[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6955 Engrossed in House (EH)]
<DOC>
119th CONGRESS
2d Session
H. R. 6955
_______________________________________________________________________
AN ACT
To make improvements to the Federal banking laws, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Main Street
Capital Access Act'' or the ``Main Street Act''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--NEW BANK FORMATION AND LOCAL COMMUNITY ACCESS
Sec. 101. Promoting New Bank Formation.
Sec. 102. New Bank Application Numbers Knowledge.
Sec. 103. CDFI Fund Transparency.
Sec. 104. CDFI Bond Guarantee Improvement.
TITLE II--TAILORING BANK REGULATION
Sec. 201. Taking Account of Institutions with Low Operation Risk.
Sec. 202. Small Bank Holding Company Relief.
Sec. 203. Tailoring and Indexing Enhanced Regulations.
Sec. 204. Community Bank Regulatory Tailoring.
TITLE III--FAIR AND TRANSPARENT BANK SUPERVISION
Sec. 301. Halting Uncertain Methods and Practices in Supervision.
Sec. 302. Fair Audits and Inspections for Regulators' Exams.
Sec. 303. Supervisory Modifications for Appropriate Risk-based Testing.
Sec. 304. Financial Integrity and Regulation Management.
TITLE IV--REGULATORY ACCOUNTABILITY AND TRANSPARENCY
Sec. 401. FDIC Board Accountability.
Sec. 402. Stop Agency Fiat Enforcement of Guidance.
Sec. 403. Regulatory Efficiency, Verification, Itemization, and
Enhanced Workflow.
TITLE V--STRENGTHENING LOCAL BANK FUNDING
Sec. 501. Bringing the Discount Window into the 21st Century.
Sec. 502. Keeping Deposits Local.
TITLE VI--PROMOTING BANK COMPETITION AND MERGER CLARITY
Sec. 601. Bank Competition Modernization.
Sec. 602. Merger Agreement Approvals Clarity and Predictability.
Sec. 603. Merger Process Review.
Sec. 604. Bank Failure Prevention.
TITLE VII--STRENGTHENING TRANSPARENCY AND INVOLVEMENT IN BANK
RESOLUTIONS
Sec. 701. Least Cost Exception.
Sec. 702. Enhancing Bank Resolution Participation.
Sec. 703. Failing Bank Acquisition Fairness.
TITLE VIII--FACILITATING INNOVATION AND BANK PARTNERSHIPS
Sec. 801. Merchant Banking Modernization.
Sec. 802. Bank-Fintech Partnership Enhancement.
Sec. 803. Discretionary surplus fund.
TITLE I--NEW BANK FORMATION AND LOCAL COMMUNITY ACCESS
SEC. 101. PROMOTING NEW BANK FORMATION.
Section 908 of the 21st Century ROAD to Housing Act is amended--
(1) in subsection (b)(2), by striking ``180-day'' and
inserting ``90-day'';
(2) in subsection (c)--
(A) in the heading, by inserting ``and Extension''
after ``Study'';
(B) by redesignating paragraph (2) as paragraph
(3); and
(C) by inserting after paragraph (1) the following:
``(2) Safety and soundness determination; extension of
pilot program.--
``(A) Determination.--Not earlier than January 1,
2031, and not later than June 30, 2031, the Federal
banking agencies may, jointly, determine that
subsections (a) and (b) have had a significant adverse
effect on the safety and soundness of qualifying
community banks.
``(B) Extension.--Unless the Federal banking
agencies make the determination described in
subparagraph (A), the authorities under subsections (a)
and (b) shall be permanent.
``(C) Termination.--If the Federal banking agencies
make the determination described in subparagraph (A)--
``(i) subsections (a) and (b) shall only
apply to a qualifying community bank that
became an insured depository institution before
the date of such determination; and
``(ii) the Federal banking agencies shall
issue a report to the Committee on Financial
Services of the House of Representatives and
the Committee on Banking, Housing, and Urban
Affairs of the Senate, and make such report
available to the public, containing such
determination and the reasons for such
determination.''; and
(3) in subsection (e)(6)(B), by striking ``between January
1, 2026, and December 31, 2028'' and inserting ``on or after
January 1, 2026''.
SEC. 102. NEW BANK APPLICATION NUMBERS KNOWLEDGE.
(a) Annual Report on National Bank and Federal Savings Association
Charter Applications.--The Comptroller of the Currency shall publish an
annual report that includes the following, or with respect to any
equivalent procedure used by the Office of the Comptroller of the
Currency includes the following:
(1) The number of applications for a national bank or
Federal savings association charter received, approved on a
preliminary basis, approved on a final basis, denied,
withdrawn, inactive, expired, mooted, returned, returned
pending resubmission, or otherwise dispositioned.
(2) The mean and median times for preliminary approval of
such applications.
(3) The mean and median times for final approval of such
applications.
(4) To the extent practicable, common reasons leading to
the denial, withdrawal, or expiration of preliminary approval
of such applications.
(b) Annual Report on Federal Credit Union Charter Applications.--
The National Credit Union Administration shall publish an annual report
that includes the following, or with respect to any equivalent
procedure used by the agency includes the following:
(1) The number of Federal credit union charter applications
received, approved on a final basis, denied, withdrawn,
inactive, or returned pending resubmission.
(2) The mean and median times for final approval of such
applications.
(3) To the extent practicable, common reasons leading to
application denial, withdrawal, inactivity, or to applications
being returned for resubmission.
(c) Annual Report on Depository Institution Holding Company
Applications.--
(1) In general.--The Board of Governors of the Federal
Reserve System shall publish an annual report that includes the
following, or with respect to any equivalent procedure used by
the Board of Governors includes the following:
(A) The number of applications to become a top-tier
depository institution holding company received,
approved on a preliminary basis, approved on a final
basis, denied, withdrawn, inactive, expired, mooted,
returned, returned pending resubmission, or otherwise
dispositioned.
(B) The mean and median times to approve such
applications.
(C) To the extent practicable, common reasons
leading to denial or withdrawal of such applications.
(2) Top-tier depository institution holding company
defined.--In this subsection, the term ``top-tier depository
institution holding company'' means a depository institution
holding company (as defined in section 3 of the Federal Deposit
Insurance Act (12 U.S.C. 1813)) that is not controlled by any
other depository institution holding company.
(d) Annual Report on Federal Deposit Insurance Applications.--The
Federal Deposit Insurance Corporation shall publish an annual report
that includes the following, or with respect to any equivalent
procedure used by the Corporation includes the following:
(1) The number of applications for deposit insurance
received, approved on a preliminary basis, approved on a final
basis, denied, withdrawn, inactive, expired, mooted, returned,
returned pending resubmission, or otherwise dispositioned.
(2) The mean and median times to approve such applications.
(3) To the extent practicable, common reasons leading to
denial or withdrawal of such applications.
(e) Annual Report on State Depository Institution and State Credit
Union Charter Applications.--
(1) In general.--The Board of Governors of the Federal
Reserve System, the Federal Deposit Insurance Corporation, and
the National Credit Union Administration Board shall, jointly,
and in consultation with State banking regulators and State
credit union regulators, publish an annual report that includes
the following, or with respect to any equivalent procedure used
by such agencies includes the following:
(A) The number of applications for a State
depository institution charter received, approved on a
preliminary basis, approved on a final basis, denied,
withdrawn, inactive, expired, mooted, returned,
returned pending resubmission, or otherwise
dispositioned.
(B) The mean and median times to approve such
applications, with times for each State shown
separately.
(C) To the extent practicable, common reasons
leading to denial or withdrawal of such applications.
(2) Definitions.--In this subsection:
(A) State.--The term ``State'' means any State of
the United States, the District of Columbia, and any
territory of the United States.
(B) State depository institution.--The term ``State
depository institution'' means--
(i) a State depository institution, as
defined in section 3 of the Federal Deposit
Insurance Act (12 U.S.C. 1813); and
(ii) a State credit union, as defined in
section 101 of the Federal Credit Union Act (12
U.S.C. 1752).
SEC. 103. CDFI FUND TRANSPARENCY.
Section 104(b) of the Riegle Community Development and Regulatory
Improvement Act of 1994 (12 U.S.C. 4703(b)) is amended by adding to the
end the following:
``(5) Annual testimony.--The Secretary of the Treasury (or
a designee of the Secretary) shall, at the discretion of the
Chair of the Committee on Financial Services of the House of
Representatives and the Chair of the Committee on Banking,
Housing, and Urban Affairs of the Senate, annually testify
before such committees (or a subcommittee of such committees)
regarding--
``(A) the operations of the Fund during the
previous year;
``(B) steps the Secretary and the Fund are taking
to support community development financial institutions
through the financial agent mentor-protege program; and
``(C) steps the Secretary and the Fund are taking
to coordinate with regulators to ensure certification
and reporting requirements are appropriately
streamlined for community development financial
institutions.''.
SEC. 104. CDFI BOND GUARANTEE IMPROVEMENT.
(a) Sense of Congress.--It is the sense of Congress that the
authority to guarantee bonds under section 114A of the Community
Development Banking and Financial Institutions Act of 1994 (12 U.S.C.
4713a) (commonly referred to as the ``CDFI Bond Guarantee Program'')
provides community development financial institutions with a
sustainable source of long-term capital and furthers the mission of the
Community Development Financial Institutions Fund (established under
section 104(a) of such Act (12 U.S.C. 4703(a))) to increase economic
opportunity and promote community development investments for
underserved populations and distressed communities in the United
States.
(b) Guarantees for Bonds and Notes Issued for Community or Economic
Development Purposes.--
(1) In general.--Section 114A of the Community Development
Banking and Financial Institutions Act of 1994 (12 U.S.C.
4713a) is amended--
(A) in subsection (c)(2)--
(i) by striking ``, multiplied by an amount
equal to the outstanding principal balance of
issued notes or bonds''; and
(ii) by inserting ``outstanding'' before
``principal amount'';
(B) by amending subsection (e)(2) to read as
follows:
``(2) Limitation on guarantee amount.--The Secretary may
not guarantee any amount under the Program equal to an amount
less than $25,000,000, but the total of all such guarantees in
any fiscal year may not exceed $1,000,000,000.'';
(C) in subsection (g)(1), by striking ``10 basis
points'' and inserting ``not fewer than 10 basis points
and not more than 15 basis points''; and
(D) in subsection (k), by striking ``September 30,
2014'' and inserting ``December 31, 2028''.
(2) Clerical amendment.--The table of contents in section
1(b) of the Riegle Community Development and Regulatory
Improvement Act of 1994 (Public Law 103-325; 108 Stat. 2160) is
amended by inserting after the item relating to section 114 the
following:
``Sec. 114A. Guarantees for bonds and notes issued for community or
economic development purposes.''.
(c) Report on the CDFI Bond Guarantee Program.--Not later than 3
years after the date of enactment of this Act, the Secretary of the
Treasury shall issue a report to the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on Financial Services of
the House of Representatives on the effectiveness of the CDFI bond
guarantee program established under section 114A of the Community
Development Banking and Financial Institutions Act of 1994 (12 U.S.C.
4713a).
TITLE II--TAILORING BANK REGULATION
SEC. 201. TAKING ACCOUNT OF INSTITUTIONS WITH LOW OPERATION RISK.
(a) Tailoring Regulation to Business Model and Risk.--
(1) Definitions.--In this subsection--
(A) the term ``Federal financial institutions
regulatory agency'' means the Office of the Comptroller
of the Currency, the Board of Governors of the Federal
Reserve System, the Federal Deposit Insurance
Corporation, the National Credit Union Administration,
and the Bureau of Consumer Financial Protection; and
(B) the term ``regulatory action''--
(i) means any proposed, interim, or final
rule or regulation; and
(ii) does not include any action taken by a
Federal financial institutions regulatory
agency that is solely applicable to an
individual institution, including an
enforcement action, adjudication, or order.
(2) Consideration and tailoring.--For any regulatory action
occurring after the date of enactment of this Act, each Federal
financial institutions regulatory agency shall--
(A) take into consideration the risk profile and
business models of each type of institution or class of
institutions subject to the regulatory action; and
(B) tailor the regulatory action applicable to a
class or type of institution in a manner that limits
the regulatory impact, including cost, human resource
allocation, and other burdens, on the institution or
type of institution as is appropriate for the risk
profile and business model involved.
(3) Factors to consider.--In carrying out the requirements
of paragraph (2) with respect to a regulatory action, each
Federal financial institutions regulatory agency shall
consider--
(A) the aggregate effect of all applicable
regulatory actions promulgated by such agency on the
ability of institutions to flexibly serve customers of
the institutions and local markets on and after the
date of enactment of this Act;
(B) the potential that efforts to implement the
regulatory action and third-party service provider
actions may work to undercut efforts to tailor the
regulatory action, as described in paragraph (2)(B);
and
(C) the statutory provision authorizing the
regulatory action, the congressional intent with
respect to the statutory provision, and the underlying
policy objectives of the regulatory action.
(4) Notice of proposed and final rulemaking.--Each Federal
financial institutions regulatory agency shall disclose and
document in every notice of proposed rulemaking and in any
final rulemaking for a regulatory action how the agency has
applied paragraphs (2) and (3).
(5) Reports to congress.--
(A) Agency reporting.--Not later than 1 year after
the date of enactment of this Act and annually
thereafter, each Federal financial institutions
regulatory agency shall submit to the Committee on
Banking, Housing, and Urban Affairs of the Senate and
the Committee on Financial Services of the House of
Representatives a report on the specific actions taken
to tailor the regulatory actions of the Federal
financial institutions regulatory agency pursuant to
the requirements of this section.
(B) GAO reporting.--Not later than 18 months after
the date of enactment of this Act, the Comptroller
General of the United States shall submit to the
Committee on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Financial Services of the
House of Representatives a report evaluating the
effects of this section on the factors described in
paragraph (3).
(b) Short-form Call Reports for All Banks Eligible for the
Community Bank Leverage Ratio.--The appropriate Federal banking
agencies, as defined in section 3 of the Federal Deposit Insurance Act
(12 U.S.C. 1813), shall establish a reduced reporting requirement for
all banks eligible for the Community Bank Leverage Ratio, as defined in
section 201(a) of the Economic Growth, Regulatory Relief, and Consumer
Protection Act (12 U.S.C. 5371 note), when making the first and third
report of condition of a year as required by section 7(a) of the
Federal Deposit Insurance Act (12 U.S.C. 1817(a)).
(c) Report to Congress on Modernization of Supervision.--Not later
than 18 months after the date of enactment of this Act, the appropriate
Federal banking agencies, as defined in section 3 of the Federal
Deposit Insurance Act (12 U.S.C. 1813), in consultation with State bank
supervisors, shall submit to the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on Financial Services of
the House of Representatives a report on the modernization of bank
supervision, including the following factors:
(1) Changing bank business models.
(2) Examiner workforce and training.
(3) The structure of supervisory activities within banking
agencies.
(4) Improving bank-supervisor communication and
collaboration.
(5) The use of supervisory technology.
(6) Supervisory factors uniquely applicable to community
banks.
(7) Changes in statutes necessary to achieve more effective
supervision.
SEC. 202. SMALL BANK HOLDING COMPANY RELIEF.
Not later than 180 days after the date of the enactment of this
Act, the Board of Governors of the Federal Reserve System shall revise
appendix C to part 225 of title 12, Code of Federal Regulations
(commonly known as the ``Small Bank Holding Company and Savings and
Loan Holding Company Policy Statement''), to raise the consolidated
asset threshold under that appendix to $6,000,000,000 for any bank
holding company or savings and loan holding company.
SEC. 203. TAILORING AND INDEXING ENHANCED REGULATIONS.
(a) Periodic Adjustments to Thresholds.--The Financial Stability
Act of 2010 (12 U.S.C. 5311 et seq.) is amended by adding at the end
the following:
``SEC. 177. PERIODIC ADJUSTMENTS TO THRESHOLDS.
