[Congressional Record Volume 164, Number 19 (Monday, January 29, 2018)]
[House]
[Pages H650-H652]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




       FINANCIAL INSTITUTION LIVING WILL IMPROVEMENT ACT OF 2017

  Mr. TIPTON. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 4292) to reform the living will process under the Dodd-Frank 
Wall Street Reform and Consumer Protection Act, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 4292

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Financial Institution Living 
     Will Improvement Act of 2017''.

     SEC. 2. LIVING WILL REFORMS.

       (a) In General.--Section 165(d) of the Dodd-Frank Wall 
     Street Reform and Consumer Protection Act (12 U.S.C. 5365(d)) 
     is amended--
       (1) in paragraph (1), by striking ``periodically'' and 
     inserting ``every 2 years''; and
       (2) in paragraph (3)--
       (A) by striking ``The Board'' and inserting the following:
       ``(A) In general.--The Board'';
       (B) by striking ``shall review'' and inserting the 
     following: ``shall--
       ``(i) review'';
       (C) by striking the period and inserting ``; and''; and
       (D) by adding at the end the following:
       ``(ii) not later than the end of the 6-month period 
     beginning on the date the company submits the resolution 
     plan, provide feedback to the company on such plan.
       ``(B) Disclosure of assessment framework.--The Board of 
     Governors and the Corporation shall publicly disclose the 
     assessment framework that is used to review information under 
     this paragraph.''.

[[Page H651]]

       (b) Treatment of Other Resolution Plan Requirements.--
       (1) In general.--With respect to an appropriate Federal 
     banking agency that requires a banking organization to submit 
     to the agency a resolution plan not described under section 
     165(d) of the Dodd-Frank Wall Street Reform and Consumer 
     Protection Act--
       (A) the respective agency shall ensure that the review of 
     such resolution plan is consistent with the requirements 
     contained in the amendments made by this Act;
       (B) the agency may not require the submission of such a 
     resolution plan more often than every 2 years; and
       (C) paragraphs (6) and (7) of such section 165(d) shall 
     apply to such a resolution plan.
       (2) Definitions.--For purposes of this subsection:
       (A) Appropriate federal banking agency.--The term 
     ``appropriate Federal banking agency''--
       (i) has the meaning given such term under section 3 of the 
     Federal Deposit Insurance Act; and
       (ii) means the National Credit Union Administration, in the 
     case of an insured credit union.
       (B) Banking organization.--The term ``banking 
     organization'' means--
       (i) an insured depository institution;
       (ii) an insured credit union;
       (iii) a depository institution holding company;
       (iv) a company that is treated as a bank holding company 
     for purposes of section 8 of the International Banking Act; 
     and
       (v) a U.S. intermediate holding company established by a 
     foreign banking organization pursuant to section 252.153 of 
     title 12, Code of Federal Regulations.
       (C) Insured credit union.--The term ``insured credit 
     union'' has the meaning given that term under section 101 of 
     the Federal Credit Union Act.
       (D) Other banking terms.--The terms ``depository 
     institution holding company'' and ``insured depository 
     institution'' have the meaning given those terms, 
     respectively, under section 3 of the Federal Deposit 
     Insurance Act.
       (c) Rule of Construction.--Nothing in this Act, or any 
     amendment made by this Act, shall be construed as limiting 
     the authority of an appropriate Federal banking agency (as 
     defined under subsection (b)(2)) to obtain information from 
     an institution in connection with such agency's authority to 
     examine or require reports from the institution.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Colorado (Mr. Tipton) and the gentlewoman from New York (Ms. Velazquez) 
each will control 20 minutes.
  The Chair recognizes the gentleman from Colorado.


