        company or a foreign financial company operating in the United 
        States to facilitate the completion of a financial transaction, 
        including--
                    (A) the calculation and communication of unsettled 
                obligations between counterparties;
                    (B) the netting of transactions;
                    (C) the provision and maintenance of trade, 
                contract, or instrument information;
                    (D) the management of risks and activities 
                associated with continuing obligations;
                    (E) the transmittal and storage of payment 
                instructions;
                    (F) the movement of funds;
                    (G) the final settlement of obligations; and
                    (H) other similar functions, as determined by the 
                Council;
            (11) the term ``primary prudential regulator'' means a 
        Federal financial regulator designated by the Council as the 
        primary prudential regulator of a financial company;
            (12) the term ``State'' means 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;
            (13) the term ``systemic risk'' means the risk that the 
        disruption or failure of a United States financial company, a 
        foreign financial company operating in the United States, or a 
        financial market utility could have a serious adverse effect on 
        the economic conditions in or financial stability of the United 
        States; and
            (14) the term ``United States financial company'' means a 
        bank holding company, as that term is defined in section 2 of 
        the Bank Holding Company Act of 1954 (12 U.S.C. 1841), or any 
        affiliate thereof, or any other person that is--
                    (A) incorporated or organized under the laws of the 
                United States or any State; and
                    (B) in whole or in part engaged, directly or 
                indirectly, in activities that are financial in nature.
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