``(a) In General.--
``(1) Adjustment.--Not later than 1 year after the date of
enactment of this section, and every 5 years thereafter, the
Board of Governors shall increase each threshold described in
subsection (b) by the ratio, if greater than 1, of the annual
value of the economic indicator selected by the Board of
Governors as appropriate for that threshold under paragraph
(2)(B) for the calendar year preceding the year in which the
adjustment is calculated under this section, to the published
annual value of such economic indicator for the calendar year
preceding April 1, 2026.
``(2) Selection of economic indicators.--Not later than 3
months after the date of enactment of this section, the Board
of Governors shall--
``(A) complete a study on the advantages and
disadvantages of the use of either nominal United
States gross domestic product (as published by the
Department of Commerce) or the Consumer Price Index (as
published by the Department of Labor) to adjust
periodically the quantitative regulatory thresholds
described in subsection (b);
``(B) for each threshold described in subsection
(b), select either nominal United States gross domestic
product (as published by the Department of Commerce) or
the Consumer Price Index (as published by the
Department of Labor) as appropriate for adjusting such
threshold;
``(C) transmit a report to the Committee on
Financial Services of the House of Representatives and
the Committee on Banking, Housing, and Urban Affairs of
the Senate containing--
``(i) all findings and determinations made
in carrying out the study required under
subparagraph (A); and
``(ii) all selections made under
subparagraph (B).
``(b) Covered Thresholds.--The thresholds described in this
subsection are the following:
``(1) Each bank holding company or savings and loan holding
company total consolidated asset amount in the second
subsection (s) (relating to assessments) of section 11 of the
Federal Reserve Act.
``(2) Each bank holding company total consolidated asset
amount in--
``(A) sections 116(a), 121(a), 163(b), 164,
165(a)(1), 165(h)(2), 165(j)(1) of this Act; and
``(B) section 401(f) of the Economic Growth,
Regulatory Relief, and Consumer Protection Act.
``(3) Each financial company total consolidated asset
amount in section 165(i)(2)(A) of this Act.
``(c) Currency of Information.--The values used in the calculation
under subsection (a) shall be, as of the date of the calculation, the
values most recently published by the Department of Commerce or
Department of Labor, as appropriate.
``(d) Rounding.--
``(1) If any amount equal to or greater than
$100,000,000,000 determined under subsection (a) for any period
is not a multiple of $50,000,000,000, the amount shall be
rounded up to the nearest $50,000,000,000.
``(2) If any amount less than $100,000,000,000 determined
under subsection (a) for any period is not a multiple of
$5,000,000,000, the amount shall be rounded up to the nearest
$5,000,000,000.
``(e) Publication.--Not later than April 5 of any calendar year in
which an adjustment is required to be calculated under subsection (a),
the Board of Governors shall publish in the Federal Register the
amounts as so calculated.
``(f) Implementation Period.--Any increase in amounts determined
under subsection (a) shall take effect on January 1 of the year
immediately succeeding the calendar year in which the increase is
required to be calculated under subsection (a).
``SEC. 178. PERIODIC ADJUSTMENTS TO THRESHOLDS ESTABLISHED BY RULE.
``(a) Agency Review.--Not later than June 30, 2026, and the 1st day
of each subsequent 5-year period, the Board of Governors, the
Comptroller of the Currency, and the Corporation shall, to the extent
applicable, review--
``(1) any regulation--
``(A) implementing section 165 of this Act; or
``(B) making specific cross-reference to any
regulation of the Board of Governors implementing
section 165 of this Act; and
``(2) any asset threshold or other quantitative threshold
in such regulations implementing section 165 of this Act, or in
such regulations making specific cross-reference to any
regulation of the Board of Governors implementing section 165
of this Act, the amount of which is not prescribed by statute.
``(b) Modifications Required.--The Board of Governors, the
Comptroller of the Currency, and the Corporation shall modify any such
thresholds identified by each review conducted under subsection (a) by
the ratio, if greater than 1, of the annual value of the economic
indicator selected by the agency as appropriate for that threshold
under paragraph (1) for the calendar year preceding the year in which
the adjustment is calculated under this section, to the published
annual value of such economic indicator for the calendar year preceding
the effective date of such threshold, as each respective agency shall
determine as appropriate for such regulations. In making such
determination, the Board of Governors, the Comptroller of the Currency,
and the Corporation shall--
``(1) not later than 3 months after the date of enactment
of this subsection, for each threshold identified by each
review conducted under subsection (a), select either nominal
United States gross domestic product (as published by the
Department of Commerce) or the Consumer Price Index (as
published by the Department of Labor) as appropriate for
adjusting such threshold, and use the values of such selected
economic indicator most recently published as of the date of
commencement of the review to compute the ratio described in
this subsection;
``(2) seek to establish, to the extent feasible, uniform
thresholds for use by each such agency, taking into account the
entities regulated by each such agency and the purposes for
which such threshold was established; and
``(3) seek to adjust such thresholds, to the extent
feasible, with rounding consistent with section 177(d) of this
Act.
``(c) Report.--Upon conclusion of each review required under
subsection (a), each of the Board of Governors, the Comptroller of the
Currency, and the Corporation shall transmit a report to the Committee
on Financial Services of the House of Representatives and the Committee
on Banking, Housing, and Urban Affairs of the Senate containing a
description of any modification of any regulation such agency made
pursuant to subsection (b).''.
(b) Clerical Amendment.--The table of contents in section 1(b) of
the Dodd-Frank Wall Street Reform and Consumer Protection Act is
amended by inserting after the item relating to section 176 the
following:
``Sec. 177. Periodic adjustments to thresholds.
``Sec. 178. Periodic adjustments to thresholds established by rule.''.
SEC. 204. COMMUNITY BANK REGULATORY TAILORING.
(a) Periodic Adjustments to Thresholds.--
(1) In general.--
(A) Adjustment.--By April 1, 2031, and the 1st day
of each subsequent 5-year period, the Board of
Governors of the Federal Reserve System shall prescribe
the amount by which each dollar amount described in
subsection (b) shall be increased by the ratio, if
greater than 1, of the annual value of the economic
indicator selected by the Board of Governors of the
Federal Reserve System as appropriate for that dollar
amount under subparagraph (B) for the calendar year
preceding the year in which the adjustment is
calculated under this section, to the published annual
value of such economic indicator for the calendar year
preceding April 1, 2026.
(B) Selection of economic indicators.--Not later
than 3 months after the date of enactment of this Act,
the Board of Governors of the Federal Reserve System
shall--
(i) complete a study on the advantages and
disadvantages of the use of either nominal
United States gross domestic product (as
published by the Department of Commerce) or the
Consumer Price Index (as published by the
Department of Labor) to adjust periodically the
dollar amounts described in subsection (b);
(ii) for each dollar amount described in
subsection (b), select either nominal United
States gross domestic product (as published by
the Department of Commerce) or the Consumer
Price Index (as published by the Department of
Labor) as appropriate for adjusting such dollar
amount;
(iii) transmit a report to the Committee on
Financial Services of the House of
Representatives and the Committee on Banking,
Housing, and Urban Affairs of the Senate
containing--
(I) all findings and determinations
made in carrying out the study required
under clause (i); and
(II) all selections made under
clause (ii).
(2) Currency of information.--The values used in the
calculation under paragraph (1) shall be, as of the date of the
calculation, the values most recently published by the
Department of Commerce or Department of Labor, as appropriate.
(3) Rounding.--
(A) If any amount equal to or greater than
$100,000,000,000 determined under paragraph (1) for any
period is not a multiple of $50,000,000,000, the amount
shall be rounded up to the nearest $50,000,000,000.
(B) If any amount less than $100,000,000,000 but
equal to or greater than $10,000,000,000 determined
under paragraph (1) for any period is not a multiple of
$5,000,000,000, the amount shall be rounded up to the
nearest $5,000,000,000.
(C) If any amount less than $10,000,000,000 but
equal to or greater than $1,000,000,000 determined
under paragraph (1) for any period is not a multiple of
$500,000,000, the amount shall be rounded up to the
nearest $500,000,000.
(D) If any amount less than $1,000,000,000 but
equal to or greater than $100,000,000 determined under
paragraph (1) for any period is not a multiple of
$50,000,000, the amount shall be rounded up to the
nearest $50,000,000.
(E) If any amount less than $100,000,000 but equal
to or greater than $10,000,000 determined under
paragraph (1) for any period is not a multiple of
$5,000,000, the amount shall be rounded up to the
nearest $5,000,000.
(F) If any amount less than $10,000,000 but equal
to or greater than $1,000,000 determined under
paragraph (1) for any period is not a multiple of
$500,000, the amount shall be rounded up to the nearest
$500,000.
(G) If any amount less than $1,000,000 but equal to
or greater than $100,000 determined under paragraph (1)
for any period is not a multiple of $50,000, the amount
shall be rounded up to the nearest $50,000.
(H) If any amount less than $100,000 but equal to
or greater than $10,000 determined under paragraph (1)
for any period is not a multiple of $5,000, the amount
shall be rounded up to the nearest $5,000.
(I) If any amount less than $10,000 but equal to or
greater than $1,000 determined under paragraph (1) for
any period is not a multiple of $500, the amount shall
be rounded up to the nearest $500.
(J) If any amount less than $1,000 but equal to or
greater than $100 determined under paragraph (1) for
any period is not a multiple of $50, the amount shall
be rounded up to the nearest $50.
(K) If any amount less than $100 but equal to or
greater than $10 determined under paragraph (1) for any
period is not a multiple of $5, the amount shall be
rounded up to the nearest $5.
(L) If any amount less than $10 but equal to or
greater than $1 determined under paragraph (1) for any
period is not a multiple of $0.50, the amount shall be
rounded up to the nearest $0.50.
(4) Publication.--Not later than April 5 of any calendar
year in which an adjustment is required to be calculated under
paragraph (1), the Board of Governors of the Federal Reserve
System shall publish in the Federal Register the dollar amounts
as so calculated.
(5) Implementation period.--The increase in the dollar
amounts shall take effect on January 1 of the year immediately
succeeding any calendar year in which an adjustment is required
to be calculated under paragraph (1).
(b) Dollar Amounts.--The dollar amounts described in this
subsection are the dollar amounts described in each of the following:
(1) Section 5(c)(3)(C)(ii) of the Bank Holding Company Act
of 1956 (12 U.S.C. 1844(c)(3)(C)(ii)).
(2) Section 809(a) of the Community Reinvestment Act of
1977 (12 U.S.C. 2908(a)).
(3) Sections 202(4), 203(1), and 204 of the Depository
Institution Management Interlocks Act (12 U.S.C. 3201 et seq.).
(4) Sections 210(o), 210(r)(1)(A)(i), and section 956(f)
Dodd-Frank Wall Street Reform and Consumer Protection Act (12
U.S.C. 5301 et seq.).
(5) Sections 202(a)(6), 202(b)(1)(A), 202(c)(1)(A)(iii),
216(b)(2)(B)(iii)(II), 216(f)(2), 216(i)(4)(B), 216(j)(2)(A),
and 216(o)(4) of the Federal Credit Union Act (12 U.S.C. 1751
et seq.).
(6) Sections 7(a)(12), 11(p)(1)(A)(i), 36(i)(1)(B), 36(j),
38(b)(2)(A)(ii), and 38(k)(2)(B)(iii) of the Federal Deposit
Insurance Act (12 U.S.C. 1811 et seq.).
(7) Section 2(10) of the Federal Home Loan Bank Act (12
U.S.C. 1422(10)).
(8) Sections 7(a)(1) and 22(h)(5)(C) of the Federal Reserve
Act (12 U.S.C. 221 et seq.).
(9) The second paragraph (3) of section 304(i) (relating to
``Exemption from certain disclosure requirements'') and section
309(a) of the Home Mortgage Disclosure Act of 1975 (12 U.S.C.
2801 et seq.).
(10) Section 5(u)(2)(A) of the Home Owners' Loan Act (12
U.S.C. 1464(u)(2)(A)).
(11) Section 909(a)(1) of the International Lending
Supervision Act of 1983 (12 U.S.C. 3908(a)(1)).
(12) Section 3(1)(B)(iv) of the Real Estate Settlement
Procedures Act of 1974 (12 U.S.C. 2602(1)(B)(iv)).
(13) Section 5136A(a)(2)(D)(ii) of the Revised Statutes of
the United States (12 U.S.C. 24a(a)(2)(D)(ii)).
(14) Section 129C(b)(2)(F)(i) of the Truth in Lending Act
(15 U.S.C. 1639c(b)(2)(F)(i)).
TITLE III--FAIR AND TRANSPARENT BANK SUPERVISION
SEC. 301. HALTING UNCERTAIN METHODS AND PRACTICES IN SUPERVISION.
(a) Findings.--Congress finds that--
(1) CAMELS ratings (Capital adequacy, Asset quality,
Management, Earnings, Liquidity, and Sensitivity to market
risk) are a critical tool for evaluating the safety and
soundness of financial institutions, and the basis for
determining significant regulatory matters such as the
evaluation for mergers and acquisitions and a bank's deposit
insurance premiums;
(2) the CAMELS rating system relies heavily on examiner
judgment, which can lead to subjective and inconsistent ratings
across similar institutions;
(3) establishing articulable, clear, and reviewable
measures for each CAMELS component and their relative weighting
in determining composite ratings will promote fairness,
consistency, and accountability in supervisory assessments; and
(4) examination and supervision, as well as the CAMELS
rating system, should focus on a financial institution's
material financial condition or solvency.
(b) Amendments to the CAMELS Rating System.--
(1) In general.--The Federal Financial Institutions
Examination Council Act of 1978 (12 U.S.C. 3301 et seq.) is
amended by adding at the end the following:
``SEC. 1012. AMENDMENTS TO THE CAMELS RATING SYSTEM.
``(a) In General.--The Council shall make recommendations to amend
the Uniform Financial Institutions Rating System, and the CAMELS
components thereunder, to--
``(1) establish articulable, clear, and reviewable criteria
for assessing each CAMELS component;
``(2) revise the factors affecting each CAMELS component to
derive a composite rating that more accurately reflects the
material financial condition and risk profile of the financial
institutions being rated;
``(3) revise the management component of the CAMELS
components to limit the assessment under such component to
articulable, clear, and reviewable measures of an institution's
management in relation to its risk profile;
``(4) ensure that composite ratings consider the financial
institution's compliance with--
``(A) section 21 of the Federal Deposit Insurance
Act (12 U.S.C. 1829b);
``(B) chapter 2 of title I of Public Law 91-508 (12
U.S.C. 1951 et seq.);
``(C) subchapter II of chapter 53 of title 31,
United States Code; and
``(D) any other applicable requirements and
implementing regulations relating to the prevention of
money laundering and terrorist financing; and
``(5) ensure that composite ratings are determined based on
a transparent methodology that is limited to the objective
criteria established for each CAMELS component.
``(b) Rulemaking.--Not later than 12 months after the Council makes
the recommendations required under subsection (a), the Federal
financial institutions regulatory agencies shall, jointly, issue rules
to carry out the recommendations described under subsection (a).
``(c) Public Comment Period.--In issuing the rules required under
subsection (b), the Federal financial institutions regulatory agencies
shall--
``(1) publish a notice of proposed rulemaking with respect
to such rules; and
``(2) provide for a public comment period of not less than
90 days.
``(d) Rule of Construction.--Nothing in this section may be
construed to limit the authority of the Federal financial institutions
regulatory agencies to take supervisory, adjudicatory, or enforcement
actions to ensure the safety and soundness of financial
institutions.''.
(2) Well managed definition.--
(A) Bank holding company act of 1956.--Section
2(o)(9)(A) of the Bank Holding Company Act of 1956 (12
U.S.C. 1841(o)(9)(A)) is amended--
(i) by striking ``achievement of'' and all
that follows through ``a CAMEL'' and inserting
``achievement of a CAMEL'';
(ii) by striking ``; and'' and inserting
``; or''; and
(iii) by striking clause (ii).
