[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.
____________________