[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 3048 Introduced in Senate (IS)]

112th CONGRESS
  2d Session
                                S. 3048

To provide for a safe, accountable, fair, and efficient banking system, 
                        and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 9, 2012

Mr. Brown of Ohio (for himself and Mr. Harkin) introduced the following 
 bill; which was read twice and referred to the Committee on Banking, 
                       Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
To provide for a safe, accountable, fair, and efficient banking system, 
                        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 ``Safe, Accountable, Fair, and 
Efficient Banking Act of 2012'' or the ``SAFE Banking Act of 2012''.

SEC. 2. DEFINITIONS.

    (a) In General.--As used in this Act--
            (1) the term ``appropriate Federal regulator'' means--
                    (A) the Board of Governors of the Federal Reserve 
                System (in this Act referred to as the ``Board'');
                    (B) the Comptroller of the Currency (in this Act 
                referred to as the ``Comptroller''; or
                    (C) the Federal Deposit Insurance Corporation (in 
                this Act referred to as the ``Corporation'');
            (2) the term ``average total consolidated assets'' has the 
        same meaning as in part 225 of title 12, Code of Federal 
        Regulations, as in effect on the date of enactment of this Act, 
        or any successor thereto;
            (3) the term ``FDIC-assessed deposits'' means the 
        assessment base, as computed under part 327 of title 12, Code 
        of Federal Regulations, as in effect on the date of enactment 
        of this Act, or any successor thereto;
            (4) the term ``tangible common equity'' means qualifying 
        common stockholders' equity plus retained earnings;
            (5) the term ``liabilities'' equals a financial company's 
        total assets less tier 1 capital;
            (6) the term ``nondeposit liabilities'' means the total 
        assets of a bank holding company, less tier 1 capital, less 
        FDIC-assessed deposits; and
            (7) the term ``tier 1 capital'' has the same meaning as in 
        part 225 of title 12, Code of Federal Regulations, as in effect 
        on the date of enactment of this Act, or any successor thereto.
    (b) Nonbank Financial Company Definitions.--
            (1) Foreign nonbank financial company.--The term ``foreign 
        nonbank financial company'' means a company (other than a 
        company that is, or is treated in the United States, as a bank 
        holding company or a subsidiary thereof) that is--
                    (A) incorporated or organized in a country other 
                than the United States; and
                    (B) substantially engaged in, including through a 
                branch in the United States, activities in the United 
                States that are financial in nature (as defined in 
                section 4(k) of the Bank Holding Company Act of 1956).
            (2) U.S. nonbank financial company.--The term ``U.S. 
        nonbank financial company'' means a company (other than a bank 
        holding company or a subsidiary thereof) that is--
                    (A) incorporated or organized under the laws of the 
                United States or any State; and
                    (B) substantially engaged in activities in the 
                United States that are financial in nature (as defined 
                in section 4(k) of the Bank Holding Company Act of 
                1956).
            (3) Nonbank financial company.--The term ``nonbank 
        financial company'' means a U.S. nonbank financial company and 
        a foreign nonbank financial company.

SEC. 3. CONCENTRATION LIMITS.

    (a) Nationwide Concentration Limits.--Section 3(d) of the Bank 
Holding Company Act of 1956 (12 U.S.C. 1842(d)) is amended--
            (1) in paragraph (2), by striking subparagraph (A) and 
        inserting the following:
                    ``(A) Nationwide concentration limits.--No bank 
                holding company may hold more than 10 percent of the 
                total amount of deposits of insured depository 
                institutions in the United States.''; and
            (2) by striking paragraph (5) and inserting the following:
            ``(5) Enforced compliance.--The Board shall require any 
        bank holding company having a deposit concentration in 
        violation of this subsection to sell or otherwise transfer 
        deposit liabilities to unaffiliated firms to bring the company 
        into compliance with this subsection.''.
    (b) Treatment of Liabilities.--Section 14 of the Bank Holding 
Company Act of 1956 (12 U.S.C. 1852) is amended--
            (1) in subsection (a), by striking paragraph (3) and 
        inserting the following:
            ``(3) the term `liabilities' means--
                    ``(A) with respect to a United States financial 
                company--
                            ``(i) the total assets of the financial 
                        company, including all off-balance-sheet 
                        assets, including financings of assets for 
                        which the issuer has more than minimal economic 
                        or reputational risks or rewards; less
                            ``(ii) the total regulatory capital of the 
                        financial company;
                    ``(B) with respect to a foreign-based financial 
                company--
                            ``(i) the total assets of the United States 
                        operations of the financial company, including 
                        all off-balance-sheet assets, including 
                        financings of assets for which the issuer has 
                        more than minimal economic or reputational 
                        risks or rewards of the financial company; less
                            ``(ii) the total regulatory capital of the 
                        United States operations of the financial 
                        company; and
                    ``(C) with respect to an insurance company or other 
                nonbank financial company supervised by the Board, such 
                assets of the company as the Board shall specify, by 
                rule, in order to provide for consistent and equitable 
                treatment of such companies.''; and
            (2) by striking subsections (b) through (e) and inserting 
        the following:
    ``(b) Concentration Limit.--A financial company may not hold more 
than 10 percent of the total consolidated liabilities of all financial 
companies.
    ``(c) Required Disposition.--The Board shall require any financial 
company having liabilities in violation of this section to sell or 
otherwise transfer liabilities to unaffiliated firms to bring the 
company into compliance with this section.
    ``(d) Rulemaking and Guidance.--The Board shall issue regulations 
implementing this section, including the definition of terms, as 
necessary. The Board may issue interpretations or guidance regarding 
the application of this section to an individual financial company or 
to financial companies in general.''.