(B) Revised statutes of the united states.--Section
5136A(g)(6)(A) of the Revised Statutes of the United
States (12 U.S.C. 24a(g)(6)(A)) is amended--
(i) by striking ``agency--'' and all that
follows through ``the achievement'' and
inserting ``agency, the achievement'';
(ii) by striking ``; and'' and inserting
``; or''; and
(iii) by striking clause (ii).
SEC. 302. FAIR AUDITS AND INSPECTIONS FOR REGULATORS' EXAMS.
(a) Timeliness of Examinations and Examination Reports.--The
Federal Financial Institutions Examination Council Act of 1978 (12
U.S.C. 3301 et seq.), as amended by section 301(b)(1), is further
amended by adding at the end the following:
``SEC. 1013. TIMELINESS OF EXAMINATIONS AND EXAMINATION REPORTS.
``(a) Timeliness of Examinations.--A Federal financial institutions
regulatory agency shall complete any examination of a financial
institution, other than a financial institution subject to a continuous
or resident examination program, within 270 days of commencing the
examination, except that such period may be extended by the Federal
financial institutions regulatory agency by providing written notice to
the financial institution describing with particularity the reasons
that a longer period is needed.
``(b) Final Examination Report.--A Federal financial institutions
regulatory agency shall provide a final examination report to a
financial institution, other than a financial institution subject to a
continuous or resident examination program, not later than 90 days
after the later of--
``(1) the exit interview for an examination of the
institution; or
``(2) the provision of additional material information by
the institution relating to the examination.
``(c) Exit Interview Requirement.--Within 30 days of completing an
examination for a financial institution not subject to a continuous or
resident examination program, a Federal financial institutions
regulatory agency shall conduct an exit interview with the financial
institution's senior management or the board of directors, except that
such period may be extended by the Federal financial institutions
regulatory agency by providing written notice to the institution
describing with particularity the reasons that a longer period is
needed to complete the exit interview.
``(d) Examination Materials.--Upon the written request of a
financial institution, the Federal financial institutions regulatory
agency shall include with the final report an appendix listing all
examination or other factual information relied upon by the agency in
support of a material supervisory determination.''.
(b) Timeliness of Required Prudential Private Letter Rulings.--The
Federal Financial Institutions Examination Council Act of 1978 (12
U.S.C. 3301 et seq.), as amended by subsection (a), is further amended
by adding at the end the following:
``SEC. 1014. TIMELINESS OF REQUIRED PRUDENTIAL PRIVATE LETTER RULINGS.
``(a) Authority and Regulation.--
``(1) In general.--Each Federal financial institutions
regulatory agency shall establish procedures providing that a
covered financial institution may, upon application by the
covered financial institution and with respect to a covered
action, obtain written advice regarding--
``(A) the agency's non-objection to the financial
institution conducting a particular activity;
``(B) the agency's interpretation of a law or
regulation as applied to a particular matter;
``(C) the agency's interpretation of how generally
accepted accounting principles or accounting
objectives, standards, and requirements apply to a
particular matter; or
``(D) the agency's application of any supervisory
guidance, statement of policy, or interpretive rule to
a particular matter.
``(2) Covered action defined.--In this subsection and with
respect to a covered financial institution, the term `covered
action' means--
``(A) any action in connection with a regulated
activity that the covered financial institution is
taking or is intending to take, including--
``(i) entering into a transaction;
``(ii) issuing a product or service; or
``(iii) changing the corporate structure of
the covered financial institution; and
``(B) a Federal financial institutions regulatory
agency's objection to the covered financial institution
commencing or otherwise conducting an activity
(including an action described in subparagraph (A)).
``(b) Contents of Request.--The procedures established under
subsection (a) shall provide that a request for written advice made
under the procedures shall be in writing and contain--
``(1) the nature of the request;
``(2) applicable facts relating to the matter;
``(3) applicable law, regulations, or generally accepted
accounting principles relating to the matter; and
``(4) a summary of the request.
``(c) Response to Request.--A Federal financial institutions
regulatory agency receiving a request for written advice under
subsection (a) shall, not later than 30 days after receiving the
request--
``(1) provide the financial institution making the request
with written notification confirming receipt of the request and
stating whether the request contains all of the information
required under subsection (b); and
``(2) if the request does not contain all of the
information required under subsection (b)--
``(A) provide the financial institution with an
explanation of what information is missing; and
``(B) notify the financial institution that the
financial institution may provide the missing
information to the agency within 30 days.
``(d) Providing Missing Information.--If a Federal financial
institutions regulatory agency informs the financial institution under
subsection (c) that the request for written advice does not contain all
the information required under subsection (b), the financial
institution may provide the missing information to the Federal
financial institutions regulatory agency within 30 days of the date the
financial institution receives the explanation of the missing
information under subsection (c).
``(e) Determination.--A Federal financial institutions regulatory
agency receiving a request for written advice under the procedures
established under subsection (a) shall provide the financial
institution with a written response (or, for purposes of paragraph (3),
notify the financial institution that a determination cannot be made)--
``(1) if the initial request contains the information
required under subsection (b), not later than the end of the
60-day period beginning on the date the Federal financial
institutions regulatory agency notifies the financial
institution of the receipt of the request under subsection (c);
``(2) if the initial request does not contain the
information required under subsection (b), but the financial
institution provides the missing information during the 30-day
period described under subsection (d), not later than the end
of the 60-day period beginning on the date such missing
information is provided; or
``(3) if the initial request does not contain the
information required under subsection (b), and the financial
institution does not provide the missing information during the
30-day period described under subsection (d), not later than
the end of the 60-day period beginning on the end of such 30-
day period.
``(f) Limited Binding Effect.--Written advice issued by a Federal
financial institutions regulatory agency under the procedures
established under this section--
``(1) shall be binding on the agency with respect to the
financial institution requesting the written advice and the
specific facts described in the request;
``(2) may be relied upon by the financial institution
requesting the written advice in good faith; and
``(3) shall not be binding on the agency with respect to
any other person or institution and shall not be treated as
precedent.
``(g) Confidentiality and Privilege.--
``(1) Treatment of written advice.--Written advice issued
under this section, and any materials submitted in connection
therewith, and the fact that a request for written advice was
made shall be treated as confidential supervisory information
and exempt from disclosure under section 552(b) of title 5,
United States Code.
``(2) Publishing of anonymized or redacted summaries.--A
Federal financial institutions regulatory agency may publish
anonymized or redacted summaries of rulings for informational
purposes.
``(h) Modification or Revocation.--A Federal financial institutions
regulatory agency may modify or revoke written advice issued under this
section only if--
``(1) the requesting financial institution made a material
misstatement or omission of fact;
``(2) there has been a change in controlling law; or
``(3) the ruling is inconsistent with a final rule or
judicial decision issued after the date the written advice was
issued.
``(i) Reasonable Fees.--Each Federal financial institutions
regulatory agency may establish and collect a reasonable fee for the
processing and issuance of any written advice issued under this
section, and such fee--
``(1) shall be based on the estimated cost to the agency of
reviewing, analyzing, and responding to the request;
``(2) may vary based on the complexity of the request or
the size of the requesting institution; and
``(3) shall be prescribed by regulation.
``(j) Finality.--Written advice issued under the procedures
established under this section shall not be construed as a final agency
action.''.
(c) Office of Independent Examination Review.--
(1) In general.--The Federal Financial Institutions
Examination Council Act of 1978 (12 U.S.C. 3301 et seq.), as
amended by subsection (b), is further amended by adding at the
end the following:
``SEC. 1015. OFFICE OF INDEPENDENT EXAMINATION REVIEW.
``(a) Establishment.--There is established in the Council an Office
of Independent Examination Review (the `Office').
``(b) Board of Independent Examination Review.--
``(1) In general.--The head of the Office shall be the
Board of Independent Examination Review, which shall be
comprised of 3 members, appointed by the President, by and with
the advice and consent of the Senate.
``(2) Qualifications.--The President shall appoint 1 member
of the Board from each of the following classes of individuals:
``(A) Individuals who have been employed by a
Federal financial institutions regulatory agency.
``(B) Individuals who are not, and were not during
the previous 5-year period, employed by a Federal
financial institutions regulatory agency or a Federal
reserve bank and who--
``(i) are a licensed attorney or a
certified public accountant authorized to
practice under the laws of a State, the
District of Columbia, or a territory of the
United States;
``(ii) have academic or private sector
experience relating to financial services; or
``(iii) have relevant work-related
experience in consumer affairs or compliance
with consumer protection laws with respect to
financial institutions.
``(C) Individuals with at least 10 years private
sector financial services senior management-level
experience.
``(3) Prohibition on certain individuals serving as a board
member.--The President may not appoint an individual as a
member of the Board if the individual--
``(A) is, or was during the previous 2-year period,
employed by a Federal financial institutions regulatory
agency or a Federal reserve bank; or
``(B) is, or was during the previous 2-year period,
employed by a financial institution.
``(4) Consultation.--In appointing members of the Board,
the President shall consult with the Federal financial
institutions regulatory agencies and financial institutions.
``(5) Term.--
``(A) In general.--Each member of the Board shall
serve for a term of 3 years. Upon the expiration of a
member's terms of office, the member shall continue to
serve until the member's successor has been confirmed
by the Senate.
``(B) Term limitation.--No individual may serve
more than 2 full terms on the Board.
``(6) Political affiliation.--Not more than 2 members of
the Board shall be members of the same political party.
``(7) Quorum.--
``(A) In general.--3 members of the Board shall
constitute a quorum.
``(B) Initial quorum.--During the 6-month period
beginning on the date of enactment of this section, 1
member of the Board shall constitute a quorum until the
Board has 3 members.
``(8) Rate of pay.--The annual rate of basic pay for the
members of the Board shall be the rate of basic pay for Level
IV of the Executive Schedule under section 5315 of title 5,
United States Code.
``(c) Staffing.--The Board is authorized to hire staff to support
the activities of the Office of Independent Examination Review, and set
the salaries of such staff. One-fifth of the costs and expenses of the
Office, including the salaries of its employees, shall be paid by each
of the Federal financial institutions regulatory agencies. Annual
assessments for such share shall be levied by the Council based upon
its projected budget for the year, and additional assessments may be
made during the year if necessary.
``(d) Duties.--The Board shall--
``(1) receive and, at the discretion of the Board,
investigate complaints from financial institutions, their
representatives, or another entity acting on behalf of such
institutions, concerning completed examinations, examination
practices, or examination reports;
``(2) hold meetings, at least once every three months and
in locations designed to encourage participation from all
sections of the United States, with financial institutions,
their representatives, or another entity acting on behalf of
such institutions, to discuss examination procedures,
examination practices, or examination policies;
``(3) review examination procedures of the Federal
financial institutions regulatory agencies to ensure that the
written examination policies of those agencies are being
followed in practice and adhere to the standards for
consistency;
``(4) conduct a continuing and regular program of
examination quality assurance on a sample for all examination
types conducted by the Federal financial institutions
regulatory agencies;
``(5) carry out an independent review of any supervisory
appeal initiated under section 1016; and
``(6) report annually to the Committee on Financial
Services of the House of Representatives, the Committee on
Banking, Housing, and Urban Affairs of the Senate, and the
Council, on the reviews carried out pursuant to paragraphs (3)
and (5), including compliance with the requirements set forth
in section 1014 regarding timeliness of examination reports,
and the Board's recommendations for improvements in examination
procedures, practices, and policies.
``(e) Confidentiality.--
``(1) In general.--The Board and the Council shall keep
confidential--
``(A) all meetings, discussions, and information
provided by financial institutions and Federal
financial institutions regulatory agencies that involve
confidential supervisory information or privileged
information;
``(B) all information and communications exchanged
between a financial institution and the Office of
Independent Examination Review; and
``(C) all information and communications exchanged
between a Federal financial institutions regulatory
agency and the Office of Independent Examination
Review.
``(2) Submission of information does not constitute a
waiver.--Section 18(x) of the Federal Deposit Insurance Act (12
U.S.C. 1828(x)) and section 205(j) of the Federal Credit Union
Act (12 U.S.C. 1785(j)) shall apply to the submission of
information to the Board by a financial institution or a
Federal financial institutions regulatory agency to the same
extent as such sections 18(x) and 205(j) apply to the
submission of information described in such sections 18(x) and
205(j).
``(3) Sharing of information without waiving privilege.--
The Board shall be considered a `covered agency' for purposes
of section 11(t) of the Federal Deposit Insurance Act (12
U.S.C. 1821(t)).''.
(2) Definitions.--Section 1003 of the Federal Financial
Institutions Examination Council Act of 1978 (12 U.S.C. 3302)
is amended--
(A) in paragraph (2), by striking ``and'' at the
end; and
(B) by adding at the end the following:
``(4) the term `Board' means the Board of Independent
Examination Review established under section 1015(b);
``(5) the term `material supervisory determination' has the
meaning given such term in section 309(c) of the Riegle
Community Development and Regulatory Improvement Act of 1994;
``(6) the term `insured depository institution' has the
meaning given that term in section 3 of the Federal Deposit
Insurance Act; and
``(7) the term `insured credit union' has the meaning given
that term in section 101 of the Federal Credit Union Act.''.
(d) Right to Independent Review of Material Supervisory
Determinations.--The Federal Financial Institutions Examination Council
Act of 1978 (12 U.S.C. 3301 et seq.), as amended by subsection (c), is
further amended by adding at the end the following:
``SEC. 1016. RIGHT TO INDEPENDENT REVIEW OF MATERIAL SUPERVISORY
DETERMINATIONS.
``(a) In General.--A financial institution shall have the right to
obtain an independent review, as described in this section, of a
material supervisory determination contained in a final report of
examination. A Federal financial institutions regulatory agency and the
Board may not conduct concurrent reviews.
``(b) Notice.--
``(1) Timing.--A financial institution seeking review of a
material supervisory determination under this section shall
file a written notice with the Board within 30 days after
receiving the final report of examination that is the subject
of such review.
``(2) Extension.--The institution may file a written
request with the Board for an extension of the 60-day time
period described under paragraph (1), which shall state good
cause for granting the extension. Such request shall be granted
in the sole discretion of the Board.
``(3) Identification of determination.--The written notice
shall--
``(A) identify the material supervisory
determination that is the subject of the requested
independent examination review;
``(B) state the reasons why the institution
believes that the material supervisory determination is
incorrect or should otherwise be modified; and
``(C) include--
``(i) a clear and complete statement of all
relevant facts and issues;
``(ii) all arguments that the institution
wishes to present; and
``(iii) all relevant and material documents
in the possession of the institution that the
institution wishes to be considered.
``(4) Information made available to institution.--A
financial institution seeking a review of a material
supervisory determination may, not later than 7 days after
receiving the final examination report, request that the
Federal financial institutions regulatory agency that made the
material supervisory determination provide the financial
institution with all examination and factual information relied
upon by the Federal financial institutions regulatory agency in
making the material supervisory determination. The Federal
financial institutions regulatory agency shall provide such
information to the financial institution not later than 14 days
after receiving the request.
``(5) Submission of record.--After receiving a written
notice of review from a financial institution under this
subsection, the Board shall direct the Federal financial
institutions regulatory agency that made the material
supervisory determination under review to file with the Board
the supervisory record of the examination resulting in the
material supervisory determination under review.
``(c) Determination; Right to Hearing.--
``(1) In general.--The Board shall--
``(A) determine the merits on the record, including
whether the material supervisory determination being
reviewed should be upheld, canceled, or modified; or
``(B) at the election of the financial institution,
conduct a hearing, which shall take place not later
than 60 days after the petition for review is received
by the Board, except that such 60-day period may be
extended if both the financial institution and the
Board agree to such extension.
``(2) Right to obtain testimony.--A financial institution
electing for a hearing under paragraph (1)(B) shall have the
right the obtain testimony under oath from agency employees and
obtain documents and other evidence at the hearing, or in
advance of the hearing, according to procedures instituted by
the Board consistent with those set forth under sections 556
and 557 of title 5, United States Code.
``(3) Basis of decision.--The Board shall issue a written
decision based upon the record of the examination, supplemented
by the record established before the Board and at any hearing.