                             General Leave

  Mr. TIPTON. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days in which to revise and extend their remarks and 
to include extraneous material on the bill.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Colorado?
  There was no objection.
  Mr. TIPTON. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, the living wills process, as mandated under the Dodd-
Frank Act for systemically important financial institutions and 
designated nonbank financial companies, has become a heavily burdensome 
process for the institutions subjected to it.
  Section 165 of the Dodd-Frank Act requires bank holding companies 
with total consolidated assets of $50 billion or more to annually 
submit detailed plans to the Federal Reserve and the Federal Deposit 
Insurance Corporation that describe the company's strategy for rapid 
and orderly resolution under the Bankruptcy Code in the event of its 
material financial distress or failure.
  The Federal Reserve and the FDIC have near total discretion in 
deciding whether a plan is acceptable, and, therefore, whether an 
institution will be subject to heavy penalties.
  Mr. Zeldin's legislation, the Financial Institution Living Will 
Improvement Act, will do just that: improve the regulatory process for 
both sides of the living will assessment. This bipartisan legislation 
will provide needed change by limiting the frequency of the living 
wills process to a 2-year cycle, requiring regulators to publicly 
disclose the framework used to be able to review resolution plans, and 
requiring feedback on resolution plans within 6 months of the date they 
were submitted.
  Mr. Speaker, the regulators themselves--members of the Board of 
Governors of the Federal Reserve System and the FDIC--have suggested 
before Congress that reforms should be made to the living wills 
process. Recognition from those running the process that the living 
wills framework needs to be reformed demonstrates the necessity of Mr. 
Zeldin's bill.
  Mr. Zeldin's legislation, which was voted out of the Financial 
Services Committee unanimously, takes steps toward effectiveness and 
efficiency in this process, and I urge my colleagues to support this 
measure here today.
  Mr. Speaker, I reserve the balance of my time.
  Ms. VELAZQUEZ. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, this is straightforward, commonsense legislation.
  Mr. Speaker, I thank Mr. Zeldin for working with Democrats to make 
improvements to the bill.
  Mr. Speaker, I urge all of my Democratic colleagues to support the 
bill, and I yield back the balance of my time.
  Mr. TIPTON. Mr. Speaker, I am pleased to yield 5 minutes to the 
gentleman from New York (Mr. Zeldin), a member of the Financial 
Services Committee and the sponsor of the legislation.
  Mr. ZELDIN. Mr. Speaker, I rise in support of this bipartisan 
legislation, which I was proud to introduce with my colleague from New 
York, Congresswoman Carolyn Maloney.
  This legislation would provide needed reforms to the living will 
submission process, would ensure that impacted financial institutions 
get needed feedback from their regulators, and would uphold sensible 
standards to protect the financial system.
  This may sound like wonky financial policy, but to the hardworking 
men and women in my district, fixing these confusing regulations that 
have choked off community lending can be the determining factor with 
regards to getting a small business loan or a mortgage.
  These are the financial products that provide access to the American 
Dream, that help communities grow through homeownership, and that allow 
small-business owners to hire and expand.
  Now, more than ever, we need to be working on a bipartisan basis to 
improve the standards and reform the confusing regulations that are 
being imposed on our community banks and financial institutions.
  This bill changes the procedure for the submission and review of 
resolution plans, also known as living wills.

                              {time}  1830

  This legislation is in line with recommendations from a 2016 GAO 
report in which it was recommended that banking regulators should 
publicly disclose the assessment frameworks, consider shifting to a 2-
year cycle, and provide feedback to companies within a minimum of 6 
months.
  The vast discretion granted to Federal regulators under the current 
law's living will regime is essentially a license for those regulators 
to decide the proper size, scale, and business model of private sector 
enterprises.
  This legislation reins in that unchecked government authority and 
provides greater accountability and much-needed transparency to the 
living will process.
  This bill requires public disclosure of the rules for living wills 
and also requires regulators to follow up with financial institutions 
in a timely fashion with the feedback necessary to meet these 
standards.
  These reforms are critical for providing our Nation's banking systems 
and the customers they serve, to protect our Nation's banking systems.
  This bill cleared the Financial Services Committee with a strong 
bipartisan vote of 60-0. I am especially thankful for the bipartisan 
cooperation of my colleague, the gentlewoman from New York (Mrs. 
Carolyn B. Maloney), the ranking member of the Capital Markets, 
Securities, and Investment Subcommittee.
  Mr. Speaker, I would also like to thank Chairmen Hensarling and 
Luetkemeyer for their leadership on this important issue.
  Mr. Speaker, I include in the Record these letters of support from 
the Financial Services Roundtable and the American Bankers Association.