SEC. 4. LEVERAGE RATIO AND SIZE REQUIREMENTS FOR BANK 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:

``SEC. 5A. LIMITS ON LEVERAGE AND SIZE.

    ``(a) Leverage Ratio Requirements for Bank Holding Companies and 
Financial Companies.--
            ``(1) Leverage ratio.--
                    ``(A) In general.--No bank holding company with 
                total consolidated assets equal to or greater than 
                $50,000,000,000 or nonbank financial company supervised 
                by the Board may maintain tangible common equity in an 
                amount less than 10 percent of average total 
                consolidated assets.
                    ``(B) Average total consolidated assets.--For 
                purposes of this paragraph, average total consolidated 
                assets shall include all off-balance-sheet assets, 
                including financings of assets for which the issuer has 
                more than minimal economic or reputational risks or 
                rewards.
            ``(2) Exemptions.--
                    ``(A) In general.--The Board may adjust the 
                leverage ratio requirements provided in paragraph (1) 
                for any class of institutions, based upon the size or 
                activity of such class of institutions. No adjustment 
                made under this subparagraph may allow an institution 
                to carry less tangible common equity than provided in 
                paragraph (1).
                    ``(B) Authority of other regulators.--
                            ``(i) In general.--The appropriate Federal 
                        regulator may, in a manner consistent with this 
                        subsection, grant any bank holding company an 
                        emergency temporary exemption from the ratio 
                        requirements provided in paragraph (1) or (2), 
                        where necessary to prevent an imminent threat 
                        to the financial stability of the United 
                        States.
                            ``(ii) Publication required.--Any exemption 
                        granted under this subparagraph shall be 
                        published in the Federal Register within a 
                        reasonable period after the date on which such 
                        exemption is granted, not to exceed 90 days, 
                        and such publication shall provide--
                                    ``(I) the name of the bank holding 
                                company or financial company being 
                                granted an exemption;
                                    ``(II) the reason for the 
                                exemption; and
                                    ``(III) the plan of the appropriate 
                                Federal regulator detailing the manner 
                                by which the bank holding company shall 
                                be brought into compliance with 
                                paragraphs (1) and (2).
            ``(3) Leverage ratio requirements for operating 
        subsidiaries of bank holding companies and nonbank financial 
        companies supervised by the board.--For bank holding companies 
        with total consolidated assets equal to or greater than 
        $50,000,000,000 and nonbank financial companies supervised by 
        the Board, the Board may promulgate regulations establishing a 
        leverage ratio, in a manner consistent with paragraph (1), for 
        all operating subsidiaries that are not insured depository 
        institutions.
            ``(4) Prompt corrective action.--
                    ``(A) Authorities.--The Board shall require any 
                bank holding company with total consolidated assets 
                equal to or greater than $50,000,000,000 or nonbank 
                financial company supervised by the Board that is in 
                violation of paragraph (1) to raise capital, sell or 
                otherwise transfer assets, liabilities, or off-balance-
                sheet items to unaffiliated firms, or impose conditions 
                on the manner in which the bank holding company 
                conducts 1 or more activities to bring the company into 
                compliance with paragraph (1).
                    ``(B) Corrective action plan.--The Board shall, not 
                later than 60 days after determining that a bank 
                holding company or financial company is in violation of 
                paragraph (1), present to the members of the Committee 
                on Banking, Housing, and Urban Affairs of the Senate 
                and the Committee on Financial Services of the House of 
                Representatives a plan detailing the manner by which 
                the bank holding company or financial company shall be 
                brought into compliance with the applicable provision 
                of law.
                    ``(C) Reports to congress.--
                            ``(i) Written reports.--The Board shall 
                        provide to the members of the Committee on 
                        Banking, Housing, and Urban Affairs of the 
                        Senate and the Committee on Financial Services 
                        of the House of Representatives periodic 
                        reports for each 60-day period during which a 
                        corrective action plan required by subparagraph 
                        (B) has not been fulfilled.
                            ``(ii) Testimony.--The Board shall provide 
                        testimony to the Committee on Banking, Housing, 
                        and Urban Affairs of the Senate and the 
                        Committee on Financial Services of the House of 
                        Representatives for each 90-day period that a 
                        corrective action plan required by subparagraph 
                        (B) has not been fulfilled.
    ``(b) Limits on Nondeposit Liabilities for Bank Holding Companies 
and Nonbank Financial Companies Supervised by the Board.--
            ``(1) Bank holding companies.--
                    ``(A) Limit on nondeposit liabilities for bank 
                holding companies.--No bank holding company may possess 
                nondeposit liabilities exceeding 2 percent of the 
                annual gross domestic product of the United States.
                    ``(B) Determination of gross domestic product.--The 
                annual gross domestic product of the United States 
                shall be determined for purposes of subparagraph (A) 
                using the average of such product over the 16 calendar 
                quarters, as calculated by the Bureau of Economic 
                Analysis of the Department of Commerce, most recently 
                completed as of the time of the determination.
                    ``(C) Off-balance-sheet liabilities.--The 
                computation of the limit under this paragraph shall 
                take into account off-balance-sheet liabilities, 
                including any liabilities used to finance assets for 
                which the issuer has more than minimal economic or 
                reputational risks or rewards.
                    ``(D) Treatment of insurance companies.--
                Notwithstanding the liability limit established in this 
                section, the Board may set a separate liability limit 
                with respect to certain bank holding companies 
                primarily engaged in the business of insurance, as the 
                Board deems necessary in order to provide for 
                consistent and equitable treatment of such 
                institutions. In establishing such separate liability 
                limits for insurance companies, for any insurance 
                company with any subsidiary regulated by a State 
                insurance regulator, the Board shall consult the 
                appropriate State insurance regulator.
                    ``(E) Treatment of foreign deposits.--
                Notwithstanding the definition of the term `nondeposit 
                liabilities' established in this section, the Board may 