``(4) Standard of review.--The Board's review of a material
supervisory determination being reviewed under this subsection
shall be de novo, and the Board shall not defer to the opinions
of the examiners or the Federal financial institutions
regulatory agency, but shall independently determine the
appropriateness of the material supervisory determination based
upon the relevant statutes, regulations, other appropriate
guidance, and the evidentiary record.
``(5) Policy matters.--The Board shall conduct reviews
under this section applying the policies, regulations, and
interpretations of the Federal financial institutions
regulatory agency that made the material supervisory
determination under review in effect at the time the material
supervisory determination was made.
``(d) Final Decision.--A decision by the Board on an independent
review under this section shall--
``(1) be made not later than 60 days after the record has
been closed; and
``(2) be deemed final and shall bind the agency whose
supervisory determination was the subject of the review and the
financial institution requesting the review.
``(e) Referral of Violations.--If the Board, in carrying out this
section, determines that a financial institution has violated a law or
regulation, the Board shall refer such determination to the applicable
Federal financial institutions regulatory agency.
``(f) Annual Report.--
``(1) In general.--The Board shall report annually to the
Committee on Financial Services of the House of
Representatives, the Committee on Banking, Housing, and Urban
Affairs of the Senate, and the Council on actions taken under
this section, including the types of issues that the Board has
reviewed and the results of those reviews, including
information on each final determination with respect to a
material supervisory determination.
``(2) Confidentiality.--In reporting under paragraph (1),
the Board shall redact information about individual financial
institutions and any confidential supervisory information or
privileged information shared by financial institutions, and
shall anonymize any un-redacted information that could, in the
aggregate, identify a financial institution.
``(g) Retaliation Prohibited.--
``(1) In general.--A Federal financial institutions
regulatory agency may not--
``(A) retaliate against a financial institution,
including service providers, or any institution-
affiliated party, for exercising appellate rights under
this section; or
``(B) delay or deny any agency action that would
benefit a financial institution or any institution-
affiliated party on the basis that an appeal under this
section is pending under this section.
``(2) Retaliation.--For purposes of this subsection,
retaliation includes delaying consideration of, or withholding
approval of, any request, notice, or application that otherwise
would have been approved, but for the exercise of a financial
institution's rights under this section.
``(h) Rulemaking.--The Board shall issue rules, consistent with
subchapter II of chapter 5 of title 5, United States Code (commonly
referred to as the `Administrative Procedure Act'), to establish
procedures for hearings described under this section, including that--
``(1) a financial institution may appear at the hearing
personally or through counsel;
``(2) a financial institution may provide an oral and
written presentation at the hearing;
``(3) the Board may ask questions of any person
participating in the hearing;
``(4) the hearing shall not be governed by the Federal
Rules of Evidence; and
``(5) the Board shall have a verbatim transcript of the
hearing prepared.
``(i) Rule of Construction.--Nothing in this section may be
construed--
``(1) to affect the right of a Federal financial
institutions regulatory agency to take enforcement or other
supervisory actions related to a material supervisory
determination under review under this section; or
``(2) to prohibit the review under this section of a
material supervisory determination with respect to which there
is an ongoing enforcement or other supervisory action.''.
(e) Additional Amendments.--
(1) Regulatory appeals process, ombudsman, and alternative
dispute resolution.--
(A) In general.--Section 309 of the Riegle
Community Development and Regulatory Improvement Act of
1994 (12 U.S.C. 4806) is amended--
(i) in the heading, by striking
``regulatory appeals process, ombudsman,'' and
inserting ``ombudsman'' (and by conforming the
item relating to such section in the table of
contents accordingly);
(ii) by striking subsections (a), (b), and
(c);
(iii) by redesignating subsections (d),
(e), (f), and (g) as subsections (a), (b), (c),
and (d), respectively;
(iv) in subsection (b), as so
redesignated--
(I) in paragraph (2)--
(aa) in subparagraph (B),
by striking ``and'' at the end;
(bb) in subparagraph (C),
by striking the period and
inserting ``; and''; and
(cc) by adding at the end
the following:
``(D) ensure that appropriate safeguards exist for
protecting any party from retaliation by any agency for
exercising rights under this subsection.''; and
(II) by adding at the end the
following:
``(6) Retaliation.--For purposes of this subsection,
retaliation includes delaying consideration of, or withholding
approval of, any request, notice, or application that otherwise
would have been approved, but for the exercise of a financial
institution's rights under this section.''; and
(v) in paragraph (1)(A) of subsection (c),
as so redesignated--
(I) in clause (ii), by striking ``;
and'' and inserting a semicolon;
(II) in clause (iii), by striking
``; and'' and inserting a semicolon;
and
(III) by adding at the end the
following:
``(iv) any issue specifically listed in an
exam report as a matter requiring attention by
the institution's management or board of
directors; and
``(v) any suspension or removal of an
institution's status as eligible for expedited
processing of applications, requests, notices,
or filings on the grounds of a supervisory or
compliance concern, regardless of whether that
concern has been cited as a basis for a
material supervisory determination or matter
requiring attention in an examination report,
provided that the conduct at issue did not
involve violation of any criminal law; and''.
(B) Effect.--Nothing in this subsection affects the
authority of a Federal banking agency (as defined in
section 304(b)) to take enforcement or other
supervisory action.
(2) Federal credit union act.--Section 205(j) of the
Federal Credit Union Act (12 U.S.C. 1785(j)) is amended by
inserting ``the Bureau of Consumer Financial Protection,''
before ``the Administration'' each place that term appears.
(3) Federal financial institutions examination council
act.--The Federal Financial Institutions Examination Council
Act of 1978 (12 U.S.C. 3301 et seq.) is amended--
(A) in section 1003 (12 U.S.C. 3302)--
(i) by striking paragraph (1) and inserting
the following:
``(1) the term `Federal financial institutions regulatory
agencies'--
``(A) means the Office of the Comptroller of the
Currency, the Board of Governors of the Federal Reserve
System, the Federal Deposit Insurance Corporation, and
the National Credit Union Administration; and
``(B) includes the Bureau of Consumer Financial
Protection for purposes of sections 1012 through
1015;''; and
(ii) in paragraph (3), by striking the
semicolon at the end and inserting ``, except
that for purposes of sections 1013 through
1016, the term `financial institution' does not
include a credit union that is not an insured
credit union;'';
(B) in section 1004(a)(4) (12 U.S.C. 3303), by
striking ``Consumer Financial Protection Bureau'' and
inserting ``Bureau of Consumer Financial Protection'';
and
(C) in section 1005 (12 U.S.C. 3304)--
(i) by striking ``One-fifth'' and inserting
``One-fourth''; and
(ii) by inserting ``described under section
1003(1)(A)'' after ``agencies''.
(f) Election of Forum for Review of Supervisory Enforcement.--
(1) Federal deposit insurance act.--Section 8 of the
Federal Deposit Insurance Act (12 U.S.C. 1818) is amended--
(A) in subsection (b), by adding at the end the
following:
``(11) Hearing.--With respect to any notice properly issued
and served upon a depository institution or institution-
affiliated party under this subsection, such depository
institution or institution-affiliated party shall be afforded a
hearing before--
``(A) the appropriate Federal banking agency; or
``(B) if such institution or person submits a
request within 20 days after the issuance of the
notice, the appropriate United States district court,
and that court shall have jurisdiction to adjudicate
all claims and requested remedies stated in the notice
of charges, including those authorized under this
subsection.'';
(B) in subsection (e), by adding at the end the
following:
``(8) Hearing.--With respect to any notice properly issued
and served upon an institution-affiliated party under this
subsection, such institution-affiliated party shall be afforded
a hearing before--
``(A) the appropriate Federal banking agency; or
``(B) if such party submits a request for such
hearing and forum within 20 days after the issuance of
the notice, the appropriate United States district
court, and that court shall have jurisdiction to
adjudicate all claims and requested remedies stated in
the notice, including those authorized under this
subsection.'';
(C) in subsection (h)--
(i) in paragraph (1), by striking ``(other
than the hearing provided for in subsection
(g)(3) of this section)'' and inserting
``(other than the hearing provided for in
subsection (b)(11)(B), (e)(8)(B), (g)(3), or
(i)(2)(H)(ii))''; and
(ii) by adding at the end the following:
``(4) Any hearing provided for in subsection (b)(11)(B), (e)(8)(B),
or (i)(2)(H)(ii) shall be subject to the jurisdiction, powers, and
equitable authority of the district court and be governed by the
Federal Rules of Civil Procedure and the Federal Rules of Evidence.
``(5) Any final decision of a United States district court made
pursuant to a respondent's election under subsection (b)(11)(B),
(e)(8)(B), or (i)(2)(H)(ii) shall be reviewable in the appropriate
court of appeals in the same manner and to the same extent as any other
civil action to which the United States is a party.'';
(D) in subsection (i)(2)--
(i) by amending subparagraph (E)(ii) to
read as follows:
``(ii) Finality of assessment.--If, with
respect to any assessment under clause (i), a
hearing is not requested or an election is not
made and timely noticed pursuant to
subparagraph (H) within the period of time
allowed under such subparagraph, the assessment
shall constitute a final and unappealable
order.'';
(ii) by amending subparagraph (H) to read
as follows:
``(H) Hearing.--The insured depository institution
or institution-affiliated party against whom any
penalty is assessed under this paragraph shall be
afforded a hearing before--
``(i) an agency, if such institution or
person submits a request for such hearing
within 20 days after the issuance of the notice
of assessment; or
``(ii) the appropriate United States
district court, if such institution or person
submits a request for such hearing and forum
within 20 days after the issuance of the notice
of assessment.''; and
(iii) by amending subparagraph (I)(ii) to
read as follows:
``(ii) Appropriateness of penalty not
reviewable.--In any civil action under clause
(i), except a civil action tried in a United
States district court pursuant to subsection
(b)(11)(B), (e)(8)(B), or (i)(2)(H)(ii), the
validity and appropriateness of the penalty
shall not be subject to review.''; and
(E) by adding at the end the following:
``(x) Savings Clause.--Nothing in subsection (b)(11)(B), (e)(8)(B),
or (i)(2)(H)(ii) shall be construed to--
``(1) limit the authority of a Federal banking agency to
initiate an administrative enforcement action; or
``(2) impair the validity of any consent order.''.
(2) Federal credit union act.--Section 206 of the Federal
Credit Union Act (12 U.S.C. 1786) is amended--
(A) in subsection (e), by adding at the end the
following:
``(5) Hearing.--With respect to any notice properly issued
and served upon an insured credit union, credit union which has
insured accounts, or an institution-affiliated party under this
subsection, such insured credit union, credit union which has
insured accounts, or institution-affiliated party shall be
afforded a hearing before--
``(A) the Administration; or
``(B) if such insured credit union, credit union
which has insured accounts, or institution-affiliated
party submits a request within 20 days after the
issuance of the notice, the appropriate United States
district court, and that court shall have jurisdiction
to adjudicate all claims and requested remedies stated
in the notice of charges, including those authorized
under this subsection.'';
(B) in subsection (g), by adding at the end the
following:
``(8) Hearing.--With respect to any notice properly issued
and served upon an institution-affiliated party under this
subsection, such institution-affiliated party shall be afforded
a hearing before--
``(A) the Administration; or
``(B) if such institution-affiliated party submits
a request within 20 days after the issuance of the
notice, the appropriate United States district court,
and that court shall have jurisdiction to adjudicate
all claims and requested remedies stated in the notice
of charges, including those authorized under this
subsection.'';
(C) in subsection (j)--
(i) in paragraph (1), by striking ``(other
than the hearing provided for in subsection
(i)(3) of this section)'' and inserting
``(other than the hearing provided for in
subsection (e)(5)(B), (g)(8)(B), (i)(3), or
(k)(2)(H)(ii))''; and
(ii) by adding at the end the following:
``(4) Any hearing provided for in subsection (e)(5)(B), (g)(8)(B),
(i)(3), or (k)(2)(H)(ii) shall be subject to the jurisdiction, powers,
and equitable authority of the district court and be governed by the
Federal Rules of Civil Procedure and the Federal Rules of Evidence.
``(5) Any final decision of a United States district court made
pursuant to a respondent's election under subsection (e)(5)(B),
(g)(8)(B), (i)(3), or (k)(2)(H)(ii) shall be reviewable in the
appropriate court of appeals in the same manner and to the same extent
as any other civil action to which the United States is a party.'';
(D) in subsection (k)(2)--
(i) by amending subparagraph (E)(ii) to
read as follows:
``(ii) Finality of assessment.--If, with
respect to any assessment under clause (i), a
hearing is not requested or an election is not
made and timely noticed pursuant to
subparagraph (H) within the period of time
allowed under such subparagraph, the assessment
shall constitute a final and unappealable
order.'';
(ii) by amending subparagraph (H) to read
as follows:
``(H) Hearing.--The insured credit union or
institution-affiliated party against whom any penalty
is assessed under this paragraph shall be afforded a
hearing before--
``(i) the Administration, if such insured
credit union or institution-affiliated party
submits a request for such hearing within 20
days after the issuance of the notice of
assessment; or
``(ii) the appropriate United States
district court, if such insured credit union or
institution-affiliated party submits a request
for such hearing and forum within 20 days after
the issuance of the notice of assessment.'';
and
(iii) by amending subparagraph (I)(ii) to
read as follows:
``(ii) Appropriateness of penalty not
reviewable.--In any civil action under clause
(i), except a civil action tried in a United
States district court pursuant to subsection
(e)(5)(B), (g)(8)(B), or (k)(2)(H)(ii), the
validity and appropriateness of the penalty
shall not be subject to review.''; and
(E) by adding at the end the following:
``(x) Savings Clause.--Nothing in subsection (e)(5)(B), (g)(8)(B),
or (k)(2)(H)(ii) shall be construed to--
``(1) limit the authority of the Administration to initiate
an administrative enforcement action; or
``(2) impair the validity of any consent order.''.
SEC. 303. SUPERVISORY MODIFICATIONS FOR APPROPRIATE RISK-BASED TESTING.
(a) Examination Relief for Certain Well Managed and Well
Capitalized Financial Institutions.--
(1) Insured depository institutions.--Section 10(d) of the
Federal Deposit Insurance Act (12 U.S.C. 1820(d)) is amended by
adding at the end the following:
``(11) Examination relief for certain well managed and well
capitalized insured depository institutions.--
``(A) In general.--Notwithstanding paragraphs (1)
and (2), the following shall apply to a well managed
and well capitalized insured depository institution
with $6,000,000,000 or less in consolidated assets:
``(i) Alternating limited-scope
examinations.--After an insured depository
institution receives a full-scope, on-site
examination from the appropriate Federal
banking agency, the next examination of the
insured depository institution by the
appropriate Federal banking agency shall be a
limited-scope examination, as determined by the
appropriate Federal banking agency.
``(ii) Combined examinations.--If an
insured depository institution is otherwise
subject to separate safety and soundness
examinations, consumer compliance examinations,
and information technology and cybersecurity
examinations, the appropriate Federal banking
agency shall, upon request of the insured
depository institution, combine two or three
such examinations, as specified by the insured
depository institution, and carry them out at
the same time.
``(B) Exception.--Subparagraph (A) shall not apply
to an insured depository institution if--
``(i) the insured depository institution is
currently subject to a formal enforcement
proceeding or order by the Corporation or the
appropriate Federal banking agency; or
``(ii) a person acquired control of the
insured depository institution since the most
recent full-scope, on-site examination of the
insured depository institution from the
appropriate Federal banking agency.
``(C) Rulemaking.--Not later than 12 months after
the date of enactment of this paragraph, the Federal
banking agencies shall issue rules to carry out
subparagraph (A), including, with respect to an insured
depository institution described under subparagraph
(A), to--
``(i) establish procedures for the limited-
scope examinations described in subparagraph
(A)(i);
``(ii) establish procedures for reviewing
insured depository institutions described under
subparagraph (A), that--
``(I) experience material changes
in financial condition or operational
risk profile between scheduled
examinations; or
``(II) have failed to comply with
Federal or State banking laws and
regulations; and
``(iii) balance the goals of streamlining
the examination cycle for individual insured
depository institutions and reducing
unnecessary regulatory burdens while
maintaining sufficient oversight to ensure the
continued safety and soundness of the insured
depository institutions and compliance with all
applicable laws and regulations.