                                Financial Services Roundtable,

                                 Washington, DC, January 29, 2018.
     Hon. Paul Ryan,
     House of Representatives,
     Washington, DC.
     Hon. Nancy Pelosi,
     House of Representatives,
     Washington, DC.
       Dear Speaker Ryan and Leader Pelosi: The Financial Services 
     Roundtable (FSR) supports H.R. 4292 the ``Financial 
     Institution

[[Page H652]]

     Living Wills Improvement Act of 2017,'' sponsored by 
     Representative Lee Zeldin.
       H.R. 4292 changes the procedure for the submission and 
     review of resolution plans, also known as ``living wills.'' 
     The bill would adjust the frequency of resolution plan 
     submissions from annually to a two-year cycle, require 
     regulators to provide feedback within six months of 
     submission and publicly disclose the framework used to review 
     the plans. Improving the resolution plan process provides 
     transparency, accountability and efficiency while enabling 
     firms to enhance their plans.
       The Federal Reserve Board and Federal Deposit Insurance 
     Corporation require resolution plan submissions be reviewed 
     and updated annually. It is increasingly evident, however, 
     that these annual requirements are neither efficient nor 
     effective for both regulators and covered firms. Resolution 
     plans do not change substantially from year to year, absent a 
     material change in a firm's structure. A Government 
     Accountability Office (GAO) report on resolution planning 
     supports a longer submission cycle so firms have sufficient 
     time to revise their plans and incorporate regulatory 
     feedback.
       Similarly, GAO recommended that regulators make the 
     assessment frameworks public, noting transparency would 
     promote accountability by the agencies and result in better 
     resolution plans. Providing firms clarity as to how 
     determinations are made will eliminate the uncertainty around 
     the appropriate changes necessary to strengthen the 
     resolution plan. Further, requiring regulators to provide 
     feedback within a defined period will enable firms to address 
     deficiencies and ensure the institution's strength in the 
     event of financial distress or failure.
       H.R. 4292 helps improve how U.S. financial regulations work 
     for individuals, financial institutions, and the U.S. 
     economy. FSR supports H.R. 4292 the ``Financial Institution 
     Living Wills Improvement Act of 2017,'' and urges enactment 
     of important legislation.
           Sincerely,

                                               Anthony Cimino,

                                             Senior Vice President
     & Head of Government Affairs.
                                  ____



                                 American Bankers Association,

                                 Washington, DC, January 29, 2018.
     Hon. Paul Ryan,
     Speaker of the House,
     House of Representatives, Washington, DC.
     Hon. Nancy Pelosi,
     Minority Leader,
     House of Representatives, Washington, DC.
       Dear Speaker Ryan and Minority Leader Pelosi: On behalf of 
     the members of the American Bankers Association, I am writing 
     to express our support for H.R. 4292, the Financial 
     Institution Living Will Improvement Act of 2017. This 
     legislation is scheduled for consideration on the January 
     29th suspension calendar.
       This bipartisan legislation introduced by Representatives 
     Lee Zeldin and Carolyn Maloney, Ranking Member of the Capital 
     Markets, Securities and Investment Subcommittee, would 
     improve the process for banks subject to the ``living will 
     submissions'' process. Requiring filings no more frequently 
     than every two years and timely regulator feedback on the 
     submissions would make the resolution planning process more 
     efficient, while still supporting regulators' ability to deal 
     with a failed institution.
       H.R. 4292 passed the House Financial Services Committee on 
     November 15, 2017 by a unanimous vote of 60-0.
       This is a commonsense piece of legislation that provides 
     needed reforms. We urge the House of Representatives to 
     approve H.R. 4292.
           Sincerely,
     James C. Ballentine,
       Executive Vice President, Congressional Relations and 
     Political Affairs.

  Mr. ZELDIN. Mr. Speaker, I urge adoption of this bill.
  Mr. TIPTON. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Colorado (Mr. Tipton) that the House suspend the rules 
and pass the bill, H.R. 4292, as amended.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Mr. TIPTON. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further 
proceedings on this motion will be postponed.

                          ____________________