                exclude from its calculation of nondeposit liabilities 
                any foreign and other deposits not covered by the 
                definition of the term `FDIC-assessed deposits', if the 
                Board deems such action necessary to ensure the 
                consistent and equitable treatment of institutions with 
                international operations.
            ``(2) Nonbank financial companies supervised by the 
        board.--
                    ``(A) Limit on nondeposit liabilities for nonbank 
                financial companies supervised by the board.--No 
                nonbank financial company supervised by the Board may 
                possess nondeposit liabilities exceeding 3 percent of 
                the annual gross domestic product of the United States.
                    ``(B) Determination of gross domestic product.--The 
                annual gross domestic product of the United States 
                shall be determined for purposes of subparagraph (A) 
                using the average of such product over the 16 calendar 
                quarters, as calculated by the Bureau of Economic 
                Analysis of the Department of Commerce, most recently 
                completed as of the time of the determination.
                    ``(C) Off-balance-sheet liabilities.--The 
                computation of the limit under this paragraph shall 
                take into account off-balance-sheet liabilities, 
                including any liabilities used to finance assets for 
                which the issuer has more than minimal economic or 
                reputational risks or rewards.
                    ``(D) Treatment of insurance companies.--
                Notwithstanding the liability limit established by this 
                paragraph, the Board may set a separate liability limit 
                with respect to insurance companies or other financial 
                companies, as the Board determines necessary in order 
                to provide for consistent and equitable treatment of 
                such institutions. In establishing such separate 
                liability limits for insurance companies, for any 
                insurance company with any subsidiary regulated by a 
                State insurance regulator, the Board shall consult with 
                the appropriate State insurance regulator.
                    ``(E) Treatment of foreign deposits.--
                Notwithstanding the definition of the term `nondeposit 
                liabilities' established in this section, the Board may 
                exclude from its calculation of nondeposit liabilities 
                any foreign and other deposits not covered by the 
                definition of the term `FDIC-assessed deposits', if the 
                Board deems such action necessary to ensure the 
                consistent and equitable treatment of institutions with 
                international operations.
            ``(3) Prompt corrective action.--
                    ``(A) Authorities.--The Board shall require any 
                bank holding company or financial company that is in 
                violation of a provision of paragraph (1) or (2), as 
                applicable, to sell or otherwise transfer assets, 
                liabilities or off-balance-sheet items to unaffiliated 
                firms, to terminate 1 or more activities, or to impose 
                conditions on the manner in which the bank holding 
                company or financial company conducts 1 or more 
                activities to bring the company into compliance with 
                paragraphs (1) or (2), as applicable.
                    ``(B) Corrective action plan.--The Board shall, not 
                later than 60 days after determining that a bank 
                holding company or financial company is in violation of 
                paragraph (1) or (2), present to the members of the 
                Committee on Banking, Housing, and Urban Affairs of the 
                Senate and the Committee on Financial Services of the 
                House of Representatives a plan detailing the manner by 
                which the bank holding company or financial company 
                shall be brought into compliance with the applicable 
                provision.
                    ``(C) Reports to congress.--
                            ``(i) Written reports.--The Board shall 
                        provide to the members of the Committee on 
                        Banking, Housing, and Urban Affairs of the 
                        Senate and the Committee on Financial Services 
                        of the House of Representatives periodic 
                        reports for each 60-day period during which a 
                        corrective action plan required by subparagraph 
                        (B) has not been fulfilled.
                            ``(ii) Testimony.--The Board shall provide 
                        testimony to the Committee on Banking, Housing, 
                        and Urban Affairs of the Senate and the 
                        Committee on Financial Services of the House of 
                        Representatives for each 120-day period during 
                        which a corrective action plan required by 
                        subparagraph (B) has not been fulfilled.
    ``(c) Definitions.--As used in this section--
            ``(1) the term `appropriate Federal regulator' means--
                    ``(A) the Board of Governors of the Federal Reserve 
                System (in this Act referred to as the `Board');
                    ``(B) the Comptroller General of the United States 
                (in this Act referred to as the `Comptroller'; or
                    ``(C) the Federal Deposit Insurance Corporation (in 
                this Act referred to as the `Corporation');
            ``(2) the term `average total consolidated assets' has the 
        same meaning as in part 225 of title 12, Code of Federal 
        Regulations, as in effect on the date of enactment of this Act, 
        or any successor thereto;
            ``(3) the term `FDIC-assessed deposits' means the 
        assessment base, as computed under part 327 of title 12, Code 
        of Federal Regulations, as in effect on the date of enactment 
        of this Act, or any successor thereto;
            ``(4) the term `liabilities' equals a financial company's 
        total assets less tier 1 capital;
            ``(5) the term `nondeposit liabilities' means the total 
        assets of a bank holding company, less tier 1 capital, less 
        FDIC-assessed deposits;
            ``(6) the term `foreign nonbank financial company' means a 
        company (other than a company that is, or is treated in the 
        United States, as a bank holding company or a subsidiary 
        thereof) that is--
                    ``(A) incorporated or organized in a country other 
                than the United States; and
                    ``(B) substantially engaged in, including through a 
                branch in the United States, activities in the United 
                States that are financial in nature (as defined in 
                section 4(k) of the Bank Holding Company Act of 1956);
            ``(7) the term `U.S. nonbank financial company' means a 
        company (other than a bank holding company or a subsidiary 
        thereof) that is--
                    ``(A) incorporated or organized under the laws of 
                the United States or any State; and
                    ``(B) substantially engaged in activities in the 
                United States that are financial in nature (as defined 
                in section 4(k) of the Bank Holding Company Act of 
                1956);
            ``(8) the term `nonbank financial company' means a U.S. 
        nonbank financial company and a foreign nonbank financial 
        company;
            ``(9) the term `tangible common equity' means qualifying 
        common stockholders' equity plus retained earnings; and
            ``(10) the term `tier 1 capital' has the same meaning as in 
        part 225 of title 12, Code of Federal Regulations, as in effect 
        on the date of enactment of this section, or any successor 
        thereto.''.

