[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 1005 Introduced in Senate (IS)]

<DOC>






116th CONGRESS
  1st Session
                                S. 1005

   To stop financial institution crime, require certain officers of 
companies to certify that they have conducted due diligence relating to 
  criminal conduct or civil fraud, create accountability in deferred 
            prosecution agreements, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 3, 2019

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

_______________________________________________________________________

                                 A BILL


 
   To stop financial institution crime, require certain officers of 
companies to certify that they have conducted due diligence relating to 
  criminal conduct or civil fraud, create accountability in deferred 
            prosecution agreements, 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 ``Ending Too Big to Jail Act''.

SEC. 2. STOP FINANCIAL INSTITUTION CRIME.

    (a) Findings.--Congress finds the following:
            (1) History has shown that the Office of the Special 
        Inspector General for the Troubled Asset Relief Program 
        (referred to in this subsection as ``SIGTARP'') has--
                    (A) served as an effective model for--
                            (i) recovering taxpayer dollars; and
                            (ii) bringing accountability by rooting out 
                        waste, fraud, and abuse; and
                    (B) proven to be a leader in targeting crimes 
                committed by insiders at financial institutions in 
                order to protect the interests of the people of the 
                United States.
            (2) The financial crisis in 2008 laid bare one of the 
        biggest vulnerabilities of the United States, which is fraud 
        committed by financial institutions. Fraud committed by 
        financial institutions continues as of the date of enactment of 
        this Act, which demonstrates that such fraud does not 
        disappear, but evolves and grows over time, which weakens 
        financial institutions from the inside.
            (3) There is a need for a permanent law enforcement agency 
        dedicated solely to investigating fraud committed by financial 
        institutions and insiders at financial institutions because 
        that type of fraud--
                    (A) wreaks havoc on the economy of the United 
                States;
                    (B) puts the finances of the United States at risk; 
                and
                    (C) ruins the lives of individuals in the United 
                States.
            (4) Investigations led by SIGTARP have resulted in criminal 
        charges against more than 400 defendants, including criminal 
        charges against nearly 100 bankers. These criminal charges were 
        related to more than 20 failed banks, with a combined estimated 
        loss to the deposit insurance fund of $7,000,000,000.
            (5) SIGTARP's investigations led to the Department of 
        Justice enforcement actions against 10 financial institutions, 
        with 8 having total assets exceeding $100,000,000,000.
            (6) SIGTARP has developed unique methods to search for 
        crime by using industry, financial, and human intelligence, 
        including fraudulent conduct that contributed to the failure of 
        financial institutions, or that was either in, or impacted, 
        financial institutions.
            (7) Rather than establishing an entirely new entity, it 
        makes the most sense for taxpayers to rely on SIGTARP's 
        understanding of complex bank records and bank operations and 
        use of intelligence to--
                    (A) identify anomalies; and
                    (B) investigate, and root out fraud at, financial 
                institutions.
            (8) The vast expertise of SIGTARP, and the proven results 
        of SIGTARP with respect to the investigation of crime at 
        financial institutions, should be used on a permanent basis to 
        bring accountability and to deter fraud that jeopardizes 
        financial institutions in the United States, especially 
        considering the extent to which the people of the United States 
        rely on those institutions.
    (b) Redesignation of the Office of the Special Inspector General 
for the Troubled Asset Relief Program and the Special Inspector General 
for the Troubled Asset Relief Program.--
            (1) In general.--The Emergency Economic Stabilization Act 
        of 2008 (12 U.S.C. 5211 et seq.) is amended--
                    (A) by striking ``Special Inspector General for the 
                Troubled Asset Relief Program'' each place the term 
                appears and inserting ``Special Inspector General for 
                Financial Institution Crime'', except where the term is 
                used to refer to the Special Inspector General for the 
                Troubled Asset Relief Program Act of 2009;
                    (B) in section 121 (12 U.S.C. 5231), in the section 
                heading, by striking ``special inspector general for 
                the troubled asset relief program'' and inserting 
                ``special inspector general for financial institution 
                crime''; and
                    (C) in the table of contents, by striking the item 
                relating to section 121 and inserting the following:

``Sec. 121. Special Inspector General for Financial Institution 
                            Crime.''.
            (2) Technical and conforming amendments.--
                    (A) Additional appropriations provision.--The 
                Helping Families Save Their Homes Act of 2009 (Public 
                Law 111-22; 123 Stat. 1632) is amended--
                            (i) in section 402 (12 U.S.C. 5231a)--
                                    (I) in the section heading, by 
                                striking ``special inspector general 
                                for the troubled asset relief program'' 
                                and inserting ``special inspector 
                                general for financial institution 
                                crime''; and
                                    (II) in subsection (b)(1)(A), by 
                                striking ``Special Inspector General of 
                                the Trouble Asset Relief Program'' and 
                                inserting ``Special Inspector General 
                                for Financial Institution Crime''; and
                            (ii) in the table of contents, by striking 
                        the item relating to section 402 and inserting 
                        the following:

``Sec. 402. Special Inspector General for Financial Institution 
                            Crime.''.
                    (B) Exemption from budget reduction.--Section 
                255(i) of the Balanced Budget and Emergency Deficit 
                Control Act of 1985 (2 U.S.C. 905(i)) is amended by 
                striking ``Special Inspector General for the Troubled 
                Asset Relief Program'' and inserting ``Special 
                Inspector General for Financial Institution Crime''.
            (3) References.--
                    (A) Office references.--Any reference to the Office 
                of the Special Inspector General for the Troubled Asset 
                Relief Program in any law, rule, regulation, 
                certificate, directive, instruction, or other official 
                paper in force on the date of enactment of this Act 
                shall be considered to refer and apply to the Office of 
                the Special Inspector General for Financial Institution 
                Crime.
                    (B) Special inspector general references.--Any 
                reference to the Special Inspector General for the 
                Troubled Asset Relief Program in any law, rule, 
                regulation, certificate, directive, instruction, or 
                other official paper in force on the date of enactment 
                of this Act shall be considered to refer and apply to 
                the Special Inspector General for Financial Institution 
                Crime.
    (c) Duties of Special Inspector General for Financial Institution 
Crime.--
            (1) In general.--Section 121 of the Emergency Economic 
        Stabilization Act of 2008 (12 U.S.C. 5231) is amended--
                    (A) in subsection (b)--
                            (i) by striking paragraph (3); and
                            (ii) by redesignating paragraphs (4), (5), 
                        and (6) as paragraphs (3), (4), and (5), 
                        respectively;
                    (B) by striking subsection (c) and inserting the 
                following:
    ``(c) Duties.--
            ``(1) In general.--It shall be the duty of the Special 
        Inspector General to conduct, supervise and coordinate--
                    ``(A) investigations of fraudulent conduct in, or 
                impacting--
                            ``(i) an entity described in any of 
                        subparagraphs (A) through (F) of section 
                        5312(a)(2) of title 31, United States Code;
                            ``(ii) a bank holding company, as defined 
                        in section 2 of the Bank Holding Company Act of 
                        1956 (12 U.S.C. 1841); or
                            ``(iii) a savings and loan holding company, 
                        as defined in section 10(a) of the Home Owners' 
                        Loan Act (12 U.S.C. 1467a(a)); and
                    ``(B) audits and investigations of--
                            ``(i) the purchase, management, and sale of 
                        assets by the Secretary under any program 
                        established by the Secretary under section 101; 
                        and
                            ``(ii) the management by the Secretary of 
                        any program established under section 102, 
                        including by collecting and summarizing the 
                        information described in paragraph (2).
            ``(2) Information required.--The information described in 
        this paragraph is the following:
                    ``(A) A description of the categories of troubled 
                assets purchased or otherwise procured by the 
                Secretary.
                    ``(B) A listing of the troubled assets purchased in 
                each such category described in subparagraph (A).
                    ``(C) An explanation of the reasons the Secretary 
                deemed it necessary to purchase each such troubled 
                asset.
                    ``(D) A listing of each financial institution from 
                which those troubled assets were purchased.
                    ``(E) A listing of and detailed biographical 
                information on each person or entity hired to manage 