``(D) Rule of construction.--Nothing in this
paragraph may be construed to limit the authority of a
Federal banking agency to conduct off-site monitoring,
targeted reviews, or additional full-scope, on-site
examinations of an insured depository institution if
the Federal banking agency determines such monitoring,
reviews, or examinations are appropriate to ensure
safety and soundness or compliance with applicable
laws.
``(E) Definitions.--In this paragraph:
``(i) Consumer compliance examination.--The
term `consumer compliance examination' means an
examination to assess compliance with the
requirements of Federal consumer financial law
(as such term is defined in section 1002 of the
Consumer Financial Protection Act of 2010).
``(ii) Well capitalized.--The term `well
capitalized' has the meaning given that term in
section 38(b).
``(iii) Well managed.--With respect to an
insured depository institution, the term `well
managed' means that, when the institution was
most recently examined by the appropriate
Federal banking agency, the institution was
found to be well managed, and the institution's
composite condition was found to be
satisfactory or outstanding.''.
(2) Insured credit unions.--Section 204 of the Federal
Credit Union Act (12 U.S.C. 1784) is amended by adding at the
end the following:
``(h) Examination Relief for Certain Well Managed and Well
Capitalized Insured Credit Unions.--
``(1) In general.--Notwithstanding any other provision of
this section, the following shall apply to a well managed and
well capitalized insured credit union with $6,000,000,000 or
less in consolidated assets:
``(A) Alternating limited-scope examinations.--
After an insured credit union receives a full-scope,
on-site examination from the National Credit Union
Administration, the next examination of the insured
credit union by the National Credit Union
Administration shall be a limited-scope examination, as
determined by the National Credit Union Administration.
``(B) Combined examinations.--If an insured credit
union is otherwise subject to separate safety and
soundness examinations, consumer compliance
examinations, and information technology and
cybersecurity examinations, the National Credit Union
Administration shall, upon request of the insured
credit union, combine two or three such examinations,
as specified by the insured credit union, and carry
them out at the same time.
``(2) Exception.--Paragraph (1) shall not apply to an
insured credit union if the insured credit union is currently
subject to a formal enforcement proceeding or order by the
National Credit Union Administration.
``(3) Rulemaking.--Not later than 12 months after the date
of enactment of this subsection, the National Credit Union
Administration shall issue rules to carry out paragraph (1),
including, with respect to an insured credit union described
under paragraph (1), to--
``(A) establish procedures for the limited-scope
examinations described in paragraph (1)(A);
``(B) establish procedures for reviewing insured
credit unions that--
``(i) experience material changes in
financial condition or operational risk profile
between scheduled examinations; or
``(ii) have failed to comply with Federal
or State banking laws and regulations; and
``(C) balance the goals of streamlining the
examination cycle for individual insured credit unions
and reducing unnecessary regulatory burdens while
maintaining sufficient oversight to ensure the
continued safety and soundness of the insured credit
unions and compliance with all applicable laws and
regulations.
``(4) Rule of construction.--Nothing in this subsection may
be construed to limit the authority of the National Credit
Union Administration to conduct off-site monitoring, targeted
reviews, or additional full-scope, on-site examinations of an
insured credit union if the National Credit Union
Administration determines such monitoring, reviews, or
examinations are appropriate to ensure safety and soundness or
compliance with applicable laws.
``(5) Definitions.--In this paragraph:
``(A) Consumer compliance examination.--The term
`consumer compliance examination' means an examination
to assess compliance with the requirements of Federal
consumer financial law (as such term is defined in
section 1002 of the Consumer Financial Protection Act
of 2010).
``(B) Well capitalized.--The term `well
capitalized' has the meaning given that term in section
216(c).
``(C) Well managed.--With respect to an insured
credit union, the term `well managed' means that, when
the credit union was most recently examined by the
National Credit Union Administration, the credit union
was found to be well managed, and the credit union's
composite condition was found to be satisfactory or
outstanding.''.
(b) Examination Practices.--
(1) Insured depository institutions.--Section 10(d) of the
Federal Deposit Insurance Act (12 U.S.C. 1820(d)), as amended
by subsection (a)(1), is further amended by adding at the end
the following:
``(12) Examination practices.--With respect to on-site
examination of an insured depository institution with less than
$6,000,000,000 in total assets, the appropriate Federal banking
agency shall--
``(A) ensure the examination is led by, to the
maximum extent practicable, an examiner with
significant experience as an examiner;
``(B) make every effort, to the maximum extent
practicable, to minimize the number of examiners
utilized and the amount of time spent at the
institution to carry out the examination;
``(C) make every effort, to the maximum extent
practicable, to schedule the examination at a time that
is convenient for the institution; and
``(D) to the maximum extent practicable, give the
institution advance notice of issues expected to be
covered in the examination.
``(13) Report.--In its annual report to Congress, each
Federal banking agency shall include--
``(A) information on how the agency is complying
with paragraphs (11) and (12); and
``(B) aggregate data summarizing the agency's
examination practices with respect to insured
depository institutions with less than $6,000,000,000
in total assets, including--
``(i) the average experience of examiners,
including the average number of years of
examiner experience of those who lead on-site
examinations;
``(ii) the average number of examiners
utilized; and
``(iii) the average amount of time the
agency spends visiting such institutions for
on-site examinations.''.
(2) Insured credit unions.--Section 204 of the Federal
Credit Union Act (12 U.S.C. 1784), as amended by subsection
(a)(2), is further amended by adding at the end the following:
``(i) Examination Practices.--With respect to on-site examination
of an insured credit union with less than $6,000,000,000 in total
assets, the National Credit Union Administration shall--
``(1) ensure the examination is led by, to the maximum
extent practicable, an examiner with significant experience as
an examiner;
``(2) make every effort, to the maximum extent practicable,
to minimize the number of examiners utilized and the amount of
time spent at the credit union to carry out the examination;
``(3) make every effort, to the maximum extent practicable,
to schedule the examination at a time that is convenient for
the credit union; and
``(4) to the maximum extent practicable, give the credit
union advance notice of issues expected to be covered in the
examination.
``(j) Report.--In its annual report to Congress, the National
Credit Union Administration shall include--
``(1) information on how the Administration is complying
with subsections (h) and (i); and
``(2) aggregate data summarizing the Administration's
examination practices with respect to insured credit unions
with less than $6,000,000,000 in total assets, including--
``(A) the average experience of examiners,
including the average number of years of examiner
experience of those who lead on-site examinations;
``(B) the average number of examiners utilized; and
``(C) the average amount of time the Administration
spends visiting such credit unions for on-site
examinations.''.
SEC. 304. FINANCIAL INTEGRITY AND REGULATION MANAGEMENT.
(a) Findings.--Congress finds that--
(1) the primary objective of financial regulation and
supervision by the Federal banking agencies is to promote
safety and soundness of depository institutions;
(2) all federally legal businesses and law-abiding citizens
regardless of political ideology should have equal opportunity
to obtain financial services and should not face unlawful
discrimination in obtaining such services;
(3) financial service providers are private entities
entitled to provide services to whichever customers they so
choose, provided that those decisions do not violate the law;
(4) financial service providers should strive to ensure
that all business decisions are based on factors free from
unlawful prejudice or political influence;
(5) the use of reputational risk in supervisory frameworks
encourages Federal banking agencies to regulate depository
institutions based on the subjective view of negative publicity
and provides cover for the agencies to implement their own
political agenda unrelated to the safety and soundness of a
depository institution;
(6) Federal banking agencies have in fact used reputational
risk to limit access of federally legal businesses and law-
abiding citizens to financial services in 2018 when the Federal
Deposit Insurance Corporation acknowledged that the agency used
reputational risk reviews to limit access to financial services
by certain industries, commonly known as ``Operation Choke
Point''; and
(7) reputational risk does not appear in any statute and is
an unnecessary and improper use of supervisory authority that
does not contribute to the safety and soundness of the
financial system.
(b) Definitions.--In this section:
(1) Depository institution.--The term ``depository
institution''--
(A) has the meaning given the term in section 3 of
the Federal Deposit Insurance Act (12 U.S.C. 1813);
(B) includes a depository institution holding
company, as such term is defined in section 3 of the
Federal Deposit Insurance Act (12 U.S.C. 1813); and
(C) includes an insured credit union, as such term
is defined in section 101 of the Federal Credit Union
Act (12 U.S.C. 1752).
(2) Federal banking agency.--The term ``Federal banking
agency''--
(A) has the meaning given the term in section 3 of
the Federal Deposit Insurance Act (12 U.S.C. 1813); and
(B) includes--
(i) the National Credit Union
Administration; and
(ii) the Bureau of Consumer Financial
Protection.
(3) Foreign terrorist organization.--The term ``foreign
terrorist organization'' means a foreign organization that is
designated by the Secretary of State in accordance with section
219 of the Immigration and Nationality Act (8 U.S.C. 1189).
(4) Reputational risk.--The term ``reputational risk''
means the potential that negative publicity or negative public
opinion regarding a depository institution's business
practices, whether true or not, will cause a decline in
confidence in the institution or a decline in the customer
base, costly litigation, or revenue reductions or otherwise
adversely impact the depository institution. The previous
sentence does not apply to negative publicity or negative
public opinion regarding an institution's business practices
where such practices involve unlawful transactions in
connection with state sponsors of terrorism or foreign
terrorist organizations.
(5) State sponsors of terrorism.--The term ``state sponsors
of terrorism'' means a country, the government of which has
been determined by the Secretary of State to have repeatedly
provided support for acts of international terrorism, for
purposes of--
(A) section 1754(c)(1)(A)(i) of the Export Control
Reform Act of 2018 (50 U.S.C. 4813(c)(1)(A)(i));
(B) section 620A of the Foreign Assistance Act of
1961 (22 U.S.C. 2371);
(C) section 40(d) of the Arms Export Control Act
(22 U.S.C. 2780(d)); or
(D) any other provision of law.
(c) Study on Reputational Risk.--Not later than 1 year after the
date of the enactment of this Act, each Federal banking agency shall--
(1) carry out a study to evaluate the use of reputational
risk in the supervision of depository institutions; and
(2) determine whether the removal of reputational risk in
the supervision of depository institutions would threaten the
safety and soundness of those depository institutions.
(d) Removal of Reputational Risk as a Consideration in the
Supervision of Depository Institutions.--If a Federal banking agency
determines, under subsection (c), that the removal of reputational risk
in the supervision of depository institutions would not threaten the
safety and soundness of those depository institutions, the Federal
banking agency shall remove from any guidance, rule, examination
manual, or similar document established by the agency any reference to
reputational risk, or any term substantially similar, regarding the
supervision of depository institutions such that reputational risk, or
any term substantially similar, is no longer taken into consideration
by the Federal banking agency when examining and supervising a
depository institution.
(e) Prohibition.--If a Federal banking agency determines, under
subsection (c), that the removal of reputational risk in the
supervision of depository institutions would not threaten the safety
and soundness of those depository institutions, the agency may not
engage in rulemaking, the issuance of guidance, supervision activities,
or enforcement activities related to the reputational risk of a
depository institution or the managing of reputational risk by a
depository institution, including--
(1) establishing any rule, regulation, requirement,
standard, or supervisory expectation concerning or related to
the reputational risk of a depository institution, or the
management thereof, whether binding or not;
(2) conducting any examination, assessment, data
collection, or other supervisory exercise concerning or related
to reputational risk of a depository institution, or the
management thereof;
(3) issuing any examination finding, supervisory criticism,
or other supervisory or examination communication concerning or
related to reputational risk of a depository institution, or
the management thereof;
(4) making any supervisory ratings decision or
determination that is based, in whole or in part, on any matter
concerning or related to reputational risk of a depository
institution, or the management thereof; and
(5) taking any formal or informal enforcement action that
is based, in whole or in part, on any matter concerning or
related to reputational risk of a depository institution, or
the management thereof.
(f) Reports.--Not later than 180 days after the date of enactment
of this Act, each Federal banking agency shall submit to the Committee
on Banking, Housing, and Urban Affairs of the Senate and the Committee
on Financial Services of the House of Representatives a report that--
(1) confirms implementation of this section; and
(2) describes any changes made to internal policies as a
result of this section.
TITLE IV--REGULATORY ACCOUNTABILITY AND TRANSPARENCY
SEC. 401. FDIC BOARD ACCOUNTABILITY.
Section 2 of the Federal Deposit Insurance Act (12 U.S.C. 1812) is
amended--
(1) by striking ``Consumer Financial Protection Bureau''
each place such term appears and inserting ``Bureau of Consumer
Financial Protection'';
(2) by amending subsection (a)(1)(C) to read as follows:
``(C) 3 of whom shall be appointed by the
President, by and with the advice and consent of the
Senate, from among individuals who are citizens of the
United States, 1 of whom shall have State bank
supervisory experience, and separately 1 of whom shall
have demonstrated primary experience working in or
supervising depository institutions having less than
$17,000,000,000 in total assets.''; and
(3) in subsection (c)--
(A) in paragraph (1), by adding at the end the
following: ``No individual may be appointed as a member
for more than two terms.''; and
(B) by adding at the end the following:
``(4) Maximum length of service.--Notwithstanding any other
provision of this Act, no person shall serve as a member for
more than twelve years in total.''.
SEC. 402. STOP AGENCY FIAT ENFORCEMENT OF GUIDANCE.
(a) In General.--Each financial agency shall include a guidance
clarity statement as described in subsection (b) on any guidance issued
by that financial agency on and after the date of the enactment of this
Act.
(b) Guidance Clarity Statement.--A guidance clarity statement
required under subsection (a) shall be displayed prominently on the
first page of the document and shall include the following: ``This
guidance does not have the force and effect of law and therefore does
not establish any rights or obligations for any person and is not
binding on the agency or the public. If this guidance suggests how
regulated entities may comply with applicable statutes or regulations,
noncompliance with this guidance does not conclusively establish a
violation of applicable law.''.
(c) Definitions.--In this section:
(1) Financial agency.--The term ``financial agency'' means
the following:
(A) The Bureau of Consumer Financial Protection.
(B) The Department of Housing and Urban
Development.
(C) The Department of the Treasury.
(D) The Federal Deposit Insurance Corporation.
(E) The Federal Housing Finance Agency.
(F) The Board of Governors of the Federal Reserve
System.
(G) The National Credit Union Administration.
(H) The Office of the Comptroller of the Currency.
(I) The Securities and Exchange Commission.
(2) Guidance.--The term ``guidance'' means a financial
agency statement of general applicability, intended to have a
future effect on the behavior of regulated parties, that sets
forth a policy on a statutory, regulatory, or technical issue,
or an interpretation of a statute or regulation, but does not
include--
(A) a rule promulgated pursuant to notice and
comment under section 553 of title 5, United States
Code;
(B) a rule exempt from rulemaking requirements
under section 553(a) of title 5, United States Code;
(C) a rule of financial agency organization,
procedure, or practice under section 553(b)(A) of title
5, United States Code;
(D) a decision of a financial agency adjudication
under section 554 of title 5, United States Code, or
any similar statutory provision;
(E) internal guidance directed to the issuing
financial agency or other agency that is not intended
to have a substantial future effect on the behavior of
regulated parties; or
(F) internal executive branch legal advice or legal
opinions addressed to executive branch officials.
SEC. 403. REGULATORY EFFICIENCY, VERIFICATION, ITEMIZATION, AND
ENHANCED WORKFLOW.