SEC. 5. EFFECTIVE DATE.

    (a) In General.--This Act and the amendments made by this Act shall 
take effect upon the date of enactment of this Act.
    (b) Allowance for Bank Holding Companies and Financial Companies 
Not in Compliance at Date of Enactment.--Any institution that is in 
violation of--
            (1) the deposit concentration limit in section 3(d)(2)(A) 
        of the Bank Holding Act of 1956, as amended by this Act, as of 
        the date of enactment of this Act, shall bring itself into 
        compliance with that limit not later than 1 year after the date 
        of enactment of this Act;
            (2) the concentration limit in section 14 of the Bank 
        Holding Company Act of 1956, as amended by this Act, as of the 
        date of enactment of this Act, shall bring itself into 
        compliance with that limit not later than 1 year after the date 
        of enactment of this Act;
            (3) the leverage ratios in section 5A of the Bank Holding 
        Act of 1956, as amended by this Act, as of the date of 
        enactment of this Act, shall bring itself into compliance with 
        those ratios, not later than 1 year after the date of enactment 
        of this Act; and
            (4) the limits on nondeposit liabilities in section 7A of 
        the Bank Holding Company Act of 1956, as added by this Act, as 
        of the date of enactment of this Act, shall bring itself into 
        compliance with those limits, not later than 3 years after the 
        date of enactment of this Act.
                                 <all>