                such troubled assets.
                    ``(F) A current estimate of the total amount of 
                troubled assets purchased pursuant to any program 
                established under section 101, the amount of troubled 
                assets on the books of the Treasury, the amount of 
                troubled assets sold, and the profit and loss incurred 
                on each sale or disposition of each such troubled 
                asset.
                    ``(G) A listing of the insurance contracts issued 
                under section 102.
            ``(3) Additional duties.--The Special Inspector General 
        shall--
                    ``(A) establish, maintain, and oversee such 
                systems, procedures, and controls as the Special 
                Inspector General considers appropriate to discharge 
                the duty under paragraph (1); and
                    ``(B) have the duties and responsibilities of 
                inspectors general under the Inspector General Act of 
                1978 (5 U.S.C. App.).
            ``(4) Additional authority.--
                    ``(A) In general.--Except as provided under 
                subparagraph (B), and in addition to the duties 
                specified in paragraphs (1) and (2), the Special 
                Inspector General shall have the authority to conduct, 
                supervise, and coordinate an audit or investigation of 
                any action taken under this title as the Special 
                Inspector General determines appropriate.
                    ``(B) Exception.--Subparagraph (A) shall not apply 
                with respect to any action taken under section 115, 
                116, 117, or 125.'';
                    (C) in subsection (e)--
                            (i) in paragraph (1), by striking 
                        subparagraph (B) and inserting the following:
    ``(B)(i) Subject to clause (ii), notwithstanding the fact that the 
Office of the Special Inspector General for Financial Institutions 
Crime Enforcement is not a temporary organization, as defined in 
subsection (a) of section 3161 of title 5, United States Code, the 
Special Inspector General may exercise the authorities of subsections 
(b) through (i) of that section.
    ``(ii) If the Special Inspector General exercises the authorities 
described in clause (i)--
            ``(I) section 3161(b)(2) of title 5, United States Code 
        (relating to periods of appointments), shall not apply; and
            ``(II) with respect to an individual who is hired after the 
        date of enactment of the Ending Too Big to Jail Act, section 
        3161(b)(3) of title 5, United States Code, shall not apply 
        unless that individual is a reemployed annuitant described in 
        paragraph (5).''; and
                            (ii) in paragraph (5)--
                                    (I) in subparagraph (A)--
                                            (aa) by striking ``(A)''; 
                                        and
                                            (bb) in the first sentence, 
                                        by striking ``Except as 
                                        provided under subparagraph 
                                        (B), if'' and inserting ``If''; 
                                        and
                                    (II) by striking subparagraph (B);
                    (D) by striking subsection (g) and inserting the 
                following:
    ``(g) Cooperation and Coordination With Other Entities.--
            ``(1) Definitions.--In this subsection--
                    ``(A) the term `bank holding company' has the 
                meaning given the term in section 2 of the Bank Holding 
                Company Act of 1956 (12 U.S.C. 1841);
                    ``(B) the term `financial institutions' means an 
                entity described in any of subparagraphs (A) through 
                (F) of section 5312(a)(2) of title 31, United States 
                Code; and
                    ``(C) the term `savings and loan holding company' 
                has the meaning given the term in section 10(a) of the 
                Home Owners' Loan Act (12 U.S.C. 1467a(a)).
            ``(2) Required coordination.--In carrying out the duties, 
        responsibilities, and authorities of the Special Inspector 
        General under this section, the Special Inspector General shall 
        work with the entities described in paragraph (3), with a view 
        toward avoiding duplication of effort and ensuring 
        comprehensive oversight of--
                    ``(A) financial institutions, bank holding 
                companies, and savings and loan holding companies;
                    ``(B) any fraudulent conduct in, or impacting, an 
                entity described in subparagraph (A); and
                    ``(C) the Troubled Asset Relief Program.
            ``(3) Entities.--The entities described in this paragraph 
        are the following:
                    ``(A) The Inspector General of the Department of 
                the Treasury.
                    ``(B) The Inspector General of the Federal Deposit 
                Insurance Corporation.
                    ``(C) The Inspector General of the Securities and 
                Exchange Commission.
                    ``(D) The Inspector General of the Board of 
                Governors of the Federal Reserve System and the Bureau 
                of Consumer Financial Protection.
                    ``(E) The Inspector General of the Federal Housing 
                Finance Agency.
                    ``(F) The Inspector General of any other entity as 