Section 2222 of the Economic Growth and Regulatory Paperwork
Reduction Act of 1996 (12 U.S.C. 3311) is amended--
(1) by striking ``appropriate Federal banking agency'' each
place such term appears and inserting ``Federal financial
institutions regulatory agency'';
(2) by striking ``appropriate Federal banking agencies''
and inserting ``Federal financial institutions regulatory
agencies'';
(3) in subsection (a)--
(A) by striking ``represented on the Council''; and
(B) by striking ``once every 10 years'' and
inserting ``once every 8 years'';
(4) in subsection (b)--
(A) by redesignating paragraphs (1) and (2) as
subparagraphs (A) and (B), respectively (and adjusting
the margins accordingly);
(B) by striking ``In conducting'' and inserting the
following:
``(1) Solicitation of public comment.--In conducting''; and
(C) by adding at the end the following:
``(2) Internal review of cumulative impact.--Each Federal
financial institutions regulatory agency shall conduct an
internal review of the cumulative impact of regulations issued
by the Federal financial institutions regulatory agency that--
``(A) assesses the effects of such regulations on
consumers' access to financial products and services;
``(B) assesses the effects of such regulations on
the availability of financial products and services to
financial and nonfinancial firms;
``(C) assesses the impact of such regulations on
credit availability and financial market liquidity in
United States financial markets;
``(D) assess the effects of such regulations on
consumer protection;
``(E) assesses the balance of benefits and costs of
such regulations with respect to the safety and
soundness of the United States financial system and
overall economic activity in the United States;
``(F) to the extent practicable, quantifies the
direct and indirect economic costs imposed by such
regulations; and
``(G) includes recommendations to streamline or
eliminate duplicative, outdated, and unnecessarily
burdensome regulations.'';
(5) in subsection (c)--
(A) by striking ``subsection (b)(2)'' and inserting
``subsection (b)(1)(B), and the internal review under
subsection (b)(2),''; and
(B) by striking ``once every 10 years'' and
inserting ``once every 8 years'';
(6) in subsection (e)--
(A) in paragraph (1), by striking ``and'' at the
end;
(B) by redesignating paragraph (2) as paragraph
(3);
(C) by inserting after paragraph (1) the following:
``(2) a summary of the findings and determinations of each
Federal financial institutions regulatory agency of the
internal review conducted by the Federal financial institutions
regulatory agency under subsection (b)(2); and''; and
(D) in paragraph (3), as so redesignated, by
striking ``the regulatory burdens associated with such
issues by regulation'' and inserting ``the regulatory
burdens associated with the issues identified by public
comments received by the Council and the Federal
financial institutions regulatory agencies, as well as
the regulatory burdens identified by each Federal
financial institutions regulatory agency through the
internal reviews conducted under subsection (b)(2), by
regulation''; and
(7) by adding at the end the following:
``(f) Federal Financial Institutions Regulatory Agency Defined.--
The term `Federal financial institutions regulatory agency' has the
meaning given that term in section 1003 of the Federal Financial
Institutions Examination Council Act of 1978 (12 U.S.C. 3302).''.
TITLE V--STRENGTHENING LOCAL BANK FUNDING
SEC. 501. BRINGING THE DISCOUNT WINDOW INTO THE 21ST CENTURY.
Section 10 of the Federal Reserve Act (12 U.S.C. 241 et seq.) is
amended by inserting after paragraph (10) the following:
``(11) Review of discount window operations.--
``(A) In general.--Not later than 60 days after the
date of enactment of this paragraph, the Board of
Governors shall commence a review of the discount
window lending programs of the Federal reserve banks
(the `discount window'), and shall complete such review
not later than 240 days after the date of enactment of
this paragraph.
``(B) Contents.--The review required by
subparagraph (A) shall include a consideration of--
``(i) the effectiveness of the discount
window in providing liquidity to financial
institutions, including in times of financial
stress;
``(ii) whether the technology
infrastructure, including means of
communications, are sufficient to support the
timely provision of liquidity, including in
times of financial stress;
``(iii) the effectiveness of cybersecurity
measures implemented with respect to discount
window operations;
``(iv) the effectiveness of communications
between Federal reserve banks, financial
institutions, the Board of Governors, the
Federal Deposit Insurance Corporation, the
Comptroller of the Currency, and the Secretary
of the Treasury regarding discount window
operations;
``(v) the effectiveness of the Board of
Governors in providing oversight of the
discount window and in ensuring consistent
access to the discount window across the
Federal Reserve System;
``(vi) how the discount window interacts
with other providers of liquidity, including
the Federal Home Loan Banks, during both normal
operations and times of financial distress;
``(vii) the effectiveness of existing
discount window operating hours and whether
such hours should be expanded, taking into
account the interaction between discount window
operating hours and the operating hours of
payment systems of the Federal reserve banks,
such as the Fedwire Funds Service and FedNow
Service;
``(viii) the impact of mobile banking and
instant communications technology on depositor
behavior and liquidity risk posed to financial
institutions, including how the discount window
can--
``(I) help financial institutions
better respond to rapid liquidity
shortfalls; and
``(II) prevent broader financial
instability; and
``(ix) the effectiveness of the discount
window in light of the stigma associated with
its usage, ways to reduce such stigma, and ways
to improve access, operational efficiency,
transparency, and timeliness of the process for
financial institutions seeking advances,
including on the pricing and other terms of
such advances.
``(C) Remediation plan.--After the Board of
Governors completes the review required by subparagraph
(A), the Board of Governors, in consultation with the
Federal reserve banks, shall--
``(i) identify deficiencies with the
discount window and areas for enhancing
discount window effectiveness; and
``(ii) develop a written plan to remediate
the identified deficiencies and implement the
identified enhancements, which shall include--
``(I) an identification of actions
that will be taken to enhance discount
window effectiveness and remediate
identified deficiencies;
``(II) timelines and milestones for
implementing the plan and measures to
demonstrate how the implemented
improvements will be maintained on an
ongoing basis; and
``(III) measures of managing and
controlling any deficiencies and
current operations until the plan is
implemented in full.
``(D) Report to congress on review and plan.--
``(i) In general.--Not later than 365 days
after the date of enactment of this paragraph,
the Board of Governors shall submit a report to
the Committee on Financial Services of the
House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the
Senate containing--
``(I) the findings of the review
required by subparagraph (A); and
``(II) the remediation plan
required by subparagraph (C).
``(ii) Consultation.--Before submitting the
report required by clause (i), the Board of
Governors shall--
``(I) provide a copy of the
proposed report to the Comptroller of
the Currency, the Federal Deposit
Insurance Corporation, the National
Credit Union Administration, and the
Secretary of the Treasury; and
``(II) provide the Comptroller of
the Currency, the Federal Deposit
Insurance Corporation, the National
Credit Union Administration, and the
Secretary of the Treasury with an
opportunity to provide feedback on the
report.
``(iii) Testimony.--The Chairman of the
Board of Governors shall, at the semi-annual
hearing required under section 2B, testify with
respect to the contents of the report required
under this subparagraph.
``(E) Annual reports to congress.--
``(i) Reports by the board.--The Board of
Governors shall submit an annual report to the
Committee on Financial Services of the House of
Representatives and the Committee on Banking,
Housing, and Urban Affairs of the Senate
containing a review of the effectiveness of
discount window operations and a progress
report on the actions taken to implement the
identified enhancements described in
subparagraph (C).
``(ii) Reports by the inspector general.--
The Inspector General of the Board of Governors
of the Federal Reserve System and the Bureau of
Consumer Financial Protection shall submit an
annual report to the Committee on Financial
Services of the House of Representatives and
the Committee on Banking, Housing, and Urban
Affairs of the Senate containing a report on
the progress of the Board of Governors in
implementing the remediation plan required by
subparagraph (C).
``(F) Confidential report information.--Any report
required under this paragraph may contain a
confidential annex containing information that, if made
public, could--
``(i) impact monetary policy, financial
stability, or cybersecurity; or
``(ii) significantly endanger the safety
and soundness of any financial institution.
``(G) Repeal.--This paragraph shall be repealed on
the date on which the Board of Governors notifies the
Congress and publishes on a public website of the Board
of Governors that the remediation plan required under
subparagraph (C) has been fully implemented.''.
SEC. 502. KEEPING DEPOSITS LOCAL.
(a) Amount of Reciprocal Deposits That Are Not Considered To Be
Funds Obtained by or Through a Deposit Broker.--Section 29(i)(1)(C) of
the Federal Deposit Insurance Act (12 U.S.C. 1831f(i)(1)(C)) is amended
by striking ``$96,333,333,333'' and inserting ``$250,000,000,000''.
(b) Definition of Agent Institution.--Section 29(i) of the Federal
Deposit Insurance Act (12 U.S.C. 1831f(i)) is amended--
(1) in paragraph (2)(A)--
(A) in clause (i), by striking subclause (I) and
inserting the following:
``(I) when most recently examined
under section 10(d) was assigned a
CAMELS rating of 1, 2, or 3 under the
Uniform Financial Institutions Rating
System (or an equivalent rating under a
comparable rating system); and'';
(B) by redesignating clauses (ii) and (iii) as
clauses (iii) and (iv), respectively; and
(C) by inserting after clause (i) the following:
``(ii) has not yet been examined under
section 10(d) and the deposits of which first
became insured under this Act during the
current calendar year or during the immediately
preceding calendar year;''; and
(2) by adding at the end the following:
``(3) Reservation of authority.--If an insured depository
institution ceases to be an agent institution because it no
longer satisfies any of the criteria in paragraph (2)(A), the
Corporation may, on a case-by-case basis and upon application,
provide a waiver to permit the institution to continue to
consider some or all of the deposits previously subject to the
exception under paragraph (1) as continuing to be subject to
the exception under paragraph (1), for a specific or indefinite
period of time, if the Corporation determines that failure to
grant such a waiver would negatively impact the safety and
soundness of the insured depository institution.''.
(c) Reciprocal Deposits Study.--
(1) In general.--The Federal Deposit Insurance Corporation,
in consultation with the Board of Governors of the Federal
Reserve System, shall carry out a study on reciprocal deposits.
(2) Contents.--The study required under paragraph (1) shall
include--
(A) an analysis of how reciprocal deposits have
performed since 2018, which shall include--
(i) the use of quantitative and qualitative
data;
(ii) a breakdown of the usage of reciprocal
deposits by size of insured depository
institution;
(iii) the usage of reciprocal deposits
during periods of stress; and
(iv) an analysis, to the extent
practicable, of end-user depositors, such as
municipalities, businesses, and non-profit
organizations, that drive demand for reciprocal
products;
(B) an analysis, to the extent practicable, of how
reciprocal deposits compare to other deposit
arrangements; and
(C) an analysis of the benefits and potential risks
of reciprocal deposits.
(3) Report.--Not later than 6 months after the date of
enactment of this Act, the Federal Deposit Insurance
Corporation shall issue a report to the Committee on Financial
Services of the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the Senate containing
all findings and determinations made in carrying out the study
required under paragraph (1).
TITLE VI--PROMOTING BANK COMPETITION AND MERGER CLARITY
SEC. 601. BANK COMPETITION MODERNIZATION.
(a) In General.--Section 18(c) of the Federal Deposit Insurance Act
(12 U.S.C. 1828(c)), as amended by section 604(c), is further amended--
(1) in paragraph (4)(C)--
(A) in clause (i), by striking ``or'' at the end;
(B) in clause (ii), by striking the period at the
end and inserting ``; or''; and
(C) by adding at the end the following:
``(iii) the proposed merger transaction
would result in an entity with less than
$10,000,000,000 in assets and would not result
in there being only one insured depository
institution with a physical presence in any
relevant metropolitan statistical area.''; and
(2) by adding at the end the following:
``(16) For Merger Transactions Resulting in Institutions With Less
Than $10,000,000,000 in Assets and That Would Not Result in There Being
Only One Insured Depository Institution With a Physical Presence in Any
Relevant Metropolitan Statistical Area.--Notwithstanding paragraph (5),
if a proposed merger transaction would result in an institution with
less than $10,000,000,000 in assets and would not result in there being
only one insured depository institution with a physical presence in any
relevant metropolitan statistical area, then the responsible agency
shall not consider whether such merger transaction would--
``(A) result in a monopoly, or would be in furtherance of
any combination or conspiracy to monopolize or to attempt to
monopolize the business of banking in any part of the United
States; and
``(B) have the effect in any section of the country of
substantially lessening competition, tending to create a
monopoly, or in any other manner restraining trade.''.
(b) For Bank Holding Companies.--Section 3(c) of the Bank Holding
Company Act of 1956 (12 U.S.C. 1842(c)) is amended by adding at the end
the following:
``(8) For proposed transactions resulting in companies with
less than $10,000,000,000 in assets and that would not result
in there being only one insured depository institution with a
physical presence in any relevant metropolitan statistical
area.--Notwithstanding paragraph (1), if a proposed
acquisition, merger, or consolidation under this section would
result in a company with less than $10,000,000,000 in assets
and would not result in there being only one insured depository
institution with a physical presence in any relevant
metropolitan statistical area, then the Board shall not
consider whether such acquisition, merger, or consolidation
would--
``(A) result in a monopoly, or would be in
furtherance of any combination or conspiracy to
monopolize or to attempt to monopolize the business of
banking in any part of the United States; and
``(B) have the effect in any section of the country
of substantially lessening competition, tending to
create a monopoly, or in any other manner restraining
trade.''.
(c) For Savings and Loan Holding Companies.--Section 10(e) of the
Home Owners' Loan Act (12 U.S.C. 1467a(e)), as amended by section
604(b), is further amended by adding at the end the following:
``(10) For proposed transactions resulting in companies
with less than $10,000,000,000 in assets and that would not
result in there being only one insured depository institution
with a physical presence in any relevant metropolitan
statistical area.--Notwithstanding subparagraphs (A) and (B) of
paragraph (2), if a proposed transaction under this section
would result in a company with less than $10,000,000,000 in
assets and would not result in there being only one insured
depository institution with a physical presence in any relevant
metropolitan statistical area, then the Board shall not
consider whether the transaction would--
``(A) result in a monopoly, or would be in
furtherance of any combination or conspiracy to
monopolize or to attempt to monopolize the savings and
loan business in any part of the United States; and
``(B) have the effect in any section of the country
of substantially lessening competition, tending to
create a monopoly, or in any other manner restraining
trade.''.
SEC. 602. MERGER AGREEMENT APPROVALS CLARITY AND PREDICTABILITY.
(a) Study.--The Comptroller General of the United States shall
carry out a study on the use of commitments, conditions, and other
aspects of merger review procedures by Federal depository institution
regulatory agencies in connection with insured depository institution
merger applications. The study shall--
(1) include an evaluation of relevant quantifiable metrics;
(2) review the extent to which the use of commitments and
conditions has aligned with statutory requirements, including a
review of whether the use of commitments and conditions has
been influenced by extrastatutory issues or considerations;
(3) consider the benefits and risks of utilizing different
merger review approaches and procedures in compliance with the
law; and
(4) include an evaluation of the impact of such merger
review procedures and resulting approved mergers on safety and
soundness, financial stability, competition, and the
availability of financial products and services offered by
insured depository institutions.
(b) Report.--Not later than 1 year after the date of enactment of
this Act, the Comptroller General shall issue a report to the Committee
on Financial Services of the House of Representatives and the Committee
on Banking, Housing, and Urban Affairs of the Senate containing all
findings and determinations made in carrying out the study required
under subsection (a).
(c) Definitions.--In this section:
(1) Application.--The term ``application'' means an
application, notice, or other similar request for permission
submitted to a Federal depository institution regulatory
agency.
(2) Federal depository institution regulatory agency.--The
term ``Federal depository institution regulatory agency'' means
the Board of Governors of the Federal Reserve System, the
Comptroller of the Currency, the Federal Deposit Insurance
Corporation, and the National Credit Union Administration
Board.
(3) Insured depository institution.--The term ``insured
depository institution''--
(A) has the meaning given that term in section 3 of
the Federal Deposit Insurance Act (12 U.S.C. 1813); and
(B) means an insured credit union, as defined in
section 101 of the Federal Credit Union Act (12 U.S.C.
1752).
(4) Insured depository institution merger application.--The
term ``insured depository institution merger application''
means an application with respect to the acquisition of an
insured depository institution, its equity interests, its
assets, or its deposits under--
(A) section 10(e) of the Home Owners' Loan Act (12
U.S.C. 1467a(e));
(B) section 205(b) of the Federal Credit Union Act
(12 U.S.C. 1785(b));
(C) section 7(j) of the Federal Deposit Insurance
Act (12 U.S.C. 1817(j));
(D) section 18(c)(2) of the Federal Deposit
Insurance Act (12 U.S.C. 1828(c)(2));
(E) section 3 of the Bank Holding Company Act of
1956 (12 U.S.C. 1842); and
(F) section 4 of the Bank Holding Company Act of
1956 (12 U.S.C. 1843).
SEC. 603. MERGER PROCESS REVIEW.
(a) Review.--Not later than 1 year after the date of enactment of
this Act, and every 3 years thereafter, the Inspector General of each
Federal depository institution regulatory agency shall review the
Federal depository institution regulatory agency's merger review
procedures, including record of timeliness and efficiency in reviewing
and acting upon insured depository institution merger applications. The
review shall--
(1) include an evaluation of relevant quantifiable metrics,
including mean and median application processing times;
(2) identify sources of delay that may hinder the timely
consummation of proposals that meet the relevant statutory
factors;
(3) consider the benefits and risks of utilizing different
merger review approaches and procedures in compliance with the
law;
(4) include an evaluation of the impact of such merger
review procedures and resulting approved mergers on safety and
soundness, financial stability, competition, and the
availability of financial products and services offered by
insured depository institutions; and
(5) include specific recommendations to improve the merger
review process, including timeliness and efficiency of
application processing, consistent with the Federal depository
institution regulatory agency's statutory responsibilities.
(b) Report.--Each Inspector General described under subsection (a)
shall, at the conclusion of each review required under subsection (a),
issue a report to the Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing, and Urban
Affairs of the Senate containing all findings and determinations made
in carrying out the review, and publish such report online.
(c) Agency Response.--In response to each report issued under
subsection (a), the appropriate Federal depository institution
regulatory agency shall submit to the Committee on Financial Services
of the House of Representatives and the Committee on Banking, Housing,
and Urban Affairs of the Senate and publish online a written response,
including a plan to implement the recommendations in the report, to the
extent such implementation is appropriate.
(d) Definitions.--In this section:
(1) Application.--The term ``application'' means an
application, notice, or other similar request for permission
submitted to a Federal depository institution regulatory
agency.
(2) Federal depository institution regulatory agency.--The
term ``Federal depository institution regulatory agency'' means
the Board of Governors of the Federal Reserve System, the
Comptroller of the Currency, the Federal Deposit Insurance
Corporation, and the National Credit Union Administration.
(3) Insured depository institution.--The term ``insured
depository institution''--
(A) has the meaning given that term in section 3 of
the Federal Deposit Insurance Act (12 U.S.C. 1813); and
(B) means an insured credit union, as defined in
section 101 of the Federal Credit Union Act (12 U.S.C.
1752).
(4) Insured depository institution merger application.--The
term ``insured depository institution merger application''
means an application with respect to the acquisition of an
insured depository institution, its equity interests, its
assets, or its deposits under--
(A) section 10(e) of the Home Owners' Loan Act (12
U.S.C. 1467a(e));
(B) section 205(b) of the Federal Credit Union Act
(12 U.S.C. 1785(b));
(C) section 7(j) of the Federal Deposit Insurance
Act (12 U.S.C. 1817(j));
(D) section 18(c)(2) of the Federal Deposit
Insurance Act (12 U.S.C. 1828(c)(2));
(E) section 3 of the Bank Holding Company Act of
1956 (12 U.S.C. 1842); and
(F) section 4 of the Bank Holding Company Act of
1956 (12 U.S.C. 1843).
SEC. 604. BANK FAILURE PREVENTION.
(a) Bank Holding Companies.--Section 3(b)(1) of the Bank Holding
Company Act of 1956 (12 U.S.C. 1842(b)(1)) is amended--
(1) by striking ``Upon receiving'' and inserting the
following:
``(A) In general.--Upon receiving'';
(2) by striking ``required'' and inserting ``acquired'';
(3) by striking ``In the event of the failure of the Board
to act on any application for approval under this section
within the ninety-one-day period which begins on the date of
submission to the Board of the complete record on that
application, the application shall be deemed to have been
granted.''; and
(4) by adding at the end the following:
``(B) Complete record on an application.--
``(i) Notice to applicant.--Not later than 30 days
after the date on which the Board receives an
application for approval under this section, the Board
shall transmit to the applicant a letter that either--
``(I) confirms the record on the
application is complete; or
``(II) details all additional information
that is required for the record on that
application to be complete.
``(ii) Extension of notice.--Notwithstanding clause
(i), the Board may, if an application is complex,
extend the 30-day period described under clause (i) for
an additional period not to exceed 60 days.
``(iii) Receipt of response; deeming of complete
record.--Upon receipt of a response from an applicant
to a notice requesting additional information described
under clause (i)(II), the record on the application
shall be deemed complete unless the Board--
``(I) determines that the applicant's
response was materially deficient; and
``(II) not later than 30 days after the
date on which the Board received the response,
provides the applicant a detailed notice
describing the deficiencies.
``(iv) Treatment of third-party information.--In
determining whether the record on an application is
complete, the Board may take into account only
information provided by the applicant, and may not base
the determination of completeness on any information
(including reports, views, or recommendations) provided
by third parties.
``(C) Deadline for determination.--
``(i) In general.--Notwithstanding subparagraphs
(A) and (B), the Board shall grant or deny an
application submitted under this section not later than
120 days after the date on which the application was
initially submitted to the Board, regardless of whether
the record on such initial application was complete.
``(ii) Failure to make a determination.--If the
Board does not grant or deny an application within the
time period described under clause (i), such
application shall be deemed to have been granted.
``(iii) Tolling of period.--The Board may at any
time extend the deadline described under clause (i) at
the request of the applicant, but may not extend the
deadline more than 30 days past the deadline described
under clause (i).''.
(b) Savings and Loan Holding Companies.--Section 10(e) of the Home
Owners' Loan Act (12 U.S.C. 1467a(e)) is amended--
(1) in paragraph (2), by striking ``, and shall render a
decision within 90 days after submission to the Board of the
complete record on the application'';
(2) by redesignating paragraph (7) as paragraph (9); and
(3) by inserting after paragraph (6) the following:
``(7) Complete record on an application.--
``(A) Notice to applicant.--Not later than 30 days
after the date on which the Board receives an
application for approval under this subsection, the
Board shall transmit to the applicant a letter that
either--
``(i) confirms the record on the
application is complete; or
``(ii) details all additional information
that is required for the record on that
application to be complete.
``(B) Extension of notice.--Notwithstanding
subparagraph (A), the Board may, if an application is
complex, extend the 30-day period described under
subparagraph (A) for a period not to exceed 60 days.
``(C) Receipt of response; deeming of complete
record.--Upon receipt of a response from an applicant
to a notice requesting additional information described
under subparagraph (A)(ii), the record on the
application shall be deemed complete unless the Board--
``(i) determines that the applicant's
response was materially deficient; and
``(ii) not later than 30 days after the
date on which the Board received the response,
provides the applicant a detailed notice
describing the deficiencies.
``(D) Treatment of third-party information.--In
determining whether the record on an application is
complete, the Board may take into account only
information provided by the applicant, and may not base
the determination of completeness on any information
(including reports, views, or recommendations) provided
by third parties.
``(8) Deadline for determination.--
``(A) In general.--Notwithstanding any other
provision of this subsection, the Board shall grant or
deny an application submitted under this subsection not
later than 120 days after the date on which the
application was initially submitted to the Board,
regardless of whether the record on such initial
application was complete.
``(B) Failure to make a determination.--If the
Board does not grant or deny an application within the
time period described under subparagraph (A), such
application shall be deemed to have been granted.
``(C) Tolling of period.--The Board may at any time
extend the deadline described under subparagraph (A) at
the request of the applicant, but may not extend the
deadline more than 30 days past the deadline described
under subparagraph (A).''.
(c) Insured Depository Institutions.--Section 18(c) of the Federal
Deposit Insurance Act (12 U.S.C. 1828(c)) is amended by adding at the
end the following:
``(14) Complete Record on an Application.--
``(A) Notice to applicant.--Not later than 30 days after
the date on which the responsible agency receives a merger
application for approval under this subsection, the responsible
agency shall transmit to the applicant a letter that either--
``(i) confirms the record on the application is
complete; or
``(ii) details all additional information that is
required for the record on that application to be
complete.
``(B) Extension of notice.--Notwithstanding subparagraph
(A), the responsible agency may, if an application is complex,
extend the 30-day period described under subparagraph (A) for a
period not to exceed 60 days.
``(C) Receipt of response; deeming of complete record.--
Upon receipt of a response from an applicant to a notice
requesting additional information described under subparagraph
(A)(ii), the record on the application shall be deemed complete
unless the responsible agency--
``(i) determines that the applicant's response was
materially deficient; and
``(ii) not later than 30 days after the date on
which the responsible agency received the response,
provides the applicant a detailed notice describing the
deficiencies.
``(D) Treatment of third-party information.--In determining
whether the record on an application is complete, the
responsible agency may take into account only information
provided by the applicant, and may not base the determination
of completeness on any information (including reports, views,
or recommendations) provided by third parties.
``(15) Deadline for Determination.--
``(A) In general.--Notwithstanding any other provision of
this subsection, the responsible agency shall grant or deny a
merger application submitted under this subsection not later
than 120 days after the date on which the application was
initially submitted to the responsible agency, regardless of
whether the record on such initial application was complete.
``(B) Failure to make a determination.--If the responsible
agency does not grant or deny an application within the time
period described under subparagraph (A), such application shall
be deemed to have been granted.
``(C) Tolling of period.--The responsible agency may at any
time extend the deadline described under subparagraph (A) at
the request of the applicant, but may not extend the deadline
more than 30 days past the deadline described under
subparagraph (A).''.
TITLE VII--STRENGTHENING TRANSPARENCY AND INVOLVEMENT IN BANK
RESOLUTIONS
SEC. 701. LEAST COST EXCEPTION.
(a) In General.--Section 13(c)(4) of the Federal Deposit Insurance
Act (12 U.S.C. 1823(c)(4)) is amended--
(1) in subparagraph (A)(ii), by inserting ``except as
provided in subparagraph (I),'' before ``the total amount'';
(2) in subparagraph (E)(i), by inserting ``and except as
provided in subparagraph (I),'' after ``appropriate,''; and
(3) by adding at the end the following:
``(I) Least cost resolution exception.--
``(i) In general.--With respect to an exercise of
authority by the Corporation described in subparagraph
(A), the Corporation may, at the discretion of the
Corporation, select an alternative method of exercising
such authority that is not the least costly to the
Deposit Insurance Fund, if--
``(I) the Corporation determines that the
selected alternative complies with the
requirements of clause (iii); and
``(II) the Corporation and the Board of
Governors of the Federal Reserve System, after
consultation with the Secretary of the
Treasury, determine that the potential
additional risks to the Deposit Insurance Fund
of the selected alternative are outweighed by
the reasonably expected benefits of limiting
further concentration of the United States
banking system in global systemically important
banking organizations.
``(ii) Maximum cost to the deposit insurance
fund.--Not later than 1 year after the date of
enactment of this subparagraph, the Corporation, by
rule, shall establish criteria for determining on a
case-by-case basis the maximum allowable cost against
the net worth of the Deposit Insurance Fund that may be
utilized to account for any determination under clause
(i).
``(iii) Requirements described.--The requirements
for the selected alternative described in clause (i)
are as follows:
``(I) The selected alternative is least
costly to the Deposit Insurance Fund of all
alternatives that do not involve a transaction
with a global systemically important banking
organization and that do not exceed the cost of
liquidating the insured depository institution.
``(II) The difference between the cost of
the selected alternative and the cost of a
covered alternative is less than or equal to
the maximum cost to the Deposit Insurance Fund
specified pursuant to the rule adopted under
clause (ii).
``(III) In the case of a selected
alternative that involves another person
purchasing assets of the insured depository
institution or assuming deposit liabilities of
the insured depository institution, such person
agrees to pay an assessment to the Corporation
comprised of payments--
``(aa) made over a period to be
determined by the Corporation, but
which may not be less than 5 years; and
``(bb) in an amount that takes into
account, on a case-by-case basis,
criteria the Corporation, by rule,
shall establish, including a realistic
discount rate, the aggregate amount
equal to the difference calculated in
subclause (II), and any bid
inconsistent with the purposes of this
Act, with such rule to be established
by the Corporation not later than 1
year after the date of enactment of
this subparagraph.
``(iv) Report to congress.--Not later than 30 days
after selecting an alternative described in clause (i),
the Corporation shall issue a report to the Committee
on Financial Services of the House of Representatives
and the Committee on Banking, Housing, and Urban
Affairs of the Senate containing an analysis of the
economic difference between the cost to the Deposit
Insurance Fund of the selected alternative and the cost
to the Deposit Insurance Fund of the least costly
alternative that would have been selected absent the
application of this subparagraph.
``(v) Cost determinations.--All cost determinations
required under this subparagraph shall be made in
accordance with subparagraphs (B) and (C).
``(vi) Definitions.--In this subparagraph:
``(I) Covered alternative.--The term
`covered alternative' means a method of
exercising authority described in subparagraph
(A) that is the least costly to the Deposit
Insurance Fund of all such methods that involve
a sale of all or substantially all assets of
the insured depository institution to, and
assumption of all or substantially all deposit
liabilities of the insured depository
institution by, a global systemically important
banking organization.
``(II) Global systemically important
banking organization.--The term `global
systemically important banking organization'
means a global systemically important BHC (as
such term is defined in section 217.402 of
title 12, Code of Federal Regulations, or any
successor thereto) and any affiliate
thereof.''.
(b) Rule of Construction.--Section 13(c)(4)(H) of the Federal
Deposit Insurance Act (12 U.S.C. 1823(c)(4)(H)) does not apply to the
amendments made by subsection (a).
SEC. 702. ENHANCING BANK RESOLUTION PARTICIPATION.
(a) Study.--The Comptroller of the Currency, the Federal Deposit
Insurance Corporation, and the Board of the Governors of the Federal
Reserve System shall, jointly, carry out a study of--
(1) the use by the Comptroller of the Currency of shelf
charters, including all conditional or preliminary shelf
charter approvals granted between January 1, 2008, and the date
of enactment of this Act;
(2) the use by the Federal Deposit Insurance Corporation of
the modified bidder qualification process;
(3) the application of the Bank Holding Company Act of 1956
(12 U.S.C. 1841 et seq.) and section 10 of the Home Owners'
Loan Act (12 U.S.C. 1467a) to shelf charter proposals;
(4) whether shelf charters and modified bidder
qualification processes were considered or used in connection
with the receivership of any insured depository institution for
which the Federal Deposit Insurance Corporation was appointed
receiver in 2023;
(5) with respect to such receiverships, the extent to which
greater use of shelf charters and modified bidder qualification
processes could have--
(A) expanded the pool of participants in the
acquisition of the assets or liabilities of such failed
insured depository institutions;
(B) resulted in greater competition and diversity
in market outcomes;
(C) protected the Deposit Insurance Fund; or
(D) strengthened financial stability and reduced
the need for any emergency determination by the
Secretary of the Treasury under section 13(c)(4)(G) of
the Federal Deposit Insurance Act (12 U.S.C.
1823(c)(4)(G)) with respect to any such receivership;
(6) the impact of the use of shelf charters and modified
bidder qualification processes since January 1, 2008, including
on financial stability, the safety and soundness of affected
insured depository institutions, and the availability of
financial products and services provided to consumers by such
institutions; and
(7) any benefits and risks of private equity ownership of
banks through the use of shelf charters and modified bidder
qualification processes.