                appropriate.'';
                    (E) in subsection (h), by striking ``until the date 
                of termination of the Office of the Special Inspector 
                General for the Troubled Asset Relief Program'';
                    (F) by striking subsection (i) and inserting the 
                following:
    ``(i) Reports.--
            ``(1) In general.--
                    ``(A) Requirement.--Subject to subparagraph (B), 
                not later than April 30 and October 31 of each year, 
                the Special Inspector General shall submit to the 
                appropriate committees of Congress a semiannual report 
                with respect to the 6-month period that ends on March 
                31 and September 30 of that year, respectively.
                    ``(B) Initial report.--The first report submitted 
                by the Special Inspector General under subparagraph (A) 
                after the date of enactment of the Ending Too Big to 
                Jail Act shall be with respect to the first full 6-
                month period that ends on March 31 or September 30 
                after that date of enactment, whichever is earlier.
            ``(2) Contents.--Each report submitted under paragraph (1) 
        shall include a summary of, for the period covered by the 
        report, the relevant actions taken by the Special Inspector 
        General.
            ``(3) Rule of construction.--Nothing in this subsection may 
        be construed to authorize the public disclosure of information 
        that is--
                    ``(A) specifically prohibited from disclosure by 
                any other provision of law;
                    ``(B) specifically required by Executive order to 
                be protected from disclosure in the interest of 
                national defense or national security or in the conduct 
                of foreign affairs; or
                    ``(C) a part of an ongoing criminal investigation.
            ``(4) Public availability.--Except as provided under 
        paragraph (3), all reports submitted under this subsection 
        shall be available to the public.'';
                    (G) in subsection (j), by adding at the end the 
                following:
    ``(3) the amounts made available under section 402(c) of the 
Public-Private Investment Program Improvement and Oversight Act of 2009 
(12 U.S.C. 5231a(c)) shall remain available until expended for any 
purpose in furtherance of the mission of the Office of the Special 
Inspector General for Financial Institution Crime; and
    ``(4) the Office of the Special Inspector General for Financial 
Institution Crime shall receive annual appropriations from Congress 
separate and apart from appropriations made to the U.S. Department of 
the Treasury.''; and
                    (H) by striking subsection (k).
            (2) Continuing service.--If the individual serving as the 
        Special Inspector General for the Troubled Asset Relief Program 
        on the day before the date of enactment of this Act was 
        appointed to that position by the President, by and with the 
        advice and consent of the Senate, that individual shall 
        continue to serve as the Special Inspector General for 
        Financial Institution Crime.
    (d) Authority of Special Inspector General.--Section 121 of the 
Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5231) is 
amended by adding at the end the following:
    ``(l) Disclosure.--
            ``(1) In general.--Without approval of the Special 
        Inspector General, no person, financial institution (as defined 
        in section 5312(a) of title 31, United States Code), bank 
        holding company (as defined in section 2 of the Bank Holding 
        Company Act of 1956 (12 U.S.C. 1841)), savings and loan holding 
        company (as defined in section 10(a) of the Home Owners' Loan 
        Act (12 U.S.C. 1467a(a))), or any other entity, including an 
        entity that lawfully possesses non-public information and 
        records of the Special Inspector General, may disclose 
        information and records with respect to the duties of the 
        Special Inspector General under this section unless--
                    ``(A) the Special Inspector General has approved a 
                request for that information or those records, as 
                applicable, under procedures established by the Special 
                Inspector General; or
                    ``(B)(i) an appropriate court of the United States 
                has ordered that information or those records, as 
                applicable, be released; and
                    ``(ii) the Special Inspector General had the 
                opportunity to oppose the release of the material 
                described in clause (i) in a proceeding before the 
                court described in that clause.
            ``(2) Application of privilege.--No Federal or State 
        financial institutions regulatory agency, including the Office 
        of the Comptroller of the Currency, the Board of Governors of 
        the Federal Reserve System, the Federal reserve banks, the 
        Federal Deposit Insurance Corporation, the Bureau of Consumer 
        Financial Protection, the Federal Housing Finance Agency, and 
        any State banking agency, may, on the basis of any common law 
        privilege, including the bank examiner privilege, deny the 
        Special Inspector General access to information or records 
        after the Special Inspector General has requested that 
        information or those records, as applicable.''.