(b) Report.--Not later than 1 year after the date of enactment of
this Act, the Comptroller of the Currency, the Federal Deposit
Insurance Corporation, and the Board of the Governors of the Federal
Reserve System shall, jointly, submit a report to the Committee on
Financial Services of the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the Senate containing--
(1) all findings and determinations made in carrying out
the study required under subsection (a); and
(2) an identification of statutory or regulatory barriers
to the use and effectiveness of shelf charters and modified
bidder qualification processes in the resolution of failed
insured depository institutions, including recommendations for
legislative and regulatory changes.
(c) Definitions.--In this section:
(1) Insured depository institution.--The term ``insured
depository institution'' has the meaning given the term in
section 3 of the Federal Deposit Insurance Act (12 U.S.C.
1813).
(2) Modified bidder qualification process.--The term
``modified bidder qualification process'' has the meaning given
such term in the press release of the Federal Deposit Insurance
Corporation titled ``FDIC Expands Bidder List for Troubled
Institutions Plan Allows Those Without a Bank Charter to
Participate in the Process'' published November 26, 2008.
(3) Shelf charter.--The term ``shelf charter'' has the
meaning given such term in the report issued by the Comptroller
of the Currency titled ``Activities Permissible for National
Banks and Federal Savings Associations, Cumulative'' published
October 2017.
SEC. 703. FAILING BANK ACQUISITION FAIRNESS.
(a) Concentration Limit Exceptions Only Available to Avoid Serious
Adverse Economic or Financial Effects.--
(1) Concentration limits with respect to deposits.--
(A) Federal deposit insurance act.--The Federal
Deposit Insurance Act (12 U.S.C. 1811 et seq.) is
amended--
(i) in section 18(c)(13)--
(I) by amending subparagraph (B) to
read as follows:
``(B) Subparagraph (A) shall not apply to an interstate merger
transaction if--
``(i) such interstate merger transaction involves 1 or more
insured depository institutions in default or in danger of
default and the responsible agency determines, based on clear
and convincing evidence, that consummation of the proposed
interstate merger transaction is necessary to prevent
significant economic disruption or significant adverse effects
on financial stability, and the Corporation has not received
any qualified bid from a company that is not subject to the
prohibition in subparagraph (A); or
``(ii) the Corporation provides assistance under section 13
to facilitate such interstate merger transaction and the
responsible agency determines, based on clear and convincing
evidence, that consummation of the proposed interstate merger
transaction is necessary to prevent significant economic
disruption or significant adverse effects on financial
stability, and the Corporation has not received any qualified
bid from a company that is not subject to the prohibition in
subparagraph (A).''; and
(II) in subparagraph (C)--
(aa) in clause (i), by
striking ``and'' at the end;
(bb) in clause (ii), by
striking the period at the end
and inserting a semicolon; and
(cc) by adding at the end
the following:
``(iii) the term `qualified bid' means an application,
proposed application, or bid from a company where--
``(I) if applicable, the company, any affiliate
insured depository institution, and any affiliate
depository institution holding company are well
capitalized and well managed, as of the date of the
application, proposed application, or bid; and
``(II) upon consummation of the transaction, the
resulting insured depository institution is well
capitalized;
``(iv) the term `well capitalized'--
``(I) with respect to an insured depository
institution, has the meaning given such term in section
38(b) (12 U.S.C. 1831o(b));
``(II) with respect to a bank holding company, has
the meaning given such term in section 2(o)(1)(B) of
the Bank Holding Company Act of 1956 (12 U.S.C.
1841(o)(1)(B));
``(III) with respect to a savings and loan holding
company, has the meaning given such term in section
238.2 of title 12, Code of Federal Regulations; and
``(IV) with respect to a company that is not an
insured depository institution, bank holding company,
or savings and loan holding company, means maintaining
equity capital that the Corporation determines is
commensurate with the capital maintained by an insured
depository institution that is well capitalized; and
``(v) the term `well managed' has the meaning given such
term in section 2(o)(9) of the Bank Holding Company Act of 1956
(12 U.S.C. 1841(o)(9)).''; and
(ii) in section 44, by amending subsection
(e) to read as follows:
``(e) Exception for Banks in Default or in Danger of Default.--
``(1) General exception.--The responsible agency may,
without regard to paragraph (1), (3), (4), or (5) of subsection
(b) or paragraph (2), (4), or (5) of subsection (a), approve an
application under subsection (a)(1) for approval of a merger
transaction if--
``(A) the merger transaction involves 1 or more
banks in default or in danger of default; or
``(B) the Corporation provides assistance under
section 13(c) to facilitate such merger transaction.
``(2) Concentration limit exception.--The responsible
agency may, without regard to subsection (b)(2), approve an
application under subsection (a)(1) for approval of a merger
transaction if--
``(A) the merger transaction involves 1 or more
banks in default or in danger of default and the
responsible agency determines, based on clear and
convincing evidence, that consummation of the proposed
interstate merger transaction is necessary to prevent
significant economic disruption or significant adverse
effects on financial stability, and the Corporation has
not received any qualified bid from another institution
that is not subject to the prohibition in subsection
(b)(2); or
``(B) the Corporation provides assistance under
section 13(c) to facilitate such merger transaction and
the responsible agency determines, based on clear and
convincing evidence, that consummation of the proposed
interstate merger transaction is necessary to prevent
significant economic disruption or significant adverse
effects on financial stability, and the Corporation has
not received any qualified bid from another institution
that is not subject to the prohibition in subsection
(b)(2).
``(3) Qualified bid defined.--In this subsection, the term
`qualified bid' has the meaning given that term in section
18(c)(13)(C).''.
(B) Bank holding company act of 1956.--The Bank
Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) is
amended--
(i) in section 3(d), by amending paragraph
(5) to read as follows:
``(5) Exception for banks in default or in danger of
default.--
``(A) General exception.--The Board may, without
regard to subparagraph (B) or (D) of paragraph (1) or
paragraph (3), approve an application pursuant to
paragraph (1)(A) if--
``(i) the application is for an acquisition
of 1 or more banks in default or in danger of
default; or
``(ii) the application is for an
acquisition with respect to which assistance is
provided under section 13(c) of the Federal
Deposit Insurance Act.
``(B) Concentration limit exception.--The Board
may, without regard to paragraph (2), approve an
application pursuant to paragraph (1)(A) if--
``(i) the application is for the
acquisition of 1 or more banks in default or in
danger of default and the Board determines,
based on clear and convincing evidence, that
consummation of the proposed acquisition is
necessary to prevent significant economic
disruption or significant adverse effects on
financial stability, and the Corporation has
not received any qualified bid from another
institution that is not subject to the
prohibition in paragraph (2); or
``(ii) the application is for an
acquisition with respect to which assistance is
provided under section 13(c) of the Federal
Deposit Insurance Act and the Board determines,
based on clear and convincing evidence, that
consummation of the proposed acquisition is
necessary to prevent significant economic
disruption or significant adverse effects on
financial stability, and the Corporation has
not received any qualified bid from another
institution that is not subject to the
prohibition in paragraph (2).
``(C) Qualified bid defined.--In this paragraph,
the term `qualified bid' has the meaning given that
term in section 18(c)(13)(C) of the Federal Deposit
Insurance Act.''; and
(ii) in section 4(i)(8), by amending
subparagraph (B) to read as follows:
``(B) Exception.--Subparagraph (A) shall not apply
to an acquisition if--
``(i) such acquisition involves an insured
depository institution in default or in danger
of default and the Board determines, based on
clear and convincing evidence, that
consummation of the proposed acquisition is
necessary to prevent significant economic
disruption or significant adverse effects on
financial stability, and the Corporation has
not received any qualified bid (as defined in
section 18(c)(13)(C) of the Federal Deposit
Insurance Act) from another institution that is
not subject to the prohibition in paragraph
(2); or
``(ii) the Federal Deposit Insurance
Corporation provides assistance under section
13 of the Federal Deposit Insurance Act to
facilitate such acquisition and the Board
determines, based on clear and convincing
evidence, that consummation of the proposed
acquisition is necessary to prevent significant
economic disruption or significant adverse
effects on financial stability, and the
Corporation has not received any qualified bid
(as defined in section 18(c)(13)(C) of the
Federal Deposit Insurance Act) from another
institution that is not subject to the
prohibition in paragraph (2).''.
(2) Concentration limit with respect to consolidated
liabilities.--Section 14(c) of the Bank Holding Company Act of
1956 (12 U.S.C. 1852(c)) is amended--
(A) by redesignating paragraphs (1), (2), and (3)
as subparagraphs (A), (B), and (C), respectively;
(B) by striking ``With the'' and inserting the
following:
``(1) In general.--With the''; and
(C) by adding at the end the following:
``(2) Limitation.--The Board may provide written consent
for an acquisition described in paragraph (1)(A) or in
paragraph (1)(B) only if the Board determines, based on clear
and convincing evidence, that consummation of the proposed
acquisition is necessary to prevent significant economic
disruption or significant adverse effects on financial
stability, and the Corporation has not received any qualified
bid (as defined in section 18(c)(13)(C) of the Federal Deposit
Insurance Act) from another institution that is not subject to
the prohibition in subsection (b).''.
(b) Congressional Notification and Justification for Waivers.--
(1) In general.--Whenever the Board of Governors of the
Federal Reserve System, the Comptroller of the Currency, or the
Federal Deposit Insurance Corporation waives a concentration
limit under section 18(c)(13)(B) or section 44(e) of the
Federal Deposit Insurance Act or under section 3(d)(5), section
4(i)(8)(B), or section 14(c)(2) of the Bank Holding Company Act
of 1956, in connection with the acquisition of a bank or
insured depository institution in default or in danger of
default, or in connection with an acquisition with respect to
which the Federal Deposit Insurance Corporation provides
assistance under section 13 of the Federal Deposit Insurance
Act, the waiving agency and the Federal Deposit Insurance
Corporation, jointly, shall, not later than 30 days after such
waiver, submit a written report to the Committee on Financial
Services of the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs in the Senate containing--
(A) a justification for the waiver, including an
analysis of why it was necessary to prevent significant
economic disruption or significant adverse effects on
financial stability;
(B) a description of alternative bids or outcomes
considered, including efforts to solicit and encourage
bids from entities that would not require a waiver;
(C) an explanation of why alternative bids were not
selected, if applicable; and
(D) any recommendations for legislative or
regulatory changes to improve competition in future
insured depository institution resolutions.
(2) Public disclosure.--The waiving agency submitting a
report under paragraph (1) and the Federal Deposit Insurance
Corporation shall make the report publicly available on their
respective websites, subject to redactions for confidential
supervisory information and any other information described
under section 552(b) of title 5, United States Code.
(c) Limitation on Considering Bad Faith Bids in Least Cost
Determination.--Section 13(c)(4) of the Federal Deposit Insurance Act
(12 U.S.C. 1823(c)(4)), as amended by section 701(a)(3), is further
amended by adding at the end the following:
``(J) Limitation on considering bad faith bids.--In
making a determination under this paragraph of whether
an exercise of authority is the least costly to the
Deposit Insurance Fund, any application, proposed
application, or bid that would result in violation of--
``(i) section 18(c)(13) or 44(b)(2), or
``(ii) section 3(d)(2), 4(i)(8), or 14 of
the Bank Holding Company Act of 1956,
shall not be considered a possible method for meeting
the Corporation's obligation under this section for
purposes of subparagraph (A).''.
TITLE VIII--FACILITATING INNOVATION AND BANK PARTNERSHIPS
SEC. 801. MERCHANT BANKING MODERNIZATION.
(a) In General.--Section 4(k)(7)(A) of the Bank Holding Company Act
of 1956 (12 U.S.C. 1843(k)(7)(A)) is amended by inserting ``Under such
regulations, the period of time generally permitted for holding
merchant banking investments shall not be less than 15 years. For any
merchant banking investment held on the date of enactment of the Main
Street Act, the holding period of time permitted shall not be less than
15 years from the initial date of the investment.'' after the period at
the end.
(b) Merchant Banking Study.--
(1) In general.--Not later than 1 year after the date of
enactment of this Act, the Board of Governors of the Federal
Reserve System shall carry out a study on merchant banking
investments to assess--
(A) the number, investment size, holding period,
and risk characteristics of merchant banking
investments by financial holding companies, with the
assessment of investment sizes and holding periods
based on the average, median, and distribution of the
investment sizes and holding periods;
(B) the types of businesses, projects, assets, and
activities in which such merchant banking investments
are made, including the extent to which such merchant
banking investments support infrastructure projects and
housing development and construction; and
(C) any information, analyses, or findings related
to merchant banking investments that the Board
determines to be relevant.
(2) Report.--Not later than the end of the 18-month period
beginning on the date of enactment of this Act, the Board shall
issue a report to the Committee on Financial Services of the
House of Representatives and the Committee on Banking, Housing,
and Urban Affairs of the Senate containing all findings and
determinations made in carrying out the study required under
this subsection.
SEC. 802. BANK-FINTECH PARTNERSHIP ENHANCEMENT.
(a) Study on Bank-Fintech Partnerships.--
(1) Study.--The Board of Governors of the Federal Reserve
System, the Comptroller of the Currency, and the Federal
Deposit Insurance Corporation shall carry out a study of--
(A) the impact of partnerships between banking
organizations, on the one hand, and financial
technology companies, on the other hand, on the banking
sector, competition, innovation, consumer protection,
and the availability of financial products and
services, including the extent to which these
partnerships support the formation of new banking
organizations, reduce time to market for products and
services, lower compliance burdens, boost customer
acquisition, improve technological capabilities, and
provide access to more diverse funding sources; and
(B) what changes to Federal laws governing banking
organizations, or to rules or guidance adopted by the
Board of Governors of the Federal Reserve System, the
Comptroller of the Currency, or the Federal Deposit
Insurance Corporation, may help promote effective
partnerships between banking organizations, on the one
hand, and financial technology companies, on the other
hand.
(2) Report.--Not later than 1 year after the date of
enactment of this Act, the Board of Governors of the Federal
Reserve System, the Comptroller of the Currency, and the
Federal Deposit Insurance Corporation shall issue a report to
the Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing, and
Urban Affairs of the Senate containing all findings and
determinations made in carrying out the study required under
paragraph (1).
(3) Banking organization defined.--In this subsection, the
term ``banking organization'' means a depository institution
holding company or an insured depository institution, as such
terms are defined, respectively, under section 3 of the Federal
Deposit Insurance Act (12 U.S.C. 1813).
(b) Study on Credit Union-Fintech Partnerships.--
(1) Study.--The National Credit Union Administration shall
carry out a study of--
(A) the impact of partnerships between credit
unions, on the one hand, and financial technology
companies, on the other hand, on the credit union
sector, competition, innovation, consumer protection,
and the availability of financial products and
services, including the extent to which these
partnerships support the formation of new credit
unions, reduce time to market for products and
services, lower compliance burdens, boost customer
acquisition, improve technological capabilities, and
provide access to more diverse funding sources; and
(B) what changes to Federal laws governing credit
unions, or to rules or guidance adopted by the National
Credit Union Administration, may help promote effective
partnerships between credit unions, on the one hand,
and financial technology companies, on the other hand.
(2) Report.--Not later than 1 year after the date of
enactment of this Act, the National Credit Union Administration
shall issue a report to the Committee on Financial Services of
the House of Representatives and the Committee on Banking,
Housing, and Urban Affairs of the Senate containing all
findings and determinations made in carrying out the study
required under paragraph (1).
SEC. 803. DISCRETIONARY SURPLUS FUND.
(a) In General.--The dollar amount specified under section
7(a)(3)(A) of the Federal Reserve Act (12 U.S.C. 289(a)(3)(A)) is
reduced by $425,000,000.
(b) Effective Date.--The amendment made by subsection (a) shall
take effect on September 1, 2036.
Passed the House of Representatives July 21, 2026.
Attest:
Clerk.
119th CONGRESS
2d Session
H. R. 6955
_______________________________________________________________________
AN ACT
To make improvements to the Federal banking laws, and for other
purposes.