SEC. 3. CERTIFICATION.

    (a) Definitions.--In this section--
            (1) the term ``appropriate entity'' means--
                    (A) the Special Inspector General for the Troubled 
                Asset Relief Program or any successor entity; or
                    (B) if the Program or entity described in 
                subparagraph (A) does not exist, the Attorney General;
            (2) the terms ``bank holding company'' and ``savings and 
        loan holding company'' have the meanings given those terms in 
        section 10(a) of the Home Owners' Loan Act (12 U.S.C. 
        1467a(a)); and
            (3) the term ``financial institution'' has the meaning 
        given the term in section 5312(a) of title 31, United States 
        Code.
    (b) Certification.--The chief executive officer, chief financial 
officer, chief operating officer, and chief compliance officer of a 
financial institution, a bank holding company, or a savings and loan 
holding company with assets greater than $10,000,000,000, shall submit 
to the appropriate entity, subject to section 1001 of title 18, United 
States Code, an annual certification that the officers have conducted 
due diligence and found that there is no criminal conduct or civil 
fraud in the financial institution, bank holding company, or savings 
and loan holding company, as applicable, that has not been disclosed in 
full to the Department of Justice or the applicable regulator. If a 
disclosure to the Department of Justice or the applicable regulator has 
been made, the certification shall explicitly describe all of the 
details of the conduct that has been disclosed, including but not 
limited to, the date of disclosure, and the person to whom the 
disclosure was made.
    (c) Regulations.--Not later than 1 year after the date of enactment 
of this Act, the appropriate entity shall promulgate regulations on the 
process under which certifications made under subsection (b) shall be 
submitted.
    (d) Website.--The appropriate entity shall, on the website of the 
appropriate entity--
            (1) within 90 calendar days following the promulgation of 
        regulations under subsection (c), and on an annual basis 
        thereafter, publish a list of all financial institutions, bank 
        holding companies, and savings and loan holding companies 
        subject to the upcoming year's annual certification requirement 
        under subsection (b); and
            (2) maintain on the homepage a direct link for the public 
        to report alleged misconduct pertaining to any entity listed 
        under paragraph (1).
    (e) Effective Date.--Subsection (b) shall take effect on the 
effective date of the regulations promulgated under subsection (c).
    (f) Enforcement.--
            (1) Injunctions.--When the Secretary of the Treasury 
        believes a person has violated, is violating, or will violate 
        this section or a regulation prescribed under this section, the 
        Secretary may bring a civil action in the appropriate district 
        court of the United States or appropriate United States court 
        of a territory or possession of the United States to enjoin the 
        violation or to enforce compliance with the section or 
        regulation. An injunction or temporary restraining order shall 
        be issued without bond.
            (2) Civil penalties.--
                    (A) In general.--A chief executive officer, chief 
                financial officer, chief operating officer, and chief 
                compliance officer of a financial institution, a bank 
                holding company, or a savings and loan holding company, 
                willfully violating this section or a regulation 
                prescribed under this section is liable to the United 
                States Government for a civil penalty of not more than 
                $25,000.
                    (B) Negligence.--
                            (i) In general.--The Secretary of the 
                        Treasury may impose a civil money penalty of 
                        not more than $500 on any chief executive 
                        officer, chief financial officer, chief 
                        operating officer, and chief compliance officer 
                        of a financial institution, a bank holding 
                        company, or a savings and loan holding company 
                        who negligently violates any provision of this 
                        section or any regulation prescribed under this 
                        section.
                            (ii) Pattern of negligent activity.--If any 
                        chief executive officer, chief financial 
                        officer, chief operating officer, and chief 
                        compliance officer of a financial institution, 
                        a bank holding company, or a savings and loan 
                        holding company engages in a pattern of 
                        negligent violations of any provision of this 
                        section or any regulation prescribed under this 
                        section, the Secretary of the Treasury may, in 
                        addition to any penalty imposed under clause 
                        (i) with respect to any such violation, impose 
                        a civil money penalty of not more than $50,000 
                        on the chief executive officer, chief financial 
                        officer, chief operating officer, and chief 
                        compliance officer of a financial institution, 
                        a bank holding company, or a savings and loan 
                        holding company.
            (3) Criminal penalties.--
                    (A) In general.--A chief executive officer, chief 
                financial officer, chief operating officer, and chief 
                compliance officer of a financial institution, a bank 
                holding company, or a savings and loan holding company 
                willfully violating this section or a regulation 
                prescribed under this section shall be fined not more 
                than $250,000, or imprisoned for not more than 5 years, 
                or both.
                    (B) Other laws.--A chief executive officer, chief 
                financial officer, chief operating officer, and chief 
                compliance officer of a financial institution, a bank 
                holding company, or a savings and loan holding company 
                willfully violating this section or a regulation 
                prescribed under this section while violating another 
                law of the United States or as part of a pattern of any 
                illegal activity involving more than $100,000 in a 12-
                month period, shall be fined not more than $500,000, 
                imprisoned for not more than 10 years, or both.

SEC. 4. ACCOUNTABILITY IN DEFERRED PROSECUTION AGREEMENTS.

    Section 3161(h)(2) of title 18, United States Code, is amended--
            (1) by striking ``Any'' and inserting ``(A) Any''; and
            (2) by adding at the end the following:
            ``(B)(i) If the defendant described in subparagraph (A) is 
        a person other than an individual, the court may not approve an 
        agreement described in that subparagraph unless the court 
        determines that the agreement is in the public interest, 
        including extending the term of such an agreement.
            ``(ii) In making the determination under clause (i), the 
        court shall consider--
                    ``(I) whether any reforms required under the 
                agreement are likely to prevent similar unlawful 
                behavior in the future;
                    ``(II) whether any penalties under the agreement 
                are sufficient to compensate victims and deter future 
                unlawful actions;
                    ``(III) if the defendant has previously been 
                convicted or entered into a deferred prosecution 
                agreement with the Government in connection with 
                related activity, the court may not, without good 
                cause, approve such an agreement.
            ``(iii) Any period of delay during which the court is 
        making the determination under this subparagraph shall be 
        included in the period of delay described in subparagraph (A).
            ``(C)(i) The court may, on its own or on motion of any 
        party or of an independent monitor, if one is appointed 
        pursuant to an agreement described in subparagraph (A), review 
        the implementation or termination of the agreement, and take 
        any appropriate action, to assure that the implementation or 
        termination is in the public interest.
            ``(ii) The court may order a party or an independent 
        monitor to file evidence with the court to aid the court in 
        making the determination under clause (i).
            ``(D)(i) Except as provided in clause (ii), the Attorney 
        General shall make available on the public website of the 
        Department of Justice--
                    ``(I) the text of any agreement described in 
                subparagraph (A) between an attorney for the Government 
                and a defendant that is a person other than an 
                individual; and
                    ``(II) all the terms and conditions of any 
                agreement or understanding between an independent 
                monitor appointed pursuant to the agreement described 
                in subclause (I) and the defendant.
            ``(ii) The information described in clause (i) and 
        subparagraph (C)(ii) shall not be made publicly available if, 
        upon petition by any interested party, the court finds that 
        there is good cause to not make such information public, 
        including that the information is proprietary, confidential, a 
        trade secret, or meets the requirements of rule 49.1 of the 
        Federal Rules of Criminal Procedure.''.
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